SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 27, 1997
SYQUEST TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-19674 94-2793941
(Commission File Number) (IRS Employer Identification No.)
47071 Bayside Parkway, Fremont, California 94538
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(510) 226-4000
Not Applicable
(Former name or former address, if changed since last report.)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5 Other Events
Recent warrant transactions Pursuant to Regulation D
On June 27, 1997, Registrant issued 166,667 warrant shares
to Silicon Valley Bank exercisable for 166,667 shares of
Registrants common stock (the "Common Stock") at the
exercise price noted in the warrant agreement provided
herein.
On June 27, 1997, Registrant issued 333,333 warrant shares
to Silicon Valley Bank exercisable for 333,333 shares of
Registrants common stock (the "Common Stock") at the
exercise price noted in the warrant agreement provided
herein.
On July 23, 1997 through October 15, 1997,
Registrant issued 254,428 warrant shares
to Silakhan Route exercisable for 254,428 shares of
Registrants common stock (the "Common Stock") at the
exercise prices noted in the warrant agreements provided
herein.
On November 6, 1997, Registrant issued 1,804,347 warrant shares
shares to Wharton Capital Partners exercisable for 1,804,347
shares of Registrants common stock (the "Common Stock") at the
exercise price noted in the warrant agreement provided
herein.
Item 7 Financial Statements, Pro Forma Financial Information
and Exhibits
10.1 Warrant Agreement dated as of June 27, 1997,
between Registrant and Silicon Valley Bank,.
10.2 Warrant Agreement dated as of June 27, 1997,
between Registrant and Greyrock Business Credit.
10.3 Warrant Agreement dated as of July 23, 1997,
between Registrant and Silakhan Route.
10.4 Warrant Agreement dated as of August 15, 1997,
between Registrant and Silakhan Route.
10.5 Warrant Agreement dated as of September 15, 1997,
between Registrant and Silakhan Route.
10.6 Warrant Agreement dated as of October 15, 1997,
between Registrant and Silakhan Route.
10.7 Warrant Agreement dated as of November 6, 1997,
between Registrant and Wharton Capital Partners.
Pursuant to the requirements of the Securities
Exchange Act of 1934, Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
SYQUEST TECHNOLOGY,INC.
(Registrant)
Dated: November 14, 1997 by /s/ Bob L. Corey
Bob L. Corey
Executive Vice President, Finance
and Chief Financial Officer
Exhibit 10.1
THE SECURITIES REPRESENTED BY OR ISSUABLE ON
EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.
Warrant No. 76
COMMON STOCK PURCHASE WARRANT
SYQUEST TECHNOLOGY, INC.
This Warrant certifies that Silicon Valley Bank
("Holder"), or its registered assigns, is the
registered holder of one Warrant (the "Warrant")
expiring on June 26, 2004 (the "Termination Date") to
purchase shares of common stock, par value $.0001 per
share (the "Common Stock"), of SYQUEST TECHNOLOGY,
INC., a Delaware corporation (the "Issuer"). This
Warrant entitles the holder to purchase from the
Issuer up to 166,667 Warrant Shares (as defined
below), subject to adjustment, at a per share
Exercise Price (as defined below). A "Warrant Share"
initially represents one fully paid and nonassessable
share of Common Stock, based upon an Exchange Rate
(as defined below) of one-for-one, subject to
adjustment pursuant to paragraph 10.
This Warrant was issued on June 27, 1997 (the
"Closing Date").
The exercise price per Warrant Share (plus
transfer taxes, if applicable, the "Exercise Price")
shall be the greater of (a) 130 percent of the
arithmetical average of the closing sale prices per
share of Common Stock on the five consecutive trading
days preceding the delivery of any Exercise Notice
(as defined below) as reported by the Nasdaq National
Market (the "NNM") or, if the NNM is not then the
principal trading market for the Common Stock, on the
principal trading market for the Common Stock at that
time or, if there is then no such principal trading
market, the fair market value per share of Common
Stock during such period as determined in good faith
by the Board of Directors of the Issuer and (b) 130
percent of such closing sale price on the day
immediately preceding the delivery of the Exercise
Notice; provided that in no event shall the Exercise
Price exceed $3.0469. If the value of the Common
Stock is to be determined by the Board of Directors
of the Issuer and the holder of this Warrant
disagrees with said valuation, the value of the
Common Stock will be determined by binding
arbitration in accordance with the then prevailing
commercial arbitration rules of the American
Arbitration Association, and such arbitration shall
proceed in San Francisco, California, or at such
other place as agreed to in writing by the Issuer and
the holder of this Warrant. The Exercise Price
multiplied by the Exercise Amount (as defined below)
at any Exercise Date (as defined below) is referred
to as a "Warrant Purchase Price".
This Warrant shall have the following
additional terms:
1. (a) This Warrant is not exercisable until the
lapse of a period ending on the 65th day (the
"Notice Period") after the holder delivers a
notice (a "65 Day Notice") to the Issuer
designating an aggregate number of Warrant
Shares (the "Exercisable Number"). A 65 Day
Notice may be given at any time after the
Closing Date. If the initial 65 Day Notice does
not designate all of the Warrant Shares, this
Warrant will become exercisable for some or all
of the remaining Warrant Shares upon delivery
of one or more 65 Day Notices increasing the
Exercisable Number after a further Notice
Period. From time to time following the Notice
Period, this Warrant may be exercised on any
Business Day prior to the Termination Date (an
"Exercise Date") for any quantity of Warrant
Shares, such that the aggregate number of
Warrant Shares issued hereunder is less than or
equal to the Exercisable Number. This Warrant
shall be exercisable only in the minimum amount
of 10,000 Warrant Shares and integral multiples
of 10,000 Warrant Shares in excess thereof (or
such lesser amount as shall constitute the full
amount remaining of this Warrant). As used
herein the term "Business Day" means any day on
which banks in the State of California are open
for business.
(b) To exercise this Warrant, the registered
holder must, prior to the Termination Date,
surrender this Warrant to the Issuer at its
principal office with the Exercise Notice
attached hereto (an "Exercise Notice") duly
completed and signed by the registered holder
hereof and stating the total number of Warrant
Shares in respect of which this Warrant is then
exercised (the "Exercise Amount") and either
(i) tender the applicable Warrant Purchase
Price, or (ii) comply with the requirements of
paragraph 1(c), below.
(c) If Holder elects to exercise this Warrant
pursuant to this paragraph 1(c), Holder shall
indicate its election on the Exercise Notice.
In such event, Holder shall be entitled to
convert this Warrant into a number of shares of
Common Stock determined by dividing (i) the
aggregate fair market value of the Common Stock
issuable upon exercise of this Warrant minus
the aggregate Exercise Price for such Common
Stock by (ii) the closing sale prices per share
of Common Stock on the date of the Exercise
Notice as reported by the NNM or, if the NNM is
not then the principal trading market for the
Common Stock, on the principal trading market
for the Common Stock at that time or, if there
is then no such principal trading market, the
fair market value per share of Common Stock as
determined in good faith by the Board of
Directors of the Issuer. If the value of the
Common Stock is to be determined by the Board
of Directors of the Issuer and the holder of
this Warrant disagrees with said valuation, the
value of the Common Stock will be determined by
binding arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
2. On the Business Day following an Exercise Date
(an "Issue Date"), the Issuer shall issue and
cause to be delivered to the registered holder
hereof at such address as such holder shall
specify in the Exercise Notice a certificate or
certificates for the number of full Warrant
Shares issuable upon the exercise of this
Warrant, registered in such holder's name,
together with cash (if any) as provided in
paragraph 4. Such certificate or certificates
shall be deemed to have been issued and any
person so designated to be named therein shall
be deemed to have become a holder of record of
such Warrant Shares as of such Exercise Date.
3. If on such Issue Date the number of Warrant
Shares to be delivered shall be less than the
total number of Warrant Shares deliverable
hereunder, there shall be issued to the holder
hereof or his assignee on such Issue Date a new
warrant substantially identical to this
Warrant, except that such new warrant shall
evidence the right to purchase the number of
Warrant Shares equal to (x) the total number of
Warrant Shares deliverable hereunder less (y)
the number of Warrant Shares so delivered.
4. The Issuer shall not be required to issue
fractional Warrant Shares on the exercise of
this Warrant. The number of full Warrant
Shares which shall be issuable upon the
exercise of this Warrant shall be computed on
the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant
so presented. If any fraction of a Warrant
Share would, except for the provisions of this
paragraph 4, be issuable on the exercise of
this Warrant, the Issuer shall pay an amount in
cash equal to the last per share sale price of
the Common Stock (on the NNM or the Principal
Market, as the case may be) on the day
immediately preceding the Exercise Date,
multiplied by such fraction (subject to
adjustment pursuant to paragraph 10); provided
that if at the time that the Exercise Price is
to be determined the NNM is not the principal
trading market for the Common Stock and there
is no Principal Market, then the amount of cash
to be paid per fractional Warrant Share shall
be determined in good faith by the Board of
Directors of the Issuer. If the holder of this
Warrant disagrees with such determination, the
amount of cash to be paid per fractional
Warrant Share will be determined by binding
arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
5. For so long as this Warrant has not been
exercised in full, the Issuer shall at all
times prior to the Termination Date reserve and
keep available, free from preemptive rights,
out of its authorized but unissued Common
Stock, for issuance upon exercise of this
Warrant, the maximum number of shares of Common
Stock and any other Capital Stock (as defined
below) then so issuable. In furtherance of the
foregoing, but subject to adjustment pursuant
to paragraph 10 and to increase pursuant to the
fourth paragraph hereof, the Issuer shall
reserve for issuance hereunder, not less than
166,667 shares of Common Stock. In the event
the number of shares of Common Stock or other
securities issuable in respect of the Warrant
Shares exceeds the authorized number of shares
of Common Stock or other securities, the Issuer
shall promptly take all actions necessary to
increase the authorized number, including
causing its Board of Directors to call a
special meeting of stockholders within thirty
days of the date on which such excess first
existed and recommend such increase for
approval by the Issuer's stockholders. The
Issuer shall use its best efforts to obtain
stockholder approval of the increase to the
authorized number of shares of Common Stock.
6. By accepting delivery of this Warrant, the
registered holder hereof covenants and agrees
with the Issuer not to exercise or transfer
this Warrant or any Warrant Shares except in
compliance with this Warrant, and that certain
Investment Letter dated November 14, 1997,
between Issuer and Holder.
7. By accepting this Warrant, the registered
holder hereof covenants and agrees with the
Issuer that this Warrant may not be sold,
assigned, conveyed, encumbered, pledged,
hypothecated or in any other manner disposed of
or transferred, as a whole or in part, unless
and until such holder shall deliver to the
Issuer (i) written notice of such transfer and
of the name and address of the transferee, (ii)
a written agreement, in form and substance
reasonably satisfactory to the Issuer, of the
transferee to comply with the applicable terms
of this Warrant and (iii) an opinion of counsel
for such holder, reasonably satisfactory to the
Issuer in form, scope and substance, that such
transaction will comply with all applicable
securities laws and regulations; provided that
the Issuer shall waive the requirement for such
an opinion with respect to a single transfer by
such holder (but not any subsequent transfer)
to a corporation that itself or through one or
more intermediary corporations owns of record
and beneficially all of the outstanding capital
stock of such holder or all of the outstanding
capital stock of which is owned of record and
beneficially by such holder or by a corporation
that also owns of record and beneficially all
of the outstanding capital stock of such
holder. If a portion of this Warrant is
transferred, all rights of the registered
holder hereunder may be exercised by the
transferee (subject to the requirement that
such transferee shall provide a like opinion of
counsel in respect of the number of Warrant
Shares transferred with the portion of this
Warrant), provided that any registered holder
of this Warrant may deliver a 65 Day Notice, an
Exercise Notice or elect the form of
consideration pursuant to paragraph 10 only
with respect to the Warrant Shares subject to
such holder's portion of this Warrant, and, for
purposes of paragraph 10(c), the calculation of
the Black-Scholes Warrant Value shall be made
by the registered holder(s) of a majority in
interest of this Warrant.
8. The Issuer will pay all documentary stamp taxes
(if any) attributable to the issuance of
Warrant Shares upon the exercise of this
Warrant by the registered holder hereof;
provided that the Issuer shall not be required
to pay any tax or taxes which may be payable in
respect of any transfer involved in the
registration of this Warrant or any
certificates for Warrant Shares in a name other
than that of the registered holder of this
Warrant surrendered upon the exercise of this
Warrant, and the Issuer shall not be required
to issue or deliver this Warrant or
certificates for Warrant Shares unless or until
the person or persons requesting the issuance
thereof shall have paid to the Issuer the
amount of such tax or shall have established to
the satisfaction of the Issuer that such tax
has been paid.
9. In case this Warrant shall be mutilated, lost,
stolen or destroyed, the Issuer may in its
discretion issue in exchange and substitution
for and upon cancellation of the mutilated
Warrant, or in lieu of and substitution for the
lost, stolen or destroyed Warrant, a new
Warrant of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Issuer
of such loss, theft or destruction of such
Warrant and indemnity, if requested, reasonably
satisfactory to the Issuer. Applicants for a
substitute Warrant shall also comply with such
other reasonable regulations and pay such other
reasonable charges as the Issuer may prescribe.
10. The number of shares of Common Stock (and other
Capital Stock (as defined below) or property)
(as adjusted from time to time, the "Exchange
Rate") issuable upon the exercise of this
Warrant and the terms and conditions of this
Warrant are subject to adjustment by the
Issuer, in consultation with the holder hereof,
from time to time as follows:
(a) If the Issuer:
1. subdivides its outstanding shares
of Common Stock into a greater
number of shares;
2. combines its outstanding shares of
Common Stock into a smaller number
of shares; or
3. issues by reclassification of its
Common Stock any shares of its
Capital Stock;
then the Exchange Rate in effect
immediately prior to such action shall be
adjusted so that the registered holder
hereof shall thereafter be entitled to
receive upon exercise of this Warrant in
respect of each Warrant Share the number
of shares of Common Stock or other
Capital Stock of the Issuer that such
holder would have received immediately
following such action if such holder had
so exercised this Warrant immediately
prior to such action.
As used herein, the term "Capital Stock"
means, with respect to any corporation,
any and all shares, interests, rights to
purchase, warrants, options,
participations or other equivalents of or
interests (however designated) in stock
issued by that corporation.
Such adjustment shall become effective
simultaneously with the effective date of
any subdivision, combination or
reclassification.
If, after an adjustment, the registered
holder hereof would receive upon exercise
shares of two or more classes of Capital
Stock of the Issuer, the Exchange Rate
shall thereafter be subject to adjustment
upon the occurrence of an action taken
with respect to each such class of
Capital Stock as is contemplated hereby
with respect to the Common Stock, on
terms comparable to those applicable to
Common Stock hereunder.
(b) Whenever any of the actions described in
this paragraph 10 are to be taken, the
Issuer shall provide the notices required
by paragraph 11 hereof.
(c) (A) The Issuer covenants and agrees with
the registered holder hereof not to
consolidate or merge with or into, or
sell, transfer or lease all or
substantially all its assets to, or sell
a majority of its securities generally
entitled to vote for the election of
directors of the Issuer ("Voting
Securities") to, any person, unless, and
(B) if any person consummates a tender
offer for the purchase of at least a
majority of the Voting Securities (any of
which transactions described in clauses
(A) and (B), a "Transaction"), then, at
the election of the registered holder
hereof (or if such holder does not notify
the Issuer of such election within twenty
days after being notified of the
Transaction, at the election of the
Issuer), on the effective date of such
Transaction (the "Transaction Date") and
as a condition to the consummation of any
Transaction described in clause (A),
either:
1. the Issuer shall have redeemed this
Warrant by paying to such holder,
upon surrender of this Warrant, a
cash payment equal to the Black-
Scholes value of the unexercised
portion of this Warrant from the
effective date of the Transaction
until the Warrant Expiration Date
(the "Black-Scholes Warrant
Value"), computed as of such
Transaction Date; or
2. (a) such person shall expressly
assume in writing all of the
obligations of the Issuer
hereunder and deliver notice
thereof to the registered
holder hereof; and
(b) upon consummation of such
Transaction, this Warrant
shall automatically become
exercisable for the common
stock of the acquiror
(without regard to the form
of acquisition consideration)
with similar terms and at an
exercise price that would
result in a Black-Scholes
Warrant Value of this Warrant
computed immediately after
the Transaction equal to the
Black-Scholes Warrant Value
of this Warrant computed
immediately before the
Transaction.
For purposes of this paragraph 10(c), the
factors to be used in the calculation of
the Black-Scholes Warrant Value are as
follows:
Stock Price:
the last sales price of
the Common Stock reported by Bloomberg
on the last Trading Day Prior to the
Transaction Date (the "Last Trading day")
Time To Expiration:
the number of Trading Days between the last
Trading Day and the Termination Date.
Exercise Price: Exercise Price
Volatility:
volatility shown by Bloomberg for the past
260 days at close on the Last Trading Day,
unless the Time to Expiration is less than
260 Trading Days, in which case the
volatility shown by Bloomberg at close on
the Last Trading Day for the number of
Trading Days from the Last Trading Day
to the Termination Date.
Risk-Free Interest Rate:
closing yield as of the Last Trading Day as
quoted in the Wall Street Journal for U.S.
Treasury bond with a maturity date closest
to the Termination Date.
Number of Shares Outstanding :
total number of shares of Common Stock
outstanding as of the Last Trading Day.
Exercisable Common Stock:
the number of shares of Common Stock
exercisable under this Warrant as of the
Transaction Date
The Black-Scholes Warrant Value will be
calculated using the factors shown above.
A preliminary calculation of the Black-
Scholes Warrant Value, and, if
applicable, the exercise price
contemplated by paragraph 10(c)2(b)
hereof, (using then-current values for
each factor) will be delivered by Holder
to the Issuer not later than the tenth
day after it receives notice of a
Transaction by the Issuer. The Issuer,
in turn, will respond within five days
with any comments or questions and reach
agreement with Holder on the preliminary
factors. On the Transaction Date,
Holder, in consultation with the Issuer,
will calculate the final Black-Scholes
Warrant Value using the then-current
values for each factor; such calculation
will be used to compute the values called
for in paragraph 10(c). It shall be a
condition to any Transaction that the
consideration provided for herein shall
be paid in full, in the case of cash, or
delivered, in the case of a warrant, all
in accordance with the terms hereof,
immediately prior to the consummation of
the Transaction. As used herein, the term
"Trading Day" means any day on which the
Issuer's Common Stock is quoted on the
NNM or, if applicable, other national
securities exchange. If the factors
shown above can not be determined because
the Issuer's Common Stock is not listed
on any national securities exchange or
because Bloomberg does not report the
factors shown above, then the Issuer and
the holder of this Warrant shall agree on
an alternative calculation to satisfy the
requirements of this paragraph 10(c).
