Exhibit 2.3
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ASSET CONTRIBUTION AGREEMENT
THIS ASSET CONTRIBUTION AGREEMENT (this "Agreement") is entered into and is
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effective as of June 3, 2000 (the "Effective Date") by and between CABLETRON
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SYSTEMS, INC., a Delaware corporation ("CSI"), and ENTERASYS NETWORKS, INC., a
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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 as
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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.
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 shall
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have the following meanings:
1.1. "Action" shall mean any claim, action, cause of action or suit by or
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before any Governmental Authority.
1.2. "Agreement" has the meaning assigned to such term in the preamble.
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1.3. "Ancillary Agreements" has the meaning assigned to such term in the
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Transformation Agreement.
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1.4. "Aprisma" means Aprisma Management Technologies, Inc.
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1.5. "Assignment and Assumption Agreement" has the meaning assigned to
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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. "Xxxx of Sale" has the meaning assigned to such term in Section 6.3.
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1.8. "Closing" has the meaning assigned to such term in the Transformation
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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 on Exhibit A hereto.
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1.11. "Company Transferred Subsidiaries" means each of the subsidiaries of
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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, sales
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order, purchase order, instrument or other commitment.
1.13. "Contributed Assets" has the meaning assigned to such term in Section
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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, Contributed
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Registered Intellectual Property, Contributed Other Intellectual
Property, and Contributed Third Party Tools.
1.16. "Contributed Other Intellectual Property" has the meaning assigned to
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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 Registered SSR Intellectual Property" has the meaning
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assigned to such term in Section 2.8.2.
1.19. "Contributed Third Party Tools" has the meaning assigned to such term
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in Section 2.6.
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1.20. "Contribution Agreements" has the meaning assigned to such term in
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the Transformation Agreement.
1.21. "CSI" has the meaning assigned to such term in the preamble.
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1.22. "Effective Date" has the meaning assigned to such term in the
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preamble
1.23. "Enterasys" means Enterasys Networks, Inc.
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1.24. "Excluded Assets" has the meaning assigned to such term in Section 3.
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1.25. "Excluded Liabilities" has the meaning assigned to such term in
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Section 5.
1.26. "GNTS" means GlobalNetwork Technology Services, Inc.
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1.27. "Governmental Authority" means any domestic or foreign federal, state
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or local government, regulatory or administrative agency or court.
1.28. "Initial Intercompany Amount" has the meaning assigned to such term
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in Section 8.5.
1.29. "Intellectual Property" means any or all of the following and all
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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 xxxx
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.
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1.30. "Intercompany Account" has the meaning assigned to such term in
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Section 2.4.2.
1.31. "Intercompany Amount" shall mean an amount, which may be positive or
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negative, equal to (i) the Initial Intercompany Amount plus (ii) the
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net amount (which amount may be negative) 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 Business during the period from June 3, 2000
through the Transformation Date minus (iii) any obligations in
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respect of 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.
1.32. "Inventory" means inventories, raw materials, supplies, manufactured
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and purchased parts, works in progress and finished goods.
1.33. "June 3 Balance Sheet" has the meaning assigned to such term in
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Section 8.5.
1.34. "June 3 Net Working Capital" has the meaning assigned to such term in
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Section 8.5.
1.35. "June 3 Target Net Working Capital" means $140,000,000.
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1.36. "Liability" means any debt, liability or obligation whether known or
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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.
1.37. "Net Working Capital" means (a) the total combined current assets of
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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 certifications
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issued by a Governmental Authority or other standard setting
organization.
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1.41. "Products" means the products of the Company Business as described on
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Exhibit A hereto.
1.42. "Riverstone" means Riverstone Networks, Inc.
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1.43. "Riverstone Contribution Agreement" has the meaning assigned to such
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term in the Transformation Agreement.
1.44. "Shared Services Agreement" means the one of the Shared Services
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Agreements (as such term is defined in the Transformation Agreement)
to which the Company is party.
