<PAGE> 1
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) March 29, 2000
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SEAGATE TECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 001-11403 94-2612933
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
920 Disc Drive
Scotts Valley, California 95066
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(Address of principal executive offices including Zip Code)
Registrant's telephone number, including area code: (831) 438-6550
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Item 5: Other Events
On March 29, 2000, Seagate Technology, Inc., Seagate Software Holdings,
Inc. and Suez Acquisition Company (Cayman) Limited, an entity affiliated with,
among others, Silver Lake Partners and Texas Pacific Group which we refer to
herein as SAC, entered into a Stock Purchase Agreement, and Seagate Technology
and VERITAS Software Corporation entered into an Agreement and Plan of Merger
and Reorganization, which we refer to herein as the Merger Agreement.
Under the Stock Purchase Agreement, SAC will purchase all of the
subsidiaries of Seagate Technology other than Seagate Software Holdings, Inc.,
formerly known as Seagate Software, Inc., which we refer to herein as Seagate
Software, and will also acquire all assets and assume all liabilities of Seagate
Technology and Seagate Software, other than the approximately 128 million shares
of VERITAS common stock and the securities of Gadzoox Networks (Nasdaq: ZOOX),
SanDisk Corporation (Nasdaq: SNDK), CVC, Inc. (Nasdaq: CVCI) and Dragon Systems,
Inc., a privately-held company, currently held by Seagate Technology. We refer
to this transaction herein as the Stock Purchase.
Under the Merger Agreement, immediately following the consummation of
the Stock Purchase, a wholly-owned subsidiary of VERITAS will merge with and
into Seagate Technology, with Seagate Technology to survive the merger and to
become a wholly-owned subsidiary of VERITAS. We refer to this transaction herein
as the Merger. VERITAS is not acquiring Seagate Technology's disc drive business
or any other Seagate operating business. In the Merger, the Seagate stockholders
will receive merger consideration consisting of:
- Approximately 109.3 million shares of VERITAS common stock issued in
exchange for the approximately 128 million shares of VERITAS common
stock Seagate currently holds,
- additional shares of VERITAS common stock issued in exchange for the
investment securities, and, at VERITAS' election, for up to $750 million
in retained cash, and
- all cash on the Seagate balance sheet in excess of $800 million of cash
working capital and after giving effect to VERITAS retained cash, debt
repayment, taxes and other liabilities.
Seagate stockholders will receive total consideration of approximately
$77.50 per share for each share of Seagate common stock, consisting of
approximately 0.467 shares of VERITAS common stock, or approximately 115.8
million shares in the aggregate, and approximately $5 in cash, based on the
closing market prices of the investment securities on March 28, 2000, and
assuming a $500 million cash retention by VERITAS and Seagate Technology's
anticipated cash position at closing.
The Merger is intended to qualify as a tax-free reorganization.
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On March 29, 2000, Seagate Technology, VERITAS and SAC entered into an
Indemnification Agreement, pursuant to which these entities and certain other
subsidiaries of Seagate Technology have agreed to certain indemnification
provisions regarding tax and other matters that may arise in connection with the
Stock Purchase and the Merger. Also on March 29, 2000, VERITAS and SAC entered
into a letter agreement, pursuant to which VERITAS agreed to a no-shop provision
and an alternative termination fee provision.
Each of the Stock Purchase Agreement, the Merger Agreement, the
Indemnification Agreement and the letter agreement is attached as an exhibit to
this current report. The above description is qualified in its entirety by
reference to the full text of those exhibits.
A press release announcing the Stock Purchase and the Merger is also
attached as an exhibit to this current report.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The foregoing information contains forward-looking statements within the
meaning of the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. Such statements regarding, among other things, the timing,
effect, and potential value of the Stock Purchase and the Merger, are based on
the current expectations and beliefs of managements of Seagate Technology and
VERITAS, and are subject to a number of factors and uncertainties that could
cause actual results to differ materially from those described in the
forward-looking statements. In particular, the following factors, among others,
could cause actual results to differ materially from those described in the
forward-looking statements: the failure of the Stock Purchase and the Merger to
close due to the failure to obtain regulatory or other approvals; the failure of
the Stock Purchase and the Merger to close due to the failure of Silver Lake
Partner's financing source to fulfill certain financial commitments; the failure
of the Seagate Technology or VERITAS stockholders to approve the Stock Purchase
and the Merger; the risk of unanticipated costs of effecting the Stock Purchase
and the Merger; the risk that liabilities will arise and the new private company
will be unable or unwilling to satisfy its proposed indemnification obligations
to VERITAS; the risk that the economic terms of the Stock Purchase and the
Merger will vary substantially due to changes in the market prices of VERITAS or
the investment securities and the impact of the operations of Seagate Technology
and the resulting cash balances at closing; and the risk that the Internal
Revenue Service will determine that transaction is taxable to the Seagate
Technology stockholders.
For a detailed discussion of these and other cautionary statements,
please refer to the joint proxy statement/prospectus to be filed by both Seagate
Technology and VERITAS as described below, as well as the companies' filings
with the Securities and Exchange Commission, especially in the "Factors
Affecting Future Operating Results" section of
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the Management's Discussion and Analysis of Financial Condition and Results of
Operations section of Seagate Technology's Form 10-K its fiscal year ended July
2, 1999 and its Form 10-Q for its fiscal quarter ended December 31, 1999, and in
the "Factors That May Affect Future Results" section of the Management's
Discussion and Analysis of Financial Condition and Results of Operations"
section of VERITAS' Form 10-Q for its fiscal quarter ended September 30, 1999.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Investors and security holders of both Seagate Technology and VERITAS
are advised to read the joint proxy statement/prospectus regarding the business
transaction referenced in the foregoing information, when it becomes available,
because it will contain important information. Seagate Technology and VERITAS
expect to mail a joint proxy statement/prospectus about the transaction to their
respective stockholders. Such joint proxy statement/prospectus will be filed
with the Securities and Exchange Commission by both companies. Investors and
security holders may obtain a free copy of the joint proxy statement/prospectus
(when available) and other documents filed by the companies at the Securities
and Exchange Commission's web site at http://www.sec.gov. The joint proxy
statement/prospectus and such other documents may also be obtained from Seagate
Technology or VERITAS Software by directing such requests to the respective
investor relations contacts listed below.
