EXHIBIT D
STORM TECHNOLOGY, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT is entered into as of
December 18, 1997, by and between Storm Technology, Inc., a Delaware corporation
(the "Company"), and the X. Xxxxxxx and X. Xxx Xxxxxx Trust under Agreement
dated June 21, 1994 (the "Purchaser").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto agree as follows:
1. Sale of the Shares. Subject to the terms and conditions hereof, upon
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execution of this Agreement, the Company will issue and sell to the Purchaser,
and the Purchaser will purchase from the Company, (i) 1,066,666 shares of Common
Stock (the "Shares") and (ii) a warrant to purchase 100,000 shares of Common
Stock (the "Warrant Shares") at an exercise price of $1.90 in the form attached
hereto as Exhibit A. The aggregate purchase price payable by the Purchaser
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shall be $2,012,478.95. The parties agree that $1.875 of the purchase price
will be allocated to the each Share being purchased, and $0.125 will be
allocated to the right to buy one Warrant Share.
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to the Purchaser that:
2.1 Organization and Standing; Articles and Bylaws. The Company is a
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corporation duly organized and validly existing under, and by virtue of, the
laws of the State of Delaware and is in good standing under such laws. The
Company has the requisite corporate power to own and operate its properties and
assets and to carry on its business as presently conducted and as proposed to be
conducted.
2.2 Corporate Power. The Company has all requisite corporate power to
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enter into this Agreement, to sell the Shares and Warrants hereunder and to
carry out and perform its other obligations under the terms of this Agreement.
2.3 Capitalization. The authorized capital stock of the Company
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consists of 30,000,000 shares of Common Stock, $0.001 par value (the "Common
Stock"), and 500,000 shares of Preferred Stock, $0.001 par value (the "Preferred
Stock"), of which 30,000 shares have been designated Series A 8.5% Convertible
Preferred Stock. As of September 30, 1997, (i) 10,493,972 shares of Common Stock
were issued and outstanding, all of which are validly issued, fully paid and
nonassessable; and (ii) 1,570,426 shares of Common Stock were reserved for
issuance pursuant to stock options under the Company's stock option plans (the
"The Company Option Plans") and rights under the Company's Employee Stock
Purchase Plan.
2.4 Authorization.
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(a) All corporate action on the part of the Company, its
officers, directors and stockholders necessary for (i) the sale and issuance of
the Shares and Warrants pursuant hereto, (ii) the issuance of the Warrant Shares
upon exercise of the Warrants, and (iii) the execution,
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performance and delivery by the Company of this Agreement has been taken. This
Agreement is a valid and binding obligation of the Company, enforceable against
it in accordance with its respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting enforcement of
creditors' rights and rules or laws concerning equitable remedies.
(b) The Shares, when issued in compliance with the provisions of
this Agreement, and the Warrant Shares, when issued in accordance with the
Warrants, will be validly issued, fully paid and nonassessable; provided,
however, that the Shares, and the Warrant Shares may be subject to restrictions
on transfer under state and/or federal securities laws as set forth herein or
otherwise required by such laws at the time a transfer is proposed.
(c) No stockholder of the Company has any right of first refusal
or any preemptive rights in connection with the issuance and sale of the Shares,
the Warrants or the Warrant Shares.
2.5 Compliance with Other Instruments; None Burdensome, etc. The
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Company is not in violation of any term of Certificate of Incorporation or its
Bylaws, as amended, or any mortgage, indenture, contract, agreement, instrument,
judgment, decree or order by which the Company is bound or to which its
properties are subject or, to its knowledge, any statute, rule, or regulation
applicable to the Company where such violation would materially and adversely
affect the business, assets, liabilities, financial condition, operations or
prospects of the Company. The execution, delivery and performance of and
compliance with this Agreement and the transactions contemplated hereby and
thereby will not result in any such violation and will not be in conflict with
or constitute a default under any of the foregoing and will not result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company pursuant to any of the foregoing.
3. Representations and Warranties of the Purchasers and Restrictions on
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Transfer Imposed by the Securities Act of 1933 and the California Corporate
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Securities Law of 1968.
