AGREEMENT AND PLAN OF MERGER by and among ASCEND COMMUNICATIONS, INC., a Delaware corporation, WILDCARD MERGER CORPORATION, a Delaware corporation and a wholly owned subsidiary of Ascend, and STRATUS COMPUTER, INC., a Massachusetts corporation Dated...

                          AGREEMENT AND PLAN OF MERGER
  
  
                                  by and among
    
  
                           ASCEND COMMUNICATIONS, INC., 
                             a Delaware corporation, 
    
  
                           WILDCARD MERGER CORPORATION, 
                    a Delaware corporation and a wholly owned
                              subsidiary of Ascend, 
  
    
                                       and
  
    
                              STRATUS COMPUTER, INC., 
                           a Massachusetts corporation
  
  
 
                            Dated as of August 3, 1998 

                          AGREEMENT AND PLAN OF MERGER 
  
  
           AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of
 August 3, 1998, by and among Ascend Communications, Inc., a Delaware
 corporation ("Ascend"), Wildcard Merger Corporation, a Delaware corporation
 and a wholly owned subsidiary of Ascend ("Sub"), and Stratus Computer,
 Inc., a Massachusetts corporation ("Stratus"). 
  
                                  Recitals 
  
           WHEREAS, the Boards of Directors of Ascend, Sub and Stratus deem
 it advisable and in the best interests of each corporation and its
 respective stockholders that Ascend and Stratus combine in order to advance
 the long-term business interests of Ascend and Stratus, and have approved
 this Agreement, the Merger (as defined below) and the other transactions
 contemplated by this Agreement; 
  
           WHEREAS, the combination of Ascend and Stratus shall be effected
 by the terms of this Agreement through a transaction in which Sub will
 merge with and into Stratus, Stratus will become a wholly-owned subsidiary
 of Ascend and the stockholders of Stratus will become stockholders of
 Ascend; and 
  
           WHEREAS, for U.S. federal income tax purposes, it is intended
 that the Merger shall qualify as a reorganization within the meaning of
 Section 368(a) of the Internal Revenue Code of 1986, as amended (the
 "Code") and that this Agreement shall be, and hereby is, adopted as a plan
 of reorganization for purposes of Section 368(a) of the Code. 
  
           NOW, THEREFORE, in consideration of the foregoing and the
 respective representations, warranties, covenants and agreements set forth
 below, the parties agree as follows: 
  
                                  ARTICLE I

                                 THE MERGER
  
      Section 1.1    Merger.  Subject to the provisions of this Agreement
 and in accordance with the Massachusetts Business Corporation Law (the
 "MBCL"), Sub shall be merged with and into Stratus (the "Merger").  The
 Merger shall become effective (the time of such effectiveness being
 hereinafter referred to as the "Effective Time") upon the filing of the
 Articles of Merger with the Secretary of State of the Commonwealth of
 Massachusetts prepared and executed in accordance with the relevant
 provisions of the MBCL and the filing of a Certificate of Merger with the
 Secretary of State of the State of Delaware.  As a result of the Merger,
 the outstanding shares of capital stock of Sub and Stratus shall be
 converted or canceled in the manner provided in Article II of this
 Agreement; the separate corporate existence of Sub shall cease; and Stratus
 shall be the surviving corporation in the Merger. 
  
      Section 1.2    Closing.  The closing of the Merger (the "Closing")
 will take place at 9:00 a.m., local time, on a date to be specified by
 Ascend and Stratus, which shall be no later than the second business day
 after satisfaction or waiver of the conditions set forth in Article VII
 (the "Closing Date"), at the offices of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich, LLP,
 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, unless another date or place is
 agreed to in writing by Ascend and Stratus. 
  
      Section 1.3    Effects of the Merger.  From and after the Effective
 Time, (i) the separate existence of Sub shall cease and Sub shall be merged
 with and into Stratus (Sub and Stratus are sometimes referred to below as
 the "Constituent Corporations," and Stratus after the Effective Time is
 sometimes referred to below as the Surviving Corporation"), (ii) the
 Articles of Organization of Stratus as in effect immediately prior to the
 Effective Time shall be the Articles of Organization of the Surviving
 Corporation, with such amendments thereto as Ascend may reasonably request,
 (iii) the Bylaws of Sub as in effect immediately prior to the Effective
 Time shall be the Bylaws of the Surviving Corporation, (iv) the Surviving
 Corporation shall be a Massachusetts corporation, and (v) the Merger shall
 have the further effects set forth in Section 80 of the MBCL.  Without
 limiting the generality of the foregoing and subject thereto, at the
 Effective Time all the property, rights, privileges, powers and franchises
 of Stratus and Sub shall vest in the Surviving Corporation, and all debts,
 liabilities and duties of Stratus and Sub shall become the debts,
 liabilities and duties of the Surviving Corporation. 
  
      Section 1.4    Directors and Officers.  The directors of Sub
 immediately prior to the Effective Time shall be the initial directors of
 the Surviving Corporation and shall hold office until their respective
 successors have been appointed or elected in accordance with the Articles
 of Organization and Bylaws of the Surviving Corporation.  The officers of
 Sub immediately prior to the Effective Time shall be the initial officers
 of the Surviving Corporation, in each case until their respective
 successors are duly elected or appointed. 
  
                                 ARTICLE II

                          CONVERSION OF SECURITIES
  
      Section 2.1    Conversion of Capital Stock.  As of the Effective Time,
 by virtue of the Merger and without any action on the part of the holder of
 any capital stock of Stratus or capital stock of Sub: 
  
           (a)  Capital Stock of Sub.  Each issued and outstanding share of
 the capital stock of Sub shall be converted into and become one fully paid
 and nonassessable share of common stock, $.01 par value per share, of the
 Surviving Corporation ("Sub Common Stock"), which shares of Sub Common
 Stock shall be the only shares of Sub capital stock outstanding immediately
 following such conversion. 

           (b)  Cancellation of Ascend-Owned Stock.  All shares of common
 stock, $.01 par value per share, of Stratus ("Stratus Common Stock"),
 together with each associated right (a "Right") issued under the Rights
 Agreement (as defined in Section 3.4(b)), owned by Ascend, Stratus, Sub or
 any other wholly owned Subsidiary (as defined in Section 3.2(b)) of Ascend
 or Stratus (if any), shall be canceled and retired and shall cease to
 exist, and no stock of Ascend or other consideration shall be delivered in
 exchange therefor. 
  
           (c)  Exchange Ratio for Stratus Common Stock.  Subject to
 Section 2.2, each issued and outstanding share of Stratus Common Stock
 (other than shares to be canceled in accordance with Section 2.1(b) and any
 Dissenting Shares (as defined in and to the extent provided in Section 2.3
 hereof)) together with each associated Right shall be converted into the
 right to receive 0.75 (the "Exchange Ratio") of a fully paid and
 nonassessable share of common stock, $.001 par value per share, of Ascend
 ("Ascend Common Stock") (which amount will be proportionately adjusted for
 any stock split or stock dividend effected between the date of this
 Agreement and the Effective Time).  All such shares of Stratus Common
 Stock, when so converted, shall no longer be outstanding and shall
 automatically be canceled and retired and shall cease to exist, and each
 holder of a certificate representing any such shares shall cease to have
 any rights with respect thereto, except the right to receive the shares of
 Ascend Common Stock and any cash in lieu of fractional shares of Ascend
 Common Stock to be issued or paid in consideration therefor upon the
 surrender of such certificate in accordance with Section 2.2, without
 interest. 
  
           (d)  Stratus Stock Options and Employee Stock Purchase Plan.  At
 the Effective Time, all then outstanding options to purchase Stratus Common
 Stock issued under the Stratus Amended and Restated 1983 Stock Option Plan,
 as amended, the Stratus Amended and Restated Employee Stock Purchase Plan,
 the Stratus Restated Non-Qualified Stock Option Plan, and the Stratus 1997
 Non-Qualified Stock Option Plan (collectively, including agreements entered
 into under such plans, the "Stratus Stock Plans"), not exercised as of the
 Effective Time will be assumed by Ascend in accordance with Section 6.11. 
  
      Section 2.2    Exchange of Certificates.  The procedures for
 exchanging outstanding shares of Stratus Common Stock for Ascend Common
 Stock pursuant to the Merger are as follows: 
  
           (a)  Exchange Agent.  As of the Effective Time, Ascend shall
 deposit with a bank or trust company designated by Ascend and reasonably
 acceptable to Stratus (the "Exchange Agent"), for the benefit of the
 holders of shares of Stratus Common Stock, for exchange in accordance with
 this Section 2.2, through the Exchange Agent, certificates representing the
 shares of Ascend Common Stock (such shares of Ascend Common Stock, together
 with any dividends or distributions with respect thereto, being hereinafter
 referred to as the "Exchange Fund") issuable pursuant to Section 2.1 in
 exchange for outstanding shares of Stratus Common Stock. 
  
           (b)  Exchange Procedures.  Promptly after the Effective Time, the
 Exchange Agent shall mail to each holder of record of a certificate or
 certificates which immediately prior to the Effective Time represented
 outstanding shares of Stratus Common Stock (each a "Stratus Certificate"
 and collectively the "Stratus Certificates") whose shares were converted
 pursuant to Section 2.1 into the right to receive shares of Ascend Common
 Stock (i) a duly executed letter of transmittal (which shall specify that
 delivery shall be effected, and risk of loss and title to the Stratus
 Certificates shall pass, only upon delivery of the Stratus Certificates to
 the Exchange Agent and shall be in such form and have such other provisions
 as Ascend and Stratus may reasonably specify) and (ii) instructions for use
 in effecting the surrender of the Stratus Certificates in exchange for
 certificates representing shares of Ascend Common Stock.  Upon surrender of
 a Stratus Certificate for cancellation to the Exchange Agent or to such
 other agent or agents as may be appointed by Ascend, together with such
 letter of transmittal, duly executed, the holder of such Stratus
 Certificate shall be entitled to receive in exchange therefor a certificate
 representing that number of whole shares of Ascend Common Stock which such
 holder has the right to receive pursuant to the provisions of this
 Article II, and the Stratus Certificate so surrendered shall immediately be
 canceled.  In the event of a transfer of ownership of Stratus Common Stock
 which is not registered in the transfer records of Stratus, a certificate
 representing the proper number of shares of Ascend Common Stock may be
 issued to a transferee if the Stratus Certificate representing such Stratus
 Common Stock is presented to the Exchange Agent, accompanied by all
 documents required to evidence and effect such transfer and by evidence
 that any applicable stock transfer taxes have been paid.  Until surrendered
 as contemplated by this Section 2.2, each Stratus Certificate shall be
 deemed at any time after the Effective Time to represent only the right to
 receive upon such surrender the certificate representing shares of Ascend
 Common Stock and cash in lieu of any fractional shares of Ascend Common
 Stock as contemplated by this Section 2.2. 
  
           (c)  Distributions with Respect to Unexchanged Shares.  No
 dividends or other distributions declared or made with respect to Ascend
 Common Stock with a record date after the Effective Time shall be paid to
 the holder of any unsurrendered Stratus Certificate with respect to the
 shares of Ascend Common Stock represented thereby, and no cash payment in
 lieu of fractional shares shall be paid to any such holder pursuant to
 subsection (e) below, until the holder of record of such Stratus
 Certificate shall surrender such Stratus Certificate.  Subject to the
 effect of applicable laws, following surrender of any such Stratus
 Certificate, there shall promptly be paid to the record holder of the
 certificates representing whole shares of Ascend Common Stock issued in
 exchange therefor, without interest, (i) at the time of such surrender, the
 amount of any cash payable in lieu of a fractional share of Ascend Common
 Stock to which such holder is entitled pursuant to subsection (e) of this
 Section 2.2 below and the amount of dividends or other distributions with a
 record date after the Effective Time previously paid with respect to such
 whole shares of Ascend Common Stock, and (ii) at the appropriate payment
 date, the amount of dividends or other distributions with a record date
 after the Effective Time but prior to surrender and a payment date
 subsequent to surrender payable with respect to such whole shares of Ascend
 Common Stock. 
  
           (d)  No Further Ownership Rights in Stratus Common Stock.  All
 shares of Ascend Common Stock issued upon the surrender for exchange of
 shares of Stratus Common Stock in accordance with the terms hereof
 (including any cash paid pursuant to subsection (c) and (e) of this
 Section 2.2) shall be deemed to have been issued in full satisfaction of
 all rights under the MBCL pertaining to such shares of Stratus Common
 Stock.  After the Effective Time, there shall be no further registration of
 transfers on the stock transfer books of the Surviving Corporation of the
 shares of Stratus Common Stock which were outstanding immediately prior to
 the Effective Time.  If, after the Effective Time, Stratus Certificates are
 presented to the Surviving Corporation for any reason, they shall be
 canceled and exchanged as provided in this Section 2.2. 
  
           (e)  No Fractional Shares.  No certificate or scrip representing
 fractional shares of Ascend Common Stock shall be issued upon the surrender
 for exchange of Stratus Certificates, and such fractional share interests
 will not entitle the owner thereof to vote or to hold any other rights of a
 stockholder of Ascend.  Notwithstanding any other provision of this
 Agreement, each holder of shares of Stratus Common Stock exchanged pursuant
 to the Merger who would otherwise have been entitled to receive a fraction
 of a share of Ascend Common Stock (after taking into account all Stratus
 Certificates delivered by such holder) shall receive, in lieu thereof, cash
 (without interest) in an amount equal to such fractional part of a share of
 Ascend Common Stock multiplied by the average of the last reported sale
 prices of Ascend Common Stock on The Nasdaq National Market on the ten (10)
 trading days immediately preceding the Effective Time. 
  
           (f)  Termination of Exchange Fund.  Any portion of the Exchange
 Fund which remains undistributed to the stockholders of Stratus for one
 year after the Effective Time shall be delivered to Ascend, upon demand,
 and any stockholders of Stratus who have not previously complied with this
 Section 2.2 shall thereafter look only to Ascend for payment of their claim
 for Ascend Common Stock, cash in lieu of fractional shares of Ascend Common
 Stock, and dividends or distributions with respect to Ascend Common Stock. 
  
           (g)  No Liability.  Neither Ascend nor Stratus, nor any of their
 respective directors, officers, employees or agents, shall be liable to any
 holder of shares of Stratus Common Stock or Ascend Common Stock, as the
 case may be, for such shares (or dividends or distributions with respect
 thereto) delivered to a public official pursuant to any applicable
 abandoned property, escheat or similar law. 
  
      Section 2.3    Dissenting Shares. 
  
           (a)  Notwithstanding any provision of this Agreement to the
 contrary, the shares of any holder of Stratus Common Stock who has demanded
 and perfected appraisal rights for such shares in accordance with the MBCL
 and who, as of the Effective Time, has not effectively withdrawn or lost
 such appraisal rights ("Dissenting Shares"), shall not be converted into or
 represent a right to receive Ascend Common Stock pursuant to Section 2.1,
 but the holder thereof shall only be entitled to such rights as are granted
 by the MBCL. 
  
           (b)  Notwithstanding the foregoing, if any holder of shares of
 Stratus Common Stock who demands appraisal of such shares under the MBCL
 shall effectively withdraw the request for appraisal or lose the right to
 appraisal, then, as of the later of the Effective Time and the occurrence
 of such event, such holder's shares shall automatically be converted into
 and represent only the right to receive Ascend Common Stock and cash in
 lieu of fractional shares, without interest thereon, upon surrender of the
 certificate representing such shares. 
  
           (c)  Stratus shall give Ascend (i) prompt notice of any written
 demands for appraisal of any shares of Stratus Common Stock, withdrawals of
 such demands, and any other instruments served pursuant to the MBCL and
 received by Stratus, which relate to any such demand for appraisal and
 (ii) the opportunity to participate in all negotiations and proceedings
 which take place prior to the Effective Time with respect to demands for
 appraisal under the MBCL.  Stratus shall not, except with the prior written
 consent of Ascend or as may be required by applicable law, voluntarily make
 any payment with respect to any demands for appraisal of Stratus Common
 Stock or offer to settle or settle any such demands. 
  
                                  ARTICLE III
  
                    REPRESENTATIONS AND WARRANTIES OF STRATUS
  
           Stratus represents and warrants to Ascend and Sub that the
 statements contained in this Article III are true and correct, except as
 set forth in the disclosure schedule delivered by Stratus to Ascend on or
 before the date of this Agreement ("Stratus Disclosure Schedule") or except
 to the extent disclosed in the Stratus SEC Reports (as defined herein)
 filed with the SEC since January 1, 1998.  The Stratus Disclosure Schedule
 shall be arranged in sections corresponding to the numbered and lettered
 sections contained in this Article III, and the disclosure in any such
 numbered and lettered section of the Stratus Disclosure Schedule shall
 qualify only the corresponding section in this Article III (except to the
 extent disclosure in any numbered and lettered section of the Stratus
 Disclosure Schedule is specifically cross-referenced in another numbered
 and lettered section of the Stratus Disclosure Schedule).  The term
 "Stratus Material Adverse Effect" shall mean a material adverse effect on
 the business, operations, properties, assets (including intangible assets),
 financial condition, or results of operations of Stratus and its
 Subsidiaries, with materiality determined in accordance with Section 9.3. 
  
      Section 3.1    Organization.  Stratus and each of its Subsidiaries is
 a corporation duly organized, validly existing and in good standing under
 the laws of the jurisdiction of its incorporation, has all requisite
 corporate power to own, lease and operate its property and to carry on its
 business as now being conducted and as proposed to be conducted (without
 giving effect to the Merger), and is duly qualified to do business and is
 in good standing as a foreign corporation in each jurisdiction in which it
 is required by law to be so qualified, except where the failure to have
 such power or the failure to be so qualified could not reasonably be
 expected to have a Stratus Material Adverse Effect. 

 Section 3.2    Stratus Subsidiaries and Joint Ventures. 
  
           (a)  Section 3.2(a) of the Stratus Disclosure Schedule sets forth
 a list of all Subsidiaries and Joint Ventures (as defined in
 Section 3.2(b)) of Stratus, including the name of each Subsidiary and Joint
 Venture, the jurisdiction in which such Subsidiary or Joint Venture is
 incorporated or organized and percentage ownership interests held by
 Stratus or its Subsidiaries in each such Joint Venture.  There are no
 outstanding subscriptions, options, call, contracts, voting trusts, proxies
 or other commitments, understandings, restrictions, arrangements, rights or
 warrants with respect to any such Subsidiary's capital stock, including any
 right obligating any such Subsidiary to issue, deliver, or sell additional
 shares of its capital stock, and no obligations, contingent or otherwise,
 of Stratus or any of its Subsidiaries to repurchase, redeem, or otherwise
 acquire any shares of the capital stock of any Subsidiary of Stratus or
 make any investment (in the form of a loan, capital contribution or
 otherwise) in any such Subsidiary or any other entity other than guarantees
 of bank obligations of such Subsidiaries entered into in the ordinary
 course of business.  All of the outstanding shares of capital stock of each
 Subsidiary of Stratus are duly authorized, validly issued, fully paid and
 nonassessable, and all such shares are owned by Stratus or another
 Subsidiary of Stratus free and clear of all security interests, liens,
 claims, pledges, agreements, limitations on Stratus's voting rights,
 charges or other encumbrances of any nature.  Neither Stratus nor any of
 its Subsidiaries directly or indirectly owns any equity or similar interest
 in, or any interest convertible into or exchangeable or exercisable for any
 such equity or similar interest in, any corporation, limited liability
 company, partnership, joint venture or other business association or entity
 (other than Stratus or another Subsidiary of Stratus), excluding securities
 of any publicly traded company held for investment and comprising less than
 five percent (5%) of the outstanding stock or voting power of such company. 
  
