EXHIBIT 10.8
THIS WARRANT AGREEMENT is made the ___ day of ________________
BETWEEN:
(1) VIRATA LIMITED (company number 2798338) the registered office of which is
situated at Xxxxx Xxxxxxxx Xxxxx, 0 Xxxxx Xxxxxxxx, Xxxxxxxxxx Xxxx,
Xxxxxxxxx XX0 0XX (the "Grantor"); and
(2) COMDISCO, INC., the principal office of which is situated at 0000 Xxxxx
Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, XXX (the "Grantee").
RECITALS
(A) The Grantor and the Grantee have entered into a Global Master Rental
Agreement dated _____________, ______ (the "Rental Facility Agreement")
pursuant to which the Grantor and its affiliates have been granted certain
facilities to lease from the Grantee and its affiliates certain equipment.
(B) By a resolution of the board of directors of the Grantor passed on
____________, _____ the Grantor resolved to issue warrants conferring the
right on holders thereof to subscribe for up to _____________ D Preference
Shares (as defined below) in the capital of the Grantor on the terms and
conditions contained in this agreement.
(C) The Grantor has agreed to grant to the Grantee, in consideration for the
entry by the Grantee into the Rental Facility Agreement, the right to
subscribe for D Preference Shares (as defined below) in the capital of the
Grantor on the terms and subject to the conditions herein contained.
AGREED TERMS
DEFINITIONS
In this agreement the following words and expressions shall unless the
context otherwise requires bear the following meanings:
"the ARTICLES" means the Articles of Association of the Grantor from time to
time;
"BUSINESS DAY" means any week day (Saturdays, Sundays and public holidays
excluded) upon which banks are open for business in the City of London;
"COMPANIES ACT" means the Companies Xxx 0000 as amended;
"CONSENTS" means the consents, waivers and resolutions obtained or to be
obtained by the Grantor pursuant to clause 5;
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"D PREFERENCE SHARES" means D Preference shares of 1 xxxxx each in the
capital of the Grantor having the rights and privileges attached thereto as
set out in the Articles;
"EFFECTIVE DATE OF ISSUE" means the date of allotment of D Preference Shares
in accordance with clause 4.2(a) following the exercise of any Warrant;
"the FINAL DATE" means the last date on which the Warrants can be exercised
in accordance with Clause 3;
"FINANCIAL SERVICES ACT" means the Financial Services Xxx 0000;
"HOLDERS" means the Grantee together with any other person who is registered
as the holder of a Warrant pursuant to the terms hereof from time to time,
and "Holder" shall mean any one of them;
"LISTING" means the inclusion of any part of the Grantor's loan or share
capital in the Official List or on the Alternative Investment Market of the
London Stock Exchange or on any recognised investment exchange (within the
meaning of the Financial Services Act) including any Overseas Investment
Exchange or in or on any exchange or market replacing the same;
"LISTING DATE" means the date of publication of listing particulars (as
defined in Section 144(2) of the Financial Services Act) or of a prospectus
(as that term is used in the Companies Act and the Public Offers of
Securities Regulations 1995) published in connection with the admission to
dealings on a recognised investment exchange (within the meaning of the
Financial Services Act) or of an equivalent public offering document
published in connection with the admission to dealings on any Overseas
Investment Exchange which, in any such case, is published in connection with
a Listing;
"LONDON STOCK EXCHANGE" means London Stock Exchange Limited;
"MEMORANDUM" means the Memorandum of Association of the Grantor from time to
time;
"1933 ACT" means the Securities Act of 1933 as amended having effect in the
United States of America;
"MERGER EVENT" has the meaning given thereto in clause 10.1(a);
"NOTICE OF EXERCISE" means a notice substantially in the form set out in the
Second Schedule hereto and delivered to the Grantor in accordance with
clause 4.1;
"ORDINARY SHARES" means ordinary shares in the capital of the Grantor having
the rights and privileges attached thereto as set out in the Articles;
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"OVERSEAS INVESTMENT EXCHANGE" means an investment exchange (or the
successor body to such exchange) listed in either Schedule 1 or Schedule 2
to the Financial Services Xxx 0000 (Investment Advertisements) (Exemptions)
Order 1995, or any statutory instrument substantially re-enacting the same;
"PERSON" means any body corporate, partnership, firm, trust, association or
other unincorporated body of persons;
"RECORD DATE" means, in respect of any rights attached, or benefits or
entitlements accruing, to any class of share or security in the capital of
the Grantor, the date by which holders of such shares or securities are
required to be registered in the books of the Grantor as such in order to
qualify for such rights, benefits or entitlements;
"REGISTER" means the register of Holders to be maintained by the Grantor
pursuant to clause 9;
"TRANSFEREE" has the meaning given thereto in the Transfer Notice;
"TRANSFER NOTICE" means a notice of transfer of Warrants in the form of the
third schedule served on the Grantor in accordance with clause 14;
"WARRANTS" means the rights created by this agreement entitling the Holder
to subscribe for D Preference Shares subject to the provisions of this
agreement;
"WARRANT CERTIFICATE" means a certificate representing the Warrant or
Warrants held by a Holder from time to time to be issued pursuant to the
terms of this agreement and to be in the form set out in the First Schedule
hereto;
"WARRANT EXERCISE DATE" means the date on which one or more Warrants are
exercised in accordance with clause 4;
"WARRANT EXERCISE PERIOD" means the period during which the Warrants may be
exercised as set out in clause 3; and
"WARRANT EXERCISE PRICE" means US$1.10 for each D Preference Share for which
the Holder subscribes under this agreement.