Seagate Technology and its officers and directors may be deemed to be
participants in the solicitation of proxies from Seagate Technology's
stockholders with respect to the proposed transaction. Information regarding
such officers and directors is included in Seagate Technology's proxy statement
for its annual meeting of stockholders filed with the Securities and Exchange
Commission on October 4, 1999, and in its S-4 Registration Statement, as
subsequently amended, on September 3, 1999. These documents are available free
of charge at the Securities and Exchange Commission's web site at
http://www.sec.gov and from the Seagate investor relations' contacts listed
below.
VERITAS and its officers and directors may be deemed to be participants
in the solicitation of proxies from VERITAS' stockholders with respect to the
proposed transaction. Information regarding such officers and directors is
included in VERITAS' S-1 Registration Statements filed with the Securities and
Exchange Commission on September 22, 1999, as supplemented. These documents are
available free of charge at the Securities and Exchange Commission's Web site at
http://www.sec.gov and from the VERITAS investor relations' contacts listed
below.
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For More Information Contact:
Investor Relations Investor Relations
Bill Rowley 831-439-2371 Dave Galiotto 650-318-4047
[email protected] [email protected]
Denise Franklin 831-439-2789 Borah Kim 650-318-4514
[email protected] [email protected]
Item 7: Financial Statements and Exhibits.
(c) Exhibits
2.1 Agreement and Plan of Merger and Reorganization, dated as of
March 29, 2000, by and among VERITAS Software Corporation,
Victory Acquisition Sub, Inc. and Seagate Technology, Inc.
2.2 Stock Purchase Agreement, dated as of March 29, 2000, by and
among Suez Acquisition Company (Cayman) Limited, Seagate
Technology, Inc. and Seagate Software Holdings, Inc.
2.3 Indemnification Agreement, dated as of March 29, 2000, by and
among VERITAS Software Corporation, Seagate Technology, Inc.,
Suez Acquisition Company (Cayman) Limited and certain other
parties.
2.4 Letter agreement, dated March 29, 2000, by and between VERITAS
Software Corporation and Suez Acquisition Company (Cayman)
Limited.
99.1 Press release dated March 29, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 4, 2000
SEAGATE TECHNOLOGY, INC.
By: /s/ William L. Hudson
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William L. Hudson
Senior Vice President
General Counsel & Secretary
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EXHIBIT INDEX
2.1 Agreement and Plan of Merger and Reorganization, dated as of
March 29, 2000, by and among VERITAS Software Corporation,
Victory Acquisition Sub, Inc. and Seagate Technology, Inc.
2.2 Stock Purchase Agreement, dated as of March 29, 2000 by and
among Suez Acquisition Company (Cayman) Limited, Seagate
Technology, Inc. and Seagate Software Holdings, Inc.
2.3 Indemnification Agreement, dated as of March 29, 2000, by and
among VERITAS Software Corporation, Seagate Technology, Inc.,
Suez Acquisition Company (Cayman) Limited and certain other
parties.
2.4 Letter agreement, dated March 29, 2000, by and between VERITAS
Software Corporation and Suez Acquisition Company (Cayman)
Limited.
99.1 Press release dated March 29, 2000.
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EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BY AND AMONG
VERITAS SOFTWARE CORPORATION
VICTORY MERGER SUB, INC.
AND
SEAGATE TECHNOLOGY, INC.
DATED AS OF MARCH 29, 2000
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TABLE OF CONTENTS
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION..................................................1
ARTICLE I THE MERGER.............................................................................1
1.1 The Merger........................................................................1
1.2 Effective Time; Closing...........................................................2
1.3 Effect of the Merger..............................................................2
1.4 Certificate of Incorporation and Bylaws of Surviving Corporation..................2
1.5 Effect on Capital Stock...........................................................2
1.6 Surrender of Certificates.........................................................4
1.7 No Further Ownership Rights in Seagate Common Stock...............................6
1.8 Lost, Stolen or Destroyed Certificates............................................7
1.9 Tax Consequences..................................................................7
1.10 Taking of Necessary Action; Further Action........................................7
1.11 Definitions.......................................................................7
1.12 Dissenting Shares................................................................11
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SEAGATE............................................11
2.1 Organization; Good Standing......................................................11
2.2 Charter Documents................................................................12
2.3 Capital Structure................................................................12
2.4 Authority........................................................................13
2.5 Conflicts........................................................................13
2.6 Consents.........................................................................14
2.7 SEC Filings; Financial Statements................................................14
2.8 Liabilities......................................................................15
2.9 Absence of Material Adverse Effect on Seagate....................................15
2.10 Compliance.......................................................................15
2.11 Permits..........................................................................16
2.12 Litigation.......................................................................16
2.13 Brokers' and Finders' Fees.......................................................16
2.14 Absence of Liens and Encumbrances................................................16
2.15 Statements; Registration Statement; Proxy Statement/Prospectus...................16
2.16 Board Approval...................................................................17
2.17 State Takeover Statutes..........................................................17
2.18 Fairness Opinion.................................................................17
2.19 Veritas Common Stock.............................................................17
2.20 Intercompany Transactions........................................................17
2.21 Taxes............................................................................17
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TABLE OF CONTENTS
(CONTINUED)
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2.22 Code Section 897 Company.........................................................18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF VERITAS AND MERGER SUB............................18
3.1 Organization; Good Standing......................................................18
3.2 Charter Documents................................................................18
3.3 Capital Structure................................................................18
3.4 Authority........................................................................18
3.5 Conflicts........................................................................19
3.6 Consents.........................................................................19
3.7 SEC Filings; Veritas Financial Statements........................................20
3.8 Absence of Certain Changes or Events.............................................20
3.9 Litigation.......................................................................21
3.10 Brokers' and Finders' Fees.......................................................21
3.11 Statements; Registration Statement; Proxy Statement/Prospectus...................21
3.12 Board Approval...................................................................21
3.13 Fairness Opinion.................................................................21
3.14 Merger Sub Operations............................................................21
ARTICLE IV CONDUCT OF BUSINESS AND OTHER TRANSACTIONS...........................................22
4.1 Conduct of Business..............................................................22
4.2 No Amendment to OD Documents.....................................................22
4.3 Waivers and Releases.............................................................22
ARTICLE V ADDITIONAL AGREEMENTS.................................................................22
5.1 Proxy Statement/Prospectus; Registration Statement; Other Filings................22
5.2 Stockholder Meetings.............................................................23
5.3 Confidentiality..................................................................25
5.4 No Solicitation..................................................................25
