EXHIBIT 2
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ASCEND STOCK OPTION AGREEMENT
BY AND BETWEEN
ASCEND COMMUNICATIONS, INC.,
A DELAWARE CORPORATION,
AND
CASCADE COMMUNICATIONS CORP.,
A DELAWARE CORPORATION,
DATED AS OF MARCH 30, 1997
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TABLE OF DEFINED TERMS
TERM SECTION
---- --------
Agreement............................................................. Preamble
Ascend................................................................ Preamble
Ascend Common Stock................................................... Recitals
Ascend Offer Notice................................................... 8(d)
Ascend Option......................................................... 1
Cash Exercise......................................................... 2(e)
Cash Exercise Price................................................... 2(e)
Cascade............................................................... Preamble
Cascade Charter....................................................... 2(b)
Cascade Common Stock.................................................. 2(e)
Cascade Offer Notice.................................................. 8(c)
Closing............................................................... 2(b)
Exercise Notice....................................................... 2(b)
Exercise Price........................................................ 2(e)
Expiration Date....................................................... 8(a)
Fair Market Value..................................................... 7(b)(iii)
Holder................................................................ 9(a)
Holder's Designation Notice........................................... 9(b)
HSR Act............................................................... 3
Manager............................................................... 9(b)
Material Contract..................................................... 5(e)
Merger................................................................ Recitals
Merger Agreement...................................................... Recitals
Net Proceeds.......................................................... 2(f)
Option Number......................................................... 2(d)
Option Repurchase Price............................................... 7(b)(i)
Permitted Offering.................................................... 9(a)
Purchase Period....................................................... 7(a)
Registrable Securities................................................ 9(a)
Registrant............................................................ 9(a)
Registrant's Designation Notice....................................... 9(b)
Registration Notice................................................... 9(a)
Repurchase Notice..................................................... 7(a)
Restricted Shares..................................................... 8(a)
Share Repurchase Price................................................ 7(b)(ii)
Stock Exercise........................................................ 2(e)
Stock Exercise Price.................................................. 2(e)
Sub................................................................... Recitals
Trigger Event......................................................... 2(a)
Violation............................................................. 5(e)
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TABLE OF CONTENTS
PAGE
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Section 1. Grant of Option............................................. B-1
Section 2. Exercise and Termination of the Ascend Option............... B-1
(a) Exercise.................................................... B-1
(b) Exercise Procedure.......................................... B-1
(c) Termination of the Ascend Option............................ B-2
(d) Option Number............................................... B-2
(e) Exercise Price.............................................. B-2
(f) Certain Limitations......................................... B-2
Section 3. Conditions to Closing....................................... B-3
Section 4. Closing..................................................... B-3
Section 5. Representations and Warranties of Ascend.................... B-3
(a) Organization and Standing................................... B-3
(b) Authority................................................... B-3
(c) Reservation of Shares....................................... B-3
(d) No Liens.................................................... B-4
(e) No Conflicts................................................ B-4
(f) Consents and Approvals...................................... B-4
(g) Investment Purposes......................................... B-4
Section 6. Representations and Warranties of Cascade................... B-4
(a) Organization and Standing................................... B-4
(b) Authority................................................... B-4
(c) Reservation of Shares....................................... B-5
(d) No Liens.................................................... B-5
(e) No Conflicts................................................ B-5
(f) Consents and Approvals...................................... B-5
(g) Investment Purpose.......................................... B-5
Section 7. Certain Repurchases......................................... B-5
(a) Cascade "Put"............................................... B-5
(b) Certain Definitions......................................... B-5
(c) Redelivery of Shares of Cascade Common Stock................ B-6
(d) Payment and Redelivery of Ascend Options or Shares.......... B-6
(e) Repurchase Price Reduced at Cascade's Option................ B-6
Section 8. Restrictions on Transfer.................................... B-6
(a) Restrictions on Transfer.................................... B-6
(b) Permitted Sales............................................. B-7
(c) Ascend's Right of First Refusal............................. B-7
(d) Cascade's Right of First Refusal............................ B-7
(e) Additional Restrictions..................................... B-8
Section 9. Registration Rights......................................... B-8
(a) Procedure................................................... B-8
(b) Manager's Certificate....................................... B-8
(c) First Refusal Right......................................... B-9
(d) Closing..................................................... B-9
(e) Certain Limitations......................................... B-9
(f) State Securities Laws....................................... B-9
(g) Obligations of Registrant................................... B-9
(h) Indemnification............................................. B-9
(i) Inclusion of Additional Shares of Registrant................ B-9
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PAGE
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Section 10. Adjustment Upon Changes in Capitalization.................. B-10
Section 11. Restrictive Legends........................................ B-10
Binding Effect; No Assignment; No Third-Party
Section 12. Beneficiaries............................................. B-11
Section 13. Specific Performance....................................... B-11
Section 14. Validity................................................... B-11
Section 15. Notices.................................................... B-12
Section 16. Governing Law.............................................. B-12
Section 17. Interpretation............................................. B-12
Section 18. Counterparts; Effect....................................... B-13
Section 19. Expenses................................................... B-13
Section 20. Amendments; Waiver......................................... B-13
Section 21. Extension of Time Periods.................................. B-13
Section 22. Further Assurances......................................... B-13
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ASCEND STOCK OPTION AGREEMENT
THIS ASCEND STOCK OPTION AGREEMENT (the "Agreement") is made and entered
into as of March 30, 1997 by and between Ascend Communications, Inc., a
Delaware corporation ("Ascend"), and Cascade Communications Corp., a Delaware
corporation ("Cascade").
Recitals
Concurrently with the execution and delivery of this Agreement, Ascend,
Cascade, and Cascade Merger Corporation, a Delaware corporation and a wholly-
owned subsidiary of Ascend ("Sub"), are entering into an Agreement and Plan of
Reorganization, dated as of March 30, 1997 (the "Merger Agreement"), which
provides for the merger of Sub with and into Cascade in accordance with the
terms of the Merger Agreement and the laws of the State of Delaware (the
"Merger"). As a condition and inducement to Cascade's willingness to enter
into the Merger Agreement, Cascade has requested that Ascend agree, and Ascend
has agreed, to grant to Cascade an option to acquire certain shares of
Ascend's authorized but unissued common stock, par value $.001 per share
(together with any associated rights, "Ascend Common Stock"), on the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, to induce Cascade to enter into the Merger Agreement and in
consideration of the representations, warranties, covenants and agreements
contained herein and in the Merger Agreement, the parties hereto, intending to
be legally bound, hereby agree as follows. Capitalized terms used herein but
not defined herein shall have the meanings ascribed to them in the Merger
Agreement.
