Exhibit 10.1


 


Financial
Advisor Agreement


 


 


	
   

  	
  January 22, 2005

  



 


 


	
  Proxim Corporation

  
	
  935 Stewart Drive

  
	
  Sunnyvale, CA 94085

  



 


 


Dear Sirs:


 


Section 1.                                          Appointment
of Financial Advisor.  This Agreement
confirms our understanding that Proxim Corporation, a Delaware corporation (the
“Company”), hereby appoints East Peak Advisors L.L.C. as its financial advisor
(the “Advisor”) in connection with the proposed sale (the “Offering”) of up to
$10.0 million of shares of the Company’s Class A Common Stock, par value $0.01
per share (the “Shares”), and any warrants issued in connection therewith (the “Warrants”)
pursuant to an effective Registration Statement on Form S-3, File No.
333-119975 (as amended or supplemented, the “Registration Statement”),
including any Prospectus Supplement(s) (and related final base Prospectus) (the
Prospectus and any Prospectus Supplements collectively referred to as the “Prospectus
Supplement”) relating to the Offering. 
On the basis of the representations and warranties contained herein, but
subject to the terms and conditions set forth herein, the Advisor agrees to use
its reasonable efforts to solicit and receive offers, but not act as an
underwriter, to purchase the Shares.


 


The Advisor will render
whatever services are mutually agreeable in connection with the Offering.  In particular, the Advisor agrees to:


 


a.                        Familiarize itself to the extent it deems
appropriate with respect to the business, operations, financial condition and
prospects of the Company;


 


b.                       Identify a
number of possible investors (“Purchasers”) which might have an interest in
receiving the Prospectus Supplement and evaluating participation in the
Offering;


 


c.                        Upon
authorization from the Company, the Advisor will contact one or more of such
possible investors;


 


d.                       Assist the
Company and its Board of Directors in evaluating proposals received from any
such possible investors;


 





















 


e.                        Upon the
Company’s request, the Advisor will participate in meetings of the Board of
Directors of the Company (such participation to be in person or by telephone,
as appropriate) at which the Offering is to be considered and, as appropriate,
will report to the Board of Directors with respect thereto.


 


Notwithstanding anything
to the contrary contained in this Agreement, the Advisor shall have no
obligation to purchase any of the Shares, or any liability to the Company if
any prospective purchaser fails to consummate a purchase of any of the Shares.


 


In connection with
Advisor’s activities on the Company’s behalf, the Company agrees to reasonably
cooperate with the Advisor and will furnish to, or cause to be furnished to,
the Advisor all information and data concerning the Company (the “Information”)
which the Company reasonably deems appropriate. 
The Company represents and warrants that all Information made available
to the Advisor by the Company with respect to the Offering or otherwise
included or incorporated by reference in the Prospectus Supplement will not
contain any untrue statements of material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in light of
the circumstances under which the statements are made and that any projections,
forecasts or other Information provided by the Company to the Advisor will have
been prepared in good faith and will be based upon reasonable assumptions.  Prior to any Offering, the Company agrees to
promptly notify the Advisor if the Company believes that any Information, which
was previously provided, has become materially misleading.  The Company acknowledges and agrees that, in
rendering its services hereunder, the Advisor will be using and relying on the
Information (and information available from public sources and other sources
deemed reliable by the Advisor) without independent verification thereof or
independent appraisal or evaluation of the Company, or any party to the
transaction.  The Advisor does not assume
responsibility for the accuracy or completeness of the Information, the
Prospectus Supplement (except with respect to the description of any plan of
distribution), or any other information regarding the Company.


 


Section 2.                                          Fees
and Expenses.  (a) Upon the
consummation of the Offering, the Company will pay the Advisor a cash fee (the “Fee”)
equal to 4% of the cash consideration received by the Company for the sale of
the Shares, less any fee paid under Section 2(b) hereunder.  The fees payable hereunder will be due upon
consummation of an Offering involving any investor in the approved investor
list appended as Schedule A hereto (as such list may be amended from time
to time by mutual agreement of the Company and the Advisor, the “Approved
Investor List”), which Approved Investor List may be amended from time to time
by agreement of the Company and the Advisor.


