Document:

<PAGE>   1

                                                                   EXHIBIT 10.24

                          LOAN AND SECURITY AGREEMENT

        THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of February
28, 2001, between SILICON VALLEY BANK, a California-chartered bank, with its
principal place of business at 3003 Tasman Drive, Santa Clara, California 95054
and with a loan production office located at One Newton Executive Park, Suite
200, 2221 Washington Street, Newton, Massachusetts 02462, doing business under
the name "Silicon Valley East" ("Bank") and (i) VISUAL NETWORKS, INC., a
Delaware corporation ("Visual"), (ii) VISUAL NETWORKS OPERATIONS, INC., a
Delaware corporation ("VNO"), (iii) VISUAL NETWORKS INVESTMENTS, INC., a
California corporation ("VNI"), (iv) VISUAL NETWORKS TECHNOLOGIES, INC., a
California corporation ("VNT"), (v) VISUAL NETWORKS OF TEXAS, L.P., a Texas
limited partnership ("Visual Texas"), (vi) VISUAL NETWORKS INSURANCE, INC., a
Vermont corporation ("Visual Insurance"), (vii) INVERSE NETWORK TECHNOLOGY, a
California corporation ("INT"), and (viii) AVESTA TECHNOLOGIES, INC., a Delaware
corporation ("Avesta") (hereinafter, Visual, VNO, VNI, VNT, Visual Texas, Visual
Insurance, INT, and Avesta are referred to jointly, severally and collectively
as the "Borrower" or "Borrowers" and Visual, as agent for each of Visual, VNO,
VNI, VNT, Visual Texas, Visual Insurance, INT, and Avesta is sometimes referred
to hereinafter in such capacity as the "Agent"), provides the terms on which
Bank shall lend to Borrowers and Borrowers shall repay Bank. The parties agree
as follows:

        1       AGENTED LOAN ARRANGEMENT; ACCOUNTING AND OTHER TERMS

        1.1     Designation of Agent. Each Borrower hereby designates Visual as
the agent of that Borrower to discharge the duties and responsibilities of the
Agent as provided herein.

        1.2     Operation of Agreement. (a) Except as otherwise provided in this
Article, Credit Extensions hereunder shall be requested solely by the Agent as
agent for each Borrower.

                (b)     Confirmatory assignments of accounts and accounts
receivable and remittances on accounts and accounts receivable of each Borrower
shall be provided to the Bank or otherwise directed in accordance with the
Bank's instructions given from time to time to the Agent.

                (c)     Any Credit Extension which may be made by the Bank under
this Agreement and which is directed to the Agent is received by the Agent in
trust for that Borrower who is intended to receive such Credit Extension. The
Agent shall distribute the proceeds of any such Credit Extensions solely to the
Borrowers. Each Borrower shall be directly indebted to the Bank for each Credit
Extension distributed to that Borrower by the Agent, together with all accrued
interest thereon, as if that amount had been advanced directly by the Bank to
that Borrower (whether or not the subject Credit Extension was based upon the
accounts and/or inventory or other assets of the Borrower which actually
received such distribution), in addition to which each Borrower shall be liable
to the Bank for all Obligations under this Agreement.

                (d)     The Bank shall have no responsibility to inquire as to
the distribution of Credit Extensions made by the Bank through the Agent as
described herein.

        1.3     CREDIT EXTENSIONS DIRECTLY TO BORROWER. (a) If, for any reason,
and at any time during the term of the within Agreement,

                        (i)     any Borrower, including the Agent, as agent for
        each Borrower, shall be unable to, or prohibited from carrying out the
        terms and conditions of the within Agreement (as determined by the Bank
        in the Bank's sole and absolute discretion); or

                        (ii)    the Bank deems it inexpedient (in the Bank's
        sole and absolute discretion) to continue making Credit Extensions to or
        for the account of any particular Borrower, or to channel such loans and
        Credit Extensions through the Agent, then the Bank may make Credit
        Extensions directly to such

<PAGE>   2

        Borrower as the Bank determines to be expedient, which Credit Extensions
        may be made without regard to the procedures otherwise included in this
        Article 1.

                (b)     In the event that the Bank determines to forgo the
        procedures included herein pursuant to which Credit Extensions are to be
        channeled through the Agent, then the Bank may designate one or more
        Borrower to fulfill the financial and other reporting requirements
        otherwise imposed herein upon the Agent.

                (c)     Each Borrower shall remain liable to the Bank for the
        payment and performance of all Obligations (which payment and
        performance shall continue to be secured by all Collateral)
        notwithstanding any determination by the Bank to cease making Credit
        Extensions to or for the benefit of any Borrower.

        1.4     CONTINUATION OF AUTHORITY OF AGENT. The authority of the Agent
to request Credit Extensions on behalf of, and to bind, each Borrower, shall
continue unless and until the Bank acts as provided in Section 1.4, above, or
the Bank actually receives:

                (a)     written notice of: (i) the termination of such
        authority, and (ii) the subsequent appointment of a successor Agent,
        which notice is executed by the respective Presidents of each Borrower
        (other than the President of the Agent being replaced) then eligible for
        borrowing under this Agreement; and

                (b)     written notice from the successor Agent (i) accepting
        such appointment; (ii) acknowledging that the removal and appointment
        has been effected by the respective Presidents of each Borrower eligible
        for borrowing under the within Agreement; and (iii) acknowledging that
        from and after the date of appointment, the newly appointed Agent shall
        be bound by the terms hereof, and that as used herein, the term "Agent"
        shall mean and include the newly appointed Agent.

        1.5     INDEMNIFICATION. The Agent and each Borrower respectively shall
indemnify, defend, and save and hold the Bank harmless from and against any
liabilities, claims, demands, expenses, or losses made against or suffered by
the Bank on account of, or arising out of, this Agreement, the Bank's reliance
upon Credit Extension requests made by the Agent, or any other action taken by
the Bank hereunder or under any of the Bank's various agreements with the Agent
and/or any Borrower and/or any other person arising under this Agreement, except
for any liability, claim, demand, expense, or loss as to which a final judicial
determination is made and from which no appeal is available (in a proceeding in
which the Bank has had an opportunity to be heard) that the Bank had acted in a
grossly negligent manner or in actual bad faith.

        1.6     ACCOUNTING AND OTHER TERMS. Accounting terms not defined in this
Agreement shall be construed following GAAP. Calculations and determinations
must be made following GAAP. The term "financial statements" includes the notes
and schedules. The terms "including" and "includes" always mean "including (or
includes) without limitation" in this or any Loan Document. Capitalized terms in
this Agreement shall have the meanings set forth in Section 13. This agreement
shall be construed to impart upon Bank a duty to act in a commercially
reasonable manner at all times.

        2       LOAN AND TERMS OF PAYMENT

        2.1     Credit Extensions. Borrowers shall pay Bank the unpaid principal
amount of all Credit Extensions made by Bank to Agent or any Borrowers and
interest on the unpaid principal amount of the Credit Extensions as and when due
in accordance with this Agreement.

        2.1.1   Equipment Advances.

                (a)     Through June 30, 2001 (the "Equipment Availability End
Date"), Bank shall make advances ("Equipment Advance" and, collectively,
"Equipment Advances") not exceeding the Committed Equipment Line. The Equipment
Advances may only be used to purchase or refinance Eligible Equipment

                                      -2-
<PAGE>   3

purchased within ninety (90) days (determined based upon the applicable invoice
date of such equipment) of the requested Equipment Advance, and no Equipment
Advances may exceed 100% of the equipment invoice for the Eligible Equipment,
excluding taxes, shipping, warranty charges, freight discounts and installation
expense. Each Equipment Advance must be for a minimum of Twenty Five Thousand
Dollars ($25,000.00). There shall be a maximum of six (6) Equipment Advances
hereunder.

                (b)     Interest accrues from the date of each Equipment Advance
at the rate in Section 2.2(a) and is payable monthly. Equipment Advances
outstanding on the Equipment Availability End Date are payable in equal monthly
installments of principal, plus accrued interest, beginning on the Payment Date
of each month following the Equipment Availability End Date and ending on the
Equipment Maturity Date. Equipment Advances when repaid may not be reborrowed.

                (c)     To obtain an Equipment Advance, Agent must notify Bank
(the notice is irrevocable) by facsimile no later than 3:00 p.m. Eastern time
one (1) Business Day before the day on which the Equipment Advance is to be
made. The notice in the form of EXHIBIT B (Payment/Advance Form) must be signed
by a Responsible Officer or designee and include a copy of the invoice for the
Equipment being financed.

        2.2     Interest Rate; Payments.

                (a)     Interest Rate. Advances accrue interest on the
outstanding principal balance at a per annum rate equal to the aggregate of the
Prime Rate plus two percent (2.0%) per annum. After an Event of Default,
Obligations shall bear interest at five percent (5.0%) above the rate effective
immediately before the Event of Default. The interest rate shall increase or
decrease when the Prime Rate changes. Interest is computed on the basis of a 360
day year for the actual number of days elapsed.

                (b)     Payments. Interest is payable on the Payment Date of
each month. Bank may debit any Borrowers' deposit accounts including Account
Number [__________] for principal and interest payments or any amounts Borrowers
owe Bank. Bank shall notify Agent when it debits Borrowers' accounts. These
debits are not a set-off. Payments received after 12:00 noon Eastern time are
considered received at the opening of business on the next Business Day. When a
payment is due on a day that is not a Business Day, the payment is due the next
Business Day and additional fees or interest, as applicable, shall continue to
accrue.

        2.3     Fees. Borrowers shall pay to Bank:

                (a)     Facility Fee. A fully earned, non-refundable facility
fee of Five Thousand Dollars ($5,000.00) due on the Closing Date; and

                (b)     Bank Expenses. All Bank Expenses (including reasonable
attorneys' fees and expenses incurred through and after the Closing Date) when
due.

        3       CONDITIONS OF LOANS

        3.1     Conditions Precedent to Initial Credit Extension. The obligation
of Bank to make the initial Credit Extension is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:

                (a)     this Agreement;

                (b)     a certificate of the Secretary of each Borrower with
        respect to articles, bylaws, incumbency and resolutions authorizing the
        execution and delivery of this Agreement;

                (c)     an Intellectual Property Security Agreement;

                                      -3-
<PAGE>   4

                (d)     landlord's waivers for the Borrowers' offices at 2092
        and 2096 Gaither Road, Rockville, Maryland, provided, however, that in
        the event that the Borrowers seek any Credit Extension to purchase
        Equipment to be used in any other location, then the Borrowers shall be
        required to produce a relevant landlord's waiver in advance of and as a
        condition precedent to such Credit Extension;

                (e)     an opinion of Borrowers' counsel;

                (f)     financing statements (Forms UCC-1);

                (g)     evidence of insurance;

                (h)     payment of the fees and Bank Expenses then due specified
        in Section 2.3 hereof;

                (i)     Certificate of Foreign Qualification (if applicable);

                (j)     Certificate of Good Standing/Legal Existence for each
        Borrower; and

                (k)     such other documents, and completion of such other
        matters, as Bank may reasonably deem necessary or appropriate.

        3.2     Conditions Precedent to all Credit Extensions. Bank's
obligations to make each Credit Extension, including the initial Credit
Extension, is subject to the following:

                (a)     timely receipt of any Payment/Advance Form; and

                (b)     the representations and warranties in Section 5 shall be
materially true on the date of the Payment/Advance Form and on the effective
date of each Credit Extension (except to the extent that such representations
and warranties expressly relate to an earlier date) and no Event of Default
shall have occurred and be continuing, or result from the Credit Extension. Each
Credit Extension is each Borrower's representation and warranty on that date
that the representations and warranties in Section 5 remain true.

        4       CREATION OF SECURITY INTEREST

        4.1     Grant of Security Interest. Borrowers grant Bank a continuing
security interest in all presently existing and later acquired Collateral to
secure all Obligations and performance of each of Borrowers' duties under the
Loan Documents. Any security interest shall be a first priority security
interest in the Collateral. Except as disclosed on the Schedule, no Borrower is
a party to, nor is bound by, any license or other agreement that prohibits or
otherwise restricts any Borrower from granting a security interest in Borrowers'
interest in such license or agreement or any other property. Without prior
notice to Bank, no Borrower shall enter into, or become bound by, any such
license or agreement which is reasonably likely to have a material adverse
impact on Borrowers' business or financial condition. Borrowers shall take such
steps as Bank requests to obtain the consent of, or waiver by, any person whose
consent or waiver is necessary for such licenses or contract rights to be deemed
"Collateral" and for Bank to have a security interest in it that might otherwise
be restricted or prohibited by law or by the terms of any such license or
agreement, whether now existing or entered into in the future. If the Agreement
is terminated, Bank's lien and security interest in the Collateral shall
continue until Borrowers fully satisfies their Obligations. Upon termination of
this Agreement and satisfaction of the Obligations, Bank shall release its
security interest in all Collateral, and shall execute all documents and take
actions reasonably requested by Agent in connection therewith.

        4.2     Concerning Revised Article 9 of the Uniform Commercial Code. In
anticipation of the possible application, in one or more jurisdictions to the
transactions contemplated hereby, of the revised Article 9 of the Uniform
Commercial Code in the form or substantially in the form approved by the
American Law Institute and the National Conference of Commissioners on Uniform
State Law and contained in the 1999 Official Text of the

                                      -4-
<PAGE>   5

Uniform Commercial Code ("Revised Article 9"), it is hereby agreed that applying
the law of any jurisdiction in which Revised Article 9 is in effect, the
Collateral is all assets of Borrowers, whether or not within the scope of
Revised Article 9. The Collateral shall include, without limitation, the
following categories of assets as defined in Revised Article 9: goods (including
inventory, equipment and any accessions thereto), instruments (including
promissory notes), documents, accounts (including health-care-insurance
receivables, and license fees), chattel paper (whether tangible or electronic),
deposit accounts, letter-of-credit rights (whether or not the letter of credit
is evidenced by a writing), commercial tort claims, securities and all other
investment property, general intangibles (including payment intangibles and
software), supporting obligations and any and all proceeds of any thereof,
wherever located, whether now owned or hereafter acquired. If Borrowers shall at
any time, whether or not Revised Article 9 is in effect in any particular
jurisdiction, acquire a commercial tort claim, as defined in Revised Article 9,
the Agent shall promptly notify the Bank in a writing signed by the Agent of the
brief details thereof and grant to the Bank in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance satisfactory to the Bank.