Agreement
Section 1. Grant of Option. Ascend hereby grants to Cascade an irrevocable
option (the "Ascend Option") to purchase a number of shares of Ascend Common
Stock equal to the Option Number (as defined in Section 2(d)), on the terms
and subject to the conditions set forth below.
Section 2. Exercise and Termination of the Ascend Option.
(a) Exercise. The Ascend Option may be exercised by Cascade, in whole or
in part, at any time or from time to time prior to the termination of
Cascade's right to exercise the Ascend Option by the terms of this Agreement
and upon and after the occurrence of the earliest event which causes (i) the
Ascend Termination Fee or (ii) the Ascend Post-Termination Fee (in each case
as defined in the Merger Agreement) to become payable (a "Trigger Event").
Notwithstanding the foregoing, the Ascend Option may not be exercised if
Cascade is in breach in any material respect of any of its material
representations, warranties, covenants or agreements contained in this
Agreement or the Merger Agreement.
(b) Exercise Procedure. In the event that Cascade wishes to exercise the
Ascend Option, Cascade shall deliver to Ascend written notice (an "Exercise
Notice") specifying the total number of shares of Ascend Common Stock that
Cascade wishes to purchase. To the extent permitted by law and the
Certificate of Incorporation, as amended, of Ascend (the "Ascend Charter"),
and provided that the conditions set forth in Section 3 to Ascend's
obligation to issue the shares of Ascend Common Stock to Cascade hereunder
have been satisfied or waived, Cascade shall, upon delivery of the Exercise
Notice and tender of the applicable aggregate Exercise Price, immediately
be deemed to be the holder of record of the shares of Ascend Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books
of Ascend shall then be closed or that certificates representing such
shares of Ascend Common Stock shall not theretofore have been delivered to
Cascade. Each closing of a purchase of shares of Ascend Common Stock
hereunder (a "Closing") shall occur at a place, on a date, and at a time
designated by Cascade in an Exercise Notice delivered at least two (2)
business days prior to the date of such Closing.
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(c) Termination of the Ascend Option. Cascade's right to exercise the
Ascend Option shall terminate upon the earliest to occur of:
(i) the Effective Time of the Merger;
(ii) the date on which the Merger Agreement is terminated pursuant to
Article VIII thereof other than under circumstances which also
constitute a Trigger Event under this Agreement; and
(iii) (A) in the event the Ascend Option becomes exercisable pursuant to
clause (i) of Section 2(a), the date two hundred seventy (270) days after
the date on which the Merger Agreement is terminated pursuant to Article
VIII thereof under circumstances which also constitute a Trigger Event under
clause (i) of Section 2(a), or
(B) in the event the Ascend Option becomes exercisable pursuant to clause
(ii) of Section 2(a), the later of (I) the date two hundred seventy (270)
days after the date on which the Merger Agreement is terminated pursuant to
Article VIII thereof under circumstances which also constitute a Trigger
Event under clause (ii) of Section 2(a) and (II) the date one hundred eighty
(180) days after the date on which the Ascend Option becomes exercisable
pursuant to clause (ii) of Section 2(a).
Notwithstanding the foregoing, with respect to clause (iii) in the immediately
preceding sentence, if the Ascend Option cannot be exercised by reason of any
applicable judicial or governmental judgment, decree, order, law or
regulation, the Ascend Option shall remain exercisable and shall not terminate
until the earlier of (x) the date on which such impediment shall become final
and not subject to appeal and (y) 5:00 p.m., Pacific Standard Time, on the
tenth (10th) business day after such impediment shall have been removed;
provided, however, that if such judgment, decree, or order shall have been
obtained at the request of Ascend or any of its Affiliates or a party that has
made or is proposing to make a Competing Offer (as such term is defined in
the Merger Agreement)for Ascend, and such judgment, decree or order is vacated,
set aside, withdrawn, reversed or otherwise nullified, the time during which the
Ascend Option shall remain exercisable shall be extended for as long as such
judgment, decree, or order shall be in effect. The rights of Cascade set forth
in Sections 7 and 9 shall not terminate upon termination of Cascade's right to
exercise the Ascend Option with respect to shares acquired prior to termination,
but shall extend to the time provided in such sections. Notwithstanding the
termination of the Ascend Option, Cascade shall be entitled to purchase the
shares of Ascend Common Stock with respect to which Cascade had exercised the
Ascend Option prior to such termination.
(d) Option Number. The aggregate number of shares of Ascend Common Stock
issuable upon exercise of this Ascend Option (the "Option Number") shall
initially be the number of shares, rounded down to the nearest whole share,
equal to nineteen and nine-tenths percent (19.9%) of the total number of
shares of Ascend Common Stock issued and outstanding as of the date of this
Agreement, and shall be adjusted hereafter to reflect changes in Ascend's
capitalization occurring after the date hereof in accordance with Section
10. Notwithstanding any other provision of this Agreement, in no event
shall the Option Number exceed nineteen and nine-tenths percent (19.9%) of
the total number of shares of Ascend Common Stock issued and outstanding as
of the date of this Agreement, adjusted in accordance with Section 10.
(e) Exercise Price. The purchase price per share of Ascend Common Stock
pursuant to the Ascend Option (the "Exercise Price") shall be payable, at
Cascade's election, in cash (a "Cash Exercise") or in shares (a "Stock
Exercise") of Cascade common stock, $.001 par value per share ("Cascade Common
Stock"). The Exercise Price per share of Ascend Common Stock, (i) in the case
of a Cash Exercise, shall be a cash amount equal to $52.00 (the "Cash Exercise
Price"), and (ii) in the case of a Stock Exercise, shall be 1.833 shares of
Cascade Common Stock (the "Stock Exercise Price").