 


(b)                                 In the event
that the Offering is not consummated following the Company’s execution of a
letter of intent indicating the potential terms for an investment in the
Company by an investor on the Approved Investor List due to the Company’s
refusal to participate in the transaction or transactions on the terms set
forth in such letter of intent, (as such terms may be amended from time to
time), the Company shall pay an advisory fee of $50,000 at or prior to February 28,
2005.  Whether or not the Offering is
consummated the Company will also reimburse


 


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the Advisor for any
out-of-pocket expenses reasonably incurred in connection with the Advisor’s
obligations hereunder, including without limitation, (1) travel expenses and
(2) reasonable fees and expenses of counsel engaged with the Company’s consent,
up to a maximum of $50,000.


 


(c)                                  The
right of the Advisor to receive the fees and reimbursements set forth in this Section 2
shall survive the termination of this Agreement in accordance with Section 11
hereof.


 


Section 3.                                          Information
Regarding the Company.  The Company
will not prepare any offering materials in connection with the Offering other
than the Prospectus Supplement, nor will it provide investors with any
materials not previously filed with Securities and Exchange Commission (the “Commission”)
pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
or the Securities Act of 1933 (the “Securities Act”).


 


Section 4.                                          Representations
and Warranties.  The Company represents
and warrants to the Advisor that:


 


(a)                                  This
Agreement has been duly authorized, executed and delivered by the Company and
represents the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms;


 


(b)                                 The
representations and warranties of the Company contained in each purchase
agreement executed by a Purchaser in connection with the Offering will be true
and correct as of any closing date for the Offering (a “Closing Date”);


 


(c)                                  The Company’s public reports filed with
the Commission, and all subsequent reports (collectively, the “Exchange Act
Reports”) that have been filed by the Company with the Commission or sent to
stockholders, pursuant to Section 13 of the Exchange Act, did not when
filed and, taken as a whole and as amended to the date hereof do not as of the
date hereof contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.  Such documents, when they were filed with the
Commission, conformed to the requirements of the Exchange Act, the Securities
Act and the rules and regulations of the Commission thereunder.


 


(d)                                 The Registration Statement has been declared
effective by the Commission under the Securities Act and no stop order has been
issued suspending the effectiveness of the Registration Statement and no
proceedings for such purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated or threatened by the
Commission.  The Registration Statement,
at the time it became effective, and at all subsequent times, and the
Prospectus Supplement in the form delivered to a Purchaser complied in all
material respects with the Securities Act and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.


 


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Section 5.                                          Agreements.
 The Company agrees with the Advisor
that:


 


(a)                                  The
Company shall extend to all prospective Purchasers the opportunity, prior to
the Closing Date, to ask questions of, and receive answers from, the Company
concerning the Shares and the terms and conditions of the offering thereof and
to obtain any information that such prospective purchasers may consider
necessary in making an informed investment decision, to the extent the Company
possesses the same or can acquire it without unreasonable effort or expense and
in compliance with Regulation FD promulgated under the Exchange Act; and


 


(b)                                 If
any event occurs or condition exists as a result of which the information
contained in the Company’s Exchange Act Reports, the Registration Statement,
the Prospectus or the Prospectus Supplement, would include an untrue statement
of a material fact, or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances when the filings were
made not misleading, or if, in the opinion of the Advisor or the Company, it is
necessary at any time prior to the Closing to file a subsequent report to
comply with applicable law, the Company will notify the Advisor of any such
event, condition or opinion of the Company and shall prepare an amendment or
report that will correct such statement or omission or effect such compliance
and will supply such amendment or report to the Advisor.