        5       REPRESENTATIONS AND WARRANTIES

        Borrowers represent and warrant that, except as set forth in the
Disclosure Schedules attached hereto, the following statements are true and
correct:

        5.1     Due Organization and Authorization. Borrowers and their
Subsidiaries are duly existing and in good standing in their respective state of
formation and qualified and licensed to do business in, and in good standing in,
any state in which the conduct of its business or its ownership of property
requires that each be qualified except where the failure to do so could not
reasonably be expected to cause a Material Adverse Change.

        The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrowers' organizational documents,
nor constitute an event of default under any material agreement by which any
Borrower is bound. No Borrower is in default under any agreement to which or by
which it is bound in which the default could reasonably be expected to cause a
Material Adverse Change.

        5.2     Collateral. Borrowers have good title to the Collateral, free of
Liens except Permitted Liens. Borrowers are the sole owner of the Intellectual
Property, except for non-exclusive licenses granted to its customers in the
ordinary course of business. Each Patent is valid and enforceable and no part of
the Intellectual Property has been judged invalid or unenforceable, in whole or
in part, and no claim has been made that any part of the Intellectual Property
violates the rights of any third party.

        5.3     Litigation. There are no actions or proceedings pending or, to
Borrowers' knowledge, threatened by or against any Borrower or any Subsidiary in
which an adverse decision could reasonably be expected to cause a Material
Adverse Change.

        5.4     No Material Adverse Change in Financial Statements. All
consolidated financial statements for Visual and its Subsidiaries delivered to
Bank fairly present in all material respects Visual's consolidated financial
condition and Visual's consolidated results of operations. There has not been
any material deterioration in Visual's financial condition since the date of the
most recent financial statements submitted to Bank.

        5.5     Solvency. Borrowers are able to pay their debts (including trade
debts) as they mature.

        5.6     Regulatory Compliance. No Borrower is an "investment company" or
a company "controlled" by an "investment company" under the Investment Company
Act. Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations T and U of the Federal Reserve Board
of Governors). Borrowers have complied in all material respects with the Federal
Fair Labor Standards Act. Borrowers have not violated any laws, ordinances or
rules, the violation of which could reasonably be expected to cause a Material
Adverse Change. None of Borrowers' or any Subsidiary's properties or assets has
been used by any Borrower or any Subsidiary or, to the best of Borrowers'
knowledge, by previous Persons, in disposing, producing,

                                      -5-
<PAGE>   6

storing, treating, or transporting any hazardous substance other than legally.
Each Borrower and each Subsidiary has timely filed all required tax returns and
paid, or made adequate provision to pay, all material taxes, except those being
contested in good faith with adequate reserves under GAAP. Each Borrower and
each Subsidiary has obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all government
authorities that are necessary to continue its business as currently conducted
except where the failure to make such declarations, notices or filings would not
reasonably be expected to result in a Material Adverse Change.

        5.7     Subsidiaries. No Borrower owns any stock, partnership interest
or other equity securities except for Permitted Investments.

        5.8     Full Disclosure. No representation, warranty or other statement
of Borrowers in any certificate or written statement given to Bank taken
together with all such certificates and written statements given to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained in the certificates or
statements not misleading.

        6       AFFIRMATIVE COVENANTS

        Borrowers shall do all of the following:

        6.1     Government Compliance. Each Borrower shall maintain its and all
Subsidiaries' corporate existence and good standing in its jurisdiction of
formation and maintain qualification in each jurisdiction in which the failure
to so qualify could have a material adverse effect on Borrowers' business or
operations. Borrowers shall comply, and have each Subsidiary comply, with all
laws, ordinances and regulations to which it is subject, noncompliance with
which could have a material adverse effect on Borrowers' business or operations
or cause a Material Adverse Change.

        6.2     Financial Statements, Reports, Certificates.

                (a)     Agent shall deliver to Bank: (i) as soon as available,
but no later than thirty (30) days after the last day of each month, a company
prepared consolidated balance sheet and income statement covering Borrowers'
consolidated operations during the period, in a form acceptable to Bank and
certified by a Responsible Officer; (ii) as soon as available, but no later than
ninety (90) days after the end of Visual's fiscal year, audited annual
consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion, on the financial statements from an
independent certified public accounting firm acceptable to Bank; (iii) within
five (5) days of filing, copies of all statements, reports and notices made
available to Visual's security holders or to any holders of Subordinated Debt
and all reports on Form 10-K, 10-Q and 8-K filed with the Securities and
Exchange Commission; (iv) a prompt report of any legal actions pending or
threatened against any Borrower or any Subsidiary that could result in damages
or costs to any Borrower or any Subsidiary of Two Hundred Thousand Dollars
($200,000.00) or more; (vi) within thirty (30) days after the last day of each
month, aged listings of accounts receivable (by invoice date) and; (vii) other
financial information Bank reasonably requests. Bank acknowledges that some of
the materials provided pursuant to this Section 6.2(a) may contain non-public
information ("Non-Public Information"), and Bank shall (except as provided in
this Agreement): (i) keep all Non-Public Information confidential; (ii) refrain
from purchasing, selling, or taking any market position with respect to Visual
stock while in receipt of Non-Public Information; and (iii) take all actions
required to prevent Bank employees with access to Non-Public Information from
purchasing, selling, or taking any market position with respect to Visual stock
while in receipt of Non-Public Information.

                (b)     Within thirty (30) days after the last day of each month
and within ninety (90) days after the end of Visual's fiscal year, Borrower
shall deliver to Bank, with the monthly and annual financial statements, a
Compliance Certificate signed by a Responsible Officer in the form of Exhibit C.

                                      -6-
<PAGE>   7

        6.3     Inventory; Returns. Borrowers shall keep all Inventory in good
and marketable condition, free from material defects. Returns and allowances
between Borrowers and its account debtors shall follow Borrowers' customary
practices as they exist at the Closing Date. Borrowers must promptly notify Bank
of all returns, recoveries, disputes and claims that involve more than Two
Hundred Thousand Dollars ($200,000.00).

        6.4     Taxes. Borrowers shall make, and cause each Subsidiary to make,
timely payment of all material federal, state, and local taxes or assessments
owing by Borrowers and shall deliver to Bank, on demand, appropriate
certificates attesting to such payments.

        6.5     Insurance. Borrowers shall keep their business and the
Collateral insured for risks and in amounts, as Bank requests. Insurance
policies shall be in a form, with companies, and in amounts that are reasonably
satisfactory to Bank. All property policies shall have a lender's loss payable
endorsement showing Bank as an additional loss payee and all liability policies
shall show the Bank as an additional insured and all policies shall provide that
the insurer must give Bank at least twenty (20) days notice before canceling its
policy. At Bank's request, Borrowers shall deliver certified copies of policies
and evidence of all premium payments. Proceeds payable under any policy shall,
at Bank's option, be payable to Bank on account of the Obligations.
Notwithstanding the foregoing, so long as no Event of Default has occurred and
is continuing, Borrowers shall have the option of applying the proceeds of any
casualty policy up to Twenty Five Thousand Dollars ($25,000.00), in the
aggregate, toward the replacement or repair of destroyed or damaged property;
provided that (i) any such replaced or repaired property (a) shall be of equal
or like value as the replaced or repaired Collateral and (b) shall be deemed
Collateral in which Bank has been granted a first priority security interest and
(ii) after the occurrence and during the continuation of an Event of Default all
proceeds payable under such casualty policy shall, at the option of the Bank, be
payable to Bank on account of the Obligations. If Borrowers fail to obtain
insurance as required under this Section 6.5 or to pay any amount or furnish any
required proof of payment to third persons and the Bank, Bank may make all or
part of such payment or obtain such insurance policies required in this Section
6.5, and take any action under the policies Bank deems prudent.

        6.6     Bank Accounts. Borrowers shall maintain all operating accounts
with the Bank including, without limitation, all depository and disbursement
accounts.

        6.7     Financial Covenants.

        Borrowers shall maintain as of the last day of each month unless
otherwise noted:

                (a) Quick Ratio. A ratio of Quick Assets to Current Liabilities
        of at least .90 to 1.0 through June 30, 2001; and ratio of Quick Assets
        to Current Liabilities of at least 1.0 to 1.0 thereafter.

                (b) Maximum Net Loss/Minimum Net Profit. (i) quarterly Net
        Losses not to exceed (A) Nineteen Million Five Hundred Thousand Dollars
        (19,500,000.00) for the quarter ending December 31, 2000, (B) Seven
        Million Two Hundred Fifty Thousand Dollars ($7,250,000.00) for the
        quarter ending March 31, 2001, (C) Three Million Five Hundred Thousand
        Dollars ($3,500,000.00) for the quarter ending June 30, 2001; (D) One
        Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) for the
        quarter ending September 30, 2001; (ii) quarterly Net Profit of at least
        One Million Dollars ($1,000,000.00) for the quarter ending December 31,
        2001; and (iii) a quarterly Net Profit of at least One Dollar ($1.00),
        for each quarter thereafter.

        6.8     Further Assurances. Borrowers shall execute any further
instruments and take further action as Bank reasonably requests to perfect or
continue Bank's security interest in the Collateral or to effect the purposes of
this Agreement.

        7       NEGATIVE COVENANTS

        No Borrower shall do any of the following without the Bank's prior
written consent:

                                      -7-
<PAGE>   8

        7.1     Dispositions. Convey, sell, lease, transfer or otherwise dispose
of (collectively a "Transfer"), or permit any of its Subsidiaries to Transfer,
all or any part of its business or property, other than a Transfer (i) of
Inventory in the ordinary course of business; (ii) of non-exclusive licenses and
similar arrangements for the use of the property of Borrowers or their
Subsidiaries in the ordinary course of business; (iii) of worn-out or obsolete
Equipment; or (iv) technical equipment employed in the Visual Benchmark and
Visual IP software hosting businesses up to an aggregate amount of $500,000.00
of such assets' book value; or (v) office furniture located at the Borrower's
Sunnyvale, California, and New York, New York, locations. Notwithstanding the
foregoing, the Borrowers may Transfer assets or liabilities between and among
Borrower entities without the consent of the Bank, provided that no such
Transfer causes a material impairment in the perfection or priority of Bank's
security interest in the Collateral or in the value of such Collateral.

        7.2     Changes in Business, Ownership, Management or Business
Locations. Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by Borrowers or reasonably
related thereto, or have a material change in its management. Borrowers shall
not, without at least thirty (30) days prior written notice to Bank, relocate
its principal executive office or add any new offices or business locations, or
change its state of formation or its legal name.

        7.3     Mergers or Acquisitions. Merge or consolidate, or permit any of
its Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person unless (i) a Borrower will be or
will control the surviving entity, (ii) no Event of Default has occurred or is
continuing or would result, either due to the passage of time or otherwise, and
(iii) no Material Adverse Change will be caused by such merger or consolidation,
either due to the passage of time or otherwise.

        7.4     Indebtedness. Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.

        7.5     Encumbrance. Create, incur, or allow any Lien on any of its
property, or assign or convey any right to receive income, including the sale of
any Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, or permit any Collateral not to be subject to Bank's first priority
security interest.

        7.6     Investments; Distributions. Except as permitted by Section 7.3
above, (i) directly or indirectly acquire or own any Person, or make any
Investment in any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so; or (ii) pay any dividends or make any distribution or
payment or redeem, retire or purchase any capital stock, except for repurchases
of stock or stock options from former employees or directors of Borrowers under
the terms of applicable repurchase agreements in an aggregate amount not to
exceed Two Hundred Thousand Dollars ($200,000.00) in the aggregate in any fiscal
year, provided that no Event of Default has occurred, is continuing or would
exist after giving effect to the repurchases.

        7.7     Transactions with Affiliates. Directly or indirectly enter or
permit any material transaction with any Affiliate, except transactions that are
in the ordinary course of Borrowers' business, on terms no less favorable to
Borrowers than would be obtained in an arm's length transaction with a
non-affiliated Person.

        7.8     Subordinated Debt. Make or permit any payment on any
Subordinated Debt, except under the terms of the Subordinated Debt, or amend any
provision in any document relating to the Subordinated Debt, without Bank's
prior written consent.

        7.9     Compliance. Undertake as one of its important activities
extending credit to purchase or carry margin stock, or use the proceeds of any
Advance for that purpose; fail to meet the minimum funding requirements of
ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA,
to occur; fail to comply with the Federal Fair Labor Standards Act or violate
any other law or regulation, if the violation could have a material

                                      -8-
<PAGE>   9

adverse effect on Borrowers' business or operations or cause a Material Adverse
Change, or permit any of its Subsidiaries to do so.

