EXHIBIT 10.52
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES
AND ANY SECURITIES OR SHARES ISSUED HEREUNDER OR THEREUNDER MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT (INCLUDING WITHOUT LIMITATION RULE 144 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED). COPIES OF THE AGREEMENT COVERING THE PURCHASE
OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF
THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
No. W-01A Warrant to Purchase 190,678 of Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
OF
MTI TECHNOLOGY CORPORATION
VOID AFTER THE WARRANT EXPIRATION DATE
Warrant Issue Date: January 11, 2002
Warrant Expiration Date: the fifth anniversary of the Warrant Issue Date
This certifies that, for value received, SILICON VALLEY BANK, or
registered assigns (the "Holder"), is entitled, subject to the terms set forth
below, to purchase from MTI Technology Corporation (the "Company"), a
corporation organized under the laws of the State of Delaware, 190,678 shares of
the Common Stock of the Company, $.001 value per share (the "Common Stock"), as
constituted on the Warrant Issue Date, upon surrender hereof, at the principal
office of the Company referred to below, with the subscription form attached
hereto duly executed, and simultaneous payment therefor in lawful money of the
United States or otherwise as hereinafter provided, at the Exercise Price as set
forth in Section 2 below. The number, character and Exercise Price of such
shares of Common Stock are subject to adjustment as provided below. The term
"Warrant" as used herein shall include this Warrant, and any warrants delivered
in substitution or exchange therefor as provided herein.
1. Term of Warrant. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable, in whole or in part, beginning on the
Warrant Issue Date and ending at 5:00 p.m., Pacific standard time, on the
Warrant Expiration Date, and shall be void after the Warrant Expiration Date.
2. Exercise Price. The Exercise Price at which this Warrant may be
exercised shall be $2.36 per share of Common Stock (which is the closing price
of the Shares reported for October 29, 2001 - i.e., the date of the Loan and
Security Agreement between the Company and Holder), as adjusted from time to
time pursuant to Section 11 hereof.
3. Exercise of Warrant.
(a) The purchase rights represented by this Warrant are exercisable by
the Holder in whole or in part, but not for less than one thousand (1,000)
shares at any time (unless there are less than
SVB/MTI Technology/MTI Warrant-4
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one thousand (1,000) shares remaining to be exercised at such time), or from
time to time during the term hereof as described in Section 1 above, by the
surrender of this Warrant and the Notice of Exercise annexed hereto as Exhibit
"A" duly completed and executed on behalf of the Holder, 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 Holder at the address of the Holder appearing on the
books of the Company), upon payment by Holder to the Company of an amount equal
to the aggregate Exercise Price of the shares to be purchased, which amount
shall be payable by Holder pursuant to one of the following methods of payment
(such method to be at the Holder's election): (i) in cash or by check acceptable
to the Company; or (ii) by cancellation by the Holder of indebtedness of the
Company to the Holder; or (iii) by net issue exercise pursuant to Section 3(c);
or (iv) by a combination of (i), and/or (ii) and/or (iii) above in such a
combined amount equal to the aggregate Exercise Price of the shares to be
purchased.
(b) This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the shares of Common Stock
issuable upon such exercise shall be treated for all purposes as the holder of
record of such shares as of the close of business on such date. As promptly as
practicable on or after such date and in any event within ten (10) days
thereafter, the Company at its expense shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates for the
number of shares issuable upon such exercise. In the event that this Warrant is
exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised.
(c) Net Issue Exercise. In lieu of paying the aggregate Exercise Price
for the Common Stock by one of the payment methods specified in Section 3(a)
above, the Holder may elect to receive shares of Common Stock equal to the value
of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with the Notice of
Exercise indicating such election, in which event the Company shall issue to the
Holder a number of shares of the Company's Common Stock computed (as of the
trading day immediately prior to the date that Holder delivers its Notice of
Exercise to Company) using the following formula:
Y(A-B)
X = ------
A
Where X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock purchasable under this
Warrant or, if only a portion of this Warrant is being exercised,
the portion of the Warrant being canceled.
A = the fair market value of one share of the Company's Common Stock.
B = Exercise Price of one share of the Company's Common Stock.
