Exhibit 2.3
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AMENDED AND RESTATED ASSET CONTRIBUTION AGREEMENT
THIS AMENDED AND RESTATED ASSET CONTRIBUTION AGREEMENT (this
"Agreement") is entered into and is effective as of June 3, 2000 (the "Effective
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Date") by and between CABLETRON SYSTEMS, INC., a Delaware corporation ("CSI"),
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and ENTERASYS NETWORKS, INC., a Delaware corporation and a wholly owned
subsidiary of CSI (the "Company").
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RECITALS
WHEREAS, the parties desire to enter into this Agreement in order to
cause the transfer of certain assets related to the Company Business (as defined
herein) to the Company and the assumption by the Company of certain liabilities
including those related to the Company Business on the Transformation Date (as
defined herein), giving effect to such transfer and assumption as of the
Effective Date;
WHEREAS, CSI and the Company are entering into this Agreement pursuant
to that certain Transformation Agreement (the "Transformation Agreement") dated
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as of the date hereof by and among CSI, the Company and the other Newcos (as
defined herein);
WHEREAS, CSI and the Company desire such transfer of assets and
liabilities to qualify as a tax free contribution under Section 351 of the
Internal Revenue Code of 1986, as amended; and
WHEREAS, CSI and the Company desire to amend and restate this Agreement
as of the Effective Date to correct certain mutual mistakes of the parties and
to clarify their rights and obligations under this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, provisions and covenants contained herein, and for other good and
valuable consideration, the receipt and legal sufficiency whereof are hereby
acknowledged, the parties hereto further agree as follows:
1. Definitions. For the purposes of this Agreement, the following terms
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shall have the following meanings:
1.1. "Action" shall mean any claim, action, cause of action or suit
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by or before any Governmental Authority.
1.2. "Agreement" has the meaning assigned to such term in the
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preamble.
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1.3. "Ancillary Agreements" has the meaning assigned to such term in
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the Transformation Agreement.
1.4. "Aprisma" means Aprisma Management Technologies, Inc.
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1.5. "Assignment and Assumption Agreement" has the meaning assigned
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to such term in Section 6.3.
1.6. "Assumed Liabilities" has the meaning assigned to such term in
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Section 4.
1.7. "▇▇▇▇ of Sale" has the meaning assigned to such term in Section
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6.3.
1.8. "Closing" has the meaning assigned to such term in the
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Transformation Agreement.
1.9. "Company" has the meaning assigned to such term in the preamble.
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1.10. "Company Business" means the business described in Exhibit A.
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1.11. "Company Transferred Subsidiaries" means each of the
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subsidiaries of CSI listed on Schedule 2.3 hereto and each
direct and indirect subsidiary of such entities.
1.12. "Contracts" means any contract, agreement, lease, license,
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sales order, purchase order, instrument or other commitment.
1.13. "Contributed Assets" has the meaning assigned to such term in
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Section 2.
1.14. "Contributed Contracts" has the meaning assigned to such term in
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Section 2.9.
1.15. "Contributed Intellectual Property" means, collectively,
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Contributed Registered Intellectual Property, Contributed
Non-Registered Intellectual Property, and Contributed Third
Party Tools.
1.16. "Contributed Non-Registered Intellectual Property" has the
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meaning assigned to such term in Section 2.7.1.
1.17. "Contributed Registered Intellectual Property" has the meaning
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assigned to such term in Section 2.8.1.
1.18. "Contributed Third Party Tools" has the meaning assigned to such
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term in Section 2.6.
1.19. "Contribution Agreements" has the meaning assigned to such term
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in the Transformation Agreement.
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1.20. "CSI" has the meaning assigned to such term in the preamble.
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1.21. "Effective Date" has the meaning assigned to such term in the
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preamble
1.22. "Enterasys" means Enterasys Networks, Inc.
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1.23. "Excluded Assets" has the meaning assigned to such term in
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Section 3.
1.24. "Excluded Liabilities" has the meaning assigned to such term
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in Section 5.
1.25. "GNTS" means GlobalNetwork Technology Services, Inc.
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1.26. "Governmental Authority" means any domestic or foreign federal,
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state or local government, regulatory or administrative agency
or court.
