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EXHIBIT 4.5
FORM OF
SHARE EXCHANGE AGREEMENT
BETWEEN
NSTOR TECHNOLOGIES, INC.
AND
HOLDERS OF SERIES A PREFERRED STOCK
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NSTOR TECHNOLOGIES INC.
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement ("Agreement") is made by and between
nStor Technologies, Inc., a Delaware corporation ("NSO") and the undersigned
holder ("Holder"), who is one of the holders (collectively, the "Holders") of
the Series A, 8% Convertible Preferred Stock of NSO (the "Series A Stock").
RECITALS
A. The Holder is currently the record owner of that number of shares of
the Series A Stock as are set forth on Exhibit A hereto.
B. NSO has created a new class of preferred stock, designated Series B, 8%
Convertible Redeemable Preferred Stock (the "Series B Stock"), which is
identical to the Series A Stock with the single exception that the Series B
Stock may, under certain limited circumstances, be redeemed by NSO for cash in
an amount equal to 130% of the original purchase price for the Series B Stock.
C. By this Agreement, NSO desires to assign, convey, transfer and deliver
to the Holders of the Series A Stock an equal number of shares of the Series B
Stock.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Duration of Offer. This Exchange Offer will remain open until the
thirtieth (30th) day following the mailing hereof to the Holder via overnight
delivery (the "Termination Date"). If the Holder has not accepted this Exchange
Offer, in the manner provided in Paragraph 3 hereof, prior to the Termination
Date, NSO will assume that the Holder has rejected this Exchange Offer and that
the Holder wishes to continue to own the Series A Stock.
2. Exchange of Preferred Shares. NSO and the Holder agree that NSO shall
exchange one (1) share of Series B Stock with Holder for each share of Series A
Stock owned of record by Holder, the total number of which Series A shares is
listed on Exhibit A hereto opposite the name of the Holder. Upon surrender of
the Series A Stock in the manner provided in Paragraph 3 hereof, the Holder will
cease to have any right to receipt or payment of dividends, in whole or in part,
on the Series A Stock, but will begin the right to receipt or payment of
dividends on the Series B Stock.
3. Acceptance by Holder. Simultaneously with the delivery of the signature
page of this Agreement, Holder shall deliver to NSO stock certificates
evidencing ownership of the Series A Stock exchanged hereby, either duly
endorsed in blank for transfer or accompanied by an appropriate stock power duly
executed in blank, which stock power is attached hereto. As soon as practicable
after the receipt by NSO of the executed signature page of this Agreement
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and the certificates evidencing Holder's Series A Stock, NSO will issue a new
certificate to Holder evidencing Holder's ownership of an equal number of shares
of Series B Stock.
4. Authority to Transfer Shares. Holder does hereby irrevocably constitute
and appoint NSO as attorney to transfer the Series A Stock tendered hereby (as
evidenced by the tendered stock certificates) on the books of NSO with full
power of substitution.
5. Representations and Warranties of NSO and Holder.
5.1 NSO Representations and Warranties.
(a) Organization and Good Standing. NSO is a corporation duly formed,
validly existing and in good standing under the laws of the State of Delaware,
with the full authority to issue and exchange the Series B Stock and to carry
out the provisions hereof.
(b) Stock. The Series B Stock, when issued pursuant to the terms of
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable.
(c) Capital Stock. The authorized capital stock of NSO consists of 24
million shares of common stock and 1 million shares of preferred stock. NSO has
proposed an amendment to its Restated Certificate of Incorporation which would
increase the number of shares of common stock which NSO is authorized to issue
from 24 million to 40 million. That proposal will be considered and voted upon
at NSO's annual meeting of stockholders on June 8, 1998.
(d) Registration Rights. The terms and conditions of the Registration
Rights Agreement between NSO and the Holder, dated April __, 1998, shall apply
to the Series B Stock to the same extent as such terms and conditions previously
applied to the Series A Stock.
