Exhibit 10.35

 

[g108271kgimage002.gif]

SILICON VALLEY BANK

SPECIALTY FINANCE DIVISION

 

 

ACCOUNTS RECEIVABLE FINANCING AGREEMENT

 

This ACCOUNTS RECEIVABLE FINANCING AGREEMENT (the “Agreement”), dated as of June
30, 2003 is between Silicon Valley Bank, Specialty Finance Division of (“Bank”),
and INTERWAVE COMMUNICATIONS, INC., a Delaware corporation, (“Borrower”), whose
address is 2495 Leghorn, Mountain View, California  94043 and with a FAX number
of 650-967-1293.

 

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 Debtor” is defined in the California Uniform Commercial Code and shall
include 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.

 

“Administrative Fee” is defined in Section 3.3.

 

“Advance” is defined in Section 2.2.

 

“Advance Rate” is 80%, net of deferred revenue and offsets related to each
specific Account Debtor, or another percentage as Bank establishes under Section
2.2.

 

“Applicable Rate” is 1% per month.

 

“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 California Uniform Commercial Code.

 

“Collateral” is attached as Exhibit “A”.

 

“Collateral Handling Fee” is defined in Section 3.5.

 

“Collections” are all funds received by Bank from or on behalf of an Account
Debtor for Financed Receivables.

 

“Compliance Certificate” is attached as Exhibit “B”.

 

 “Deferred Maintenance Revenue” is all amounts received in advance of
performance under maintenance contract and not yet recognized as revenue.

 

“Early Termination Fee” is defined in Section 3.6.

 

1

--------------------------------------------------------------------------------

 

“Event of Default” is defined in Section 9.

 

“Facility” is an extension of credit by Bank to Borrower in order to finance
receivables with aggregate Advances not exceeding the Facility Amount.

 

“Facility Amount” is $1,000,000, provided that the total outstanding Advances
under this Agreement and the Exim Agreement (as defined in Section 2A. below)
may not exceed $1,000,000.

 

“Facility Fee” is defined in Section 3.4.

 

“Facility Period” is the period beginning on this date and continuing until one
year from the date of this Agreement, unless the period is terminated sooner by
Bank with notice to Borrower or by Borrower under Section 3.6.

 

“Finance Charges” is defined in Section 3.2.

 

“Financed 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 (collectively “receivables”), which Bank finances and make an
Advance.  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.

 

“Good Faith Deposit” is described in Section 3.9.

 

“Ineligible Receivable” is any accounts 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.

 

“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 relief.

 

“Invoice Transmittal” shows accounts receivable which Bank 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.

 

“Lockbox” is described in Section 6.2.

 

“Minimum Finance Charge” is $1,000 per month, combined under this Agreement and
the Exim Agreement.

 

“Obligations” are all advances, liabilities, obligations, covenants and duties
owing, arising, due or payable by Borrower to Bank 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, Administrative Fees, interest, fees, expenses, professional
fees and attorneys’ fees or other.

 

“Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not
Bank’s lowest rate.

 

“Reconciliation Day” is the last calendar day of each month.

 

2

--------------------------------------------------------------------------------

 

“Reconciliation Period” is each calendar month.

 

2.               Financing of Accounts Receivable.

 

2.1. Request for Advances.  During the Facility Period, Borrower may offer
accounts receivable to Bank, if there is not an Event of Default.  Borrower will
deliver an Invoice Transmittal for each accounts receivable it offers.  Bank may
rely on information on or with the Invoice Transmittal.

 

2.2. Acceptance of Accounts Receivable.  Bank is not obligated to finance any
accounts receivable.  Bank may approve any Account Debtor’s credit before
financing any receivable.  When Bank accepts a receivable, it will pay Borrower
the Advance Rate times the face amount of the receivable (the “Advance”).  Bank
may, in its discretion, change the percentage of the Advance Rate.  When Bank
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 Advances
outstanding at any time may not exceed the Facility Amount.

 

