September 13, 1996
StreamLogic Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
Amendment to June 14, 1996 Agreement re:
Tender Offer for All Outstanding 6% Convertible Subordinated Debentures Due
2012
Dear Mr. Smart:
This letter sets forth out mutual understanding and agreement with respect
to amendments to the June 14, 1996 Agreement re: Tender Offer for All
Outstanding 6% Convertible Subordinated Debentures Due 2012 between Xxxxxx,
Xxxxxx & Co., L.P. and StreamLogic Corporation (the "Agreement"). Xxxxxx
Xxxxxx & Co., L.P. and StreamLogic Corporation hereby agree that the Agreement
shall be amended as follows:
1. Section 2 is amended by deleting it in its entirety and substituting the
following therefor:
"2. Timing. The Tender Offer shall close no later than October 21, 1996;
provided that, if based on SEC comments or otherwise, an extension of the
closing of the Tender Offer is required by applicable regulatory
requirements or law, the date by which the Tender Offer shall close shall
be the earlier of the date of the satisfaction of such requirements and
October 31, 1996. The date on which the Tender Offer closes shall
hereinafter be referred to as the "Closing Date." The exchange of the
tendered Debentures for cash, common stock and warrants on the terms and
conditions described below (the "Exchange") shall occur no later than 10
days after the Closing Date. The date of the Exchange shall hereinafter be
referred to as the "Exchange Date."
2. clause (i) of Section 3 is amended by deleting it in its entirety and
substituting the following therefor:
"cash in the amount of $233.33 per Debenture to be paid as follows: (a)
cash paid on the Exchange Date in the amount of $120.00 per Debenture and
(b) an unsecured promissory note (the "Promissory Note") in the principal
amount of $133.33 per Debenture with a maturity on the second anniversary
of the Exchange Date and bearing interest at the per annum rate of 14% from
the Exchange Date until the day before the first anniversary of the
Exchange Date and 16% from the day of the first anniversary of the Exchange
Date until the day of the second anniversary of the Exchange Date.
StreamLogic may prepay the Promissory Note without penalty at any time. The
proceeds of any debt financing of StreamLogic (other than proceeds not in
excess of $4,000,000 at any time outstanding under StreamLogic's revolving
credit facility currently in place with Xxxxx Fargo Bank, or any amendment
thereto or replacement thereof so long as the amount outstanding thereunder
does not at any time exceed $4,000,000) shall be applied, first, to
repayment of all amounts outstanding under the Promissory Note and,
thereafter, after all amounts outstanding under the Promissory Note have
been paid in full to other purposes of the financing determined by
StreamLogic and the financing entity;"
3. clause (ii) of Section 3 is amended by deleting it in its entirety and
substituting the following therefor:
"(ii) StreamLogic's common stock in the amount of 148.57143 shares of
common stock per Debenture (the "Exchange Shares");"
4. Clause (iii) of Section 3 is amended by deleting the first paragraph of
this clause in its entirety and substituting the following therefor:
"Warrants to purchase 40 shares of StreamLogic's common stock (the
"Warrants") per Debenture. The Warrants shall be exercisable at any time
before the fifth anniversary of the date of the Exchange and shall
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have an initial exercise price of $5.25 per share of common stock (the
"Exercise Price"). Each time prior to the first anniversary of the Exchange
that the average (excluding the highest price and the lowest price) closing
price of StreamLogic's common stock for a period of 5 consecutive trading
days (the "Reset Period") is less than $2.28 (after taking into account any
stock splits, consolidations or similar transactions) (the "Reset Price"),
each holder of Warrants shall have the option (the "Reset Election") to
adjust the exercise price of the Warrants held by such holder to 150% of
the Reset Price, provided that a holder of Warrants may exercise this
option no more than one time. An agent shall be appointed to handle the
mechanics of the transmission and exchange of the warrants (the "Warrant
Agent"). The holder of the Warrants must give notice to the Warrant Agent
of its intent to exercise the Reset Election within 5 business days
following the last day of the Reset Period. Notice of exercise of the Reset
Election shall be given by facsimile and perfected by delivery of the
Warrant to the Warrant Agent. Each Warrant shall be legended to reflect the
terms of the Reset Election and shall be exchanged by the Warrant Agent for
a Warrant deleting references to the Reset Election upon exercise of the
Reset Election with respect to such Warrant. If at any time for a period of
consecutive trading days the average (excluding the highest price and
lowest price) closing price of StreamLogic's common exceeds $6.56 (after
taking into account any stock splits, consolidations or similar
transactions) (the "Option Period"), StreamLogic shall have the option (the
"Warrant Exercise Option") to require the holders of the Warrants either to
exercise the Warrants held by such holder at the Exercise Price, or the
Reset Price if a Reset Price has been set, or to cancel the Warrants.
