Document:

extr-ex101_65.htm

Exhibit 10.1

TRANSITION AND SEPARATION AGREEMENT

AND GENERAL RELEASE OF CLAIMS

 

THIS TRANSITION AND SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (the “Agreement”) is entered into by and between Drew Davies (“Executive”) and Extreme Networks, Inc. (the “Company”).  This Agreement will become effective on the date it is signed by Executive (the “Effective Date”).  This Agreement was originally presented to Executive on September 18, 2018 (the “Agreement Date”).  

 

FACTUAL RECITALS

This Agreement is entered into with respect to the following facts:

	
 
	
A.
	
Executive was employed by the Company as its Chief Financial Officer and Executive Vice President from June 1, 2016 through the Separation Date (as defined below); 

	
 
	
B.
	
Executive’s status as an officer of the Company ended on September 13, 2018 (the “Officer End Date”);

	
 
	
C.
	
The Company has offered to Executive certain separation benefits provided that Executive agrees to the terms of this Agreement and the release herein, and the Agreement becomes effective; 

	
 
	
D.
	
The payments and benefits being made available to Executive pursuant to this Agreement shall satisfy all outstanding obligations under that certain offer letter agreement by between Executive and the Company dated as of May 13, 2016 (the “Offer Letter”), and the Offer Letter shall be superseded in its entirety by this Agreement; and

	
 
	
E.
	
Executive has elected to accept such separation benefits, and to terminate employment with the Company under the terms and conditions set forth below.

Accordingly, Executive and the Company now agree as set forth below.

AGREEMENT

1.Separation from Employment.  Executive acknowledges and agrees that his status as an officer of the Company ended effective as of the close of business on the Officer End Date, and shall thereafter be employed as an at-will employee of the Company assisting the Company in such tasks as reasonably requested by the Company.  Executive acknowledges and agrees that his status as an employee of the Company will end effective as of the close of business on or about September 30, 2018, unless terminated earlier by the Company with or without Cause (as defined in the Executive Change in Control Severance Plan (the “Plan”) to which Executive is a participant) (September 30, 2018 or such earlier date, the “Separation Date”).  Executive hereby agrees to execute such further document(s) as shall be determined by the Company as necessary or desirable to give effect to the termination of Executive’s status as an officer of the Company; provided that 

 

 

such documents shall not be inconsistent with any of the terms of this Agreement.

	
 
	
2.
	
Continued Employment Services.

	
 
	
(i)
	
Transition Period.  During the period of time (the “Transition Period”) commencing on the Officer End Date and ending on the Separation Date, Executive shall continue to be employed by the Company on a full time basis and provide such services as deemed necessary by the Company in Executive’s areas of expertise and work experience and responsibility. 

	
 
	
(ii)
	
Salary and Benefits Continuation.  During the Transition Period, Executive will continue to receive his base salary as in effect on the Agreement Date, in accordance with the Company’s normal payroll procedure and be eligible for all employee benefit plans generally available to employees of the Company; provided, however, that, commencing on the Agreement Date, Executive shall not be eligible for (a) any annual performance bonus for fiscal year 2019, (b) participation in the Plan or (c) any equity under the Company’s equity plan.  For the avoidance of doubt, upon the Officer End Date, Executive shall no longer be eligible to participate or receive any benefits under the Plan.  All payments made to Executive during the Transition Period will be subject to standard payroll deductions and withholdings.

	
 
	
(iii)
	
Equity Awards.  During the Transition Period, Executive’s outstanding equity awards, including any options to purchase shares of Company common stock, Company restricted stock units and Company restricted stock, (collectively, “Equity Awards”) shall continue to vest and, if applicable, become exercisable and the restrictions thereupon lapse in accordance with their original vesting schedules.  Vesting of Executive’s Equity Awards shall cease effective as of the Separation Date and any unvested shares underlying the Equity Awards as of such date shall automatically terminate.  Executive’s rights with respect to the exercise of vested options shall continue to be governed by and subject to the terms and conditions of the related stock option agreement or any other applicable equity plans/agreements under which they were granted.  

	
 
	
(iv)
	
Section 16 Reporting.  Executive acknowledges that to the extent required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), he will have continuing obligations under Section 16(a) and 16(b) of the Exchange Act to report any matching transactions in Company common stock for six (6) months following the Officer End Date.  Executive hereby agrees not to undertake, directly or indirectly, any reportable transactions involving the common stock of the Company until the end of such six (6) month period.

	
 
	
(v)
	
Protection of Information.  Executive agrees that, during the Transition Period and the Consulting Period (as defined below) and thereafter, Executive will not, except for the purposes of performing the Transition Duties, seek to obtain any confidential or proprietary information or materials of the Company.