1.27. "Initial Intercompany Amount" has the meaning assigned to such
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term in Section 8.5.
1.28. "Intellectual Property" means any or all of the following and
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all rights in, arising out of, or associated therewith: (i) all
United States and foreign patents and applications therefor and
all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (ii) all
inventions (whether patentable or not), invention disclosures,
improvements, trade secrets, proprietary information, know how,
technology, technical data and customer lists; (iii) all
copyrights, copyright registrations and applications therefor
and all other rights corresponding thereto throughout the world;
(iv) all semiconductor and semiconductor circuit designs; (v)
all rights to all mask works and reticles, mask work
registrations and applications therefor; (vi) all industrial
designs and any registrations and applications therefor
throughout the world; (vii) all trade names, logos, common law
trademarks and service marks, trademark and service ▇▇▇▇
registrations and applications therefor and all goodwill
associated therewith throughout the world; (viii) all databases
and data collections and all rights therein throughout the
world; (ix) all computer software including all source code,
object code, firmware, development tools, files, records and
data, all media on which any of the foregoing is recorded; (x)
all Web addresses, sites and domain names; (xi) any similar,
corresponding or equivalent rights to any of the foregoing; and
(xii) all documentation related to any of the foregoing.
1.29. "Intercompany Account" has the meaning assigned to such term in
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Section 2.4.2.
1.30. "Intercompany Amount" shall mean an amount, which may be
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positive or negative, equal to (i) the Initial Intercompany
Amount plus (ii) the net amount (which amount may be negative)
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of any cash received by CSI with respect to the Company Business
during the period from June 3, 2000 through the Transformation
Date minus any cash spent by CSI with respect to the Company
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Business during the period from June 3, 2000 through the
Transformation Date minus (iii) any obligations in respect of
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accounts payable and other current liabilities incurred by CSI
with respect to the Company Business during the period from June
3, 2000 through the Transformation Date not assumed by the
Company pursuant to this Agreement.
1.31. "Inventory" means inventories, raw materials, supplies,
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manufactured and purchased parts, works in progress and finished
goods.
1.32. "June 3 Balance Sheet" has the meaning assigned to such term in
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Section 8.5.
1.33. "June 3 Net Working Capital" has the meaning assigned to such
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term in Section 8.5.
1.34. "June 3 Target Net Working Capital" means $140,000,000.
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1.35. "Liability" means any debt, liability or obligation whether
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known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, whether incurred directly or
consequential and whether due or to become due, including,
without limitation, any liability arising out of applicable
statutory, regulatory or common law, any contractual obligation
and any obligation arising out of tort.
1.36. "NEC ASIC Technology" means the Intellectual Property of CSI
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related to the ASIC family manufactured as of the Effective Date
by NEC, and certain related, incidental Intellectual Property,
including Intellectual Property that supports that ASIC family
and subsystems into which those ASICs are incorporated.
1.37. "Net Working Capital" means (a) the total combined current
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assets of the Company minus (b) the total combined current
liabilities of the Company.
1.38. "Newcos" means, collectively, Aprisma, the Company, GNTS and
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Riverstone.
1.39. "Office Equipment" means furniture and other office equipment,
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including without limitation desks, tables, chairs, computers,
servers and related peripherals and copiers, but excluding
fixtures.
1.40. "Permits" means permits, licenses, authorizations and
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certifications issued by a Governmental Authority or other
standard setting organization.
1.41. "Product Segment" means networking products that are designed
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specifically for use in local area networks and applications
other than high traffic, wide area networks operated by
telecommunications service providers.
1.42. "Products" means the Products described on Exhibit A hereto.
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1.43. "Riverstone" means Riverstone Networks, Inc.
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1.44. "Riverstone Contribution Agreement" has the meaning assigned to
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such term in the Transformation Agreement.
1.45. "Service Provider ASIC Technology" has the meaning assigned to
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such term in the Riverstone Contribution Agreement.
1.46. "Shared Services Agreement" means the one of the Share Services
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Agreements (as such term is defined in the Transformation
Agreement) to which the Company is party;
1.47. "Shares" has the meaning assigned to such term in Section 6.1.