5.5 Public Disclosure................................................................26
5.6 Legal Requirements...............................................................27
5.7 Notification of Certain Matters..................................................27
5.8 Commercially Reasonable Efforts and Further Assurances...........................27
5.9 Indemnification..................................................................27
5.10 Tax-Free Reorganization..........................................................28
5.11 Nasdaq Listing...................................................................28
5.12 Seagate Affiliate Agreement......................................................28
5.13 Regulatory Filings; Reasonable Efforts...........................................29
5.14 Access to Information............................................................29
5.15 TRA Matters......................................................................29
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE VI CONDITIONS TO THE MERGER.............................................................31
6.1 Conditions to Obligations of Each Party to Effect the Merger.....................31
6.2 Additional Conditions to Obligations of Seagate..................................32
6.3 Additional Conditions to the Obligations of Veritas and Merger Sub...............32
ARTICLE VII TERMINATION, FEES AND EXPENSES; AMENDMENT AND WAIVER................................33
7.1 Termination......................................................................33
7.2 Notice of Termination; Effect of Termination.....................................35
7.3 Fees and Expenses................................................................36
7.4 Amendment........................................................................37
7.5 Extension; Waiver................................................................37
ARTICLE VIII GENERAL PROVISIONS.................................................................38
8.1 Non-Survival of Representations and Warranties...................................38
8.2 Notices..........................................................................38
8.3 Certain Interpretations..........................................................40
8.4 Counterparts.....................................................................40
8.5 Entire Agreement.................................................................40
8.6 Severability.....................................................................40
8.7 Other Remedies; Specific Performance.............................................41
8.8 Governing Law....................................................................41
8.9 Rules of Construction............................................................41
8.10 Assignment.......................................................................41
8.11 Waiver of Jury Trial.............................................................41
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this "AGREEMENT")
is made and entered into as of March 29, 2000 among VERITAS Software
Corporation, a Delaware corporation ("VERITAS"), Victory Merger Sub, Inc., a
Delaware corporation and a wholly owned subsidiary of Veritas ("MERGER SUB"),
and Seagate Technology, Inc., a Delaware corporation ("SEAGATE").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the General Corporation Law of the State of Delaware ("DELAWARE
LAW"), Veritas and Seagate have agreed to enter into a business combination
transaction pursuant to which Merger Sub will merge with and into Seagate (the
"MERGER").
B. The Boards of Directors of Veritas and Merger Sub (i) have determined
that the Merger is fair to, advisable and in the best interests of, Veritas,
Merger Sub and their stockholders, (ii) have approved this Agreement, the Merger
and the other transactions contemplated by this Agreement, and (iii) have
determined to recommend approval of the Merger. In addition, the Board of
Directors of Veritas has determined to recommend approval of, to the extent not
previously authorized, an amendment to Veritas' Certificate of Incorporation to
increase the authorized number of shares of Veritas common stock from
500,000,000 to an additional amount sufficient to permit the issuance of Veritas
Common Stock contemplated hereby (the "SHARE INCREASE").
C. The Board of Directors of Seagate (i) has determined that the Merger
is fair to, advisable and in the best interests of, Seagate and its
stockholders, (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement, and (iii) has determined to
recommend the approval of this Agreement and the Merger by the stockholders of
Seagate.
D. Veritas, Merger Sub and Seagate intend, by entering into this
Agreement, to adopt a plan of "reorganization" within the meaning of Section 368
of the Internal Revenue Code of 1986, as amended (the "CODE").
NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2
hereof), and upon the terms and subject to the conditions of this Agreement and
in accordance with the applicable provisions of Delaware Law, Merger Sub shall
be merged with and into Seagate, the separate corporate existence of Merger Sub
shall cease and Seagate shall continue as the surviving corporation. Seagate as
the surviving
<PAGE> 6
corporation after the Merger is hereinafter sometimes referred to as the
"SURVIVING CORPORATION."
1.2 Effective Time; Closing. As soon as practicable on or after the
Closing Date (as defined in this Section 1.2), and upon the terms and subject to
the conditions of this Agreement, the parties hereto shall cause the Merger to
be consummated by filing a Certificate of Merger (the "CERTIFICATE OF MERGER")
with the Secretary of State of the State of Delaware in accordance with the
relevant provisions of Delaware Law (the time of such filing (or such later time
as may be agreed upon in writing by Veritas and Seagate and specified in the
Certificate of Merger) being referred to herein as the "EFFECTIVE TIME"). The
closing of the Merger and the other transactions contemplated hereby (the
"CLOSING") shall take place at the offices of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, located at One Market Plaza, Spear Tower, Suite 1600,
San Francisco, California 94105, at a date and time to be specified by Veritas
and Seagate, which shall be no later than the second (2nd) business day
following the satisfaction or, if permitted pursuant hereto, waiver of the
conditions set forth in Article VI hereof, or at such other location, date and
time as Veritas and Seagate shall mutually agree in writing. The date upon which
the Closing actually occurs shall be referred to herein as the "CLOSING DATE."
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all of the property, rights, privileges, powers
and franchises of Seagate and Merger Sub shall vest in the Surviving
Corporation, and all of the debts, Liabilities and duties of Seagate and Merger
Sub shall become the debts, Liabilities and duties of the Surviving Corporation.
1.4 Certificate of Incorporation and Bylaws of Surviving Corporation.
(a) Certificate of Incorporation. As of the Effective Time, the
Certificate of Incorporation of Merger Sub, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation, until thereafter amended as provided by Delaware Law and such
Certificate of Incorporation.
(b) Bylaws. As of the Effective Time, the Bylaws of Merger Sub,
as in effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation, until thereafter amended as provided by Delaware Law, the
Certificate of Incorporation of the Surviving Corporation and such Bylaws.
(c) Directors and Officers. As of the Effective Time, Mr. Jay
Jones shall be the sole director of the Surviving Corporation, and the officers
of the Surviving Corporation shall be as designated by Veritas.
1.5 Effect on Capital Stock. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time, by virtue of the Merger and
without any action on the part of Merger Sub, Seagate or the holders of any of
the following securities, the following shall occur:
(a) Conversion of Seagate Common Stock. Except as otherwise
provided in this Agreement, each share of Common Stock, par value $0.01 per
share, of Seagate (the
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"SEAGATE COMMON STOCK") outstanding immediately prior to the Effective Time
(other than any shares of Seagate Common Stock to be canceled pursuant to
Section 1.5(b) hereof) shall be canceled and extinguished and automatically
converted (subject to the terms of this Section 1.5) into the right to receive
(i) the Stock Portion (as defined in Section 1.11 hereof), (ii) the Cash Portion
(as defined in Section 1.11 hereof) and (iii) the TRA Right (the Stock Portion,
the Cash Portion and a TRA Right being referred to herein, collectively, as the
"MERGER CONSIDERATION") upon the surrender of the certificate representing such
share of Seagate Common Stock in the manner set forth in Section 1.6 hereof (or
in the case of a lost, stolen or destroyed certificate, upon delivery of an
affidavit (and bond, if required) in the manner set forth in Section 1.8
hereof).
