ASCEND COMMUNICATIONS, INC.
INDEX TO EXHIBITS (continued)
No. Description
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/(6)/ Incorporated by reference from the Company's Form 10-Q for
the quarter ended June 30, 1996.
/(7)/ Incorporated by reference from the Company's Form 10-K for
the year ended December 31, 1996.
/(8)/ Incorporated by reference from Cascade Communications Corp.'s
Registration Statement on Form S-8 (File No. 33-93152) filed
with the Securities Commission and Exchange Commission (the
"Commission") on June 6, 1995.
/(9)/ Incorporated by reference from Cascade Communications Corp.'s
Registration Statement on Form S-1 (File No. 33-79330) filed
with the Commission on May 26, 1994, as amended, which
Registration Statement became effective on July 28, 1994.
/(10)/ Incorporated by reference to the corresponding exhibit
previously filed as an exhibit to Cascade Communications
Corp.'s Form 10-K filed for the fiscal year ended December
31, 1994 on March 29, 1995.
/(11)/ Incorporated by reference to the corresponding exhibit
previously filed as an exhibit to Cascade Communications
Corp.'s Form 10-K filed for the fiscal year ended December
31, 1995 on March 1, 1996.
/(12)/ Incorporated by reference to the corresponding exhibit
previously filed as an exhibit to Cascade Communications
Corp.'s Form 10-K filed for the fiscal year ended December
31, 1996 on March 14, 1997.
EXHIBIT 10.20
REVOLVING LINE OF CREDIT NOTE
$25,000,000.00 Walnut Creek, California
October 15, 1997
FOR VALUE RECEIVED, the undersigned ASCEND COMMUNICATIONS, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Mt. Diablo Regional Commercial Banking
Office, 1320 Willow Pass Road, Ste 440, Concord, California, or at such other
place as the holder hereof may designate, in lawful money of the United States
of America and in immediately available funds, the principal sum of Twenty Five
Million Dollars ($25,000,000.00), or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement (computed on the basis of a 360-day year, actual days
elapsed) either (i) at a fluctuating rate per annum equal to the Prime Rate in
effect from time to time, or (ii) at a fixed rate per annum determined by Bank
to be one half of one percent (1/2%) above LIBOR published on the first day of
the applicable Fixed Rate Term. When interest is determined in relation to the
Prime Rate, each change in the rate of interest hereunder shall become effective
on the date each Prime Rate change is announced within Bank. With respect to
each LIBOR option selected hereunder, Bank is hereby authorized to note the
date, principal amount, interest rate and Fixed Rate Term applicable thereto and
any payments made thereon on Bank's books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.
A. DEFINITIONS:
As used herein, the following terms shall have the meanings set forth after
each:
1. "Business Day" means any day except a Saturday, Sunday or any other day
designated as a holiday under Federal or California statute or regulation.
2. "Fixed Rate Term" means a period commencing on a Business Day and
continuing for one (1), three (3) or six (6) months, as designated by Borrower,
during which all or a portion of the outstanding principal balance of this Note
bears interest determined in relation to Bank's LIBOR; provided however, that no
Fixed Rate Term may be selected for a principal amount less than One Hundred
Thousand Dollars ($100,000.00); and provided further, that no Fixed Rate Term
shall extend beyond the
scheduled maturity date hereof. If any Fixed Rate Term would end on a day
which is not a Business Day, then such Fixed Rate Term shall be extended to
the next succeeding Business Day.
3. "LIBOR" means the rate published in the Money Rates Section of the Wall
Street Journal as the one (1), three (3) or six (6) month LIBOR (as applicable
to the Fixed Rate Term in question) without regard to any reference in said
Money Rates Section to contracts entered into subsequent to the date of
publication.
4. "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office in San Francisco as its Prime
Rate, with the understanding that the Prime Rate is one of Bank's base rates and
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto, and is evidenced by the recording thereof
after its announcement in such internal publication or publications as Bank may
designate.