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3.Consulting Services.  Without admission of any liability, fact or claim, if Executive has not committed any act that could constitute Cause prior to the Separation Date, subject to Executive’s execution of this Agreement and, on or within thirty (30) days following the Separation Date, the General Release of Claims attached hereto as Exhibit A (the “Release”) becoming effective and irrevocable, as well as Executive’s performance of his continuing obligations pursuant to the terms of this Agreement and the terms of the Employee Innovations and Proprietary Rights Assignment Agreement dated May 15, 2016 (the “Confidentiality Agreement”) and any other proprietary rights, assignment of inventions, and/or confidentiality agreements between the Company and Executive, then the Company and Executive hereby agree to the following:

	
 
	
(i)
	
During the period (the “Consulting Period”) commencing on the Separation Date and ending on the date reasonably determined by the Company following the date a new full-time Chief Financial Officer of the Company commences employment, unless terminated earlier by the Company with or without Cause, Executive shall be available to provide services to the Company, on a non-exclusive basis, as a consultant and shall provide transition services (the “Consulting Services”) on an as-needed basis in Executive’s areas of expertise and work experience and responsibility.  The Consulting Services shall be scheduled by Executive and the Company at mutually agreeable times.  During the Consulting Period, Executive reaffirms his commitment to remain in compliance with the Confidentiality Agreement, including, without limitation, the non-solicitation and other restrictive covenants set forth therein, it being understood that the term “employment” as used in the Confidentiality Agreement shall include the Consulting Services during the Consulting Period.  In addition, during the Consulting Period, Executive shall continue to be covered by that certain Indemnification agreement by and between the Company and Executive (the “Indemnification Agreement) for the Consulting Services, which shall include certain director and officer roles of the Company’s foreign subsidiaries.  Nothing in this Agreement shall in any way limit or terminate the Company’s continuing obligation to indemnify Executive under his Indemnification Agreement with the Company during the Consulting Period.  During the Consulting Period, the Company shall maintain directors’ and officers’ liability insurance coverage for the continuing protection of Executive, of such types and in such amounts as shall be appropriate for the size of the Company and its business risks, as determined by the Company in its sole discretion.  Following the end of the Consulting Period, Executive shall have deemed to resign from all director and officer roles held by any subsidiary of the Company.

	
 
	
(ii)
	
For the duration of the Consulting Period and in exchange for the Consulting Services, the Company shall pay to Executive consulting fees as an independent contractor in the amount of $3,000 per month (the “Consulting Fees”), pro-rated for any partial month during the Consulting Period.  The Consulting Fees will be paid to Employee in accordance with the Company’s standard payment procedures for consultants and independent contractors.

	
 
	
(iii)
	
As an independent contractor, Executive understands and agrees that, while 

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performing any services for the Company during the Consulting Period, Executive shall not be eligible to participate in or accrue benefits under any Company benefit plan for which status as an employee of the Company is a condition of such participation or accrual.  To the extent that Executive was deemed eligible to participate, as an employee, in any Company benefit plan, he hereby waives his participation.

	
 
	
(iv)
	
Executive and the Company acknowledge and agree that, during the Consulting Period, Executive shall be an independent contractor.  During the Consulting Period and thereafter, Executive shall not be an agent or employee of the Company and shall not be authorized to act on behalf of the Company.  Personal income and self-employment taxes for payments made during the Consulting Period shall be the sole responsibility of Executive.  Executive agrees to indemnify and hold the Company and the other entities released herein harmless for any tax claims or penalties resulting from any failure by Executive to make required personal income and self-employment tax payments with respect to such payments.

	
 
	
(v)
	
Executive agrees that the payments provided by this Section 3 are not required under the Company’s normal policies and procedures and are provided solely in connection with this Agreement.  Executive acknowledges and agrees that the payments referenced in this Section 3 constitute adequate and valuable consideration, in and of themselves, for the promises contained in this Agreement.  Executive acknowledges that the payment and arrangements herein shall constitute full and complete satisfaction of any and all amounts properly due and owing to Executive as a result of his employment with the Company and the termination thereof.

4.General Release of Claims.  As consideration of and in exchange for the payments and benefits described in Sections 2 and 3 herein, Executive and his successors release the Company, its parents and subsidiaries, and each of those entities’ respective current and former shareholders, investors, directors, officers, employees, agents, accountants, attorneys, tax advisors, insurers, legal successors and assigns, of and from any and all action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, loss, cost or expense, of any nature whatsoever, whether now known or unknown, fixed or contingent, which Executive now has, or at any other time had, or shall or may have against those released parties based upon or arising out of any matter, cause, fact, thing, act or omission whatsoever occurring or existing at any time up to and including the date on which Executive signs this Agreement, including, but not limited to any claim arising out of his employment with and/or separation from the Company, including, but not limited to, any claims for breach of express or implied contract; wrongful termination; constructive discharge; discrimination; harassment; retaliation; fraud; defamation; infliction of emotional distress; any and all claims arising under the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Fair Labor Standards Act, the Americans with Disabilities Act, The Family Medical Leave Act, the Rehabilitation Act of 1973, The Worker Adjustment and Retraining Notification Act, the Immigration and Nationality Act, the Employee Retirement Income Security Act of 1974, the National Labor Relations Act, the California Fair Employment and Housing Act, the California Family Rights Act, the California 

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Family and Medical Leave law, or the California Labor Code, all as amended; and any claim or damage arising out of Executive’s employment with and/or separation from the Company under any common law theory, or any federal, state or local law, statute or ordinance not expressly referenced above; provided, however, that nothing in this Agreement prevents Executive from filing, cooperating with, or participating in any proceeding before the EEOC or a State Fair Employment Practices Agency except that Executive acknowledges that he may not be able to recover any monetary benefits in connection with any such claim. Notwithstanding the above release of claims, it is expressly understood that this release does not apply to, and shall not be construed as, a waiver or release of any claims or rights that cannot lawfully be released by private agreement.  This release of claims shall not affect Executive’s (i) existing indemnity rights from the Company (whether pursuant to contract or statute, including, but not limited to, his indemnity rights pursuant to the Indemnification Agreement and California Labor Code section 2802), which rights shall remain in full force and effect, (ii) claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law; (iii) claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Company; and (iv) claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA.  In addition, the above release of claims is not intended to apply to or impact any continuing obligations the Company may have related to any benefit entitlements vested as the date of Executive’s employment termination, pursuant to written terms of any Company employee benefit plan.