Save where the context otherwise requires, terms defined in the Articles
shall have the same meanings when used in this agreement;
references to clauses and Schedules are references to, respectively, clauses
of, and Schedules to, this agreement;
the expressions "subsidiary" and "holding company" shall have the meanings
ascribed to them in Section 736 of the Companies Act;
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the clause headings in this agreement are inserted for convenience only and
shall be ignored in construing this agreement;
save as expressly provided herein, references to any statute, order or
regulation shall be construed as references to such statute, order or
regulation as re-enacted, amended, modified, replaced or consolidated from
time to time; and
the singular includes the plural and vice versa.
AGREED TERMS
GRANT OF THE RIGHT TO SUBSCRIBE FOR D PREFERENCE SHARES
In consideration of the Grantee entering into the Rental Facility Agreement,
the Grantor hereby grants to the Grantee, upon the terms and subject to the
conditions contained in this agreement, the right to subscribe at any time
and from time to time during the Warrant Exercise Period for up to
_______________ D Preference Shares at the Warrant Exercise Price (subject
always to the provisions of clause 10).
The right to subscribe for Preference Shares hereby granted shall be
evidenced by Warrant Certificates and title to the Warrants represented
thereby and Warrants represented by all subsequently issued Warrant
Certificates shall be conclusively evidenced by entry of the Grantee or the
relevant Holder, as the case may be, as holder thereof in the Register in
accordance with clause 9. Such original Warrant Certificates shall be
issued and such entry with respect thereto effected forthwith upon the
execution and delivery of this agreement on behalf of the Grantee. All
Warrants shall be held subject to the provisions of the Memorandum and
Articles and on the terms of this agreement, which are binding upon the
Grantee and each of the Holders and all persons claiming through or under
them respectively.
The Grantor hereby covenants for the benefit of the Holders and each of them
duly to perform and observe the obligations herein contained and imposed
upon it, to the intent that this agreement shall enure for the benefit of
all Holders, each of whom may xxx for the performance or observance of the
provisions hereof so far as its holding of Warrants is concerned.
WARRANT EXERCISE PERIOD
Except as otherwise provided for herein, the period during which Warrants
may be exercised shall commence on the date of this agreement and shall
terminate at 5pm on:
the date falling ten (10) years thereafter; or
if within the period of five (5) years prior to the date referred to in sub-
clause 3(a) above the Grantor has obtained a Listing, the date falling five (5)
years from the Listing Date connected with such Listing.
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EXERCISE OF WARRANTS
Warrants may be exercised, in whole or in part, at any time, or from time to
time, on or prior to the Final Date by tendering to the Grantor at its
registered office:
a Notice of Exercise duly completed and executed by or on behalf of the
Holder concerned;
the Warrant Certificate relating to the Warrants being exercised; and
where applicable, a cash sum in respect of the Warrant Exercise Price.
Once lodged in the manner provided above, any such Notice of Exercise shall
be irrevocable, save with the consent of the Grantor.
D Preference Shares issued pursuant to the exercise of Warrants shall
be allotted subject to the provisions of the Articles and in compliance
with any applicable law, regulatory requirement, judgment, order or
decree, promptly and in any event by no later than 14 days after the
date of receipt of such Notice of Exercise, the relevant Warrant
Certificate, and (where applicable) a cash sum in respect of the
Warrant Exercise Price, or, 14 days after receipt of the valuation
referred to in clause 5.4, if later;
Promptly, and in no event later than 21 days, after the Effective Date
of Issue, the Grantor shall execute under its common seal (or otherwise
as a deed), in accordance with the Articles, and issue to the relevant
Holder a share certificate for the number of D Preference Shares
subscribed and shall at the same time, where all the Warrant rights
comprised in the Warrant Certificate delivered to the Grantor pursuant
to clause 4.1(b) have not been exercised in full, execute under its
common seal (or otherwise as a deed) and issue to such Holder a fresh
Warrant Certificate indicating the number of D Preference Shares in
respect of which the Holder is thereafter entitled to exercise such
Warrant;
Share certificates for the D Preference Shares shall be endorsed with
the warranty contained in the penultimate paragraph of the first page
of the Warrant Certificates;
Any Warrant Certificate tendered pursuant to Clause 4.1 will be
cancelled and destroyed by the Grantor.
The Warrant Exercise Price may be paid at the Holder's election either (i)
by cheque or banker's draft or wire transfer, or (ii) to the extent
permitted by law and providing that the current fair market value of one D
Preference Share to be issued on the exercise of a Warrant is not less than
$1.10 at the time of such exercise, by reducing the actual number of D
Preference Shares to be issued on the exercise of a Warrant by such number,
the then
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current fair market value of which is equal to the Warrant Exercise Price.
If the Holder selects in the Notice of Exercise to pay the Warrant Exercise
Price pursuant to method (ii) above the Grantor will issue D Preference
Shares in accordance with the following formula:
Formula: X = Y (A+B)
-------
A
Where X = the number of D Preference Shares to be issued to the Holder;
Y = the number of D Preference Shares the subject of the Notice of
Exercise;
A = the then current fair market value of one (1) D Preference
Share;
B = the Warrant Exercise Price in respect of one (1) D Preference
Share.