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1.48. "Statement" has the meaning assigned to such term in Section
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8.5.
1.49. "Tax Sharing Agreement" has the meaning assigned to such term
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in the Transformation Agreement.
1.50. "Third Party Tools" means rights with respect to third party
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computer applications, programs, other software, and other
design tools, including operating software, network software,
firmware, middleware, design software, systems documentation
and instructions.
1.51. "Transfer Impediment" has the meaning assigned to such term in
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Section 8.3.1.
1.52. "Transformation Agreement" has the meaning assigned to such
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term in the recitals.
1.53. "Transformation Date" has the meaning assigned to such term
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in the Transformation Agreement.
1.54. "Vehicles" means automobiles, trucks, tractors, trailers and
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other vehicles.
2. Contributed Assets. Upon and subject to the terms and conditions of
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this Agreement, and except as provided in Sections 3, 8.3 and 8.4
hereof, effective as of the Transformation Date, CSI hereby agrees to
assign, transfer, convey and deliver and to cause all of its direct
and indirect subsidiaries other than the Company Transferred
Subsidiaries to assign, transfer, convey and deliver to the Company
(or the applicable subsidiary of the Company pursuant to Section 8.2
hereof) all of (or in the case of Intellectual Property to be
contributed to Company as contemplated by Section 2.7.2, a one-half
undivided interest in) their respective rights, title and interest in
the following properties and assets (the "Contributed Assets") to the
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extent not already held by the Company:
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2.1. Tangible Personal Property. All Office Equipment, Vehicles and
other tangible personal property which is used primarily by the
Company Business at the Transformation Date, in any event,
including without limitation such tangible personal property
specifically identified on Schedule 2.1 hereto, but excluding
fixtures.
2.2. Inventory. Except as otherwise provided on Schedule 2.2
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hereto, all inventory associated with the Products at the
Transformation Date.
2.3. Stock of CSI Subsidiaries. All of the capital stock of the
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subsidiaries of CSI set forth on Schedule 2.3 hereto (including,
except as otherwise provided on Schedule 2.3, the subsidiaries
thereof).
2.4. Certain Current Assets.
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2.4.1. All accounts receivable (including intercompany
receivables) and prepaid expenses relating primarily to
the Company Business as of the Transformation Date.
2.4.2. An intercompany account (the "Intercompany Account") to
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be maintained and administered by CSI as provided in
the Shared Services Agreement with a balance equal to
the Intercompany Amount as finally determined pursuant
to Section 8.5, such Intercompany Account representing
an amount (as adjusted from time to time for
receivables collected and payables paid and other
appropriate credits and debits) which is payable on
demand by CSI to the Company in cash.
2.5. Permits, etc. All rights under the Permits described on
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Schedule 2.5 hereto.
2.6. Third Party Tools. All rights with respect to Third Party Tools
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used exclusively by the Company Business at the Transformation
Date, including without limitation those Third Party Tools set
forth on Schedule 2.6 hereof (collectively, the "Contributed
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Third Party Tools").
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2.7. Other Intellectual Property.
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2.7.1. All rights in respect of all Intellectual Property of
CSI, other than registered Intellectual Property and
applications therefor, related to the Products or
otherwise used by the Company Business at the
Transformation Date (collectively, with the
Intellectual Property contributed to the Company
pursuant to Section 2.7.2, the "Contributed
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Non-Registered Intellectual Property") and any remedies
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against any and all past, present and future
infringements thereof and rights to protection of
interest therein; provided, however, that such rights
do not include any rights to the NEC ASIC Technology
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2.7.2. A one-half undivided interest in (it being understood
that the other one- half undivided interest is owned by
Riverstone) all NEC ASIC Technology (other than
registered Intellectual Property rights) and any
remedies against any and all past, present and future
infringements thereof and rights to protection of
interest therein without an obligation between
the Company and Riverstone to account to one another.
2.8. Registered Intellectual Property.
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2.8.1. All rights in respect of that registered Intellectual
Property set forth on Schedule 2.8 and any applications
therefor (the "Contributed Registered Intellectual
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Property") and any remedies against any and all past,
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present and future infringements thereof and rights to
protection of interest therein.