(d) After an adjustment to the Exchange Rate
hereunder, any subsequent event requiring
an adjustment hereunder shall cause an
adjustment to the Exchange Rate as so
adjusted.
(e) Upon the issuance of any stock dividend
or distribution of Common Stock pro rata
to all holders of Common Stock, the
Exchange Rate shall be adjusted so that
the registered holder hereof on the
record date for such distribution shall
be entitled to receive such dividend or
distribution on the same terms as the
holders of Common Stock upon exercise
hereof.
11. Except as provided in the following paragraph,
upon any adjustment of the Exchange Rate
pursuant to paragraph 10, the Issuer shall
promptly thereafter but in any event within
fifteen days following such adjustment (i)
cause to be delivered to the registered holder
hereof a certificate of its Chief Financial
Officer setting forth the Exchange Rate after
such adjustment and setting forth in reasonable
detail the method of calculation and the facts
upon which such calculations are based, which
certificate shall be conclusive evidence of the
correctness of the matters set forth therein,
and (ii) cause to be delivered to the
registered holder hereof at its address
appearing on the Warrant Register written
notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such
notice may be given in advance and included as
part of the notice required to be mailed under
the other provisions of this paragraph 11.
In case:
(a) the Issuer shall authorize the issuance
to all holders of shares of Common Stock
of rights, options or warrants to
subscribe for or purchase shares of
Common Stock or of any other subscription
rights or warrants; or
(b) of any proposal for a consolidation or
merger to which the Issuer is a party,
the sale or transfer of all or
substantially all of the assets of the
Issuer, or any reclassification or change
of Common Stock issuable upon exercise of
this Warrant (other than a change in par
value, or from par value to no par value,
or from no par value to par value, or as
a result of a subdivision or
combination), or of a tender offer or
exchange offer for shares of Common
Stock; or
(c) of the voluntary or involuntary
dissolution, liquidation or winding up of
the Issuer; or
(d) the Issuer proposes to take any action
that would require an adjustment of the
Exchange Rate pursuant to paragraph 10;
then the Issuer shall cause to be given to the
registered holder hereof at its address
appearing on the Warrant Register (as defined
below), at least twenty days (or ten days in
any case specified in clause (a) above) prior
to the applicable record date hereinafter
specified, or promptly in the case of events
for which there is no record date, by first
class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled
to receive any such rights, options, warrants
or distribution are to be determined, or (ii)
the initial expiration date set forth in any
tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any
such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective
or consummated, and the date as of which it is
expected that holders of record of shares of
Common Stock shall be entitled to exchange such
shares for securities or other property, if
any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up.
12. The Issuer shall serve as warrant agent (the
"Warrant Agent") under this Agreement. The
Warrant Agent hereunder shall at all times
maintain a register (the "Warrant Register") of
the holders of Warrants. Upon thirty days'
notice to the registered holder hereof, the
Issuer may appoint a new Warrant Agent. Such
new Warrant Agent shall be a corporation doing
business and in good standing under the laws
of the United States or any state thereof, and
having a combined capital and surplus of not
less than $50,000,000. The combined capital
and surplus of any such new Warrant Agent shall
be deemed to be the combined capital and
surplus as set forth in the most recent annual
report of its condition published by such
Warrant Agent prior to its appointment;
provided that such reports are published at
least annually pursuant to law or to the
requirements of a federal or state supervising
or examining authority. After acceptance in
writing of such appointment by the new Warrant
Agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it
had been originally named herein as the Warrant
Agent, without any further assurance,
conveyance, act or deed, but if for any reason
it shall be reasonably necessary or expedient
to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be
legally and validly executed and delivered by
the Issuer.
Any corporation into which the Issuer or any
new Warrant Agent may be merged or any
corporation resulting from any consolidation to
which the Issuer or any new Warrant Agent shall
be a party or any corporation to which the
Issuer or any new Warrant Agent transfers
substantially all of its corporate trust or
shareholders services business shall be a
successor Warrant Agent under this Agreement
without any further act; provided that such
corporation (i) would be eligible for
appointment as successor to the Warrant Agent
under the provisions of this paragraph 12 or
(ii) is a wholly owned subsidiary of the
Warrant Agent. Any such successor Warrant
Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by
first class mail, postage prepaid) to the
registered holder hereof at such holder's last
address as shown on the Warrant Register.
This Warrant shall not be valid unless signed
by the Issuer.
IN WITNESS WHEREOF, SyQuest Technology, Inc.
has caused this Warrant to be signed by its duly
authorized officer.
Dated:
SYQUEST TECHNOLOGY, INC.
By:
Name:
Title:
FORM OF EXERCISE NOTICE
(To Be Executed Upon Exercise of the Warrant)
[DATE]
SyQuest Technology, Inc.
47071 Bayside Parkway
Fremont, CA 94538
Attention: Chief Financial Officer
Re: Warrant No.
Ladies and Gentlemen:
The undersigned is the registered holder
of the above-referenced warrant (the "Warrant")
issued by SyQuest Technology, Inc., the original of
which is attached hereto, and hereby elects to
exercise the Warrant: (check applicable box)
[ ] to acquire _________ shares of Common
Stock (as defined in the Warrant) and
herewith tenders $_____________ by
certified or official bank check to the
order of SyQuest Technology, Inc. as
payment for such Warrant Shares in
accordance with the terms of the Warrant
(as defined in the Warrant); or
[ ] to acquire __________ shares of Common
Stock in accordance with paragraph 1(c)
of the Warrant according to the following
calculation: ([insert aggregate fair
market value of Common Stock issuable
under the Warrant to be exercised] -
[insert aggregate Exercise Price of such
shares of Common Stock]) ? [insert
closing sale price of Common Stock on
date of Exercise Notice] = [insert number
of shares of Common Stock to be acquired]
In accordance with the attached Warrant,
the undersigned requests that certificates for such
Warrant Shares be registered in the name of and
delivered to the undersigned at the following
address:
________________________
________________________
________________________
[If the number of Warrant Shares to be
delivered is less than the total number of Warrant
Shares deliverable under the Warrant, insert the
following -- The undersigned requests that a new
warrant substantially identical to the attached
Warrant be issued to the undersigned evidencing the
right to purchase the number of Warrant Shares
remaining following the exercise of the Warrant.
NAME OF REGISTERED HOLDER
[ADDRESS]
By:
Name:
Title:
Exhibit 10.2
THE SECURITIES REPRESENTED BY OR ISSUABLE ON
EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.
Warrant No. 77
COMMON STOCK PURCHASE WARRANT
SYQUEST TECHNOLOGY, INC.
This Warrant certifies that Greyrock Business
Credit ("Holder"), or its registered assigns, is the
registered holder of one Warrant (the "Warrant")
expiring on June 26, 2004 (the "Termination Date") to
purchase shares of common stock, par value $.0001 per
share (the "Common Stock"), of SYQUEST TECHNOLOGY,
INC., a Delaware corporation (the "Issuer"). This
Warrant entitles the holder to purchase from the
Issuer up to 333,333 Warrant Shares (as defined
below), subject to adjustment, at a per share
Exercise Price (as defined below). A "Warrant Share"
initially represents one fully paid and nonassessable
share of Common Stock, based upon an Exchange Rate
(as defined below) of one-for-one, subject to
adjustment pursuant to paragraph 10.
This Warrant was issued on June 27, 1997 (the
"Closing Date").
The exercise price per Warrant Share (plus
transfer taxes, if applicable, the "Exercise Price")
shall be the greater of (a) 130 percent of the
arithmetical average of the closing sale prices per
share of Common Stock on the five consecutive trading
days preceding the delivery of any Exercise Notice
(as defined below) as reported by the Nasdaq National
Market (the "NNM") or, if the NNM is not then the
principal trading market for the Common Stock, on the
principal trading market for the Common Stock at that
time or, if there is then no such principal trading
market, the fair market value per share of Common
Stock during such period as determined in good faith
by the Board of Directors of the Issuer and (b) 130
percent of such closing sale price on the day
immediately preceding the delivery of the Exercise
Notice; provided that in no event shall the Exercise
Price exceed $3.0469. If the value of the Common
Stock is to be determined by the Board of Directors
of the Issuer and the holder of this Warrant
disagrees with said valuation, the value of the
Common Stock will be determined by binding
arbitration in accordance with the then prevailing
commercial arbitration rules of the American
Arbitration Association, and such arbitration shall
proceed in San Francisco, California, or at such
other place as agreed to in writing by the Issuer and
the holder of this Warrant. The Exercise Price
multiplied by the Exercise Amount (as defined below)
at any Exercise Date (as defined below) is referred
to as a "Warrant Purchase Price".
This Warrant shall have the following
additional terms:
1. (a) This Warrant is not exercisable until the
lapse of a period ending on the 65th day (the
"Notice Period") after the holder delivers a
notice (a "65 Day Notice") to the Issuer
designating an aggregate number of Warrant
Shares (the "Exercisable Number"). A 65 Day
Notice may be given at any time after the
Closing Date. If the initial 65 Day Notice does
not designate all of the Warrant Shares, this
Warrant will become exercisable for some or all
of the remaining Warrant Shares upon delivery
of one or more 65 Day Notices increasing the
Exercisable Number after a further Notice
Period. From time to time following the Notice
Period, this Warrant may be exercised on any
Business Day prior to the Termination Date (an
"Exercise Date") for any quantity of Warrant
Shares, such that the aggregate number of
Warrant Shares issued hereunder is less than or
equal to the Exercisable Number. This Warrant
shall be exercisable only in the minimum amount
of 10,000 Warrant Shares and integral multiples
of 10,000 Warrant Shares in excess thereof (or
such lesser amount as shall constitute the full
amount remaining of this Warrant). As used
herein the term "Business Day" means any day on
which banks in the State of California are open
for business.
(b) To exercise this Warrant, the registered
holder must, prior to the Termination Date,
surrender this Warrant to the Issuer at its
principal office with the Exercise Notice
attached hereto (an "Exercise Notice") duly
completed and signed by the registered holder
hereof and stating the total number of Warrant
Shares in respect of which this Warrant is then
exercised (the "Exercise Amount") and either
(i) tender the applicable Warrant Purchase
Price, or (ii) comply with the requirements of
paragraph 1(c), below.
(c) If Holder elects to exercise this Warrant
pursuant to this paragraph 1(c), Holder shall
indicate its election on the Exercise Notice.
In such event, Holder shall be entitled to
convert this Warrant into a number of shares of
Common Stock determined by dividing (i) the
aggregate fair market value of the Common Stock
issuable upon exercise of this Warrant minus
the aggregate Exercise Price for such Common
Stock by (ii) the closing sale prices per share
of Common Stock on the date of the Exercise
Notice as reported by the NNM or, if the NNM is
not then the principal trading market for the
Common Stock, on the principal trading market
for the Common Stock at that time or, if there
is then no such principal trading market, the
fair market value per share of Common Stock as
determined in good faith by the Board of
Directors of the Issuer. If the value of the
Common Stock is to be determined by the Board
of Directors of the Issuer and the holder of
this Warrant disagrees with said valuation, the
value of the Common Stock will be determined by
binding arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
2. On the Business Day following an Exercise Date
(an "Issue Date"), the Issuer shall issue and
cause to be delivered to the registered holder
hereof at such address as such holder shall
specify in the Exercise Notice a certificate or
certificates for the number of full Warrant
Shares issuable upon the exercise of this
Warrant, registered in such holder's name,
together with cash (if any) as provided in
paragraph 4. Such certificate or certificates
shall be deemed to have been issued and any
person so designated to be named therein shall
be deemed to have become a holder of record of
such Warrant Shares as of such Exercise Date.
3. If on such Issue Date the number of Warrant
Shares to be delivered shall be less than the
total number of Warrant Shares deliverable
hereunder, there shall be issued to the holder
hereof or his assignee on such Issue Date a new
warrant substantially identical to this
Warrant, except that such new warrant shall
evidence the right to purchase the number of
Warrant Shares equal to (x) the total number of
Warrant Shares deliverable hereunder less (y)
the number of Warrant Shares so delivered.
4. The Issuer shall not be required to issue
fractional Warrant Shares on the exercise of
this Warrant. The number of full Warrant
Shares which shall be issuable upon the
exercise of this Warrant shall be computed on
the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant
so presented. If any fraction of a Warrant
Share would, except for the provisions of this
paragraph 4, be issuable on the exercise of
this Warrant, the Issuer shall pay an amount in
cash equal to the last per share sale price of
the Common Stock (on the NNM or the Principal
Market, as the case may be) on the day
immediately preceding the Exercise Date,
multiplied by such fraction (subject to
adjustment pursuant to paragraph 10); provided
that if at the time that the Exercise Price is
to be determined the NNM is not the principal
trading market for the Common Stock and there
is no Principal Market, then the amount of cash
to be paid per fractional Warrant Share shall
be determined in good faith by the Board of
Directors of the Issuer. If the holder of this
Warrant disagrees with such determination, the
amount of cash to be paid per fractional
Warrant Share will be determined by binding
arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
5. For so long as this Warrant has not been
exercised in full, the Issuer shall at all
times prior to the Termination Date reserve and
keep available, free from preemptive rights,
out of its authorized but unissued Common
Stock, for issuance upon exercise of this
Warrant, the maximum number of shares of Common
Stock and any other Capital Stock (as defined
below) then so issuable. In furtherance of the
foregoing, but subject to adjustment pursuant
to paragraph 10 and to increase pursuant to the
fourth paragraph hereof, the Issuer shall
reserve for issuance hereunder, not less than
333,333 shares of Common Stock. In the event
the number of shares of Common Stock or other
securities issuable in respect of the Warrant
Shares exceeds the authorized number of shares
of Common Stock or other securities, the Issuer
shall promptly take all actions necessary to
increase the authorized number, including
causing its Board of Directors to call a
special meeting of stockholders within thirty
days of the date on which such excess first
existed and recommend such increase for
approval by the Issuer's stockholders. The
Issuer shall use its best efforts to obtain
stockholder approval of the increase to the
authorized number of shares of Common Stock.
6. By accepting delivery of this Warrant, the
registered holder hereof covenants and agrees
with the Issuer not to exercise or transfer
this Warrant or any Warrant Shares except in
compliance with this Warrant, and that certain
Investment Letter dated November 14, 1997,
between Issuer and Holder.
7. By accepting this Warrant, the registered
holder hereof covenants and agrees with the
Issuer that this Warrant may not be sold,
assigned, conveyed, encumbered, pledged,
hypothecated or in any other manner disposed of
or transferred, as a whole or in part, unless
and until such holder shall deliver to the
Issuer (i) written notice of such transfer and
of the name and address of the transferee, (ii)
a written agreement, in form and substance
reasonably satisfactory to the Issuer, of the
transferee to comply with the applicable terms
of this Warrant and (iii) an opinion of counsel
for such holder, reasonably satisfactory to the
Issuer in form, scope and substance, that such
transaction will comply with all applicable
securities laws and regulations; provided that
the Issuer shall waive the requirement for such
an opinion with respect to a single transfer by
such holder (but not any subsequent transfer)
to a corporation that itself or through one or
more intermediary corporations owns of record
and beneficially all of the outstanding capital
stock of such holder or all of the outstanding
capital stock of which is owned of record and
beneficially by such holder or by a corporation
that also owns of record and beneficially all
of the outstanding capital stock of such
holder. If a portion of this Warrant is
transferred, all rights of the registered
holder hereunder may be exercised by the
transferee (subject to the requirement that
such transferee shall provide a like opinion of
counsel in respect of the number of Warrant
Shares transferred with the portion of this
Warrant), provided that any registered holder
of this Warrant may deliver a 65 Day Notice, an
Exercise Notice or elect the form of
consideration pursuant to paragraph 10 only
with respect to the Warrant Shares subject to
such holder's portion of this Warrant, and, for
purposes of paragraph 10(c), the calculation of
the Black-Scholes Warrant Value shall be made
by the registered holder(s) of a majority in
interest of this Warrant.
8. The Issuer will pay all documentary stamp taxes
(if any) attributable to the issuance of
Warrant Shares upon the exercise of this
Warrant by the registered holder hereof;
provided that the Issuer shall not be required
to pay any tax or taxes which may be payable in
respect of any transfer involved in the
registration of this Warrant or any
certificates for Warrant Shares in a name other
than that of the registered holder of this
Warrant surrendered upon the exercise of this
Warrant, and the Issuer shall not be required
to issue or deliver this Warrant or
certificates for Warrant Shares unless or until
the person or persons requesting the issuance
thereof shall have paid to the Issuer the
amount of such tax or shall have established to
the satisfaction of the Issuer that such tax
has been paid.
9. In case this Warrant shall be mutilated, lost,
stolen or destroyed, the Issuer may in its
discretion issue in exchange and substitution
for and upon cancellation of the mutilated
Warrant, or in lieu of and substitution for the
lost, stolen or destroyed Warrant, a new
Warrant of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Issuer
of such loss, theft or destruction of such
Warrant and indemnity, if requested, reasonably
satisfactory to the Issuer. Applicants for a
substitute Warrant shall also comply with such
other reasonable regulations and pay such other
reasonable charges as the Issuer may prescribe.
10. The number of shares of Common Stock (and other
Capital Stock (as defined below) or property)
(as adjusted from time to time, the "Exchange
Rate") issuable upon the exercise of this
Warrant and the terms and conditions of this
Warrant are subject to adjustment by the
Issuer, in consultation with the holder hereof,
from time to time as follows:
(a) If the Issuer:
1. subdivides its outstanding shares
of Common Stock into a greater
number of shares;
2. combines its outstanding shares of
Common Stock into a smaller number
of shares; or
3. issues by reclassification of its
Common Stock any shares of its
Capital Stock;
then the Exchange Rate in effect
immediately prior to such action shall be
adjusted so that the registered holder
hereof shall thereafter be entitled to
receive upon exercise of this Warrant in
respect of each Warrant Share the number
of shares of Common Stock or other
Capital Stock of the Issuer that such
holder would have received immediately
following such action if such holder had
so exercised this Warrant immediately
prior to such action.
