Of the amount, US$85 million was to be a final purchase of Cabletron products sold under the brand names of Compaq and Digital Equipment, which Compaq acquired in 1998. Compaq also paid Cabletron US$25 million to eliminate Compaq's minimum quarterly order requirements and US$13 million to return products that Cabletron can resell under its own name.
The total amount was disclosed today in Cabletron's quarterly filing with the US Securities and Exchange Commission. The companies said in September that they were discussing details of a financial settlement for replacing the earlier agreement with an alliance under which Compaq would continue to resell Cabletron products with its computers.
"The relationship is still strong, said Cabletron spokesman Tom McCallum. "This works out much better for both parties."
Compaq changed its plans because it's been focusing "on our core businesses where we can be No. 1 or No. 2 in the marketplace," said Compaq spokesman Jim Finlaw in September. Compaq officials weren't immediately available to comment on today's filing.
Cabletron said in September and reiterated in the filing that revenue from Compaq would be "flat to down over the next two quarters" because of the changes. Cabletron's fiscal third- quarter revenue from Compaq was about US$50 million to US$60 million out of total revenue of US$372 million, McCallum said.
Compaq paid US$36.3 million of the US$85 million earmarked for the purchase of products in the quarter ended November 30, according to the filing.
Under the companies' new alliance, Compaq agreed to resell Cabletron hardware and software for two years, the filing said. Compaq ordered US$34 million of Cabletron products, and Cabletron shipped US$5 million of that by November 30, according to the filing.
The company paid US$14 million for a stake in Cabletron's newly formed software unit, Aprisma Management Technologies. Aprisma officials said last month the stake was 2 percent.
The original US$1.1 billion, 3 1/2-year required-purchase agreement stemmed from Cabletron's US$430 million acquisition of Digital's networking business in February 1998. Further, last May, Compaq agreed to buy a certain amount of Cabletron products to resell under the Compaq and Digital brand names.
Shares of Houston-based Compaq rose 3/8 to 30 7/8. Rochester, New Hampshire-based Cabletron fell 3 to 26.
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