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Exhibit 10.5

 
FORM OF TERM NOTE
 
 
THE OBLIGATIONS EVIDENCED BY THIS TERM NOTE HAVE BEEN EXPRESSLY SUBORDINATED TO
CERTAIN OTHER OBLIGATIONS OF BORROWER PURSUANT TO THE TERMS OF THAT CERTAIN
SUBORDINATION AGREEMENT (DEBT AND SECURITY INTEREST) BY AND AMONG ENTRADA
NETWORKS, INC., BRIGHTLINE BRIDGE PARTNERS I, LLC, AND SILICON VALLEY BANK, AS
AMENDED.
 
 
TERM NOTE
 
October 1,
2004                                                                                                                                                             
Los Angeles, California
          U.S. $750,000
 
FOR VALUE RECEIVED, the undersigned, ENTRADA NETWORKS, INC., a Delaware
corporation (the "Borrower"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the
order of HONG KONG LEAGUE CENTRAL CREDIT UNION (the "Lender"), without offset or
counterclaim, the principal sum of Seven Hundred and Fifty Thousand U.S. Dollars
(U.S.$750,000) on or before March 31, 2005. The Borrower further promises to pay
interest on the Term Loan outstanding hereunder from time to time at the
interest rates, and payable on the dates, set forth in the Credit Agreement
referred to below. This Term Note may be prepaid at any time prior to the
Maturity Date without premium or penalty.
 
 
1. Payment. Both principal and interest are payable in lawful money of the
United States of America and in immediately available funds to the Lender at c/o
SBI Advisors, LLC, 610 Newport Center, Suite 1205, Newport Beach, CA 92660, or
such other place as the Lender may designate in writing to the Borrower from
time to time.
 
 
2. Record Keeping. The Lender shall record the amount of principal and interest
due and payable from time to time hereunder, each payment thereof and the
resulting unpaid principal balance hereof, in the Lender’s internal records, and
any such recordation shall be rebuttable presumptive evidence of the accuracy of
the information so recorded; provided, however, that the Lender’s failure so to
record shall not limit or otherwise affect the obligations of the Borrower
hereunder and under the Credit Agreement to repay the principal of and interest
on the Term Loan.
 
 
3. Credit Agreement. This Term Note is one of the Notes referred to in, and is
subject to and entitled to the benefits of, that certain Term Credit Agreement,
dated as of January 30, 2004 (as amended by the First Amendment, dated May 14,
2004 and the Second Amendment, dated October 1 ,2004, and as may be further
amended, modified, renewed or extended from time to time, the "Credit
Agreement") between the Borrower, the Lender, and certain other parties thereto.
Unless otherwise defined herein, capitalized terms used herein shall have the
respective meanings assigned to them in the Credit Agreement. The Credit
Agreement provides, among other things, for acceleration (which in certain cases
shall be automatic) of the maturity hereof upon the occurrence of certain stated
events, in each case without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived. This Term Note is secured by
certain Collateral more specifically described in the Security Agreement.
 

           

 

 

 

 
4. Limitation on Interest Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under the Credit Agreement
and charged or collected by the Lender or any holder of this Term Note exceed
the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lender has charged or received
interest hereunder or under the Credit Agreement in excess of the highest
applicable rate, the rate in effect hereunder and under the Credit Agreement
shall automatically be reduced to the maximum rate permitted by applicable law
and the Lender shall apply all interest paid in excess of the maximum lawful
rate to reduce the principal balance of the amounts outstanding hereunder and
under the Credit Agreement. It is the intent of the parties hereto that the
Borrower not pay or contract to pay, and that the Lender not receive or contract
to receive, directly or indirectly in any manner whatsoever, interest in excess
of the maximum rate of interest that may be paid by the Borrower to the Lender
under applicable law.
 
 
5. Governing Law. THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, EXCLUSIVE OF ITS CONFLICTS
OF LAWS AND CHOICE OF LAWS RULES THAT WOULD OR MAY CAUSE THE APPICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.
 
 
ENTRADA NETWORKS, INC.
 
 
By: /s/ Kanwar J. S. Chadha
Name: Kanwar J. S. Chadha, Ph. D.
Its: CEO