(f) Certain Limitations. In the event Cascade would receive aggregate,
cumulative Net Proceeds (as defined below) of more than eighty-five million
dollars ($85,000,000) in connection with the sale (or other disposition) to
any third party of the shares of Ascend Common Stock acquired pursuant to
the Ascend Option (other than a sale of such shares to Ascend pursuant to
Section 7, all Net Proceeds in excess of such amount shall be remitted to
Ascend promptly upon receipt. "Net Proceeds" shall mean the aggregate
proceeds of such sale or disposition in excess of the product of the
Exercise Price multiplied by the number of shares of Ascend Common Stock
included in such sale or disposition. Notwithstanding anything in this
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Agreement or in the Merger Agreement to the contrary, the maximum aggregate
amount payable by Ascend to Cascade and its affiliates pursuant to Section
7 of this Agreement and the provisions of Section 8.3(c) of the Merger
Agreement shall not exceed the sum of eighty-five million dollars
($85,000,000) plus, in the case of payments pursuant to Sections 7(a)(ii)
and 7(b)(ii) of this Agreement, the aggregate Exercise Price for the shares
of Ascend Common Stock repurchased by Ascend from Cascade pursuant to
Section 7 of this Agreement, it being understood that the limitation
contained in this sentence shall not limit the amounts receivable by
Cascade from persons other than Ascend, including without limitation
amounts receivable pursuant to a tender offer or other purchase and sale
transaction.
Section 3. Conditions to Closing. The obligation of Ascend to issue the
shares of Ascend Common Stock to Cascade hereunder is subject to the
conditions that (a) all waiting periods, if any, under the Xxxx Xxxxx Xxxxxx
Antitrust Improvements Act of 1975, as amended (the "HSR Act"), applicable to
the issuance of the shares of Ascend Common Stock by Ascend and the
acquisition of such shares by Cascade hereunder (and, in the case of a Stock
Exercise, the issuance of shares of Cascade Common Stock by Cascade and the
acquisition of such shares by Ascend) shall have expired or have been
terminated; (b) no preliminary or permanent injunction or other order by any
court of competent jurisdiction prohibiting or otherwise restraining such
issuance shall be in effect; and (c) all consents, approvals, orders,
authorizations and permits of any federal, state, local or foreign
governmental authority, if any, required in connection with the issuance of
the shares of Ascend Common Stock and the acquisition of such shares by
Cascade hereunder (and, in the case of a Stock Exercise, the issuance of
shares of Cascade Common Stock and the acquisition of such shares by Ascend)
shall have been obtained.
Section 4. Closing. At any Closing: (a) Ascend shall deliver to Cascade or
its designee a single certificate in definitive form representing the number
of shares of Ascend Common Stock designated by Cascade in its Exercise Notice,
such certificate to be registered in the name of Cascade and to bear the
legend set forth in Section 11; and (b) Cascade shall deliver to Ascend the
aggregate Exercise Price for the shares of Ascend Common Stock so designated
and being purchased by (i) wire transfer of immediately available funds to the
account or accounts specified in writing by Ascend (in the case of a Cash
Exercise), or (ii) subject to the satisfaction of applicable conditions,
delivery of a certificate or certificates representing the number of shares of
Cascade Common Stock being issued by Cascade in consideration thereof (in the
case of a Stock Exercise). Effective at or prior to the Closing, Ascend shall
cause the shares of Ascend Common Stock being delivered at the Closing to be
approved for quotation on The Nasdaq National Market, and Cascade shall cause
the shares of Cascade Common Stock being delivered at the Closing pursuant to
a Stock Exercise to be approved for quotation on The Nasdaq National Market.
Section 5. Representations and Warranties of Ascend. Ascend represents and
warrants to Cascade as follows:
(a) Organization and Standing. Ascend is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has all corporate power and authority required to enter into
this Agreement and to carry out its obligations hereunder.
(b) Authority. The execution and delivery of this Agreement by Ascend and
the consummation by Ascend of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of
Ascend and no other corporate proceedings on the part of Ascend and no
action of Ascend shareholders are necessary to authorize this Agreement or
any of the transactions contemplated hereby; this Agreement has been duly
and validly executed and delivered by Ascend and, assuming the due
authorization, execution and delivery hereof by Cascade and the receipt of
all required governmental approvals, constitutes the valid and binding
obligation of Ascend, enforceable against Ascend in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally, and except that the availability of equitable
remedies, including specific performance, may be subject to the discretion
of any court before which any proceeding therefor may be brought.
(c) Reservation of Shares. Ascend has taken all necessary corporate
action to authorize and reserve for issuance and to permit it to issue,
upon exercise of the Ascend Option, and at all times from the date
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hereof through the expiration of the Ascend Option will have reserved, a
number of authorized and unissued shares of Ascend Common Stock not less
than the Option Number, such amount being subject to adjustment as provided
in Section 10, all of which, upon their issuance and delivery in accordance
with the terms of this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable.
(d) No Liens. The shares of Ascend Common Stock issued to Cascade upon
the exercise of the Ascend Option will be, upon delivery thereof to
Cascade, free and clear of all claims, liens, charges, encumbrances and
security interests of any nature whatsoever.
(e) No Conflicts. The execution and delivery of this Agreement by Ascend
does not, and, subject to compliance with applicable law, the consummation
by Ascend of the transactions contemplated hereby will not, violate,
conflict with, or result in a breach of any provision of, or constitute a
default (with or without notice or lapse of time, or both) under, or result
in the termination of, or accelerate the performance required by, or result
in a right of termination, cancellation, or acceleration of any obligation
or the loss of a material benefit under, or the creation of a lien, pledge,
security interest or other encumbrance on assets (any such violation,
conflict, breach, default, termination, acceleration, right of termination,
cancellation or acceleration, loss, or creation, a "Violation") by Ascend
or any of its Subsidiaries of (i) any provision of the charter or the
Bylaws of Ascend or any of its Subsidiaries, each as amended to date, (ii)
any material provision of any material loan or credit agreement, note,
mortgage, indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise or license (a "Material
Contract") of Ascend or any of its Subsidiaries or to which any of them is
a party or by which any of them or their properties or assets are bound, or
(iii) except as contemplated by Section 4.4(c) of the Merger Agreement or
Section 5(f) below, any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Ascend or any of its subsidiaries or any
of their properties or assets.
(f) Consents and Approvals. The execution and delivery of this Agreement
by Ascend does not, and (except for the notifications required under the
HSR Act and applicable foreign laws, the expiration or early termination of
any waiting periods under the HSR Act and applicable foreign laws, and the
receipt of approvals under applicable securities laws, and except as
contemplated by Section 9), the performance of this Agreement by Ascend and
the consummation of the transactions contemplated hereby will not, require
any consent, approval, order, authorization or permit of, filing with, or
notification to any governmental or regulatory authority, other than such
consents, approvals, orders, authorizations, permits, filings and
notifications which, in the aggregate, if not obtained or made, could not
reasonably be expected to have a Cascade Material Adverse Effect or an
Ascend Material Adverse Effect (as such terms are defined in the Merger
Agreement) or a material adverse effect on the ability of the parties to
consummate the transactions contemplated by this Agreement.
