Exhibit 10.35


 





SILICON VALLEY BANK


SPECIALTY FINANCE
DIVISION


 


 


ACCOUNTS RECEIVABLE FINANCING AGREEMENT


 


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


 


1.               Definitions.  In this Agreement:


 


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


 


“Account Debtor”
is defined in the California Uniform Commercial Code and shall include any
person liable on any Financed Receivable, such as, a guarantor of the Financed
Receivable and any issuer of a letter of credit or banker’s acceptance.


 


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


 


“Administrative Fee” is
defined in Section 3.3.


 


“Advance”
is defined in Section 2.2.


 


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


 


“Applicable Rate”
is 1% per month.


 


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


 


“Code”
is the California Uniform Commercial Code.


 


“Collateral”
is attached as Exhibit “A”.


 


“Collateral Handling
Fee” is defined in Section 3.5.


 


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


 


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


 


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


 


“Early Termination
Fee” is defined in Section 3.6.


 


1

















 


“Event of Default”
is defined in Section 9.


 


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


 


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


 


“Facility Fee”
is defined in Section 3.4.


 


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


 


“Finance Charges” is defined in Section
3.2.


 


“Financed
Receivables” are all those accounts, receivables,
chattel paper, instruments, contract rights, documents, general intangibles,
letters of credit, drafts, bankers acceptances, and rights to payment, and all
proceeds, including their proceeds (collectively “receivables”), which Bank
finances and make an Advance.  A
Financed Receivable stops being a Financed Receivable (but remains Collateral)
when the Advance made for the Financed Receivable has been finally paid.


 


“Financed Receivable
Balance” is the total outstanding amount, at any time,
of all Financed Receivables.


 


“Good Faith Deposit”
is described in Section 3.9.


 


“Ineligible Receivable” is any accounts
receivable:


 


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


 


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


 


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


 


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


 


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


 


“Invoice Transmittal”
shows accounts receivable which Bank may finance and, for each receivable,
includes the Account Debtor’s, name, address, invoice amount, invoice date and
invoice number and is signed by Borrower’s authorized representative.


 


“Lockbox” is
described in Section 6.2.


 


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


 


“Obligations”
are all advances, liabilities, obligations, covenants and duties owing,
arising, due or payable by Borrower to Bank now or later under this Agreement
or any other document, instrument or agreement, account (including those
acquired by assignment) primary or secondary, such as all Advances, Finance
Charges, Administrative Fees, interest, fees, expenses, professional fees and
attorneys’ fees or other.


 


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


 


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


 


2

















 


“Reconciliation
Period” is each calendar month.


 


2.               Financing
of Accounts Receivable.


 


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


 


2.2. Acceptance of Accounts Receivable.  Bank is not obligated to finance any
accounts receivable.  Bank may approve
any Account Debtor’s credit before financing any receivable.  When Bank accepts a receivable, it will pay
Borrower the Advance Rate times the face amount of the receivable (the
“Advance”).  Bank may, in its
discretion, change the percentage of the Advance Rate.  When Bank makes an Advance, the receivable
becomes a “Financed Receivable.”  All
representations and warranties in Section 6 must be true as of the date of the
Invoice Transmittal and of the Advance and no Event of Default exists would
occur as a result of the Advance.  The
aggregate amount of all Advances outstanding at any time may not exceed the
Facility Amount.


 


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


 


3.     Collections, Finance Charges, Remittances and Fees.
  The Obligations shall be subject
to the following fees and Finance Charges. 
Fees and Finance Charges may, in Bank’s discretion, be charged as an
Advance, and shall thereafter accrue fees and Finance Charges as described
below.  Bank may, in its discretion,
charge fee and Finance Charges to Borrower’s deposit account maintained with
Bank.


 


3.1. Collections.
Collections will be credited to the Financed Receivables Balance, but if there
is an Event of Default, Bank may apply Collections to the Obligation in any
order it chooses.   If Bank receives a
payment for both Financed Receivable and a non Financed Receivable, the funds
will first be applied to the Financed Receivable and, if there is not an Event
of Default, the excess will be remitted to the Borrower, subject to Section
3.10.


