EXHIBIT 4.2
REGISTRATION AND OPTION STOCK TRADING AGREEMENT
This Registration and Option Stock Trading Agreement (the "Agreement") is
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made and entered into as of February 7, 1997 by and between Ascend
Communications, Inc., a Delaware corporation ("Ascend"), and the former holder
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of common stock or options to acquire common stock of StonyBrook Services, Inc.,
a New York corporation ("StonyBrook"), named on the signature page hereto (the
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"Holder").
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Recitals
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WHEREAS, StonyBrook and Ascend have heretofore entered into an Agreement
and Plan of Merger dated as of December 26, 1996 (the "Merger Agreement"), by
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and among Ascend, StonyBrook and Ascend Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Ascend ("Sub");
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WHEREAS, the shares of common stock of StonyBrook ("StonyBrook Common
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Stock") outstanding at the Effective Time of the Merger have been converted into
the right to receive shares of common stock of Ascend ("Ascend Common Stock"),
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and the options to acquire StonyBrook Common Stock ("StonyBrook Options")
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outstanding as of the Effective Time have been assumed by Ascend and converted
into options to acquire Ascend Common Stock (the "Assumed Options");
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WHEREAS, the shares of Ascend Common Stock issuable in the Merger or upon
exercise of the Assumed Options have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), in reliance upon the exemption
from registration contained in Section 4(2) of and/or Regulation D under the
Securities Act;
WHEREAS, the Merger Agreement and the Declaration of Registration Rights
set forth in Annex 6.12 thereto (the "Registration Rights Declaration") granted
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certain registration rights to Holder;
WHEREAS, Holder must provide to Ascend certain information necessary for
the preparation of the Registration Statement and must guarantee the accuracy
and completeness of such information;
NOW THEREFORE, in consideration of the foregoing, and the representations,
warranties, covenants, agreements and other provisions herein, the parties
hereto agree as set forth below:
Agreement
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Section 1. Definitions. As used in this Agreement:
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(a) "Affiliate" means each person or party deemed to be an "affiliate"
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for purposes of paragraphs (c) and (d) of Rule 145 of the SEC, although nothing
contained herein shall be construed as an admission by such Affiliate that such
Affiliate is in fact an "affiliate" of StonyBrook for purposes of Rule 145.
(b) "Escrow Shares" has the meaning ascribed to such term in the
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Merger Agreement.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
(d) "Form S-3" means Form S-3 or such other form under the Securities
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Act as in effect on the date hereof or any registration form under the
Securities Act subsequently adopted by the SEC which similarly permits inclusion
or incorporation of substantial information by reference to other documents
filed by Ascend with the SEC.
(e) "Governmental Entity" means any (i) nation, state, commonwealth,
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province, territory, county, municipality, district or other jurisdiction of any
nature; (ii) federal, state, local, municipal, foreign or other government; or
(iii) governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, official, organization,
and any court or other tribunal).
(f) "NASD" means the National Association of Securities Dealers.
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(g) "Sale Equivalent Transaction" means any sale, exchange, transfer
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or other disposition, transaction or arrangement, whether by short sale, hedging
or
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otherwise, that materially increases the risk that the Merger would not qualify
as a "reorganization" under Section 368 of the Code.
(h) "SEC" means the Securities and Exchange Commission.
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(i) "Securities Act" means the Securities Act of 1933, as amended.
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Capitalized terms not otherwise defined in this Agreement have the meanings
given to them in the Merger Agreement.
Section 2. Representations and Warranties of Holder. Holder represents to
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Ascend as follows:
(a) Holdings. As of the Effective Time of the Merger, Holder (i) was
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the owner of the number of StonyBrook Options set forth on the signature page
hereto, and (ii) owned no other StonyBrook Options and no shares of StonyBrook
Common Stock. Holder acknowledges and agrees that, pursuant to the Merger
Agreement, Holder's StonyBrook Options were converted into options to acquire
the number of shares of Ascend Common Stock set forth on the signature page
hereto. Holder has acquired its shares of Ascend Common Stock for investment
and without a view to resale or distribution, except as permitted by this
Agreement, the Merger Agreement, and the other agreements and representation
letters executed by Holder in connection therewith.
(b) Validity and Enforceability; Consents. This Agreement has been
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duly executed and delivered by Holder and constitutes the valid and binding
obligation of Holder, enforceable against Holder in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to creditors' rights
generally, and general principles of equity. The execution and delivery by
Holder of this Agreement does not, and the performance of Holder's obligations
under this Agreement will not, (i) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a material default
under, any material obligation or loss of any material benefit under any
material contract or other agreement or obligation to which Holder is a party or
by which Holder or any of Holder's properties or assets may be bound, or (ii)
conflict with or violate any permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Holder
or any of Holder's properties or assets. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Holder in connection with the execution
and delivery of this Agreement or the performance of Holder's obligations
hereunder.
(c) Investment Intent. The shares of Ascend Common Stock issued (or
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issuable) to Holder pursuant to the Merger Agreement or upon exercise of Assumed
Options were (or will be) acquired by Holder for investment and without a
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view to resale or distribution, except as permitted by this Agreement and the
Merger Agreement.
(d) Purchaser Representative. If Holder is not an "accredited
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investor," as defined in Rule 501 under the Securities Act and such Holder,
alone, does not have such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits and risks of an
investment in shares of Ascend Common Stock in connection with the Merger:
(i) Holder has so indicated by checking the box under his
signature below, and Xxxx Xxxxxx is acting or has acted as Holder's
representative (the "Purchaser Representative") in evaluating the merits
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and risks of the Merger;
(ii) Holder has been informed by Purchaser Representative of all
material relationships between Purchaser Representative and his affiliates,
on the one hand, and Ascend and its affiliates, on the other hand, that
currently exist, or are understood to be contemplated, or have existed at
any time since December 26, 1994, and any compensation received or to be
received as a result of such relationship;
(iii) Holder has, to the extent necessary to evaluate the risks
and merits of an investment in the Shares in connection with the Merger,
relied upon the advice of Purchaser Representative in connection with the
Merger; and
(iv) Holder had an opportunity to meet with Purchaser
Representative to discuss the Merger prior to the consummation of the
Merger.
(e) Information Concerning Ascend. Holder, either alone or together
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with Purchaser Representative, (i) has had the opportunity to ask questions of,
and obtain any additional information reasonably available to, Ascend with
respect to its plans, results of operations, financial conditions, businesses,
properties, assets or business prospects; (ii) has received all such information
as Holder or Purchaser Representative deems necessary and appropriate to enable
Holder, either alone or together with Purchaser Representative, to evaluate the
risks and merits of the Merger; and (iii) has received satisfactory and complete
information concerning the business and financial condition of Ascend in
response to all inquiries in respect thereof.
(f) Exchange Act Reports. Holder acknowledges that Ascend is a
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publicly held company that files reports and other information under the
Exchange Act with the SEC and with the NASD. Holder acknowledges that Ascend
has made available to Holder all forms, reports and documents filed by Ascend
with the SEC between December 31, 1994 (other than registration statements on
Form S-8) and the date of the Merger Agreement. Holder further acknowledges the
availability of
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current information about Ascend through such reports and other information.
Holder also acknowledges receipt of copies of Rules 10b-5, 10b-6 and 10b-7 under
the Exchange Act.
(g) Economic Risk. Holder, either alone or together with Purchaser
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Representative, has such knowledge and experience in financial and business
matters as to be able to evaluate the merits and risks of an investment in
Ascend Common Stock in connection with the Merger. Holder is able to acquire
the shares of Ascend Common Stock issued (or issuable) to Holder in connection
with the Merger or upon exercise of Assumed Options without impairing Holder's
financial condition, to hold such shares for an indefinite period of time, and
to suffer a complete loss on Holder's investment.
(h) Information Supplied by Holder. The information about Holder on
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the signature page to this Agreement is true, accurate and complete. Holder
understands that such information is being provided to Ascend specifically for
use in, or in connection with, the Registration Statement and the Prospectus,
and has executed this Agreement with such knowledge.
Section 3. Obligations of Ascend.
