Exhibit 10.8
FIRST AMENDMENT
TO
AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT,
STANDSTILL AGREEMENT
AND
REGISTRATION RIGHTS AGREEMENT
This First Amendment to Amended and Restated Securities Purchase Agreement,
Standstill Agreement and Registration Rights Agreement (this "Amendment") is
entered into as of July 12, 2001 by and between Cabletron Systems, Inc., a
Delaware corporation (the "Company"), Silver Lake Partners, L.P., a Delaware
limited partnership ("Silver Lake"), and the other Investors listed on the
signature page hereto.
WHEREAS, the Company and Silver Lake are parties to an Amended and Restated
Securities Purchase Agreement, dated as of August 29, 2000 (the "Securities
Purchase Agreement"), a Standstill Agreement, dated as of August 29, 2000 (the
"Standstill Agreement"), and a Registration Rights Agreement, dated as of August
29, 2000 (the "Registration Rights Agreement");
WHEREAS, the Company, Silver Lake and the other Investors desire to amend
certain terms of the Securities Purchase Agreement, the Standstill Agreement and
the Registration Rights Agreement as set forth herein;
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in the Securities Purchase Agreement.
2. Amendment to Securities Purchase Agreement.
2.1. Amendment to Section 1.5(c) of Securities Purchase Agreement. Section
1.5(c) of the Securities Purchase Agreement is hereby amended and restated in
its entirety to read as follows:
"(c) The Replacement Warrants (i) will be immediately exercisable upon
issuance (provided that they shall in any event become exercisable no later
than immediately prior to the consummation of the triggering third-party
acquisition, in the case of an event described in Section 1.5(a)(iii)
above), and will remain exercisable until the later of (a) the fourth
anniversary of the Closing or (b) the first anniversary of the consummation
of the Purchase Right Flip-Up Event giving rise to the issuance of such
Replacement Warrants, (ii) will have an initial aggregate exercise price
equal to the product of (A) 5 2/3, multiplied by (B) the exercise price in
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effect for the related Callable Subsidiary Stock Purchase Rights
immediately prior to such Purchase Right Flip-Up Event (subject to the
following proviso), (iii) will initially be exercisable for that percentage
of the Company's diluted Common Stock equal to the product of (A) that
percentage of the diluted common stock of the Operating Subsidiary for
which the related Subsidiary Stock Purchase Rights were (or when issued,
would have been) exercisable immediately prior to the consummation of such
Purchase Right Flip-Up Event multiplied by (B) a fraction the numerator of
which is the Flip-Up Valuation and the denominator of which is the market
capitalization of the Company immediately preceding such Purchase Right
Flip-Up Event, and (iv) otherwise will be on the terms and conditions set
forth in the form of Parent Warrant; provided, however, that, in the case
of a Purchase Right Flip-Up Event described in clause (i) or clause (ii) of
the definition thereof occurring prior to the second anniversary of the
Closing, the initial aggregate exercise price of the Replacement Warrants
shall be discounted, and shall equal the product of (A) 5 2/3, multiplied
by (B) the exercise price in effect for the related Callable Subsidiary
Stock Purchase Rights immediately prior to such Purchase Right Flip-Up
Event, multiplied by (C) 0.9."
2.2. Issuance of Subsidiary Warrants in Connection with Spin-Off. The
parties acknowledge and agree that the Company intends to consummate a Spin-Off
of Riverstone (the "Riverstone Spin"). For the avoidance of doubt, the parties
further agree that the calculations set forth in the attached Exhibit A reflect
the proper application of Section 1.7 of the Securities Purchase Agreement in
connection with the Riverstone Spin, and, based on the assumptions set forth in
Exhibit A, (a) the exercise price per share of Common Stock under the Class A
Parent Warrants and the Class B Parent Warrants outstanding on the date of the
Riverstone Spin would be adjusted as set forth in the attached Exhibit A, and
(b) the Company would cause Riverstone to issue to the Investors Subsidiary
Warrants with respect to the Class A Parent Warrants and Class B Parent Warrants
exercisable for the number of shares of common stock of Riverstone, and the
exercise price per share, set forth in the attached Exhibit A. Subject to the
foregoing, such Subsidiary Warrants shall have such other terms as are described
in the Securities Purchase Agreement.
2.3. Issuance of Replacement Warrants in Connection with Purchase Right
Flip-Up Event. The parties acknowledge and agree that the Company intends to
consummate a merger of Enterasys with and into the Company (the "Enterasys Flip-
Up Event") and that, in the event that the Riverstone Spin occurs within one
hundred and twenty days of the date hereof, the Riverstone Spin shall be deemed
to have occurred prior to the consummation of the Enterasys Flip-Up Event for
all purposes of the Securities Purchase Agreement and the issuance of
Replacement Warrants in connection with the Enterasys Flip-Up Event. The parties
further agree that, in the event that the Enterasys Flip-Up Event is consummated
within ninety days of the date hereof, pursuant to Section 1.5 of the Securities
Purchase Agreement (and notwithstanding anything in Section 1.5(c)(ii) or
1.5(c)(iii) to the contrary) in connection with the Enterasys Flip-Up Event, (a)
the Subsidiary Stock Purchase Rights issued to the Investors by Enterasys shall
be canceled, and (b) the Company shall issue to the Investors Replacement
Warrants exercisable for an aggregate of 7,400,000 shares of Common Stock, with
an aggregate exercise price of $45,880,000. Subject to the foregoing, such
Replacement Warrants shall have such other terms as are described in the
Securities Purchase Agreement.