        8       EVENTS OF DEFAULT

        Any one of the following is an Event of Default:

        8.1     Payment Default. Borrowers fail to pay any of the Obligations
within three (3) days after their due date. During the additional period the
failure to cure the default is not an Event of Default (but no Credit Extensions
shall be made during the cure period);

        8.2     Covenant Default. Borrowers do not perform any obligation in
Section 6 or violates any covenant in Section 7 or does not perform or observe
any other material term, condition or covenant in this Agreement, any Loan
Documents, or in any agreement between Borrowers and Bank and as to any default
under a term, condition or covenant that can be cured, has not cured the default
within ten (10) days after it occurs, or if the default cannot be cured within
ten (10) days or cannot be cured after Borrowers' attempts in the ten (10) day
period, and the default may be cured within a reasonable time, then Borrowers
shall have additional time, (of not more than thirty (30) days) to attempt to
cure the default. During the additional period the failure to cure the default
is not an Event of Default (but no Credit Extensions shall be made during the
cure period);

        8.3     Material Adverse Change. A Material Adverse Change occurs;

        8.4     Attachment. (i) Any material portion of Borrower's assets is
attached, seized, levied on, or comes into possession of a trustee or receiver
and the attachment, seizure or levy is not removed in ten (10) days; (ii) the
service of process upon the Borrower seeking to attach, by trustee or similar
process any funds of the Borrower on deposit with the Bank.; (iii) any Borrower
is enjoined, restrained, or prevented by court order from conducting any part of
its business; (iv) a judgment or other claim becomes a Lien on a material
portion of Borrowers' assets; or (v) a notice of lien, levy, or assessment is
filed against a material portion of Borrowers' assets by any government agency
and not paid within ten (10) days after Agent receives notice. With the
exception of subsection (ii) above, these are not Events of Default if stayed or
if a bond is posted pending contest by Borrowers (but no Credit Extensions shall
be made during the cure period);

        8.5     Insolvency. (i) Any Borrower becomes insolvent; (ii) Any
Borrower begins an Insolvency Proceeding; or (iii) an Insolvency Proceeding is
begun against any Borrower and not dismissed or stayed within forty-five (45)
days (but no Credit Extensions shall be made before any Insolvency Proceeding is
dismissed);

        8.6     Other Agreements. If there is a default in any agreement to
which Borrowers are a party with a third party or parties resulting in a right
by such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of Two Hundred Thousand
Dollars ($200,000.00) or that could result in a Material Adverse Change;

        8.7     Judgments. If a judgment or judgments for the payment of money
in an amount, individually or in the aggregate, of at least Two Hundred Thousand
Dollars ($200,000.00) shall be rendered against Borrowers and shall remain
unsatisfied and unstayed for a period of thirty (30) days (provided that no
Credit Extensions will be made prior to the satisfaction or stay of such
judgment);

        8.8     Misrepresentations. If Borrowers or any Persons acting for
Borrowers make any material misrepresentation or material misstatement now or
later in any warranty or representation in this Agreement or in any
communication delivered to Bank or to induce Bank to enter this Agreement or any
Loan Document.

Security Interest. If there is a material impairment in the perfection or
priority of Bank's security interest in the Collateral.

                                      -9-
<PAGE>   10

        8.9     Financing Agreement. The occurrence of an event of default under
the Financing Agreement.

        9       BANK'S RIGHTS AND REMEDIES

        9.1     Rights and Remedies. When an Event of Default occurs and
continues Bank may, without notice or demand, do any or all of the following:

                (a)     Declare all Obligations immediately due and payable (but
        if an Event of Default described in Section 8.5 occurs all Obligations
        are immediately due and payable without any action by Bank);

                (b)     Stop advancing money or extending credit for Borrowers'
        benefit under this Agreement or under any other agreement between
        Borrowers and Bank;

                (c)     Settle or adjust disputes and claims directly with
        account debtors for amounts, on terms and in any order that Bank
        considers advisable;

                (d)     Make any payments and do any acts it considers necessary
        or reasonable to protect its security interest in the Collateral.
        Borrowers shall assemble the Collateral if Bank requests and make it
        available as Bank designates. Bank may enter premises where the
        Collateral is located, take and maintain possession of any part of the
        Collateral, and pay, purchase, contest, or compromise any Lien which
        appears to be prior or superior to its security interest and pay all
        expenses incurred. Borrowers grant Bank a license to enter and occupy
        any of its premises, without charge, to exercise any of Bank's rights or
        remedies;

                (e)     Apply to the Obligations any (i) balances and deposits
        of Borrowers it holds, or (ii) any amount held by Bank owing to or for
        the credit or the account of Borrowers;

                (f)     Ship, reclaim, recover, store, finish, maintain, repair,
        prepare for sale, advertise for sale, and sell the Collateral. Bank is
        granted a non-exclusive, royalty-free license or other right to use,
        without charge, Borrowers' labels, Patents, Copyrights, Mask Works,
        rights of use of any name, trade secrets, trade names, Trademarks,
        service marks, and advertising matter, or any similar property as it
        pertains to the Collateral, in completing production of, advertising for
        sale, and selling any Collateral and, in connection with Bank's exercise
        of its rights under this Section, Borrowers' rights under all licenses
        and all franchise agreements inure to Bank's benefit; and

                (g)     Dispose of the Collateral according to the Code.

        9.2     Power of Attorney. Each Borrower hereby irrevocably appoints
Bank as its lawful attorney-in-fact, to be effective upon the occurrence and
during the continuance of an Event of Default, to: (i) endorse such Borrower's
name on any checks or other forms of payment or security; (ii) sign such
Borrower's name on any invoice or bill of lading for any Account or drafts
against account debtors; (iii) settle and adjust disputes and claims about the
Accounts directly with account debtors, for amounts and on terms Bank determines
reasonable; (iv) make, settle, and adjust all claims under such Borrower's
insurance policies; and (v) transfer the Collateral into the name of Bank or a
third party as the Code permits. Each Borrower hereby appoints Bank its
attorney-in-fact to sign such Borrower's name on any documents necessary to
perfect or continue the perfection of any security interest regardless of
whether an Event of Default has occurred until all Obligations have been
satisfied in full and Bank is under no further obligation to make Credit
Extensions hereunder. Bank's foregoing appointment as Borrowers' attorney in
fact, and all of Bank's rights and powers, coupled with an interest, are
irrevocable until all Obligations have been fully repaid and performed and
Bank's obligation to provide Credit Extensions terminates.

        9.3     Accounts Collection. In the event that an Event of Default
occurs and is continuing, Bank may notify any Person owing any Borrower money of
Bank's security interest in the funds and verify or collect the amount of the
Account. Borrowers shall collect all payments in trust for Bank and, if
requested by Bank,

                                      -10-
<PAGE>   11

immediately deliver the payments to Bank in the form received from the account
debtor, with proper endorsements for deposit.

        9.4     Bank Expenses. Any amounts paid by Bank as provided herein are
Bank Expenses and are immediately due and payable, and shall bear interest at
the then applicable rate and be secured by the Collateral. No payments by Bank
shall be deemed an agreement to make similar payments in the future or Bank's
waiver of any Event of Default.

        9.5     Bank's Liability for Collateral. So long as the Bank complies
with reasonable banking practices regarding the safekeeping of collateral, the
Bank shall not be liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the
value of the Collateral; or (d) any act or default of any carrier, warehouseman,
bailee, or other person. Borrowers bear all risk of loss, damage or destruction
of the Collateral.

        9.6     Remedies Cumulative. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements are cumulative. Bank has
all rights and remedies provided under the Code, by law, or in equity. Bank's
exercise of one right or remedy is not an election, and Bank's waiver of any
Event of Default is not a continuing waiver. Bank's delay is not a waiver,
election, or acquiescence. No waiver hereunder shall be effective unless signed
by Bank and then is only effective for the specific instance and purpose for
which it was given.

        9.7     Demand Waiver. Borrowers and Agent waive demand, notice of
default or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of accounts, documents, instruments, chattel paper, and guaranties held by Bank
on which Borrowers are liable.

        10      NOTICES

        Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by facsimile, as follows:

        If to Agent:            Visual Networks, Inc.
                                2092 Gaither Road
                                Rockville, Maryland 20850
                                Attn: Hank Deily, Director, Treasury Operations
                                FAX: (301) 296-2303

        If to any Borrower:     c/o Visual Networks, Inc.
                                2092 Gaither Road
                                Rockville, Maryland 20850
                                Attn: Hank Deily, Director, Treasury Operations
                                FAX: (301) 296-2303

        with a copy to:         Piper Marbury Rudnick & Wolfe LLP
                                1850 Centennial Park Drive
                                Suite 610
                                Reston, Virginia 20191
                                Attention: Nancy Spangler, Esq.
                                Telephone: (703) 391-7100
                                Facsimile: (703) 390-5299

                                      -11-
<PAGE>   12

        If to Bank:             Silicon Valley Bank
                                11600 Sunrise Valley Drive, Suite 400
                                Reston, Virginia 20191
                                Attn: Michael Selfridge, Senior Vice-President
                                FAX: (703) 648-3034

        with a copy to:         Riemer & Braunstein LLP
                                Three Center Plaza
                                Boston, Massachusetts 02108
                                Attn: David A. Ephraim, Esquire
                                FAX: (617) 880-3456

        All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given (i) two (2) business days after being sent by registered or certified
mail, return receipt requested, postage prepaid, or (ii) one (1) business day
after being sent via a reputable nationwide overnight courier service
guaranteeing next business day deliver, or (iii) on the date on which it is sent
by facsimile transmission with acknowledgment of receipt at the number to which
it is required to be sent in each case to the intended recipient as set forth
above.

        11      CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

        Massachusetts law governs the Loan Documents without regard to
principles of conflicts of law. Borrowers and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in Massachusetts; provided,
however, that if for any reason Bank cannot avail itself of such courts in the
Commonwealth of Massachusetts, Borrowers accept jurisdiction of the courts and
venue in Santa Clara County, California.

BORROWERS AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

        12      GENERAL PROVISIONS

        12.1    Successors and Assigns. This Agreement binds and is for the
benefit of the successors and permitted assigns of each party. Except as
permitted in Section 7.3 above, Borrowers may not assign this Agreement or any
rights or Obligations under it without Bank's prior written consent which may be
granted or withheld in Bank's discretion. Bank has the right, without the
consent of or notice to Agent, to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, Bank's obligations,
rights and benefits under this Agreement, the Loan Documents or any related
agreement.

        12.2    Indemnification. Each Borrower hereby indemnifies, defends and
holds the Bank and its officers, employees and agents harmless against: (a) all
obligations, demands, claims, and liabilities asserted by any other party in
connection with the transactions contemplated by the Loan Documents; and (b) all
losses or Bank Expenses incurred, or paid by Bank from, following, or
consequential to transactions between Bank and Borrowers (including reasonable
attorneys' fees and expenses), except for losses caused by Bank's gross
negligence or willful misconduct.

        12.3    Right of Set-Off. Borrower and any guarantor hereby grant to
Bank a lien, security interest and right of setoff as security for all
Obligations to Bank (up to the amount of such Obligations), whether now existing
or hereafter arising upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
Bank or any entity under the control of Silicon Valley Bank or in transit to any
of them. At any time after the occurrence and during the continuance of an Event
of Default, without demand or notice, Bank may set off the same or any part
thereof and apply the same to any liability or obligation of Borrower

                                      -12-
<PAGE>   13

and any guarantor even though unmatured and regardless of the adequacy of any
other collateral securing the loan. ANY AND ALL RIGHTS TO REQUIRE BANK TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

        12.4    Time of Essence. Time is of the essence for the performance of
all Obligations in this Agreement.

        12.5    Severability of Provision. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.

        12.6    Amendments in Writing, Integration. All amendments to this
Agreement must be in writing signed by both Bank and Borrowers. This Agreement
and the Loan Documents represent the entire agreement about this subject matter,
and supercede prior or contemporaneous negotiations or agreements. All prior or
contemporaneous agreements, understandings, representations, warranties, and
negotiations between the parties about the subject matter of this Agreement and
the Loan Documents merge into this Agreement and the Loan Documents.

        12.7    Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, are an original, and all taken together, are one
Agreement.

        12.8    Survival. All covenants, representations and warranties made in
this Agreement continue in full force while any Obligations remain outstanding.
The obligation of Borrowers in Section 12.2 to indemnify Bank shall survive
until the statute of limitations with respect to such claim or cause of action
shall have run.

        12.9    Confidentiality. In handling any confidential information, Bank
shall exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (i) to Bank's
subsidiaries or affiliates in connection with their present or prospective
business relations with Borrowers; (ii) to prospective transferees or purchasers
of any interest in the Credit Extensions; (iii) as required by law, regulation,
subpoena, or other order, (iv) as required in connection with Bank's examination
or audit; and (v) as Bank considers appropriate in exercising remedies under
this Agreement. Confidential information does not include information that
either: (a) is in the public domain or in Bank's possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (b) is
disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information. The obligation set forth in this
Section 12.9 shall survive the termination of this Agreement for a period of
three (3) years from the Equipment Maturity Date.

        13      DEFINITIONS

        13.1    Definitions.

        "Accounts" are all existing and later arising accounts, contract
rights, and other obligations owed Borrowers in connection with its sale or
lease of goods (including licensing software and other technology) or provision
of services, all credit insurance, guaranties, other security and all
merchandise returned or reclaimed by Borrowers and Borrowers' Books relating to
any of the foregoing.

        "Affiliate" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.

                                      -13-
<PAGE>   14

        "Bank Expenses" are all audit fees and expenses and reasonable costs or
expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).

        "Borrowers' Books" are all Borrowers' books and records including
ledgers, records regarding Borrowers' assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

        "Business Day" is any day that is not a Saturday, Sunday or a day on
which the Bank is closed in the Commonwealth of Massachusetts or the State of
California.

        "Closing Date" is the date of this Agreement.

        "Code" is the Uniform Commercial Code as adopted in Massachusetts, as
amended and in effect from time to time.

        "Collateral" is any and all collateral granted by Borrowers to Bank or
arising under the Code, now, or in the future, including, without limitation,
the property described on Exhibit A.

        "Committed Equipment Line" represents the Equipment Advances of up to
Two Million Dollars ($2,000,000.00).

        "Contingent Obligation" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.

        "Copyrights" are all copyright rights, applications or registrations and
like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.

        "Credit Extension" is each Equipment Advance or any other extension of
credit by Bank for Borrowers' benefit.

        "Current Liabilities" are the aggregate amount of Borrowers' Total
Liabilities which mature within one (1) year (excluding all deferred revenue),
which shall include, without limitation, all obligations and liabilities of
Borrowers to Bank, including all Obligations.

