Xxxxxxx X. Xxxxxx
Proxim Corporation (PROX)
August 2, 2004
Exhibit 99.1
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Continuation Sheet
Note (1): Pursuant to that certain Securities Purchase Agreement, dated as of
July 27, 2004, by and among WP VIII, the other purchasers named
therein and the Company (the "Purchase Agreement"), on July 30, 2004,
Warburg Pincus Private Equity VIII, L.P., a Delaware limited
partnership ("WP VIII"), surrendered for cancellation the Subordinated
Secured Promissory Note in an aggregate principal amount of
$26,000,000 (the "Subordinated Note") that it had purchased from
Proxim Corporation (the "Company") on October 21, 2003 and the Senior
Secured Promissory Note in an aggregate principal amount of $8,666,667
(the "Senior Secured Note") that it had purchased from the Company on
December 19, 2003, in exchange for 425, 186 shares of the Series B
Convertible Preferred Stock (the "Series B Preferred Stock") of the
Company. The Subordinated Note and the Senior Note were each purchased
pursuant to the terms of that certain Amended and Restated Securities
Purchase Agreement (the "2003 Purchase Agreement"), dated as of
October 21, 2003, by and among WP VIII, the other purchasers named
therein and the Company. Pursuant to the terms of the 2003 Purchase
Agreement, all or any portion of the outstanding principal and accrued
but unpaid interest outstanding on each of the Subordinated Note and
the Senior Note could be exchanged for the number of shares of Series
B Preferred Stock equal to the quotient obtained by dividing the
aggregate outstanding principal balance plus any accrued but unpaid
interest then outstanding on the Subordinated Note and the Senior
Note, respectively, or the portion thereof to be exchanged, by
$100.00. Pursuant to the 2003 Purchase Agreement, the total amount of
funds required to purchase the Subordinated Note was $26,000,000 and
the total amount of funds required to purchase the Senior Note was
$8,666,667.
In addition, pursuant to the Purchase Agreement, WP VIII purchased a
Secured Promissory Note in the aggregate principal amount of
$8,666,667, for a cash purchase price of $8,666,667, which Secured
Promissory Note is not convertible into or exchangeable for any equity
securities. No additional funds were required. The Series B Preferred
Stock is convertible by WP VIII, at any time and from time to time,
into shares of Common Stock at an initial conversion price of $1.15,
and at an initial conversion rate of approximately 86.96 shares of
Common Stock for each share of Series B Preferred Stock converted,
subject to certain adjustments as set forth in the Certificate of
Designations, Preferences and Rights of Series B preferred Stock of
Proxim Corporation, as filed with the Secretary of State of the State
of Delaware on December 15, 2003 (the "Series B Certificate of
Designations"). The liquidation preference of the Series B Preferred
Stock accretes at an annual rate of 14%, compounded quarterly, as more
fully described in the Series B Certificate of Designations. As of
July 30, 2004, the Series B Preferred Stock would convert into
36,972,702 shares of the Company's Common Stock.
The sole general partner of WP VIII is Warburg Pincus & Co., a New
York general partnership ("WP"). Warburg Pincus LLC, a New York
limited liability company ("WP LLC"), manages WP VIII. The members of
WP LLC are substantially the same as the partners of WP. By reason of
the provisions of Rule 16a-1 of the Securities Exchange Act of 1934,
as amended, WP VIII, WP and WP LLC may be deemed to be the beneficial
owners of the shares of Series B Preferred Stock and the shares of
Common Stock into which the Series B Preferred Stock converts. WP and
WP LLC disclaim beneficial ownership of such securities, except to the
extent of any indirect pecuniary interest therein. Xxxxxxx X. Xxxxxx
is a partner of WP and a member and managing director of WP LLC. As
such, Xx. Xxxxxx may be deemed to be the beneficial owner (within the
meaning of Rule 16a-1 under the Securities Exchange Act of 1934) of an
indeterminate portion of the securities beneficially owned by WP and
WP LLC. Xx. Xxxxxx is also a member of the board of directors of the
Company. Xx. Xxxxxx disclaims any beneficial ownership of the
securities reported herein as owned.
Note (2): The maturity date of each of the Subordinated Note and the Senior Note
was the earliest of (i) the date on which any event of default under
the Subordinated Note or Senior Note, respectively, occurred, (ii) any
date on which WP VIII demanded payment of the Subordinated Note or the
Senior Note, respectively, pursuant to its terms and (iii) September
30, 2004. Each share of Series B Preferred Stock shall be redeemed by
the Company on the seventh anniversary of its issuance date for an
amount equal to the liquidation value then in effect plus all accrued
and unpaid dividends.
