Exhibit 99.1
Letter Agreement
June 13, 2003
To: Silicon Valley Bank
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement between you ("you" or
"Silicon") and the undersigned ("Borrower" or "us") dated December 27, 2002
(as amended, the "Loan Agreement").
Concurrently we are entering into an Accounts Receivable Financing
Agreement (the "Accounts Agreement"). (Capitalized terms used in this Agreement,
which are not defined, shall have the meanings set forth in the Accounts
Agreement. The Loan Agreement, the Accounts Agreement and all other present and
future documents and agreements relating thereto are collectively referred to
herein as the "Loan Documents".)
This will confirm our agreement as follows:
1. Accounts Agreement. No further loans or extensions of credit will be
made under the Loan Agreement, and, instead, all further loans and extensions of
credit will be made under the Accounts Agreement. The existing outstanding
Letters of Credit issued under the Loan Agreement will, effective on the date
hereof, be deemed issued under the Accounts Agreement and will be subject to all
the terms and conditions thereof. All of the terms and provisions of the Loan
Agreement will be replaced by the terms and provisions of the Accounts
Agreement, effective on the date hereof, provided that all security interests
granted in the Loan Agreement shall continue in full force and effect to secure
all "Obligations" as defined in the Loan Agreement.
2. IP Security Agreement. The Intellectual Property Security Agreement
between us dated December 27, 2002 (the "IP Security Agreement") shall continue
in full force and effect, but with the following modifications:
a. All references in the IP Security Agreement to "Loan Agreement"
shall be deemed to refer both to the Loan Agreement and to the Accounts
Agreement.
b. Recital B is hereby deleted from the IP Security Agreement.
c. The portion of the IP Security Agreement, which presently reads
"To secure its obligations under the Loan Agreement, effective on the earlier of
(i) the date the Asset Based Terms go into effect, or (ii) the breach of any of
the financial covenants set forth in Section 5.1 of the Schedule to the Loan
Agreement," is amended to read as follows:
To secure all of its `Obligations' as defined the Loan Agreement,
and all of its `Obligations' as defined in the Accounts Receivable
Financing Agreement between Grantor and Bank dated on or about June
13, 2003, ..."
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3. Subsidiary Guaranties.
a. Borrower has caused the following companies (the "Domestic
Subsidiaries") to execute and deliver to Silicon Continuing Guaranties, dated
December 27, 2003, with respect to all of the Obligations and Security
Agreements and related documentation with respect to all of their assets:
Proxim Wireless Networks, Inc., a Delaware corporation,
Wirelesshome Corporation, a Delaware corporation, and
Western Multiplex International Holdings, Inc., a Delaware corporation
b. Borrower represents and warrants that the Domestic Subsidiaries
are all of its domestic subsidiaries as of the date hereof and that none of them
have assets in excess of $100,000 at the date hereof, except that Proxim
Wireless Networks, Inc. has the following domestic subsidiaries (the "Networks
Subs"): Wavespan Corporation, Farallon Communications, Inc., Micrilor, Inc. and
ProximCA, Inc.; and Proxim Corporation as the following subsidiary: ALK
Acquisition Corp. (together with the Networks Subs, the "Shell Companies"). This
will confirm that the Shell Companies are not engaged in business, are shell
companies and do not have, and will not during the term of the Accounts
Agreement have, total assets of more than $100,000.
c. In the event, in the future, the Borrower creates or acquires any
additional domestic subsidiaries, Borrower shall promptly cause such additional
domestic subsidiaries to execute and deliver to Silicon Continuing Guaranties
with respect to all of the Obligations and Security Agreements and related
documentation with respect to all of their assets, in the same form, and
certified resolutions or other evidence of authority with respect to the
execution and delivery of such Guaranties and Security Agreements. Throughout
the term of the Accounts Agreement Borrower shall cause the Guaranties and
Security Agreements referred to in this Section 3 to continue in full force and
effect.
4. General. This letter agreement and the other Loan Documents between us
set forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions, oral
representations, oral agreements and oral understandings between the parties
with respect to the subject matter hereof. This letter agreement may not be
modified or amended, nor may any rights hereunder be waived, except in a writing
signed by the parties hereto. In the event of any litigation between the parties
based upon, arising out of, or in any way relating to this letter agreement, the
prevailing party shall be entitled to recover all of his costs and expenses
(including without limitation attorneys' fees) from the non-prevailing party.
Borrower shall cooperate fully with Silicon and take all further actions and
execute all further documents from time to time as may be reasonably necessary
to carry out the purposes of this letter agreement. This letter agreement is
being entered into, and shall be governed by the laws of the State of
California.
Sincerely yours,
PROXIM CORPORATION
By /s/ Xxxxx X. Xxxxxx
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Title EVP & CFO, Secretary
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Accepted and agreed:
SILICON VALLEY BANK
By /s/ Xxxx Xxxxx
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Title VP
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CONSENT
Each of the undersigned acknowledges that its consent to the foregoing
letter agreement is not required, but the undersigned nevertheless does hereby
consent to the foregoing letter agreement and to the documents and agreements
referred to therein and to all future modifications and amendments thereto, and
any termination thereof, and to any and all other present and future documents
and agreements between or among the foregoing parties. Nothing herein shall in
any way limit any of the terms or provisions of the Continuing Guaranty of the
undersigned, all of which are hereby ratified and affirmed.
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 VP and Officer Title VP and Officer
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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 VP and Officer
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