        "Eligible Equipment" is (a) general purpose computer equipment, office
equipment, test and laboratory equipment, assembly equipment, telephone and
networking equipment, furnishings, and, subject to the limitations set forth
herein, (b) Other Equipment that complies with all of Borrowers' representations
and warranties to Bank and which is reasonably acceptable to Bank in all
respects.

        "Equipment" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrowers have any interest. "Equipment Advance" is defined in Section
2.1.1.

                                      -14-
<PAGE>   15

        "Equipment Availability End Date" is defined in Section 2.1.1.

        "Equipment Maturity Date"shall be June 1, 2004.

        "ERISA" is the Employment Retirement Income Security Act of 1974, and
its regulations.

        "Financing Agreement": means that certain Accounts Receivable Financing
Agreement dated February 28, 2001, between Borrowers and Bank.

        "GAAP" is generally accepted accounting principles.

        "Indebtedness" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

        "Insolvency Proceeding" is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

        "Intellectual Property" is:

                (a)     Copyrights, Trademarks, Patents, and Mask Works
        including amendments, renewals, extensions, and all licenses or other
        rights to use and all license fees and royalties from the use;

                (b)     Any trade secrets and any Intellectual Property Rights
        in computer software and computer software products now or later
        existing, created, acquired or held;

                (c)     All design rights which may be available to Borrowers
        now or later created, acquired or held;

                (d)     Any claims for damages (past, present or future) for
        infringement of any of the rights above, with the right, but not the
        obligation, to sue and collect damages for use or infringement of the
        intellectual property rights above;

All proceeds and products of the foregoing, including all insurance, indemnity
or warranty payments.

        "Inventory" is present and future inventory in which Borrowers have any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrowers, including inventory temporarily out of its custody
or possession or in transit and including returns on any accounts or other
proceeds (including insurance proceeds) from the sale or disposition of any of
the foregoing and any documents of title.

        "Investment" is any beneficial ownership of (including stock,
partnership interest or other securities) any Person (including any subsidiary),
or any loan, advance or capital contribution to any Person.

        "Lien" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

        "Loan Documents" are, collectively, this Agreement, any note, or notes
or guaranties executed by Borrowers or Guarantor, and any other present or
future agreement between Borrowers and/or for the benefit of Bank in connection
with this Agreement, all as amended, extended or restated.

                                      -15-
<PAGE>   16

        "Mask Works" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.

        "Material Adverse Change " is: (i) A material impairment in the
perfection or priority of Bank's security interest in the Collateral or in the
value of such Collateral which is not covered by adequate insurance; or (ii)
Bank determines, based upon information available to it and in its reasonable
judgment, that there is a reasonable likelihood that Borrowers shall fail to
comply with one or more of the financial covenants in Section 6 during the next
succeeding financial reporting period.

        "Net Loss" is a reconciled amount that is calculated as the net loss of
Borrowers (on a consolidated basis) as determined by GAAP, and adjusted by (i)
non-cash charges including, without limitation, intangible amortization and
depreciation, and (ii) non-recurring costs including, without limitation,
restructuring charges and asset write-downs.

        "Net Profit" is a reconciled amount that is calculated as the net income
of Borrowers (on a consolidated basis) as determined by GAAP, and adjusted by
(i) non-cash charges including, without limitation, intangible amortization and
depreciation, and (ii) non-recurring costs including, without limitation,
restructuring charges and intangible asset write-downs.

        "Obligations" are debts, principal, interest, Bank Expenses and other
amounts Borrowers owe Bank now or later, including letters of credit (drawn and
undrawn), and foreign exchange contracts, if any, and including interest
accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrowers assigned to Bank, and including the Financing
Agreement.

        "Other Equipment" is leasehold improvements, intangible property such as
transferable software licenses and other similar property and soft costs
approved by the Bank, including sales tax, freight and installation expenses.
Unless otherwise agreed to by Bank, not more than twenty five percent (25%) of
the Committed Equipment Line shall be used to finance Other Equipment.

        "Payment Date" means the first calendar day of each month commencing on
the first such day after the Closing Date and ending on the Equipment Maturity
Date.

        "Permitted Indebtedness" is:

                (a)     Borrowers' indebtedness to Bank under this Agreement or
        the Loan Documents;

                (b)     Indebtedness existing on the Closing Date incurred in
        the ordinary course of business;

                (c)     Subordinated Debt;

                (d)     Indebtedness to trade creditors incurred in the ordinary
        course of business;

                (e)     Indebtedness secured by Permitted Liens;

                (f)     Indebtedness shown on the Schedule;

                (g)     Any Borrower intercompany indebtedness; and

                (h)     Extensions, refinancings, modifications, amendments and
        restatements of any items of Permitted Indebtedness (a) through (g)
        above, provided that the principal amount thereof is not increased or
        the terms thereof are not modified to impose more burdensome terms upon
        Borrowers or their Subsidiaries, as the case may be.

                                      -16-
<PAGE>   17

        "Permitted Investments" are:

                (a)     Investments shown on the Schedule and existing on the
        Closing Date;

                (b)     (i) marketable direct obligations issued or
        unconditionally guaranteed by the United States or its agency or any
        state maturing within 1 year from its acquisition, (ii) commercial paper
        maturing no more than 1 year after its creation and having the highest
        rating from either Standard & Poor's Corporation or Moody's Investors
        Service, Inc., (iii) Bank's certificates of deposit issued maturing no
        more than 1 year after issue, (iv) investments made pursuant to a
        written investment policy acceptable to Bank in writing, and (v) any
        other investments administered through the Bank.

        "Permitted Liens" are:

                (a)     Liens existing on the Closing Date incurred in the
        ordinary course of business or arising under this Agreement or other
        Loan Documents;

                (b)     Liens for taxes, fees, assessments or other government
        charges or levies, either not delinquent or being contested in good
        faith and for which Borrowers maintain adequate reserves on its Books,
        if they have no priority over any of Bank's security interests;

                (c)     Purchase money Liens of up to Three Million Dollars
        ($3,000,000.00) in the aggregate (i) on Equipment acquired or held by
        Borrower incurred for financing the acquisition of the Equipment, or
        (ii) existing on equipment when acquired, if the Lien is confined to the
        property and improvements and the proceeds of the equipment;

                (d)     Leases or subleases and non-exclusive licenses or
        sublicenses granted in the ordinary course of Borrowers' business, if
        the leases, subleases, licenses and sublicenses do not prohibit granting
        Bank a security interest;

                (e)     Liens shown on the Schedule; and

                (f)     Liens incurred in the extension, renewal or refinancing
        of the indebtedness secured by Liens described in (a) through (e), but
        any extension, renewal or replacement Lien must be limited to the
        property encumbered by the existing Lien and the principal amount of the
        indebtedness may not increase.

        "Person" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

        "Prime Rate" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.

        "Quick Assets" is, on any date, the Borrowers' consolidated,
unrestricted cash, cash equivalents, net billed accounts receivable determined
according to GAAP.

        "Responsible Officer" is each of the Chief Executive Officer; President;
Chief Financial Officer; Vice President, Finance; Director, Treasury Operations;
and Controller of Agent, or of a Borrower (if appropriate).

        "Subordinated Debt" is debt incurred by Borrowers subordinated to
Borrowers' debt to Bank (pursuant to a subordination agreement entered into
between the Bank, the Borrowers and the subordinated creditor).

        "Subsidiary" is for any Person, joint venture, or any other business
entity of which more than 50% of the voting stock or other equity interests is
owned or controlled, directly or indirectly, by the Person or one or more
Affiliates of the Person.

                                      -17-
<PAGE>   18

        "Total Liabilities" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrowers' consolidated balance sheet, including
all Indebtedness.

        "Trademarks" are trademark and service mark rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Assignor connected with the trademarks.

                                      -18-
<PAGE>   19

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first above written.

AGENT:

VISUAL NETWORKS, INC.

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  Chief Financial Officer
        -----------------------

BORROWERS:

VISUAL NETWORKS, INC.

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  Chief Financial Officer
        -----------------------

VISUAL NETWORKS OPERATIONS, INC.

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------

VISUAL NETWORKS INVESTMENTS, INC.

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------

VISUAL NETWORKS TECHNOLOGIES, INC.

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------

VISUAL NETWORKS OF TEXAS, L.P.,
by Visual Networks Texas Operations, Inc., its
General Partner

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------

                                      -19-
<PAGE>   20

VISUAL NETWORKS INSURANCE, INC.

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------

INVERSE NETWORK TECHNOLOGY

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  President
        ------------------

AVESTA TECHNOLOGIES, INC.

By:     /s/ Peter J. Minihane
        ---------------------
        Peter J. Minihane

Title:  President
        ------------------

BANK:

SILICON VALLEY BANK, d/b/a
SILICON VALLEY EAST

By  /s/ David J. Reich
  -------------------------------------------------

Name:   David J. Reich
     ----------------------------------------------

Title:  SVP
      ---------------------------------------------

SILICON VALLEY BANK

By  /s/ David J. Reich
  -------------------------------------------------

Name:   David J. Reich
     ----------------------------------------------

Title:  SVP
      ---------------------------------------------
        (Signed in Santa Clara County, California)

                                      -20-
<PAGE>   21

                                    EXHIBIT A

        The Collateral consists of all of Borrower's right, title and interest
in and to the following:

        All goods, equipment, inventory, contract rights, trademarks,
servicemarks, trade styles, trade names, patents, patent applications, leases,
license agreements, franchise agreements, general intangibles, accounts,
documents, instruments, chattel paper, cash, deposit accounts, fixtures, letters
of credit, investment property, and financial assets, whether now owned or
hereafter acquired, wherever located; and

        Any copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work, whether
published or unpublished, now owned or later acquired; any patents, trademarks,
service marks and applications therefor; any trade secret rights, including any
rights to unpatented inventions, know-how, operating manuals, license rights and
agreements and confidential information, now owned or hereafter acquired; or any
claims for damages by way of any past, present and future infringement of any of
the foregoing; and

        All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

                                      -21-
<PAGE>   22

                                    EXHIBIT B

                   LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
              DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., E.S.T.

<TABLE>
<S>                                                             <C>
TO: CENTRAL CLIENT SERVICE DIVISION                             DATE:
                                                                      --------------------------
FAX#:[ ]                                                        TIME:
                                                                      --------------------------

---------------------------------------------------------------------------------------------------
FROM:   VISUAL NETWORKS, INC., AS AGENT
     ---------------------------------------------------------------------------
                                CLIENT NAME (BORROWER)

REQUESTED BY:
             ----------------------------------------------------------------
                              AUTHORIZED SIGNER'S NAME

AUTHORIZED SIGNATURE:
                     ------------------------------------------------------

PHONE NUMBER:
             ------------------------------------------------------------

FROM ACCOUNT #                     TO ACCOUNT #
               -------------------              ------------------------------------

REQUESTED TRANSACTION TYPE                    REQUEST DOLLAR AMOUNT
--------------------------                    ---------------------

PRINCIPAL INCREASE (ADVANCE)                  $
                                               ---------------
PRINCIPAL PAYMENT (ONLY)                             $
                                                      ---------------
INTEREST PAYMENT (ONLY)                              $
                                                      ---------------
PRINCIPAL AND INTEREST (PAYMENT)              $
                                               ---------------

OTHER INSTRUCTIONS:
                    --------------------------------------------------------------------

All Borrower's representations and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
telephone request for and Advance confirmed by this Borrowing Certificate; but
those representations and warranties expressly referring to another date shall
be true, correct and complete in all material respects as of that date.

---------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                                          <C>
---------------------------------------------------------------------------------------------------
                                             BANK USE ONLY
TELEPHONE REQUEST:
-----------------

The following person is authorized to request the loan payment transfer/loan advance on the
advance designated account and is known to me.

------------------------------------------------------        ---------------------------------
                  Authorized Requester                                 Phone #

------------------------------------------------------
                                                              ---------------------------------
---------------------------------------------------------------------------------------------------
</TABLE>

                                      -22-
<PAGE>   23

                                    EXHIBIT C
                             COMPLIANCE CERTIFICATE

TO:   SILICON VALLEY BANK
FROM: VISUAL NETWORKS, INC., AS AGENT

        The undersigned Responsible Officer of VISUAL NETWORKS, INC. certifies
that under the terms and conditions of the Loan and Security Agreement between
Agent (for the benefit of certain "Borrowers" named therein) and Bank (the
"Agreement"), (i) Borrowers are in complete compliance for the period ending
_______________ with all required covenants except as noted below and (ii) all
representations and warranties in the Agreement are true and correct in all
material respects on this date. Attached are the required documents supporting
the certification. The Officer certifies that these are prepared in accordance
with Generally Accepted Accounting Principles (GAAP) consistently applied from
one period to the next except as explained in an accompanying letter or
footnotes. The Officer acknowledges that no borrowings may be requested at any
time or date of determination that Borrowers are not in compliance with any of
the terms of the Agreement, and that compliance is determined not just at the
date this certificate is delivered.

        PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.

<TABLE>
<CAPTION>
REPORTING COVENANT                                   REQUIRED                                     COMPLIES
------------------                                   --------                                     --------
<S>                                                  <C>                                          <C>

Monthly financial statements with CC                 Monthly within 30 days                       Yes   No
Annual (CPA Audited)  with CC                        FYE within 90 days                           Yes   No
</TABLE>

<TABLE>
<CAPTION>
FINANCIAL COVENANT                                   REQUIRED                   ACTUAL            COMPLIES
------------------                                   --------                   ------            --------
<S>                                                  <C>                        <C>               <C>
Maintain on a Monthly Basis:

Minimum Quick Ratio (monthly)                        .90:1.0 through 6/30/01    _____:1.0         Yes   No
                                                     1.0:1.0 thereafter         _____:1.0         Yes   No

Maximum Net Loss/Profit (quarterly):                 ($*      )                 ($_________)      Yes   No
</TABLE>

        *(i) ($19,500,000.00) for the quarter ending 12/31/00;
        *(ii) ($7,250,000.00) for the quarter ending 3/31/01;
        *(iii) ($3,500,000.00) for the quarter ending 6/30/01;
        *(iv) ($1,250,000.00) for the quarter ending 9/30/01;
        *(v) $1,000,000.00 for the quarter ending 12/31/01;
        *(vi) a quarterly net profit of $1.00 thereafter.