(b) Cancellation of Certain Seagate Common Stock. Unless
otherwise determined by Veritas, each share of Seagate Common Stock (i) held in
the treasury of Seagate, or (ii) owned by Merger Sub, Veritas or any direct or
indirect wholly-owned subsidiary of Seagate or of Veritas, in either case
immediately prior to the Effective Time, shall be canceled and extinguished
without any conversion thereof.
(c) Seagate Stock Options; Seagate Employee Stock Purchase Plan.
At the Effective Time, (i) the vesting restrictions applicable to all options to
purchase Seagate Common Stock ("SEAGATE OPTIONS") outstanding immediately prior
to the Effective Time under all Seagate stock option and stock purchase plans
(collectively, the "SEAGATE STOCK OPTION PLANS"), excluding the Rolled Options
(as defined in Section 1.11 hereof), shall be accelerated such that no vesting
restrictions remain thereon, (ii) each such Seagate Option (excluding the Rolled
Options) shall, for all purposes of and under this Agreement, be converted into
a number of shares of Seagate Common Stock ("SEAGATE OPTION SHARES") equal to
(x) the aggregate number of shares of Seagate Common Stock issuable upon the
exercise in full of such Seagate Option, minus (y) the NE Amount in respect of
such Seagate Option, (iii) the Seagate Option Shares so converted shall be
considered outstanding shares of Seagate Common Stock for all purposes of and
under this Agreement, including, without limitation, the right to receive the
Merger Consideration pursuant to the Merger in accordance with Section
1.11(a)(xvii) and Section 1.5(a) hereof, (iv) the Rolled Options shall be
canceled and extinguished without any payment of Merger Consideration or any
other consideration therefor, and (v) in accordance with the terms of Seagate's
1999 Employee Stock Purchase Plan (the "SEAGATE ESPP"), all rights to purchase
shares of Seagate Common Stock outstanding under the Seagate ESPP immediately
prior to the Effective Time shall be exercised and each share of Seagate Common
Stock purchased pursuant to such exercise shall by virtue of the Merger, and
without any action on the part of the holder thereof, be converted into the
right to receive the Merger Consideration payable in respect thereof, without
the issuance of certificates representing issued and outstanding shares of
Seagate Common Stock. The Seagate ESPP shall be terminated immediately following
such exercises.
(d) Required Withholding. Each of the Exchange Agent (as defined
in Section 1.6(a) hereof) and Veritas shall be entitled to deduct and withhold
from the Merger Consideration or any other consideration deliverable or
otherwise payable pursuant to the Merger and this Agreement to any holder or
former holder of Seagate Common Stock or Seagate Option Shares such amounts as
may be required to be deducted or withheld therefrom under the Code or under any
applicable provision of state, local or foreign tax law or under any other
applicable legal requirement. To the extent such amounts are so deducted or
withheld, such amounts shall
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be treated for all purposes under this Agreement as having been delivered or
otherwise paid to the person to whom such amounts would otherwise have been
delivered or otherwise paid pursuant to the Merger and this Agreement.
(e) Adjustments to Exchange Ratio. The Merger Consideration shall
be adjusted to reflect appropriately the effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into Veritas Common Stock or Seagate Common Stock),
extraordinary cash dividend, reorganization, recapitalization, reclassification,
combination, consolidation or subdivision, exchange of shares or other like
change with respect to Veritas Common Stock or Seagate Common Stock occurring on
or after the date hereof and prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Veritas Common
Stock shall be issued pursuant to the Merger, but in lieu thereof each holder of
shares of Seagate Common Stock and Seagate Option Shares who would otherwise be
entitled to a fraction of a share of Veritas Common Stock (after aggregating all
fractional shares of Veritas Common Stock to be received by such holder)
pursuant to the Merger shall receive from Veritas an amount in cash (rounded to
the nearest whole cent), without interest, equal to the product obtained by
multiplying (x) such fraction by (y) the Average Veritas Stock Price (as defined
in Section 1.11 hereof).
(g) Capital Stock of Merger Sub. Each share of Common Stock,
$0.01 par value per share, of Merger Sub (the "MERGER SUB COMMON STOCK") issued
and outstanding immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and nonassessable share of Common Stock, $0.01
par value per share, of the Surviving Corporation. Each certificate evidencing
ownership of shares of Merger Sub Common Stock shall evidence ownership of such
shares of capital stock of the Surviving Corporation.
1.6 Surrender of Certificates.
(a) Exchange Agent. Veritas shall select an institution
reasonably satisfactory to Seagate to act as the exchange agent (the "EXCHANGE
AGENT") for the Merger.
(b) Veritas to Provide Merger Consideration. Promptly following
the Effective Time, Veritas shall make available to the Exchange Agent for
exchange in accordance with this Article I, (i) the shares of Veritas Common
Stock issuable pursuant to Section 1.5(a) or Section 1.5(c) hereof in exchange
for outstanding shares of Seagate Common Stock and Seagate Option Shares, (ii)
the cash payable pursuant to Section 1.5(a) hereof in exchange for outstanding
shares of Seagate Common Stock and Seagate Option Shares, (iii) cash in an
amount sufficient to make the cash payments in lieu of fractional shares
pursuant to Section 1.5(f) hereof, and (iv) cash in an amount sufficient to pay
any dividends or distributions to which holders of shares of Seagate Common
Stock and Seagate Option Shares may be entitled pursuant to Section 1.6(e)
hereof. From and after the date that is 6 months after the Effective Date,
Veritas shall have the right to cause the Exchange Agent to transfer to Veritas
all funds deposited by Veritas with the Exchange Agent pursuant to this Section
1.6(b) that have not been distributed pursuant to Section 1.6(d), and all
holders of Seagate Common Stock and Seagate Options
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entitled to receive the Merger Consideration shall thereafter become general
creditors of Veritas in respect of the Merger Consideration.
(c) Exchange Procedures for Seagate Common Stock Certificates.
