{"id":41128,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-and-security-agreement-digital-microwave-corporation-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-and-security-agreement-digital-microwave-corporation-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-and-security-agreement-digital-microwave-corporation-and.html","title":{"rendered":"Loan and Security Agreement &#8211; Digital Microwave Corporation and Export-Import Bank"},"content":{"rendered":"<pre>_______________________________________________________________________________\n\n\n\n                         DIGITAL MICROWAVE CORPORATION\n\n                               EXPORT-IMPORT BANK\n\n\n                          LOAN AND SECURITY AGREEMENT\n\n\n_______________________________________________________________________________\n\n \n                               TABLE OF CONTENTS\n\n                                                                                          Page\n\n1.         DEFINITIONS AND CONSTRUCTION   . . . . . . . . . . . . . . . . . . .1\n           1.1         Definitions  . . . . . . . . . . . . . . . . . . . . . .1\n           1.2         Accounting Terms . . . . . . . . . . . . . . . . . . . .6\n                                                                                      \n2.         LOAN AND TERMS OF PAYMENT  . . . . . . . . . . . . . . . . . . . . .7\n           2.1         Revolving Advances . . . . . . . . . . . . . . . . . . .7\n           2.2         Overadvances . . . . . . . . . . . . . . . . . . . . . .7\n           2.3         Interest Rates, Payments, and Calculations . . . . . . .7\n           2.4         Crediting Payments . . . . . . . . . . . . . . . . . . .8\n           2.5         Fees . . . . . . . . . . . . . . . . . . . . . . . . . .8\n           2.6         Increased Costs  . . . . . . . . . . . . . . . . . . . .8\n           2.7         Term . . . . . . . . . . . . . . . . . . . . . . . . . .9\n           2.8         Use of Proceeds  . . . . . . . . . . . . . . . . . . . .9\n                                                                                      \n3.         CONDITIONS OF LOANS  . . . . . . . . . . . . . . . . . . . . . . . .9\n           3.1         Conditions Precedent to Initial Advance  . . . . . . . .9\n           3.2         Conditions Precedent to all Advances . . . . . . . . . .9\n                                                                                      \n4.         CREATION OF SECURITY INTEREST  . . . . . . . . . . . . . . . . . . 10\n           4.1         Grant of Security Interest . . . . . . . . . . . . . . 10\n           4.2         Delivery of Additional Documentation Required  . . . . 10\n           4.3         Power of Attorney  . . . . . . . . . . . . . . . . . . 10\n           4.4         Right to Inspect . . . . . . . . . . . . . . . . . . . 10\n                                                                                      \n5.         REPRESENTATIONS AND WARRANTIES   . . . . . . . . . . . . . . . . . 11\n           5.1         Due Organization and Qualification . . . . . . . . . . 11\n           5.2         Due Authorization; No Conflict . . . . . . . . . . . . 11\n           5.3         No Prior Encumbrances  . . . . . . . . . . . . . . . . 11\n           5.4         Bona Fide Eligible Accounts  . . . . . . . . . . . . . 11\n           5.5         Merchantable Inventory . . . . . . . . . . . . . . . . 11\n           5.6         Name; Location of Chief Executive Office . . . . . . . 11\n           5.7         Litigation . . . . . . . . . . . . . . . . . . . . . . 11\n           5.8         No Material Adverse Change in Financial Statements . . 11\n           5.9         Solvency . . . . . . . . . . . . . . . . . . . . . . . 11\n           5.10        Regulatory Compliance  . . . . . . . . . . . . . . . . 11\n           5.11        Environmental Condition  . . . . . . . . . . . . . . . 12\n           5.12        Taxes  . . . . . . . . . . . . . . . . . . . . . . . . 12\n           5.13        Subsidiaries . . . . . . . . . . . . . . . . . . . . . 12\n           5.14        Government Consents  . . . . . . . . . . . . . . . . . 12\n           5.15        Full Disclosure  . . . . . . . . . . . . . . . . . . . 12\n           5.16        CoastFed Loan Documents  . . . . . . . . . . . . . . . 12\n           5.17        Ex-Im Guarantee  . . . . . . . . . . . . . . . . . . . 12\n                                                                                      \n6.         AFFIRMATIVE COVENANTS  . . . . . . . . . . . . . . . . . . . . . . 12\n           6.1         Good Standing  . . . . . . . . . . . . . . . . . . . . 13\n           6.2         Government Compliance  . . . . . . . . . . . . . . . . 13\n           6.3         Financial Statements, Reports, Certificates  . . . . . 13\n           6.4         Inventory; Equipment . . . . . . . . . . . . . . . . . 14\n           6.5         Taxes  . . . . . . . . . . . . . . . . . . . . . . . . 14\n           6.6         Insurance  . . . . . . . . . . . . . . . . . . . . . . 14\n           6.7         Tangible Net Worth . . . . . . . . . . . . . . . . . . 14\n           6.8         CoastFed Loan Documents  . . . . . . . . . . . . . . . 14\n\n\n\n\n                                       i\n\n   3\n\n                                                                                      \n           6.9         Notice in Event of Filing of Action for Debtor's Relief 15\n           6.10        Terms of Sale  . . . . . . . . . . . . . . . . . . . . 15\n           6.11        Assignment of Letter of Credit Proceeds  . . . . . . . 15\n           6.13        Further Assurances . . . . . . . . . . . . . . . . . . 15\n                                                                                      \n7.         NEGATIVE COVENANTS   . . . . . . . . . . . . . . . . . . . . . . . 15\n           7.1         Dispositions . . . . . . . . . . . . . . . . . . . . . 16\n           7.2         Change in Business . . . . . . . . . . . . . . . . . . 16\n           7.3         Mergers or Acquisitions  . . . . . . . . . . . . . . . 16\n           7.4         Indebtedness . . . . . . . . . . . . . . . . . . . . . 16\n           7.5         Encumbrances . . . . . . . . . . . . . . . . . . . . . 16\n           7.6         Distributions  . . . . . . . . . . . . . . . . . . . . 16\n           7.7         Investments  . . . . . . . . . . . . . . . . . . . . . 16\n           7.8         Transactions with Affiliates . . . . . . . . . . . . . 16\n           7.9         Subordinated Debt  . . . . . . . . . . . . . . . . . . 16\n           7.10        Inventory  . . . . . . . . . . . . . . . . . . . . . . 16\n           7.11        Compliance . . . . . . . . . . . . . . . . . . . . . . 17\n           7.12        CoastFed and Heller Loan Documents . . . . . . . . . . 17\n           7.13        Ex-Im Guarantee  . . . . . . . . . . . . . . . . . . . 17\n                                                                                      \n8.         EVENTS OF DEFAULT  . . . . . . . . . . . . . . . . . . . . . . . . 17\n           8.1         Payment Default  . . . . . . . . . . . . . . . . . . . 17\n           8.2         Covenant Default; Cross Default  . . . . . . . . . . . 17\n           8.3         Material Adverse Effect  . . . . . . . . . . . . . . . 17\n           8.4         Attachment . . . . . . . . . . . . . . . . . . . . . . 17\n           8.5         Insolvency . . . . . . . . . . . . . . . . . . . . . . 17\n           8.6         Other Agreements . . . . . . . . . . . . . . . . . . . 18\n           8.7         Judgments  . . . . . . . . . . . . . . . . . . . . . . 18\n           8.8         Misrepresentations . . . . . . . . . . . . . . . . . . 18\n           8.9         Ex-Im Guarantee  . . . . . . . . . . . . . . . . . . . 18\n                                                                                      \n9.         BANK'S RIGHTS AND REMEDIES   . . . . . . . . . . . . . . . . . . . 18\n           9.1         Rights and Remedies  . . . . . . . . . . . . . . . . . 18\n           9.2         Ex-Im Direction  . . . . . . . . . . . . . . . . . . . 19\n           9.3         Ex-Im Notification . . . . . . . . . . . . . . . . . . 19\n           9.4         Accounts Collection  . . . . . . . . . . . . . . . . . 19\n           9.5         Bank Expenses  . . . . . . . . . . . . . . . . . . . . 19\n           9.6         Bank's Liability for Collateral  . . . . . . . . . . . 20\n           9.7         Remedies Cumulative  . . . . . . . . . . . . . . . . . 20\n           9.8         Demand; Protest; Application . . . . . . . . . . . . . 20\n                                                                                      \n10.        NOTICES      . . . . . . . . . . . . . . . . . . . . . . . . . . ..20\n                                                                                      \n11.        CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER   . . . . . . . . . . . 21\n                                                                                      \n12.        GENERAL PROVISIONS   . . . . . . . . . . . . . . . . . . . . . . . 21\n           12.1        Successors and Assigns . . . . . . . . . . . . . . . . 21\n           12.2        lndemnification  . . . . . . . . . . . . . . . . . . . 21\n           12.3        Time of Essence  . . . . . . . . . . . . . . . . . . . 21\n           12.4        Severability of Provisions; Headings . . . . . . . . . 21\n           12.5        Amendments in Writing  . . . . . . . . . . . . . . . . 21\n           12.6        Counterparts . . . . . . . . . . . . . . . . . . . . . 21\n           12.7        Survival . . . . . . . . . . . . . . . . . . . . . . . 22\n           12.8        Ex-Im Guarantee  . . . . . . . . . . . . . . . . . . . 22\n\n\n\n\n\n\n                                       ii\n\n   4\n           This LOAN AND SECURITY AGREEMENT is entered into as of March 21,\n1995, by and between BANK OF THE WEST (\"Bank\") and DIGITAL MICROWAVE\nCORPORATION (\"Borrower\").\n\n                                    RECITALS\n\n           Borrower and Bank desire in this Agreement to set forth their\nagreement with respect to a working capital facility to be guaranteed by\nExport-Import Bank of the United States.\n\n                                   AGREEMENT\n\n           The parties agree as follows:\n\n           1.          DEFINITIONS AND CONSTRUCTION\n\n                       1.1        Definitions.  As used in this Agreement, the\nfollowing terms shall have the following definitions:\n\n\n                                  \"Accounts\" means all presently existing and\nhereafter arising accounts, contract rights, and all other forms of obligations\nowing to Borrower arising out of the sale or lease of goods (including, without\nlimitation, the licensing of software and other technology) or the rendering of\nservices by Borrower, whether or not earned by performance, and any and all\ncredit insurance, guaranties, and other security therefor, as well as all\nmerchandise returned to or reclaimed by Borrower and Borrower's Books relating\nto any of the foregoing.\n\n                                  \"Advance\" or \"Advances\" means an Advance\nunder the Revolving Facility.\n\n                                  \"Affiliate\" means, with respect to any\nPerson, any Person that owns or controls directly or indirectly such Person,\nany Person that controls or is controlled by or is under common control with\nsuch Person, and each of such Person's senior executive officers, directors,\nand partners.\n\n                                  \"Availability Date\" means the earlier of (i)\ntwelve (12) months after the date of the first Advance or (ii) February 29,\n1996.\n\n                                  \"Bank Expenses\" means all: reasonable costs\nor expenses (including reasonable attorneys' fees and expenses) incurred in\nconnection with the preparation, negotiation, administration, and enforcement\nof the Loan Documents, including any costs incurred in relation to opposing or\nseeking to obtain relief from any stay or restructioning order prohibiting Bank\nfrom exercising its rights as a secured party, foreclosing upon or disposing of\nCollateral, or such related matters; and Bank's reasonable attorneys' fees and\nexpenses incurred in amending, enforcing or defending the Loan Documents,\nwhether or not suit is brought.  Bank Expenses shall not include the Coast Fee\nthat Bank pays pursuant to the Intercreditor Agreement of even date herewith\nbetween Bank and CoastFed Business Credit Corporation.\n\n                                  \"Borrower's Account\" means a deposit account\nmaintained by Borrower with Bank upon terms mutually acceptable to Borrower and\nBank.\n\n                                  \"Borrowing Base\" has the meaning set forth in\nSection 2.1 hereof.\n\n                                  \"Borrower's Books\" means all of Borrower's\nbooks and records including: ledgers; records concerning Borrower's assets or\nliabilities, the Collateral, business operations or financial condition; and\nall computer programs, or tape files, and the equipment, containing such\ninformation.\n\n\n\n\n\n                                       1\n\n   5\n                                  \"Business Day\" means any day that is not a\nSaturday, Sunday, or other day on which banks in the State of California are\nauthorized or required to close.\n\n                                  \"Closing Date\" means the date of this\nAgreement.\n\n                                  \"CoastFed Loan Documents\" means the Loan and\nSecurity Agreement between CoastFed Business Credit Corporation and Borrower\ndated June 25, 1992 as amended from time to time and the instruments and\ndocuments executed in connection with that agreement.\n\n                                  \"Code\" means the California Uniform\nCommercial Code.\n\n                                  \"Collateral\" means the property described on\nExhibit A attached hereto.\n\n                                  \"Contingent Obligation\" means, as applied to\nany Person, any direct or indirect liability, contingent or otherwise, of that\nPerson with respect to (i) any indebtedness, lease, dividend, letter of credit\nor other obligation of another, including, without limitation, any such\nobligation directly or indirectly guaranteed, endorsed, co-made or discounted\nor sold with recourse by that Person, or in respect of which that Person is\notherwise directly or indirectly liable; (ii) any obligations with respect to\nundrawn letters of credit issued for the account of that Person; and (iii) all\nobligations arising under any interest rate, currency or commodity swap\nagreement, interest rate cap agreement, interest rate collar agreement, or\nother agreement or arrangement designated to protect a Person against\nfluctuation in interest rates, currency exchange rates or commodity prices;\nprovided, however, that the term \"Contingent Obligation\" shall not include\nendorsements for collection or deposit in the ordinary course of business.  The\namount of any Contingent Obligation shall be deemed to be an amount equal to\nthe stated or determined amount of the primary obligation in respect of which\nsuch Contingent Obligation is made or, if not stated or determinable, the\nmaximum reasonably anticipated liability in respect thereof as determined by\nsuch Person in good faith; provided, however, that such amount shall not in any\nevent exceed the maximum amount of the obligations under the guarantee or other\nsupport arrangement.\n\n                                  \"Contract\" means the subcontract between\nSiemens, A.G.  (\"Siemens\") and Borrower dated November 16, 1993, which was\nentered into to fulfill the obligations of Siemens under a contract between\nSiemens and E-Plus Mobilfunk, GmbH dated November 16,1993.\n\n                                  \"Eligible Foreign Accounts\" means those\nAccounts that arise in the ordinary course of Borrower's business from\nBorrower's sale of Eligible Foreign Inventory (i) with respect to which the\naccount debtor is not a resident of the United States; (ii) that have been\nvalidly assigned and comply with all of Borrower's representations and\nwarranties to Bank; (iii) that are and at all times shall continue to be\nacceptable to Bank in all respects; and (iv) that have been approved by the\nEx-Im Bank under the Ex-Im Guarantee (which approval, as of the date hereof,\nhas been granted only with respect to Accounts arising out of the Contract);\nprovided, that standards of eligibility may be fixed and revised from time to\ntime by Bank in Bank's reasonable judgment and upon notification thereof to the\nBorrower in accordance with the provisions hereof.  Eligible Foreign Accounts\nshall not include the following:\n\n                                  (a)        Accounts that the account debtor\nhas failed to pay within ninety (90) days of the original date of the invoice;\n\n                                  (b)        Unless pre-approved by Bank,\nAccounts on which payment is due more than thirty (30) days after the original\ndate of the invoice (Bank acknowledges that the Contract has been\npre-approved);\n\n                                  (c)        Accounts with respect to which the\naccount debtor is an officer, employee, or agent of Borrower;\n\n\n\n\n\n                                       2\n\n   6\n                                  (d)        Accounts with respect to which the\naccount debtor is an Affiliate of Borrower;\n\n                                  (e)        Accounts with respect to which\nBorrower is liable to the account debtor for goods sold or services rendered by\nthe account debtor to Borrower, but only to the extent of Borrower's liability\nto such account debtor;\n\n                                  (f)        Accounts with respect to which the\naccount debtor disputes liability or makes any claim with respect thereto (but\nonly to the extent of the amount subject to such dispute or claim), or is\nsubject to any Insolvency Proceeding, or becomes insolvent, or goes out of\nbusiness;\n\n                                  (g)        Accounts with respect to which the\naccount debtor is located in any country in which Ex-Im Bank is prohibited from\ndoing business;\n\n                                  (h)        Accounts generated by the sale of\nProducts purchased for military purposes; and\n\n                                  (i)        Accounts the collection of which\nBank determines after reasonable inquiry to be doubtful.\n\n                                  \"Eligible Foreign Inventory\" means Inventory\nheld by Borrower in the United States in connection with satisfaction of\nBorrower's obligations under the Contract, other than Inventory that consists\nof, or is to be incorporated into, or is used for the sale or manufacture of,\n(i) Products that are destined for shipment to any countries in which Ex-Im\nBank is prohibited from doing business, (ii) Products that are purchased for\nany military purpose, or (iii) Products that are destined for shipment to\ncountries designated in Ex-Im Bank's Country Limitation Schedule as countries\nin which Ex-Im Bank cover is not available for commercial reasons.\n\n\n                                  \"ERISA\" means the Employment Retirement\nIncome Security Act of 1974, as amended, and the regulations thereunder.\n\n                                  \"Ex-Im Bank\" means Export-Import Bank of the\nUnited States.\n\n                                  \"Ex-Im Committed Line\" means Fifteen Million\nDollars ($15,000,000).\n\n                                  \"Ex-Im Guarantee\" means that certain Working\nCapital Guarantee Agreement No.  APO67616XX issued by Ex-Im Bank with respect\nto Borrower, including the Transaction Attachment and Special Conditions\nattached thereto, as amended from time to time, the terms of which are\nincorporated by reference into this Agreement.\n\n                                  \"GAAP\" means generally accepted accounting\nprinciples as in effect from time to time.\n\n                                  \"Heller Loan Documents\" means the $10,000,000\nPromissory Note dated October 28, 1994 (the \"Note\") executed by Borrower in\nfavor of Heller Financial, Inc.  (\"HFI\") and the related Security Agreement\ndated as of October 28, 1994 between the Company and HFI, as amended from time\nto time and the instruments and documents executed in connection with such Note\nand Security Agreement.\n\n                                  \"Indebtedness\" means (a) all indebtedness for\nborrowed money or the deferred purchase price of property or services,\nincluding without limitation reimbursement and other obligations with respect\nto surety bonds and letters of credit, (b) all obligations evidenced by notes,\nbonds, debentures or similar instruments, (c) all capital lease obligations and\n(d) all Contingent Obligations.\n\n\n\n\n\n                                       3\n\n   7\n                                  \"Insolvency Proceeding\" means any proceeding\ncommenced by or against any person or entity under any provision of the United\nStates Bankruptcy Code, as amended, or under any other bankruptcy or insolvency\nlaw, including assignments for the benefit of creditors, formal or informal\nmoratoria, compositions, extension generally with its creditors, or proceedings\nseeking reorganization, arrangement, or other relief.\n\n                                  \"Inventory\" means Borrower's raw materials,\nwork in process and finished goods.\n\n                                  \"Investment\" means any beneficial ownership\nof (including stock, partnership interest or other securities) any Person, or\nany loan, advance or capital contribution to any Person.\n\n                                  \"IRC\" means the Internal Revenue Code of\n1986, as amended, and the regulations thereunder.\n\n                                  \"Lien\" means any mortgage, lien, deed of\ntrust, security interest or other encumbrance.\n\n                                  \"Loan Documents\" means, collectively, this\nAgreement, any note or notes executed by Borrower, and any other agreement\nentered into between Borrower and Bank in connection with this Agreement, all\nas amended or extended from time to time.\n\n                                  \"Material Adverse Effect\" means a material\nadverse effect on (i) the business operations or condition of Borrower and its\nSubsidiaries taken as a whole, (ii) the ability of Borrower to repay the\nObligations or otherwise perform its obligations under the Loan Documents,\n(iii) the validity or enforceability of the Loan Documents, or (iv) the rights\nand remedies of Bank under the Loan Documents.\n\n                                  \"Maturity Date\" means August 28, 1996.\n\n                                  \"Negotiable Collateral\" means all of\nBorrower's present and future letters of credit of which it is a beneficiary,\nnotes, drafts, instruments, securities, documents of title, and chattel paper,\nand Borrower's Books relating to any of the foregoing.\n\n                                  \"Obligations\" means all debt, principal,\ninterest, Bank Expenses and other amounts owed to the Bank by Borrower pursuant\nto this Agreement or any other agreement, whether absolute or contingent, due\nor to become due, now existing or hereafter arising (including all interest\naccruing after the commencement of an Insolvency Proceeding), and including any\ndebt, liability, or obligation owing from Borrower to others that Bank may have\nobtained by assignment or otherwise.\n\n                                  \"Periodic Payments\" means all installments or\nsimilar recurring payments that Borrower may now or hereafter become obligated\nto pay to Bank pursuant to the terms and provisions of any instrument, or\nagreement now or hereafter in existence between Borrower and Bank.\n\n                                  \"Permitted Indebtedness\" means:\n\n                                  (a)        Indebtedness of Borrower in favor\nof Bank arising under this Agreement or any other Loan Document;\n\n                                  (b)        Subordinated Debt;\n\n                                  (c)        Capital leases or indebtedness\nincurred solely to purchase equipment, which is secured in accordance with\nclause (c) of \"Permitted Liens\" below and is not in excess of the\n\n\n\n\n\n                                       4\n\n   8\nlesser of the purchase price of such equipment or the fair market value of such\nequipment on the date of acquisition;\n\n                                  (d)        Indebtedness to trade creditors\nincurred in the ordinary course of business; and\n\n                                  (e)        Indebtedness incurred under the\nCoastFed Loan Documents and the Heller Loan Documents, and or extensions,\nrenewals and refinancings of such Indebtedness, provided that the principal\namount of such Indebtedness being extended, renewed or refinanced does not\nincrease;\n\n                                  (f)        guarantees of any obligations of\nthe Borrower's Subsidiaries and of the Borrower's joint venture in Malaysia;\n\n                                  (g)        obligations pursuant to the\nBorrower's bylaws or in indemnification agreements, to indemnify officers,\ndirectors and employees of the Borrower; and\n\n                                  (h)        other Indebtedness for borrowed\nmoney not in excess of $500,000 in any fiscal year.\n\n                                  \"Permitted Investment\" means: (a)(i)\nmarketable direct obligations issued or unconditionally guaranteed by the\nUnited States of America or any agency or any State thereof maturing within one\n(1) year from the date of acquisition thereof, (ii) commercial paper maturing\nno more than one (1) year from the date of creation thereof and currently\nhaving the highest rating obtainable from either Standard &amp; Poor's Corporation\nor Moody's Investors Service, Inc., and (iii) certificates of deposit maturing\nno more than one (1) year from the date of investment therein issued by Bank;\nand (b) Investments in the Borrower's Subsidiaries and existing joint venturers\nto fund the normal operating expenses in the ordinary course of business of\nsuch Subsidiaries and joint ventures in an amount not to exceed $500,000 in any\nfiscal year.\n\n                                  \"Permitted Liens\" means the following:\n\n                                  (a)        Any Liens arising under this\nAgreement or the other Loan Documents;\n\n                                  (b)        Liens for taxes, fees, assessments\nor other governmental charges or levies, either not delinquent or being\ncontested in good faith by appropriate proceedings, provided the same have no\npriority over any of Bank's security interests;\n\n                                  (c)        Liens upon or in any equipment\nacquired by Borrower or any of its Subsidiaries after the date hereof to secure\nthe purchase price of such equipment or indebtedness incurred solely for the\npurpose of financing the acquisition of such equipment or existing on such\nequipment at the time of acquisition, provided that the Lien is confined solely\nto the property so acquired and improvements thereon, and the proceeds of such\nequipment;\n\n                                  (d)        Liens under the CoastFed Loan\nDocuments and Heller Loan Documents;\n\n                                  (e)        Liens incurred in connection with\nthe extension, renewal or refinancing of the indebtedness secured by Liens of\nthe type described in clauses (a) through (d) above and (i) below, provided\nthat any extension, renewal or replacement Lien shall be limited to the\nproperty encumbered by the existing Lien and the principal amount of the\nindebtedness being extended, renewed or refinanced does not increase;\n\n\n\n\n\n                                       5\n\n   9\n                                  (f)        Liens of materialmen, mechanics,\nwarehousemen, carriers, or employees or other like Liens arising in the\nordinary course of business and securing obligations either not delinquent or\nbeing contested in good faith by appropriate proceedings;\n\n                                  (g)        Any judgment, attachment or\nsimilar lien, unless the judgment it secures is not fully covered by insurance\nand has not been discharged or execution thereof effectively stayed and bonded\nagainst pending appeal with 30 days of the entry thereof;\n\n                                  (h)        Easements, rights of way,\nservitudes or zoning or building restrictions and other minor encumbrances on\nreal property and irregularities in the title to such property which do not in\nthe aggregate materially impair the use or value of such property or risk the\nloss or forfeiture of title thereto; and\n\n                                  (i)        Liens on assets of corporations\nwhich become subsidiaries of the Borrower after the date hereof, provided that\nsuch Liens existed at the time the respective corporations became subsidiaries\nof the Borrower and were not created in anticipation thereof.