5.2 Holder Representations and Warranties.
(a) Title. Holder is the owner, beneficially and of record, of all the
Series A Stock exchanged hereby, free and clear of all liens, encumbrances,
security agreements, equities, options, claims, charges and restrictions. Holder
has full power to transfer the Series A Stock exchanged hereby with NSO without
obtaining the consent or approval of any other person, entity or governmental
authority. The Series A Stock being exchanged hereby constitutes all of the
Series A Stock owned by Holder.
(b) Information True and Correct. All the information that is set forth
in this Agreement with respect to the Holder is correct and complete as of the
date of this Agreement.
(c) Applicable Securities Laws. Holder intends that the state
securities laws of the state listed in the residential address of Holder below,
together with the federal securities laws, govern this transaction.
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(d) Knowledge and Experience. Holder has such knowledge and experience
in financial and business matters that Holder, together with his representatives
and advisors, if any, is capable of evaluating the merits and risks of an
investment in the Series B Stock.
(e) Holder's Liquidity. Holder has adequate means of providing for his
current needs and personal contingencies and has no need for liquidity in
connection with the investment contemplated herein. Holder acknowledges that he
must bear the economic risk of investment in the Series B Stock for an
indefinite period of time, and that he could bear a loss of his entire
investment in the Series B Stock, without materially impairing his financial
wherewithal. Holder's overall commitment to investments which are not readily
marketable is not disproportionate to the net worth of the Holder, and the
Holder's investment in the Series B Stock will not cause such overall commitment
to become excessive.
(f) Securities Restrictions on Transfer. Holder acknowledges and
understands that the Series B Stock has not been registered under the Securities
Act of 1933, as amended (the " 1933 Act") or under any state securities laws and
agrees that the Series B Stock cannot be resold unless it is subsequently
registered under the 1933 Act or pertinent state securities laws unless an
exemption from such registration is available. The Holder agrees not to resell
or otherwise dispose of (collectively, "transfer") all or any part of the Series
B Stock except as permitted by law, and that the transfer of the Series B Stock
is restricted by the terms of this Agreement.
(g) Reliance Only on Published Documents. Holder acknowledges and
represents that he or she has made the decision to invest in the Series B Stock
solely on the basis of the publicly available information previously provided to
Holder by NSO in its Form 10-K for the fiscal year ended December 31, 1997 and
its Forms 10-Q for the fiscal quarter ended March 31, 1998, and that no officer,
director or other person affiliated with NSO has given any information or made
any representation, oral or written, other than as provided in such documents,
on which Holder has relied in deciding to invest in the Series B Stock,
including, without limitation, any information or representations with respect
to the future operations of NSO or to the economic returns which may accrue to
Holder as a result of the exchange of the Series A Stock for the Series B Stock.
(h) Recision Right for Florida Residents. Holder, if a Florida
resident, acknowledges that he or she may, at any time within three (3) days
after delivery of this Agreement and the stock certificates evidencing ownership
of the Series A Stock exchanged hereby, notify NSO of his intent to cancel this
Agreement. In such event, this Agreement shall be canceled and of no further
force or effect, and NSO shall promptly return the tendered stock certificates
to Holder.
(i) Execution of the Agreement. Holder has the full right, power and
authority to enter into and to perform this Agreement and all other agreements,
certificates and documents executed and delivered, or to be executed and
delivered, by Holder in connection herewith (collectively, with this Agreement,
the "Holder Documents"). This Agreement has been duly
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authorized, executed and delivered by Holder, and the Holder Documents are (or
when executed and delivered will be) legal, valid and binding obligations of
Holder, enforceable in accordance with their respective terms.
6. Share Certificates
6.1 Legend. Each certificate representing shares of Series B Stock
issued pursuant to the provisions hereof shall bear the following legend:
THESE SHARES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. NEITHER THE SHARES REPRESENTED BY THIS CERTIFICATE NOR
ANY INTEREST THEREIN MAY BE OFFERED, SOLD PLEDGED OR
TRANSFERRED IN THE ABSENCE OF REGISTRATION OR QUALIFICATION OR
EXEMPTION THEREFROM UNDER SAID ACT OR STATE SECURITIES LAWS OR
THE RULES AND REGULATIONS PROMULGATED THEREUNDER, OR AN
OPINION OF COUNSEL ACCEPTABLE TO NSO THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH LAWS.
