EXHIBIT 3
EXECUTION COPY
VOTING AGREEMENT
This VOTING AGREEMENT (this "Agreement"), is made and entered into this
15th day of September 2004 by and among Palo Alto Acquisition Corporation, a
Delaware corporation ("Buyer"), and the undersigned stockholder (the
"Stockholder") of nStor Technologies, Inc., a Delaware corporation ("Parent").
WHEREAS, pursuant to the terms and subject to the conditions of that
certain Stock Purchase Agreement, dated as of September 15, 2004 (the "Purchase
Agreement"), by and among Symphony Service Corp., a Delaware corporation ("Buyer
Parent"), its wholly owned subsidiary, Buyer, and each of the shareholders of
Stonehouse Technologies, Inc., a Texas corporation (the "Company"), set forth
therein, including Parent, Buyer shall purchase all of the stock of the Company,
which may constitute substantially all the assets of Parent (the "Transaction");
WHEREAS, Stockholder is the holder of record or beneficial owner (for all
purposes in this Agreement, as such term is defined in Rule 13d-3 of the Rules
and Regulations promulgated by the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
securities for which Stockholder has beneficial ownership shall be "Beneficially
Owned") of 53,149,572 shares of the outstanding common stock, par value $0.05
per share of Parent (the "Common Stock");
WHEREAS, the Shares (as such term is defined below) represent
approximately 32.2% of the voting power of the issued and outstanding voting
securities of Parent; and
WHEREAS, to induce the execution of the Purchase Agreement by Buyer and
Buyer Parent, Stockholder agrees to vote the Shares so as to facilitate
consummation of the Transaction to the extent more fully described below.
NOW, THEREFORE, in consideration of the mutual promises and the mutual
covenants and agreements contained herein, the parties agree as follows:
1. Agreement to Vote Shares.
1.1 At any meeting of the stockholders of Parent called with
respect to the Transaction, the Purchase Agreement and the other transactions
contemplated thereby, and at any adjournment thereof, and on every action or
approval by written consent of stockholders of Parent, and with respect to any
consent solicited with respect to the Transaction, the Purchase Agreement and
any of the other transactions contemplated thereby, Stockholder shall vote the
Shares (a) in favor of approval of the Transaction, the Purchase Agreement, the
other transactions contemplated thereby and any matter which could reasonably be
expected to facilitate the Transaction and such other transactions and (b)
against approval or adoption of any Acquisition Proposal (as such term is
defined in the Purchase Agreement) or any other proposal that is intended or
would reasonably be construed to be in opposition to, or in competition with, or
in conflict with adoption of the Purchase Agreement and consummation of the
transactions
contemplated thereby. Stockholder may vote on all other matters in a manner
determined in his sole discretion.
1.2 Stockholder, as the holder of record or beneficial owner of
voting stock of Parent, shall be present, in person or by proxy, at all meetings
of stockholders of Parent and at any adjournment thereof, and on every action or
approval by written consent of stockholders of Parent with respect to any of the
matters addressed in Section 1.1, so that all Shares are counted for the purpose
of determining the presence of a quorum at such meetings or on such written
consent. Stockholder shall not enter into any agreement or understanding with
any person or entity to vote or give instructions in any manner inconsistent
with the terms of this Section 1.
2. Irrevocable Proxy. Concurrently with the execution of this
Agreement, Stockholder agrees to deliver to Buyer an irrevocable proxy in the
form attached hereto as Exhibit A (the "Proxy"), provided that the Proxy shall
be revoked only upon the Expiration Date (as defined below). The Proxy is
irrevocable and coupled with an interest in the obligations of the Stockholder.
3. No Solicitation of Proxies. Stockholder agrees (solely in his
capacity as such) that he shall not directly or indirectly, engage in any
solicitation (as defined in Regulation 14A of the Rules and Regulations
promulgated by the Securities and Exchange Commission pursuant to the Exchange
Act) of other stockholders of Parent (a) against the Transaction, the Purchase
Agreement, the other transactions contemplated thereby or any matter that could
reasonably be expected to facilitate the Transaction and such other transactions
or (b) in favor of any Acquisition Proposal.
4. Definition of Shares. For purposes of this Agreement, the term
"Shares" shall include: (i) all securities of Parent (including, without
limitation, all shares of Common Stock and all Options) owned of record or
Beneficially Owned by Stockholder as of the date of this Agreement, as indicated
on the signature page of this Agreement; and (ii) all additional securities of
Parent of which Stockholder acquires record ownership during the period from the
date of this Agreement through the Expiration Date, including, without
limitation, through the exercise or conversion of any options, warrants or other
rights to purchase shares of Common Stock and other securities convertible into,
or exercisable for shares of Common Stock. In the event of a stock dividend or
distribution, or any change in the Shares by reason of any stock dividend,
split-up, recapitalization, combination, exchange of shares or the like, the
term "Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for which
any or all of the Shares may be changed or exchanged.