2.9. All Contracts. All rights, excluding rights in respect of
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Intellectual Property and rights with respect to the use of
real property, under Contracts primarily used by the Company
Business at the Transformation Date, including without
limitation those Contracts set forth on Schedule 2.9
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(collectively, the "Contributed Contracts").
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2.10. Claims. Claims and rights of recovery, rights of set-off and
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rights of recoupment which relate primarily to the Company
Business.
2.11. Lists. All customer lists, distributor lists and supplier
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lists used primarily by the Company Business at the
Transformation Date.
2.12. Books and Records. All (i) accounting and other books and
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records, (ii) correspondence, (iii) reports, (iv) studies, and
(v) documents and other business records and files used
primarily by the Company Business at the Transformation Date.
2.13. Tax Attributes. (i) Tax attributes with respect to, and the
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overpayment of, property taxes, sales and use taxes and
franchise taxes which relate primarily to the Company Business
and (ii) to the extent provided in the Tax Sharing Agreement,
tax attributes with respect to, and the overpayment of, income
and payroll taxes which relate to the Company Business or are
otherwise allocated to the Company.
2.14. Other Assets. Any other assets that are allocated to the
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Company pursuant to the Transformation Agreement.
Notwithstanding the foregoing, the Contributed Assets do not include
the Excluded Assets.
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3. Excluded Assets. Notwithstanding anything to the contrary in Section 2,
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there shall be excluded from the Contributed Assets to be assigned,
transferred, conveyed and delivered to the Company and its subsidiaries
hereunder, the following assets, properties and rights (collectively,
the "Excluded Assets"):
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3.1. Other Newco Assets. Except for rights with respect to
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Intellectual Property to be contributed to the Company and
also owned by Riverstone as contemplated by Section 2.7.2, any
assets to be transferred to a Newco (or its subsidiaries)
other than the Company pursuant to the Contribution Agreement
to which such other Newco is party.
The parties understand and acknowledge that except for rights
with respect to Intellectual Property to be contributed to the
Company and also owned by Riverstone as contemplated by
Section 2.7.2, where an asset is specifically identified in
another Contribution Agreement (or the schedules thereto) as
an asset to be transferred to another Newco, such asset is not
primarily related to the Company Business and shall be
transferred to such other Newco and not the Company.
The parties further understand and acknowledge that Riverstone
owns all rights in and to the Service Provider ASIC
Technology, and that CSI has contributed no rights in or to
such Service Provider ASIC Technology to Company.
3.2. Real Property. Other than as expressly set forth in the Shared
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Services Agreement all rights in respect of real property,
including without limitation all leases with respect to real
property, all improvements, fixtures and fittings on real
property, and easements, rights-of way, and other rights
appurtenant to real property.
3.3. Cash and Securities. Other than as expressly set forth in
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Section 2.3 and Section 2.4 hereof, all cash, cash equivalents
and securities of CSI (to the extent not held by a Company
Transferred Subsidiary).
3.4. Third Party Tools. Any Third Party Tools used by a Newco
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other than the Company as of the Transformation Date,
including without limitation those Third Party Tools set forth
on Schedule 3.4.
3.5. Intellectual Property Rights. Any rights in respect of
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Intellectual Property that is not Contributed Intellectual
Property, including without limitation any rights in respect
of registered Intellectual Property and applications therefor
that is not Contributed Registered Intellectual Property.
3.6. Confidentiality and Non-Competition Agreements. Except as
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otherwise provided in the Transformation Agreement, all rights
under confidentiality agreements, non-competition,
non-disclosure and other similar agreements with employees.
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3.7. Assets Retained by CSI. Any assets to be retained by CSI
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pursuant tso the Transformation Agreement.
4. Assumption of Liabilities. On the terms and subject to the conditions
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set forth herein, and except as provided in Sections 5, 8.3 and 8.4
hereof, from and after the Closing, the Company will assume and satisfy
or perform when due all Liabilities of CSI and its direct and indirect
subsidiaries, to the extent not discharged prior to the Transformation
Date, which relate primarily to the Company Business and/or the
Contributed Assets (collectively, the "Assumed Liabilities") to the
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extent not already assumed by the Company, including without limitation
the following Liabilities:
4.1. Intercompany Payables; Accrued Expenses. All Liabilities as
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of the Transformation Date in respect of intercompany payables
and accrued expenses, including without limitation expenses in
respect of legal and accounting services, which relate
primarily to the Company Business.
