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EXHIBIT 10.2
[SyQuest Technology, Inc. letterhead]
April 22, 1998
Via Facsimile
Xxxx Xxxxxxxx
Castle Creek Partners
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Exercise of Warrants/Issuance of Common Stock
Dear Xxxx:
This letter confirms the agreement (the "Letter Agreement") between SyQuest
Technology, Inc. ("SyQuest") and CC Investments, LDC ("CCI") that CCI will
exercise warrant number 81 (the "Warrant") to exercise 1,500,000 shares of
SyQuest's common stock at the exercise price of $3.0469 as set forth in of the
Warrant. The purchase price for said 1,500,000 shares shall total $4,570,350
(the "Proceeds"). Upon receipt of the Proceeds, plus an additional $78.52
representing the par value for an additional 785,175 shares (the "Additional
Common Shares) of the Company's common stock, the Company will issue a total of
2,285,175 shares of common stock to CCI. SyQuest will also issue a replacement
warrant for the 2,000,000 shares of common stock available pursuant to the
Warrant after the exercise resulting in the issuance of 1,500,000 shares of
SyQuest's common stock.
CCI hereby represents, warrants and covenants that as of April 22, 1998 and
as of the issuance of the Additional Common Shares that:
a. The execution, delivery and performance by CCI of this Letter
Agreement and that certain other letter agreement dated the same date hereof
(the "Other Letter Agreement"), a copy of which is attached as Exhibit A hereto,
have been duly autho rized by all requisite corporate action and no further
consent or
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authorization of CCI, its Board of Directors or its stockholders is required.
b. CCI understands that no United States federal or state agency has
passed on, reviewed or made any recommendation or endorsement of the Additional
Common Shares.
c. In making the decision to accept the Additional Common Shares, CCI
has relied solely upon independent investigations made by it and not upon any
representations made by the Company other than that the Company acknowledges
that CCI is relying on information disclosed in the Company's public filings
with the SEC and confirms that it is aware of no material misstatements or
omissions in those filings.
d. CCI understands that the Additional Common Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be reoffered or resold other than pursuant to such registration or
an available exemption therefrom.
e. CCI is acquiring the Additional Common Shares for its own account
for investment only and not with a view to, or for resale in connection with,
the public sale or distribution thereof except pursuant to sales registered
under the Securities Act.
f. CCI is an "accredited investor" as that term is defined in Rule
501(a)(1) of Regulation D as promulgated by the Securities and Exchange
Commission under the Securities Act. CCI is able to bear the economic risk of
CCI's investment hereunder.
g. CCI understands that the Additional Common Shares are being or
will be offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying on the truth and accuracy of, and CCI's compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of CCI set forth herein in order to determine the availability of
such exemptions and the eligibility of CCI to acquire the Additional Common
Shares.
h. A principal executive officer or other representative of CCI who
is acting on behalf of CCI in connection with the transactions contemplated
hereby has such knowledge and experience in financial and business matters that
such officer is capable of evaluating the merits and risks of the investment by
CCI contemplated by this Agreement and has the capacity to protect CCI's
interests.
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i. CCI has been furnished with all materials and information relating
to the business, management, properties, financial condition, operations,
affairs and prospects of the Company and all materials and information relating
to the offer and sale of the Additional Common Shares as have been requested by
CCI. CCI has been afforded the opportunity to ask all questions of the Company
that the CCI considered appropriate or desirable to ask in connection with this
Agreement and has received answers to such inquiries that CCI considers
satisfactory. CCI understands that its investment in the Additional Common
Shares involves and will involve a high degree of risk. CCI has sought such
investment, accounting, legal and tax advice as it has considered necessary to
an informed investment decision with respect to its acquisition of the
Additional Common Shares.
j. CCI understands that (i) the Additional Common Shares have not
been registered under the Securities Act or any state securities laws, and may
not be offered for sale, sold, assigned or transferred unless (a) subsequently
registered thereunder, or (b) CCI shall have delivered to the Company an opinion
of counsel, reasonably satisfactory in form, scope and substance to the Company,
to the effect that the securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration;
(ii) any sale of such securities made in reliance on Rule 144 promulgated under
the Securities Act ("Rule 144") may be made only in accordance with the terms of
Rule 144 and, if Rule 144 is not applicable, any resale of such securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act
or the rules and regulations of the SEC thereunder; and (iii) other than as
provided in that certain Other Letter Agreement, neither the Company nor any
other person is under any obligation to register such securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
The Proceeds plus the additional $78.52 will be wire-transferred to the
following account:
Bank of America
0000 Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxxxx, XX 00000
ABA # 000-000-000
A/C # 12334-56287
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The Company agrees to deliver the shares of common stock issued upon
exercise of the warrants in accordance with the terms of the warrants.
SyQuest hereby represents, warrants and covenants that as of April 22, 1998
and as of the issuance of the Additional Common Shares that:
a. The execution, delivery and performance by SyQuest of this Letter
Agreement and the Other Letter Agreement have been duly authorized by all
requisite corporate action and no further
(remainder of page intentionally left blank)
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consent or authorization of SyQuest, its Board of Directors or its stockholders
is required.
Please sign below documenting your agreement to the above terms.
SyQuest Technology, Inc. CC Investments, LDC
By: Castle Creek Partners
its Investment Manager
/s/ Xxxxxx X. Xxxxx /s/ Xxxx Xxxxxxxx
-------------------------------------- --------------------------------------
Xxxxxx X. Xxxxx Xxxx Xxxxxxxx its
Vice President, General Counsel and Managing Partner
Secretary
cc: Xxxxxx X. Xxxxxxxx
