EXHIBIT 4.1
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED PURSUANT TO THE ACT OR AN
OPINION OF LEGAL COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY,
IS OBTAINED STATING THAT AN EXEMPTION FROM REGISTRATION UNDER THE
ACT IS AVAILABLE. THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN.
DATED: January 26, 1999 NO. __
FORM OF
WARRANT
nSTOR TECHNOLOGIES, INC.
Warrant to Purchase _______ Shares
of Common Stock, par value $.05 per share
VOID AFTER 5:00 P.M., EASTERN STANDARD TIME
ON JANUARY 25, 2002
The Company (as hereafter defined) has issued to Holder (as
hereafter defined) that certain Promissory Note dated January 26,
1999, in the principal amount of $_______ (the "Note"). In partial
consideration of Holder's agreement to deliver the proceeds of the
loan to the Company, the Company desires to issue this Warrant (as
hereafter defined) in accordance with the terms and conditions set
forth herein.
This certifies that, for value received, _____________________ or
registered assigns (collectively with ___________, the "Holder"),
is entitled to purchase from nStor Technologies, Inc., a Delaware
corporation (the "Company"), Two Hundred Thousand (200,000) fully
paid and nonassessable shares (the "Shares") of the Common Stock,
par value $.05 per share, of the Company ("Common Stock") at a
price of $3.00 per Share (the "Exercise Price") at any time from
and after January 26, 1999 to and including 5:00 p.m. Eastern
Standard Time on January 25, 2002 (the "Exercise Period"), subject
to the terms, conditions and adjustments set forth in this Warrant
(the "Warrant").
1. Exercise of Warrants. This Warrant may be exercised in whole
or in part by the Holder during the Exercise Period upon
presentation and surrender hereof, with the attached Purchase Form
duly executed, at the office of the Company located at 000 Xxxxxxx
Xxxxxxxxx, Xxxx Xxxx Xxxxx, XX 00000, accompanied by full payment
of the Exercise Price multiplied by the number of Shares of the
Company being purchased (the "Purchase Price"), whereupon the
Company shall cause the appropriate number of Shares to be issued
and shall deliver to the Holder, as promptly as practicable, a
certificate representing the Shares being purchased. This Warrant
may be exercised for not less than 1,000 Shares and in additional
increments of 1,000 Shares at any time and from time to time during
the Exercise Period. Upon each partial exercise hereof, a new
Warrant evidencing the remainder of the Shares will be issued to
the Holder, at the Company's expense, as soon as reasonably
practicable, at the same Exercise Price, for the same Exercise
Period, and otherwise of like tenor as the Warrant partially
exercised. The Purchase Price shall be payable by delivery of a
certified or bank cashier's check payable to the Company, or by
wire transfer of immediately available funds to an account
designated in writing by the Company, in the amount of the Purchase
Price. The Holder shall be deemed for all purposes to have become
the holder of record of Shares so purchased upon exercise of this
Warrant as of the close of business on the date as of which this
Warrant, together with a duly executed Purchase Form, was delivered
to the Company and payment of the Purchase Price was made,
regardless of the date of delivery of any certificate representing
the Shares so purchased, except that if the Company were subject to
any legal requirements prohibiting it from issuing shares of Common
Stock on such date, the Holder shall be deemed to have become the
record holder of such Shares on the next succeeding date as of
which the Company ceased to be so prohibited.
2. Exchange; Restrictions on Transfer or Assignment. This
Warrant is exchangeable, without expense, at the option of the
Holder, upon surrender hereof to the Company for other Warrants of
like tenor of different denominations entitling the Holder to
purchase in the aggregate the same number of Shares purchasable
hereunder. This Warrant and the Holder's rights hereunder may not
be transferred, assigned or subjected to a pledge or security
interest, except that the Holder may transfer this Warrant in whole
or in part (in minimum increments of 1,000 Shares) to a corporation
controlled by or under common control with the Holder, by surrender
of this Warrant to the Company at its principal office with the
assignment form attached hereto duly completed and executed (with
signature guaranteed), whereupon the Company, if it determines that
the proposed assignment is permitted pursuant to the provisions
hereof, shall register the assignment of this Warrant in accordance
with the information contained in the assignment instrument and
shall, without charge, execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees named in such
assignment instrument (and, if applicable, a new Warrant in the
name of the Holder evidencing any remaining portion of the Warrant
not theretofore exercised, transferred or assigned) and this
Warrant shall promptly be cancelled. Conditions to the transfer of
this Warrant or any portion thereof shall be that (x) Holder
deliver to the Company an opinion of counsel, reasonably
satisfactory in form and substance to the Company's counsel, to the
effect that the proposed transfer will not be in violation of the
Securities Act of 1933, as amended (the "Act") or of any applicable
state law and that (y) the proposed transferee deliver to the
Company his or its written agreement to accept and be bound by all
of the terms and conditions of this Warrant. The term "Warrant" as
used herein includes any Warrants into which this Warrant may be
divided or exchanged.