4.2. Taxes. All Liabilities as of the Transformation Date in
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respect of unpaid taxes, including without limitation (i)
property taxes, sales and use taxes, and franchise taxes which
relate primarily to the Company Business and (ii) as provided
in the Tax Sharing Agreement, income and payroll taxes which
relate to the Company Business or are otherwise allocated to
the Company.
4.3. Contracts. All Liabilities relating to or arising out of the
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Contributed Contracts.
4.4. Products and Services. All Liabilities relating to or arising
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out of products manufactured or sold or services rendered by
the Company Business.
4.5. Actions. All Liabilities relating primarily to the Company
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Business arising as a result of any Action or threatened
Action.
4.6. Non-compliance with Legal Requirements. All Liabilities
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relating primarily to the Company Business arising out of
noncompliance with any legal requirements.
4.7. Employee Liabilities. All Liabilities with respect to
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employees which relate primarily to the Company Business.
4.8. Allocated Liabilities. The Liabilities allocated to the
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Company pursuant to the Transformation Agreement.
Notwithstanding the foregoing, the Assumed Liabilities do not include
the Excluded Liabilities.
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5. Excluded Liabilities. Notwithstanding anything to the contrary in
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Section 4, there shall be excluded from the Assumed Liabilities to be
assumed by the Company hereunder, the following Liabilities
(collectively, the "Excluded Liabilities"):
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5.1. Accounts Payable. All Liabilities in respect of accounts
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payable to third parties (not including intercompany payables)
and deposits held by CSI or its affiliates for the account of
third parties as of the Transformation Date which arise out of
the Company Business.
6. Consideration And Closing.
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6.1. Consideration. As consideration for the transfer described in
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Sections 2 through 5 hereof, the Company agrees to record such
transfer as a contribution of capital on behalf of CSI for
shares of a series of preferred stock of the Company (the
"Shares") as described on Exhibit B hereto.
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6.2. Closing. The closing of the transactions contemplated by this
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Agreement shall be a part of the Closing described in the
Transformation Agreement and shall take place at the time and
place set forth in the Transformation Agreement; provided,
however, that certain circumstances, including regulatory
matters in various jurisdictions outside the United States,
may require the transfer of certain assets and the assumption
of certain Liabilities to occur in such other manner and at
such other time as provided in Sections 8.3 and 8.4 hereof.
Except as otherwise provided herein, in the Transformation
Agreement and the other Ancillary Agreements, the simultaneous
occurrence of the other transactions which are a part of the
Closing under the Transformation Agreement is a condition
precedent to the closing of the transactions contemplated
hereby.
6.3. Deliveries at Closing. At the Closing, (i) CSI will execute
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and deliver to the Company a ▇▇▇▇ of Sale in substantially the
form attached hereto as Exhibit B-1 (the "▇▇▇▇ of Sale") and
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an Assignment and Assumption Agreement in substantially the
-----------------------------------
form attached hereto as Exhibit B-2 (the "Assignment and
Assumption Agreement") and (ii) the Company will execute and
deliver to CSI the Assignment and Assumption Agreement and
will deliver to CSI certificate(s) representing the Shares.
7. Representations and Warranties.
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7.1. Representations and Warranties of CSI. CSI hereby represents
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and warrants to the Company as follows:
7.1.1. Organization and Good Standing. CSI is a corporation
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duly organized, validly existing and in good standing
under the laws of the jurisdiction of the State of
Delaware. CSI has full corporate power and authority
to execute, deliver and perform this Agreement. The
execution, delivery and
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performance of this Agreement by CSI has been duly
authorized by all necessary corporate and stockholder
actions.
7.1.2. Binding Effect. This Agreement has been duly executed
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and delivered by CSI and, assuming the due execution
and delivery hereof by the Company, constitutes the
legal, valid and binding obligation of CSI,
enforceable against CSI in accordance with its terms.
