Exhibit 10.13

## **LOAN AGREEMENT**

ThisLoan Agreement (“Agreement”) dated as of July 16, 2001 (the “EffectiveDate”), is by and between LATITUDE COMMUNICATIONS, INC., a Delawarecorporation (the “Lender”), and RICK M. McCONNELL AND ANGELA A.McCONNELL (together, the “Borrowers”).

TheBorrowers desire to borrow, and the Lender is willing to lend to the Borrowers,the amount of $400,000 on a secured basis under the terms and conditions ofthis Agreement.

TheLender and the Borrowers agree as follows:

1.             The Loan.  Subject to the terms and conditions containedherein, the Lender will lend to the Borrowers the amount of $400,000 (the “Loan”)on the date hereof.  The Loan and allobligations hereunder shall be due and payable on the date four years followingthe date of this Agreement, provided, however, that the Borrowers may prepaywithout penalty all or part of the Loan and the accrued interest thereunder atany time.

2.             The Note.  In consideration of the Lender’s delivery ofthe Loan, the Borrowers will execute a promissory note (the “Note”) inthe form attached hereto as Exhibit A in the principal amount of theLoan and bearing interest at 5.02% per annum, compounded anually.

3.             Deed of Trust.  The Note shall be secured by a deed of trustin a form acceptable to the Lender (the “Deed of Trust”) given by theBorrowers to the Lender with respect to the Borrowers’ principal residencelocated at *753Berry Avenue, Los Altos, CA 94024* (the “Property”). The Lender may, if the Lender so elects, but without obligation to doso, at any time during the term of this Agreement record the Deed of Trustagainst the Property in the official records of the county in which theProperty is located.  The Lender agreesthat the Property shall be released as collateral and the Deed of Trust shallbe released in full and cancelled on the Loan Repayment Date, and that Lenderwill take all reasonable actions to accomplish the foregoing release, includingrecording certain documents.

4.             Representations and Covenants ofBorrowers.  Subject to the Scheduleof Exceptions (if any) attached as Exhibit B, the Borrowers herebyjointly and severally make the following representations and warranties to theLender, and acknowledge that the Lender is relying on such representations inmaking the Loan:

(a)           The Borrowers have the legal capacityto enter into and perform their obligations under this Agreement, the Note andthe Deed of Trust (the “Transaction Documents”).  The Transaction Documents have been dulyexecuted and delivered by the Borrowers and constitute, legal, valid andbinding agreements of the Borrowers enforceable against the Borrowers inaccordance with their respective terms. The Note will be free of restrictions on transfer other than underapplicable federal and state securities laws and as provided herein.

(b)           No authorization, consent, approval,license, exemption or other action by, and no registration, qualification,designation, declaration or filing with, any Authority (as defined below) orany other person is required to be made or obtained by the Borrowers in orderto execute or deliver the Transaction Documents or to consummate thetransactions contemplated hereby or thereby other than the recording of theDeed of Trust to perfect the security interest in the Property.  “Authority” shall mean any governmentor political subdivision, or any agency, authority, bureau, central bank,commission, department or instrumentality of either, or any court, tribunal,grand jury, arbitrator or mediator, in each case whether federal, state, localor foreign.

(c)           Neither the execution and delivery ofthe Transaction Documents nor the consummation of the transactions contemplatedhereby or thereby nor the performance of or compliance with the terms andconditions in the Transaction Documents will (i) violate any Law (as definedbelow); (ii) conflict with or result in a breach or violation of or a defaultor loss of benefit under or permit the acceleration of any obligation under anyprovision of any agreement or instrument to which any Borrower is a party or bywhich any Borrower or any of the Borrowers’ properties is bound, or (iii)except as provided in the Deed of Trust, result in the creation or impositionof any Lien (as defined below) on any property or asset of any Borrower.  “Law” shall mean any judgment,decree, order, statute, law, ordinance, rule or regulation of any Authority(including common law), constitution, statute, treaty, regulation, rule,ordinance, judgment, order, foreign injunction, writ, decree or award of anyAuthority.  “Lien” shall mean anyvoluntary or involuntary lien, security interest, mortgage, pledge, charge,encumbrance, title defect or title retention agreement, except for such lienswhich individually and in the aggregate do not exceed $10,000.

