the deal was not really cancelled riley, just restructured...
they do not have the guaranteed 300 mil, but have potential for much more, at least that is what i got from the cc...
Monday September 20, 6:45 pm Eastern Time
Compaq, Cabletron revamp partnership
ROCHESTER, N.H., Sept 20 (Reuters) - Cabletron Systems Inc. (NYSE:CS - news) said Compaq Computer Corp. (NYSE:CPQ - news) has made an equity investment in Cabletron's Spectrum business, but has canceled an earlier pact to buy roughly $300 million a year worth of Cabletron networking equipment for resale.
Terms of Compaq's investment in Cabletron's Spectrum network management business were not disclosed, although Compaq said the deal also includes a commitment from Compaq to make a ''multi-year purchase'' of Spectrum products and services.
The companies have also agreed to revamp Cabletron's existing supply agreement with Houston-based Compaq.
Previously, Compaq had committed to buy roughly $300 million a year worth of equipment from Cabletron to resell under the Compaq brand, but Cabletron spokesman Mike Quinn said, ''Compaq has decided not to get into the Compaq-branded networking business.''
Instead, he said, Compaq will continue to buy Cabletron products for internal use and for resale by Compaq's professional services unit.
As a result of the cancellation of the previous Compaq deal, ''we expect flat to a slight decline'' in revenue from Compaq, Quinn said. He said Cabletron expects to make that revenue up in new business to Compaq's professional services business, as well as through the partnership with Spectrum.
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