**Exhibit 10.39**

 

***PARTNERS FOR GROWTH***

 

**Amendmentto Loan Documents**

 
| **Borrower:** |   | **INTERWAVE  COMMUNICATIONS, INC.**                      |
|---------------|--------|----------------------------------------------------------|
|          |   |                                                     |
| **Address:**  |   | **2495 Leghorn,  Mountain View, California  94043** |
|          |   |                                                     |
| **Date:**     |   | **September 10,  2004**                             |

 

**THIS AMENDMENT TO LOAN DOCUMENTS**(this “Amendment”) is entered intobetween **PARTNERSFOR GROWTH, L.P.** (“PFG”), and the borrower named above (“Borrower”).

 

The Parties agreeto amend the Loan and Security Agreement between them, dated June 4, 2004(as otherwise amended, if at all, the “Loan Agreement”), as follows, effectiveas of the date hereof.  (Capitalizedterms used but not defined in this Amendment, shall have the meanings set forthin the Loan Agreement.)

 

**1.****                                     ****Addition of Term Loan Facility.** Section 1 of the Schedule to the Loan Agreement  is hereby amended to read as follows:

 

“1.  CreditLimit (Section 1.1):                                      The sum of the Revolving Loans undersubsection (a) below and the Term Loans under subsection (b) below:

 

(a)                                  Revolving Loans. Loans (the “Revolving Loans”) in an amount not to exceed the lesser of(1) $1,500,000 (the “Dollar Credit Limit”) at any one time outstanding, or (2)an amount equal to the sum of the following:

 

(A)                              up to 80% (an “Advance Rate”) of theamount of Borrower’s Eligible Accounts-Domestic (as defined in Section 8above); plus

 

(B)                                up to 80% (an “Advance Rate”) of theamount of Borrower’s Eligible Accounts-Foreign (as defined in Section 8above); plus

 

(C)                                up to 100% (an “Advance Rate”) of theamount of Borrower’s Eligible Accounts-LC Supported (as defined inSection 8 above); plus

 

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(D)                               up to 75% (an “Advance Rate”) of theamount of Borrower’s Eligible Purchase Orders (as defined in Section 8above); plus

 

(E)                                 up to 50% (an “Advance Rate”) of thevalue of Borrower’s Eligible Inventory (as defined in Section 8above),  calculated at the lower of costor market value and determined on a first-in, first-out basis.

 

PFG may, from time to time, modify the Advance Rates,in its good faith business judgment, upon notice to the Borrower, based onchanges in collection experience with respect to Accounts, its evaluation ofthe Inventory or other issues or factors relating to the Accounts, Inventory orother Collateral.

 

Borrower shall have the right to repay and reborrowRevolving Loans hereunder, subject to all of the terms and conditions of thisAgreement.

 

(b)                                 Term Loans.  Loans (the“Term Loans”) in an amount not to exceed $2,000,000, which shall be subject tothe following terms and conditions:

 

(1)                                  Disbursements. The first disbursement of the Term Loans, in the amount of $1,000,000shall be made by PFG to Borrower on or about September    ,2004.  Subsequent disbursements of theTerm Loans shall be subject to the approval of PFG, which shall be a matter ofPFG’s good faith business judgment, and, if approved, shall be made withinthree Business Days of written request therefor, in disbursements of not lessthan $250,000, and with the total number of disbursements not to exceed five(including the first disbursement).

 

(2)                                  Reborrowing; Prepayment. Term Loans may not be reborrowed, once they have been repaid.  Term Loans may be prepaid, in whole or inpart, at any time without premium or penalty. Prepayments shall be applied to the payments on the Term Loan in theinverse order of their maturity.

 

(3)                                  Loan Fee.  On the datehereof, Borrower shall pay PFG a loan fee of $30,000 representing 3% of the$1,000,000 first disbursement of the Term Loan, and thereafter, Borrower shallpay PFG a loan fee in an amount equal to 3% of the principal amount of

 

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each subsequent disbursement of the Term Loan,concurrently with the disbursement. Such loan fees are fully earned on the date due, are in addition to allinterest and all other fees and are non-refundable.

