<PAGE> 1
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD OR OFFERED FOR SALE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
COMPUTER MOTION, INC.
PROMISSORY NOTE
$1,500,000 July 25, 2000
Goleta, California
FOR VALUE RECEIVED, Computer Motion, Inc., a Delaware corporation
("Company"), promises to pay to Robert Duggan (the "Holder"), the principal sum
of $1,500,000 together with interest from the date of this Note on the unpaid
principal balance at a rate equal to the Prime Rate, defined as appearing in the
Wall Street Journal or any other regularly published source selected by the
Company) per annum (the "Prime Rate"). The Prime Rate shall be determined on the
last day of each calendar month for use in calculating the interest which
accrues for the succeeding calendar month. All unpaid principal, together with
the balance of unpaid and accrued interest and other amounts payable hereunder,
shall be due and payable on demand.
The following is a statement of the rights of the Holder and the conditions to
which this Note is subject, and to which the Holder hereof, by the acceptance of
this Note, agrees
1. Default. The Company will be deemed to be in default hereunder and the unpaid
principal balance of this Note, together with all accrued interest thereon,
will become immediately due and payable on any default under this Note or the
Agreement, including without limitation, any breach of the covenants and
undertakings of the Company thereunder.
2. Successors and Assigns. The rights and obligations of Company and the Holder
of this Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties.
3. Waiver and Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of Company and the Holder.
4. Notices. Any notice, approval, request, authorization, direction or other
communication under this Note shall be given in writing and shall be deemed
to have been delivered and given for all purposes (i) on the delivery date if
delivered personally to the party to whom the same is directed or transmitted
by facsimile with confirmation of receipt, (ii) one (1) business day after
deposit with a commercial overnight carrier, with written verification of
receipt, or (iii) five (5) business days after the mailing date, whether or
not actually received, if sent by U.S. mail, return receipt requested,
postage and charges prepaid, at the address of the party set forth on the
signature page of the Agreement (or at such other address as may be
communicated to the notifying party in writing).
5. Payment. Payment shall be made in lawful tender of the United States.
<PAGE> 2
6. Expenses. Proceeds of the note are subject to a .4% origination fee ($6,000)
on the original loan. If action is instituted to collect this Note, Company
promises to pay all costs and expenses, including, without limitation,
reasonable attorneys' fees and costs, incurred in connection with such
action.
7. Governing Law. This Note and all actions arising out of or in connection with
this Note shall be governed by and construed in accordance with the laws of
the State of California, without regard to the conflicts of law provisions of
the State of California or of any other state.
8. Miscellaneous.
(a) The Company hereby waives presentment, demand, protest, notice of
dishonor, diligence and all other notices, any release or discharge
arising from any extension of time, discharge of a prior party, release
of any or all of any security given from time to time for this Note, or
other cause of release or discharge other than actual payment in full
hereof.
(b) The Holder shall not be deemed, by any act or omission, to have waived
any of its rights or remedies hereunder unless such waiver is in writing
and signed by the Holder and then only to the extent specifically set
forth in such writing. A waiver with reference to one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy
as to a subsequent event. No delay or omission of the Holder to exercise
any right, whether before or after a default hereunder, shall impair any
such right or shall be construed to be a waiver of any right or default,
and the acceptance at any time by the Holder of any past-due amount shall
not be deemed to be a waiver of the right to require prompt payment when
due of any other amounts then or thereafter due and payable.
(c) Time is of the essence hereof. Upon any default hereunder, the Holder may
exercise all rights and remedies provided for herein and by law or
equity, including, but not limited to, the right to immediate payment in
full of this Note.
(d) The remedies of the Holder as provided herein, or any one or more of
them, or in law or in equity, shall be cumulative and concurrent, and may
be pursued singularly, successively or together at the Holder sole
discretion, and may be exercised as often as occasion therefor shall
occur.
(e) The Company and the Holder intend to contract in compliance with all
state and federal usury laws governing this Note. The Company and the
Holder agree that none of the terms of the Agreement or this Note shall
be construed as a contract for, or requirement to pay interest at a rate
in excess of, the maximum interest rate allowed by any applicable state
or federal usury laws. If the Holder receives sums which constitute
interest that would otherwise increase the effective interest rate on the
Note to a rate in excess of that permitted by any applicable law, then
all such sums constituting interest in excess of the maximum lawful rate
shall, at Holder's option, either be credited to the payment of principal
or returned to the Company.
IN WITNESS WHEREOF, Company has caused this Note to be issued as of the
date first written above.
COMPUTER MOTION, INC.,
a Delaware Corporation
By: /s/ GORDON ROGERS
--------------------------------
Gordon Rogers,
Chief Financial Officer
2