1.45. "Shares" has the meaning assigned to such term in Section 6.1.
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1.46. "SSR Intellectual Property" means all Intellectual Property of CSI
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related to Products that are also "Products" of Riverstone under the
Riverstone Contribution Agreement.
1.47. "Statement" has the meaning assigned to such term in Section 8.5.
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1.48. "Tax Sharing Agreement" has the meaning assigned to such term in the
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Transformation Agreement.
1.49. "Third Party Tools" means rights with respect to third party computer
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applications, programs, other software, and other design tools,
including operating software, network software, firmware, middleware,
design software, systems documentation and instructions.
1.50. "Transfer Impediment" has the meaning assigned to such term in
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Section 8.3.1.
1.51. "Transformation Agreement" has the meaning assigned to such term in
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the recitals.
1.52. "Transformation Date" has the meaning assigned to such term in the
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Transformation Agreement.
1.53. "Vehicles" means automobiles, trucks, tractors, trailers and other
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vehicles.
2. Contributed Assets. Upon and subject to the terms and conditions of this
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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
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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 Sections 2.7.2 and 2.8.2, a one-half
undivided interest in) their respective rights, title and interest in the
following properties and assets (the "Contributed Assets") to the extent
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not already held by the Company:
2.1. Tangible Personal Property. All Office Equipment, Vehicles and other
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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 hereto, all
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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 be
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maintained and managed 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.
2.5. Permits, etc. All rights under the Permits described on Schedule
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2.5 hereto.
2.6. Third Party Tools. All rights with respect to Third Party Tools used
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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 Third Party
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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, exclusively related to the Products or otherwise
exclusively 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 Other Intellectual Property") and any
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remedies against any and all past, present and future
infringements thereof and rights to protection of interest
therein; provided, however, that such rights are subject to
any license or sublicense or other rights granted with
respect thereto.
2.7.2. A one-half undivided interest in (it being understood that
the other one-half undivided interest shall be contributed to
Riverstone pursuant to the Riverstone Contribution Agreement)
all SSR Intellectual Property (other than registered SSR
Intellectual Property and applications therefor) 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; provided, however, that
such rights are subject to any license or sublicense or other
rights granted with respect thereto.
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(a) and any applications
therefor (collectively, with the Contributed Registered SSR
Intellectual Property, the "Contributed Registered
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Intellectual Property") and any remedies against any and all
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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;
provided, however, that such rights are subject to any
license or sublicense or other rights granted with respect
thereto.
2.8.2. A one-half undivided interest in (it being understood that
the other one-half undivided interest shall be contributed to
Riverstone pursuant to the Riverstone Contribution Agreement)
that registered Intellectual Property set forth on Schedule
2.8(b) and applications therefor (the "Contributed Registered
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SSR Intellectual Property") and any remedies against any and
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all past, present and future infringements thereof and rights
to protection of interest therein; provided, however, that
such rights are subject to any license or sublicense or other
rights granted with respect thereto.
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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 (collectively, the "Contributed
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Contracts").
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2.10. Claims. Claims and rights of recovery, rights of set-off and rights
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of recoupment which relate primarily to the Company Business.
2.11. Lists. All customer lists, distributor lists and supplier lists used
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primarily by the Company Business at the Transformation Date.
2.12. Books and Records. All (i) accounting and other books and records,
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(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 Company
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pursuant to the Transformation Agreement.
Notwithstanding the foregoing, the Contributed Assets do not include the
Excluded Assets.
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 Intellectual
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Property to be contributed to both the Company and Riverstone as
contemplated by Sections 2.7.2 and 2.8.2, 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.
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The parties understand and acknowledge that except for rights with
respect to Intellectual Property to be contributed to both the
Company and Riverstone as contemplated by Sections 2.7.2 and 2.8.2,
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.
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 Section
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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 other than
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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 Intellectual
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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 otherwise
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provided in the Transformation Agreement, all rights under
confidentiality agreements, non-competition, non-disclosure and other
similar agreements with employees.
