Terabeam Nabs Proxim Assets

Terabeam Wireless acquires Proxim assets for approximately $28M

July 20, 2005

3 Min Read

SUNNYVALE, Calif. and SAN JOSE, Calif. -- Terabeam Wireless, the business name of YDI Wireless, Inc. (Nasdaq: YDIW) and Proxim Corporation (OTC: PROXQ), leading providers of Wi-Fi and broadband wireless equipment, jointly announced today that they have entered into an asset purchase agreement whereby Terabeam will acquire substantially all of the assets of Proxim.

   Terabeam and Proxim entered into the asset purchase agreement after Proxim declared Terabeam the high bidder in the court-approved auction held in connection with Proxim's Chapter 11 Bankruptcy Filing. The agreement between Terabeam and Proxim is expected to supersede Proxim's earlier arrangements to sell substantially all of its assets to Moseley Associates.The transaction is subject to final approval by the US Bankruptcy Court for District of Delaware and is expected to close on or before July 29, 2005. As quickly as practical after closing, Terabeam will move its headquarters to Proxim's San Jose facility and will assume responsibility for Proxim's ongoing sales as well as for support of the Proxim product lines through the combined company's worldwide distribution channel.

   The combined company will have significant presence in wireless LAN, point-to-multipoint and point-to-point wireless markets and will continue its product development pipeline to address opportunities in the WiMAX and wireless mesh markets. The parties anticipate continuing to drive the Proxim brands and are committed to a seamless transition that avoids disruption to Proxim's customers, channel partners, employees and suppliers.

   "This is a great opportunity for Terabeam as well as for our respective customers and employees" says Robert Fitzgerald, chief executive officer of Terabeam. "We will be able to offer best-of-breed wireless solutions in virtually every arena, from Wi-Fi through wireless Giga-bit Ethernet. We have always been very impressed by Proxim's distribution system, and we look forward to expanding on their strong channel partnerships. We look forward to bringing together two energetic organizations and believe that we can accelerate product development and our position in the market while maintaining the financial discipline to achieve profitable operations."

   "We view this transaction as an opportunity to team with a company with an aggressive and focused growth strategy," said Kevin Duffy, president and chief executive officer of Proxim. "With this agreement, we combine our talent and technology to gain time-to-market advantage, exceed the expectations and needs of our combined customers, and grow the overall adoption of wireless networking."

   Under the terms of the asset purchase agreement, Terabeam will acquire and assume most of the domestic and foreign operations of Proxim for a purchase price of approximately $28,000,000, subject to certain adjustments and deductions. In addition, upon Court approval, Terabeam is obligated to provide debtor-in-possession financing, which will ultimately be deducted from the purchase price. As previously disclosed in Proxim's public filings with the Securities and Exchange Commission, as a result of Proxim's outstanding obligations to its creditors, no proceeds from the sale of Proxim's assets will be distributed to Proxim stockholders.

Terabeam Wireless

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