For the purposes of the above calculation, the fair market value of the
Common Stock shall mean with respect to each share of Common Stock:
(i) the average of the closing bid and asked prices of the
Company's Common Stock quoted in the Over-The-Counter Market Summary or the
closing price quoted on the Nasdaq National Market or any exchange on which the
Common Stock is listed, whichever is applicable, as
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published in the Western Edition of The Wall Street Journal for the trading day
immediately prior to the date of determination of fair market value; or
(ii) if the Company's Common Stock is not traded
Over-The-Counter or on an exchange, fair market value of each share of the
Common Stock shall be determined in good faith by the Company's Board of
Directors. Receipt and acknowledgment of this Warrant by the Holder shall be
deemed to be an acknowledgment and acceptance of any such fair market value
determination by the Company's Board of Directors as the final and binding
determination of such value for purposes of this Section 3(c).
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
5. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor and amount.
6. Rights of Stockholders. Subject to Sections 9 and 11 of this Warrant,
the Holder shall not be entitled to vote or receive dividends or be deemed the
holder of Common Stock or any other securities of the Company that may at any
time be issuable on the exercise hereof for any purpose, nor shall anything
contained herein be construed to confer upon the Holder, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
otherwise until the Warrant shall have been exercised as provided herein.
7. Transfer of Warrant.
(a) The Company will maintain a register (the "Warrant
Register") containing the names and addresses of the Holder and its transferees.
Any Holder of this Warrant or any portion thereof may change his address as
shown on the Warrant Register by written notice to the Company requesting such
change. Any notice or written communication required or permitted to be given to
the Holder may be delivered or given by mail to such Holder as shown on the
Warrant Register and at the address shown on the Warrant Register. Until this
Warrant is transferred on the Warrant Register of the Company, the Company may
treat the Holder as shown on the Warrant Register as the absolute owner of this
Warrant for all purposes, notwithstanding any notice to the contrary.
(b) The Company may, by written notice to the Holder, appoint an
agent for the purpose of maintaining the Warrant Register referred to in Section
7(a) above, issuing the Common Stock or other securities then issuable upon the
exercise of this Warrant, exchanging this Warrant, replacing this Warrant, or
any or all of the foregoing. Thereafter, any such registration, issuance,
exchange, or replacement, as the case may be, shall be made at the office of
such agent.
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(c) This Warrant may not be transferred or assigned in whole or
in part without compliance with all applicable federal and state securities laws
by the transferor and the transferee (including the delivery of investment
representation letters in form and substance substantially similar to that set
forth in Section 7(e) below, and, if this Warrant is sold, transferred, pledged
or hypothecated in whole or in part, the delivery of legal opinions reasonably
satisfactory to the Company and its counsel, if such are reasonably requested by
the Company; provided, however, that the Company shall not require Holder to
provide an opinion of counsel if the transfer is to an affiliate of Holder or if
there is no material question as to the availability of current information as
referenced in Rule 144(c), Holder represents in reasonable detail that it has
complied with Rule 144(d) and (e), and the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of Holder's
notice of proposed sale.). Subject to the provisions of this Warrant with
respect to compliance with the Securities Act of 1933, as amended (the "Act"),
title to this Warrant may be transferred by endorsement (by Holder executing an
assignment form substantially similar to the form attached hereto as Exhibit "B"
(the "Assignment Form")) and delivery in the same manner as a negotiable
instrument transferable by endorsement and delivery.
(d) On surrender of this Warrant for exchange, properly endorsed
on the Assignment Form and subject to the provisions of this Warrant with
respect to compliance with the Act and with the limitations on assignments and
transfers and contained in this Section 7, the Company at its expense shall
issue to or on the order of the Holder a new warrant or warrants of like tenor,
in the name of the Holder or as the Holder (on payment by the Holder of any
applicable transfer taxes) may direct, for the number of shares issuable upon
exercise hereof.
(e) Compliance with securities laws; Holder representations:
(i) The Holder of this Warrant, by acceptance hereof,
acknowledges that, except for transfers to affiliates of Holder, this Warrant
and the shares of Common Stock to be issued upon exercise hereof, if the
issuance or resale thereof is unregistered under the Act, are being acquired
solely for the Holder's own account and not as a nominee for any other party,
and for investment. Upon exercise of this Warrant, the Holder shall, if
requested by the Company, confirm in writing, in form and substance
substantially similar to that set forth in this Section 7(e), that Holder has
such investment intent as is required under the Act.
(ii) The Holder represents and warrants that (i) it is
an "accredited investor" within the meaning of Rule 501 promulgated under the
Act, and (ii) that it has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of its
investment in the Warrant and the shares of Common Stock to be issued upon the
exercise of the Warrant and has the ability to bear the economic risks of its
investment in the Warrant and the shares of Common Stock to be issued upon the
exercise of the Warrant.