7.2. Representations and Warranties of the Company. The Company
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hereby represents and warrants to CSI as follows:
7.2.1. Organization. The Company is a corporation duly
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organized, validly existing and in good standing
under the laws of the jurisdiction of the State of
Delaware. The Company has full corporate power and
authority to execute, deliver and perform this
Agreement. The execution, delivery and performance of
this Agreement by the Company has been duly
authorized by all necessary corporate and stockholder
actions.
7.2.2. Binding Effects. This Agreement has been duly
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executed and delivered by the Company and, assuming
the due execution and delivery hereof by CSI,
constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in
accordance with its terms.
8. Certain Agreements of the Parties.
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8.1. Contributed Assets. The Contributed Assets will be assigned
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by CSI to the Company pursuant to this Agreement hereof on an
"AS IS" basis, without any representations or warranties
whatsoever, except as provided in Section 7.1 hereof. Without
limiting the generality of the foregoing, CSI DISCLAIMS ANY
AND ALL OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES
OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT AND FITNESS FOR A
PARTICULAR PURPOSE.
8.2. Certain Foreign Assets and Liabilities. In the case of assets
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(other than the stock of subsidiaries of CSI contributed
pursuant to Section 2.3) or Liabilities that are held by a
subsidiary of CSI organized in a jurisdiction located outside
of the United States that are to be transferred to or assumed
by the Company pursuant hereto, instead of the Company such
assets shall be transferred to and such Liabilities shall be
assumed by (i) the subsidiary of the Company organized in the
same jurisdiction as the entity from which the assets or
liabilities are being transferred, if the Company has such a
subsidiary or (ii) otherwise, the subsidiary of the Company
organized under the laws of the United Kingdom, and the
Company shall cause such subsidiary to accept such transfers
and assumptions.
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8.3. Inability to Assign Assets.
--------------------------
8.3.1. If and to the extent that the valid, complete and
perfected transfer to the Company of any Contributed
Asset would be a violation of applicable laws or
agreements or require any consent or governmental
approval in connection with the transactions
contemplated hereby that has not been obtained by the
Transformation Date (a "Transfer Impediment"), then,
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unless the parties shall otherwise determine, the
transfer or assignment to the Company of such
Contributed Asset shall be automatically deemed
deferred and any such purported transfer shall be
null and void until such time as all relevant
Transfer Impediments are removed or obtained, as
applicable, and CSI (or its applicable affiliate)
shall not be obligated to transfer such asset except
as provided in Section 8.3.2 below. Notwithstanding
the foregoing, such asset shall still be considered a
Contributed Asset for purposes of determining whether
any Liability is an Assumed Liability.
8.3.2. If the transfer or assignment of any asset intended
to be transferred or assigned hereunder is not
consummated prior to or on the Transformation Date,
whether as a result the provisions of Section 8.3.1
or for any other reason, then CSI (or its applicable
affiliate) shall hold such asset for the use and
benefit, insofar as reasonably possible and not in
violation of a Transfer Impediment, of the Company
(at the expense of the Company) and shall take such
other actions as may be reasonably requested by the
Company in order to place the Company, insofar as
reasonably possible and not in violation of a
Transfer Impediment, in the same position as if such
asset had been transferred as contemplated hereby and
so that all the benefits and burdens relating to such
asset, including possession, use, risk of loss,
potential for gain, and dominion, control and command
over such asset, are to inure from and after the
Transformation Date to the Company. If and when a
Transfer Impediment which caused the deferral of a
transfer of any asset pursuant to Section 8.3.1 is
removed or obtained, as applicable, the transfer of
the applicable asset shall be effected in accordance
with the terms of this Agreement.
8.3.3. The parties shall cooperate and use reasonable
efforts, without the requirement to make any payment
or make a material concession, to remove or obtain,
as applicable, any Transfer Impediment which
prohibits the transfer or assignment of assets
hereunder.