3. Rights and Obligations of Warrant Holders. This Warrant does
not confer upon the Holder any rights as a shareholder of the
Company, either at law or in equity. The rights of the Holder are
limited to those expressed herein and the Holder, by acceptance
hereof, consents to and agrees to be bound by and to comply with
all the provisions of this Warrant. Each Holder, by acceptance of
this Warrant, agrees that the Company and its transfer agent, if
any, may, prior to any presentation of this Warrant for
registration of transfer, deem and treat the person in whose name
this Warrant is registered as the absolute, true and lawful owner
of this Warrant for all purposes whatsoever and neither the Company
nor any transfer agent shall be affected by any notice to the
contrary.
4. Covenants and Warranties of the Company Stock. The Company
covenants and agrees that (i) all Shares which may be issued and
delivered upon exercise of this Warrant and payment of the Purchase
Price will, upon delivery, be duly authorized, validly issued,
fully-paid and nonassessable shares of Common Stock; and (ii) the
Company shall at all times during the Exercise Period reserve and
keep available a number of authorized but unissued shares of Common
Stock sufficient to permit the exercise in full of this Warrant.
The Company will take all such actions as may be necessary to
assure that all shares of Common Stock may be so issued without
violation by the Company of any applicable law or government
regulation or any requirement of any securities exchange upon which
shares of Common Stock may be listed (except for official notice of
issuance, which the Company will transmit promptly upon issuance of
such shares).
The Company represents and warrants that: (i) the Company is a
corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware; (ii) the Company has all
requisite corporate power and authority to issue this Warrant and
to consummate the transactions contemplated hereby, and such
issuance and consummation will not conflict with, result in a
material breach of, constitute a material default under or material
violation of any provision of the Company's Certificate of
Incorporation or Bylaws, and to the best knowledge of the Company,
any law or regulation of any governmental authority or any
provision of any agreement, judgment or decree affecting the
Company; and (iii) all corporate action required to be taken by the
Company in connection with the execution and delivery of this
Warrant and the performance of the Company's obligations hereunder
has been taken.
5. Disposition of Warrants or Shares. The Holder acknowledges
that this Warrant and the Shares issuable upon exercise thereof
have not been registered under the Act or applicable state law.
The Holder agrees, by acceptance of this Warrant, (i) that no sale,
transfer or distribution of this Warrant or the Shares shall be
made except in compliance with the Act and the rules and
regulations promulgated thereunder, including any applicable
prospectus delivery requirements and the restrictions on transfer
set forth herein, and (ii) that if distribution of this Warrant or
any Shares is proposed to be made by it otherwise than by delivery
of a prospectus meeting the requirements of Section 10 of the Act,
such action shall be taken only after submission to the Company of
an opinion of counsel, reasonably satisfactory in form and
substance to the Company's counsel, to the effect that the proposed
distribution will not be in violation of the Act or of applicable
state law.
6. Adjustment. The number of Shares purchasable upon the
exercise of this Warrant and the Exercise Price per Share are
subject to adjustment from time to time as provided in this Section
6.
(a) Subdivision or Combination of Shares. If the Company
shall at any time subdivide its outstanding shares of Common Stock
into a greater number of shares (including a stock split effected
as a stock dividend) or combine its outstanding shares of Common
Stock into a lesser number of shares, the number of Shares issuable
upon exercise of this Warrant shall be adjusted to such number as
is obtained by multiplying the number of shares issuable upon
exercise of this Warrant immediately prior to such subdivision or
combination by a fraction, the numerator of which is the aggregate
number of shares of Common Stock outstanding immediately after
giving effect to such subdivision or combination and the
denominator of which is the aggregate number of shares of Common
Stock outstanding immediately prior to such subdivision or
combination, and the Exercise Price per Share shall be
correspondingly adjusted to such amount as shall, when multiplied
by the number of Shares issuable upon full exercise of this Warrant
(as increased or decreased to reflect such subdivision or
combination of outstanding shares of Common Stock, as the case may
be), equal the product of the Exercise Price per Share in effect
immediately prior to such subdivision or combination multiplied by
the number of Shares issuable upon exercise of this Warrant
immediately prior to such subdivision or combination.