(iii) This Warrant and all shares of Common Stock issued
upon exercise hereof that are not registered under the Act shall be stamped or
imprinted with a legend in substantially the following form (in addition to any
legend required by state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER OR
THEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT (INCLUDING WITHOUT
LIMITATION RULE 144 PROMULGATED UNDER THE
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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED). COPIES OF THE AGREEMENT
COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER
OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
OF RECORD HEREOF TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY.
(iv) Upon receipt by Holder of the executed Warrant, Holder will
transfer all or part of this Warrant or the shares issuable upon exercise of
this Warrant to Silicon Valley Bancshares, Holder's parent company, subject to
the provisions of this Section 7. In addition, subject to the provisions of this
Section 7, Holder or Silicon Valley Bancshares (if applicable) may transfer all
or part of this Warrant or the shares issuable upon exercise of this Warrant to
The Silicon Valley Bank Foundation, or to any affiliate of Holder, or to any
other transferee, by giving the Company notice of the portion of the Warrant
being transferred with the name, address and taxpayer identification number of
the transferee and surrendering this Warrant to the Company for reissuance to
the transferee(s) (and Holder if applicable).
8. Reservation of Stock. The Company covenants that during the period
this Warrant is exercisable, the Company will reserve and keep available from
its authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of all Common Stock issuable upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Certificate of Incorporation (the "Certificate") to provide sufficient reserves
of shares of Common Stock issuable upon exercise of this Warrant. The Company
further covenants that all shares that may be issued upon the exercise of rights
represented by this Warrant and payment of the Exercise Price, all as set forth
herein, will be duly and validly issued and fully paid and nonassessable, not
subject to preemptive rights, free from all taxes, liens and charges in respect
of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein). The Company agrees 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 Common Stock upon the exercise of this
Warrant.
Before taking any action which would cause an adjustment reducing the
current Exercise Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of this Warrant, the Company shall take any
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of such Common Stock at
such adjusted Exercise Price.
Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in the
current Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
9. Notices.
(a) Whenever the Exercise Price or number of shares purchasable
hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall
issue a certificate signed by its Chief Financial Officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise
Price and number of shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Warrant.
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(b) In case:
(i) the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe
for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or
(ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of
the assets of the Company to another corporation, or
(iii) of any voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holder of record of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
fifteen (15) days prior to the date therein specified.
(c) All such notices, advices and communications shall be deemed
to have been received (i) in the case of personal delivery, on the date of such
delivery, and (ii) in the case of mailing, on the third business day following
the date of such mailing.
10. Amendments.
(a) Any term of this Warrant may be amended with the written
consent of the Company and the Holder. Any amendment effected in accordance with
this Section 10 shall be binding upon the Holder, each future holder of all
rights pursuant to this Warrant, and the Company.
(b) No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
11. Adjustments. The Exercise Price and the number of shares of Common
Stock purchasable hereunder are subject to adjustment from time to time as
follows:
(a) If at any time while this Warrant, or any portion thereof,
is outstanding and unexpired there shall be (i) a reorganization (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), (ii) a merger or consolidation of the Company with or into
another corporation in which the Company is not the surviving entity, or a
reverse triangular merger in which the Company is the surviving entity but the
shares of the Company's capital stock outstanding immediately prior to the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash, or otherwise, (iii) an offering of Common Stock or any
other
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securities pro rata among the shareholders, or (iv) a sale or transfer of the
Company's properties and assets as, or substantially as, an entirety to any
other person, then, as a part of such reorganization, merger, consolidation,
sale or transfer, lawful provision shall be made so that the Holder of this
Warrant shall thereafter be entitled to receive upon exercise of this Warrant,
during the period specified herein and upon payment of the Exercise Price then
in effect, the number of shares of stock or other securities or property of the
successor corporation resulting from such reorganization, merger, consolidation,
sale or transfer that a Holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been exercised
immediately before such reorganization, merger, consolidation, sale or transfer,
all subject to further adjustment as provided in this Section 11. The foregoing
provisions of this Section 11(a) shall similarly apply to successive
reorganizations, consolidations, mergers, sales and transfers and to the stock
or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. If the per-share consideration payable to the Holder
hereof for shares in connection with any such transaction is in a form other
than cash or marketable securities, then the value of such consideration shall
be determined in good faith by the independent members of the Company's Board of
Directors. In all events, appropriate adjustment (as determined in good faith by
the independent members of the Company's Board of Directors) shall be made in
the application of the provisions of this Warrant with respect to the rights and
interests of the Holder after the transaction, to the end that the provisions of
this Warrant shall be applicable after that event, as near as reasonably may be,
in relation to any shares or other property deliverable after that event upon
exercise of this Warrant.