StreamLogic shall exercise such option within 5 business days following the
last day of the Option Period.
5. Section 4 shall be amended by adding the following sentence after the
fifth sentence of Section 4:
"StreamLogic shall take all reasonable measures and efforts to limit the
length of the time after a Withdrawal Election during which the shelf
registration is not available to as short a period of time as is possible,
consistent with the reason for the Withdrawal Election, and shall terminate
each Withdrawal Election and the period during which the shelf registration
is not available as quickly as reasonably possible, consistent with the
reason for the Withdrawal Election."
the introductory paragraph of Section 5 shall be amended by deleting it in its
entirety and substituting the following therefor:
"5. Agreement to Tender. Xxxxxx Xxxxxx agrees that it will
(i) advise the institutional clients it advises as of the Closing
Date, and
(ii) use its reasonable best efforts consistent with its various
relationships with its institutional clients to cause its institutional
clients as of the Closing Date which hold Debentures as of the Closing
Date,
to tender all of the Debentures held by such institutional clients as of
the Closing Date to StreamLogic pursuant to the Tender Offer and not
withdraw prior to the closing Date the tender of any Debentures held by
them, if
(a) the Tender Offer includes each of the terms described in paragraphs 1
through 4 above, and
(b) each of the following terms and conditions are met to the
satisfaction of Xxxxxx Xxxxxx:"
6. clause (a) of Section 5 shall be amended by deleting it in entirety and
substituting the following therefor:
"(a) The Tender Offer shall have closed no later than October 21, 1996;
provided that, if based on SEC comments or otherwise, an extension of the
closing of the Tender Offer is required by applicable regulatory
requirements or law, the date by which the Tender Offer shall close shall
be the earlier of the date of the satisfaction of such requirements and
October 31, 1996;"
7. clause (d) of Section 5 shall be amended by deleting it in its entirety
and substituting the following therefor:
"(d) StreamLogic's board of directors shall have been expanded to seven
members, of which three (3) shall be persons designated in writing by
Xxxxxx Xxxxxx. StreamLogic and its management shall also have
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agreed that StreamLogic's management will include in its slate of persons
nominated to be directors for election at the next meeting of shareholders
three persons designated in writing by Xxxxxx Xxxxxx. In the event that the
institutional clients of Xxxxxx Xxxxxx transfer more than eighty percent
(80%), in the aggregate, of the total aggregate number of Exchange Shares
and shares of common stock issued or issuable pursuant to the Warrants to
persons who are not advised by Xxxxxx Xxxxxx, the Xxxxxx Xxxxxx' right to
nominate directors shall terminate."
8. clause (a) of Section 6 shall be deleted in its entirety.
9. Exhibit A is amended by deleting it in its entirety and substituting
Exhibit A attached hereto therefor.
----------------
Each of Xxxxxx, Xxxxxx & Co., L.P. and StreamLogic Corporation hereby
reaffirm (i) the terms and conditions contained in the Agreement, as amended
hereby and (ii) that the Agreement, as amended hereby, is a legal, valid and
binding obligation of each of them on the terms set forth in the Agreement, as
amended hereby.
If this letter is satisfactory to you as a basis for proceeding with Tender
Offer, on the terms and conditions described in the Agreement, as amended
hereby, please so signify on the enclosed copy of this letter and return it to
us at the above address. We reserve the right to withdraw this letter at any
time before it is accepted.
Xxxxxx, Xxxxxx & Co., L.P.
By: Xxxxxx, Xxxxxx & Co., Inc.
By Xxxxxxxxx X. Xxx
Title: Vice President
Agreed:
STREAMLOGIC CORPORATION
By Xxx Xxxxxxx
Title: Chief Financial Officer
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EXHIBIT A
NO. OF SHARES,
TRANSACTION OPTIONS, WARRANTS
----------- -----------------
Shares issued to FWB at Closing as of July 1, 1996
(subject to adjustment 120 days after closing)....... 1,256,123
Warrants outstanding to Salomon as of September 18,
1996................................................. 80,081 at an exercise
price of $5.00 per share
Warrants outstanding to Xxxxxxx as of September 18,
1996................................................. 1,500,000 at an exercise
price of $4.00 per share
STOCK OPTIONS:
Options outstanding September 18, 1996................ 1,657,300
Options expected to be granted by October 31, 1996.... 150,000
Total stock options................................. 1,807,300
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