Executive, on behalf of himself and his successors, agrees not to sue or file any claims seeking monetary recovery from any of the released parties based upon any claim released by this Agreement.

5.Civil Code Section 1542 Waiver.  Executive acknowledges that he has read section 1542 of the Civil Code of the State of California, which states in full:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Executive waives any rights that he has or may have under section 1542 (or any similar provision of the laws of any other jurisdiction) to the full extent that he may lawfully waive such rights pertaining to this general release of claims, and affirm that he is releasing all known and unknown claims that he has or may have against the released parties listed in Section 4 above.

6.Agreement Not To Assist With Other Claims; Executive Representations. 

	
 
	
(i)
	
Executive agrees that he shall not, at any time in the future, encourage any current or former Company employee, or any other person or entity, to file any legal or administrative claim of any type or nature against the Company or any of its officers or employees.  Subject to Sections 4 and 9, Executive further agrees that he shall not, at any time in the future, assist in any manner any current or former Company employee, or any other person or entity, in the pursuit or prosecution of 

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any legal or administrative claim of any type or nature against the Company or any of its officers or employees.  This Section shall not apply to the Executive’s participation in any legal or administrative proceeding pursuant to a duly-issued subpoena or other compulsory legal process.

	
 
	
(ii)
	
Executive warrants and represents that (a) he has not filed or authorized the filing of any complaints, charges or lawsuits against the Company or any affiliate of the Company with any governmental agency or court, and that if, unbeknownst to Executive, such a complaint, charge or lawsuit has been filed on his behalf, he will immediately cause it to be withdrawn and dismissed, (b) he has reported all hours worked as of the date of this Agreement and has been paid all compensation, wages, bonuses, commissions, and/or benefits to which he may be entitled and no other compensation, wages, bonuses, commissions and/or benefits are due to him, except as provided in this Agreement, (c) he has no known workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requested under the Family and Medical Leave Act or any similar state law, (d) the execution, delivery and performance of this Agreement by Executive does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject, and (e) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a valid and binding obligation of Executive, enforceable in accordance with its terms.

7.Prior Agreement and Return of Company Property.  Executive acknowledges and agrees that he shall continue to be bound by and comply with the terms of any Confidentiality Agreement, a copy of each having been provided to Executive at his request. To the extent that he has not already done so, by the Separation Date, Executive will promptly return to the Company, in good working condition, all Company property and equipment that is in Executive’s possession or control, including, but not limited to, any PDAs, files, records, computers, computer equipment, cell phones, credit cards, keys, programs, manuals, business plans, and financial records, and all documents (whether in paper, electronic, or other format, and all copies thereof) that Executive prepared or received in the course of his employment with the Company.  

8.References.  Executive understands and agrees that, provided that Executive directs all requests for employment references to the Company’s Chief People Officer, Dean Chabrier, or her successor, the Company will respond to reference requests for Executive by providing his date of hire on or about June 1, 2016, his last date of employment of the Separation Date, his last position with the Company of Chief Financial Officer and Executive Vice President, and his last rate of pay with the Company of $400,000 per year plus potential bonus.  The Company will provide no further information.

9.Confidentiality.  The covenants of confidentiality set forth in this Agreement and the Release are material terms hereof, and for the breach thereof, the Company will be entitled to pursue damages and seek injunctive relief.  Executive acknowledges that during his employment with the Company he received and/or obtained Confidential Information and Third Party Information as those terms are defined below.  Executive represents that at all times during the 

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term of his employment he held in strictest confidence, and did not use, except for the benefit of the Company any Confidential Information of the Company.  Executive agrees that he will continue to keep confidential and not to use for the benefit of any person or entity all non-public information about the Company or third parties that he acquired during the course of his employment with the Company, including without limitation any Confidential Information or Third Party Information.  Executive acknowledges that “Confidential Information” means any Company personnel information, employee information, proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, pricing, markets, software, processes, marketing, finances or other business information obtained by Executive and/or disclosed to Executive by the Company either directly or indirectly in writing or orally.  Executive further acknowledges that Confidential Information does not include any of the foregoing items which have become publicly known and made generally available through no wrongful act of Executive or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof.

Executive acknowledges that the Company has received from third parties their confidential or proprietary information subject to a duty on the part of the Company to maintain the confidentiality of such information (“Third Party Information”).  Executive represents that he has held all such confidential or proprietary information in the strictest confidence and agrees not to disclose any Third Party Information to any person, firm or corporation or to use it.

Nothing in this Agreement is intended to waive or release Executive from any and all obligations to the Company under any Confidentiality Agreement, or any obligation created by statutory or common law to protect any intellectual property or proprietary information of the Company and/or its employees.