As used herein, the term "Capital Stock"
means, with respect to any corporation,
any and all shares, interests, rights to
purchase, warrants, options,
participations or other equivalents of or
interests (however designated) in stock
issued by that corporation.
Such adjustment shall become effective
simultaneously with the effective date of
any subdivision, combination or
reclassification.
If, after an adjustment, the registered
holder hereof would receive upon exercise
shares of two or more classes of Capital
Stock of the Issuer, the Exchange Rate
shall thereafter be subject to adjustment
upon the occurrence of an action taken
with respect to each such class of
Capital Stock as is contemplated hereby
with respect to the Common Stock, on
terms comparable to those applicable to
Common Stock hereunder.
(b) Whenever any of the actions described in
this paragraph 10 are to be taken, the
Issuer shall provide the notices required
by paragraph 11 hereof.
(c) (A) The Issuer covenants and agrees with
the registered holder hereof not to
consolidate or merge with or into, or
sell, transfer or lease all or
substantially all its assets to, or sell
a majority of its securities generally
entitled to vote for the election of
directors of the Issuer ("Voting
Securities") to, any person, unless, and
(B) if any person consummates a tender
offer for the purchase of at least a
majority of the Voting Securities (any of
which transactions described in clauses
(A) and (B), a "Transaction"), then, at
the election of the registered holder
hereof (or if such holder does not notify
the Issuer of such election within twenty
days after being notified of the
Transaction, at the election of the
Issuer), on the effective date of such
Transaction (the "Transaction Date") and
as a condition to the consummation of any
Transaction described in clause (A),
either:
1. the Issuer shall have redeemed this
Warrant by paying to such holder,
upon surrender of this Warrant, a
cash payment equal to the Black-
Scholes value of the unexercised
portion of this Warrant from the
effective date of the Transaction
until the Warrant Expiration Date
(the "Black-Scholes Warrant
Value"), computed as of such
Transaction Date; or
2. (a) such person shall expressly
assume in writing all of the
obligations of the Issuer
hereunder and deliver notice
thereof to the registered
holder hereof; and
(b) upon consummation of such
Transaction, this Warrant
shall automatically become
exercisable for the common
stock of the acquiror
(without regard to the form
of acquisition consideration)
with similar terms and at an
exercise price that would
result in a Black-Scholes
Warrant Value of this Warrant
computed immediately after
the Transaction equal to the
Black-Scholes Warrant Value
of this Warrant computed
immediately before the
Transaction.
For purposes of this paragraph 10(c), the
factors to be used in the calculation of
the Black-Scholes Warrant Value are as
follows:
Stock Price:
the last sales price of
the Common Stock reported by Bloomberg
on the last Trading Day Prior to the
Transaction Date (the "Last Trading day")
Time To Expiration:
the number of Trading Days between the last
Trading Day and the Termination Date.
Exercise Price: Exercise Price
Volatility:
volatility shown by Bloomberg for the past
260 days at close on the Last Trading Day,
unless the Time to Expiration is less than
260 Trading Days, in which case the
volatility shown by Bloomberg at close on
the Last Trading Day for the number of
Trading Days from the Last Trading Day
to the Termination Date.
Risk-Free Interest Rate:
closing yield as of the Last Trading Day as
quoted in the Wall Street Journal for U.S.
Treasury bond with a maturity date closest
to the Termination Date.
Number of Shares Outstanding :
total number of shares of Common Stock
outstanding as of the Last Trading Day.
Exercisable Common Stock:
the number of shares of Common Stock
exercisable under this Warrant as of the
Transaction Date
The Black-Scholes Warrant Value will be
calculated using the factors shown above.
A preliminary calculation of the Black-
Scholes Warrant Value, and, if
applicable, the exercise price
contemplated by paragraph 10(c)2(b)
hereof, (using then-current values for
each factor) will be delivered by Holder
to the Issuer not later than the tenth
day after it receives notice of a
Transaction by the Issuer. The Issuer,
in turn, will respond within five days
with any comments or questions and reach
agreement with Holder on the preliminary
factors. On the Transaction Date,
Holder, in consultation with the Issuer,
will calculate the final Black-Scholes
Warrant Value using the then-current
values for each factor; such calculation
will be used to compute the values called
for in paragraph 10(c). It shall be a
condition to any Transaction that the
consideration provided for herein shall
be paid in full, in the case of cash, or
delivered, in the case of a warrant, all
in accordance with the terms hereof,
immediately prior to the consummation of
the Transaction. As used herein, the term
"Trading Day" means any day on which the
Issuer's Common Stock is quoted on the
NNM or, if applicable, other national
securities exchange. If the factors
shown above can not be determined because
the Issuer's Common Stock is not listed
on any national securities exchange or
because Bloomberg does not report the
factors shown above, then the Issuer and
the holder of this Warrant shall agree on
an alternative calculation to satisfy the
requirements of this paragraph 10(c).
(d) After an adjustment to the Exchange Rate
hereunder, any subsequent event requiring
an adjustment hereunder shall cause an
adjustment to the Exchange Rate as so
adjusted.
(e) Upon the issuance of any stock dividend
or distribution of Common Stock pro rata
to all holders of Common Stock, the
Exchange Rate shall be adjusted so that
the registered holder hereof on the
record date for such distribution shall
be entitled to receive such dividend or
distribution on the same terms as the
holders of Common Stock upon exercise
hereof.
11. Except as provided in the following paragraph,
upon any adjustment of the Exchange Rate
pursuant to paragraph 10, the Issuer shall
promptly thereafter but in any event within
fifteen days following such adjustment (i)
cause to be delivered to the registered holder
hereof a certificate of its Chief Financial
Officer setting forth the Exchange Rate after
such adjustment and setting forth in reasonable
detail the method of calculation and the facts
upon which such calculations are based, which
certificate shall be conclusive evidence of the
correctness of the matters set forth therein,
and (ii) cause to be delivered to the
registered holder hereof at its address
appearing on the Warrant Register written
notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such
notice may be given in advance and included as
part of the notice required to be mailed under
the other provisions of this paragraph 11.
In case:
(a) the Issuer shall authorize the issuance
to all holders of shares of Common Stock
of rights, options or warrants to
subscribe for or purchase shares of
Common Stock or of any other subscription
rights or warrants; or
(b) of any proposal for a consolidation or
merger to which the Issuer is a party,
the sale or transfer of all or
substantially all of the assets of the
Issuer, or any reclassification or change
of Common Stock issuable upon exercise of
this Warrant (other than a change in par
value, or from par value to no par value,
or from no par value to par value, or as
a result of a subdivision or
combination), or of a tender offer or
exchange offer for shares of Common
Stock; or
(c) of the voluntary or involuntary
dissolution, liquidation or winding up of
the Issuer; or
(d) the Issuer proposes to take any action
that would require an adjustment of the
Exchange Rate pursuant to paragraph 10;
then the Issuer shall cause to be given to the
registered holder hereof at its address
appearing on the Warrant Register (as defined
below), at least twenty days (or ten days in
any case specified in clause (a) above) prior
to the applicable record date hereinafter
specified, or promptly in the case of events
for which there is no record date, by first
class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled
to receive any such rights, options, warrants
or distribution are to be determined, or (ii)
the initial expiration date set forth in any
tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any
such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective
or consummated, and the date as of which it is
expected that holders of record of shares of
Common Stock shall be entitled to exchange such
shares for securities or other property, if
any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up.
12. The Issuer shall serve as warrant agent (the
"Warrant Agent") under this Agreement. The
Warrant Agent hereunder shall at all times
maintain a register (the "Warrant Register") of
the holders of Warrants. Upon thirty days'
notice to the registered holder hereof, the
Issuer may appoint a new Warrant Agent. Such
new Warrant Agent shall be a corporation doing
business and in good standing under the laws
of the United States or any state thereof, and
having a combined capital and surplus of not
less than $50,000,000. The combined capital
and surplus of any such new Warrant Agent shall
be deemed to be the combined capital and
surplus as set forth in the most recent annual
report of its condition published by such
Warrant Agent prior to its appointment;
provided that such reports are published at
least annually pursuant to law or to the
requirements of a federal or state supervising
or examining authority. After acceptance in
writing of such appointment by the new Warrant
Agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it
had been originally named herein as the Warrant
Agent, without any further assurance,
conveyance, act or deed, but if for any reason
it shall be reasonably necessary or expedient
to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be
legally and validly executed and delivered by
the Issuer.
Any corporation into which the Issuer or any
new Warrant Agent may be merged or any
corporation resulting from any consolidation to
which the Issuer or any new Warrant Agent shall
be a party or any corporation to which the
Issuer or any new Warrant Agent transfers
substantially all of its corporate trust or
shareholders services business shall be a
successor Warrant Agent under this Agreement
without any further act; provided that such
corporation (i) would be eligible for
appointment as successor to the Warrant Agent
under the provisions of this paragraph 12 or
(ii) is a wholly owned subsidiary of the
Warrant Agent. Any such successor Warrant
Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by
first class mail, postage prepaid) to the
registered holder hereof at such holder's last
address as shown on the Warrant Register.
This Warrant shall not be valid unless signed
by the Issuer.
IN WITNESS WHEREOF, SyQuest Technology, Inc.
has caused this Warrant to be signed by its duly
authorized officer.
Dated:
SYQUEST TECHNOLOGY,INC.
By:
Name:
Title:
FORM OF EXERCISE NOTICE
(To Be Executed Upon Exercise of the Warrant)
[DATE]
SyQuest Technology, Inc.
47071 Bayside Parkway
Fremont, CA 94538
Attention: Chief Financial Officer
Re: Warrant No.
Ladies and Gentlemen:
The undersigned is the registered holder
of the above-referenced warrant (the "Warrant")
issued by SyQuest Technology, Inc., the original of
which is attached hereto, and hereby elects to
exercise the Warrant: (check applicable box)
[ ] to acquire _________ shares of Common
Stock (as defined in the Warrant) and
herewith tenders $_____________ by
certified or official bank check to the
order of SyQuest Technology, Inc. as
payment for such Warrant Shares in
accordance with the terms of the Warrant
(as defined in the Warrant); or
[ ] to acquire __________ shares of Common
Stock in accordance with paragraph 1(c)
of the Warrant according to the following
calculation: ([insert aggregate fair
market value of Common Stock issuable
under the Warrant to be exercised] -
[insert aggregate Exercise Price of such
shares of Common Stock]) ? [insert
closing sale price of Common Stock on
date of Exercise Notice] = [insert number
of shares of Common Stock to be acquired]
In accordance with the attached Warrant,
the undersigned requests that certificates for such
Warrant Shares be registered in the name of and
delivered to the undersigned at the following
address:
________________________
________________________
________________________
[If the number of Warrant Shares to be
delivered is less than the total number of Warrant
Shares deliverable under the Warrant, insert the
following -- The undersigned requests that a new
warrant substantially identical to the attached
Warrant be issued to the undersigned evidencing the
right to purchase the number of Warrant Shares
remaining following the exercise of the Warrant.
NAME OF REGISTERED
HOLDER
[ADDRESS]
By:
_____________________________
Name:
Title:
Exhibit 10.3
THE SECURITIES REPRESENTED BY OR ISSUABLE ON
EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.
Warrant No. 73
COMMON STOCK PURCHASE WARRANT
SYQUEST TECHNOLOGY, INC.
This Warrant certifies that The Silakhan Route
("Holder"), or its registered assigns, is the
registered holder of one Warrant (the "Warrant")
expiring on May 20, 2004 (the "Termination Date") to
purchase shares of common stock, par value $.001 per
share (the "Common Stock"), of SYQUEST TECHNOLOGY,
INC., a Delaware corporation (the "Issuer"). This
Warrant entitles the holder to purchase from the
Issuer up to 132,923 Warrant Shares (as defined
below), subject to adjustment, at a per share
Exercise Price (as defined below). A "Warrant Share"
initially represents one fully paid and nonassessable
share of Common Stock, based upon an Exchange Rate
(as defined below) of one-for-one, subject to
adjustment pursuant to paragraph 10.
This Warrant was issued on July 23, 1997 (the
"Closing Date").
The exercise price per Warrant Share (plus
transfer taxes, if applicable, the "Exercise Price")
shall be the greater of (a) 130 percent of the
arithmetical average of the closing sale prices per
share of Common Stock on the five consecutive trading
days preceding the delivery of any Exercise Notice
(as defined below) as reported by the Nasdaq National
Market (the "NNM") or, if the NNM is not then the
principal trading market for the Common Stock, on the
principal trading market for the Common Stock at that
time or, if there is then no such principal trading
market, the fair market value per share of Common
Stock during such period as determined in good faith
by the Board of Directors of the Issuer and (b) 130
percent of such closing sale price on the day
immediately preceding the delivery of the Exercise
Notice; provided that in no event shall the Exercise
Price exceed $3.0469. If the value of the Common
Stock is to be determined by the Board of Directors
of the Issuer and the holder of this Warrant
disagrees with said valuation, the value of the
Common Stock will be determined by binding
arbitration in accordance with the then prevailing
commercial arbitration rules of the American
Arbitration Association, and such arbitration shall
proceed in San Francisco, California, or at such
other place as agreed to in writing by the Issuer and
the holder of this Warrant. The Exercise Price
multiplied by the Exercise Amount (as defined below)
at any Exercise Date (as defined below) is referred
to as a "Warrant Purchase Price".
This Warrant shall have the following
additional terms:
1. This Warrant is not exercisable until the lapse
of a period ending on the 65th day (the "Notice
Period") after the holder delivers a notice (a
"65 Day Notice") to the Issuer designating an
aggregate number of Warrant Shares (the "Exer-
cisable Number"). A 65 Day Notice may be given
at any time after the Closing Date. If the
initial 65 Day Notice does not designate all of
the Warrant Shares, this Warrant will become
exercisable for some or all of the remaining
Warrant Shares upon delivery of one or more 65
Day Notices increasing the Exercisable Number
after a further Notice Period. From time to
time following the Notice Period, this Warrant
may be exercised on any Business Day prior to
the Termination Date (an "Exercise Date") for
any quantity of Warrant Shares, such that the
aggregate number of Warrant Shares issued
hereunder is less than or equal to the Exercis-
able Number. To exercise this Warrant, the
registered holder must, prior to the
Termination Date, surrender this Warrant to the
Issuer at its principal office with the
Exercise Notice attached hereto (an "Exercise
Notice") duly completed and signed by the
registered holder hereof and stating the total
number of Warrant Shares in respect of which
this Warrant is then exercised (the "Exercise
Amount") and tender the applicable Warrant
Purchase Price. This Warrant shall be
exercisable only in the minimum amount of
10,000 Warrant Shares and integral multiples of
10,000 Warrant Shares in excess thereof (or
such lesser amount as shall constitute the full
amount remaining of this Warrant). As used
herein the term "Business Day" means any day on
which banks in the State of California are open
for business.
2. On the Business Day following an Exercise Date
(an "Issue Date"), the Issuer shall issue and
cause to be delivered to the registered holder
hereof at such address as such holder shall
specify in the Exercise Notice a certificate or
certificates for the number of full Warrant
Shares issuable upon the exercise of this
Warrant, registered in such holder's name,
together with cash (if any) as provided in
paragraph 4. Such certificate or certificates
shall be deemed to have been issued and any
person so designated to be named therein shall
be deemed to have become a holder of record of
such Warrant Shares as of such Exercise Date.
3. If on such Issue Date the number of Warrant
Shares to be delivered shall be less than the
total number of Warrant Shares deliverable
hereunder, there shall be issued to the holder
hereof or his assignee on such Issue Date a new
warrant substantially identical to this
Warrant, except that such new warrant shall
evidence the right to purchase the number of
Warrant Shares equal to (x) the total number of
Warrant Shares deliverable hereunder less (y)
the number of Warrant Shares so delivered.
4. The Issuer shall not be required to issue
fractional Warrant Shares on the exercise of
this Warrant. The number of full Warrant
Shares which shall be issuable upon the
exercise of this Warrant shall be computed on
the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant
so presented. If any fraction of a Warrant
Share would, except for the provisions of this
paragraph 4, be issuable on the exercise of
this Warrant, the Issuer shall pay an amount in
cash equal to the last per share sale price of
the Common Stock (on the NNM or the Principal
Market, as the case may be) on the day
immediately preceding the Exercise Date,
multiplied by such fraction (subject to
adjustment pursuant to paragraph 10); provided
that if at the time that the Exercise Price is
to be determined the NNM is not the principal
trading market for the Common Stock and there
is no Principal Market, then the amount of cash
to be paid per fractional Warrant Share shall
be determined in good faith by the Board of
Directors of the Issuer. If the holder of this
Warrant disagrees with such determination, the
amount of cash to be paid per fractional
Warrant Share will be determined by binding
arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
5. For so long as this Warrant has not been
exercised in full, the Issuer shall at all
times prior to the Termination Date reserve and
keep available, free from preemptive rights,
out of its authorized but unissued Common
Stock, for issuance upon exercise of this
Warrant, the maximum number of shares of Common
Stock and any other Capital Stock (as defined
below) then so issuable. In furtherance of the
foregoing, but subject to adjustment pursuant
to paragraph 10 and to increase pursuant to the
fourth paragraph hereof, the Issuer shall
reserve for issuance hereunder, not less than
132,923 shares of Common Stock. In the event
the number of shares of Common Stock or other
securities issuable in respect of the Warrant
Shares exceeds the authorized number of shares
of Common Stock or other securities, the Issuer
shall promptly take all actions necessary to
increase the authorized number, including
causing its Board of Directors to call a
special meeting of stockholders within thirty
days of the date on which such excess first
existed and recommend such increase for
approval by the Issuer's stockholders. The
Issuer shall use its best efforts to obtain
stockholder approval of the increase to the
authorized number of shares of Common Stock.
6. By accepting delivery of this Warrant, the
registered holder hereof covenants and agrees
with the Issuer not to exercise or transfer
this Warrant or any Warrant Shares except in
compliance with this Warrant, and that certain
Investment Letter dated November 14, 1997,
between Issuer and Holder.
