This Voting Agreement
( “
Agreement ”) is entered into as of July 21, 2008,
by and between Brocade
Communications Systems, Inc . , a Delaware corporation
(“ Parent ”), and the undersigned stockholder
(“ Stockholder ”) of Foundry Networks, Inc., a
Delaware corporation (the “ Company
”).
A.
Stockholder Owns certain securities of the Company.
B.
Parent, Falcon Acquisition Sub, Inc., a Delaware corporation
(“ Merger Sub ”), and the Company are entering
into an Agreement and Plan of Merger of even date herewith (the
“ Merger Agreement ”) which provides (subject to
the conditions set forth therein) for the merger of Merger Sub into
the Company (the “ Merger ”).
C.
In the Merger, each outstanding share of common stock of the
Company is to be converted into the right to receive the
consideration set forth in the Merger Agreement.
D.
Stockholder is entering into this Agreement in order to induce
Parent to enter into the Merger Agreement.
The parties to
this Agreement, intending to be legally bound, agree as
follows:
SECTION
1. Certain
Definitions
For purposes of
this Agreement:
(a)
“ Company Common Stock ” shall mean the common
stock, par value $0.0001 per share, of the Company.
(b)
Stockholder shall be deemed to “ Own ” or to
have acquired “ Ownership ” of a security if
Stockholder: (i) is the record owner of such security; or
(ii) is the “beneficial owner” (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934) of
such security.
(c)
“ Specified Period ” shall mean the period
commencing on the date of this Agreement and ending on the
Termination Date.
(d)
“ Subject Securities ” shall mean: (i) all
securities of the Company (including all shares of Company Common
Stock and all options, warrants and other rights to acquire shares
of Company Common Stock) Owned by Stockholder as of the date of
this Agreement; and (ii) all additional securities of the
Company (including all additional shares of Company Common Stock
and all additional options, warrants and other rights to acquire
shares of
Company Common
Stock) of which Stockholder acquires Ownership during the Specified
Period; provided , that any Subject Securities transferred
as permitted in Section 2.3 shall from and after such transfer
cease to be Subject Securities of Stockholder (but shall thereafter
be “Subject Securities” under the similar Voting
Agreement entered into by the transferee of such
securities).
(e)
“ Termination Date ” shall mean the earliest of
(i) the date upon which the Merger Agreement is validly
terminated in accordance with its terms, (ii) the Effective
Time, (iii) the date upon which the parties hereto agree in
writing to terminate this Agreement; or (iv) any amendment to
the Merger Agreement that results in a decrease in the
“Merger Consideration” as set forth in the Merger
Agreement (which shall be deemed to exclude any change in the
proportionate form of consideration (between cash and shares of
Parent Common Stock) to be paid and issued by Parent in the Merger
that is intended to maintain the aggregate value of the Merger
Consideration, calculated at the time of such amendment);
provided, however, that if at or prior to the time the
Termination Date would otherwise occur, Parent and Stockholder
enter into any amendment or extension of this Agreement that
extends the Termination Date to a later date, the
“Termination Date” shall not be deemed to have occurred
until the date designated as the Termination Date in such amendment
or extension.
(f)
A Person shall be deemed to have a effected a “
Transfer ” of a security if such Person directly or
indirectly: (i) sells, pledges, encumbers, grants an option
with respect to, transfers or disposes of such security or any
interest in such security to any Person other than Parent (provided
that the exercise by Stockholder of any Company Option held by
Stockholder shall not be deemed a Transfer hereunder); or
(ii) enters into an agreement or commitment contemplating the
possible sale of, pledge of, encumbrance of, grant of an option
with respect to, transfer of or disposition of such security or any
interest therein to any Person other than Parent.
(g)
Capitalized terms used but not otherwise defined in this Agreement
have the meanings assigned to such terms in the Merger
Agreement.
SECTION 2.
Transfer of Subject
Securities and Voting Rights
2.1
Restriction on Transfer of Subject Securities . Subject to
Section 2.3, during the Specified Period, Stockholder shall
not, directly or indirectly, cause or permit any Transfer of any of
the Subject Securities to be effected.
2.2
Restriction on Transfer of Voting Rights . During the Specified
Period, Stockholder shall not: (a) deposit any Subject
Securities into a voting trust; or (b) grant a proxy or enter
into a voting agreement or similar agreement (other than this
Agreement) with respect to any of the Subject Securities, in each
case in a manner which would or would reasonably be expected to (i)
prevent or materially hinder the ability of Stockholder to perform
any of Stockholder’s obligations hereunder, (ii) limit
or reduce any of the rights of Parent hereunder or (iii) be
inconsistent with any of the terms of this Agreement.
2.3 Permitted
Transfers . Section 2.1 shall not prohibit a transfer of
Subject Securities by Stockholder (a) to any member of
Stockholder’s immediate family, or to a trust for the benefit
of Stockholder or any member of Stockholder’s immediate
family, (b) upon the death
2.
of Stockholder,
(c) in connection with or for the purpose of personal
tax-planning or (d) to a charitable organization qualified
under Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended; provided, however, that a transfer referred to
in this Section 2.3 shall be permitted only if, as a
precondition to such transfer, the transferee agrees in writing to
be bound by all of the terms of this Agreement.