Promptly following the Effective Time, Veritas shall cause the Exchange Agent to
mail to each holder of record (as of the Effective Time) of a certificate or
certificates (the "CERTIFICATES") which immediately prior to the Effective Time
represented outstanding shares of Seagate Common Stock and which were converted
into the right to receive shares of Veritas Common Stock and cash pursuant to
Section 1.5(a) hereof, cash in lieu of any fractional shares pursuant to Section
1.5(f) hereof and any dividends or other distributions pursuant to Section
1.6(e) hereof, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent, and which shall be
in such form and have such other provisions as Veritas may reasonably specify),
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Veritas Common Stock issuable
and cash payable in respect of such shares of Seagate Common Stock pursuant to
Section 1.5(a) hereof, cash in lieu of any fractional shares payable in respect
of such shares of Seagate Common Stock pursuant to Section 1.5(f) hereof and any
dividends or other distributions payable in respect of such Seagate Common Stock
pursuant to Section 1.6(e) hereof. Upon the surrender and delivery of
Certificates for cancellation to the Exchange Agent (or to such other agent or
agents as may be appointed by Veritas), and such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, the
holders of such Certificates shall be entitled to receive in exchange therefor
certificates representing the number of whole shares of Veritas Common Stock
issuable and cash payable in respect of such shares of Seagate Common Stock
pursuant to Section 1.5(a) hereof, cash in lieu of fractional shares payable in
respect of such shares of Seagate Common Stock pursuant to Section 1.5(f) hereof
and any dividends or distributions payable in respect of such shares of Seagate
Common Stock pursuant to Section 1.6(e) hereof, and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time, for all corporate
purposes, subject to Section 1.6(e) hereof as to the payment of dividends and
other distributions, to evidence the ownership of a number of full shares of
Veritas Common Stock and the right to receive an amount in cash into which such
shares of Seagate Common Stock shall have been so converted pursuant to Section
1.5(a) hereof, and the right to receive an amount in cash in lieu of the
issuance of any fractional shares payable in respect of such shares of Seagate
Common Stock pursuant to Section 1.5(f) hereof and any dividends or
distributions payable in respect of such shares of Seagate Common Stock pursuant
to Section 1.6(e) hereof.
(d) Exchange Procedures for Seagate Options. Promptly following
the Effective Time, Veritas shall cause the Exchange Agent to mail to each
holder (as of the Effective Time) of a Seagate Option which was converted into
the right to receive the Merger Consideration pursuant to Section 1.5(a) hereof,
cash in lieu of any fractional shares pursuant to Section 1.5(f) hereof and any
dividends or other distributions pursuant to Section 1.6(e) hereof, (i) a letter
of transmittal (which shall be in such form and have such other provisions as
Veritas may reasonably specify), and (ii) instructions for use in receiving the
certificates representing shares of Veritas Common Stock issuable and cash
payable in respect of such Seagate Options pursuant to Section 1.5(a) and
Section 1.5(c), cash in lieu of any fractional shares payable in
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respect of such Seagate Options pursuant to Section 1.5(f) hereof and any
dividends or other distributions payable pursuant to Section 1.6(e) hereof. Upon
the delivery of such letter of transmittal, duly completed and validly executed
in accordance with the instructions thereto, to the Exchange Agent (or to such
other agent or agents as may be appointed by Veritas), the holders of Seagate
Options shall be entitled to receive the Merger Consideration payable to them
pursuant to Common Stock issuable and cash issuable in respect of such Seagate
Options pursuant to Section 1.5(a) and Section 1.5(c), cash in lieu of
fractional shares payable in respect of such Seagate Options pursuant to Section
1.5(f) hereof and any dividends or distributions payable in respect of such
Seagate Options pursuant to Section 1.6(e) hereof.
(e) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date of this
Agreement in respect of Veritas Common Stock with a record date after the
Effective Time shall be paid to the holders of any unsurrendered Certificates or
Seagate Options with respect to the shares of Veritas Common Stock represented
thereby until the holders of record of such Certificates shall surrender such
Certificates or the holders of such Seagate Options shall return a letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto. Subject to applicable law, following surrender of any such
Certificates and return of such letter of transmittal, the Exchange Agent shall
deliver to the record holders of such Certificates or the holders of such
Seagate Options, as the case may be, without interest, certificates representing
whole shares of Veritas Common Stock issued in exchange therefor, along with
payment in lieu of fractional shares payable in respect of shares of Seagate
Common Stock or Seagate Options pursuant to Section 1.5(g) hereof and the amount
of any such dividends or other distributions with a record date after the
Effective Time payable in respect of such whole shares of Veritas Common Stock.
(f) Transfers of Ownership. If certificates for shares of Veritas
Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to Veritas (or any agent designated by
it) any transfer or other taxes required by reason of the issuance of
certificates for shares of Veritas Common Stock in any name other than that of
the registered holders of the Certificates surrendered, or established to the
satisfaction of Veritas or any agent designated by it that such tax has been
paid or is not payable.
(g) No Liability. Notwithstanding anything to the contrary in
this Section 1.6, neither the Exchange Agent, Veritas, the Surviving Corporation
nor any party hereto shall be liable to a holder of shares of Veritas Common
Stock or Seagate Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
1.7 No Further Ownership Rights in Seagate Common Stock. All cash and
shares of Veritas Common Stock issued pursuant to and in accordance with the
terms of this Article I (including any cash paid in respect thereof pursuant to
Section 1.5(f) and Section 1.6(e) hereof) shall be deemed to have been issued in
full satisfaction of all rights pertaining to shares of Seagate Common Stock,
and there shall be no further registration of transfers on the records of
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the Surviving Corporation of shares of Seagate Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be canceled and exchanged as provided in this Article I.
1.8 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, shares of Veritas
Common Stock and cash payable in respect thereof pursuant to Section 1.5(a) or
Section 1.5(b) hereof, cash in lieu of fractional shares, if any, payable in
respect thereof pursuant to Section 1.5(f) hereof and any dividends or
distributions payable in respect thereof pursuant to Section 1.6(e) hereof;
provided, however, that Veritas may, in its discretion and as a condition
precedent to the issuance and payment thereof, require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Veritas or the Exchange Agent with respect to the Certificates alleged to have
been so lost, stolen or destroyed.
1.9 Tax Consequences. Veritas and Seagate intend that the Merger shall
constitute a "reorganization" within the meaning of Section 368 of the Code.
Veritas and Seagate adopt this Agreement as a "plan of reorganization" within
the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income
Tax Regulations.