(g) Investment Purposes. Any shares of Cascade Common Stock acquired by
Ascend pursuant to this Agreement will be acquired for Ascend's own
account, for investment purposes only, and will not be acquired by Ascend
with a view to the public distribution thereof in violation of any
applicable provision of the Securities Act.
Section 6. Representations and Warranties of Cascade. Cascade represents and
warrants to Ascend as follows:
(a) Organization and Standing. Cascade is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has all corporate power and authority required to enter into
this Agreement and to carry out its obligations hereunder.
(b) Authority. Except as set forth in Section 6(c), the execution and
delivery of this Agreement by Cascade and the consummation by Cascade of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Cascade, and no other corporate
proceedings on the part of Cascade and no action of its stockholders are
necessary to authorize this Agreement or any of the transactions
contemplated hereby; this Agreement has been duly and validly executed and
delivered by Cascade and, assuming the due authorization, execution and
delivery hereof by Ascend and the receipt of all required governmental
approvals, constitutes the valid and binding obligation of Cascade,
enforceable
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against Cascade in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally, and except that
the availability of equitable remedies, including specific performance, may
be subject to the discretion of any court before which any proceeding may
be brought.
(c) Reservation of Shares. Prior to any delivery of shares of Cascade
Common Stock in consideration of the purchase of shares of Ascend Common
Stock pursuant hereto, Cascade will have taken all necessary corporate
action to authorize for issuance and to permit it to issue such shares of
Cascade Common Stock, all of which, upon their issuance and delivery in
accordance with the terms of this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable.
(d) No Liens. The shares of Cascade Common Stock (if any) issued to
Ascend in consideration of the purchase of shares of Ascend Common Stock
pursuant hereto will be, upon delivery thereof to Ascend, free and clear of
all claims, liens, charges, encumbrances and security interests of any
nature whatsoever.
(e) No Conflicts. The execution and delivery of this Agreement by Cascade
does not, and the consummation by Cascade of the transactions contemplated
hereby will not, violate, conflict with, or result in a Violation by
Cascade or any of its Subsidiaries of (i) any provision of the Certificate
of Incorporation or Bylaws of Cascade, (ii) any material provision of any
Material Contract of Cascade or any of its Subsidiaries or to which any of
them is a party or by which any of them or their properties or assets are
bound, or (iii) except as contemplated by Section 3.4(c) of the Merger
Agreement or Section 6(f) below, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Cascade or any of its
subsidiaries or any of their properties or assets.
(f) Consents and Approvals. The execution and delivery of this Agreement
by Cascade does not, and (except for the notifications required under the
HSR Act and applicable foreign laws, the expiration or early termination of
waiting periods under the HSR Act and applicable foreign laws, and the
receipt of approvals under applicable securities laws, and except as
contemplated by Section 9), the performance of this Agreement by Ascend and
the consummation of the transactions contemplated hereby will not, require
any consent, approval, order, authorization or permit of, filing with, or
notification to any governmental or regulatory authority, other than such
consents, approvals, orders, authorizations, permits, filings and
notifications which, in the aggregate, if not obtained or made, could not
reasonably be expected to have a Cascade Material Adverse Effect or an
Ascend Material Adverse Effect (as such terms are defined in the Merger
Agreement) or a material adverse effect on the ability of the parties to
consummate the transactions contemplated by this Agreement.
(g) Investment Purpose. Any shares of Ascend Common Stock acquired by
Cascade upon exercise of the Ascend Option will be acquired for Cascade's
own account, for investment purposes only and will not be, and the Ascend
Option is not being, acquired by Cascade with a view to the public
distribution thereof in violation of any applicable provision of the
Securities Act.
Section 7. Certain Repurchases.
(a) Cascade "Put". At any time during which the Ascend Option is
exercisable pursuant to Section 2 (the "Purchase Period") upon written
notice to Ascend by Cascade (the "Repurchase Notice"):
(i) Ascend and its successors in interest shall repurchase from
Cascade all or any portion of the Ascend Option, as specified by
Cascade, to the extent not previously exercised, at the Option
Repurchase Price set forth in Section 7(b)(i), subject to and as
limited by Section 2(f) above; and
(ii) Ascend and its successors in interest shall repurchase from
Cascade all or any portion of the shares of Ascend Common Stock
purchased by Cascade pursuant to the Ascend Option, as specified by
Cascade, at the Share Repurchase Price set forth in Section 7(b)(ii)
subject to and as limited by Section 2(f) above.
(b) Certain Definitions. For purposes of this Section 7, the following
definitions shall apply:
(i) Option Repurchase Price. "Option Repurchase Price" shall mean (A)
the amount (if any) by which the Fair Market Value (as defined in
Section 7(b)(iii)) of a single share of Ascend Common
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Stock as of the date of the applicable Repurchase Notice exceeds the
per share Exercise Price, multiplied by (B) the number of shares of
Ascend Common Stock purchasable pursuant to the Ascend Option or the
portion thereof covered by the applicable Repurchase Notice.
(ii) Share Repurchase Price. "Share Repurchase Price" shall mean the
product of (A) the greater of (I) the Exercise Price paid by Cascade
per share of Ascend Common Stock acquired pursuant to the Ascend Option
and (II) the Fair Market Value (as defined in Section 7(b)(iii)) of a
single share of Ascend Common Stock as of the date of the applicable
Repurchase Notice, and (B) the number of shares of Ascend Common Stock
to be repurchased pursuant to this Section 7 as covered by the
applicable Repurchase Notice.
(iii) Fair Market Value. As used in this Agreement, "Fair Market
Value" shall mean, with respect to any security, the per share average
of the last reported sale prices on The Nasdaq National Market (or such
other national stock exchange or national market system as shall then
be the primary trading market for such security) for the ten (10)
trading days immediately preceding the applicable date.
