Unassociated Document


    
      AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT

       

      THIS AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this “Agreement”) dated as of the
Effective Date among SILICON
VALLEY BANK, a California corporation (“Bank”), AIRSPAN NETWORKS INC., a
corporation formed under the laws of the State of Washington (“US Borrower”), and AIRSPAN COMMUNICATIONS
LIMITED, a company registered under the laws of England and Wales under
company number 03501881 (“UK
Borrower”; US Borrower and UK Borrower hereinafter referred to
individually and collectively, jointly and severally, as “Borrower”), provides the terms
on which Bank shall lend to Borrower and Borrower shall repay
Bank.  The parties agree as follows:

       

      Recitals.

       

      A.           Bank
and Borrower have entered into that certain Loan and Security Agreement dated as
of August 1, 2006 (as amended from time to time, the “Prior Loan
Agreement”).

       

      B.           Borrower
is currently in default of the Loan Agreement for failing to comply with the
financial covenant set forth in Section 6.9(a) (Tangible Net Worth) of the Loan
Agreement for the fiscal quarter ending December 31, 2008 (the “Existing
Default”).

       

      C.           Borrower
has requested, and Bank has agreed, to waive the Existing Default and
replace, amend and restate the Prior Loan Agreement in its
entirety.  Bank and Borrower hereby agree that the Prior Loan
Agreement is amended and restated in its entirety as follows:

       

      1.           ACCOUNTING AND OTHER
TERMS

       

      Accounting
terms not defined in this Agreement shall be construed following
GAAP.  Calculations and determinations must be made following
GAAP.  Capitalized terms not otherwise defined in this Agreement shall
have the meanings set forth in Section 13.  All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning
provided by the Code to the extent such terms are defined therein.

       

      2.           LOAN AND TERMS OF
PAYMENT

       

      2.1.        Promise to
Pay.  Borrower hereby unconditionally promises to pay Bank the
outstanding principal amount of all Credit Extensions and accrued and unpaid
interest thereon as and when due in accordance with this Agreement.

       

      2.1.1.     Revolving
Advances.

       

      (a)           Availability.  Subject
to the terms and conditions of this Agreement, Bank will make Advances to
Borrower up to the Availability Amount.

       

      (b)           Termination;
Repayment.  The Revolving Line terminates on the Revolving Line
Maturity Date, when the principal amount of all Advances, the unpaid interest
thereon, and all other Obligations relating to the Revolving Line shall be
immediately due and payable.


      
        
           


        

        
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      2.1.2.     Letters
of Credit Sublimit

       

      (a)           As
part of the Revolving Line, Bank shall issue or have issued Letters of Credit
for Borrower’s account.  The face amount of outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve) may not exceed the lesser of (i) Five Million Dollars
($5,000,000) minus the FX Reserve or (ii) the Availability
Amount.  Such aggregate amounts utilized hereunder shall at all times
reduce the amount otherwise available for Advances under the Revolving
Line.  If, on the Revolving Line Maturity Date, there are any
outstanding Letters of Credit, then on such date Borrower shall provide to Bank
cash collateral in an amount equal to one hundred percent (100%) of the face
amount of all such Letters of Credit, to secure all of the Obligations relating
to said Letters of Credit and pay all interest, fees, costs and expenses
incurred by Bank in connection therewith.  All Letters of Credit shall
be in form and substance acceptable to Bank in its sole discretion and shall be
subject to the terms and conditions of Bank’s standard Application and Letter of
Credit Agreement (the “Letter
of Credit Application”).  Borrower agrees to execute any
further documentation in connection with the Letters of Credit as Bank may
reasonably request.  Prior to or simultaneously with the opening of
each Letter of Credit, Borrower shall pay to Bank a letter of credit fee in an
amount equal to one percent (1.0%) per annum of the face amount of the Letter of
Credit.

       

      (b)           The
obligation of Borrower to immediately reimburse Bank for drawings made under
Letters of Credit shall be absolute, unconditional, and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement, such
Letters of Credit, and the Letter of Credit Application.

       

      (c)           Borrower
may request that Bank issue a Letter of Credit payable in a Foreign
Currency.  If a demand for payment is made under any such Letter of
Credit, Bank shall treat such demand as an Advance to Borrower of the equivalent
of the amount thereof (plus fees and charges in connection therewith such as
wire, cable, SWIFT or similar charges) in Dollars at the then-prevailing rate of
exchange in San Francisco, California, for sales of the Foreign Currency for
transfer to the country issuing such Foreign Currency.

       

      (d)           To
guard against fluctuations in currency exchange rates, upon the issuance of any
Letter of Credit payable in a Foreign Currency, Bank shall create a reserve (the
“Letter of Credit
Reserve”) under the Revolving Line in an amount equal to ten percent
(10%) of the face amount of such Letter of Credit.  The amount of the
Letter of Credit Reserve may be adjusted by Bank from time to time to account
for fluctuations in the exchange rate; provided, however, that Bank shall give
Borrower at least five (5) Business Days prior written notice of any adjustment
to the Letter of Credit Reserve requirement which would require the Letter of
Credit Reserve to exceed (10%) of the face amount of a Letter of
Credit.  The availability of funds under the Revolving Line shall be
reduced by the amount of such Letter of Credit Reserve for as long as such
Letter of Credit remains outstanding.


      
        
           


        

        
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      2.1.3.     Foreign Exchange
Sublimit.  As part of the Revolving Line, Borrower may enter
into foreign exchange contracts with Bank under which Borrower commits to
purchase from or sell to Bank a specific amount of Foreign Currency (each, a
“FX Forward Contract”)
on a specified date (the “Settlement
Date”).  FX Forward Contracts shall have a Settlement Date of
at least one (1) FX Business Day after the contract date and shall be subject to
a reserve of ten percent (10%) of each outstanding FX Forward Contract in a
maximum aggregate amount equal to the lesser of (i) Five Million Dollars
($5,000,000), minus the face amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit), and minus an amount equal
to all Letter of Credit Reserves combined or (ii) the Availability Amount (the
“FX
Reserve”).  The aggregate amount of FX Forward Contracts at any
one time may not exceed ten (10) times the amount of the FX
Reserve.

       

      2.1.4.     Cash Management Services
Sublimit.  Borrower may use up to the lesser of (i) One Million
Dollars ($1,000,000) or (ii) the Availability Amount (the “Cash Management Services
Sublimit”) of the Revolving Line for Bank’s cash management services
which may include merchant services, direct deposit of payroll, business credit
card, and check cashing services identified in Bank’s various cash management
services agreements (collectively, the “Cash Management
Services”).  Any amounts Bank pays on behalf of Borrower or any
amounts that are not paid by Borrower for any Cash Management Services will be
treated as Advances under the Revolving Line and will accrue interest at the
interest rate applicable to Advances.

       

      2.2.        Overadvances.  If at
any time or for any reason the total of all outstanding Advances and all other
monetary Obligations exceeds the Availability Amount (an “Overadvance”), Borrower shall
pay the amount of the excess to Bank, without notice or demand, within two (2)
Business Days after the occurrence of such Overadvance.  Without
limiting Borrower’s obligation to repay to Bank the amount of any Overadvance,
Borrower agrees to pay Bank interest on the outstanding amount of any
Overadvance that has been outstanding for more than three (3) Business Days, on
demand, at the Default Rate.

       

      2.3.        Payment of Interest on the Credit
Extensions.

       

      (a)           Interest Rate; Advances.  Subject
to Section 2.3(b), the amounts outstanding under the Revolving Line (which, for
purposes of clarification, do not include the FX Reserve or any undrawn Letters
of Credit or Letter of Credit Reserves) shall accrue interest at a per annum
rate equal to the greater of (i) the Prime Rate plus four percentage points (4%)
or (ii) eight percent (8%).

       

      (b)           Default Rate.
Immediately upon the occurrence and during the continuance of an Event of
Default, Obligations shall bear interest at a rate per annum which is three percentage points (3%)
above the rate effective immediately before the Event of Default (the “Default
Rate”).  Payment or acceptance of the increased interest rate
provided in this Section 2.3(b) is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Bank.


      
        
           


        

        
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      (c)           Adjustment to Interest
Rate.  Changes to the interest rate of any Credit Extension
based on changes to the Prime Rate shall be effective on the effective date of
any change to the Prime Rate and to the extent of any such change.

       

      (d)           360-Day
Year.  Interest shall be computed on the basis of a 360-day
year for the actual number of days elapsed.

       

      (e)           Debit of
Accounts.  Bank may debit any of Borrower’s deposit accounts,
including the Designated Deposit Account, for principal and interest payments or
any other amounts Borrower owes Bank when due.  These debits shall not
constitute a set-off.

       

      (f)           Payment; Interest
Computation; Float Charge.  Interest is payable monthly on the
last calendar day of each month.  In computing interest on the
Obligations, all payments received after 3:00 p.m. Eastern time on any day shall
be deemed received on the next Business Day.  Bank shall be entitled
to charge Borrower a “float” charge in an amount equal to two (2) Business Days
interest, at the interest rate applicable to the Advances, on all payments
received by Bank.  The float charge for each month shall be payable on
the last day of the month.  Bank shall not, however, be required to
credit Borrower's account for the amount of any item of payment which is
unsatisfactory to Bank in its good faith business judgment, and Bank may charge
Borrower's Designated Deposit Account for the amount of any item of payment
which is returned to Bank unpaid.

       

      2.4.        Fees.  Borrower
shall pay to Bank:

       

      (a)           Extension
Fee.  A fully earned, non-refundable extension fee of Twenty
Two Thousand Five Hundred Dollars ($22,500) which shall be paid on the Effective
Date;

       

      (b)           Letter of Credit
Fee.  Bank’s customary fees and expenses for the issuance or
renewal of Letters of Credit, upon the issuance or renewal of such Letter of
Credit by Bank, provided that the Letter of Credit fee shall in no event exceed
the one (1) percent fee referenced in Section 2.1.2(a) hereof;

       

      (c)           Termination
Fee.  A termination fee as provided under Section 4.1
hereof;

       

      (d)           Collateral Monitoring
Fee.  A monthly collateral monitoring fee of One Thousand Two
Hundred Fifty Dollars ($1,250), payable in arrears on the last day of each month
(prorated for any partial month with respect to the Effective Date or the
termination of this Agreement, whether by acceleration of the obligations
following an Event of Default by the Borrower under Section 4.1 below, or on the
Revolving Line Maturity Date);

       

      (e)           Bank
Expenses.  All Bank Expenses (including reasonable attorneys’
fees and expenses, plus expenses, for documentation and negotiation of this
Agreement) incurred through and after the Effective Date, when due;
and

       

      (f)           Restructuring
Fee.  A fully earned, non-refundable extension fee of Twenty
Thousand Dollars ($20,000) which shall be paid on the Effective
Date.

       

      
        
          
          

        

        
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      3.           CONDITIONS OF
LOANS

       

      3.1.        Conditions Precedent to Initial
Advance.  Bank’s obligation to make the initial Advance is
subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, such documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate, including,
without limitation:

       

      (a)           Borrower
shall have delivered duly executed original signatures to this
Agreement;

       

      (b)           Borrower
shall have delivered its Operating Documents and a good standing certificate of
US Borrower certified by the Secretary of State of the State of
Washington  as of a date no earlier than thirty (30) days prior to the
Effective Date;

       

      (c)           Bank
shall have received certified copies, dated as of a recent date, of financing
statement searches, as Bank shall reasonably request, accompanied by written
evidence (including any UCC termination statements) that the Liens indicated in
any such financing statements either constitute Permitted Liens or have been or,
in connection with the initial Advance, will be terminated or
released;

       

      (d)           Borrower
shall have delivered evidence satisfactory to Bank that the insurance policies
required by Section 6.7 hereof are in full force and effect, together with
appropriate evidence showing loss payable and/or additional insured clauses or
endorsements in favor of Bank; and

       

      (e)           Borrower
shall have paid the fees and Bank Expenses then due as specified in Section 2.4
hereof.

       

      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)           except
as otherwise provided in Section 3.4, timely receipt of an executed
Payment/Advance Form;

       

      (b)           the
representations and warranties in Section 5 shall be true in all material
respects on the date of the Payment/Advance Form and on each Funding Date;
provided, however, that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, and no
Default or Event of Default shall have occurred and be continuing or result from
the Credit Extension.  Each Credit Extension is Borrower’s
representation and warranty on that date that the representations and warranties
in Section 5 remain true in all material respects; provided, however, that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date; and

       

      (c)           in
Bank’s sole discretion, there has not been a Material Adverse
Change.


      
        
           


        

        
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      3.3.        Covenant to
Deliver.  Borrower agrees to deliver to Bank each item required
to be delivered to Bank under this Agreement as a condition to any Credit
Extension.  Borrower expressly agrees that the extension of a Credit
Extension prior to the receipt by Bank of any such item shall not constitute a
waiver by Bank of Borrower’s obligation to deliver such item, and any such
extension in the absence of a required item shall be in Bank’s sole
discretion.