           (b)  As used in this Agreement, "Subsidiary" means, with respect
 to any party, any corporation, limited liability company, partnership,
 joint venture, or other business association or entity, at least a majority
 of the voting securities or economic interests of which is directly or
 indirectly owned or controlled by such party or by any one or more of its
 Subsidiaries. As used in this Agreement, "Joint Venture" means, with
 respect to any party, any corporation, limited liability company,
 partnership, joint venture or other entity in which (i) such party,
 directly or indirectly, owns or controls five percent (5%) or more but less
 than a majority of any class of the outstanding voting securities or
 economic interests, or (ii) such party or a Subsidiary of such party is a
 general partner. 
  
      Section 3.3    Stratus Capital Structure. 
  
           (a)  The authorized capital stock of Stratus consists of
 150,000,000 shares of Stratus Common Stock and 500,000 shares of Junior
 Common Stock, $.01 par value per share ("Stratus Junior Common Stock").  As
 of July 31, 1998:  (i) 28,219,077 shares of Stratus Common Stock were
 issued and outstanding, all of which are validly issued, fully paid and
 nonassessable; (ii) no shares of Stratus Junior Common Stock are issued or
 outstanding; (iii) 4,176,900 shares of Stratus Common Stock and no Stratus
 Junior Common Stock were held in the treasury of Stratus or by Subsidiaries
 of Stratus; (iv) 17,980,200 shares of Stratus Common Stock were reserved
 for issuance under Stratus Stock Plans (including (A) 10,880,200 shares
 reserved for issuance, as a maximum combined aggregate, under the Amended
 and Restated 1983 Stock Option Plan and Stratus Restated Non-Qualified
 Stock Option Plan, 4,014,041 of which were subject to outstanding options
 and 3,644,066 of which were reserved for future option grants,
 (B) 4,100,000 shares of Stratus Common Stock reserved for future issuance
 pursuant to rights outstanding under the Stratus Amended and Restated
 Employee Stock Purchase Plan, and (C) 3,000,000 shares reserved for
 issuance under the Stratus 1997 Non-Qualified Stock Option Plan; and (v) no
 shares of Stratus Common Stock were reserved for issuance pursuant to
 incentive and non-qualified stock option agreements with certain officers
 of Stratus.  All shares of Stratus Common Stock subject to issuance as
 specified above, upon issuance on the terms and conditions specified in the
 instruments pursuant to which they are issuable, shall be duly authorized,
 validly issued, fully paid and nonassessable.  There are no obligations,
 contingent or otherwise, of Stratus or any of its Subsidiaries to
 repurchase, redeem or otherwise acquire any shares of Stratus Common Stock. 
  
           (b)  Except as set forth in this Section 3.3 or as reserved for
 future grants of rights or options under the Stratus Stock Plans, as
 amended, and except for the Rights, there are no equity securities of any
 class of Stratus, or any security exchangeable into or exercisable for such
 equity securities, issued, reserved for issuance or outstanding.  Except
 (i) pursuant to the Stratus Stock Plans, (ii) as set forth in this
 Section 3.3(b), and (iii) for the Rights, there are no options, warrants,
 equity securities, calls, rights, commitments or agreements of any
 character to which Stratus is a party or by which it is bound obligating
 Stratus to issue, deliver or sell, or cause to be issued, delivered or
 sold, additional shares of capital stock of Stratus or obligating Stratus
 to grant, extend, accelerate the vesting of or enter into any such option,
 warrant, equity security, call, right, commitment or agreement, and, to the
 best knowledge of Stratus, there are no voting trusts, proxies or other
 agreements or understandings with respect to the shares of capital stock of
 Stratus to which Stratus or any of its Subsidiaries is a party. 
  
      Section 3.4    Authority; No Conflict; Required Filings and Consents. 
  
           (a)  Stratus has all requisite corporate power and authority to
 enter into this Agreement and to consummate the transactions contemplated
 hereby.  The execution and delivery of this Agreement and the consummation
 of the transactions contemplated hereby have been duly authorized by all
 necessary corporate and stockholder action on the part of Stratus, subject
 only to the approval of the Merger by Stratus's stockholders by the
 affirmative vote of two-thirds of the shares of Stratus Common Stock
 outstanding at the record date under the MBCL.  This Agreement has been
 duly executed and delivered by Stratus and, assuming this Agreement
 constitutes valid and binding obligations of the other parties hereto, this
 Agreement constitutes valid and binding obligations of Stratus, enforceable
 in accordance with the terms hereof, except as such enforceability may be
 limited by (i) bankruptcy laws and other similar laws affecting creditors'
 rights generally and (ii) general principles of equity, regardless of
 whether asserted in a proceeding in equity or at law. 
  
           (b)  The execution and delivery of this Agreement by Stratus does
 not, and the consummation of the transactions contemplated by this
 Agreement will not, (i) conflict with, or result in any violation or breach
 of any provision of the Articles of Organization or Bylaws of Stratus or
 any of its Subsidiaries (in each case as heretofore amended), (ii) result
 in any violation or breach of, or constitute (with or without notice or
 lapse of time, or both) a default (or give rise to a right of termination,
 cancellation or acceleration of any obligation or loss of any material
 benefit) or require the consent, waiver or agreement of any person or
 entity (other than consents, waivers and agreements that have been or prior
 to the Closing will be obtained) under any of the terms, conditions or
 provisions of any material note, bond, mortgage, indenture, lease, contract
 or other material agreement, instrument or obligation to which Stratus or
 any of its Subsidiaries is a party or by which any of them or any of their
 properties or assets may be bound, (iii) constitute a "Stock Acquisition
 Date" or cause Ascend to become an "Acquiring Person" or an "Adverse
 Person" as such terms are defined in that certain Rights Agreement dated as
 of December 4, 1990 between Stratus and The First National Bank of Boston
 (the "Rights Agreement"), or (iv) subject to the consents, approvals,
 orders, authorizations, filings and registrations specified in
 Section 3.4(c), conflict with or violate any judgment, order, decree,
 statute, law, ordinance, rule or regulation or any material permit,
 concession, franchise or license applicable to Stratus or any of its
 Subsidiaries or any of their properties or assets, except in the cases of
 clause (ii) and (iv) for such consents, waivers and agreements, the absence
 of which, and such violations, breaches, defaults, terminations,
 cancellations or accelerations which, in the aggregate could not reasonably
 be expected to have a Stratus Material Adverse Effect or a material adverse
 effect on the telecommunications (including SS7) business of Stratus or the
 ability of Stratus to consummate the transactions contemplated by this
 Agreement. 
  
           (c)  No consent, approval, order or authorization of, or
 registration, declaration or filing with, any court, administrative agency,
 commission or other governmental authority or instrumentality
 ("Governmental Entity") is required by or with respect to Stratus or any of
 its Subsidiaries in connection with the execution and delivery of this
 Agreement or the consummation of the transactions contemplated hereby,
 except for (i) the filing of pre-merger notification reports under the
 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
 Act") and the antitrust laws of any foreign jurisdiction which is
 applicable to the Merger and the expiration or early termination of any
 waiting period(s) thereunder; (ii) the filing of the Registration Statement
 (as defined in Section 3.18 with the Securities and Exchange Commission
 (the "SEC") in accordance with the Securities Act of 1933, as amended (the
 "Securities Act") and the entry of an order by the SEC permitting such
 registration statement to become effective; (iii) the filing of the
 Articles of Merger with the Secretary of State of the Commonwealth of
 Massachusetts in accordance with the MBCL; (iv) the filing of the Proxy
 Statement (as defined in Section 3.18 and related proxy materials with the
 SEC in accordance with the Securities Exchange Act of 1934, as amended (the
 "Exchange Act"); (v) such consents, approvals, orders, authorizations,
 filings, registrations and declarations as may be required under applicable
 federal and state securities laws and the laws of any foreign country; and
 (vi) such other consents, approvals, orders, authorizations, filings,
 approvals and registrations which, in the aggregate, if not obtained or
 made, could not reasonably be expected to have a Stratus Material Adverse
 Effect or have a material adverse effect on the ability of Stratus to
 consummate the transactions contemplated by this Agreement. 
  
      Section 3.5    SEC Filings; Financial Statements. 
  
           (a)  Stratus has filed and made available to Ascend all forms,
 reports and documents required to be filed by Stratus with the SEC since
 January 1, 1996 (collectively, the "Stratus SEC Reports").  The Stratus SEC
 Reports (i) at the time filed, complied in all material respects with the
 applicable requirements of the Securities Act and the Exchange Act, as the
 case may be, and (ii) did not at the time they were filed (or if amended or
 superseded by a subsequent filing, then on the date of such filing) contain
 any untrue statement of a material fact or omit to state a material fact
 required to be stated in such Stratus SEC Reports or necessary in order to
 make the statements in such Stratus SEC Reports, in the light of the
 circumstances under which they were made, not misleading.  None of
 Stratus's Subsidiaries is required to file any forms, reports or other
 documents as a result of their issuance (or the registration of such
 securities on a national securities exchange) with the SEC, the National
 Association of Securities Dealers, Inc. (the "NASD"), the New York Stock
 Exchange, Inc., or any other stock exchange or any foreign securities
 commission or stock exchange regulating issuers of securities. 
  
           (b)  Each of the consolidated financial statements (including, in
 each case, any related notes) contained in the Stratus SEC Reports,
 including any Stratus SEC Reports filed after the date of this Agreement
 until the Closing (the "Stratus Financial Statements"), complied or will
 comply as to form in all material respects with the applicable published
 rules and regulations of the SEC with respect thereto, was or will be
 prepared in accordance with U.S. generally accepted accounting principles
 ("U.S. GAAP") applied on a consistent basis throughout the periods involved
 (except as may be indicated in the notes to such financial statements or,
 in the case of unaudited statements, as permitted by Form 10-Q or 8-K
 promulgated by the SEC), and fairly presented or will fairly present the
 consolidated financial position of Stratus and its Subsidiaries as at the
 respective dates and the consolidated results of its operations and cash
 flows for the periods indicated, except that the unaudited interim
 financial statements were or are subject to normal and recurring year-end
 adjustments which were not or are not expected to be material in amount. 
 The audited consolidated balance sheet of Stratus as of December 28, 1997
 is referred to herein as the "Stratus Balance Sheet." 
  
      Section 3.6    Absence of Undisclosed Liabilities.  Stratus and its
 Subsidiaries do not have any liabilities, either accrued or contingent
 (whether or not required to be reflected in financial statements in
 accordance with U.S. GAAP), and whether due or to become due, other than
 (i) liabilities reflected in the Stratus Balance Sheet, (ii) normal or
 recurring liabilities incurred since December 28, 1997 in the ordinary
 course of business consistent with past practices, or (iii) liabilities
 arising out of the transactions contemplated hereby or permitted hereunder,
 after the date hereof. 
  
      Section 3.7    Absence of Certain Changes or Events.  Since the date
 of the Stratus Balance Sheet (and in the case of clauses (a) and (e)
 through the date hereof), Stratus and its Subsidiaries have conducted their
 businesses only in the ordinary course in a manner consistent with past
 practice, and since such date there has not been: 
  
           (a)  any Stratus Material Adverse Effect; 
  
           (b)  any material change by Stratus or any of its Subsidiaries in
 its accounting methods, principles or practices; 
  
           (c)  any revaluation by Stratus or any of its Subsidiaries of any
 material asset or any writedown of the value of capitalized software or
 inventory, or any write-off of notes or accounts receivable other than in
 the ordinary course of business consistent with past practice; 
  
           (d)  any increase in the compensation payable or to become
 payable by Stratus or any of its Subsidiaries to its respective officers or
 employees, except for compensation increases granted in the ordinary course
 of business and in a manner consistent with past practices to the non-
 officer employees of Stratus and its Subsidiaries; 
  
           (e)  entered into any commitment or transaction outside the
 ordinary course of Stratus's business involving the payment or receipt by
 Stratus or its Subsidiaries of more than five million dollars ($5,000,000)
 (including without limitation any borrowing or capital expenditure); or 
  
           (f)  any other action or event that would have required the
 consent of Ascend pursuant to Section 5.1 of this Agreement had such action
 or event occurred after the date of this Agreement. 
  
      Section 3.8    Taxes. 
  
           (a)  For purposes of this Agreement, a "Tax" or, collectively,
 Taxes" means any and all federal, state, local and foreign taxes,
 assessments and other similar governmental charges, duties and impositions,
 including taxes based upon or measured by gross receipts, income, profits,
 sales, use and occupation, and value added, ad valorem, transfer,
 franchise, withholding, payroll, recapture, employment, excise and property
 taxes, together with all interest, penalties and additions imposed with
 respect to such amounts and any obligations under any agreements or
 arrangements with any other person with respect to such amounts and
 including any liability for taxes of a predecessor entity. 
  
           (b)  Each of Stratus and its Subsidiaries have accurately
 prepared and timely filed (or will so file) all federal, state, local and
 foreign returns, estimates, information statements and reports relating to
 any and all Taxes concerning or attributable to Stratus or any of its
 Subsidiaries or to their operations ("Returns") required to be filed at or
 before the Effective Time, and such Returns are true and correct in all
 material respects and have been completed in all material respects in
 accordance with applicable law. 
  
           (c)  Each of Stratus and its Subsidiaries as of the Effective
 Time:  (i) will have paid all Taxes it is required to pay prior to the
 Effective Time and (ii) will have withheld with respect to its employees
 all federal and state income taxes, FICA, FUTA and other Taxes required to
 be withheld, except for Taxes contested in good faith by appropriate
 proceedings for which adequate reserves have been taken. 
  
           (d)  There is no Tax deficiency outstanding, proposed or assessed
 against Stratus or any of its Subsidiaries that is not reflected as a
 liability on the Stratus Balance Sheet nor has Stratus or any of its
 Subsidiaries executed any waiver of any statute of limitations on or
 extending the period for the assessment or collection of any Tax. 
  
           (e)  Neither Stratus nor any of its Subsidiaries has any
 liability for unpaid federal, state, local or foreign Taxes that has not
 been accrued for or reserved on the Stratus Balance Sheet, whether asserted
 or unasserted, contingent or otherwise. 
  
           (f)  No audit or other examination of any Return of Stratus or
 any of its Subsidiaries is presently in progress, nor has Stratus or any of
 its Subsidiaries been notified of any request for such an audit or other
 examination. 
  
           (g)  Stratus has made available to Ascend or its legal counsel
 copies of all foreign, federal and state income and all state sales and use
 Returns for Stratus and all its Subsidiaries filed for all periods since
 their respective inceptions. 
  
           (h)  There are (and immediately following the Effective Time
 there will be) no liens, pledges, charges, claims, restrictions on
 transfer, mortgages, security interests or other encumbrances of any sort
 (collectively, "Liens") on the assets of Stratus nor any of its
 Subsidiaries relating to or attributable to Taxes other than Liens for
 Taxes not yet due and payable. 
  
           (i)  Neither Stratus nor any of its Subsidiaries has knowledge of
 any basis for the assertion of any claim relating or attributable to Taxes
 which, if adversely determined, would result in any Lien on the assets of
 Stratus or any of its Subsidiaries. 
  
           (j)  None of the assets of Stratus of any of its Subsidiaries are
 treated as "tax-exempt use property" within the meaning of Section 168(h)
 of the Code. 
  
           (k)  As of the Effective Time, there will not be any contract,
 agreement, plan or arrangement, including but not limited to the provisions
 of this Agreement, covering any employee or former employee of Stratus or
 any of its Subsidiaries that, individually or collectively, could give rise
 to the payment of any amount that would not be deductible by Stratus or any
 of its Subsidiaries as an expense under applicable law.  None of Stratus
 nor any of its Subsidiaries has, or will have as a result of the
 transactions contemplated by this Agreement, any liabilities for Taxes (for
 example under Section 280G of the Code) as a result of the amount of
 remuneration paid or to be paid to its employees. 
  
           (l)  Stratus nor any of its Subsidiaries has filed any consent
 agreement under Section 341(f) of the Code or agreed to have
 Section 341(f)(4) of the Code apply to any disposition of a subsection (f)
 asset (as defined in Section 341(f)(4) of the Code) owned by Stratus or any
 of its Subsidiaries. 
  
           (m)  Neither Stratus nor any of its Subsidiaries is a party to
 any Tax sharing, indemnification or allocation agreement and neither owes
 any amount under any such agreement, other than this Agreement. 
  
           (n)  Each of Stratus's and its Subsidiaries' Tax basis in its
 assets for purposes of determining its future amortization, depreciation
 and other federal income Tax deductions is accurately reflected on its
 respective Tax books and records. 
  
           (o)  Neither Stratus nor any of its Subsidiaries is and has not
 been at any time, a "United States real property holding corporation"
 within the meaning of Section 897(c)(2) of the Code. 
  
           (p)  Except as may be required as a result of the Merger, Stratus
 and its Subsidiaries have not been and will not be required to include any
 adjustment in taxable income for any Tax period (or portion thereof)
 pursuant to Section 481 or Section 263A of the Code or any comparable
 provision under state or foreign Tax laws as a result of the transactions,
 events or accounting methods employed prior to Closing. 
  
           (q)  The operations of Stratus and its Subsidiaries in the
 Republic of Ireland qualify for the ten percent (10%) effective rate (the
 "Effective Rate") of Tax imposed by the Republic of Ireland on the sale of
 goods manufactured in the Republic of Ireland.  Stratus has made available
 to Ascend or its legal counsel copies of all of its and its Subsidiaries'
 files, books and records concerning Taxes imposed by the Republic of
 Ireland on the operations of Stratus and its Subsidiaries for all periods
 since the inception of such operations.  Neither Stratus nor any of its
 Subsidiaries has (i) knowledge of any basis for the assertion of any claim
 which, if adversely determined, would result in any loss of qualification
 for the Effective Rate or (ii) any plan or intention for the operations of
 Stratus or its Subsidiaries in the Republic of Ireland which would result
 in any loss of qualification for the Effective Rate. 
  
      Section 3.9    Properties.  Stratus and its Subsidiaries own or have
 valid leasehold interests in all real property necessary for the conduct of
 their businesses as presently conducted.  All material leases to which
 Stratus or any of its Subsidiaries is a party are in good standing, valid
 and effective in accordance with their respective terms, and neither
 Stratus nor its Subsidiaries is in default under any of such leases, except
 where the lack of such good standing, validity and effectiveness or the
 existence of such default could not reasonably be expected to have a
 Stratus Material Adverse Effect. 