(d)           There are no claims, prosecutions,actions, demands, suits, arbitrations, proceedings, hearings, studies,investigations or reviews pending or, to the best of the Borrowers’ knowledge,threatened against or affecting the Borrowers or any of their respectiveproperties or assets at law, in equity or otherwise, in, before or by anyAuthority.  The Borrowers do not know ofany reasonably likely basis for any such claims, prosecutions, actions,demands, suits, arbitrations, proceedings, hearings, studies, investigations orreviews.

(e)           The Borrowers have good andmarketable title to or, in the case of leases and licenses, valid andsubsisting leasehold interests or licenses in, all of their properties andassets of whatever kind (whether real or personal, tangible or intangible) freeand clear of any Liens.

(f)            No Event or Default (as definedbelow) has occurred.

5.             Covenants.  The Borrowers hereby covenant that so longas the Note is outstanding:

(a)           The Borrowers shall promptly givewritten notice to the Lender of:

i)              Any Event ofDefault or any event which, upon giving of notice or lapse of time or both,would constitute an Event of Default; and

ii)             any event oroccurrence which would cause any of the representations or warranties set forthin the Transaction Documents to be inaccurate or not true in any materialrespect at any time after the date of this Agreement.

(b)           The Borrowers shall not create,incur, assume or permit to exist Liens on any of its property except as setforth on the Schedule of Exceptions.

(c)           The Borrowers shall comply in allmaterial respects with all Laws to which they or their properties or assets areor may become subject.

6.             Events of Default and Remedies.

(a)           Events of Default.** **Any one or more of the followingshall constitute an “Event of Default”:

i)              The Borrowersdefault in the payment of any principal or interest due under the Note when thesame shall have become due;

ii)             the Borrowers failto observe or perform any covenant, condition or agreement in any of theTransaction Documents, which is not remedied within 10 days after the Lendernotifies the Borrowers that such failure has occurred; provided that such 10day period shall be reduced by the number of days that a Borrower knew of suchfailure, but shall in no event be reduced to less than 5 days;

iii)            any representationor warranty made by the Borrowers in any of the Transaction Documents shallprove to have been false, incorrect, incomplete or misleading in any materialrespect when made or deemed made, such representation or warranty continues tobe material and the Borrowers shall fail to correct the fact or circumstancewhich made such representation or warranty materially false, incorrect,incomplete or misleading within 10 days after the Lender notifies the Borrowersof such misrepresentation; provided that such 10 day period shall be reduced bythe number of days in excess of 5 days that a Borrower knew the informationthat caused such representation or warranty to be false, incorrect, incompleteor misleading in such material respect, but shall in no event be reduced toless than 5 days;

iv)           entry of a decree ororder by a court of competent jurisdiction for relief in respect of a Borrowerin any involuntary case under applicable bankruptcy, insolvency or othersimilar Laws now or hereafter in effect, or appointing a receiver, liquidator,assignee, custodian, trustee, sequestrator or similar official of a Borrower orany substantial part of his or her assets, or ordering the winding up orliquidation of either or their affairs, if such decree or order shall remainunstayed and in effect for a period of 60 days; or

v)            commencement by aBorrower of a voluntary case under any applicable bankruptcy, insolvency orother similar Laws now or hereafter in effect, or consent by a Borrower to the entryof an order for relief in any involuntary case under any such Law or to theappointment of or taking possession by a receiver, liquidator, assignee,trustee, sequestrator or similar official of a Borrower or any substantial partof its property, or any general assignment by a Borrower for the benefit ofcreditors, or failure by a Borrower generally to pay its debts as they becomedue, or any action by a Borrower in furtherance of any of the foregoing.