3.7. Assets Retained by CSI. Any assets to be retained by CSI pursuant to
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the Transformation Agreement.
4. Assumption of Liabilities. On the terms and subject to the conditions set
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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 extent not already assumed
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by the Company, including without limitation the following Liabilities:
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4.1. Intercompany Payables; Accrued Expenses. All Liabilities as of the
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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 respect of
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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 out of
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products manufactured or sold or services rendered by the Company
Business.
4.5. Actions. All Liabilities relating primarily to the Company Business
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arising as a result of any Action or threatened Action.
4.6. Non-compliance with Legal Requirements. All Liabilities relating
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primarily to the Company Business arising out of noncompliance with
any legal requirements.
4.7. Employee Liabilities. All Liabilities with respect to employees which
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relate primarily to the Company Business.
4.8. Allocated Liabilities. The Liabilities allocated to the Company
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pursuant to the Transformation Agreement.
Notwithstanding the foregoing, the Assumed Liabilities do not include the
Excluded Liabilities.
5. Excluded Liabilities. Notwithstanding anything to the contrary in Section
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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 payable to
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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.
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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
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described on Exhibit B hereto.
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 and
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deliver to the Company a Xxxx of Sale in substantially the form
attached hereto as Exhibit B-1 (the "Xxxx of Sale") and an Assignment
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and Assumption Agreement in substantially the form attached hereto as
Exhibit B-2 (the "Assignment and Assumption Agreement") and (ii) the
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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. CSI hereby represents and warrants to the Company as follows:
7.1.1. Organization and Good Standing. CSI 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. CSI has
full corporate power and authority to execute, deliver and
perform this Agreement. The execution, delivery and
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 and
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delivered by CSI and, assuming the due execution and delivery
hereof by the
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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 hereby
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represents and warrants to CSI as follows:
7.2.1. Organization. The Company is a corporation duly organized,
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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 executed and
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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 by CSI to
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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 (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.
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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
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 the
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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 for the purposes of the June 3 Balance Sheet the
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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 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) assets that
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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
14
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
Xxxx 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 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.
15
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.
9.2. Amendment or Modification. Except as otherwise provided in the
-------------------------
Transformation Agreement, the parties hereto may not amend or modify
this Agreement 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:
16
If to CSI,
to it at: Cabletron Systems, Inc.
00 Xxxxxxxxxx Xxx
Xxxxxxxx 00
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx and Chief Financial Officer
Telecopier No.: (000) 000-0000
with a copy to: Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Fine
Telecopier No.: (000) 000-0000
If to the Company
to it at: Enterasys Networks, Inc.
00 Xxxxxxxxxx Xxx
Xxxxxxxx 00
Xxxxxxxxx, XX 00000
Attention: President
Telecopier No.: (000) 000-0000
with a copy to: Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Fine
Telecopier No.: (000) 000-0000
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.
17
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 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 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.]
18
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be executed, as of the date first above
written by their respective officers thereunto duly authorized.
CABLETRON SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Title: President, Chairman & CEO
ENTERASYS NETWORKS, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Title: President
19
Exhibits and Schedules to Asset Contribution Agreement
Exhibits
Exhibit A Description of the Business
Exhibit B Summary of Terms of Preferred Stock to be Issued to CSI
Exhibit B-1 Xxxx of Sale and Conveyance
Exhibit B-2 Assignment and Assumption Agreement
Schedules
Schedule 2.1 Tangible Personal Property
Schedule 2.2 Inventory
Schedule 2.3 CSI Subsidiaries
Schedule 2.5 Permits
Schedule 2.6 Applications and Tools
Schedule 2.8(a) Contributed Registered Intellectual Property
Schedule 2.8(b) Contributed Registered SSR Intellectual Property
Schedule 2.9 Material Contracts
Schedule 3.4 Shared Third Party Tools
