THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Proxim Corporation (Retired) (PROXQ.PK.X)

4/15/2005 Proxy Information

Except for the compensation agreements and other arrangements that are described under the sections above entitled "Director Compensation," "Employment Contracts," "Termination of Employment and Change-in-Control Arrangements," and the agreements and transactions described under the subsections below entitled "Transactions with Directors, Executive Officers and 5% Stockholders," "Certain Business Relationships" and "Indebtedness of Management" there was not since the beginning of our fiscal year ended December 31, 2004, nor is there currently proposed, any transaction or series of similar transactions to which the Company was or is to be a party in which the amount involved exceeds $60,000 and in which any director, executive officer, 5% stockholder or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

Transactions with Directors, Executive Officers and 5% Stockholders

Recent Financing Activities. On July 30, 2004, we received an aggregate investment of $10 million in cash from several private equity investors, namely, Warburg Pincus Private Equity VIII, L.P., BCP Capital, L.P., BCP Capital QPF, L.P. and BCP Capital Affiliates Fund LLC (the "Investors"). In exchange for the investment, we issued to the Investors 15% Secured Promissory Notes ("Bridge Notes") with an aggregate principal amount equal to their investment of $10 million and a maturity date of June 30, 2005. In connection with the issuance of the Bridge Notes, the Investors agreed to and did exchange $30 million aggregate principal amount of our Amended and Restated Secured Subordinated Promissory Notes, plus accrued but unpaid interest on each, and $10 million aggregate principal amount of our Senior Secured Promissory Notes, plus accrued but unpaid interest on each, for 490,599 shares of our Series B Convertible Preferred Stock.

In connection with the issuance of the Bridge Notes, we and the Investors agreed that, subject to the approval of our stockholders, the Investors would surrender (i) all of their Series A Convertible Preferred Stock, (ii) all of their Series B Convertible Preferred Stock and (iii) their warrants to purchase an aggregate of 4,213,346 shares of our Common Stock in exchange for 16,400,000 shares of our Common Stock and 400,000 shares of our Series C Preferred Stock. We refer to this transaction as the Exchange. The Exchange was approved at the special annual meeting of stockholders held October 21, 2004 and consummated on October 22, 2004.

Certain of our directors may have an indirect financial interest in the investment as a result of positions held with the Investors. Messrs. Bettino and Harris are partners of Warburg Pincus & Co. and members and managing directors of Warburg Pincus LLC, affiliates of Warburg Pincus Private Equity VIII, L.P. Mr. Brooks is a member and managing director of Broadview Capital Partners Management LLC, an affiliate of Broadview Capital Partners L.P. In addition, in connection with services provided as members of our Board of Directors, each of Messrs. Harris, Brooks and Bettino received an option grants to purchase 2,500 shares of our Common Stock under the Proxim Corporation 2000 Stock Option Plan for Non-Employee Directors, as well as certain other remuneration disclosed in the section above entitled "Director Compensation".

Certain Business Relationships

Legal Services. During the year ended December 31, 2004, the law firm of Wilson Sonsini Goodrich & Rosati, Professional Corporation, served, and in the current fiscal year continues to serve, as outside general corporate counsel to the Company. Mr. Saper, a director of the Company, is a member of Wilson Sonsini Goodrich & Rosati, Professional Corporation and Vice Chairman of the firm. We believe that the services performed by Wilson Sonsini Goodrich & Rosati, Professional Corporation, have been provided on terms no more favorable than those with unrelated parties.

4/8/2004 Proxy Information

During 2003, Warburg Pincus Private Equity VIII, L.P. and Broadview Capital Partners L.P. and affiliates invested an aggregate of $40 million in us in exchange for secured promissory notes, exchangeable for shares of our Series B preferred stock, and warrants to purchase an aggregate of 24 million shares of our common stock. Please refer to Part I, Item 1, “Business — Recent Financing Activities” in our Annual Report on Form 10-K, a copy of which is enclosed herewith, for a detailed description of our recent transactions with these Investors, the terms of the Notes and warrants, including terms of conversion and exercise thereof, and our Amended Agreement with the Investors. Prior to the investment, Warburg Pincus Private Equity VIII, L.P. held approximately 87% of our Series A preferred stock, and Broadview Capital Partners L.P. and affiliates held approximately 13% of our Series A preferred stock.

In connection with the investment and pursuant to the terms of the Amended Agreement, we appointed Jeffrey A. Harris and Steven D. Brooks as members of our Board of Directors effective as of July 30, 2003. In addition, Lorenzo A. Bettino has served as a member of our Board of Directors since September 2002. These directors may have an indirect financial interest in the investment as a result of positions held with the Investors. Messrs. Bettino and Harris are partners of Warburg Pincus & Co. and members and managing directors of Warburg Pincus LLC, affiliates of Warburg Pincus Private Equity VIII, L.P. Mr. Brooks is a member and managing director of Broadview Capital Partners Management LLC, an affiliate of Broadview Capital Partners L.P. In addition, in connection with services provided as members of our Board of Directors, each of Messrs. Harris and Brooks received an initial option grant to purchase 50,000 shares of our common stock under the Proxim Corporation 2000 Stock Option Plan for Non-Employee Directors, and Mr. Bettino received an annual option grant to purchase 25,000 shares of our common stock under the same plan, as well as certain other remuneration disclosed in the section above entitled “Director Compensation”.

