Document:

Registration Rights Agreement

 Exhibit 10.1 
  
 REGISTRATION RIGHTS AGREEMENT 
  

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of August 3, 2004 by and among Net to Net
Technologies, Inc., a Delaware corporation (“Net to Net”), Mack Technologies, Inc., a Delaware corporation (“Mack”) and Paradyne Networks, Inc., a Delaware corporation (“Issuer”). 
  
 This Agreement is made pursuant to the Asset Purchase Agreement (the
“Purchase Agreement”) dated July 24, 2004 by and among Net to Net, Net to Net Technologies Ltd, a private limited company organized and existing under the laws of England and Wales, Net to Net Technologies GmbH, a company
organized and existing under the laws of Germany, Issuer and for the limited purposes stated therein, certain stockholders of Net to Net, pursuant to which Issuer is issuing (i) to Net to Net (a) 252,282 shares of Buyer Common Stock and (b) a
warrant to acquire Buyer Common Stock equal to that certain number of shares of Buyer Common Stock that results from dividing $5,000,000 by the Average Closing Price of Buyer Common Stock and rounding the quotient up to the nearest whole number and
(ii) to Mack 352,557 shares of Buyer Common Stock (collectively, the “Shares”). The Shares are being offered and sold to Net to Net and Mack without registration under the Securities Act of 1933, as amended (the “Securities
Act”), in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act and the provisions of Rule 506 of Regulation D, promulgated under the Securities Act. In order to induce Net to Net to enter into the
Purchase Agreement and to satisfy an accounts payable owed by Parent to Mack which is assumed by Issuer, Issuer has agreed to provide to Net to Net (and its permitted transferees, if any, subject to Section 8.1 of this Agreement) and Mack the
registration rights set forth in this Agreement with respect to the resale of the Shares. Capitalized terms used but not defined herein shall have the meaning provided in the Purchase Agreement. 
  
 In consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows: 
  
 SECTION 1 
  
 Registration Rights 
  
 1.1. Filing of Resale Registration Statement. As soon as practicable, but in no event longer than twenty (20) business days, after the Closing, Issuer shall file with the Securities and Exchange
Commission (the “SEC” or the “Commission”) a registration statement on Form S-3 pursuant to Rule 415 under the Securities Act, or, in the event that Form S-3 is unavailable to Issuer, a registration statement on
such other SEC Form that is available to Issuer (together with any exhibits, amendments or supplements thereto, and any documents incorporated by reference therein, the “Registration Statement”), with respect to the resale of the
Shares, and any securities 

 of Issuer issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares
(subject to Net to Net, or its permitted transferees, as appropriate, and Mack providing the information described below). The securities described in the preceding sentence are collectively referred to herein as the “Registrable
Securities”; provided, that the term “Registrable Securities” shall not include securities transferred to a person other than a permitted transferee. Net to Net, or its permitted transferees, as appropriate and Mack
(collectively, the “Holders”), agree that they will within fifteen (15) business days of the Closing Date supply information regarding themselves and their plan of resale to the Issuer. 
  
 1.2. Effectiveness. The Issuer shall use its reasonable best
efforts to cause the Registration Statement to become effective as soon as practicable after the filing thereof and shall use its reasonable best efforts to keep the Registration Statement continuously effective from the date such Registration
Statement is effective until the second anniversary of the Closing Date in order to permit the prospectus forming a part thereof to be usable by the Holders during such period. 
  
 1.3. Supplements; Amendments. Subject to Section 6 hereof, Issuer shall supplement or amend the Registration
Statement, (i) as required by the applicable SEC Form, including, without limitation, the instructions for the applicable SEC Form, or by the Securities Act, the Exchange Act, or the rules and regulations promulgated under the Securities Act or the
Exchange Act, respectively, and (ii) to include in the Registration Statement any additional securities that become Registrable Securities by operation of the definition thereof unless such securities are otherwise registered under the Securities
Act. Issuer shall furnish to the Holders copies of any such supplement or amendment sufficiently in advance (but in no event less than five (5) business days in advance) of its use and/or filing with the Commission to allow the Holders a meaningful
opportunity to comment thereon with respect to the information contained therein regarding the Holders. The Holders agree that they will within five (5) business days prior to the filing of the Registration Statement supply information regarding
themselves and their plan of resale to Issuer and hereby waive any notice of the initial filing of the Registration Statement, and that such Holders and their successors and assigns will promptly notify Issuer of any changes in such information,
other than sales or transfers of Common Stock. 
  
 SECTION 2

  
 Restrictions on Transfer 
  
 2.1. Restriction. Prior to any proposed transfer of the
Shares, the Holders thereof shall give written notice to the Issuer of its intention to effect such transfer. Each such notice shall describe the manner of the proposed transfer and, if requested by the Issuer, shall be accompanied by an opinion of
counsel reasonably satisfactory to the Issuer to the effect that the proposed transfer may be effected without registration under the Securities Act, whereupon such Holder shall be entitled to transfer the Shares in accordance with the terms of its
notice. Each certificate or instrument transferred as above provided shall bear the legend set forth in Section 2.2, except that such certificate or instrument shall not bear such legend if (i) such transfer is in accordance with the provisions of
Rule 144 (or any other rule permitting public sale without registration under the Securities Act) or (ii) the opinion of counsel referred to above is to the 
  

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 further effect that the transferee and any subsequent transferee would be entitled to transfer such Shares in a public
sale without registration under the Securities Act. This Section 2.1 shall not restrict or prohibit the distribution by Net to Net of the Shares to certain stockholders of Net to Net (all of whom are “accredited investors” as defined in
Regulation D under the Securities Act) entitled to receive such Shares upon any distribution of the consideration under the Purchase Agreement. 
  
 2.2. Legend. Each certificate evidencing the Shares shall bear a legend in substantially the following form: 
  
 “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES, OR “BLUE SKY,” LAWS OF ANY STATE OR OTHER DOMESTIC OR FOREIGN JURISDICTION. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION AND
RESALE AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO A REGISTRATION STATEMENT IN EFFECT UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR A WRITTEN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE FOR SUCH TRANSACTIONS UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS.” 
  