 


Section 6.                                          Closing
Documents.  On each Closing Date, the
Company shall deliver to the Advisor:


 


(a)                                  a
copy of each officer’s certificate delivered by the Company to a Purchaser
pursuant to the applicable purchase agreement;


 


(b)                                 an
opinion of counsel to the Company dated the Closing Date to the effect that
this Agreement has been duly authorized, executed and delivered by the Company
and a letter from such counsel dated the Closing Date to the effect that the
Advisor may rely on each opinion of such counsel delivered to any Purchaser in
connection with the closing contemplated by each purchase agreement to the same
extent as if such opinion or opinions had been addressed to the Advisor;


 


(c)                                  a
copy of any “comfort letter” delivered to Purchasers of the Shares dated the
Closing Date and a letter from Company’s independent auditors dated the Closing
Date to the effect that the Advisor may rely on such “comfort letter” delivered
to any Purchaser in connection with the closing contemplated by each purchase
agreement to the same extent as if such opinion or opinions had been addressed
to the Advisor; and


 


(d)                                 copies of any other documents delivered
to Purchasers on such Closing Date as the Advisor may reasonably request in
form satisfactory to the Advisor.


 


Section 7.                                          Appointment.  During the term of the Advisor’s appointment,
the Company shall not, directly or indirectly (except through the Advisor),
sell or offer to sell any of the Shares or any substantially similar security
in a financing transaction to the parties listed on the Approved Investor
List.  The term of the Advisor’s
appointment under this Agreement will continue until the


 


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earliest of (i) the
consummation of the Offering, (ii) the date of any termination of this
Agreement pursuant to Section 12 and (iii) June 30, 2005.  Any sale or disposition of such Shares or
similar securities during the term of such appointment to any of the parties
listed on the Approved Investor List will be deemed to be as if such sale or
disposition were undertaken by the Advisor directly.


 


Section 8.                                          Advertising.  Upon the completion of the Offering, Company
agrees that, the Advisor, at its own expense, has the right to place “tombstone”
style advertisements in financial and other newspapers and journals or on the
Internet describing the results of its services to the Company hereunder,
subject to approval by the Company not to be unreasonably withheld.


 


Section 9.                                          Indemnity
and Contribution.  The Company and
the Advisor agree to the indemnification and contribution arrangements set
forth in Attachment A hereto.


 


Section 10.                                   Representations,
Indemnity and Agreements to Survive. 
The respective representations, warranties and indemnities set forth
herein will remain in full force and effect regardless of any investigation
made by or on behalf of the Advisor or the Company or any of their respective
officers, directors or controlling persons, and will survive delivery of any
payment for the Shares.  The provisions
of this Section and Sections 2, 4, 7, 9, 11, and 12 hereof shall survive
the termination or cancellation of this Agreement.


 


Section 11.                                   Termination.  The Advisor’s services hereunder may be
terminated with or without cause by either the Company or the Advisor at any
time and without liability or continuing obligation to the Advisor or the
Company, except for (a) any compensation earned or expenses incurred by
the Advisor to the date of termination as specified in Section 2(b) and
(b) if the Company has terminated the Agreement, the Advisor’s right to
fees pursuant to this Agreement for any sale prior to June 30, 2005 to any
investor on the Approved Investor List.


 


Section 12.                                   Successors;
Entire Agreement; Governing Law; Amendments.  The terms and provisions of this Agreement
are solely for the benefit of the Company and the Advisor and the other
Indemnified Persons and their respective successors, assigns, heirs and
personal representatives, and no other person shall acquire or have any right
by virtue of this Agreement.  This
Agreement represents the entire understanding between the Company and the Advisor
with respect to the Offering and the Advisor’s engagement hereunder, and all
prior discussions are merged herein. 
This Agreement (including Attachment A) shall be governed by and
construed in accordance with the internal laws of the State of California,
without regard to such state’s principles of conflicts of laws, and may be
amended, modified or supplemented only by written instrument executed by each
of the parties hereto.