(b)           If any one or more of the foregoingEvents of Default occur, the Lender may at any time (unless all defaults shalltheretofore have been remedied) declare the entire unpaid principal of and allaccrued interest on the Note immediately due and payable without presentment,demand, protest or other notice of any kind, all of which are hereby expresslywaived by the Borrowers.  On any suchacceleration of the maturity of the Note, the Borrowers shall immediately payto the Lender, in lawful money of the United States, the entire principalbalance unpaid on such Note and interest accrued and unpaid on the Loan to thedate of such payment.

7.             Term and Termination.  The term of this Agreement shall begin onthe Effective Date and end on the date all amounts under the Note are repaid infull.

8.             Miscellaneous Provisions.

(a)           Loss, Theft, Etc. of Note.  Upon receipt of evidence reasonablysatisfactory to the Borrowers of the loss, theft, mutilation or destruction ofthe Note and in the case of any such loss, theft or destruction upon deliveryof a bond of indemnity in such form and amount as shall be reasonablysatisfactory to the Borrowers, or in the event of such mutilation uponsurrender and cancellation of such Note, the Borrowers will make and deliverwithout expense to the holder thereof, a new Note, of like tenor, in lieu ofsuch lost, stolen, destroyed or mutilated Note.  If the Lender is the owner of any such lost, stolen or destroyedNote, then the affidavit of the Lender setting forth the fact of loss, theft ordestruction and of its ownership of such Note at the time of such loss, theftor destruction shall be accepted as satisfactory evidence thereof and nofurther indemnity shall be required as a condition to the execution anddelivery of a new Note other than the written agreement of such owner to indemnifythe Borrowers.

(b)           Powers and Rights Not Waived:Remedies Cumulative.  No delay orfailure on the Lender’s part in the exercise of any power or right shalloperate as a waiver thereof, nor shall any single or partial exercise of thesame preclude any other or further exercise thereof or the exercise of anyother power or right, and the Lender’s rights and remedies are cumulative toand are not exclusive of any rights or remedies the Lender would otherwisehave, and no waiver or consent given or extended pursuant hereto shall extendto or affect any obligation or right not expressly waived or consented to.

(c)           Successors and Assigns.  This Agreement shall inure to the benefit ofthe respective heirs, personal representatives, successors and assigns of theparties hereto.  The Borrowers may notassign their rights and/or duties under this Agreement to a third party withoutthe prior written consent of the Lender, which may be withheld in its solediscretion.

(d)           Governing Law.  This Agreement and all acts and transactionspursuant hereto and the rights and obligations of the parties hereto shall begoverned, construed and interpreted in accordance with the laws of the State ofDelaware.

(e)           Entire Agreement.  The Transaction Documents constitute the entireagreement of the parties hereto with respect to the subject matter hereof andsupersedes all prior agreements and understandings related to such subjectmatter.

(f)            Modification.  This Agreement shall not be amended withoutthe written consent of both parties hereto.

(g)           Construction.  This Agreement is the result of negotiationsbetween and has been reviewed by each of the parties hereto and theirrespective counsel; accordingly, this Agreement shall be deemed to be theproduct of all of the parties hereto, and no ambiguity shall be construed infavor of or against any one of the parties hereto.  The Borrowers acknowledge that the Lender has made norepresentation or warranty to the Borrowers concerning the income taxconsequences of the Loan, and the Borrowers shall be solely responsible forascertaining and bearing such tax consequences.

(h)           Titles and Subtitles.  The titles and subtitles used in thisAgreement are used for convenience only and are not to be considered inconstruing or interpreting this Agreement.