 2.3. New Certificates. In the event that any Shares
shall cease to be subject to the restrictions on transfer set forth in this Agreement, the Issuer shall, upon the written request of the Holder thereof, issue to such Holder a new certificate evidencing such Shares without the legend required by
Section 2.2 hereof endorsed thereon. 
  

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 SECTION 3 
  

Expenses 
  
 Issuer shall pay all expenses, fees and costs incurred in connection with the preparation, filing, distribution and effectiveness of the Registration
Statement and any supplements or amendments thereto, whether or not the Registration Statement becomes effective, and whether all, none or some of the Registrable Securities are sold pursuant to the Registration Statement, including, without
limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for Issuer and the expense of any special audits incident to or required by, or in connection with the filing and effectiveness of the Registration
Statement (but excluding the compensation of regular employees of Issuer, which shall be paid in any event by Issuer). The Holders shall, severally and not jointly, pay all underwriting fees and discounts, selling commissions, brokerage fees and
stock transfer taxes, if any, applicable to the Registrable Securities sold by such Holder and the fees and expenses of their counsel, if any. 
  
 SECTION 4 
  
 Registration Procedures 
  
 Issuer will advise the Holders as to the status of the preparation, filing and effectiveness of the Registration Statement and, at Issuer’s expense, will do the following: 
  
 (a) make available to each Holder upon request a copy of the
Registration Statement (including all exhibits thereto) and any prospectus forming a part thereof and any amendments and supplements thereto (including all documents incorporated or deemed incorporated by reference therein prior to the effectiveness
of the Registration Statement and including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, which documents, other than documents incorporated or deemed incorporated by reference, will be subject
to the review of the information contained therein regarding the Holders and any such underwriter, if any, for a period of at least five (5) business days from the Holder’s receipt of such documents, and Issuer shall not file the Registration
Statement or such prospectus or any amendment or supplement to the Registration Statement or prospectus if any Holder shall reasonably object within the five (5) business day period after the receipt thereof unless Issuer shall have been advised by
its counsel that the Registration Statement or such prospectus or amendment or supplement thereto is required under the Securities Act or the rules or regulations adopted thereunder in connection with the distribution of Registrable Securities by
the Holders or Issuer. A Holder shall be deemed to have reasonably objected to such filing only if the Registration Statement, amendment, prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission
with respect to such Holder or its plan of resale; 
  
 (b) make available to each Holder upon request one conformed copy of the Registration Statement and of each amendment and supplement thereto (in each case 
  

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 including all exhibits) and such number of copies of the prospectus forming a part of the Registration
Statement (including each preliminary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, including, without limitation, documents
incorporated or deemed to be incorporated by reference prior to the effectiveness of such Registration Statement, as each of the Holders or any such underwriter, from time to time may reasonably request; 
  
 (c) to the extent practicable, promptly upon the filing of
any document that is to be incorporated by reference into the Registration Statement or prospectus forming a part thereof subsequent to the effectiveness thereof, and in any event no later than five (5) business days after such document is filed
with the Commission, make available copies of such document to the Holders upon request, and make representatives of the Issuer available for discussion of such document and other customary due diligence matters; and provide promptly to the Holders
upon request any document filed by Issuer with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act; 
  
 (d) make available at reasonable times for inspection by the Holders, and any attorney or accountant (collectively,
“Representatives”) retained by the Holders, subject to the recipient’s prior written agreement to keep such information confidential and not use or disclose it, all financial and other records, pertinent corporate documents and
properties of Issuer and cause the officers, directors and employees of Issuer to supply all information reasonably requested by the Holders or their respective Representatives in connection with the preparation, filing and effectiveness of the
Registration Statement; 
  
 (e) use
its commercially reasonable efforts (i) to register or qualify all Registrable Securities covered by the Registration Statement under state securities, or “blue sky,” laws of such States of the United States of America where required and
where an exemption is not available and as the Holders shall reasonably request, (ii) to keep such registration or qualification in effect for so long as the Registration Statement is required to be effective hereunder and (iii) to take any other
action which may be reasonably necessary or advisable to enable the Holders to consummate the disposition of the securities to be sold by the Holders in such jurisdictions, consistent with the plan of distribution described in the prospectus
included in the Registration Statement, except that Issuer shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where it is not so qualified, or to execute a general consent to
service of process in effecting such registration, qualification or compliance, unless Issuer is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder;

  
 (f) use its commercially reasonable efforts
to cause all Registrable Securities covered by the Registration Statement to be registered or qualified with or approved by all other applicable Governmental Authorities as may be necessary, in the opinion of counsel to Issuer and counsel to the
Holders, to enable the Holders thereof the consummate the disposition of such Registrable Securities; 
  

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 (g) subject to Section 6 hereof, promptly notify each Holder of Registrable Securities
covered by the Registration Statement (i) upon discovery that, or upon the occurrence of any event as a result of which, the prospectus forming a part of the Registration Statement, as then in effect, includes an untrue statement of a material fact
or omits 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, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of proceedings for that purpose, (iii) of any request by the Commission for (A) amendments to the Registration Statement or any document incorporated or deemed to be
incorporated by reference in the Registration Statement, or (B) supplements to the prospectus forming a part of the Registration Statement, or (C) additional information or (iv) of the receipt by Issuer of any notification with respect to the
suspension of the registration, qualification or exemption from registration or qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, and at the request of any such
Holder promptly prepare and file an amendment to the Registration Statement or a supplement to the prospectus as the Issuer may deem necessary so that, as thereafter delivered to the Purchaser of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a 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; and make available to each
Holder upon their request a reasonable number of copies of such supplement to, or amendment of, such Registration Statement and prospectus, and, in the event of a stop order, use its commercially reasonable efforts 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 Registrable Securities for sale in any jurisdiction; 
  
 (h) if reasonably requested by any Holder or if required by
law or SEC or other applicable rule or regulation, promptly incorporate in the Registration Statement such appropriate information as the Holder may reasonably request to have included therein by filing a Form 8-K, or filing a supplement to the
prospectus, to reflect any change in the information regarding the Holder, and make all required filings with the Commission in respect of any offer or sale of Registrable Securities or any amendment or supplement to the Registration Statement or
related prospectus; 
  
 (i) otherwise use
its commercially reasonable efforts to comply with all applicable rules and regulations, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months, but not
more than eighteen (18) months, beginning with the first full calendar month after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder; and 
  

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 (j) use its commercially reasonable efforts to cause all Registrable Securities included
in the Registration Statement to be listed on Nasdaq and each securities exchange on which securities of the same class are then listed, or, if not then listed on any securities exchange or Nasdaq, to be eligible for trading in any over-the-counter
market or trading system in which securities of the same class are then traded. 
  