(b) Effect of Sale, Merger or Consolidation. If any capital
reorganization or reclassification of the capital stock of the
Company, or consolidation or merger of the Company with another
corporation, or sale of all or substantially all of the Company's
assets to another corporation shall be effected after the date
hereof in such a way that holders of Common Stock shall be entitled
to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganiza-
tion, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder shall
thereafter have the right to purchase and receive, upon the basis
and the terms and conditions specified in this Warrant and in lieu
of the Shares immediately theretofore purchasable and receivable
upon the exercise of this Warrant, such shares of stock, securities
or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of Common Stock equal
to the number of shares of Common Stock immediately theretofore
purchasable and receivable upon the exercise of this Warrant, and
in any such case appropriate provision shall be made with respect
to the rights and interests of the Holder to the end that the
provisions of this Warrant (including, without limitation,
provisions for adjustments of the Exercise Price and of the number
of Shares issuable upon the exercise of this Warrant) shall
thereafter be applicable, as nearly as may be possible, in relation
to any shares of stock, securities or assets thereafter deliverable
upon the exercise of this Warrant. The Company shall not effect
any such consolidation, merger or sale unless prior to or
simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets
shall assume, by written instrument executed and delivered to the
Holder at its last address appearing on the books of the Company,
the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing sentence,
the Holder may be entitled to purchase.
(c) Notice to Holder of Adjustment. Whenever the number of
Shares purchasable upon exercise of this Warrant or the Exercise
Price per Share is adjusted as herein provided, the Company shall
cause to be mailed to the Holder, in accordance with the provisions
of Section 10 hereof, notice setting forth the adjusted number of
Shares purchasable upon the exercise of the Warrant and the
adjusted Exercise Price and showing in reasonable detail the
computation of the adjustment and the facts upon which such
adjustment is based.
(d) Notices to Holder of Certain Events. If at any time
after the date hereof:
(i) the Company shall declare any dividend or other
distribution upon or with respect to the Common Stock payable
otherwise than in cash out of the consolidated net income of
the Company and any subsidiaries thereof, including any
dividend payable in shares of Common Stock or other securities
of the Company; or
(ii) the Company shall offer for subscription to
the holders of its Common Stock any additional shares of stock
of any class or any other securities convertible into stock or
any rights to subscribe thereto; or
(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Company (other
than a change in par value, or from par value to no par value,
or from no par value to par value or as result of the
subdivision or combination of shares), or any conversion of
the Shares into securities of another corporation, or a sale
of all or substantially all of the assets of the Company, or
a consolidation or merger of the Company with another
corporation (other than a merger with a subsidiary in which
the Company is the continuing corporation and which does not
result in any reclassification or change of the Shares
issuable upon exercise of the Warrants); or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall cause to
be mailed to the Holder, not less than ten (10) days before any
record date or other date set for the definitive action, written
notice of the date upon which the books of the Company shall close
or a record shall be taken for purposes of such dividend,
distribution or subscription rights or upon which such
reorganization, reclassification, conversion, sale, consolidation,
merger, dissolution, liquidation or winding up shall take place, as
the case may be. Such notice shall also set forth facts as shall
indicate the effect of such action (to the extent such effect may
be known at the date of such notice) on the number of Shares and
the kind and amount of the shares of stock and other securities and
property deliverable upon exercise of the Warrants. Such notice
shall also specify the date as of which the holder of record of the
shares of Common Stock shall participate in said dividend,
distribution or subscription rights or shall be entitled to
exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification,
conversion, sale, consolidation, merger, dissolution, liquidation
or winding up, as the case may be (on which date in the event of
voluntary or involuntary dissolution, liquidation or winding up of
the Company, the right to exercise the Warrants shall terminate).
(e) Fractional Shares. The Company shall not be required to
issue any fraction of a Share upon the exercise of this Warrant.
The number of full Shares which shall be issuable upon the full or
partial exercise of this Warrant shall be computed on the basis of
the aggregate number of Shares as to which this Warrant is being
exercised. In lieu of any fractional interest in a Share otherwise
deliverable upon the exercise of this Warrant, the Company shall
pay a cash adjustment (which may be effected as a reduction of the
amount to be paid by the Holder upon such exercise) in respect of
such fraction of a Share in an amount equal to the same fraction
multiplied by the closing sales price of the Common Stock on the
principal securities exchange on which the Common Stock is traded,
or if the Common Stock is not so listed for trading, the closing
bid price of the Common Stock, in each case on the date of the
notice of exercise required pursuant to Section 1 above, or the
next succeeding trading date, if the date of such notice is not a
trading date, or if the Common Stock is not traded on such dates,
the next succeeding trading date on which the Common Stock is
traded.
