<PAGE>
As filed with the Securities and Exchange Commission on May 6, 1999
Registration No. 333--74679
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 4 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
NETWORK ACCESS SOLUTIONS CORPORATION
(Exact name of registrant as specified in its charter)
100 Carpenter Drive
Sterling, Virginia 20164
(703) 742-7700
(Address of principal executive offices)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 4813 54-1738938
(State or other jurisdiction (Primary standard industrial (I.R.S. employer
of incorporation or classification code number) identification
organization) number)
</TABLE>
-------------------
Jonathan P. Aust
President and Chief Executive Officer
Network Access Solutions Corporation
100 Carpenter Drive
Sterling, Virginia 20164
(703) 742-7700
(Name, address, including zip code and telephone number, including area code
of agent for service)
-------------------
Copies to:
Edwin M. Martin, Jr., Esquire Scott M. Wornow, Esquire
Nancy A. Spangler, Esquire Paul, Hastings, Janofsky & Walker LLP
Piper & Marbury L.L.P. 399 Park Avenue, 31st Floor
1200 19th Street, N.W. New York, New York 10022
Washington, D.C. 20036 (212) 318-6000
(202) 861-3900
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Each Class of Securities To Proposed Maximum Aggregate Amount of
Be Registered Offering Price (1) Registration Fee (2)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Shares of Common Stock, par value
$.001................................ $100,000,000 $ 0
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act.
(2) A registration fee of $27,800 was paid at the time of the initial filing
of this registration statement.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act, or until the registration statement shall
become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
13. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities
offered hereby, other than underwriting discounts and commissions. All of the
amounts shown are estimated except the Securities and Exchange Commission
registration fee, the National Association Securities Dealers, Inc. filing fee
and the Nasdaq National Market listing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $27,800
National Association of Securities Dealers, Inc. filing fee...... 12,000
Nasdaq National Market listing fee............................... *
Transfer agent's and registrar's fees............................ *
Printing expenses................................................ *
Legal fees and expenses.......................................... *
Accounting fees and expenses..................................... *
Blue Sky filing fees and expenses................................ *
Miscellaneous expenses........................................... *
-------
Total.......................................................... *
=======
</TABLE>
- ---------------------
* To be filed by amendment.
14. Indemnification of Officers and Directors
Section 145 of the Delaware General Corporation Law ("Section 145") permits
indemnification of directors, officers, agents and controlling persons of a
corporation under certain conditions and subject to certain limitations. The
Registrant's Bylaws include provisions to require the Registrant to indemnify
its directors and officers to the fullest extent permitted by Section 145,
including circumstances in which indemnification is otherwise discretionary.
Section 145 also empowers the Registrant to purchase and maintain insurance
that protects its officers, directors, employees and agents against any
liabilities incurred in connection with their service in such positions.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
The form of Underwriting Agreement filed as Exhibit 1.1 to this Registration
Statement provides for indemnification by the Underwriters of the Registrant
and its directors and officers, and by the Registrant of the Underwriters, for
certain liabilities arising under the Securities Act.
II-1
<PAGE>
15. Recent Sales of Unregistered Securities
The following information relates to securities issued or sold by the
Registrant within the last three years. During that time, the Registrant has
issued unregistered securities in the transactions described below. Securities
issued in such transactions were offered and sold in reliance upon the
exemption from registration under Section 4(2) of the Securities Act, relating
to sales by an issuer not involving any public offering, or under Rule 701
under the Securities Act. The sales of securities were made without the use of
an underwriter and the certificates evidencing the shares bear a restrictive
legend permitting the transfer thereof only upon registration of the shares or
an exemption under the Act.
(1) In August 1998 the Registrant issued 260,000 shares of Common Stock to an
employee at a price of $0.50 per share in exchange for services rendered.
(2) In August 1998 the Registrant issued 9,800,000 shares of Common Stock to a
group of four accredited investors at a purchase price of $0.0005 per share
for an aggregate price of $4,900.
(3) In August 1998 the Registrant issued 10,000,000 shares of Series A
Preferred Stock to a group of four accredited investors, at a purchase
price of $1.00 per share for an aggregate price of $10,000,000.
(4) Between July 1998 and April 1999, the Registrant issued options exercisable
for an aggregate of 4,000,200 shares of Common Stock at an exercise price
of $0.20 per share.
(5) In April 1999 the Registrant issued options to one of its directors
exercisable for an aggregate of 111,111 shares of Common Stock at an
exercise price of $15 per share, subject to adjustment.
16. Exhibits and Financial Statement Schedules
(a)Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
1.1* Form of Underwriting Agreement
3.1* Amended and Restated Certificate of Incorporation of the Company
3.2* Amended and Restated By-Laws of the Company
4.1* Specimen stock certificate for shares of Common Stock of the
Company
5.1* Form of opinion of Piper & Marbury L.L.P., regarding legality of
securities being registered
10.1+* Master Equipment Lease Agreement dated November 17, 1998, by and
between the Company and Paradyne Credit Corporation
10.2+ Purchase and Sale Agreement dated as of October 16, 1998, by and
between the Company and Ascend Communications, Inc., as amended
10.3* Master Lease Agreement dated October 9, 1998, by and between the
Company and Ascend Credit Corporation
10.4 Promissory Note dated October 16, 1998, by and between the Company
and Ascend Communications, Inc., as amended
10.5* Commercial Lease dated February 24, 1997, by and between the
Company, Sterling/Gunston Limited Partnership and Bernstein
Management Corporation
10.5.1* First Lease Amendment dated June 26, 1998, by and between the
Company and Sterling/Gunston LLC
10.5.2* Third Lease Amendment dated February 1, 1999, by and between the
Company and Sterling/Gunston LLC
10.6* Sublease dated August 31, 1998, by and between the Company and
U.S. Interactive, Inc.