Certain Business Relationships

Legal Services. During the year ended December 31, 2003, the law firm of Wilson Sonsini Goodrich & Rosati, Professional Corporation, served, and in the current fiscal year continues to serve, as outside general corporate counsel to the Company. Mr. Saper, a director of the Company, is a member of Wilson Sonsini Goodrich & Rosati, Professional Corporation. We believe that the services performed by Wilson Sonsini Goodrich & Rosati, Professional Corporation, have been provided on terms no more favorable than those with unrelated parties.

Indebtedness of Management

Promissory Note Issued by Amir Zoufonoun. On January 31, 2000, Mr. Zoufonoun issued a promissory note to us in the amount of $465,500 in connection with his purchase of 950,000 shares of our common stock. The principal amount of the promissory note is payable on the earlier of (i) the thirtieth day after we exercise a right to repurchase Mr. Zoufonoun’s shares of our common stock and under the related stock purchase agreement with him, or (ii) the tenth anniversary of the promissory note. Mr. Zoufonoun was serving as an executive officer of the Company at the time the note was issued to us and was serving as an executive officer of the Company during a portion of the year ended December 31, 2003. As disclosed above in the section entitled “Executive Compensation — Summary Compensation Table”, Mr. Zoufonoun tendered his resignation from the Company effective as of August 8, 2003.

The note accrues interest at a rate of 8% per year, compounded annually. The aggregate amount of indebtedness outstanding in respect of the note during the year ended December 31, 2003 was $611,399.

Mr. Zoufonoun also entered into a pledge agreement pursuant to which we hold a first priority security interest in the shares of our common stock purchased by him in connection with his respective note, the options to purchase shares of our common stock granted by the Company to him, the shares received pursuant to the exercise of any such options, and the proceeds received upon sale of any such shares purchased or received in connection with the foregoing. Under the pledge agreement with Mr. Zoufonoun, we have the right to reclaim such collateral in the event of default under the terms of the respective note. In the event any amounts outstanding under the note are not satisfied following any such reclamation of the collateral and our use of related proceeds to offset amounts outstanding under the note, we are entitled to seek recourse from Mr. Zoufonoun’s other personal assets or income for up to half of the principal amount of the loan.

Guaranty of Indebtedness of David C. King; Indebtedness of David C. King. In December 2002, the Company entered into an employment agreement with Mr. King pursuant to which the Company assumed Proxim, Inc.’s guaranty of Mr. King’s obligations concerning certain margin accounts. In March 2001, Proxim, Inc. entered into a guaranty in favor of an investment bank, guaranteeing up to $5 million of the obligations of Mr. King, who was then serving as Proxim, Inc.’s Chief Executive Officer, to that investment bank. In consideration for this guaranty, Mr. King entered into a reimbursement and security agreement with Proxim, Inc. pursuant to which Mr. King was obligated, among other things, to pay a guaranty fee to Proxim, Inc. or any successor company. In October 2002, following a decline in the share price of our common stock, the investment bank demanded that Mr. King deposit sufficient funds into his account to discharge his indebtedness. After making certain payments to the investment bank, Mr. King indicated that he was unable to promptly pay the remaining $5 million of debt in his margin account. The investment bank called the Company’s guaranty and the Company made a payment to the investment bank of $5 million on October 15, 2002. In January 2003, Mr. King made a cash payment of $500,000 to the Company. We assessed the recoverability of the remaining balance of the loan with respect to Mr. King’s current financial position and recorded an impairment charge of $4.5 million in the fourth quarter of 2002. This charge does not constitute forgiveness of Mr. King’s indebtedness to the Company. Mr. King remains subject to the terms and conditions of the reimbursement and security agreement and is obligated to reimburse the Company for payments that the Company made to the investment bank under the guaranty.

4/29/2003 Proxy Information

Voting Agreements. In connection with the ORiNOCO Acquisition and the October 8, 2002 special meeting of our stockholders held for the purpose of approving certain related transactions, Jonathan N. Zakin, our Chairman and Chief Executive Officer who had the power to vote approximately 4.3% of our outstanding common stock as of the record date for that special meeting, and affiliates of Ripplewood Investments LLC that beneficially owned approximately 27% of the outstanding shares of our common stock as of the record date for that special meeting, agreed to vote their shares in favor of the proposal at the special meeting. In exchange for their voting agreement, these affiliates of Ripplewood Investments LLC were released, as of the record date for that special meeting, from the transfer restrictions imposed on their shares arising under the stockholders’ agreement they entered into with us on January 16, 2002 in connection with the Merger.