Notwithstanding anything in this Agreement to the contrary, nothing contained in this Agreement and/or the Release shall prohibit Executive (or Executive’s attorney) from (i) filing a charge with, reporting possible violations of federal law or regulation to, participating in any investigation by, or cooperating with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Equal Employment Opportunity Commission, the National Labor Relations Act Board, the Occupational Safety and Health Administration, the U.S. Commodity Futures Trading Commission, the U.S. Department of Justice or any other securities regulatory agency, self-regulatory authority or federal, state or local regulatory authority (collectively, “Government Agencies”), or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation, (ii) communicating directly with, cooperating with, or providing information (including trade secrets) in confidence to any Government Agencies for the purpose of reporting or investigating a suspected violation of law, or from providing such information to my attorney or in a sealed complaint or other document filed in a lawsuit or other governmental proceeding, and/or (iii) receiving an award for information provided to any Government Agency.  Pursuant to 18 USC Section 1833(b), Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (x) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (y) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Further, nothing in this Agreement and/or the Release is intended 

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to or shall preclude Executive from providing truthful testimony in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law.  If Executive is required to provide testimony, then unless otherwise directed or requested by a Governmental Agency or law enforcement, Executive shall notify the Company in writing as promptly as practicable after receiving any such request of the anticipated testimony and at least ten (10) days prior to providing such testimony (or, if such notice is not possible under the circumstances, with as much prior notice as is possible) to afford the Company a reasonable opportunity to challenge the subpoena, court order or similar legal process.

10.Non-Disparagement.  Executive agrees that he will not make any disparaging statements about the Company, or any of its services, products, officers, directors, employees, customers, or channel partners except to the extent that such statements are made truthfully in response to a duly issued subpoena or other compulsory legal process.  The Company agrees that it will direct its officers and directors not to make any disparaging statements about the Executive, or any of his work product, except to the extent that such statements are made truthfully in response to a duly issued subpoena or other compulsory legal process.  The covenants of non-disparagement set forth in this Agreement are material terms hereof, and for the breach thereof, any aggrieved party will be entitled to pursue damages and seek injunctive relief.

11.Non-Solicitation.  Executive recognizes the highly competitive nature of the Company’s business and that Company employees are exposed to Company trade secrets, which may include Confidential Information regarding its employees; therefore, Executive agrees that for a period of one year following the Separation Date, he will not, on behalf of himself or any other person or entity, directly or indirectly solicit any employee of the Company to terminate his/her employment with the Company.

12.Section 409A Compliance.  The Company intends that income provided to the Executive pursuant to this Agreement will not be subject to taxation under Section 409A of the Code (“Section 409A”).  The provisions of this Agreement shall be interpreted and construed in favor of satisfying any applicable requirements of Section 409A of the Code.  However, the Company does not guarantee any particular tax effect for income provided to the Executive pursuant to this Agreement.  In any event, except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to the Executive, the Company shall not be responsible for the payment of any applicable taxes incurred by the Executive on compensation paid or provided to the Executive pursuant to this Agreement.  In the event that any compensation to be paid or provided to Executive pursuant to this Agreement may be subject to the excise tax described in Section 409A, the Company may delay such payment for the minimum period required in order to avoid the imposition of such excise tax.

13.Transition; Cooperation.  Each of the Company and Executive shall use their respective reasonable efforts to cooperate with each other in good faith to facilitate a smooth transition of Executive’s duties to other executive(s) of the Company.  After the Separation Date, Executive shall cooperate with the Company and its affiliates, upon the Company’s reasonable request, with respect to any internal investigation or administrative, regulatory or judicial proceeding involving matters within the scope of Executive’s duties and responsibilities to the Company or its affiliates during his employment with the Company (including, without limitation, Executive being 

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available to the Company upon reasonable notice for interviews and factual investigations, appearing at the Company’s reasonable request to give testimony without requiring service of a subpoena or other legal process, and turning over to the Company all relevant Company documents which are or may have come into Executive’s possession during his employment); provided, however, that any such request by the Company shall not be unduly burdensome or interfere with Executive’s personal schedule or ability to engage in gainful employment.

14.No Admission.  This Agreement shall never be considered at any time or for any purpose as an admission of liability by any party hereto, or that any party or person referred to herein in this Agreement acted wrongfully with respect to any other party or person.

15.Governing Law.  This Agreement shall be interpreted in accordance with and governed by the laws of the State of California.

16.Severability.  If any provision of this Agreement is deemed invalid, illegal, or unenforceable, that provision will be modified so as to make it valid, legal, and enforceable, or if it cannot be so modified, it will be stricken from this Agreement, and the validity, legality, and enforceability of the remainder of the Agreement shall not in any way be affected.  This Agreement shall be binding upon, and shall inure to the benefit of, the parties and their respective successors, assigns, heirs and personal representatives.

17.Dispute Resolution.  In the event of any disputes or claims between the parties, including, but not limited to, any claims that are based upon or arise out of this Agreement or any alleged breach of this Agreement, the parties agree that all such disputes or claims shall be resolved by binding arbitration before a single arbitrator of the American Arbitration Association (“AAA”) in Santa Clara County, California pursuant to the AAA’s then-current arbitration rules for the resolution of employment disputes, which can be reviewed at www.adr.org.  Executive acknowledges that he waives his rights to have any disputes under this Agreement, or any dispute otherwise related to his employment or the termination thereof, resolved before a court or jury.    

18.Entire Agreement and Modification.  This Agreement, along with the Release and any other agreements described herein, constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior negotiations and agreements between the parties, whether written or oral, including the Offer Letter, which agreements are hereby terminated and of no further legal force or effect.  However, nothing in this Agreement or the Release shall waive or release any obligations under the Confidentiality Agreement and the Indemnification Agreement, which agreements shall remain in full force and effect.  This Agreement and the Release may not be modified or amended except by a document signed by an authorized officer of the Company and Executive.

