EXHIBIT E
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, TOGETHER WITH THE REGULATIONS PROMULGATED THEREUNDER (THE "SECURITIES
ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. THIS WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF
ANY U.S. PERSON UNLESS REGISTERED UNDER THE SECURITIES ACT, OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
STOCK PURCHASE WARRANT
To Purchase 100,000 Shares of Common Stock of
STORM TECHNOLOGY, INC.
THIS CERTIFIES that, for value received, the X. Xxxxxxx and X. Xxx
Xxxxxx Trust under Agreement dated June 21, 1994 (the "Holder"), is entitled,
upon the terms and subject to the conditions hereinafter set forth, at any time
on or after one day after the date hereof and on or prior to December 18, 2002
(the "Termination Date") but not thereafter, to subscribe for and purchase from
STORM TECHNOLOGY, INC., a Delaware corporation (the "Company"), One Hundred
Thousand (100,000) shares of Common Stock (the "Warrant Shares"). The purchase
price of one share of Common Stock (the "Exercise Price") under this Warrant
shall be One Dollar and Ninety Cents (US $1.90). The Exercise Price and the
number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. This Warrant is being issued in connection with
the Common Stock and Warrant Purchase Agreement dated on or about December 18,
1997, between the Company and Holder and is subject to its terms. In the event
of any conflict between the terms of this Warrant and the Agreement, the
Agreement shall control. Unless otherwise defined herein, all capitalized terms
shall have meanings as provided for in the Agreement.
1. Title of Warrant. Prior to the expiration hereof and subject to
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compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, pursuant to paragraph 9 hereof.
2. Authorization of Shares. The Company covenants that all shares of
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Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).
3. Exercise of Warrant.
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(a) Procedure for Exercise. Exercise of the purchase rights
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represented by this Warrant may be made at any time or times after the date
hereof, in whole or in part, before the close of business on the Termination
Date, or such earlier date on which this Warrant may terminate as provided in
paragraph 12 below, by the surrender of this Warrant and the Notice of Exercise
annexed hereto duly executed, at the office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to the
registered Holder hereof at the address of such Holder appearing on the books of
the Company) and upon payment of the Exercise Price of the shares thereby
purchased; whereupon the Holder of this Warrant shall be entitled to receive a
certificate for the number of shares of Common Stock so purchased. Certificates
for shares of Common Stock purchased hereunder shall be delivered to the holder
hereof within five (5) NASDAQ trading days after the date on which this Warrant
shall have been exercised as aforesaid. Payment of the Exercise Price of the
shares may be by certified check or cashier's check or by wire transfer to an
account designated by the Company in an amount equal to the Exercise Price
multiplied by the number of shares of Common Stock being purchased.
(b) Net Exercise Rights. Notwithstanding the payment provisions set
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forth in this Section 3, the holder may elect to receive the amount of Warrant
Shares equal to the value (as determined below) of this Warrant by surrender of
this Warrant at the principal office of the Company together with notice of such
election, in which event the Company shall issue to the holder the number of
shares of Common Stock determined by use of the following formula:
X = Y(A-B)
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A
Where: X = the number of shares of Common Stock to be issued to the
holder.
Y = the number of Warrant Shares subject to this Warrant.
A = the Fair Market Value (as defined below) of one (1) Warrant
Share.
B = the Exercise Price per share of the Warrant Shares.
For purposes of this Section 3, fair market value of a share as of a
particular date shall mean:
(i) If the Company's registration statement under the Act,
covering its initial underwritten public offering of stock has been declared
effective by the Securities and Exchange Commission, then the fair market value
of a share shall be the closing price (the last reported sales price, of not so
reported, the average of the last reported bid and asked prices) of the
Company's stock as of the last business day immediately prior to the exercise of
this Warrant.
(ii) If such a registration statement has not been declared
effective, or if it has been declared effective but the offering is not
consummated in accordance with the terms of
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the underwriting agreement between the Company and its underwriters relating to
such registration statement, then as determined in good faith by the Company's
Board of Directors upon a review of relevant factors.
4. No Fractional Shares or Scrip. No fractional shares or scrip
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representing fractional shares shall be issued upon the exercise of this
Warrant.