(f) No Other Adjustments. No adjustment to the number of
Shares subject to this Warrant or the Exercise Price per Share
shall be made pursuant to this Section 6 except as expressly
provided herein.
7. Piggy-Back Registration.
(a) In the event the Company shall, at any time prior to the
expiration of this Warrant, file a registration statement with the
Securities and Exchange Commission (the "SEC") to register shares
of Common Stock, the Company shall furnish the Holders with at
least thirty (30) days' prior written notice thereof and such
Holders shall have the option to include the Shares to be issued to
the Holders upon the exercise of this Warrant in such registration
statement. The Holders shall exercise the "piggy-back registration
rights" granted pursuant to this Section 7 by giving written notice
to the Company within twenty (20) days of the receipt of the
aforementioned written notice from the Company.
(b) Notwithstanding any other provision of this Warrant, the
Company's obligations under this Section 7 shall be subject to and
limited by the following terms and conditions:
(i) The obligations of the Company set forth under this
Section 7 shall not arise upon the filing of a registration
statement relating solely to shares of Common Stock issued pursuant
to employee stock option or other benefit plans, a merger of other
business combination or a registration statement which does not
include substantially the same information as Form X-0, Xxxx X-0 or
Form S-3, or any successor forms thereto.
(ii) If the Company files a registration statement in
connection with a proposed underwritten primary or secondary public
offering of Common Stock, the Company shall use its best efforts to
cause the managing underwriter of the proposed offering to grant
any request by the Holder that Shares purchased by the Holder upon
the exercise of this Warrant be included in the proposed public
offering on terms and conditions which are customary under industry
practice. Notwithstanding any other provision of this Agreement,
if the managing underwriter of a proposed primary or secondary
public offering of the Common Stock gives written notice to the
Company that, in the reasonable opinion of such managing
underwriter, marketing factors require a limitation of the total
number of shares of Common Stock to be underwritten, then the
number of Shares purchased by the Holder upon the exercise of this
Warrant which the Company shall be obligated to include in the
registration statement shall be reduced in accordance with the
limitations imposed by the managing underwriter. Any such
limitation imposed by the managing underwriter shall be imposed pro
rata among all holders of Common Stock exercising rights granted
pursuant to this Section 7 or otherwise, in accordance with the
amount of Common Stock which each such person requested to be
included in the registration statement.
(c) The Company will pay all Registration Expenses (as
hereinafter defined) of all registrations under this Warrant;
provided, however, that if a registration is withdrawn at the
request of the Holders requesting such registration (other than as
a result of information concerning the business or financial
condition of the Company which is made known to the Holders after
the date on which such registration was requested), each of the
Holders shall pay the Registration Expenses of such registration
pro rata in accordance with the number of its Shares included in
such registration. For purposes of this Section 7, the term
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with this Section 7, including, without
limitation, all registration and filing fees, exchange listing
fees, printing expenses, fees and disbursements of counsel for the
Company, state Blue Sky fees and expenses, transfer agent fees,
cost of engraving of stock certificates, costs for mailing and
tombstone advertising, cost of preparing the registration
statement, related exhibits, amendments and supplements thereto,
underwriting documents, selected dealer agreements, preliminary and
final prospectuses, and the expense of any special audits incident
to or required by any such registration, but excluding underwriting
discounts and selling commissions attributable to the Shares and
the fees and expenses of the Holder's own counsel and accountants,
which shall be borne by such holders.
8. Indemnification and Notification.
(a) The Company will indemnify and hold harmless the Holders,
and each person, if any, who controls such Holders within the
meaning of Section 15 of the Act, from and against any and all
losses, claims, damages, expenses and liabilities caused by any
untrue statement of a material fact contained in any registration
statement or contained in a prospectus furnished thereunder or
caused by any omission to state a material fact therein necessary
to make the statement therein not misleading, provided, however,
that the foregoing indemnification and agreement to hold harmless
shall not apply insofar as such losses, claims, damages, expenses
and liabilities are caused by any such untrue statement or
omissions based upon information furnished in writing to the
Company by any such Holder expressly for use in any registration
statement or prospectus.
(b) The Holders will indemnify the Company, and each person
who controls the Company within the meaning of Section 15 of the
Act, from and against any and all losses, claims, damages, expenses
and liabilities caused by an untrue statement of a material fact
contained in any registration statement or contained in a
prospectus furnished thereunder or caused by an omission to state
a material fact therein necessary to make the statement therein not
misleading insofar as such losses, claims, damages, expenses and
liabilities caused by such untrue statement or omission based upon
information furnished in writing to the Company by any such Holder
expressly for use in any registration statement or prospectus.
