EXHIBIT 99.3
January 6, 2004
Infowave Software, Inc.
Xxxxx 000
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, X.X.
X0X 0X0
Attention: Xxxxx Xxxxxxxx, Chief Executive Officer
Dear Sirs:
Re: Credit Facility Agreement
This letter agreement (the "Letter Agreement") sets out the terms and
conditions by which Xxxxxx X. Xxxxxxx ("Trooien"), has agreed to make available
to Infowave Software, Inc, a credit line in an amount up to a maximum of
US$3,000,000 (the "Credit Line").
This Letter Agreement is not intended to be a legally binding and
enforceable agreement upon the acceptance by the Company. The parties agree to
proceed diligently and in good faith to negotiate a detailed binding credit
agreement (the "Credit Agreement") and a security agreement (the "Security
Agreement") containing terms and conditions as set out in this Letter Agreement
and in form and content satisfactory to both the Trooien and the Company.
1. Credit Line. Provided that the Company acquires a controlling interest in
Telispark Inc., Trooien shall make available to the Company a credit line up to
a maximum of US$3,000,000, less an amount equal to the net proceeds (after
agent's fees and expenses) of any equity, debt or other financing transaction
completed by the Company prior to the date (the "Credit Limit Calculation Date")
which is the earlier of: (a) the date of the initial draw-down under the Credit
Line; and (b) 150 days from the date of the Credit Agreement (such adjusted
amount the "Credit Limit"). The Company may by a resolution of the Board of
Directors draw down on the Credit Line at any time upon 60 days notice in
incremental amounts of US$1,000,000, subject to the restriction in paragraph 3.
2. Interest Rate. The principal outstanding under the Credit Line shall bear
interest at a rate of Prime plus 8% per annum. Interest shall be payable monthly
in arrears.
3. Initial Draw-down. The Credit Line may not be drawn upon until shareholder
approval has been obtained as specified in paragraph 7.
4. Maturity. The Credit Line shall become due and payable on demand any time
after December 31, 2005.
5. Warrants. As consideration for making the Credit Line available, the Company
shall issue to Trooien warrants (the "Warrants") entitling him to purchase for a
period of three years from the date of the Credit Agreement such number of
common shares equal to the greater of: (a) 7,500,000; and (b) the Credit Limit
(converted into Canadian dollars at a price equal to the Canadian-U.S. exchange
rate on the date of the Credit Agreement) divided by the Exercise Price. The
"Exercise Price" shall be Cdn.$0.21. The Warrants shall not be exercisable until
receipt by the Company of the shareholder
approval specified in paragraph 7 and no more than 7,500,000 warrants may be
exercised prior to the Credit Limit Calculation Date.
6. Security. The Credit Line shall be secured by a first charge on all of the
shares of Telispark Inc. The security interest shall be evidenced by the
Security Agreement.
7. Shareholder Approval. The parties acknowledge and agree that the Credit Line
requires shareholder approval. The Company will hold an extraordinary general
meeting of shareholders as soon as practicable, and in no event later than March
31, 2004, to seek approval of shareholders by a "majority of the minority" vote,
excluding any shares owned or controlled by Trooien and his affiliates. In the
event shareholder approval is not received, neither party shall have any
obligations hereunder.
8. Representations and Warranties and Covenants. The Credit Agreement shall
contain such representations and warranties and covenants of the Company as are
appropriate for the type of transaction contemplated in this Letter Agreement.
9. Access to Information. Subject to applicable securities laws and any
confidentiality restrictions which may be required thereunder, the Company will
provide Trooien with reasonable access to the books, records, accounts and
senior management of the Company to permit him to monitor the business,
operations and affairs of the Company (reasonable access shall include monthly
telephone and quarterly in-person meetings with the Company's CEO).
10. Other Items. The Credit Agreement and the Security Agreement shall contain
such other terms, conditions, indemnities, covenants and agreements as the
parties may agree to include to complete the Credit Line and the Credit
Agreement.
11. Regulatory Approval. This Letter Agreement and all of the obligations
hereunder are subject to receipt of all required regulatory approvals, including
without limitation the approval of the Toronto Stock Exchange.
12. Expenses. The Company shall pay the reasonable legal fees of Trooien in
negotiating and establishing the Credit Line.
13. Obligation. This Letter Agreement is not intended to be a legally binding
and enforceable agreement upon the acceptance by the Company.
* * * * *
If this Letter Agreement is acceptable, I ask that you communicate your
acceptance of this Letter of Agreement by executing the appropriate space below.
Yours truly,
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
INFOWAVE SOFTWARE, INC.
/s/ Xxxxx Xxxxxxxx
--------------------------------
By: Xxxxx Xxxxxxxx, CEO