5. Charges, Taxes and Expenses. Issuance of certificates for shares
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of Common Stock upon the exercise of this Warrant shall be made without charge
to the Holder hereof for any issue or transfer tax or other incidental expense
in respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Holder of this Warrant or in such name or names as may be directed by the
Holder of this Warrant; provided, however, that in the event certificates for
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shares of Common Stock are to be issued in a name other than the name of the
Holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
hereof; and provided further, that upon any transfer involved in the issuance or
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delivery of any certificates for shares of Common Stock, the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Holder Representations. The Holder of the Warrant agrees and
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acknowledges that the Warrant is being purchased for the Holder's own account,
for investment purposes only, and not for the account of any other person, and
not with a view to distribution, assignment, pledge or resale to others or to
fractionalization in whole or in part. The Holder further represents, warrants
and agrees as follows: no other person has or will have a direct or indirect
beneficial interest in this Warrant and the Holder will not sell, hypothecate or
otherwise transfer the Warrant except in accordance with the Securities Act and
Regulation D thereunder and applicable state securities laws or unless, in the
opinion of counsel for the Holder acceptable to the Company, an exemption from
the registration requirements of the Securities Act and such laws is available.
7. Closing of Books. The Company will at no time close its
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shareholder books or records in any manner which interferes with the timely
exercise of this Warrant.
8. No Rights as Stockholder until Exercise. This Warrant does not
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entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company prior to the exercise thereof. If, however, at the time of the
surrender of this Warrant and purchase the Holder hereof shall be entitled to
exercise this Warrant, the shares so purchased shall be and be deemed to be
issued to such holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been exercised.
9. Assignment and Transfer of Warrant. This Warrant may be assigned
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by the surrender of this Warrant and the Assignment Form annexed hereto duly
executed at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder hereof
at the address of such holder appearing on the books of the
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Company); provided, however, that this Warrant may not be resold or otherwise
transferred except with the prior consent of the Company and (i) in a
transaction registered under the Securities Act, or (ii) in a transaction
pursuant to an exemption, if available, from such registration and whereby, if
requested by the Company, an opinion of counsel reasonably satisfactory to the
Company is obtained by the holder of this Warrant to the effect that the
transaction is so exempt.
10. Loss, Theft, Destruction or Mutilation of Warrant. The Company
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represents and warrants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any Warrant
or stock certificate, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and upon reimbursement to the Company of
all reasonable expenses incidental thereto, and upon surrender and cancellation
of such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of this Warrant or stock certificate.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day
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for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a legal
holiday.
12. Effect of Certain Events.
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(a) If at any time the Company proposes (i) to sell or otherwise
convey all or substantially all of its assets, or (ii) to effect a transaction
(by merger or otherwise) in which more than 50% of the voting power of the
Company is disposed of (collectively, a "Sale or Merger Transaction") in which
the consideration to be received by the Company or its stockholders consists
solely of cash, the Company shall give the Holder of this Warrant thirty (30)
days' notice of the proposed effective date of the transaction specifying that
the Warrant shall terminate if the Warrant has not been exercised by the
effective date of the transaction.
(b) In case the Company shall at any time effect a Sale or Merger
Transaction in which the consideration to be received by the Company or its
stockholders consists in part of consideration other than cash, the Holder of
this Warrant shall have the right thereafter to purchase, by exercise of this
Warrant and payment of the aggregate Exercise Price in effect immediately prior
to such action, the kind and amount of shares and other securities and property
which it would have owned or have been entitled to receive after the happening
of such transaction had this Warrant been exercised immediately prior thereto.
(c) "Piggy-Back" Registration. The Holder of this Warrant shall have
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the right to include all of the shares of Common Stock underlying this Warrant
(the "Registrable Securities") as part of any registration of securities filed
by the Company (other than in connection with a transaction contemplated by Rule
145(a) promulgated under the Securities Act or pursuant to Form S-8) and must be
notified in writing of such filing; provided, however, that the holder of this
Warrant agrees it shall not have any piggy-back registration rights pursuant to
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this Section 12(c) if the shares of Common Stock underlying this Warrant are
freely tradable in the United States pursuant to the provisions of Regulation X.