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3.1 Representations and Warranties of the Purchaser. The Purchaser
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hereby represents and warrants to the Company as follows:
(a) The Shares, the Warrants, and the Warrant Shares (the
"Securities") are being acquired for the Purchaser's own account, for investment
and not with a view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act or the
California Law.
(b) The Purchaser understands that the Securities have not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act pursuant to
Regulation D promulgated thereunder, that the Company has no present intention
of registering the Securities, that the Securities must be held by the Purchaser
indefinitely, and that the Purchaser must therefore bear the economic risk of
the investment indefinitely, unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration. The
Purchaser further understands that the Securities have not been qualified under
the California Law by reason of their issuance in a
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transaction exempt from the qualification requirements of the California Law
pursuant to Section 25102(f) thereof, which exemption depends upon, among other
things, the bona fide nature of the Purchaser's investment intent expressed
above.
(c) The Purchaser will not sell, negotiate, pledge or otherwise
dispose of any of the Securities (other than in conjunction with an effective
registration statement for the Securities under the Securities Act) in the
United States, its territories and possessions or any area subject to its
jurisdiction, or to any person who is a national or resident of the United
States (including any estate of such person or any corporation, partnership or
other entity created or organized therein) unless and until (i) the Purchaser
shall have notified the Company of the proposed disposition, and (ii) the
Purchaser shall have furnished the Company with an opinion of counsel
satisfactory in form and substance to the Company to the effect that such
disposition will not require registration under the Securities Act.
(d) During the negotiation of the transactions contemplated
herein, the Purchaser and its counsel have been afforded full access to the
corporate books, records, documents, and other information concerning the
Company and have been afforded an opportunity to ask such questions of the
Company's officers and representatives concerning the Company's business,
operations, financial condition, assets, liabilities and other relevant matters
as they have deemed necessary or desirable, and have been given all such
information as has been requested, in order to evaluate the merits and risks of
the prospective investment contemplated herein.
(e) The Purchaser has such knowledge and experience in financial
and business matters that the Purchaser is capable of evaluating the merits and
risks of the purchase of the Shares and the Warrants pursuant to the terms of
this Agreement.
(f) The Purchaser has the full right, power and authority to
enter into and perform the Purchaser's obligations under this Agreement. This
Agreement is q valid and binding obligation of the Purchaser enforceable in
accordance with its terms except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting enforcement of creditors' rights
and rules or laws concerning equitable remedies.
(g) No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the
Purchaser is required in connection with the valid execution and delivery of
this Agreement.
3.2 Legends. Each certificate representing the Shares, the Warrant
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Shares or the Warrant Shares may be endorsed with legends in substantially the
following form:
(a) THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE TRANSFER IS MADE IN
COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT OR THE
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COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.
(b) THE HOLDER WILL NOT SELL, HYPOTHECATE, PLEDGE, OR OTHERWISE
DISPOSE OF ANY INTEREST IN THE SHARES FOR A PERIOD OF TWELVE MONTHS FROM
DECEMBER 18, 1997.
4. Miscellaneous.
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4.1 Governing Law. This Agreement shall be governed in all respects
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by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
4.2 Entire Agreement. This Agreement constitutes the entire
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understanding and agreement between the parties with regard to the subjects
hereof. This Agreement may only be amended by a written instrument signed by the
Company and the Purchaser.
4.3 Expenses. The Company and the Purchasers shall each bear their
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respective expenses and legal fees incurred with respect to this Agreement and
the transactions contemplated hereby.
4.4 Lockup. Purchaser agrees that for the first twelve (12) months
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after the date of this Agreement, the Purchaser will not directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase, pledge or otherwise transfer or dispose of
any shares of the Shares or Warrant Shares.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
STORM TECHNOLOGY, INC.
By:_________________________________
Its:________________________________
PURCHASER :
X. Xxxxxxx and X. Xxx Xxxxxx Trust under
Agreement dated June 21, 1994
By:_________________________________
Its:________________________________
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