Arista Networks (ANET) disclosed that it entered into a binding term sheet with Cisco Systems (CSCO) which, upon execution of a final agreement, will result in the dismissal of all pending district court and International Trade Commission litigation between the parties.

Under the binding term sheet, Arista will pay Cisco $400M by August 20. Cisco will grant the company a release for all claims of infringement with respect to the patent infringement allegations against the company in the pending litigation. Arista will grant Cisco a release from all past antitrust claims. These mutual releases will extend to the company's and Cisco's customers, contract manufacturers, and partners, Arista added. The parties have further agreed to a five-year stand-down period as to any utility patent infringement claims either may have against features currently implemented in the other party's products and services, with some carve-outs for products stemming from acquired companies. The parties further agreed to a three-year dispute resolution process for allegations by either party against new and/or modified features in the other party's products.

Arista also agreed to make certain modifications to its Command Line Interface. In light of the binding term sheet, the parties are planning to seek a continuance and/or stay of their jury trial, which is set to commence today.