SECTION 3.
Voting of Shares;
Proxy;
3.1 Voting
Covenant . Stockholder hereby agrees that, during the Specified
Period, at any meeting of the stockholders of the Company, however
called, and in any written action by consent of stockholders of the
Company, unless otherwise directed in writing by Parent and to the
extent not voted by the Person(s) appointed pursuant to
Section 3.2 hereof, Stockholder shall vote all shares of
Company Common Stock owned of record by Stockholder and all other
Subject Securities (to the fullest extent of the
Stockholder’s right to do so):
(a) in favor of the adoption of the Merger Agreement, in
favor of the Merger and in favor of any other action reasonably
necessary to facilitate the Merger; and
(b) against the following actions (other than the Merger and
the transactions contemplated by the Merger Agreement):
(A) any reorganization, recapitalization, dissolution or
liquidation of the Company or any subsidiary of the Company; and
(B) any Acquisition Proposal (including any Superior Offer)
and any other action that is intended, or that would reasonably be
expected, to impede, interfere with, discourage, frustrate, delay,
postpone, prevent or adversely affect the Merger or any of the
other transactions contemplated by the Merger Agreement.
During the
Specified Period, Stockholder shall not enter into any agreement or
understanding with any Person to vote or give instructions in any
manner inconsistent with clause “(a)” or clause
“(b)” of the preceding sentence. Notwithstanding
anything to the contrary set forth in this Agreement, nothing in
this Agreement shall limit or restrict Stockholder from
(i) acting in Stockholder’s capacity as a director or
officer of the Company; or (ii) voting in Stockholder’s
sole discretion on any matter other than the matters referred to in
this Section 3.1.
(a) Contemporaneously with the execution of this Agreement:
(i) Stockholder shall deliver to Parent a proxy in the form
attached to this Agreement as Exhibit A , which shall
be irrevocable to the fullest extent permitted by law (at all times
prior to the Termination Date) with respect to the shares referred
to therein (the “ Proxy ”); and (ii) if
applicable, Stockholder shall cause to be delivered to Parent an
additional proxy (in the form attached hereto as Exhibit A)
executed on behalf of the record owner of any outstanding shares of
Company Common Stock that are owned beneficially (within the
meaning of Rule 13d-3 under the Securities Exchange Act of
1934), but not of record, by Stockholder.
(b) Stockholder hereby revokes any and all prior proxies or
powers of attorney given by the Stockholder with respect to the
voting of any Subject Securities inconsistent with the terms of
Section 3.1 hereof and agrees not to grant any subsequent
proxies
3.
or powers of
attorney with respect to the voting of any Subject Securities
inconsistent with the terms of Section 3.1 until after the
Termination Date.
SECTION 4.
Waiver of Appraisal
Rights
Stockholder hereby
irrevocably and unconditionally waives, and agrees to cause to be
waived and to prevent the exercise of, with respect to any shares
of Company Common Stock Owned by Stockholder, any rights of
appraisal, any dissenters’ rights and any similar rights
relating to the Merger that Stockholder or any other Person who is
the record owner of such shares of Company Common Stock Owned by
Stockholder may have by virtue of any shares of such Company Common
Stock; provided, however , that in the event that the
Termination Date shall occur prior to the consummation of the
Merger, such waiver shall be deemed rescinded in its entirety
without any required action on the part of Stockholder.
SECTION 5.
No
Solicitation
Stockholder agrees
that, during the Specified Period, Stockholder shall not, without
limiting the last sentence of Section 3.1, directly or
indirectly, take or authorize to be taken any action that the
Company is prohibited from taking or authorizing to be taken
pursuant to Section 4.3 of the Merger Agreement.
SECTION
6. Representations and Warranties of
Stockholder
Stockholder hereby
represents and warrants to Parent as follows as of the date
hereof:
6.1
Authorization, etc . Stockholder has all requisite power,
capacity and authority to execute and deliver this Agreement and
the Proxy and, with respect to the Subject Securities not
transferred in accordance with Section 2.3 hereof, to grant
the rights to Parent set forth herein and therein and to perform
Stockholder’s obligations hereunder. This Agreement and the
Proxy have been duly executed and delivered by Stockholder and,
assuming the due authorization, execution and delivery of this
Agreement by Parent, constitute legal, valid and binding
obligations of Stockholder, enforceable against Stockholder in
accordance with their terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
6.2 No
Conflicts or Consents .
(a) The execution and delivery of this Agreement and the
Proxy by Stockholder do not, and the performance of this Agreement
and the Proxy by Stockholder will not: (i) conflict with or
violate any Legal Requirement or Order applicable to Stockholder or
by which Stockholder or any of Stockholder’s properties is or
may be bound or affected; or (ii) result in the creation of
any encumbrance or restriction on any of the Subject Securities
Owned by Stockholder, in each case except for any conflict,
violation or encumbrance that would not, individua
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