Exhibit 99.3
TEMPORARY OVERADVANCE AGREEMENT
June 23, 2003
Proxim Corporation
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
Reference is made to the Accounts Receivable Financing Agreement dated as
of June 13, 2003 between us (as amended, the "Loan Agreement"). (The Loan
Agreement, and the agreements, documents and instruments relating thereto are
referred to herein collectively as the "Loan Documents". Capitalized terms used
in this Agreement, which are not defined in this Agreement, shall have the
meanings set forth in the Loan Agreement.)
This will confirm the terms and conditions on which we may, in our good
faith business judgment, provide you with Advances and Letters of Credit in
excess of the formulas set forth in the Loan Agreement (the "Overadvances" and
"Overadvance LCs" respectively), as set forth below. (If a Letter of Credit is
100% secured by cash or is 100% reserved for from Advances which would otherwise
be available to the Borrower under the Factoring Agreement (after all other
reserves), such Letter of Credit will not be deemed an Overadvance LC. If only
part of the face amount of a Letter of Credit is secured by cash or is so
reserved, then such Letter of Credit shall only be deemed an Overadvance LC to
the extent such Letter of Credit is not cash secured and not covered by such
reserves.)
1. Overadvances.
(a) The unpaid principal balance of all Overadvances from time to
time outstanding shall not at any time exceed $4,000,000, and in the event it
does, at any time, you will repay the excess to us immediately, without notice
or demand.
(b) The unpaid principal balance of all Overadvance LCs from time to
time outstanding shall not at any time exceed $4,000,000, and in the event it
does, at any time, you will provide us with cash collateral in an amount equal
to 100% of the excess immediately, without notice or demand.
(c) In no event shall the total Obligations (including without
limitation the Overadvances and the Overadvance LCs) exceed $20,000,000.
Overadvances shall only be requested by Borrower for, and shall only be used by
the Borrower for, operating expenses of Borrower incurred in the ordinary course
of business where other funds of Borrower (including without limitation deposit
accounts) are not available for such purposes.
2. Overadvance Maturity Date.
(a) Overadvances will be made and Overadvance LCs may be outstanding
only during the period from the date hereof to July 25, 2003 (the "Overadvance
Maturity Date").
(b) On and after the Overadvance Maturity Date, the Overadvance
facility established by this Agreement will expire, and no further Overadvances
will be made and no further Overadvance LCs will be issued. On or before the
Overadvance Maturity Date, Borrower shall repay in full all Overadvances, and
shall provide Bank with cash collateral in an amount equal to 100% of the face
amount of all outstanding Overadvance LCs (including without limitation drawn,
but unreimbursed Overadvance LCs). All cash collateral provided pursuant to this
Agreement shall be held as "Collateral" for all purposes of the Loan Agreement.
3. Fees.
(a) In consideration for Bank entering into this Agreement Borrower
agrees to pay Bank, concurrently, an overadvance facility fee of $80,000, which
is fully earned on the date hereof, is in addition to all other fees, interest
and charges and is non-refundable.
(b) In addition, Borrower agrees to pay Bank Overadvance charges
(the "Overadvance Charges") in an amount equal to 1.50% of the average daily
outstanding balance of all Overadvances and the average daily face amount of all
outstanding Overadvance LCs, for each seven day period, commencing on the date
hereof, that any Overadvances or Overadvance LCs are outstanding, prorated for
any period of less than seven days ending on the Overadvance Maturity Date. The
Overadvance Charges shall be payable on the last day of each such seven-day
period, and on the Overadvance Maturity Date.
(c) The Overadvance Charges payable hereunder with respect to
Overadvances and Overadvance LCs shall be in lieu of Finance Charges under
Section 3.2 of the Factoring Agreement with respect to the such Overadvances and
Overadvance LCs. The Overadvance Charges with respect to Overadvance LCs are in
addition to the standard charges with respect to Letters of Credit charged by
Bank's International Department.
(d) In the event, on the Overadvance Maturity Date, Borrower fails
to repay in full all Overadvances, or fails to provide Bank with cash collateral
in an amount equal to 100% of the face amount of all outstanding Overadvance
LCs, such failure shall constitute an Event of Default under the Loan Agreement.
4. Collateral. All Overadvances, the Obligation to reimburse Bank for all
Overadvance LCs, and all of Borrower's other obligations under this Agreement
shall for all purposes be deemed "Obligations" under the Loan Agreement and
shall be secured by all of the Collateral. All Overadvances, shall, for all
purposes, be deemed to be "Advances" under the Loan Agreement, and all
Overadvance LCs shall, for all purposes, be deemed to be "Letters of Credit"
under the Loan Agreement, and all Overadvances and Overadvance LCs shall be
entitled to all of the benefits of, and (except as herein expressly set forth)
shall be subject to all of the terms and provisions of, all of the Loan
Documents.
5. Default. Without limiting the fact that the decision to make
Overadvances is a matter of Bank's good faith business judgment, Overadvances
will not be made in the event any Event of Default occurs under any of the Loan
Documents, or if any event occurs which, after
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notice or passage of time or both, would constitute a default or event of
default under any of the Loan Documents.
6. General. This Agreement and the other Loan Documents set forth in full
all of your and our representations and agreements with respect to the subject
matter hereof and supersede all prior and contemporaneous oral discussions,
representations, agreements and understandings. As herein expressly amended, the
Factoring Agreement and all other Loan Documents continue in full force and
effect and the same are hereby ratified and confirmed. This Agreement may not be
modified or amended, nor may any rights hereunder be waived, except in a writing
signed by you and us.
Please confirm your agreement to the foregoing by signing the enclosed
copy of this letter and returning it to us.
Sincerely yours,
Silicon Valley Bank
By /s/ Xxxx Xxxxx
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Title VP
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Accepted and Agreed:
Proxim Corporation
By /s/ Xxxxx X. Xxxxxx
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Name Xxxxx X. Xxxxxx
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Title EVP & CFO
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Guarantors' Consent
The undersigned, guarantors, acknowledge that their consent to the
foregoing Agreement is not required, but the undersigned nevertheless do hereby
consent to the foregoing Agreement and to the documents and agreements referred
to therein and to all future modifications and amendments thereto, and to any
and all other present and future documents and agreements between or among the
foregoing parties. The Continuing Guarantees of the undersigned are hereby
ratified and affirmed and shall continue in full force and effect and apply to
the Overadvances and Overadvance LCs under the foregoing Agreement and any other
present or future agreement regarding overadvances (whether or not consented to
by the undersigned) as well as all other "Indebtedness" (as defined in the
Continuing Guarantees). This Consent may be executed in counterparts. The
signature of the undersigned shall be fully effective even if other persons
named below fail to sign this Consent. Nothing herein shall imply any obligation
on the
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part of any party to obtain the consent of the undersigned to any future
transaction, whether or not similar to the foregoing.
Proxim Wireless Networks, Inc. Wirelesshome Corporation
By /s/ Xxxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxxx
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Name Xxxxx X. Xxxxxx Name Xxxxx X. Xxxxxx
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Title EVP & CFO Title EVP & CFO
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Western Multiplex International Holdings, Inc.
By /s/ Xxxxx X. Xxxxxx
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Name Xxxxx X. Xxxxxx
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Title EVP & CFO
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