8.4. Inability to Assign Liabilities. If the assignment of an
-------------------------------
Assumed Liability to the Company hereunder is prohibited by a
Transfer Impediment, CSI or the applicable CSI affiliate shall
continue to be bound by the relevant obligations and, unless
not permitted by law or the terms of the relevant obligation,
the Company shall, as agent or subcontractor for CSI or its
affiliate, pay, perform and discharge
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fully, or cause to be paid, transferred or discharged all the
obligations or other liabilities of CSI or its affiliate, as
the case may be, thereunder. CSI shall, without further
consideration, pay and remit, or cause to be paid or remitted,
to the Company promptly all money, rights and other
consideration received by it in respect of such performance
(unless any such consideration is an Excluded Asset). If and
when such Transfer Impediment is removed or obtained, as
applicable, or such obligations shall otherwise become
assignable, the transfer of the applicable liability shall be
effected in accordance with the terms of this Agreement. The
parties shall cooperate and use reasonable efforts, without
the requirement to make any payment or make a material
concession, to remove or obtain, as applicable, any Transfer
Impediment, which prohibits the assignment of any Liability
hereunder.
8.5. Preparation of Balance Sheets. For the purposes of calculating
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the Intercompany Amount as of the Transformation Date, as soon
as practicable and in any event prior to the Transformation
Date, CSI shall prepare a pro forma balance sheet of the
Company as of June 3, 2000 (the "June 3 Balance Sheet") which
--------------------
gives effect to the contribution of the Contributed Assets to
the Company and the assumption of the Assumed Liabilities by
the Company pursuant to this Agreement as if the
Transformation Date were June 3, 2000; provided, however, that
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for the purposes of the June 3 Balance Sheet the Intercompany
Amount shall equal an amount (the "Initial Intercompany
--------------------
Amount"), which may be positive or negative, such that the Net
------
Working Capital as reflected on the June 3 Balance sheet
equals the June 3 Target Net Working Capital. A statement (the
"Statement") prepared by CSI setting forth the calculation of
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the Initial Intercompany Amount shall accompany the June 3
Balance Sheet. The June 3 Balance Sheet and the Statement
shall be final and binding on the parties.
8.6. Mistaken Assignments and Assumptions. There may exist (i)
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assets that the parties discover were, contrary to the
agreements between the parties, by mistake or omission,
transferred to the Company or retained by CSI or (ii)
Liabilities that the parties discover were, contrary to the
agreements between the parties, by mistake or omission,
assumed by the Company or retained by CSI. The parties shall
cooperate in good faith to effect the transfer or re-transfer
of such assets, and/or the assumption or re-assumption of such
Liabilities, to or by the appropriate party. Each party shall
reimburse the other or make other financial adjustments or
other adjustments to remedy any mistakes or omissions relating
to any of the assets transferred hereby or any of the
Liabilities assumed hereby.
8.7. Further Assurances. In furtherance of the assignment,
------------------
transfer and conveyance of the Contributed Assets and the
assumption of the Assumed Liabilities set forth herein, CSI
shall, in addition to the ▇▇▇▇ of Sale and the Assignment and
Assumption Agreement, execute and deliver, and shall cause its
subsidiaries to execute and deliver, such bills of sale, stock
powers, certificates of title, assignments of contracts and
intellectual property rights and other instruments of
13
transfer, conveyance and assignment as and to the extent
necessary to evidence the transfer, conveyance and assignment
of all the Contributed Assets to the Company and (ii) the
Company, in addition to the Assignment and Assumption
Agreement, shall execute and deliver, and shall cause its
subsidiaries to execute and deliver, to CSI and its
subsidiaries such assumptions of contracts and other
instruments of assumption as and to the extent necessary to
evidence the valid and effective assumption of the Assumed
Liabilities by the Company.
8.8. Compliance with Bulk Sales Laws. The parties hereby waive
-------------------------------
compliance with the bulk sales law and any other similar laws
in any applicable jurisdiction in respect of the transactions
contemplated by this Agreement, including, without limitation,
any applicable state tax law that may require notification of
state taxing authorities and related actions in respect of
bulk sales of assets outside of the ordinary course of
business.
8.9. Access. The parties hereto will allow each other reasonable
------
access to the books and records of one another relating to the
Contributed Assets and the Assumed Liabilities, and to
personnel having knowledge of the whereabouts and/or contents
thereof, for legitimate business reasons, such as the
preparation of tax returns or the defense of litigation. The
requesting party will hold in confidence all confidential
information identified as such by, and obtained from, the
disclosing party or any of its officers, agents,
representatives or employees.
