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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)
April 22, 1998
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.)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5 Other Events
Issuance of Equity Securities Pursuant to Regulation D
On April 22, 1998, Registrant entered into two related contracts (the
"CC Investment Agreements") with CC Investments, LDC ("CCI") whereby
Registrant sold RGC 785,175 shares of Registrant's common stock (par value
$.0001) for par value as an incentive for CCI to exercise outstanding warrants
to acquire 1,500,000 shares of Registrant's common stock. The sale of the
785,175 shares of common stock was made in accordance with Regulation D of the
Securities Act of 1933, as amended (the "Securities Act"). The outstanding
warrants were exercised on or about April 22, 1998, and the proceeds paid to
Registrant from the exercise of warrants and the sale of the common stock
totalled $4,570,350. The 785,175 shares of common stock have not been
registered, though Registrant agreed to register such shares as soon as
possible consistent with existing contractual obligations regarding
registration of newly issued shares of common stock. Registrant currently
anticipates registering such shares in September 1998. A copy of the two
contracts comprising the CC Investment Agreements is attached as Exhibit 10.1
and 10.2 to this Form 8-K and incorporated herein by this reference.
THE FOREGOING DESCRIPTION OF THE CC INVESTMENT AGREEMENT IS ONLY A BRIEF
SUMMARY, DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO EXHIBIT 10.1 AND 10.2 TO THIS REPORT ON FORM 8-K, WHICH IS
INCORPORATED HEREIN BY THIS REFERENCE.
Resignation of Chief Financial Officer
On April 28, 1998, Registrant announced that Bob L. Corey, Executive
Vice President and Chief Financial Officer resigned effective April 30, 1998,
and that Michael Clemens, Senior Vice President and Treasurer was named acting
Chief Financial Officer. A copy of the press release containing that
announcement is attached hereto as Exhibit 99.1.
Item 7 Financial Statements, Pro Forma Financial Information
and Exhibits
10.1 Letter Agreement dated April 22, 1998, between Registrant and CCI
Investments, LDC.
10.2 Letter Agreement dated April 22, 1998, between Registrant and CCI
Investments, LDC.
99.1 Registrant's Press Release dated April 28, 1998.
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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: May 18, 1998 By /s/ Michael Clemens
Michael Clemens
Acting Chief Financial Officer,
Senior Vice President,
and Treasurer
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EXHIBIT 10.1
[SyQuest Technology, Inc. letterhead]
May 13, 1998
Via Facsimile:
- -------------
Mr. John Zigelman
Castle Creek Partners
333 W. Wacker Drive
Suite 1410
Chicago, IL 60606
Re: Exercise of Warrants/ Issuance of Common Stock
----------------------------------------------
Dear John:
This letter confirms that SyQuest Technology, Inc. ("SyQuest") and CC
Investments, LDC ("CCI") agree as follows:
1. CCI will exercise part of its warrant it received in connection with its
purchase of the Company's Convertible Preferred Stock, Series 5 at $3.0469
per share to acquire 1,500,000 shares of the Company's common stock, for
total proceeds of $4,570,350 (the "Proceeds")
2. Upon receipt of the Proceeds, plus an additional $78.52 representing the
par value for an additional 785,175 shares (the "Additional Common Shares")
of the Company's common stock, the Company will issue a total of 2,285,175
shares of common stock to CCI.
3. The Additional Common Shares shall have piggy-back registration rights so
that they will be registered in a future registration statement consistent
with existing Company contractual obligations regarding registration
statement consistent with existing Company contractual obligations
regarding registrations, provided however that the Company agrees to
register such shares no later than 180 days from the date of this letter,
subject to delays caused by reasonable business considerations.
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Mr. John Zigelman
May 12, 1998
Page 5
4. The Proceeds plus the additional $78.52 will be wire-transferred to the
following account: Bank of America, 1850 Gateway Blvd., 4th Floor,
Concord, CA 94520, ABA #121-000-358, Account #12334-56287.
5. The Company will deliver the shares of common stock issued upon exercise of
the warrants in accordance with the terms of the warrants, and the Company
confirms that it will direct its transfer agent to deliver such shares
electronically without a restrictive legend provided that CCI complies with
the applicable prospectus delivery requirements under the Securities Act of
1933 and provides notice to the Company using the attached form.
The Company acknowledges that CCI is relying on information disclosed in
the Company's public filings with SEC and confirms that it is aware of no
material misstatements or omissions in those filings.