5. Transfers of Shares. Stockholder hereby agrees that, at all times
during the period commencing with the execution and delivery of this Agreement
until the Expiration Date, Stockholder (a) shall not cause or permit the
Transfer (as defined below) of any Shares, or any interest in the Shares, to be
effected, or discuss, negotiate or make any offer regarding any Transfer of any
Shares, and (b) shall not deposit (or permit the deposit of) any Shares in a
voting trust or grant any proxy, or enter into any voting agreement or similar
agreement or arrangement in contravention of the obligations of Stockholder
under this Agreement with respect to the Shares. Stockholder further agrees
with, and covenants to, Buyer that Stockholder shall not request that Parent
register the Transfer of any certificate or uncertificated interest representing
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any of the Shares, unless such Transfer is made in compliance with this Section
5. From and after the date of this Agreement, through the Expiration Date,
Parent will not register or otherwise recognize the transfer (book-entry or
otherwise) of any Shares or any certificate or uncertificated interest
representing any of Stockholder's Shares, except as permitted by, and in
accordance with this Section 5. This Section 5 shall not prohibit a transfer of
Shares by Stockholder (A) to any member of Stockholder's immediate family, or to
a trust for the benefit of Stockholder or any member of Stockholder's immediate
family, or (B) upon the death of Stockholder; provided however, that a transfer
referred to in this sentence shall be permitted only if, as a precondition such
transfer, the transferee shall have (i) duly executed a counterpart of this
Agreement and a proxy in the form attached hereto as Exhibit A, and (ii) agreed
in writing to hold such Shares, or such interest therein, subject to all of the
terms and conditions set forth in this Agreement. For purposes of this
Agreement, a person or entity shall be deemed to have effected a "Transfer" of a
security if such person or entity, directly or indirectly: (i) sells, offers to
sell, makes any short sales of, pledges, encumbers, lends, hypothecates, enters
into any type of equity swap or hedging of, grants an option with respect to,
transfers or disposes of such security, any interest therein, or the economic
consequences of ownership of such security or (ii) enters into an agreement,
contract or commitment providing for the sale of, making any short sales of,
pledge of, lending of, encumbrance of, equity swap or hedging of, grant of an
option with respect to, transfer of or disposition of such security, any
interest therein or the economic consequences of ownership of such security,
other than any such actions pursuant to which such person or entity maintains
all voting rights with respect to such security.
6. Representations and Warranties of the Stockholder. Stockholder
hereby represents and warrants to Buyer as follows:
6.1 Authority.
(a) Stockholder has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Stockholder, and
the consummation of the transactions contemplated hereby, has been duly
authorized by all necessary action on the part of Stockholder.
(b) This Agreement has been duly executed and delivered by
Stockholder and constitutes a valid and binding obligation of Stockholder
enforceable in accordance with its terms, subject to its enforceability
against Buyer and the effect of applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject to the effect of general principles of equity,
including, without limitation, the possible unavailability of specific
performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, conflict with, or
result in any violation of or default (with or without notice or lapse of
time or both) under or the acceleration of any provision of any trust
agreement, partnership agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license, judgment, order, notice,
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decree, statute, law, ordinance, rule or regulation applicable to
Stockholder or to any of the property or assets of Stockholder.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency
or commission or other governmental authority or instrumentality,
domestic, foreign or supranational, is required by or with respect to
Stockholder in connection with the execution and delivery of this
Agreement or the consummation by Stockholder of the transactions
contemplated hereby.
6.2 The Shares. The Shares have not been pledged by Stockholder.
Stockholder owns no capital stock of Parent other than the Shares. Except for
this Agreement, no proxies or powers of attorney have been granted with respect
to the Shares that will remain in effect after the execution of this Agreement.
Except for this Agreement and the Proxy, no voting arrangement (including voting
agreement or voting trust) affecting the Shares shall remain in effect after the
execution of this Agreement.
7. Effectiveness. The effectiveness of this Agreement is conditioned
upon the Purchase Agreement having been duly executed and delivered by all of
the parties thereto and the Purchase Agreement being in full force and effect.
8. Termination. Notwithstanding anything else in this Agreement, this
Agreement, the Proxy and all obligations of Stockholder under either this
Agreement or the Proxy shall automatically terminate as of the earlier to occur
of the following (such date, the "Expiration Date"): (i) such date and time as
the Purchase Agreement shall have been terminated in accordance with its terms,
(ii) such date and time as the Transaction shall become effective in accordance
with the terms and conditions of the Purchase Agreement or (iii) upon the
execution of a written agreement by all parties hereto.
9. Additional Documents. Buyer and Stockholder hereby covenant and
agree to execute and deliver any additional documents necessary, in the
reasonable determination of Buyer's legal counsel, to carry out the intent of
this Agreement.
10. Miscellaneous.
10.1 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
10.2 Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by any of
the parties without the prior written consent of all of the other parties
hereto.