 

(4)                                  Due Date; Mandatory Prepayment. Borrower shall repay the unpaid principal balance of the Term Loans andany accrued and unpaid interest on October 31, 2004 (or on any earliertermination of this Agreement) (the “Term Loan Maturity Date”); provided thatBorrower shall be required to prepay unpaid principal of the Term Loans (the“Mandatory Prepayments”) in the amount of any loans, advances or other sumsthat Borrower has the right to receive from the Senior Lender under theAccounts Receivable Financing Agreement between Borrower and Senior Lenderdated June 30, 2003, as amended, and any other loan or similar agreement(the “Senior Loans”) meeting the following requirements:

 

(i)                                     on or prior to September 30,2004:  Senior Loans which Borrower hasthe right to receive, and which Senior Loans would bring the total unpaidprincipal balance of outstanding indebtedness of Borrower to Senior Lender tomore than $575,000; or

 

(ii)                                  after September 30, 2004: any andall Senior Loans which Borrower has the right to receive.

 

Such prepayment shall be due on the earliest datesBorrower has the right to receive the Senior Loans from the Senior Lender andfrom the first proceeds of such loans. Borrower agrees to borrow from Senior Lender all Senior Loans availableto it, at the first date they become available to Borrower from the SeniorLender, and to execute and deliver in connection therewith all loan requestsand other documents and instruments necessary in order to borrow such SeniorLoans, and to cause the proceeds thereof to be paid directly by Senior Lenderto PFG to the extent necessary to make the foregoing Mandatory Prepayments orto make payment of the Term Loans in full on the due date

 

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of the Term Loans, but the obligation of the Borrowerto pay the Term Loans in full on the Term Loan Maturity Date is not dependenton whether or not Borrower has Senior Loans available to it.

 

(5)                                  Irrevocable Assignment. Borrower shall, prior to the first disbursement of the Term Loan,execute and deliver to PFG an Irrevocable Assignment of Loan Proceeds andConsent in the form of Exhibit A hereto (the “Assignment”).  Disbursement of the Term Loan is conditionedon the Senior Lender also executing and delivering the Assignment to PFG.  If, for any reason, notwithstanding theAssignment, the Borrower receives proceeds of Senior Loans Borrower shall holdthe same in trust for PFG and remit the same to PFG within one business day ofreceipt of the same, to the extent a Mandatory Prepayment or other payment onthe Term Loans is due.

 

(6)                                  Late Charge. In the event any installment ofprincipal of the Term Loan or interest thereon is not paid on the date due(including without limitation Mandatory Prepayments), the Borrower  agrees to pay PFG a late charge in an amountequal to 5% of the amount of the installment as liquidated damages and faircompensation to the PFG to compensate the PFG for the delinquency, but nothingherein shall be construed to obligate the PFG to accept late payment or tolimit any of the PFG’s rights and remedies as a result of the late payment.

 

(c)                                  Loans.  RevolvingLoans and Term Loans are “Loans” for all purposes of this Loan Agreement.

 

(d)                                 Interest.  RevolvingLoans and Term Loans shall bear interest at the rate set forth inSection 2 below of this Schedule.

 

**2.****                                     ****Representations True.** Borrowerrepresents and warrants to PFG that all representations and warranties setforth in the Loan Agreement are true and correct in all material respects.