10.7* Letter of Intent dated March 2, 1999 by and between the Company
and Trans Dulles Center, Inc.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.8* Employment Agreement dated as of August 16, 1998, by and between
the Company and
Jonathan P. Aust
10.9* Employment Agreement dated as of July 13, 1998, by and between the
Company and
Christopher J. Melnick
10.10* Employment Agreement dated as of July 13, 1998, by and between the
Company and Scott G. Yancey, Jr.
10.11* Employment Agreement dated as of August 18, 1998, by and between
the Company and James A. Aust
10.12* Employment Agreement dated as of March 1, 1999, by and between the
Company and John J. Hackett
10.13* 1998 Stock Incentive Plan, as amended
10.14* Incentive Stock Option Grant Agreement dated July 23, 1998, by and
between the Company and Scott G. Yancey, Jr., as amended
10.15* Incentive Stock Option Grant Agreement dated July 23, 1998, by and
between the Company and Christopher J. Melnick, as amended
10.16* Incentive Stock Option Grant Agreement dated November 1, 1998, by
and between the Company and James A. Aust
10.17* Incentive Stock Option Grant Agreement dated March 30, 1999, by
and between the Company and John J. Hackett
10.18* Deferred Compensation Agreement dated June 1, 1997, by and between
the Company and
Jonathan P. Aust
10.19* Deferred Compensation Agreement dated June 1, 1997, by and between
the Company and
James A. Aust
10.20* Repurchase Agreement dated August 6, 1998, by and between the
Company and Longma M. Aust, Jonathan P. Aust, James A. Aust and
Stephen L. Aust
10.21* Investor Rights Agreement dated August 6, 1998, by and between the
Company, Spectrum Equity Investors II, L.P., SEA 1998 II, L.P.,
FBR Technology Venture Partners L.P. and W2 Venture Partners, LLC,
as amended
10.22* Series A Preferred Stock Purchase Agreement dated August 6, 1998,
by and between the Company, Spectrum Equity Investors II, L.P.,
SEA 1998 II, L.P., FBR Technology Venture Partners L.P. and W2
Venture Partners, LLC
10.23* Note Purchase Agreement dated March 31, 1999, by and between the
Company, Spectrum Equity Investors II, L.P. and FBR Technology
Venture Partners L.P.
10.24* Convertible Note dated March 31, 1999, by and between the Company
and Spectrum Equity Investors II, L.P.
10.25* Convertible Note dated March 31, 1999, by and between the Company
and FBR Technology Venture Partners L.P.
10.26* Nonqualified Stock Option Grant Agreement dated April 1, 1999, by
and between the Company and Dennis R. Patrick
10.27* Deed of Lease dated April 8, 1999, by and between the Company and
TransDulles Center, Inc.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
11.1* Statement of computation of loss per share
23.1* Consent of PricewaterhouseCoopers, LLP
23.2* Consent of Piper & Marbury L.L.P. (included as part of Exhibit
5.1)
24.1* Power of Attorney
27* Financial Data Schedule
</TABLE>
- ---------------------
* Previously filed.
** To be filed by amendment.
+ Information has been omitted from this exhibit pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
(b) Financial Statement Schedules:
Schedules have been omitted because the information required to be shown in
the schedules is not applicable or is included elsewhere in our financial
statements or the notes thereto.
17. Undertakings
The undersigned Registrant hereby undertakes to provide to the underwriter
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions of its Certificate of Incorporation or
Bylaws or the Delaware General Corporation Law or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted form the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Sterling, Virginia, on
the 6th day of May, 1999.
NETWORK ACCESS SOLUTIONS CORPORATION
/s/ Jonathan P. Aust
By: _________________________________
Jonathan P. Aust
President, Chief Executive Officer
and Chairman of the Board of
Directors
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Name Title Date
<S> <C> <C>
/s/ Jonathan P. Aust President, Chief May 6, 1999
- ------------------------------------- Executive Officer
Jonathan P. Aust and Chairman of the
Board of Directors
(Principal Executive
Officer)
* Chief Financial May 6, 1999
- ------------------------------------- Officer and Director
Scott G. Yancey, Jr. (Principal
Accounting and
Financial Officer)
* Chief Operating May 6, 1999
- ------------------------------------- Officer and Director
Christopher J. Melnick
* Director May 6, 1999
- -------------------------------------
Brion B. Applegate
Director
- -------------------------------------
Dennis R. Patrick
*By: /s/ Jonathan P. Aust
- -------------------------------------
Jonathan P. Aust
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
1.1* Form of Underwriting Agreement
3.1* Amended and Restated Certificate of Incorporation of the Company
3.2* Amended and Restated By-Laws of the Company
4.1* Specimen stock certificate for shares of Common Stock of the
Company
5.1* Form of opinion of Piper & Marbury L.L.P., regarding legality of
securities being registered
10.1+* Master Equipment Lease Agreement dated November 17, 1998, by and
between the Company and Paradyne Credit Corporation
10.2+ Purchase and Sale Agreement dated as of October 16, 1998, by and
between the Company and Ascend Communications, Inc., as amended
10.3* Master Lease Agreement dated October 9, 1998, by and between the
Company and Ascend Credit Corporation
10.4 Promissory Note dated October 16, 1998, by and between the Company
and Ascend Communications, Inc., as amended
10.5* Commercial Lease dated February 24, 1997, by and between the
Company, Sterling/Gunston Limited Partnership and Bernstein
Management Corporation
10.5.1* First Lease Amendment dated June 26, 1998, by and between the
Company and
Sterling/Gunston LLC
10.5.2* Third Lease Amendment dated February 1, 1999, by and between the
Company and Sterling/Gunston LLC
10.6* Sublease dated August 31, 1998, by and between the Company and
U.S. Interactive, Inc.
10.7* Letter of Intent dated March 2, 1999 by and between the Company
and Trans Dulles Center, Inc.
10.8* Employment Agreement dated as of August 16, 1998, by and between
the Company and
Jonathan P. Aust
10.9* Employment Agreement dated as of July 13, 1998, by and between the
Company and
Christopher J. Melnick
10.10* Employment Agreement dated as of July 13, 1998, by and between the
Company and Scott G. Yancey, Jr.
