EXHIBIT 1
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CASCADE STOCK OPTION AGREEMENT
BY AND BETWEEN
CASCADE COMMUNICATIONS CORP.,
A DELAWARE CORPORATION,
AND
ASCEND COMMUNICATIONS, INC.,
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................................................... 2(e)
Ascend Offer Notice................................................... 8(c)
Cash Exercise......................................................... 2(e)
Cash Exercise Price................................................... 2(e)
Cascade............................................................... Preamble
Cascade Charter....................................................... 2(b)
Cascade Common Stock.................................................. Recitals
Cascade Offer Notice.................................................. 8(d)
Cascade Option........................................................ 1
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 Cascade Option.............. B-1
(a) Exercise.................................................... B-1
(b) Exercise Procedure.......................................... B-1
(c) Termination of the Cascade 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 Cascade................... B-3
(a) Organization and Standing................................... B-3
(b) Authority................................................... B-3
(c) Reservation of Shares....................................... B-4
(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 Ascend.................... 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) Ascend "Put"................................................ B-5
(b) Certain Definitions......................................... B-6
(c) Redelivery of Shares of Ascend Common Stock................. B-6
(d) Payment and Redelivery of Cascade Options or Shares......... B-6
(e) Repurchase Price Reduced at Ascend's Option................. B-6
Section 8. Restrictions on Transfer.................................... B-6
(a) Restrictions on Transfer.................................... B-6
(b) Permitted Sales............................................. B-7
(c) Cascade's Right of First Refusal............................ B-7
(d) Ascend'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-10
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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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CASCADE STOCK OPTION AGREEMENT
THIS CASCADE STOCK OPTION AGREEMENT (the "Agreement") is made and entered
into as of March 30, 1997 by and between Cascade Communications Corp., a
Delaware corporation ("Cascade"), and Ascend Communications, Inc., a Delaware
corporation ("Ascend").
Recitals
Concurrently with the execution and delivery of this Agreement, Cascade,
Ascend, and Catskill 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 Ascend's willingness to enter into
the Merger Agreement, Ascend has requested that Cascade agree, and Cascade has
agreed, to grant to Ascend an option to acquire certain shares of Cascade's
authorized but unissued common stock, par value $.001 per share (together with
any associated rights, "Cascade Common Stock"), on the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, to induce Ascend 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. Cascade hereby grants to Ascend an irrevocable
option (the "Cascade Option") to purchase a number of shares of Cascade 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 Cascade Option.
(a) Exercise. The Cascade Option may be exercised by Ascend, in whole or in
part, at any time or from time to time prior to the termination of Ascend's
right to exercise the Cascade Option by the terms of this Agreement and upon and
after the occurrence of the earliest event which causes (i) the Cascade
Termination Fee or (ii) the Cascade Post-Termination Fee (in each case as
defined in the Merger Agreement) to become payable (a "Trigger Event").
Notwithstanding the foregoing, the Cascade Option may not be exercised if Ascend
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 Ascend wishes to exercise the
Cascade Option, Ascend shall deliver to Cascade written notice (an "Exercise
Notice") specifying the total number of shares of Cascade Common Stock that
Ascend wishes to purchase. To the extent permitted by law and the Certificate
of Incorporation, as amended, of Cascade (the "Cascade Charter"), and provided
that the conditions set forth in Section 3 to Cascade's obligation to issue
the shares of Cascade Common Stock to Ascend hereunder have been satisfied or
waived, Ascend 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 Cascade Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Cascade shall then be closed
or that certificates representing such shares of Cascade Common Stock shall
not theretofore have been delivered to Ascend. Each closing of a purchase of
shares of Cascade Common Stock hereunder (a "Closing") shall occur at a place,
on a date, and at a time designated by Ascend 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 Cascade Option. Ascend's right to exercise the
Cascade 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 Cascade 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 Cascade 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 Cascade 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 Cascade Option cannot be exercised by reason of any
applicable judicial or governmental judgment, decree, order, law or regulation,
the Cascade 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 Cascade 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
Cascade, and such judgment, decree or order is vacated, set aside, withdrawn,
reversed or otherwise nullified, the time during which the Cascade Option shall
remain exercisable shall be extended for as long as such judgment, decree, or
order shall be in effect. The rights of Ascend set forth in Sections 7 and 9
shall not terminate upon termination of Ascend's right to exercise the Cascade
Option with respect to shares acquired prior to such termination, but shall
extend to the time provided in such sections. Notwithstanding the termination of
the Cascade Option, Ascend shall be entitled to purchase the shares of Cascade
Common Stock with respect to which Ascend had exercised the Cascade Option prior
to such termination.
(d) Option Number. The aggregate number of shares of Cascade Common Stock
issuable upon exercise of this Cascade 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 Cascade Common Stock issued and outstanding as of the date of this
Agreement, and shall be adjusted hereafter to reflect changes in Cascade'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 Cascade 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 Cascade Common Stock
pursuant to the Cascade Option (the "Exercise Price") shall be payable, at
Ascend's election, in cash (a "Cash Exercise") or in shares (a "Stock
Exercise") of Ascend common stock, $.001 par value per share ("Ascend Common
Stock"). The Exercise Price per share of Cascade Common Stock, (i) in the case
of a Cash Exercise, shall be a cash amount equal to $36.40 (the "Cash Exercise
Price"), and (ii) in the case of a Stock Exercise, shall be seven tenths (.7) of
a share of Ascend Common Stock (the "Stock Exercise Price").
(f) Certain Limitations. In the event Ascend 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 Cascade Common Stock acquired pursuant to the
Cascade Option (other than a sale of such shares pursuant to Section 7), all
Net Proceeds in excess of such amount shall be remitted to Cascade 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 Cascade Common
B-2
Stock included in such sale or disposition. Notwithstanding anything in this
Agreement or in the Merger Agreement to the contrary, the maximum aggregate
amount payable by Cascade to Ascend and its affiliates pursuant to Section 7
of this Agreement and the provisions of Section 8.3(b) 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 Cascade Common Stock
repurchased by Cascade from Ascend pursuant to Section 7 of this Agreement, it
being understood that the limitation contained in this sentence shall not
limit the amounts receivable by Ascend from persons other than Cascade,
including without limitation amounts receivable pursuant to a tender offer or
other purchase and sale transaction.
Section 3. Conditions to Closing. The obligation of Cascade to issue the
shares of Cascade Common Stock to Ascend 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 Cascade Common Stock by Cascade and the
acquisition of such shares by Ascend hereunder (and, in the case of a Stock
Exercise, the issuance of shares of Ascend Common Stock by Ascend and the
acquisition of such shares by Cascade) 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 Cascade Common Stock and the acquisition of such shares by
Ascend hereunder (and, in the case of a Stock Exercise, the issuance of shares
of Ascend Common Stock and the acquisition of such shares by Cascade) shall
have been obtained.
Section 4. Closing. At any Closing: (a) Cascade shall deliver to Ascend or
its designee a single certificate in definitive form representing the number
of shares of Cascade Common Stock designated by Ascend in its Exercise Notice,
such certificate to be registered in the name of Ascend and to bear the legend
set forth in Section 11; and (b) Ascend shall deliver to Cascade the aggregate
Exercise Price for the shares of Cascade Common Stock so designated and being
purchased by (i) wire transfer of immediately available funds to the account
or accounts specified in writing by Cascade (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 Ascend Common
Stock being issued by Ascend in consideration thereof (in the case of a Stock
Exercise). Effective at or prior to the Closing, Cascade shall cause the
shares of Cascade Common Stock being delivered at the Closing to be approved
for quotation on The Nasdaq National Market, and Ascend shall cause the shares
of Ascend 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 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. 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 Cascade 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 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 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 therefor may be brought.
B-3
(c) Reservation of Shares. Cascade has taken all necessary corporate
action to authorize and reserve for issuance and to permit it to issue,
upon exercise of the Cascade Option, and at all times from the date hereof
through the expiration of the Cascade Option will have reserved, a number
of authorized and unissued shares of Cascade 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 Cascade Common Stock issued to Ascend upon
the exercise of the Cascade Option 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, subject to compliance with applicable law, the consummation
by Cascade 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 Cascade
or any of its Subsidiaries of (i) any provision of the charter or the
Bylaws of Cascade 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 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 5(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 Cascade 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 Ascend Common Stock acquired by
Cascade pursuant to this Agreement will be acquired for Cascade's own
account, for investment purposes only, and will not be acquired by Cascade
with a view to the public distribution thereof in violation of any
applicable provision of the Securities Act.
Section 6. 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. Except as set forth in Section 6(c), 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 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
B-4
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 may be
brought.
(c) Reservation of Shares. Prior to any delivery of shares of Ascend
Common Stock in consideration of the purchase of shares of Cascade Common
Stock pursuant hereto, Ascend will have taken all necessary corporate
action to authorize for issuance and to permit it to issue such shares of
Ascend 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 Ascend Common Stock (if any) issued to
Cascade in consideration of the purchase of shares of Cascade Common Stock
pursuant hereto 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 the consummation by Ascend of the transactions contemplated
hereby will not, violate, conflict with, or result in a Violation by Ascend
or any of its Subsidiaries, of (i) any provision of the Certificate of
Incorporation or Bylaws of Ascend, (ii) any material provision of any
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 6(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 Purpose. Any shares of Cascade Common Stock acquired by
Ascend upon exercise of the Cascade Option will be acquired for Ascend's
own account, for investment purposes only and will not be, and the Cascade
Option is not being, acquired by Ascend with a view to the public
distribution thereof in violation of any applicable provision of the
Securities Act.
Section 7. Certain Repurchases.
(a) Ascend "Put". At any time during which the Cascade Option is exercisable
pursuant to Section 2 (the "Purchase Period"), upon written notice to Cascade
by Ascend (the "Repurchase Notice"):
(i) Cascade and its successors in interest shall repurchase from Ascend
all or any portion of the Cascade Option, as specified by Ascend, 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) Cascade and its successors in interest shall repurchase from Ascend
all or any portion of the shares of Cascade Common Stock purchased by
Ascend pursuant to the Cascade Option, as specified by Ascend, at the Share
Repurchase Price set forth in Section 7(b)(ii) subject to and as limited by
Section 2(f) above.
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(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 Cascade Common Stock as of the date of the
applicable Repurchase Notice exceeds the per share Exercise Price,
multiplied by (B) the number of shares of Cascade Common Stock purchasable
pursuant to the Cascade 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 Ascend per
share of Cascade Common Stock acquired pursuant to the Cascade Option and
(II) the Fair Market Value (as defined in Section 7(b)(iii)) of a single
share of Cascade Common Stock as of the date of the applicable Repurchase
Notice, and (B) the number of shares of Cascade 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 Ascend Common Stock. In Cascade's discretion or
if specified by Ascend in the Repurchase Notice, all or a portion of the Share
Repurchase Price shall be paid by Cascade in shares of Ascend Common Stock, by
redelivery to Ascend of the shares of Ascend Common Stock (and the
certificate(s) representing such shares) previously delivered by Ascend to
Cascade pursuant to a Stock Exercise. For purposes of this Section 7(c), each
share of Ascend Common Stock redelivered to Ascend shall be valued at and
exchanged for 1.428 shares of Cascade Common Stock. If fewer than all of the
shares of Cascade Common Stock purchased by Ascend pursuant to a Stock
Exercise are to be repurchased by Cascade pursuant to Section 7(a)(ii), Ascend
shall issue to Cascade new certificates representing those shares of Ascend
Common Stock which are not due to be redelivered to Ascend pursuant to this
Section 7(c) to the extent that excess shares of Ascend Common Stock are
included in the certificates redelivered to Ascend by Cascade. All shares of
Ascend Common Stock redelivered to Ascend hereunder shall be free and clear of
all claims, liens, charges, encumbrances and security interests of any nature
whatsoever.
