Exhibit 1
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 24,455,906 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 14.7% 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. This Agreement is intended to bind Stockholder
only with respect to the voting of the Shares as Stockholder herein, and shall
not prohibit Stockholder from acting in accordance with his fiduciary duties as
an officer or director of Company or Parent.
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
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, 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.
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.
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]
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
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Name: Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
STOCKHOLDER:
By: /s/ H. Xxxxx Xxxx
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Name: H. Xxxxx Xxxx
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
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Print Address
(000) 000-0000
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Telephone
(000) 000-0000
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Facsimile No.
Shares Beneficially Owned:
24,455,906 shares of Parent Common Stock