       

      3.4.        Procedures for
Borrowing.  Subject to the prior satisfaction of all other
applicable conditions to the making of an Advance set forth in this Agreement,
to obtain an Advance, Borrower shall notify Bank (which notice shall be
irrevocable) by electronic mail, facsimile, or telephone by 3:00 p.m. Eastern
time on the Funding Date of the Advance.  Together with such
notification, Borrower must promptly deliver to Bank by electronic mail or
facsimile a completed Transaction Report executed by a Responsible Officer or
his or her designee.  Bank shall credit Advances to the Designated
Deposit Account.  Bank may make Advances under this Agreement based on
instructions from a Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations which have become
due.  Bank may rely on any telephone notice given by a person whom
Bank believes is a Responsible Officer or designee.

       

      4.           CREATION OF SECURITY
INTEREST

       

      4.1.        Grant of Security Interest;
Termination of Agreement and
Security Interest; Termination Fee.  US Borrower hereby grants
Bank, to secure the payment and performance in full of all of the Obligations, a
continuing security interest in, and pledges to Bank, the Collateral, wherever
located, whether now owned or hereafter acquired or arising, and all proceeds
and products thereof.  US Borrower represents, warrants, and covenants
that the security interest granted herein is and shall at all times continue to
be a first priority perfected security interest in the Collateral (subject only
to Permitted Liens that may have superior priority to Bank’s Lien under this
Agreement).  If US Borrower shall acquire a commercial tort claim, US
Borrower shall promptly notify Bank in a writing signed by Borrower of the
general details thereof and grant to 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 reasonably satisfactory to
Bank.

       

      This
Agreement may be terminated prior to the Revolving Line Maturity Date by
Borrower, effective three (3) Business Days after written notice of termination
is given to Bank or if Bank’s obligation to fund Credit Extensions terminates
pursuant to the terms of Section 2.1.1(b).  Notwithstanding any such
termination, Bank’s lien and security interest in the Collateral shall continue
until US Borrower fully satisfies its Obligations.  If this Agreement
is terminated prior to the Revolving Line Maturity Date at Borrower’s election
or at Bank’s election due to the occurrence and continuance of an Event of
Default, US Borrower shall pay to Bank, in addition to the payment of any other
expenses or fees then-owing, a termination fee in an amount equal to one percent
(1.0%) of the Revolving Line; provided, however, that no termination fee shall
be charged if the credit facility hereunder terminates on the Revolving Line
Maturity Date or is replaced with a new facility from Silicon Valley Bank or
another division thereof.  Upon payment in full of the Obligations and
at such time as Bank’s obligation to make Credit Extensions has terminated, Bank
shall release its liens and security interests in the Collateral and all rights
therein shall revert to US Borrower.


      
        
           


        

        
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      4.2.        Authorization to File Financing
Statements.  US Borrower hereby authorizes Bank to file
financing statements, without notice to US Borrower, with all appropriate
jurisdictions to perfect or protect Bank’s interest or rights hereunder,
including a notice that any disposition of the Collateral, by either Borrower or
any other Person, shall be deemed to violate the rights of Bank under the
Code.

       

      5.           REPRESENTATIONS AND
WARRANTIES

       

      Borrower
represents and warrants as follows:

       

      5.1.        Due Organization and
Authorization.  US Borrower is duly existing and in good
standing as a Registered Organization only in the State of Washington and UK
Borrower is a private limited company duly incorporated and validly existing
under the laws of England and Wales, and each is qualified and licensed to do
business and is in good standing in any jurisdiction in which the conduct of
their business or their ownership of property requires that they be qualified
except where the failure to do so could not reasonably be expected to have a
material adverse effect on Borrower’s business.  In connection with
this Agreement, US Borrower has delivered to Bank a completed certificate
substantially in the form attached hereto as Exhibit C signed by US
Borrower, entitled “Perfection Certificate”.  US Borrower represents
and warrants to Bank that (a) US Borrower’s exact legal name is that indicated
on the Perfection Certificate and on the signature page hereof; (b) US
Borrower is an organization of the type and is organized in the jurisdiction set
forth in the Perfection Certificate; (c) the Perfection Certificate accurately
sets forth US Borrower’s organizational identification number or accurately
states that Borrower has none; (d) the Perfection Certificate accurately sets
forth US Borrower’s place of business, or, if more than one, its chief executive
office as well as US Borrower’s mailing address (if different than its chief
executive office); (e) US Borrower (and each of its predecessors) has not,
in the past five (5) years, changed its state of formation, organizational
structure or type, or any organizational number assigned by its jurisdiction;
and (f) all other information set forth on the Perfection Certificate pertaining
to US Borrower and each of its Subsidiaries is accurate and
complete.  If US Borrower is not now a Registered Organization but
later becomes one, Borrower shall promptly notify Bank of such occurrence and
provide Bank with US Borrower’s organizational identification
number.

       

      The
execution, delivery and performance of the Loan Documents have been duly
authorized, and do 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 it is
a party or by which it is bound in which the default could reasonably be
expected to have a material adverse effect on Borrower’s business.

       

      5.2.        Collateral.  US
Borrower has good title to the Collateral, free of Liens except Permitted
Liens.  Borrower has no deposit account other than the deposit
accounts with Bank.

       

      The
Collateral is not in the possession of any third party bailee (such as a
warehouse).  Except as hereafter disclosed to Bank in writing by US
Borrower, none of the components of the Collateral shall be maintained at
locations other than as provided in the Perfection Certificate.  In
the event that US Borrower, after the date hereof, intends to store or otherwise
deliver any portion of the Collateral to a bailee, then US Borrower will first
receive the written consent of Bank and such bailee must acknowledge in writing
that the bailee is holding such Collateral for the benefit of
Bank.


      
        
           


        

        
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      All Net
Inventory is in all material respects of good and marketable quality, free from
material defects.

       

      Borrower
is the sole owner of its 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 to the best of Borrower’s knowledge, no claim has been made that any
part of the Intellectual Property violates the rights of any third party except
to the extent such claim could not reasonably be expected to have a material
adverse effect on Borrower’s business.

       

      Except as
noted on the Perfection Certificate, US Borrower is not a party to, nor is bound
by, any license or other agreement with respect to which Borrower is the
licensee that prohibits or otherwise restricts Borrower from granting a security
interest in Borrower’s interest in such license or agreement or any other
property.  Borrower shall provide written notice to Bank within ten
(10) days of entering or becoming bound by any such license or agreement which
is reasonably likely to have a material impact on Borrower’s business or
financial condition (other than over-the-counter software that is commercially
available to the public).  Borrower shall take such steps as Bank
requests to obtain the consent of, or waiver by, any person whose consent or
waiver is necessary for all 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 (such consent or authorization may include a licensor’s agreement to a
contingent assignment of the license to Bank if Bank determines that is
necessary in its good faith judgment), whether now existing or entered into in
the future.

       

      5.3.        Accounts
Receivable.

       

      (a)           For
each Account with respect to which Advances are requested, on the date each
Advance is requested and made, such Account shall be an Eligible
Account.

       

      (b)           All
statements made and all unpaid balances appearing in all invoices, instruments
and other documents evidencing the Accounts are and shall be true and correct
and all such invoices, instruments and other documents, and all of Borrower's
Books are genuine and in all respects what they purport to be.  All
sales and other transactions underlying or giving rise to each Account shall
comply in all material respects with all applicable laws and governmental rules
and regulations.  Borrower has no knowledge of any actual or imminent
Insolvency Proceeding of any Account Debtor whose accounts are an Eligible
Account in any Transaction Report.  To the best of Borrower’s
knowledge, all signatures and endorsements on all documents, instruments, and
agreements relating to all Accounts are genuine, and all such documents,
instruments and agreements are legally enforceable in accordance with their
terms.

       

      5.4.        Litigation.  Except
as disclosed on the Perfection Certification, there are no actions or
proceedings pending or, to the knowledge of the Responsible Officers, threatened
in writing by or against Borrower or any of its Subsidiaries involving more than
Two Hundred Fifty Thousand Dollars ($250,000).


      
        
           


        

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

       

      5.6.        Solvency.  The fair
salable value of Borrower’s assets (including goodwill minus disposition costs)
exceeds the fair value of its liabilities; Borrower is not left with
unreasonably small capital after the transactions in this Agreement; and
Borrower is able to pay its debts (including trade debts) as they
mature.

       

      5.7.        Regulatory
Compliance.  US Borrower is not an “investment company” or a
company “controlled” by an “investment company” under the Investment Company
Act.  US 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).  US Borrower has complied in all material
respects with the Federal Fair Labor Standards Act.  Borrower has not
violated any laws, ordinances or rules, the violation of which could reasonably
be expected to have a material adverse effect on its business.  None
of Borrower’s or any of its Subsidiaries’ properties or assets has been used by
Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous
Persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than legally.  Borrower and each of its
Subsidiaries have 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 their respective business as
currently conducted.

       

      5.8.        Subsidiaries;
Investments.  Borrower does not own any stock, partnership
interest or other equity securities except for Permitted
Investments.

       

      5.9.        Tax Returns and Payments; Pension
Contributions.  Borrower has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state,
governmental and local taxes, assessments, deposits and contributions owed by
Borrower.  Borrower may defer payment of any contested taxes, provided
that Borrower (a) in good faith contests its obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, (b)
notifies Bank in writing of the commencement of, and any material development
in, the proceedings, (c) posts bonds or takes any other steps required to
prevent the governmental authority levying such contested taxes from obtaining a
Lien upon any of the Collateral that is other than a “Permitted
Lien”.  Borrower is unaware of any claims or adjustments proposed for
any of Borrower's prior tax years which could result in additional taxes
becoming due and payable by Borrower.  Borrower has paid all amounts
necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not withdrawn from
participation in, and has not permitted partial or complete termination of, or
permitted the occurrence of any other event with respect to, any such plan which
could reasonably be expected to result in any liability of Borrower, including
any liability to the Pension Benefit Guaranty Corporation or its successors or
any other governmental agency in any part of the world.


      
        
           


        

        
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      5.10.      Use of
Proceeds.  Borrower shall use the proceeds of the Credit
Extensions solely as working capital, and to fund its general business
requirements and not for personal, family, household or agricultural
purposes.

       

      5.11.      Full Disclosure.  No
written representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank, as of the date such
representation, warranty, or other statement was made, taken together with all
such written 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 (it being recognized by Bank that the projections and forecasts
provided by Borrower in good faith and based upon reasonable assumptions are not
viewed as facts and that actual results during the period or periods covered by
such projections and forecasts may differ from the projected or forecasted
results).

       

      6.           AFFIRMATIVE
COVENANTS

       

      Borrower
shall do all of the following:

       

      6.1.        Government
Compliance.  Borrower shall maintain its legal existence and
good standing in its jurisdiction of formation and each jurisdiction in which
the nature of its business requires them to be so qualified, except where the
failure to take such action would not reasonably be expected to have a material
adverse effect on Borrower’s business or operations, taken as a whole; provided, that
Borrower may not permit its qualification to do business in the jurisdiction of
its chief executive office to terminate or lapse; and provided, further, that this
Section 6.1 shall not be construed to prohibit any other transaction that is
otherwise permitted in Section 7 of this Agreement.

       

      Borrower
shall comply with all laws, ordinances and regulations to which it is subject,
noncompliance with which could have a material adverse effect on Borrower’s
business.

       

      6.2.        Financial Statements, Reports,
Certificates.  Borrower shall provide Bank with the
following:

       

      (a)           a
Transaction Report weekly and upon delivery of each request for an
Advance;

       

      (b)           within
thirty (30) days after the end of each month, deliver to Bank (A) monthly
accounts receivable agings, aged by invoice date, (B) monthly accounts payable
agings, aged by invoice date, and (C) monthly reconciliations of accounts
receivable agings (aged by invoice date), including (i) KKS receivable aging and
extended term reporting, and general ledger and (ii) Datatell receivable aging
and extended term reporting, and general ledger;

       

      (c)           as
soon as available, and in any event within thirty (30) days after the end of
each month (other than January), monthly unaudited financial statements on a
consolidated and consolidating basis;


      
        
           


        

        
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      (d)           within
thirty (30) days after the end of each month (other than January) a monthly
Compliance Certificate signed by a Responsible Officer, certifying that as of
the end of such month, Borrower was in full compliance with all of the terms and
conditions of this Agreement, and setting forth calculations showing compliance
with the financial covenants set forth in this Agreement and such other
information as Bank shall reasonably request, including, without limitation, a
statement that at the end of such month there were no held checks;

       

      (e)           no
later than thirty (30) days prior to the end of each fiscal year of Borrower,
(A) annual operating budgets (including income statements, balance sheets and
cash flow statements, by month) for the upcoming fiscal year of Borrower, and
(B) annual financial projections for the following fiscal year (on a quarterly
basis) as approved by Borrower’s board of directors, together with any related
business forecasts used in the preparation of such annual financial
projections;

       

      (f)           as
soon as available, and in any event within one hundred eighty (180) days
following the end of Borrower's fiscal year, annual financial statements
certified by, and with an unqualified opinion (other than a qualification with
respect to going concern) of, independent certified public accountants
acceptable to Bank (for clarification, Grant Thornton LLP is deemed by Bank to
be acceptable);

       

      (g)           as
soon as available, but no later than five (5) days after filing with the
Securities Exchange Commission, the US Borrower’s 10K, 10Q, and 8K reports
together with a Compliance Certificate;

       

      (h)           a
prompt report of any legal actions pending or threatened against Borrower or any
Subsidiary that could result in damages or costs to Borrower or any Subsidiary
of Two Hundred Fifty Thousand Dollars ($250,000) or more;

       

      (i)           prompt
written notice of (i) any material change in the composition of the Intellectual
Property, (ii) the registration of any Copyright, including any subsequent
ownership right of Borrower in or to any Copyright, Patent or Trademark not
shown in the IP Security Agreement, or (iii) Borrower’s knowledge of an
event that materially adversely affects the value of the Intellectual
Property.