10.11* Employment Agreement dated as of August 18, 1998, by and between
the Company and James A. Aust
10.12* Employment Agreement dated as of March 1, 1999, by and between the
Company and
John J. Hackett
10.13* 1998 Stock Incentive Plan, as amended
10.14* Incentive Stock Option Grant Agreement dated July 23, 1998, by and
between the Company and Scott G. Yancey, Jr., as amended
10.15* Incentive Stock Option Grant Agreement dated July 23, 1998, by and
between the Company and Christopher J. Melnick, as amended
10.16* Incentive Stock Option Grant Agreement dated November 1, 1998, by
and between the Company and James A. Aust
10.17* Incentive Stock Option Grant Agreement dated March 30, 1999, by
and between the Company and John J. Hackett
10.18* Deferred Compensation Agreement dated June 1, 1997, by and between
the Company and
Jonathan P. Aust
10.19* Deferred Compensation Agreement dated June 1, 1997, by and between
the Company and
James A. Aust
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.20* Repurchase Agreement dated August 6, 1998, by and between the
Company and Longma M. Aust, Jonathan P. Aust, James A. Aust and
Stephen C. Aust
10.21* Investor Rights Agreement dated August 6, 1998, by and between the
Company, Spectrum Equity Investors II, L.P., SEA 1998 II, L.P.,
FBR Technology Venture Partners L.P. and W2 Venture Partners, LLC,
as amended
10.22* Series A Preferred Stock Purchase Agreement dated August 6, 1998,
by and between the Company, Spectrum Equity Investors II, L.P.,
SEA 1998 II, L.P., FBR Technology Venture Partners L.P. and W2
Venture Partners, LLC
10.23* Note Purchase Agreement dated March 31, 1999, by and between the
Company, Spectrum Equity Investors II, L.P. and FBR Technology
Venture Partners L.P.
10.24* Convertible Note dated March 31, 1999, by and between the Company
and Spectrum Equity Investors II, L.P.
10.25* Convertible Note dated March 31, 1999, by and between the Company
and FBR Technology Venture Partners L.P.
10.26* Nonqualified Stock Option Grant Agreement dated April 1, 1999, by
and between the Company and Dennis R. Patrick
10.27* Deed of Lease dated April 8, 1999, by and between the Company and
TransDulles Center, Inc.
11.1* Statement of computation of loss per share
23.1* Consent of PricewaterhouseCoopers, LLP
23.2* Consent of Piper & Marbury L.L.P. (included as part of Exhibit 5.1
hereto)
24.1* Power of Attorney (included in signature pages)
27* Financial Data Schedule
</TABLE>
- ---------------------
* Previously filed.
** To be filed by amendment.
+ Information has been omitted from this exhibit pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
II-7
<PAGE>
Exhibit 10.2
PURCHASE AND SALE AGREEMENT
---------------------------
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as
of the 16th day of October, 1998 by and between Ascend Communications, Inc., a
----
California corporation, having its principal office at 1701 Harbor Bay Parkway,
Alameda, California, 94502 ("Seller") and Network Access Solutions, Inc., a
Delaware corporation having its principal office at 100 Carpenter Drive, Suite
206, Sterling, Virginia 20164 ("Buyer").
WITNESSETH
----------
WHEREAS, Seller manufactures and owns all of the rights, title and interest in
and to the telecommunications network equipment described and identified on
Exhibit A hereto (individually and collectively such items of equipment being
- ---------
referred to as the "Equipment"); and
WHEREAS, Seller and Buyer have reached an understanding whereby Seller has
agreed to cause its affiliate, Ascend Credit Corporation ("Ascend Credit"), to
purchase from Seller and lease to Buyer the items of Equipment ordered from
Seller by the Buyer from time to time, with an option for Buyer to purchase the
leased Equipment from Ascend Credit at the termination of such lease.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Sale and Purchase of Equipment.
------------------------------
(a) Subject to the terms and conditions set forth herein, Seller hereby
irrevocably agrees to sell to Buyer from time to time during the term
of this Agreement and to cause Ascend Credit to purchase from Seller
and lease to Buyer up to $95,000,000 worth of Equipment, as may be
selected by Buyer from the list of available Equipment set forth in
Exhibit A and detailed in a purchase order. Such Equipment shall be
---------
leased and sold on the terms and conditions of that certain Master
Lease Agreement No. 9314 between Buyer and Ascend Credit dated for
reference October 9, 1998, a copy of which is attached hereto as
Exhibit B (the "Lease Agreement").
---------
(b) In consideration for the Equipment, Buyer agrees to pay to Seller
***.
- --------------------
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
2. Term of Agreement.
-----------------
The term of this Agreement shall be 24 months from the date hereof.
3. Seller's Representations, Warranties and Covenants.
--------------------------------------------------
Seller hereby represents, warrants and covenants to Buyer that:
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of California and has all requisite corporate
power and authority to enter into and perform this Agreement and the
transactions contemplated hereby.
(b) All requisite corporate action has been authorized for the execution
and delivery to Buyer of this Agreement and the agreements
contemplated hereunder and for the performance of Seller's obligations
hereunder. This Agreement is a valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms.
(c) There are no actions, suits or proceedings pending or, to the best of
the knowledge of Seller, threatened against or affecting Seller or of
which the Equipment is the subject matter or any proceedings with
respect to Seller or any of the Equipment before any federal, state or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign that would in any way adversely
affect the transactions contemplated herein.
(d) Seller possesses valid legal rights in and title to all of the
Equipment, free from all pledges, liens, security interests,
encumbrances or charges.
(e) All necessary approvals and authority to enter into this Agreement and
bind Seller have been obtained, the person executing this Agreement on
behalf of Seller has express authority to do so and, in doing, to bind
Seller hereto and the execution of this Agreement by Seller does not
violate any provision of any by-law, charter, regulation or any other
governing authority of Seller.