For the purpose of this agreement, the "current fair market value" of a D
Preference Share from time to time means:
if the Warrant Exercise Date falls on or within three Business Days
following a Listing of Ordinary Shares involving an offer of Ordinary
Shares to the public by placing or otherwise, the price at which
Ordinary Shares are offered to members of the public under the terms of
such Listing multiplied by the number of Ordinary Shares into which
each D Preference Share is convertible under the Articles at the time
of such exercise;
if the Warrant Exercise Date falls outside the period provided for
under (a) above and the Ordinary Shares are as a result of a Listing
then traded, quoted or admitted to dealings on an exchange or market,
then such current fair market value shall be deemed to be the average
(i.e. the arithmetical mean) of the closing prices relating to the
Ordinary Shares announced by such exchange or market over a twenty-one
(21) day period (or such lesser period during which the Ordinary Shares
have actually been so traded, quoted or admitted to dealings) ending
three days before the Warrant Exercise Date multiplied by the number of
Ordinary Shares into which each D Preference Share is convertible under
the Articles at the time of such exercise; or
if, at the time such current fair market value falls to be determined,
the Ordinary Shares are not as a result of a Listing traded, quoted, or
admitted to dealings on an exchange or market, such current fair market
value shall be the highest price per Ordinary Share on the Warrant
Exercise Date which could be obtained from a willing buyer in the open
market for Ordinary Shares (as determined in good faith by the
Grantor's auditors on such basis as they shall certify to be fair and
reasonable), multiplied by the number of Ordinary Shares into which
each D Preference Share is convertible at the time of such exercise.
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CONSENTS
The Grantor hereby warrants that it has obtained all necessary consents and
waivers from or resolutions of its bankers, shareholders or other persons
from whom consents, waivers or resolutions are required for the grant of
the Warrants herein contained, the subscription of D Preference Shares by
the Grantee, and the full implementation of this agreement in accordance
with its terms.
The Grantor undertakes that it shall use all reasonable commercial
endeavours throughout the Warrant Exercise Period to ensure the prompt
obtaining of any necessary consents or waivers from or resolutions of its
bankers, shareholders or other persons from whom consents, waivers or
resolutions are required for the exercise of the Warrants, the subscription
of D Preference Shares by the Holders, and the full implementation of this
agreement in accordance with its terms.
In particular, the Consents shall include such consents or resolutions as
are required to:
increase the authorised share capital of the Grantor to enable it to
issue up to the aggregate maximum of D Preference Shares referred to
in clause 2.1;
give general and unconditional authority to the directors of the
Grantor pursuant to Section 80 of the Companies Act to exercise all
powers of the Grantor to allot and issue the D Preference Shares to the
Holders;
give general and unconditional authority to the directors of the
Grantor pursuant to Section 95 of the Companies Act to allot and issue
the D Preference Shares to the Holders as if Section 89(1) of the
Companies Act did not apply to such allotment and issue;
fully and effectively waive all rights of pre-emption of any person
(whether such rights are contained in the Articles or otherwise) to
enable this agreement to become effective and to enable the D
Preference Shares to be allotted and issued to the Holders free of any
such rights; and
(e) attach to the D Preference Shares to be issued pursuant to the exercise
of Warrants at least the same rights and privileges attaching to the
existing issued D Preference Shares of 1 xxxxx each in the capital of
the Grantor as at the date of this agreement so that the D Preference
Shares to be issued rank pari passu in all respects with such existing
issued D Preference Shares.
If the Holder elects to pay the Warrant Exercise Price in accordance with
method (ii) described in clause 4.3, and if the Grantor is a public company
at the time of the relevant
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exercise of the Warrant, the Grantor shall, on such exercise, instruct its
auditors or other appropriate person to prepare a valuation in accordance
with Section 103 of the Companies Xxx 0000, as amended.
RESERVATION OF SHARES
During the Warrant Exercise Period the Grantor will keep available for issue
sufficient authorised and unissued D Preference Shares, free of pre-emptive,
option or other prior contractual rights, to satisfy in full all Warrants as
and when they may be exercised.
Where, at the time of issue of any D Preference Shares pursuant to the
exercise of any Warrant, the preference share capital of the Grantor is as a
result of a Listing traded, quoted or admitted to dealings on an exchange or
market, then the Grantor will (at no charge to the Holder) apply to the
relevant exchange or market, as the case may be, for permission to deal in,
or for the quotation of such shares or for permission for dealings therein,
as the case may be, on such exchange or market.
NO FRACTIONAL SHARES
No fractional shares or rights to shares shall be issued upon the exercise
of any Warrant. The number of D Preference Shares being issued shall be
rounded down to the nearest whole number, and the Grantor shall make a cash
payment to the Holder in lieu of the fractional share entitlement, such cash
payment to be calculated on the basis of the then current fair market value
of a D Preference Share (as estimated in good faith by the directors of the
Grantor if at the relevant time there has been no Listing of Ordinary Shares
or D Preference Shares).
NO RIGHTS AS SHAREHOLDER
Save as provided by this agreement, nothing herein contained shall entitle
any Holder to any voting rights or other rights as a shareholder of the
Grantor prior to the exercise of a Warrant.
REGISTER OF HOLDERS OF WARRANTS
The Grantor shall maintain a register showing the names and addresses of
Holders and enter therein details of the issue and any transfer or change of
ownership of Warrants. The Holders of any of the Warrants may inspect the
Register at reasonable times and on reasonable notice during normal office
hours.
The Grantor shall be entitled to treat the Holder of each Warrant as the
sole and absolute beneficial owner thereof. Accordingly, the Grantor shall
not be affected by notice (actual
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or constructive) of, and shall not, except as ordered by a court of
competent jurisdiction or as required by applicable law, be bound to
recognise, or record in the Register, any note or evidence of, any trust or
any other right, title, claim or interest in respect of a Warrant in favour,
or for the benefit, of any person other than the Holder.
