Exhibit 4.9
June 9, 1998
Via Facsimile (913-642-8661)
Xxxx Xxxxxx
Jayhawk Investments, LP
Jayhawk Institutional Partners, LP
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxx 00000
Re: Exercise of Warrants/Issuance of Common Stock
Dear Josh:
This letter confirms the agreement (the "Letter Agreement") between SyQuest
Technology, Inc. ("SyQuest") and Jayhawk Investments, L.P. and Jayhawk
Institutional Partners, LP (collectively "Jayhawk") that Jayhawk will exercise
certain warrants issued by the SyQuest (collectively, the "Warrants") for a
total of up to 1,500,000 shares of SyQuest's common stock at the respective
exercise price of $2.00 per share as set forth in each of the Warrants. The
purchase price for said 1,500,000 shares shall total $3,000,000 (or lesser
amount based on the number of shares exercised) (the "Proceeds"). Upon receipt
of the Proceeds, plus an additional $225.00 representing the par value for an
additional 2,250,000 shares (or lesser pro rata amount) (the "Additional Common
Shares) of the Company's common stock, the Company will issue a total of
3,750,000 (or lesser pro rata amount) shares of common stock to Jayhawk. The
Proceeds plus the addtional $225.00 (or lesser pro rata amount) for the
Additional Common Shares shall be paid no later than June 16, 1998. After June
16, 1998, Jayhawk shall not be entitled to exercise any rights under this Letter
Agreement to acquire Additional Common Shares upon exercise of the Warant.
The Additional Common Shares shall have piggy back registration rights so
that they will be registered in a future registration statement consistent with
existing Company contractual obligations regarding registrations, but in any
event shall be registered no later than the earlier of September 10, 1998, or
the registration of the incentive shares of common stock previously issued to
Xxxxxxxx International Limited, subject to delays caused by reasonable business
considerations.
Jayhawk hereby represents, warrants and covenants that as of June 9, 1998
and as of the issuance of the Additional Common Shares that:
a. The execution, delivery and performance of this Letter Agreement by
Jayhawk has been duly authorized by all requisite corporate action and no
further consent or authorization
of Jayhawk, its Board of Directors or its stockholders is required.
b. Jayhawk 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, Jayhawk
has relied solely upon independent investigations made by it and not upon any
representations made by the Company other than as set forth in the Letter
Agreement.
d. Jayhawk 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. Jayhawk 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. Jayhawk 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. Jayhawk is able to bear the economic risk
of Jayhawk's investment hereunder.
g. Jayhawk 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 Jayhawk's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Jayhawk set forth herein in order to determine the
availability of such exemptions and the eligibility of Jayhawk to acquire the
Additional Common Shares.
h. A principal executive officer or other representative of Jayhawk who is
acting on behalf of Jayhawk 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
Jayhawk contemplated by this Agreement and has the capacity to protect Jayhawk's
interests.
i. Jayhawk 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
Jayhawk. Jayhawk has been afforded the opportunity to ask all
questions of the Company that the Jayhawk considered appropriate or desirable to
ask in connection with this Agreement and has received answers to such inquiries
that Jayhawk considers satisfactory. Jayhawk understands that its investment in
the Additional Common Shares involves and will involve a high degree of risk.
Jayhawk 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. Jayhawk 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) Jayhawk 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) except as provided in this 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 there under.
k. Neither Jayhawk nor any of its affiliates nor any person acting on its
or their behalf will at any time offer or sell the Additional Common Shares
other than pursuant to registration under the Securities Act or pursuant to an
available exemption therefrom.
The Proceeds plus the additional $195 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
SyQuest hereby represents and warrants that when issued, the Additional
Common Shares shall be duly authorized, validly issued, fully paid and
nonassesable.
SyQuest agrees to deliver the shares of common stock issued upon exercise
of the warrants in accordance with the terms of the warrants.
Please sign below documenting your agreement to the above terms.
SyQuest Technology, Inc. Jayhawk Investments, LP
/s/ /s/
-------------------------------------- --------------------------------------
Xxxxxxx Xxxxxxx Xxxx Xxxxxx
Acting Chief Financial Officer Authorized Signatory
Jayhawk Institutional Partners, LP
/s/
------------------------------
Xxxx Xxxxxx
Authorized Signatory
cc: Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx
