Advice Of Borrowing Terms

Exhibit 10.3


Corporate Banking
Services


Advice of Borrowing Terms
for
Blue Wave Systems Limited


From:
Leicester Corporate Business Centre


28 July 1999


NatWest


Advice of Borrowing Terms


Relationship Office: Leicester Corporate Business Centre Date: 28 July 1999


Borrower(s) Registered Number:
Blue Wave Systems Limited 1751065


We intend that the facilities listed in Part 1 of the attached Facility Schedule (the "on-demand facilities") should remain available to the borrower(s) until 28 January 2000 and all facilities should be reviewed on or before that date. The facilities are, however, subject to the following: . the terms and conditions below,


. the specific conditions applicable to an individual facility as detailed in
the Facility Schedule,


. the Security detailed in the attached Security Schedule, and


. the attached General Terms.


All amounts outstanding are repayable on demand which may be made by us at our discretion at any time and the facilities may be withdrawn, reduced, made subject to further conditions or otherwise varied by us giving notice in writing.


Conditions: The following conditions must be satisfied at all times while the facilities are outstanding, but this will not affect our right to demand repayment at any time:


. Monthly management accounts to be provided to us within 28 days of the end
of the month to which they relate


. Audited accounts to be provided to us within 180 days of the financial year
end to which they relate.


. Month end overdraft utilisation to be covered 100% by a lending formula of
the following in total;


1. 50% of month end eligible debtors 90 days or under. Eligible debtors are
defined as those domiciled in Blue Wave Systems Ltd for UK and Export
customers, excluding those to associated companies.


2. 50% of month end net finished stock. Net finished stock is defined as to
total finished stock net of that not sold in the previous 6 months.


3. 30% of month end net WIP. Net WIP is defined as to total WIP less provision.


Other Fees and Costs The following fees are due, in addition to the specific Arrangement Fee(s) detailed in the Facility Schedule: ---------------------------------------------------------------------------------------------
Fee Type Amount Account to be debited Date to be debited --------------------------------------------------------------------------------------------- Excess overdraft arrangement fee (pound)2,500 89286669 29.7.99 ---------------------------------------------------------------------------------------------


A T Dunlop Corporate Manager For and on behalf of National Westminster Bank Plc


Facility Schedule


Part 1 - Facilities Repayable on Demand:
----------------------------------------
Composite Facility ------------------------------------------------------------------------------------------------------------- Name of Borrower(s): Blue Wave Systems Limited ------------------------------------------------------------------------------------------------------------- Limit: Gross (pound)1,000,000 plus Total between sterling and currency borrowing as
excess detailed below.
(pound)200,000 to 31.8.99 ----------------------------------------------------- Limit: Net (pound)1,000,000 plus
excess
(pound)200,000 to 31.8.99 ------------------------------------------------------------------------------------------------------------- The following Facilities are included within the Composite Facility Limit arrangement, together with any allocated sub-limit(s):
---------------------------------------------
Overdraft: - Base rate ------------------------------------------------------------------------------------------------------------- Account Number: 89286669 ------------------------------------------------------------------------------------------------------------- Name of Borrower Blue Wave Systems Limited ------------------------------------------------------------------------------------------------------------- Limit: (pound)1,000,000 plus excess(pound)200,000 to 31.8.99 ------------------------------------------------------------------------------------------------------------- Purpose: To finance working capital ------------------------------------------------------------------------------------------------------------- Repayment: Fully fluctuating with excess repayment from Blue Wave Systems Inc ------------------------------------------------------------------------------------------------------------- 1st Debit Interest Rate: 1.75% above the Bank's Base rate ------------------------------------------------------------------------------------------------------------- 2nd Debit Interest Rate: The Bank's unarranged borrowing rate on borrowing over(pound)1,500,000, or
in excess of agreed facilities ------------------------------------------------------------------------------------------------------------- Interest Payable: Quarterly ------------------------------------------------------------------------------------------------------------- Monitoring Fee: (pound)1,250 per quarter will be debited on 30.09.99 and quarterly
thereafter ------------------------------------------------------------------------------------------------------------- Excess Fees: We will be entitled to charge an
excess fee at the Bank's published rate for
each day any agreed limit is exceeded (see
our "Services & Charges for Business
Customers" brochure for details). -------------------------------------------------------------------------------------------------------------


---------------------------------------------
Overdraft: - Currency ------------------------------------------------------------------------------------------------------------- Account Number: 02559846 Currency: US Dollars ------------------------------------------------------------------------------------------------------------- Name of Borrower Blue Wave Systems Limited ------------------------------------------------------------------------------------------------------------- Limit: (pound)1,000,000 plus excess(pound)200,000 to 31.8.99 (sterling equivalent) ------------------------------------------------------------------------------------------------------------- Purpose: To finance working capital ------------------------------------------------------------------------------------------------------------- Repayment: Fully fluctuating. ------------------------------------------------------------------------------------------------------------- 1st Debit Interest Rate: 1.75% above the Bank's Currency Base rate. ------------------------------------------------------------------------------------------------------------- 2nd Debit Interest Rate: We will be entitled to charge the Bank's unarranged
borrowing rate for the relevant currency for borrowing over $2,400,000,or
in excess of agreed facilities ------------------------------------------------------------------------------------------------------------- Interest Payable: Quarterly ------------------------------------------------------------------------------------------------------------- Excess Fees: We will be entitled to charge an excess fee at the Bank's published rate for
each day any agreed limit is exceeded. -------------------------------------------------------------------------------------------------------------


Facilities not subject to a Composite Facility Limit:


--------------------------------
Terminable Indemnities ------------------------------------------------------------------------------------------------------- Name of Borrower: Blue Wave Systems Limited ------------------------------------------------------------------------------------------------------- Limit: (pound)100,000 ------------------------------------------------------------------------------------------------------- Type and Purpose: Guarantee to H M Customs and Excise for the deferment of import duty ------------------------------------------------------------------------------------------------------- Basis of Expiry: 7 days notice ------------------------------------------------------------------------------------------------------- Indemnity Fee: 1% p.a. payable quarterly in advance, to be debited to account number
89286669 on pre-advised dates -------------------------------------------------------------------------------------------------------


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