(b) If the Company, at any time while this Warrant, or any
portion thereof, remains outstanding and unexpired, by reclassification of
securities or otherwise, shall change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Exercise Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 11.
(c) If the Company at any time while this Warrant, or any
portion thereof, remains outstanding and unexpired, shall split, subdivide or
combine the securities as to which purchase rights under this Warrant exist,
into a different number of securities of the same class, the Exercise Price for
such securities shall be proportionately decreased in the case of a split or
subdivision or proportionately increased in the case of a combination.
(d) If while this Warrant, or any portion thereof, remains
outstanding and unexpired, the holders of the securities as to which purchase
rights under this Warrant exist at the time shall have received, or, on or after
the record date fixed for the determination of eligible Stockholders, shall have
become entitled to receive, without payment therefor, other or additional stock
or other securities or property (other than cash) of the Company by way of
dividend, then and in each case, this Warrant shall represent the right to
acquire, in addition to the number of shares of the security receivable upon
exercise of this Warrant, and without payment of any additional consideration
therefor, the amount of such other or additional stock or other securities or
property (other than cash) of the Company that such holder would hold on the
date of such exercise had it been the holder of record of the security
receivable upon exercise of this Warrant on the date hereof and had thereafter,
during the period from the date hereof to and including the date of such
exercise, retained such shares and/or all other additional stock available by it
as aforesaid during such period, giving effect to all adjustments called for
during such period by the provisions of this Section 11.
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(e) Upon the occurrence of each adjustment or readjustment
pursuant to this Section 11, the Company at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms hereof and furnish
to each Holder of this Warrant a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon the written request, at any time,
of any such Holder, furnish or cause to be furnished to such Holder a like
certificate setting forth: (i) such adjustments and readjustments; (ii) the
Exercise Price at the time in effect; and (iii) the number of shares and the
amount, if any, of other property that at the time would be received upon the
exercise of the Warrant.
(f) The Company will not, by any voluntary action, avoid or seek
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Section 11 and in the taking
of all such actions as may be necessary or appropriate in order to protect the
rights of the Holders of this Warrant against impairment.
12. Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
13. Standard Provisions.
(a) Notice. Except as otherwise expressly provided herein, all
notices referred to in this Warrant will be in writing and will be delivered
personally or by registered or certified mail, return receipt requested, postage
prepaid and will be deemed to have been given when so personally delivered or on
the date of receipt appearing on the return receipt requested or, if refused, on
the date of refusal,
(i) To the Company: With a copy to:
MTI Technology Corporation Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxx Xx Xxxxx Xxxxxx 00000 XxxXxxxxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer Attention: Xxxxxx Xxxxxx Xxxx, Esq.
(ii) To the Holder:
SILICON VALLEY BANK
0000 Xxxxxx Xxxxx, XX 000
Xxxxx Xxxxx, XX 00000
Attention: Treasury Department
(b) Construction and Titles. This Warrant has been negotiated
between the parties hereto, and the language hereof shall not be construed for
or against any party. The titles and subtitles used in this Warrant are used for
convenience only and are not to be considered in construing or interpreting this
Warrant. A reference herein to any Section shall be deemed to include a
reference to every subsection thereof. All pronouns contained herein, and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as to the identity of the parties hereto may
require.
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(c) Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to the Holder under this Warrant, upon any
breach or default of the Company under this Warrant, shall impair any such
right, power or remedy of the Holder nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of Holder, or any waiver on the part of Holder, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Warrant or by law or otherwise afforded
to Holder shall be cumulative and not alternative.
(d) Successors and Assigns. The terms and conditions of this
Warrant shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties, except as expressly limited in this
Warrant. Nothing in this Warrant, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Warrant, except as expressly provided in this Warrant.
(e) Severability. If any provisions of this Warrant is held to
be unenforceable under applicable law, it shall be interpreted, to the extent
possible, to enhance its enforceability in order to achieve the intent of the
parties to this Warrant. But if no feasible construction would save the
provision, the parties agree to renegotiate such provision in good faith. In the
event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, its invalidity, illegality or unenforceability
shall not affect any other provision of this Warrant; rather this Warrant shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein; provided, however, no such severability shall be
effective if it materially changes the economic benefit of this Warrant to any
party. The invalidity of any provision of this Warrant as applied to certain
circumstances shall not affect the validity or enforceability of such provision
as applied to other circumstances or any other provisions of this Warrant.
