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Exhibit 4.3
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE BLUE SKY LAWS, AND ARE SUBJECT TO CERTAIN INVESTMENT
REPRESENTATIONS. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER
THE ACT AND APPLICABLE BLUE SKY LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
BIGBAND NETWORKS, INC.
WARRANT TO PURCHASE
CLASS B NONVOTING COMMON STOCK
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Warrant No. 1
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June 29, 2004
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THIS CERTIFIES THAT, ADC TELECOMMUNICATIONS,
INC., a Minnesota corporation, or its registered assigns (the
"Holder"), having a mailing address at 13625 Technology Drive, Eden
Prairie, MN 55344, is entitled to subscribe for and purchase from
BIGBAND NETWORKS, INC., a Delaware corporation (the "Company"), at
any time during that period commencing on the date hereof (the
"Date of Grant"), and ending at 4:00 p.m., California time, on the
Exercise Date (as hereinafter defined), One Million Six Hundred
Three Thousand and Two Hundred Ninety-eight (1,603,298) fully
paid and nonassessable shares (the "Warrant Shares") of the
Company’s Class B nonvoting common stock, par value $0.001
per share (the "Class B Common Stock"), at the purchase price of
$1.0915 (the "Exercise Price"). The number of Warrant Shares to be
received upon the exercise of this Warrant to Purchase Class B
Nonvoting Common Stock (the "Warrant"), and the per share Exercise
Price to be paid for such Warrant Shares, may be adjusted from time
to time as hereinafter set forth.
This Warrant has been issued in connection with the issuance of
Advances pursuant to the terms of that certain Credit and Security
Agreement, dated as of June 29, 2004, between the Company and
ADC Telecommunications, Inc. (the "Credit Agreement"). All
capitalized terms used herein and not otherwise defined shall have
the meanings given to such terms in the Credit Agreement.
This Warrant is subject to the following provisions, terms and
conditions:
1. Method of Exercise . At the option of the Holder, the
Holder may exercise the Warrant by using either of the following
methods:
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(a) Payment of Exercise Price in Cash . The Holder may
exercise its right to purchase the Warrant Shares or any permitted
portion thereof, by surrendering this Warrant with the form of
notice attached hereto duly executed by such Holder, to the Company
at its principal office, accompanied by payment, in cash, by wire
transfer to an account of the Company, or by check payable to the
order of the Company, of the aggregate Exercise Price payable in
respect of the shares of the Class B Common Stock being
purchased.
(b) Redemption By Net Exercise Price . The
Holder may elect to receive, without the payment by the Holder of
any additional consideration, the Warrant Shares or any portion
hereof by the surrender of this Warrant or such portion to the
Company. Thereupon, the Company shall issue to the Holder such
number of fully paid and nonassessable Warrant Shares as is
computed using the following formula:
X = Y (A-B)
A
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where X = the number of shares to be
issued to the Holder pursuant to this Section l(b).
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Y = the number of shares covered by this Warrant in respect of
which the net issue election is made pursuant to this Section
l(b).
A = the fair market value ("FMV") of one share of Class B Common
Stock, as determined below, as at the time the net issue election
is made pursuant to this Section l(b).
B = the Exercise Price in effect under this Warrant at the time
the net issue election is made pursuant to this Section l(b).
For the purposes of this Section l(b), FMV shall be determined
at the time of exercise and shall mean (a) the mean between
the reported high and low sale prices of the Class B Common Stock
over the five trading days immediately preceding the determination
date if the Class B Common Stock is listed, admitted to unlisted
trading privileges or reported on any foreign or national
securities exchange or on the Nasdaq National Market or an
equivalent foreign market on which sale prices are reported; or
(b) if the Class B Common Stock is not so listed, admitted to
unlisted trading privileges or reported, the closing bid price over
the five trading days immediately preceding the determination date
as reported by the Nasdaq SmallCap Market, OTC Bulletin Board or
the National Quotation Bureau, Inc. or other comparable service; or
(c) if the Class B Common Stock is not so listed or reported,
a fair value as determined in good faith by the Board of Directors
of the Company. Notwithstanding the foregoing, no shares of Class B
Common Stock shall be issuable upon exercise of this Warrant in
accordance with the foregoing in the event that the FMV is less
than the Exercise Price.
(c) Partial Exercise under Sections l(a) and l(b) . If
any amount less than the remaining Warrant Shares is purchased or
redeemed pursuant to Section l(a)(l) or Section l(a)(2),
respectively, the Company shall, upon such exercise, execute and
deliver to the Holder hereof a new Warrant (dated the date hereof)
evidencing the number of Warrant Shares remaining and not yet so
purchased or redeemed. As soon as practicable after the exercise of
this Warrant and payment of the requisite Exercise Price or
redemption by net exercise price, the Company will cause to be
issued in the name of and delivered to the Holder hereof, or as
such Holder may direct, a certificate or certificates representing
the number of Warrant Shares purchased upon exercise.
2. Term . The purchase right represented
by this Warrant is exercisable, in whole or in part, at any time
and from time to time from the Date of Grant through the earlier of
(i) five (5) years after the Date of Grant or
(ii) three (3) years after the closing of the
Company’s initial public offering of its common stock ("IPO")
effected pursuant to a Registration Statement on Form S-l (or its
successor) filed under the Securities Act of 1933, as amended (the
"Act") (such date being referred to as the "Exercise Date"). Upon
request of the Company, the holder of this Warrant agrees that in
the event of a consolidation, merger or reorganization of the
Corporation with or into, or a sale of all or substantially all of
the Corporation’s assets, or substantially all of the
Corporation’s issued and outstanding share capital, to any
other corporation, or any other entity or person, other than a sale
of all or substantially all of the Corporation’s assets to or
a merger with a wholly-owned subsidiary of the Corporation, that
either (y) the holder of this Warrant will exercise the
purchase right under this Warrant (including, without limitation,
by way of net issuance as provided in Section l(b) and such
exercise will be deemed effective upon completion of such sale or
merger or (z) if the holder of this Warrant elects not to
exercise the Warrant, this Warrant will expire upon completion of
such sale or merger. The Company shall provide the Holder of this
Warrant not less than 20 days’ prior written notice of the
Company’s request that the holder exercise its purchase right
hereunder in accordance with the provisions of
Section 8.
3. Legend . The Company may require that any certificate
or certificates representing ownership in the Warrant Shares issued
hereunder contain on the face thereof a legend substantially as
follows:
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"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR APPLICABLE BLUE SKY LAWS, AND ARE SUBJECT TO CERTAIN
INVESTMENT REPRESENTATIONS. THESE SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE ACT AND SUCH APPLICABLE BLUE SKY LAWS, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
"THE VOTING, SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS
AND CONDITIONS OF A CERTAIN STOCKHOLDERS AGREEMENT BY AND BETWEEN
THE STOCKHOLDER, THE COMPANY AND CERTAIN HOLDERS OF SHARES OF THE
COMPANY’S CAPITAL STOCK. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY."
4. Stock Fully Paid: Reservation of the Warrant Shares .
The Company covenants and agrees that this Warrant has been
authorized by all necessary corporate action, that all of the
Warrant Shares that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be fully paid and
nonassessable and free from all liens. The Company covenants and
agrees that, during the period within which the rights represented
by this Warrant may be exercised, it shall reserve at least the
number of shares o
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