(i)            Notices.  Any notice required or permitted by thisAgreement shall be in writing and shall be personally delivered or sent byprepaid registered or certified mail, return receipt requested, or overnightexpress courier or facsimile transmission, addressed to the other party at theaddress shown below or at such other address for which such party gives priorwritten notice of hereunder.  Noticessent by registered or certified mail shall be deemed to have been delivered 72hours after deposit in the United States mail. Notice delivered by overnight express courier or facsimile shall bedeemed delivered upon receipt, as evidenced by facsimile confirmation orovernight courier confirmation thereof.

(j)            Counterparts.  This Agreement may be executed in two ormore counterparts, each of which shall be deemed an original and all of whichtogether shall constitute one instrument.

(k)           Further Acts.  Each party hereto agrees to execute,acknowledge and deliver or to cause to have executed, acknowledged anddelivered, such other and further instruments and documents as may reasonablybe requested by the other to carry out the purposes of this Agreement.

(l)            Voluntary Execution; LegalCounsel.  This Agreement and theexhibits hereto are executed voluntarily and without any duress or undueinfluence on the part or behalf of the parties hereto, with the full intent ofcreating the obligations and security interests described herein andtherein.  The parties acknowledgethat:  (a) they have read this agreementand the exhibits hereto; (b) they have been represented in the preparation,negotiation, and execution of this Agreement and exhibits hereto by legalcounsel of their own choice or they have voluntarily declined to seek suchcounsel; (c) they understand the terms and consequences of this Agreement andthe exhibits hereto and of the obligations and security interests they create;and (d) they are fully aware of the legal and binding effect of this Agreementand the exhibits hereto.

(m)          Survival.  Each of the obligations of Borrowershereunder, and the liability of Borrowers for any failure of therepresentations or warranties set forth herein to be accurate and complete,shall survive the closing of the Loan described herein for the entire term ofthe Loan.

[signature pagefollows]

Theundersigned have executed this Loan Agreement as of the date first writtenabove.

 
| BORROWERS:                           |               |
|--------------------------------------|--------------------|
|                                 |               |
|                                 |               |
|   /s/  Rick M McConnell    |
| RICK M. McCONNELL                    |               |
|                                 |               |
|                                 |               |
|   /s/  Angela A. McConnell |
| ANGELA A. McCONNELL                  |               |
|                                 |               |
|                                 |               |
| Address:                             |               |
|                                 |               |
|                                 |               |
|                                 |               |
| LENDER:                              |               |
|                                 |               |
| LATITUDE COMMUNICATIONS, INC.        |               |
|                                 |               |
|                                 |               |
| By:                                  | /s/ Emil C.W. Wang |
|                                 |               |
| Name:                                | Emil C. W. Wang    |
|                                 |               |
| Title:                               | CEO                |
|                                      |                    |  |  |

 

 

 

 

 

 

 

 

**EXHIBITB**

**SCHEDULEOF EXCEPTIONS**

 

                This Schedule ofExceptions is made and given pursuant to Section 5 of the Loan Agreement datedas of the date hereof (the “Loan Agreement”), by and among RICK M.McCONNELL AND ANGELA A. McCONNELL (together, the “Borrowers”) andLATITUDE COMMUNICATIONS, INC. (the “Lender”). The information disclosed hereunder shall be deemed to be disclosed andincorporated into any section number under the Loan Agreement where disclosurewould be appropriate.  Any terms used inthis Schedule of Exceptions shall have the meaning defined for them in the LoanAgreement unless otherwise defined herein.

 

[To be completedby Borrowers -- check one box only]

1.             ý            There are no exceptions to theBorrowers’ representations and covenants set forth in Section 4.