ACKNOWLEDGED AND ACCEPTED:
SyQuest Technology, Inc. CC Investments, LDC
By Castle Creek Partners
Its Investment Manager
/s/ Thomas C. Tokos
- --------------------------------------
Thomas C. Tokos /s/ John Zigelman
Vice President, General Counsel and --------------------------------------
Secretary Authorized representative
John Zigelman
Its Managing Partner
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Mr. John Zigelman
May 12, 1998
Page 6
EXHIBIT 10.2
[SyQuest Technology, Inc. letterhead]
April 22, 1998
Via Facsimile
John Zigelman
Castle Creek Partners
333 W. Wacker Drive
Chicago, Illinois 60606
Re: Exercise of Warrants/Issuance of Common Stock
Dear John:
This letter confirms the agreement (the "Letter Agreement") between SyQuest
Technology, Inc. ("SyQuest") and CC Investments, LDC ("CCI") that CCI will
exercise warrant number 81 (the "Warrant") to exercise 1,500,000 shares of
SyQuest's common stock at the exercise price of $3.0469 as set forth in of the
Warrant. The purchase price for said 1,500,000 shares shall total $4,570,350
(the "Proceeds"). Upon receipt of the Proceeds, plus an additional $78.52
representing the par value for an additional 785,175 shares (the "Additional
Common Shares) of the Company's common stock, the Company will issue a total of
2,285,175 shares of common stock to CCI. SyQuest will also issue a replacement
warrant for the 2,000,000 shares of common stock available pursuant to the
Warrant after the exercise resulting in the issuance of 1,500,000 shares of
SyQuest's common stock.
CCI hereby represents, warrants and covenants that as of April 22, 1998 and
as of the issuance of the Additional Common Shares that:
a. The execution, delivery and performance by CCI of this Letter
Agreement and that certain other letter agreement dated the same date hereof
(the "Other Letter Agreement"), a copy of which is attached as Exhibit A hereto,
have been duly autho rized by all requisite corporate action and no further
consent or
<PAGE>
Mr. John Zigelman
May 12, 1998
Page 7
authorization of CCI, its Board of Directors or its stockholders is required.
b. CCI understands that no United States federal or state agency has
passed on, reviewed or made any recommendation or endorsement of the Additional
Common Shares.
c. In making the decision to accept the Additional Common Shares, CCI
has relied solely upon independent investigations made by it and not upon any
representations made by the Company other than that the Company acknowledges
that CCI is relying on information disclosed in the Company's public filings
with the SEC and confirms that it is aware of no material misstatements or
omissions in those filings.
d. CCI understands that the Additional Common Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be reoffered or resold other than pursuant to such registration or
an available exemption therefrom.
e. CCI is acquiring the Additional Common Shares for its own account
for investment only and not with a view to, or for resale in connection with,
the public sale or distribution thereof except pursuant to sales registered
under the Securities Act.
f. CCI is an "accredited investor" as that term is defined in Rule
501(a)(1) of Regulation D as promulgated by the Securities and Exchange
Commission under the Securities Act. CCI is able to bear the economic risk of
CCI's investment hereunder.
g. CCI understands that the Additional Common Shares are being or
will be offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying on the truth and accuracy of, and CCI's compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of CCI set forth herein in order to determine the availability of
such exemptions and the eligibility of CCI to acquire the Additional Common
Shares.
h. A principal executive officer or other representative of CCI who
is acting on behalf of CCI in connection with the transactions contemplated
hereby has such knowledge and experience in financial and business matters that
such officer is capable of evaluating the merits and risks of the investment by
CCI contemplated by this Agreement and has the capacity to protect CCI's
interests.
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Mr. John Zigelman
May 12, 1998
Page 8
i. CCI has been furnished with all materials and information relating
to the business, management, properties, financial condition, operations,
affairs and prospects of the Company and all materials and information relating
to the offer and sale of the Additional Common Shares as have been requested by
CCI. CCI has been afforded the opportunity to ask all questions of the Company
that the CCI considered appropriate or desirable to ask in connection with this
Agreement and has received answers to such inquiries that CCI considers
satisfactory. CCI understands that its investment in the Additional Common
Shares involves and will involve a high degree of risk. CCI has sought such
investment, accounting, legal and tax advice as it has considered necessary to
an informed investment decision with respect to its acquisition of the
Additional Common Shares.