7. By accepting this Warrant, the registered
holder hereof covenants and agrees with the
Issuer that this Warrant may not be sold,
assigned, conveyed, encumbered, pledged,
hypothecated or in any other manner disposed of
or transferred, as a whole or in part, unless
and until such holder shall deliver to the
Issuer (i) written notice of such transfer and
of the name and address of the transferee, (ii)
a written agreement, in form and substance
reasonably satisfactory to the Issuer, of the
transferee to comply with the applicable terms
of this Warrant and (iii) an opinion of counsel
for such holder, reasonably satisfactory to the
Issuer in form, scope and substance, that such
transaction will comply with all applicable
securities laws and regulations. If a portion
of this Warrant is transferred, all rights of
the registered holder hereunder may be
exercised by the transferee (subject to the
requirement that such transferee shall provide
a like opinion of counsel in respect of the
number of Warrant Shares transferred with the
portion of this Warrant), provided that any
registered holder of this Warrant may deliver a
65 Day Notice, an Exercise Notice or elect the
form of consideration pursuant to paragraph 10
only with respect to the Warrant Shares subject
to such holder's portion of this Warrant, and,
for purposes of paragraph 10(c), the
calculation of the Black-Scholes Warrant Value
shall be made by the registered holder(s) of a
majority in interest of this Warrant.
8. The Issuer will pay all documentary stamp taxes
(if any) attributable to the issuance of
Warrant Shares upon the exercise of this
Warrant by the registered holder hereof;
provided that the Issuer shall not be required
to pay any tax or taxes which may be payable in
respect of any transfer involved in the
registration of this Warrant or any
certificates for Warrant Shares in a name other
than that of the registered holder of this
Warrant surrendered upon the exercise of this
Warrant, and the Issuer shall not be required
to issue or deliver this Warrant or
certificates for Warrant Shares unless or until
the person or persons requesting the issuance
thereof shall have paid to the Issuer the
amount of such tax or shall have established to
the satisfaction of the Issuer that such tax
has been paid.
9. In case this Warrant shall be mutilated, lost,
stolen or destroyed, the Issuer may in its
discretion issue in exchange and substitution
for and upon cancellation of the mutilated
Warrant, or in lieu of and substitution for the
lost, stolen or destroyed Warrant, a new
Warrant of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Issuer
of such loss, theft or destruction of such
Warrant and indemnity, if requested, reasonably
satisfactory to the Issuer. Applicants for a
substitute Warrant shall also comply with such
other reasonable regulations and pay such other
reasonable charges as the Issuer may prescribe.
10. The number of shares of Common Stock (and other
Capital Stock (as defined below) or property)
(as adjusted from time to time, the "Exchange
Rate") issuable upon the exercise of this
Warrant and the terms and conditions of this
Warrant are subject to adjustment by the
Issuer, in consultation with the holder hereof,
from time to time as follows:
(a) If the Issuer:
1. subdivides its outstanding shares
of Common Stock into a greater
number of shares;
2. combines its outstanding shares of
Common Stock into a smaller number
of shares; or
3. issues by reclassification of its
Common Stock any shares of its
Capital Stock;
then the Exchange Rate in effect
immediately prior to such action shall be
adjusted so that the registered holder
hereof shall thereafter be entitled to
receive upon exercise of this Warrant in
respect of each Warrant Share the number
of shares of Common Stock or other
Capital Stock of the Issuer that such
holder would have received immediately
following such action if such holder had
so exercised this Warrant immediately
prior to such action.
As used herein, the term "Capital Stock"
means, with respect to any corporation,
any and all shares, interests, rights to
purchase, warrants, options,
participations or other equivalents of or
interests (however designated) in stock
issued by that corporation.
Such adjustment shall become effective
simultaneously with the effective date of
any subdivision, combination or
reclassification.
If, after an adjustment, the registered
holder hereof would receive upon exercise
shares of two or more classes of Capital
Stock of the Issuer, the Exchange Rate
shall thereafter be subject to adjustment
upon the occurrence of an action taken
with respect to each such class of
Capital Stock as is contemplated hereby
with respect to the Common Stock, on
terms comparable to those applicable to
Common Stock hereunder.
(b) Whenever any of the actions described in
this paragraph 10 are to be taken, the
Issuer shall provide the notices required
by paragraph 11 hereof.
(c) (A) The Issuer covenants and agrees with
the registered holder hereof not to
consolidate or merge with or into, or
sell, transfer or lease all or
substantially all its assets to, or sell
a majority of its securities generally
entitled to vote for the election of
directors of the Issuer ("Voting
Securities") to, any person, unless, and
(B) if any person consummates a tender
offer for the purchase of at least a
majority of the Voting Securities (any of
which transactions described in clauses
(A) and (B), a "Transaction"), then, at
the election of the registered holder
hereof (or if such holder does not notify
the Issuer of such election within twenty
days after being notified of the
Transaction, at the election of the
Issuer), on the effective date of such
Transaction (the "Transaction Date") and
as a condition to the consummation of any
Transaction described in clause (A),
either:
1. the Issuer shall have redeemed this
Warrant by paying to such holder,
upon surrender of this Warrant, a
cash payment equal to the Black-
Scholes value of the unexercised
portion of this Warrant from the
effective date of the Transaction
until the Warrant Expiration Date
(the "Black-Scholes Warrant
Value"), computed as of such
Transaction Date; or
2. (a) such person shall expressly
assume in writing all of the
obligations of the Issuer
hereunder and deliver notice
thereof to the registered
holder hereof; and
(b) upon consummation of such
Transaction, this Warrant
shall automatically become
exercisable for the common
stock of the acquiror
(without regard to the form
of acquisition consideration)
with similar terms and at an
exercise price that would
result in a Black-Scholes
Warrant Value of this Warrant
computed immediately after
the Transaction equal to the
Black-Scholes Warrant Value
of this Warrant computed
immediately before the
Transaction.
For purposes of this paragraph 10(c), the
factors to be used in the calculation of
the Black-Scholes Warrant Value are as
follows:
Stock Price:
the last sales price of
the Common Stock reported by Bloomberg
on the last Trading Day Prior to the
Transaction Date (the "Last Trading day")
Time To Expiration:
the number of Trading Days between the last
Trading Day and the Termination Date.
Exercise Price: Exercise Price
Volatility:
volatility shown by Bloomberg for the past
260 days at close on the Last Trading Day,
unless the Time to Expiration is less than
260 Trading Days, in which case the
volatility shown by Bloomberg at close on
the Last Trading Day for the number of
Trading Days from the Last Trading Day
to the Termination Date.
Risk-Free Interest Rate:
closing yield as of the Last Trading Day as
quoted in the Wall Street Journal for U.S.
Treasury bond with a maturity date closest
to the Termination Date.
Number of Shares Outstanding :
total number of shares of Common Stock
outstanding as of the Last Trading Day.
Exercisable Common Stock:
the number of shares of Common Stock
exercisable under this Warrant as of the
Transaction Date
The Black-Scholes Warrant Value will be
calculated using the factors shown above.
A preliminary calculation of the Black-
Scholes Warrant Value, and, if
applicable, the exercise price
contemplated by paragraph 10(c)2(b)
hereof, (using then-current values for
each factor) will be delivered by Holder
to the Issuer not later than the tenth
day after it receives notice of a
Transaction by the Issuer. The Issuer,
in turn, will respond within five days
with any comments or questions and reach
agreement with Holder on the preliminary
factors. On the Transaction Date,
Holder, in consultation with the Issuer,
will calculate the final Black-Scholes
Warrant Value using the then-current
values for each factor; such calculation
will be used to compute the values called
for in paragraph 10(c). It shall be a
condition to any Transaction that the
consideration provided for herein shall
be paid in full, in the case of cash, or
delivered, in the case of a warrant, all
in accordance with the terms hereof,
immediately prior to the consummation of
the Transaction. As used herein, the term
"Trading Day" means any day on which the
Issuer's Common Stock is quoted on the
NNM or, if applicable, other national
securities exchange. If the factors
shown above can not be determined because
the Issuer's Common Stock is not listed
on any national securities exchange or
because Bloomberg does not report the
factors shown above, then the Issuer and
the holder of this Warrant shall agree on
an alternative calculation to satisfy the
requirements of this paragraph 10(c).
(d) After an adjustment to the Exchange Rate
hereunder, any subsequent event requiring
an adjustment hereunder shall cause an
adjustment to the Exchange Rate as so
adjusted.
(e) Upon the issuance of any stock dividend
or distribution of Common Stock pro rata
to all holders of Common Stock, the
Exchange Rate shall be adjusted so that
the registered holder hereof on the
record date for such distribution shall
be entitled to receive such dividend or
distribution on the same terms as the
holders of Common Stock upon exercise
hereof.
11. Except as provided in the following paragraph,
upon any adjustment of the Exchange Rate
pursuant to paragraph 10, the Issuer shall
promptly thereafter but in any event within
fifteen days following such adjustment (i)
cause to be delivered to the registered holder
hereof a certificate of its Chief Financial
Officer setting forth the Exchange Rate after
such adjustment and setting forth in reasonable
detail the method of calculation and the facts
upon which such calculations are based, which
certificate shall be conclusive evidence of the
correctness of the matters set forth therein,
and (ii) cause to be delivered to the
registered holder hereof at its address
appearing on the Warrant Register written
notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such
notice may be given in advance and included as
part of the notice required to be mailed under
the other provisions of this paragraph 11.
In case:
(a) the Issuer shall authorize the issuance
to all holders of shares of Common Stock
of rights, options or warrants to
subscribe for or purchase shares of
Common Stock or of any other subscription
rights or warrants; or
(b) of any proposal for a consolidation or
merger to which the Issuer is a party,
the sale or transfer of all or
substantially all of the assets of the
Issuer, or any reclassification or change
of Common Stock issuable upon exercise of
this Warrant (other than a change in par
value, or from par value to no par value,
or from no par value to par value, or as
a result of a subdivision or
combination), or of a tender offer or
exchange offer for shares of Common
Stock; or
(c) of the voluntary or involuntary
dissolution, liquidation or winding up of
the Issuer; or
(d) the Issuer proposes to take any action
that would require an adjustment of the
Exchange Rate pursuant to paragraph 10;
then the Issuer shall cause to be given to the
registered holder hereof at its address
appearing on the Warrant Register (as defined
below), at least twenty days (or ten days in
any case specified in clause (a) above) prior
to the applicable record date hereinafter
specified, or promptly in the case of events
for which there is no record date, by first
class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled
to receive any such rights, options, warrants
or distribution are to be determined, or (ii)
the initial expiration date set forth in any
tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any
such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective
or consummated, and the date as of which it is
expected that holders of record of shares of
Common Stock shall be entitled to exchange such
shares for securities or other property, if
any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up.
12. The Issuer shall serve as warrant agent (the
"Warrant Agent") under this Agreement. The
Warrant Agent hereunder shall at all times
maintain a register (the "Warrant Register") of
the holders of Warrants. Upon thirty days'
notice to the registered holder hereof, the
Issuer may appoint a new Warrant Agent. Such
new Warrant Agent shall be a corporation doing
business and in good standing under the laws
of the United States or any state thereof, and
having a combined capital and surplus of not
less than $50,000,000. The combined capital
and surplus of any such new Warrant Agent shall
be deemed to be the combined capital and
surplus as set forth in the most recent annual
report of its condition published by such
Warrant Agent prior to its appointment;
provided that such reports are published at
least annually pursuant to law or to the
requirements of a federal or state supervising
or examining authority. After acceptance in
writing of such appointment by the new Warrant
Agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it
had been originally named herein as the Warrant
Agent, without any further assurance,
conveyance, act or deed, but if for any reason
it shall be reasonably necessary or expedient
to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be
legally and validly executed and delivered by
the Issuer.
Any corporation into which the Issuer or any
new Warrant Agent may be merged or any
corporation resulting from any consolidation to
which the Issuer or any new Warrant Agent shall
be a party or any corporation to which the
Issuer or any new Warrant Agent transfers
substantially all of its corporate trust or
shareholders services business shall be a
successor Warrant Agent under this Agreement
without any further act; provided that such
corporation (i) would be eligible for
appointment as successor to the Warrant Agent
under the provisions of this paragraph 12 or
(ii) is a wholly owned subsidiary of the
Warrant Agent. Any such successor Warrant
Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by
first class mail, postage prepaid) to the
registered holder hereof at such holder's last
address as shown on the Warrant Register.
This Warrant shall not be valid unless signed
by the Issuer.
IN WITNESS WHEREOF, SyQuest Technology, Inc.
has caused this Warrant to be signed by its duly
authorized officer.
Dated: July 23, 1997
SYQUEST TECHNOLOGY, INC.
By:
Name:
Title:
FORM OF EXERCISE NOTICE
(To Be Executed Upon Exercise of the Warrant)
[DATE]
SyQuest Technology, Inc.
47071 Bayside Parkway
Fremont, CA 94538
Attention: Chief Financial Officer
Re: Warrant No.
Ladies and Gentlemen:
The undersigned is the registered holder
of the above-referenced warrant (the "Warrant")
issued by SyQuest Technology, Inc., the original of
which is attached hereto, and hereby elects to
exercise the Warrant to purchase _________ Warrant
Shares (as defined in the Warrant) and herewith
tenders $_____________ by certified or official bank
check to the order of SyQuest Technology, Inc. as
payment for such Warrant Shares in accordance with
the terms of the Warrant (as defined in the Warrant).
In accordance with the attached Warrant,
the undersigned requests that certificates for such
Warrant Shares be registered in the name of and
delivered to the undersigned at the following
address:
________________________
________________________
________________________
[If the number of Warrant Shares to be
delivered is less than the total number of Warrant
Shares deliverable under the Warrant, insert the
following -- The undersigned requests that a new
warrant substantially identical to the attached
Warrant be issued to the undersigned evidencing the
right to purchase the number of Warrant Shares equal
to (x) the total number of Warrant Shares deliverable
under the Warrant less (y) the number of Warrant
Shares to be delivered in connection with this
exercise.]
NAME OF REGISTERED HOLDER
[ADDRESS]
By:
Name:
Title:
Exhibit 10.4
THE SECURITIES REPRESENTED BY OR ISSUABLE ON
EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.
Warrant No. 89
COMMON STOCK PURCHASE WARRANT
SYQUEST TECHNOLOGY, INC.
This Warrant certifies that The Silakhan Route
("Holder"), or its registered assigns, is the
registered holder of one Warrant (the "Warrant")
expiring on May 20, 2004 (the "Termination Date") to
purchase shares of common stock, par value $.001 per
share (the "Common Stock"), of SYQUEST TECHNOLOGY,
INC., a Delaware corporation (the "Issuer"). This
Warrant entitles the holder to purchase from the
Issuer up to 49,797 Warrant Shares (as defined
below), subject to adjustment, at a per share
Exercise Price (as defined below). A "Warrant Share"
initially represents one fully paid and nonassessable
share of Common Stock, based upon an Exchange Rate
(as defined below) of one-for-one, subject to
adjustment pursuant to paragraph 10.
This Warrant was issued as of August 15, 1997
(the "Closing Date").
The exercise price per Warrant Share (plus
transfer taxes, if applicable, the "Exercise Price")
shall be the greater of (a) 130 percent of the
arithmetical average of the closing sale prices per
share of Common Stock on the five consecutive trading
days preceding the delivery of any Exercise Notice
(as defined below) as reported by the Nasdaq National
Market (the "NNM") or, if the NNM is not then the
principal trading market for the Common Stock, on the
principal trading market for the Common Stock at that
time or, if there is then no such principal trading
market, the fair market value per share of Common
Stock during such period as determined in good faith
by the Board of Directors of the Issuer and (b) 130
percent of such closing sale price on the day
immediately preceding the delivery of the Exercise
Notice; provided that in no event shall the Exercise
Price exceed 130 percent of the closing sale price
per share of Common Stock on the date of the initial
issuance of the warrant which, price is $2.75 per
share. If the value of the Common Stock is to be
determined by the Board of Directors of the Issuer
and the holder of this Warrant disagrees with said
valuation, the value of the Common Stock will be
determined by binding arbitration in accordance with
the then prevailing commercial arbitration rules of
the American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to in
writing by the Issuer and the holder of this Warrant.
The Exercise Price multiplied by the Exercise Amount
(as defined below) at any Exercise Date (as defined
below) is referred to as a "Warrant Purchase Price".
This Warrant shall have the following
additional terms:
1. This Warrant is not exercisable until the lapse
of a period ending on the 65th day (the "Notice
Period") after the holder delivers a notice (a
"65 Day Notice") to the Issuer designating an
aggregate number of Warrant Shares (the "Exer-
cisable Number"). A 65 Day Notice may be given
at any time after the Closing Date. If the
initial 65 Day Notice does not designate all of
the Warrant Shares, this Warrant will become
exercisable for some or all of the remaining
Warrant Shares upon delivery of one or more 65
Day Notices increasing the Exercisable Number
after a further Notice Period. From time to
time following the Notice Period, this Warrant
may be exercised on any Business Day prior to
the Termination Date (an "Exercise Date") for
any quantity of Warrant Shares, such that the
aggregate number of Warrant Shares issued
hereunder is less than or equal to the Exercis-
able Number. To exercise this Warrant, the
registered holder must, prior to the
Termination Date, surrender this Warrant to the
Issuer at its principal office with the
Exercise Notice attached hereto (an "Exercise
Notice") duly completed and signed by the
registered holder hereof and stating the total
number of Warrant Shares in respect of which
this Warrant is then exercised (the "Exercise
Amount") and tender the applicable Warrant
Purchase Price. This Warrant shall be
exercisable only in the minimum amount of
10,000 Warrant Shares and integral multiples of
10,000 Warrant Shares in excess thereof (or
such lesser amount as shall constitute the full
amount remaining of this Warrant). As used
herein the term "Business Day" means any day on
which banks in the State of California are open
for business.
2. On the Business Day following an Exercise Date
(an "Issue Date"), the Issuer shall issue and
cause to be delivered to the registered holder
hereof at such address as such holder shall
specify in the Exercise Notice a certificate or
certificates for the number of full Warrant
Shares issuable upon the exercise of this
Warrant, registered in such holder's name,
together with cash (if any) as provided in
paragraph 4. Such certificate or certificates
shall be deemed to have been issued and any
person so designated to be named therein shall
be deemed to have become a holder of record of
such Warrant Shares as of such Exercise Date.