ADJUSTMENT RIGHTS
The number of D Preference Shares that may be subscribed pursuant to the
exercise of any Warrant is subject to adjustment as follows:
RECONSTRUCTION AND TAKEOVER
If, while any Warrant remains exercisable, in whole or in part, there shall
be a reconstruction in respect of the Grantor's share capital (other than as
referred to in the following provisions of this clause 10), or the shares in
the Grantor shall be transferred to a company so that such company becomes
the holding company of the Grantor (hereinafter referred to as a "Merger
Event"), then, as a condition of and at the same time as such Merger Event,
the Grantor shall (subject to clause 10.1(g)) procure that the Holder of
each Warrant is granted by the reconstructed or transferee Person a
substituted warrant to subscribe for securities in the capital of such
Person of a value (having regard to the rights and privileges attaching to
such securities) equivalent to the value of the Warrants granted hereunder
immediately prior to the Merger Event (as certified in good faith by the
Grantor's auditors on such basis as they shall certify to be fair and
reasonable having regard to the terms upon which the holders of existing
issued D Preference Shares in the Grantor receive shares in such
reconstructed or transferee Person following such Merger Event). The
auditors' decision shall be final and binding and not subject to review
under paragraph (j) of this Clause 10.1. If however the auditors fail or
decline to act, the provisions of clause 10.1(j) shall take effect. The
Grantee hereby expressly agrees and acknowledges that the substitute
warrants may be in respect of only one class of share, namely ordinary
shares carrying the unrestricted right to vote at general meetings. The
Grantor shall so far as it is able procure that such substitute warrants
shall be granted by such Person so that the rights of the Holders thereof
(including adjustments of the Warrant Exercise Price and the number of
shares which may be subscribed) shall correspond with the rights of Holders
under this agreement. The Warrants granted hereunder shall cease to be
capable of being exercised immediately upon the grant of such substitute
Warrants. The board of directors of the Grantor shall in good faith
determine whether any adjustment to the provisions of this agreement is
necessary or appropriate following the Merger Event in order to preserve the
rights and entitlements of the Holders under this agreement.
RECLASSIFICATION OF SHARES
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If, while any Warrant remains exercisable, in whole or in part, the
Grantor at any time shall, by consolidation, reclassification, exchange
or subdivision or otherwise, reclassify its D Preference Share capital
into the same or a different number of securities of any other class or
classes (which the Grantor undertakes to do solely in compliance with,
and to the extent permitted by, the Articles), then each Warrant shall
thereafter represent the right to subscribe for such number and kind of
securities as would have been issuable as the result of such
consolidation, reclassification, exchange or subdivision with respect
to the D Preference Shares which would have been subscribed had such
Warrant been exercised immediately prior to the date of such
consolidation, reclassification, exchange, subdivision or other change.
SUBDIVISION OR CONSOLIDATION
If, while any Warrant remains exercisable, in whole or in part, the Grantor
at any time shall consolidate or sub-divide its D Preference Share capital,
the Warrant Exercise Price shall be proportionately decreased in the case of
a sub-division, or proportionately increased in the case of a consolidation
(as certified in good faith by the Grantor's auditors on such basis as they
shall certify to be fair and reasonable).
RIGHTS ISSUES AND RELATED OFFERS
If, while any Warrant remains exercisable, in whole or in part, the Grantor
at any time makes any offer or invitation (whether pursuant to the terms of
pre-emption rights or otherwise) to the holders of any of its D Preference
Share capital for subscription of any share or loan capital of the Grantor,
including an offer or invitation in relation to any rights issue, the
Grantor shall procure that at the same time as such offer or invitation is
made, a similar offer or invitation (including an offer or invitation in
relation to any rights issue) is made to Holders as if each Holder's rights
to subscribe for D Preference Shares pursuant to exercise of Warrants had
been exercised immediately prior to the Record Date applicable to such offer
or invitation.
WINDING-UP OF GRANTOR
If an order is made or an effective resolution is passed on or before the
Final Date for the voluntary winding-up of the Grantor (except for the
purpose of reconstruction in which case the provisions of clause 10.1(a)
shall apply) each Holder shall be entitled for the purpose of ascertaining
such Holder's rights in such winding-up to be treated as if such Holder had,
immediately before the date of the making of the order or the passing of the
resolution, exercised its rights to subscribe for the maximum number of D
Preference Shares pursuant to exercise of the Warrants and in that event
such Holder shall be entitled to receive out of the assets available in the
liquidation pari passu with the holders of the existing issued D Preference
Shares such a sum as such Holder would have received had such Holder been
the holder of the D Preference Shares to which such Holder would have become
entitled by virtue of such exercise, after deducting a sum equal to the sum
which would have been
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payable in respect of the relevant Warrant Exercise Price. Subject to this
clause 10.1(e), all Warrants shall lapse on liquidation of the Grantor.
SCHEMES OF ARRANGEMENT
The Grantor will procure that, while any Warrant remains exercisable, in
whole or in part, there shall be no compromise or scheme of arrangement
(within the meaning of Section 425 of the Companies Act) affecting the D
Preference Share capital of the Grantor unless either (i) the Holders shall
be granted substitute Warrants pursuant to clause 10.1(a) or (ii) the
Holders shall be treated as members of the Grantor to the extent of the
maximum number of D Preference Shares for which they shall be entitled to
subscribe pursuant to the exercise of Warrants and shall be a party to such
scheme. The decision as to which of the above alternatives will apply shall
be that of the Grantor.