       

      Borrower’s
10K, 10Q, and 8K reports required to be delivered pursuant to Section 6.2(g)
shall be deemed to have been delivered on the date on which Borrower posts such
report or provides a link thereto on Borrower’s or another website on the
Internet; provided, that
Borrower shall provide paper copies to Bank of the Compliance Certificates
required by Section 6.2(g).

      


      6.3.        Accounts
Receivable.

       

      (a)           Schedules and Documents
Relating to Accounts.
Borrower shall deliver to Bank transaction reports and schedules of
collections, as provided in Section 6.2, on Bank’s standard forms; provided,
however, that Borrower’s failure to execute and deliver the same shall not
affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor
shall Bank’s failure to advance or lend against a specific Account affect or
limit Bank’s Lien and other rights therein.  If requested by Bank,
Borrower shall furnish Bank with copies (or, at Bank’s request, originals to the
extent necessary or desirable to create or perfect Bank’s Lien on Collateral) of
all contracts, orders, invoices, and other similar documents, and all shipping
instructions, delivery receipts, bills of lading, and other evidence of
delivery, for any goods the sale or disposition of which gave rise to such
Accounts.  In addition, Borrower shall deliver to Bank, on its
request, copies (or, at Bank’s request, originals to the extent necessary or
desirable to create or perfect Bank’s Lien on Collateral) of all instruments,
chattel paper, security agreements, guarantees and other documents and property
evidencing or securing any Accounts, in the same form as received, with all
necessary indorsements, and copies of all credit memos.


      
        
           


        

        
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      (b)           Disputes.  Borrower
shall promptly notify Bank of all disputes or claims relating to Accounts to the
extent such disputes or claims involve amounts in excess $250,000 individually
or in the aggregate outstanding at any time.  Borrower may forgive
(completely or partially), compromise, or settle any Account for less than
payment in full, or agree to do any of the foregoing so long as
(i) Borrower does so in good faith, in a commercially reasonable manner, in
the ordinary course of business, in arm’s-length transactions, and reports the
same to Bank in the regular reports provided to Bank; (ii) no Default or
Event of Default has occurred and is continuing; and (iii) after taking
into account all such discounts, settlements and forgiveness, the total
outstanding Advances will not exceed the Availability Amount.

       

      (c)           Collection of
Accounts.  Borrower shall have the right to collect all
Accounts unless and until a Default or an Event of Default has occurred and is
continuing.  Whether or not an Event of Default has occurred and is
continuing, Borrower shall hold all payments on, and proceeds of, Accounts in
trust for Bank, and Borrower shall immediately deliver all such payments and
proceeds to Bank in their original form, duly endorsed, to be applied to the
Obligations pursuant to the terms of Section 9.4 hereof.  Bank may, in
its good faith business judgment, require that all proceeds of Domestic Accounts
be deposited by US Borrower into a lockbox account, or such other “blocked
account” as Bank may specify, pursuant to a blocked account agreement in such
form as Bank may specify in its good faith business judgment, and Bank shall
apply any proceeds in such lockbox account to the balance of the outstanding
Obligations.  Upon the occurrence and during the continuance of an
Event of Default, (i) Bank shall apply any proceeds in such lockbox account to
the balance of the outstanding Obligations and (ii) UK Borrower shall deposit
all proceeds of Foreign Accounts into a lockbox account with the Royal Bank of
Scotland or another bank or financial institution satisfactory to Bank (the
“UK Lockbox”) pursuant
to a blocked account agreement in such form as Bank may specify in its good
faith business judgment.  It will be considered an immediate Event of
Default if the UK Lockbox is not set-up and operational on April 15,
2009.

       

      (d)           Returns.  Provided no
Event of Default has occurred and is continuing, if any Account Debtor returns
any Inventory to Borrower, Borrower shall promptly (i) determine the reason
for such return, (ii) issue a credit memorandum to the Account Debtor in
the appropriate amount, and (iii) provide a copy of such credit memorandum
to Bank, upon request from Bank.  In the event any attempted return
occurs after the occurrence and during the continuance of any Event of Default,
Borrower shall hold the returned Inventory in trust for Bank, and promptly
notify Bank of the return of the Inventory.

       

      (e)           Verification.  Bank may, from
time to time, verify directly with the respective Account Debtors the validity,
amount and other matters relating to the Accounts, either in the name of
Borrower or Bank or such other name as Bank may choose.


      
        
           


        

        
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      (f)           No Liability.  Bank shall not
be responsible or liable for any shortage or discrepancy in, damage to, or loss
or destruction of, any goods, the sale or other disposition of which gives rise
to an Account, or for any error, act, omission, or delay of any kind occurring
in the settlement, failure to settle, collection or failure to collect any
Account, or for settling any Account in good faith for less than the full amount
thereof, nor shall Bank be deemed to be responsible for any of Borrower's
obligations under any contract or agreement giving rise to an
Account.  Nothing herein shall, however, relieve Bank from liability
for its own gross negligence or willful misconduct.

       

      6.4.        Remittance of
Proceeds.  Except as otherwise provided in Section 6.3(c),
deliver, in kind, all proceeds arising from the disposition of any Collateral to
Bank in the original form in which received by Borrower not later than five (5)
Business Days after receipt by Borrower, to be applied to the Obligations
pursuant to the terms of Section 9.4 hereof; provided that, if no Default or
Event of Default has occurred and is continuing, Borrower shall not be obligated
to remit to Bank the proceeds of the sale of worn out or obsolete Equipment
disposed of by Borrower in good faith in an arm’s length transaction for an
aggregate purchase price of Two Hundred Fifty Thousand Dollars ($250,000) or
less (for all such transactions in any fiscal year).  Borrower agrees
that it will not commingle proceeds of Collateral with any of Borrower’s other
funds or property, but will hold such proceeds separate and apart from such
other funds and property and in an express trust for Bank.  Nothing in
this Section limits the restrictions on disposition of Collateral set forth
elsewhere in this Agreement.

       

      6.5.        Taxes;
Pensions.  Timely file all required tax returns and reports and
timely pay all foreign, federal, state, governmental and local taxes,
assessments, deposits and contributions owed by Borrower except for deferred
payment of any taxes contested pursuant to the terms of Section 5.9 hereof, and
pay all amounts necessary to fund all present pension, profit sharing and
deferred compensation plans in accordance with their terms.

       

      6.6.        Access to Collateral; Books and
Records.  So long as an Event of Default has not occurred and
is continuing, Bank, or its agents, shall have the right to inspect the
Collateral and the right to audit and copy Borrower’s Books at reasonable times
not more than four (4) times per fiscal year, on three (3) Business Days’ notice
(provided that no such advance notice shall be required after the occurrence and
during the continuance of an Event of Default); provided, however, that after
the closing of a Subsequent Financing in which Borrower receives, in the
aggregate, at least Twenty Million Dollars ($20,000,000) of net proceeds
(excluding any bridge debt financing except to the extent actually converted to
equity in Borrower) and so long as no Event of Default has occurred and is
continuing, then Bank, or its agents, shall have the right to inspect the
Collateral and the right to audit and copy Borrower’s Books only two (2) times
per year (rather than four (4)), at reasonable times on five (5) Business Days’
notice (provided that no such advance notice shall be required after the
occurrence and during the continuance of an Event of Default).  The
foregoing inspections and audits shall be at Borrower’s expense, and the charge
therefor shall be $750 per person per day (or, during the continuance of an
Event of Default, such higher amount as shall represent Bank’s then-current
standard charge for the same), plus reasonable out-of-pocket
expenses.  In the event Borrower and Bank schedule an audit more than
ten (10) days in advance, and Borrower cancels or seeks to reschedules the audit
with less than ten (10) days written notice to Bank, then (without limiting any
of Bank’s rights or remedies), Borrower shall pay Bank a fee of $1,000 plus any
out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated
costs and expenses of the cancellation or rescheduling.  Borrower
hereby acknowledges that the first such audit will be conducted within sixty
(60) days after the execution of this Agreement.


      
        
           


        

        
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      6.7.        Insurance.  Keep its
business and the Collateral insured for risks and in amounts standard for
companies in Borrower’s industry and location and as Bank may reasonably
request.  Insurance policies shall be in a form, with companies, and
in amounts that are satisfactory to Bank.  All property policies shall
have a lender’s loss payable endorsement showing Bank as the sole lender loss
payee and waive subrogation against Bank, and all liability policies shall show,
or have endorsements showing, Bank as an additional insured.  All
policies (or the loss payable and additional insured endorsements) shall provide
that the insurer must give Bank at least twenty (20) days notice before
canceling, amending, or declining to renew its policy.  At Bank’s
request, Borrower 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.  If Borrower
fails to obtain insurance as required under this Section 6.7 or to pay any
amount or furnish any required proof of payment to third persons and Bank, Bank
may make all or part of such payment or obtain such insurance policies required
in this Section 6.7, and take any action under the policies Bank deems
prudent.

       

      6.8.        Operating
Accounts.

       

      (a)           Maintain
(i) all of its primary depository and investment accounts in the United States
with Bank or Bank’s Affiliates, (ii) unrestricted cash and Investments of not
less than seventy-five percent (75%) of the aggregate consolidated unrestricted
cash and Investments of Borrower and its Subsidiaries, and (iii) from and after
April 15, 2009, its primary depository and investment accounts in the United
Kingdom with Royal Bank of Scotland or such other institution as Bank agrees to
in writing.

       

      (b)           Provide
Bank five (5) days prior written notice before establishing any Collateral
Account at or with any bank or financial institution other than Bank or its
Affiliates.  In addition, for each Collateral Account that Borrower at
any time maintains, Borrower shall cause the applicable bank or financial
institution (other than Bank) at or with which any Collateral Account is
maintained (but in each case only to the extent such bank or financial
institution is located in the United States) to execute and deliver a Control
Agreement or other appropriate instrument with respect to such Collateral
Account to perfect Bank’s Lien in such Collateral Account in accordance with the
terms hereunder.  The provisions of the previous sentence shall not
apply to deposit accounts exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of Borrower’s employees
and identified to Bank by Borrower as such.

       

      6.9.        Financial
Covenants.  Borrower shall maintain at all times, to be tested
as of the last day of each quarter, unless otherwise noted, on a consolidated
basis with respect to US Borrower and UK Borrower:


      
        
           


        

        
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      (a)           Tangible Net
Worth.  A Tangible Net Worth of not less than the sum of (i)
fifty percent (50%) of quarterly Net Income after the Second Supplemental
Closing Date (but not to be decreased by fifty percent (50%) of quarterly
consolidated net loss, if any), (ii) fifty percent (50%) of the proceeds
received by Borrower from the sale of US Borrower’s capital stock after the
Second Supplemental Closing Date (other than pursuant to the Borrower’s Employee
Stock Purchase Plan or Borrower’s existing stock option plans), (iii) fifty
percent (50%) of the principal amount of Subordinated Debt incurred by Borrower
after the Second Supplemental Closing Date, plus an amount equal to (A) for the
fiscal quarter ending June 30, 2008 and as of the last day of each fiscal
quarter thereafter through the fiscal quarter ending December 31, 2008, at least
Thirty Million Dollars ($30,000,000), (B) for the fiscal quarter ending March
31, 2009, at least Eighteen Million Dollars ($18,000,000), (C) for the fiscal
quarter ending June 30, 2009, at least Fourteen Million Dollars ($14,000,000),
(D) for the fiscal quarter ending September 30, 2009, at least Thirteen Million
Dollars ($13,000,000), and (E) for the fiscal quarter ending December 31, 2009
and as of the last day of each fiscal quarter thereafter, at least Twelve
Million Dollars ($12,000,000); and

       

      (b)           Minimum Adjusted Quick
Ratio.  An Adjusted Quick Ratio of at least 1.00 to 1.00 as of
the last day of each month.

       

      6.10.      Protection and Registration of
Intellectual Property Rights.  Borrower shall:  (a)
protect, defend and maintain the validity and enforceability of its intellectual
property; (b) promptly advise Bank in writing of material infringements of its
intellectual property; and (c) not allow any intellectual property material to
Borrower’s business to be abandoned, forfeited or dedicated to the public
without Bank’s written consent.  If Borrower decides to register any
copyrights or mask works in the United States Copyright Office, Borrower shall:
(x) provide Bank with at least fifteen (15) days prior written notice of its
intent to register such copyrights or mask works together with a copy of the
application it intends to file with the United States Copyright Office
(excluding exhibits thereto); (y) execute an intellectual property security
agreement or such other documents as Bank may reasonably request to maintain the
perfection and priority of Bank’s security interest in the copyrights or mask
works intended to be registered with the United States Copyright Office; and (z)
record such intellectual property security agreement with the United States
Copyright Office contemporaneously with filing the copyright or mask work
application(s) with the United States Copyright Office.  Borrower
shall promptly provide to Bank a copy of the application(s) filed with the
United States Copyright Office together with evidence of the recording of the
intellectual property security agreement necessary for Bank to maintain the
perfection and priority of its security interest in such copyrights or mask
works.  Borrower shall provide written notice to Bank of any
application filed by Borrower in the United States Patent and Trademark Office
for a patent or to register a trademark or service mark within 30 days after any
such filing.