      Section 3.10   Intellectual Property. 
  
           (a)  Stratus and its Subsidiaries own, or are licensed or
 otherwise possess, legally enforceable rights to use, all patents,
 trademarks, trade names, service marks, copyrights and mask works, any
 applications for and registrations of such patents, trademarks, trade
 names, service marks, copyrights and mask works, and all processes,
 formulae, methods, schematics, technology, know how, computer software
 programs or applications programs and tangible or intangible proprietary
 information or material that are used in and material to the business of
 Stratus and its Subsidiaries as currently conducted by Stratus and its
 Subsidiaries (without giving effect to the Merger) (the "Stratus
 Intellectual Property Rights"). 
  
           (b)  Neither Stratus nor any of its Subsidiaries is, or will be
 as a result of the execution and delivery of this Agreement or the
 performance of any of its obligations hereunder, in breach of any license,
 sublicense or other agreement relating to the Stratus Intellectual Property
 Rights except for such breaches as would not, individually or in the
 aggregate, be reasonably likely to have a Stratus Material Adverse Effect. 
  
           (c)  (i) Each patent, registered trademark, service ▇▇▇▇ and
 copyright which is owned by Stratus or any of its Subsidiaries which is
 material to the business of Stratus and its Subsidiaries is subsisting and,
 to the best of Stratus's knowledge valid and enforceable; (ii) Stratus as
 of the date hereof has not been sued in any suit, action or proceeding
 which is currently pending which involves a claim of infringement of any
 patent, trademark, service ▇▇▇▇, copyright or violation of any trade secret
 or other proprietary right of any third party, or received notice of any
 such claim; (iii) to the best of Stratus's knowledge, the manufacturing,
 marketing, licensing or sale of Stratus's products sold or licensed to
 other than the telecommunications industry in the manner currently
 manufactured, marketed, sold or licensed, does not infringe any patent,
 trademark, service ▇▇▇▇, copyright, trade secret or other proprietary right
 of any third party which infringement, either individually or in the
 aggregate, could reasonably be expected to have a Stratus Material Adverse
 Effect; and (iv) to the best of Stratus's knowledge, the manufacturing,
 marketing, licensing or sale of Stratus's material products sold or
 licensed to the telecommunications industry in the manner currently
 manufactured, marketed, sold or licensed, does not infringe any patent,
 trademark, service ▇▇▇▇, copyright, trade secret or other proprietary right
 of any third party. 
  
           (d)  Section 3.10(d) of the Stratus Disclosure Schedule lists all
 patents and patent applications and all trademarks, registered copyrights,
 trade names and service marks included in the Stratus Intellectual Property
 Rights, including the jurisdictions in which each such Stratus Intellectual
 Property Right has been issued or registered or in which any such
 application for such issuance and registration has been filed.  Stratus has
 made available to Ascend (i) all material licenses, sublicenses,
 distribution agreements and other agreements as to which Stratus or any of
 its Subsidiaries is a party and pursuant to which any person has exclusive
 rights to use any Stratus Intellectual Property Rights or has the exclusive
 right to manufacture, reproduce, market or exploit any product of Stratus
 or any of its Subsidiaries or any adaptation, translation or derivative
 work based on a product of Stratus or any of its Subsidiaries or any
 portion thereof; (ii) all material licenses, sublicenses and other
 agreements as to which Stratus or any of its Subsidiaries is a party and
 pursuant to which Stratus or any of its Subsidiaries is authorized to use
 any third party patents, trademarks or copyrights, including software which
 is used in the manufacture of, incorporated in, or forms a part of any
 product of Stratus or any of its Subsidiaries, that limits such use by
 geography or field of use; and (iii) all material joint development
 agreements to which Stratus or any of its Subsidiaries is a party. 
  
      Section 3.11   Agreements, Contracts and Commitments.  Neither Stratus
 nor any of its Subsidiaries has breached, or received in writing any claim
 or threat that it has breached, any of the terms or conditions of any
 agreement, contract, license or commitment to which it is a party or by
 which any of its assets and properties are bound ("Stratus Material
 Contracts") in such a manner as would permit any other party to cancel or
 terminate the same (within or without notice of passage of time) or would
 provide a basis for any other party to claim money damages (either
 individually or in the aggregate with all other such claims) from Stratus
 or any of its Subsidiaries under any Stratus Material Contract, except such
 breaches, cancellations or terminations which in the aggregate could not
 reasonably be expected to have a Stratus Material Adverse Effect. 
  
      Section 3.12   Litigation.  There is no action, suit, proceeding,
 claim, arbitration or, to the knowledge of Stratus, investigation against
 Stratus or any of its Subsidiaries pending or, to the knowledge of Stratus,
 threatened, or as to which Stratus or any of its Subsidiaries has received
 any written notice of assertion, which, if decided adversely to Stratus or
 such Subsidiary, could reasonably be expected to have a Stratus Material
 Adverse Effect or have a material adverse effect on the ability of Stratus
 to consummate the transactions contemplated by this Agreement. 
  
      Section 3.13   Environmental Matters. 
  
           (a)  As of the date hereof, neither Stratus nor any of its
 Subsidiaries has any reason to believe that any Hazardous Material- (as
 defined herein) related underground storage tanks, sumps, vaults, piping or
 other underground Hazardous Material-related equipment (collectively,
 "USTs"), are present at any property that Stratus or any of its
 Subsidiaries has at any time owned, operated, occupied, or leased, where
 the use, condition, or presence of such USTs would be reasonably likely to
 give rise to any corrective, investigative, or remedial obligation or any
 exposure to money damages under any Environmental Law (as defined herein)
 that could reasonably be expected to have a Material Adverse Effect. 
  
           (b)  Neither Stratus nor any of its Subsidiaries has disposed of,
 emitted, discharged, handled, stored, transported, used or released any
 Hazardous Material (collectively, "Hazardous Material Handling"), arranged
 for any Hazardous Material Handling, or exposed any employee or other
 individual to any Hazardous Material so as to give rise to any corrective,
 investigative, or remedial obligation under any Environmental Law that
 could reasonably be expected to have a Material Adverse Effect. 
  
           (c)  Neither Stratus nor any of its Subsidiaries is aware of the
 presence at any time of any Hazardous Material-related contamination at,
 in, on, beneath, or relating to any property that Stratus or its
 Subsidiaries has at any time owned, operated, occupied, or leased that
 could reasonably be expected to have a Material Adverse Effect. 
  
           (d)  Stratus and its Subsidiaries have performed or arranged
 Hazardous Material Handling in compliance with all Environmental Laws
 except where non-compliance would not reasonably be expected to have a
 Material Adverse Effect.  Without limiting the generality of the preceding
 sentence, neither Stratus nor any of its subsidiaries has disposed of,
 labeled, packaged, transported, sold, recycled, discarded, or manufactured
 any product or component of a product containing a Hazardous Material (the
 "Hazardous Material Product Activities") in violation of any Environmental
 Laws where such violation would reasonably be expected to have a Material
 Adverse Effect. 
  
           (e)  Stratus and its Subsidiaries currently hold all governmental
 environmental Hazardous Material-related approvals, permits, licenses,
 clearances, consents, and orders (the "Environmental Permits") necessary
 for the conduct of their respective Hazardous Material Handling and
 Hazardous Material Product Activities and other businesses of Stratus and
 its Subsidiaries as such activities are currently being conducted, except
 where the failure to hold any such Environmental Permit would not
 reasonably be expected to have a Material Adverse Effect. 
  
           (f)  No action, proceeding, revocation proceeding, amendment
 procedure, writ, injunction, or other governmental action is pending or, to
 the knowledge of Stratus threatened, concerning any Environmental Permits,
 or any Hazardous Material Handling or any Hazardous Material Product
 Activities of Stratus or any of its Subsidiaries that could reasonably be
 expected to have a Material Adverse Effect. 
  
           (g)  Neither Stratus nor any of its Subsidiaries is aware of any
 fact or circumstance which could involve Stratus or any of its Subsidiaries
 in any litigation or in any administrative enforcement action, penalty or
 sanction, or impose upon Stratus or any of its Subsidiaries any liability,
 with respect to any Hazardous Materials Handling, any Hazardous Material
 Product Activities, or any Hazardous Material-related contamination
 relating to any business operation of Stratus or its Subsidiaries or
 relating to a property that Stratus or any of its Subsidiaries at any time
 has owned, operated, occupied, or leased that could reasonably be expected
 to have a Material Adverse Effect. 
  
           (h)  To the knowledge of Stratus, no property that Stratus or any
 of its Subsidiaries has at any time owned, operated, occupied, or leased is
 proposed for listing on the National Priorities List, CERCLIS, or any
 similar state, local or foreign list of sites that potentially endanger
 human health, ecology or environment or that require environmental
 investigation or cleanup. 
  
           (i)  To the knowledge of Stratus, any asbestos-containing
 material which is on, in or a part of any property or structure thereon
 currently owned, operated, occupied, or leased by Stratus or any of its
 Subsidiaries complies with current applicable standards of Environmental
 Law except where non-compliance would not have a Material Adverse Effect. 
  
           (j)  To the knowledge of Stratus, no governmental notification,
 approval, or consent, whether before or after the Closing, is required
 under Environmental Laws in connection with the consummation of the
 transaction contemplated by this Agreement. 

           (k)  As used herein, "Hazardous Material" means any substance,
 waste, material, chemical, compound or mixture which is harmful to the
 environment, flora, fauna, or human health, or which is flammable,
 ignitable, corrosive, reactive, radioactive, or explosive, or which is
 defined, listed, designated, described or characterized under Environmental
 Laws as hazardous, toxic, biohazardous, a contaminant, a pollutant, or
 words of similar import, and includes without limitation asbestos,
 polychlorinated biphenyls, petroleum (including crude oil or any fraction
 or distillate thereof), and natural gas. 
  
           (l)  As used herein, "Environmental Laws" means all applicable
 civil, criminal, and administrative laws (including common law), statutes,
 codes, rules, regulations, ordinances, and legally enforceable orders,
 decrees, judgments, permits, licenses, approvals, authorizations, and other
 requirements, directives, consents, and obligations imposed by local,
 state, federal, foreign, or supranational governmental authority pertaining
 to protection of the environment, flora, fauna, public health and safety. 
  
      Section 3.14   Employee Benefit Plans and Employee Matters. 
  
           (a)  With the exception of the definition of "Affiliate" set
 forth in Section 3.14(a)(i) below (which definition shall apply only to
 this Section 3.14), for purposes of this Agreement, the following terms
 shall have the meanings set forth below: 
  
                (i)  "Affiliate" shall mean any other person or entity under
 common control with Stratus within the meaning of Section 414(b), (c), (m)
 or (o) of the Code and the regulations issued thereunder; 
  
                (ii) "Stratus Employee Plan" shall mean each plan, program,
 policy, practice, contract, agreement or other arrangement providing for
 compensation, severance, termination pay, performance awards, stock or
 stock-related awards, fringe benefits or other employee benefits or
 remuneration of any kind, whether written or unwritten or otherwise, funded
 or unfunded, including without limitation, each "employee benefit plan,"
 within the meaning of Section 3(3) of ERISA (as defined herein) which is
 maintained, contributed to, or required to be contributed to, by Stratus or
 any Affiliate for the benefit of any Employee (as defined in
 Section 3.14(a)(iv) below); 
  
                (iii)     "DOL" shall mean the Department of Labor; 
  
                (iv) "Employee" shall mean any current, former, or retired
 employee, officer, or director of Stratus or any Affiliate; 
  
                (v)  "Employee Agreement" shall mean each management,
 employment, severance, consulting, relocation, repatriation, expatriation
 or similar agreement or contract between Stratus or any Affiliate and any
 Employee or consultant; 
  
                (vi) "ERISA" shall mean the Employee Retirement Income
 Security Act of 1974, as amended; 
  
                (vii) "International Employee Plan" shall mean each
 Stratus Employee Plan that has been adopted or maintained by Stratus,
 whether informally or formally, for the benefit of Employees outside the
 United States; 
  
                (viii) "IRS" shall mean the Internal Revenue Service; 
  
                (ix) "Multiemployer Plan" shall mean any Pension Plan (as
 defined in Section 3.14(a)(xi) below) which is a "multiemployer plan," as
 defined in Section 3(37) of ERISA; 
  
                (x)  "PBGC" shall mean the Pension Benefit Guaranty
 Corporation; and 
  
                (xi) "Pension Plan" shall mean each Stratus Employee Plan
 which is an "employee pension benefit plan," within the meaning of
 Section 3(2) of ERISA. 
  
           (b)  The Stratus Disclosure Schedule contains an accurate and
 complete list of each material Stratus Employee Plan and each material
 Employee Agreement other than Employee Agreements with former employees
 where Stratus has performed substantially all of Stratus's obligations
 thereunder) as of the date hereof.  Stratus does not have any binding plan
 or binding commitment to establish any new Stratus Employee Plan, to modify
 any Stratus Employee Plan or Employee Agreement (except to the extent
 required by law or to conform any such Stratus Employee Plan or Employee
 Agreement to the requirements of any applicable law, or as required by this
 Agreement), or to enter into any Stratus Employee Plan or material Employee
 Agreement, nor does it have any commitment to do any of the foregoing. 
  
           (c)  Stratus has provided to Ascend:  (i) correct and complete
 copies of all documents embodying each material Stratus Employee Plan and
 each material Employee Agreement (other than Employee Agreements with
 former employees where Stratus has performed substantially all of Stratus's
 obligations thereunder), including all amendments thereto and written
 interpretations thereof; (ii) the three most recent annual reports (Form
 Series 5500 and all schedules and financial statements attached thereto),
 if any, required under ERISA or the Code in connection with each Stratus
 Employee Plan or related trust; (iii) if the Stratus Employee Plan is
 funded, the most recent annual and periodic accounting of Stratus Employee
 Plan assets; (iv) the most recent summary plan description together with
 the summary of material modifications thereto, if any, required under ERISA
 with respect to each Stratus Employee Plan; (v) all IRS determination,
 opinion, notification and advisory letters, and rulings relating to Stratus
 Employee Plans and copies of all applications and correspondence to or from
 the IRS or the DOL with respect to any Stratus Employee Plan; (vi) all
 material written agreements and contracts relating to each Stratus Employee
 Plan, including, but not limited to, administrative service agreements,
 group annuity contracts and group insurance contracts; and (vii) all
 material communications to any Employee or Employees relating to any
 Stratus Employee Plan and any proposed Stratus Employee Plan, in each case,
 relating to any amendments, terminations, establishments, increases or
 decreases in benefits, acceleration of payments or vesting schedules or
 other events which would result in any material liability to Stratus. 
  
           (d)  (i) Each Stratus Employee Plan has been established and
 maintained in all material respects in accordance with its terms and in
 compliance with all applicable laws, statutes, orders, rules and
 regulations, including but not limited to ERISA and the Code; (ii) each
 Stratus Employee Plan intended to qualify under Section 401(a) of the Code
 and each trust intended to qualify under Section 501(a) of the Code has
 either received a favorable determination letter from the IRS with respect
 to such plan as to its qualified status under the Code, including all
 amendments to the Code effected by the Tax Reform Act of 1986 and
 subsequent legislation, or has remaining a period of time under applicable
 Treasury regulations or IRS pronouncements in which to apply for such a
 determination letter and make any amendments necessary to obtain a
 favorable determination; (iii) no material "prohibited transaction," within
 the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA,
 and not otherwise exempt under Section 408 of ERISA, has occurred with
 respect to any material Stratus Employee Plan; (iv) there are no material
 actions, suits or claims pending, or, to Stratus's knowledge, threatened
 (other than routine claims for benefits) against any Stratus Employee Plan
 or against the assets of any Stratus Employee Plan; (v) each Stratus
 Employee Plan can be amended, terminated or otherwise discontinued after
 the Effective Time in accordance with its terms, without material liability
 to Stratus or any of its Affiliates (other than ordinary administration
 expenses typically incurred in a termination event); (vi) to Stratus's
 knowledge, there are no material audits, inquiries or proceedings pending
 or threatened by the IRS or DOL with respect to any Stratus Employee Plan;
 and (vii) neither Stratus nor any Affiliate has been assessed any material
 penalty or material tax with respect to any Stratus Employee Plan under
 Section 402(i) of ERISA or Sections 4975 through 4980 of the Code. 
  
           (e)  With respect to the Stratus Employee Plans, individually and
 in the aggregate, there are no material funded benefit obligations for
 which contributions have not been made or properly accrued and there are no
 material unfunded benefit obligations which have not been accounted for by
 reserves, or otherwise properly footnoted in accordance with U.S.GAAP, on
 the Stratus Financial Statements. 
  
           (f)  Stratus does not now, nor has it ever, maintained,
 established, sponsored, participated in, or contributed to, any Pension
 Plan which is subject to Title IV of ERISA or Section 412 of the Code. 
  
           (g)  At no time has Stratus contributed to or been required to
 contribute to any Multiemployer Plan. 
  
           (h)  No Stratus Employee Plan or Employee Agreement provides, or
 has any liability to provide, retiree life insurance, retiree health or
 other retiree employee welfare benefits to any person for any reason,
 except (i) coverage mandated by applicable law, (ii) death benefits under
 any "pension plan" or (iii) benefits the full cost of which is borne by the
 current or former employee (or his beneficiary).  
  
           (i)  The execution of this Agreement and the announcement or the
 consummation of the transactions contemplated hereby will not (either alone
 or upon the occurrence of any additional or subsequent acts or events or
 passage of time) result in, or constitute an event under any Stratus
 Employee Plan, Employee Agreement, trust or loan that will or may result
 in, the establishment, accrual or payment of any benefit or compensation
 (whether of severance pay or otherwise), any acceleration, forgiveness of
 indebtedness, vesting or distribution of or increase in any benefit or
 obligation to fund any benefit with respect to any Employee.  Neither
 Stratus nor any of its Subsidiaries is a party to any management,
 employment, deferred compensation, severance, bonus or other contract for
 personal services with any Employee or any plan agreement or understanding
 similar to any of the foregoing, in each case providing for compensation in
 excess of two hundred thousand dollars ($200,000) per annum. 
  
           (j)  Neither Stratus nor any of its Subsidiaries is a party to
 any oral or written agreement with any officer of Stratus or any of its
 Subsidiaries providing any term of employment or compensation guarantee
 extending for a period of longer than one year from the date hereof or for
 the payment of compensation in excess of two hundred thousand dollars
 ($200,000) per annum. 
  
           (k)  No payment or benefit which will or may be made by Stratus
 or its Affiliates with respect to any Employee as a result of the
 transactions contemplated by this Agreement will be characterized as an
 "excess parachute payment," within the meaning of Section 280G(B)(1) of the
 Code. 
  