TAKE-OVER BIDS
If, while any Warrant remains exercisable, in whole or in part, an
offer is made or proposed to be made to shareholders of the Grantor to
acquire the whole or any part of the issued share capital of the
Grantor and the Grantor becomes aware that, as a result of such offer,
the right to cast a majority of the votes which may ordinarily be cast
at a General Meeting of the Grantor may become vested in the offeror
the Grantor shall give notice thereof to the Holders as soon as
practicable and in any event within four Business Days of its becoming
so aware. For the avoidance of doubt, the publication of a scheme of
arrangement under the Companies Act providing for the acquisition by
any Person of the whole or any part of the share capital of the Grantor
and an agreement for the purchase of shares by private treaty shall be
deemed to be the making of an offer for these purposes. The Grantor
shall in any such case procure either (i) that the Holders shall be
granted substitute Warrants pursuant to clause 10.1(a) or (ii) that the
benefit of such an offer is extended to each of the Holders in respect
of such number of D Preference Shares as such Holder may specify (up to
its maximum entitlement to subscribe pursuant to the exercise of its
Warrant) subject only to payment of the Warrant Exercise Price. The
decision as to which of the above alternatives will apply shall be that
of the Grantor.
CAPITALISATION AND BONUS RIGHTS
If, while any Warrant remains exercisable, in whole or in part, the
Grantor at any time shall (i) capitalise any profits or reserves
(including share premium account and capital redemption reserve) or
(ii) make any issue of shares to its D Preference Shareholders by way
of rights or bonus, then the number of D Preference Shares referred to
in clause 2.1 shall be increased by a number of additional D Preference
Shares, such number to be calculated by dividing the aggregate number
of shares which would be issued to the Holders under (i) or (ii) of
this sub-clause (h) if the Holders had exercised their right to
subscribe for the maximum number of D Preference Shares on the Record
Date ("the Bonus Shares") by the amount credited as fully paid up on
each Bonus Share.
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NOTIFICATION
The Grantor undertakes that, without prejudice to its other obligations
to notify the Grantee pursuant to this agreement, it shall notify the
Holders by way of a copy of the notice of Annual or Extraordinary
General Meeting of the Company (at the same time as such notice is
issued to the members of the Company) of any proposed amendment or
modification to the Memorandum or the Articles.
RESOLUTION OF DISPUTES AS TO ENTITLEMENTS
If any question shall arise in regard to the number of D Preference
Shares that may be subscribed pursuant to the exercise of any Warrant,
following the coming into effect of any adjustment referred to in the
provisions of this clause 10, the same shall be referred for
determination either by some person, firm or company nominated jointly
for such purpose by the Grantor and the relevant Holder or, failing
agreement on such joint nomination, by the firm of chartered
accountants to be nominated at the request of the Grantor or the
relevant Holder by the President for the time being of the Institute of
Chartered Accountants in England and Wales and so that any person, firm
or company so nominated shall be deemed to be acting as an expert or
experts and not as an arbitrator or arbitrators and his or their
decision shall accordingly be conclusive and binding on all concerned.
NOTICE OF ADJUSTMENT
The Grantor shall send to Holders: (a) prior written notice of the
Record Date applicable to any dividend, distribution, issue or
subscription rights or the effective date of any such capitalisation
referred to above or the date set for determining rights to vote in
respect of any such Merger Event, liquidation or winding-up (as the
context requires); and (b) in the case of any such Merger Event,
liquidation or winding-up, the required notice, as prescribed by the
Articles, of the date when the same shall take place (and specifying
the date on which the holders of preference shares in the capital of
the Grantee shall be entitled to exchange their shares for securities
or other property deliverable upon such Merger Event, liquidation or
winding-up). In the case of a Listing, the Grantor shall give Holders
not less than 45 clear days' written notice prior to the Listing Date
applicable thereto. In addition, each such written notice to Holders
shall contain, in reasonable detail, (i) the event requiring the
adjustment, (ii) the amount of the adjustment, (iii) the method by
which such adjustment was calculated, and (iv) the number of additional
D Preference Shares (or the number and class of the securities for
which the Warrants will represent the right to subscribe pursuant to
this clause 10 following the relevant adjustment) to which such
Holder's Warrant enables the Holder to subscribe after giving effect to
such adjustment. For the avoidance of doubt, the Grantor shall not
require Holders' consent in any of the events detailed above requiring
prior written notice.
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REPLACEMENT WARRANT CERTIFICATES
The Grantor shall, forthwith upon any adjustment as is referred to above
becoming effective, and at no charge to each Holder:
issue to such Holder a replacement Warrant Certificate, executed under the
Grantor's common seal (or otherwise executed as a deed), showing the Warrant
Exercise Price and number of D Preference Shares (or the securities for
which the Warrants represent the right to subscribe pursuant to this clause
10 following such adjustment) that may be subscribed pursuant to exercise of
such Warrant following such adjustment becoming effective, against either
(i) the surrender of the existing Warrant Certificate, or (ii) an indemnity
from the Holder in a form reasonably satisfactory to the Grantor where the
existing Warrant Certificate has been lost, stolen, defaced, mutilated or
destroyed; and
upon such issue, procure that an appropriate record thereof is made in the
Register.
Any Warrant Certificate surrendered pursuant to Clause 10.2(a) shall be
cancelled and destroyed by the Grantor.
HOLDERS' UNDERTAKINGS
Each Holder hereby undertakes and covenants to and in favour of the Grantor:
not to create or permit to subsist any mortgage, charge, assignation by way
of security or other interest, agreement or arrangement having the effect
of conferring security on the whole or any part of the Warrants;
not to make any disposition of all or any portion of the D Preference Shares
in the United States or to a United States person unless and until:
there is then in effect a registration statement under the 1933 Act covering
such proposed disposition and such disposition is made in accordance with
such registration statement and all applicable state securities laws; or
(a) such Holder shall have notified the Grantor of the proposed disposition
and shall have furnished the Grantor with a statement of the circumstances
surrounding the proposed disposition; and (b) if reasonably requested by the
Grantor, such Holder shall have furnished the Grantor with an opinion of
counsel (which counsel shall be external to the Holder) addressed to the
Grantor and in a form reasonably acceptable to the Grantor, that such
disposition will not require registration of such securities under the 1933
Act and that all requisite action has been taken under any applicable
securities laws in connection with such disposition; and (c) if reasonably
requested by the Grantor, such Holder shall have
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furnished the Grantor with an undertaking that any requisite action required
in the future under any applicable securities laws will be taken in a timely
manner.