10.3 Amendments and Modifications. This Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.
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10.4 Specific Performance; Injunctive Relief. The parties hereto
acknowledge that each of the parties will be irreparably harmed and that there
will be no adequate remedy at law for a violation of any of the covenants or
agreements of the parties set forth herein. Therefore, it is agreed that, in
addition to any other remedies which may be available to any party upon a
violation by one or more other parties, such non-violating party shall have the
right to enforce such covenants and agreements by specific performance,
injunctive relief or by any other means available to it at law or in equity.
10.5 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and sufficient if delivered in
person, by commercial overnight courier service, by confirmed fax or sent by
mail (registered or certified mail, postage prepaid, return receipt requested)
to the respective parties as follows:
(a) if to Buyer, to:
Palo Alto Acquisition Corporation
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx Xxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Venture Law Group
000 Xxxxxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to Stockholder, to the address set forth below with a
copy to:
Akerman Senterfitt
Las Olas Centre II
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
or to such other address as any party hereto may have furnished to the other
parties in writing in accordance herewith, except that notices of change of
address shall only be effective upon receipt.
10.6 Governing Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts to be executed and performed entirely within such State.
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10.7 Entire Agreement. This Agreement and the other agreements
referred to herein contain the entire understanding of the parties in respect of
the subject matter hereof and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
10.8 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
10.9 Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
BUYER:
PALO ALTO ACQUISITION CORPORATION
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: President and Chief
Executive Officer
STOCKHOLDER:
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
000 Xxxxxxxxx Xxxxx Xxxxxx - Penthouse #01
Xxxx Xxxxx, XX 00000
___________________________________
Print Address
(000) 000-0000
___________________________________
Telephone
(000)000-0000
___________________________________
Facsimile No.
Shares Beneficially Owned:
53,149,572 shares of Parent Common Stock
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EXHIBIT A
IRREVOCABLE PROXY
The undersigned stockholder ("Stockholder") of nStor Technologies, Inc., a
Delaware corporation ("Parent"), hereby irrevocably appoints Xxxx Xxx Xxxxxx as
the sole and exclusive attorney and proxy of Stockholder, with full power of
substitution and resubstitution, to vote and exercise all voting and related
rights (to the full extent that the undersigned is entitled to do so) with
respect to all of the shares of capital stock of Parent that now are or
hereafter may be Beneficially Owned (as defined in the Voting Agreement (as
defined below) by Stockholder, and any and all other shares or securities of
Parent issued or issuable in respect thereof on or after the date hereof
(collectively, the "Shares") in accordance with the terms of this Proxy. The
Shares Beneficially Owned by Stockholder as of the date of this Proxy are listed
on the final page of this Proxy. Upon Stockholder's execution of this Proxy, any
and all prior proxies given by the undersigned with respect to any Shares are
hereby revoked and Stockholder hereby agrees not to grant any subsequent proxies
with respect to the Shares until after the Expiration Date (as defined below).
This Proxy is irrevocable, is coupled with an interest and is granted
pursuant to that certain Voting Agreement of even date herewith by and between
Palo Alto Acquisition Corporation, a Delaware corporation ("Buyer") and
Stockholder (the "Voting Agreement"), and is granted in consideration of Buyer
and its parent, Symphony Service Corp., a Delaware corporation ("Buyer Parent"),
entering into that certain Stock Purchase Agreement (the "Purchase Agreement"),
by and among Buyer Parent, Buyer and each of the shareholders of Stonehouse
Technologies, Inc., a Texas corporation (the "Company"), set forth therein,
including Parent. As used herein, the term "Expiration Date" shall mean the
earlier to occur of (i) such date and time as the Purchase Agreement shall have
been terminated in accordance with its terms, (ii) such date and time as the
Transaction shall become effective in accordance with the terms and conditions
of the Purchase Agreement or (iii) upon the execution of a written agreement by
all parties to the Voting Agreement.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting, consent and similar rights of the undersigned with respect
to the Shares (including, without limitation, the power to execute and deliver
written consents) at every annual, special, adjourned or postponed meeting of
stockholders of Parent and in every written consent in lieu of such meeting:
(a) in favor of adoption of the Purchase Agreement and
consummation of the transactions contemplated thereby; and
(b) against approval or adoption of any Acquisition Proposal or
any other proposal that is intended or would reasonably be construed to be
in opposition to, or in competition with, or in conflict with adoption of
the Purchase Agreement and consummation of the transactions contemplated
thereby.
The attorneys and proxies named above may not exercise this Proxy on any
other matter except as provided above. Stockholder may vote the Shares on all
other matters.
Any obligation of Stockholder hereunder shall be binding upon the
successors and assigns of Stockholder.
This Proxy is irrevocable. This Proxy shall terminate, and be of no
further force and effect, automatically upon the Expiration Date.
Dated: September 15, 2004
STOCKHOLDER:
By: ______________________________
Name:
Shares Beneficially Owned:
_____shares of Parent Common Stock