6.2 Removal of Legend. The transfer restrictions imposed by the
legend set forth in Section 6.1 hereof shall terminate as to some or all of the
Series B Stock when:
(a) Such Series B Stock shall have been effectively registered
under the Securities Act of 1933 and any applicable state law and sold by the
holder thereof in accordance with such registration; or
(b) Written opinions to the effect that such registration is no
longer required or necessary under any federal or state law or regulation or
governmental authority shall have been received from counsel for NSO.
Whenever the restrictions imposed by Section 6.1 hereof shall
terminate, as provided above, any holder of such Series B Stock as to which such
requirements shall have terminated shall be entitled to receive from NSO,
without expenses to such holder, a new stock certificate evidencing such Series
B Stock without the restrictive legend set forth in Section 6. 1.
7. Notices. All notices or other communications in connection with this
Agreement shall be in writing and shall be considered given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, or when sent via commercial courier or telecopier,
directed as follows:
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If to NSO:
nStor Technologies, Inc.
000 Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Att: Xxxx Xxxx
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
with a copy to:
Xxxx Xxxxxx, Esq.
Holland & Knight LLP
Xxx Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
If to the Holder:
to the address opposite such Holder's name on Schedule 1 hereof.
with a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx, Xxxxxxxxx & Xxxx, LLP
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
8. Choice of Law. This Agreement and all transactions contemplated by this
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws of the State of Delaware without regard to principles of
conflicts of laws.
9. Survival of Representations. All statements contained in any
certificate or instrument or conveyance delivered by or on behalf of the parties
pursuant to this Agreement or in connection with the transactions contemplated
hereby shall be deemed to be additional representations and warranties of the
parties making such disclosure. All representations and warranties shall survive
the exchange of the Series B Stock for the Series A Stock as contemplated
herein.
10. Assignment. Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by either party without the prior written consent of
the other party hereto. Subject
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to the foregoing, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, and no other
person shall have any right, benefit or obligation hereunder.
11. Entire Agreement; Amendments and Waivers. This Agreement, together with
all exhibits, attachments and schedules hereto, constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, amendment, modification or waiver of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
12. Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein shall
for any reason be held invalid, illegal or unenforceable in any respect, then
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or any other instrument.
13. Further Assurances. The parties shall cooperate and take such actions,
and execute such other documents, in connection with the transactions
contemplated herein, as either may reasonably request in order to carry out the
provisions or purpose of this Agreement.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned has duly executed this Agreement on
the __ day June, 1998.
HOLDER
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(Signature)
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(Signature of Joint Holder, if applicable)
Acknowledged and Agreed to as of the ____ day of June, 1998.
NSTOR TECHNOLOGIES INC.
By:
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Xxxx Xxxx, President
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Stock Transfer and Assignment
(Preferred Stock)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, transfers,
conveys and delivers to nStor Technologies Inc., a Delaware corporation ("NSO"),
1,000 shares of the Series A, 8 % Convertible Preferred Stock, par value $.001
per share, of NSO, represented by certificate number 14, and irrevocably
constitutes and appoints NSO as my attorney to transfer such shares on the books
and records of the Corporation, with full power of substitution.
Dated: June __, 1998
Witness:
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(Signature of Holder)
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(Signature of Joint Holder, if applicable)
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Schedule 1
Series A Preferred Stockholders
===============================================================================================================================
SUBSCRIBER Purchase Number of Number of State of
NAME AND ADDRESS Price Preferred Warrant Origination
Shares Shares
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CPR (USA) Inc. $1,500,000 1,500 120,000 Delaware
000 Xxxxxx Xxxxxx Corp.
00xx Xxxxx
Xxxxxx Xxxx, XX 00000
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LibertyView Plus Fund 800,000 800 64,000 Bermuda Corp.
Xxxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx
HMDX
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LibertyView Fund, LLC 200,000 200 16,000 Delaware LLC
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx Xxxx, XX 00000
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H. Xxxxx Xxxx 1,000,000 1,000 80,000 Florida
000 Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, XX 00000
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