(f) At such time as Buyer exercises its right to purchase the Equipment
under the Lease Agreement, Seller will transfer to Buyer all of its
right, title and interest in and to the Equipment, free and clear of
any Third Party (as defined herein below) rights or other
encumbrances, and Buyer shall have the right to sell, license, assign
or otherwise convey the Equipment to any Third Party. Seller shall
agree to execute any and all instruments and agreements to effect the
conveyance and assignment of the Equipment as Buyer may deem
necessary. The term "Third
-2-
<PAGE>
Party" as used herein means any person or entity that is not a party
to this Agreement.
(g) The Equipment delivered to Buyer shall materially conform with and
perform the functions set forth in the specifications attached hereto
as Exhibit A (the "Specifications") as are applicable to the Equipment
---------
and shall be free from defects in material or workmanship that impair
Buyer's use of the Equipment. If notified by Buyer of any such
defects in material or workmanship or nonconformity with the
Specifications, Seller shall, at its election and expense, repair or
replace any such defective Equipment. Any Equipment repaired or
replaced under this Section [3(g)] shall be subject to the provisions
of this Section [3(g)].
4. Buyer's Representations, Warranties and Covenants.
-------------------------------------------------
Buyer hereby represents, warrants and covenants to Seller that:
(a) Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority to enter into and perform this Agreement
and the transactions contemplated hereby.
(b) All requisite corporate action has been authorized for the execution
and delivery to Seller of this Agreement and the agreements
contemplated hereunder and for the performance of Buyer's obligations
hereunder. This Agreement is a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.
(c) There are no actions, suits or proceedings pending or, to the best of
the knowledge of Buyer, threatened against or affecting Buyer or any
proceedings with respect to Buyer before any federal, state or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign that would in any way adversely
affect the transactions contemplated herein.
(d) All necessary approvals and authority to enter into this Agreement and
bind Buyer have been obtained, the person executing this Agreement on
behalf of Buyer has express authority to do so and, in doing, to bind
Buyer hereto and the execution of this Agreement by Buyer does not
violate any provision of any by-law, charter, regulation or any other
governing authority of Buyer.
-3-
<PAGE>
5. Seller Financing.
----------------
Seller acknowledges that, as an inducement to Buyer to enter into this Agreement
and to commit a substantial portion of its network technology to Seller, Buyer
is relying on Seller, or its affiliate, to provide financing for all Equipment
purchases hereunder as well as operating capital financing in the manner
described in that certain Letter of Intent dated September 24, 1998, (the
"LOI"), a copy of which is attached hereto as Exhibit C as evidenced by
---------
Promissory Notes made by Buyer in favor of Seller, or its affiliate,
substantially in the form attached hereto as Exhibit D.
---------
***.
6. Indemnification.
---------------
***
7. Limitation of Liability.
-----------------------
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IN NO
EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING BUT
NOT LIMITED TO NEGLIGENCE OR INFRINGEMENT), SHALL SELLER OR BUYER BE LIABLE
UNDER THIS AGREEMENT FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY NATURE
WHATSOEVER, INCLUDING LOST PROFITS OF THE OTHER PARTY, BEFORE OR AFTER
ACCEPTANCE, WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE OR WHETHER A PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8. Indemnity for Product Liability.
-------------------------------
Notwithstanding anything contained herein to the contrary, Seller agrees to
defend and indemnify Buyer, its officers, agents and employees, from and against
any damages, claims, demands, liabilities and expenses (including reasonable
attorneys' fees) that arise out of or result from the death or bodily injury to,
or damage to property of any third party resulting solely from a defect in the
Equipment delivered by Seller to Buyer. Seller shall pay all costs, damages and
reasonable attorneys' fees that a court awards as a result of such claim
provided that: (i) Seller has sole control of the defense and related settlement
negotiations; (ii) Buyer provides Seller with assistance, information and
authority reasonably necessary for Seller to perform its obligations under this
Section [8] and (iii) Buyer notifies Seller in writing within thirty (30) days
of the discovery of the claim.
9. Termination and Default.
-----------------------
- -----------------------
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
-4-
<PAGE>
(a) Each of Seller and Buyer shall be entitled to terminate this Agreement
in whole or in part:
(i) if either party fails to observe, keep or perform any material
term or condition of this Agreement or repeatedly fails to
observe, keep or perform any non-material term or condition of
this Agreement, which repeated breaches collectively constitute a
material breach;
(ii) if a voluntary or involuntary petition is commenced by or against
either party under any laws relating to bankruptcy, insolvency,
reorganization, moratorium and creditors' rights and remedies
generally, and such voluntary or involuntary petition is not
withdrawn or dismissed, as applicable, within 30 days of filing;
or
(iii) if a party becomes insolvent because they are unable to pay
their debts in the ordinary course of business as they become
due, any substantial part of either party's property becomes
subject to any levy, seizure, assignment, application or sale for
or by any creditor or governmental agency or if a receiver shall
be appointed for either party.
(b) The party seeking to terminate this Agreement shall give the other
party written notice of any of the foregoing claimed to be a basis for
termination and the date of termination. The Agreement shall
terminate no less than fifteen 15 days after receipt of such notice in
the event of the occurrence under Section [9](a)(iii) above. In the
event of an occurrence of an event under Section [9](a)(i), a party in
breach shall have 30 days to cure, if curable, any such breach. In the
event that a party does not cure such breach within that cure period,
the non-breaching party may terminate this Agreement immediately upon
notice to the breaching party.
(c) Any and all provisions of this Agreement which by their nature or
terms contemplate survival beyond the expiration of this Agreement or
which are reasonably necessary to survive termination in order to
achieve their respective fundamental purposes, including, without
limitation, any provisions of this Agreement relating to and
specifically the Sections entitled Indemnification, Limitation of
--------------- -------------
Liability, Indemnity for Product Liability, the provision contained in
--------- -------------------------------
Section [3(g)] and Sections [10 through 18] relating to miscellaneous
matters, as applicable, shall survive and continue to bind the parties
following any termination of this Agreement.