3. If on such Issue Date the number of Warrant
Shares to be delivered shall be less than the
total number of Warrant Shares deliverable
hereunder, there shall be issued to the holder
hereof or his assignee on such Issue Date a new
warrant substantially identical to this
Warrant, except that such new warrant shall
evidence the right to purchase the number of
Warrant Shares equal to (x) the total number of
Warrant Shares deliverable hereunder less (y)
the number of Warrant Shares so delivered.
4. The Issuer shall not be required to issue
fractional Warrant Shares on the exercise of
this Warrant. The number of full Warrant
Shares which shall be issuable upon the
exercise of this Warrant shall be computed on
the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant
so presented. If any fraction of a Warrant
Share would, except for the provisions of this
paragraph 4, be issuable on the exercise of
this Warrant, the Issuer shall pay an amount in
cash equal to the last per share sale price of
the Common Stock (on the NNM or the Principal
Market, as the case may be) on the day
immediately preceding the Exercise Date,
multiplied by such fraction (subject to
adjustment pursuant to paragraph 10); provided
that if at the time that the Exercise Price is
to be determined the NNM is not the principal
trading market for the Common Stock and there
is no Principal Market, then the amount of cash
to be paid per fractional Warrant Share shall
be determined in good faith by the Board of
Directors of the Issuer. If the holder of this
Warrant disagrees with such determination, the
amount of cash to be paid per fractional
Warrant Share will be determined by binding
arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
5. For so long as this Warrant has not been
exercised in full, the Issuer shall at all
times prior to the Termination Date reserve and
keep available, free from preemptive rights,
out of its authorized but unissued Common
Stock, for issuance upon exercise of this
Warrant, the maximum number of shares of Common
Stock and any other Capital Stock (as defined
below) then so issuable. In furtherance of the
foregoing, but subject to adjustment pursuant
to paragraph 10 and to increase pursuant to the
fourth paragraph hereof, the Issuer shall
reserve for issuance hereunder, not less than
49,797 shares of Common Stock. In the event
the number of shares of Common Stock or other
securities issuable in respect of the Warrant
Shares exceeds the authorized number of shares
of Common Stock or other securities, the Issuer
shall promptly take all actions necessary to
increase the authorized number, including
causing its Board of Directors to call a
special meeting of stockholders within thirty
days of the date on which such excess first
existed and recommend such increase for
approval by the Issuer's stockholders. The
Issuer shall use its best efforts to obtain
stockholder approval of the increase to the
authorized number of shares of Common Stock.
6. By accepting delivery of this Warrant, the
registered holder hereof covenants and agrees
with the Issuer not to exercise or transfer
this Warrant or any Warrant Shares except in
compliance with this Warrant, and that certain
Investment Letter dated November 14, 1997,
between Issuer and Holder.
7. By accepting this Warrant, the registered
holder hereof covenants and agrees with the
Issuer that this Warrant may not be sold,
assigned, conveyed, encumbered, pledged,
hypothecated or in any other manner disposed of
or transferred, as a whole or in part, unless
and until such holder shall deliver to the
Issuer (i) written notice of such transfer and
of the name and address of the transferee, (ii)
a written agreement, in form and substance
reasonably satisfactory to the Issuer, of the
transferee to comply with the applicable terms
of this Warrant and (iii) an opinion of counsel
for such holder, reasonably satisfactory to the
Issuer in form, scope and substance, that such
transaction will comply with all applicable
securities laws and regulations. If a portion
of this Warrant is transferred, all rights of
the registered holder hereunder may be
exercised by the transferee (subject to the
requirement that such transferee shall provide
a like opinion of counsel in respect of the
number of Warrant Shares transferred with the
portion of this Warrant), provided that any
registered holder of this Warrant may deliver a
65 Day Notice, an Exercise Notice or elect the
form of consideration pursuant to paragraph 10
only with respect to the Warrant Shares subject
to such holder's portion of this Warrant, and,
for purposes of paragraph 10(c), the
calculation of the Black-Scholes Warrant Value
shall be made by the registered holder(s) of a
majority in interest of this Warrant.
8. The Issuer will pay all documentary stamp taxes
(if any) attributable to the issuance of
Warrant Shares upon the exercise of this
Warrant by the registered holder hereof;
provided that the Issuer shall not be required
to pay any tax or taxes which may be payable in
respect of any transfer involved in the
registration of this Warrant or any
certificates for Warrant Shares in a name other
than that of the registered holder of this
Warrant surrendered upon the exercise of this
Warrant, and the Issuer shall not be required
to issue or deliver this Warrant or
certificates for Warrant Shares unless or until
the person or persons requesting the issuance
thereof shall have paid to the Issuer the
amount of such tax or shall have established to
the satisfaction of the Issuer that such tax
has been paid.
9. In case this Warrant shall be mutilated, lost,
stolen or destroyed, the Issuer may in its
discretion issue in exchange and substitution
for and upon cancellation of the mutilated
Warrant, or in lieu of and substitution for the
lost, stolen or destroyed Warrant, a new
Warrant of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Issuer
of such loss, theft or destruction of such
Warrant and indemnity, if requested, reasonably
satisfactory to the Issuer. Applicants for a
substitute Warrant shall also comply with such
other reasonable regulations and pay such other
reasonable charges as the Issuer may prescribe.
10. The number of shares of Common Stock (and other
Capital Stock (as defined below) or property)
(as adjusted from time to time, the "Exchange
Rate") issuable upon the exercise of this
Warrant and the terms and conditions of this
Warrant are subject to adjustment by the
Issuer, in consultation with the holder hereof,
from time to time as follows:
(a) If the Issuer:
1. subdivides its outstanding shares
of Common Stock into a greater
number of shares;
2. combines its outstanding shares of
Common Stock into a smaller number
of shares; or
3. issues by reclassification of its
Common Stock any shares of its
Capital Stock;
then the Exchange Rate in effect
immediately prior to such action shall be
adjusted so that the registered holder
hereof shall thereafter be entitled to
receive upon exercise of this Warrant in
respect of each Warrant Share the number
of shares of Common Stock or other
Capital Stock of the Issuer that such
holder would have received immediately
following such action if such holder had
so exercised this Warrant immediately
prior to such action.
As used herein, the term "Capital Stock"
means, with respect to any corporation,
any and all shares, interests, rights to
purchase, warrants, options,
participations or other equivalents of or
interests (however designated) in stock
issued by that corporation.
Such adjustment shall become effective
simultaneously with the effective date of
any subdivision, combination or
reclassification.
If, after an adjustment, the registered
holder hereof would receive upon exercise
shares of two or more classes of Capital
Stock of the Issuer, the Exchange Rate
shall thereafter be subject to adjustment
upon the occurrence of an action taken
with respect to each such class of
Capital Stock as is contemplated hereby
with respect to the Common Stock, on
terms comparable to those applicable to
Common Stock hereunder.
(b) Whenever any of the actions described in
this paragraph 10 are to be taken, the
Issuer shall provide the notices required
by paragraph 11 hereof.
(c) (A) The Issuer covenants and agrees with
the registered holder hereof not to
consolidate or merge with or into, or
sell, transfer or lease all or
substantially all its assets to, or sell
a majority of its securities generally
entitled to vote for the election of
directors of the Issuer ("Voting
Securities") to, any person, unless, and
(B) if any person consummates a tender
offer for the purchase of at least a
majority of the Voting Securities (any of
which transactions described in clauses
(A) and (B), a "Transaction"), then, at
the election of the registered holder
hereof (or if such holder does not notify
the Issuer of such election within twenty
days after being notified of the
Transaction, at the election of the
Issuer), on the effective date of such
Transaction (the "Transaction Date") and
as a condition to the consummation of any
Transaction described in clause (A),
either:
1. the Issuer shall have redeemed this
Warrant by paying to such holder,
upon surrender of this Warrant, a
cash payment equal to the Black-
Scholes value of the unexercised
portion of this Warrant from the
effective date of the Transaction
until the Warrant Expiration Date
(the "Black-Scholes Warrant
Value"), computed as of such
Transaction Date; or
2. (a) such person shall expressly
assume in writing all of the
obligations of the Issuer
hereunder and deliver notice
thereof to the registered
holder hereof; and
(b) upon consummation of such
Transaction, this Warrant
shall automatically become
exercisable for the common
stock of the acquiror
(without regard to the form
of acquisition consideration)
with similar terms and at an
exercise price that would
result in a Black-Scholes
Warrant Value of this Warrant
computed immediately after
the Transaction equal to the
Black-Scholes Warrant Value
of this Warrant computed
immediately before the
Transaction.
For purposes of this paragraph 10(c), the
factors to be used in the calculation of
the Black-Scholes Warrant Value are as
follows:
Stock Price:
the last sales price of
the Common Stock reported by Bloomberg
on the last Trading Day Prior to the
Transaction Date (the "Last Trading day")
Time To Expiration:
the number of Trading Days between the last
Trading Day and the Termination Date.
Exercise Price: Exercise Price
Volatility:
volatility shown by Bloomberg for the past
260 days at close on the Last Trading Day,
unless the Time to Expiration is less than
260 Trading Days, in which case the
volatility shown by Bloomberg at close on
the Last Trading Day for the number of
Trading Days from the Last Trading Day
to the Termination Date.
Risk-Free Interest Rate:
closing yield as of the Last Trading Day as
quoted in the Wall Street Journal for U.S.
Treasury bond with a maturity date closest
to the Termination Date.
Number of Shares Outstanding :
total number of shares of Common Stock
outstanding as of the Last Trading Day.
Exercisable Common Stock:
the number of shares of Common Stock
exercisable under this Warrant as of the
Transaction Date
The Black-Scholes Warrant Value will be
calculated using the factors shown above.
A preliminary calculation of the Black-
Scholes Warrant Value, and, if
applicable, the exercise price
contemplated by paragraph 10(c)2(b)
hereof, (using then-current values for
each factor) will be delivered by Holder
to the Issuer not later than the tenth
day after it receives notice of a
Transaction by the Issuer. The Issuer,
in turn, will respond within five days
with any comments or questions and reach
agreement with Holder on the preliminary
factors. On the Transaction Date,
Holder, in consultation with the Issuer,
will calculate the final Black-Scholes
Warrant Value using the then-current
values for each factor; such calculation
will be used to compute the values called
for in paragraph 10(c). It shall be a
condition to any Transaction that the
consideration provided for herein shall
be paid in full, in the case of cash, or
delivered, in the case of a warrant, all
in accordance with the terms hereof,
immediately prior to the consummation of
the Transaction. As used herein, the term
"Trading Day" means any day on which the
Issuer's Common Stock is quoted on the
NNM or, if applicable, other national
securities exchange. If the factors
shown above can not be determined because
the Issuer's Common Stock is not listed
on any national securities exchange or
because Bloomberg does not report the
factors shown above, then the Issuer and
the holder of this Warrant shall agree on
an alternative calculation to satisfy the
requirements of this paragraph 10(c).
(d) After an adjustment to the Exchange Rate
hereunder, any subsequent event requiring
an adjustment hereunder shall cause an
adjustment to the Exchange Rate as so
adjusted.
(e) Upon the issuance of any stock dividend
or distribution of Common Stock pro rata
to all holders of Common Stock, the
Exchange Rate shall be adjusted so that
the registered holder hereof on the
record date for such distribution shall
be entitled to receive such dividend or
distribution on the same terms as the
holders of Common Stock upon exercise
hereof.
11. Except as provided in the following paragraph,
upon any adjustment of the Exchange Rate
pursuant to paragraph 10, the Issuer shall
promptly thereafter but in any event within
fifteen days following such adjustment (i)
cause to be delivered to the registered holder
hereof a certificate of its Chief Financial
Officer setting forth the Exchange Rate after
such adjustment and setting forth in reasonable
detail the method of calculation and the facts
upon which such calculations are based, which
certificate shall be conclusive evidence of the
correctness of the matters set forth therein,
and (ii) cause to be delivered to the
registered holder hereof at its address
appearing on the Warrant Register written
notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such
notice may be given in advance and included as
part of the notice required to be mailed under
the other provisions of this paragraph 11.
In case:
(a) the Issuer shall authorize the issuance
to all holders of shares of Common Stock
of rights, options or warrants to
subscribe for or purchase shares of
Common Stock or of any other subscription
rights or warrants; or
(b) of any proposal for a consolidation or
merger to which the Issuer is a party,
the sale or transfer of all or
substantially all of the assets of the
Issuer, or any reclassification or change
of Common Stock issuable upon exercise of
this Warrant (other than a change in par
value, or from par value to no par value,
or from no par value to par value, or as
a result of a subdivision or
combination), or of a tender offer or
exchange offer for shares of Common
Stock; or
(c) of the voluntary or involuntary
dissolution, liquidation or winding up of
the Issuer; or
(d) the Issuer proposes to take any action
that would require an adjustment of the
Exchange Rate pursuant to paragraph 10;
then the Issuer shall cause to be given to the
registered holder hereof at its address
appearing on the Warrant Register (as defined
below), at least twenty days (or ten days in
any case specified in clause (a) above) prior
to the applicable record date hereinafter
specified, or promptly in the case of events
for which there is no record date, by first
class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled
to receive any such rights, options, warrants
or distribution are to be determined, or (ii)
the initial expiration date set forth in any
tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any
such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective
or consummated, and the date as of which it is
expected that holders of record of shares of
Common Stock shall be entitled to exchange such
shares for securities or other property, if
any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up.
12. The Issuer shall serve as warrant agent (the
"Warrant Agent") under this Agreement. The
Warrant Agent hereunder shall at all times
maintain a register (the "Warrant Register") of
the holders of Warrants. Upon thirty days'
notice to the registered holder hereof, the
Issuer may appoint a new Warrant Agent. Such
new Warrant Agent shall be a corporation doing
business and in good standing under the laws
of the United States or any state thereof, and
having a combined capital and surplus of not
less than $50,000,000. The combined capital
and surplus of any such new Warrant Agent shall
be deemed to be the combined capital and
surplus as set forth in the most recent annual
report of its condition published by such
Warrant Agent prior to its appointment;
provided that such reports are published at
least annually pursuant to law or to the
requirements of a federal or state supervising
or examining authority. After acceptance in
writing of such appointment by the new Warrant
Agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it
had been originally named herein as the Warrant
Agent, without any further assurance,
conveyance, act or deed, but if for any reason
it shall be reasonably necessary or expedient
to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be
legally and validly executed and delivered by
the Issuer.
Any corporation into which the Issuer or any
new Warrant Agent may be merged or any
corporation resulting from any consolidation to
which the Issuer or any new Warrant Agent shall
be a party or any corporation to which the
Issuer or any new Warrant Agent transfers
substantially all of its corporate trust or
shareholders services business shall be a
successor Warrant Agent under this Agreement
without any further act; provided that such
corporation (i) would be eligible for
appointment as successor to the Warrant Agent
under the provisions of this paragraph 12 or
(ii) is a wholly owned subsidiary of the
Warrant Agent. Any such successor Warrant
Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by
first class mail, postage prepaid) to the
registered holder hereof at such holder's last
address as shown on the Warrant Register.
This Warrant shall not be valid unless signed
by the Issuer.
IN WITNESS WHEREOF, SyQuest Technology, Inc.
has caused this Warrant to be signed by its duly
authorized officer.
Dated:
SYQUEST TECHNOLOGY, INC.
By:
Name:
Title:
FORM OF EXERCISE NOTICE
(To Be Executed Upon Exercise of the Warrant)
[DATE]
SyQuest Technology, Inc.
47071 Bayside Parkway
Fremont, CA 94538
Attention: Chief Financial Officer
Re: Warrant No.
Ladies and Gentlemen:
The undersigned is the registered holder
of the above-referenced warrant (the "Warrant")
issued by SyQuest Technology, Inc., the original of
which is attached hereto, and hereby elects to
exercise the Warrant to purchase _________ Warrant
Shares (as defined in the Warrant) and herewith
tenders $_____________ by certified or official bank
check to the order of SyQuest Technology, Inc. as
payment for such Warrant Shares in accordance with
the terms of the Warrant (as defined in the Warrant).
In accordance with the attached Warrant,
the undersigned requests that certificates for such
Warrant Shares be registered in the name of and
delivered to the undersigned at the following
address:
________________________
________________________
________________________
[If the number of Warrant Shares to be
delivered is less than the total number of Warrant
Shares deliverable under the Warrant, insert the
following -- The undersigned requests that a new
warrant substantially identical to the attached
Warrant be issued to the undersigned evidencing the
right to purchase the number of Warrant Shares equal
to (x) the total number of Warrant Shares deliverable
under the Warrant less (y) the number of Warrant
Shares to be delivered in connection with this
exercise.]
NAME OF REGISTERED HOLDER
[ADDRESS]
By:
Name:
Title:
Exhibit 10.5
THE SECURITIES REPRESENTED BY OR ISSUABLE ON
EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.
Warrant No. 90
COMMON STOCK PURCHASE WARRANT
SYQUEST TECHNOLOGY, INC.
This Warrant certifies that The Silakhan Route
("Holder"), or its registered assigns, is the
registered holder of one Warrant (the "Warrant")
expiring on May 20, 2004 (the "Termination Date") to
purchase shares of common stock, par value $.001 per
share (the "Common Stock"), of SYQUEST TECHNOLOGY,
INC., a Delaware corporation (the "Issuer"). This
Warrant entitles the holder to purchase from the
Issuer up to 35,854 Warrant Shares (as defined
below), subject to adjustment, at a per share
Exercise Price (as defined below). A "Warrant Share"
initially represents one fully paid and nonassessable
share of Common Stock, based upon an Exchange Rate
(as defined below) of one-for-one, subject to
adjustment pursuant to paragraph 10.
This Warrant was issued as of September 15,
1997 (the "Closing Date").
