EXHIBIT 10.2
March 31, 1998
Via Facsimile
Xxxxxx Xxxxxx
Combination, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Re: Exercise of Warrants/Issuance of Common Stock
Dear Xxxxxx:
This letter confirms the agreement (the "Letter Agreement") between SyQuest
Technology, Inc. ("SyQuest") and Combination, Inc. ("Combination") that
Combination will exercise, or will cause to be exercised by the lawful owner,
certain warrants issued by the SyQuest represented by warrant numbers 10, 12,
24, 31, 34, 35, 37A, 38, 39, 40, 41, 43A, 45A, 48, 49 and 50 (collectively, the
"Warrants") for a total of 1,956,273 shares of SyQuest's common stock at the
respective exercise price set forth in each of the Warrants. The purchase price
for said 1,956,273 shares shall total $4,909,379.19 (the "Proceeds"). Upon
receipt of the Proceeds, plus an additional $70 representing the approximate par
value for an additional 693,727 shares (the "Additional Common Shares) of the
Company's common stock, the Company will issue a total of 2,650,000 shares of
common stock to Combination.
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. Combination
hereby represents, warrants and covenants that as of March 31, 1998 and as of
the issuance of the Additional Common Shares that:
a. The execution, delivery and performance of this Letter Agreement by
Combination has been duly authorized by all requisite corporate action and no
further consent or authorization of Combination, its Board of Directors or its
stockholders is required.
b. Combination 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,
Combination 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. Combination 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. Combination 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. Combination 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. Combination is able to bear the economic
risk of Combination's investment hereunder.
g. Combination 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 Combination's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Combination set forth herein in order to determine the
availability of such exemptions and the eligibility of Combination to acquire
the Additional Common Shares.
h. A principal executive officer or other representative of Combination
who is acting on behalf of Combination 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 Combination contemplated by this Agreement and has the capacity to
protect Combination's interests.
i. Combination 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 Combination. Combination has been afforded the
opportunity to ask all questions of the Company that the Combination considered
appropriate or desirable to ask in connection with this Agreement and has
received answers to such inquiries that Combination considers satisfactory.
Combination understands that its investment in the Additional Common Shares
involves and will involve a high degree of risk. Combination 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. Combination 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) Combination 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) 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.
k. Neither Combination 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 $70 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
(remainder of page intentionally left blank)
The Company 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. Combination, Inc.
Xxx X. Xxxxx
Executive Vice President and
Chief Financial Officer
cc: Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx