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(a) Registration. Promptly after the date of this Agreement, Ascend
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shall (i) file with the SEC a Registration Statement Form S-3 with respect to
one-third of the shares of Ascend Common Stock issuable to Holder pursuant to
the Assumed Options (the "Registration Statement") and shall use its
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reasonable best efforts to cause the Registration Statement to become effective
as promptly as practicable after filing and to keep the Registration Statement
effective until the Termination Date (as hereinafter defined); (ii) prepare and
file with the SEC such amendments and supplements to the Registration Statement
and the prospectus used in connection therewith as may be necessary, and to
comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities proposed to be registered in the
Registration Statement until the Termination Date (as hereinafter defined);
(iii) furnish to Holder such number of copies of any prospectus (including any
preliminary prospectus and any amended or supplemented prospectus) in conformity
with the requirements of the Securities Act, and such other documents, as Holder
may reasonably request in order to effect the offering and sale of the shares of
Ascend Common Stock to be offered and sold, but only while Ascend shall be
required under the provisions hereof to cause the Registration Statement to
remain current; and (iv) use reasonable efforts to register or qualify the
shares of Ascend Common Stock covered by the Registration Statement under the
securities or blue sky laws of such jurisdictions as Holder shall reasonably
request (provided that Ascend shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general consent to
service of process in any such jurisdiction where it has not been qualified).
For purposes of this Section 3(a), "Termination Date" means the earlier of (i)
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December 27, 1998, (ii) the date on which Holder can sell all of the shares of
Ascend Common Stock issued to Holder pursuant to the
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Merger or issuable pursuant to the Assumed Options pursuant to Rule 144 of the
SEC under the Securities Act, and (iii) the date on which all such shares of
Ascend Common Stock have been resold pursuant to Rule 144 or an effective
Registration Statement.
(b) Notification of Certain Events. Ascend shall notify Holder (i)
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when a prospectus or any prospectus supplement or post-effective amendment has
been filed, and, with respect to the Registration Statement or any post-
effective amendment, when the same has become effective; (ii) of any request by
the SEC or any other Governmental Entity during the period of effectiveness of
the Registration Statement for amendments or supplements to the Registration
Statement or related prospectus or for additional information relating to the
Registration Statement, (iii) of the issuance by the SEC or any other federal or
state Governmental Entity of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose,
(iv) of the receipt by Ascend of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; or (v) of the happening of any event which makes any statement
made in the Registration Statement or related prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or which requires the making of any changes in the Registration
Statement or prospectus so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Ascend may, upon the happening of
any event of the kind described in clauses (iii), (iv) or (v) hereof, suspend
use of the prospectus on written notice to Holder, in which case Holder shall
discontinue disposition of the shares covered by the Registration Statement or
prospectus until copies of a supplemented or amended prospectus are distributed
to Holder or until Holder is advised in writing by Ascend that the use of the
applicable prospectus may be resumed. Ascend shall use its reasonable best
efforts to ensure that the use of the prospectus may be resumed as soon as
practicable. Ascend shall use every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of the Registration Statement, or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the securities for sale in any jurisdiction, at the earliest
practicable moment. Ascend shall, upon the occurrence of any event contemplated
by clause (iv) or (v) above, prepare a supplement or post-effective amendment to
the Registration Statement or a supplement to the related prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the shares being sold
thereunder, such prospectus will not contain an untrue statement of a material
fact or omit to state a material fact
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required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(c) Certificates. In connection with any offering of shares of Ascend
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Common Stock registered pursuant to this Agreement, Ascend shall, subject to the
limitations set forth in Sections 4, 5 and 6 of this Agreement: (i) furnish
Holder, at Ascend's expense, with unlegended certificates representing ownership
of the shares of Ascend Common Stock being sold in such denominations as Holder
shall request, and (ii) instruct the transfer agent and registrar of such shares
to release any stop transfer orders with respect to such shares.
Section 4. Obligations of Holder.
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(a) Information. Holder shall provide all information and materials
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to Ascend, and take all action, as may be required in order to permit Ascend to
comply with all applicable requirements of the SEC and to obtain any desired
acceleration of the effective date of such Registration Statement. The
provision of such information and materials by Holder and by the other holders
of securities included in the Registration Statement is a condition precedent to
the obligations of Ascend pursuant to this Agreement.
