<PAGE>

                            EQUIPMENT TERM NOTE                 Exhibit 10.18
                            ---------------------               -------------

$2,500,000                                                         Reston, VA
                                                            November 29, 2001

     FOR VALUE RECEIVED, the undersigned, THE ULTIMATE SOFTWARE GROUP, 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 equipment 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 Million Five Hundred Thousand Dollars ($2,500,000)
("Principal Sum"), or so much thereof as may be advanced and remains unpaid.
Borrower may request Equipment Advances under this Note from and until November
28, 2003. The unpaid Principal Sum, together with interest thereon at the rate
or rates provided in the Loan Agreement, shall accrue and be payable as set
forth in the Loan Agreement.

     Borrower further agrees that, if any payment made by Borrower or any other
person is applied to this Note and is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any property hereafter
securing this Note is required to be returned by Bank to Borrower, its estate,
trustee, receiver or any other party, including, without limitation, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, Borrower's liability hereunder (and
any lien, security interest or other collateral securing such liability) shall
be and remain in full force and effect, as fully as if such payment had never
been made, or, if prior thereto any such lien, security interest or other
collateral hereafter securing Borrower's liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender, this Note
(and such lien, security interest or other collateral) shall be reinstated in
full force and effect, and such prior cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect the obligations of
Borrower in respect of the amount of such payment (or any lien, security
interest or other collateral securing such obligation).

     This Note is the "Equipment Term Note" described in the Loan Agreement, to
which reference is hereby made for a more complete statement of the terms and
conditions under which the loans and advances 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.
<PAGE>

     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
Borrower 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
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 expressly 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.

     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. 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.
<PAGE>

     This Note is issued pursuant to the Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.

     Borrower acknowledges and agrees that this Note shall be governed by the
laws of the State of Florida, excluding conflicts of laws principles, even
though for the convenience and at the request of Borrower, 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 FLORIDA 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 FLORIDA, BORROWER ACCEPTS JURISDICTION OF THE COURTS AND VENUE
IN SANTA CLARA 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.

                    [SIGNATURES ARE ON THE FOLLOWING PAGE]

                                        3
<PAGE>

     IN WITNESS WHEREOF, Borrower has caused this Note to be executed under
seal by its duly authorized officers as of the date first written above.

WITNESS/ATTEST:                               THE ULTIMATE SOFTWARE GROUP, INC.

                                                By:/s/ Mitchell Dauerman (SEAL)
------------------------                        -------------------------------
                                                Name:   Mitchell Dauerman
                                                Title:  Evec. VP-CFO & Treasurer

                                        4
<PAGE>

                         AFFIDAVIT REGARDING DELIVERY
                       (attach to note or other written
                           obligation to pay money)

I, Mike Selfridge hereby certify that I am a SVP of Silicon Valley Bank and
   ---------------                           ---
that the foregoing Note or other written obligation to pay money was delivered
to me as a representative of Silicon Valley Bank in the State of VA, County of
Fairfax by __________________ of __________________.
-------

                                 /s/Mike D. Selfridge
                                 --------------------
                                 Signature of Officer of Lender

     On this the 26 day of Nov, 2001, before me, the undersigned a Notary
                 --        ---
Public in and for the State of Maryland, County of Montgomery, personally
                                                   ----------
known to me or proved to me on the basis of satisfactory evidence to be a SVP of
                                                                          ---
Silicon Valley Bank, that executed the foregoing affidavit on behalf of such
party and acknowledged to me that such party executed the foregoing pursuant to
its by-laws or a resolution of its board of directors, said execution taking
place in the State of Maryland, County of Montgomery.
                                          ----------

                                             /s/ Bahar Hains
                                          ----------------------
                                                Notary Signature

                                          My Commission Expires: 2/9/03
                                                                --------
                                          [Affix Notarial Seal]

                                        5