           (l)  To its knowledge, Stratus:  (i) is in compliance in all
 material respects with all applicable federal, state, local and foreign
 laws, rules and regulations respecting employment, employment practices,
 terms and conditions of employment and wages and hours; (ii) has withheld
 all amounts required by law or by agreement to be withheld from the wages,
 salaries and other payments to Employees, which amounts are material
 individually or in the aggregate; (iii) is not liable for any material
 arrears of wages or any taxes or any penalty for failure to comply with any
 of the foregoing; and (iv) is not liable for any material payment to any
 trust or other fund or to any governmental or administrative authority,
 with respect to unemployment compensation benefits, social security or
 other benefits or obligations for Employees (other than routine payments to
 be made in the normal course of business and consistent with past
 practice).  There are no pending or, to Stratus's knowledge, threatened
 material claims or actions against Stratus under any worker's compensation
 policy or long-term disability policy.  To Stratus's knowledge, no employee
 of Stratus has violated any employment contract, nondisclosure agreement or
 noncompetition agreement by which such employee is bound due to such
 employee being employed by Stratus and disclosing to Stratus or using trade
 secrets or proprietary information of any other person or entity. 
  
           (m)  No work stoppage or labor strike against Stratus is pending
 or, to the knowledge of Stratus, threatened.  Stratus does not know of any
 activities or proceedings of any labor union to organize any Employees. 
 There are no actions, suits, claims, labor disputes or grievances pending,
 or, to Stratus's knowledge, threatened or relating to any labor, safety or
 discrimination matters involving any Employee, including, without
 limitation, charges of unfair labor practices or discrimination complaints,
 which, if adversely determined, individually or in the aggregate, would be
 reasonably likely to be a Stratus Material Adverse Effect.  Neither Stratus
 nor any of its Affiliates has been charged with or received notice of any
 actual or alleged unfair labor practices within the meaning of the National
 Labor Relations Act.  Stratus is not presently, nor has it been in the
 past, a party to, or bound by, any collective bargaining agreement or union
 contract with respect to Employees and no collective bargaining agreement
 is currently being negotiated by Stratus. 
  
           (n)  Each International Employee Plan has been established,
 maintained and administered in material compliance with its terms and
 conditions and with the requirements prescribed by any and all statutory or
 regulatory laws that are applicable to such International Employee Plan. 
 No International Employee Plan has unfunded liabilities, that as of the
 Effective Time, will not be offset by insurance or fully accrued.   
  
      Section 3.15   Compliance with Laws.  (a) Stratus and its Subsidiaries
 have complied with, and have not received any notices of violations with
 respect to, and (b) as of the date hereof, Stratus and its Subsidiaries are
 not in violation of any U.S. federal, state, or local or foreign statute,
 law or regulation, affecting the conduct of its business or the ownership
 or operation of its business, including the U.S. Foreign Corrupt Practices
 Act and all United States statutes, laws and regulations governing the
 license and delivery of technology and products abroad by persons subject
 to the jurisdiction of the United States, except for failures to comply or
 violations which could not reasonably be expected to have a Stratus
 Material Adverse Effect. 
  
      Section 3.16   Tax Matters.  Neither Stratus nor any of its
 Subsidiaries, nor to Stratus's knowledge, any of its other Affiliates (as
 defined herein) has taken or agreed to take any action or failed to take
 any action which could prevent the Merger from qualifying as a
 reorganization within the meaning of Section 368(a) of the Code. 
  
      Section 3.17   Interested Party Transactions.  Since the date of
 Stratus's last proxy statement to its stockholders, no event has occurred
 that would be required to be reported by Stratus as a Certain Relationship
 or Related Transaction pursuant to Item 404 of Regulation S-K promulgated
 by the SEC. 
  
      Section 3.18   Registration Statement; Proxy Statement/Prospectus. 
 The information supplied to Ascend by Stratus for inclusion in the
 registration statement of Ascend on Form S-4 pursuant to which shares of
 Ascend Common Stock issued in the Merger will be registered with the SEC
 (the "Registration Statement") shall not contain, at the time the
 Registration Statement is first filed in publicly available form and at the
 time the Registration Statement is declared effective by the SEC, any
 untrue statement of a material fact or omit to state any material fact
 required to be stated in the Registration Statement or necessary in order
 to make the statements in the Registration Statement, in light of the
 circumstances under which they were made, not misleading.  The information
 supplied by Stratus for inclusion in the proxy statement/prospectus (the
 "Proxy Statement") to be sent to the stockholders of Stratus in connection
 with the special meeting of Stratus stockholders to consider this Agreement
 and the Merger (the "Stratus Stockholders Meeting") shall not, on the date
 the Proxy Statement is first mailed to stockholders of Stratus, at the time
 of the Stratus Stockholders Meeting or at the Effective Time, contain any
 statement which, at such time and in light of the circumstances under which
 it was made, is false or misleading with respect to any material fact, or
 omit to state any material fact necessary in order to make the statements
 made in the Proxy Statement not false or misleading or omit to state any
 material fact necessary to correct any statement in any earlier
 communication with respect to the solicitation of proxies for the Stratus
 Stockholders Meeting which has become false or misleading.  If at any time
 prior to the Effective Time any event relating to Stratus or any of its
 Affiliates, officers or directors should be discovered by Stratus which
 should be set forth in an amendment to the Registration Statement or a
 supplement to the Proxy Statement, Stratus shall promptly inform Ascend. 
  
      Section 3.19   Opinion of Financial Advisor.  The financial advisor to
 ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Company Incorporated, has delivered to Stratus an
 opinion dated as of or immediately prior to the date of this Agreement to
 the effect that the Exchange Ratio is fair from a financial point of view
 to the holders of Stratus Common Stock. 
  
      Section 3.20   Applicability of Certain Massachusetts Laws.  Neither
 the control share acquisition provisions of Chapters 110D and 110E of the
 MBCL nor any similar provisions of the Articles of Organization or Bylaws
 of Stratus are applicable to the transactions contemplated by this
 Agreement. 
  
  
  
                                 ARTICLE IV 
  
              REPRESENTATIONS AND WARRANTIES OF ASCEND AND SUB 
  
           Ascend and Sub represent and warrant to Stratus that the
 statements contained in this Article IV are true and correct, except as set
 forth in the disclosure schedule delivered by Ascend to Stratus on or
 before the date of this Agreement ("Ascend Disclosure Schedule") or except
 to the extent disclosed in the Ascend SEC Reports (as defined herein) filed
 with the SEC since January 1, 1998.  The Ascend Disclosure Schedule shall
 be arranged in sections corresponding to the numbered and lettered sections
 contained in this Article IV and the disclosure in any such numbered and
 lettered section of the Ascend Disclosure Schedule shall qualify only the
 corresponding section in this Article IV (except to the extent disclosure
 in any numbered and lettered section of the Ascend Disclosure Schedule is
 specifically cross-referenced in another numbered and lettered section of
 the Ascend Disclosure Schedule).  The term "Ascend Material Adverse Effect"
 shall mean a material adverse effect on the business, operations,
 properties, assets (including intangible assets), financial condition or
 results of operations of Ascend and its Subsidiaries, with materiality
 determined in accordance with Section 9.3. 
  
      Section 4.1    Organization.  Ascend and each of its Subsidiaries is a
 corporation duly organized, validly existing and in good standing under the
 laws of the jurisdiction of its incorporation, has all requisite corporate
 power to own, lease and operate its property and to carry on its business
 as now being conducted and as proposed to be conducted (without giving
 effect to the Merger), and is duly qualified to do business and is in good
 standing as a foreign corporation in each jurisdiction in which if it is
 required by law to be so qualified except where the failure to have such
 power or the failure to be so qualified could not reasonably be expected to
 have an Ascend Material Adverse Effect. 
  
      Section 4.2    Ascend Subsidiaries and Joint Ventures.  Section 4.2 of
 the Ascend Disclosure Schedule sets forth a list of all Subsidiaries and
 Joint Ventures of Ascend, including the name of each Subsidiary and Joint
 Venture and the jurisdiction in which such Subsidiary or Joint Venture is
 incorporated or organized.  There are no outstanding subscriptions,
 options, call, contracts, voting trusts, proxies or other commitments,
 understandings, restrictions, arrangements, rights or warrants with respect
 to any such Subsidiary's capital stock, including any right obligating any
 such Subsidiary to issue, deliver, or sell additional shares of its capital
 stock, and no obligations, contingent or otherwise, of Ascend or any of its
 Subsidiaries to repurchase, redeem, or otherwise acquire any shares of the
 capital stock of any Subsidiary of Ascend or make any investment (in the
 form of a loan, capital contribution or otherwise) in any such Subsidiary
 or any other entity other than guarantees of bank obligations of such
 Subsidiaries entered into in the ordinary course of business.  All of the
 outstanding shares of capital stock of each Subsidiary of Ascend are duly
 authorized, validly issued, fully paid and nonassessable, and all such
 shares are owned by Ascend or another Subsidiary of Ascend free and clear
 of all security interests, liens, claims, pledges, agreements, limitations
 on Ascend's voting rights, charges or other encumbrances of any nature. 
 Section 4.2 of the Ascend Disclosure Schedule sets forth the nature and
 extent of the ownership and voting interests held by Ascend in each such
 Joint Venture.  Except as set forth in Section 4.2 of the Ascend Disclosure
 Schedule, neither Ascend nor any of its Subsidiaries directly or indirectly
 owns any equity or similar interest in, or any interest convertible into or
 exchangeable or exercisable for any such equity or similar interest in, any
 corporation, limited liability company, partnership, joint venture or other
 business association or entity (other than Ascend or another Subsidiary of
 Ascend), excluding securities of any publicly traded company held for
 investment and comprising less than five percent (5%) of the outstanding
 stock or voting power of such company. 
  
      Section 4.3    Ascend Capital Structure. 
  
           (a)  The authorized capital stock of Ascend consists of
 400,000,000 shares of Ascend Common Stock and 2,000,000 shares of preferred
 stock, $.001 par value per share ("Ascend Preferred Stock").  As of July
 31, 1998:  (i) 198,001,540 shares of Ascend Common Stock were issued and
 outstanding, all of which are validly issued, fully paid and nonassessable;
 (ii) no shares of Ascend Preferred Stock are issued or outstanding;
 (iii) no shares of Ascend Common Stock or Ascend Preferred Stock were held
 in the treasury of Ascend or by Subsidiaries of Ascend; and (iv) 28,934,033
 shares of Ascend Common Stock were reserved for issuance pursuant to stock
 options granted and outstanding under Ascend's stock option plans (the
 "Ascend Option Plans") and rights outstanding under Ascend's employee stock
 purchase plan (the "Ascend Purchase Plan").  All shares of Ascend Common
 Stock subject to issuance as specified above, upon issuance on the terms
 and conditions specified in the instruments pursuant to which they are
 issuable, shall be duly authorized, validly issued, fully paid and
 nonassessable.  There are no obligations, contingent or otherwise, of
 Ascend or any of its Subsidiaries to repurchase, redeem or otherwise
 acquire any shares of Ascend Common Stock. 
  
           (b)  Except as set forth in this Section 4.3 or as reserved for
 future grants of rights or options under the Ascend Option Plans or the
 Ascend Purchase Plan, there are no equity securities of any class of
 Ascend, or any security exchangeable into or exercisable for such equity
 securities, issued, reserved for issuance or outstanding.  Except pursuant
 to the Ascend Option Plans, the Ascend Purchase Plan or any related
 agreement in effect as of the date of this Agreement, or as set forth in
 this Section 4.3, there are no options, warrants, equity securities, calls,
 rights, commitments or agreements of any character to which Ascend is a
 party or by which it is bound obligating Ascend to issue, deliver or sell,
 or cause to be issued, delivered or sold, additional shares of capital
 stock of Ascend obligating Ascend to grant, extend, accelerate the vesting
 of or enter into any such option, warrant, equity security, call, right,
 commitment or agreement, and, to the best knowledge of Ascend, there are no
 voting trusts, proxies or other agreements or understandings with respect
 to the shares of capital stock of Ascend to which Ascend is a party. 
  
      Section 4.4    Authority; No Conflict; Required Filings and Consents. 
  
           (a)  Ascend has all requisite corporate power and authority to
 enter into this Agreement and to consummate the transactions contemplated
 hereby and thereby.  The execution and delivery of this Agreement and the
 consummation of the transactions contemplated hereby have been duly
 authorized by all necessary corporate and stockholder action on the part of
 Ascend.  This Agreement has been duly executed and delivered by Ascend and,
 assuming this Agreement constitutes valid and binding obligation of the
 other parties hereto, this Agreement constitutes the valid and binding
 obligations of Ascend, enforceable against Ascend in accordance with the
 terms hereof, except as such enforceability may be limited by
 (i) bankruptcy laws and other similar laws affecting creditors' rights
 generally and (ii) general principles of equity, regardless of whether
 asserted in a proceeding in equity or at law. 
  
           (b)  The execution and delivery of this Agreement by Ascend does
 not, and the consummation of the transactions contemplated by this
 Agreement will not, (i) conflict with, or result in any violation or breach
 of any provision of the Certificate of Incorporation or Bylaws of Ascend or
 any of its Subsidiaries (in each case as heretofore amended), (ii) result
 in any violation or breach of, or constitute (with or without notice or
 lapse of time, or both) a default (or give rise to a right of termination,
 cancellation or acceleration of any obligation or loss of any material
 benefit) or require the consent, waiver or agreement of any person or
 entity (other than consents, waivers and agreements that have been or prior
 to the Closing will be obtained) under any of the terms, conditions or
 provisions of any material note, bond, mortgage, indenture, lease, contract
 or other material agreement, instrument or obligation to which Ascend or
 any of its Subsidiaries is a party or by which any of them or any of their
 properties or assets may be bound, or (iii) subject to the consents,
 approvals, orders, authorizations, filings and registrations specified in
 Section 4.4(c), conflict with or violate any judgment, order, decree,
 statute, law, ordinance, rule or regulation or any material permit,
 concession, franchise or license applicable to Ascend or any of its
 Subsidiaries or any of their properties or assets, except in the case of
 clauses (ii) and (iii) for such consents, waivers and agreements, the
 absence of which, and such violations, breaches, defaults, terminations,
 cancellations or accelerations which, in the aggregate could not reasonably
 be expected to have an Ascend Material Adverse Effect or a material adverse
 effect on the ability of Ascend to consummate the transactions contemplated
 by this Agreement. 
  
           (c)  No consent, approval, order or authorization of, or
 registration, declaration or filing with, any Governmental Entity is
 required by or with respect to Ascend or any of its Subsidiaries in
 connection with the execution and delivery of this Agreement or the
 consummation of the transactions contemplated hereby, except for (i) the
 filing of pre-merger notification reports under the HSR Act and the
 antitrust laws of any foreign jurisdiction which is applicable to the
 Merger and the expiration or early termination of any waiting periods
 thereunder; (ii) the filing of the Registration Statement with the SEC in
 accordance with the Securities Act and the entry of an order by the SEC
 permitting such registration statement to become effective; (iii) the
 filing of the Articles of Merger with the Secretary of State of the
 Commonwealth of Massachusetts in accordance with the MBCL; (iv) the filing
 of the Proxy Statement and related proxy materials with the SEC in
 accordance with the Exchange Act; (v) such consents, approvals, orders,
 authorizations, filings, registrations and declarations as may be required
 under applicable federal and state securities laws and the laws of any
 foreign country; and (vi) such other consents, approvals, orders,
 authorizations, filings, approvals and registrations which, in the
 aggregate, if not obtained or made, could not reasonably be expected to
 have an Ascend Material Adverse Effect or a material adverse effect on the
 ability of Ascend to consummate the transactions contemplated by this
 Agreement.Section  
  
      4.5  SEC Filings; Financial Statements. 
  
           (a)  Ascend has filed and made available to Stratus all forms,
 reports and documents required to be filed by Ascend with the SEC since
 January 1, 1996 (collectively, the "Ascend SEC Reports").  The Ascend SEC
 Reports (i) at the time filed, complied in all material respects with the
 applicable requirements of the Securities Act and the Exchange Act, as the
 case may be, and (ii) did not at the time they were filed (or if amended or
 superseded by a subsequent filing, then on the date of such filing) contain
 any untrue statement of a material fact or omit to state a material fact
 required to be stated in such Ascend SEC Reports or necessary in order to
 make the statements in such Ascend SEC Reports, in the light of the
 circumstances under which they were made, not misleading.  None of Ascend's
 Subsidiaries is required to file any forms, reports or other documents as a
 result of their issuance of securities (or the registration of such
 securities on a national market system) with the SEC, the NASD, any other
 stock exchange or any foreign securities commission or stock exchange
 regulating issuers of securities. 
  
           (b)  Each of the consolidated financial statements (including, in
 each case, any related notes) contained in the Ascend SEC Reports,
 including any Ascend SEC Reports filed after the date of this Agreement
 until the Closing (the "Ascend Financial Statements"), complied or will
 comply as to form in all material respects with the applicable published
 rules and regulations of the SEC with respect thereto, was or will be
 prepared in accordance with U.S. GAAP applied on a consistent basis
 throughout the periods involved (except as may be indicated in the notes to
 such financial statements or, in the case of unaudited statements, as
 permitted by Form 10-Q or 8-K promulgated by the SEC), and fairly presented
 or will fairly present the consolidated financial position of Ascend and
 its Subsidiaries as at the respective dates and the consolidated results of
 its operations and cash flows for the periods indicated, except that the
 unaudited interim financial statements were or are subject to normal and
 recurring year-end adjustments which were not or are not expected to be
 material in amount.  The audited consolidated balance sheet of Ascend as of
 December 31, 1997 is referred to herein as the "Ascend Balance Sheet." 
  
      Section 4.6    Absence of Undisclosed Liabilities.  Ascend and its
 Subsidiaries do not have any liabilities, either accrued or contingent
 (whether or not required to be reflected in financial statements in
 accordance with U.S. GAAP), and whether due or to become due, other than
 (i) liabilities reflected in the Ascend Balance Sheet, (ii) normal or
 recurring liabilities incurred since December 31, 1997 in the ordinary
 course of business consistent with past practices, or (iii) liabilities
 arising out of the transaction contemplated hereby or permitted hereunder. 
  
      Section 4.7    Absence of Certain Changes or Events.  Since the date
 of the Ascend Balance Sheet, Ascend and its Subsidiaries have conducted
 their businesses only in the ordinary course in a manner consistent with
 past practice, and since such date there has not been:  (a) any Ascend
 Material Adverse Effect or any fact or circumstance that would be
 reasonably likely to result in an Ascend Material Adverse Effect or (b) any
 material change by Ascend or any of its Subsidiaries in its accounting
 methods, principles or practices; (c) any revaluation by Ascend or any of
 its Subsidiaries of any material asset or any writedown of the value of
 capitalized software or inventory, or any write-off of notes or accounts
 receivable other than in the ordinary course of business consistent with
 past practice; or (d) any other action or event that would have required
 the consent of Stratus pursuant to Section 5.2 of this Agreement had such
 action or event occurred after the date of this Agreement and that could
 reasonably be expected to result in an Ascend Material Adverse Effect. 
  