 

**3.****                                     ****General Provisions.* ***This Amendment, the Loan Agreement, anyprior written amendments to the Loan Agreement signed by PFG and Borrower, andthe other written documents and agreements between PFG and Borrower set forthin full all of the representations and agreements of the parties with respectto the subject matter hereof and supersede all prior discussions,representations, agreements and understandings between the parties with respectto the subject hereof.  Except as hereinexpressly amended, all of the terms and provisions of the

 

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Loan Agreement, and all other documents and agreements between PFG andBorrower shall continue in full force and effect and the same are herebyratified and confirmed.

 
| **Borrower:**                        | **PFG:**                               |
|--------------------------------------|----------------------------------------|
|                                 |                                   |
| **INTERWAVE  COMMUNICATIONS,  INC.** | **PARTNERS  FOR GROWTH, L.P.**         |
|                                 |                                   |   |   |   |   |
|                                 |                                   |   | **By** |    /s/ Lorraine Nield |   |
| **By**                               |    /s/ Erwin Leichtle   |   | **Title** |   Manager |   |
|                                 | **President**                          |   |   |   Partners for Growth, LLC |   |
|                                 |                                   |   |   |   Its General Partner |   |
|                                 |                                   |   |   |   |   |
|                                 |                                   |   |   |   |   |
| **By**                               |    /s/  Cal R. Hoagland |   |   |   |   |
|                                 | **Secretary**                          |   |   |   |   |
|                                      |                                        |  |  |  |  |  |  |

 

 

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**CONSENT**

 

Each of theundersigned acknowledges that its consent to the foregoing Amendment is notrequired, but the undersigned nevertheless does hereby consent to the foregoingAmendment and to the documents and agreements referred to therein and to allfuture modifications and amendments thereto, and any termination thereof, andto any and all other present and future documents and agreements between oramong the foregoing parties.  Nothingherein shall in any way limit any of the terms or provisions of the ContinuingGuaranty of the undersigned, all of which are hereby ratified and affirmed.

 
| **Interwave Advanced  Communications, Inc.** |                                  | **Interwave  Communications International,  Ltd.** |
|----------------------------------------------|---------------------------------------|----------------------------------------------------|
|                                         |                                  |                                               |
| **By**                                       |    /s/  Erwin Leichtle |                                               |   | **By** |    /s/  Erwin Leichtle |   |
| **Name**                                     |    Erwin  Leichtle     |                                               |   | **Name** |    Erwin  Leichtle |   |
| **Title**                                    |    President and CEO   |                                               |   | **Title** |    President and CEO |   |
|                                              |                                       |                                                    |  |  |  |  |  |  |  |  |  |

 

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**IRREVOCABLEASSIGNMENT OF LOAN PROCEEDS AND CONSENT**

 

**THIS IRREVOCABLE ASSIGNMENT OF LOANPROCEEDS AND CONSENT**is entered into on September 10, 2004 among SILICON VALLEY BANK (“Bank“), **INTERWAVE COMMUNICATIONS, INC.** (the“Company“), and **PARTNERS FOR GROWTH, L.P.** (“PFG“).

 

**1.  Assignment of Loan Proceeds.**

*** ***

**1.1  Irrevocable Assignment.** The Company hereby irrevocably assigns to PFG all of its right,title and interest in and to all loans, advances or other sums now or hereafterdue from the Senior Lender to the Company (the “Assigned Funds“) under theAccounts Receivable Financing Agreement between Borrower and Senior Lenderdated June 30, 2003, as amended, and any other present or future loan orsimilar agreement (collectively, the “Loan Agreement“).

 

**1.2  Payment.** Bank shallremit all Assigned Funds which would otherwise be payable to the Company underthe Loan Agreement (subject to all of Bank‘s rights under the Loan Agreement),directly to PFG at such address and to such account as PFG shall from time to timedirect by written notice to the Bank.  All payments made by Bank to PFG hereunder shall be applied by PFG asfollows:

 

(i)                                     first to any Mandatory Prepayments due onthe Term Loan (the “PFG Term Loan“) under the Loan and Security Agreementbetween the Company and PFG dated June 4, 2004 (as amended by theAmendment to Loan Documents of even date (the “PFG Amendment“), as so amended,the “PFG Loan Agreement“), and accrued interest thereon;

 

(ii)                                  next to any other payments due on the PFGTerm Loan; and

 

(iii)                               provided no default or event of default has occurredand is continuing under the PFG Loan Agreement, any excess shall be remitted byPFG to the Company.