(c) Redelivery of Shares of Cascade Common Stock. In Ascend's discretion
or if specified by Cascade in the Repurchase Notice, all or a portion of
the Share Repurchase Price shall be paid by Ascend in shares of Cascade
Common Stock, by redelivery to Cascade of the shares of Cascade Common
Stock (and the certificate(s) representing such shares) previously
delivered by Cascade to Ascend pursuant to a Stock Exercise. For purposes
of this Section 7(c), each share of Cascade Common Stock redelivered to
Cascade shall be valued at and exchanged for .546 shares of Cascade Common
Stock. If fewer than all of the shares of Ascend Common Stock purchased by
Cascade pursuant to a Stock Exercise are to be repurchased by Ascend
pursuant to Section 7(a)(ii), Cascade shall issue to Ascend new
certificates representing those shares of Cascade Common Stock which are
not due to be redelivered to Cascade pursuant to this Section 7(c) to the
extent that excess shares of Cascade Common Stock are included in the
certificates redelivered to Cascade by Ascend. All shares of Cascade Common
Stock redelivered to Cascade hereunder shall be free and clear of all
claims, liens, charges, encumbrances and security interests of any nature
whatsoever.
(d) Payment and Redelivery of Ascend Options or Shares. In the event that
Cascade exercises its rights under Section 7(a), Ascend shall, within ten
(10) business days thereafter, pay the required amount to Cascade in
immediately available funds (or shares of Cascade Common Stock, if
applicable) and Cascade shall surrender to Ascend the Ascend Option or the
certificate or certificates evidencing the shares of Ascend Common Stock
purchased by Cascade pursuant hereto, and Cascade shall warrant that it has
sole beneficial ownership of the Ascend Option or such shares and that the
Ascend Option or such shares are then free and clear of all claims, liens,
charges, encumbrances and security interests of any nature whatsoever.
(e) Repurchase Price Reduced at Cascade's Option. In the event that
payment of the repurchase price specified in Section 7(a) would subject the
repurchase of the Ascend Option or the shares of Ascend Common Stock
purchased by Cascade pursuant to the Ascend Option to a vote of the
stockholders of Ascend pursuant to applicable law, regulations, or
requirements of a national securities exchange or national market system or
the Ascend Charter, then Cascade may, at its election, reduce the
repurchase price or the number of shares covered by the Cascade repurchase
request to an amount which would permit such repurchase without the
necessity for such a vote.
Section 8. Restrictions on Transfer.
(a) Restrictions on Transfer. Prior to the fifth anniversary of the date
hereof (the "Expiration Date"), neither party shall, directly or
indirectly, by operation of law or otherwise, sell, assign, pledge, or
otherwise dispose of or transfer any shares of capital stock of the other
party acquired by such party pursuant to this Agreement, including any
shares of Cascade Common Stock issued pursuant to a Stock Exercise
("Restricted Shares") or otherwise beneficially owned (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) by such other party,
other than (i) pursuant to Section 7 or (ii) in accordance with Sections
8(b) or 9.
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(b) Permitted Sales. Following the termination of the Merger Agreement, a
party shall be permitted to sell any Restricted Shares beneficially owned
by it if such sale is made (i) pursuant to a tender or exchange offer or
other business combination transaction that has been approved or
recommended, or otherwise determined to be fair to and in the best
interests of the holders of common stock of the other party, by a majority
of the members of the Board of Directors of such other party, or (ii)
subject to Section 8(c) or (d) as the case may be, to a person who,
immediately following such sale, would beneficially own (within the meaning
of Rule 13d-3 promulgated under the Exchange Act), either alone or as part
of a "group" (as used in Rule 13d-5 under the Exchange Act), not more than
ten percent (10%) of such party's outstanding voting securities, which
person is a passive institutional investor who would be eligible under Rule
13d-1(b)(1) under the Exchange Act to report such holdings of Restricted
Shares on Schedule 13G under the Exchange Act.
(c) Ascend's Right of First Refusal. At any time after the first
occurrence of a Trigger Event and prior to the Expiration Date, if Cascade
shall desire to sell, assign, transfer or otherwise dispose of all or any
of the shares of Ascend Common Stock or other securities acquired by it
pursuant to the Ascend Option, it shall give Ascend written notice of the
proposed transaction (a "Cascade Offer Notice"), identifying the proposed
transferee, accompanied by a copy of a binding offer to purchase such
shares or other securities signed by such transferee and setting forth the
terms of the proposed transaction. A Cascade Offer Notice shall be deemed
an offer by Cascade to Ascend, which may be accepted within five (5)
business days of the receipt of such Cascade Offer Notice, on the same
terms and conditions and at the same price at which Cascade is proposing to
transfer such shares or other securities to such transferee. The purchase
of any such shares or other securities by Ascend shall be settled within
five (5) business days of the date of the acceptance of the offer and the
purchase price shall be paid to Cascade in immediately available funds. In
the event of the failure or refusal of Ascend to purchase all the shares or
other securities covered by a Cascade Offer Notice, Cascade may sell all,
but not less than all, of such shares or other securities to the proposed
transferee at no less than the price specified and on terms no more
favorable to the transferee than those set forth in the Cascade Offer
Notice as long as such sale is completed within ninety (90) days of the
receipt by Ascend of the applicable Cascade Offer Notice; provided that the
provisions of this sentence shall not limit the rights Cascade may
otherwise have in the event Ascend has accepted the offer contained in the
Cascade Offer Notice and wrongfully refuses to purchase the shares or other
securities subject thereto. The requirements of this Section 8(c) shall not
apply to (i) any disposition as a result of which the proposed transferee
would own beneficially not more than three percent (3%) of the outstanding
voting power of Ascend, (ii) any disposition of Ascend Common Stock or
other securities by a person to whom Cascade has assigned its rights under
the Ascend Option with the consent of Ascend, (iii) any sale by means of a
public offering registered under the Securities Act, or (iv) any transfer
to a wholly-owned subsidiary of Cascade which agrees in writing to be bound
by the terms hereof.