Notwithstanding the provisions of paragraphs (b)(i) and (ii) above, no such
registration statement or opinion of counsel shall be necessary for a
transfer by any Holder pursuant to Rule 144A or Rule 144(k) promulgated
under the 1933 Act or a transfer by a Holder to a subsidiary or affiliate of
such Holder, if the transferee agrees in writing to be subject to the terms
hereof to the same extent as if such transferee were an original Holder
hereunder, and if such transfer is not in violation of any federal or state
securities laws.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GRANTOR
The Grantor hereby represents, warrants and covenants in favour of the
Grantee and each of the Holders as follows:
the Grantor is and shall (until it is dissolved) remain a corporation
duly incorporated and validly existing under the laws of England and
Wales and has all requisite corporate power and authority to carry on
its business as now conducted and as presently proposed to be
conducted;
the D Preference Shares to be issued upon valid exercise of Warrants,
when issued, will be validly issued, fully paid, not subject to any
call for the payment of further capital, free of any taxes, liens,
charges or encumbrances of any nature whatsoever and, based in part
upon the representations of the Grantee contained in this agreement,
will be issued in compliance with applicable law, including without
limitation the Companies Act. The Ordinary Shares into which the D
Preference Shares may be converted in accordance with the terms of the
Articles shall, upon such conversion, be duly and validly issued, fully
paid and not subject to any call for the payment of further capital and
issued in compliance with applicable laws as aforesaid;
the existing issued shares in the capital of the Grantor were duly and
validly authorised allotted and issued, fully paid, are not subject to
any call for the payment of further capital and were issued in
compliance with applicable law, including without limitation the
Companies Act and all US federal and state securities laws applicable
at the relevant time to the Grantor;
the Grantor has made available to the Grantee on the date of this
agreement true, correct and complete copies of the Memorandum and
Articles, and the Grantor shall supply to each Holder, within fourteen
days of the relevant resolution being passed, a copy of any resolution
amending either the Memorandum or the Articles;
the issue of share certificates for D Preference Shares upon exercise
of Warrants shall be made without charge to the Holder for any cost
incurred by the Grantor in connection with such exercise and the
related issue of such D Preference Shares;
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the execution and delivery by the Grantor of this agreement and the
performance of all its obligations hereunder, including (but not
limited to) the issue of the Warrants, have been duly authorised by all
necessary action on the part of the Grantor and the entry by the
Grantor into the Rental Facility Agreement and this agreement does not
conflict with, or contravene any provision of the Memorandum or the
Articles and does not contravene any United Kingdom law or governmental
rule, regulation or order applicable to it, does not and will not
contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other instrument to which it is a
party or by which it or any of its assets is bound, and the Warrants
and this agreement constitute the legal and valid obligations of the
Grantor, enforceable against it in accordance with their respective
terms;
no consent or approval of, giving of notice to, registration with, or
taking of any other action in respect of any United Kingdom
governmental authority or agency is required with respect to the
execution, delivery and performance by the Grantor of its obligations
under the Warrants or this agreement, except for the filing of
documents with the Companies' Registry for England and Wales. Any such
filings shall be effected promptly and in any event within the period
permitted by Statute;
the Grantor is not, pursuant to the terms of any agreement, under any
obligation to (i) secure any Listing in respect of, or (ii) make any
offer to the public in respect of, any of its issued loan or share
capital.
In the event of any breach of any of the representations, warranties and
covenants set out in clause 12.1, the Grantor shall have no liability in
respect of such breach unless written notice of a claim in relation to such
breach is given by the relevant Holder no later than twelve months following
the date that such Holder became aware, or ought reasonably to have become
aware, of such breach.
GRANTEE'S UNDERTAKINGS
The Grantee hereby acknowledges that, in reliance upon the
representations and warranties of the Grantor set forth herein, the
Warrants are, and the D Preference Shares shall be, issued without
registration under the 1933 Act or any state securities laws and
consequently none of the Warrants or the D Preference Shares
(collectively, the "Securities") may be sold, transferred or otherwise
disposed of without registration under the 1933 Act and any applicable
state securities laws or an exemption therefrom.
The Grantee hereby represents, warrants and covenants in favour of the
Grantor:
-15-
that the Securities are or will be acquired for investment and not
with a view to the sale or distribution of any part thereof, and
the Grantee has no present intention of selling or engaging in any
public distribution of the same;
that the Grantee has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic
risks of its investment;
that the Grantee understands that if the Grantee does not register
with the Securities and Exchange Commission pursuant to Section 12
of the 1933 Act, or file reports pursuant to Section 15(d) of the
Securities Exchange Act of 1934, or if a registration statement
covering the securities under the 1933 Act is not in effect when
it desires to sell (i) the rights to purchase D Preference Shares
pursuant to this Warrant Agreement, or (ii) the D Preference
Shares issuable upon exercise of the right to purchase, it may be
required to hold such securities for an indefinite period. The
Grantee also understands that any sale of the Securities which
might be made by it in reliance upon Rule 144 under the 1933 Act
may be made only in accordance with the terms and conditions of
that Rule;
that the Grantee is an "accredited investor" within the meaning of
the Securities and Exchange Rule 501 of Regulation D, as presently
in effect.