10. Dispute Resolution.
------------------
Any dispute arising out of or in connection with this Agreement shall be settled
by arbitration in Alameda, California under the Rules of the American
Arbitration Association ("Rules"), as
-5-
<PAGE>
modified by this Section [10]. The number of arbitrators shall be one (1). The
arbitrator shall be appointed by the parties, if both parties agree on an
arbitrator. If the parties are unable to agree on an arbitrator within fifteen
(15) days of the date of a request for arbitration made by any party hereto,
then the arbitrator shall be appointed in accordance with the Rules. The
decision of the arbitrator shall be delivered in writing to, and shall be
binding upon, the parties and judgment may be entered upon such award in any
court of competent jurisdiction.
11. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the laws of
the State of California, not including the conflicts of laws principles of that
jurisdiction.
12. Letter of Intent.
----------------
The terms and conditions contained in Sections 1 through 8 and 10 through 11 of
the LOI that are not specifically addressed in the body of this Agreement are
incorporated herein by reference and made a part of this Agreement with the same
force and effect as though set forth in their entirety herein and the parties
hereto agree that they shall be bound by all such terms and conditions. In the
event of any conflict or inconsistency among the provisions of this Agreement
and the LOI, such conflict or inconsistency shall be resolved by giving
precedence to this Agreement and thereafter to the LOI.
13. Severability.
------------
In the event any provision of this Agreement shall be held invalid, illegal or
unenforceable by a court of competent jurisdiction, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
14. Headings.
--------
The headings of the sections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.
15. Counterparts.
------------
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
16. Waivers and Amendments.
----------------------
Except as otherwise expressly provided herein, this Agreement or any provision
hereof may be amended, waived, discharged or terminated only by a statement in
writing signed by the parties hereto.
-6-
<PAGE>
17. Notices.
-------
Except as otherwise expressly provided herein, any notice required or permitted
hereunder shall be given in writing and shall be deemed to have been duly given
upon receipted personal delivery (professional courier permissible), receipted
certified delivery or registered mail delivery to the last address either party
(with respect to itself) furnishes to the other party in writing, or electronic
transmission, with a confirmation copy sent in the manner previously described.
Any notice or communication required or desired to be served, given or delivered
hereunder shall be in the form and manner specified below, and shall be
addressed to the party to be notified as follows:
If to Lender: Ascend Communications, Inc.
1701 Harbor Bay Parkway
Alameda, California 94502
Attention: Fran Jewels, Esq.
Telecopier: (510) 747-2638
If to Borrower: Networks Access Solutions, Inc.
100 Carpenter Dr.
Sterling, VA 20164
Attention: Scott Yancey, CFO
Telecopier: (703) 742-7706
18. Effective Date.
--------------
This Agreement shall become effective on the date first written above.
19. Entire Agreement.
----------------
This document and the attached Exhibits represent the entire Agreement of the
parties with respect to its subject matter.
IN WITNESS WHEREOF the parties hereto have authorized their respective
representatives to execute this Agreement as of the day and year first herein
before written.
Seller:
- ------
ASCEND COMMUNICATIONS , INC.
-7-
<PAGE>
By: /s/ Bernard V. Schnader
-----------------------
Name: Bernard V. Schander
------------------------
Title: Treasurer
--------------
Buyer:
- ------
NETWORK ACCESS SOLUTIONS, INC.
By: /s/ Scott G. Yancey
--------------------
Name: Scott G. Yancey
---------------------
Title: Chief Financial Officer
-----------------------------
-8-
<PAGE>
EXHIBIT A
---------
LIST OF AVAILABLE EQUIPMENT,
----------------------------
SPECIFICATIONS (including Core Systems Publications Library, dated 2/98),
-------------------------------------------------------------------------
ASCEND/NAS-CuNet SERVICE MARKETING PROGRAM PROPOSAL,
----------------------------------------------------
AND PRICING
-----------
<PAGE>
Ascend's xDSL
Proposal for Network Access Solutions
For CopperNet Service
&
Financial Term Sheet
August 25, 1998
***
- ------------------------
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
EXHIBIT B
---------------
LEASE AGREEMENT
------------------------
(Filed as Exhibit 10.3)
<PAGE>
EXHIBIT C
---------
LETTER OF INTENT
----------------
<PAGE>
To: Network Access Solutions, Inc.
From: Ascend Communications, Inc.
Date: 9/24/98
Re: NAS-CUNET SERVICE OFFERING Financing Proposal
Ascend offers the following to Network Access Solutions, Inc. herein referred to
as (NAS):
Credit Line
1. Equipment Financing: Ascend will provide equipment financing totaling
$95MM. The facility will be used for the purchase and subsequent lease
financing of Ascend equipment by NAS. The facility will be available for 24
months following the initial draws of moneys from the facility. Up to
$30,000,000 of the equipment financing is immediately available. The
remaining $65,000,000 of the equipment financing shall be available to NAS
at any point after the closing of the initial public offering the common
stock of NAS pursuant to a registration statement under the Securities Act
of 1933, as amended, and which yields gross proceeds to NAS in excess of
$50,000,000. If for any reason Ascend shall not make the remaining facility
available to NAS, then NAS has no further purchase commitment to Ascend.
There will no commitment fee or other fixed fees charged to NAS (other than
the lease payments themselves) outside of the lease financing under
agreement, for the use of the facility or reserve of unused capacity under
the facility.
Financing terms: ***
2. Working capital: Ascend will provide a working capital line of credit of
$5MM to be used at the sole discretion of NAS for the purchase of other
vendor's equipment in the event that Ascend cannot provide like equipment,
or to pay for operating expenses. The draws against this $5MM will be set
at a minimum of $1MM each. There will be no commitment or fixed fees
charged to NAS for the use of the facility or reserve of unused capacity
under the working capital facility other than the interest financing under
agreement per the terms of the promissory note.
