May 29, 2002 To: Purchasers of Series I Preferred Stock Listed at the End of This Letter RE: Amendment No. 1 to Series I Preferred Stock Purchase Agreement
May 29, 2002
To: Purchasers of Series I Preferred Stock Listed at the End of This Letter
RE: Amendment No. 1 to Series I Preferred Stock Purchase Agreement
This letter requests your agreement to amend the Series I Preferred Stock Purchase Agreement dated as of May 17, 2002 (the "Purchase Agreement") by and among Exabyte Corporation (the "Company"), you and the other purchasers ("Purchasers") named in the Purchase Agreement. Capitalized terms used in this letter shall have the meanings ascribed to them in the Purchase Agreement.
Need for Amendments
We are requesting an amendment that we (i) register the Shares (which are the shares of Series I Preferred Stock) and the Warrants on a Form S-1 registration statement or any other registration form for which Exabyte is eligible and (ii) register the Conversion Stock and the Warrant Stock on a Form S-3 or Form S-1 registration statement or any other registration form for which Exabyte is eligible. This could result in the filing of more than one registration statement to register the securities for resale.
Under Section 7.1(b) of the Purchase Agreement, the Company is required to file with the Securities and Exchange Commission, no later than 15 days after the Closing Date, "a Registration Statement on Form S-3" for the resale of the Shares, the Warrants, the Conversion Stock and the Warrant Stock. However, the Form S-3 rules permit us to register for resale only securities that are listed on a national securities exchange or a Nasdaq market. The Conversion Stock and the Warrant Stock (the common stock issuable upon conversion of the Series I Preferred or upon exercise of the springing Warrants) satisfy this requirement. However, the Series I Preferred and Warrants are not listed on Nasdaq and, therefore, cannot be registered for resale on a Form S-3. Thus, we cannot accomplish fully what is contemplated by the Stock Purchase Agreement.
In addition, we are requesting that you agree to (1) a six-day extension of the time by which we are required to file the resale registration statement(s) for the Conversion Stock and Warrant Stock from June 1, 2002 (15 days after the Initial Closing) to the close of business on June 7, 2002, (2) a twenty-day extension of the time by which we were required to file the resale registration statement for the Series I Preferred and Warrants from June 1, 2002 to June 21, 2002, (3) correspondingly an extension of the date by which we are to have the registration statement for the Conversion Stock and Warrant Stock effective from 90 days to 96 days after the Initial Closing, and (4) correspondingly an extension of the date by which we are to have the registration statement(s) for the Series I Preferred and Warrants effective from 90 days to 110 days after the Initial Closing.
Reasons for the Proposed Amendments
The reasons that we think you should approve the amendments are as follows:
-- We cannot register the Shares and the Warrants on a Form S-3 because the Shares and the Warrants are
not listed on Nasdaq;
-- It will take Exabyte longer to prepare a registration statement on Form S-1 than on Form S-3 because the
disclosure requirements are more extensive and the Company cannot incorporate information by
reference to its other publicly filed documents; and
-- We have determined it is advisable under the securities laws to have a binding agreement for all of the
Series I Preferred that we plan to sell before we file a registration statement on Form S-3 for the
Conversion Stock and Warrant Stock.
Amendment
We are requesting that you agree to amend Section 7.1 of the Purchase Agreement:
-- so that the Company's obligation to file a resale registration statement with respect to the Shares and
Warrants shall be on Form S-1 or any other form for which Exabyte is eligible;
-- so that the Company's obligation to file a resale registration statement with respect to the Conversion
Stock and the Warrant Stock shall be on Form S-3, Form S-1 or any other form for which Exabyte is
eligible;
-- to extend the date by which we were required to file the resale registration statement for the Conversion
Stock and Warrant Stock until the close of business on June 7, 2002 and correspondingly to extend the
date by which we are to have the registration statement for the Conversion Stock and Warrant effective
from 90 days to 96 days after the Closing Date as stated in Sections 7.1(b), 7.1(d) and 7.1.2; and
-- to extend the date by which we are required to file the resale registration statement(s) for the Shares and
Warrants until the close of business on June 21, 2002 and correspondingly to extend the date by which
we are to have such registration statement(s) effective from 90 days to 110 days after the Closing Date as
stated in Sections 7.1(b), 7.1(d) and 7.1.2.
All other provisions of the Purchase Agreement shall remain in full force and effect. This amendment to the Purchase Agreement will be effective upon approval by 75% in interest of the Purchasers.
Please evidence your agreement to the amendment to the Purchase Agreement by signing below. We request that you return the signed copy of this letter to us in the enclosed self-addressed overnight courier envelope as soon as possible.
Please feel free to contact us with any questions or comments you have concerning these matters.
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Very truly yours, |
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EXABYTE CORPORATION |
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Title: VP, General Counsel & Secretary |
ACCEPTED AND AGREED:
State of Wisconsin Investment Board
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Investment Director |
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Madison, WI 53702 |
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Meritage Private Equity Fund, L.P.
Meritage Private Equity Parallel Fund, L.P.
Meritage Entrepreneurs Fund, L.P.
By Meritage Investment Partners, LLC
general partner
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Denver, Colorado 80202 |
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Crestview Capital Fund, LP
Crestview Capital Fund II, LP
Crestview Capital Offshore Fund, Inc.
By Kingsport Capital Partners, LLC
General Partner
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Northbrook, Illinois |
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Valley Ventures II, L.P.
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General Partner
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Scottsdale, Arizona 85253 |
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Millennial Holdings LLC
The Millennial Fund
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Denver, CO 80202 |
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Hexagon Investments LLC
Grandhaven LLC
Legacy Enterprises LLC
Labyrinth Enterprises LLC
By: Hexagon Investments, Inc.
Manager
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VP |
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Larimer Square |
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Denver, CO 80202 |
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Builder Investment Group, Inc |
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Atlanta, GA 30305 |
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New York, NY 10022 |
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The Sama Partnership
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General Partner
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South Padre Island, TX 78597 |
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