       

      6.11.      Litigation
Cooperation.  From the date hereof and continuing through the
termination of this Agreement, make available to Bank, without expense to Bank,
Borrower and its officers, employees and agents and Borrower's books and
records, to the extent that Bank may deem them reasonably necessary to prosecute
or defend any third-party suit or proceeding instituted by or against Bank with
respect to any Collateral or relating to Borrower.

       

      6.12.      Further
Assurances.  Borrower shall execute any further instruments and
take further action as Bank reasonably requests to perfect or continue Bank’s
Lien in the Collateral or to effect the purposes of this Agreement.

       

      
        
          
             


          

          
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      6.13.      Foreign Exchange
Business.  Borrower shall allow Bank to bid on all of
Borrower’s foreign exchange contracts

       

      7.           NEGATIVE
COVENANTS

       

      Borrower
shall not do any of the following without Bank’s prior written
consent:

       

      7.1.        Dispositions.  Convey,
sell, lease, transfer or otherwise dispose of (collectively “Transfer”) all or any part of
its business or property, except for: (i) of Inventory in the ordinary
course of business; (ii) of worn-out or obsolete Equipment; (iii) excess
Inventory in connection with that certain Purchase Contract dated April 14,
2005, as amended, between Borrower and Yozan, Inc., provided that the aggregate
sales price of such excess Inventory does not exceed $2,000,000; (iv) other
excess Inventory not included in Section 7.1(iii) above provided that the
aggregate sales price (calculated at book value) of such other excess Inventory
does not exceed $250,000; (v) dispositions in connection with Permitted Liens
and Permitted Investments; (vi) of non-exclusive licenses for the use of
the property of Borrower in the ordinary course of business; (vii) Transfers to
another Borrower; and (viii) Transfers to any Subsidiaries of Borrower not to
exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate in any
calendar year.

       

      7.2.        Changes in Business, Legal Name or
Jurisdiction of Formation.  (a) Engage in any material line of
business other than those lines of business conducted by Borrower on the date
hereof and any businesses reasonably related, complementary or incidental
thereto or reasonable extensions thereof, or (b) liquidate or
dissolve.  Borrower shall not, without at least thirty (30) days prior
written notice to Bank: (1) add any new offices or business locations,
including warehouses (unless such new offices or business locations contain less
than One Hundred Thousand Dollars ($100,000) in Borrower’s assets or property),
(2) change its jurisdiction of organization, (3) change its organizational
structure or type, (4) change its legal name, or (5) change any
organizational number (if any) assigned by its jurisdiction of
organization.

       

      7.3.        Mergers or
Acquisitions.  Merge or consolidate with any other Person, or
acquire, all or substantially all of the capital stock or property of another
Person.

       

      7.4.        Indebtedness.  Create,
incur, assume, or be liable for any Indebtedness other than Permitted
Indebtedness.

       

      7.5.        Encumbrance.  Create,
incur, or allow any Lien on any of the Collateral, or assign or convey any right
to receive income, including the sale of any Accounts, except for Permitted
Liens, permit any Collateral not to be subject to the first priority security
interest granted herein.

       

      7.6.        Maintenance of Collateral
Accounts.  Maintain any Collateral Account except pursuant to
the terms of Section 6.8(b) hereof.

       

      7.7.        Investments;
Distributions.  (a) Directly or indirectly acquire or own any
Person, or make any Investment in any Person, other than Permitted Investments,
or (b) pay any dividends or make any distribution or payment or redeem, retire
or purchase any capital stock other than Permitted
Distributions.


      
        
           


        

        
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      7.8.        Transactions with
Affiliates.  Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower except for
transactions that are in the ordinary course of Borrower’s business, upon fair
and reasonable terms (when viewed in the context of any series of transactions
of which it may be a part, if applicable) that are no less favorable to Borrower
than would be obtained in an arm’s length transaction with a non-affiliated
Person.

       

      7.9.        Subordinated
Debt.  Make or permit any payment on or amendments of any
Subordinated Debt, except as permitted under the terms of the applicable
Subordination Agreement.

       

      7.10.      Compliance.  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 (as defined in
Regulation U of the Board of Governors of the Federal Reserve System), or use
the proceeds of any Credit Extension 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 reasonably be expected to have a material adverse effect on Borrower’s
business; withdraw from participation in, permit partial or complete termination
of, or permit the occurrence of any other event with respect to, any present
pension, profit sharing and deferred compensation plan which could reasonably be
expected to result in any liability of Borrower, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other governmental
agency.

       

      8.           EVENTS OF
DEFAULT

       

      Any one
of the following shall constitute an event of default (an “Event of Default”) under this
Agreement:

       

      8.1.        Payment
Default.  Borrower fails to (a) make any payment of
principal or interest on any Credit Extension on its due date, or (b) pay
any other Obligations within three (3) Business Days after such Obligations are
due and payable.  During the cure period, the failure to cure the
payment default is not an Event of Default (but no Credit Extension will be made
during the cure period);

       

      8.2.        Covenant
Default.

       

      (a)           Borrower
fails or neglects to perform any obligation in Section 6.2, 6.8, 6.9, or
violates any covenant in Section 7; or

       

      (b)           Borrower
fails or neglects to perform, keep, or observe any other term, provision,
condition, covenant or agreement contained in this Agreement, any Loan
Documents, and as to any default (other than those specified in this Section 8)
under such other term, provision, condition, covenant or agreement that can be
cured, has failed to cure the default within ten (10) days after the occurrence
thereof; provided, however, that if the default cannot by its nature be cured
within the ten (10) day period or cannot after diligent attempts by Borrower be
cured within such ten (10) day period, and such default is likely to be cured
within a reasonable time, then Borrower shall have an additional period (which
shall not in any case exceed thirty (30) days) to attempt to cure such default,
and within such reasonable time period the failure to cure the default shall not
be deemed an Event of Default (but no Credit Extensions shall be made during
such cure period).  Grace periods provided under this section shall
not apply, among other things, to financial covenants or any other covenants set
forth in subsection (a) above;


      
        
           


        

        
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      8.3.        Material Adverse
Change.  A Material Adverse Change occurs;

       

      8.4.        Attachment.  (a) Any
material portion of Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver or similar officer and the attachment,
seizure or levy is not removed in ten (10) days; (b) the service of process
upon Bank seeking to attach, by trustee or similar process, any funds of
Borrower, or of any entity under control of Borrower (including a Subsidiary) on
deposit with Bank; (c) Borrower is enjoined, restrained, or prevented by court
order from conducting a material part of its business; (d) a judgment or other
claim in excess of Two Hundred Fifty Thousand Dollars ($250,000) becomes a Lien
on any of Borrower’s assets; or (e) a notice of lien, levy, or assessment is
filed against any of Borrower’s assets by any government agency and not paid
within ten (10) days after Borrower receives notice.  These are not
Events of Default if stayed or if a bond is posted pending contest by Borrower
(but no Credit Extensions shall be made during the cure period);

       

      8.5.        Insolvency.  Borrower
is unable to pay its debts (including trade debts) as they become due or
otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or
(c) an Insolvency Proceeding is begun against Borrower and not dismissed or
stayed within thirty (30) days in the case of the US Borrower or fourteen (14)
days in the case of the UK Borrower (but no Credit Extensions shall be made
while of any of the conditions described in clause (a) exist and/or until any
Insolvency Proceeding is dismissed);

       

      8.6.        Other
Agreements.  If Borrower fails to (a) make any payment that is
due and payable with respect to any Material Indebtedness and such failure
continues after the applicable grace or notice period, if any, specified in the
agreement or instrument relating thereto, or (b) perform or observe any
other condition or covenant, or any other event shall occur or condition exist
under any agreement or instrument relating to any Material Indebtedness, and
such failure continues after the applicable grace or notice period, if any,
specified in the agreement or instrument relating thereto and the effect of such
failure, event or condition is to cause the holder or holders of such Material
Indebtedness to accelerate the maturity of such Material Indebtedness or cause
the mandatory repurchase of any Material Indebtedness;

       

      8.7.        Judgments.  A
judgment or judgments for the payment of money in an amount, individually or in
the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000) (not
covered by independent third-party insurance) shall be rendered against Borrower
and shall remain unsatisfied and unstayed for a period of ten (10) days after
the entry thereof (provided that no Credit Extensions will be made prior to the
satisfaction or stay of such judgment);


      
        
           


        

        
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      8.8.        Misrepresentations.  Borrower
or any Person acting for Borrower makes any representation, warranty, or other
statement now or later in this Agreement, any Loan Document or in any writing
delivered to Bank or to induce Bank to enter this Agreement or any Loan
Document, and such representation, warranty, or other statement is incorrect in
any material respect when made; or

       

      8.9.        Subordinated
Debt.  A default or breach occurs under any agreement between
Borrower and any creditor of Borrower that signed a subordination,
intercreditor, or other similar agreement with Bank, or any creditor that has
signed such an agreement with Bank breaches any terms of such
agreement.

       

      9.           BANK’S RIGHTS AND
REMEDIES

       

      9.1.        Rights
and Remedies.  While 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 Borrower’s benefit under this Agreement
or under any other agreement between Borrower and Bank;

       

      (c)           demand
that Borrower (i) deposit cash with Bank in an amount equal to the aggregate
amount of any Letters of Credit remaining undrawn, as collateral security for
the repayment of any future drawings under such Letters of Credit, and Borrower
shall forthwith deposit and pay such amounts, and (ii) pay in advance all Letter
of Credit fees scheduled to be paid or payable over the remaining term of any
Letters of Credit;

       

      (d)           terminate
any FX Contracts;

       

      (e)           settle
or adjust disputes and claims directly with Account Debtors for amounts on terms
and in any order that Bank considers advisable, notify any Person owing Borrower
money of Bank’s security interest in such funds, and verify the amount of such
account;

       

      (f)           make
any payments and do any acts it considers necessary or reasonable to protect the
Collateral and/or its security interest in the Collateral.  Borrower
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. Borrower grants Bank a license
to enter and occupy any of its premises, without charge, to exercise any of
Bank’s rights or remedies;

       

      (g)           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;


      
        
           


        

        
          19

          
            

          

        

        
           


        

      

       

      (h)           ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell the Collateral.  Bank is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower’s 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, Borrower’s
rights under all licenses and all franchise agreements inure to Bank’s
benefit;

       

      (i)           place
a “hold” on any account maintained with Bank and/or deliver a notice of
exclusive control, any entitlement order, or other directions or instructions
pursuant to any Control Agreement or similar agreements providing control of any
Collateral;

       

      (j)           demand
and receive possession of Borrower’s Books; and

       

      (k)           exercise
all rights and remedies available to Bank under the Loan Documents or at law or
equity, including all remedies provided under the Code (including disposal of
the Collateral pursuant to the terms thereof).

       

      9.2.        Power of
Attorney.  Borrower hereby irrevocably appoints Bank as its
lawful attorney-in-fact, exercisable upon the occurrence and during the
continuance of an Event of Default, to:  (a) endorse Borrower’s name
on any checks or other forms of payment or security; (b) sign Borrower’s name on
any invoice or bill of lading for any Account or drafts against Account Debtors;
(c) settle and adjust disputes and claims about the Accounts directly with
Account Debtors, for amounts and on terms Bank determines reasonable; (d) make,
settle, and adjust all claims under Borrower’s insurance policies; (e) pay,
contest or settle any Lien, charge, encumbrance, security interest, and adverse
claim in or to the Collateral, or any judgment based thereon, or otherwise take
any action to terminate or discharge the same; and (f) transfer the Collateral
into the name of Bank or a third party as the Code permits.  Borrower
hereby appoints Bank as its lawful attorney-in-fact to sign 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
Borrower’s 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.  Nothing in this Section shall, however, relieve Bank from
liability for its own gross negligence or willful misconduct.

       

      9.3.        Protective
Payments.  If Borrower fails to obtain the insurance called for
by Section 6.7 or fails to pay any premium thereon or fails to pay any other
amount which Borrower is obligated to pay under this Agreement or any other Loan
Document, Bank may obtain such insurance or make such payment, and all amounts
so paid by Bank are Bank Expenses and immediately due and payable, bearing
interest at the then highest applicable rate, and secured by the
Collateral.  Bank will make reasonable efforts to provide Borrower
with notice of Bank obtaining such insurance at the time it is obtained or
within a reasonable time thereafter.  No payments by Bank are deemed
an agreement to make similar payments in the future or Bank’s waiver of any
Event of Default.