 


Section 13.                                   No
Rights in Equityholders, Creditors.  The
Advisor is being retained to serve as financial advisor solely to the Company,
and it is agreed that the engagement of the Advisor is not, and shall not be
deemed to be, on behalf of, and is not intended to confer rights or benefits
upon any stockholder or creditor of the Company or upon any other person or
entity.  No one other than the Company is
authorized to rely upon this engagement of the Advisor or any


 


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statements, conduct or
advice of the Advisor, and no one other than the Company is intended to be a
beneficiary of this engagement.  All
opinions, advice or other assistance (whether written or oral) given by the
Advisor in connection with this engagement are intended solely for the benefit
and use of the Company and will be treated by the Company as confidential, and
no opinion, advice or other assistance of the Advisor shall be used for any
other purpose or reproduced, disseminated, quoted or referred to at any time,
in any manner or for any purpose, nor shall any public or other references to
the Advisor (or to such opinions, advice or other assistance) be made without
the express prior written consent of the Advisor.


 


Section 14.                                   Counterparts;
Headings.  This Agreement may be
signed in counterparts with the same effect as if the signatures thereto were
on the same instrument.  The headings of
the Sections of this Agreement have been inserted for convenience of reference
only and shall not be deemed a part of this Agreement.


 


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If the
foregoing correctly sets forth the entire understanding and agreement between
the Advisor and the Company, please so indicate in the space provided for that
purpose below and return an executed copy to us, whereupon this letter shall
constitute a binding agreement as of the date first above written.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  East Peak Advisors L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brewer S. Stone

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Brewer S. Stone

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted as of January     ,
  2005

  	
   

  
	
   

  	
   

  
	
  Proxim Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kevin J. Duffy

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Kevin J. Duffy

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President & CEO

  	
   

  	
   

  



 


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ATTACHMENT A


 


INDEMNIFICATION,
CONTRIBUTION AND LIMITATION OF LIABILITY PROVISIONS


 


This
Attachment A is a part of and is incorporated into the Financial Advisor’s
Agreement (together, the “Agreement”) dated January 22, 2005 by and
between the Company and East Peak Advisors L.L.C. (the “Advisor”).  Capitalized terms used and not otherwise
defined in this Attachment A shall have the meanings ascribed to them elsewhere
in this Agreement.


 


The
Company will indemnify and hold harmless Advisor and its affiliates, and the
respective directors, officers, and employees of Advisor and its affiliates
(Advisor and each such entity or person, an “Indemnified Person”) from and
against any losses, claims, damages, judgments, assessments, costs and other
liabilities (collectively “Liabilities”), and will reimburse each Indemnified
Person for all reasonable, documented out-of-pocket fees and expenses
(including the reasonable fees and expenses of counsel) (collectively, “Expenses”)
as they are incurred in investigating, preparing, pursuing or defending any
claim, action, proceeding or investigation, whether or not any Indemnified
Person is a party (collectively, “Actions”), arising out of or in connection
with advice or services rendered or to be rendered by any Indemnified Person
pursuant to this Agreement, the transactions contemplated hereby or any
Indemnified Person’s actions or inactions in connection with any such advice,
services or transactions (including, without limitation, any Liabilities or
Expenses arising out of the Registration Statement, the Prospectus Supplement
or any Exchange Act Report containing or allegedly containing any untrue
statement of a material fact or omitting to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading); provided that the Company will not be
responsible to the extent that Liabilities or Expenses of any Indemnified
Person that are determined by a judgment of a court of competent jurisdiction
to have resulted primarily from such Indemnified Person’s gross negligence or
willful misconduct (in which case any reimbursements made by the Company to an
Indemnified Person relating to such Liabilities or Expenses shall promptly be
refunded to the Company and such Indemnified Persons shall not be entitled to
Contribution hereunder.  The Company also
agrees to reimburse each Indemnified Person for all Expenses as they are
incurred in connection with enforcing such Indemnified Person’s rights under
this Agreement (including, without limitation, its rights under this Attachment
A).