\n\n                                  \"Person\" means any individual, sole\nproprietorship, limited liability company, partnership, joint venture, trust,\nunincorporated organization, association, corporation, institution, public\nbenefit corporation, firm, joint stock company, estate, entity or governmental\nagency.\n\n                                  \"Prime Rate\" means the variable rate of\ninterest, per annum, most recently announced by Bank, as its \"prime rate,\"\nwhether or not such announced rate is the lowest rate available from Bank.\n\n                                  \"Products\" means digital microwave\nequipment.\n\n                                  \"Responsible Officer\" means each of the Chief\nExecutive Officer, Chief Financial Officer and Corporate Controller of\nBorrower.\n\n                                  \"Revolving Facility\" means the facility under\nwhich Borrower may request Bank to issue cash advances, as specified in Section\n2.1 hereof.\n\n                                  \"Subordinated Debt\" means any debt incurred\nby Borrower that is subordinated to the debt owing by Borrower to Bank on terms\nacceptable to Bank.\n\n                                  \"Subsidiary\" means any corporation or\npartnership in which (i) any general partnership interest or (ii) more than 50%\nof the stock of which by the terms thereof ordinary voting power to elect the\nBoard of Directors, managers or trustees of the entity shall, at the time as of\nwhich any determination is being made, is owned by Borrower, either directly or\nthrough an Affiliate.\n\n                                  \"Tangible Net Worth\" means at any date as of\nwhich the amount thereof shall be determined, the consolidated total assets of\nBorrower and its Subsidiaries minus, without duplication, (i) the sum of any\namounts attributable to (a) goodwill, (b) intangible items such as unamortized\ndebt discount and expense, patents, trade and service marks and names,\ncopyrights and research and development expenses except prepaid expenses, (c)\nobligations owed to Borrower by Affiliates, and (d) all reserves not already\ndeducted from assets, and (ii) Total Liabilities.\n\n                                  \"Total Liabilities\" means at any date as of\nwhich the amount thereof shall be determined, all obligations that should, in\naccordance with GAAP be classified as liabilities on the consolidated balance\nsheet of Borrower, including in any event all Indebtedness.\n\n                       1.2        Accounting Terms.  All accounting terms not\nspecifically defined herein shall be construed in accordance with GAAP and all\ncalculations made hereunder shall be made in\n\n\n\n\n\n                                       6\n\n   10\naccordance with GAAP.  When used herein, the terms \"financial statements\" shall\ninclude the notes and schedules thereto.\n\n           2.          LOAN AND TERMS OF PAYMENT\n\n                       2.1        Revolving Advances.  Subject to the terms and\nconditions of this Agreement, Bank agrees to make revolving advances\n(\"Advances\") to Borrower in an amount not to exceed the lesser of the Ex-Im\nCommitted Line or the Borrowing Base.  For purposes of this Agreement\n\"Borrowing Base\" shall mean an amount equal to the sum of (i) Ninety Percent\n(90%) of the Eligible Foreign Accounts and (ii) Seventy Percent (70%) of\nEligible Foreign Inventory.  The value of Eligible Foreign Inventory for the\npurpose of calculating the Borrowing Base shall be the lesser of the cost or\nthe wholesale fair market value of that inventory.\n\n           To evidence the Advances, Borrower shall execute and deliver to Bank\non the date hereof a promissory note (the \"Note\") in substantially the form\nattached hereto as Exhibit B.\n\n           Borrower may request an Advance at any time from the date hereof\nuntil the Availability Date.  Whenever Borrower desires an Advance, Borrower\nwill notify Bank by facsimile transmission or telephone no later than 11:00\na.m. California time, on the Business Day that the Advance is to be made.\nEach such notification shall be promptly confirmed by a Borrowing Certificate\nin substantially the form of Schedule 2.1 hereto.  In addition to the procedure\nset forth in the preceding sentence, Bank is authorized to make Advances under\nthis Agreement, based upon written instructions received from a Responsible\nOfficer or without instructions if in Bank's discretion such Advances are\nnecessary to meet Obligations which have become due and remain unpaid.  Bank\nwill credit the amount of Advances made under this Section 2.1 to such deposit\naccount held by Bank as Bank elects.  Amounts borrowed pursuant to this Section\n2.1 may be repaid and re-borrowed at any time through the Availability Date so\nlong as no Event of Default has occurred and is continuing, and may be repaid\nat any time without penalty or premium during the term of this Agreement.\n\n                       2.2        Overadvances.  If, at any time or for any\nreason, the amount of Obligations pursuant to this Agreement owed by Borrower\nto Bank pursuant to Section 2.1 of this Agreement is greater than the lesser of\n(i) the Borrowing Base or (ii) the Ex-Im Committed Line, at the option of Bank,\n(i) Borrower shall immediately pay to Bank, in cash, the amount of such excess,\nor (ii) Borrower shall furnish additional collateral to Bank in form and amount\nsatisfactory to Bank and Ex-Im Bank.\n\n                       2.3        Interest Rates, Payments, and Calculations.\n\n                                  (a)        Interest Rate.  Except as\nspecified to the contrary in any Loan Document, the Obligations under this\nAgreement shall bear interest, on the average Daily Balance, at a rate equal to\nOne and One Half Percentage Point (1.5%) above the Prime Rate.\n\n                                  (b)        Default Rate.  All Obligations\nshall bear interest, from and after the occurrence of an Event of Default, at a\nrate equal to three (3) percentage points above the rate that applied\nimmediately prior to the occurrence of the Event of Default.\n\n                                  (c)        Payments.  Interest hereunder\nshall be due and payable on the last Business Day of each calendar month during\nthe term hereof.  Bank shall, at its option, upon notice to Borrower, charge\nsuch interest, all Bank Expenses, and all Periodic Payments against Borrower's\ndeposit account or against the Ex-Im Committed Line, in which case those\namounts shall thereafter accrue interest at the rate then applicable hereunder.\nAny interest not paid when due shall be compounded by becoming a part of the\nObligations, and such interest shall thereafter accrue interest at the rate\nthen applicable hereunder.\n\n\n\n\n\n                                       7\n\n   11\n                                  (d)        Computation.  In the event the\nPrime Rate is changed from time to time hereafter, the applicable rate of\ninterest hereunder shall be increased or decreased contemporaneously with such\nchange by an amount equal to such change in the Prime Rate.  All interest\nchargeable under the Loan Documents shall be computed on the basis of a three\nhundred sixty (360) day year for the actual number of days elapsed.\n\n                       2.4        Crediting Payments.  The receipt by Bank of\nany wire transfer of funds, check, or other item of payment shall be\nimmediately applied to conditionally reduce Obligations, but shall not be\nconsidered a payment on account unless such wire transfer is of immediately\navailable federal funds and is made to the appropriate deposit account of Bank\nor unless and until such check or other item of payment is honored when\npresented for payment.  Notwithstanding anything to the contrary contained \nherein, any wire transfer or payment received by Bank after 11:00 a.m. \nCalifornia time shall be deemed to have been received by Bank as of the\nopening of business on the immediately following Business Day.\n\n                       2.5        Fees.  Borrower shall pay to Bank the\nfollowing fees:\n\n                                  (a)        Financial Examination and\nAppraisal Fees.  Bank's reasonable fees and reasonable out-of-pocket expenses\nfor Bank's initial audit of Borrower's Accounts and Inventory, and for each\nsubsequent appraisal of Collateral and financial analysis and examination of\nBorrower performed from time to time by Bank or its agents;\n\n                                  (b)        Facility and Collateral Management\nFee.  A facility fee equal to Thirty Thousand Dollars ($30,000) and a\ncollateral management fee equal to Five Thousand Dollars ($5,000), which fees\nshall be due and fully earned upon Bank's receipt of the Ex-Im Guarantee;\n\n                                  (c)        Ex-Im Fee.  A fee to Ex-Im Bank\nequal to Two Hundred Twenty Five Thousand Dollars ($225,000), which fee shall\nbe due upon Bank's demand or, if no demand is made, then on February 28, 1995;\nand\n\n                                  (d)        Bank Expenses.  On the Closing\nDate, Bank Expenses incurred through the Closing Date and, after the Closing\nDate, all Bank Expenses as they become due.\n\n                       2.6        Increased Costs.  In case any law,\nregulation, treaty or official directive or the interpretation or application\nthereof by any court or any governmental authority charged with the\nadministration thereof or the compliance with any guideline or request of any\ncentral bank or other governmental authority (whether or not having the force\nof law):\n\n                                  (a)        subjects Bank to any tax with\nrespect to payments of principal or interest or any other amounts payable '\nhereunder by Borrower or otherwise with respect to the transactions\ncontemplated hereby (except for taxes on the overall net income of Bank imposed\nby the United States of America or any political subdivision thereof); or\n\n                                  (b)        imposes, modifies or deems\napplicable any deposit insurance, reserve, special deposit or similar\nrequirement against assets held by, or deposits in or for the account of, or\nloans by, Bank; or\n\n                                  (c)        imposes upon Bank any other\ncondition with respect to their performance under this Agreement,\n\nand the result of any of the foregoing is to increase the cost to Bank, reduce \nthe income receivable by Bank or impose any expense upon Bank with respect to \nany loans, Bank shall notify Borrower thereof.  Borrower agrees to pay to Bank\nwithin thirty (30) days following demand the amount of such increase in cost,\nreduction in income or additional expense as and when such cost, reduction or\nexpense is\n\n\n\n\n\n                                       8\n\n   12\nincurred or determined, upon presentation by Bank of a statement in the amount\nand setting forth Bank's calculation thereof, which statement shall be deemed\ntrue and correct absent manifest error.\n\n                       2.7        Term.  This Agreement shall become effective\nupon acceptance by Bank and shall continue in full force and effect for a term\nending on the Maturity Date, on which date all Obligations shall become\nimmediately due and payable.  Notwithstanding the foregoing, Bank shall have\nthe right, upon notice, to terminate this Agreement immediately during the\nexistence of an Event of Default and Borrower shall have the right, upon\nnotice, to terminate this Agreement immediately upon payment in full of its\nObligations then outstanding hereunder.  Notwithstanding any termination of\nthis Agreement, all of Bank's security interest in all of the Collateral and\nall of the terms and provisions of this Agreement shall continue in full force\nand effect until all Obligations have been paid and performed in full, and no\ntermination shall impair any right or remedy of Bank, nor shall any such\ntermination relieve Borrower of any Obligation to Bank until all of the\nObligations have been paid and performed in full.\n\n                       2.8        Use of Proceeds.  Borrower will use the\nproceeds of Advances only for the purpose of financing the cost of\nmanufacturing or selling the Products for sale outside of the United States.\nThe proceeds shall not be used to finance (i) that part of the cost of any\nProducts that has been charged to foreign labor, materials or services, unless\nsuch part is not greater than fifty percent (50%) of the cost of the Products\nand is incorporated into such Product in the United States or (ii) the\nmanufacture or sale of goods and services destined for military use.  