AMENDMENT TO SECOND WAIVER AND CONSENT
Exhibit 10.2
AMENDMENT TO
SECOND WAIVER AND CONSENT
SECOND WAIVER AND CONSENT
This Amendment to Second Waiver and Consent (this “Amendment”) is entered into as of this
31st day of May, 2006, by and between The Canopy Group, Inc., a Utah corporation
(“Canopy”), and MTI Technology Corporation, a Delaware corporation (“MTI”).
On December 28, 2004, MTI and Canopy entered into that certain Second Waiver and Consent (the
"Waiver”), attached hereto as Exhibit “A.” On June 15, 2005, MTI entered into that certain
Third Amendment to Loan and Security Agreement, between MTI and Comerica Bank, amending the
revolving maturity date to May 31, 2006 (the “Comerica Amendment”), attached hereto as Exhibit
“B.” Canopy remains MTI’s major stockholder and agrees that it is in the best interest of MTI
and its stockholders that it amend the Waiver as set forth herein. All terms not otherwise defined
shall have the meaning set forth in the Waiver.
Whereas, in order to obtain Canopy’s wavier and consent to MTI’s obligations under the
Comerica Amendment, MTI desires to grant a warrant to Canopy to purchase shares of MTI’s common
stock on the terms set forth herein.
Now, therefore, in consideration of the promises, covenants and agreements set forth below,
the mutual benefits to be derived from the transactions described above and other good and valuable
consideration, and intending to be legally bound, the parties hereby agree as follows:
1. MTI agrees to grant a warrant to Canopy to purchase shares of MTI’s common stock, on
the terms and conditions set forth in the Warrant attached as Exhibit “C.”
2. Canopy consents to MTI’s entering into and performing its obligations under the
Comerica Amendment and agrees to guarantee MTI’s line of credit with Comerica Bank through
December 31, 2006.
3. Section 3(c) of the Waiver is hereby deleted in its entirety.
4. Canopy hereby represents, warrants and covenants to MTI as follows:
4.1 Purchase for Own Account. Canopy represents that it is acquiring the
Warrant, and the common stock issuable upon exercise of the Warrant (collectively, the
“Securities”) solely for investment for Canopy’s own account not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and that Canopy has no
present intention of selling, granting any participation in, or otherwise distributing the
same. The acquisition by Canopy of any of the Securities shall constitute confirmation of
the representation by Canopy that Canopy does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such person or
to any third person, with respect to any of the Securities.
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4.2 Accredited Investor. Canopy represents that it is an “accredited investor”
within the meaning of Securities and Exchange Commission Rule 501 of Regulation D, as
presently in effect and, for the purpose of Section 25102(f) of the California Corporations
Code, it is excluded from the count of “purchasers” pursuant to Rule 260.102.13 thereunder.
4.3 Restrictions on Transfer. Canopy understands that the Securities are
characterized as “restricted securities” under the federal securities laws inasmuch as they
are being acquired from MTI in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may be resold without registration
under the Securities Act of 1933, as amended (the “Act”), only in certain limited
circumstances. In this connection Canopy represents that it is familiar with Rule 144,
promulgated under the Act as presently in effect, and understands the resale limitations
imposed thereby and by the Act. CANOPY UNDERSTANDS AND ACKNOWLEDGES HEREIN THAT AN
INVESTMENT IN MTI’S SECURITIES INVOLVES AN EXTREMELY HIGH DEGREE OF RISK AND MAY RESULT IN A
COMPLETE LOSS OF ITS INVESTMENT. Canopy understands that the Securities have not been and
will not be registered under the Act and have not been and will not be registered or
qualified in any state in which they are offered, and thus Canopy will not be able to resell
or otherwise transfer its Securities unless they are registered under the Act and registered
or qualified under applicable state securities laws, or an exemption from such registration
or qualification is available. Canopy has no immediate need for liquidity in connection
with this investment and does not anticipate that it will need to sell its Securities in the
foreseeable future.
THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE ISSUANCE OF THE SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR
25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
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In witness whereof, the undersigned has executed this Amendment as of the date first set forth
above.
| THE CANOPY GROUP, INC., a Utah corporation |
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| By: | /s/ E. Xxxx Xxxxxx | |||
| Title: | VP/Treasurer | |||
| MTI TECHNOLOGY CORPORATION, a Delaware corporation |
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| By: | /s/ Xxxxx Xxxxxxxxx 6/20/06 | |||
| Title: | CFO | |||
