October 3, 1996
StreamLogic Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
Second 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 & Company, L.P. and StreamLogic Corporation, as amended by the
September 13, 1996 amendment to June 14, 1996 Agreement re: Tender Offer for
All Outstanding 6% Convertible Subordinated Debentures Due 2012 (the
"Agreement"). Xxxxxx Xxxxxx & Company, 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 November 4, 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
November 14, 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 (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 216.6667 shares of common
stock per Debenture (the "Exchange Shares");"
3. 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 have an
initial exercise price of $3.60 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 $1.56 (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
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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 $4.50 (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.
4. 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 November 4, 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
November 14, 1996;"
5. 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 two (2) shall be persons designated in writing by Xxxxxx
Xxxxxx. StreamLogic hereby agrees that it will take all actions reasonably
necessary, and will cause its management to take all actions reasonably
necessary, to include in management's slate of persons nominated to be
directors for election at the next meeting of shareholders two (2) persons
designated in writing by investors advised by Xxxxxx Xxxxxx. In the event
that the investors advised by Xxxxxx Xxxxxx hold less than twenty-eight
(28%), in the aggregate, of the total aggregate number of shares of common
stock of StreamLogic outstanding, the right of such investors to nominate
directors shall terminate. Xxxxxx Xxxxxx may in its discretion require each
person designated by investors advised by Xxxxxx Xxxxxx to be a member of
StreamLogic's board of directors to agree to take measures designated by
Xxxxxx Xxxxxx which are intended to prevent nonpublic information from
being communicated to Xxxxxx Xxxxxx or investors advised by Xxxxxx Xxxxxx
unless Xxxxxx Xxxxxx determines that receiving nonpublic information is in
the best interests of the investors advised by Xxxxxx Xxxxxx."
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Each of Xxxxxx Xxxxxx & Company, 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 & Company, L.P.
By: Xxxxxx Xxxxxx & Company, Inc.
By Xxxxxxxxx X. Xxx
Title: Vice President
Agreed:
STREAMLOGIC CORPORATION
By Xxx Xxxxxxx
Title: Chief Financial Officer
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