       

      
        
          
             


          

          
            20

            
              

            

          

          
             


          

        

      

       

      9.4.        Application of Payments and
Proceeds.  Unless an Event of Default has occurred and is
continuing, Bank shall apply any funds in its possession, whether from Borrower
account balances, payments, or proceeds realized as the result of any collection
of Accounts or other disposition of the Collateral, first, to the principal of
the Obligations; second, to Bank Expenses, including without limitation, the
reasonable costs, expenses, liabilities, obligations and attorneys’ fees
incurred by Bank in the exercise of its rights under this Agreement; third, to
the interest due upon any of the Obligations; and finally, to any applicable
fees and other charges, in such order as Bank shall determine in its sole
discretion.  Any surplus shall be paid to Borrower by credit to the
Designated Deposit Account or other Persons legally entitled thereto; Borrower
shall remain liable to Bank for any deficiency.  If an Event of
Default has occurred and is continuing, Bank may apply any funds in its
possession, whether from Borrower account balances, payments, proceeds realized
as the result of any collection of Accounts or other disposition of the
Collateral, or otherwise, to the Obligations in such order as Bank shall
determine in its sole discretion.  Any surplus shall be paid to
Borrower by credit to the Designated Deposit Account or to other Persons legally
entitled thereto; Borrower shall remain liable to Bank for any
deficiency.  If Bank, in its good faith business judgment, directly or
indirectly enters into a deferred payment or other credit transaction with any
purchaser at any sale of Collateral, Bank shall have the option, exercisable at
any time, of either reducing the Obligations by the principal amount of the
purchase price or deferring the reduction of the Obligations until the actual
receipt by Bank of cash therefor.

       

      9.5.        Bank’s Liability for
Collateral.  So long as Bank complies with reasonable banking
practices regarding the safekeeping of the Collateral in the possession or under
the control of Bank, 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.  Borrower bears all
risk of loss, damage or destruction of the Collateral.

       

      9.6.        No Waiver; Remedies
Cumulative.  Bank’s failure, at any time or times, to require
strict performance by Borrower of any provision of this Agreement or any other
Loan Document shall not waive, affect, or diminish any right of Bank thereafter
to demand strict performance and compliance herewith or therewith.  No
waiver hereunder shall be effective unless signed by Bank and then is only
effective for the specific instance and purpose for which it is
given.  Bank’s rights and remedies under this Agreement and the other
Loan Documents 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 in exercising any remedy is not
a waiver, election, or acquiescence.

       

      9.7.        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 guarantees held by Bank on which Borrower is
liable.


      
        
           


        

        
          21

          
            

          

        

        
           


        

      


      10.         NOTICES

       

      All
notices, consents, requests, approvals, demands, or other communication
(collectively, “Communication”), other than
Advance requests made pursuant to Section 3.4, by any party to this Agreement or
any other Loan Document must be in writing and be delivered or sent by facsimile
at the addresses or facsimile numbers listed below.  Bank or Borrower
may change its notice address by giving the other party written notice
thereof.  Each such Communication shall be deemed to have been validly
served, given, or delivered: (a) upon the earlier of actual receipt and three
(3) Business Days after deposit in the U.S. or Canadian mail, registered or
certified mail, return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by facsimile transmission (with such facsimile promptly
confirmed by delivery of a copy by personal delivery or United States mail as
otherwise provided in this Section 10); (c) one (1) Business Day after deposit
with a reputable overnight courier with all charges prepaid; or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number indicated
below.  Advance requests made pursuant to Section 3.4 must be in
writing and may be in the form of electronic mail, delivered to Bank by Borrower
at the e-mail address of Bank provided below and shall be deemed to have been
validly served, given, or delivered when sent (with such electronic mail
promptly confirmed by delivery of a copy by personal delivery or United States
mail as otherwise provided in this Section 10).  Bank or Borrower may
change its address, facsimile number, or electronic mail address by giving the
other party written notice thereof in accordance with the terms of this
Section 10.

       

      
        
          
            
              
                	
                        If
      to US Borrower:

                      	
                        Airspan
      Networks Inc.

                      
	 
      	
                        777
      Yamato Road

                      
	 
      	
                        Boca
      Raton, Florida 33431

                      
	 
      	
                        Attn:  David
      Brant

                      
	 
      	
                        Fax:  561-893-8681

                      
	 
      	
                        Email:  dbrant@airspan.com

                      
	 
      	 
      
	
                        If
      to UK Borrower:

                      	
                        Airspan
      Communications Limited

                      
	 
      	
                        c/o
      Airspan Networks Inc.

                      
	 
      	
                        777
      Yamato Road

                      
	 
      	
                        Boca
      Raton, Florida 33431

                      
	 
      	
                        Attn:  David
      Brant

                      
	 
      	
                        Fax:  561-893-8681

                      
	 
      	
                        Email:  dbrant@airspan.com

                      
	 
      	 
      
	
                        If
      to Bank:

                      	
                        Silicon
      Valley Bank

                      
	 
      	
                        3353
      Peachtree Road, N.E., Suite M-10

                      
	 
      	
                        Atlanta,
      Georgia 30326

                      
	 
      	
                        Attn:  Tony
      Barkett

                      
	
                         

                      	
                        
                          Fax:
      (404) 467-4467

                        

                      
	 
      	
                        Email:
      tbarkett@svb.com

                      


              

            

          

        

      


      
        
           


        

        
          22

          
            

          

        

        
           


        

      


      11.         CHOICE OF LAW, VENUE AND
JURY TRIAL WAIVER AND JUDICIAL REFERENCE

       

      Georgia
law governs the Loan Documents without regard to principles of conflicts of
law.  Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in the State of Georgia; provided, however, that if
for any reason the Bank cannot avail itself of the courts of the State of
Georgia, the Borrower and Bank each submit to the jurisdiction of the State and
Federal Courts in Santa Clara County, California.  Borrower expressly
submits and consents in advance to such jurisdiction in any action or suit
commenced in any such court, and Borrower hereby waives any objection that it
may have based upon lack of personal jurisdiction, improper venue, or forum non
conveniens and hereby consents to the granting of such legal or equitable relief
as is deemed appropriate by such court.  Borrower hereby waives
personal service of the summons, complaints, and other process issued in such
action or suit and agrees that service of such summons, complaints, and other
process may be made by registered or certified mail addressed to Borrower at the
address set forth in Section 10 of this Agreement and that service so made shall
be deemed completed upon the earlier to occur of Borrower’s actual receipt
thereof or three (3) days after deposit in the U.S. mails, proper postage
prepaid.

       

      TO THE EXTENT PERMITTED BY APPLICABLE
LAW, 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, 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.  Borrower 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
Borrower, 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 and the other Loan Documents.

       

      12.2.      Indemnification.  Borrower
agrees to indemnify, defend and hold Bank and its directors, officers,
employees, agents, attorneys, or any other Person affiliated with or
representing Bank harmless against:  (a) all obligations,
demands, claims, and liabilities (collectively, “Claims”) 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 arising from transactions between Bank and Borrower (including reasonable
attorneys’ fees and expenses), except for Claims and/or losses directly caused
by Bank’s gross negligence or willful misconduct.

       

      12.3.      Limitation of Actions. Any claim or cause of
action by Borrower against Bank, its directors, officers, employees, agents,
accountants, attorneys, or any other Person affiliated with or representing Bank
based upon, arising from, or relating to this Loan Agreement or any other Loan
Document, or any other transaction contemplated hereby or thereby or relating
hereto or thereto, or any other matter, cause or thing whatsoever, occurred,
done, omitted or suffered to be done by Bank, its directors, officers,
employees, agents, accountants or attorneys, shall be barred unless asserted by
Borrower by the commencement of an action or proceeding in a court of competent
jurisdiction by (a) the filing of a complaint within one year from the earlier
of (i) the date any of Borrower’s officers or directors had knowledge of the
first act, the occurrence or omission upon which such claim or cause of action,
or any part thereof, is based, or (ii) the date this Agreement is terminated,
and (b) the service of a summons and complaint on an officer of Bank, or on any
other person authorized to accept service on behalf of Bank, within thirty (30)
days thereafter.  Borrower agrees that such one-year period is a
reasonable and sufficient time for Borrower to investigate and act upon any such
claim or cause of action.  The one-year period provided herein shall
not be waived, tolled, or extended except by the written consent of Bank in its
sole discretion.  This provision shall survive any termination of this
Loan Agreement or any other Loan Document.


      
        
           


        

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

       

      12.5.      Severability of
Provisions.  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 Borrower.  This Agreement and the Loan
Documents represent the entire agreement about this subject matter and supersede
prior negotiations or agreements.  All prior 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, constitute one Agreement.

       

      12.8.      Survival.  All
covenants, representations and warranties made in this Agreement continue in
full force until this Agreement has terminated pursuant to its terms and all
Obligations (other than inchoate indemnity obligations and any other obligations
which, by their terms, are to survive the termination of this Agreement) have
been satisfied.  The obligation of Borrower 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: (a) to Bank’s Subsidiaries or Affiliates; (b) to
prospective transferees or purchasers of any interest in the Credit Extensions
(provided, however, Bank shall use commercially reasonable efforts to obtain
such prospective transferee’s or purchaser’s agreement to the terms of this
provision); (c) as required by law, regulation, subpoena, or other order;
(d) to Bank’s regulators or as otherwise required in connection with Bank’s
examination or audit; and (e) as Bank considers appropriate in exercising
remedies under this Agreement.  Confidential information does not
include information that either: (i) 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 (ii) is disclosed to Bank by a third party, if Bank does
not know that the third party is prohibited from disclosing the
information.


      
        
           


        

        
          24

          
            

          

        

        
           


        

      

       

      12.10.    Attorneys’ Fees, Costs and
Expenses.  In any action or proceeding between Borrower and
Bank arising out of or relating to the Loan Documents, the prevailing party
shall be entitled to recover its reasonable attorneys’ fees and other costs and
expenses incurred, in addition to any other relief to which it may be
entitled.

       

      12.11.    Waiver of Existing
Default.  Borrower acknowledges and agrees that unless the
Existing Default is waived by Bank, such Existing Default would constitute an
Event of Default under the Loan Documents.  Bank hereby waives the
Existing Default.  Bank’s agreement to waive the Existing Default
shall in no way obligate Bank to make any modifications to the Loan Agreement or
to waive Borrower’s compliance with any other terms of the Loan Documents, and
shall not limit or impair Bank’s right to demand strict performance of all other
terms and covenants as of any date.

       

      12.12.    Acknowledgement and Reaffirmation of
Loan Documents.  Borrower and Bank hereby acknowledge that US
Borrower executed the Prior Loan Agreement and certain Loan Documents as
“Airspan Networks, Inc.” but that the legal name of US Borrower is “Airspan
Networks Inc.” US Borrower hereby reaffirms the Loan Documents and acknowledges
and agrees to honor, perform and comply with, in all respects, all terms and
provisions therein.  All references in the Loan Documents to “Airspan
Networks, Inc.” shall be deemed to refer to “Airspan Networks Inc.”

       

      13.         DEFINITIONS

       

      13.1.      Definitions.  As
used in this Agreement, the following terms have the following
meanings:

       

      “Account” is any “account” as
defined in the Code with such additions to such term as may hereafter be made,
and includes, without limitation, all accounts receivable and other sums owing
to Borrower.

       

      “Account Debtor” is any
“account debtor” as defined in the Code with such additions to such term as may
hereafter be made.

       

      “Adjusted Quick Ratio” is the
ratio of (a) Quick Assets to (b) Current Liabilities minus Deferred
Revenue.

       

      “Advance” or “Advances” means an advance (or
advances) under the Revolving Line.

       

      “Affiliate” of any 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.

       

      “Agreement” is defined in the
preamble hereof.

       

      “Availability Amount” is (a)
the lesser of (i) the Revolving Line or (ii) the Borrowing Base, minus (b) the
amount of all outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit) plus an amount equal to the Letter of Credit Reserves, minus (c) the FX
Reserve, and minus (d) the
outstanding principal balance of any Advances (including any amounts used for
Cash Management Services).


      
        
           


        

        
          25

          
            

          

        

        
           


        

      

       

      “Bank” is defined in the
preamble hereof.

       

      “Bank Expenses” are all audit
fees and expenses, costs, and expenses (including reasonable attorneys’ fees and
expenses) for preparing, negotiating, administering, defending and enforcing the
Loan Documents (including, without limitation, those incurred in connection with
appeals or Insolvency Proceedings) or otherwise incurred with respect to
Borrower.

       

       “Borrower” is defined in the
preamble hereof

       

      “Borrower’s Books” are all
Borrower’s books and records including ledgers, federal and state tax returns,
records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any
equipment containing such information.

       

      “Borrowing Base” is (a) eighty
percent (80%) of Eligible Accounts, as determined by Bank from Borrower’s most
recent Transaction Report, plus at all times
that Borrower has complied with the Contingent Availability Conditions and
remains in compliance with such Contingent Availability Conditions, (b) the
lesser of (i) sixty percent (60%) of Eligible Inventory (valued at the lower of
cost or wholesale fair market value) as determined by Bank from Borrower’s most
recent Transaction Report or (ii) Eight Million Dollars ($8,000,000); provided,
however, that Bank may decrease the foregoing percentages in its good faith
business judgment based on events, conditions, contingencies, or risks which, as
determined by Bank from the results of any audit by the Bank of the Borrower’s
Collateral, may adversely affect Collateral.