. Financing terms: Ascend will extend financing for working capital in the
form of a secured promissory note. The note will be as follows: Each
Draw will be 42 months in duration beginning with the date of each draw.
Principal payments will be made on the basis of a 60 month linear
amortization starting with the 10th month. The interest rate will be at
8.5% per annum for the first 27 months' payments. The first 9 months'
- ----------------------------------
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
payments will be at interest only. The next 18 months' payments will be
at the stated amortized rate. The remaining 15 months' payments will be
at an interest rate consistent with the prevailing "high-yield" bond
index and at the stated amortized rate. All accrued interest and
principal will be immediately due and payable at the end of the 42nd
month. There will be no penalty for prepayment in the working capital
financing. Monthly payments will be due on the 30th day of each month.
Payment to reflect the monthly aggregate amount due for all draws.
3. Security Interest: The Ascend equipment will secure the note.
4. Review of financial performance: Ascend will require NAS to provide
audited financials within 90 days of the close of each fiscal year end and
informal unaudited balance sheets and income statements within 60 days of
the close of each quarter. This requirement will be in effect after the
acceptance of the sales agreement, execution of related financing
agreements, and NAS's utilization of any financing under the Equipment
Financing Credit Line or the Working Capital Credit Line.
5. Mandatory prepayment: The principal indebtedness and all accrued but
unpaid interest in respect to the promissory note will become immediately
due and payable in the event of and upon a change of control, defined as
acquisition of more than 50% of the voting common equivalent shares of NAS
by any entity or person other than NAS' existing shareholders.
6. ***
7. ***
8. ***
9. ***
10. Shipping is FOB-ORIGIN-Alameda, CA (DSL technology) and Westford, MA (Core
Products)
11. Public Communication: Both parties agree that no public disclosure of terms
relating to this agreement will take place without mutual consent as to the
content and timing of such disclosure.
12. ***
Both sides recognize that this term sheet is not the definitive agreement. The
terms of this proposal will be set forth in a purchase agreement, a master lease
agreement, and secured promissory note; both parties will mutually agree upon
the terms and provisions of which; however, both parties represent that they are
not aware of any other substantive terms and conditions which would represent
material conditions precedent to Ascend
- ----------------------------
*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
<PAGE>
making the equipment financing facility and working capital line of credit
available to NAS.
Signed and accepted:
/s/ Scott G. Yancey 9/24/98 CFO
- -----------------------------------
NAS, Inc. Date:
/s/ Illegible 9/25/98
- --------------------------
Ascend Communications, Inc. Date:
<PAGE>
EXHIBIT D
---------
PROMISSORY NOTES FOR VENDOR FINANCING
-------------------------------------
AND OPERATING CAPITAL FINANCING
-------------------------------
(Filed as Exhibit 10.4)
<PAGE>
Exhibit 10.4
PROMISSORY NOTE
$5,000,000 October 16, 1998
FOR VALUE RECEIVED, the undersigned, Network Access Solutions, Inc.
("Borrower"), hereby promises to pay to ASCEND COMMUNICATIONS, INC. ("Lender"),
-------- ------
or order, the principal sum or so much of the principal sum of Five Million
Dollars ($5,000,000) as may from time to time have been advanced and be
outstanding, together with accrued interest as provided herein.
A. Principal.
---------
1. Advances. Borrower may from time to time request advances from
--------
Lender (individually an "Advance" and collectively the "Advances") by giving
------- --------
written notice to Lender in accordance with the terms hereof, which notice shall
indicate the amount of the Advance requested and the proposed use of the Advance
proceeds.
Advances shall be available to Borrower as follows: upon written notice as
specified above, and in minimum amounts of One Million Dollars ($1,000,000)
each.
Provided that no Event of Default is in existence and that the requested
Advance would not cause an Event of Default to occur, Lender shall make the
Advance to Borrower within five (5) days of receipt of Borrower's notice.
Lender shall not be obligated to make an Advance to the extent that such
Advance, when aggregated with all prior Advances, would exceed Five Million
Dollars ($5,000,000). Borrower shall not have the right to re-borrow any
Advance to the extent that it has been repaid.
<PAGE>
2. Use of Proceeds. The proceeds of Advances shall be used at the sole
---------------
discretion of NAS for (i) the purchase of other vendor's equipment in the event
that Ascend cannot provide like equipment, or (ii) operating capital purposes.
B. Interest.
--------
Each Advance shall be for Forty-two (42) months in duration, beginning with the
date upon which sums are advanced. Each Advance shall be repaid on the basis of
a Sixty (60) month linear amortization schedule repayment period. During the
first nine months following any Advance, payments shall be of interest only and
at the per annum rate of 8.25%. During the next Eighteen (18) months, interest
shall accrue at the per annum rate of 8.25 %, and payments shall be made
according to the amortization schedule described above. During the remaining
Fifteen (15) months of the Fortytwo duration of any Advance, interest shall be
paid according to the prevailing "high-yield" bond index, and principal shall be
paid according to the amortization schedule described above. All accrued
principal and interest shall be immediately due and payable at the end of the
Forty-second (42nd) month following any Advance.
If an Event of Default, as defined herein, occurs, then interest shall accrue at
the rate per annum equal to two percent (2%) plus the rate that would otherwise
be in effect (the "Default Rate"). Interest payable hereunder shall be
------------
calculated on the basis of a three hundred sixty (360) day year for actual days
elapsed. Interest shall be due and payable in arrears on the first day of each
calendar month, commencing with the first month after the date hereof.
C. Payment.
--------
1. Scheduled Payment. Monthly payments shall be due on the Thirtieth
-----------------
(30th) day of each month, and as set forth in paragraph B. above
("Interest"). Monthly payments shall reflect the aggregate amount owing on all
Advances
2. Mandatory Prepayment. The principal indebtedness and all accrued but
--------------------
unpaid interest shall become immediately due and payable, without demand or any
notice by Lender, on the date of a Change of Control.