Indebtedness of each of Amir Zoufonoun and Fred Corsentino. On January 31, 2000, Mr. Zoufonoun issued a promissory note to us in the amount of $465,500 in connection with his purchase of 950,000 shares of our common stock. On February 25, 2000, Mr. Corsentino also issued a promissory note to us in the amount of $93,100 in connection with his purchase of 190,000 shares of our common stock. The principal amount of each promissory note is payable on the earlier of (i) the thirtieth day after we exercise a right to repurchase the employee’s shares of our common stock and under the related stock purchase agreement for such employee, or (ii) the tenth anniversary of the promissory note. Each of Messrs. Zoufonoun and Corsentino was serving as an executive officer of the Company at the time the respective note was issued to us and each was serving as an executive officer of the Company for all or a portion of the fiscal year ended December 31, 2002.

The notes accrue interest at a rate of 8% per year, compounded annually. The largest aggregate amount of indebtedness outstanding during the year ended December 31, 2002 was $574,159 in respect of the note issued by Mr. Zoufonoun and $114,322 in respect of the note issued by Mr. Corsentino. The amount of indebtedness outstanding as of April 4, 2003 was approximately $583,750 in respect of the note issued by Mr. Zoufonoun and $116,240 in respect of the note issued by Mr. Corsentino.

Each of Messrs. Zoufonoun and Corsentino also entered into a pledge agreement pursuant to which we hold a first priority security interest in the shares of our common stock purchased by each such individual in connection with his respective note, the options to purchase shares of our common stock granted by the Company to such individual, the shares received pursuant to the exercise of any such options, and the proceeds received upon sale of any such shares purchased or received in connection with the foregoing (the “Collateral”). Under the pledge agreement with each of them, we have the right to reclaim such collateral in the event of default under the terms of the respective note. In the event any amounts outstanding under the note are not satisfied following any such reclamation of Collateral and our use of related proceeds to offset amounts outstanding under the note, we are entitled to seek recourse from the employee’s other personal assets or income for up to half of the principal amount of the loan.

Guaranty of Indebtedness of David C. King; Indebtedness of David C. King. Mr. King’s employment agreement, as amended, provides for the assumption by the Company of Proxim, Inc.’s guaranty of Mr. King’s obligations concerning certain margin accounts. In March 2001, Proxim, Inc. entered into a guaranty in favor of an investment bank, guaranteeing up to $5 million of the obligations of Mr. King, who was then serving as Proxim, Inc.’s Chief Executive Officer, to that investment bank. In consideration for this guaranty, Mr. King entered into a reimbursement and security agreement with Proxim, Inc. pursuant to which Mr. King is obligated, among other things, to pay a guaranty fee to Proxim, Inc. or any successor company. In October 2002, following a decline in the share price of our common stock, the investment bank demanded that Mr. King deposit sufficient funds into his account to discharge his indebtedness. After making certain payments to the investment bank, Mr. King indicated that he was unable to promptly pay the remaining $5 million of debt in his margin account. The investment bank called the Company’s guaranty and the Company made a payment to the investment bank of $5 million on October 15, 2002. In January 2003, Mr. King made a cash payment of $500,000 to the Company. We assessed the recoverability of the remaining balance of the loan with respect to Mr. King’s current financial position and recorded an impairment charge of $4.5 million in the fourth quarter of 2002. This charge does not constitute forgiveness of Mr. King’s indebtedness to the Company. Mr. King remains subject to the terms and conditions of the reimbursement and security agreement and is obligated to reimburse the Company for payments that the Company made to the investment bank under the guaranty.

Financial Services. Broadview International LLC acted as one of the Company’s financial advisors in connection with the ORiNOCO Acquisition and also acted as financial advisor to Proxim, Inc. in connection with the Merger. Broadview International LLC received customary fees and reimbursement of its expenses in connection with these transactions. Broadview Holdings LLP, the parent of Broadview International LLC, is a member of Broadview Capital LLC and Broadview Capital Partners Management LLC, which serve as Manager and General Partner, respectively, of each of Broadview Capital Partners LP, Broadview Capital Partners Qualified Purchaser Fund LP and Broadview Capital Partners Affiliates Fund LLC (collectively, “Broadview Capital”). Broadview Capital is a beneficial holder of greater than five percent of our Series A preferred stock. We believe that the services performed by Broadview International LLC have been provided on terms no more favorable than those with unrelated parties.

Legal Services. Effective as of March 26, 2002, the law firm of Wilson Sonsini Goodrich & Rosati, Professional Corporation, serves as outside general corporate counsel to the Company. Mr. Saper, a director of the Company, is a member of Wilson Sonsini Goodrich & Rosati, Professional Corporation. We believe that the services performed by Wilson Sonsini Goodrich & Rosati, Professional Corporation, have been provided on terms no more favorable than those with unrelated parties.