 


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


 


3

















 


3.3.  Administrative Fee.   Not applicable.


 


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


 


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


 


3.6. Early
Termination Fee. Not applicable.


 


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


 


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


 


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


 


3.10. Account
Collection Services.  All
Borrowers’ receivables are to be paid to the same address/or party and Borrower
and Bank must agree on such address.  If
Bank collects all receivables and there is not an Event of Default or an event
that with notice or lapse of time will be an Event of Default, within five (5) days
of receipt of those collections, Bank will give Borrower, the receivables
collections it receives for receivables other than Financed Receivables and/or
amount in excess of the amount for which Bank has made an Advance to Borrower,
less any amount due to Bank, such as the Finance Charge, Administrative Fee,
Collateral Handling Fee and expenses or otherwise. This Section does not impose
any affirmative duty on Bank to do any act other than to turn over
amounts.  All receivables and
collections are Collateral and if an Event of Default occurs, Bank need not
remit collections of Collateral and may apply them to the Obligations.


 


4.     Repayment of Obligations.


 


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


 


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


 


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


 


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


 


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


 


4

















 


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


 


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


 


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


 


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


 


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


 


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


 


6.     Representations, Warranties  and
Covenants.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6.1.1 Additional
Representations and Warranties. 
Borrower represents and warrants as follows:


 


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


 


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


 


(C)        Borrower
is not an “investment company” or a company “controlled” by an “investment
company” under the Investment Company Act. 
Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations G, T and U of the Federal
Reserve Board of


 


5

















 


Governors).  Borrower has complied with the Federal Fair
Labor Standards Act.  Borrower has not
violated any laws, ordinances or rules. None of Borrower’s properties or assets
has been used by Borrower, to the best of Borrower’s knowledge, by previous
persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than legally. 
Borrower has timely filed all required tax returns and paid, or made
adequate provision to pay, all taxes. 
Borrower has obtained all consents, approvals and authorizations of,
made all declarations or filings with, and given all notices to, all government
authorities that are necessary to continue its business as currently conducted.


 


6.2. Affirmative
Covenants.  Borrower will do
all of the following:


 


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


 


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


 


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


 


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


 


(E)         Unless
the same are publicly available, give Bank copies of all Forms 10-K, 10-Q and
8-K (or equivalents) within 5 days of filing with the Securities and Exchange
Commission, while any Financed Receivable is outstanding.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


7.     Adjustments.  If any Account Debtor asserts a discount, allowance, return,
offset, defense, warranty claim, or the like (an “Adjustment”) or if Borrower
breaches any of the representations, warranties or covenants set forth in
Section 6., Borrower will promptly advise Bank.  Borrower will resell any rejected, returned, returned, or
recovered personal property for Bank, at Borrower’s expense, and pay proceeds
to Bank.  While Borrower has returned
goods that are Borrower property, Borrower will segregate and mark them
“property of Silicon Valley Bank.”  Bank
owns the Financed Receivables and until receipt of payment, has the right to
take possession of any rejected, returned, or recovered personal property.


 


8.     Security Interest. Borrower grants to
Bank a continuing security interest in all presently and later acquired
Collateral.  Any security interest will
be a first priority security interest in the Collateral.


 


9.               Events of
Default. Any one or more of the following is an Event of
Default.


 


(A)      Borrower
fails to pay any amount owed to Bank when due;


 


(B)        Borrower
files or has filed against it any Insolvency Proceedings or any assignment for
the benefit of creditors, or appointment of a receiver or custodian for any of
its assets, provided that, in the case of an involuntary bankruptcy proceeding
filed against Borrower, the same shall not constitute an Event of Default if it
is dismissed within 30 days after the date it was filed;


 


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


 


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


 


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


 


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


 


(G)        [intentionally
omitted];


 


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


 


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


 


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


 


7

















 


10.   Remedies.



 