1.10 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes and intent of this Agreement and to vest in the Surviving
Corporation full right, title and possession in and to all of the assets,
properties, rights, privileges, powers and franchises of Seagate and Merger Sub,
the officers and directors of Merger Sub and Seagate shall be authorized to
take, and shall take, all such lawful and necessary action.
1.11 Definitions.
(a) For all purposes of and under this Agreement, the following
terms shall have the following respective meanings:
(i) "ADMINISTRATORS" has the meaning set forth in Section
5.15.
(ii) "AVAILABLE AMOUNT" means an amount equal to Cash held
by Seagate immediately prior to the Effective Time including net amounts
received under the OD Documents minus the VP Amount.
(iii) "AVERAGE SEAGATE STOCK PRICE" means the average
closing price of a share of Seagate Common Stock, as reported on the NYSE, for
the five (5) consecutive trading days ending two (2) trading days immediately
preceding the Closing Date.
(iv) "AVERAGE VERITAS STOCK PRICE" means the average
closing price of a share of Veritas Common Stock, as reported on the Nasdaq, for
the five (5) consecutive
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trading days ending two (2) trading days immediately preceding the Closing Date,
as with respect to the VP Amount, preceding the date that Veritas makes its
election.
(v) "CASH" means cash, cash equivalents and short-term
investments (including all debt securities available for sale) as determined in
accordance with GAAP and consistent with the determination thereof in the Recent
SEC Reports.
(vi) "CASH PORTION" means an amount, in cash, equal to the
quotient obtained by dividing (x) the Available Amount by (y) the Outstanding
Shares.
(vii) "DESIGNATED LIABILITIES" mean all Liabilities
(including with respect to Taxes) relating solely to (i) the Designated Assets
and (ii) the transactions pursuant to this Agreement. Without expanding the
definition of Designated Liabilities, Designated Liabilities shall not include
Liabilities relating to the transactions contemplated by the OD Documents or any
Liabilities included in the Adjustment Amount (as defined in the OD Documents).
(viii) "GOVERNMENTAL ENTITY" means any court,
administrative agency or commission or other governmental authority or
instrumentality.
(ix) "INDEMNIFICATION AGREEMENT" means the Indemnification
Agreement dated as of even date herewith by and among Veritas, Seagate and
Purchaser and each of its Subsidiaries.
(x) "ISA AMOUNT" means a number of shares of Veritas
Common Stock equal to the quotient obtained by dividing (x) (A) the Stipulated
Amount, divided by (B) the Average Veritas Stock Price, by (y) the Outstanding
Shares.
(xi) "KNOWLEDGE" means, with respect to either party
hereto, the actual knowledge of the executive officers of such party.
(xii) "LIABILITY" or "LIABILITIES" means any and all
debts, liabilities and obligations of any type or nature whatsoever, whether
accrued or fixed, absolute or contingent, matured or unmatured or determined or
determinable, including, without limitation, those arising under any Law
(including, without limitation, any Environmental Law), Action or Governmental
Order and those arising under any contract, agreement, arrangement, commitment
or undertaking.
(xiii) "LIEN" means any lien, security interest, adverse
claim, charge, mortgage or other encumbrance.
(xiv) "MATERIAL ADVERSE EFFECT ON VERITAS" means any
change, event, violation, inaccuracy, circumstance or effect that is materially
adverse to the business, assets (including intangible assets), capitalization,
financial condition or results of operations of Veritas and its Subsidiaries,
taken as a whole; provided, however, that in no event shall (i) a decrease in
Veritas' stock price or the failure to meet or exceed Wall Street research
analysts' or Veritas' internal earnings or other estimates or projections in and
of itself constitute a "Material Adverse Effect on Veritas," or (ii) any change,
event, violation, inaccuracy, circumstance or effect that
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results from (A) the public announcement or pendency of the transactions
contemplated hereby, (B) changes affecting the software industry generally or
the segments thereof in which Veritas competes, or (C) changes affecting the
United States economy generally, constitute a "Material Adverse Effect on
Veritas."
(xv) "MATERIAL ADVERSE EFFECT ON SEAGATE" means any
change, event, violation, inaccuracy, circumstance or effect that, after giving
effect to the consummation of the transactions contemplated by the OD Documents,
gives rise to, or is reasonably likely to give rise to, any Liability (absolute,
accrued, contingent or otherwise, but excluding the Designated Liabilities) of
Seagate (or Veritas following the Effective Time) for which Veritas is not
entitled to indemnification under the Indemnification Agreement following the
Effective Time.
(xvi) "NASDAQ" means the Nasdaq National Market System of
the National Association of Securities Dealers, Inc.
(xvii) "NE AMOUNT" means an amount equal to the quotient
obtained by dividing (x) (A) the per share exercise price of a Seagate Option,
multiplied by (B) the aggregate number of shares of Seagate Common Stock
issuable upon the exercise in full of such Seagate Option immediately prior to
the Effective Time, by (y) the Average Seagate Stock Price.
(xviii)"NYSE" means the New York Stock Exchange.
(xix) "OD DOCUMENTS" means the Stock Purchase Agreement of
even date herewith by and among Seagate, Seagate Software and Suez Acquisition
Company (Cayman) Limited.
(xx) "OUTSTANDING SHARES" means the aggregate number of
shares of Seagate Common Stock outstanding immediately prior to the Effective
Time, after giving effect to the treatment of Seagate Options under Section
1.5(c) hereof.
(xxi) "PRO RATA PORTION" means with respect to each person
receiving a TRA Right, the number of shares of Seagate Common Stock held by such
person immediately prior to the Effective Time, including shares deemed
outstanding by virtue of Section 1.5(c) divided by the Outstanding Shares.
(xxii) "PURCHASER" has the meaning provided in the Stock
Purchase Agreement.
(xxiii)"ROLLED OPTIONS" means the Seagate Options and
Seagate Common Stock held by the individuals and in the amounts indicated in the
Rollover Commitment Agreements previously delivered to the parties hereto.
(xxiv) "SEAGATE RESTRICTED STOCK" means shares of Seagate
Common Stock subject to a right of repurchase or other restriction.
(xxv) "SEAGATE SOFTWARE" means Seagate Software Holdings,
Inc.
(XXVI) "STIPULATED AMOUNT" means the sum of:
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(1) with respect to all shares of SanDisk Corp.