(d) Cascade's Right of First Refusal. At any time after the first
occurrence of a Trigger Event and prior to the Expiration Date, if Ascend
shall desire to sell, assign, transfer or otherwise dispose of all or any
of the shares of Cascade Common Stock or other securities acquired by it
pursuant to a Stock Exercise of the Ascend Option by Cascade, it shall give
Cascade written notice of the proposed transaction (a "Ascend Offer
Notice"), identifying the proposed transferee, accompanied by a copy of a
binding offer to purchase such shares or other securities signed by such
transferee and setting forth the terms of the proposed transaction. An
Ascend Offer Notice shall be deemed an offer by Ascend to Cascade, which
may be accepted within five (5) business days of the receipt of such Ascend
Offer Notice, on the same terms and conditions and at the same price at
which Ascend is proposing to transfer such shares or other securities to
such transferee. The purchase of any such shares or other securities by
Cascade shall be settled within five (5) business days of the date of the
acceptance of the offer and the purchase price shall be paid to Ascend in
immediately available funds. In the event of the failure or refusal of
Cascade to purchase all the shares or other securities covered by a Ascend
Offer Notice, Ascend may sell all, but not less than all, of such shares or
other securities to the proposed transferee at no less than the price
specified and on terms no more favorable to the transferee than those set
forth in the Ascend Offer Notice as long as such sale is completed within
ninety (90) days of the receipt by Cascade of the applicable Ascend Offer
Notice; provided that the
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provisions of this sentence shall not limit the rights Ascend may otherwise
have in the event Cascade has accepted the offer contained in the Ascend
Offer Notice and wrongfully refuses to purchase the shares or other
securities subject thereto. The requirements of this Section 8(d) shall not
apply to (i) any disposition as a result of which the proposed transferee
would own beneficially not more than three percent (3%) of the outstanding
voting power of Cascade, (ii) any sale by means of a public offering
registered under the Securities Act, or (iii) any transfer to a wholly-
owned subsidiary of Ascend which agrees in writing to be bound by the terms
hereof.
(e) Additional Restrictions. Prior to any permitted sales of any
Restricted Shares under Section 8(b)(ii), the holder thereof shall give
written notice to the issuer of such Restricted Shares of its intention to
effect such transfer. Each such notice shall describe the manner of the
proposed transfer and, if requested by the issuer of such Restricted
Shares, shall be accompanied by an opinion of counsel satisfactory to such
issuer (it being agreed that each of Xxxx Xxxx Xxxx & Freidenrich and
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP shall be satisfactory) to the effect that
such sale may be effected without registration under the Securities Act and
any applicable state securities laws. Each certificate for Restricted
Shares transferred as above provided shall bear the legend set forth in
Section 11, except that such certificate shall not bear such legend if (i)
such transfer is in accordance with the provisions of Rule 144 (or any
other rule permitting public sale without registration under the Securities
Act) or (ii) the opinion of counsel referred to above is to the further
effect that the transferee and any subsequent transferee would be entitled
to transfer such securities in a public sale without registration under the
Securities Act and any applicable state securities laws. The restrictions
provided for in this Section 8(e) shall not apply to securities which are
not required to bear the legend prescribed by Section 11 in accordance with
the provisions of this Agreement. The foregoing restrictions on
transferability shall terminate as to any particular shares when such
shares shall have been effectively registered under the Securities Act and
any applicable state securities laws and sold or otherwise disposed of in
accordance with the registration statement covering such shares.
Section 9. Registration Rights.
(a) Procedure. Following the termination of the Merger Agreement, either
party hereto that owns Restricted Shares (a "Holder") may by written notice
(the "Registration Notice") to the other party (the "Registrant") request
the Registrant to register under the Securities Act all or any part of the
Restricted Shares acquired by such Holder pursuant to this Agreement (the
"Registrable Securities") in order to permit the sale or other disposition
of such shares pursuant to a bona fide firm commitment underwritten public
offering, in which the Holder and the underwriters shall effect as wide a
distribution of such Registrable Securities as is reasonably practicable
and shall use their best efforts to prevent any person (including any
"group" as used in Rule 13d-5 under the Exchange Act)) and its affiliates
from purchasing through such offering Restricted Shares representing more
than three percent (3%) of the outstanding shares of common stock of the
Registrant on a fully diluted basis (a "Permitted Offering"). Any rights to
require registration hereunder shall terminate with respect to any shares
that may be sold pursuant to Rule 144(k) under the Securities Act.
(b) Manager's Certificate. The managing underwriter shall be an
investment banking firm of nationally recognized standing, and shall be
selected by (i) the Registrant within ten (10) business days after receipt
of a Registration Notice, subject to approval of the Holder (which approval
shall not be unreasonably withheld, delayed or conditioned), or (ii) if
Registrant fails to deliver notice (the "Registrant's Designation Notice")
to Holder of such selection within ten (10) business days after receipt of
a Registration Notice, then by Holder subject to the reasonable approval of
Registrant (which approval shall not be unreasonably withheld, delayed or
conditioned) (the "Manager"), and Holder shall deliver written notice (the
"Holder's Designation Notice") of such selection within ten (10) business
days after expiration of the ten (10) day period in which Registrant is
entitled to give notice. The Registrant's Designation Notice or the
Holder's Designation Notice, as the case may be, shall state that (i) the
party delivering such notice and its proposed Manager have a good faith
intention to commence promptly a Permitted Offering, and (ii) such proposed
Manager in good faith believes that, based on the then-prevailing market
conditions, it will be able to sell the Registrable Securities to the
public in a Permitted Offering within one hundred twenty (120) days at a
per share price equal to at least eighty percent (80%) of the then Fair
Market Value of such shares.
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(c) First Refusal Right. The Registrant (and/or any person designated by
the Registrant) shall thereupon have the option exercisable by written
notice delivered to the Holder within five (5) business days after the
receipt of the Registration Notice, irrevocably to agree to purchase all or
any part of the Registrable Securities proposed to be so sold for cash at a
price equal to the product of (i) the number of Registrable Securities to
be so purchased by the Registrant and (ii) the then Fair Market Value of
such shares.
(d) Closing. Any purchase of Registrable Securities by the Registrant (or
its designee) under Section 9(c) shall take place at a closing to be held
at the principal executive offices of the Registrant or at the offices of
its counsel at any reasonable date and time designated by the Registrant
and/or such designee in such notice within twenty (20) business days after
delivery of such notice, and any payment for the shares to be so purchased
shall be made by delivery at the time of such closing in immediately
available funds.