 SECTION 5 
  
 Indemnification 
  
 4.1. Indemnification by
Issuer. Issuer will indemnify: 
  

	 	(a)	each of the Holders, as applicable, 

  

	 	(b)	each of the Holder’s officers, directors, members and partners, and 

  

	 	(c)	each individual, partnership, joint stock company, corporation, trust, unincorporated organization, government agency or political subdivision (each of the foregoing, a
“Person”) controlling each of the Holders within the meaning of SEC Rule 405 under the Securities Act, Section 15 of the Securities Act or Section 20 of the Exchange Act, 

  
 with respect to the Registration Statement, against all expenses, claims, losses, damages and
liabilities (or actions, investigations or proceedings in respect thereof) (collectively, a “Claim”) arising out of or based on any actual or alleged untrue statement of a material fact, or any omission or alleged omission of a
material fact required to be stated therein or necessary in order to make the statements included therein not misleading, contained in the Registration Statement, any prospectus (in light of the circumstances under which they were made) or other
offering document, and will reimburse each of the Holders, each of its officers, directors, members and partners, and each Person controlling each of the Holders, for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such Claim; provided, however, that the Issuer will not be liable in any such case to the extent that any such Claim arises out of or is based on (i) any untrue statement or omission based upon written
information furnished to issuer by the Holders or their Representatives and stated to be specifically for use therein, or (ii) any untrue statement or omission of a material fact required to make such statement not misleading in any prospectus that
is corrected in any subsequent prospectus that was delivered to the Holder before the pertinent sale or sales by such Holder, is such prospectus is not delivered by such Holder. 
  
 4.2. Indemnification by the Holders. Each of the Holders will, if Registrable Securities held by it are
included in the securities as to which such Registration Statement is being effected, severally and not jointly, indemnify the Issuer, each of its directors and officers, and each Person who “controls” the Issuer within the meaning of SEC
Rule 405 under the Securities Act, Section 15 of the Securities Act or Section 20 of the Exchange Act, and each other Holder, against all Claims arising out of or based on (i) any actual or alleged untrue statement of a material fact, or any
omission or alleged omission of a material fact required to be stated therein or necessary in 
  

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 order to make the statement included or incorporated therein not misleading, contained in the Registration Statement,
prospectus (in light of the circumstances under which they were made), or other offering document based upon written information furnished to Issuer by or on behalf of such Holder and stated to be specifically for use therein, or (ii) any untrue
statement or omission of a material fact required to make such statement not misleading in any prospectus that is corrected in any subsequent prospectus that was delivered to such Holder before the pertinent sale or sales by such Holder, and will
reimburse Issuer, its directors, officers, partners, members or control Persons for any legal or any other expenses reasonably incurred in connection with investigating and defending any such Claim, in the case of subsection (i) above 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 memorandum or other document in reliance upon and in conformity with written information
furnished to Issuer by or on behalf of such Holder and stated to be specifically for use therein; provided, however, that the several obligations of each of the Holders hereunder shall be limited to an amount equal to the net proceeds
received by such Holder from the sale of the Registrable Securities pursuant to the Registration Statement. 
  
 4.3. Procedures. Each party entitled to indemnification under this Agreement (each, an “Indemnified Party”) shall give
notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any Claim as to which indemnity may be sought, and shall permit the Indemnifying Party
to assume the defense of any such Claim; provided that counsel for the Indemnifying Party, who shall conduct the defense of such Claim, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such party’s expense (unless the Indemnified Party shall have reasonably concluded based upon a written opinion of counsel that there may be a conflict of interest between the Indemnifying
Party and the Indemnified Party in such action, in which case the fees and expenses of one such counsel for all Indemnified Parties shall be at the expense of the Indemnifying Party), 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 unless the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in the investigation or defense of any
such Claim shall, except with the consent of each Indemnified Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement or compromise which does not include a release of the
Indemnified Party from all liability in respect to such Claim. Each Indemnified Party shall furnish such information regarding itself or the Claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the investigation and defense of such Claim. 
  
 4.4. Contribution. If the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Claim, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such Claim, as well as any other 
  

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 relevant equitable considerations; provided, however, that Issuer will not be liable in any such case to the
extent that any such Claim (i) arises out of or is based on any untrue statement or omission based upon written information furnished to Issuer by the Holders or their Representatives and stated to be specifically for use therein, or (ii) is finally
judicially determined to have resulted primarily from the gross negligence or willful misconduct of any person or entity set forth in Section 4.1(a) through 4.1(c) above. The relative fault of the Indemnifying Party and of the Indemnified Party
shall be determined by reference to, among other things, whether the untrue (or alleged untrue) statement of a material fact or the omission (or alleged omission) to state a material fact relates to information supplied by the Indemnifying Party or
by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and provided that each Holder shall not be required to contribute, in the aggregate,
more than the net proceeds received by such Holder from the sale of its Registrable Securities pursuant to the Registration Statement and further provided that the obligations of the Holders under this Section 4.4 shall be several and not joint.

  
 SECTION 6 
  
 Provision of Information by the Holders 
  
 Each of the Holders whose Registrable Securities are included in the
Registration Statement shall furnish to the Issuer such information regarding such Holder as the Issuer may reasonably request in writing and as shall be reasonably required or advisable in connection with any registration, qualification or
compliance referred to in this Agreement, and shall promptly notify the Issuer if such information becomes incorrect or misleading, or requires amendment or updating. The other information regarding the Holders required for the initial filing of the
Registration Statement has been provided by each Holder. Each Holder, severally and not jointly, represents, warrants and covenants to the Issuer that the information regarding such Holder that appears in Schedule A is accurate and complete
in all material respects consistent with Commission Regulation S-K, Items 507 and 508. The Issuer will confirm promptly by delivery of a signed copy of Schedule A, the sale of any Shares pursuant to Rule 144 or the Registration Statement.

  
 SECTION 7 
  
 Holdback; Postponement 
  
 Notwithstanding the other provisions of this Agreement, if (a) there is
material non-public information regarding Issuer which Issuer’s Board of Directors reasonably and in good faith determines not to be in Issuer’s best interest to disclose and which Issuer is not otherwise required to disclose, or (b) there
is a extraordinary business opportunity (including but not limited to the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar extraordinary transaction not
in the ordinary course of business) which Issuer’s Board of Directors reasonably and in good faith determines not to be in Issuer’s best interest to disclose and which Issuer is not otherwise required to disclose, then Issuer may postpone
or suspend filing or effectiveness of a registration 
  

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 statement for a period not to exceed forty-five (45) days, provided that Issuer may not postpone or suspend filing
or effectiveness of a registration statement for more than ninety (90) days in the aggregate during any 365-day period; provided, however that no postponement or suspension shall be permitted for consecutive forty-five (45) day periods
arising out of the same set of facts, circumstances or transactions. Each of the Holders shall keep confidential any material non-public information disclosed to such Holder by Issuer in accordance with this Section 7. 
  
 SECTION 8 
  
 Rule 144 Reporting, Etc. 
  
 7.1. SEC Reporting Compliance. 
  
 (a) With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, through the second anniversary of this Agreement, Issuer will: 
  
 (i) make and keep “current public information”
regarding Issuer available, as defined in Commission Rule 144(c) under the Securities Act, and cooperate with the Holders and take such further reasonable action as the Holders may reasonably request in writing (including, without limitation, making
such reasonable representations as the Holders may reasonably request); 
  
 (ii) use its commercially reasonable efforts to file with the Commission in a timely manner all SEC Reports and other filings and documents required of Issuer under the Securities Act and the Exchange Act; and

  
 (iii) so long as a Holder owns any
Registrable Securities, furnish the Holder forthwith upon request a written statement by Issuer as to its compliance with the reporting requirements under the Securities Act and the Exchange Act, including compliance with SEC Rule 144(c), a copy of
the most recent annual or quarterly report of Issuer, and such other reports and documents of Issuer and other information in the possession of, or reasonably obtainable by, Issuer as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities without registration. 
  
 Notwithstanding the foregoing, nothing in this Section 7.1(a) shall be deemed to require Issuer to register any of its securities (other than the Buyer
Common Stock) under any section of the Exchange Act. 
  
 (b) Issuer shall file the reports required to be filed by it under the Exchange Act and shall comply with all other requirements set forth in the instruction to Form S-3 in order to allow Issuer to be eligible to file registration
statements on Form S-3. 
  

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 SECTION 9 
  

Miscellaneous 
  
 8.1. Assignment. The registration rights set forth herein may be assigned, in whole or in part, to any transferee of Registrable Securities
permitted in accordance with the Purchase Agreement, which transferee, upon registration on Issuer’s or its transfer agent’s books and records as a holder of record of Registrable Securities, shall be considered thereafter to be a Holder
and shall be bound by all obligations and limitations of this Agreement and the Purchase Agreement. Each such permitted transferred shall be required to execute a counterpart of this Agreement and shall not be considered a Holder until such
counterpart to this Agreement is executed and delivered to the Issuer. 
  
 8.2. Section Headings. The titles and headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof. 
  
 8.3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving effect to the conflict of law rules thereof to the extent that the application of the law of another jurisdiction would be required thereby. 
  
 8.4. Notices. 
  
 (a) All communications under this Agreement shall be in
writing and shall be delivered by facsimile, by hand, by reliable overnight delivery service such as UPS or FedEx or by registered or certified mail, postage prepaid: 
  

			
	 If to the Issuer:
	  	Paradyne Networks, Inc.
	 	  	8545 126th Avenue North
	 	  	Largo, FL 33773
	 	  	Telephone: (727) 530-2209
	 	  	Facsimile: (727) 530-2210
	 	  	Attention: Patrick M. Murphy
		
	 With a copy to:
	  	Alston & Bird LLP
	 	  	1201 West Peachtree Street
	 	  	Atlanta, GA 30309
	 	  	Telephone: (404) 881-7000
	 	  	Facsimile: (404) 881-4777
	 	  	Attention: Craig Apolinsky, Esq.
		
	 If to Net to Net:
	  	Net to Net Technologies, Inc.
	 	  	112 Corporate Drive
	 	  	Pease International Tradeport
	 	  	Portsmouth, NH 03801
	 	  	Telephone: (603) 422-0691
	 	  	Facsimile: (603) 422-0611
	 	  	Attention: Stephen Royal

  

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	 With a copy to:
	  	Goodwin Procter, LLP
	 	  	Exchange Place
	 	  	53 State Street
	 	  	Boston, MA 02109
	 	  	Telephone: (617) 570-1000
	 	  	Facsimile: (617) 523-1231
	 	  	Attention: Michael Kendall, Esq.
		
	 If to Mack:
	  	Mack Technologies, Inc.
	 	  	608 Warm Brook Road
	 	  	Arlington, VT 05250
	 	  	Telephone: (802) 375-0357
	 	  	Facsimile: (802) 375-1327
	 	  	Attention: Florence Delnap
		
	 With a copy to:
	  	Choate, Hall & Stewart
	 	  	53 State Street
	 	  	Boston, MA 02109
	 	  	Telephone: (617) 248-5000
	 	  	Facsimile: (617) 248-4000
	 	  	Attention: Douglas R. Gooding, Esq.

  
 (b)
Any notice so addressed shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if sent by reliable overnight delivery service such as UPS or FedEx, on the first business day following the date of delivery to such
service for overnight delivery, (iii) if delivered by facsimile, on the date of such facsimile, or (iv) if mailed by registered or certified mail, on the third business day after the date of such mailing. In the event that any notice is sent by
facsimile transmission, such transmission shall be followed immediately by overnight delivery of such notice. 
  
 8.5. Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of each of the parties. No other person is intended to or shall have any rights or remedies hereunder, whether as a third part beneficiary or otherwise. 
  