(c) Promptly after the receipt by any indemnified party of
notice of the commencement of any action, said indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof; but the omission to
so notify the indemnifying party will not relieve it from any
liabilities which it may have to them otherwise than under this
Section 8, except if such delay prejudices the indemnifying party.
In case any such action is brought against any party who may seek
indemnification hereunder and the indemnifying party is notified of
the commencement thereof as provided herein, the indemnifying party
will be entitled to participate in, and, to the extent that it may
wish, to assume the defense thereof, with counsel satisfactory to
the indemnified party, and after notice from the indemnifying party
to such indemnified party of the indemnifying party's election so
to assume the defense thereof, the indemnifying party will not be
liable under this Section 8 for any legal or other expense
subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation.
The indemnifying party will not be liable for any settlement
effected without its written consent.
9. Survival. The various rights and obligations of the Holder
and of the Company as set forth in Sections 4, 5, 6, 7 and 8 hereof
shall survive the exercise of this Warrant and the surrender of
this instrument upon such exercise.
10. Notice. All notices required by this Warrant to be given or
made by the Company shall be given or made by first class mail,
postage prepaid, addressed to the registered holder hereof at the
address of such holder as shown on the books of the Company.
11. Loss or Destruction. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any loss, theft or
destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company and its counsel, or,
in the case of any such mutilation, upon surrender and cancellation
of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12. Miscellaneous.
(a) Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated except by a written instrument
executed by the Company and the Holder.
(b) This Warrant shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of
Florida, without regard to principles of conflicts of laws thereof.
(c) Each provision of this Warrant shall be interpreted in
such a manner as to be effective, valid and enforceable under
applicable law, but if any provision of this Warrant is held to be
invalid, illegal or unenforceable under any applicable law or rule
in any jurisdiction, such provision will be ineffective only to the
extent of such invalidity, illegality or unenforceability in such
jurisdiction, without invalidating the remainder of this Warrant in
such jurisdiction or any provision hereof in any other
jurisdiction.
(d) No course of dealing or delay or failure to exercise any
right hereunder on the part of the Holder shall operate as a waiver
of such right or otherwise prejudice the Holder's rights, power or
remedies.
(e) The Company shall pay all expenses incurred by it in
connection with, and all documentary stamp and other taxes (other
than stock transfer taxes) and other governmental charges that may
be imposed in respect of, the issue, sale and delivery of this
Warrant and the Shares issuable upon the exercise hereof.
(f) This Warrant and the rights evidenced hereby shall inure
to the benefit of and be binding upon the successors and assigns of
the Company and the successors and permitted assigns of the Holder.
IN WITNESS WHEREOF the Company has caused this Warrant to be
executed by its duly authorized officer as of the date first above
written.
ATTEST: nSTOR TECHNOLOGIES, INC.
By:________________________ By:_________________________
Name: _____________________ Name:_______________________
Title:_____________________ Title:______________________
ASSIGNMENT
To be executed by the registered holder to effect a permitted
transfer of the within Warrant. Capitalized terms have the same
meanings ascribed to them in the within Warrant.
FOR VALUE RECEIVED ______________________________
("Assignor")
hereby sells, assigns and transfers unto
___________________________________________("Assignee")
(Name)
___________________________________________
(Address)
___________________________________________
the right to purchase __________ shares of Common Stock of nStor
Technologies, Inc. evidenced by the within Warrant, together with
all right, title and interest therein, and does irrevocably
constitute and appoint _____________________________ attorney to
transfer the said right on the books of said corporation with full
power of substitution in the premises.
In satisfaction of a condition to the effectiveness of this
assignment, Assignor hereby certifies that Assignee is a
corporation controlled by or under common control with Assignor.
Date: ____________________ Assignor:
By_________________________
Its_________________________
Signature:__________________
PURCHASE FORM
To be executed upon exercise of the within Warrant.
Capitalized terms have the same meanings ascribed to them in the
within Warrant.
TO: nStor Technologies, Inc.
The undersigned hereby exercises the right to purchase
_____________ Shares of Common Stock evidenced by the within
Warrant, according to the terms and conditions thereof, and hereby
makes payment of the Purchase Price. The undersigned requests that
certificates for the Shares shall be issued in the name set forth
below:
Dated:________________ Name:_____________________
__________________________
(Address)
__________________________
Social Security No.
__________________________
or other identifying number