(b) Certain Limitations. Holder shall not sell, transfer, pledge, or
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otherwise dispose of, or reduce Holder's interest in or risk relating to, any
shares of Ascend Common Stock issued to Holder pursuant to the Merger or upon
exercise of any Assumed Options until after such time as Ascend has published
(within the meaning of SEC Accounting Series Release No. 135, as amended)
financial results covering at least 30 days of combined operations of Ascend and
StonyBrook. From and after the publication of such results, Holder may sell or
otherwise dispose of the shares of Ascend Common Stock registered pursuant to
this Agreement, subject to the following restrictions:
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(i) Holder shall not offer, sell, exchange, pledge, transfer or
otherwise dispose of or engage in any Sale Equivalent Transaction with
respect to, any of the shares of Ascend Common Stock issued or issuable
upon exercise of Holder's Assumed Options unless at such time such
transaction shall be permitted pursuant to the provisions of SEC Rule 145
under the Securities Act (including any applicable limitations on the
amount of Ascend Common Stock to be sold as set forth in Rule 145(d)(1) and
the provisions of Rule 144 referred to therein), or Holder shall have
furnished to Ascend an opinion of counsel, satisfactory to Ascend, to the
effect that no registration under the Securities Act would be required in
connection with the proposed offer, sale, exchange, pledge, transfer or
other disposition or Sale Equivalent Transaction, or a Registration
Statement under the Securities Act covering the proposed offer, sale,
exchange, pledge, transfer or other disposition or Sale Equivalent
Transaction shall be effective under the Securities Act;
(ii) Holder shall not offer or sell any of the shares of Ascend Common
Stock issued or issuable upon exercise of Holder's Assumed Options except
during such periods as directors, officers and Affiliates of Ascend are
permitted to purchase and sell Ascend Common Stock pursuant to the xxxxxxx
xxxxxxx policies of Ascend (the "Window Periods"); and
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(iii) during the effective period of the Registration Statement,
Holder shall (A) offer for sale under the Registration Statement only those
shares of Ascend Common Stock which were issued to Holder upon exercise of
the Assumed Options and are registered under the Registration Statement;
(B) sell such shares in accordance with and subject to the terms,
conditions and covenants set forth in this Agreement and in the
Registration Statement; (C) to the extent required by applicable law, cause
to be furnished to any purchaser of such shares, and to the broker-dealer,
if any, through whom such shares may be offered, a copy of the final
prospectus contained in the Registration Statement, as supplemented or
amended through the date of the sale (the "Prospectus"); (D) not engage in
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any stabilization activity in connection with any Ascend securities other
than as permitted under the Exchange Act; and (E) not bid for or purchase
any securities of Ascend or any rights to acquire Ascend securities, or
attempt to induce any person to purchase any Ascend securities (except for
Holder's shares of Ascend Common Stock to be sold to such person by means
of the Prospectus) or any rights to acquire Ascend securities other than as
permitted under the Exchange Act.
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The restrictions set forth in subparagraph (ii) of this Section 4(b) shall cease
without further action of the parties upon and in the event of the death of
Holder, and Ascend shall amend the Registration Statement to the extent (if any)
necessary to permit Holder's estate, personal representative(s), devisees and
heirs, as the case may be, to resell Holder's remaining shares of Ascend Common
Stock pursuant to this Registration Statement.
(c) Escrow. Holder agrees that: (i) upon exercise of any Assumed
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Option before the first anniversary of the Closing Date, Ascend will deduct from
the number of shares of Ascend Common Stock issuable upon the exercise of such
Assumed Option pursuant to Section 6.11 of the Merger Agreement, and will
deposit into escrow certificates representing, ten percent of the shares of the
Ascend Common Stock issuable to Holder upon exercise of Holder's Assumed
Options, on a pro rata basis, in accordance with Section 2.3 of the Merger
Agreement; (ii) the shares so deposited into escrow shall be held as collateral
for the indemnification obligations of the persons who were shareholders or
option holders of StonyBrook immediately prior to the Effective Time under
Article IX of the Merger Agreement, in accordance with the terms thereof; and
(iii) for purposes of such indemnification obligations, Holder shall be treated
as if Holder had been a shareholder of StonyBrook immediately prior to the
Effective Time, and shall be subject on a pro rata basis, to the same
obligations as such a shareholder, subject to the same conditions and
limitations. Holder approves and agrees to be bound by all provisions of
Section 2.3 and Article IX of the Merger Agreement (relating to the Escrow).
Without limiting the generality of the foregoing, Holder consents and agrees to
the appointment of Xxxx Xxxxxx as Shareholder Representative pursuant to the
Merger Agreement and the appointment of the Escrow Agents named therein. In the
event of resignation of an Escrow Agent, Holder consents and agrees to the
appointment of a replacement Escrow Agent by Ascend and Shareholder
Representative.
Section 5. Restricted Periods. Ascend shall use its best efforts to keep
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effective the Registration Statement during Window Periods (subject to the right
of Ascend to suspend use of a prospectus pursuant to this Agreement).
