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EXHIBIT 4.6
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY
BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL
IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
WARRANT TO PURCHASE PREFERRED STOCK
OF
BROCADE COMMUNICATIONS SYSTEMS, INC.
THIS CERTIFIES THAT in partial consideration of that certain
leasehold provided to Brocade Communications Systems, Inc., a California
corporation (the "COMPANY"), receipt of which is hereby acknowledged,
Symmetricom, Inc., a California corporation, or its permitted registered assigns
("REGISTERED HOLDER"), is entitled, subject to the terms and conditions of this
Warrant, to purchase from the Company at any time after the Commencement Date
(as defined in Section 2) of this Warrant and prior to 5:00 p.m. Pacific Time on
May ___, 2002, unless terminated earlier under Section 12 hereof (the
"EXPIRATION DATE"), up to Twenty Thousand (20,000) shares of Warrant Stock (as
defined below) at a price per share equal to the Warrant Price (as defined
below), upon surrender of this Warrant at the principal office of the Company,
together with a duly executed subscription form in the form attached hereto as
Exhibit 1 and simultaneous payment of the full Warrant Price for the shares of
Warrant Stock so purchased in lawful money of the United States. The Warrant
Price is subject to adjustment as provided herein.
1. CERTAIN DEFINITIONS. The following definitions shall apply for
purposes of this Warrant:
(a) "CONVERSION STOCK" shall mean Common Stock of the Company or
other securities issuable upon conversion of the Warrant Stock.
(b) "ISSUE DATE" shall mean the date of this Warrant.
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(c) "MAXIMUM NUMBER OF PURCHASABLE SHARES" shall be Twenty
Thousand (20,000) shares, subject to adjustment as provided herein.
(d) "WARRANT PRICE" shall mean Three Dollars ($3.00) per share.
The Warrant Price is subject to adjustment as provided herein.
(e) "WARRANT" shall mean this Warrant and any warrant(s)
delivered in substitution or exchange therefor, as provided herein.
(f) "WARRANT STOCK" shall mean Series C Preferred Stock of the
Company.
2. EXERCISE. Subject to compliance with all applicable securities laws,
this Warrant may be exercised in whole or in part, at any time or from time to
time, on any business day commencing on the earlier of (i) May __, 1998, or (ii)
immediately prior to a Terminating Transaction under Section 12 (such date being
herein referred to as "Commencement Date") and before the Expiration Date, for
up to the Maximum Number of Purchasable Shares by surrendering this Warrant at
the principal office of the Company at 0000 Xxxxxxxxx Xxxxxxx, Xxx Xxxx,
Xxxxxxxxxx, 00000, with the subscription form attached hereto duly executed by
the Registered Holder, and payment, in cash and/or cancellation of bona fide
indebtedness of the Company to the Registered Holder, of an amount equal to the
product obtained by multiplying (i) the number of shares of Warrant Stock to be
purchased by the Registered Holder by (ii) the Warrant Price or adjusted Warrant
Price therefor, if applicable, as determined in accordance with the terms
hereof. Upon a partial exercise of this Warrant: (i) the Maximum Purchasable
Number of Shares immediately prior to such partial exercise shall be reduced by
the number of shares of Warrant Stock purchased upon such exercise of this
Warrant, and (ii) this Warrant shall be surrendered by the Registered Holder and
replaced with a new Warrant of like tenor with respect to which the new Maximum
Purchasable Number of Shares Amount is the former Maximum Purchasable Number of
Shares Amount as so reduced. This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Warrant Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
soon as practicable on or after such date, the Company shall issue and deliver
to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Warrant Stock issuable upon such
exercise.
3. FULLY PAID SHARES. All shares of Warrant Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and nonassessable.
4. TRANSFER AND EXCHANGE. Subject to the foregoing and terms and
conditions of this Warrant and compliance with all applicable securities laws,
this Warrant and all rights hereunder are transferable, in whole or in part, on
the books of the Company maintained for such purpose at the principal office of
the Company referred to above, by the Registered Holder hereof in person, or by
duly authorized attorney, upon surrender of this Warrant properly endorsed, the
Registered Holder's written instructions as to what quantity of the Maximum
Number of Purchasable Shares
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is being transferred to each transferee's Warrant and upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer.
Upon any partial transfer, the Company will issue and deliver to the Registered
Holder and its transferee(s), respectively, a new Warrant or Warrants (of like
tenor entitling the Registered Holder and its transferees to purchase shares of
Warrant Stock equal in the aggregate to the Maximum Number of Purchasable Shares
as determined immediately prior to such transfer, with the portions of the
Maximum Number of Purchasable Shares allocated to each such Warrant to be
determined by the Registered Holder's written instructions to the Company
regarding such transfer not so transferred. Until a transfer of this Warrant is
registered on the books of the Company, the Company may treat the Registered
Holder hereof as the owner for all purposes. Notwithstanding the foregoing, this
Warrant and the rights hereunder may not be transferred unless such transfer
complies with all applicable securities laws and the provisions of Section 10
hereof.