19.Execution in Counterparts.  This Agreement may be executed in one or more counterparts, any one of which shall be deemed to be the original even if the others are not produced.  Furthermore, facsimile or electronic format signatures shall be enforceable as originals.  

20.Accepting the Agreement.  To accept the Agreement, Executive must date, sign and return this Agreement to the attention of Katy Motiey at the Company no later than September 30, 2018.  

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If Executive does not sign and return the Agreement by September 30, 2018, the Agreement will expire. 

EXECUTIVE ACKNOWLEDGES THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT HE IS GIVING UP ANY LEGAL CLAIMS (AS DESCRIBED ABOVE IN SECTIONS 4, 5 AND 6 HEREIN) HE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EXECUTIVE ACKNOWLEDGES THAT HE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE PAYMENTS AND BENEFITS DESCRIBED IN SECTIONS 2 AND 3 HEREIN, WHICH INCLUDES CONSIDERATION HE WOULD OTHERWISE NOT BE ENTITLED TO RECEIVE.

 

AGREED:

 

		
	
Date:September 30, 2018
	
/s/Drew Davies

Drew Davies

 

	
Date:September 27, 2018
	
EXTREME NETWORKS, INC.

 

 

By:/s/Katy Motiey

 

Name:Katy Motiey

 

Title:Chief Administrative Officer

 

10extr-ex102_66.htm

Exhibit 10.2

SECOND AMENDMENT TO CREDIT AGREEMENT 

AND FIRST AMENDMENT TO PLEDGE AGREEMENT

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO PLEDGE AGREEMENT (this “Agreement”), dated as of September 30, 2018, is entered into by and among EXTREME NETWORKS, INC., a Delaware corporation (the “Borrower”), ENTERASYS NETWORKS, INC., a Delaware corporation (“Enterasys”), the several banks and other financial institutions or entities party hereto (each a “Lender” and, collectively, the “Lenders”), and BANK OF MONTREAL (“BMO), as administrative and collateral agent (in such capacity, the “Administrative Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement (defined below) and used herein shall have the respective meanings given to such terms in the Credit Agreement.

RECITALS

A.The Borrower, the Lenders and the Administrative Agent are parties to that certain Credit Agreement, dated as of May 1, 2018, as amended by that certain First Amendment to Credit Agreement, dated as of June 28, 2018, among the Borrower, Enterasys, the Lenders and the Administrative Agent (as so amended, the “Credit Agreement”).

B.Reference is made to the Pledge Agreement, dated as of May 1, 2018, made by Enterasys in favor of the Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified prior to the date hereof, the “Pledge Agreement”).

C.The Borrower and Enterasys have requested that the Administrative Agent and the Lenders party hereto agree to amend the Credit Agreement and the Pledge Agreement in the manner described in Section 1 hereof.

D.The Administrative Agent and the Lenders party hereto have agreed to so amend the Credit Agreement and the Pledge Agreement upon the terms and conditions set forth herein.

ACCORDINGLY, subject to the satisfaction of the conditions to effectiveness described in Section 2 of this Agreement, the parties hereto hereby agree as follows:

AGREEMENT

SECTION 1Amendments.  

(a)The following definition of “Beneficial Ownership Regulation” is hereby added in appropriate alphabetical order in Section 1.1 of the Credit Agreement:

“Beneficial Ownership Regulation” means 31 C.F.R § 1010.230.

(b)The following definition of “Irish Guarantor” is hereby added in appropriate alphabetical order in Section 1.1 of the Credit Agreement:

“Irish Guarantor”: Extreme Networks Ireland Holding Limited, an Irish company limited by shares.

(c) The definition of “Excluded Assets” in Section 1.1 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

 

“Excluded Assets”: as defined in the Guarantee and Collateral Agreement; provided, however, that notwithstanding anything to the contrary in any Loan Document, any right title or interest of any Loan Party or Enterasys in the outstanding voting Capital Stock or other Equity Interest in the Irish Guarantor shall not be Excluded Assets.

(d)The definition of “Excluded Foreign Subsidiary” in Section 1.1 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

““Excluded Foreign Subsidiary”:  in respect of any Loan Party, any Subsidiary of such Loan Party (other than the Irish Guarantor) (a) that is a “controlled foreign corporation” as defined in Section 957 of the Code, (b) that is a Subsidiary (whether direct or indirect) of a “controlled foreign corporation” as defined in Section 957 of the Code, or (c) substantially all of the assets of which are Equity Interests (or Equity Interests and debt interests) in one or more “controlled foreign corporations” as defined in Section 957 of the Code. Notwithstanding anything to the contrary in any Loan Documents, the Irish Guarantor shall not be an Excluded Foreign Subsidiary.”