 

**1.3  Subordination Agreement; Consent. **Bank agrees thatthe payments from the Bank to PFG provided for herein and the application ofsuch payments to the indebtedness of the Company to PFG as provided hereinshall be permitted under the Subordination Agreement between Bank and PFG datedJune 7, 2004. Bank acknowledges receipt of the PFG Amendment and consentsto the transactions described therein (the “Transactions“), including theincurrence of term loans of up to $2,000,000 and the assignment of certainassets described in this Assignment to PFG. Bank agrees that the consummationof the Transactions shall not constitute a default under the Loan Agreement.

 

**1.4  Monthly Statements and Information.** Bank shall send PFG a copy of all monthly statements and otherstatements rendered to the Company under or in connection with the LoanAgreement at the same time as they are provided to the Company, provided thatBank shall have no liability to PFG for negligently or inadvertently failing tofurnish such monthly statements.  Bankshall also respond to reasonable inquiries from PFG relating to the status ofthe Loan Agreement, the

 

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availability of loansthereunder, and other matters relating thereto.  The Company hereby irrevocably authorizes the Bank to provide toPFG all information called for by this Assignment.

 

**1.5  Authority; Further Assurance.** The Company represents that it has not made, executed or delivered anyother assignment of the monies covered by this Agreement.  The Company hereby irrevocably authorizesand empowers PFG to ask, demand, receive, receipt and give acquittance for anyand all monies hereby assigned, and to endorse any checks or other orders forthe payment of money payable to the Company in payment thereof.  The Company agrees that it will at all timeshereafter at the request of PFG, make, do and execute all such further acts, agreements,assurances and other documents and instruments as shall be reasonably requiredto enable PFG to collect all sums due or to become due under or in connectionwith the Loan Agreement, according to the intent and purpose of this Agreement.  Bank is hereby authorized to recognize PFG‘sclaims to rights hereunder without investigating the reason for any actiontaken by PFG or the validity or the amount of the obligations owing from theCompany to PFG or the existence of any default or the application to be made byPFG of any of the amounts paid to PFG.

 

**1.6  Assignment Subject to Loan Agreement.** This Assignment is subject in all respects to, and shall not affect orlimit any rights of Bank under, the terms and conditions of the Loan Agreement(as it may be amended from time to time) with respect to any matter, including(but not limited to) Bank’s right to retain reserves from time to time in itssole discretion, Bank‘s right to offset any amounts owing by the Company toBank from time to time, and Bank’s right to terminate the Loan Agreement inaccordance with the terms thereof, all without prior notice to PFG (except thatBank shall send to PFG a copy of any notice of termination given to theCompany, at the same time as the same is sent to the Company). Nothingcontained in this Agreement shall be construed to require Bank to advance anyfunds beyond any amount provided in the Loan Agreement.

 

**1.7  Perfection of PFG’s Security Interest.** PFG warrants and represents to Bank that the assignment to PFG bythe Company has been or will be validly perfected in all respects pursuant toapplicable law, and that PFG alone is entitled to receive all amounts otherwisepayable to the Company pursuant to the Loan Agreement.

 

**1.8  Conflicting Demands.** Bank shall not be obligated to make any payment to PFG hereunder, if anysuch payment is enjoined, restrained, or stayed by any court or by any statuteor governmental rule or regulation.  Inthe event any conflicting demands are made on Bank with respect to monies to bepaid hereunder, Bank shall not be required to determine the same and shall havethe right to file suit in interpleader or for declaratory relief.  In the event Bank shall bring any suchaction, the Company agrees to reimburse Bank, for its attorneys‘ fees, costsand expenses in connection therewith, and without limiting its other rights andremedies, and Bank shall be entitled to deduct such attorneys‘ fees, costs andexpenses from the funds which are the subject of such interpleader ordeclaratory relief action.