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The Maximum Number
of Purchasable Shares, and the number and character of shares of Warrant Stock
issuable upon exercise of this Warrant (or any shares of stock or other
securities or property at the time receivable or issuable upon exercise of this
Warrant) and the Warrant Price therefor, are subject to adjustment upon the
occurrence of the following events:
5.1 Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The Maximum Number of Purchasable Shares, the Warrant
Price of this Warrant and the number of shares of Warrant Stock issuable upon
exercise of this Warrant shall each be proportionally adjusted to reflect any
stock dividend, stock split, reverse stock split, combination of shares,
reclassification, recapitalization or other similar event affecting the number
of outstanding shares of Warrant Stock that occurs after the date of the
Warrant.
5.2 Adjustment for Other Dividends and Distributions. In case the
Company shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution payable
with respect to the Warrant Stock payable in securities of the Company (other
than issuances with respect to which adjustment is made under Section 5.1),
then, and in each such case, the Registered Holder of this Warrant, upon
exercise of this Warrant at any time after the consummation, effective date or
record date of such event, shall receive, in addition to the shares of Warrant
Stock issuable upon such exercise prior to such date, the securities or such
other assets of the Company to which such Registered Holder would have been
entitled upon such date if such Registered Holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided in this
Warrant).
5.3 Adjustment for Reorganization, Consolidation, Merger. Except
in the event this Warrant is terminated pursuant to Section 12 hereof, in case
of any reorganization of the Company (or of any other corporation, the stock or
other securities of which are at the time receivable on the exercise of this
Warrant) after the date of this Warrant, or in case, after such date, the
Company (or any such corporation) shall consolidate with or merge into another
corporation or convey all or substantially all of its assets to another
corporation, then, and in each such case, the Registered Holder of this Warrant,
upon the exercise of this Warrant (as provided in Section 2), at any time after
the consummation of such reorganization, consolidation, merger,
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or conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise of this Warrant prior to
such consummation, the stock or other securities or property to which such
Registered Holder would have been entitled upon the consummation of such
reorganization, consolidation, merger or conveyance if such Registered Holder
had exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in this Section 5, and the successor or purchasing
corporation in such reorganization, consolidation, merger or conveyance (if
other than the Company) shall duly execute and deliver to the Registered Holder
a supplement hereto acknowledging such corporation's obligations under this
Warrant; and in each such case, the terms of this Warrant shall be applicable to
the shares of stock or other securities or property receivable upon the exercise
of this Warrant after the consummation of such reorganization, consolidation,
merger or conveyance.
5.4 Conversion of Warrant Stock. In case all the authorized class
or series constituting the Warrant Stock of the Company is converted, pursuant
to the Company's Articles of Incorporation, into Common Stock or other
securities or property (the "PRIOR WARRANT STOCK CONVERSION PROCEEDS"), or the
Warrant Stock otherwise ceases to exist, then, in such case, the Registered
Holder of this Warrant, upon exercise of this Warrant at any time after the date
on which the Warrant Stock is so converted or ceases to exist (the "WARRANT
STOCK TERMINATION DATE"), shall receive, in lieu of the number of shares of
Warrant Stock that would have been issuable upon such exercise immediately prior
to the Warrant Stock Termination Date (the "FORMER WARRANT STOCK"), the Prior
Warrant Stock Conversion Proceeds to which such Registered Holder would have
been entitled to receive upon the Warrant Stock Termination Date if such
Registered Holder had exercised this Warrant with respect to the Former Warrant
Stock immediately prior to the Warrant Stock Termination Date (all subject to
further adjustment as provided in this Warrant).
6. NO IMPAIRMENT. The Company will not, by amendment of its Articles of
Incorporation or Bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, willfully avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Registered Holder
under this Warrant against wrongful impairment. Without limiting the generality
of the foregoing, the Company: (i) will not set nor increase the par value of
any shares of stock issuable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and (ii) will take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and non-assessable shares of Warrant Stock upon the exercise of
this Warrant.
7. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in
either the Maximum Number of Purchasable Shares, the Warrant Price or in the
number of shares of Warrant Stock, or other stock, securities or property
receivable upon the exercise of this Warrant, the Chief Financial Officer of the
Company shall compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based, including a statement of
the adjusted Maximum Number of Purchasable Shares and the adjusted Warrant
Price. The Company will
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cause copies of such certificate to be mailed (by first class mail, postage
prepaid) to the Registered Holder.