      Section 4.8    Litigation.  There is no action, suit, proceeding,
 claim, arbitration or, to the knowledge of Ascend, investigation against
 Ascend or any of its Subsidiaries pending, or to the knowledge of Ascend,
 threatened, or as to which Ascend or any of its Subsidiaries has received
 any written notice of assertion, which, if decided adversely to Ascend or
 such Subsidiary, could reasonably be expected to have an Ascend Material
 Adverse Effect or a material adverse effect on the ability of Ascend to
 consummate the transactions contemplated by this Agreement. 
  
      Section 4.9    Compliance with Laws.  (a) Ascend and its Subsidiaries
 have complied with, and have not received any notices of violations with
 respect to and (b) as of the date hereof, Ascend and its Subsidiaries are
 not in violation of any U.S. federal, state, or local or foreign statute,
 law or regulation, affecting the conduct of its business or the ownership
 or operation of its business, including the U.S. Foreign Corrupt Practices
 Act and all United States statutes, laws and regulations governing the
 license and delivery of technology and products abroad by persons subject
 to the jurisdiction of the United States, except for failures to comply or
 violations which could not reasonably be expected to have an Ascend
 Material Adverse Effect. 
  
      Section 4.10   Tax Matters.  Neither Ascend nor any of its
 Subsidiaries, nor to Ascend's knowledge, any of its other Affiliates (as
 defined herein) has taken or agreed to take any action or failed to take
 any action which could prevent the Merger from qualifying as a
 reorganization within the meaning of Section 368(a) of the Code. 
  
      Section 4.11   Interested Party Transactions.  Since the date of
 Ascend's last proxy statement to its stockholders, no event has occurred
 that would be required to be reported by Ascend as a Certain Relationship
 or Related Transaction pursuant to Item 404 of Regulation S-K promulgated
 by the SEC. 
  
      Section 4.12   Registration Statement; Proxy Statement/Prospectus. 
 The information supplied by Ascend for inclusion in the Registration
 Statement shall not contain, at the time the Registration Statement is
 first filed in publicly available form and at the time the Registration
 Statement is declared effective by the SEC, any untrue statement of a
 material fact or omit to state any material fact required to be stated in
 the Registration Statement or necessary in order to make the statements in
 the Registration Statement, in light of the circumstances under which they
 were made, not misleading.  The information supplied by Ascend for
 inclusion in the Proxy Statement to be sent to the stockholders of Stratus
 in connection with the Stratus Stockholders Meeting shall not, on the date
 the Proxy Statement is first mailed to stockholders of Stratus, at the time
 of the Stratus Stockholders Meeting or at the Effective Time, contain any
 statement which, at such time and in light of the circumstances under which
 it was made, is false or misleading with respect to any material fact, or
 omit to state any material fact necessary in order to make the statements
 made in the Proxy Statement not false or misleading or omit to state any
 material fact necessary to correct any statement in any earlier
 communication with respect to the solicitation of proxies for the Stratus
 Stockholders Meeting which has become false or misleading.  If at any time
 prior to the Effective Time any event relating to Ascend or any of its
 Affiliates, officers or directors should be discovered by Ascend which
 should be set forth in an amendment to the Registration Statement or a
 supplement to the Proxy Statement, Ascend shall promptly inform Stratus. 
  
      Section 4.13   Opinion of Financial Advisor.  The financial advisor to
 Ascend, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, has delivered to Ascend an opinion dated as
 of or immediately prior to the date of this Agreement to the effect that
 the Exchange Ratio is fair to Ascend from a financial point of view. 
  
      Section 4.14   Taxes.  (i) Ascend and each of its Subsidiaries has
 filed all Tax Returns required to have been filed on or prior to the date
 hereof, or appropriate extensions therefor have been properly obtained, and
 such Tax Returns are true, correct and complete, except to the extent that
 any failure to file such Tax Returns or to cause such Tax Returns to be
 true, correct and complete would not, individually or in the aggregate, be
 expected to have an Ascend Material Adverse Effect; (ii) all Taxes shown to
 be due on such Tax Returns have been timely paid or extensions for payment
 have been properly obtained, or such Taxes are being timely and properly
 contested by Ascend, except for failures to make payment, properly obtain
 extensions or timely and properly contest which could not reasonably be
 expected to have an Ascend Material Adverse Effect; (iii) there is no
 audit, examination, claimed deficiency, refund litigation, proposed
 adjustment or matter in controversy regarding any Taxes due and owing by
 Ascend or any of its Subsidiaries that would individually or in the
 aggregate, have an Ascend Material Adverse Effect; (iv) neither Ascend nor
 any of its Subsidiaries has waived any statutory period of limitations in
 respect of any material Taxes or Tax Returns; (v) all assessments for Taxes
 due and owing by Ascend or any of its Subsidiaries with respect to
 completed and settled examinations or concluded litigation have been paid
 (except where the nonpayment of such Taxes could not reasonably be expected
 to have an Ascend Material Adverse Effect); and (vi) neither Ascend nor any
 of its Subsidiaries is a party to, bound by, or has any obligation under
 any Tax sharing, allocation, indemnity or similar contract or arrangement. 
  
      Section 4.15   Interim Operations of Sub.  Sub was formed solely for
 the purpose of engaging in the transactions contemplated by this Agreement,
 has engaged in no other business activities and has conducted its
 operations only as contemplated by this Agreement. 
  
                                 ARTICLE V

                            CONDUCT OF BUSINESS
  
      Section 5.1    Covenants of Stratus.  During the period from the date
 of this Agreement and continuing until the earlier of the termination of
 this Agreement or the Effective Time, except as expressly contemplated by
 this Agreement, Stratus agrees as to itself and its Subsidiaries (except to
 the extent that Ascend shall otherwise consent in writing, which consent
 shall not be unreasonably withheld), to carry on its business in the usual,
 regular and ordinary course in substantially the same manner as previously
 conducted, to pay its debts and Taxes when due subject to good faith
 disputes over such debts or Taxes, to pay or perform its other obligations
 when due, and, to the extent consistent with such business, except where
 the failure to do so could not reasonably be expected to have a Stratus
 Material Adverse Effect, to use all reasonable efforts consistent with past
 practices and policies to (i) preserve intact its present business
 organization, (ii) keep available the services of its present officers and
 key employees, and (iii) preserve its relationships with customers,
 suppliers, distributors, licensors, licensees and others having business
 dealings with it.  Stratus shall promptly after becoming aware thereof
 notify Ascend of any events or occurrences not in the ordinary course of
 business of Stratus that would, individually or in the aggregate, result in
 a breach of any representation, warranty, covenant or agreement of Stratus
 set forth in this Agreement which would cause any of the conditions to
 Ascend's obligations to effect the Merger set forth in Article VII to not
 be satisfied.  Except as expressly contemplated by this Agreement or as set
 forth in the Stratus Disclosure Schedule, Stratus shall not (and shall not
 permit any of its Subsidiaries to), without the prior written consent of
 Ascend, which consent shall not be unreasonably withheld: 
  
           (a)  accelerate, amend or change the period of exercisability of
 options or restricted stock granted under any Stratus Stock Plan or
 authorize cash payments in exchange for any options granted under any of
 such plans except as required by the terms of such plans or any related
 agreements in effect as of the date of this Agreement; 
  
           (b)  transfer or license to any person or entity or otherwise
 extend, amend or modify any material rights to the Stratus Intellectual
 Property Rights (as defined in Section 6.1(b)), other than non-exclusive
 licenses in the ordinary course of business consistent with past practices,
 provided that Stratus and its Subsidiaries shall be permitted to renew or
 extend exclusive licenses existing as of the date hereof; 
  
           (c)  declare or pay any dividends on or make any other
 distributions (whether in cash, stock or property) in respect of any of its
 capital stock, or split, combine or reclassify any of its capital stock or
 issue or authorize the issuance of any other securities in respect of, in
 lieu of or in substitution for shares of its capital stock, or purchase or
 otherwise acquire, directly or indirectly, any shares of its capital stock
 except from former employees, directors and consultants, as and to the
 extent required pursuant to agreements entered into prior to the date
 hereof providing for the repurchase of shares in connection with any
 termination of service by such party; 
  
           (d)  issue, deliver or sell, or authorize or propose the
 issuance, delivery or sale of, any shares of its capital stock or
 securities convertible into shares of its capital stock, or subscriptions,
 rights, warrants or options to acquire, or other agreements or commitments
 of any character obligating it to issue any such shares or other
 convertible securities, other than (i) the issuances of Stratus Common
 Stock or the grant of options or rights to acquire Stratus Common Stock
 pursuant to the Stratus Stock Plans in the ordinary course of business
 consistent as to amount, exercise price, vesting and other terms with past
 practice not to exceed two hundred fifty thousand (250,000) shares in the
 aggregate, and (ii) the issuance of shares of Stratus Common Stock upon the
 exercise of options granted under the Stratus Stock Plans as and to the
 extent required under the Stratus Stock Plans; 
  
           (e)  acquire or agree to acquire, by merging or consolidating
 with, by purchasing a substantial equity interest in or substantial portion
 of the assets of, or by any other means, any business or any corporation,
 partnership or other business organization or division, or otherwise
 acquire or agree to acquire any material amount of assets; 
  
           (f)  sell, lease, license or otherwise dispose of any of its
 properties or assets which are material, individually or in the aggregate
 to the business of Stratus and its Subsidiaries, taken as a whole, other
 than in the ordinary course of business; 
  
           (g)  take any action to:  (i) increase or agree to increase the
 compensation paid, payable or to become payable to its directors, officers,
 employees, or consultants, except for increases in salary or wages of
 employees in accordance with past practices and except as may be necessary
 to satisfy contractual obligations existing as of the date hereof,
 (ii) grant any additional severance or termination pay to, or enter into
 any employment or severance agreements with, directors, officers or
 employees, except as may be necessary to satisfy contractual obligations
 existing as of the date hereof, (iii) grant any severance or termination
 pay to, or enter into any employment or severance agreement with, any
 employee, except in accordance with past practices and except as may be
 necessary to satisfy contractual obligations existing as of the date
 hereof, (iv) enter into any collective bargaining agreement, or (v) except
 as required by applicable law establish, adopt, enter into or amend any
 bonus, profit sharing, thrift, compensation, stock option, restricted
 stock, pension, retirement, deferred compensation, employment, termination,
 severance or other plan, trust, fund, policy or arrangement for the benefit
 of any directors, officers or employees, except as may be necessary to
 satisfy contractual obligations existing as of the date hereof; provided,
 however, that nothing contained herein shall prohibit Stratus from
 conclusively determining the earned amount of any bonuses under Stratus's
 bonus plans in respect of calendar year 1998, based on Stratus's annualized
 performance through the Effective Time (determined without regard to the
 costs incurred in connection with the transactions contemplated by this
 Agreement), such bonuses to be paid in accordance with the terms of such
 plans and Stratus's past practices; 
  
           (h)  revalue any of its assets, including writing down the value
 of inventory or writing off notes or accounts receivable other than in the
 ordinary course of business or pursuant to arm's length transactions on
 commercially reasonable terms; 
  
           (i)  incur or prepay any indebtedness for borrowed money or
 guarantee any such indebtedness or issue or sell any debt securities or
 warrants or rights to acquire any debt securities or guarantee any debt
 securities of others, other than indebtedness incurred under outstanding
 lines of credit and bank agreements consistent with past practice; 
  
           (j)  amend or propose to amend its Bylaws; 
  
           (k)  incur or commit to incur any individual capital expenditure
 in excess of five million dollars ($5,000,000) or aggregate capital
 expenditures in excess of forty million dollars ($40,000,000); 
  
           (l)  enter into or amend any material OEM agreement or any
 material agreements pursuant to which any third party is granted exclusive
 marketing, manufacturing or other rights with respect to any Stratus
 product, process or technology; 
  
           (m)  amend or terminate any material contract, agreement or
 license to which it is a party except in the ordinary course of business; 
  
           (n)  waive or release any material right or claim, except in the
 ordinary course of business; 
  
           (o)  initiate any litigation or arbitration proceeding against
 any person known to Stratus to be a customer or distributor of Ascend
 without prior notice to the Chief Financial Officer of Ascend or settle any
 litigation or arbitration proceeding involving out-of-pocket settlement
 payments of greater than one million dollars ($1,000,000); 
  
           (p)  make any loans to directors, officers or employees (other
 than pursuant to contracts in existence prior to the date hereof); 
  
           (q)  make any material changes in its Tax or (except as required
 by law) accounting policies; or 
  
           (r)  take, or agree in writing or otherwise to take, any of the
 actions described in the foregoing clauses (a) through (q), or any action
 which is reasonably likely to cause any of the conditions set forth in
 Section 7.2(a) or Section 7.2(b) not to be satisfied. 
  
      Section 5.2    Covenants of Ascend.  During the period from the date
 of this Agreement and continuing until the earlier of the termination of
 this Agreement or the Effective Time, except as expressly contemplated by
 this Agreement, Ascend agrees as to itself and its Subsidiaries (except to
 the extent that Stratus shall otherwise consent in writing, which consent
 shall not be unreasonably withheld), to carry on its business in the usual,
 regular and ordinary course, in substantially the same manner as previously
 conducted or as otherwise disclosed to Stratus prior to the date hereof, to
 pay its debts and Taxes when due subject to good faith disputes over such
 debts or Taxes, to pay or perform its other obligations when due and, to
 the extent consistent with such business, except where the failure to do so
 could not reasonably be expected to have an Ascend Material Adverse Effect,
 to use all reasonable efforts consistent with past practices and policies
 to (i) preserve intact its present business organization, (ii) keep
 available the services of its present officers and key employees, and
 (iii) preserve its relationships with customers, suppliers, distributors,
 licensors, licensees and others having business dealings with it, in each
 case.  Ascend shall promptly after becoming aware thereof notify Stratus of
 any events or occurrences not in the ordinary course of business of Ascend
 that would individually or in the aggregate result in a breach of any
 representation, warranty, covenant or agreement of Ascend set forth in this
 Agreement, which would cause any of the conditions to Ascend's obligations
 to effect the Merger set forth in Article VII not to be satisfied.   
 Except as expressly contemplated by this Agreement or as set forth in the
 Ascend Disclosure Schedule, Ascend shall not (and shall not permit any of
 its Subsidiaries to), without the prior written consent of Stratus which
 consent shall not be unreasonably withheld: 
  
           (a)  declare or pay any dividends on or make any other
 distributions (whether in cash, stock or property) in respect of any of its
 capital stock or split, combine or reclassify any of its capital stock or
 issue or authorize the issuance of any other securities in respect of, in
 lieu of or in substitution for shares of its capital stock, or purchase or
 otherwise acquire, directly or indirectly, any shares of its capital stock
 except from former employees, directors and consultants in accordance with
 agreements entered into prior to the date hereof providing for the
 repurchase of shares in connection with any termination of service by such
 party; 
  
           (b)  amend or propose to amend its Certificate of Incorporation
 or Bylaws, except as contemplated by this Agreement; or 
  
           (c)  take, or agree in writing or otherwise to take, any of the
 actions described in the foregoing clauses (a) and (b), or any action which
 is reasonably likely to cause any of the conditions set forth in Section
 7.3(a) or Section 7.3(b) not to be satisfied. 
  
      Section 5.3    Cooperation.  Subject to compliance with applicable
 law, from the date hereof until the Effective Time, each of Ascend and
 Stratus shall keep the other apprised of the status of matters relating to
 the completion of the transactions contemplated hereby, including promptly
 furnishing the other party or its counsel with copies of all filings made
 by such party with any Governmental Entity in connection with this
 Agreement, the Merger and the other transactions contemplated hereby. 
  
                                ARTICLE VI   
  
                           ADDITIONAL AGREEMENTS 
  
 Section 6.1    No Solicitation. 
  
           (a)  Stratus agrees that, from and after the date of this
 Agreement until the earlier of the Effective Time or the termination of
 this Agreement in accordance with Section 8.1 it shall not, directly or
 indirectly, through any officer, director, employee, representative, agent,
 or affiliate, (i) solicit, initiate, or encourage any inquiries or
 proposals that constitute, or could reasonably be expected to lead to, a
 proposal or offer for a merger, consolidation, sale or purchase of
 substantial assets or stock, tender or exchange offer, or other business
 combination or change in control or similar transaction involving such
 party, other than the transactions contemplated or permitted by this
 Agreement (any of the foregoing inquiries or proposals being referred to in
 this Agreement as a "Competing Offer"), (ii) engage in negotiations or
 discussions concerning, or provide any non-public information to any person
 or entity relating to, any Competing Offer, or (iii) agree to, accept,
 approve, recommend or consummate a Competing Offer; provided, however, that
 nothing in this Section 6.1 shall prevent Stratus or its Board of Directors
 from (A) furnishing non-public information to, or entering into discussions
 or negotiations with, any person or entity in connection with an
 unsolicited bona fide written Competing Offer by such person or entity or
 recommending such an unsolicited bona fide written Competing Offer to the
 stockholders of Stratus, if and only to the extent that (1) such Competing
 Offer would, if consummated, result in a transaction that would, in the
 reasonable good faith judgment of Stratus's Board of Directors, after
 consultation with its financial advisors, be more favorable to Stratus's
 stockholders from a financial point of view than the Merger and, in the
 reasonable good faith judgment of Stratus's Board of Directors after
 consultation with its financial advisors, the person or entity making such
 Competing Offer appears to have the financial means, or the ability to
 obtain the necessary financing, to conclude such transaction (any such
 Competing Offer meeting such criteria being referred to in this Agreement
 as a "Superior Proposal"), (2) the failure to take such action would, in
 the reasonable good faith judgment of Stratus's Board of Directors after
 consultation with outside corporate counsel, be contrary to the fiduciary
 duties of Stratus's directors to Stratus's stockholders under applicable
 law, and (3) prior to furnishing non-public information to, or entering
 into discussions or negotiations with, such person or entity, Stratus's
 Board of Directors receives from such person or entity an executed
 confidentiality agreement not materially less restrictive to such person or
 entity than those contained in the Mutual Nondisclosure and Confidentiality
 Agreement dated June 15, 1998 between Ascend and Stratus (the
 "Confidentiality Agreement"); or (B) from accepting or agreeing to a
 Superior Proposal or consummating a transaction contemplated by a Superior
 Proposal (provided that Stratus has given notice as required by the last
 sentence of Section 6.1(b);or (C) complying with Rule 14e-2 promulgated
 under the Exchange Act with regard to a Competing Offer. 
  
           (b)  Stratus shall notify Ascend no later than twenty-four
 (24) hours after receipt by Stratus (or its advisors), of any Competing
 Offer or any request for nonpublic information in connection with a
 Competing Offer or for access to the properties, books or records of
 Stratus by any person or entity that informs such party that it is
 considering making, or has made, a Competing Offer (the "Competing
 Offeror").  Such notice to Ascend shall be made orally and in writing and
 shall indicate in reasonable detail the identity of the Competing Offeror
 and the terms and conditions of such proposal, inquiry or contact.  Stratus
 shall notify Ascend of the occurrence and substance of any discussions held
 with any such Competing Offeror within twenty-four (24) hours of the
 occurrence of such discussions.  Stratus shall notify Ascend at least
 forty-eight (48) hours prior to accepting or agreeing to a Superior
 Proposal or making any public announcement of its intention to do so or to
 recommend a Superior Proposal to its stockholders or to withdraw its
 recommendation for approval of the Merger or to engage in a Superior
 Proposal. 
  