TRANSFERS
Subject to clause 11, every Holder shall be entitled to transfer the
Warrants held by him or any part thereof provided that in no event shall the
aggregate number of transfers of Warrants by all Holders exceed three (3),
and provided that the Holder shall inform the Grantor, at least ten (10)
days prior to any proposed transfer, of the identity of the proposed
transferee, and the Holder will not transfer the Warrants or any interest
therein to any party determined by the board of directors of the Grantor, in
good faith, and so communicated to the Holder prior to the expiration of
such ten (10) day period, to be a competitor of the Grantor. There shall not
be included in any transfer any warrants other than the Warrants constituted
by this agreement. Each transfer shall be recorded upon service on the
Grantor of a Transfer Notice. When a Holder transfers part only of the
Warrants comprised in a certificate the old certificate shall be cancelled
and a new certificate for the balance of such Warrants issued by the Grantor
without charge.
NOTICES
Any notice or other written communication given under or in connection with
this agreement may be delivered personally or sent by first class post
(airmail if overseas) or by telex or facsimile.
-16-
The address for service of any party shall be its registered office marked
for the attention of the Managing Director or, if any other address for
service has previously been notified to the server, to the address so
notified.
Any such notice or other written communication shall be deemed to have been
served:
if delivered personally, at the time of delivery;
if posted, at the expiry of two Business Days or in the case of airmail
four Business days after it was posted;
if sent by telex or facsimile message, at the time of transmission (if
sent during normal business hours, that is 9.30 to 17.30 local time) in
the place to which it was sent or (if not sent during such normal
business hours) at the beginning of the next Business Day in the place
to which it was sent.
In proving such service it shall be sufficient to prove that personal
delivery was made, or that such notice or other written communication was
properly addressed stamped and posted or in the case of a telex that the
intended recipient's answerback code is shown on the copy retained by the
sender at the beginning and end of the message or in the case of a facsimile
message that an activity or other report from the sender's facsimile machine
can be produced in respect of the notice or other written communication
showing the recipient's facsimile number and the number of pages
transmitted.
MISCELLANEOUS
This agreement and the Warrants shall be governed by, and construed in all
respects in accordance with, the laws of England and Wales. Each of the
parties agrees that the courts of England shall have jurisdiction to hear
and settle any disputes or proceedings arising out of this agreement (other
than any dispute arising under Clause 10.1, in which event the provisions of
Clause 10.1(j) shall apply).
In the event of any default hereunder, the non-defaulting party may proceed
to protect and enforce its rights by action at law, including but not
limited to an action for damages as a result of any such default, and/or an
action for specific performance for any default where the non-defaulting
party will not have an adequate remedy at law and where damages will not be
readily ascertainable.
The Grantor will not recommend the amendment of the Memorandum or Articles
in any manner which would have the effect of avoiding the observance or
performance of any of the terms of this agreement or the Warrants, or avoid
or seek to avoid the observance or performance of any of the terms of this
agreement or the Warrants by any other means, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate in order to protect the
rights of the Grantee and/or any Holder under this agreement.
-17-
The representations, warranties, covenants and conditions of the respective
parties contained herein or made or deemed made pursuant to this agreement
shall survive the execution and delivery of this agreement.
In the event that any one or more of the provisions of this agreement shall
for any reason be held invalid, illegal or unenforceable, the remaining
provisions of this agreement shall remain in full force and effect, and the
invalid, illegal or unenforceable provision shall be replaced by a valid,
legal and enforceable provision, which comes closest to the intention of the
parties underlying the invalid, illegal or unenforceable provision.
Any provision of this agreement may be amended by a written instrument,
signed by each Holder and by the Grantor.
IN WITNESS whereof these presents are executed as follows:
EXECUTED and DELIVERED )
as a deed by VIRATA LIMITED )
)
acting by [ ] )
and [ ] )
Director
Director/Secretary
SIGNED by )
on behalf of COMDISCO, INC. )
in the presence of: )
-18-
FIRST SCHEDULE
--------------
Form of Warrant Certificate (D Preference Shares)
-------------------------------------------------
VIRATA LIMITED
---------------
(Registered No. 2798338)
("the Company")
(Incorporated under the Companies Act 1985)
WARRANT TO SUBSCRIBE FOR D PREFERENCE SHARES OF 1 XXXXX EACH
Certificate No: Date of Issue: ____________, _______
THIS IS TO CERTIFY that _______________________ of ____________________________
("the Holder") is entitled to subscribe for up to [number in words] "D"
Preference Shares of 1 xxxxx each in the capital of the Company pursuant to this
Warrant on the terms and subject to the conditions set forth in the Warrant
Agreement dated ____________, ______between the Company and Comdisco, Inc. ("the
Warrant Agreement") and pursuant to a Resolution of the Board of Directors of
the Company dated ____________, ______.
The Holder is deemed to have notice of, and to be bound by, the terms set forth
in the Warrant Agreement and shall hold this Warrant subject to the Memorandum
and Articles of Association of the Company.
US LAW: The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended or any state securities laws. They
may not be sold, offered for sale, pledged or hypothecated in the United States
or to any United States person if such transfer would violate any state
securities law or in the absence of a registration statement in effect with
respect to the securities under such Act or an opinion of Counsel that such
registration is not required, unless sold pursuant to Rule 144(k) of Rule 144A
of such Act.
The securities represented by this certificate are subject to the provisions of
the Warrant Agreement, a copy of which is on file at the registered office of
the Company.
Executed as a deed and delivered as a deed by Virata Limited this _________ day
of ____________ _______.