j. CCI understands that (i) the Additional Common Shares have not
been registered under the Securities Act or any state securities laws, and may
not be offered for sale, sold, assigned or transferred unless (a) subsequently
registered thereunder, or (b) CCI shall have delivered to the Company an opinion
of counsel, reasonably satisfactory in form, scope and substance to the Company,
to the effect that the securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration;
(ii) any sale of such securities made in reliance on Rule 144 promulgated under
the Securities Act ("Rule 144") may be made only in accordance with the terms of
Rule 144 and, if Rule 144 is not applicable, any resale of such securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act
or the rules and regulations of the SEC thereunder; and (iii) other than as
provided in that certain Other Letter Agreement, neither the Company nor any
other person is under any obligation to register such securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
The Proceeds plus the additional $78.52 will be wire-transferred to the
following account:
Bank of America
1850 Gateway Blvd., 4th Floor
Concord, CA 94520
ABA # 121-000-358
A/C # 12334-56287
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Mr. John Zigelman
May 12, 1998
Page 9
The Company agrees to deliver the shares of common stock issued upon
exercise of the warrants in accordance with the terms of the warrants.
SyQuest hereby represents, warrants and covenants that as of April 22, 1998
and as of the issuance of the Additional Common Shares that:
a. The execution, delivery and performance by SyQuest of this Letter
Agreement and the Other Letter Agreement have been duly authorized by all
requisite corporate action and no further
(remainder of page intentionally left blank)
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Mr. John Zigelman
May 12, 1998
Page 10
consent or authorization of SyQuest, its Board of Directors or its stockholders
is required.
Please sign below documenting your agreement to the above terms.
SyQuest Technology, Inc. CC Investments, LDC
By: Castle Creek Partners
its Investment Manager
/s/ Thomas C. Tokos /s/ John Zigelman
- -------------------------------------- --------------------------------------
Thomas C. Tokos John Zigelman its
Vice President, General Counsel and Managing Partner
Secretary
cc: Edward L. Marinaro
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Mr. John Zigelman
May 12, 1998
Page 11
EXHIBIT 99.1
Contacts:
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Michael Celiceo
Account Executive
Miller/Shandwick Technologies
(650) 596-5800
[email protected]
FOR IMMEDIATE RELEASE
- ---------------------
BOB L. COREY RESIGNS AS
CHIEF FINANCIAL OFFICER OF SYQUEST
SyQuest Senior Vice President and Treasurer Michael Clemens Named Acting CEO
FREMONT, Calif., April 28, 1998 -- SyQuest Technology Inc. (NASDAQ: SYQT), a
leading manufacturer of removable cartridge hard drives, today announced the
resignation of Bob L. Corey as chief financial officer, effective April 30,
1998. Corey is leaving, SyQuest to pursue an opportunity in the software
industry and will be replaced on an acting basis by company senior vice
president and treasurer, Michael Clemens.
"Bob is leaving SyQuest to return to the software industry with a company that
has leading products within the market niche it serves," said Ed Harper, SyQuest
president and CEO. "His financial management efforts have contributed greatly
to our new business strategy and we wish him continued success."
As part of the original management team associated with SyQuest's turnaround,
Michael Clemens joined the company in 1996 as senior vice president, financial
services and treasurer. Prior to joining SyQuest, Clemens spent 11 years at
Western Digital Corporation as vice president and assistant treasurer.
<PAGE>
Mr. John Zigelman
May 12, 1998
Page 12
About SyQuest
Based in Fremont, Calif., SyQuest Technology, Inc. is the leader in removable
cartridge hard drive storage technology. The company offers the highest
capacity, best performing, most affordable, and easy to use removable hard
drives and cartridges in the marketplace. SyQuest award winning products are
ideal storage solutions for SOHO/professionals, families, students, Internet
users and more. SyQuest (SYQT) is publicly traded on NASDAQ's National Market
System. The company's web site is www.syquest.com.
###
This news release contains forward-looking statements that involve risks and
uncertainties, including competition in the marketplace for the company's
products, and other risks detailed from time to time in the SEC reports filed by
SyQuest including its most recent reports on Forms 8K, 1OK and 10Q.
(c)SyQuest is a registered trademark and the SyQuest logo is a trademark of
SyQuest Technology, Inc. All other brands or trade names are the property of
their respective companies.