       

      “Borrowing Resolutions” are,
with respect to any Person, those resolutions adopted by such Person’s Board of
Directors and delivered by such Person to Bank approving the Loan Documents to
which such Person is a party and the transactions contemplated thereby, together
with a certificate executed by its secretary on behalf of such Person certifying
that (a) such Person has the authority to execute, deliver, and perform its
obligations under each of the Loan Documents to which it is a party,
(b) that attached as Exhibit A to such certificate is a true, correct, and
complete copy of the resolutions then in full force and effect authorizing and
ratifying the execution, delivery, and performance by such Person of the Loan
Documents to which it is a party, (c) the name(s) of the Person(s) authorized to
execute the Loan Documents on behalf of such Person, together with a sample of
the true signature(s) of such Person(s), and (d) that Bank may conclusively
rely on such certificate unless and until such Person shall have delivered to
Bank a further certificate canceling or amending such prior
certificate.

       

      “Business Day” is any day that
is not a Saturday, Sunday or a day on which Bank is closed.

       

      “Cash Equivalents” means
(a) marketable direct obligations issued or unconditionally guaranteed by
the United States or any agency or any State thereof having maturities of not
more than one (1) year from the date of acquisition; (b) commercial paper
maturing no more than one (1) year after its creation and having the highest
rating from either Standard & Poor’s Ratings Group or Moody’s Investors
Service, Inc., and (c) Bank’s certificates of deposit issued maturing no more
than one (1) year after issue.


      
        
           


        

        
          26

          
            

          

        

        
           


        

      

       

      “Cash Management Services” is
defined in Section 2.1.4.

       

      “Cash Management Services
Sublimit” is defined in Section 2.1.4.

       

      “Code” is the Uniform
Commercial Code, as the same may, from time to time, be enacted and in effect in
the State of Georgia; provided, that, to the extent that the Code is used to
define any term herein or in any Loan Document and such term is defined
differently in different Articles or Divisions of the Code, the definition of
such term contained in Article or Division 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection, or priority of, or remedies with respect to, Bank’s
Lien on any Collateral is governed by the Uniform Commercial Code in effect in a
jurisdiction other than the State of Georgia, the term “Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for
purposes on the provisions thereof relating to such attachment, perfection,
priority, or remedies and for purposes of definitions relating to such
provisions.

       

      “Collateral” is any and all
properties, rights and assets of Borrower described on Exhibit
A.

       

      “Collateral Account” is any
Deposit Account, Securities Account, or Commodity Account.

       

      “Commodity Account” is any
“commodity account” as defined in the Code with such additions to such term as
may hereafter be made.

       

      “Communication” is defined in
Section 10.

       

      “Compliance Certificate” is
that certain certificate in the form attached hereto as Exhibit
E.

       

      “Contingent Availability
Conditions” means those conditions in which (a) Borrower’s worldwide cash
and investments exceeds Twenty Million Dollars ($20,000,000) as of the last day
of the most recently ended fiscal quarter, and (b) Borrower’s cash and
investments maintained at Bank and Bank’s Affiliates exceeds Fifteen Million
Dollars ($15,000,000).

       

      “Contingent Obligation” is, for
any Person, any direct or indirect liability, contingent or not, of that Person
for (a) 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; (b) any obligations for undrawn letters
of credit for the account of that Person; and (c) 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 any guarantee or
other support arrangement.

       

      
        
          
             


          

          
            27

            
              

            

          

          
             


          

        

      

       

      “Control Agreement” is any
control agreement entered into among the depository institution at which
Borrower maintains a Deposit Account or the securities intermediary or commodity
intermediary at which Borrower maintains a Securities Account or a Commodity
account, pursuant to which Bank obtains control (within the meaning of the Code)
over such Deposit Account, Securities Account, or Commodity
Account.

       

      “Country Limitation
Schedule”is that
certain schedule of the EXIM Bank listed on http://www.exim.gov/tools/country/country
limits.html.

       

      “Credit Extension” is any
Advance, Letter of Credit, FX Forward Contract, amount utilized for Cash
Management Services, or any other extension of credit by Bank for Borrower’s
benefit.

       

      “Current Assets” are amounts
that under GAAP should be included on that date as current assets on Borrower’s
consolidated balance sheet.

       

      “Current Liabilities” are all
obligations and liabilities of Borrower to Bank, plus, without duplication, the
aggregate amount of Borrower’s Total Liabilities that mature within one (1)
year, minus any accrued severance expenses related to Airspan Israel
Ltd.

       

      “Datatell” means Datatell 3000
de Costa Rica S.A., and any entity that is an Affiliate of  Datatell
3000 de Costa Rica S.A.

       

      “Default” means any event which
with notice or passage of time or both, would constitute an Event of
Default.

       

      “Default Rate” is defined in
Section 2.3(b).

       

      “Deferred Revenue” is all
amounts received or invoiced in advance of performance under contracts and not
yet recognized as revenue.

       

      “Deposit Account” is any
“deposit account” as defined in the Code with such additions to such term as may
hereafter be made.

       

      “Designated Deposit Account” is
Borrower’s deposit account, account number 3300534737, maintained with
Bank.

       

      “Dollars,” “dollars” and “$” each mean lawful money of
the United States.

       

      “Domestic Accounts” are
Accounts for which the Account Debtor has its principal place of business in the
United States.

       

      “Domestic Subsidiary” means a
Subsidiary organized under the laws of the United States or any state or
territory thereof or the District of Columbia.


      
        
           


        

        
          28

          
            

          

        

        
           


        

      

       

       “Effective Date” is the date
Bank executes this Agreement and as indicated on the signature page
hereof.

       

      “Eligible Accounts” are
Accounts which arise in the ordinary course of Borrower’s business that meet all
Borrower’s representations and warranties in Section 5.3.  Bank
reserves the right at any time and from time to time after the Effective Date to
reasonably adjust any of the criteria set forth below and to reasonably
establish new criteria; provided that Bank shall provide Borrower with five (5)
Business Days prior written notice of any such adjustment to the criteria or
establishment of new criteria.  Unless Bank agrees otherwise in
writing, Eligible Accounts shall not include:

       

      (a)           Accounts
for which the Account Debtor has not been invoiced;

       

      (b)           Accounts
(other than Accounts owing from KKS and Datatell) that the Account Debtor has
not paid within one hundred twenty (120) days of invoice date;

       

      (c)           Accounts
owing from (i) KKS and Datatell that KKS and Datatell have not paid within
ninety (90) days of the due date;

       

      (d)           Accounts
owing from an Account Debtor (other than Accounts owing from KKS and Datatell),
fifty percent (50%) or more of whose Accounts owing have not been paid within
one hundred twenty (120) days of invoice date, and Accounts owing from KKS and
Datatell, fifty percent (50%) or more of whose Accounts owing have not been paid
within ninety (90) days of the due date;

       

      (e)           Credit
balances over ninety (90) days from invoice date;

       

      (f)           Accounts
owing from (i) an Account Debtor, including its Affiliates, whose total
obligations to Borrower exceed twenty-five (25%) of all Accounts for the amounts
that exceed that percentage, unless Bank approves otherwise in writing; and (ii)
KKS in excess of Two Million Dollars ($2,000,000) and Datatell in excess of Four
Million Dollars ($4,000,000), unless Bank approves otherwise in
writing;

       

      (g)           Accounts
owing from an Account Debtor which does not have its principal place of business
in the United States except for Eligible Foreign Accounts;

       

      (h)           Eligible
Foreign Accounts for which the Account Debtor has its principal place of
business in any country in which EXIM Bank coverage is not available for any
period of time greater than or equal to one (1) year (as designated by the EXIM
Bank’s most recent Country Limitation Schedule).

       

      (i)           Accounts
owing from the United States or any department, agency, or instrumentality
thereof unless there has been compliance, to Bank’s satisfaction, with the Federal Assignment
of Claims Act of 1940, as amended;

       

      (j)           Accounts
owing from an Account Debtor to the extent that Borrower is indebted or
obligated in any manner to the Account Debtor (as creditor, lessor, supplier or
otherwise - sometimes called “contra” accounts, accounts payable, customer
deposits or credit accounts), with the exception of customary credits,
adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business;


      
        
           


        

        
          29

          
            

          

        

        
           


        

      

       

      (k)           Accounts
for demonstration or promotional equipment, or in which goods are consigned, or
sold on a “sale guaranteed”, “sale or return”, “sale on approval”, “bill and
hold”, or other terms if Account Debtor’s payment may be
conditional;

       

      (l)           Accounts
for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;

       

      (m)           Accounts
in which the Account Debtor disputes liability or makes any claim (but only up
to the disputed or claimed amount), or if the Account Debtor is subject to an
Insolvency Proceeding, or becomes insolvent, or goes out of
business;

       

      (n)           [Reserved];

       

      (o)           Accounts
for which Bank in its good faith business judgment determines collection to be
doubtful; and

       

      (p)           other
Accounts Bank deems ineligible in the exercise of its good faith business
judgment.

       

      “Eligible Foreign Accounts” are
Accounts for which the Account Debtor does not have its principal place of
business in the United States but are otherwise Eligible Accounts that are (a)
covered by credit insurance satisfactory to Bank, less any deductible;
(b) supported by letter(s) of credit acceptable to Bank; or (c) that Bank
approves in writing.

       

      “Eligible Inventory” means, at
any time, the aggregate of Borrower’s Inventory that (a) consists of raw
materials or finished goods, in good, new, and salable condition, which is not
perishable, returned, consigned, obsolete, not sellable, damaged, or defective,
and is not comprised of demonstrative or custom inventory, works in progress,
packaging or shipping materials, or supplies; (b) meets all applicable
governmental standards; (c) has been manufactured in compliance with the Fair
Labor Standards Act; (d) is not subject to any Liens, except the first priority
Liens granted or in favor of Bank under this Agreement or any of the other Loan
Documents and subclauses (b) and (j) of Permitted Liens; (e) is located at
Borrower’s principal places of business, warehouses or manufacturing
subcontractors (or any location permitted under Section 7.2); and (f) is
otherwise acceptable to Bank in its good faith business judgment.

       

      “Equipment” is all “equipment”
as defined in the Code with such additions to such term as may hereafter be
made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the
foregoing.

       

      “Ericsson” means Ericsson AB
and any entity that is an Affiliate of Ericsson AB.

       

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


      
        
           


        

        
          30

          
            

          

        

        
           


        

      

       

      “Event of Default” is defined
in Section 8.

       

      “EXIM Bank” means the Export
Import Bank of the United States of America.

       

      “Existing Default” is defined
in Recital B.

       

       “Foreign Accounts” are
Accounts for which the Account Debtor does not have its principal place of
business in the United States.

       

      “Foreign Currency” means
lawful money of a country other than the United States.

       

      “Foreign Subsidiary” means any
Subsidiary which is not a Domestic Subsidiary.

       

      “Fujitsu” means Fujitsu
Limited, and any entity that is an Affiliate of Fujitsu Limited.

       

       “Funding Date” is any date on
which a Credit Extension is made to or on account of Borrower which shall be a
Business Day.

       

      “FX Business Day” is any day
when (a) Bank’s Foreign Exchange Department is conducting its normal business
and (b) the Foreign Currency being purchased or sold by Borrower is available to
Bank from the entity from which Bank shall buy or sell such Foreign
Currency.

       

      “FX Forward Contract” is defined in Section
2.1.3.

       

      “FX Reserve” is defined in Section
2.1.3.

       

      “GAAP” is generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other Person as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.

       

      “General Intangibles” is all
“general intangibles” as defined in the Code in effect on the date hereof with
such additions to such term as may hereafter be made, and includes without
limitation, all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, trademarks, service marks
and, to the extent permitted under applicable law, any applications therefor,
whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights,
goodwill, franchise agreements, purchase orders, customer lists, route lists,
telephone numbers, domain names, claims, income and other tax refunds, security
and other deposits, options to purchase or sell real or personal property,
rights in all litigation presently or hereafter pending (whether in contract,
tort or otherwise), insurance policies (including without limitation key man,
property damage, and business interruption insurance), payments of insurance and
rights to payment of any kind.


      
        
           


        

        
          31

          
            

          

        

        
           


        

      

       

      “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 in any applicable jurisdiction, 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, Mask Works and Patents 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, chip
design, chip mask works and computer software products now or later existing,
created, acquired or held;

       

      (c)              All
design rights, including chips, masks and associated software which may be
available to Borrower 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;

       

      (e)              All
Proceeds and products of the foregoing, including all insurance, indemnity or
warranty payments.

       

      “Intellectual Property
Collateral” is all of Borrower’s Intellectual Property including without
limitation, such Intellectual Property as more particularly defined, described
and set forth in the IP Agreements and on the exhibits attached
thereto.

       

      “Inventory” is all “inventory”
as defined in the Code in effect on the date hereof with such additions to such
term as may hereafter be made, and includes without limitation all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process
and finished products, including without limitation such inventory as is
temporarily out of Borrower’s custody or possession or in transit and including
any returned goods and any documents of title representing any of the
above.

       

      “Investment” is any beneficial
ownership interest in any Person (including stock, partnership interest or other
securities), and any loan, advance or capital contribution to any
Person.

       

      “IP Agreements” are those
certain Intellectual Property Security Agreements executed and delivered by
Borrower to Bank dated as of the date hereof.


      
        
           


        

        
          32

          
            

          

        

        
           


        

      

       

      “KKS” means KKS-Telecom, and
any entity that is an Affiliate of KKS-Telecom.

       

      “Letter of Credit” means a
standby letter of credit issued by Bank or another institution based upon an
application, guarantee, indemnity or similar agreement on the part of Bank as
set forth in Section 2.1.2.

       

      “Letter of Credit Application”
is defined in Section 2.1.2(a).