Borrower\nshall not use the proceeds to service any existing or future Indebtedness of\nBorrower unrelated to the Advances made pursuant to this Agreement.\n\n           3.          CONDITIONS OF LOANS\n\n                       3.1        Conditions Precedent to Initial Advance.  The\nobligation of Bank to make the initial Advance is subject to the condition\nprecedent that Bank shall have received, in form and substance satisfactory to\nBank, the following:\n\n                                  (a)        this Agreement and the Note, each\nduly executed by Borrower;\n\n                                  (b)        a certificate of the secretary of\nBorrower with respect to incumbency and resolutions authorizing the execution\nand delivery of this Agreement;\n\n                                  (c)        an opinion of Borrower's counsel;\n\n                                  (d)        the Ex-Im Guarantee;\n\n                                  (e)        Intercreditor Agreements among\nHeller Financial, Inc., Bank and Borrower and among CoastFed Business Credit\nCorporation, Bank and Borrower;\n\n                                  (f)        an audit of the Collateral;\n\n                                  (g)        such other documents, and\ncompletion of such other matters, as Bank may deem reasonably necessary or\nappropriate.\n\n                       3.2        Conditions Precedent to all Advances.  The\nobligation of Bank to make each Advance, including the initial Advance, is\nfurther subject to the following conditions:\n\n                                  (a)        timely receipt by Bank of the\nNotice of Borrowing as provided in Section 2.1;\n\n\n\n\n\n                                       9\n\n   13\n                                  (b)        a copy of the executed firm\nwritten export purchase order and an assignment relating to the requested\nAdvance, the payment terms of which shall be acceptable to Bank;\n\n                                  (c)        a statement and breakdown of costs\ndemonstrating that Advances are only for documented U.S. costs associated with\nsales that will generate Eligible Foreign Accounts; and\n\n                                  (d)        the representations and warranties\ncontained in Section 5 shall be true and accurate in all material respects on\nand as of the date of such Notice of Borrowing and on the effective date of\neach Advance as though made at and as of each such date, and no Event of\nDefault shall have occurred and be continuing, or would result from such\nAdvance.\n\n           The making of each Advance shall be deemed to be a representation\nand warranty by Borrower on the date of such Advance as to the accuracy of the\nfacts referred to in subsection (b) of this Section 3.2.\n\n           4.          CREATION OF SECURITY INTEREST\n\n                       4.1        Grant of Security Interest.  Borrower hereby\nassigns and grants to Bank a continuing security interest in all presently\nexisting and hereafter acquired or arising Collateral (including all rights\nunder the Contract) in order to secure prompt repayment of any and all\nObligations and in order to secure prompt performance by Borrower of each of\nits covenants and duties under the Loan Documents.\n\n                       4.2        Delivery of Additional Documentation\nRequired.  Borrower shall from time to time execute and deliver to Bank, at the\nrequest of Bank, all financing statements and other documents that Bank may\nreasonably request, in form satisfactory to Bank, to perfect and continue\nperfected Bank's security interests in the Collateral and in order to fully\nconsummate all of the transactions contemplated under the Loan Documents.\n\n                       4.3        Power of Attorney.  Borrower hereby\nirrevocably appoints Bank (and any of Bank's designated officers, or employees)\nas Borrower's true and lawful attorney, with power to: (a) send requests for\nverification of Accounts; (b) endorse Borrower's name on any checks or other\nforms of payment or security that may come into Bank's possession; (c) sign the\nname of Borrower on any of the documents described in Section 4.2; (d) sign\nBorrower's name on any invoice or bill of lading relating to any Account,\ndrafts against account debtors, schedules and assignments of Accounts,\nverifications of Accounts, and notices to account debtors; (e) make, settle,\nand adjust all claims under and decisions with respect to Borrower's policies\nof insurance; and (f) settle and adjust disputes and claims respecting the\naccounts directly with account debtors, for amounts and upon terms which Bank\ndetermines to be reasonable.  The appointment of Bank as Borrower's\nattorney-in-fact, and each of Bank's rights and powers, being coupled with an\ninterest, is irrevocable until all of the Obligations have been fully repaid\nand performed and Bank's obligation to provide advances hereunder is\nterminated.\n\n                       4.4        Right to Inspect.  Bank (through any of its\nofficers, employees, or agents) shall have the right, upon reasonable prior\nnotice, from time to time during Borrower's usual business hours, to inspect\nBorrower's Books, facilities and activities, and to check, test, inspect, value\nand appraise the Collateral in order to verify Borrower's financial condition\nor the amount, condition of, or any other matter relating to, the Collateral.\nBank shall conduct quarterly accounts receivable audits and physical\ninspections of the Inventory relating to the Contract at Borrower's expense,\nthe results of which audits shall be satisfactory to Bank.  Borrower will cause\nits officers and employees to give their full cooperation and assistance in\nconnection therewith.\n\n\n\n\n\n                                       10\n\n   14\n           5.          REPRESENTATIONS AND WARRANTIES\n\n                       Borrower represents, warrants and covenants as follows:\n\n                       5.1        Due Organization and Qualification.  Borrower\nand each Subsidiary is a corporation duly existing and in good standing under\nthe laws of its state of incorporation and qualified and licensed to do\nbusiness in, and is in good standing in, any state in which the conduct of its\nbusiness or its ownership of property requires that it be so qualified.\n\n                       5.2        Due Authorization; No Conflict.  The\nexecution, delivery, and performance of the Loan Documents are within Borrower's\npowers, have been duly authorized, and are not in conflict with nor constitute\na breach of any provision contained in Borrower's Certificate of Incorporation\nor Bylaws, nor will they constitute an event of default under any material\nagreement to which Borrower is a party or by which Borrower is bound.  Borrower\nis not in default under any agreement to which it is a party or by which it is\nbound, which default could have a Material Adverse Effect.\n\n                       5.3        No Prior Encumbrances.  Borrower has good and\nindefeasible title to the Collateral, free and clear of Liens, except for\nPermitted Liens.\n\n                       5.4        Bona Fide Eligible Accounts.  The Eligible\nForeign Accounts are or will be bona fide existing obligations of Borrower's\naccount debtors, created by the sale or lease of goods, the licensing of\nrights, or the rendition of services to account debtors in the ordinary course\nof Borrower's business, and, except as may be provided in the Contract,\nunconditionally owed to Borrower.  The property giving rise to such Eligible\nForeign Accounts has been delivered to the account debtor or to the account\ndebtor's agent for immediate shipment to and unconditional acceptance by the\naccount debtor.  Borrower has not received notice of actual or imminent\nInsolvency Proceeding of any account debtor that is included in any Borrowing\nBase Certificate as an Eligible Account.\n\n                       5.5        Merchantable Inventory.  All Inventory is in\nall material respects of good and marketable quality, free from all material\ndefects.\n\n                       5.6        Name; Location of Chief Executive Office.\nBorrower has not done business under any name other than that specified on the\nsignature page hereof.  The chief executive office of Borrower is located at\nthe address indicated in Section 10 hereof.\n\n                       5.7        Litigation.  Except as set forth in the\nSchedule hereto, there are no actions or proceedings pending by or against\nBorrower or any Subsidiary before any court or administrative agency in which\nan adverse decision is reasonably likely to have a Material Adverse Effect or a\nmaterial adverse effect on Borrower's interest or Bank's security interest in\nthe Collateral.  Borrower does not have knowledge of any such pending or\nthreatened actions or proceedings.\n\n                       5.8        No Material Adverse Change in Financial\nStatements.  All consolidated financial statements related to Borrower that\nhave been delivered by Borrower to Bank fairly present in all material respects\nBorrower's consolidated financial condition as of the date thereof and\nBorrower's consolidated results of operations for the period then ended.  There\nhas not been a material adverse change in the consolidated financial condition\nof Borrower since the date of the most recent of such financial statements\nsubmitted to Bank.\n\n                       5.9        Solvency.  Borrower is solvent and able to\npay its debts (including trade debts) as they mature.\n\n                       5.10       Regulatory Compliance.  Borrower and each\nSubsidiary has met the minimum funding requirements of ERISA with respect to\nany employee benefit plans subject to ERISA.  No event has occurred resulting\nfrom Borrower's failure to comply with ERISA that is reasonably likely to\n\n\n\n\n\n                                       11\n\n   15\nresult in Borrower's incurring any liability that could have a Material Adverse\nEffect.  Borrower is not an \"investment company\" or a company \"controlled\" by\nan \"investment company\" within the meaning of the Investment Company Act of\n1940.  Borrower is not engaged principally, or as one of the important\nactivities, in the business of extending credit for the purpose of purchasing\nor carrying margin stock (within the meaning of Regulations G, T and U of the\nBoard of Governors of the Federal Reserve System).  Borrower has complied with\nall the provisions of the Federal Fair Labor Standards Act, and Borrower has\ncomplied with all other statutes, laws, ordinances, and government rules and\nregulations to which it is subject, non-compliance with which could have a\nMaterial Adverse Effect or a material adverse effect on the Collateral or the\npriority of Bank's Lien on the Collateral.\n\n                       5.11       Environmental Condition.  None of Borrower's\nor any Subsidiary's properties or assets has ever been used by Borrower or any\nSubsidiary or, to the best of Borrower's knowledge, by previous owners or\noperators, in the disposal of, or to produce, store, handle, treat, release, or\ntransport, any hazardous waste or hazardous substance other than in accordance\nwith applicable law; to the best of Borrower's knowledge, none of Borrower's\nproperties or assets has ever been designated or identified in any manner\npursuant to any environmental protection statute as a hazardous waste or\nhazardous substance disposal site, or a candidate for closure pursuant to any\nenvironmental protection statute; no lien arising under any environmental\nprotection statute has attached to any revenues or to any real or personal\nproperty owned by Borrower or any Subsidiary; and neither Borrower nor any\nSubsidiary has received a summons, citation, notice, or directive from the\nEnvironmental Protection Agency or any other federal or state governmental\nagency concerning any action or omission by Borrower or any Subsidiary relating\nto the release or disposal of hazardous waste or hazardous substances; except\nin each case where the failure of any of the foregoing to be true and correct\ncould not reasonably be expected to have a Material Adverse Effect or a\nmaterial adverse effect on the Collateral or the priority of the Bank's Lien on\nthe Collateral.\n\n                       5.12       Taxes.  Borrower and each Subsidiary has\nfiled or caused to be filed all tax returns required to be filed, and has paid,\nor has made adequate provision for the payment of, all taxes reflected therein.\n\n                       5.13       Subsidiaries.  Borrower does not own any\nstock, partnership interest or other equity securities of any Person, except as\nset forth in the Schedule and except for Permitted Investments.\n\n                       5.14       Government Consents.  Borrower and each\nSubsidiary has obtained all consents, approvals and authorizations of, made all\ndeclarations or filings with, and given all notices to, all governmental\nauthorities that are necessary for the continued operation of Borrower's\nbusiness as currently conducted; except in each case where the failure of any\nof the foregoing to be true and correct could not reasonably be expected to\nhave a Material Adverse Effect.\n\n                       5.15       Full Disclosure.  No representation, warranty\nor other statement made by Borrower in any certificate or written statement\nfurnished to Bank contains any untrue statement of a material fact or omits to\nstate a material fact necessary in order to make the statements contained in\nsuch certificates or statements not misleading.\n\n                       5.16       CoastFed Loan Documents.  The representations\nand warranties contained in the CoastFed Loan Documents are true and correct.\n\n                       5.17       Ex-Im Guarantee.  The Ex-Im Guarantee remains \nin full force and effect.\n\n\n\n\n\n                                       12\n\n   16\n           6.          