 8.6. Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall
be deemed an original and all of which shall be one and the same agreement. Any signature that is delivered by facsimile signature page shall be valid and binding, with the same force and effect as if an original, manually signed counterpart.

  

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 8.7. Remedies. Each Holder of Registrable Securities, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. Issuer agrees that monetary damages would not be adequate compensation for any loss incurred by reason of
a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 
  
 8.8. Severability. In the event that any provision contained herein is unenforceable, the remaining provisions
shall continue in full force and effect. 
  
 8.9. Delays or
Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to the Holders, upon any breach or default of Issuer under this Agreement, shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any provision hereof, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.
It is further agreed that any waiver, permit, consent or approval of any kind or character by a Holder of any breach or default under this Agreement, or any waiver by a Holder of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in the writing, and that all remedies, either under this Agreement, or by law or otherwise afforded to a Holder, shall be cumulative and not alternative. 
  
 8.10. Attorney’s Fees. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

  
 8.11. Entire Agreement; Amendment. This
Agreement and the Purchase Agreement constitute the entire understanding and agreement of the parties with respect to the subject matter hereof and supersede all prior understandings, written or otherwise, among such parties. This Agreement may be
amended only in a writing signed by Issuer and the Holders of at least a majority of the then outstanding Registrable Securities. 
  
 [The remainder of this page has been intentionally left blank.] 
  

 13 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above
written. 
  

			
	PARADYNE NETWORKS, INC.
		
	By:	 	 /s/ Sean E. Belanger

	Name:	 	Sean E. Belanger
	Its:	 	Chief Executive Officer
	
	NET TO NET TECHNOLOGIES, INC.
		
	By:	 	 /s/ Kenneth J. Latimer

	Name:	 	Kenneth J. Latimer
	Its:	 	President and Chief Executive Officer
	
	MACK TECHNOLOGIES, INC.
		
	By:	 	 /s/ Florence M. Delnap

	Name:	 	Florence M. Delnap
	Its:	 	Secretary

  

 14 

 Counterpart Signature Page 
  
 IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page as of the day and year set forth below.

  

					
	 	 	Permitted Transferee:
			
	Date: __________	 	By:	 	  

	 	 	Name:	 	  

	 	 	Its:	 	  

  

 15 

 SCHEDULE A 
  
 Purchaser’s Certificate of Subsequent Sale1 
  
 The undersigned, an officer of, or other person duly authorized by the Purchaser named below hereby certifies to Issuer, as defined in the Registration
Rights Agreement, dated as of                     , 2004 (the “Agreement”) that he/she (said institution) is the Purchaser of
the shares evidenced by the attached certificate, and as such, sold or otherwise transferred such shares on                     ,
200     in accordance with: 
  

	 	(i)	Registration Statement number
                                        
                                , in the manner indicated under “Plan of
Distribution” in the current prospectus and has delivered a current prospectus, or 

  

	 	(ii)	Pursuant to the applicable requirements of Rule 144 of the Securities Act of 1933, as amended, in which case, a copy of Form 144 as filed with the Securities and Exchange
Commission, together with the representation letter of the undersigned and the broker’s representation letter are enclosed. 

  

			
	Print or Type:
		
	 	 	Name of Purchaser (Individual or Institution):
	 	 	  

	 	 	Name of Individual Representing Purchaser (if an Institution):
		
	 	 	  

	Title:	 	  

	
	Confirmed by the undersigned thereunto duly authorized:
		
	 	 	  

	 	 	Purchaser Name
		
	By:	 	  

	Name:	 	 
	Title:	 	 

	1	All capitalized terms used but not defined herein shall have the meanings provided in the Agreement.Warrant

 Exhibit 10.2 
  
 NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM, OR IN THE ABSENCE OF RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE WARRANT
OR SHARES SOUGHT TO BE SOLD OR TRANSFERRED MAY BE SOLD OR TRANSFERRED WITHOUT SUCH REGISTRATION. 
  
 THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT AS SPECIFIED IN PARAGRAPHS 2 AND 5 HEREOF. 
  
 Number      
  
 PARADYNE NETWORKS, INC. 
  
 WARRANT TO PURCHASE COMMON STOCK 
  
 THIS CERTIFIES THAT, for value received, NET TO NET TECHNOLOGIES, INC., a Delaware corporation (“Net to Net”), or its registered assigns,
is entitled to subscribe for and purchase from PARADYNE NETWORKS, INC., a Delaware corporation (the “Company”), at the price of $5.95 per share at any time from August 3, 2004 until the Expiration Date (as defined below), all or any
part of 1,008,065 shares (the “Warrant Shares”) of the Company’s fully paid and nonassessable Common Stock (as defined below); subject, however, to the provisions and upon the terms and conditions hereinafter set forth.

  
 This Warrant is issued pursuant to that certain Asset Purchase
Agreement dated as of July 24, 2004 by and among the Company, Net to Net, Net to Net Technologies Limited, Net to Net Technologies GmbH and for certain limited purposes thereof, certain stockholders of Net to Net (the “Purchase
Agreement”). 
  
 1. The rights represented by this
Warrant may be exercised by the holder hereof, in whole or in part (but not as to a fractional share of Common Stock), by the surrender of this Warrant (properly endorsed, if required) (with the notice of exercise substantially in the form attached
hereto as Exhibit A duly completed and executed), at the principal office of the Company (or such other office as the Company may designate by notice in writing to the holder hereof). Unless the exercise is a “cashless exercise” as
described below, such surrender of the Warrant shall be accompanied by full payment to the Company, by wire transfer to an account designated by the Company in immediately available funds in lawful money of the United States of America or by
certified check or bank draft, of the purchase price for such Warrant Shares. The Company agrees that the shares so purchased shall be deemed to be issued to the holder hereof as the record owner of such shares, as of the close of business of the
date on which this Warrant shall have been surrendered and payment made for such shares, as aforesaid. 