B. INTEREST:
1. Payment of Interest. Interest accrued on this Note shall be payable on
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the last day of each month, commencing November 30, 1997.
2. Selection of Interest Rate Options. At any time any portion of this
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Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or in
relation to LIBOR for a new Fixed Rate Term designated by Borrower. At any time
any portion of this Note bears interest determined in relation to the Prime
Rate, Borrower may convert all or a portion thereof so that it bears interest
determined in relation to LIBOR for a Fixed Rate Term designated by Borrower.
At the time each advance is requested hereunder or Borrower wishes to select the
LIBOR option for all or a portion of the outstanding principal balance hereof,
and at the end of each Fixed Rate Term, Borrower shall give Bank notice
specifying (a) the interest rate option selected by Borrower, (b) the principal
amount subject thereto, and (c) if the LIBOR option is selected, the length of
the applicable Fixed Rate Term. Any such notice may be given by telephone so
long as, with respect to each LIBOR selection, (i) Bank receives written
confirmation from Borrower not later than three (3) Business Days after such
telephone notice is given, and (ii) such notice is given to Bank prior to 10:00
a.m., California time, on the first day of the Fixed Rate Term. For each LIBOR
option requested hereunder, Bank will quote the applicable fixed rate to
Borrower at approximately 10:00 a.m., California time, on the first day of the
Fixed Rate Term. If Borrower does not immediately accept the rate quoted by
Bank, any subsequent acceptance by Borrower shall be subject to a
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redetermination by Bank of the applicable fixed rate; provided however, that
if Borrower fails to accept any such rate by 11:00 a.m., California time, on
the Business Day such quotation is given, then the quoted rate shall expire
and Bank shall have no obligation to permit a LIBOR option to be selected on
such day. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance
or the principal amount to which such Fixed Rate Term applied.
3. Additional LIBOR Provisions. If Bank at any time shall determine that
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for any reason adequate and reasonable means do not exist for ascertaining
LIBOR, then Bank shall promptly give notice thereof to Borrower. If such notice
is given and until such notice has been withdrawn by Bank, then (i) no new LIBOR
option may be selected by Borrower, and (ii) any portion of the outstanding
principal balance hereof which bears interest determined in relation to Bank's
LIBOR, subsequent to the end of the Fixed Rate Term applicable thereto, shall
bear interest determined in relation to the Prime Rate.
4. Default Interest. From and after the maturity date of this Note, or
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such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to two percent (2%) above
the rate of interest from time to time applicable to this Note.
C. BORROWING AND REPAYMENT:
1. Borrowing and Repayment. Borrower may from time to time during the
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term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced
hereunder by the holder hereof less the amount of principal payments made hereon
by or for any Borrower, which balance may be endorsed hereon from time to time
by the holder. The outstanding principal balance of this Note shall be due and
payable in full on June 30,1999.
2. Advances. Advances hereunder, to the total amount of the principal sum
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stated above, may be made by the holder at the oral or written request of (a)
Mory Ejabat or Michael Ashby or Michael J. Johnson, any one acting alone, who
are authorized to request advances and direct the disposition of any advances
until written notice of the revocation of such authority is received by
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the holder at the office designated above, or (b) any person, with respect to
advances deposited to the credit of any account of any Borrower with the
holder, which advances, when so deposited, shall be conclusively presumed to
have been made to or for the benefit of each Borrower regardless of the fact
that persons other than those authorized to request advances may have
authority to draw against such account. The holder shall have no obligation to
determine whether any person requesting an advance is or has been authorized
by any Borrower.
3. Application of Payments. Each payment made on this Note shall be
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credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
Bank's LIBOR, with such payments applied to the oldest Fixed Rate Term first.
D. EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions of
that certain Credit Agreement between Borrower and Bank dated as of November 30,
1995, as amended from time to time (the "Credit Agreement"). Any default in the
payment or performance of any obligation under this Note, or any defined event
of default under the Credit Agreement, shall constitute an "Event of Default"
under this Note.
E. MISCELLANEOUS:
1. Remedies. Upon the occurrence of any Event of Default, the holder of
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this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, protest or notice of dishonor, all of which are expressly
waived by each Borrower, and the obligation, if any, of the holder to extend any
further credit hereunder shall immediately cease and terminate. Each Borrower
shall pay to the holder immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys' fees (to
include outside counsel fees and all allocated costs of the holder's in-house
counsel), incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, and including any of the foregoing incurred in connection with any
bankruptcy proceeding relating to any Borrower.
2. Regulatory Costs and Reserve Percentages. Upon Bank's demand, Borrower
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shall pay to Bank, in addition to all other
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amounts which may be, or become, due and payable under this Note any and all
future, supplemental, emergency or other changes in Reserve Percentages (as
defined below), assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or
foreign governmental authority and related in any manner to LIBOR
(collectively, "Regulatory Costs"), to the extent they are not internalized by
calculation of LIBOR. Further, at Bank's option, LIBOR shall be automatically
adjusted by adjusting the Reserve Percentage, as determined by Bank in its
prudent banking judgment, from the date of imposition (or subsequent date
selected by Bank) of any such Regulatory Costs. Bank shall give Borrower
notice of any Regulatory Costs as soon as practicable after their occurrence,
but Borrower shall be liable for any Regulatory Costs regardless of whether or
when notice is so given. As used herein, "Reserve Percentage" shall mean at
any time the percentage announced within Bank as the reserve percentage under
Regulation D for loans and obligations making reference to LIBOR for a Fixed
Rate Term or time remaining in a Fixed Rate Term, as appropriate; the Reserve
Percentage shall be based on Regulation D or other regulations from time to
time in effect concerning reserves for Eurocurrency Liabilities from related
institutions as though Bank were in a net borrowing position, as promulgated
by the Board of Governors of the Federal Reserve System or its successor.
3. Indemnification. Borrower hereby agrees to indemnify and hold Bank
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free and harmless from any loss or expense (including, without limitation, any
loss or expense incurred by reason of the liquidation or redeployment of
deposits or other funds acquired by Bank to fund or maintain any LIBOR based
advances which Bank may incur as a result of (a) a default by Borrower in
payment when due of the principal amount or interest on any LIBOR based advance,
(b) Borrower's failure to make a borrowing, conversion or extension with respect
to a LIBOR based advance after making a request therefor, (c) a prepayment
(whether mandatory or otherwise) of a LIBOR based advance prior to the
expiration of a related Fixed Rate Term, and (d) any demand for payment
following default of a LIBOR Loan by Bank prior to the expiration of the related
Fixed Rate Term. At the election of Bank such losses shall be conclusively
deemed to consist of an amount equal to the sum of:
(a) the interest that would have been received from Borrower on the
amounts to be reemployed during the Fixed Rate Term (or remaining
portion thereof) in question had Borrower not prepaid, repaid or
failed to borrow, convert or extend, such funds, as the case may
be, less
(b) the return which Bank could have obtained had it placed such
funds on deposit in the interbank dollar market selected by Bank
in its sole
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discretion on the date of such prepayment, repayment or failure
to borrow, convert or extend, as the case may be, and such
funds had remained on deposit until the end of the relevant
Fixed Rate Term.
4. Governing Law. This Note shall be governed by and construed in
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accordance with the laws of the State of California, except to the extent Bank
has greater rights or remedies under Federal law, whether as a national bank or
otherwise, in which case such choice of California law shall not be deemed to
deprive Bank of any such rights and remedies as may be available under Federal
law.
ASCEND COMMUNICATIONS, INC.
By: /s/ Michael Ashby
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Michael Ashby
Executive Vice President and
Chief Financial Officer |