The exercise price per Warrant Share (plus
transfer taxes, if applicable, the "Exercise Price")
shall be the greater of (a) 130 percent of the
arithmetical average of the closing sale prices per
share of Common Stock on the five consecutive trading
days preceding the delivery of any Exercise Notice
(as defined below) as reported by the Nasdaq National
Market (the "NNM") or, if the NNM is not then the
principal trading market for the Common Stock, on the
principal trading market for the Common Stock at that
time or, if there is then no such principal trading
market, the fair market value per share of Common
Stock during such period as determined in good faith
by the Board of Directors of the Issuer and (b) 130
percent of such closing sale price on the day
immediately preceding the delivery of the Exercise
Notice; provided that in no event shall the Exercise
Price exceed 130 percent of the closing sale price
per share of Common Stock on the date of the initial
issuance of the warrant, which price is $2.656 per
share. If the value of the Common Stock is to be
determined by the Board of Directors of the Issuer
and the holder of this Warrant disagrees with said
valuation, the value of the Common Stock will be
determined by binding arbitration in accordance with
the then prevailing commercial arbitration rules of
the American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to in
writing by the Issuer and the holder of this Warrant.
The Exercise Price multiplied by the Exercise Amount
(as defined below) at any Exercise Date (as defined
below) is referred to as a "Warrant Purchase Price".
This Warrant shall have the following
additional terms:
1. This Warrant is not exercisable until the lapse
of a period ending on the 65th day (the "Notice
Period") after the holder delivers a notice (a
"65 Day Notice") to the Issuer designating an
aggregate number of Warrant Shares (the "Exer-
cisable Number"). A 65 Day Notice may be given
at any time after the Closing Date. If the
initial 65 Day Notice does not designate all of
the Warrant Shares, this Warrant will become
exercisable for some or all of the remaining
Warrant Shares upon delivery of one or more 65
Day Notices increasing the Exercisable Number
after a further Notice Period. From time to
time following the Notice Period, this Warrant
may be exercised on any Business Day prior to
the Termination Date (an "Exercise Date") for
any quantity of Warrant Shares, such that the
aggregate number of Warrant Shares issued
hereunder is less than or equal to the Exercis-
able Number. To exercise this Warrant, the
registered holder must, prior to the
Termination Date, surrender this Warrant to the
Issuer at its principal office with the
Exercise Notice attached hereto (an "Exercise
Notice") duly completed and signed by the
registered holder hereof and stating the total
number of Warrant Shares in respect of which
this Warrant is then exercised (the "Exercise
Amount") and tender the applicable Warrant
Purchase Price. This Warrant shall be
exercisable only in the minimum amount of
10,000 Warrant Shares and integral multiples of
10,000 Warrant Shares in excess thereof (or
such lesser amount as shall constitute the full
amount remaining of this Warrant). As used
herein the term "Business Day" means any day on
which banks in the State of California are open
for business.
2. On the Business Day following an Exercise Date
(an "Issue Date"), the Issuer shall issue and
cause to be delivered to the registered holder
hereof at such address as such holder shall
specify in the Exercise Notice a certificate or
certificates for the number of full Warrant
Shares issuable upon the exercise of this
Warrant, registered in such holder's name,
together with cash (if any) as provided in
paragraph 4. Such certificate or certificates
shall be deemed to have been issued and any
person so designated to be named therein shall
be deemed to have become a holder of record of
such Warrant Shares as of such Exercise Date.
3. If on such Issue Date the number of Warrant
Shares to be delivered shall be less than the
total number of Warrant Shares deliverable
hereunder, there shall be issued to the holder
hereof or his assignee on such Issue Date a new
warrant substantially identical to this
Warrant, except that such new warrant shall
evidence the right to purchase the number of
Warrant Shares equal to (x) the total number of
Warrant Shares deliverable hereunder less (y)
the number of Warrant Shares so delivered.
4. The Issuer shall not be required to issue
fractional Warrant Shares on the exercise of
this Warrant. The number of full Warrant
Shares which shall be issuable upon the
exercise of this Warrant shall be computed on
the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant
so presented. If any fraction of a Warrant
Share would, except for the provisions of this
paragraph 4, be issuable on the exercise of
this Warrant, the Issuer shall pay an amount in
cash equal to the last per share sale price of
the Common Stock (on the NNM or the Principal
Market, as the case may be) on the day
immediately preceding the Exercise Date,
multiplied by such fraction (subject to
adjustment pursuant to paragraph 10); provided
that if at the time that the Exercise Price is
to be determined the NNM is not the principal
trading market for the Common Stock and there
is no Principal Market, then the amount of cash
to be paid per fractional Warrant Share shall
be determined in good faith by the Board of
Directors of the Issuer. If the holder of this
Warrant disagrees with such determination, the
amount of cash to be paid per fractional
Warrant Share will be determined by binding
arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
5. For so long as this Warrant has not been
exercised in full, the Issuer shall at all
times prior to the Termination Date reserve and
keep available, free from preemptive rights,
out of its authorized but unissued Common
Stock, for issuance upon exercise of this
Warrant, the maximum number of shares of Common
Stock and any other Capital Stock (as defined
below) then so issuable. In furtherance of the
foregoing, but subject to adjustment pursuant
to paragraph 10 and to increase pursuant to the
fourth paragraph hereof, the Issuer shall
reserve for issuance hereunder, not less than
35,854 shares of Common Stock. In the event
the number of shares of Common Stock or other
securities issuable in respect of the Warrant
Shares exceeds the authorized number of shares
of Common Stock or other securities, the Issuer
shall promptly take all actions necessary to
increase the authorized number, including
causing its Board of Directors to call a
special meeting of stockholders within thirty
days of the date on which such excess first
existed and recommend such increase for
approval by the Issuer's stockholders. The
Issuer shall use its best efforts to obtain
stockholder approval of the increase to the
authorized number of shares of Common Stock.
6. By accepting delivery of this Warrant, the
registered holder hereof covenants and agrees
with the Issuer not to exercise or transfer
this Warrant or any Warrant Shares except in
compliance with this Warrant, and that certain
Investment Letter dated November 14, 1997,
between Issuer and Holder.
7. By accepting this Warrant, the registered
holder hereof covenants and agrees with the
Issuer that this Warrant may not be sold,
assigned, conveyed, encumbered, pledged,
hypothecated or in any other manner disposed of
or transferred, as a whole or in part, unless
and until such holder shall deliver to the
Issuer (i) written notice of such transfer and
of the name and address of the transferee, (ii)
a written agreement, in form and substance
reasonably satisfactory to the Issuer, of the
transferee to comply with the applicable terms
of this Warrant and (iii) an opinion of counsel
for such holder, reasonably satisfactory to the
Issuer in form, scope and substance, that such
transaction will comply with all applicable
securities laws and regulations. If a portion
of this Warrant is transferred, all rights of
the registered holder hereunder may be
exercised by the transferee (subject to the
requirement that such transferee shall provide
a like opinion of counsel in respect of the
number of Warrant Shares transferred with the
portion of this Warrant), provided that any
registered holder of this Warrant may deliver a
65 Day Notice, an Exercise Notice or elect the
form of consideration pursuant to paragraph 10
only with respect to the Warrant Shares subject
to such holder's portion of this Warrant, and,
for purposes of paragraph 10(c), the
calculation of the Black-Scholes Warrant Value
shall be made by the registered holder(s) of a
majority in interest of this Warrant.
8. The Issuer will pay all documentary stamp taxes
(if any) attributable to the issuance of
Warrant Shares upon the exercise of this
Warrant by the registered holder hereof;
provided that the Issuer shall not be required
to pay any tax or taxes which may be payable in
respect of any transfer involved in the
registration of this Warrant or any
certificates for Warrant Shares in a name other
than that of the registered holder of this
Warrant surrendered upon the exercise of this
Warrant, and the Issuer shall not be required
to issue or deliver this Warrant or
certificates for Warrant Shares unless or until
the person or persons requesting the issuance
thereof shall have paid to the Issuer the
amount of such tax or shall have established to
the satisfaction of the Issuer that such tax
has been paid.
9. In case this Warrant shall be mutilated, lost,
stolen or destroyed, the Issuer may in its
discretion issue in exchange and substitution
for and upon cancellation of the mutilated
Warrant, or in lieu of and substitution for the
lost, stolen or destroyed Warrant, a new
Warrant of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Issuer
of such loss, theft or destruction of such
Warrant and indemnity, if requested, reasonably
satisfactory to the Issuer. Applicants for a
substitute Warrant shall also comply with such
other reasonable regulations and pay such other
reasonable charges as the Issuer may prescribe.
10. The number of shares of Common Stock (and other
Capital Stock (as defined below) or property)
(as adjusted from time to time, the "Exchange
Rate") issuable upon the exercise of this
Warrant and the terms and conditions of this
Warrant are subject to adjustment
by the Issuer, in consultation with the holder
hereof, from time to time as follows:
(a) If the Issuer:
1. subdivides its outstanding shares
of Common Stock into a greater
number of shares;
2. combines its outstanding shares of
Common Stock into a smaller number
of shares; or
3. issues by reclassification of its
Common Stock any shares of its
Capital Stock;
then the Exchange Rate in effect
immediately prior to such action shall be
adjusted so that the registered holder
hereof shall thereafter be entitled to
receive upon exercise of this Warrant in
respect of each Warrant Share the number
of shares of Common Stock or other
Capital Stock of the Issuer that such
holder would have received immediately
following such action if such holder had
so exercised this Warrant immediately
prior to such action.
As used herein, the term "Capital Stock"
means, with respect to any corporation,
any and all shares, interests, rights to
purchase, warrants, options,
participations or other equivalents of or
interests (however designated) in stock
issued by that corporation.
Such adjustment shall become effective
simultaneously with the effective date of
any subdivision, combination or
reclassification.
If, after an adjustment, the registered
holder hereof would receive upon exercise
shares of two or more classes of Capital
Stock of the Issuer, the Exchange Rate
shall thereafter be subject to adjustment
upon the occurrence of an action taken
with respect to each such class of
Capital Stock as is contemplated hereby
with respect to the Common Stock, on
terms comparable to those applicable to
Common Stock hereunder.
(b) Whenever any of the actions described in
this paragraph 10 are to be taken, the
Issuer shall provide the notices required
by paragraph 11 hereof.
(c) (A) The Issuer covenants and agrees with
the registered holder hereof not to
consolidate or merge with or into, or
sell, transfer or lease all or
substantially all its assets to, or sell
a majority of its securities generally
entitled to vote for the election of
directors of the Issuer ("Voting
Securities") to, any person, unless, and
(B) if any person consummates a tender
offer for the purchase of at least a
majority of the Voting Securities (any of
which transactions described in clauses
(A) and (B), a "Transaction"), then, at
the election of the registered holder
hereof (or if such holder does not notify
the Issuer of such election within twenty
days after being notified of the
Transaction, at the election of the
Issuer), on the effective date of such
Transaction (the "Transaction Date") and
as a condition to the consummation of any
Transaction described in clause (A),
either:
1. the Issuer shall have redeemed this
Warrant by paying to such holder,
upon surrender of this Warrant, a
cash payment equal to the Black-
Scholes value of the unexercised
portion of this Warrant from the
effective date of the Transaction
until the Warrant Expiration Date
(the "Black-Scholes Warrant
Value"), computed as of such
Transaction Date; or
2. (a) such person shall expressly
assume in writing all of the
obligations of the Issuer
hereunder and deliver notice
thereof to the registered
holder hereof; and
(b) upon consummation of such
Transaction, this Warrant
shall automatically become
exercisable for the common
stock of the acquiror
(without regard to the form
of acquisition consideration)
with similar terms and at an
exercise price that would
result in a Black-Scholes
Warrant Value of this Warrant
computed immediately after
the Transaction equal to the
Black-Scholes Warrant Value
of this Warrant computed
immediately before the
Transaction.
For purposes of this paragraph 10(c), the
factors to be used in the calculation of
the Black-Scholes Warrant Value are as
follows:
Stock Price:
the last sales price of
the Common Stock reported by Bloomberg
on the last Trading Day Prior to the
Transaction Date (the "Last Trading day")
Time To Expiration:
the number of Trading Days between the last
Trading Day and the Termination Date.
Exercise Price: Exercise Price
Volatility:
volatility shown by Bloomberg for the past
260 days at close on the Last Trading Day,
unless the Time to Expiration is less than
260 Trading Days, in which case the
volatility shown by Bloomberg at close on
the Last Trading Day for the number of
Trading Days from the Last Trading Day
to the Termination Date.
Risk-Free Interest Rate:
closing yield as of the Last Trading Day as
quoted in the Wall Street Journal for U.S.
Treasury bond with a maturity date closest
to the Termination Date.
Number of Shares Outstanding :
total number of shares of Common Stock
outstanding as of the Last Trading Day.
Exercisable Common Stock:
the number of shares of Common Stock
exercisable under this Warrant as of the
Transaction Date
The Black-Scholes Warrant Value will be
calculated using the factors shown above.
A preliminary calculation of the Black-
Scholes Warrant Value, and, if
applicable, the exercise price
contemplated by paragraph 10(c)2(b)
hereof, (using then-current values for
each factor) will be delivered by Holder
to the Issuer not later than the tenth
day after it receives notice of a
Transaction by the Issuer. The Issuer,
in turn, will respond within five days
with any comments or questions and reach
agreement with Holder on the preliminary
factors. On the Transaction Date,
Holder, in consultation with the Issuer,
will calculate the final Black-Scholes
Warrant Value using the then-current
values for each factor; such calculation
will be used to compute the values called
for in paragraph 10(c). It shall be a
condition to any Transaction that the
consideration provided for herein shall
be paid in full, in the case of cash, or
delivered, in the case of a warrant, all
in accordance with the terms hereof,
immediately prior to the consummation of
the Transaction. As used herein, the term
"Trading Day" means any day on which the
Issuer's Common Stock is quoted on the
NNM or, if applicable, other national
securities exchange. If the factors
shown above can not be determined because
the Issuer's Common Stock is not listed
on any national securities exchange or
because Bloomberg does not report the
factors shown above, then the Issuer and
the holder of this Warrant shall agree on
an alternative calculation to satisfy the
requirements of this paragraph 10(c).
(d) After an adjustment to the Exchange Rate
hereunder, any subsequent event requiring
an adjustment hereunder shall cause an
adjustment to the Exchange Rate as so
adjusted.
(e) Upon the issuance of any stock dividend
or distribution of Common Stock pro rata
to all holders of Common Stock, the
Exchange Rate shall be adjusted so that
the registered holder hereof on the
record date for such distribution shall
be entitled to receive such dividend or
distribution on the same terms as the
holders of Common Stock upon exercise
hereof.
11. Except as provided in the following paragraph,
upon any adjustment of the Exchange Rate
pursuant to paragraph 10, the Issuer shall
promptly thereafter but in any event within
fifteen days following such adjustment (i)
cause to be delivered to the registered holder
hereof a certificate of its Chief Financial
Officer setting forth the Exchange Rate after
such adjustment and setting forth in reasonable
detail the method of calculation and the facts
upon which such calculations are based, which
certificate shall be conclusive evidence of the
correctness of the matters set forth therein,
and (ii) cause to be delivered to the
registered holder hereof at its address
appearing on the Warrant Register written
notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such
notice may be given in advance and included as
part of the notice required to be mailed under
the other provisions of this paragraph 11.
In case:
(a) the Issuer shall authorize the issuance
to all holders of shares of Common Stock
of rights, options or warrants to
subscribe for or purchase shares of
Common Stock or of any other subscription
rights or warrants; or
(b) of any proposal for a consolidation or
merger to which the Issuer is a party,
the sale or transfer of all or
substantially all of the assets of the
Issuer, or any reclassification or change
of Common Stock issuable upon exercise of
this Warrant (other than a change in par
value, or from par value to no par value,
or from no par value to par value, or as
a result of a subdivision or
combination), or of a tender offer or
exchange offer for shares of Common
Stock; or
(c) of the voluntary or involuntary
dissolution, liquidation or winding up of
the Issuer; or
(d) the Issuer proposes to take any action
that would require an adjustment of the
Exchange Rate pursuant to paragraph 10;
then the Issuer shall cause to be given to the
registered holder hereof at its address
appearing on the Warrant Register (as defined
below), at least twenty days (or ten days in
any case specified in clause (a) above) prior
to the applicable record date hereinafter
specified, or promptly in the case of events
for which there is no record date, by first
class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled
to receive any such rights, options, warrants
or distribution are to be determined, or (ii)
the initial expiration date set forth in any
tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any
such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective
or consummated, and the date as of which it is
expected that holders of record of shares of
Common Stock shall be entitled to exchange such
shares for securities or other property, if
any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up.
12. The Issuer shall serve as warrant agent (the
"Warrant Agent") under this Agreement. The
Warrant Agent hereunder shall at all times
maintain a register (the "Warrant Register") of
the holders of Warrants. Upon thirty days'
notice to the registered holder hereof, the
Issuer may appoint a new Warrant Agent. Such
new Warrant Agent shall be a corporation doing
business and in good standing under the laws
of the United States or any state thereof, and
having a combined capital and surplus of not
less than $50,000,000. The combined capital
and surplus of any such new Warrant Agent shall
be deemed to be the combined capital and
surplus as set forth in the most recent annual
report of its condition published by such
Warrant Agent prior to its appointment;
provided that such reports are published at
least annually pursuant to law or to the
requirements of a federal or state supervising
or examining authority. After acceptance in
writing of such appointment by the new Warrant
Agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it
had been originally named herein as the Warrant
Agent, without any further assurance,
conveyance, act or deed, but if for any reason
it shall be reasonably necessary or expedient
to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be
legally and validly executed and delivered by
the Issuer.
Any corporation into which the Issuer or any
new Warrant Agent may be merged or any
corporation resulting from any consolidation to
which the Issuer or any new Warrant Agent shall
be a party or any corporation to which the
Issuer or any new Warrant Agent transfers
substantially all of its corporate trust or
shareholders services business shall be a
successor Warrant Agent under this Agreement
without any further act; provided that such
corporation (i) would be eligible for
appointment as successor to the Warrant Agent
under the provisions of this paragraph 12 or
(ii) is a wholly owned subsidiary of the
Warrant Agent. Any such successor Warrant
Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by
first class mail, postage prepaid) to the
registered holder hereof at such holder's last
address as shown on the Warrant Register.
This Warrant shall not be valid unless signed
by the Issuer.
IN WITNESS WHEREOF, SyQuest Technology, Inc.
has caused this Warrant to be signed by its duly
authorized officer.
Dated:
SYQUEST TECHNOLOGY,INC.
By:
Name:
Title:
FORM OF EXERCISE NOTICE
(To Be Executed Upon Exercise of the Warrant)
SyQuest Technology, Inc.