<TABLE>
<S>                                                            <C>
                                                               ----------------------------------------
COMMENTS REGARDING EXCEPTIONS:  See Attached, if any.                   BANK USE ONLY

Sincerely,                                                     Received by:
                                                                            -----------------------
                                                                                 AUTHORIZED SIGNER
-----------------------------
SIGNATURE                                                      Date:
                                                                     ------------------------------
-----------------------------
TITLE                                                          Verified:
                                                                         --------------------------
-----------------------------                                                    AUTHORIZED SIGNER
DATE
                                                               Date:
                                                                     ------------------------------
                                                               Compliance Status:      Yes     No
                                                               3
                                                               ----------------------------------------
</TABLE>

<PAGE>   24

                                  SCHEDULE 5.2

                                   COLLATERAL

1.      SMARTS Claim. On October 31, 1997, a lawsuit was filed against Avesta
Technologies, Inc. ("Avesta") and David Zager (a founder and, at the time, an
employee of Avesta) by Systems Management ARTS Incorporated ("SMARTS") in the
United States District Court for the Southern District of New York, alleging
unfair competition, unjust enrichment and that Avesta and Mr. Zager infringed
two patents held by SMARTS. The complaint also alleges interference with
contractual relations against Avesta, as well as a claim of breach of contract
against Mr. Zager. Avesta answered the complaint, denying all allegations, and
also asserted counterclaims against SMARTS for patent misuse, unfair
competition, interference with business and patent invalidity.

2.      eWatcher Challenge. AverStar, Inc. ("AverStar") sent a letter dated
August 24, 1999 advising Avesta of AverStar's belief that it has superior rights
to the eWatcher mark. AverStar has filed a competing trademark application for
the mark in the U.S. Patent and Trademark Office.

<PAGE>   25

                                  SCHEDULE 5.3

                                   LITIGATION

1.      SMARTS Litigation. On October 31, 1997, a lawsuit was filed against
Avesta Technologies, Inc. ("Avesta") and David Zager (a founder and, at the
time, an employee of Avesta) by Systems Management ARTS Incorporated ("SMARTS")
in the United States District Court for the Southern District of New York,
alleging unfair competition, unjust enrichment and that Avesta and Mr. Zager
infringed two patents held by SMARTS. The complaint also alleges interference
with contractual relations against Avesta, as well as a claim of breach of
contract against Mr. Zager. Avesta answered the complaint, denying all
allegations, and also asserted counterclaims against SMARTS for patent misuse,
unfair competition, interference with business and patent invalidity.

2.      Shareholders Litigation. In July 2000, several purported class action
complaints were filed against Visual Networks, Inc. ("Visual") and Scott E.
Stouffer, Chairman and CEO of Visual, in the United States District Court for
the District of Maryland. The complaints allege that between February 7, 2000
and August 23, 2000, the defendants made false and misleading statements and
omissions that had the effect of inflating the market price of Visual's common
stock in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of
1934. The complaints do not specify the amount of damages sought.

3.      Sexual Discrimination. In January 2001, a claim was filed in the Reading
(United Kingdom) Employment Tribunal by a former employee alleging that she was
dismissed as the result of sexual discrimination and seeking monetary
compensation. The amount is not identified. The Company believes that the claim
has no merit and intends to strongly defend itself against this claim.

<PAGE>   26

                                  SCHEDULE 7.4

                             PERMITTED INDEBTEDNESS

The Standby Letter of Credit issued by Silicon Valley Bank on December 12, 2000
in the amount of $5,000,000 for the benefit of Celestica Corporation.

<PAGE>   27

                                  SCHEDULE 7.5

                                 PERMITTED LIENS

Existing warehouse liens, or warehouse liens that may be created in the future,
that are junior and subordinate to any liens created in favor of Silicon Valley
Bank. Notwithstanding the foregoing, such liens may permit a storage facility to
sell assets to the extent necessary to satisfy outstanding overdue storage fees.

<PAGE>   28

                                  SCHEDULE 7.6

                              PERMITTED INVESTMENTS

1.      Investments in the following marketable securities pursuant to Visual's
Investment Objectives and Guidelines dated March 1998:

        U. S. Treasury Bills, Notes, Bonds and Strips: Issued and guaranteed by
        the U.S. Government.

        Federal Agencies: Government National Mortgage Association (GNMA),
        Tennessee Valley Authority (TVA), and World Bank.

        Government Sponsored Enterprises: Federal National Mortgage Association
        (FNMA), Federal Home Loan Mortgage Corporation (FHLMC), and Student Loan
        Marketing Association (SLMA).

        Money Markets: Taxable and/or tax-exempt issues rated A1/P1 or better as
        defined by Standard & Poor's and/or Moody's.

        Mortgage Backed Securities: Participation certificates and pass-through
        certificates of Government National Mortgage Association (GNMA), Federal
        Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage
        Association (FNMA).

        Repurchase Agreements: Backed by U.S. Treasury obligations pledged as
        collateral and delivered to a third party custodian for safekeeping. The
        value of underlying repurchase collateral must be equal to or exceed
        102% of the principal and interest amount of the investment at
        initiation. Repurchase Agreements should be limited to maturities of
        less than one week.

        Tax Advantage Debt Instruments: Issued by state governmental entities
        rated AAA by Standard & Poor's. No more than 5% of the Portfolio shall
        be invested in the securities of any issuer.

        Commingled (pooled) Funds: Short-term money market investment funds
        consisting of the Eligible Securities described above and managed by (1)
        a sponsor with a family of funds with assets in excess of $10 billion,
        or (2) a federal or state chartered bank with assets of at least $100
        billion and total stockholders equity of at least $10 billion.

2       Investments in /advances to Visual's joint venture, End-to-End Germany,
a private start-up company that will offer products and complete solutions for
monitoring and managing networks. HypoVereinsbank, the second largest German
commercial bank, owns 60% of the joint venture and Visual owns 30%. The
remaining 10% is reserved for management.

<PAGE>   29

3.      Investments in Goldman Sachs Financial Square Trust Money Market Fund
(portfolio account 026263525.)

4.      An investment in Quadrian Holdings, Inc. preferred stock received by
Avesta Technologies, Inc. in 1998 in exchange for a license of certain
technology rights.

5.      Investments made as of the Closing Date in any of the following
Affiliates:

-   VISUAL NETWORKS OPERATIONS, INC. (Delaware)
-   VISUAL NETWORKS OF TEXAS, L. P. (Texas)
-   VISUAL NETWORKS PROTECTION, INC. (Vermont)
-   VISUAL NETWORKS INSURANCE, INC. (Vermont)
-   VISUAL NETWORKS INTERNATIONAL OPERATIONS, INC. (Delaware)
-   VISUAL NETWORKS, LTD. (Bermuda)
-   VISUAL NETWORKS TECHNOLOGIES, INC. (California)
-   VISUAL NETWORKS INVESTMENTS, INC. (California)
-   VISUAL NETWORKS TEXAS OPERATIONS, INC. (Delaware)
-   NET2NET, LLC (Delaware)
-   INVERSE NETWORK TECHNOLOGY (California)
-   AVESTA TECHNOLOGIES, INC. (Delaware)
-   AVESTA TECHNOLOGIES CANADA, INC. (Ontario, Canada)
-   AVESTA TECHNOLOGIES PTE. LTD. (Singapore)<PAGE>   1

                                                                   EXHIBIT 10.25

                     ACCOUNTS RECEIVABLE FINANCING AGREEMENT

        This ACCOUNTS RECEIVABLE FINANCING AGREEMENT (the "Agreement") dated as
of February 28, 2001, is between SILICON VALLEY BANK, a California-chartered
bank, with its principal place of business at 3003 Tasman Drive, Santa Clara,
California 95054 and with a loan production office located at One Newton
Executive Park, Suite 200, 2221 Washington Street, Newton, Massachusetts 02462,
doing business under the name "Silicon Valley East" ("Lender"), and (i) VISUAL
NETWORKS, INC., a Delaware corporation, (ii) VISUAL NETWORKS OPERATIONS, INC., a
Delaware corporation, (iii) VISUAL NETWORKS INVESTMENTS, INC., a California
corporation, (iv) VISUAL NETWORKS TECHNOLOGIES, INC., a California corporation,
(v) VISUAL NETWORKS OF TEXAS, L.P., a Texas limited partnership, (vi) VISUAL
NETWORKS INSURANCE, INC., a Vermont corporation, (vii) INVERSE NETWORK
TECHNOLOGY, a California corporation, and (viii) AVESTA TECHNOLOGIES, INC., a
Delaware corporation (jointly, severally and collectively, the "Borrower").

1.      DEFINITIONS.  In this Agreement:

        "ACCOUNTS" are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of
goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

        "ACCOUNT BALANCE" is the aggregate outstanding Advances made hereunder.

        "ACCOUNT DEBTOR" is as defined in the Code and shall include, without
limitation, any person liable on any Financed Receivable, such as, a guarantor
of the Financed Receivable and any issuer of a letter of credit or banker's
acceptance.

        "ADJUSTMENTS" are all discounts, allowances, returns, disputes,
counterclaims, offsets, defenses, rights of recoupment, rights of return,
warranty claims, or short payments, asserted by or on behalf of any Account
Debtor for any Financed Receivable.

        "ADVANCE" is defined in Section 2.2.

        "ADVANCE RATE" is eighty percent (80%), net of customer specific offsets
related to maintenance billings and customer deposits, provided, however, that
so long as the Borrower retains a Quick Ratio of 1.5:1.0 or greater, no such
offsets shall be applied to calculate the Advance Rate.

        "APPLICABLE RATE" is a per annum rate equal to the "Prime Rate" plus two
percentage points (2.0%).

        "BORROWER'S BOOKS" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

        "CODE" is the Uniform Commercial Code as adopted by The Commonwealth of
Massachusetts (presently, Mass. Gen. Laws, Ch. 106), as may be amended and in
effect from time to time.

        "COLLATERAL" is described on EXHIBIT "A".

        "COLLATERAL HANDLING FEE" is defined in Section 3.5.

        "COLLECTIONS" are all funds received by Lender from or on behalf of an
Account Debtor for Financed Receivables.

<PAGE>   2

        "COMPLIANCE CERTIFICATE" is attached as EXHIBIT "C".

        "CURRENT LIABILITIES" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year (excluding all deferred revenue),
which shall include, without limitation, all obligations and liabilities of
Borrower to Lender.

        "EVENT OF DEFAULT" is defined in Section 9.

        "FACILITY" is an extension of credit by Lender to Borrower in order to
finance Receivables with an aggregate Account Balance not exceeding the Facility
Amount.

        "FACILITY AMOUNT" is Ten Million Dollars ($10,000,000.00).

        "FACILITY FEE" is defined in Section 3.3.

        "FACILITY PERIOD" is the period beginning on this date and continuing
until February __, 2002, unless the period is terminated sooner by Lender with
notice to Borrower or by Borrower pursuant to the terms of this Agreement.

        "FINANCE CHARGES" is defined in Section 3.2.

        "FINANCED RECEIVABLES" are Receivables which Lender finances by making
an Advance in accordance with this Agreement. A Financed Receivable stops being
a Financed Receivable (but remains Collateral) when the Advance made for the
Financed Receivable has been finally paid.

        "FINANCED RECEIVABLE BALANCE" is the total outstanding amount, at any
time, of all Financed Receivables.

        "GUARANTOR" means any future guarantor of the Obligations, to the extent
as may hereafter be applicable.

        "INELIGIBLE RECEIVABLE" is any Receivable:

               (a)    that is unpaid (90) calendar days after the invoice date;
                      or

               (b)    that is owed by an Account Debtor that has filed, or has
                      had filed against it, any bankruptcy case, assignment for
                      the benefit of creditors, receivership, or Insolvency
                      Proceeding or who has become insolvent (as defined in the
                      United States Bankruptcy Code) or who is generally not
                      paying its debts as they become due; or

               (c)    for which there has been any breach of warranty or
                      representation in Section 6 or any breach of any covenant
                      in this Agreement; or

               (d)    for which the Account Debtor asserts any discount,
                      allowance, return, dispute, counterclaim, offset, defense,
                      right of recoupment, right of return, warranty claim, or
                      short payment; or

               (e)    that has been modified after the Invoice Transmittal has
                      been delivered to Lender, without Lender's written
                      consent.

        "INSOLVENCY PROCEEDING" are proceedings by or against any person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.

                                      -2-
<PAGE>   3

        "INVOICE TRANSMITTAL" shows Receivables which Lender may finance and,
for each Receivable, includes the Account Debtor's, name, address, invoice
amount, invoice date and invoice number and is signed by Borrower's authorized
representative.

        "LOAN AGREEMENT" means a certain Loan and Security Agreement of even
date between the Borrower and the Bank.

        "LOCKBOX" is described in Section 6.3(J).

        "MINIMUM FINANCE CHARGE" is a minimum monthly Finance Charge of
$4,000.00 payable to the Lender.

        "NET LOSS" is a reconciled amount that is calculated as the net loss of
the Borrower (on a consolidated basis) as determined by GAAP, and adjusted by
(i) non-cash charges including, without limitation, intangible amortization and
depreciation, and (ii) non-recurring costs including, without limitation,
restructuring charges and intangible asset write-downs.

        "NET PROFIT" is a reconciled amount that is calculated as the net income
of the Borrower (on a consolidated basis) as determined by GAAP, and adjusted by
(i) non-cash charges including, without limitation, intangible amortization and
depreciation, and (ii) non-recurring costs including, without limitation,
restructuring charges and intangible asset write-downs.