(d) Payment and Redelivery of Cascade Options or Shares. In the event that
Ascend exercises its rights under Section 7(a), Cascade shall, within ten (10)
business days thereafter, pay the required amount to Ascend in immediately
available funds (or shares of Ascend Common Stock, if applicable) and Ascend
shall surrender to Cascade the Cascade Option or the certificate or
certificates evidencing the shares of Cascade Common Stock purchased by Ascend
pursuant hereto, and Ascend shall warrant that it has sole beneficial
ownership of the Cascade Option or such shares and that the Cascade 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 Ascend's Option. In the event that payment
of the repurchase price specified in Section 7(a) would subject the repurchase
of the Cascade Option or the shares of Cascade Common Stock purchased by
Ascend pursuant to the Cascade Option to a vote of the stockholders of Cascade
pursuant to applicable law, regulations, or requirements of a national
securities exchange or national market system or the Cascade Charter, then
Ascend may, at its election, reduce the repurchase price or the number of
shares covered by the Ascend 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 Ascend Common Stock
issued pursuant to a Stock Exercise ("Restricted
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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.
(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) 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 the
Cascade Option, it shall give Cascade written notice of the proposed
transaction (an "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 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(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 Cascade, (ii) any disposition of Cascade Common
Stock or other securities by a person to whom Ascend has assigned its rights
under the Cascade Option with the consent of Cascade, (iii) any sale by means
of a public offering registered under the Securities Act, or (iv) any transfer
to a wholly-owned subsidiary of Ascend which agrees in writing to be bound by
the terms hereof.
(d) 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 a Stock
Exercise of the Cascade Option by Ascend, 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
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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(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 Ascend, (ii) any sale by means of a public offering registered under the
Securities Act, or (iii) any transfer to a wholly-owned subsidiary of Cascade
which agrees in writing to be bound by the terms hereof.
(e) Additional Restrictions. Prior to any permitted sales of any Restricted
Shares under of 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, A Professional Corporation,
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
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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.
(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
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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 9 only if 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 Cascade contained in this Agreement
or in the Merger Agreement, in the event of any change in 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,
the type and number of shares or securities subject to the Cascade 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 Ascend shall receive, upon exercise of the Cascade Option,
the number and class of securities or property that Ascend would have received
in respect of the shares of Cascade Common Stock issuable to Ascend if the
Cascade 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 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 Cascade shall enter into an agreement: (i) to
consolidate with or merge into any person, other than Ascend 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 Ascend or one
of its Subsidiaries, to merge into Cascade and Cascade shall be the continuing
or surviving corporation, but, in connection with such merger, the then-
outstanding shares of Cascade Common Stock shall be changed into or exchanged
for stock or other securities of Cascade 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 Ascend 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 Cascade Option, Ascend shall be entitled
to receive, for each share of Cascade Common Stock with respect to which the
Cascade 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 Cascade 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 Cascade Common Stock, subject
to the foregoing, proper provision shall be made so that the holder of the
Cascade Option would have the same election or similar rights as would the
holder of the number of shares of Cascade Common Stock for which the Cascade
Option is then exercisable).
Section 11. Restrictive Legends. Each certificate representing shares of
Cascade Common Stock issued to Ascend hereunder, and shares of Ascend Common
Stock, if any, delivered to Cascade 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 CASCADE
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
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reference if Ascend or Cascade, 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 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 Ascend is not permitted to acquire, or Cascade is
not permitted to repurchase pursuant to Section 7, the full number of shares
of Cascade Common Stock provided in this Agreement (as the same may be
adjusted), it is the express intention of Cascade to allow Ascend to acquire
or to require Cascade 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
B-11
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.
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 Cascade, to:
Cascade Communications Corp.
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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.
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
Fax Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq. &
Xxx X. Xxxxxx, 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
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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.
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. 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 under Section 4 and any stock listing or stock quotation
application required to be filed by Cascade with respect to such shares, and
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 in connection with a Stock
Exercise and any stock listing or stock quotation application required to be
filed by Cascade 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.
[Remainder of Page Intentionally Left Blank]
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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.
Cascade Communications Corp.
By: /s/ XXXXXX X. XXXXX
_________________________________
Name: Xxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
Ascend Communications, Inc.
By: /s/ XXXXXX X. XXXX
_________________________________
Name: Xxxxxx X. Xxxx
Title: Vice President, Finance,
and Chief Financial Officer
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