 Certificates for the shares so purchased shall be delivered to the holder hereof within a reasonable time, not exceeding
thirty (30) days, after the rights represented by this Warrant shall have been so exercised. The Company shall permit the holder of the Warrant to pay the exercise price and any applicable taxes through a cashless exercise by withholding from the
Warrant Shares a number of shares of Common Stock having a value equal to the exercise price. The Fair Market Value of the Common Stock as of the last trading day immediately prior to the exercise date shall be used in valuing the Warrant Shares
used in payment of the exercise price. Alternatively, to the extent permitted under Regulation T of the Federal Reserve Board and subject to applicable securities laws, the Warrant may be exercised through a broker in a cashless exercise whereby the
broker sells the Warrant Shares and delivers cash sales proceeds to the Company in payment of the exercise price and any applicable taxes. In such case, the date of exercise shall be deemed to be the date on which notice of exercise is received by
the Company, and the exercise price shall be delivered to the Company on the settlement date. 
  
 2. The Warrant will be exercisable, assignable and transferable until the Expiration Date; provided, however, that any transfer or assignment of the
Warrant to any person must be made in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), or any similar federal statute then in effect and the Delaware General Corporation Law and any
applicable state securities statute (collectively, the “Securities Laws”). Subject to compliance with the foregoing and with Section 5, this Warrant and all rights hereunder are transferable in whole or in part upon the books of the
Company by the registered holder hereof in person or by duly authorized attorney, and new Warrants shall be made and delivered by the Company, of the same tenor and date as this Warrant but registered in the name of the transferees, upon surrender
of this Warrant, duly endorsed, to the office or agency of the Company.  
  
 3. The Company covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will have at all times authorized and reserved for the purpose of
issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide therefor.  
  
 4. Each certificate for Warrant Shares issued upon exercise of this Warrant, unless at the time of exercise such Warrant Shares are registered under the
Securities Act, shall bear the following legend (and any additional legend required by applicable law or rule) on the face thereof: 
  
 THE SHARES OF STOCK REPRESENTED HEREBY HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. NEITHER
THESE SHARES, NOR ANY PORTION THEREOF OR INTEREST THEREIN, MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED AND QUALIFIED IN ACCORDANCE WITH SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR, IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. 
  
 The provisions of Section 5 shall be binding upon all holders of certificates bearing the above legend and shall also be applicable to all holders of this Warrant. 
  

 - 2 - 

 5. (a) Warrant and Warrant Shares Not Registered. The holder of this Warrant, by acceptance
hereof, represents, acknowledges and agrees that this Warrant and the Warrant Shares which may be purchased upon exercise of this Warrant are not being registered under the Securities Act, that the issuance of this Warrant and the offering and sale
of such Warrant Shares are being made in reliance on the exemption from registration under Section 4(2) of the Securities Act as not involving any public offering and that the Company’s reliance on such exemption is predicated in part on the
representations made by the initial holder of this Warrant to the Company that such holder (1) is acquiring this Warrant for investment for its own account, with no present intention of reselling or otherwise distributing the same, provided,
nevertheless, that the disposition of its property shall at all times be within its control, (2) is an “accredited investor” as defined in Regulation D under the Securities Act, (3) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the investments made or to be made in connection with the acquisition and exercise of this Warrant, (4) has been given the opportunity to (i) ask questions of, and receive
answers from the Company or any affiliate thereof concerning matters pertaining to an investment in the Company and (ii) obtain any additional information which the Company can acquire without unreasonable effort or expense that is necessary to
evaluate the merits and risks of an investment in the Company and (5) has carefully considered and has, to the extent it believes such discussion necessary, discussed with legal, tax, accounting and financial advisers the suitability of an
investment in the Company in light of its particular tax and financial situation, and has determined that this Warrant and any Warrant Shares being acquired by it hereunder are a suitable investment for such holder. Neither this Warrant nor the
related Warrant Shares may be transferred except (i) pursuant to an effective registration statement under the Securities Act, (ii) to any affiliate, or a nominee, of the holder hereof or thereof, or (iii) in the case of transfers other than those
described in clauses (i) and (ii) preceding, upon the conditions specified in Section 5(b), which conditions are intended, among other things, to ensure compliance with the provisions of the Securities Act in respect of the transfer of this Warrant
or of such Warrant Shares. 
  
 (b) Notice of Transfer; Opinion
of Counsel. The holder of this Warrant, by acceptance hereof, agrees that prior to the disposition of this Warrant or of any Warrant Shares, such holder will give written notice to the Company expressing such holder’s intention to effect
such disposition together with (1) an opinion of independent counsel as may be designated by such holder and reasonably satisfactory to the Company as to the necessity or non-necessity of registration under the Securities Act, and (2) such
counsel’s opinion (or other evidence reasonably satisfactory to the Company) that such disposition will also be in compliance with applicable state securities law, and the following provisions shall apply: 
  
 (i) If in the opinion of such counsel, the proposed
disposition does not require registration under the Securities Act of this Warrant or the Warrant Shares issuable or issued upon the exercise of this Warrant, such holder shall be entitled to dispose of this Warrant or the Warrant Shares theretofore
issued upon the exercise hereof, all in accordance with the terms of the notice delivered by such holder to the Company. 
  

 - 3 - 

 (ii) If in the opinion of such counsel, such proposed disposition may require such
registration of this Warrant or the Warrant Shares issuable or issued upon the exercise of this Warrant, the holder of this Warrant shall not be entitled to transfer this Warrant or such Warrant Shares without such registration. 
  
 The parties hereto expressly acknowledge and agree that the restrictions under this Section 5
shall not apply to any distribution of this Warrant or any Warrant Shares hereunder to certain of the stockholders of Net to Net (all of whom are “accredited investors” as defined in Regulation D under the Securities Act) entitled to
receive such Warrant or any Warrant Shares upon any distribution of the consideration under the Purchase Agreement 
  
 6. (a) If at any time the Company shall (i) declare a dividend or make a distribution on its outstanding Common Stock in Common Stock or any stock or
securities convertible into or exchangeable for Common Stock, (ii) subdivide or reclassify any of its outstanding Common Stock into a greater number of shares or (iii) combine or reclassify any of its outstanding Common Stock into a smaller number
of shares, then upon the occurrence of such event or action, the Warrant purchase price shall be adjusted, effective immediately after the record date for such dividend or distribution or the effective date of such subdivision, combination or
reclassification, to the price calculated by multiplying the Warrant purchase price in effect immediately prior to such record date or effective date by a fraction, the numerator of which is the total number of fully diluted outstanding shares of
Common Stock immediately prior to giving effect to such dividend, distribution, subdivision, combination or reclassification, and the denominator of which is the total number of shares of fully diluted outstanding shares of Common Stock immediately
after giving effect to such dividend, distribution, subdivision, combination or reclassification. Upon any adjustment to the Warrant purchase price as provided above, the holder hereof shall thereafter be entitled to purchase, at the Warrant
purchase price resulting from such adjustment, the number of shares of Common Stock (calculated to the nearest .001 of a share) obtained by multiplying the Warrant purchase price in effect immediately prior to such adjustment by the number of shares
of Common Stock issuable on the exercise hereof immediately prior to such adjustment and dividing the product thereof by the Warrant purchase price resulting from such adjustment. 
  