      Section 6.2    Proxy Statement/Prospectus; Registration Statement. 
  
           (a)  As promptly as practicable after the execution of this
 Agreement, Ascend shall prepare and file with the SEC the Registration
 Statement, and Stratus shall prepare and file with the SEC the Proxy
 Statement.  Ascend and Stratus shall use all reasonable efforts to cause
 the Registration Statement to become effective as soon after such filing as
 reasonably practicable.  Unless the Stratus Board of Directors determines
 in reasonable good faith after consultation with outside corporate counsel
 that to do so would be contrary to the fiduciary duties of the Stratus
 Board of Directors to Stratus's stockholders under applicable law, the
 Proxy Statement shall include the recommendation of the Board of Directors
 of Stratus in favor of approval and adoption of this Agreement and the
 Merger. 
  
           (b)  Ascend and Stratus shall each use all reasonable efforts to
 make all necessary filings with respect to the Merger under the Securities
 Act and the Exchange Act and applicable state securities laws and the rules
 and regulations thereunder. 
  
      Section 6.3    Consents.  Each of Ascend and Stratus shall use all
 reasonable efforts to obtain all necessary consents, waivers and approvals
 under its respective material agreements, contracts, licenses or leases
 required for the consummation of the Merger and the other transactions
 contemplated by this Agreement. 
  
      Section 6.4    Access to Information.  Upon reasonable notice, Stratus
 shall (and shall cause each of its Subsidiaries to) afford to the officers,
 employees, accountants, financial advisors, counsel and other
 representatives of Ascend, access, during normal business hours during the
 period prior to the Effective Time, to all its properties, books,
 contracts, commitments and records and all other information concerning its
 business, properties and personnel as such other party may reasonably
 request and, during such period, each of Stratus and Ascend shall (and
 shall cause each of its Subsidiaries to) furnish promptly to the other a
 copy of each report, schedule, registration statement and other document
 filed or received by it during such period pursuant to the requirements of
 federal securities laws.  Upon reasonable notice, Ascend shall (and shall
 cause each of its Subsidiaries to) provide to the officers, employees,
 accountants, financial advisors, counsel of Stratus such information as may
 be reasonably requested by Stratus in order for the Board of Directors of
 Stratus to satisfy its fiduciary duties pertaining to this Agreement and
 the transactions contemplated hereby.  Unless otherwise required by law,
 the parties will hold all such information which is non-public in
 confidence and shall treat such information as "Proprietary Information" in
 accordance with the Confidentiality Agreement.  No information or knowledge
 obtained in any investigation pursuant to this Section 6.4 shall affect or
 be deemed to modify any representation or warranty contained in this
 Agreement or the conditions to the obligations of the parties to consummate
 the Merger. 
  
      Section 6.5    Stratus Stockholders Meeting.  Stratus shall call and
 hold the Stratus Stockholders Meeting as promptly as practicable after the
 date hereof for the purpose of voting upon the adoption of this Agreement
 and the approval of the Merger.  Unless the Stratus Board of Directors
 determines in reasonable good faith after consultation with outside
 corporate counsel that to do so would be contrary to the fiduciary duties
 of the Stratus Board of Directors to Stratus's stockholders under
 applicable law, Stratus's Board of Directors shall recommend that Stratus
 stockholders vote in favor of the adoption of this Agreement and the
 approval of the Merger and Stratus shall otherwise use all reasonable
 efforts, including but not limited to hiring a proxy solicitor and
 participating in presentations to stockholders, to obtain the requisite
 approval of Stratus stockholders. 
  
      Section 6.6    Legal Conditions to Merger.  Each of Ascend and Stratus
 shall take all reasonable actions necessary to comply promptly with all
 legal requirements which may be imposed on such party with respect to the
 Merger (which actions shall include, without limitation, furnishing all
 information required under the HSR Act and any applicable foreign antitrust
 laws and in connection with approvals of or filings with any other
 Governmental Entity) and shall promptly cooperate with and furnish
 information to each other in connection with any such requirements imposed
 upon either of them or any of their Subsidiaries in connection with the
 Merger.  Each of Ascend and Stratus shall, and shall cause its Subsidiaries
 to, take all reasonable actions necessary to obtain (and shall cooperate
 with each other in obtaining) any consent, authorization, order or approval
 of, or any exemption by, any Governmental Entity or other third party,
 required to be obtained or made by Stratus, Ascend or any of their
 Subsidiaries in connection with the Merger (any of the foregoing, an
 "Approval") or the taking of any action required in furtherance thereof or
 otherwise contemplated thereby or by this Agreement, (i) diligently oppose
 or pursue any rehearing, appeal or other challenge which may be available
 to it of any refusal to issue any Approval or of any order or ruling of any
 Governmental Entity which may adversely affect the ability of the parties
 hereto to consummate the Merger or to take any action contemplated by any
 Approval or by this Agreement until such time as such refusal to issue any
 Approval or any order or ruling has become final and non-appealable, and
 (ii) diligently oppose any objections to, appeals from or petitions to
 reconsider or reopen any Approval or the taking of any action contemplated
 thereby or by this Agreement.  Notwithstanding the foregoing, neither
 Ascend nor Stratus shall be required to agree, as a condition to any
 Approval, to divest itself or hold separate any Subsidiary, division or
 business unit, the divestiture or holding separate of which would be
 reasonably likely (A) to have an Ascend Material Adverse Effect, or (B) to
 impair in any material way the benefits intended to be derived by Ascend
 after the Effective Time as a result of the Merger 
  
      Section 6.7    Public Disclosure.  Ascend and Stratus shall consult
 with each other before issuing any press release or otherwise making any
 public statement with respect to the Merger or this Agreement and shall not
 issue any such press release or make any such public statement prior to
 such consultation, except as may be required by law or by the rules of the
 NASD or the stock exchanges on which their respective securities are
 listed. 
  
      Section 6.8    Tax-Free Reorganization.  Each of Ascend and Stratus
 shall and shall cause its respective Subsidiaries to use its best efforts
 to cause the Merger to be treated as a reorganization within the meaning of
 Section 368(a) of the Code, and to obtain the opinion of its respective
 counsel contemplated by Article VII.  No party hereto, nor any Subsidiary
 thereof, shall take any action that would cause the Merger not to qualify
 under Section 368(a) of the Code, and the parties hereto shall, and shall
 cause their respective Subsidiaries to take the position for all purposes
 that the Merger qualifies as a reorganization under such Section of the
 Code.   
  
      Section 6.9    Affiliate Legends.  Between the date of this Agreement
 and the Effective Time, Ascend and Stratus shall, if requested, promptly
 provide each other such information and documents as Ascend or Stratus
 shall reasonably request for purposes of reviewing a list of each of its
 directors and executive officers who may, in the reasonable judgment of
 Ascend and Stratus, be deemed to be an "affiliate" of Ascend within the
 meaning of Rule 145 promulgated under the Securities Act ("Rule 145") (each
 such person so judged to be an "affiliate" of Ascend or Stratus, is
 referred to herein as an "Affiliate").  Ascend shall be entitled to place
 appropriate legends on the certificates evidencing any Ascend Common Stock
 to be received by such Affiliates of Stratus pursuant to this Agreement and
 to issue appropriate stop transfer instructions to the transfer agent for
 the Ascend Common Stock, consistent with the Securities Act and the rules
 and regulations of the SEC thereunder. 
  
      Section 6.10   Nasdaq Quotation.  Ascend shall use its best efforts to
 cause the shares of Ascend Common Stock to be issued in the Merger to be
 approved for quotation on The Nasdaq National Market, subject to official
 notice of issuance, prior to the Effective Time. 
  
      Section 6.11   Stock Plans and Options. 
  
           (a)  Stratus shall provide to each holder of an outstanding
 option to purchase Stratus Common Stock (a "Stratus Option") under the
 Stratus Stock Plans the notice (if any) required pursuant to such plans. 
  
           (b)  From and after the Effective Time, each outstanding Stratus
 Option shall be assumed by Ascend and shall be deemed to constitute an
 option to acquire, on the same terms and conditions as were applicable
 under such Stratus Option, the same number of shares of Ascend Common Stock
 as the holder of such Stratus Option would have been entitled to receive in
 the Merger pursuant to this Agreement had such holder exercised such option
 in full immediately prior to the Effective Time (rounded down to the
 nearest whole number), at a price per share (rounded up to the nearest
 whole cent) equal to the quotient of (i) the exercise price per share of
 Stratus Common Stock pursuant to such Stratus Option divided by (ii) the
 Exchange Ratio. 
  
           (c)  As soon as practicable after the Effective Time, Ascend
 shall deliver to the participants in the Stratus Stock Plan an appropriate
 notice setting forth such participants' rights pursuant thereto and the
 grants pursuant to the Stratus Stock Plans shall continue in effect on the
 same terms and conditions (subject to the adjustments required by this
 Section 6.11 after giving effect to the Merger).  Ascend shall comply with
 the terms of the Stratus Stock Plans and ensure, to the extent required by,
 and subject to the provisions of, such plan, that Stratus Options which
 qualified as incentive stock options pursuant to Section 422 of the Code
 prior to the Effective Time will continue to so qualify after the Effective
 Time. 
  
           (d)  Ascend shall take all corporate action necessary to reserve
 and make available for issuance a sufficient number of shares of Ascend
 Common Stock for delivery upon the exercise of the Stratus Options assumed
 in accordance with this Section 6.11.  As soon as practicable after the
 Effective Time, and not more than ten (10) business days thereafter, Ascend
 shall file a registration statement on Form S-8 (or any successor or other
 appropriate form) with respect to the shares of Ascend Common Stock subject
 to the Stratus Options assumed pursuant to this Section 6.11 and shall use
 its best efforts to maintain the effectiveness of such registration
 statement or registration statements (and maintain the current status of
 the prospectus or prospectuses contained therein) for as long as the
 Stratus Options remain outstanding.  With respect to those individuals, if
 any, who subsequent to the Merger will be subject to the reporting
 requirements under Section 16(a) of the Exchange Act, where applicable,
 Ascend shall administer Stratus Options assumed pursuant to this
 Section 6.11 in a manner that complies with Rule 16b-3 promulgated under
 the Exchange Act to the extent the Stratus Stock Plan complied with such
 rule prior to the Merger. 
  
      Section 6.12   Brokers or Finders.  Each of Ascend and Stratus
 represents, as to itself, its Subsidiaries and its Affiliates, that no
 agent, broker, investment banker, financial advisor or other firm or person
 is or will be entitled to any broker's or finder's fee or any other
 commission or similar fee in connection with any of the transactions
 contemplated by this Agreement except ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated,
 whose fees and expenses will be paid by Stratus in accordance with
 Stratus's agreement with such firm, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, whose fees
 and expenses will be paid by Ascend in accordance with Ascend's agreement
 with such firm, and each of Ascend and Stratus agrees to indemnify and hold
 the other harmless from and against any and all claims, liabilities or
 obligations with respect to any other fees, commissions or expenses
 asserted by any person on the basis of any act or statement alleged to have
 been made by such party or any of its directors, officers, employees or
 affiliates. 
  
      Section 6.13   Indemnification. 
  
           (a)  Stratus shall and, from and after the Effective Time, Ascend
 and the Surviving Corporation shall, indemnify, defend and hold harmless
 each person who is now, or has been at any time prior to the date of this
 Agreement or who becomes prior to the Effective Time, an officer or
 director of Stratus or any of its Subsidiaries (the "Indemnified Parties")
 against all losses, claims, damages, costs, expenses, liabilities or
 judgments or amounts that are paid in settlement (provided, in the case of
 amounts paid in settlement, that such amounts shall have been approved by
 the indemnifying party, which approval shall not be unreasonably withheld),
 of or in connection with any claim, action, demand, suit, proceeding or
 investigation based in whole or in part on or arising in whole or in part
 out of the fact that such person is or was a director or officer of Stratus
 or any of its Subsidiaries, whether pertaining to any matter existing or
 occurring at or prior to the Effective Time and whether asserted or claimed
 prior to, or at or after, the Effective Time ("Indemnified Liabilities")
 including, without limitation, all losses, claims, damages, costs,
 expenses, liabilities or judgments or settlement amounts based in whole or
 in part on, or arising in whole or in part out of, or pertaining to this
 Agreement or the transactions contemplated hereby, in each case to the full
 extent a corporation is permitted under the MBCL to indemnify its own
 directors and officers, as the case may be.  Stratus, Ascend and the
 Surviving Corporation, as the case may be, shall pay expenses in advance of
 the final disposition of any such claim, demand, action suit, proceeding or
 investigation to each Indemnified Party to the full extent permitted by law
 upon receipt of any undertaking contemplated by Section 67 of the MBCL. 
 Without limiting the foregoing, in the event any such claim, action, suit,
 proceeding or investigation is brought or asserted against any Indemnified
 Party (whether arising before or after the Effective Time), (i) the
 Indemnified Parties may retain counsel reasonably satisfactory to them and
 Stratus (or them and Ascend and the Surviving Corporation after the
 Effective Time), (ii) Stratus (or after the Effective Time, Ascend and the
 Surviving Corporation) shall pay all reasonable fees and expenses of such
 counsel for the Indemnified Parties promptly as statements therefor are
 received upon receipt of an undertaking by such person to repay such
 payment if it is determined that such person is not entitled to
 indemnification hereunder, and (iii) Stratus (or after the Effective Time,
 Ascend and the Surviving Corporation) shall use all reasonable efforts to
 assist in the vigorous defense of any such matter, provided that none of
 Stratus, Ascend or the Surviving Corporation shall be liable for any
 settlement of any claim effected without its written consent, which
 consent, however, shall not be unreasonably withheld.  Any Indemnified
 Party wishing to claim indemnification under this Section 6.13, upon
 learning of any such claim, action, suit, proceeding or investigation,
 shall promptly notify Stratus, Ascend or the Surviving Corporation (but the
 failure so to notify an Indemnifying Party shall not relieve it from any
 liability which it may have under this Section 6.13 except to the extent
 such failure materially prejudices such party), and shall deliver to
 Stratus (or after the Effective Time, Ascend and the Surviving Corporation)
 the undertaking contemplated by Section 67 of the MBCL.  The Indemnified
 Parties as a group may retain only one law firm to represent them with
 respect to each such matter unless there is, under applicable standards of
 professional conduct, a conflict on any significant issue between the
 positions of any two or more Indemnified Parties. 
  
           (b)  From and after the Effective Time, the Surviving Corporation
 and Ascend shall fulfill, assume and honor in all respects the obligations
 of Stratus pursuant to Stratus's Bylaws and any indemnification agreement
 between Stratus and any of Stratus's directors and officers existing and in
 force as of the date of this Agreement and filed as an exhibit to the
 Stratus SEC Reports.  Ascend and Stratus agree that the indemnification
 obligations set forth in Stratus's Articles of Organization and Bylaws, in
 each case as of the date of this Agreement, shall survive the Merger (and,
 as of or prior to the Effective Time, Ascend shall cause the Bylaws of Sub
 to reflect such provisions) and shall not be amended, repealed or otherwise
 modified for a period of six (6) years after the Effective Time in any
 manner that would adversely affect the rights thereunder of the Indemnified
 Parties. 
  
           (c)  In the event Ascend or the Surviving Corporation or any of
 their respective successors or assigns (i) consolidates with or merges into
 any other person and shall not be the continuing or surviving corporation
 or entity in such consolidation or merger or (ii) transfers all or
 substantially all its properties and assets to any person, then, and in
 each case, proper provision shall be made so that the successors and
 assigns of Ascend or the Surviving Corporation, as the case may be, honor
 the indemnification obligations set forth in this Section 6.13. 
  
           (d)  Ascend and the Surviving Corporation, shall, until the sixth
 anniversary of the Effective Time or such earlier date as may be mutually
 agreed upon by Ascend, the Surviving Corporation and the applicable
 Indemnified Party, cause to be maintained in effect, to the extent
 available, the policies of directors' and officers' liability insurance
 maintained by Stratus and its Subsidiaries as of the date hereof (or
 policies of at least the same coverage and amounts containing terms that
 are not less advantageous to the insured parties) with respect to claims
 arising from facts or events that occurred on or prior to the Effective
 Time, including without limitation all claims based upon, arising out of,
 directly or indirectly resulting from, in consequence of, or in any way
 involving the Merger and any and all related events.  In lieu of the
 purchase of such insurance by Ascend or the Surviving Corporation, Stratus
 may purchase a six (6) year extended reporting period endorsement
 ("reporting tail coverage") under its existing directors' and liability
 insurance coverage, provided that such reporting tail coverage shall extend
 the director and officer liability coverage in force as of the date hereof
 for a period of at least six (6) years from the Effective Time for any
 claims based upon, arising out of, directly or indirectly resulting from,
 in consequence of, or in any way involving wrongful acts or omissions
 occurring on or prior to the Effective Time, including without limitation
 all claims based upon, arising out of, directly or indirectly resulting
 from, in consequence of, or in any way involving the Merger and any and all
 related transactions or related events.  In no event shall Ascend or the
 Surviving Corporation be obligated to expend in order to maintain or
 procure insurance coverage pursuant to this paragraph (d) any amount per
 year in excess of one hundred fifty percent (150%) of the aggregate
 premiums paid by Stratus and its Subsidiaries in the fiscal year ended for
 directors' and officers' liability insurance. 
  
           (e)  The obligations of Stratus, the Surviving Corporation and
 Ascend under this Section 6.13 shall not be terminated or modified in such
 a manner as to adversely affect any of the Indemnified Parties without the
 consent of such Indemnified Party (it being expressly agreed that each such
 Indemnified Party shall be a third party beneficiary of this Section 6.13). 
  
      Section 6.14   Employees. 
  
           (a)  Ascend will, or will cause Stratus or the appropriate
 Subsidiary to give individuals who are employed by Stratus or any of its
 Subsidiaries as of the Effective Time and who remain employees of Stratus
 or such Subsidiary following the Effective Time (each such employee, an
 "Affected Employee") full credit for purposes of eligibility, vesting,
 benefit accrual and determination of the level of benefits under any
 employee benefit plans or arrangements maintained by Ascend, Stratus or any
 such Subsidiary for such Affected Employees' service with Stratus or any
 affiliate thereof to the same extent recognized immediately prior to the
 Effective Time. 
  
           (b)  Ascend will, or will cause Stratus or the appropriate
 Subsidiary to (i) waive all limitations as to pre-existing conditions
 exclusions and waiting periods with respect to participation and coverage
 requirements applicable to the Affected Employees under any welfare benefit
 plans that such employees may be eligible to participate in after the
 Effective Time, other than limitations or waiting periods that are already
 in effect with respect to such employees and that have not been satisfied
 as of the Effective Time under any welfare plan maintained for the Affected
 Employees immediately prior to the Effective Time, and (ii) provide each
 Affected Employee with credit for any co-payments and deductibles paid
 prior to the Effective Time in satisfying any applicable deductible or out-
 of-pocket requirements under any welfare plans that such employees are
 eligible to participate in after the Effective Time. 
  