2A.  Exim Agreement; Cross-Collateralization; Cross-Default.  Bank and the
Borrower are parties to that certain Accounts Receivable Financing Agreement
(Exim Facility) of even date (the “Exim Agreement”).  Both this Agreement and
the Exim Agreement shall continue in full force and effect, and all rights and
remedies under this Agreement and the Exim Agreement are cumulative.  The term
“Obligations” as used in this Agreement and in the Exim Agreement shall include
without limitation the obligation to pay when due all Advances made pursuant to
this Agreement (the “Non-Exim Advances”) and all Finance Charges and interest
thereon and the obligation to pay when due all Advances made pursuant to the
Exim Agreement (the “Exim Advances”) and all Finance Charges and interest
thereon.  Without limiting the generality of the foregoing, all “Collateral” as
defined in this Agreement and as defined in the Exim Agreement shall secure all
Exim Advances and all Non-Exim Advances and all Finance Charges and interest
thereon, and all other Obligations.  Any Event of Default under this Agreement
shall also constitute an Event of Default under the Exim Agreement, and any
Event of Default under the Exim Agreement shall also constitute an Event of
Default under this Agreement.  In the event Bank assigns its rights under the
Exim Agreement and/or its rights under this Agreement, to any third party,
including without limitation the Export-Import Bank of the United States (“Exim
Bank”), whether before or after the occurrence of any Event of Default, Bank
shall have the right (but not any obligation), in its sole discretion, to
allocate and apportion Collateral to the Agreement assigned and to specify the
priorities of the respective security interests in such Collateral between
itself and the assignee, all without notice to or consent of the Borrower. In
the event Borrower terminates this Agreement, any such termination shall also
constitute a termination of the Exim Agreement, and all such terminations be
subject to the other provisions of this Agreement and the Exim Agreement.

 

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 Bank’s discretion, be charged as an Advance, and shall
thereafter accrue fees and Finance Charges as described below.  Bank may, in its
discretion, charge fee and Finance Charges to Borrower’s deposit account
maintained with Bank.

 

3.1. Collections. Collections will be credited to the Financed Receivables
Balance, but if there is an Event of Default, Bank may apply Collections to the
Obligation in any order it chooses.   If Bank receives a payment for both
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 3.10.

 

3.2. Finance Charges. In computing Finance Charges on the Obligations, all
Collections received by Bank shall be deemed applied by Bank on account of the
Obligations Three Business Days after receipt of the Collections.  Borrower will
pay a monthly finance charge (the “Finance Charge”), which is equal to the
Applicable Rate times the number of days in the Reconciliation Period times the
outstanding average daily Financed Receivable Balance for that Reconciliation
Period, provided that the total Finance Charge each month under this Agreement
and the Exim Agreement shall not be less than the Minimum Finance Charge. After
an Event of Default, Obligations accrue interest at 5 percent above the
Applicable Rate effective immediately before the Event of Default.

 

3

--------------------------------------------------------------------------------

 

3.3.  Administrative Fee.   Not applicable.

 

3.4. Facility Fee. A fully earned, non-refundable total facility fee of $15,000
combined for this Agreement and the Exim Agreement, reduced by any fees payable
to Exim Bank under Section 2A of the Exim Agreement.

 

3.5. Collateral Handling Fee. On each Reconciliation Day, Borrower will pay to
Bank a collateral handling fee, equal to 0.50% per month of the average daily
Financed Receivable Balance outstanding during the applicable Reconciliation
Period. After an Event of Default, the Collateral Handling Fee will increase an
additional 0.50% effective immediately before the Event of Default.

 

3.6. Early Termination Fee. Not applicable.

 

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

 

3.8.  Deductions.  Bank may deduct fees, finance charges and other amounts due
from any Advances made or Collections received by Bank.

 

3.9.  Good Faith Deposit.  Borrower has paid to Bank a Good Faith Deposit of
$7,000 to initiate Banks due diligence review process.  Any portion of the
deposit not utilized to pay expenses will be applied to the Facility Fee.

 

3.10. Account Collection Services.  All Borrowers’ receivables are to be paid to
the same address/or party and Borrower and Bank must agree on such address.  If
Bank 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 five (5)
days of receipt of those collections, Bank will give Borrower, the receivables
collections it receives for receivables other than Financed Receivables and/or
amount in excess of the amount for which Bank has made an Advance to Borrower,
less any amount due to Bank, such as the Finance Charge, Administrative Fee,
Collateral Handling Fee and expenses or otherwise. This Section does not impose
any affirmative duty on Bank to do any act other than to turn over amounts.  All
receivables and collections are Collateral and if an Event of Default occurs,
Bank 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 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 Bank demands (or, in an Event of Default under Section 9(B),
immediately without notice or demand from Bank) repay all of the Advances.  The
demand may, at Bank’s option, include the Advance for each Financed Receivable
then outstanding and all accrued Finance Charges, Administrative Fees, attorneys
and professional fees, court costs and expenses, and any other Obligations.

 

5.               Power of Attorney.  Borrower irrevocably appoints Bank and its
successors and assigns it attorney-in-fact and authorizes Bank, regardless of
whether there has been an Event of Default, to:

 

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

 

(B)        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 Bank’s or Borrower’s name, as Bank chooses:

 

4

--------------------------------------------------------------------------------

 

(C)        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 Bank directly;

 

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

 

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

 

(G)        execute on Borrower’s behalf any instruments, documents, financing
statements to perfect Bank’s interests in the Financed Receivables and
Collateral; and

 

(H)       do all acts and things necessary or expedient.