(f) Governing Law. This Warrant and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California as applied to agreements among California residents entered into and
to be performed entirely in California.
(g) Attorneys' Fees. If any action at law or in equity
(including arbitration) is instituted to enforce or interpret the terms of the
Warrants, the prevailing party shall be entitled to reasonable attorney's fees,
costs and necessary disbursements in addition to any other relief to which such
party may be entitled.
14. Additional Provisions.
(a) Registration Rights. The Company agrees that the shares of
Common Stock issued or issuable upon exercise of this Warrant (the "Shares")
shall be subject to the registration rights set forth for the Shares in that
certain Amended and Restated Registration Rights Agreement, dated as of the
Warrant Issue Date, between the Company and Holder (as the same may be amended,
restated, supplemented, or otherwise modified from time to time).
(b) Automatic Conversion upon Expiration. In the event that,
upon the Warrant Expiration Date, the fair market value of one Share (or other
security issuable upon the exercise hereof)
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as determined in accordance with Section 3(c) above is greater than the Exercise
Price in effect on such date, then this Warrant shall automatically be deemed on
and as of such date to be converted pursuant to Section 3(c) above as to all
Shares (or such other securities) for which it shall not previously have been
exercised or converted, and the Company shall promptly deliver a certificate
representing the Shares (or such other securities) issued upon such conversion
to the Holder.
(c) Acquisition. (i) For the purpose of this Warrant,
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
(ii) If Holder so elects in its good faith business
judgment, then, upon the closing of any Acquisition, the successor or acquiring
entity shall assume the obligations of this Warrant, and this Warrant shall be
exercisable for the same securities, cash, and property as would be payable for
the shares issuable upon exercise of the unexercised portion of this Warrant as
if such shares were outstanding on the record date for the Acquisition and
subsequent closing, and the Initial Exercise Price and/or number of shares shall
be adjusted accordingly.
[The balance of this page is intentionally left blank;
signature page immediately follows.]
10
IN WITNESS WHEREOF, each of the Company and the Holder have caused this
Warrant to be executed and delivered by its respective officers thereunto duly
authorized as of the Warrant Issue Date.
MTI TECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President & CEO
By: /s/ Xxxx X. Xxxxx, XX
---------------------------------
Name: Xxxx X. Xxxxx, XX
Title: COO & Secretary
"HOLDER"
SILICON VALLEY BANK
By: /s/ Xxxxxxx X. X'Xxxxxxx
---------------------------------
Name: Xxxxxxx X. X'Xxxxxxx
Title: Vice President and
Regional Market Manager
signature page
EXHIBIT A
NOTICE OF EXERCISE
To: MTI Technology Corporation
(1) The undersigned hereby elects to purchase shares of Common Stock
of MTI Technology Corporation, pursuant to the terms of the attached
Warrant.
(2) The undersigned Holder elects to exercise the Warrant for such
shares of Common Stock in the following manner:
[ ] in cash or by the enclosed check in a form acceptable to the
Company, made payable to the Company in the amount of $________;
[ ] by cancellation of indebtedness of the Company in the amount
of $__________;
[ ] by net issue exercise pursuant to Section 3(c) of the Warrant;
or
[ ] by a combination of two or more of the foregoing as indicated
above.
(3) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that, except for transfers to affiliates of the
undersigned, the shares of Common Stock are being acquired solely
for the account of the undersigned and not as a nominee for any
other party, and for investment. The undersigned acknowledges that
any such shares of Common Stock may not be transferred or assigned
in whole or in part without compliance with all applicable federal
and state securities laws by the transferor and the transferee
(including without limitation the Securities Act of 1933, as amended
(the "Act")).
(4) In exercising this Warrant, the undersigned hereby represents and
warrants that (i) it is an "accredited investor" within the meaning
of Rule 501 promulgated under the Act, and (ii) that it has such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment in the
Warrant and the shares of Common Stock to be issued upon the
exercise of the Warrant and has the ability to bear the economic
risks of its investment in the Warrant and the shares of Common
Stock to be issued upon the exercise of the Warrant.
(5) 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)
---------------------------------
(Name)
(6) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other
name as is specified below:
---------------------------------
(Name)
---------------------------------
(Name)
Exhibit A
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply the
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
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(Please Print)
whose address is
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(Please Print)
Dated:_________________,________
Holder's Signature:
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Holder's Address:
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Exhibit B