8. LOSS OR MUTILATION. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership, and the loss, theft, destruction
or mutilation, of this Warrant, and of indemnity reasonably satisfactory to it,
and (in the case of mutilation) upon surrender and cancellation of this Warrant,
the Company will execute and deliver in lieu thereof a new Warrant of like
tenor.
9. RESERVATION OF WARRANT STOCK. If at any time the number of authorized
but unissued shares of the Company's class or series of Warrant Stock (or Prior
Warrant Stock Conversion Proceeds) or other securities of the Company shall not
be sufficient to effect the exercise of this Warrant, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of such class or series of Warrant Stock or
other securities to such number of shares of such class or series of Warrant
Stock or other securities as shall be sufficient for such purpose.
10. RESTRICTIONS ON TRANSFER.
10.1 The Registered Holder understands that neither this Warrant
nor the shares of Warrant Stock or Conversion Stock have been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities
laws. As a condition to the issuance of this Warrant and to its exercise the
Registered Holder hereby represents and warrants to the Company that:
(a) The Warrant and, if applicable, the shares of Warrant
Stock and Conversion Stock (collectively, the "Securities") have been acquired
by the Registered Holder for investment and not with a view to the sale or other
distribution thereof within the meaning of the Act and the Registered Holder has
no present intention of selling or otherwise disposing of all or any portion of
the Securities.
(b) The Registered Holder has acquired (and will acquire)
the Securities for the Registered Holder's own account only and no one else has
any beneficial ownership in the Securities.
(c) The Registered Holder is capable of evaluating the
merits and risks of any investment in the Securities, is financially capable of
bearing a total loss of this investment and has either: (i) a preexisting
personal or business relationship with the Company or its principals; (ii) by
reason of the Registered Holder's business or financial experience, has the
capacity to protect his or its own interests in connection with this investment;
or (iii) is an "accredited investor" within the meaning of Regulation D
promulgated under the Act, as amended.
(d) The Registered Holder has had access to all
information regarding the Company, its present and prospective business, assets,
liabilities and financial condition that the Registered Holder considers
important to making the decision to acquire the Securities and
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has had ample opportunity to ask questions of and receive answers from the
Company's representatives concerning an investment in the Securities and to
obtain any and all documents requested in order to supplement or verify any of
the information supplied.
(e) The Registered Holder understands that the Securities
shall be deemed restricted securities under the Act and may not be resold unless
they are registered under the Act and any applicable State securities law, or in
the opinion of counsel in form and substance satisfactory to the Company, an
exemption from such registration is available.
(f) The Registered Holder is aware of Rule 144 promulgated
under the Act, which rule provides, in substance, that: (i) after two years from
the date restricted securities have been purchased and fully paid for, a holder
may transfer restricted securities provided certain conditions are met (e.g.,
certain public information is available about the Company), and specific
limitations on the amount of shares which can be sold within certain periods and
the manner in which such shares must be sold are complied with; and (ii) after
three years from the date the securities have been purchased and fully paid for,
holders who are not "affiliates" of the Company may sell restricted securities
without satisfying such conditions.
(g) The Registered Holder further understands that if the
requirements of Rule 144 are not met, registration under the Act, compliance
with Regulation A, or some other registration exemption will be required for any
disposition of the Securities; and that, although Rule 144 is not exclusive, the
Securities and Exchange Commission ("SEC") has expressed its opinion that
persons proposing to sell restricted securities other than in a registered
offering or other than pursuant to Rule 144 will have a substantial burden of
proof in establishing that an exemption from registration is available for such
offers or sales and such persons and the brokers who participate in the
transactions do so at their own risk.
10.2 The Registered Holder of this Warrant, by acceptance hereof,
agrees that, absent an effective registration statement filed with the SEC under
the Act, covering the disposition or sale of this Warrant or the Warrant Stock
(or Conversion Stock) issued or issuable upon exercise hereof, such Registered
Holder will not sell or transfer any or all of such Warrant Stock or Conversion
Stock, as the case may be, without first providing the Company with an opinion
of counsel satisfactory to the Company to the effect that such sale or transfer
will be exempt from the registration and prospectus delivery requirements of the
Act, and such Registered Holder consents to the Company making a notation on its
records, or giving instructions to any transfer agent of this Warrant, or such
Warrant Stock (or Conversion Stock), in order to implement such restriction on
transfer. The shares issued upon exercise of this Warrant shall bear legends
referring to the restrictions or transfer set forth in this Section 10. As a
condition to the transfer of this Warrant or transfer of the shares issuable on
exercise hereof, any permitted transferee must execute and deliver to the
Company representations and warranties similar to these set forth in this
Section 10 and agree in writing to accept and be bound by all the terms and
conditions of this Warrant.