("SANDISK") held by Seagate immediately prior to the Effective Time (the
"SANDISK SHARES"), (A) the product obtained by multiplying (x) the average
closing price of a share of SanDisk common stock, as reported on the Nasdaq, for
the five (5) consecutive trading days ending two (2) trading days immediately
preceding the Closing Date (the "REFERENCE AVERAGE"), by (y) 0.8 (the product of
(x) and (y) being the "Value"), minus (B) 0.4 multiplied by the difference
between the Value and Seagate's tax basis in a SanDisk Share; multiplied by (C)
the number of SanDisk Shares;
(2) with respect to all shares of CVC, Inc.
("CVCI") and Gadzoox Networks Inc. ("GADZOOX") held by Seagate immediately prior
to the Effective Time (respectively, the "CVCI SHARES" and the "GADZOOX
SHARES"), (A) the product obtained by multiplying (x) the Reference Average for
shares of CVCI or Gadzoox common stock, respectively, by (y) 0.6 (the product of
(x) and (y) being the "Value"), minus (B) 0.4 multiplied by the difference
between the Value and Seagate's tax basis in a CVCI or Gadzoox Share, as the
case may be, multiplied by (C) the number of CVCI Shares and Gadzoox Shares,
respectively; and
(3) with respect to shares of Dragon Systems, Inc.
("DRAGON") held by Seagate immediately prior to the Effective Time ( including
shares into which such shares may have been converted, the "DRAGON SHARES"), (i)
if such Dragon Shares are not listed for trading on a national securities
exchange or over-the-counter market, then an amount mutually agreed upon by the
parties hereto at least ten days prior to the Seagate Stockholders Meeting, (ii)
if shares of Dragon are listed for trading on a national securities exchange or
over-the-counter-market, then (A) the product obtained by multiplying (x) the
Reference Average for shares of Dragon common stock, by (y) 0.6 (the product of
(x) and (y) being the "Value"), minus (B) 0.4 multiplied by the difference
between the Value and Seagate's tax basis in a Dragon Share multiplied by (C)
the number of Dragon Shares (other than those subject to any escrow agreement).
If the parties are unable to agree upon a value under clause (i) above or the
valuation of any escrowed Dragon Shares, then the parties agree to include the
Dragon Shares and such escrowed shares in the TRA Amount as provided in Section
5.15 hereof.
(xxvii) "STOCK PORTION" means a number of shares of
Veritas Common Stock equal to the sum of (i) the quotient obtained by dividing
(x) (A) the number of shares of Veritas Common Stock held by Seagate immediately
prior to the Effective Time, multiplied by (B) 0.853743, by (y) the Outstanding
Shares, (ii) the quotient obtained by dividing (x) (A) the VP Amount, divided by
(B) the Average Veritas Stock Price, by (y) the Outstanding Shares, and (iii)
the ISA Amount.
(xxviii) "SUBSIDIARY" or "SUBSIDIARIES" means any and all
corporations, limited liability companies, general or limited partnerships,
joint ventures, business trusts, associations and other business enterprises and
entities controlled by a person directly or indirectly through one or more
intermediaries.
(xxix) "TAX" or "TAXES" has the meaning provided in the
Stock Purchase Agreement.
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(xxx) "TRA AMOUNT" means the amount of cash received with
respect to all refunds or the utilization of credits for Seagate Taxes for or
attributable to taxable years or periods of Seagate ending on or prior to the
Effective Time, or the pre-closing period, in the case of a taxable period
commencing before the Effective Time and ending after the Effective Time, less
any administrative charges of the Administrators.
(xxxi) "TRA RIGHT" means a non-transferable right to
receive, when, as and if received by Veritas or its Affiliates, a stockholder's
Pro Rata Portion of the TRA Amount.
(xxxii)"VERITAS COMMON STOCK" means common stock, par
value $.001 per share, of Veritas.
(XXXIII) "VP AMOUNT" means either $0, $500 million or, if
Seagate has received gross proceeds in excess of $200,000,000 with respect to
the securities listed in Part B of Schedule I hereto on or prior to the election
of the VP Amount, $750 million, at the election of Veritas, which election shall
be made no later than the tenth (10th) day prior to the date of the Seagate
Stockholders' Meeting.
1.12 Dissenting Shares. Shares of Seagate Common Stock which have not
been voted in favor of the Merger and with respect to which the holder thereof
has exercised and demanded appraisal rights under Delaware Law ("DISSENTING
SHARES") shall not be converted into the Merger Consideration pursuant to the
Merger, but shall instead be converted into the right to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to Delaware Law. Seagate agrees that, except with the prior
written consent of Veritas, or as required under Delaware Law, it will not
voluntarily make any payment with respect to, or settle or offer to settle, any
appraisal demand. Each holder of Dissenting Shares ("DISSENTING STOCKHOLDER")
who, pursuant to the provisions of Delaware Law, becomes entitled to payment of
the fair value for shares of Seagate Common Stock shall receive payment therefor
from Veritas (but only after the value therefor shall have been agreed upon or
finally determined pursuant to Delaware Law). If, after the Effective Time, any
Dissenting Shares shall lose their status as Dissenting Shares, Veritas shall
issue and deliver, upon surrender by such stockholder of a certificate or
certificates representing shares of Seagate Common Stock pursuant to Section 1.6
hereof, the Merger Consideration to which such stockholder would otherwise be
entitled under Section 1.5.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SEAGATE
As of the date hereof and as of the Closing Date, Seagate hereby
represents and warrants to Veritas and Merger Sub, subject to the exceptions and
qualifications specifically set forth or disclosed in writing in the disclosure
letter delivered by Seagate to Veritas, dated as of the date hereof (the
"SEAGATE DISCLOSURE SCHEDULE"), as follows:
2.1 Organization; Good Standing. Each of Seagate and Seagate Software is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, with the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as
presently being conducted and as proposed to be
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conducted, and is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction in which the failure to be so qualified
or in good standing would reasonably be expected to have a Material Adverse
Effect on Seagate.
2.2 Charter Documents. Seagate has delivered or made available to
Veritas a true and correct copy of the Certificate of Incorporation and Bylaws
of Seagate and Seagate Software each as amended and in effect as of the date
hereof. Neither Seagate nor Seagate Software is in violation of any of the
provisions of its Certificate of Incorporation or Bylaws, each as amended and in
effect as of the date hereof.