 

6.     Representations, Warranties and Covenants.

 

6.1. Representations and Warranties.  Borrower represents and warrants for each
Financed Receivable:

 

(A)      It 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;

 

(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;

 

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

 

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

 

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

 

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

 

(I)            No representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank 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.

 

6.1.1 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 execution, delivery and performance of this
Agreement has been duly authorized, and does not conflict with Borrower’s
organizational documents, nor 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.

 

(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 G, T and U of the Federal Reserve Board of

 

5

--------------------------------------------------------------------------------

 

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.

 

6.2. 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 Bank at least written notice of changes to its name,
organization, chief executive office or location of records, within 15 days
after the date such change occurs.

 

(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 within 10 days, if payment of any Financed
Receivable does not occur by its due date and include the reasons for the delay.

 

(E)         Unless the same are publicly available, give Bank copies of all
Forms 10-K, 10-Q and 8-K (or equivalents) within 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 Bank
requests to perfect or continue Bank’s security interest in the Collateral or to
effect the purposes of this Agreement.

 

(G)        Provide Bank with a Compliance Certificate no later than 30 days
following the end of each month, or as requested by Bank.

 

(H)       Provide Bank with, as soon as available, but no later than 30 days
following each Reconciliation Period, a company prepared balance sheet and
income statement, prepared under GAAP, consistently applied, covering Borrower’s
operations during the period together with a deferred revenue report, and as
soon as available, but no later than 20 days following each Reconciliation
Period an aged listing of accounts receivable and accounts payable.

 

(I)            Immediately notify, transfer and deliver to Bank all collections
Borrower receives for Financed Receivables.

 

(J)           Borrower will remit all payment’s for Accounts to the Bank by the
close of business on each Friday along with a detailed cash receipts journal and
shall immediately notify and direct all of the Borrower’s Account Debtor’s to
make all payment’s for Borrower’s Accounts to a lockbox account established with
the Bank (“Lockbox”) or to wire transfer payments to a cash collateral account
that Bank controls. It will be considered an immediate Event of Default if the
Lockbox is not set-up and operational within 45 days from the date of this
Agreement.

 

(K)       Borrower will allow Bank to audit Borrower’s Collateral, including but
not limited to Borrower’s Accounts, at Borrowers expense, at such times as Bank
shall determine in its good faith business judgment.

 

(L)         Borrower shall, at all times, maintain its primary operating and
investment accounts with Bank, and without limiting the generality of the
foregoing, Borrower shall at all times maintain not less than 85% of Borrower’
total cash, cash equivalents, deposit accounts and investment accounts with
Bank.

 

6.3. Negative Covenants.  Borrower will not do any of the following without
Bank’s prior written consent:

 

6

--------------------------------------------------------------------------------

 

(A)      Assign, transfer, sell or grant, or permit any lien or security
interest in the Collateral.

 

(B)        Convey, sell, lease, transfer or otherwise dispose of the Collateral.

 

(C)        Create, incur, assume, or be liable for any indebtedness.

 

(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 violate 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 Bank.  Borrower will resell any
rejected, returned, returned, or recovered personal property for Bank, at
Borrower’s expense, and pay proceeds to Bank.  While Borrower has returned goods
that are Borrower property, Borrower will segregate and mark them “property of
Silicon Valley Bank.”  Bank 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 Bank 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 Bank when due;

 

(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, provided that, in the case of an involuntary
bankruptcy proceeding filed against Borrower, the same shall not constitute an
Event of Default if it is dismissed within 30 days after the date it was filed;

 

(C)        Borrower becomes insolvent or is generally not paying its debts as
they become due;

 

(D)       Any involuntary lien, garnishment, attachment attaches to the Financed
Receivables or any Collateral;

 

(E)         Borrower breaches any covenant, agreement, warranty, or
representation is an immediate Event of Default;

 

(F)         Borrower is in default under any document, instrument or agreement
evidencing any debt, obligation or liability in favor of Bank its affiliates or
vendors regardless of whether the debt, obligation or liability is direct or
indirect, primary or secondary, or fixed or contingent;

 

(G)        [intentionally omitted];

 

(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 Bank;

 

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

 

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

 

7

--------------------------------------------------------------------------------

 

10.   Remedies.

 

10.1. Remedies Upon Default.  When an Event of Default occurs, (1) Bank may stop
financing receivables or extending credit to Borrower;  (2) at Banks 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) apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower; and (4) Bank 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 commercial manner.  Borrower agrees that any notice of
sale required to be given to Borrower is deemed given if at least five days
before the sale may be held.

 

10.2. Demand Waiver.  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 Bank on which Borrower is
liable.

 

10.3. Default Rate.  If any amount is not paid when due, the amount bears
interest at the Applicable Rate plus five percent until the earlier of (a)
payment in good funds or (b) 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 Bank 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, or any Account Debtor.