(e) The definition of “Foreign Investment Limit” in Section 1.1 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

““Foreign Investment Limit”:  at any time, with respect to all of the Loan Parties and in respect of (a) the aggregate amount of all Investments (other than Investments that are intercompany Indebtedness) made by any Loan Party in any Subsidiary (including any Foreign Subsidiary) that is not a Loan Party, in each case to the extent such Investments are made on or after the Closing Date and remain outstanding at such time, (b) the aggregate amount of all intercompany Indebtedness incurred by any Subsidiary (including any Foreign Subsidiary) that is not a Loan Party and owing to a Loan Party, in each case to the extent such intercompany Indebtedness is incurred on or after the Closing Date and remains outstanding at such time, (c) the aggregate amount of all Restricted Payments made on or after the Closing Date by any Loan Party to any Subsidiary (including any Foreign Subsidiary) that is not a Loan Party, (d) the aggregate amount of all Dispositions made on or after the Closing Date by any Loan Party to any Subsidiary (including any Foreign Subsidiary) that is not a Loan Party and (e) without duplication, the book value of the assets of any Loan Party that is merged or consolidated with or into any Subsidiary (including any Foreign Subsidiary) that is not a Loan Party if the surviving entity in such merger is not, or does not immediately become, a Loan Party, an aggregate amount for all of the foregoing clauses (a) through (e) not exceeding 10% of Consolidated Tangible Net Worth (measured as of the date of the financial statements most recently delivered to the Administrative Agent pursuant to Section 6.1 (or, prior to the date financial statements are first delivered to the Administrative Agent pursuant to Section 6.1, as of December 31, 2017)); provided that for purposes of this definition, any Investments, intercompany Indebtedness, Restricted Payments, and Dispositions that are made in connection with the lease at Eton House, Maidenhead Office Park in the United Kingdom shall be excluded from all of clauses (a) through (d).”

(f)The definition of “Guarantors” in Section 1.1 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

““Guarantors”: a collective reference to the Borrower, the Irish Guarantor and each Domestic Subsidiary of the Borrower which has become a Guarantor pursuant to the Guarantee and Collateral Agreement.  Notwithstanding the foregoing or any contrary provision herein or in any other Loan Document, (a) no Excluded Foreign Subsidiary shall be a Guarantor and (b) no Immaterial Subsidiary shall be required to be a Guarantor, but the Borrower may elect to make any Immaterial Subsidiary a Guarantor.”

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(g)Section 6.2(h) is hereby amended and restated in its entirety to read as follows:

“by no later than three days prior to the effectiveness thereof, copies of substantially final drafts of any proposed amendment, supplement, waiver or other modification with respect to any Blue Angel Asset Acquisition Document;”

(h)Section 6.2(i) is hereby amended and restated in its entirety to read as follows:

“promptly, such additional financial and other information as the Administrative Agent or any Lender may from time to time reasonably request; and”

(i)Section 6.2 of the Credit Agreement is hereby amended to add, after subsection (i) thereof, a subsection (j) that shall read as follows:

“promptly following any request therefor, information and documentation reasonably requested in writing by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money-laundering rules and regulations, including the Patriot Act and the Beneficial Ownership Regulation.”

(j)Section 6.11(c) of the Credit Agreement is hereby amended and restated in its entirety as follows:

“With respect to any new First Tier Foreign Subsidiary or any First Tier Foreign Subsidiary Holding Company, as applicable, created or acquired after the Closing Date by any Loan Party or Enterasys, promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement or the Enterasys Pledge Agreement as the Administrative Agent reasonably deems necessary or advisable to grant to the Administrative Agent, for the ratable benefit of the Secured Parties, a perfected first priority security interest and Lien in the Capital Stock of such new First Tier Foreign Subsidiary or First Tier Foreign Subsidiary Holding Company, as applicable, that is owned by any such Loan Party or Enterasys (provided that in no event shall more than 65% of the total outstanding voting Capital Stock of any such new First Tier Foreign Subsidiary (other than the Irish Guarantor) or First Tier Foreign Subsidiary Holding Company (other than the Irish Guarantor), as applicable, be required to be so pledged), (ii) deliver to the Administrative Agent the certificates representing such Capital Stock (if certificated), together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Loan Party or Enterasys, and take such other action (including, as applicable, the delivery of any Foreign Pledge Documents reasonably requested by the Administrative Agent) as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the Administrative Agent’s security interest therein, and (iii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.”

(k)Section 6.11 of the Credit Agreement is hereby amended to add, after subsection (e) thereof, a subsection (f) that shall read as follows:

“With respect to the Irish Guarantor, promptly (i) cause the Irish Guarantor (A) to become a party to the Guarantee and Collateral Agreement as a Grantor and a Guarantor thereunder, (B) to take such actions as are necessary or advisable in the opinion of the Administrative Agent to grant to the Administrative Agent for the ratable benefit of the Secured Parties a perfected first priority security interest and Lien in the Collateral described in the Guarantee and Collateral Agreement, with respect to the Irish Guarantor, including the filing of Uniform Commercial Code financing statements in such 

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jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Administrative Agent, and the filing of Form C1 with the Irish Companies Registration Office, the filing of a notification with the Revenue Commissioners of Ireland in accordance with section 1001 of the Irish Taxes Consolidation Act 1997, and take such other action (including, as applicable, the delivery of any foreign law security documents reasonably requested by the Administrative Agent) as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the Administrative Agent’s security interest therein and (C) to deliver to the Administrative Agent a certificate of the secretary (or other equivalent officer) of the Irish Guarantor of the type described in Section 5.1(c), in form reasonably satisfactory to the Administrative Agent, with appropriate insertions and attachments, and (iii) deliver to the Administrative Agent legal opinions addressing such matters as the Administrative Agent may reasonably specify, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.”

(l)Section 7.2(q) of the Credit Agreement is hereby amended and restated in its entirety as follows:

“(i) Indebtedness incurred on or after the Closing Date by any Subsidiary (including any Foreign Subsidiary) that is not a Loan Party and owing to a Loan Party; provided that no Indebtedness incurred at any time in reliance on this clause (q)(i) shall cause the Foreign Investment Limit in effect at such time to be exceeded, (ii) Indebtedness incurred by the Irish Guarantor (A) pursuant to the Loan Agreement, dated as of June 28, 2018, by and between Extreme Networks Ireland Limited and the Irish Guarantor in an aggregate principal amount not to exceed $85,000,000 and (B) pursuant to the Platform Contribution License Agreement, dated as of June 28, 2018, by and between Extreme Networks, Inc. and Extreme Networks Ireland Holding Limited in an aggregate principal amount not to exceed $23,000,000, and (iii) to the extent payments to be made by the Irish Guarantor to Extreme Networks Ireland Limited in connection with the Enterasys IP License Agreement (Enterasys IP), dated as of September 30, 2018, by and between Extreme Networks, Inc. and Extreme Networks Ireland Holding Limited are payments in respect of Indebtedness, Indebtedness owing by the Irish Guarantor to Extreme Networks Ireland Limited in an aggregate principal amount not to exceed $61,000,000.”

(m) Section 7.10 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than any other Loan Party or between or among any Subsidiaries that are not Loan Parties) unless such transaction is (a)(i) not otherwise prohibited under this Agreement or any other Loan Document, (ii) in the ordinary course of business of the relevant Group Member, (iii) upon fair and reasonable terms no less favorable to the relevant Group Member than it would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate, and (iv) one the consummation of which would not cause the Foreign Investment Limit in effect at such time to be exceeded, (b) one involving the payment of customary directors’ fees and indemnification and reimbursement of expenses to directors and employees, (c) one involving the issuance of stock and stock options pursuant to the Borrower’s stock option plans and stock purchase plans, (d) one involving reasonable compensation paid to officers and employees in their capacities as such (e) one in connection with the Irish Intellectual Property License so long as the transaction is otherwise permitted hereunder.”

(n)The proviso at the end of the definition of “Excluded Assets” in Section 1.1 of the Pledge Agreement is hereby amended and restated as follows:

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“provided, however, that (i) any Proceeds, substitutions or replacements of any Excluded Assets shall not be Excluded Assets (unless such Proceeds, substitutions or replacements are otherwise, in and of themselves, Excluded Assets) and (ii) the Pledgor’s right, title or interest in the Capital Stock or other Equity Interest in the Irish Guarantor shall not be Excluded Assets.”

SECTION 2Conditions Precedent to Effectiveness.  The effectiveness of Section 1 of this Agreement shall be subject to the prior satisfaction of each of the following conditions precedent (the first date on which all such conditions shall be satisfied or waived, the “Effective Date”):

(a)Executed Agreement.  The Administrative Agent shall have received from the Borrower, Enterasys and the Lenders constituting the Required Lenders a duly executed counterpart of this Agreement.

(b)Costs and Expenses.  The Borrower shall have paid all costs and expenses of the Administrative Agent then due in accordance with Section 5(d) hereof and Section 10.5(a) of the Credit Agreement, to the extent such costs and expenses have been invoiced to the Borrower prior to the Effective Date.

(c)Representation and Warranties; No Default.  On the Effective Date, after giving effect to this Agreement, (i) the representations and warranties contained in Section 3 of this Agreement shall be true and correct and (ii) no Default or Event of Default shall have occurred and be continuing.

SECTION 3Representations and Warranties.  Each of the Borrower and Enterasys hereby represents and warrants to the Administrative Agent and the Lenders that: 

(a)no Default or Event of Default exists immediately before, and that no Default or Event of Default exists immediately after, giving effect to the amendments contemplated by Section 1 hereof; 

(b)the execution, delivery, and performance by the Borrower and Enterasys of this Agreement have been duly authorized by all necessary corporate action on the part of the Borrower and Enterasys, as applicable, and do not and will not require any registration with, consent or approval of, or notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable; 

(c)this Agreement and the other Loan Documents constitute the legal, valid, and binding obligations of each of the Borrower and Enterasys party hereto or thereto, and are enforceable against each such Person in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles and principles of good faith and fair dealing (whether enforcement is sought by proceedings in equity or at law); and 

(d)each of the representations and warranties made by each of the Borrower and Enterasys in or pursuant to any Loan Document (after giving effect to the amendments to the Credit Agreement and the Pledge Agreement contemplated by this Agreement) (i) that is qualified by materiality is true and correct, and (ii) that is not qualified by materiality, is true and correct in all material respects, in each case, on and as of the date hereof, except to the extent that any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects or in all respects, as required, as of such earlier date.

SECTION 4Reaffirmation.  

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(a)Validity of Obligations.  The Borrower acknowledges and agrees that, both before and after giving effect to this Agreement, the Borrower is indebted to the Lenders for the Obligations, without defense, counterclaim or offset of any kind and the Borrower hereby ratifies and reaffirms the validity, enforceability and binding nature of such Obligations.