Notwithstanding any other provision of this Agreement to the contrary, Ascend
shall not be required to keep the Registration Statement effective at any time
other than during Window Periods. Holder agrees that the right of Holder to
resell the shares of Ascend Common Stock registered pursuant to this Agreement
shall be suspended, unless otherwise agreed by Ascend, whenever Ascend
"insiders" (as defined in the Ascend Xxxxxxx Xxxxxxx Policy furnished to Holder
and any amendments thereto hereafter furnished to Holder) are restricted from
trading capital stock of Ascend (a "Restricted Period"). Unless otherwise
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specified by Ascend by written notice to Holder, Restricted Periods shall
include the period commencing at the opening of trading on the first day of the
third month of each fiscal quarter of Ascend and expiring at the close of
trading on the second full trading day following release of Ascend financial
results for such fiscal quarter (or, in the case of the fourth quarter of each
year, for the fiscal year). If a Restricted Period shall commence or shall
expire or terminate on any other date, Ascend shall provide advance written
notice of such
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commencement and prompt written notice of such expiration or termination.
Ascend shall have the affirmative right to suspend the effectiveness of any
Registration Statement filed by Ascend pursuant to this Agreement at any time
and from time to time during a Restricted Period, for the whole of such
Restricted Period or any portion thereof.
Section 6. Legends. Subject to the provisions of Section 3(c) of this
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Agreement Ascend may, at its election, cause one or more legends reflecting the
limitations set forth in this Agreement (including the limitations set forth in
Sections 4 and 5 of this Agreement) to be affixed to the certificate or
certificates issued to Holder representing the shares of Ascend Common Stock
issued to Holder upon exercise of Assumed Options, including a legend in
substantially the form set forth below:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE OTHER
CONDITIONS SPECIFIED IN A REGISTRATION AND STOCK TRADING AGREEMENT BETWEEN
THE HOLDER OF THIS CERTIFICATE AND ASCEND COMMUNICATIONS, INC., A COPY OF
WHICH AGREEMENT WILL BE FURNISHED BY ASCEND COMMUNICATIONS, INC. TO THE
HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT CHARGE."
Ascend, in its discretion, may cause stop transfer orders to be placed with its
transfer agent with respect to the certificates for the shares which are
required to bear such legend. Such legend shall be removed in connection with
the sale of any stock at a time that the Registration Statement is effective or
upon a sale pursuant to SEC Rule 144, as provided in Section 3(c) of this
Agreement.
Section 7. Expenses. Ascend shall pay all of the out-of-pocket expenses
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incurred, other than underwriting discounts and commissions, in connection with
any registration pursuant to this Agreement, including, without limitation, all
SEC, NASD and blue sky registration and filing fees, printing expenses, transfer
agents' and registrars' fees, and the reasonable fees and disbursements of
Ascend's outside counsel and independent accountants and a single counsel for
all of the holders of securities included in the Registration Statement.
Section 8. Indemnification. In the event of any offering registered
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pursuant to this Agreement:
(a) Ascend will indemnify Holder and each broker-dealer (if any) which
may be deemed to be an underwriter of the shares of Ascend Common Stock covered
by the Registration Statement against all claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue
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statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, any prospectus, or any amendment or supplement thereto,
incident to any offering registered pursuant to this Agreement, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading, or any violation by Ascend
of any rule or regulation promulgated under the Securities Act, or state
securities laws applicable to Ascend in connection with any such registration,
and subject to Section 8(c), will reimburse Holder for any legal and any other
out-of-pocket expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that Ascend will not be liable in any such case to the extent that any
such claim, loss, damage, or liability arises out of or is based in any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to Ascend by Holder or
controlling person and stated to be specifically for use therein.
(b) Holder will, if shares held by Holder are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify (i) Ascend, its directors, officers, legal counsel and
independent accountants, (iii) each underwriter, if any, of Ascend securities
covered by the Registration Statement, (iv) each person who controls Ascend or
such underwriter within the meaning of Section 15 of the Securities Act, (v)
each other holder of shares of Ascend Common Stock included in the Registration
Statement and such holder's legal counsel and independent accountants (each such
person named in clauses (i) through (v), an "Indemnified Party," and
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collectively, the "Indemnified Parties") against all claims, losses, damages and
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liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
the Registration Statement, prospectus, offering circular or other document, or
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and will reimburse Ascend, such other holders, directors, officers, legal
counsel, independent accountants, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating or
defending any such claim loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in the Registration
Statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to Ascend by Holder and stated
to be specifically for use therein; provided, however, that Holder's obligations
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hereunder shall be several with all other holders of securities included in the
Registration Statement and not joint and shall be limited to an amount equal to
the net proceeds before expenses and commissions to Holder of the shares sold as
contemplated herein.