3. Optional Prepayment. Borrower shall have the right at any time and
-------------------
from time to time to prepay, in whole or in part, the principal of this Note,
without payment of any premium or penalty. Any principal prepayment shall be
accompanied by a payment of all interest accrued on the amount prepaid through
the date of such prepayment.
-2-
<PAGE>
4. Form of Payment. Principal and interest and all other amounts due
---------------
hereunder are to be paid in lawful money of the United States of America in
federal or other immediately available funds.
D. Covenants.
---------
1. Insurance. Borrower, at its expense and with such companies as are
---------
reasonably acceptable to Lender, shall maintain business interruption and
liability insurance and fire, theft and other hazard insurance, which insurance
shall be in such amounts as are ordinarily carried by other owners in similar
businesses conducted in the locations where Borrower's business is conducted on
the date hereof. All such liability insurance policies shall show Lender as an
additional insured or loss payee, as applicable, and shall specify that the
insurer must give at least thirty (30) days' notice to Lender before canceling
its policy for any reason. Borrower, upon Lender's request, shall deliver to
Lender certified copies of such policies of insurance and evidence of the
payments of all premiums therefor.
2. Financial Information. Borrower shall deliver to Lender:
---------------------
(a) as soon as practicable after the end of each calendar
quarter, and in any event within sixty (60) days thereafter, an unaudited
balance sheet of Borrower as of the end of such quarter and an unaudited income
statement of Borrower for the portion of the Fiscal Year ended with such quarter
prepared and certified by the chief financial officer of Borrower, subject,
however, to the exclusion of footnotes and to normal year-end audit adjustments;
(b) as soon as practicable after the end of each Fiscal Year, and
in any event within ninety (90) days thereafter, a copy of its audited financial
statements accompanied by a report thereon by a firm of independent certified
public accountants selected by Borrower, which report shall state that such
financial statements fairly present Borrower's financial position at the end of
such Fiscal Year;
(c) on a quarterly basis, Borrower and Lender shall meet for the
purposes of discussing issues between the parties.
(d) with reasonable promptness, such other information as from
time to time may be reasonably requested by Lender.
E. Events of Default.
-----------------
1. Definition of Event of Default. The occurrence of any one or more of
------------------------------
the following events shall constitute an "Event of Default" hereunder:
----------------
-3-
<PAGE>
(i) Borrower's breach of the obligation to pay any amount payable
hereunder on the date that it is due and payable;
(ii) Borrower's failure to perform, keep or observe any of its
covenants, conditions, promises, agreements or obligations under any other
agreement with any person or entity if such failure may have a material adverse
effect on Borrower's assets, operations or condition, financial or otherwise;
(iii) Borrower's institution of proceedings against it, or
Borrower's filing of a petition or answer or consent seeking reorganization or
release, under the federal Bankruptcy Code, or any other applicable federal or
state law relating to creditor rights and remedies, or Borrower's consent to the
filing of any such petition or the appointment of a receiver, liquidator,
assignee, trustee or other similar official of Borrower or of any substantial
part of its property, or Borrower's making of an assignment for the benefit of
creditors, or the taking of corporate action in furtherance of such action;
(iv) the entry of any judgment or order against Borrower which
remains unsatisfied or undischarged and in effect for thirty (30) days after
such entry without a stay of enforcement or execution.
2. Rights and Remedies on Event of Default.
---------------------------------------
Upon the occurrence and during the continuance of an Event of Default and
such event of default continuing for a period of 10 days from Notice to borrower
of such event of default, Lender may declare all Advances and interest accrued
thereon to be immediately due and payable and may proceed to protect and enforce
its rights in equity or by action at law, or both, whether for specific
performance of any provision of this Note or in aid of the exercise of any
power(s) granted to Lender under this note.
F. Other Provisions.
----------------
1. Definitions. As used herein, the following terms shall have the
-----------
following meanings:
"Change of Control" means an event or series of events as a result of which
-----------------
(i) any person or group (other than a stockholder of Borrower as of the date
hereof) becomes the beneficial owner of shares representing more than fifty
percent (50%) of the combined voting power of the then outstanding securities
entitled to vote generally in elections of Borrower's directors (the "Voting
------
Stock"), (ii) Borrower consolidates with or merges into any other corporation,
- -----
or conveys, transfers or leases all or substantially all of its assets to any
person, or any other corporation merges into Borrower, and, in the case of any
such transaction, Borrower's outstanding common stock is changed or exchanged as
a result, unless the Borrower's
-4-
<PAGE>
shareholders immediately before such transaction own, directly or indirectly,
immediately following such transaction, at least fifty-one percent (51%) of the
combined voting power of the outstanding voting securities of the corporation
resulting from such transaction in substantially the same proportion as their
ownership of the Voting Stock immediately before such transaction, or (iii)
Continuing Directors do not constitute a majority of the Board of Directors of
Borrower (or, if applicable, Borrower's successor).
"Continuing Directors" means at any date a member of Borrower's Board
--------------------
of Directors (i) who was a member of the Board as of the date hereof, or (ii)
who was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election.
"Fiscal Year" means the fiscal year of Borrower.
-----------
"IPO" means the first sale of Borrower's securities to the public pursuant
---
to a registration statement under the Securities Act of 1933, as amended, in
which the gross proceeds to Borrower, without reduction for selling commissions
or expenses of the sale equals or exceeds Forty Million Dollars ($40,000,000).
"UCC" means the Uniform Commercial Code in effect from time to time in the
---
relevant jurisdiction.
2. Governing Law; Venue. This Note shall be governed by the laws of the
--------------------
State of California, without giving effect to conflicts of law principles.