           (c)  As of the Effective Time, Ascend shall expressly assume and
 agree to perform in accordance with their terms, all employment, severance
 and other compensation agreements then existing between Stratus or any
 Subsidiary with any director, officer or employee thereof. 
  
           (d)  Notwithstanding the foregoing, Ascend agrees to provide or
 to cause the Surviving Corporation to provide Affected Employees, for a
 period of one year following the Effective Time, with employee benefit
 plans or arrangements, including the Stratus severance plan and policy,
 that are, in the aggregate, not less favorable than those provided to
 Affected Employees immediately prior to the Effective Time.  Ascend agrees
 to provide Affected Employees with a written description of such plans and
 arrangements promptly following the Effective Time. 
  
           (e)  Commencing on the first anniversary of the Effective Time
 (unless Ascend consents to an earlier commencement date), the Affected
 Employees shall be eligible to participate in Ascend's employee benefit
 plans and arrangements in which similarly situated employees of Ascend or
 affiliates of Ascend participate, to the same extent as such similarly
 situated employees of Ascend or affiliates of Ascend. 
  
      Section 6.15   Additional Agreements; Reasonable Efforts.  Subject to
 the terms and conditions of this Agreement, each of the parties agrees to
 use all reasonable efforts to take, or cause to be taken, all actions and
 to do, or cause to be done, all things necessary, proper or advisable under
 applicable laws and regulations to consummate and make effective the
 transactions contemplated by this Agreement, subject to the appropriate
 vote of the stockholders of Stratus described in Section 3.4, including
 cooperating fully with the other party, including by provision of
 information and making all necessary filings under the HSR Act and any
 foreign antitrust laws.  If at any time after the Effective Time any
 further action is necessary or desirable to carry out the purposes of this
 Agreement or to vest the Surviving Corporation with full title to all
 properties, assets, rights, approvals, immunities and franchises of either
 of the Constituent Corporations, the proper officers and directors of each
 party to this Agreement shall take all such necessary action. 
  
      Section 6.16   Certain Director and Officer Appointments.  Ascend and
 the Ascend Board of Directors of Ascend shall take all action required to
 cause the election promptly after the Effective Time by the Ascend Board of
 ▇▇▇▇ ▇▇▇▇▇▇▇▇ to the Ascend Board and the appointment of ▇▇▇▇▇ ▇▇▇▇▇ as
 Executive Vice President of Carrier Signalling and Management of Ascend. 
  
      Section 6.17   Stratus's Rights Agreement.  Stratus covenants and
 agrees with Ascend that Stratus shall not (i) make any modifications to the
 Rights Agreement, except such modifications made in furtherance of or in
 connection with the transactions contemplated hereby, nor (ii) take any
 action which would in either case cause Ascend to be deemed to be an
 "Acquiring Person" or an "Adverse Person" under the Rights Agreement or
 cause the Rights Agreement to apply to Ascend or the transactions
 contemplated by this Agreement.  Stratus agrees to take such actions as are
 required to prevent the Rights Agreement and the provisions thereof from
 applying to Ascend or the transactions contemplated by this Agreement and
 to prevent Ascend from being treated as an "Acquiring Person" or an
 "Adverse Person" under the Rights Agreement. 
  
                                ARTICLE VII 
  
                            CONDITIONS TO MERGER 
  
      Section 7.1    Conditions to Each Party's Obligation to Effect the
 Merger.  The respective obligations of each party to this Agreement to
 effect the Merger shall be subject to the satisfaction prior to the Closing
 Date of the following conditions: 
  
           (a)  Stockholder Approvals.  This Agreement and the Merger shall
 have been adopted and approved by the requisite vote of holders of Stratus
 Common Stock pursuant to the MBCL and the Articles of Organization of
 Stratus. 
  
           (b)  HSR Act.  The waiting periods applicable to the consummation
 of the Merger under the HSR Act and all applicable foreign laws (if any)
 shall have expired or been terminated, and no action by the Department of
 Justice or Federal Trade Commission or any foreign Governmental Entity
 challenging or seeking to enjoin the consummation of the Merger shall have
 been instituted and be pending. 
  
           (c)  Approvals.  All authorizations, consents, order or approvals
 of, or declarations or filings with any Governmental Entity required to
 consummate the transactions contemplated by this Agreement, the absence or
 nonoccurrence of which would be reasonably likely to have an Ascend
 Material Adverse Effect or a Stratus Material Adverse Effect, to impair the
 benefits intended to be derived by Ascend after the Effective Time from the
 Merger, or to limit or restrict the operation of the business of Ascend on
 Stratus after the Effective Time. 
  
           (d)  Registration Statement; State Securities Laws.  The
 Registration Statement shall have become effective under the Securities Act
 and shall not be the subject of any stop order or proceedings seeking a
 stop order, and Ascend shall have received all permits and other
 authorizations required under applicable state securities laws for the
 issuance of shares of Ascend Common Stock pursuant to the Merger. 
  
           (e)  No Injunctions or Restraints; Illegality.  No temporary
 restraining order, preliminary or permanent injunction or other order
 issued by any court of competent jurisdiction or other legal or regulatory
 restraint or prohibition preventing the consummation of the Merger or
 limiting or restricting Ascend's conduct or operation of the business of
 Ascend or Stratus after the Effective Time shall have been issued and be in
 effect, nor shall any proceeding brought by a domestic administrative
 agency or commission or other domestic Governmental Entity, seeking any of
 the foregoing be pending; nor shall any action have been taken or any
 statute, rule, regulation or order have been enacted, entered or enforced
 or be deemed applicable to the Merger which makes the consummation of the
 Merger illegal or prevents or prohibits the Merger. 
  
           (f)  Nasdaq.  The shares of Ascend Common Stock to be issued in
 the Merger shall have been approved for quotation on The Nasdaq National
 Market. 
  
      Section 7.2    Additional Conditions to Obligations of Ascend and Sub. 
 The obligations of Ascend and Sub to effect the Merger are subject to the
 satisfaction or waiver of each of the following conditions, any of which
 may be waived in writing exclusively by Ascend and Sub: 
  
           (a)  Representations and Warranties.  The representations and
 warranties of Stratus set forth in this Agreement shall be true and correct
 in all material respects as of the date of this Agreement and (except to
 the extent such representations and warranties expressly speak as of an
 earlier date) as of the Closing Date as though made on and as of the
 Closing Date, except (i) for changes contemplated by this Agreement or
 (ii) where the failure to be true and correct could not reasonably be
 expected to have a Stratus Material Adverse Effect or a material adverse
 effect upon the parties' ability to consummate the Merger in accordance
 with this Agreement,  and Ascend shall have received a certificate signed
 on behalf of Stratus by the chief executive officer or chief financial
 officer of Stratus to such effect.  For purposes of this Section 7.2(a), no
 "Stratus Material Adverse Effect" shall be deemed to have occurred with
 respect to breaches of the representations and warranties of Stratus in
 Section 3.8 unless such breaches involve claims against or liability of
 Stratus or any of its Subsidiaries for Taxes in an aggregate amount in
 excess of the amount set forth in Schedule 7.2(a). 
  
           (b)  Performance of Obligations.  Stratus shall have performed in
 all material respects all obligations required to be performed by it under
 this Agreement at or prior to the Closing Date, and Ascend shall have
 received a certificate signed on behalf of Stratus by the chief executive
 officer or chief financial officer of Stratus to such effect. 
  
           (c)  Rights Plan.  The provisions of the Rights Plan shall not
 apply to Ascend or the Merger and all rights issued thereunder shall have
 been canceled or redeemed or shall be converted in accordance with
 Article II of this Agreement. 
  
           (d)  Tax Opinion.  Ascend shall have received an opinion of ▇▇▇▇
 ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, tax counsel to Ascend, dated as of the
 Effective Time, to the effect that the Merger will qualify as a
 reorganization within the meaning of Section 368(a) of the Code.  The
 issuance of such opinion shall be conditioned upon the receipt by such tax
 counsel of representation letters from each of Stratus, Sub and Ascend, in
 each case, in form and substance reasonably satisfactory to such tax
 counsel.  The specific provisions of each such representation letter shall
 be in form and substance reasonably satisfactory to such tax counsel, and
 each such representation letter shall be dated on or before the date of
 such opinion and shall not have been withdrawn or modified in any material
 respect. 
  
      Section 7.3    Additional Conditions to Obligations of Stratus.  The
 obligation of Stratus to effect the Merger is subject to the satisfaction
 of each of the following conditions, any of which may be waived, in
 writing, exclusively by Stratus: 
  
           (a)  Representations and Warranties.  The representations and
 warranties of Ascend and Sub set forth in this Agreement shall be true and
 correct in all material respects as of the date of this Agreement and
 (except to the extent such representations and warranties expressly speak
 as of an earlier date) as of the Closing Date as though made on and as of
 the Closing Date, except (i) for changes contemplated by this Agreement or
 (ii) where the failure to be true and correct could not reasonably be
 expected to have an Ascend Material Adverse Effect or a material adverse
 effect upon the parties' ability to consummate the Merger in accordance
 with this Agreement, and Stratus shall have received a certificate signed
 on behalf of Ascend by the chief executive officer or chief financial
 officer of Ascend to such effect. 
  
           (b)  Performance of Obligations.  Ascend and Sub shall have
 performed in all material respects all obligations required to be performed
 by them under this Agreement at or prior to the Closing Date, and Stratus
 shall have received a certificate signed on behalf of Ascend by the chief
 executive officer or chief financial officer of Ascend to such effect. 
  
           (c)  Tax Opinion.  Stratus shall have received an opinion of
 Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, tax counsel to Stratus, dated as
 of the Effective Time, to the effect that the Merger will qualify as a
 reorganization within the meaning of Section 368(a) of the Code.  The
 issuance of such opinion shall be conditioned upon the receipt by such tax
 counsel of representation letters from each of Ascend, Sub and Stratus, in
 each case, in form and substance reasonably satisfactory to such tax
 counsel.  The specific provisions of each such representation letter shall
 be in form and substance reasonably satisfactory to such tax counsel, and
 each such representation letter shall be dated on or before the date of
 such opinion and shall not have been withdrawn or modified in any material
 respect.  
  
                                ARTICLE VIII 
  
                         TERMINATION AND AMENDMENT 
  
      Section 8.1    Termination.  This Agreement may be terminated at any
 time prior to the Effective Time (with respect to Section 8.1(b) through
 Section 8.1(h), by written notice by the terminating party to the other
 party), whether before or after approval of the matters presented in
 connection with the Merger by the stockholders of Stratus: 
  
           (a)  by mutual written consent of Ascend and Stratus; or 
  
           (b)  by either Ascend or Stratus if the Merger shall not have
 been consummated by January 31, 1999 (provided, however, that the right to
 terminate this Agreement under this Section 8.1(b) shall not be available
 to any party whose failure to fulfill any obligation under this Agreement
 has been the cause of or resulted in the failure of the Merger to occur on
 or before such date); or 
  
           (c)  by either Ascend or Stratus if a court of competent
 jurisdiction or other Governmental Entity shall have issued a final order,
 decree or ruling, or taken any other action, having the effect of
 permanently restraining, enjoining or otherwise prohibiting the Merger, and
 all appeals with respect to such order, decree, ruling or action have been
 exhausted or the time for appeal of such order, decree, ruling or action
 shall have expired (provided, however, that the right to terminate this
 Agreement under this Section 8.1(c) shall not be available to any party
 which has not complied with its obligations under Section 6.6); or 
  
           (d)  by either Ascend or Stratus if, at the Stratus Stockholders
 Meeting (including any adjournment or postponement thereof), the requisite
 vote of Stratus stockholders in favor of this Agreement and approval of the
 Merger shall not have been obtained; or 
  
           (e)  by Ascend if (i) the Board of Directors of Stratus shall
 have withdrawn or modified its recommendation of this Agreement or the
 Merger in a manner adverse to Ascend or shall have resolved or publicly
 announced or disclosed its intention to do so; or (ii) the Board of
 Directors of Stratus shall have recommended a Superior Proposal to the
 stockholders of Stratus or shall have resolved or publicly announced its
 intention to recommend or accept a Superior Proposal; or (iii) a tender
 offer or exchange offer which if completed would result in the ownership by
 any person and such person's affiliates of fifty percent (50%) or more of
 the outstanding shares of Stratus Common Stock shall have been commenced
 and the  Board of Directors of Stratus shall have filed a Statement on Form
 14D-9 recommending acceptance of such tender or exchange offer or shall
 have resolved or publicly announced its intention to recommend acceptance
 of such tender or exchange offer; or 
  
           (f)  by Ascend if a breach of any representation, warranty,
 covenant or agreement on the part of Stratus set forth in this Agreement
 shall have occurred which if uncured would cause any condition set forth in
 Section 7.2(a) or Section 7.2(b) not to be satisfied, and such breach is
 incapable of being cured or, if capable of being cured, shall not have been
 cured within twenty (20) business days following receipt by Stratus of
 written notice of such breach from Ascend; or 
  
           (g)  by Stratus if it shall have accepted, approved or resolved
 to accept or approve a Superior Proposal in compliance with the terms of
 Section 6.1; or 
  
           (h)  by Stratus, if a breach of any representation, warranty,
 covenant or agreement on the part of Ascend set forth in this Agreement
 shall not have occurred which if uncured would cause any condition set
 forth in Section 7.3(a) or Section 7.3(b) not to be satisfied, and such
 breach is incapable of being cured or, if capable of being cured, shall not
 have been cured within twenty (20) business days following receipt by
 Ascend of written notice of such breach from Stratus. 
  
      Section 8.2    Effect of Termination.  In the event of any termination
 of this Agreement pursuant to Section 8.1, there shall be no liability or
 obligation on the part of Ascend, Stratus, Sub, or any of their respective
 officers, directors, stockholders or Affiliates, except as set forth in
 Section 8.3.  The foregoing limitations shall not apply to the extent that
 such termination results from the willful breach by a party of any of its
 representations, warranties, covenants or agreements in this Agreement. 
 The provisions of Section 6.15 and Section 8.3 of this Agreement and the
 Confidentiality Agreement shall remain in full force and effect and survive
 any termination of this Agreement. 
  
      Section 8.3    Fees and Expenses.  
  
           (a)  Except as set forth in this Section 8.3, all fees and
 expenses incurred in connection with this Agreement and the transactions
 contemplated hereby shall be paid by the party incurring such expenses,
 whether or not the Merger is consummated; provided, however, that Ascend
 and Stratus shall share equally all fees and expenses, other than
 attorneys' and accounting fees and expenses, incurred in relation to the
 printing and filing of the Proxy Statement (including any related
 preliminary materials) and the Registration Statement (including financial
 statements and exhibits) and any amendments or supplements thereto and the
 fee(s) required to be paid in connection with the filing(s) required under
 the HSR Act and applicable foreign laws (if any) in connection with the
 transactions contemplated by this Agreement. 
  
           (b)  If this Agreement is terminated (i) by Ascend pursuant to
 Section 8.1(e), or (ii) by Stratus pursuant to Section 8.1(g), or (iii) by
 Stratus or Ascend pursuant to Section 8.1(d) as a result of the failure to
 obtain the requisite vote for adoption of this Agreement and approval of
 the Merger by the stockholders of Stratus and (in the case of clause (iii))
 (x) at the time of such failure an Alternative Transaction involving
 Stratus shall have been announced or publicly proposed and (y) within one
 year of such failure Stratus or its Board of Directors accepts, recommends
 or enters into or announces any definitive or preliminary agreement or
 letter of intent with respect to an Alternative Transaction, amends or
 otherwise takes action under the Rights Agreement which has the effect of
 rendering the Rights Agreement inapplicable to an Alternative Transaction,
 or redeems the Rights so as to facilitate an Alternative Transaction, or an
 Alternative Transaction is consummated, Stratus shall pay to Ascend a
 termination fee of $36,759,995 (the "Termination Fee"). The Termination Fee
 shall be paid in cash by wire transfer of immediately available funds to an
 account designated by Ascend and shall be payable: (x) in the case of
 termination by Stratus pursuant to Section 8.1(g), prior to and as a
 condition precedent to the effectiveness of such termination; (y) in the
 case of termination by Ascend pursuant to Section 8.1(e), promptly after
 such termination; and (z) in the case of termination by Stratus or Ascend
 pursuant to Section 8.1(d) in the circumstances set forth in clause (iii)
 of the preceding sentence, not later than the earliest such time as
 (A) Stratus or its Board of Directors accepts, recommends or enters into or
 announces any definitive or preliminary agreement or letter of intent with
 respect to such Alternative Transaction, amends or otherwise takes action
 under the Rights Agreement which has the effect of rendering the Rights
 Agreement inapplicable to such Alternative Transaction, or redeems the
 Rights so as to facilitate such Alternative Transaction, or (B) an
 Alternative Transaction is consummated. 
  
           (c)  As used in this Agreement, an "Alternative Transaction" with
 respect to Stratus means (i) a transaction or series of transactions
 pursuant to which any person or group (as such term is defined under the
 Exchange Act), other than Ascend or Sub, or any affiliate thereof (a "Third
 Party"), acquires (or would acquire upon completion of such transaction or
 series of transactions) more than fifty percent (50%) of the equity
 securities or voting power of Stratus or any of its material subsidiaries,
 pursuant to a tender offer or exchange offer or otherwise, (ii) a merger,
 consolidation, share exchange or other business combination involving
 Stratus or any of its material Subsidiaries pursuant to which any Third
 Party acquires ownership (or would acquire ownership upon consummation of
 such merger, consolidation, share exchange or other business combination)
 of more than fifty percent (50%) of the outstanding equity securities or
 voting power of Stratus or any of its material Subsidiaries or of the
 entity surviving such merger or business combination or resulting form such
 consolidation, or (iii) any other transaction or series of transactions
 pursuant to which any Third Party acquires (or would acquire upon
 completion of such transaction or series of transactions) control of assets
 of Stratus or any of its material Subsidiaries (including, for this
 purpose, outstanding equity securities of Subsidiaries of Stratus) having a
 fair market value equal to more than fifty percent (50%) of the fair market
 value of all the consolidated assets of Stratus immediately prior to such
 transaction or series of transactions. 
  
           (d)  If any fee or expense due hereunder is not timely paid, the
 defaulting party shall pay the costs and expenses (including reasonable
 documented legal fees and expenses) in connection with any action,
 including the filing of any lawsuit or other legal action, taken to collect
 payment, together with interest on the amount of any unpaid fee at the
 publicly announced prime rate of Citibank, N.A. from the date such fee was
 required to be paid. 
  
      Section 8.4    Amendment.  This Agreement may be amended by the
 parties hereto, by action taken or authorized by their respective Boards of
 Directors, at any time before or after approval of the matters presented in
 connection with the Merger by the stockholders of Stratus, but, after any
 such approval, no amendment shall be made which by law requires further
 approval by such stockholders without such further approval.  This
 Agreement may not be amended except by an instrument in writing signed on
 behalf of each of the parties hereto. 
  