10.1. Remedies
Upon Default.  When an Event
of Default occurs, (1) Bank may stop financing receivables or extending credit
to Borrower;  (2) at Banks option and on
demand, all or a portion of the Obligations or, for to an Event of Default
described in Section 9(B), automatically and without demand, are due and
payable in full; (3) apply to the Obligations any (i) balances and deposits of
Borrower it holds, or (ii) any amount held by Bank owing to or for the credit
or the account of Borrower; and (4) Bank may exercise all rights and remedies
under this Agreement and the law, including those of a secured party under the
Code, power of attorney rights in Section 5 for the Collateral, and the right
to collect, dispose of, sell, lease, use, and realize upon all Financed
Receivables and Collateral in any commercial manner.  Borrower agrees that any notice of sale required to be given to
Borrower is deemed given if at least five days before the sale may be held.


 


10.2. Demand Waiver.  Borrower waives demand, notice of
default or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of accounts, documents, instruments, chattel paper, and guaranties held by Bank
on which Borrower is liable.


 


10.3. Default Rate.  If any amount is not paid when due, the
amount bears interest at the Applicable Rate plus five percent until the
earlier of (a) payment in good funds or (b) entry of a final judgment when the
principal amount of any money judgment will accrue interest at the highest rate
allowed by law.


 


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


 


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


 


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


 


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


 


14.   General Provisions.


 


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


 


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


 


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


 


8

















 


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


 


14.5. Amendments
in Writing, Integration.  All
amendments to this Agreement must be in writing.  This Agreement is the entire agreement about this subject matter
and supersedes prior negotiations or agreements.


 


14.6.
Counterparts.  This Agreement
may be executed in any number of counterparts and by different parties on
separate counterparts and when executed and delivered are one Agreement.


 


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


 


14.8. Confidentiality.  Bank will use the same degree of care handling Borrower’s
confidential information that it uses for its own confidential information, but
may disclose information; (i) to its subsidiaries or affiliates in connection
with their business with Borrower, (ii) to prospective transferees or
purchasers of any interest in the Agreement, (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with an
examination or audit and (v) as it considers appropriate exercising the
remedies under this Agreement. 
Confidential information does not include information that is either:
(a) in the public domain or in Bank’s possession when disclosed, or becomes
part of the public domain after disclosure to Bank; or (b) disclosed to Bank by
a third party, if Bank does not know that the third party is prohibited from
disclosing the information.


 


14.9. Other
Agreements.  This Agreement
may not adversely affect Banks rights under any other document or agreement.  If there is a conflict between this
Agreement and any agreement between Borrower and Bank, Bank may determine in
its sole discretion which provision applies. 
Borrower acknowledges that any security agreements, liens and/or
security interests securing payment of Borrower’s Obligations also secure
Borrower’s Obligations under this Agreement and are not adversely affected by
this Agreement.  Additionally, (a) any
Collateral under other agreements or documents between Borrower and Bank
secures Borrowers Obligations under this Agreement and (b) a default by
Borrower under this Agreement is a default under agreements between Borrower
and Bank.


 


BORROWER:        INTERWAVE COMMUNICATIONS, INC.


 


 


	
  By 

  	
  /s/ Cal R. Hoagland

  	
   

  	
   

  
	
  Title 

  	
   SVP and CFO

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BANK: SILICON
  VALLEY BANK

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Illegible

  	
   

  	
   

  
	
  Title 

  	
   VP

  	
   

  	
   

  
							



 


9

















 


EXHIBIT A


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


All Borrower’s Books
relating to the foregoing and any and all claims, rights and interests in any
of the above and all substitutions for, additions and accessions to and
proceeds thereof.


 


1

















 


Exhibit “B”


 





SILICON VALLEY BANK


SPECIALTY FINANCE
DIVISION


 


Compliance Certificate


 


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


 


Borrower represents and warrants for each
Financed Receivable:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Additionally,
Borrower represents and warrants as follows:


 


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


 


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


 


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


 


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


 


Sincerely,


 


	
   

  	
   

  
	
  SIGNATURE

  
	
   

  
	
   

  	
   

  
	
  TITLE

  
	
   

  
	
   

  	
   

  
	
  DATE

  



 


2