AFFIRMATIVE COVENANTS\n\n                       Borrower covenants and agrees that, until payment in\nfull of all outstanding Obligations, and for so long as Bank may have any\ncommitment to make an Advance hereunder, Borrower shall do all of the\nfollowing:\n\n                       6.1        Good Standi.  Borrower shall maintain its and\neach of its Subsidiaries' corporate existence and good standing in its\njurisdiction of incorporation and maintain qualification in each jurisdiction\nin which the failure to so qualify could have a Material Adverse Effect,\nprovided that Borrower and each of its Subsidiaries shall at all times be\npermitted to merge with a Subsidiary (as long as Borrower remains the surviving\nentity) and acquire substantially all the assets of a Subsidiary, and the\nBorrower shall at all times be permitted to dissolve any inactive or dormant\nSubsidiaries.  Borrower shall maintain, and shall cause each of its\nSubsidiaries to maintain, to the extent consistent with prudent management of\nBorrower's business, in force all licenses, approvals and agreements, the loss\nof which could have a Material Adverse Effect.\n\n                       6.2        Government Compliance.  Borrower shall meet,\nand shall cause each Subsidiary to meet, the minimum funding requirements of\nERISA with respect to any employee benefit plans subject to ERISA.  Borrower\nhas not withdrawn from, and no termination or partial termination has occurred\nwith respect to any deferred compensation plan, and Borrower has not withdrawn\nfrom any multi-employer plan under ERISA.  Borrower shall comply, and shall\ncause each Subsidiary to comply, with all statutes, laws, ordinances and\ngovernment rules and regulations to which it is subject, noncompliance with\nwhich could have a Material Adverse Effect or a material adverse effect on the\nCollateral or the priority of Bank's Lien on the Collateral.\n\n                       6.3        Financial Statements, Reports, Certificates.\nBorrower shall maintain a standard system of accounting in accordance with\nGAAP.  Borrower shall deliver to Bank: (a) within five (5) days after filing or\nsending copies of all statements, reports and notices sent or made available\ngenerally by Borrower to its security holders or to any holders of Subordinated\nDebt and all reports on Form 10-K and 10-Q filed with the Securities and\nExchange Commission; (and, in any case with respect to Form 10-K, within\nninety-five (95) days after the end of Borrower's fiscal year and, with respect\nto Form 10-Q, within fifty (50) days after the end of each fiscal quarter); (b)\npromptly upon receipt of notice thereof, a report of any legal actions pending\nor threatened against Borrower or any Subsidiary that could result in damages\nor costs to Borrower or any Subsidiary of Five Hundred Thousand Dollars\n($500,000) or more; and (c) such budgets, sales projections, operating plans or\nother financial information as Bank may reasonably request from time to time.\nBorrower shall maintain as Bank's custodian copies of Borrower's sales\njournals, customer purchase orders and evidence of shipping arrangements in\neach case with respect to the Contract, and shall deliver copies thereof to\nBank at Bank's request.  Borrower shall deliver copies of the items described\nin clause (a), above, to Ex-Im Bank at the same time as Borrower delivers such\nitems to Bank.\n\n           Within twenty (20) days after the last day of each month, Borrower\nshall deliver to Bank a Borrowing Base Certificate signed by a Responsible\nOfficer in a form and substance acceptable to Bank, together with aged listings\nof accounts receivable and accounts payable in each case with respect to the\nContract, in form and substance acceptable to Bank.\n\n           Borrower shall deliver to Bank with the reports on Form 10-K and\n10-Q a Compliance Certificate signed by a Responsible Officer in form and\nsubstance acceptable to Bank.\n\n           Bank shall have a right from time to time hereafter to audit\nBorrower's Accounts and Inventory in each case with respect to the Contract at\nBorrower's expense, provided that such audits will be conducted no more often\nthan every three (3) months unless an Event of Default has occurred and is\ncontinuing.\n\n\n\n\n\n                                       13\n\n   17\n           Bank may destroy or otherwise dispose of any documents delivered to\nBank six (6) months after Bank's receipt thereof, unless Borrower makes written\nrequest therefor.\n\n                       6.4        Inventory; Equipment. Borrower shall keep\nall Inventory in good and marketable condition, free from all material defects.\nReturns and allowances, if any, as between Borrower and its account debtors\nshall be on the same basis and in accordance with the usual customary practices\nof Borrower, as they exist at the time of the execution and delivery of this\nAgreement.  Borrower shall promptly notify Bank of all returns and recoveries\nand of all disputes and claims in each case with respect to the Contract, where\nthe return, recovery, dispute or claim involves more than Fifty Thousand\nDollars ($50,000).  Borrower shall keep accurate records with respect to the\nInventory, in accordance with Borrower's usual and customary practices, as they\nexist at the time of execution and delivery of this Agreement, all of which\nshall be available to Bank for inspection and copying upon Bank's request.\nBorrower shall keep all equipment used in Borrower's business in good operating\ncondition.  Borrower shall maintain records of such equipment showing date of\npurchase, identifying numbers, and records of maintenance, and shall deliver\nthe same from time to time to Bank upon Bank's request.  Bank shall have the\nright from time to time during Borrower's usual business hours to inspect such\nequipment.\n\n                       6.5        Taxes.  Borrower shall make, and shall cause\neach Subsidiary to make, due and timely payment or deposit of all material\nfederal, state, and local taxes, assessments, or contributions required of it\nby law, and will execute and deliver to Bank, on demand, appropriate\ncertificates attesting to the payment or deposit thereof; and Borrower will\nmake, and will cause each Subsidiary to make, timely payment or deposit of all\nmaterial tax payments and withholding taxes required of it by applicable laws,\nincluding, but not limited to, those laws concerning F.I.C.A., F.U.T.A., state\ndisability, and local, state, and federal income taxes, and will, upon request,\nfurnish Bank with proof satisfactory to Bank indicating that Borrower or a\nSubsidiary has made such payments or deposits; provided that Borrower or a\nSubsidiary need not make any payment if the amount or validity of such payment\nis contested in good faith by appropriate proceedings and is reserved against\n(to the extent required by GAAP) by Borrower.\n\n                       6.6        Insurance.\n\n                                  (a)        Borrower, at its expense, shall\nkeep the Collateral (other than Accounts) insured against loss or damage by\nfire, theft, explosion, sprinklers, and all other hazards and risks, and in\nsuch amounts, as ordinarily insured against by other owners in similar\nbusinesses conducted in the locations where Borrower's business is conducted on\nthe date hereof.  Borrower shall also maintain insurance relating to Borrower's\nbusiness and ownership of Borrower's property (other than Accounts) in amounts\nand of a type that are customary to businesses similar to Borrower's.\n\n                                  (b)        All such policies of insurance\nshall be in such form, with such companies, and in such amounts as reasonably\nsatisfactory to Bank.  All such policies of property insurance shall contain a\nlender's loss payable endorsement, in a form satisfactory to Bank, showing Bank\nas an additional loss payee thereof and all liability insurance policies shall\nshow the Bank as an additional insured, and shall specify that the insurer must\ngive at least twenty (20) days notice to Bank before canceling its policy for\nany reason.  Borrower shall deliver to Bank certified copies of such policies\nof insurance and evidence of the payments of all premiums therefor.  All\nproceeds payable under any such policy shall, at the option of Bank, be payable\nto Bank to be applied on account of the Obligations.\n\n                       6.7        Tangible Net Worth.  Borrower shall maintain,\nas of the last day of each fiscal quarter, a Tangible Net Worth of not less\nthan Thirty Million Dollars ($30,000,000).\n\n                       6.8        CoastFed Loan Documents.  Borrower shall\ncomply in all respects with the provisions of the CoastFed Loan Documents.\n\n\n\n\n\n                                       14\n\n   18\n                       6.9        Notice in Event of Filing of Action for\nDebtor's Relief.  Borrower shall promptly notify Bank in writing of the\noccurrence of any of the following: (1) Borrower begins or consents in any\nmanner to any proceeding or arrangement for its liquidation in whole or in part\nor to any other proceeding or arrangement whereby any of its assets are subject\ngenerally to the payment of its liabilities or whereby any receiver, trustee,\nliquidator or the like is appointed for it or any substantial part of its\nassets (including without limitation the filing by Borrower of a petition for\nappointment as a debtor-in-possession under Title 11 of the U.S. Code); (2)\nBorrower fails to obtain the dismissal or stay on appeal within thirty (30)\ncalendar days of the commencement of any proceeding arrangement referred to in\n(1) above; (3) Borrower begins any other procedure for the relief of\nfinancially distressed or insolvent debtors, or such procedure has been\ncommenced against it, whether voluntarily or involuntarily, and such procedure\nhas not been effectively terminated, dismissed or stayed within thirty (30)\ncalendar days after the commencement thereof, or (4) Borrower begins any\nprocedure for its dissolution, or a procedure therefor has been commenced\nagainst it.\n\n                       6.10       Terms of Sale.  Borrower shall require\npayment in United States Dollars for the Products, unless Ex-Im Bank otherwise\nagrees in writing.  All sales financed with the proceeds of any Advances shall\nbe on open account not to exceed net fifty (50) days to Siemens in the Federal\nRepublic of Germany.\n\n                       6.11       Assignment of Letter of Credit Proceeds.\n\n                                  (1)        Borrower shall require that each\nletter of credit issued for its benefit with respect to the sale of the\nProducts (the \"Letter of Credit\") shall provide that one of the required\ndocuments for the first payment under the Letter of Credit shall be a copy of\nan assignment of proceeds executed by Borrower (the beneficiary of the Letter\nof Credit) in favor of Bank in substantially the same form of Schedule 6.11;\nsuch assignment shall be for the full amount of the Letter of Credit, and shall\nprovide that all payments under the Letter of Credit shall be made to the Bank.\n\n                                  (2)        Borrower will take all necessary\nand advisable steps to ensure that the Letter of Credit will be delivered to\nthe paying or confirming bank and that said paying or confirming bank shall be\nauthorized to retain the Letter of Credit on behalf of Bank as the assignee of\nthe proceeds thereof.\n\n                                  (3)        In the event that Borrower is\nunable to obtain the assignment of the Letter of Credit in accordance with\nsubparagraphs (1) and (2) above, Borrower shall arrange in writing (with a copy\nto Bank) with the account party under the Letter of Credit for the issuer of\nsuch Letter of Credit to include therein a provision to the effect that payment\nunder such Letter of Credit shall be negotiated only at Bank's counters or,\nalternatively, that payment shall be made only to the Collateral Account.\n\n                       6.12       Assignment of Contact Proceeds.  Borrower\nassigns to Bank, effective upon receipt of each written purchase order for the\nProducts under the Contract, all amounts to be paid to Borrower in connection\nwith such purchase order.  Such amounts shall be payable to Borrower's Account.\n\n                       6.13       Further Assurances.  At any time and from\ntime to time Borrower shall execute and deliver such further instruments and\ntake such further action as may reasonably be requested by Bank to effect the\npurposes of this Agreement.\n\n           7.          NEGATIVE COVENANTS\n\n                       Borrower covenants and agrees that, so long as any\ncredit hereunder shall be available and until payment in full of the\nObligations or for so long as Bank may have any commitment to\n\n\n\n\n\n                                       15\n\n   19\nmake any Advances, Borrower will not do any of the following, or enter into any\nagreement to do any of the following:\n\n                       7.1        Dispositions.  Convey, sell, lease, transfer\nor otherwise dispose of (collectively, a \"Transfer\"), or permit any of its\nSubsidiaries to Transfer, all or any part of its business or property, other\nthan (i) Transfers of Inventory in the ordinary course of business, (ii)\nTransfers of assets in the ordinary course of business which have become worm\nout or obsolete or which are promptly being replaced, and (iii) other Transfers\nof assets (other than Accounts) outside the ordinary course of business in an\naggregate amount not to exceed One Hundred Fifty Thousand Dollars ($150,000) in\nany fiscal year.\n\n                       7.2        Change in Business.  Suspend or go out of\nbusiness, engage in any business, or permit any of its Subsidiaries to engage\nin any business, other than the businesses currently engaged in by Borrower and\nany business substantially similar or related thereto (or incidental thereto),\nor suffer a material change in Borrower's ownership.  