-19-
EXECUTED as a deed and
DELIVERED as a deed by
VIRATA LIMITED )
)
acting by )
)
Director
Director/Secretary
- - - - - - - - - - - - - - - - - - - - - - - -
[ON THE REVERSE]
-20-
IMPORTANT NOTICE
----------------
1. This Warrant shall be exercisable in accordance with Clause 4 of the Warrant
Agreement by completion of the Notice of Exercise in the form set out in the
second schedule to the Warrant Agreement and lodgement of such Notice of
Exercise and this Warrant at the then registered office of the Company,
together with the appropriate payment (if any) in respect of the relevant
Warrant Exercise Price. AT 5.00 P.M. (LONDON TIME) ON THE FINAL DATE (AS
DEFINED IN THE WARRANT AGREEMENT), THIS WARRANT WILL CEASE TO HAVE ANY VALUE
OR EFFECT, AND SHALL THEREAFTER BECOME VOID.
2. No transfer of this Warrant (or part thereof) will be registered unless it
is effected in accordance with the provisions of the Warrant Agreement and
those provisions (if any) of the Articles of Association of the Company as
are in force from time to time and expressed to be applicable to the
Warrants.
3. The Holder of this Warrant will be entitled severally to enforce the
covenants and obligations on the part of the Company contained in the
Warrant Agreement without the need to join the original allottee or any
intervening or other Holder in the proceedings for such enforcement.
4. This Warrant shall (subject as provided in the Warrant Agreement) be
divisible and transferable, and new certificates in respect of Warrants
shall be issued in respect of the right to subscribe for any whole number of
D Preference Shares. New certificates in respect of Warrants shall be
issued following any adjustment of the entitlement of the Holder to
subscribe for D Preference Shares pursuant to Clause 10 of the Warrant
Agreement.
5. Terms used herein and not otherwise herein defined shall have the same
meanings as are respectively ascribed thereto in the Warrant Agreement.
-21-
SECOND SCHEDULE
---------------
Notice of Exercise (D Preference Shares)
----------------------------------------
THIS NOTICE IS IRREVOCABLE EXCEPT WITH THE
CONSENT OF THE DIRECTORS OF THE COMPANY
Date:
To: The Directors
Virata Limited
("the Company")
1. I/We hereby exercise my/our entitlement evidenced by the Warrant Certificate
attached hereto to subscribe for the number of D Preference Shares of 1
xxxxx each in the capital of the Company for which I/we [am] [are] entitled.
[I/we elect to pay the Warrant Exercise Price in accordance with method (i)
in clause 4.3 and attach a cheque for (Pounds)___________, in payment of the
applicable Warrant Exercise Price, as required pursuant to Clause 4 of the
Warrant Agreement dated ____________, _____ between the Company as Grantor
and Comdisco, Inc. as Grantee ("the Warrant Agreement")].[I/we elect to pay
the Warrant Exercise Price in accordance with method (ii) in clause 4.3 and
accordingly agree to forego a certain number of the shares to which I/we
have rights under the Warrant Certificate, such number to be calculated in
accordance with clause 4.3].
2. I/We hereby request that duly sealed Share Certificates for such D
Preference Shares be issued to me/us and sent by post at my/our risk to
my/our address being.
3. I/We hereby agree that such D Preference Shares shall be accepted subject to
the Memorandum and Articles of Association of the Company.
4. I/We hereby warrant and undertake to the Company that this Warrant is not
charged or encumbered or subject to any other lien or security interest.
SIGNED........................................
FULL NAME.....................................
ADDRESS.......................................
-22-
THIRD SCHEDULE
--------------
NOTICE OF TRANSFER OF WARRANTS (D PREFERENCE SHARES)
----------------------------------------------------
THIS NOTICE IS IRREVOCABLE EXCEPT WITH THE
CONSENT OF THE DIRECTORS OF THE COMPANY
Date:
To: The Directors
Virata Limited
("the Company")
By this notice ("xxx Xxxxxx"), X/Xx ________________________ ("the Transferor")
and I/We _________________________________ ("the Transferee") hereby give you
notice of the proposed transfer of Warrants to subscribe for D Preference Shares
of each in the capital of the Company pursuant to the Warrant Agreement dated
_________, _____ between the Company as Grantor and Comdisco, Inc. as Grantee
("the Warrant Agreement").
For this purpose, we attach the Warrant Certificate issued on _________, ______
to the Transferor (Certificate No. ) entitling the Transferor to
subscribe up to D Preference Shares aforesaid.
Further, in consideration of the covenants on the part of the Company contained
in the Warrant Agreement, the Transferee hereby (i) confirms to the Company that
it has received an executed copy of the Warrant Agreement, and understands its
contents, (ii) undertakes to each of the Transferor and the Company on the date
of this Notice to accept and assume and be bound by in all respects the terms
of the Warrant Agreement as if originally named therein as the Grantee and so
that where this Notice relates to a transfer of part of the Transferor's
entitlement to subscribe D Preference Shares pursuant to the exercise of
Warrants, such terms shall be so accepted and assumed by the Transferee
severally with the Transferor, mutatis mutandis.
The Company is hereby requested to accept this Notice and to effect the transfer
of Warrants above referred to in the Register pursuant to the Warrant Agreement.
-23-
[A] Warrant Certificate[s] should be despatched, at the risk of the Transferee
[and the Transferor]/1/ as follows:
RIGHTS TO SUBSCRIBE ADDRESS
------------------- -------
D PREFERENCE SHARES (ATTENTION)
------------------- -----------
Transferee:
[Transferor]/1/:
Yours faithfully,
for and on behalf offor and on behalf of
the Transfereethe Transferor
DATED
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-24-