 (b) In the event that the Company shall, at any time or from time to time during the period that this Warrant shall be
exercisable, issue any shares of Common Stock (other than shares issuable pursuant to options outstanding as of the date hereof and shares issuable pursuant to incentive stock plans adopted for benefit of the Company’s employees) for a
consideration per share less than the Warrant purchase price in effect immediately prior to the issuance of such shares, or without consideration, then, and thereafter successively upon each such issuance, the Warrant purchase price in effect
immediately prior to the issuance of such shares shall forthwith be reduced to a price (calculated to the nearest full cent) determined by dividing (a) an amount equal to (i) the total number of shares of Common Stock outstanding immediately prior
to such issuance, multiplied by the Warrant purchase price in effect immediately prior to such issuance, plus (ii) the consideration, if any, received by the Company upon such issuance, by (b) the total 
  

 - 4 - 

 number of shares of Common Stock outstanding immediately after such issuance. After each adjustment of the Warrant
purchase price, the total number of shares of Common Stock purchasable upon exercise of this Warrant shall be proportionately adjusted to such a number of shares as the Warrant purchase price, multiplied by the number of shares of Common Stock, will
pay for at the adjusted Warrant purchase price. For purposes of this subsection (6), the following provisions shall be applicable: 
  
 (i) In the case of the issuance of shares of Common Stock or other securities of the Company for cash, the consideration received by the
Company therefor shall be deemed to be the cash proceeds received by the Company therefor, less any commissions or other expenses paid or incurred by the Company for any underwriting of, or otherwise in connection with, the issuance thereof.

  
 (ii) In case of the issuance of shares of
Common Stock or other securities of the Company for a consideration other than cash, or a consideration a part of which shall be other than cash, the amount of the consideration received by the Company therefor shall be deemed to be the cash
proceeds, if any, received by the Company, plus the fair market value of the consideration other than cash, as determined by the Board of Directors of the Company, less any commissions or other expenses paid or incurred by the Company for any
underwriting of, or otherwise in connection with, such issuance; provided, however, that the amount of such consideration other than cash shall in no event exceed the cost thereof as recorded on the books of the Company. 
  
 (iii) In case of the issuance by the Company of (i) any
security that is convertible into or exchangeable for shares of Common Stock or (ii) any rights, warrants (other than these Warrants) or options to purchase shares of Common Stock, the Company shall be deemed to have issued the maximum number of
shares of Common Stock into which such convertible or exchangeable securities may be converted or exchanged, or the maximum number of shares of Common Stock deliverable upon the exercise of such rights, warrants or options, as the case may be, for
the consideration (determined as provided in (i) and (ii) above) received by the Company for such convertible or exchangeable securities, or for such rights or options, as the case may be, plus the minimum aggregate price at which shares of Common
Stock are to be delivered upon the exercise of such rights, warrants or options, as the case may be. On the expiration of such rights, warrants or options, or the termination of such right to convert or exchange, the Warrant purchase price hereunder
shall be readjusted to such Warrant purchase price as would have obtained had the adjustments made upon the issuance of such rights, warrants or options, or convertible or exchangeable securities been made upon the basis of the delivery of, and
receipt of the consideration or adjustment payment, if any, actually paid for, only the number of shares of Common Stock actually delivered upon the exercise of such rights, warrants or options, or upon the conversion or exchange of such securities.
Except as provided in the next preceding sentence, no further adjustment of the Warrant purchase price shall be made as a result of the actual issuance of shares of Common Stock referred to in this (iii). 
  

 - 5 - 

 (iv) The consideration for any securities issued as a stock dividend shall be deemed to
be zero. 
  
 (v) The number of shares of stock of
any class at any time outstanding shall include all shares of stock of that class then owned or held by or for the account of the Company. 
  
 (vi) If at any time or from time to time, the Company shall, by subdivision, consolidation or reclassification of shares, or otherwise,
change as a whole the outstanding shares of Common Stock into a different number or class of shares, the number and class of shares as so changed shall, for the purposes of each Warrant and the terms and conditions hereof, replace the shares
outstanding immediately prior to such change, and the Warrant purchase price in effect, and the number of shares purchasable under each Warrant, immediately prior to the date on which such change shall become effective, shall be proportionately
adjusted. 
  
 (vii) Irrespective of any
adjustment or change in the Warrant purchase price or the number of shares of Common Stock actually purchasable under each warrant of like tenor, the Warrants theretofore and thereafter issued may continue to express the Warrant purchase price per
share and the number of shares purchasable thereunder as the Warrant purchase price per share and the number of shares purchasable were expressed on the Warrants when initially issued. 
  
 (c) In case of any reorganization, reclassification or recapitalization of the capital stock of the Company (other than in
the cases referred to in Section 6(a) above), or in case of the consolidation or merger of the Company with or into another corporation, or in case of the sale or transfer of the property of the Company as an entirety or substantially as an
entirety, there shall thereafter be deliverable, upon the exercise of this Warrant or any portion thereof (in lieu of or in addition to the number of Warrant Shares theretofore deliverable, as appropriate), the number of shares of stock or other
securities or property which would otherwise have been deliverable upon the exercise of this Warrant or any portion hereof at the time, that the holder would have been entitled upon such reorganization, reclassification or recapitalization of
capital stock, or upon such consolidation, merger or sale, and at the same aggregate Warrant purchase price. 
  