(e) Certain Limitations. If the Registrant does not elect to exercise its
option pursuant to Section 9(c) with respect to all Registrable Securities,
it shall use its best efforts to effect, as promptly as practicable, the
registration under the Securities Act of the unpurchased Registrable
Securities proposed to be so sold; provided, however, that (i) neither
party shall be entitled to demand more than an aggregate of two (2)
effective registration statements hereunder, and (ii) the Registrant will
not be required to file any such registration statement during any period
of time (not to exceed sixty (60) days after such request in the case of
clause (A) below or ninety (90) days after such request in the case of
clauses (B) and (C) below) when (A) the Registrant is in possession of
material non-public information which it reasonably believes would be
detrimental to be disclosed at such time and, in the opinion of counsel to
the Registrant, such information would be required to be disclosed if a
registration statement were filed at that time; (B) the Registrant is
required under the Securities Act to include audited financial statements
for any period in such registration statement and such financial statements
are not yet available for inclusion in such registration statement; or (C)
the Registrant determines, in its reasonable judgment, that such
registration would interfere with any financing, acquisition or other
transaction involving the Registrant or any of its material subsidiaries
and that such transaction is material to the Registrant and its
subsidiaries taken as a whole. If consummation of the sale of any
Registrable Securities pursuant to a registration hereunder does not occur
within one hundred twenty (120) days after the effectiveness of the initial
registration statement, the provisions of this Section 9 shall again be
applicable to any proposed registration.
(f) State Securities Laws. The Registrant shall use its reasonable best
efforts to cause any Registrable Securities registered pursuant to this
Section 9 to be qualified for sale under the securities laws of such states
as the Holder may reasonably request and shall continue such registration
or qualification in effect in such jurisdiction; provided, however, that
the Registrant shall not be required to qualify to do business in, or
consent to general service of process in, any jurisdiction by reason of
this provision.
(g) Obligations of Registrant. The Registrant shall provide to the
underwriters such documentation (including certificates, opinions of
counsel and "comfort" letters from auditors) as is customary in connection
with underwritten public offerings as such underwriters may reasonably
require. The registration rights set forth in this Section 9 are subject to
the condition that the Holder shall provide the Registrant with such
information with respect to its Registrable Securities, the plans for the
distribution thereof, and such other information with respect to the Holder
as, in the reasonable judgment of counsel for the Registrant, is necessary
to enable the Registrant to include in such registration statement all
material facts required to be disclosed with respect to a registration
thereunder.
(h) Indemnification. In connection with any registration effected under
this Section 9, the parties agree (i) to indemnify each other and the
underwriters in the customary manner, (ii) to enter into an underwriting
agreement in form and substance customary for transactions of such type
with the Manager and the other underwriters participating in such offering,
and (iii) to take all further actions which shall be reasonably necessary
to effect such registration and sale (including, if the Manager deems it
necessary, participating in road-show presentations).
(i) Inclusion of Additional Shares of Registrant. The Registrant shall be
entitled to include (at its expense) additional shares of its common stock
in a registration effected pursuant to this Section 10 only if
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and to the extent the Manager determines that such inclusion will not
adversely affect the prospects for success of such offering.
Section 10. Adjustment Upon Changes in Capitalization.
(a) Without limiting any restriction on Ascend contained in this
Agreement or in the Merger Agreement, in the event of any change in Ascend
Common Stock by reason of any stock dividend, stock split, merger (other
than the Merger), recapitalization, combination, exchange of shares or any
similar transaction, the type and number of shares or securities subject to
the Ascend Option, and the Exercise Price per share provided herein, shall
be adjusted appropriately and proper provision shall be made in the
agreements governing such transaction so that Cascade shall receive, upon
exercise of the Ascend Option, the number and class of securities or
property that Cascade would have received in respect of the shares of
Ascend Common Stock issuable to Cascade if the Ascend Option had been
exercised immediately prior to such event or the record date therefor, as
applicable. In addition, without limiting any restriction on Ascend or
Cascade contained in this Agreement or the Merger Agreement, in the event
of any change in Ascend Common Stock or Cascade Common Stock by reason of
any stock dividend, stock split, merger (other than the Merger)
recapitalization, combination, exchange of shares or any similar
transaction, equitable adjustment shall be made to the other provisions
hereof to carry out the original intent of this Agreement.
(b) In the event that Ascend shall enter into an agreement: (i) to
consolidate with or merge into any person, other than Cascade or one of its
subsidiaries, and shall not be the continuing or surviving corporation of
such consolidation or merger; (ii) to permit any person, other than Cascade
or one of its Subsidiaries, to merge into Ascend and Ascend shall be the
continuing or surviving corporation, but, in connection with such merger,
the then-outstanding shares of Ascend Common Stock shall be changed into or
exchanged for stock or other securities of Ascend or any other person or
cash or any other property; or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than Cascade or one of
its Subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provision so that upon the consummation of
such transaction and upon the subsequent exercise of the Ascend Option,
Cascade shall be entitled to receive, for each share of Ascend Common Stock
with respect to which the Ascend Option has not theretofore been exercised,
an amount of consideration in the form of and equal to the per share amount
of consideration that would be received by the holder of one share of
Ascend Common Stock (and, in the event of an election or similar
arrangement with respect to the type of consideration to be received by the
holders of Ascend Common Stock, subject to the foregoing, proper provision
shall be made so that the holder of the Ascend Option would have the same
election or similar rights as would the holder of the number of shares of
Ascend Common Stock for which the Ascend Option is then exercisable).
Section 11. Restrictive Legends. Each certificate representing shares of
Ascend Common Stock issued to Cascade hereunder, and shares of Cascade Common
Stock, if any, delivered to Ascend pursuant to a Stock Exercise, shall include
a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES OR
BLUE SKY LAWS, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO
SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE ASCEND
STOCK OPTION AGREEMENT DATED AS OF MARCH 30, 1997, A COPY OF WHICH MAY BE
OBTAINED FROM THE ISSUER UPON REQUEST.
It is understood and agreed that (i) the reference to the resale
restrictions of the Securities Act and state securities or Blue Sky laws in
the foregoing legend shall be removed by delivery of substitute certificate(s)
without such reference if Cascade or Ascend, as the case may be, shall have
delivered to the other party a copy of a letter from the staff of the
Securities and Exchange Commission, or an opinion of counsel, in form and
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substance reasonably satisfactory to the other party, to the effect that such
legend is not required for purposes of the Securities Act or such laws; (ii)
the reference to the provisions of this Agreement in the foregoing legend
shall be removed by delivery of substitute certificate(s) without such
reference if the shares have been sold or transferred in compliance with the
provisions of this Agreement and under circumstances that do not require the
retention of such reference; and (iii) the legend shall be removed in its
entirety if the conditions in the preceding clauses (i) and (ii) are both
satisfied. In addition, such certificates shall bear any other legend as may
be required by law. Certificates representing shares sold in a registered
public offering pursuant to Section 9 shall not be required to bear the legend
set forth in this Section 11.