Borrower will not,\nwithout thirty (30) days prior written notification to Bank, relocate its chief\nexecutive office.\n\n                       7.3        Mergers or Acquisitions.  Except as provided\nin Section 6.1 above, merge or consolidate, or permit any of its Subsidiaries\nto merge or consolidate, with or into any other business organization, or\nacquire, or permit any of its Subsidiaries to acquire, all or a substantial\nportion of the capital stock or property of another Person.\n\n                       7.4        Indebtedness.  Create, incur, assume or be or\nremain liable with respect to any Indebtedness, or permit any Subsidiary so to\ndo, other than Permitted Indebtedness.\n\n                       7.5        Encumbrances.  Create, incur, assume or\nsuffer to exist any Lien with respect to any of its property, or assign or\notherwise convey any right to receive income, including the sale of any\nAccounts, or permit any of its Subsidiaries so to do, except for Permitted\nLiens.\n\n                       7.6        Distributions.  Pay any dividends or make any\nother distribution or payment on account of or in redemption, retirement or\npurchase of any capital stock, or set apart any funds for the payment of\ndividends (other than dividends payable in shares of Borrower's stock) on any\nclass of shares of Borrower's stock, or apply any of its funds, property or\nassets for, the purchase, redemption, or other retirement of, or make any other\ndistribution, by reduction of capital or otherwise, in respect of any class of\nshares of Borrower's stock, or with respect to any other funds or assets.\n\n                       7.7        Investments.  Directly or indirectly acquire\nor own, or make any Investment in or to any Person, or permit any of its\nSubsidiaries so to do, other than Permitted Investments.\n\n                       7.8        Transactions with Affiliates.  Directly or\nindirectly enter into or permit to exist any material transaction with any\nAffiliate of Borrower except for transactions that are in the ordinary course\nof Borrower's business, upon fair and reasonable terms that are no less\nfavorable to Borrower than would be obtained in an arm's length transaction\nwith a nonaffiliated Person.\n\n                       7.9        Subordinated Debt.  Make any payment in\nrespect of any Subordinated Debt, or permit any of its Subsidiaries to make any\nsuch payment, except in compliance with any applicable subordination agreement\nor with the terms of such Subordinated Debt, or amend any provision contained\nin any documentation relating to the Subordinated Debt without Bank's prior\nwritten consent.\n\n                       7.10       Inventory.  Store the Inventory with a\nbailee, warehouseman, or similar party unless Bank has received a pledge of the\nwarehouse receipt covering such Inventory.  Except for Inventory sold in the\nordinary course of business and except for such other locations as Bank may\napprove in writing, Borrower shall keep the Inventory only at the location set\nforth in Section 10\n\n\n\n\n\n                                       16\n\n   20\nhereof and such other locations of which Borrower gives Bank prior written\nnotice and as to which Borrower signs and files a financing statement where\nneeded to perfect Bank's security interest.\n\n                       7.11       Compliance.  Become an \"investment company\"\ncontrolled by an \"investment company,\" within the meaning of the Investment\nCompany Act of 1940, or become principally engaged in, or undertake as one of\nits important activities, the business of extending credit for the purpose of\npurchasing or carrying margin stock, or use the proceeds of any Advance for\nsuch purpose.  Fail to meet the minimum funding requirements of ERISA, permit \na Reportable Event or Prohibited Transaction, as defined in ERISA, to occur,\npermit any condition to exist that would entitle any Person to obtain a decree\nadjudicating that any Plan under ERISA must be terminated, fail to comply with\nthe Federal Fair Labor Standards Act or violate any law or regulation, which\nviolation could have a Material Adverse Effect or a material adverse effect on\nthe Collateral or the priority of Bank's Lien on the Collateral, or permit any\nof its Subsidiaries to do any of the foregoing.\n\n                       7.12       CoastFed and Heller Loan Documents.  Violate\nor otherwise fail to comply with any provision of the CoastFed Loan Documents\nor the Heller Loan Documents.\n\n                       7.13       Ex-Im Guarantee.  Take any action, or permit\nany action to be taken, that causes or, with the passage of time, could\nreasonably be expected to cause, the Ex-Im Guarantee to cease to be in full\nforce and effect.\n\n           8.          EVENTS OF DEFAULT\n\n                       Any one or more of the following events shall constitute \nan Event of Default by Borrower under this Agreement:\n\n                       8.1        Payment Default.  If Borrower fails to pay\nwhen due and payable, or when declared due and payable, any portion of the\nObligations (whether of principal, interest (including any interest which, but\nfor the provisions of the United States Bankruptcy Code, would have accrued on\nsuch accounts), fees and charges due Bank, taxes, reimbursement of Bank\nExpenses, or otherwise);\n\n                       8.2        Covenant Default; Cross Default.  If Borrower\nfails or neglects to perform, keep, or observe any material term, provision,\ncondition, covenant, or agreement contained in this Agreement, in any of the\nCoastFed Loan Documents, the Heller Loan Documents, or the Loan Documents, or\nan Event of Default occurs under any of the CoastFed Loan Documents or the\nHeller Loan Documents; or\n\n                       8.3        Material Adverse Effect.  If there occurs an\nevent that has a Material Adverse Effect or a material impairment of the value\nor priority of Bank's security interest in the Collateral;\n\n                       8.4        Attachment.  If all or any portion of\nBorrower's assets is attached, seized, subjected to a writ or distress warrant,\nor is levied upon, or comes into the possession of any trustee, receiver or\nperson acting in a similar capacity and such attachment, seizure, writ or\ndistress warrant or levy has not been removed, discharged or rescinded within\nten (10) days, or if Borrower is enjoined, restrained, or in any way prevented\nby court order from continuing to conduct all or any part of its business\naffairs, or if a judgment or other claim becomes a lien or encumbrance upon any\nportion of Borrower's assets, or if a notice of lien, levy, or assessment is\nfiled of record with respect to any of Borrower's assets by the United States\nGovernment, or any department, agency, or instrumentality thereof, or by any\nstate, county, municipal, or governmental agency, and the same is not paid\nwithin ten (10) days after Borrower receives notice thereof, (provided that no\nAdvances will be required to be made during any cure period permitted under\nthis section);\n\n                       8.5        Insolvency.  If Borrower becomes insolvent,\nor if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency\nProceeding is commenced against Borrower and is not\n\n\n\n\n\n                                       17\n\n   21\ndismissed or stayed within ten (10) days (provided that no Advances will be made\nprior to the dismissal of such Insolvency Proceeding);\n\n                       8.6        Other Agreements.  If there is a default in\nany agreement to which Borrower is a party with a third party or parties\nresulting in a right by such third party or parties, whether or not exercised,\nto accelerate the maturity of any Indebtedness in an amount in excess of Three\nHundred Thousand Dollars ($300,000), or which default could have a Material\nAdverse Effect;\n\n                       8.7        Judgments.  If a judgment or judgments for\nthe payment of money in an amount, individually or in the aggregate, the\nuninsured portion of which is at least Three Hundred Thousand Dollars\n($300,000), shall be rendered against Borrower and shall remain unsatisfied and\nunstayed for a period of ten (10) days (provided that no Advances will be made\nprior to the satisfaction or stay of such judgment); or\n\n                       8.8        Misrepresentations.  If any material\nmisrepresentation or misstatement exists now or hereafter in any warranty or\nrepresentation set forth herein or in any certificate delivered to Bank by any\nResponsible Officer pursuant to this Agreement or to induce Bank to enter into\nthis Agreement or any other Loan Document.\n\n                       8.9        Ex-Im Guarantee.  If the Ex-Im Guarantee\nceases for any reason to be in full force and effect, or if the Ex-Im Bank\ndeclares the Ex-Im Guarantee void or revokes or purports to revoke its\nobligations under the Ex-Im Guarantee.\n\n           9.          BANK'S RIGHTS AND REMEDIES\n\n                       9.1        Rights and Remedies.  Upon the occurrence and\ncontinuation of an Event of Default, Bank may, at its election, upon notice\n(except for an Event of Default specified under section 8.5, as to which no\nnotice shall be required), do any one or more of the following:\n\n                                  (a)        Declare all Obligations, whether\nevidenced by this Agreement, by any of the other Loan Documents, or otherwise,\nimmediately due and payable;\n\n                                  (b)        Cease advancing money or extending\ncredit to or for the benefit of Borrower under this Agreement or under any\nother agreement between Borrower and Bank;\n\n                                  (c)        Settle or adjust disputes and\nclaims directly with account debtors for amounts, upon terms and in whatever\norder that Bank reasonably considers advisable;\n\n                                  (d)        Make such payments and do such\nacts as Bank considers necessary or reasonable to protect its security interest\nin the Collateral.  Borrower agrees to assemble the Collateral if Bank so\nrequires, and to make the Collateral available to Bank as Bank may designate.\nBorrower authorizes Bank to enter the premises where the Collateral is located,\nto take and maintain possession of the Collateral, or any part of it, and to\npay, purchase, contest, or compromise any encumbrance, charge, or lien which in\nBank's determination appears to be prior or superior to its security interest\nand to pay all expenses incurred in connection therewith.  With respect to any\nof Borrower's owned premises, Borrower hereby grants Bank a license to enter\ninto possession of such premises and to occupy the same, without charge, for up\nto one hundred twenty (120) days in order to exercise any of Bank's rights or\nremedies provided herein, at law, in equity, or otherwise;\n\n                                  (e)        Set off and apply to the\nObligations any and all (i) balances and deposits of Borrower held by Bank, or\n(ii) indebtedness at anytime owing to or for the credit or the account of\nBorrower held by Bank;\n\n\n\n\n\n                                       18\n\n   22\n                                  (f)        Ship, reclaim, recover, store,\nfinish, maintain, repair, prepare for sale, advertise for sale, and sell (in\nthe manner provided for herein) the Collateral.  Bank is hereby granted a\nlicense or other right, solely pursuant to the provisions of this section 9.1,\nto use, without charge, Borrower's labels, patents, copyrights, rights of use\nof any name, trade secrets, trade names, trademarks, service marks, and\nadvertising matter, or any property of a similar nature, as it pertains to the\nCollateral, in completing production of, advertising for sale, and selling any\nCollateral and, in connection with Bank's exercise of its rights under this\nsection 9.1, Borrower's rights under all licenses and all franchise agreements\nshall inure to Bank's benefit;\n\n                                  (g)        Sell the Collateral at either a\npublic or private sale, or both, by way of one or more contracts or\ntransactions, for cash or on terms, in such manner and at such places\n(including Borrower's premises) as Bank determines is commercially reasonable;\n\n                                  (h)        Bank may credit bid and purchase \nat any public sale; and\n\n                                  (i)        Any deficiency that exists after\ndisposition of the Collateral as provided above will be paid immediately by\nBorrower.\n\n                       9.2        Ex-Im Direction.  Upon the occurrence of an\nEvent of Default, Ex-Im Bank shall have a right to: (i) direct Bank to exercise\nthe remedies specified in section 9.1 and (ii) request that Bank accelerate the\nmaturity of any other loans to Borrower as to which Bank has a right to\naccelerate.\n\n                       9.3        Ex-Im Notification.  Bank shall have a right\nimmediately to notify Ex-Im Bank in writing if it has knowledge of the\noccurrence of any of the following events: (1) any failure to pay any amount\ndue under this Agreement or the Note; (2) the Borrowing Base is less than the\nsum of outstanding Advances hereunder (after giving effect to any prepayments);\n(3) any failure to pay when due any amount payable to Bank by the Borrower\nunder any loan(s) extended by Bank to Borrower; (4) the filing of an action for\ndebtor's relief by, against, or on behalf of Borrower, or (5) any threatened or\npending material litigation against Borrower, or any material dispute involving\nBorrower.\n\n           In the event that it sends such a notification to Ex-Im Bank, Bank\nshall have a right thereafter to send Ex-Im Bank a written report on the status\nof the events covered by said notification on each Business Day which occurs\nevery thirty (30) calendar days after the date of said notification, until such\ntime as Bank files a claim with Ex-Im Bank or said default or other events have\nbeen cured.