        "OBLIGATIONS" are all advances, liabilities, obligations, covenants and
duties owing, arising, due or payable by Borrower to Lender now or later under
this Agreement or any other document, instrument or agreement, account
(including those acquired by assignment) primary or secondary, such as all
Advances, Finance Charges, Collateral Handling Fees, Facility Fees, interest,
fees, expenses, professional fees and attorneys' fees, or other amounts now or
hereafter owing by Borrower to Lender.

        "PRIME RATE" is Lender's most recently announced "Prime Rate," even if
it is not Lender's lowest rate.

        "QUICK ASSETS" is, on any date, the Borrower's consolidated,
unrestricted cash, cash equivalents, net billed Receivables determined according
to GAAP.

        "QUICK RATIO".  A ratio of Quick Assets to Current Liabilities.

        "RECEIVABLES" are all those accounts, receivables, chattel paper,
instruments, contract rights, documents, general intangibles, letters of credit,
drafts, bankers acceptances, and rights to payment, and all proceeds, including
their proceeds.

        "RECONCILIATION DAY" is the last calendar day of each month.

        "RECONCILIATION PERIOD" is each calendar month.

        "RESPONSIBLE OFFICER" is each of the Chief Executive Officer; President;
Chief Financial Officer; Vice President, Finance; Director, Treasury Operations;
and Controller of Agent, or of a Borrower (if appropriate).

        "SERVICE AGREEMENT" is Borrower's contract documents with its customer
containing the terms, conditions and payment obligations for use of services by
such customers.

        "TOTAL LIABILITIES" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness.

                                      -3-
<PAGE>   4

2.      FINANCING OF ACCOUNTS RECEIVABLE.

        2.1.    REQUEST FOR ADVANCES. So long as no Event of Default has
occurred or is continuing, Borrower may request that the Lender finance
Receivables. Borrower will deliver an Invoice Transmittal in the form attached
hereto at EXHIBIT B for each Receivable or package of Receivables it offers.
Lender may rely on information on or with such Invoice Transmittals.

        2.2.    ACCEPTANCE OF ACCOUNTS RECEIVABLE. Lender is not obligated to
finance any Receivable. Lender may review any Account Debtor's credit before
agreeing to finance any Receivable. When Lender agrees to finance a Receivable,
it will extend credit to the Borrower in an amount up to the result of the
Advance Rate multiplied by the face amount of the Receivable (the "Advance").
Such extension of credit may include the issuance of letters of credit, subject
to the terms and rates acceptable to Lender. When Lender makes an Advance, the
Receivable becomes a "Financed Receivable." All representations and warranties
in Section 6 must be true as of the date of the Invoice Transmittal and of the
Advance and no Event of Default exists would occur as a result of the Advance.
The aggregate amount of all Financed Receivables outstanding at any time may not
exceed the Facility Amount.

3.      COLLECTIONS, FINANCE CHARGES, REMITTANCES AND FEES. The Obligations
shall be subject to the following fees and Finance Charges. Fees and Finance
Charges may, in Lender's discretion, be charged as an Advance, and shall
thereafter accrue fees and Finance Charges as described below. Lender may, in
its discretion, charge fees and Finance Charges to Borrower's deposit account
maintained with Lender.

        3.1.    COLLECTIONS. Collections will be credited to the Financed
Receivables Balance, with the exception of Collections of Financed Receivables
on account of Advances used to issue letters of credit, which are undrawn or
drawn but unpaid, which collections shall be used solely to cash secure such
letters of credit, but if there is an Event of Default, Lender may apply
Collections to the Obligations in any order it chooses. If Lender receives a
payment for both a Financed Receivable and a non Financed Receivable, the funds
will first be applied to the Financed Receivable and, if there is not an Event
of Default, the excess will be remitted to the Borrower, subject to Section 3.8.

        3.2.    FINANCE CHARGES. In computing Finance Charges on the
Obligations, all Collections received by Lender shall be deemed applied by
Lender on account of the Obligations three (3) Business Days after receipt of
the Collections. Borrower will pay a finance charge (the "Finance Charge"),
except for the portion of Financed Receivable Balance which relates to letters
of credit issued by Lender, which is equal to the greater of (i) the Applicable
Rate multiplied by the number of days in the Reconciliation Period divided by
360, which is then multiplied by the outstanding average daily Financed
Receivable Balance for that Reconciliation Period, or (ii) the Minimum Finance
Charge, as and when same may be applicable. After an Event of Default,
Obligations accrue interest at five percent (5%) above the Applicable Rate
effective immediately before the Event of Default.

        3.3.    FACILITY FEE. A fully earned, non-refundable facility fee of
Fifty Thousand Dollars ($50,000.00) is due upon execution of this Agreement.

        3.4.    ACCOUNTING. After each Reconciliation Period, Lender will
provide an accounting of the transactions for that Reconciliation Period,
including the amount of all Financed Receivables, all Collections, Adjustments,
Finance Charges, Collateral Handling Fee, and the Facility Fee. If Borrower does
not object to the accounting in writing within thirty (30) days it is considered
correct. All Finance Charges and other interest and fees are calculated on the
basis of a 360 day year and actual days elapsed.

        3.5.    COLLATERAL HANDLING FEE. On each Reconciliation Day, Borrower
will pay to Lender a collateral handling fee, equal to one half of one percent
(0.50%) per month of the average daily Financed Receivable Balance

                                      -4-
<PAGE>   5

outstanding during the applicable Reconciliation Period. After an Event of
Default, the Collateral Handling Fee will increase an additional one half of one
percent (.50%) effective immediately before the Event of Default.

        3.6.    DEDUCTIONS. Lender may deduct fees, Finance Charges and other
amounts due pursuant to this Agreement from any Advances made or Collections
received by Lender.

        3.7.    ACCOUNT COLLECTION SERVICES. All Borrower's Receivables are to
be paid to the same address/or party and Borrower and Lender must agree on such
address. If Lender collects all Receivables and there is not an Event of Default
or an event that with notice or lapse of time will be an Event of Default,
within three (3) days of receipt of those collections, Lender will give Borrower
the Receivables collections it receives for Receivables other than Financed
Receivables and/or amount in excess of the amount for which Lender has made an
Advance to Borrower, less any amount due to Lender, such as the Finance Charge,
the Collateral Handling Fee, the Facility Fee, other fees and expenses, or
otherwise. This Section 3.8 does not impose any affirmative duty on Lender to do
any act other than to turn over amounts. All Receivables and collections are
Collateral and if an Event of Default occurs, Lender need not remit collections
of Collateral and may apply them to the Obligations.

4.      REPAYMENT OF OBLIGATIONS.

        4.1.    REPAYMENT ON MATURITY. Borrower will repay each Advance on the
earliest of: (a) payment of the Financed Receivable in respect of which the
Advance was made, (b) the Financed Receivable becomes an Ineligible Receivable,
(c) when any Adjustment is made to the Financed Receivable (but only to the
extent of the Adjustment if the Financed Receivable is not otherwise an
Ineligible Receivable), or (d) the last day of the Facility Period (including
any early termination). Each payment will also include all accrued Finance
Charges on the Advance and all other amounts due hereunder.

        4.2.    REPAYMENT ON EVENT OF DEFAULT. When there is an Event of
Default, Borrower will, if Lender demands (or, in an Event of Default under
Section 9(B), immediately without notice or demand from Lender) repay all of the
Advances. The demand may, at Lender's option, include the Advance for each
Financed Receivable then outstanding and all accrued Finance Charges, attorneys
and professional fees, court costs and expenses, and any other Obligations.

5.      POWER OF ATTORNEY. Borrower irrevocably appoints Lender and its
successors and assigns it attorney-in-fact and authorizes Lender, regardless of
whether there has been an Event of Default, to:

                                (A)     following an Event of Default, sell,
                        assign, transfer, pledge, compromise, or discharge all
                        or any part of the Financed Receivables:

                                (B)     following an Event of Default, demand,
                        collect, sue, and give releases to any Account Debtor
                        for monies due and compromise, prosecute, or defend any
                        action, claim, case or proceeding about the Financed
                        Receivables, including filing a claim or voting a claim
                        in any bankruptcy case in Lender's or Borrower's name,
                        as Lender chooses:

                                (C)     following an Event of Default, prepare,
                        file and sign Borrower's name on any notice, claim,
                        assignment, demand, draft, or notice of or satisfaction
                        of lien or mechanics' lien or similar document;

                                (D)     notify all Account Debtors to pay Lender
                        directly;

                                (E)     receive, open, and dispose of mail
                        addressed to Borrower;

                                      -5-
<PAGE>   6

                                (F)     endorse Borrower's name on check or
                        other instruments;

                                (G)     execute on Borrower's behalf any
                        instruments, documents, financing statements to perfect
                        Lender's interests in the Financed Receivables and
                        Collateral and do all acts and things necessary or
                        expedient, as determined solely and exclusively by the
                        Lender, to protect, preserve, and otherwise enforce the
                        Lender's rights and remedies under this Agreement, as
                        directed by the Lender;

6.      REPRESENTATIONS, WARRANTIES AND COVENANTS.

        6.1.    REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
for each Financed Receivable:

                                (A)     Borrower is the owner with legal right
                        to sell, transfer and assign it;

                                (B)     The correct amount is on the Invoice
                        Transmittal and is not disputed;

                                (C)     Payment is not contingent on any
                        obligation or contract and it has fulfilled all its
                        obligations as of the Invoice Transmittal date provided,
                        however, that some payments under Service Agreements may
                        be contingent upon Borrower providing services under the
                        terms of such Service Agreements;

                                (D)     It is based on an actual sale and
                        delivery of goods and/or services rendered, due to
                        Borrower, it is not past due or in default, has not been
                        previously sold, assigned, transferred, or pledged and
                        is free of any liens, security interests and
                        encumbrances provided, however, some Service Agreements
                        may be based on delivery of services in the future by
                        Borrower under terms of such Service Agreements;

                                (E)     There are no defenses, offsets,
                        counterclaims or agreements for which the Account Debtor
                        may claim any deduction or discount;

                                (F)     Borrower reasonably believes no Account
                        Debtor is insolvent or subject to any Insolvency
                        Proceedings;

                                (G)     Borrower has not filed or had filed
                        against it Insolvency Proceedings and does not
                        anticipate any filing;

                                (H)     Lender has the right to endorse and/ or
                        require Borrower to endorse all payments received on
                        Financed Receivables and all proceeds of Collateral; and

                                (I)     No representation, warranty or other
                        statement of Borrower in any certificate or written
                        statement given to Lender contains any untrue statement
                        of a material fact or omits to state a material fact
                        necessary to make the statement contained in the
                        certificates or statement not misleading.

        6.2.    ADDITIONAL REPRESENTATIONS AND WARRANTIES. Borrower represents
and warrants as follows:

                                (A)     Borrower is duly existing and in good
                        standing in its state of formation and qualified and
                        licensed to do business in, and in good standing in, any
                        state in which the conduct of its business or its
                        ownership of property requires that it be qualified. The

                                      -6-
<PAGE>   7

                        execution, delivery and performance of this Agreement
                        has been duly authorized, and does not conflict with
                        Borrower's organizational documents or constitute an
                        Event of Default under any material agreement by which
                        Borrower is bound. Borrower is not in default under any
                        agreement to which or by which it is bound, the default
                        of which will have a material adverse effect on the
                        Borrower's business.

                                (B)     Borrower has good title to the
                        Collateral. All inventory is in all material respects of
                        good and marketable quality, free from material defects.

                                (C)     Borrower is not an "investment company"
                        or a company "controlled" by an "investment company"
                        under the Investment Company Act. Borrower is not
                        engaged as one of its important activities in extending
                        credit for margin stock (under Regulations T and U of
                        the Federal Reserve Board of Governors). Borrower has
                        complied with the Federal Fair Labor Standards Act.
                        Borrower has not violated any laws, ordinances or rules.
                        None of Borrower's properties or assets has been used by
                        Borrower, to the best of Borrower's knowledge, by
                        previous persons, in disposing, producing, storing,
                        treating, or transporting any hazardous substance other
                        than legally. Borrower has timely filed all required tax
                        returns and paid, or made adequate provision to pay, all
                        taxes. Borrower has obtained all consents, approvals and
                        authorizations of, made all declarations or filings
                        with, and given all notices to, all government
                        authorities that are necessary to continue its business
                        as currently conducted.

        6.3.    AFFIRMATIVE COVENANTS. Borrower will do all of the following:

                                (A)     Maintain its corporate existence and
                        good standing in its jurisdictions of incorporation and
                        maintain its qualification in each jurisdiction
                        necessary to Borrower's business or operations.

                                (B)     Give Lender at least ten (10) days'
                        prior written notice of changes to its name,
                        organization, chief executive office or location of
                        records.

                                (C)     Pay all its taxes including gross
                        payroll, withholding and sales taxes when due and will
                        deliver satisfactory evidence of payment if requested.

                                (D)     Provide a written report respecting any
                        Financed Receivable as part of the monthly accounting
                        required in Section 3.4 hereof (or as and when otherwise
                        directed by the Lender), if payment of any Financed
                        Receivable does not occur by its due date and include
                        the reasons for the delay.

                                (E)     Give Lender copies of all Forms 10-K,
                        10-Q and 8-K (or equivalents) within five (5) days of
                        filing with the Securities and Exchange Commission,
                        while any Financed Receivable is outstanding.

                                (F)     Execute any further instruments and take
                        further action as Lender reasonably requests to perfect
                        or continue Lender's security interest in the Collateral
                        or to effect the purposes of this Agreement.