 


Upon
receipt by an Indemnified Person of actual notice of an Action against such
Indemnified Person with respect to which indemnity may be sought under this
Agreement, such Indemnified Person shall promptly notify the Company in
writing; provided that failure so to notify the Company shall not relieve the
Company from any liability which the Company may have on account of this
indemnity or otherwise, except to the extent the Company shall have been
materially prejudiced by such failure. 
The Company shall, if requested by Advisor, assume the defense of any
such Action including the employment of counsel reasonably satisfactory to
Advisor. Any Indemnified Person shall have the right to employ separate counsel
in any such action and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person,
unless: (i) the Company has failed promptly to assume


 





















 


the defense and employ counsel or (ii) the named
parties to any such Action (including any impleaded parties) include such
Indemnified Person and the Company, and such Indemnified Person shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or in addition to those available to the Company;
provided that the Company shall not in such event be responsible hereunder for
the fees and expenses of more than one firm of separate counsel in connection
with any Action in the same jurisdiction, in addition to any local
counsel.  The Company shall not be liable
for any settlement of any Action effected without its written consent, which
consent shall not be unreasonably withheld. 
In addition, the Company will not, without prior written consent of
Advisor, which consent shall not be unreasonably withheld, settle, compromise
or consent to the entry of any judgment in or otherwise seek to terminate any
pending or threatened Action in respect of which indemnification or
contribution may be sought hereunder (whether or not any Indemnified Person is
a party thereto) unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Person from all
Liabilities arising out of such Action.


 


In the
event the foregoing indemnity is unavailable to an Indemnified Person other
than in accordance with this Agreement, the Company shall contribute to the
Liabilities and Expenses paid or payable by such Indemnified Person in such
proportion as is appropriate to reflect (i) the relative benefits to the
Company and its stockholders, on the one hand, and to Advisor, on the other
hand, of the matters contemplated by this Agreement or (ii) if the allocation
provided by the immediately preceding clause is not permitted by the applicable
law, not only such relative benefits but also the relative fault of the Company,
on the one hand, and Advisor, on the other hand, in connection with the matters
as to which such Liabilities or Expenses relate, as well as any other relevant
equitable considerations; provided that in no event shall the Company
contribute less than the amount necessary to ensure that all Indemnified
Persons, in the aggregate, are not liable for any Liabilities and Expenses in
excess of the amount of fees actually received by Advisor pursuant to this
Agreement.  For purposes of this
paragraph, the relative benefits to the Company and its stockholders, on the
one hand, and to Advisor, on the other hand, of the matters contemplated by
this Agreement shall be deemed to be in the same proportion as (a) the total
value paid or contemplated to be paid or received or contemplated to be
received by the Company or the Company’s stockholders, as the case may be, in
the transaction or transactions that are within the scope of this Agreement,
whether or not any such transaction is consummated, bears to (b) the fees paid
or to be paid to Advisor under this Agreement.


 


The
Company also agrees that no Indemnified Person shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company
for or in connection with advice or services rendered or to be rendered by any
Indemnified Person pursuant to this Agreement, the transactions contemplated
hereby or any Indemnified Person’s actions or inactions in connection with any
such advice, services or transactions except for Liabilities (and related
Expenses) of the Company that are determined by a judgment of a court of
competent jurisdiction have resulted primarily from such Indemnified Person’s
gross negligence or willful misconduct in connection with any such advice,
actions, inactions or services.


 


The reimbursement,
indemnity and contribution obligations of the Company set forth


 





















 


herein shall apply to any
modification of this Agreement and shall remain in full force and effect
regardless of any termination of, or the completion of any Indemnified Person’s
services under or in connection with, this Agreement.


 





















 


Approved
Investor List


 


Satellite Asset
Management


EBF Capital


Larry Bowman and
Affiliates


MicroCapital


O33 Growth


Seligman


Ssquared Technology


CrossLink Capital


Fort Mason Capital