       

      “Letter of Credit Reserve” has
the meaning set forth in Section 2.1.2(d)

       

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

       

      “Loan Documents” are,
collectively, this Agreement, the Perfection Certificate, the IP Agreements, any
note, or notes executed by Borrower, and any other present or future agreement
between Borrower and/or for the benefit of Bank in connection with this
Agreement, all as amended, restated, or otherwise modified.

       

      “Material Adverse Change” is
(a) a material impairment in the perfection or priority of Bank’s Lien in the
Collateral or in the value of such Collateral; (b) a material adverse change in
the business, operations, or condition (financial or otherwise) of Borrower; or
(c) a material impairment of the prospect of repayment of any portion of the
Obligations.

       

      “Material Indebtedness” is any
Indebtedness the principal amount of which is equal to or greater than Two
Hundred Fifty Thousand Dollars ($250,000).

       

      “Mortgage Debenture” means
that certain Mortgage Debenture between UK Borrower and Bank dated as of the
date hereof.

       

      “Net Income” means, as
calculated on a consolidated basis for Borrower for any period as at any date of
determination, the net profit (or loss), after provision for taxes, of Borrower
for such period taken as a single accounting period.

       

      “Net Inventory” is Inventory
having a positive value on the Borrower’s balance sheet as of the end of the
preceding fiscal quarter.

       

      “Nortel” means Nortel Networks
Corp. and any entity that is an Affiliate of Nortel Networks Corp.

       

      “Obligations” are Borrower’s
obligation to pay when due any debts, principal, interest, Bank Expenses and
other amounts Borrower owes Bank now or later, whether under this Agreement, the
Loan Documents, or otherwise, including, without limitation, all obligations
relating to letters of credit, cash management services, and foreign exchange
contracts, if any, and including interest accruing after Insolvency Proceedings
begin and debts, liabilities, or obligations of Borrower assigned to Bank, and
the performance of Borrower’s duties under the Loan Documents.


      
        
           


        

        
          33

          
            

          

        

        
           


        

      

       

      “Operating Documents” are, for
any Person, such Person’s formation documents, as certified with the Secretary
of State of such Person’s state of formation on a date that is no earlier than
30 days prior to the Effective Date, and, (a) if such Person is a corporation,
its bylaws in current form, (b) if such Person is a limited liability company,
its limited liability company agreement (or similar agreement), and (c) if such
Person is a partnership, its partnership agreement (or similar agreement), each
of the foregoing with all current amendments or modifications
thereto.

       

      “Payment/Advance Form” is that
certain form attached hereto as Exhibit
B.

       

      “Perfection Certificate” is
defined in Section 5.1.

       

      “Permitted Distributions”
means:

       

      (a)           purchases
of capital stock from former employees, consultants and directors pursuant to
repurchase agreements or other similar agreements provided that at the time of
such purchase no Default or Event of Default has occurred and is
continuing;

       

      (b)           purchases
for value of any rights distributed in connection with any stockholder rights
plan;

       

      (c)           purchases
of capital stock or options to acquire such capital stock with the proceeds
received from a substantially concurrent issuance of capital stock or
convertible securities;

       

      (d)           purchases
of capital stock pledged as collateral for loans to employees;

       

      (e)           purchases
of capital stock in connection with the exercise of stock options or stock
appreciation rights by way of cashless exercise or in connection with the
satisfaction of withholding tax obligations;

       

      (f)           purchases
of fractional shares of capital stock arising out of stock dividends, splits or
combinations or business combinations; and

       

      (g)           the
settlement or performance of such Person’s obligations under any equity
derivative transaction, option contract or similar transaction or combination of
transactions.

       

      “Permitted Indebtedness”
is:

       

      (a)           Borrower’s
Indebtedness to Bank under this Agreement or any other Loan
Document;

       

      (b)           Subordinated
Debt;

       

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


      
        
           


        

        
          34

          
            

          

        

        
           


        

      

       

      (d)           Indebtedness
incurred as a result of endorsing negotiable instruments received in the
ordinary course of business;

       

      (e)           Indebtedness
consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect a Person
against fluctuations in interest rates, currency exchange rates, or commodity
prices; and

       

      (f)           capitalized
leases and purchase money Indebtedness not to exceed One Million Dollars
($1,000,000) in the aggregate in any fiscal year secured by Permitted
Liens.

       

      “Permitted Investments”
are:

       

      (a)           Investments
existing on the Effective Date;

       

      (b)           (i) marketable
direct obligations issued or unconditionally guaranteed by the United States or
its agencies or any State maturing within 1 year from its acquisition, (ii)
commercial paper maturing no more than 2 years after its creation and having the
highest rating from either Standard & Poor’s Corporation or Moody’s
Investors Service, Inc., and (iii) Bank’s certificates of deposit maturing no
more than 2 years after issue;

       

      (c)           Investments
approved by the Borrower’s Board of Directors or otherwise pursuant to a
Board-approved investment policy;

       

      (d)           Investments
in or to another Borrower or any of its Subsidiaries in the ordinary course of
business;

       

      (e)           Investments
permitted under Section 7.1(vi) and (vii) above; and

       

      (f)           Investments
consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect a Person
against fluctuations in interest rates, currency exchange rates, or commodity
prices.

       

      “Permitted Liens”
are:

       

      (a)           Liens
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 Borrower maintains
adequate reserves on its Books, if they have no priority over any of Bank’s
Liens other than Liens in connection with municipal taxes not yet delinquent or
being contested in good faith which are entitled to priority by operation of
law;

       

      (c)           Liens
(including with respect to capital leases) not to exceed One Million Dollars
($1,000,000) in the aggregate (i) on property (including accessions, additions,
parts, replacements, fixtures, improvements and attachments thereto, and the
proceeds thereof) acquired or held by Borrower incurred for financing such
property (including accessions, additions, parts, replacements, fixtures,
improvements and attachments thereto, and the proceeds thereof), or (ii)
existing on property (and accessions, additions, parts, replacements, fixtures,
improvements and attachments thereto, and the proceeds thereof) when acquired,
if the Lien is confined to such property (including accessions, additions,
parts, replacements, fixtures, improvements and attachments thereto, and the
proceeds thereof);


      
        
           


        

        
          35

          
            

          

        

        
           


        

      

       

      (d)           Liens
incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (c), 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 it secures may not increase;

       

      (e)           leases
or subleases of real property granted in the ordinary course of business, and
leases, subleases, non-exclusive licenses or sublicenses of property (other than
real property or intellectual property) granted in the ordinary course of
Borrower’s business, if the leases,
subleases, licenses and sublicenses do not prohibit granting Bank a security
interest;

       

      (f)           non-exclusive
licenses of intellectual property granted to third parties in the ordinary
course of business;

       

      (g)           leases
or subleases granted in the ordinary course of Borrower’s business, including in
connection with Borrower’s leased premises or leased property;

       

      (h)           Liens
arising from judgments, decrees or attachments in circumstances not constituting
an Event of Default under Sections 8.4 or 8.7;

       

      (i)           Liens
in favor of other financial institutions arising in connection with Borrower’s
deposit or securities accounts held at such institutions;

       

      (j)           carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period of
more than 30 days or which are being contested in good faith and by appropriate
proceeding if adequate reserves with respect thereto are maintained on the books
of the applicable Person; and

       

      (k)           pledges
or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and compliance with other social security
requirements applicable to Borrower.

       

      “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.

       

      “Prior Loan Agreement” is
defined in Recital A.

       

      “Quick Assets” is, on any date,
(i) Borrower’s unrestricted cash and Cash Equivalents, plus (ii) Borrower’s
Accounts.


      
        
           


        

        
          36

          
            

          

        

        
           


        

      

       

       “Registered Organization” is
any “registered organization” as defined in the Code with such additions to such
term as may hereafter be made

       

      “Responsible Officer” is any of
the Chief Executive Officer, President, Chief Financial Officer and Controller
of Borrower.

       

      “Revolving Line” is an Advance
or Advances in an aggregate amount of up to Twenty Million Dollars ($20,000,000)
outstanding at any time.

       

      “Revolving Line Maturity
Date” is
March 31, 2010.

       

      “Royal Bank of Scotland” means
Royal Bank of Scotland PLC.

       

      “Second Supplemental Closing Date”
means August 21, 2008.

       

      “Secretary’s Certificate”
means a certificate of the Secretary of the UK Borrower substantially in the
form attached as Exhibit F hereto.

       

      “Securities Account” is any
“securities account” as defined in the Code with such additions to such term as
may hereafter be made.

       

      “Settlement Date” is defined in Section
2.1.3.

       

      “Subordinated Debt” is
indebtedness incurred by Borrower subordinated to all of Borrower’s now or
hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or
other similar agreement in form and substance satisfactory to Bank entered into
between Bank and the other creditor (a “Subordination Agreement”)), on
terms acceptable to Bank.

       

      “Subsequent Financing” means
the next round of private equity financing closing after June 6,
2007.

       

      “Subsidiary” means, with
respect to any Person, any Person of which more than fifty percent (50%) of the
voting stock or other equity interests is owned or controlled, directly or
indirectly, by such Person or one or more Affiliates of such
Person.

       

      “Supplemental Closing Date”
means August 7, 2007.

       

      “Tangible Net Worth” is, on any
date, the consolidated total assets of Borrower minus (a) any amounts
attributable to (i) goodwill, (ii) intangible items including unamortized debt
discount and expense, patents, trade and service marks and names, copyrights and
research and development expenses except prepaid expenses, (iii) notes, accounts
receivable and other obligations owing to Borrower from its officers or other
Affiliates, and (iv) reserves not already deducted from assets, minus (b) Total
Liabilities.

       

      “Total Liabilities” is on any
day, obligations that should, under GAAP, be classified as liabilities on
Borrower’s consolidated balance sheet, including all Indebtedness, and current
portion of Subordinated Debt permitted by Bank to be paid by Borrower, but
excluding all other Subordinated Debt.

       

      
        
          
             


          

          
            37

            
              

            

          

          
             


          

        

      

       

      “Transaction Report” is that
certain form attached hereto as Exhibit
D.

       

      “Transfer” is defined in
Section 7.1.

       

      “UK Lockbox” is defined in
Section 6.3(c).

       

      [Signature page follows.]

       

      
        
          
             


          

          
            38

            
              

            

          

          
             


          

        

      

    

     

    
      IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the Effective
Date.

       

      
        
          	
                  BORROWER:

                
	 
      
	
                  AIRSPAN
      NETWORKS INC.

                
	 
      	 
      
	
                  By

                	
                  /s/ David Brant

                
	
                  Name:

                	
                  David Brant

                
	
                  Title:

                	
                  Chief Financial Officer

                
	 
      
	
                  AIRSPAN
      COMMUNICATIONS LIMITED

                
	 
      	 
      
	
                  By

                	
                  /s/ David Brant

                
	
                  Name:

                	
                  David Brant

                
	
                  Title:

                	
                  Director

                
	 
      
	
                  BANK:

                
	 
      
	
                  SILICON
      VALLEY BANK

                
	 
      	 
      
	
                  By

                	
                  /s/ Anthony Barkett

                
	
                  Name:

                	
                  Anthony Barkett

                
	
                  Title:

                	
                  Vice President

                
	
                  Effective
      Date:  March 25,
2009

                


        

      

      


      [Signature
Page to Amended and Restated Loan and Security Agreement]


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
A

       

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

       

      All
goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles, commercial tort claims, documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, fixtures, letters of credit rights (whether
or not the letter of credit is evidenced by a writing), securities, and all
other investment property, supporting obligations, and financial assets, whether
now owned or hereafter acquired, wherever located; 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.

       

      
        
          

        

      

       

      All other
terms contained in this Exhibit, unless otherwise indicated, shall have the
meanings provided by the Code (as defined herein), to the extent such terms are
defined in the Code.  For purposes hereof, the following terms shall
have the following meanings:

       

      “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, as
such definition may be amended from time to time according to the
Code.

       

      “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 in Georgia as amended and in effect from
time to time.

       

      “Equipment”
is all present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which Borrower has any
interest.

       

      “Inventory”
is present and future inventory in which Borrower has 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
Borrower, 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.

       

      “Letter-of-Credit
Right” means a right to payment or performance under a letter of credit, whether
or not the beneficiary has demanded or is at the time entitled to demand payment
or performance.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “Proceeds”
has the meaning described in the Code as in effect from time to
time.

       

      “Supporting
Obligation” means a letter-of-credit right, secondary obligation or obligation
of a secondary obligor or that supports the payment or performance of an
account, chattel paper, a document, a general intangible, an instrument or
investment property.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
B

       

      LOAN PAYMENT/ADVANCE REQUEST
FORM

       

      DEADLINE
FOR SAME DAY PROCESSING IS 3:00 PM E.S.T.

       

      
        	
                Fax
      To:  (404) 467-1471

              	
                Date:
      ___________________

              


      

       

      
        
          
            	
                    LOAN
    PAYMENT:

                  	 
      	 
      
	
                    Borrower: Airspan Networks Inc. and Airspan
      Communications, LTD.