 

2.             o            The following are exceptions to theBorrowers’ representations and covenants set forth in Section 4:

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

                                                                                                                                                                                                            

 

**EXHIBIT A**

**SECURED FULL-RECOURSE PROMISSORY NOTE**

 

 
| $400,000.00 | Santa Clara, California |
|-------------|-------------------------|
|        | July 16, 2001           |

 

                FORVALUE RECEIVED, the undersigned, Rick M. McConnell and Angela A. McConnell(together, the "Borrowers") promise to pay to LatitudeCommunications, Inc., a Delaware corporation ("Lender"), or order, atthe principal office of Lender, or at such other place as Lender may from timeto time designate in writing, the sum of Four Hundred Thousand Dollars ($400,000.00),plus accrued and unpaid interest thereon. Except as provided below in the case of a default in payment, theprincipal amount of this Note shall bear interest at a rate of 5.02% per annum,compounded annually.  The entire unpaidbalance, principal and interest, shall be due and payable four years from thedate of this Note (the “Due Date”).

 

                1.             Definitions. The following terms used in thisAgreement shall have the following meanings:

(a)           “Cause” shall mean (i) grossnegligence or willful misconduct in the performance of the Employee’s duties tothe Company; (ii) repeated unexplained or unjustified absence from the Company;(iii) a material and willful violation of any federal or state law; (iv)refusal or failure to act in accordance with any specific direction or order ofthe Company; (v) commission of any act of fraud with respect to the Company; or(vi) conviction of a felony or a crime involving moral turpitude causingmaterial harm to the standing and reputation of the Company, in each case asdetermined by the Board of Directors of the Company.

(b)           “Change of Control” means theoccurrence of any of the following events:

(i)            The stockholders ofthe Company approve an agreement for the sale of all or substantially all ofthe assets of the Company; or

(ii)           The stockholders ofthe Company approve a merger or consolidation of the Company with any othercorporation, other than a merger or consolidation which would result in thevoting securities of the Company outstanding immediately prior theretocontinuing to represent (either by remaining outstanding or by being convertedinto voting securities of the surviving entity) at least fifty percent (50%) ofthe total voting power represented by the voting securities of the Company orsuch surviving entity outstanding immediately after such merger orconsolidation; or

(iii)          Completion of atender or exchange offer or other transaction or series of transactionsresulting in less than a majority of the outstanding voting shares of thesurviving corporation being held, immediately after such transaction or seriesof transactions, by the holders of the voting shares of the Company outstandingimmediately prior to such transaction or series of transactions.

(c)           “Employee” shall mean Rick M.McConnell.

(d)           “Company” shall mean LatitudeCommunications, Inc. or such surviving entity immediately after a Change ofControl.

(d)           “Involuntary Termination” shall mean(i) without the Employee’s express written consent, the significant reductionof the Employee’s duties, authority or responsibilities, relative to theEmployee’s duties, authority or responsibilities as in effect immediately priorto such reduction, or the assignment to Employee of such reduced duties,authority or responsibilities; (ii) without the Employee’s express writtenconsent, a substantial reduction, without good business reasons, of thefacilities and prerequisites (including office space and location) available tothe Employee immediately prior to such reduction; (iii) a material reduction bythe Company in the base salary of the Employee as in effect immediately priorto such reduction; (iv) a material reduction by the Company in the kind orlevel of employee benefits, including bonuses, to which the Employee wasentitled immediately prior to such reduction with the result that theEmployee’s overall benefits package is significantly reduced; (v) any purportedtermination of the Employee by the Company which is not effected for Cause, orany purported termination for which the grounds relied upon are not valid; or(vi) any act or set of facts or circumstances which would, under Californiacase law or statute, constitute a constructive termination of the Employee.

(e)           “Termination Date” shall mean (i) thedate on which a notice of termination is given, provided that if within thirty(30) days after the Company gives the Employee notice of termination, theEmployee notifies the Company that a dispute exists concerning the terminationor the benefits due pursuant to this Agreement, then the Termination Date shallbe the date on which such dispute is finally determined, either by mutualwritten agreement of the parties, or by a final judgment, order or decree of acourt of competent jurisdiction (the time for appeal therefrom having expiredand no appeal having been perfected)**,** or (ii) if the Agreement is terminated bythe Employee, the date on which the Employee delivers the notice of terminationto the Company.