 

12.   Choice of Law, Venue and Jury Trial Waiver.  California law governs this
Agreement.  Borrower and Bank each submit to the exclusive jurisdiction of the
State and Federal courts in Santa Clara County, California.

 

BORROWER 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 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 or demands by either party about this Agreement must be
in writing and personally delivered or sent by an overnight delivery service, by
certified mail postage prepaid return receipt requested, or by FAX to the
addresses listed at the beginning of this Agreement.  A party may change notice
address by written notice to the other party.

 

14.   General Provisions.

 

14.1.  Successors and Assigns.  This Agreement binds and is for the benefit of
successors and permitted assigns of each party.  Borrower may not assign this
Agreement or any rights under it without Bank’s prior written consent which may
be granted or withheld in Bank’s discretion.  Bank may, without the consent of
or notice to Borrower, sell, transfer, or grant participation in any part of
Bank’s obligations, rights or benefits under this Agreement.

 

14.2.  Indemnification.  Borrower will indemnify, defend and hold harmless Bank
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 Bank from or consequential to transactions between Bank and
Borrower (including reasonable attorneys fees and expenses), except for losses
caused by Bank’s gross negligence or willful misconduct.

 

14.3.  Time of Essence.  Time is of the essence for performance of all
obligations in this Agreement.

 

8

--------------------------------------------------------------------------------

 

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

 

14.5. 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.

 

14.6. 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.

 

14.7. 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 Bank have run.

 

14.8. Confidentiality.  Bank 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 it considers appropriate exercising the remedies
under this Agreement.  Confidential information does not include information
that is either: (a) in the public domain or in Bank’s possession when disclosed,
or becomes part of the public domain after disclosure to Bank; or (b) disclosed
to Bank by a third party, if Bank does not know that the third party is
prohibited from disclosing the information.

 

14.9. Other Agreements.  This Agreement may not adversely affect Banks rights
under any other document or agreement.  If there is a conflict between this
Agreement and any agreement between Borrower and Bank, Bank 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 Bank secures
Borrowers Obligations under this Agreement and (b) a default by Borrower under
this Agreement is a default under agreements between Borrower and Bank.

 

BORROWER:        INTERWAVE COMMUNICATIONS, INC.

 

 

By

/s/ Cal R. Hoagland

 

 

Title

 SVP and CFO

 

 

 

 

 

 

BANK: SILICON VALLEY BANK

 

 

 

 

 

By

/s/ Illegible

 

 

Title

 VP

 

 

 

9

--------------------------------------------------------------------------------

 

EXHIBIT A

 

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

 

All goods and equipment now owned or hereafter acquired, including, without
limitation, all machinery, fixtures, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

 

All inventory, now owned or hereafter acquired, including, without limitation,
all merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products including such inventory as is temporarily
out of Borrower’s custody or possession or in transit and including any returns
upon any accounts or other proceeds, including insurance proceeds, resulting
from the sale or disposition of any of the foregoing and any documents of title
representing any of the above;

 

All contract rights and general intangibles now owned or hereafter acquired,
including, without limitation, goodwill, trademarks, service marks, trade
styles, trade names, patents, patent applications, leases, license agreements,
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, infringements, claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs, design rights, income tax refunds,
payments of insurance and rights to payment of any kind;

 

All now existing and hereafter arising accounts, contract rights, royalties,
license rights and all other forms of obligations owing to Borrower arising out
of the sale or lease of goods, the licensing of technology or the rendering of
services by Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower;

 

All documents, cash, deposit accounts, securities, securities entitlements,
securities accounts, investment property, financial assets, letters of credit,
certificates of deposit, instruments and chattel paper now owned or hereafter
acquired and Borrower’s Books relating to the foregoing;

 

All copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; all trade secret
rights, including all rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired; all claims
for damages by way of any past, present and future infringement of any of the
foregoing;

 

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 and
accessions to and proceeds thereof.

 

1

--------------------------------------------------------------------------------

 

Exhibit “B”

 

[g108271kgimage004.gif]

SILICON VALLEY BANK

SPECIALTY FINANCE DIVISION

 

Compliance Certificate

 

I, as authorized officer of INTERWAVE COMMUNICATIONS, INC. (“Borrower”) certify
under the Accounts Receivable Financing Agreement (the “Agreement”) between
Borrower and Silicon Valley Bank (“Bank”) as follows.

 

Borrower represents and warrants for each Financed Receivable:

 

It is the owner with legal right to sell, transfer and assign it;

 

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;

 

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

 

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

 

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

 

Bank 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 Bank 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 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.

 

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.  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.

 

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

 

Sincerely,

 

 

 

SIGNATURE

 

 

 

TITLE

 

 

 

DATE

 

2

--------------------------------------------------------------------------------