                                (G)     Provide Lender with, as soon as
                        available, but no later than thirty (30) days following
                        each Reconciliation Period, a company prepared balance
                        sheet and income statement, prepared under GAAP,
                        consistently applied, covering Borrower's consolidated
                        operations during the period together with an aged
                        listing of Receivables

                                      -7-
<PAGE>   8

                        (but such aged listing shall only be furnished while
                        there are Financed Receivables or upon Lender's
                        request). All of the foregoing shall be in form and
                        substance satisfactory to the Lender in its sole but
                        reasonable determination.

                                (H)     Within thirty (30) days after the last
                        day of each month and within ninety (90) days after the
                        last day of each fiscal year or as otherwise directed by
                        the Lender in its sole discretion, Borrower shall
                        deliver to Lender a Compliance Certificate signed by a
                        Responsible Officer in the form of EXHIBIT "B". The
                        Borrower shall provide the Lender with all other
                        financial information reasonably requested by the Lender
                        from time to time, including, without limitation,
                        periodic deferred revenue schedules. All of the
                        foregoing shall be in form and substance satisfactory to
                        the Lender.

                                (I)     Immediately notify, transfer and deliver
                        to Lender all collections Borrower receives for Financed
                        Receivables (and, as and when required hereunder, for
                        all Receivables).

                                (J)     The Borrower shall remit all Financed
                        Receivables cash payments and remittances to the Lender
                        at least weekly (at the close of business on each
                        Friday). Notwithstanding the foregoing, upon the
                        earliest to occur of: (a) March 31, 2001 or (b) the
                        occurrence of any Event of Default, or (c) written
                        notification to the Borrower provided by the Lender (in
                        its sole and exclusive discretion), the Borrower shall
                        direct each Account Debtor to make payments with respect
                        to all Receivables to a lockbox account established with
                        the Lender ("Lockbox").

                                (K)     Borrower will allow Lender to audit
                        Borrower's Collateral, including, but not limited to,
                        Borrower's Accounts and Receivables, at Borrower's
                        expense, no later than ninety (90) days after the
                        execution of this Agreement and annually thereafter.
                        Provided, however, if an Event of Default has occurred,
                        Lender may audit Borrower's Collateral, including, but
                        not limited to, Borrower's Accounts and Receivables at
                        Lender's sole and exclusive discretion and without
                        notification and authorization from Borrower.

                                (L)     Bank shall, upon Borrower's request,
                        issue up to Five Million Dollars ($5,000,000.00) in
                        unsecured letters of credit on behalf of Borrower,
                        provided that Borrower maintains at least Ten Million
                        Dollars ($10,000,000.00) in unrestricted cash balances
                        with the Lender at all times and is otherwise in
                        compliance with this Agreement. In the event that the
                        Borrower does not, at any time maintain at least Ten
                        Million Dollars ($10,000,000.00) in unrestricted cash
                        balances with the Lender and there are outstanding
                        unsecured letters of credit, Borrower shall have the
                        options of: (a) immediately cash securing all unsecured
                        letters of credit pursuant to terms and conditions
                        acceptable to Lender; or (b) as long as no Event of
                        Default has occurred and is continuing, treating all
                        outstanding unsecured letters of credit as an Advance
                        subject to the provisions of Section 2.2 hereof.

                                (M)     Borrower shall maintain as of the last
                        day of each month unless otherwise noted:

                (1) Quick Ratio. A ratio of Quick Assets to Current Liabilities
        of at least .90 to 1.0 through June 30, 2001; and ratio of Quick Assets
        to Current Liabilities of at least 1.0 to 1.0 thereafter.

                (2) Maximum Net Loss/Minimum Net Profit. (i) quarterly Net
        Losses not to exceed (A) Nineteen Million Five Hundred Thousand Dollars
        (19,500,000.00) for the quarter ending December 31, 2000,

                                      -8-
<PAGE>   9

        (B) Seven Million Two Hundred Fifty Thousand Dollars ($7,250,000.00) for
        the quarter ending March 31, 2001, (C) Three Million Five Hundred
        Thousand Dollars ($3,500,000.00) for the quarter ending June 30, 2001;
        (D) One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) for
        the quarter ending September 30, 2001; (ii) quarterly Net Profit of at
        least One Million Dollars ($1,000,000.00) for the quarter ending
        December 31, 2001; and (iii) a quarterly Net Profit of One Dollar
        ($1.00), for each quarter thereafter.

        6.4.    NEGATIVE COVENANTS. Borrower will not do any of the following,
except as permitted in the Loan Agreement, without Lender's prior written
consent:

                                (A)     Except for dispositions of Borrower's
                        inventory in the ordinary course of business, assign,
                        transfer, sell or grant, or permit any lien or security
                        interest in the Collateral.

                                (B)     Except for the disposition of Obsolete
                        Equipment in the ordinary course of business, convey,
                        sell, lease, transfer or otherwise dispose of the
                        Collateral.

                                (C)     Create, incur, assume, or be liable for
                        any indebtedness (with the exception of trade payables
                        incurred in the normal course of business).

                                (D)     Become an "investment company" or a
                        company controlled by an "investment company," under the
                        Investment Company Act of 1940 or undertake as one of
                        its important activities extending credit to purchase or
                        carry margin stock, or use the proceeds of any Advance
                        for that purpose; fail to meet the minimum funding
                        requirements of ERISA, permit a Reportable Event or
                        Prohibited Transaction, as defined in ERISA, to occur;
                        fail to comply with the Federal Fair Labor Standards
                        Act, or violated any other law or regulation, or permit
                        any of its subsidiaries to do so.

7.      ADJUSTMENTS. If any Account Debtor asserts a discount, allowance,
return, offset, defense, warranty claim, or the like (an "Adjustment") or if
Borrower breaches any of the representations, warranties or covenants set forth
in Section 6, Borrower will promptly advise Lender. Borrower will resell any
rejected, returned, or recovered personal property for Lender, at Borrower's
expense, and pay proceeds to Lender. Lender owns the Financed Receivables and
until receipt of payment, has the right to take possession of any rejected,
returned, or recovered personal property.

8.      SECURITY INTEREST. Borrower grants to Lender a continuing security
interest in all presently and later acquired Collateral. Any security interest
will be a first priority security interest in the Collateral.

9.      EVENTS OF DEFAULT. Any one or more of the following is an Event of
Default.

                                (A)     Borrower fails to pay any amount owed to
                        Lender when due, including any obligations under a
                        certain Loan and Security Agreement of even date between
                        the Borrower and Lender;

                                (B)     Borrower files or has filed against it
                        any Insolvency Proceedings or any assignment for the
                        benefit of creditors, or appointment of a receiver or
                        custodian for any of its assets;

                                (C)     Borrower becomes insolvent or is
                        generally not paying its debts as they become due or is
                        left with unreasonably small capital;

                                      -9-
<PAGE>   10

                                (D)     (i) Any material portion of Borrower's
                        assets or any Financed Receivable is attached, seized,
                        levied on, or comes into possession of a trustee or
                        receiver and the attachment, seizure or levy is not
                        removed in ten (10) days; (ii) the service of process
                        upon the Borrower seeking to attach, by trustee or
                        similar process any funds of the Borrower on deposit
                        with the Lender; (iii) Borrower is enjoined, restrained,
                        or prevented by court order from conducting any part of
                        its business; (iv) a judgment or other claim becomes a
                        Lien on a material portion of Borrower's assets or any
                        Financed Receivable; or (v) a notice of lien, levy, or
                        assessment is filed against a material portion of
                        Borrower's assets or any Financed Receivable by any
                        government agency and not paid within ten (10) days
                        after Borrower receives notice. With the exception of
                        subsection (ii) above, these are not Events of Default
                        if stayed or if a bond is posted pending contest by
                        Borrowers (but no Advances shall be made during the cure
                        period);

                                (E)     Borrower breaches any covenant,
                        agreement, warranty, or representation and does not cure
                        it to Lender's satisfaction within ten (10) days; but a
                        breach that cannot be cured it is an immediate Event of
                        Default;

                                (F)     Borrower defaults under any agreement to
                        which Borrower is a party with a third party or parties
                        resulting in a right by such third party or parties,
                        whether or not exercised, to accelerate the maturity of
                        any Indebtedness in an amount in excess of Two Hundred
                        Thousand Dollars ($200,000.00) or that could result in a
                        material adverse change in Borrower's financial
                        condition or the Lender's perfection or priority in the
                        Financed Receivables or the Collateral;

                                (G)     An event of default occurs under any
                        guaranty of the Obligations or any material provision of
                        any guaranty is not valid or enforceable or a guaranty
                        is repudiated or terminated;

                                (H)     A material default or Event of Default
                        occurs under any agreement between Borrower and any
                        creditor of Borrower that signed a subordination
                        agreement with Lender;

                                (I)     Any creditor that has signed a
                        subordination agreement with Lender breaches any terms
                        of the subordination agreement; or

                                (J)     Any of the following occurs: (i) A
                        material impairment in the perfection or priority of the
                        Lender's security interest in the Collateral; (ii) a
                        material adverse change in the business, operations, or
                        conditions (financial or otherwise) of the Borrower; or
                        (iii) a material impairment of the prospect of repayment
                        of any portion of the Advances.

10.     REMEDIES.

        10.1.   REMEDIES UPON DEFAULT. When an Event of Default occurs, (1)
Lender may stop financing Receivables or extending credit to Borrower; (2) at
Lender's option and on demand, all or a portion of the Obligations (or, for to
an Event of Default described in Section 9(B), automatically and without demand)
are due and payable in full; (3) the Lender may apply to the Obligations any (i)
balances and deposits of Borrower it holds, or (ii) any amount held by Lender
owing to or for the credit or the account of Borrower; and (4) Lender may
exercise all rights and remedies under this Agreement and the law, including
those of a secured party under the Code, power of attorney rights in Section 5
for the Collateral, and the right to collect, dispose of, sell, lease, use, and
realize upon all Financed Receivables and Collateral in any commercially
reasonable manner. Borrower agrees that

                                      -10-
<PAGE>   11

any notice of sale required to be given to Borrower is deemed given if at least
five (5) days before the sale may be held.

        10.2.   DEMAND WAIVER. Except as expressly provided in this Agreement,
the Borrower waives demand, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of accounts, documents, instruments, chattel
paper, and guaranties held by Lender on which Borrower is liable.

        10.3.   DEFAULT RATE. While any Event of Default exists, all Advances
hereunder shall bear interest at the Applicable Rate plus five percent (5%) per
annum until the earliest of (a) payment of all Obligations in good funds or (b)
the Event of Default is cured in the sole and exclusive determination of the
Lender, or (c) entry of a final judgment when the principal amount of any money
judgment will accrue interest at the highest rate allowed by law.

11.     FEES, COSTS AND EXPENSES. The Borrower will pay on demand all fees,
costs and expenses (including attorneys' and professionals fees with costs and
expenses) that Lender incurs from: (a) preparing, negotiating, administering,
and enforcing this Agreement or related agreement, including any amendments,
waivers or consents, (b) any litigation or dispute relating to the Financed
Receivables, the Collateral, this Agreement or any other agreement, (c)
enforcing any rights against Borrower or any guarantor, or any Account Debtor,
(d) protecting or enforcing its interest in the Financed Receivables or other
Collateral, (e) collecting the Financed Receivables and the Obligations, and (f)
any bankruptcy case or insolvency proceeding involving Borrower, any Financed
Receivable, the Collateral, any Account Debtor, or any Guarantor.

12.     CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER. This Agreement shall be
construed, governed, and enforced pursuant to the laws (without regard to
conflict of law principles) of The Commonwealth of Massachusetts. Borrower and
Lender each submits to the exclusive jurisdiction of the State and Federal
courts in Suffolk County, Massachusetts.

BORROWER AND LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

13.     NOTICES.

        Notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by certified
or registered mail or sent by facsimile, as follows:

        If to any Borrower:  Visual Networks, Inc.
                             2092 Gaither Road
                             Rockville, Maryland 20850
                             Attn: Hank Deily, Director, Treasury Operations
                             FAX: (301) 296-2303

        with a copy to:      Piper Marbury Rudnick & Wolfe LLP
                             1850 Centennial Park Drive
                             Suite 610
                             Reston, Virginia 20191
                             Attention:  Nancy Spangler, Esq.
                             Telephone:  (703) 391-7100
                             Facsimile:  (703) 390-5299

                                      -11-
<PAGE>   12

        If to Lender:        Silicon Valley Bank
                             11600 Sunrise Valley Drive, Suite 400
                             Reston, Virginia 20191
                             Attn: Michael Selfridge, Senior Vice-President
                             FAX:  (703) 648-3034

        with a copy to:      Riemer & Braunstein LLP
                             Three Center Plaza
                             Boston, Massachusetts 02108
                             Attn: David A. Ephraim, Esquire
                             FAX: (617) 880-3456

        All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given (i) two (2) business days after being sent by registered or certified
mail, return receipt requested, postage prepaid, or (ii) one (1) business day
after being sent via a reputable nationwide overnight courier service
guaranteeing next business day deliver, or (iii) on the date on which it is sent
by facsimile transmission with acknowledgment of receipt at the number to which
it is required to be sent in each case to the intended recipient as set forth
above.

14.     GENERAL PROVISIONS.

        14.1.   BORROWER LIABILITY. Any Borrower may, acting singly, request
Advances hereunder. Each Borrower hereby appoints the other as agent for the
other for all purposes hereunder, including with respect to requesting Advances
hereunder. Each Borrower hereunder shall be obligated to repay all Advances made
hereunder, regardless of which Borrower actually receives said Advance, as if
each Borrower hereunder directly received all Advances. Each Borrower
acknowledges that, to the extent any other Borrower has or may have certain
rights of subrogation or reimbursement against the other for claims arising out
of this Agreement, that those rights are hereby waived.