 

(f)            “Loan Agreement” shall mean the LoanAgreement between the Company and the Borrowers, dated as of the date hereof.

2.             Termination.

 

(a)           InvoluntaryTermination.  If the Employee’semployment with the Company is Involuntarily Terminated for any reason otherthan for Cause, all of the then outstanding principal and accrued interestunder this Note shall become due and payable either within twenty four monthsfollowing the Termination Date or on the Due Date, whichever occurs earlier.

 

(b)           Voluntary Termination.  If the Employee voluntarily terminates hisemployment with the Company, all of the then outstanding principal and accruedinterest under this Note shall become due and payable either within twelvemonths following the Termination Date or on the Due Date, whichever occursearlier.

 

(c)           Termination For Cause.  If the Employee’s employment with the Companyis terminated for Cause, all of the then outstanding principal and accruedinterest under this Note shall become due and payable immediately.

 

                3.             Borrowers’ Obligations.  Borrowers shall grant Lender a securityinterest in certain real property located at *753 Berry Avenue, Los Altos, California94024*(the "Property") and shall cooperate in any mannerand take such actions requested by Lender to grant, memorialize and perfectsuch security interest under all applicable laws, including but not limited tothe preparation and filing of a customary land mortgage covering the Property,which land mortgage shall provide, among other things, that upon default byBorrowers upon the covenants and agreements under such land mortgage, theholder of this Note may declare the entire principal amount outstanding underthis Note, and any accrued interest thereon, to be immediately due and payable.

 

                4.             Acceleration.  If an Event of Default (as defined in theLoan Agreement) shall occur, or if the Borrowers shall sell, convey or alienatethe Property, or any part thereof, or any interest therein, or shall bedivested of their title or any interest therein in any manner or way, whethervoluntarily or involuntarily, without the written consent of the holder hereofbeing first had and obtained, the holder of this Note shall have the right, atits option, to declare any indebtedness or obligations hereunder immediatelydue and payable.  Borrowers shall notifythe holder of this Note promptly in writing of any transaction which may giverise to such right of acceleration. Borrowers shall pay to the holder of this Note direct, ascertainable anddocumented damages the holder may sustain by reason of Borrowers' breach of thecovenant of notice contained in this paragraph.

 

                5.             Payment.  Amounts due under this Note shall be payablein lawful money of the United States of America and in immediately availablefunds free and clear of and without deduction for any present or future taxes,restrictions or conditions of any nature. Any installment of principal due under this Note which is not paid whendue shall bear interest at the rate of ten percent (10%) per annum, or, ifless, the highest rate permitted by law from the date such payment became dueuntil paid.  All payments under this Noteshall be applied first to any accrued and unpaid interest and then toprincipal.  Borrowers shall have theright to pay, without penalty or premium, all or any portion of the outstandingprincipal amount of this Note prior to the date for payment specified above.

 

                6.             Full Recourse.  Borrowers acknowledge that notwithstandingthe foregoing, the obligations under this Note are with full recourse toBorrowers and Borrowers shall have full personal liability for any amounts ofprincipal or interest, or any other payments due under this Note, withoutregard to the value of the Property.

 

                7.             Action to Collect on Note.  Borrowers waive presentment, protest anddemand, the notice of protest, demand, dishonor and nonpayment of this Note anddiligence in taking any action to collect any amounts owing under this Note byproceeding against any of the rights and interests in and to the Property,securing the payment of this Note.  Ifaction is instituted on this Note, Borrowers agree to pay such reasonable sumas attorney's fees as the court may fix and award in such action.

 

                IN WITNESSWHEREOF, Borrowers have executed this Note as of the date first written above.

 

 
|   |   /s/   Rick M. McConnell   |
|--------|---------------------------------------|
|   | Rick M. McConnell                     |   |
|   |                                  |   |
|   |                                  |   |
|   |   /s/   Angela A. McConnell |
|   | Angela A. McConnell                   |   |
|   |                                  |   |