Borrower and Lender agree that all actions or proceedings arising in connection
with this Note shall be tried and litigated only in the state and federal courts
located in the County of Alameda, State of California or, at Lender's option,
any court in which Lender determines it is necessary or appropriate to initiate
legal or equitable proceedings in order to exercise, preserve, protect or defend
any of its rights and remedies under this Note. Borrower waives any right it
may have to assert the doctrine of forum non conveniens or to object to such
venue, and consents to any court ordered relief. Borrower waives personal
service of process and agrees that a summons and complaint commencing an action
or proceeding in any such court shall be promptly served and shall confer
personal jurisdiction if served by registered or certified mail to Borrower. If
Borrower fails to appear or answer any summons, complaint, process or papers so
served within thirty (30) days after the
-5-
<PAGE>
mailing or other service thereof, it shall be deemed in default and an order of
judgment may be entered against it as demanded or prayed for in such summons,
complaint, process or papers. The choice of forum set forth herein shall not be
deemed to preclude the enforcement of any judgment obtained in such forum, or
the taking of any action under this Note to enforce the same, in any appropriate
jurisdiction.
3. Notices. Any notice or communication required or desired to be
-------
served, given or delivered hereunder shall be in the form and manner specified
below, and shall be addressed to the party to be notified as follows:
If to Lender: Ascend Communications, Inc.
1701 Harbor Bay Parkway
Alameda, California 94502
Attention: Fran Jewels, Esq.
Telecopier: (510) 747-2638
If to Borrower: Networks Access Solutions, Inc.
100 Carpenter Dr.
Sterling, VA 20164
Attention: Scott Yancey, CFO
Telecopier: (703) 742-7706
or to such other address as each party designates to the other by notice in the
manner herein prescribed. Notice shall be deemed given hereunder if (i)
delivered personally or otherwise actually received, (ii) sent by overnight
delivery service, (iii) mailed by first-class United States mail, postage
prepaid, registered or certified, with return receipt requested, or (iv) sent
via telecopy machine with a duplicate signed copy sent on the same day as
provided in clause (ii) above. Notice mailed as provided in clause (iii) above
shall be effective upon the expiration of three (3) business days after its
deposit in the United States mail, and notice telecopied as provided in clause
(iv) above shall be effective upon receipt of such telecopy if the duplicate
signed copy is sent under clause (iv) above. Notice given in any other manner
described in this section shall be effective upon receipt by the addressee
thereof; provided, however, that if any notice is tendered to an addressee and
-------- -------
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender unless expressly set forth in such notice.
4. Lender's Rights; Borrower Waivers. Lender's acceptance of partial or
---------------------------------
delinquent payment from Borrower hereunder, or Lender's failure to exercise any
right hereunder, shall not constitute a waiver of any obligation of Borrower
hereunder, or any right of Lender hereunder, and shall not affect in any way the
right to require full performance at any time thereafter. Except as otherwise
specifically provided herein, Borrower waives presentment, diligence, demand of
payment, notice, protest and all other demands and notices in connection with
the delivery, acceptance, performance, default or enforcement of this Note. In
any action on this
-6-
<PAGE>
Note, Lender need not produce or file the original of this Note, but need only
file a photocopy of this Note certified by Lender be a true and correct copy of
this Note in all material respects.
5. Lender's Rights; Borrower Waivers. Lender's acceptance of partial or
---------------------------------
delinquent payment from Borrower hereunder, or Lender's failure to exercise any
right hereunder, shall not constitute a waiver of any obligation of Borrower
hereunder, or any right of Lender hereunder, and shall not affect in any way the
right to require full performance at any time thereafter. Except as otherwise
specifically provided herein, Borrower waives presentment, diligence, demand of
payment, notice, protest and all other demands and notices in connection with
the delivery, acceptance, performance, default or enforcement of this Note. In
any action on this Note, Lender need not produce or file the original of this
Note, but need only file a photocopy of this Note certified by Lender be a true
and correct copy of this Note in all material respects.
6. Enforcement Costs. Borrower shall pay all costs and expenses,
-----------------
including, without limitation, reasonable attorneys' fees and expenses Lender
expends or incurs in connection with the enforcement of this Note, the
collection of any sums due hereunder, any actions for declaratory relief in any
way related to this Note, or the protection or preservation of any rights of the
holder hereunder.
7. Severability. Whenever possible each provision of this Note shall be
------------
interpreted in such manner as to be effective and valid under applicable law,
but if any provision is prohibited by or invalid under applicable law, it shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of the provision or the remaining provisions of this
Note.
8. Amendment Provisions. This Note may not be amended or modified, nor
--------------------
may any of its terms be waived, except by written instruments signed by Borrower
and Lender.
9. Binding Effect. This Note shall be binding upon, and shall inure to
--------------
the benefit of, Borrower and the holder hereof and their respective successors
and assigns; provided, however, that Borrower's rights and obligations shall not
-------- -------
be assigned or delegated without
-7-
<PAGE>
Lender's prior written consent, given in its sole discretion, and any purported
assignment or delegation without such consent shall be void ab initio.
-- ------
10. Time of Essence. Time is of the essence of each and every provision
---------------
of this Note.
11. Headings. Section headings used in this Note have been set forth
--------
herein for convenience of reference only. Unless the contrary is compelled by
the context, everything contained in each section hereof applies equally to this
entire Note.
12. Public Communications. There will be no public disclosure of the
---------------------
terms of this Note (or any related agreement) except by the mutual consent of
Lender and Borrower as to the content and timing of the disclosure.
-8-
<PAGE>
IN WITNESS WHEREOF the parties hereto have authorized their respective
representatives to execute this Agreement as of the day and year first herein
before written.
Seller:
- ------
ASCEND COMMUNICATIONS , INC.
By: /s/ Bernard V. Schnader
___________________________
Name: Bernard V. Schnader
___________________________
Title: Treasurer
___________________________
Buyer:
- ------
NETWORK ACCESS SOLUTIONS, INC.
By: /s/ Scott G. Yancey
___________________________
Name: Scott G. Yancey
___________________________
Title: Chief Financial Officer
___________________________
-9-