      Section 8.5    Extension; Waiver.  At any time prior to the Effective
 Time, the parties hereto, by action taken or authorized by their respective
 Boards of Directors, may, to the extent legally allowed, (i) extend the
 time for the performance of any of the obligations or other acts of the
 other parties hereto, (ii) waive any inaccuracies in the representations
 and warranties contained herein or in any document delivered pursuant
 hereto, and (iii) waive compliance with any of the agreements or conditions
 contained herein.  Any agreement on the part of a party hereto to any such
 extension or waiver shall be valid only if set forth in a written
 instrument signed on behalf of such party. 
  
                                 ARTICLE IX 
  
                               MISCELLANEOUS 
  
      Section 9.1    Nonsurvival of Representations, Warranties and
 Agreements.  None of the representations, warranties and agreements in this
 Agreement or in any instrument delivered pursuant to this Agreement shall
 survive the Closing and the Effective Time, except for the agreements
 contained in Section 1.3 (Effects of the Merger), Section 1.4 (Directors
 and Officers), Section 2.1 (Conversion of Capital Stock), Section
 2.2 (Exchange of Certificates), Section 6.11 (Stock Plans and Options),
 Section 6.13 (Indemnification), Section 8.2 (Effect of Termination),
 Section 8.3 (Fees and Expenses), this Article IX, and any other agreement
 contemplated by this Agreement which, by its terms, does not terminate
 until a later date.  The Confidentiality Agreement shall survive the
 execution and delivery of this Agreement. 
  
      Section 9.2    Notices.  All notices and other communications
 hereunder shall be in writing and shall be deemed given if delivered
 personally, telecopied (which is confirmed) or mailed by registered or
 certified mail (return receipt requested) to the parties at the following
 addresses (or at such other address for a party as shall be specified by
 like notice): 
  
           (a)  if to Ascend or Sub, to 
  
                Ascend Communications, Inc. 
                One Ascend Plaza 
                ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 
                ▇▇▇▇▇▇▇, ▇▇  ▇▇▇▇▇ 
                Attention: ▇▇▇▇▇▇▇ ▇. Jewels, Esq. 
                           Vice President & General Counsel 
                Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇ 
                 
                with a copy to: 
                 
                ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP 
                ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 
                ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 
                Attention:  ▇▇▇ ▇. ▇▇▇▇▇▇, Esq. 
                Facsimile No.:  (▇▇▇) ▇▇▇-▇▇▇▇ 
  
           (b)  if to Stratus, to 
                Stratus Computer, Inc.  
                ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. 
                ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 
                Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq. 
                           Vice President & General Counsel 
                Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ 
                 
                with a copy to: 
                 
                Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP 
                ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 
                ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 
                Attention:  ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. 
                Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ 
  
      Section 9.3    Interpretation.  When a reference is made in this
 Agreement to an Article or a Section, such reference shall be to an Article
 or a Section of this Agreement unless otherwise indicated.  The table of
 contents and headings contained in this Agreement are for reference
 purposes only and shall not affect in any way the meaning or interpretation
 of this Agreement.  Whenever the words "include," "includes" or "including"
 are used in this Agreement they shall be deemed to be followed by the words
 "without limitation."  The phrase "made available" in this Agreement shall
 mean that the information referred to has been made available.  The phrases
 "the date of this Agreement," "the date hereof," and terms of similar
 import, unless the context otherwise requires, shall be deemed to refer to
 August 3, 1998.  In determining whether a Stratus Material Adverse Effect
 or an Ascend Material Adverse Effect exists: (a) materiality shall be
 determined on the basis of the applicable party and all of its
 Subsidiaries, taken together as a whole, and not on the basis of the party
 or any single Subsidiary alone; and (b) none of the factors set forth on
 Schedule 9.3.1 hereof shall be deemed by itself or by themselves, either
 alone or in combination, to constitute a Stratus Material Adverse Effect
 and none of the factors set forth on Schedule 9.3.2 hereof shall be deemed
 by itself or by themselves, either alone or in combination, to constitute
 an Ascend Material Adverse Effect.  Reference to a party's "knowledge"
 means (a) in the case of Stratus, the actual knowledge of the persons
 identified in Schedule 9.3.3 and (b) in the case of Ascend, the actual
 knowledge of the persons identified in Schedule 9.3.4. 
  
      Section 9.4    Counterparts.  This Agreement may be executed in two or
 more counterparts, all of which shall be considered one and the same
 agreement and shall become effective when two or more counterparts have
 been signed by each of the parties and delivered to the other parties, it
 being understood that all parties need not sign the same counterpart. 
  
      Section 9.5    Entire Agreement; No Third Party Beneficiaries.  This
 Agreement (including the documents and the instruments referred to herein)
 (a) constitutes the entire agreement and supersedes all prior agreements
 and understandings, both written and oral, among the parties with respect
 to the subject matter hereof, and (b) except as provided in Section 6.13 is
 not intended to confer upon any person other than the parties hereto any
 rights or remedies hereunder. 
  
      Section 9.6    Governing Law.  This Agreement shall be governed and
 construed in accordance with the internal laws of the State of Delaware
 without regard to conflicts of law rules thereof except that the MBCL
 shall, to the extent applicable, govern the procedures to be taken
 hereunder to effect the Merger.  Each party hereto consents and submits to
 the jurisdiction of the courts of the State of Delaware and the courts of
 the United States located in such state for the adjudication of any action,
 suit, proceeding, claim or dispute arising out of or otherwise relating to
 this Agreement. 
  
      Section 9.7    Assignment.  Neither this Agreement nor any of the
 rights, interests or obligations hereunder shall be assigned by any of the
 parties hereto (whether by operation of law or otherwise) without the prior
 written consent of the other parties, and any attempted assignment thereof
 without such consent shall be null and void.  Subject to the preceding
 sentence, this Agreement will be binding upon, inure to the benefit of and
 be enforceable by the parties and their respective successors and assigns. 




 IN WITNESS WHEREOF, Ascend, Sub and Stratus have caused this Agreement to
 be signed under seal by their respective officers thereunto duly authorized
 as of the date first written above. 

  
 STRATUS COMPUTER, INC.             ASCEND COMMUNICATIONS, INC.


 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇             By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
    -------------------                 --------------------------

 Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇               Name: ▇▇▇▇ ▇▇▇▇▇▇

 Title: President                   Title: Chief Executive Officer
 

 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇      WILDCARD MERGER CORPORATION
     -------------------------

 Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇        By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
                                       ---------------------------

 Title: Assistant Treasurer         Name: ▇▇▇▇ ▇▇▇▇▇▇
 
                                    Title: President 
 
                                    By: /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
                                       ---------------------------

                                    Name: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇

                                    Title: Treasurer 



                           TABLE OF DEFINED TERMS 
                                                                    Section 
  
 Affected Employee.  . . . . . . . . . . . . . . . . . . . . . . .  6.14(a) 
 Affiliate.  . . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) & 6.9 
 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble 
 Alternative Transaction . . . . . . . . . . . . . . . . . . . . . . 8.3(c) 
 Approval  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6.6 
 Ascend  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble 
 Ascend Balance Sheet  . . . . . . . . . . . . . . . . . . . . . . . 4.5(a) 
 Ascend Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 2.1(c) 
 Ascend Disclosure Schedule  . . . . . . . . . . . . . . . . . . . . . . IV 
 Ascend Financial Statements . . . . . . . . . . . . . . . . . . . . 4.5(a) 
 Ascend Material Adverse Effect  . . . . . . . . . . . . . . . . . . . . IV 
 Ascend Option Plans . . . . . . . . . . . . . . . . . . . . . . . . 4.3(a) 
 Ascend Preferred Stock  . . . . . . . . . . . . . . . . . . . . . . 4.3(a) 
 Ascend Purchase Plan  . . . . . . . . . . . . . . . . . . . . . . . 4.3(a) 
 Ascend SEC Reports  . . . . . . . . . . . . . . . . . . . . . . . . 4.5(a) 
 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1.2 
 Closing Date  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1.2 
 Code  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals 
 Competing Offe  . . . . . . . . . . . . . . . . . . . . . . . . .  r6.1(a) 
 Competing Offero  . . . . . . . . . . . . . . . . . . . . . . . .  r6.1(b) 
 Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . 6.1(a) 
 Constituent Corporations  . . . . . . . . . . . . . . . . . . . . . .  1.3 
 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . 2.3(a) 
 DOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Effective Rate  . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(q) 
 Effective Time  . . . . . . . . . . . . . . . . . . . . . . . . . . .  1.1 
 Employee  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Employee Agreement    . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Environmental Laws  . . . . . . . . . . . . . . . . . . . . . . .  3.13(l) 
 Environmental Permits . . . . . . . . . . . . . . . . . . . . . .  3.13(e) 
 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Exchange Act  . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(c) 
 Exchange Agent  . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a) 
 Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a) 
 Exchange Ratio  . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(c) 
 Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . 3.4(c) 
 Hazardous Material  . . . . . . . . . . . . . . . . . . . . . . .  3.13(k) 
 Hazardous Material Handling . . . . . . . . . . . . . . . . . . .  3.13(b) 
 Hazardous Material Product Activities . . . . . . . . . . . . . .  3.13(d) 
 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(c) 
 Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . .  6.13(a) 
 Indemnified Liabilities . . . . . . . . . . . . . . . . . . . . .  6.13(a) 
 International Employee Plan     . . . . . . . . . . . . . . . . .  3.14(a) 
 IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(b) 
 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8(h) 
 MBCL  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1.1 
 Merger  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1.1 
 Multiemployer Plan  . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 NASD  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5(a) 
 PBGC  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Pension Plan  . . . . . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18 
 Registration Statement  . . . . . . . . . . . . . . . . . . . . . . . 3.18 
 Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8(b) 
 Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b) 
 Rights Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(b) 
 Rule 145  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6.9 
 SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(c) 
 Securities Act  . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(c) 
 Stratus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble 
 Stratus Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . 3.5(b) 
 Stratus Certificate . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b) 
 Stratus Certificates  . . . . . . . . . . . . . . . . . . . . . . . 2.2(b) 
 Stratus Common Stock  . . . . . . . . . . . . . . . . . . . . . . . 2.1(b) 
 Stratus Disclosure Schedule . . . . . . . . . . . . . . . . . . . . .  III 
 Stratus Employee Plan . . . . . . . . . . . . . . . . . . . . . .  3.14(a) 
 Stratus Financial Statements  . . . . . . . . . . . . . . . . . . . 3.5(b) 
 Stratus Intellectual Property Rights  . . . . . . . . . . . . . .  3.10(a) 
 Stratus Junior Common Stock . . . . . . . . . . . . . . . . . . . . 3.3(a) 
 Stratus Material Adverse Effect . . . . . . . . . . . . . . . . . . .  III 
 Stratus Material Contracts  . . . . . . . . . . . . . . . . . . . . . 3.11 
 Stratus Option  . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11 
 Stratus SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . 3.4(c) 
 Stratus Stockholders Meeting  . . . . . . . . . . . . . . . . . . . . 3.18 
 Stratus Stock Plans . . . . . . . . . . . . . . . . . . . . . . . . 2.1(d) 
 Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble 
 Sub Common Stock  . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a) 
 Subsidiary  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(b) 
 Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(a) 
 Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . .  1.3 
 Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8(a) 
 Taxes       . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8(a) 
 Third Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3(c) 
 U.S. GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5(b) 
 USTs  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.13(a) 


  
                             TABLE OF CONTENTS 
                                                                     Page 

 ARTICLE I   THE MERGER  . . . . . . . . . . . . . . . . . . . . . . .  1 
 Section 1.1 Merger  . . . . . . . . . . . . . . . . . . . . . . . . .  1 
 Section 1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . .  2 
 Section 1.3 Effects of the Merger . . . . . . . . . . . . . . . . . .  2 
 Section 1.4 Directors and Officers  . . . . . . . . . . . . . . . . .  2 

 ARTICLE II   CONVERSION OF SECURITIES . . . . . . . . . . . . . . . .  4 
 Section 2.1 Conversion of Capital Stock . . . . . . . . . . . . . . .  4 
 Section 2.2 Exchange of Certificates  . . . . . . . . . . . . . . . .  5 
 Section 2.3 Dissenting Shares . . . . . . . . . . . . . . . . . . . .  7 
  
 ARTICLE III   REPRESENTATIONS AND WARRANTIES OF STRATUS . . . . . . .  8 
 Section 3.1 Organization  . . . . . . . . . . . . . . . . . . . . . .  9 
 Section 3.2 Stratus Subsidiaries and Joint Ventures . . . . . . . . . 10 
 Section 3.3 Stratus Capital Structure . . . . . . . . . . . . . . . . 11 
 Section 3.4 Authority; No Conflict; Required Filings and Consents . . 12 
 Section 3.5 SEC Filings; Financial Statements . . . . . . . . . . . . 13 
 Section 3.6 Absence of Undisclosed Liabilities  . . . . . . . . . . . 14 
 Section 3.7 Absence of Certain Changes or Events  . . . . . . . . . . 15 
 Section 3.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 15 
 Section 3.9 Properties  . . . . . . . . . . . . . . . . . . . . . . . 18 
 Section 3.10 Intellectual Property  . . . . . . . . . . . . . . . . . 19 
 Section 3.11 Agreements, Contracts and Commitments  . . . . . . . . . 20 
 Section 3.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . 20 
 Section 3.13 Environmental Matters  . . . . . . . . . . . . . . . . . 21 
 Section 3.14 Employee Benefit Plans and Employee Matters  . . . . . . 22 
 Section 3.15 Compliance with Laws . . . . . . . . . . . . . . . . . . 28 
 Section 3.16 Tax Matters  . . . . . . . . . . . . . . . . . . . . . . 28 
 Section 3.17 Interested Party Transactions  . . . . . . . . . . . . . 28 
 Section 3.18 Registration Statement; Proxy Statement/Prospectus . . . 29 
 Section 3.19 Opinion of Financial Advisor . . . . . . . . . . . . . . 29 
 Section 3.20 Applicability of Certain Massachusetts Laws  . . . . . . 29 
  
 ARTICLE IV   REPRESENTATIONS AND  
 WARRANTIES OF ASCEND AND SUB  . . . . . . . . . . . . . . . . . . . . 30 
 Section 4.1 Organization  . . . . . . . . . . . . . . . . . . . . . . 30 
 Section 4.2 Ascend Subsidiaries and Joint Ventures  . . . . . . . . . 31 
 Section 4.3 Ascend Capital Structure  . . . . . . . . . . . . . . . . 32 
 Section 4.4 Authority; No Conflict; Required Filings and Consents . . 33 
 Section 4.5 SEC Filings; Financial Statements . . . . . . . . . . . . 34 
 Section 4.6 Absence of Undisclosed Liabilities  . . . . . . . . . . . 34 
 Section 4.7  Absence of Certain Changes or Events . . . . . . . . . . 25 
 Section 4.8  Litigation . . . . . . . . . . . . . . . . . . . . . . . 35 
 Section 4.9  Compliance with Laws . . . . . . . . . . . . . . . . . . 35 
 Section 4.10 Tax Matter . . . . . . . . . . . . . . . . . . . . . . . 35 
 Section 4.11 Interested Party Transactions  . . . . . . . . . . . . . 35 
 Section 4.12 Registration Statement; Proxy Statement/Prospectus . . . 36 
 Section 4.13 Opinion of Financial Advisor . . . . . . . . . . . . . . 36 
 Section 4.14 Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . 66 
 Section 4.15 Interim Operations of Sub  . . . . . . . . . . . . . . . 37 
  
 ARTICLE V   CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . 37 
 Section 5.1 Covenants of Stratus  . . . . . . . . . . . . . . . . . . 37 
 Section 5.2 Covenants of Ascend . . . . . . . . . . . . . . . . . . . 41 
 Section 5.3 Cooperation . . . . . . . . . . . . . . . . . . . . . . . 42 
  
 ARTICLE VI  ADDITIONAL AGREEMENTS  . . . . . . . . . . . . . . . . .  42 
 Section 6.1 No Solicitation . . . . . . . . . . . . . . . . . . . . . 42 
 Section 6.2 Proxy Statement/Prospectus; Registration Statement  . . . 43 
 Section 6.3 Consents  . . . . . . . . . . . . . . . . . . . . . . . . 44 
 Section 6.4 Access to Information . . . . . . . . . . . . . . . . . . 44 
 Section 6.5 Stratus Stockholders Meeting  . . . . . . . . . . . . . . 45 
 Section 6.6 Legal Conditions to Merger  . . . . . . . . . . . . . . . 45 
 Section 6.7 Public Disclosure . . . . . . . . . . . . . . . . . . . . 46 
 Section 6.8 Tax-Free Reorganization . . . . . . . . . . . . . . . . . 46 
 Section 6.9 Affiliate Legends . . . . . . . . . . . . . . . . . . . . 46 
 Section 6.10 Nasdaq Quotation . . . . . . . . . . . . . . . . . . . . 46 
 Section 6.11 Stock Plans and Options  . . . . . . . . . . . . . . . . 47 
 Section 6.12 Brokers or Finders . . . . . . . . . . . . . . . . . . . 48 
 Section 6.13 Indemnification  . . . . . . . . . . . . . . . . . . . . 48 
 Section 6.14 Employees  . . . . . . . . . . . . . . . . . . . . . . . 51 
 Section 6.15 Additional Agreements; Reasonable Efforts  . . . . . .  52  
 Section 6.16 Certain Director and Officer Appointments  . . . . . . . 52 
 Section 6.17 Stratus's Rights Agreement . . . . . . . . . . . . . . . 52 
 
ARTICLE VII  CONDITIONS TO MERGER  . . . . . . . . . . . . . . . . . . 53 
 Section 7.1 Conditions to Each Party's Obligation to Effect the Merger53 
 Section 7.2 Additional Conditions to Obligations of Ascend and Sub  . 54 
 Section 7.3 Additional Conditions to Obligations of Stratus . . . . . 55 
  
 ARTICLE VIII TERMINATION AND AMENDMENT  . . . . . . . . . . . . . . . 56 
 Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . 56 
 Section 8.2 Effect of Termination . . . . . . . . . . . . . . . . . . 58 
 Section 8.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . 58 
 Section 8.4 Amendment . . . . . . . . . . . . . . . . . . . . . . . . 60 
 Section 8.5 Extension; Waiver . . . . . . . . . . . . . . . . . . . . 60 
  
 ARTICLE IX  MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . . .  60 
 Section 9.1 Nonsurvival of Representations, Warranties
             and Agreements . . . . . . . . . . . . . . . . . . . . .  60 
 Section 9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 60 
 Section 9.3 Interpretation  . . . . . . . . . . . . . . . . . . . . . 62 
 Section 9.4 Counterparts  . . . . . . . . . . . . . . . . . . . . . . 62 
 Section 9.5 Entire Agreement; No Third Party Beneficiaries  . . . . . 62 
 Section 9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . 63 
 Section 9.7 Assignment  . . . . . . . . . . . . . . . . . . . . . . . 63