47071 Bayside Parkway
Fremont, CA 94538
Attention: Chief Financial Officer
Re: Warrant No.
Ladies and Gentlemen:
The undersigned is the registered holder
of the above-referenced warrant (the "Warrant")
issued by SyQuest Technology, Inc., the original of
which is attached hereto, and hereby elects to
exercise the Warrant to purchase _________ Warrant
Shares (as defined in the Warrant) and herewith
tenders $_____________ by certified or official bank
check to the order of SyQuest Technology, Inc. as
payment for such Warrant Shares in accordance with
the terms of the Warrant (as defined in the Warrant).
In accordance with the attached Warrant,
the undersigned requests that certificates for such
Warrant Shares be registered in the name of and
delivered to the undersigned at the following
address:
________________________
________________________
________________________
[If the number of Warrant Shares to be
delivered is less than the total number of Warrant
Shares deliverable under the Warrant, insert the
following -- The undersigned requests that a new
warrant substantially identical to the attached
Warrant be issued to the undersigned evidencing the
right to purchase the number of Warrant Shares equal
to (x) the total number of Warrant Shares deliverable
under the Warrant less (y) the number of Warrant
Shares to be delivered in connection with this
exercise.]
NAME OF REGISTERED HOLDER
[ADDRESS]
By:
Name:
Title:
Exhibit 10.6
THE SECURITIES REPRESENTED BY OR ISSUABLE ON
EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.
Warrant No. 91
COMMON STOCK PURCHASE WARRANT
SYQUEST TECHNOLOGY, INC.
This Warrant certifies that The Silakhan Route
("Holder"), or its registered assigns, is the
registered holder of one Warrant (the "Warrant")
expiring on May 20, 2004 (the "Termination Date") to
purchase shares of common stock, par value $.001 per
share (the "Common Stock"), of SYQUEST TECHNOLOGY,
INC., a Delaware corporation (the "Issuer"). This
Warrant entitles the holder to purchase from the
Issuer up to 35,854 Warrant Shares (as defined
below), subject to adjustment, at a per share
Exercise Price (as defined below). A "Warrant Share"
initially represents one fully paid and nonassessable
share of Common Stock, based upon an Exchange Rate
(as defined below) of one-for-one, subject to
adjustment pursuant to paragraph 10.
This Warrant was issued as of October 15, 1997
(the "Closing Date").
The exercise price per Warrant Share (plus
transfer taxes, if applicable, the "Exercise Price")
shall be the greater of (a) 130 percent of the
arithmetical average of the closing sale prices per
share of Common Stock on the five consecutive trading
days preceding the delivery of any Exercise Notice
(as defined below) as reported by the Nasdaq National
Market (the "NNM") or, if the NNM is not then the
principal trading market for the Common Stock, on the
principal trading market for the Common Stock at that
time or, if there is then no such principal trading
market, the fair market value per share of Common
Stock during such period as determined in good faith
by the Board of Directors of the Issuer and (b) 130
percent of such closing sale price on the day
immediately preceding the delivery of the Exercise
Notice; provided that in no event shall the Exercise
Price exceed 130 percent of the closing sale price
per share of Common Stock on the date of the initial
issuance of the warrant, which price is $4.75 per
share. If the value of the Common Stock is to be
determined by the Board of Directors of the Issuer
and the holder of this Warrant disagrees with said
valuation, the value of the Common Stock will be
determined by binding arbitration in accordance with
the then prevailing commercial arbitration rules of
the American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to in
writing by the Issuer and the holder of this Warrant.
The Exercise Price multiplied by the Exercise Amount
(as defined below) at any Exercise Date (as defined
below) is referred to as a "Warrant Purchase Price".
This Warrant shall have the following
additional terms:
1. This Warrant is not exercisable until the lapse
of a period ending on the 65th day (the "Notice
Period") after the holder delivers a notice (a
"65 Day Notice") to the Issuer designating an
aggregate number of Warrant Shares (the "Exer-
cisable Number"). A 65 Day Notice may be given
at any time after the Closing Date. If the
initial 65 Day Notice does not designate all of
the Warrant Shares, this Warrant will become
exercisable for some or all of the remaining
Warrant Shares upon delivery of one or more 65
Day Notices increasing the Exercisable Number
after a further Notice Period. From time to
time following the Notice Period, this Warrant
may be exercised on any Business Day prior to
the Termination Date (an "Exercise Date") for
any quantity of Warrant Shares, such that the
aggregate number of Warrant Shares issued
hereunder is less than or equal to the Exercis-
able Number. To exercise this Warrant, the
registered holder must, prior to the
Termination Date, surrender this Warrant to the
Issuer at its principal office with the
Exercise Notice attached hereto (an "Exercise
Notice") duly completed and signed by the
registered holder hereof and stating the total
number of Warrant Shares in respect of which
this Warrant is then exercised (the "Exercise
Amount") and tender the applicable Warrant
Purchase Price. This Warrant shall be
exercisable only in the minimum amount of
10,000 Warrant Shares and integral multiples of
10,000 Warrant Shares in excess thereof (or
such lesser amount as shall constitute the full
amount remaining of this Warrant). As used
herein the term "Business Day" means any day on
which banks in the State of California are open
for business.
2. On the Business Day following an Exercise Date
(an "Issue Date"), the Issuer shall issue and
cause to be delivered to the registered holder
hereof at such address as such holder shall
specify in the Exercise Notice a certificate or
certificates for the number of full Warrant
Shares issuable upon the exercise of this
Warrant, registered in such holder's name,
together with cash (if any) as provided in
paragraph 4. Such certificate or certificates
shall be deemed to have been issued and any
person so designated to be named therein shall
be deemed to have become a holder of record of
such Warrant Shares as of such Exercise Date.
3. If on such Issue Date the number of Warrant
Shares to be delivered shall be less than the
total number of Warrant Shares deliverable
hereunder, there shall be issued to the holder
hereof or his assignee on such Issue Date a new
warrant substantially identical to this
Warrant, except that such new warrant shall
evidence the right to purchase the number of
Warrant Shares equal to (x) the total number of
Warrant Shares deliverable hereunder less (y)
the number of Warrant Shares so delivered.
4. The Issuer shall not be required to issue
fractional Warrant Shares on the exercise of
this Warrant. The number of full Warrant
Shares which shall be issuable upon the
exercise of this Warrant shall be computed on
the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant
so presented. If any fraction of a Warrant
Share would, except for the provisions of this
paragraph 4, be issuable on the exercise of
this Warrant, the Issuer shall pay an amount in
cash equal to the last per share sale price of
the Common Stock (on the NNM or the Principal
Market, as the case may be) on the day
immediately preceding the Exercise Date,
multiplied by such fraction (subject to
adjustment pursuant to paragraph 10); provided
that if at the time that the Exercise Price is
to be determined the NNM is not the principal
trading market for the Common Stock and there
is no Principal Market, then the amount of cash
to be paid per fractional Warrant Share shall
be determined in good faith by the Board of
Directors of the Issuer. If the holder of this
Warrant disagrees with such determination, the
amount of cash to be paid per fractional
Warrant Share will be determined by binding
arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
5. For so long as this Warrant has not been
exercised in full, the Issuer shall at all
times prior to the Termination Date reserve and
keep available, free from preemptive rights,
out of its authorized but unissued Common
Stock, for issuance upon exercise of this
Warrant, the maximum number of shares of Common
Stock and any other Capital Stock (as defined
below) then so issuable. In furtherance of the
foregoing, but subject to adjustment pursuant
to paragraph 10 and to increase pursuant to the
fourth paragraph hereof, the Issuer shall
reserve for issuance hereunder, not less than
35,854 shares of Common Stock. In the event
the number of shares of Common Stock or other
securities issuable in respect of the Warrant
Shares exceeds the authorized number of shares
of Common Stock or other securities, the Issuer
shall promptly take all actions necessary to
increase the authorized number, including
causing its Board of Directors to call a
special meeting of stockholders within thirty
days of the date on which such excess first
existed and recommend such increase for
approval by the Issuer's stockholders. The
Issuer shall use its best efforts to obtain
stockholder approval of the increase to the
authorized number of shares of Common Stock.
6. By accepting delivery of this Warrant, the
registered holder hereof covenants and agrees
with the Issuer not to exercise or transfer
this Warrant or any Warrant Shares except in
compliance with this Warrant, and that certain
Investment Letter dated November 14, 1997,
between Issuer and Holder.
7. By accepting this Warrant, the registered
holder hereof covenants and agrees with the
Issuer that this Warrant may not be sold,
assigned, conveyed, encumbered, pledged,
hypothecated or in any other manner disposed of
or transferred, as a whole or in part, unless
and until such holder shall deliver to the
Issuer (i) written notice of such transfer and
of the name and address of the transferee, (ii)
a written agreement, in form and substance
reasonably satisfactory to the Issuer, of the
transferee to comply with the applicable terms
of this Warrant and (iii) an opinion of counsel
for such holder, reasonably satisfactory to the
Issuer in form, scope and substance, that such
transaction will comply with all applicable
securities laws and regulations. If a portion
of this Warrant is transferred, all rights of
the registered holder hereunder may be
exercised by the transferee (subject to the
requirement that such transferee shall provide
a like opinion of counsel in respect of the
number of Warrant Shares transferred with the
portion of this Warrant), provided that any
registered holder of this Warrant may deliver a
65 Day Notice, an Exercise Notice or elect the
form of consideration pursuant to paragraph 10
only with respect to the Warrant Shares subject
to such holder's portion of this Warrant, and,
for purposes of paragraph 10(c), the
calculation of the Black-Scholes Warrant Value
shall be made by the registered holder(s) of a
majority in interest of this Warrant.
8. The Issuer will pay all documentary stamp taxes
(if any) attributable to the issuance of
Warrant Shares upon the exercise of this
Warrant by the registered holder hereof;
provided that the Issuer shall not be required
to pay any tax or taxes which may be payable in
respect of any transfer involved in the
registration of this Warrant or any
certificates for Warrant Shares in a name other
than that of the registered holder of this
Warrant surrendered upon the exercise of this
Warrant, and the Issuer shall not be required
to issue or deliver this Warrant or
certificates for Warrant Shares unless or until
the person or persons requesting the issuance
thereof shall have paid to the Issuer the
amount of such tax or shall have established to
the satisfaction of the Issuer that such tax
has been paid.
9. In case this Warrant shall be mutilated, lost,
stolen or destroyed, the Issuer may in its
discretion issue in exchange and substitution
for and upon cancellation of the mutilated
Warrant, or in lieu of and substitution for the
lost, stolen or destroyed Warrant, a new
Warrant of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Issuer
of such loss, theft or destruction of such
Warrant and indemnity, if requested, reasonably
satisfactory to the Issuer. Applicants for a
substitute Warrant shall also comply with such
other reasonable regulations and pay such other
reasonable charges as the Issuer may prescribe.
10. The number of shares of Common Stock (and other
Capital Stock (as defined below) or property)
(as adjusted from time to time, the "Exchange
Rate") issuable upon the exercise of this
Warrant and the terms and conditions of this
Warrant are subject to adjustment
by the Issuer, in consultation with the holder
hereof, from time to time as follows:
(a) If the Issuer:
1. subdivides its outstanding shares
of Common Stock into a greater
number of shares;
2. combines its outstanding shares of
Common Stock into a smaller number
of shares; or
3. issues by reclassification of its
Common Stock any shares of its
Capital Stock;
then the Exchange Rate in effect
immediately prior to such action shall be
adjusted so that the registered holder
hereof shall thereafter be entitled to
receive upon exercise of this Warrant in
respect of each Warrant Share the number
of shares of Common Stock or other
Capital Stock of the Issuer that such
holder would have received immediately
following such action if such holder had
so exercised this Warrant immediately
prior to such action.
As used herein, the term "Capital Stock"
means, with respect to any corporation,
any and all shares, interests, rights to
purchase, warrants, options,
participations or other equivalents of or
interests (however designated) in stock
issued by that corporation.
Such adjustment shall become effective
simultaneously with the effective date of
any subdivision, combination or
reclassification.
If, after an adjustment, the registered
holder hereof would receive upon exercise
shares of two or more classes of Capital
Stock of the Issuer, the Exchange Rate
shall thereafter be subject to adjustment
upon the occurrence of an action taken
with respect to each such class of
Capital Stock as is contemplated hereby
with respect to the Common Stock, on
terms comparable to those applicable to
Common Stock hereunder.
(b) Whenever any of the actions described in
this paragraph 10 are to be taken, the
Issuer shall provide the notices required
by paragraph 11 hereof.
(c) (A) The Issuer covenants and agrees with
the registered holder hereof not to
consolidate or merge with or into, or
sell, transfer or lease all or
substantially all its assets to, or sell
a majority of its securities generally
entitled to vote for the election of
directors of the Issuer ("Voting
Securities") to, any person, unless, and
(B) if any person consummates a tender
offer for the purchase of at least a
majority of the Voting Securities (any of
which transactions described in clauses
(A) and (B), a "Transaction"), then, at
the election of the registered holder
hereof (or if such holder does not notify
the Issuer of such election within twenty
days after being notified of the
Transaction, at the election of the
Issuer), on the effective date of such
Transaction (the "Transaction Date") and
as a condition to the consummation of any
Transaction described in clause (A),
either:
1. the Issuer shall have redeemed this
Warrant by paying to such holder,
upon surrender of this Warrant, a
cash payment equal to the Black-
Scholes value of the unexercised
portion of this Warrant from the
effective date of the Transaction
until the Warrant Expiration Date
(the "Black-Scholes Warrant
Value"), computed as of such
Transaction Date; or
2. (a) such person shall expressly
assume in writing all of the
obligations of the Issuer
hereunder and deliver notice
thereof to the registered
holder hereof; and
(b) upon consummation of such
Transaction, this Warrant
shall automatically become
exercisable for the common
stock of the acquiror
(without regard to the form
of acquisition consideration)
with similar terms and at an
exercise price that would
result in a Black-Scholes
Warrant Value of this Warrant
computed immediately after
the Transaction equal to the
Black-Scholes Warrant Value
of this Warrant computed
immediately before the
Transaction.
For purposes of this paragraph 10(c), the
factors to be used in the calculation of
the Black-Scholes Warrant Value are as
follows:
Stock Price:
the last sales price of
the Common Stock reported by Bloomberg
on the last Trading Day Prior to the
Transaction Date (the "Last Trading day")
Time To Expiration:
the number of Trading Days between the last
Trading Day and the Termination Date.
Exercise Price: Exercise Price
Volatility:
volatility shown by Bloomberg for the past
260 days at close on the Last Trading Day,
unless the Time to Expiration is less than
260 Trading Days, in which case the
volatility shown by Bloomberg at close on
the Last Trading Day for the number of
Trading Days from the Last Trading Day
to the Termination Date.
Risk-Free Interest Rate:
closing yield as of the Last Trading Day as
quoted in the Wall Street Journal for U.S.
Treasury bond with a maturity date closest
to the Termination Date.
Number of Shares Outstanding :
total number of shares of Common Stock
outstanding as of the Last Trading Day.
Exercisable Common Stock:
the number of shares of Common Stock
exercisable under this Warrant as of the
Transaction Date
The Black-Scholes Warrant Value will be
calculated using the factors shown above.
A preliminary calculation of the Black-
Scholes Warrant Value, and, if
applicable, the exercise price
contemplated by paragraph 10(c)2(b)
hereof, (using then-current values for
each factor) will be delivered by Holder
to the Issuer not later than the tenth
day after it receives notice of a
Transaction by the Issuer. The Issuer,
in turn, will respond within five days
with any comments or questions and reach
agreement with Holder on the preliminary
factors. On the Transaction Date,
Holder, in consultation with the Issuer,
will calculate the final Black-Scholes
Warrant Value using the then-current
values for each factor; such calculation
will be used to compute the values called
for in paragraph 10(c). It shall be a
condition to any Transaction that the
consideration provided for herein shall
be paid in full, in the case of cash, or
delivered, in the case of a warrant, all
in accordance with the terms hereof,
immediately prior to the consummation of
the Transaction. As used herein, the term
"Trading Day" means any day on which the
Issuer's Common Stock is quoted on the
NNM or, if applicable, other national
securities exchange. If the factors
shown above can not be determined because
the Issuer's Common Stock is not listed
on any national securities exchange or
because Bloomberg does not report the
factors shown above, then the Issuer and
the holder of this Warrant shall agree on
an alternative calculation to satisfy the
requirements of this paragraph 10(c).
(d) After an adjustment to the Exchange Rate
hereunder, any subsequent event requiring
an adjustment hereunder shall cause an
adjustment to the Exchange Rate as so
adjusted.
(e) Upon the issuance of any stock dividend
or distribution of Common Stock pro rata
to all holders of Common Stock, the
Exchange Rate shall be adjusted so that
the registered holder hereof on the
record date for such distribution shall
be entitled to receive such dividend or
distribution on the same terms as the
holders of Common Stock upon exercise
hereof.
11. Except as provided in the following paragraph,
upon any adjustment of the Exchange Rate
pursuant to paragraph 10, the Issuer shall
promptly thereafter but in any event within
fifteen days following such adjustment (i)
cause to be delivered to the registered holder
hereof a certificate of its Chief Financial
Officer setting forth the Exchange Rate after
such adjustment and setting forth in reasonable
detail the method of calculation and the facts
upon which such calculations are based, which
certificate shall be conclusive evidence of the
correctness of the matters set forth therein,
and (ii) cause to be delivered to the
registered holder hereof at its address
appearing on the Warrant Register written
notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such
notice may be given in advance and included as
part of the notice required to be mailed under
the other provisions of this paragraph 11.