\n\n           No Advances shall be made by Bank following said notification to\nEx-Im Bank, unless Ex-Im Bank gives its written approval thereto.\n\n           If directed to do so by Ex-Im Bank, Bank shall have a right promptly\nto exercise any rights it may have against Borrower to demand the immediate\nrepayment of all amounts outstanding under the Loan Documents.\n\n                       9.4        Accounts Collection.  At any time from the\ndate of this Agreement, Bank may notify any Person owing funds to Borrower in\nconnection with the Contract of Bank's security interest in such funds.\nBorrower shall collect all amounts owing to Borrower for Bank, receive in trust\nall payments as Bank's trustee, and immediately deliver such payments to Bank\nin their original form as received from the account debtor, with proper\nendorsements for deposit.\n\n                       9.5        Bank Expenses.  If Borrower fails to pay any\namounts or furnish any required proof of payment due to third persons or\nentities, as required under the terms of this Agreement, then Bank may do any\nor all of the following: (a) make payment of the same or any part thereof, (b)\nset up such reserves under the Revolving Facility as Bank deems necessary to\nprotect Bank from the exposure created by such failure; or (c) obtain and\nmaintain insurance policies of the type discussed in\n\n\n\n\n\n                                       19\n\n   23\nSection 6.6 of this Agreement, and take any action with respect to such\npolicies as Bank deems prudent.  Any amounts so paid or deposited by Bank shall\nconstitute Bank Expenses, shall be immediately due and payable, and shall bear\ninterest at the then applicable rate hereinabove provided, and shall be secured\nby the Collateral.  Any payments made by Bank shall not constitute an agreement\nby Bank to make similar payments in the future or a waiver by Bank of any Event\nof Default under this Agreement.\n\n                       9.6        Bank's Liability for Collateral.  So long as\nBank complies with reasonable banking practices, Bank shall not in any way or\nmanner be liable or responsible for: (a) the safekeeping of the Collateral; (b)\nany loss or damage thereto occurring or arising in any manner or fashion from\nany cause; (c) any diminution in the value thereof; or (d) any act or default\nof any carrier, warehouseman, bailee, forwarding agency, or other person\nwhomsoever.  All risk of loss, damage or destruction of the Collateral shall be\nborne by Borrower.\n\n                       9.7        Remedies Cumulative.  Bank's rights and\nremedies under this Agreement, the Loan Documents, and all other agreements\nshall be cumulative.  Bank shall have all other rights and remedies not\ninconsistent herewith as provided under the Code, by law, or in equity.  No\nexercise by Bank of one right or remedy shall be deemed an election, and no\nwaiver by Bank of any Event of Default on Borrower's part shall be deemed a\ncontinuing waiver.  No delay by Bank shall constitute a waiver, election, or\nacquiescence by it.  No waiver by Bank shall be effective unless in writing.\n\n                       9.8        Demand; Protest; Application.  Borrower\nwaives demand, protest, notice of protest, notice of default or dishonor,\nnotice of payment and nonpayment, notice of any default, nonpayment at\nmaturity, release, compromise, settlement, extension, or renewal of accounts,\ndocuments, instruments, chattel paper, and guarantees at any time held by Bank\non which Borrower may in any way be liable.  Borrower waives any right to\ndirect the application of any amount received by Bank.\n\n           10.         NOTICES\n\n                       Unless otherwise provided in this Agreement, all notices\nor demands by any party relating to this Agreement or any other agreement\nentered into in connection herewith shall be in writing and (except for\nfinancial statements and other informational documents which may be sent by\nfirst-class mail, postage prepaid) shall be personally delivered or sent by a\nrecognized, overnight delivery service or by certified mail, postage prepaid,\nreturn receipt requested, or by telefacsimile to Borrower or to Bank, as the\ncase may be, at its addresses set forth below:\n\n           If to Borrower:                   Digital Microwave Corporation\n                                             170 Rose Orchard Way\n                                             San Jose, CA 95134\n                                             Attn: Chief Financial Officer\n                                             FAX: (408) 944-1770\n\n           If to Bank:                       Bank of the West\n                                             50 West San Fernando\n                                             P.O.  Box 1000, 7-064-2\n                                             San Jose, CA 95108\n                                             Attn: Daniel W. Corry\n                                             FAX: (408) 947-5117\n\n           The parties hereto may change the address at which they are to\nreceive notices hereunder, by notice in writing in the foregoing manner given\nto the other.\n\n\n\n\n\n                                       20\n\n   24\n           11.         CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER\n\n           This Agreement shall be governed by, and construed in accordance\nwith, the internal laws of the State of California, without regard to\nprinciples of conflicts of law.  Each of Borrower and Bank hereby submits to\nthe exclusive jurisdiction of the state and Federal courts located in the\nCounty of Santa Clara, State of California.  BORROWER AND BANK EACH HEREBY\nWAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION\nBASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE\nTRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,\nBREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH\nPARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL\nINDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT.  EACH PARTY REPRESENTS AND\nWARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT\nKNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION\nWITH LEGAL COUNSEL.\n\n           12.         GENERAL PROVISIONS\n\n                       12.1       Successors and Assigns.  This Agreement shall\nbind and inure to the benefit of the respective successors and permitted\nassigns of each of the parties; provided, however, that neither this Agreement\nnor any rights hereunder may be assigned by Borrower without Bank's prior\nwritten consent, which consent may be granted or withheld in Bank's sole\ndiscretion.  Bank shall have the right without the consent of or notice to\nBorrower to sell, transfer, negotiate, or grant participations in all or any\npart of, or any interest in, Bank's obligations, rights and benefits hereunder.\n\n                       12.2       Indemnification.  Borrower shall defend,\nindemnify and hold harmless Bank and its officers, employees, and agents\nagainst: (a) all obligations, demands, claims, and liabilities claimed or\nasserted by any other party in connection with the transactions contemplated by\nthis Agreement; and (b) all losses or Bank Expenses in any way suffered,\nincurred, or paid by Bank as a result of or in any way arising out of,\nfollowing, or consequential to transactions between Bank and Borrower whether\nunder this Agreement, or otherwise (including without limitation reasonable\nattorneys fees and expenses), except for losses caused by Bank's gross\nnegligence or willful misconduct.\n\n                       12.3       Time of Essence.  Time is of the essence for \nthe performance of all obligations set forth in this Agreement.\n\n                       12.4       Severability of Provisions; Headings.  Each\nprovision of this Agreement shall be severable from every other provision of\nthis Agreement for the purpose of determining the legal enforceability of any\nspecific provision.  Headings are set forth in this Agreement for convenience\nonly.\n\n                       12.5       Amendments in Writing.  This Agreement cannot\nbe changed or terminated orally.  Without the prior written consent of Ex-Im\nBank, no material amendment of or deviation from the terms of this Agreement or\nthe Note shall be made that would adversely affect the interests of Ex-Im Bank\nunder the Ex-Im Guarantee including without limitation the rescheduling of any\npayment terms provided for in this Agreement.  All prior agreements,\nunderstandings, representations, warranties, and negotiations between the\nparties hereto with respect to the subject matter of this Agreement, if any,\nare merged into this Agreement.\n\n                       12.6       Counterparts.  This Agreement may be executed\nin any number of counterparts and by different parties on separate \ncounterparts, each of which, when executed and delivered, shall be deemed to be\nan original, and all of which, when taken together, shall constitute but one\nand the same Agreement.\n\n\n\n\n\n                                       21\n\n   25\n                       12.7       Survival.  All covenants, representations and\nwarranties made in this Agreement shall continue in full force and effect so\nlong as any Obligations remain outstanding.  The obligations of Borrower to\nindemnify Bank with respect to the expenses, damages, losses, costs and\nliabilities described in Section 10.3 shall survive until all applicable\nstatute of limitations periods with respect to actions that may be brought\nagainst Bank have run.\n\n                       12.8       Ex-Im Guarantee.  The terms of the Ex-Im\nGuarantee are incorporated into the terms of this Agreement.  Borrower\nacknowledges and accepts that the Ex-Im Guarantee is effective for a 12-month\nperiod only and shall expire not later than the Availability Date.  Nothing in \nthe Ex-Im Guarantee shall have the effect of obligating, whether expressly or \nby implication, or otherwise give rise to any real or implied liability on the\npart of Ex-Im Bank to continue to extend the Ex-Im Guarantee at the end of such\n12-month period or to undertake any future guarantee related to Borrower with\nrespect to the Contract.\n\n           IN WITNESS WHEREOF, the parties hereto have caused this Agreement to\nbe executed as of the date first above written.\n\n                                         DIGITAL MICROWAVE CORPORATION\n\n\n                                         By: \/s\/ CARL A. THOMSEN\n                                             ---------------------------------\n                                             Title: Vice President - CFO\n\n\n                                         BANK OF THE WEST\n                                         \n                                         \n                                         By: \/s\/ DANIEL W. CORRY\n                                             ---------------------------------\n                                             Daniel W. Corry\n                                             Vice President\n\n\n\n\n\n                                       22\n\n   26\n                                   EXHIBIT A\n\n           The Collateral shall consist of all right, title and interest of\nBorrower in and to the following:\n\n           (a) All goods and equipment now owned or hereafter acquired,\nincluding, without limitation, all machinery, fixtures, vehicles (including\nmotor vehicles and trailers), and any interest in any of the foregoing, and all\nattachments, accessories, accessions, replacements, substitutions, additions,\nand improvements to any of the foregoing, wherever located;\n\n           (b)         All inventory, now owned or hereafter acquired,\nincluding, without limitation, all merchandise, raw materials, parts, supplies,\npacking and shipping materials, work in process and finished products including\nsuch inventory as is temporarily out of Borrower's custody or possession or in\ntransit and including any returns upon any accounts or other proceeds,\nincluding insurance proceeds, resulting from the sale or disposition of any of\nthe foregoing and any documents of title representing any of the above, and\nBorrower's Books relating to any of the foregoing;\n\n           (c)         All contract rights and general intangibles now owned or\nhereafter acquired, including, without limitation, goodwill, trademarks,\nservicemarks, trade styles, trade names, patents, patent applications, leases,\nlicense agreements, franchise agreements, blueprints, drawings, purchase\norders, customer lists, route lists, infringements, claims, computer programs,\ncomputer discs, computer tapes, literature, reports, catalogs, design rights,\nincome tax refunds, payments of insurance and rights to payment of any kind;\n\n           (d)         All now existing and hereafter arising accounts,\ncontract rights, royalties, license rights and all other forms of obligations\nowing to Borrower arising out of the sale or lease of goods, the licensing of\ntechnology or the rendering of services by Borrower, whether or not earned by\nperformance, and any and all credit insurance, guaranties, and other security\ntherefor, as well as all merchandise returned to or reclaimed by Borrower and\nBorrower's Books relating to any of the foregoing;\n\n           (e)         All documents, cash, deposit accounts, securities,\nletters of credit, certificates of deposit, instruments and chattel paper now\nowned or hereafter acquired and Borrower's Books relating to the foregoing;\n\n           (f)         All copyright rights, copyright applications, copyright\nregistrations and like protections in each work of authorship and derivative\nwork thereof, whether published or unpublished, now owned or hereafter\nacquired; all trade secret rights, including all rights to unpatented\ninventions, know-how, operating manuals, license rights and agreements and\nconfidential information, now owned or hereafter acquired; all mask work or\nsimilar rights available for the protection of semiconductor chips, now owned\nor hereafter acquired; all claims for damages by way of any past, present and\nfuture infringement of any of the foregoing, and\n\n           (g)         Any and all claims, rights and interests in any of the\nabove and all substitutions for, additions and accessions to and proceeds\nthereof.