                  
	 
      	 
      	 
      
	
                    From Account
      #________________________

                  	 
      	
                    To Account
      #____________________________

                  
	
                    (Deposit
      Account #)

                  	 
      	
                    (Loan
      Account #)

                  
	
                    Principal $_____________________________and/or
      Interest $______________________________________

                  
	 
      	 
      	 
      
	
                    Authorized Signature:
      _______________________

                  	 
      	
                    Phone Number:
      __________________________

                  
	
                    Print
      Name/Title: ____________________________

                  	 
      	 
      


          

        

      

       

      
        
          	
                  Loan
    Advance:

                
	 
      
	
                  Complete
      Outgoing Wire
      Request section below if all or a portion of the funds from this
      loan advance are for an outgoing wire.

                
	 
      	 
      	 
      
	
                  From Account
      #________________________________

                	 
      	
                  To
      Account #____________________________

                
	
                  (Loan
      Account #)

                	 
      	
                  (Deposit
      Account #)

                
	 
      	 
      	 
      
	
                  Amount of Advance
      $___________________________

                	 
      	 
      
	 
      	 
      	 
      
	
                  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 request for an advance; provided, however, that such
      materiality qualifier shall not be applicable to any representations and
      warranties that already are qualified or modified by materiality in the
      text thereof; and provided, further that those representations and
      warranties expressly referring to a specific date shall be true, accurate
      and complete in all material respects as of such date:

                
	 
      	 
      	 
      
	
                  Authorized Signature:                                                 

                	 
      	
                  Phone
      Number:                                                               

                
	
                  Print
      Name/Title:                                                             

                	 
      	 
      


        

      

      


       

      
        
          
            
              
                	
                        Outgoing Wire
      Request:

                      	 
      	 
      
	
                        Complete
      only if all or a portion of funds from the loan advance above is to be
      wired.

                      	 
      	 
      
	
                        Deadline
      for same day processing is 3:00 E.S.T.

                      	 
      	 
      
	 
      	 
      	 
      
	
                        Beneficiary Name:                                                                    
      

                      	 
      	
                        Amount
      of Wire: $ _____________________________

                      
	
                        Beneficiary Bank:                                                                    
      

                      	 
      	 
      
	 
      	 
      Account
      Number:                                                                          
	
                        City and State:                                                                         
      

                      	 
      	 
      
	 
      	 
      	 
      
	
                        Beneficiary Bank Transit (ABA) #:                                       

                      	 
      	
                        Beneficiary Bank Code (Swift, Sort, Chip, etc.):                                                               

                      
	 
      	 
      	
                        (For
      International Wire Only)

                      
	 
      	 
      	 
      
	
                        Intermediary Bank:                                                                     

                      	 
      	
                        Transit
      (ABA) #:                                                               

                      
	
                        For
      Further Credit to:                                                                                                                                                                             

                      
	 
      
	
                        Special
      Instruction:                                                                                                                                                                      
               

                      
	 
      	 
      	 
      
	
                        By
      signing below, I (we) acknowledge and agree that my (our) funds transfer
      request shall be processed in accordance with and subject to the terms and
      conditions set forth in the agreements(s) covering funds transfer
      service(s), which agreements(s) were previously received and executed by
      me (us).

                      
	 
      	 
      	 
      
	
                        Authorized Signature:                                                  

                      	 
      	
                        2nd Signature (if required): ____________________

                      
	Print Name/Title:                                                            
      Print Name/Title:                                                                                   
	
                        Telephone #:                                                                  

                      	 
      	
                        Telephone #:                                                           

                      


              

            

          

        

      


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      
        
          	
                  EXHIBIT
D

                


        

      

      TRANSACTION
REPORT


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
E

       

      COMPLIANCE
CERTIFICATE

       

      
        
          
            
              
                
                  
                    
                      	
                              TO:

                            	
                              SILICON
      VALLEY BANK

                            	
                              Date:                                  
              

                            
	 
      	 
      	 
      
	
                              FROM:

                            	
                              AIRSPAN
      NETWORKS INC.

                            	 
      
	 
      	
                              AIRSPAN
      COMMUNICATIONS LIMITED

                            	 
      


                    

                  

                

              

            

          

        

      

       

      The
undersigned authorized officer of AIRSPAN NETWORKS INC. and AIRSPAN
COMMUNICATIONS LIMITED (individually and collectively, jointly and severally,
“Borrower”) certifies that under the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is
in complete compliance for the period ending _______________ with all required
covenants except as noted below, (2) no Event of Default has occurred and is
continuing, (3) all representations and warranties in the Agreement are
true and correct in all material respects on this date except as noted below;
provided, however, that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, (4)
Borrower has timely filed all required tax returns and reports, and Borrower has
timely paid all foreign, federal, state, governmental and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise
permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no
Liens have been levied or claims made against Borrower relating to unpaid
employee payroll or benefits of which Borrower has not previously provided
written notification to Bank.  Attached are the required documents
supporting the certification.  The undersigned certifies that these
are prepared in accordance with GAAP consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.  The
undersigned 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.  Capitalized terms used but not otherwise
defined herein shall have the meanings given them in the Agreement.

       

      Please
indicate compliance status by circling Yes/No under “Complies”
column.

      


      
        	
                Reporting Covenant

              	 
      	
                Required

              	 
      	
                Complies

              
	 
      	 
      	 
      	 
      	 
      
	
                Monthly
      financial statements with

                Compliance
      Certificate

              	 
      	
                Monthly
      within 30 days*

              	 
      	
                Yes   No

              
	
                Annual
      financial statement (CPA Audited) + CC

              	 
      	
                FYE
      within 120 days

              	 
      	
                Yes   No

              
	
                10-Q,
      10-K and 8-K

              	 
      	
                Within
      5 days after filing with

                SEC

              	 
      	
                Yes   No

              
	
                Transaction
      Reports

              	 
      	
                Weekly

              	 
      	
                Yes   No

              
	
                A/R
      & A/P Agings, reconciliations

              	 
      	
                Monthly
      within 30 days

              	 
      	
                Yes   No

              
	
                Annual
      operating budget and projections

              	 
      	
                Annually
      no later than 30 days

                prior
      to year-end

              	 
      	
                Yes   No

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      
        
          
            
              
                	
                        Financial Covenant

                      	 	
                        Required

                      	 	
                        Actual

                      	 	
                        Complies

                      
	 
      	 	 	 	 
      	 	 
      
	
                        Maintain
      on a Quarterly Basis:

                      	 	 	 	 
      	 	 
      
	
                           Minimum
      Tangible Net Worth

                      	 	 	 	
                        $ ______

                      	 	
                        Yes   No

                      
	
                            Through
      fiscal quarter ending 12/31/08

                      	 	$	30,000,000	**	 
      	 	 
      
	
                            Fiscal
      quarter ending 3/31/09

                      	 	$	18,000,000	**	 
      	 	 
      
	
                            Fiscal
      quarter ending 6/30/09

                      	 	$	14,000,000	**	 
      	 	 
      
	
                            Fiscal
      quarter ending 9/30/09

                      	 	$	13,000,000	**	 
      	 	 
      
	
                            Fiscal
      quarter ending 12/31/09 and thereafter

                      	 	$	12,000,000	**	 
      	 	 
      
	 
      	 	 	 	 	 
      	 	 
      
	
                        Maintain
      on a Monthly Basis:

                      	 	 	 	 	 
      	 	 
      
	
                           Adjusted
      Quick Ratio

                      	 	
                        1.00:1.00

                      	 	
                            
      :1.00

                      	 	
                        Yes   No

                      


              

            

          

        

      

      


      * except
for the month of January

      ** plus 50% of quarterly Net Income (but
not to be decreased by 50% of quarterly consolidated Net Loss), 50% of new
equity (other than Employee Stock Purchase Plan or existing stock option plans)
and 50% of new Subordinated Debt raised after the Second Supplemental Closing
Date.

       

      The
following financial covenant analyses and information set forth in Schedule 1
attached hereto are true and accurate as of the date of this
Certificate.

       

      The
following are the exceptions with respect to the certification
above:  (If no exceptions exist, state “No exceptions to
note.”)

      
        
          

        

        
          

        

        
          

        

         

      

      
        
          
            
              
                
                  
                    
                      	
                              Borrower:

                            	 	
                              BANK
      USE ONLY

                            
	 
      	 
      	 	 
      
	
                              AIRSPAN
      NETWORKS INC.

                            	 	
                              Received
      by: ____________________

                            
	
                              AIRSPAN
      COMMUNICATIONS LIMITED

                            	 	
                              authorized
      signer

                            
	 
      	 
      	 	 
      
	 
      	 
      	 	
                              Date:
      _________________________

                            
	 
      	 
      	 	 
      
	
                              By:

                            	 
      	 	
                              Verified:
      _______________________

                            
	
                              Name:

                            	 
      	 	
                              authorized
      signer  

                            
	
                              Title:

                            	 
      	 	
                              
                                Date:
      _________________________

                              

                            
	 
      	 
      	 	
                              
                              

                            
	 
      	 
      	 	
                              
                                Compliance
      Status:        
      Yes        
       No

                              

                            
	 
      	 
      	 	 
      
	 
      	 
      	 	
                               

                            


                    

                  

                

              

            

          

        

      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      SCHEDULE 1 TO COMPLIANCE
CERTIFICATE

       

      FINANCIAL COVENANTS OF
BORROWER

       

      Dated: ____________________

       

      I.           Tangible Net Worth (Section
6.9 (a))

       

      Required:
50% of quarterly Net Income, 50% of new equity (other than Employee Stock
Purchase Plan or existing stock option plans) and 50% of new Subordinated Debt
plus (a) $30,000,000 through fiscal quarter ending 12/31/08, (b) $18,000,000 for
fiscal quarter ending 3/31/09, (c) $14,000,000 for fiscal quarter ending
6/30/09, (c) $13,000,000 for fiscal quarter ending 9/30/09, and (d) $12,000,000
commencing w/fiscal quarter ending 12/31/09

       

      Actual:

      


      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              A.

                                            	
                                              Aggregate
      value of total assets of Borrower

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              B.

                                            	
                                              Aggregate
      value of goodwill of Borrower

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              C.

                                            	
                                              Aggregate
      value of intangible assets of Borrower

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              D.

                                            	
                                              Aggregate
      value of any reserves not already deducted from assets

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              E.

                                            	
                                              Aggregate
      value of liabilities of Borrower (including all Indebtedness)

                                              and
      current portion of Subordinated Debt permitted by Bank to be paid by
      Borrower (but no other Subordinated Debt).

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              F.

                                            	
                                              Tangible
      Net Worth (line A minus line B minus line C minus line D minus line
      E)

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              G.

                                            	
                                              Quarterly
      Net Income after the Effective Date

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              H.

                                            	
                                              Proceeds
      from the sale of US Borrower’s capital stock after the Effective
      Date

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              I.

                                            	
                                              Subordinated
      Debt received after the Effective Date

                                            	 	$	                      
      	 
	 	 	 	 	 	 
	
                                              J.

                                            	
                                              Required
      Tangible Net Worth ($Line F plus 50% of the sum of line G plus line H plus
      line I)

                                            	 	$	                      
      	 


                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      


      Is line J
equal to or greater than the amount set forth above?

       

      
        
          
            	
                                                   
      No, not in compliance

                  	
                                       Yes,
      in compliance

                  


          

        

      

      


      II.           Adjusted Quick Ratio (Section
6.9 (b))

       

      Required:                      1.00:1.00

       

      Actual:

      


      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          	
                                                                  A.

                                                                	
                                                                  Aggregate
      value of the unrestricted cash and cash equivalents of Borrower and its
      Subsidiaries

                                                                	 	$	                      
      	 
	 	 	 	 	 	 
	
                                                                  B.

                                                                	
                                                                  Aggregate
      value of the Accounts of Borrower and its Subsidiaries

                                                                	 	$	                      
      	 
	 	 	 	 	 	 
	
                                                                  C.

                                                                	
                                                                  Quick
      Assets (the sum of lines A and B)

                                                                	 	$	                      
      	 
	 	 	 	 	 	 
	
                                                                  D.

                                                                	
                                                                  Aggregate
      value of Obligations to Bank

                                                                	 	$	                      
      	 
	 	 	 	 	 	 
	
                                                                  E.

                                                                	
                                                                  Aggregate
      value of liabilities that should, under GAAP, be classified as liabilities
      on Borrower’s consolidated balance sheet, including all Indebtedness, and
      not otherwise reflected in line E above that matures within one (1)
      year

                                                                	 	$	                      
      	 
	 	 	 	 	 	 
	
                                                                  F.

                                                                	
                                                                  Any
      accrued severance expenses related to Airspan Israel Ltd.

                                                                	 	$	                      
      	 
	 	 	 	 	 	 
	
                                                                  G.

                                                                	
                                                                  Aggregate
      value of all amounts received or invoiced by Borrower in
      advance

                                                                  of
      performance under contracts and not yet recognized as
    revenue

                                                                	 	$	                      
      	 
	 	 	 	 	 	 
	
                                                                  H.

                                                                	
                                                                  Line
      D plus line E minus line F minus line G)

                                                                	 	$	                      
      	 
	 	 	 	 	 	 
	
                                                                  I.

                                                                	
                                                                  Adjusted
      Quick Ratio (line C divided by line H) 

                                                                	 	 	 	 


                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      


      Is line I
equal to or greater than ___:1:00?

       

      
        
          	
                                 
              No, not in
      compliance

                	
                                      
      Yes, in compliance