8.10. Conflicting Agreements. In the event of conflict between
----------------------
this Agreement and the Transformation Agreement, the
provisions of the Transformation Agreement shall prevail.
8.11. Manufactured Products Agreement. Notwithstanding anything to
-------------------------------
the contrary set forth in Sections 2, 3, 4 and 5 of this
Agreement, to the extent the Company is allocated rights and
obligations pursuant to the Manufactured Products Agreement
(as such term is defined in the Transformation Agreement),
they shall be deemed to be included in the Contributed Assets
and the Assumed Liabilities, as applicable.
9. Miscellaneous.
-------------
9.1. Entire Agreement. This Agreement, the Transformation Agreement
----------------
and the other Ancillary Agreements, including the Schedules
and Exhibits hereto and thereto, and the other documents
delivered hereunder and thereunder constitute the entire
agreement among the parties hereto pertaining to the subject
matter hereof and supersede all prior or contemporaneous
agreements, understandings, negotiations and discussions,
whether oral or written, of the parties with respect to such
subject matter.
14
9.2. Amendment or Modification. Except as otherwise provided in
-------------------------
the Transformation Agreement, the parties hereto may not amend
or modify this Agreement except by a written instrument
executed by CSI and the Company.
9.3. Severability. In the event that any provision hereof would,
------------
under applicable law, be invalid or unenforceable in any
respect, such provision shall (to the extent permitted under
applicable law) be construed by modifying or limiting it so as
to be valid and enforceable to the maximum extent compatible
with, and possible under, applicable law. The provisions
hereof are severable, and in the event any provision hereof
should be held invalid or unenforceable in any respect, it
shall not invalidate, render unenforceable or otherwise affect
any other provision hereof.
9.4. Successors and Assigns. All of the terms and provisions of
----------------------
this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective permitted
transferees and assigns (each of which transferees and assigns
shall be deemed to be a party hereto for all purposes hereof);
provided, however, that (i) other than as contemplated by
-------- -------
Section 8.2 hereof, no transfer or assignment by any party
hereto shall be permitted without the prior written consent of
the other party hereto and any such attempted transfer or
assignment without consent shall be null and void and (ii) no
transfer or assignment by any party shall relieve such party
of any of its obligations hereunder.
9.5. Notices. Any notices or other communications required or
-------
permitted hereunder shall be sufficiently given if in writing
and delivered personally or sent by telecopier, Federal
Express, or registered or certified mail, postage prepaid,
addressed as follows:
15
If to CSI,
to it at: Cabletron Systems, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ and Chief Financial
Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Fine
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company
to it at: Enterasys Networks, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Fine
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other
communications shall be deemed received (a) on the date delivered,
if delivered personally, (b) two Business Days after being sent by
Federal Express, if sent by Federal Express, (c) one Business Day
after being delivered, if delivered by telecopier and (d) three
Business Days after being sent, if sent by registered or certified
mail. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the
other parties hereto.
9.6. Interpretation. Section and subsection headings are not to be
--------------
considered part of this Agreement, are included solely for
convenience, are not intended to be full or accurate descriptions
of the content thereof and shall not affect the construction
hereof. No rule of strict construction shall apply to or be used
against any party hereto.
9.7. Third Party Beneficiaries. Nothing in this Agreement is intended or
-------------------------
shall be construed to entitle any person or entity other than the
parties and their respective
16
transferees and assigns permitted hereby to any claim, cause of
action, remedy or right of any kind.
9.8. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same instrument.
9.9. Governing Law. This Agreement shall be governed by and construed
-------------
construed in accordance with the domestic substantive laws of the
State of Delaware, without giving effect to any choice or conflict
of law provision or rule that would cause the application of the
laws of any other jurisdiction.
[The remainder of this page has been intentionally left blank.]
17
Signature Page to 8372590
IN WITNESS WHEREOF, the undersigned have executed this instrument under
seal effective as of the date first written above.
CABLETRON SYSTEMS, INC.
Dated: November 8, 2000 By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President, CEO
ENTERASYS NETWORKS, INC.
Dated: November 8, 2000 By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
18