        14.2.   SUBROGATION AND SIMILAR RIGHTS. Notwithstanding any other
provision of this Agreement or other related document, each Borrower irrevocably
waives all rights that it may have at law or in equity (including, without
limitation, any law subrogating the Borrower to the rights of Lender under the
Loan Documents) to seek contribution, indemnification or any other form of
reimbursement from any other Borrower, or any other Person now or hereafter
primarily or secondarily liable for any of the Obligations, for any payment made
by the Borrower with respect to the Obligations in connection with the Loan
Documents or otherwise and all rights that it might have to benefit from, or to
participate in, any security for the Obligations as a result of any payment made
by the Borrower with respect to the Obligations in connection with the Loan
documents or otherwise. Any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this Section shall be
null and void. If any payment is made to a Borrower in contravention of this
Section, such Borrower shall hold such payment in trust for Lender and such
payment shall be promptly delivered to Lender for application to the
Obligations, whether matured or unmatured.

        14.3.   SUCCESSORS AND ASSIGNS. This Agreement binds and is for the
benefit of successors and permitted assigns of each party. Unless pursuant to a
merger or consolidation permitted under Section 7.3 of the Loan and Security
Agreement, Borrower may not assign this Agreement or any rights under it without
Lender's prior written consent which may be granted or withheld in Lender's
discretion. Lender may, without the consent of or notice to Borrower, sell,
transfer, or grant participation in any part of Lender's obligations, rights or
benefits under this Agreement.

                                      -12-
<PAGE>   13

        14.4.   RIGHT OF SET-OFF. Borrower and any guarantor hereby grant to
Lender, a lien, security interest and right of setoff as security for all
Obligations (up to the amount of such Obligations) to Lender, whether now
existing or hereafter arising upon and against all deposits, credits, collateral
and property, now or hereafter in the possession, custody, safekeeping or
control of Lender or any entity under the control of Silicon Valley Bank or in
transit to any of them. At any time after the occurrence and during the
continuance of an Event of Default, without demand or notice, Lender may set off
the same or any part thereof and apply the same to any liability or obligation
of Borrower and any guarantor even though unmatured and regardless of the
adequacy of any other collateral securing the loan. ANY AND ALL RIGHTS TO
REQUIRE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY
GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

        14.5.   INDEMNIFICATION. Borrower will indemnify, defend and hold
harmless Lender and its officers, employees, and agents against: (a)
obligations, demands, claims, and liabilities asserted by any other party in
connection with the transactions contemplated by this Agreement; and (b) losses
or expenses incurred, or paid by Lender from or consequential to transactions
between Lender and Borrower (including reasonable attorneys fees and expenses),
except for losses caused by Lender's gross negligence or willful misconduct.

        14.6.   TIME OF ESSENCE. Time is of the essence for performance of all
obligations in this Agreement.

        14.7.   SEVERABILITY OF PROVISION. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.

        14.8.   AMENDMENTS IN WRITING, INTEGRATION. All amendments to this
Agreement must be in writing. This Agreement is the entire agreement about this
subject matter and supersedes prior negotiations or agreements.

        14.9.   COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts and when executed
and delivered are one Agreement.

        14.10.  SURVIVAL. All covenants, representations and warranties made in
this Agreement continue in force while any Financed Receivable amount remains
outstanding. Borrower's indemnification obligations survive until all statutes
of limitations for actions that may be brought against Lender have run.

        14.11.  CONFIDENTIALITY. Lender will use the same degree of care
handling Borrower's confidential information that it uses for its own
confidential information, but may disclose information; (i) to its subsidiaries
or affiliates in connection with their business with Borrower, (ii) to
prospective transferees or purchasers of any interest in the Agreement, (iii) as
required by law, regulation, subpoena, or other order, (iv) as required in
connection with an examination or audit and (v) as reasonably required to
exercise the remedies under this Agreement. Confidential information does not
include information that is either: (a) in the public domain or in Lender's
possession when disclosed, or becomes part of the public domain after disclosure
to Lender; or (b) disclosed to Lender by a third party, if Lender does not
reasonably know that the third party is prohibited from disclosing the
information. The obligation set forth in this Section 14.11 shall survive the
termination of this Agreement for a period of three (3) years from the
termination of the Facility Period.

        14.12.  OTHER AGREEMENTS. This Agreement may not adversely affect
Lender's rights under any other document or agreement. If there is a conflict
between this Agreement and any agreement between Borrower and Lender, Lender may
determine in its sole discretion which provision applies. Borrower acknowledges
that any security agreements, liens and/or security interests securing payment
of Borrower's Obligations also secure Borrower's Obligations under this
Agreement and are not adversely affected by this Agreement. Additionally, (a)
any Collateral under other agreements or documents between Borrower and Lender
secures Borrower's

                                      -13-
<PAGE>   14

Obligations under this Agreement and (b) a default by Borrower under this
Agreement is a default under agreements between Borrower and Lender.

BORROWER:

VISUAL NETWORKS, INC.

By:     /s/ Peter J. Minihane
        ------------------------
        Peter J. Minihane

Title:  Chief Financial Officer
        ------------------------

VISUAL NETWORKS OPERATIONS, INC.

By:     /s/ Peter J. Minihane
        ------------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------------

VISUAL NETWORKS INVESTMENTS, INC.

By:     /s/ Peter J. Minihane
        ------------------------
        Peter J. Minihane

Title:  Treasurer

VISUAL NETWORKS TECHNOLOGIES, INC.

By:     /s/ Peter J. Minihane
        ------------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------------

VISUAL NETWORKS OF TEXAS, L.P.
by Visual Networks Texas Operations, Inc., its
General Partner

By:     /s/ Peter J. Minihane
        ------------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------------

                                      -14-
<PAGE>   15

VISUAL NETWORKS INSURANCE, INC.

By:     /s/ Peter J. Minihane
        ------------------------
        Peter J. Minihane

Title:  Treasurer
        ------------------------

INVERSE NETWORK TECHNOLOGY

By:     /s/ Peter J. Minihane
        ------------------------
        Peter J. Minihane

Title:  President
        ------------------------

AVESTA TECHNOLOGIES, INC.

By:     /s/ Peter J. Minihane
        ------------------------
        Peter J. Minihane

Title:  President
        ------------------------

LENDER:

SILICON VALLEY BANK

By  /s/ David J. Reich
  ------------------------------------------

Title   SVP
      --------------------------------------
         (Signed in Santa Clara, California)

SILICON VALLEY BANK, doing business as
"SILICON VALLEY EAST"

By  /s/ David J. Reich
  ------------------------------------------

Title   SVP
      --------------------------------------

616741.6 (56120/293)

                                      -15-
<PAGE>   16

                                    EXHIBIT A

        The Collateral consists of all of Borrower's right, title and interest
in and to the following:

        All goods, equipment, inventory, contract rights, trademarks,
servicemarks, trade styles, trade names, patents, patent applications, leases,
license agreements, franchise agreements, general intangibles, accounts,
documents, instruments, chattel paper, cash, deposit accounts, fixtures, letters
of credit, investment property, and financial assets, whether now owned or
hereafter acquired, wherever located; and

        Any copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work, whether
published or unpublished, now owned or later acquired; any patents, trademarks,
service marks and applications therefor; any trade secret rights, including any
rights to unpatented inventions, know-how, operating manuals, license rights and
agreements and confidential information, now owned or hereafter acquired; or any
claims for damages by way of any past, present and future infringement of any of
the foregoing; and

        All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

                                      -16-
<PAGE>   17

                                   EXHIBIT "B"

                               SILICON VALLEY BANK

                               Invoice Transmittal

I, as a Responsible Officer of VISUAL NETWORKS, INC., a Delaware corporation,
("Borrower") certify under the Accounts Receivable Financing Agreement (the
"Agreement") between Borrower and Lender ("Lender") as follows.

BORROWER REPRESENTS AND WARRANTS FOR EACH FINANCED RECEIVABLE:

        To Borrower's knowledge, it is the owner with legal right to sell,
transfer and assign it;

        To Borrower's knowledge, the correct amount is on the Invoice
Transmittal and is not disputed;

        Payment is not contingent on any obligation or contract and it has
fulfilled all its obligations as of the Invoice Transmittal date;

        It is based on an actual sale and delivery of goods and/or services
rendered, due to Borrower, it is not past due or in default, has not been
previously sold, assigned, transferred, or pledged and is free of any liens,
security interests and encumbrances;

        To Borrower's knowledge, there are no defenses, offsets, counterclaims
or agreements for which the Account Debtor may claim any deduction or discount;

        Borrower reasonably believes no Account Debtor is insolvent or subject
to any Insolvency Proceedings;

        Borrower has not filed or had filed against it proceedings and does not
anticipate any filing;

        Lender has the right to endorse and/ or require Borrower to endorse all
payments received on Financed Receivables and all proceeds of Collateral.

        No representation, warranty or other statement of Borrower in any
certificate or written statement given to Lender contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statement contained in the certificates or statement not misleading.

        ADDITIONALLY, BORROWER REPRESENTS AND WARRANTS AS FOLLOWS:

        Borrower is duly existing and in good standing in its state of formation
and qualified and licensed to do business in, and in good standing in, any state
in which the conduct of its business or its ownership of property requires that
it be qualified. The execution, delivery and performance of this Agreement has
been duly authorized, and do not conflict with Borrower's formations documents,
nor constitute an Event of Default under any material agreement by which
Borrower is bound. Borrower is not in default under any material agreement to
which or by which it is bound.

        Borrower has good title to the Collateral. All inventory is in all
material respects of good and marketable quality, free from material defects.

                                      -17-
<PAGE>   18

        Borrower is not an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act. Borrower is not engaged
as one of its important activities in extending credit for margin stock (under
Regulations G, T and U of the Federal Reserve Board of Governors). Borrower has
complied with the Federal Fair Labor Standards Act. None of Borrower's
properties or assets has been used by Borrower, to the best of Borrower's
knowledge, by previous persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than legally. Borrower has timely
filed all required tax returns and paid, or made adequate provision to pay, all
taxes. Borrower has obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all government
authorities that are necessary to continue its business as currently conducted.

        All representations and warranties in the Agreement are true and correct
in all material respects on this date.

Sincerely,

----------------------------------
SIGNATURE

----------------------------------
TITLE

----------------------------------
DATE

                                      -18-
<PAGE>   19

                                    EXHIBIT C
                             COMPLIANCE CERTIFICATE

TO:     SILICON VALLEY BANK
FROM: VISUAL NETWORKS, INC.

        The undersigned Responsible Officer of VISUAL NETWORKS, INC. certifies
that under the terms and conditions of the Accounts Receivable Financing
Agreement between Borrower and Lender (the "Agreement"), (i) Borrower is in
complete compliance for the period ending _______________ with all required
covenants except as noted below and (ii) all representations and warranties in
the Agreement are true and correct in all material respects on this date.
Attached are the required documents supporting the certification. The Officer
certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) consistently applied from one period to the next
except as explained in an accompanying letter or footnotes. The Officer
acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered.

        PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.

<TABLE>
<S>                                             <C>
        REPORTING COVENANT                         REQUIRED                           COMPLIES
        ------------------                         --------                           --------

        Monthly financial statements with CC       Monthly within 30 days             Yes   No
        Annual (CPA Audited)  with CC              FYE within 90 days                 Yes   No

        FINANCIAL COVENANT                         REQUIRED                 ACTUAL         COMPLIES
        ------------------                         --------                 ------         --------
        Maintain on a Monthly Basis:

        Minimum Quick Ratio (monthly)              .90:1.0 through 6/30/01  _____:1.0      Yes   No
                                                   1.0:1.0 thereafter       _____:1.0      Yes   No

        Maximum Net Loss/Profit (quarterly):       ($*    )                 ($_________)   Yes   No
</TABLE>

        *(i) ($19,500,000.00) for the quarter ending 12/31/00;
        *(ii) ($7,250,000.00) for the quarter ending 3/31/01;
        *(iii) ($3,500,000.00) for the quarter ending 6/30/01;
        *(iv) ($1,250,000.00) for the quarter ending 9/30/01;
        *(v) $1,000,000.00 for the quarter ending 12/31/01;
        *(vi) a quarterly net profit of $1.00 thereafter.

COMMENTS REGARDING EXCEPTIONS:  See Attached, if any.

Sincerely,

-----------------------------
SIGNATURE

-----------------------------
TITLE

-----------------------------
DATE

---------------------------------------
             LENDER USE ONLY
Received by:
            -------------------------
                  AUTHORIZED SIGNER

Date:
        -----------------------------

Verified:
         ----------------------------
                  AUTHORIZED SIGNER

Date:
        -----------------------------
Compliance Status:       Yes    No
3
---------------------------------------

                                      -19-
<PAGE>   20

                            AMENDED LOCKBOX AGREEMENT

VISUAL NETWORKS, INC., a Delaware corporation ("Borrower") shall hold all
payments on, and proceeds of, Receivables in trust for Lender ("Silicon"), and
Borrower shall immediately deliver all such payments and proceeds to Silicon in
their original form, duly endorsed in blank, to be applied to the Obligations in
such order as Silicon shall determine.

Borrower hereby agrees to accept a change in the disposition of its lockbox
#___________ proceeds from the current account #______________ to the Silicon
Cash Collateral Account #_______________ beginning immediately. We understand
that Silicon may, in its discretion, require that all proceeds of Collateral be
deposited by Borrower into a lockbox account, or such other "blocked account" as
Silicon may specify, pursuant to a blocked account agreement in such form as
Silicon may specify. Silicon or its designee may, at any time, notify Account
Debtors that Receivables have been assigned to Silicon.

DATED:

AGREED TO AND ACKNOWLEDGED BY:

Borrower:

        VISUAL NETWORKS, INC.

        By
          --------------------------------------
          President or Vice President

        By
          --------------------------------------
          Secretary or Ass't Secretary

Lender:

        SILICON VALLEY BANK

        By
          --------------------------------------

        Title
             -----------------------------------
             (Signed in Santa Clara, California)

        SILICON VALLEY BANK, doing
        business as "SILICON VALLEY EAST"

        By
          --------------------------------------

        Title
             -----------------------------------

616741.6 (56120/293)

                                      -20-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}]]