In case:
(a) the Issuer shall authorize the issuance
to all holders of shares of Common Stock
of rights, options or warrants to
subscribe for or purchase shares of
Common Stock or of any other subscription
rights or warrants; or
(b) of any proposal for a consolidation or
merger to which the Issuer is a party,
the sale or transfer of all or
substantially all of the assets of the
Issuer, or any reclassification or change
of Common Stock issuable upon exercise of
this Warrant (other than a change in par
value, or from par value to no par value,
or from no par value to par value, or as
a result of a subdivision or
combination), or of a tender offer or
exchange offer for shares of Common
Stock; or
(c) of the voluntary or involuntary
dissolution, liquidation or winding up of
the Issuer; or
(d) the Issuer proposes to take any action
that would require an adjustment of the
Exchange Rate pursuant to paragraph 10;
then the Issuer shall cause to be given to the
registered holder hereof at its address
appearing on the Warrant Register (as defined
below), at least twenty days (or ten days in
any case specified in clause (a) above) prior
to the applicable record date hereinafter
specified, or promptly in the case of events
for which there is no record date, by first
class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled
to receive any such rights, options, warrants
or distribution are to be determined, or (ii)
the initial expiration date set forth in any
tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any
such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective
or consummated, and the date as of which it is
expected that holders of record of shares of
Common Stock shall be entitled to exchange such
shares for securities or other property, if
any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up.
12. The Issuer shall serve as warrant agent (the
"Warrant Agent") under this Agreement. The
Warrant Agent hereunder shall at all times
maintain a register (the "Warrant Register") of
the holders of Warrants. Upon thirty days'
notice to the registered holder hereof, the
Issuer may appoint a new Warrant Agent. Such
new Warrant Agent shall be a corporation doing
business and in good standing under the laws
of the United States or any state thereof, and
having a combined capital and surplus of not
less than $50,000,000. The combined capital
and surplus of any such new Warrant Agent shall
be deemed to be the combined capital and
surplus as set forth in the most recent annual
report of its condition published by such
Warrant Agent prior to its appointment;
provided that such reports are published at
least annually pursuant to law or to the
requirements of a federal or state supervising
or examining authority. After acceptance in
writing of such appointment by the new Warrant
Agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it
had been originally named herein as the Warrant
Agent, without any further assurance,
conveyance, act or deed, but if for any reason
it shall be reasonably necessary or expedient
to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be
legally and validly executed and delivered by
the Issuer.
Any corporation into which the Issuer or any
new Warrant Agent may be merged or any
corporation resulting from any consolidation to
which the Issuer or any new Warrant Agent shall
be a party or any corporation to which the
Issuer or any new Warrant Agent transfers
substantially all of its corporate trust or
shareholders services business shall be a
successor Warrant Agent under this Agreement
without any further act; provided that such
corporation (i) would be eligible for
appointment as successor to the Warrant Agent
under the provisions of this paragraph 12 or
(ii) is a wholly owned subsidiary of the
Warrant Agent. Any such successor Warrant
Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by
first class mail, postage prepaid) to the
registered holder hereof at such holder's last
address as shown on the Warrant Register.
This Warrant shall not be valid unless signed
by the Issuer.
IN WITNESS WHEREOF, SyQuest Technology, Inc. has
caused this Warrant to be signed by its duly
authorized officer.
Dated:
SYQUEST TECHNOLOGY,INC.
By:
Name:
Title:
FORM OF EXERCISE NOTICE
(To Be Executed Upon Exercise of the Warrant)
[DATE]
SyQuest Technology, Inc.
47071 Bayside Parkway
Fremont, CA 94538
Attention: Chief Financial Officer
Re: Warrant No.
Ladies and Gentlemen:
The undersigned is the registered holder
of the above-referenced warrant (the "Warrant")
issued by SyQuest Technology, Inc., the original of
which is attached hereto, and hereby elects to
exercise the Warrant to purchase _________ Warrant
Shares (as defined in the Warrant) and herewith
tenders $_____________ by certified or official bank
check to the order of SyQuest Technology, Inc. as
payment for such Warrant Shares in accordance with
the terms of the Warrant (as defined in the Warrant).
In accordance with the attached Warrant,
the undersigned requests that certificates for such
Warrant Shares be registered in the name of and
delivered to the undersigned at the following
address:
________________________
________________________
________________________
[If the number of Warrant Shares to be
delivered is less than the total number of Warrant
Shares deliverable under the Warrant, insert the
following -- The undersigned requests that a new
warrant substantially identical to the attached
Warrant be issued to the undersigned evidencing the
right to purchase the number of Warrant Shares equal
to (x) the total number of Warrant Shares deliverable
under the Warrant less (y) the number of Warrant
Shares to be delivered in connection with this
exercise.]
NAME OF REGISTERED HOLDER
[ADDRESS]
By:
Name:
Title:
Exhibit 10.7
THE SECURITIES REPRESENTED BY OR ISSUABLE ON
EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND
SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.
Warrant No. 92
COMMON STOCK PURCHASE WARRANT
SYQUEST TECHNOLOGY, INC.
This Warrant certifies that Wharton Capital
Partners ("Holder"), or its registered assigns, is
the registered holder of one Warrant (the "Warrant")
expiring on May 1, 2004 (the "Termination Date") to
purchase shares of common stock, par value $.0001 per
share (the "Common Stock"), of SYQUEST TECHNOLOGY,
INC., a Delaware corporation (the "Issuer"). This
Warrant entitles the holder to purchase from the
Issuer up to 1,804,347 Warrant Shares (as defined
below), subject to adjustment, at a per share
Exercise Price (as defined below). A "Warrant Share"
initially represents one fully paid and nonassessable
share of Common Stock, subject to adjustment pursuant
to paragraph 10.
This Warrant was issued as of November 6, 1997
(the "Closing Date").
The exercise price per Warrant Share (plus
transfer taxes, if applicable, the "Exercise Price")
shall be the greater of (a) 130 percent of the
arithmetical average of the closing sale prices per
share of Common Stock on the five consecutive trading
days preceding the delivery of any Exercise Notice
(as defined below) as reported by the Nasdaq National
Market (the "NNM") or, if the NNM is not then the
principal trading market for the Common Stock, on the
principal trading market for the Common Stock at that
time or, if there is then no such principal trading
market, the fair market value per share of Common
Stock during such period as determined in good faith
by the Board of Directors of the Issuer and (b) 130
percent of such closing sale price on the day
immediately preceding the delivery of the Exercise
Notice; provided that in no event shall the Exercise
Price exceed $3.0469. If the value of the Common
Stock is to be determined by the Board of Directors
of the Issuer and the holder of this Warrant
disagrees with said valuation, the value of the
Common Stock will be determined by binding
arbitration in accordance with the then prevailing
commercial arbitration rules of the American
Arbitration Association, and such arbitration shall
proceed in San Francisco, California, or at such
other place as agreed to in writing by the Issuer and
the holder of this Warrant. The Exercise Price
multiplied by the Exercise Amount (as defined below)
at any Exercise Date (as defined below) is referred
to as a "Warrant Purchase Price".
The number of Warrant Shares for which this
Warrant may be exercised will increase by 6.67% for
each month (prorated daily for partial months) that
either of the following conditions is not satisfied:
(i) the Registration Statement (as defined in the
Purchase Agreement) shall be effective not later than
December 4, 1997 (provided that such condition need
not be satisfied until January 5, 1998 if the
Securities and Exchange Commission reviews the
Registration Statement), and (ii) on the day after
the Issuer's 1997 Special Meeting of stockholders,
but in any event not later than December 4, 1997
(provided that such condition need not be satisfied
until January 5, 1998 if the Securities and Exchange
Commission reviews the proxy filing) the Issuer shall
have the number of duly authorized shares of Common
Stock reserved for issuance to Holder equal to the
total number then issuable upon full exercise of this
Warrant and full conversion of the Preferred Shares
(as defined in the Securities Purchase Agreement) or
Issuer is otherwise able to deliver shares of Common
Stock upon such exercise or conversion.
This Warrant shall have the following
additional terms:
1. This Warrant is not exercisable until the lapse
of a period ending on the 65th day (the "Notice
Period") after the holder delivers a notice (a
"65 Day Notice") to the Issuer designating an
aggregate number of Warrant Shares (the "Exer-
cisable Number"). A 65 Day Notice may be given
at any time after the Closing Date. If the
initial 65 Day Notice does not designate all of
the Warrant Shares, this Warrant will become
exercisable for some or all of the remaining
Warrant Shares upon delivery of one or more 65
Day Notices increasing the Exercisable Number
after a further Notice Period. From time to
time following the Notice Period, this Warrant
may be exercised on any Business Day prior to
the Termination Date (an "Exercise Date") for
any quantity of Warrant Shares, such that the
aggregate number of Warrant Shares issued
hereunder is less than or equal to the Exercis-
able Number. To exercise this Warrant, the
registered holder must, prior to the
Termination Date, surrender this Warrant to the
Issuer at its principal office with the
Exercise Notice attached hereto (an "Exercise
Notice") duly completed and signed by the
registered holder hereof and stating the total
number of Warrant Shares in respect of which
this Warrant is then exercised (the "Exercise
Amount") and tender the applicable Warrant
Purchase Price. This Warrant shall be
exercisable only in the minimum amount of
10,000 Warrant Shares and integral multiples of
10,000 Warrant Shares in excess thereof (or
such lesser amount as shall constitute the full
amount remaining of this Warrant). As used
herein the term "Business Day" means any day on
which banks in the State of California are open
for business.
2. On the Business Day following an Exercise Date
(an "Issue Date"), the Issuer shall issue and
cause to be delivered to the registered holder
hereof at such address as such holder shall
specify in the Exercise Notice a certificate or
certificates for the number of full Warrant
Shares issuable upon the exercise of this
Warrant, registered in such holder's name,
together with cash (if any) as provided in
paragraph 4. Such certificate or certificates
shall be deemed to have been issued and any
person so designated to be named therein shall
be deemed to have become a holder of record of
such Warrant Shares as of such Exercise Date.
If the certificate or certificates for the
number of the Warrant Shares can be issued
without a restrictive legend pursuant to the
Purchase Agreement, on request made by the
holders of the Warrant in the Exercise Notice,
the Company will authorize and instruct its
transfer agent to issue the such certificate or
certificates electronically.
3. If on such Issue Date the number of Warrant
Shares to be delivered shall be less than the
total number of Warrant Shares deliverable
hereunder, there shall be issued to the holder
hereof or his assignee on such Issue Date a new
warrant substantially identical to this
Warrant, except that such new warrant shall
evidence the right to purchase the number of
Warrant Shares equal to (x) the total number of
Warrant Shares deliverable hereunder less (y)
the number of Warrant Shares so delivered.
4. The Issuer shall not be required to issue
fractional Warrant Shares on the exercise of
this Warrant. The number of full Warrant
Shares which shall be issuable upon the
exercise of this Warrant shall be computed on
the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant
so presented. If any fraction of a Warrant
Share would, except for the provisions of this
paragraph 4, be issuable on the exercise of
this Warrant, the Issuer shall pay an amount in
cash equal to the last per share sale price of
the Common Stock (on the NNM or the Principal
Market, as the case may be) on the day
immediately preceding the Exercise Date,
multiplied by such fraction (subject to
adjustment pursuant to paragraph 10); provided
that if at the time that the Exercise Price is
to be determined the NNM is not the principal
trading market for the Common Stock and there
is no Principal Market, then the amount of cash
to be paid per fractional Warrant Share shall
be determined in good faith by the Board of
Directors of the Issuer. If the holder of this
Warrant disagrees with such determination, the
amount of cash to be paid per fractional
Warrant Share will be determined by binding
arbitration in accordance with the then
prevailing commercial arbitration rules of the
American Arbitration Association, and such
arbitration shall proceed in San Francisco,
California, or at such other place as agreed to
in writing by the Issuer and the holder of this
Warrant.
5. Only after Issuer has amended its Certificate
of Incorporation to increase the number of
shares of its authorized Common Stock to
240,000,000, and for so long as this Warrant
has not been exercised in full, the Issuer
shall at all times prior to the Termination
Date reserve and keep available, free from
preemptive rights, out of its authorized but
unissued Common Stock, for issuance upon
exercise of this Warrant, the maximum number of
shares of Common Stock then so issuable. In
furtherance of the foregoing, but subject to
adjustment pursuant to paragraph 10 and to
increase pursuant to the fourth paragraph
hereof, the Issuer shall reserve for issuance
hereunder after Issuer has amended its
Certificate of Incorporation to increase the
number of shares of its authorized Common Stock
to 240,000,000, not less than 1,804,347 shares
of Common Stock. In the event the number of
shares of Common Stock or other securities
issuable in respect of the Warrant Shares
exceeds the authorized number of shares of
Common Stock or other securities, the Issuer
shall promptly take all actions necessary to
increase the authorized number, including
causing its Board of Directors to call a
special meeting of stockholders within thirty
days of the date on which such excess first
existed and recommend such increase for
approval by the Issuer's stockholders. The
Issuer shall use its best efforts to obtain
stockholder approval of the increase to the
authorized number of shares of Common Stock.
6. By accepting delivery of this Warrant, the
registered holder hereof covenants and agrees
with the Issuer not to exercise or transfer
this Warrant or any Warrant Shares except in
compliance with this Warrant, and that certain
Investment Letter dated ___________, between
Issuer and Holder.
7. By accepting this Warrant, the registered
holder hereof covenants and agrees with the
Issuer that this Warrant may not be sold,
assigned, conveyed, encumbered, pledged,
hypothecated or in any other manner disposed of
or transferred, as a whole or in part, unless
and until such holder shall deliver to the
Issuer (i) written notice of such transfer and
of the name and address of the transferee, (ii)
a written agreement, in form and substance
reasonably satisfactory to the Issuer, of the
transferee to comply with the applicable terms
of the Purchase Agreement and this Warrant and
(iii) an opinion of counsel for such holder,
reasonably satisfactory to the Issuer in form,
scope and substance, that such transaction will
comply with all applicable securities laws and
regulations. If a portion of this Warrant is
transferred, all rights of the registered
holder hereunder may be exercised by the
transferee (subject to the requirement that
such transferee shall provide a like opinion of
counsel in respect of the number of Warrant
Shares transferred with the portion of this
Warrant), provided that any registered holder
of this Warrant may deliver a 65 Day Notice, or
an Exercise Notice subject to such holder's
portion of this Warrant.
8. The Issuer will pay all documentary stamp taxes
(if any) attributable to the issuance of
Warrant Shares upon the exercise of this
Warrant by the registered holder hereof;
provided that the Issuer shall not be required
to pay any tax or taxes which may be payable in
respect of any transfer involved in the
registration of this Warrant or any
certificates for Warrant Shares in a name other
than that of the registered holder of this
Warrant surrendered upon the exercise of this
Warrant, and the Issuer shall not be required
to issue or deliver this Warrant or
certificates for Warrant Shares unless or until
the person or persons requesting the issuance
thereof shall have paid to the Issuer the
amount of such tax or shall have established to
the satisfaction of the Issuer that such tax
has been paid.
9. In case this Warrant shall be mutilated, lost,
stolen or destroyed, the Issuer may in its
discretion issue in exchange and substitution
for and upon cancellation of the mutilated
Warrant, or in lieu of and substitution for the
lost, stolen or destroyed Warrant, a new
Warrant of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Issuer
of such loss, theft or destruction of such
Warrant and indemnity, if requested, reasonably
satisfactory to the Issuer. Applicants for a
substitute Warrant shall also comply with such
other reasonable regulations and pay such other
reasonable charges as the Issuer may prescribe.
10. In case of any reclassification, capital
reorganization or other change of outstanding
shares of the Common Stock, or in case of any
consolidation or merger of the Issuer with or
into another corporation (other than a
consolidation or merger in which the Issuer is
the continuing corporation and which does not
result in any reclassification, capital
reorganization or other change of outstanding
shares of Common Stock), the Issuer shall cause
effective provision to be made so that the
Holder shall have the right thereafter, by
exercising this Warrant, to purchase the kind
and number of shares of stock or other
securities or property (including cash)
receivable upon such reclassification, capital
reorganization or other change, consolidation
or merger by a holder of the number of shares
of Common Stock that could have been purchased
upon exercise of the Warrant immediately prior
to such reclassification, capital
reorganization or other change, consolidation
or merger. Any such provision shall include
provision for adjustments that shall be as
nearly equivalent as may be practicable to the
adjustments provided for in this Section 9.
The foregoing provisions shall similarly apply
to successive reclassifications, capital
reorganizations and other changes of
outstanding shares of Common Stock and to
successive consolidations or mergers. If the
consideration received by the holders of Common
Stock is other than cash, the value shall be as
determined by the Board of Directors of the
Company acting in good faith.
11. If and whenever the Issuer shall effect a stock
dividend, a stock split, a stock combination,
or a reverse stock split of the Common Stock,
the number of Warrant Shares purchasable
hereunder and the Exercise Price shall be
proportionately adjusted in the manner
determined by the Issuer's Board of Directors
acting in good faith. The number of shares, as
so adjusted, shall be rounded down to the
nearest whole number and the Exercise Price
shall be rounded to the nearest cent.
This Warrant shall not be valid unless signed
by the Issuer.
IN WITNESS WHEREOF, SyQuest Technology, Inc.
has caused this Warrant to be signed by its duly
authorized officer.
Dated: November 11, 1997
SYQUEST TECHNOLOGY, INC.
By:
Name:
Title:
FORM OF EXERCISE NOTICE
(To Be Executed Upon Exercise of the Warrant)
[DATE]
SyQuest Technology, Inc.
47071 Bayside Parkway
Fremont, CA 94538
Attention: Chief Financial Officer
Re: Warrant No.
Ladies and Gentlemen:
The undersigned is the registered holder
of the above-referenced warrant (the "Warrant")
issued by SyQuest Technology, Inc., the original of
which is attached hereto, and hereby elects to
exercise the Warrant to purchase _________ Warrant
Shares (as defined in the Warrant) and herewith
tenders $_____________ by certified or official bank
check to the order of SyQuest Technology, Inc. as
payment for such Warrant Shares in accordance with
the terms of the Warrant and the Purchase Agreement
(as defined in the Warrant).
In accordance with the attached Warrant,
the undersigned requests that certificates for such
Warrant Shares be registered in the name of and
delivered to the undersigned at the following
address:
________________________
________________________
________________________
[If the number of Warrant Shares to be
delivered is less than the total number of Warrant
Shares deliverable under the Warrant, insert the
following -- The undersigned requests that a new
warrant substantially identical to the attached
Warrant be issued to the undersigned evidencing the
right to purchase the number of Warrant Shares equal
to (x) the total number of Warrant Shares deliverable
under the Warrant less (y) the number of Warrant
Shares to be delivered in connection with this
exercise.]
NAME OF REGISTERED HOLDER
[ADDRESS]
By:
Name:
Title