(b)Validity of Liens and Loan Documents.  Each of the Borrower and Enterasys hereby agrees and confirms that the Credit Agreement and each other Loan Document constitutes a legal, valid, and binding obligation of the Borrower and Enterasys, in each case, to the extent party to such Loan Document, enforceable against the Borrower and Enterasys in accordance with its terms.  Each of the Borrower and Enterasys hereby ratifies and reaffirms the validity and enforceability (without defense, counterclaim or offset of any kind) of the Liens and security interests granted to the Administrative Agent for the benefit of the Secured Parties to secure any of the Obligations by the Borrower or Enterasys pursuant to the Loan Documents to which any of the Borrower or Enterasys is a party and hereby confirms and agrees that notwithstanding the effectiveness of this Agreement, and except as expressly amended by this Agreement, each such Loan Document is, and shall continue to be, in full force and effect and each is hereby ratified and confirmed in all respects, except that, on and after the effectiveness of this Agreement, each reference in the Loan  Documents to the “Credit Agreement”, “thereunder”, “thereof” (and each reference in the Credit Agreement to this “Agreement”, “hereunder” or “hereof”) or words of like import shall mean and be a reference to the Credit Agreement as amended by this Agreement and on and after the effectiveness of this Agreement, each reference in the Loan  Documents to the “Pledge Agreement”, “thereunder”, “thereof” (and each reference in the Pledge Agreement to this “Agreement”, “hereunder” or “hereof”) or words of like import shall mean and be a reference to the Pledge Agreement as amended by this Agreement.

SECTION 5Miscellaneous. 

(a)Agreements Otherwise Not Affected.  Except as expressly contemplated hereby, each of the Credit Agreement and Pledge Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed in all respects.  The Administrative Agent’s and the Lenders’ execution and delivery of, or acceptance of, this Agreement shall not be deemed to create a course of dealing or otherwise to create any express or implied duty by the Administrative Agent or any Lender to provide any other or further amendments under the same or similar circumstances in the future.

(b)No Reliance.  The Borrower hereby acknowledges and confirms to the Administrative Agent and the Lenders that it is executing this Agreement on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person. 

(c)Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and to the benefit of their respective successors and assigns permitted by the terms of the Loan Documents. No third party beneficiaries are intended in connection with this Agreement.

(d)Costs and Expenses.  The Borrower hereby agrees to pay to the Administrative Agent on demand the reasonable and documented out-of-pocket costs and expenses of the Administrative Agent, and the reasonable and documented out-of-pocket fees and disbursements of counsel to the Administrative Agent, in connection with the negotiation, preparation, execution and delivery of this Agreement and any other documents to be delivered herewith.

(e)Governing Law.  This Agreement, the other Loan Documents and any claims, controversy, dispute or causes of actions arising therefrom (whether in contract or tort or otherwise) shall be construed in 

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accordance with and governed by the law of the State of New York. This Section 5(e) shall survive the Discharge of Obligations.  This Agreement is subject to the provisions of Section 10.14 of the Credit Agreement and Section 7.11 of the Pledge Agreement relating to submission to jurisdiction, jury trial waiver and judicial reference, which provisions are by this reference incorporated herein, mutatis mutandis, as if set forth herein in full. 

(f)Complete Agreement; Amendments.  This Agreement, together with the Credit Agreement, the Pledge Agreement and the other Loan Documents, contains the entire and exclusive agreement of the parties hereto with reference to the matters discussed herein and therein.  This Agreement supersedes all prior drafts and communications with respect hereto and may not be amended except in accordance with the provisions of Section 10.1 of the Credit Agreement. 

(g)Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under all applicable laws and regulations.  If, however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction.

(h)Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.  Delivery of an executed counterpart of this Agreement by PDF, facsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability and binding effect of this Agreement.

(i)Interpretation. This Agreement is the result of negotiations between and has been reviewed by respective counsel to the Loan Parties and Enterasys and is the product of all parties hereto.  Accordingly, this Agreement shall not be construed against any party merely because of its involvement in the preparation hereof.

(j)Loan Document. This Agreement shall constitute a Loan Document.

[remainder of page intentionally left blank]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

 

		
	
EXTREME NETWORKS, INC., as Borrower

	
By:
	
/s/Matt Cleaver

	
 
	
Name:Matt Cleaver

	
 
	
Title: Interim CFO and VP of Finance

	
 
	
 

 

 

		
	
ENTERASYS NETWORKS, INC.

	
By:
	
/s/Katy Motiey

	
 
	
Name:Katy Motiey

	
 
	
Title: Director and Secretary

	
 
	
 

 

 

		
		
	

BANK OF MONTREAL, as Administrative Agent

	
By:
	
/s/Michael Kus

	
 
	
Name:Michael Kus

	
 
	
Title:Managing Director

2

 

		
	
BMO HARRIS BANK N.A., as Lender

	
By:
	
/s/Michael Kus

	
 
	
Name:Michael Kus

	
 
	
Title: Managing Director

 

 

 

 

3

 

		
		
	
JPMORGAN CHASE BANK, N.A., as Lender

	
By:
	
/s/Eleftherios Karsos

	
 
	
Name:Eleftherios Karsos

	
 
	
Title: Authorized Officer

 

 

 

 

 

		
		
	
BANK OF AMERICA, N.A., as a Lender

	
By:
	
/s/Molly Daniello

	
 
	
Name:Molly Daniello

	
 
	
Title: Vice President

 

 

 

2

 

		
		
	
Silicon Valley Bank, as Lender

	
By:
	
/s/Stephen Chang

	
 
	
Name:Stephen Chang

	
 
	
Title: Director

 

 

 

 

 

3

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