Xxxxxx shall have five (5) business days to notify the Company in writing as to
whether the Company is to include Holder or not include Holder as part of the
registration; provided, however, that if any registration pursuant to this
Section shall be underwritten, in whole or in part, the Company may require that
the Registrable Securities requested for inclusion pursuant to this Section be
included in the underwriting on the same terms and conditions as the securities
otherwise being sold through the underwriters. If in the good faith judgment of
the underwriter evidenced in writing of such offering only a limited number of
Registrable Securities should be included in such offering, or no such shares
should be included, the Holder, and all other selling stockholders, shall be
limited to registering such proportion of their respective shares as shall equal
the proportion that the number of shares of selling stockholders permitted to be
registered by the underwriter in such offering bears to the total number of all
shares then held by all selling stockholders desiring to participate in such
offering. Those Registrable Securities which are excluded from an underwritten
offering pursuant to the foregoing provisions of this Section (and all other
Registrable Securities held by he selling stockholders) shall be withheld from
the market by the Holders thereof for a period, not to exceed one hundred eighty
(180) days, which the underwriter may reasonably determine is necessary in order
to effect such underwritten offering. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 12(c)
prior to the effectiveness of such registration whether or not any Warrant
holder elected to include securities in such registration. All registration
expenses incurred by the Company in complying with this Section 12(c) shall be
paid by the Company, exclusive of underwriting discounts, commissions and legal
fees and expenses for counsel to the holders of the Warrants.
13. Adjustments of Exercise Price and Number of Warrant Shares. The
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number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following.
In case the Company shall (i) declare or pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, the number of Warrant Shares purchasable
upon exercise of this Warrant immediately prior thereto shall be adjusted so
that the holder of this Warrant shall be entitled to receive the kind and number
of Warrant Shares or other securities of the Company which he would have owned
or have been entitled to receive had such Warrant been exercised in advance
thereof. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
14. Voluntary Adjustment by the Company. The Company may at its
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discretion, at any time during the term of this Warrant, reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.
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15. Notice of Adjustment. Whenever the number of Warrant Shares or
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number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the Holder of this Warrant notice of such adjustment or adjustments setting
forth the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth computation by which such
adjustment was made. Such notice, in absence of manifest error, shall be
conclusive evidence of the correctness of such adjustment.
16. Authorized Shares. The Company covenants that during the period
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the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of Common
Stock upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of the
Company's Common Stock upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be necessary
to assure that such shares of Common Stock may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the NASDAQ (or on the principal national securities exchange on which the Common
Stock is admitted to trading or listed or, if not listed or admitted to trading
on NASDAQ or a national securities exchange, as reported by the National
Quotation Bureau, Inc. or other similar organization ("Other Exchanges")) for
the three (3) trading days immediately prior to the date such dividend is
payable.
17. Miscellaneous.
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(a) Issue Date; Jurisdiction. The provisions of this Warrant shall
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be construed and shall be given effect in all respects as if it had been issued
and delivered by the Company on the date hereof. This Warrant shall be binding
upon any successors or assigns of the Company. This Warrant shall constitute a
contract under the laws and jurisdictions of Delaware and for all purposes shall
be construed in accordance with and governed by the laws of said state without
regard to its conflict of law, principles or rules.
(b) Restrictions. The holder hereof acknowledges that the Common
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Stock acquired upon the exercise of this Warrant, if not registered, may have
restrictions upon its resale imposed by state and federal securities laws.
(c) Modification and Waiver. This Warrant and any provisions hereof
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may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.
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(d) Notices. Any notice, request or other document required or
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permitted to be given or delivered to the holders hereof of the Company shall be
delivered or shall be sent by certified or registered mail, postage prepaid, to
each such holder at its address as shown on the books of the Company or to the
Company at the address set forth in the Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated: December 18, 1997
STORM TECHNOLOGY, INC.
By: /s/ Xxxx XxXxxxxxx
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Title: Chief Financial Officer
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NOTICE OF EXERCISE
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To: STORM TECHNOLOGY, INC.
(1) The undersigned hereby elects to purchase ________ shares of
Common Stock of STORM TECHNOLOGY, INC. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price in full, together
with all applicable transfer taxes, if any.
(2) By signing below, the undersigned hereby certifies that the shares
of Common Stock to be issued upon exercise of this Warrant have been registered
under the Securities Act of 1933 (the "Act"), or that an exemption from
registration under the Securities Act is available for such shares of Common
Stock.
(3) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
_______________________________
(Name)
_______________________________
(Address)
_______________________________
Dated:
______________________________
Signature
NOTE: Signature must conform in all respects to xxxxxx's name as specified on
the face of the attached warrant.
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ASSIGNMENT FORM
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(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
________________________________________________________________
Dated: ______________, 199_
Holder's Signature: _____________________________
Holder's Address: _____________________________
_____________________________
Signature Guaranteed: _________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
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