\n\n\n\n\n\n                                       23\n\n   27\n                                   Exhibit B\n                           Revolving Promissory Note\n                              (Export-Import Line)\n\n$15,000,000                                                 San Jose, California\n                                                                  March   , 1995\n\n           FOR VALUE RECEIVED, the undersigned, Digital Microwave Corporation\n(the \"Borrower\"), promises to pay to the order of Bank of the West (\"Bank\"), at\nsuch place as the holder hereof may designate, in lawful money of the United\nStates of America, the aggregate unpaid principal amount of all advances\n(\"Advances\") made by Bank to Borrower under the terms of this Note, up to a\nmaximum principal amount of Fifteen Million Dollars ($15,000,000).  Borrower\nshall also pay interest on the aggregate unpaid principal amount of such\nAdvances at the rates and in accordance with the terms of the Loan and Security\nAgreement between Borrower and Bank of even date herewith, as amended from time\nto time (the \"Loan Agreement\") on the last Business Day of each month after an\nAdvance has been made.  The entire principal amount and all accrued interest\nshall be due and payable on August 28, 1996, or on such earlier date, as\nprovided for in the Loan Agreement.\n\n           Borrower irrevocably waives the right to direct the application of\nany and all payments at any time hereafter received by Bank from or on behalf\nof Borrower, and Borrower irrevocably agrees that Bank shall have the\ncontinuing exclusive right to apply any and all such payments against the then\ndue and owing obligations of Borrower as Bank may deem advisable.  In the\nabsence of a specific determination by Bank with respect thereto, all payments\nshall be applied in the following order: (a) then due and payable fees and\nexpenses; (b) then due and payable interest payments and mandatory prepayments;\nand (c) then due and payable principal payments and optional prepayments.\n\n           Bank is hereby authorized by Borrower to endorse on Bank's books and\nrecords each Advance made by Bank under this Note and the amount of each\npayment or prepayment of principal of each such Advance received by Bank; it\nbeing understood, however, that failure to make any such endorsement (or any\nerrors in notation) shall not affect the obligations of Borrower with respect\nto Advances made hereunder, and payments of principal by Borrower shall be\ncredited to Borrower notwithstanding the failure to make a notation (or any\nerrors in notation) thereof on such books and records.\n\n           Borrower promises to pay Bank all reasonable costs and reasonable\nexpenses of collection of this Note and to pay all reasonable attorneys' fees\nincurred in such collection or in any suit or action to collect this Note or in\nany appeal thereof.  Borrower waives presentment, demand, protest, notice of\nprotest, notice of dishonor, notice of nonpayment, and any and all other\nnotices and demands in connection with the delivery, acceptance, performance,\ndefault or enforcement of this Note, as well as any applicable statute of\nlimitations.  No delay by Bank in exercising any power or right hereunder shall\noperate as a waiver of any power or right.  Time is of the essence as to all\nobligations hereunder.\n\n           This Note is issued pursuant to the Loan Agreement, which shall\ngovern the rights and obligations of Borrower with respect to all obligations\nhereunder.\n\n           This Note shall be deemed to be made under, and shall be construed\nin accordance with and governed by, the laws of the State of California,\nexcluding conflicts of laws principles.\n\n                                         DIGITAL MICROWAVE CORPORATION\n\n\n                                         By: _________________________________\n\n                                         Title: ______________________________\n\n\n\n\n\n                                       24\n\n   28\n                                  SCHEDULE 2.1\n\n                             BORROWING CERTIFICATE\n\n           The undersigned hereby certifies as follows:\n\n           I, ____________, am the duly elected and acting _______________ of \nDigital Microwave Corporation (\"Borrower\").\n\n           This certificate is delivered pursuant to Section 2.1 of that\ncertain Loan and Security Agreement (Export-Import Bank) dated as of March ___,\n1995 (the \"Loan Agreement\") by and between Borrower and Bank of the West\n(\"Bank\").  The terms used in this Borrowing Certificate which are defined in\nthe Loan Agreement have the same meaning herein as ascribed to them therein.\n\n           Borrower is confirming its telephone request made on ___________,\n19__ for an Advance as follows:\n\n                    (a)        The date on which the Advance is to be made is \n           _______________, 19__.\n\n                    (b)        The amount of the Advance is to be $__________.\n\n           As of the date of the telephone request for and Advance confirmed by\nthis Borrowing Certificate, all representations and warranties of Borrower\nstated in the Loan Agreement are true, accurate and complete in all material\nrespects and Borrower is in compliance with all terms and conditions of the\nEx-Im Guarantee; provided, however, that those representations and warranties\nexpressly referring to another date shall be true, accurate and complete in all\nmaterial respects as of such date.\n\n           IN WITNESS WHEREOF, this Borrowing Certificate is executed by the\nundersigned as of this ____  day of __________, 199_.\n\n                                         DIGITAL MICROWAVE CORPORATION\n\n\n                                         By: _________________________________\n\n                                         Title: ______________________________\n\n\n\n\n\n                                       25\n\n   29\n                                 SCHEDULE 6.11\n\n                                          Request to Pay Proceeds to Third Party\n\n                                    _____________________, 19__\n                                    Letter of Credit no. _____________________\n                                    Issued by: _______________________________\n                                    Advice no. _______________________________\n\n\n      (Issuing Bank)\n__________________________\n__________________________\n__________________________\n\n\nGentlemen:\n\n           We hereby authorize and direct you to pay the proceeds of each Draft\ndrawn us, payable to your order, under and in compliance with the terms and\nconditions of the above Letter of Credit (herein called the \"Credit\"), if and\nwhen such draft is honored by you, as follows:\n\n           (1)         __________%, not exceeding $__________ or\n\n           (2)         at the rate $__________ per __________; not exceeding \n                       $__________ or\n\n           (3)         $__________\n\n           Please pay proceeds to:\n\n                       Name:      Bank of the West (the \"Designated Payee\")\n\n                                  ________________________\n                                  ________________________\n\n                                  Account No. ____________\n\nand pay the balance, if any to us.\n\n           This instrument, and your acceptance thereof is an assignment of the\ncredit, does not give to the Designated Payee any interest therein and does not\naffect our right or your right to agree to amendments, cancellation, or\nsubstitution or direction to make any payment to any third party except through\nyou.\n\n           Please advise Designated Payee you have received this instrument\nwithout engagements on your part.\n\n           We are enclosing the original credit advice, including any\namendments for retention by you.  We request you to note on it our\nauthorization to pay the proceeds to the Designated Payee.\n\n\n\n\n\n                                       26\n\n   30\n           We also agree to pay you on demand any expenses which may incurred\nhave incurred by you in connection with this instrument.\n\n                                        Very truly yours,\n\n                                        ______________________________________\n                                        Name of Beneficiary\n\n                                        ______________________________________\n                                        Name of Authorized Signee and Title\n\n                                        ______________________________________\n                                        Authorized Signature\n\n                                        The above signature and title conform\n                                        with those shown in our files as \n                                        authorized to sign for the beneficiary.\n\n                                        ______________________________________\n                                        Name of Bank\n\n                                        ______________________________________\n                                        Authorized Signature and Title\n\n\n                                        We accept the above instrument:\n\n                                        Bank of the West\n\n                                        By: __________________________________\n                                            Authorized Signature\n\n                                        Date: ________________________________\n\n\n\n\n\n                                       27\n\n   31\nTO:     BANK OF THE WEST\nFROM:   DIGITAL MICROWAVE CORPORATION\n\n\n                         BORROWING BASE CERTIFICATE\n                            AS OF    \n\n\n                                                              \n1.      Export Accounts Receivable Balance                             $_________\n        Minus: Ineligible Accounts:\n           Amounts over 60 days past due                   $_________\n           Credit balances over 90 days                    $_________\n           Contra accounts                                 $_________\n           Intercompany and Affiliate accounts             $_________\n           Disputed accounts                               $_________\n           Shipments to countries not covered by \n             Ex-Im Bank                                    $_________\n           Shipments to be used for military purposes      $_________\n           Other                                                      \n2.      Total Ineligible Accounts                                      $_________\n3.      Eligible Export Accounts Receivable (line 1\n          minus line 2)                                                $_________\n4.      Funds Available vs Export Accounts Receivable\n          (90% of line 3)                                              $_________\n5.      Contract-related Inventory (Valued at lower\n           of cost or market)                                          $_________\n        Minus:  Ineligible Inventory:\n           Contract-related Inventory not located\n             in U.S.                                       $_________\n           Other                                           $_________\n6.      Total Ineligible Amounts                                       $_________\n7.      Eligible Inventory (line 5 minus line 6)                       $_________\n8.      Total Firm Written Export Purchase Orders\n           and Sales Contracts                                         $_________ \n9.      Funds available vs. Inventory\n           (Enter the lesser of line 8, or 70% of \n             line 7)                                                   $_________\n10.     Total Funds Available (line 4 plus line 9)                     $_________\n11.     Loan Balance Presently Outstanding                             $_________\n12.     Reserve Position (line 10 minus line 11)                       $_________\n\n\nThe Borrowing Base Certificate is made to induce Bank of the West to make a \nloan to the undersigned, pursuant to a Revolving Promissory Note and a Loan and\nSecurity Agreement.  The undersigned certifies that the foregoing information\nis true, and that all calculations have been made with the terms and \nrequirements of the Export-Import Working Capital Guaranteee Agreement.\n\n                                         DIGITAL MICROWAVE CORPORATION\n                                         \n                                         \n                                         By: _________________________________\n                                         \n                                         Title: ______________________________\n                                         \n                                         Date: _______________________________\n                                         \n\n\n                                         \n                                         \n                                      28\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7334],"corporate_contracts_industries":[9516],"corporate_contracts_types":[9561,9560],"class_list":["post-41128","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-dmc-stratex-networks-inc","corporate_contracts_industries-telecommunications__equipment","corporate_contracts_types-finance__credit","corporate_contracts_types-finance"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41128"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41128"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41128"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}