11. NO RIGHTS OR LIABILITIES AS SHAREHOLDER. This Warrant does not by
itself entitle the Registered Holder to any voting rights or other rights as a
shareholder of the Company. In
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the absence of affirmative action by Registered Holder to purchase Warrant Stock
by exercise of this Warrant, no provisions of this Warrant, and no enumeration
herein of the rights or privileges of the Registered Holder shall cause such
Registered Holder to be a shareholder of the Company for any purpose.
12. TERMINATION. The right to exercise this Warrant shall terminate upon
the effective date of a merger or consolidation of the Company into or with
another corporation, or the sale of all or substantially all of the Company's
assets to another corporation or person, if, immediately after any such merger,
consolidation or sale of assets, at least fifty percent (50%) of the voting
power of the surviving corporation or such other person, as the case may be, is
owned by persons who are not shareholders of the Company immediately prior to
such merger, consolidation or sale (the "Terminating Transaction"). In such
event, the Company shall, at least fifteen (15) days prior to the effective date
of the Terminating Transaction, give written notice pursuant to Section 14
hereof the imminence of such Terminating Transaction.
13. LOCK-UP AGREEMENT. The Registered Holder agrees, upon request of the
Company or the underwriters managing any firmly underwritten public offering of
the Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any shares of the Warrant
Stock or Common Stock issuable upon conversion of the Warrant Stock acquired
pursuant to the exercise of this Warrant (other than those included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as the Company or
underwriters may specify.
14. AMENDMENT; WAIVER. Any term of this Warrant may be amended, and the
observance of any term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively) by the written
consent of the Company and the Registered Holder.
15. NOTICES. All notices and other communications from the Company to
the Registered Holder shall be deemed given when mailed by first-class
registered or certified mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder who shall have furnished an
address to the Company in writing.
16. ATTORNEYS' FEES. In the event any party is required to engage the
services of any attorneys for the purpose of enforcing this Warrant, or any
provision thereof, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and any other related cost or expenses.
17. HEADINGS. The headings in this Warrant are for purposes of
convenience in reference only, and shall not be deemed to constitute a part
hereof.
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18. LAW GOVERNING. This Warrant shall be construed and enforced in
accordance with, and governed by, the internal laws of the State of California,
excluding that body of law applicable to conflicts of laws.
19. TERMS BINDING. By acceptance of this Warrant, the Registered Holder
of this Warrant (and each subsequent assignee, transferee or Registered Holder
of this Warrant) accepts and agrees to be bound by all the terms and conditions
of this Warrant.
Dated: May 6, 1997
BROCADE COMMUNICATIONS ACKNOWLEDGED AND ACCEPTED
SYSTEMS, INC. BY REGISTERED HOLDER:
By: /s/ B. Xxxx Xxx By: /s/ J. Xxxxx Xxxxxxx
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Name: B. Xxxx Xxx Name: J. Xxxxx Xxxxxxx
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Title: VP & CFO Title: VP & CEO
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EXHIBIT 1
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Brocade Communications Systems, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
(1) The undersigned hereby elects to purchase _____ shares of
that class or series of Warrant Stock of Brocade Communications Systems, Inc.
(or, if applicable, such Prior Warrant Stock Conversion Proceeds, pursuant to
the terms of the attached Warrant) and tenders herewith payment of the purchase
price for such shares in full.
(2) In exercising this Warrant, the undersigned hereby confirms
and acknowledges that the representations and warranties of the undersigned set
forth in Section 10 of the Warrant are true and correct as of this date.
(3) Please issue a certificate or certificates representing such
shares of that class or series of Warrant Stock of Brocade Communications
Systems, Inc. (or, if applicable, such Prior Warrant Stock Conversion Proceeds,
pursuant to the terms of the attached Warrant) in the name or names specified
below:
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(Name) (Name)
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(Address) (Address)
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(City, State, Zip Code) (City, State, Zip Code)
(4) Please issue a new Warrant for the unexercised portion of
the attached Warrant in the name of the undersigned or in such other name as is
specified below:
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(Name)
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(Date) (Signature of Registered Holder)
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned Registered Holder of this
Warrant hereby sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned under the within Warrant, with respect to the
number of shares of Warrant Stock set forth below:
Name of Assignee Address Number of Shares of Warrant Stock Transferred
and does hereby irrevocably constitute and appoint ___________________________
Attorney to make such transfer on the books of ____________________________,
maintained for the purpose, with full power of substitution in the premises.
Dated: _________________
REGISTERED HOLDER
By:_______________________________
Name:_____________________________
Title:____________________________