Section 12. Binding Effect; No Assignment; No Third-Party
Beneficiaries. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
Except as expressly provided for in this Agreement, neither this Agreement nor
the rights or obligations of either party hereto are assignable, except by
operation of law, or with the written consent of the other party, and any such
attempted assignment in violation of this Agreement shall be void and of no
force or effect. Nothing contained in this Agreement, express or implied, is
intended to confer upon any person other than the parties hereto and their
respective permitted assigns any rights or remedies of any nature whatsoever.
Any Restricted Shares sold by a party in compliance with the provisions of
Section 9 shall, upon consummation of such sale, be free of the restrictions
imposed and the benefits provided with respect to such shares by this
Agreement.
Section 13. Specific Performance. The parties hereto recognize and agree
that if for any reason any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise breached,
immediate and irreparable harm or injury would be caused for which money
damages would not be an adequate remedy. Accordingly, each party agrees that,
in addition to other remedies, whether at law or in equity, the other party
shall be entitled to an injunction to prevent or restrain any violation or
threatened violation of the provisions of this Agreement, and to enforce
specifically the terms and provisions hereof, in any court of the State of
Delaware or of the United States of America located in the State of Delaware.
In the event that any action should be brought in equity to enforce the
provisions of this Agreement, neither party will allege, and each party hereby
waives the defense, that there is an adequate remedy at law. Each party hereto
irrevocably and unconditionally consents and submits to the jurisdiction of
the courts of the State of Delaware and of the United States of America
located in the City of Wilmington in the State of Delaware for any actions,
suits or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby, and waives any objection to venue in any
such court therein.
Section 14. Validity.
(a) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of the other provisions of
this Agreement, which shall remain in full force and effect.
(b) In the event any court or other governmental or regulatory authority
holds any provisions of this Agreement to be null, void or unenforceable,
the parties hereto shall negotiate in good faith the execution and delivery
of an amendment to this Agreement in order, as nearly as possible, to
effectuate, to the extent permitted by law, the intent of the parties
hereto with respect to such provision and the economic effects thereof.
(c) If for any reason any such court or other governmental or regulatory
authority determines that Cascade is not permitted to acquire, or Ascend is
not permitted to repurchase pursuant to Section 7, the full number of
shares of Ascend Common Stock provided in this Agreement (as the same may
be adjusted), it is the express intention of Ascend to allow Cascade to
acquire or to require Ascend to repurchase such lesser number of shares as
may be permissible without any other amendment or modification hereof.
(d) Each party agrees that, should any court or other governmental or
regulatory authority hold any provision of this Agreement or part hereof to
be null, void or unenforceable, or order any party to take any action
inconsistent herewith, or not take any action required herein, the other
party shall not be entitled to specific performance of such provision or
part hereof or to any other remedy, including but not limited to money
damages, for breach hereof or of any other provision of this Agreement or
part hereof as the result of such holding or order.
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Section 15. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if (a) delivered personally, or (b) if
sent by overnight courier service (receipt confirmed in writing), or (c) if
delivered by facsimile transmission (with receipt confirmed), or (d) five (5)
days after being mailed by registered or certified mail (return receipt
requested) to the parties in each case to the following addresses (or at such
other address for a party as shall be specified by like notice):
If to Ascend, to:
Ascend Communications, Inc.
One Ascend Plaza
0000 Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: President
with a copy to:
Xxxx Xxxx Xxxx & Freidenrich
A Professional Corporation
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq. &
Xxx X. Xxxxxx, Esq.
If to Cascade, to:
Cascade Communications Corp.
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile No.: (508) 692-1221
Attention: President and Corporate Counsel
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Fax Number: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Section 16. Governing Law. This Agreement shall be governed by and
construed, and any controversy arising out of or otherwise relating to this
Agreement shall be determined, in accordance with the laws of the State of
Delaware applicable to agreements made and to be performed entirely within
such State and without regard to its choice of law principles. Each party
hereto consents and submits to the exclusive jurisdiction of the courts of the
State of Delaware and the courts of the United States located in such state
for the adjudication of any action, suit, proceeding, claim or dispute arising
out of or otherwise relating to this Agreement.
Section 17. Interpretation. The headings contained in this Agreement are for
reference purposes and shall not affect in any way the meaning or
interpretation of the Agreement. When reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement, unless
otherwise indicated. Whenever the words "include," "includes," or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation." Whenever "or" is used in this Agreement it shall be
construed in the nonexclusive sense. The words "herein," "hereby," "hereof,"
"hereto," "hereunder" and words of similar import refer to this Agreement.
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Section 18. Counterparts; Effect. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
Section 19. Expenses. Ascend shall pay all expenses, and any and all
federal, state and local taxes and other charges, that may be payable in
connection with the preparation, issuance and delivery of Ascend stock
certificates under Section 4 and any stock listing or stock quotation
application required to be filed by Ascend with respect to such shares, and
Cascade shall pay all expenses, and any and all federal, state and local taxes
and other charges, that may be payable in connection with the preparation,
issuance and delivery of Cascade stock certificates in connection with a Stock
Exercise and any stock listing or stock quotation application required to be
filed by Ascend with respect to such shares. A registration effected under
Section 9 shall be effected at the Registrant's expense, except for
underwriting discounts and commissions and the fees and the expenses of
counsel to the Holder. Subject to the foregoing, and except as otherwise
expressly provided herein or in the Merger Agreement, all other costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.
Section 20. Amendments; Waiver. This Agreement may be amended by the parties
hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of
a waiver, by an instrument signed on behalf of the party waiving compliance.
Section 21. Extension of Time Periods. The time periods for exercises of
certain rights hereunder shall be extended (but in no event by more than six
(6) months): (a) to the extent necessary to obtain all governmental approvals
for the exercise of such rights, and for the expiration of all statutory
waiting periods; and (b) to the extent necessary to avoid any liability or
disgorgement of profits under Section 16(b) of the Exchange Act by reason of
such exercise.
Section 22. Further Assurances. Each party agrees to execute and deliver all
such further documents and instruments and take all such further action as may
be necessary in order to consummate the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first
above written.
Ascend Communications, Inc.
By: /s/ XXXXXX X. XXXX
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President, Finance and
Chief Financial Officer
Cascade Communications Corp.
By: /s/ XXXXXX X. XXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
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