(c) Each Indemnified Party claiming indemnification under this Section
8 shall give notice to the party from whom indemnification is sought (the
"Indemnifying Party") promptly after such Indemnified Party receives written
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notice
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of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by such
Indemnified Party (whose approval shall not be unreasonably withheld), and such
Indemnified Party may participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement, except to the extent, but only to the extent, that the
Indemnifying Party's ability to defend against such claim or litigation is
impaired as a result of such failure to give notice. Notwithstanding the
foregoing sentence, an Indemnified Party seeking indemnification hereunder may
retain its own counsel to conduct the defense of any such claim or litigation,
and shall be entitled to be reimbursed by the Indemnifying Party for expenses
incurred by such Indemnified Party in defense of such claim or litigation, in
the event that the Indemnifying Party does not assume the defense of such claim
or litigation within sixty (60) days after the Indemnifying Party receives
notice thereof from such Indemnified Party. Further, an Indemnifying Party
shall be liable for amounts paid in settlement of any such claim or litigation
only if the Indemnifying Party consents in writing to such settlement (which
consent shall not be reasonably withheld). No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party a release from all liability in
respect to such claim or litigation.
(d) The obligations of Ascend and Holder under this Section 8 shall
survive the completion of any offering of stock in a Registration Statement
under this Agreement and otherwise.
Section 9. Miscellaneous.
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(a) Notices. All notices and other communications hereunder shall be in
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writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(i) if to Ascend, to:
Ascend Communications, Inc.
One Ascend Plaza
0000 Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: Vice President - Finance
Fax: (000) 000-0000
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with a copy to:
Xxxx Xxxx Xxxx & Freidenrich, A Professional Corporation
000 Xxxxxxxx Xxx.
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq. & Xxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(ii) if to Holder, to the address of such Holder as set forth in the stock
transfer books and other applicable records of Ascend.
(b) Interpretation. When a reference is made in this Agreement to a
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section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The phrases "the date of this Agreement," "the date hereof," and terms of
similar import, unless the context otherwise requires, shall be deemed to refer
to February 7, 1997. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(c) Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
(d) Severability. In the event that any provision of this Agreement, or
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the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
(e) Entire Agreement. This Agreement (including the documents and the
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instruments referred to herein) constitutes the entire agreement of the parties
with respect to the subject matter of this Agreement and supersedes Section
2(a)(iii) and (iv) of the Registration Rights Declaration. Nothing in this
Agreement shall impair or affect the right of the Holder to request or the
obligation of Ascend to effect registration of the remaining two-thirds (2/3) of
the shares of Ascend Common Stock issued to Holder in the Merger or upon
exercise of Assumed Options, on the terms and subject to the conditions and
limitations set forth in the Declaration of Registration Rights annexed as
Annex 6.2 to the Merger Agreement which shall remain in full force and effect
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except as explicitly modified by the immediately preceding sentence.
(f) Governing Law. This Agreement shall be governed and construed in
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accordance with the laws of the State of California without regard to any
applicable conflicts of law.
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(h) Assignment. Neither this Agreement nor any of the rights, interests or
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obligations hereunder shall be assigned by either party hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
(i) Third Party Beneficiary. Nothing contained in this Agreement is
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intended to confer upon any person other than the parties hereto and their
respective successors and permitted assigns, any rights, remedies or obligations
under, or by reason of this Agreement.
IN WITNESS WHEREOF, Ascend and the undersigned Holder have signed or caused
this Agreement to be signed as of the date first written above.
ASCEND COMMUNICATIONS, INC. HOLDER
By:_________________________________ ____________________________________
Name:
Title:
Number of StonyBrook Options owned by Holder as of the Effective Time of the
Merger. _____________________________
Number of shares of Ascend Common Stock issuable to Holder upon exercise in full
of all Assumed Options of Holder: ____________________________________
[_] Check this box and sign to indicate that you have employed a Purchaser
Representative.
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