 

**2. Termination.** The assignment in Section 1 above isirrevocable and shall continue in effect until written notice of termination isgiven by PFG to Bank.  PFG agrees toprovide such notice immediately upon payment in full of the PFG Term Loans andall accrued interest thereon, provided no default or event of default hasoccurred and is continuing under the PFG Loan Agreement.

 

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**3. General.**  This Agreement is solely for the benefit ofthe parties hereto and their respective successors and assigns, and no otherperson shall have any right, benefit, priority or interest under, or because ofthe existence of, this Agreement.  Allof Bank‘s and PFG’s rights and remedies hereunder and under applicable law arecumulative and not exclusive.  ThisAgreement sets forth in full the terms of agreement among the parties withrespect to the subject matter hereof, and may not be modified or amended, normay any rights hereunder be waived, except in a writing signed by the partieshereto.  The Company shall reimburse PFGand Bank for all reasonable attorneys‘ fees and all other reasonable costs andexpenses incurred by them in connection with, or relating to, this Agreement,whether or not any lawsuit is filed.  Inthe event of any litigation between or among the Company, PFG and Bank basedupon, or arising out of, or relating to this Agreement, the prevailing partyshall be entitled to recover all of its reasonable costs and expenses(including without limitation reasonable attorneys fees) from thenon-prevailing party.  This Agreementshall be construed in accordance with, and governed by, the laws of the Stateof California.  As a material part ofthe consideration to the parties for entering into this Agreement, each party(i) agrees that all actions and proceedings based upon, arising out of orrelating in any way directly or indirectly to, this Agreement shall belitigated exclusively in courts located within Santa Clara County, California,(ii) consents to the jurisdiction of any such court and consents to theservice of process in any such action or proceeding by personal delivery,first-class mail, or any other method permitted by law, and (iii) waivesany and all rights to transfer or change the venue of any such action orproceeding to any court located outside Santa Clara County, California.  This Agreement shall be binding upon andinure to the benefit of PFG, the Company and Bank and their respective successorsand assigns.

 

**4. Mutual Waiver of Jury Trial*.***  **PFG, theCompany and Bank each hereby waive the right to trial by jury in any action orproceeding based upon, arising out of, or in any way relating to: (i) thisAgreement; or (ii)  any other present orfuture instrument or agreement between or among PFG, the Company and/or Bank;or (iii) any conduct, acts or omissions of PFG, the Company or Bank or any oftheir directors, officers, employees, agents, attorneys or any other personsaffiliated with PFG, the Company or Bank; in each of the foregoing cases,whether sounding in contract or tort or otherwise.**

 
| **Company:**                       | PFG:                                  |
|------------------------------------|---------------------------------------|
|                               |                                  |
| **Interwave Communications, Inc.** | **Partners For Growth, L.P.**         |
|                               |                                  |
|                               |                                  |
| By                                 |    /s/  Erwin Leichtle |   | By |    /s/  Lorraine Nield |   |
| Name                               |    Erwin  Leichtle     |   | Name |    Lorraine  Nield |   |
| Title                              |    President  and CEO  |   | Title |    Manager,  Partners for Growth, LLC |   |
|                               |                                  |   |   |    Its  General Partner |   |
|                                    |                                       |  |  |  |  |  |  |  |  |  |  |  |

 

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| Bank:                   |                                 |
|-------------------------|--------------------------------------|
|                    |                                 |
| **Silicon Valley Bank** |                                 |
|                    |                                 |
|                    |                                 |
| By                      |    /s/  Nick Tsiagkas |   |   |   |   |
| Name                    |    Nick  Tsiagkas     |   |   |   |   |
| Title                   |    Vice  President    |   |   |   |   |
|                         |                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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