 Prior to and as a condition of the consummation of any transaction described in the preceding paragraph, the Company shall cause effective provisions to
be made so that the holder shall have the right thereafter by exercising this Warrant to purchase the kind and amount of shares of stock or other securities or property which would have been receivable upon such consummation had this Warrant been
exercised in full immediately prior thereto. Any such provisions shall also include adjustments which shall be as nearly equivalent as practicable to the adjustments as provided for in this Section 6. Any such adjustment shall be made by and set
forth in a supplemental agreement between the Company and the successor entity which agreement shall bind such entity. 
  

 - 6 - 

 (d) Notwithstanding anything herein to the contrary, no adjustment under this Section 6 need be made to
the number of Warrant Shares or the Warrant purchase price unless such adjustment would require an increase or decrease of at least 1% of the number of Warrant Shares of the Warrant purchase price then in effect. Any lesser adjustment shall be
carried forward and shall be made at the earlier of immediately prior to the exercise of this Warrant or the time of and together with the next subsequent adjustment, which, together with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% of the Warrant Shares or the Warrant purchase price. 
  
 7. Upon the happening of any event requiring an adjustment of the Warrant purchase price hereunder, the Company shall forthwith give written notice
thereof to the registered holder of each Warrant, stating the adjusted Warrant purchase price and the adjusted number of shares of Common Stock purchasable upon the exercise thereof resulting from such event, and setting forth in reasonable detail
the method of calculation and the facts on which such calculation is based. The certificate of the Company’s independent public accountants shall be conclusive evidence of the correctness of any computation made hereunder. 
  
 8. In case at any time during the period this Warrant shall be exercisable,

  
 (a) the Company shall declare a dividend or
make a distribution on its outstanding Common Stock in Common Stock or any stock or securities convertible into or exchangeable for Common Stock; 
  
 (b) the Company shall subdivide or reclassify any of its outstanding Common Stock into a greater number of shares; 
  
 (c) the Company shall combine or reclassify any of its
outstanding Common Stock into a smaller number of shares; 
  
 (d) there shall be any reorganization, reclassification or recapitalization of the capital stock of the Company, or consolidation or merger of the Company with or into another corporation, or sale or transfer of the
property of the Company as an entirety or substantially as an entirety; or 
  
 (e) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; 
  
 then, in any one or more of such cases, the Company shall give to the holder of this Warrant (i) at least ten (10) days’ prior written notice of the date on which
the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights, or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, and (ii) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, at least ten (10) days’ prior written notice of the date when the
same shall take place. Such notice in accordance with the foregoing clause (i) shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holders of Common Stock 
  

 - 7 - 

 shall be entitled thereto, and such notice in accordance with the foregoing clause (ii) shall also specify when the
holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may
be. Each such written notice shall be given by first class mail, postage prepaid, addressed to the holder of this Warrant at the address of such holder as shown on the books of the Company. 
  
 9. The following words and terms as used in this Warrant shall have the
following meanings: 
  

	 	(a)	“Common Stock” shall mean and include the Company’s Common Stock, $0.001 par value per share, authorized on the date hereof. 

  

	 	(b)	“Expiration Date” shall mean the close of business on December 31, 2005. 

  

	 	(c)	“Fair Market Value” shall mean the closing sales price on the Nasdaq National Market on such date or, in the absence of reported sales on such date, the closing
sales price on the immediately preceding date on which sales were reported. 

  
 10. This Warrant is exchangeable, upon its surrender by the registered holder at such office of the Company, for new warrants of like tenor, representing, in the aggregate, the right to subscribe for and purchase the
number of shares that may be subscribed for and purchased hereunder, each of such new warrants to represent the right to subscribe for and purchase such number of shares as shall be designated by the registered holder at the time of such surrender.
Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction, upon delivery of a bond of indemnity satisfactory to the Company, or, in the case of any such mutilation, upon surrender or cancellation of this Warrant, the
Company will issue to the registered holder a new warrant of like tenor, in lieu of this Warrant, representing the right to subscribe for and purchase the number of shares that may be subscribed for and purchased hereunder. Nothing herein is
intended to authorize the transfer of this Warrant, except as permitted under Paragraphs 2 and 5. 
  
 11. Except as otherwise specifically set forth herein, no provisions of this Warrant and no right or option granted or conferred hereunder shall in any
way limit, affect or abridge the exercise by the Company of any of its corporate rights or powers to recapitalize, amend its Certificate of Incorporation, reorganize, consolidate or merge with or into another corporation, or transfer all or any part
of its property or assets, or the exercise of any other of its corporate rights and powers. 
  
 12. This Warrant shall be construed, interpreted and the rights of the parties determined in accordance with the laws of the State of Delaware, without regard to the conflict of law principles thereof. 
  
 13. No provision of this Warrant may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which enforcement of the same is sought. 
  

 - 8 - 

 IN WITNESS WHEREOF, the undersigned has caused this Warrant to be signed by its duly authorized
officers under its corporate seal, and to be dated this 3rd day of August, 2004. 
  

			
	PARADYNE NETWORKS, INC.
		
	 By:
	 	 /s/ Sean E. Belanger

	 Name:
	 	 Sean E. Belanger

	 Title:
	 	 President and Chief Executive Officer

  

	
	 Attest:

	
	 /s/ Patrick M. Murphy

	 Patrick M. Murphy

	 Senior Vice President, Chief Financial Officer,

	 Treasurer and Secretary

  

 EXHIBIT A 
  

NOTICE OF EXERCISE 
  
 To: Paradyne Networks, Inc. (the “Company”) 
  
 1. The undersigned hereby elects to
purchase                     shares of Common Stock of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment
of the purchase price of such shares in full. 
  
 2. Please issue
a certificate or certificates representing                      shares in the name of the undersigned or in such other name or names as are
specified below: 
  

	
	  

	(Name)
	  

	  

	(Address)

  
 3. The undersigned
represents that (i) it is an “accredited investor” as defined in Rule 501 under Regulation D promulgated under the Securities Act of 1933, as amended and (ii) the aforesaid shares are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, except as in compliance with applicable securities laws.

  

	
	  

	 (Signature)

	  

	 (Date)

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