SANTA CLARA, Calif. -- Cabletron Systems (NYSE:CS) today announced that Cabletron expects to distribute to its shareholders of record as of July 27, 2001 all of its shares of common stock of Riverstone Networks (Nasdaq:RSTN). The distribution of these shares is expected be completed on August 6, 2001. Cabletron also announced it will contribute $120 million in cash and strategic equity investments valued at approximately $15 million to Riverstone. The cash contribution will increase Riverstone's cash balance to approximately $295 million. Riverstone will use the cash proceeds for general corporate purposes and working capital to fund its operations. "The $120 million in cash significantly enhances Riverstone's already strong balance sheet and provides us with over $300 million in working capital to help us strengthen our lead in the Metropolitan Area Network market. This is a very cost effective way for Riverstone to raise additional working capital in today's capital market environment. The investments provide us strategic value in terms of next-generation technologies and marketing partnerships that will help to fuel our growth," said Romulus Pereira, president and chief executive officer of Riverstone Networks. In exchange for the cash and equity contributions to Riverstone, Cabletron will receive approximately 7.1 million shares of Riverstone common stock valued at approximately $135 million or $19.00 per share, the average 30-day closing price of Riverstone stock for the period ending July 9, 2001. These shares will be distributed at the spin together with the other Riverstone shares Cabletron already holds.Cabletron Systems Inc. Riverstone Networks Inc.