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2.4. Further Notifications. The Company shall have no further obligation to
provide the Investors with notice of the Riverstone Spin or the Enterasys Flip-
Up Event, provided that the Company consummates each of the foregoing upon the
terms and within the time periods contemplated by this Amendment and its
Exhibits.
2.5. References to the Company's Series A and Series B Participating
Convertible Preferred Stock. Upon the consummation of the exchange by the
Company pursuant to a Securities Exchange Agreement among the parties hereto,
dated as of July 12, 2001, of the Company's Series D and Series E Participating
Convertible Preferred Stock for the outstanding shares of the Company's Series A
and Series B Participating Convertible Preferred Stock issued pursuant to the
Securities Purchase Agreement (the "Exchange"), (a) the references in Sections
5.5, 5.6, 6.1 and 9.4 of the Securities Purchase Agreement to the "Shares" shall
be deemed to be references to the Company's Series D and Series E Participating
Convertible Preferred Stock, and (b) the references in Section 5.7 of the
Securities Purchase Agreement to the "Shares" issued by the Company to the
Investors on the Closing Date shall be deemed to be references to the Company's
Series D and Series E Participating Convertible Preferred Stock, which shall be
deemed to have been outstanding as of the Closing Date for purposes of Section
5.7 of the Securities Purchase Agreement.
3. Amendment to Standstill Agreement. Upon the consummation of the Exchange,
Section 1.01(p) of the Standstill Agreement is hereby amended and restated in
its entirety to read as follows:
"(p) "Preferred Stock" shall mean the Company's Series D and
Series E Participating Convertible Preferred Stock, $1.00 par value per
share."
4. Amendment to Registration Rights Agreement. Upon the consummation of the
Exchange, references in the Registration Rights Agreement to the "Preferred
Stock" shall be deemed to be references to the Company's Series D and Series E
Participating Convertible Preferred Stock and shall be deemed to include any
preferred stock or other securities issued upon a recapitalization of the
Company's Series D and Series E Participating Convertible Preferred Stock,
except where the context requires otherwise.
5. Miscellaneous.
5.1. Full Force and Effect. Except to the extent specifically amended
hereby, the provisions of the Securities Purchase Agreement and the Standstill
Agreement shall remain unmodified, and each of the Securities Purchase Agreement
and the Standstill Agreement shall continue in full force and effect.
5.2. Governing Law. This Amendment shall be governed in all respects by the
laws of the State of Delaware, exclusive of its conflict-of-law principles. The
Company hereby submits to the non-exclusive jurisdiction of the courts of the
State of New York, and the Investors hereby submit to the non-exclusive
jurisdiction of the courts of the State of New Hampshire, in each case for the
purpose of any suit, proceeding or judgment with respect to this Amendment. Each
of the parties hereto hereby irrevocably and unconditionally waives trial by
jury in any legal action or proceeding in relation to this Amendment and for any
counterclaim therein.
5.3. Severability. In case any provision of this Amendment shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
5.4. Amendment and Waiver. This Amendment may be amended or modified, and
the rights of the Company or the Investors hereunder may only be waived, upon
the written consent of the Company and the Majority Investors.
5.5. Titles and Subtitles. The titles of the sections and subsections of
this Amendment are for convenience of reference only and are not to be
considered in construing this Amendment.
5.6. Counterparts; Execution by Facsimile Signature. This Amendment may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument. This Amendment may be
executed by facsimile signature(s).
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to Amended and Restated Securities Purchase Agreement, Standstill Agreement and
Registration Rights Agreement as of the date set forth in the first paragraph
hereof.
The Company: CABLETRON SYSTEMS, INC.
By: XXXXXX XXXXX
--------------
Name: Xxxxxx Xxxxx
Title: Chief Executive Officer
The Investors: SILVER LAKE PARTNERS, L.P.
By: Silver Lake Technology Associates, L.L.C.,
its general partner
By: XXX XXXXXXXX
--------------
Name: Xxx Xxxxxxxx
Title: Managing Member
SILVER LAKE INVESTORS, L.P.
By: Silver Lake Technology Associates, L.L.C.,
its general partner
By: XXX XXXXXXXX
--------------
Name: Xxx Xxxxxxxx
Title: Managing Member
SILVER LAKE TECHNOLOGY
INVESTORS, L.L.C.
By: Silver Lake Technology Associates, L.L.C.,
its managing member
By: XXX XXXXXXXX
--------------
Name: Xxx Xxxxxxxx
Title: Managing Member
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XXXXXX XXXXXXX XXXX XXXXXX EQUITY FUNDING, INC.
By: XXXXX X. XXXXX
----------------
Name: Xxxxx X. Xxxxx
Title: Vice President
INTEGRAL CAPITAL PARTNERS V, L.P.
By: Integral Capital Management V, LLC,
its general partner
By: XXXXXX XXXXXXX
----------------
Name: Xxxxxx Xxxxxxx
Title: Manager
INTEGRAL CAPITAL PARTNERS V
SIDE FUND, L.P.
By: ICP Management V, LLC,
its general partner
By: XXXXXX XXXXXXX
----------------
Name: Xxxxxx Xxxxxxx
Title: Manager
ORIGINATORS INVESTMENT PLAN, L.P.
By: MSDW OIP Investors, Inc.,
its general partner
By: XXXXX X. XXXXX
----------------
Name: Xxxxx X. Xxxxx
Title: Vice President
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