SYCAMORE NETWORKS INC

On August 2, 2016, the Company completed the sale of all of its equity shares of Tejas Networks Limited, an Indian private company (“Tejas”), to Samena Spectrum Co, a company incorporated under the laws of Mauritius (“Samena”), pursuant to a Share Purchase Agreement dated as of August 2, 2016 (the “Share Purchase Agreement”) for an aggregate purchase price of $3.5 million. The Company received net proceeds of approximately $3.27 million after deduction of Indian withholding and stamp duty taxes in the transaction. The Share Purchase Agreement contains certain representations and warranties, covenants and agreements of each of the Company and Samena, including a covenant of the Company not to adopt a resolution authorizing the completion of the liquidation of Company’s assets and the making of a final liquidating distribution to the Company’s stockholders in accordance with the General Corporation Law of the State of Delaware (the “DGCL”) prior to the expiration of the 90th calendar day following August 2, 2016, the closing date under the Share Purchase Agreement.

Certain of the representations and warranties of each of the Company and Samena contained in the Share Purchase Agreement, including with respect to the Company’s authority to consummate the transactions contemplated by the Share Purchase Agreement, its title to the Tejas shares and its ability to execute, deliver and perform the Share Purchase Agreement consistent with the terms and conditions of the Plan of Dissolution, survive the closing through January 29, 2017. However, if the board of directors of the Company adopts a resolution on or after November 1, 2016 authorizing the completion of the liquidation of the Company’s assets and the making of a final liquidating distribution to the Company’s stockholders in accordance with the DGCL, the Company’s representations and warranties that survived the closing will expire on the date immediately preceding the date of such resolution and the Company will be free to complete its liquidation and dissolution at that time. All other representations and warranties contained in the Share Purchase Agreement expired at the closing. Each of the Company and Samena has agreed to indemnify and hold harmless the other party against any and all claims, losses and other expenses incurred as a result of any breach of such first party’s representations and warranties contained in the Share Purchase Agreement that survived the closing.

On February 25, 2016, the Court of Chancery entered an order extending Sycamore’s corporate existence for an additional period of up to two years, ending on March 7, 2018, or such shorter period as the Board deems necessary, and affirming that approximately $3.54 million is sufficient to be retained for anticipated wind down costs and expenses. However, this amount may not be adequate to cover all of our claims and obligations prior to the completion of the Dissolution. Under the DGCL, each stockholder could be held liable for claims against the Company, solely in respect of claims brought during the Dissolution period, in an amount not to exceed the lesser of (i) such stockholder’s pro rata share of amounts owed to creditors in excess of the contingency reserve and (ii) the amounts previously received by such stockholder in the Dissolution from us and from any liquidating trust or trusts. Accordingly, in such event, a stockholder could be required to return part or all of the liquidating distributions previously made to such stockholder, and a stockholder could receive nothing from us under the Plan of Dissolution. In addition, although the Board determined that all amounts distributed to our stockholders prior to the filing of the Certificate of Dissolution were appropriately paid out of surplus as defined under the DGCL and otherwise not required to satisfy liabilities to our creditors, to the extent that the contingency reserve is determined to be inadequate for payment of our claims and obligations, and it is further determined that the Board’s determination was incorrect at the time of the declaration of such distributions, it is possible that creditors could seek to recoup such amounts from our stockholders. Moreover, if a stockholder has paid taxes on amounts previously received, a repayment of all or a portion of such amount could result in a situation in which a stockholder may incur a net tax cost if the repayment of the amount previously distributed does not cause a commensurate reduction in taxes payable in an amount equal to the amount of the taxes paid on amounts previously distributed.

On August 2, 2016, the Company completed the sale of all of its equity shares of Tejas Networks Limited, an Indian private company (“Tejas”), to Samena Spectrum Co, a company incorporated under the laws of Mauritius (“Samena”), pursuant to a Share Purchase Agreement dated as of August 2, 2016 (the “Share Purchase Agreement”) for an aggregate purchase price of $3.5 million. Sycamore received net proceeds of approximately $3.27 million after deduction of Indian withholding and stamp duty taxes in the transaction. The Share Purchase Agreement contains certain representations and warranties, covenants and agreements of each of Sycamore and Samena, including a covenant of Sycamore not to adopt a resolution authorizing the completion of the liquidation of Company’s assets and the making of a final liquidating distribution to the Company’s stockholders in accordance with the General Corporation Law of the State of Delaware (the “DGCL”) prior to the expiration of the 90th calendar day following August 2, 2016, the closing date under the Share Purchase Agreement.

In connection with the closing of the sale of the Tejas shares, the Company agreed to indemnify Samena for any damages arising out of a breach of certain representations or warranties as set forth in the Share Purchase Agreement, including with respect to the Company’s authority to consummate the transactions contemplated by the Share Purchase Agreement, its title to the Tejas shares and its ability to execute, deliver and perform the Share Purchase Agreement consistent with the terms and conditions of the previously adopted Plan of Complete Liquidation and Dissolution. The Company’s aggregate indemnification liability for breaches of representations or warranties is limited to $3.5 million. All of the Company’s indemnification obligations for breaches of representations or warranties under the Share Purchase Agreement are set to expire no later than January 29, 2017. However, if the board of directors of the Company adopts a resolution on or after November 1, 2016 authorizing the completion of the liquidation of the Company’s assets and the making of a final liquidating distribution to the Company’s stockholders in accordance with the DGCL, the Company’s representations and warranties that survived the closing will expire on the date immediately preceding the date of such resolution and the Company will be free to complete its liquidation and dissolution at that time. The Company has not received any claims for indemnification under the Share Purchase Agreement and therefore has not recorded, nor does it expect to record, any liability in connection with its indemnification obligations under the Share Purchase Agreement.