2.3 Capital Structure.
(a) (i) The authorized capital stock of Seagate consists of
600,000,000 shares of Common Stock, par value $0.01 per share, of which there
were 226,977,176 shares issued and outstanding as of February 29, 2000, and
1,000,000 shares of Preferred Stock, par value $0.01 per share, of which no
shares are issued or outstanding. All outstanding shares of Seagate Common Stock
are duly authorized and validly issued, fully paid and nonassessable, are not
subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Seagate or any contract, agreement or other
commitment to which Seagate is a party or by which it is bound and have been
offered, issued, sold and delivered by Seagate in compliance with all
registration or qualification required (or applicable exemptions therefrom) of
applicable federal and State securities laws. As of February 29, 2000, Seagate
had reserved an aggregate of 47,709,220 shares of Seagate Common Stock, net of
exercises, for issuance to employees, consultants and non-employee directors
pursuant to the Seagate Stock Option Plans, under which there were (i)
outstanding Seagate Options to purchase an aggregate of 34,415,211 shares of
Seagate Common Stock, and (ii) 13,294,009 shares of Seagate Common Stock
available for future grant. All shares of Seagate Common Stock subject to
issuance under the Seagate Stock Option Plans, upon issuance in accordance with
the terms and conditions set forth in the instruments pursuant to which such
shares of Seagate Common Stock are issuable, would be duly authorized and
validly issued, fully paid and nonassessable.
(ii) The authorized capital stock of Seagate Software
consists of 300,000,000 shares of Common Stock, par value $0.01 per share, and
73,000,000 shares of Preferred Stock, par value $0.01 per share, all of the
issued or outstanding shares of which capital stock are owned by Seagate. All
outstanding shares of Seagate Software Common Stock are duly authorized and
validly issued, fully paid and nonassessable, are not subject to preemptive
rights created by statute, the Certificate of Incorporation or Bylaws of Seagate
Software or any contract, agreement or other commitment to which Seagate
Software is a party or by which it is bound and have been offered, issued, sold
and delivered by Seagate Software in compliance with all registration or
qualification required (or applicable exemptions therefrom) of applicable
federal and State securities laws.
(b) Except as set forth in Section 2.3(a) hereof, there are no
equity securities, partnership interests or other similar ownership interests of
any class or series of Seagate or Seagate Software, or any securities
exchangeable or convertible into, or exercisable for, any such equity
securities, partnership interests or other similar ownership interests, issued,
reserved for issuance or outstanding. Except as set forth in Section 2.3(a)
hereof, there are no options,
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warrants, equity securities, partnership interests or other similar ownership
interests, calls, rights (including preemptive rights), commitments or
agreements of any kind or character to which Seagate or Seagate Software is a
party or by which it is bound obligating Seagate or Seagate Software to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or cause the repurchase, redemption or acquisition, of any
shares of capital stock of Seagate or Seagate Software, or obligating Seagate or
Seagate Software to grant, extend, accelerate the vesting of, or enter into, any
such option, warrant, equity security, partnership interest or other similar
ownership interest, call, right, commitment or agreement. Except as set forth in
Section 2.3(b) of the Seagate Disclosure Schedule, there are no registration
rights and, to the knowledge of Seagate, there are no voting trusts, proxies or
other agreements or understandings, with respect to any capital stock of Seagate
or Seagate Software.
(c) Except for the Designated Assets (as defined in Section 4.1
hereof), as of the Closing Date, Seagate will not own or hold, directly or
indirectly through one or more subsidiaries, any equity securities, partnership
interests or other similar ownership interests of or in any class or series of
any other corporation, limited liability company, general or limited
partnership, joint venture, business trust, association or other business entity
or enterprise, or any security exchangeable or convertible into, or exercisable
for, any such equity securities, partnership interests or other similar
ownership interests.
2.4 Authority. Seagate has all requisite corporate power and authority
to enter into this Agreement and the OD Documents, to perform its obligations
hereunder and thereunder, and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Seagate of this Agreement and the OD
Documents, the performance by Seagate of its obligations hereunder and
thereunder, and the consummation by Seagate of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate action
on the part of Seagate, subject only to the approval and adoption of the
transaction contemplated by the OD Documents and this Agreement and the Merger
by Seagate's stockholders and the filing and recordation of the Certificate of
Merger in accordance with Delaware Law and the transactions contemplated by the
OD Documents. The affirmative approval of the holders of a majority of the
outstanding shares of the Seagate Common Stock is required for Seagate's
stockholders to approve and adopt this Agreement and the Merger under Delaware
Law and the transactions contemplated by the OD Documents. This Agreement and
the OD Documents been duly executed and delivered by Seagate and, assuming the
due authorization, execution and delivery of this Agreement by Veritas and
Merger Sub and the OD Documents by the other parties thereto, this Agreement and
the OD Documents constitute the valid and binding obligations of Seagate,
enforceable in accordance with their respective terms, subject to (i) the effect
of any applicable laws of general application relating to bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights and the relief of debtors generally, and (ii) the effect of
rules of law and general principles of equity, including, without limitation,
rules of law and general principal of equity governing specific performance,
injunctive relief and other equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2.5 Conflicts. The execution and delivery of this Agreement and the OD
Documents by Seagate do not, and the performance by Seagate of its obligations
hereunder and thereunder and the consummation by Seagate of the transactions
contemplated hereby and thereby will not,
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(i) conflict with or violate the Certificate of Incorporation or Bylaws of
Seagate, each as amended and in effect as of the date hereof, (ii) subject to
obtaining the consents, approvals, orders or authorizations, and making the
registrations, declarations or filings, set forth in Section 2.6 hereof,
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Seagate or by which Seagate or its assets and properties are bound
or affected, or (iii) result in any breach of, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or impair Seagate's rights or alter the rights or obligations of any third party
under, or give to any third party any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the assets or properties of Seagate pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Seagate is a party or by which Seagate
or its assets and properties are bound or affected, except to the extent such
conflict, violation, breach, default, impairment or other effect would not, in
the case of clause (ii) or (iii) of this Section 2.5, individually or in the
aggregate, (a) reasonably be expected to have a Material Adverse Effect, or (b)
reasonably be expected to have a material adverse effect on, or materially
delay, the ability of Veritas or Seagate to consummate the transactions
contemplated hereby or on Seagate's ability to consummate the transactions
contemplated by the OD Documents.
2.6 Consents. Except as set forth in the Seagate Disclosure Statement,
no material consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Seagate in connection with the execution and delivery of this
Agreement or the OD Documents by Seagate, or the performance by Seagate of its
obligations hereunder or thereunder or the consummation by Seagate of the
transactions contemplated hereby or thereby, except for (i) the filing and
effectiveness of the Registration Statement (as defined in Section 5.1 hereof)
with the United States Securities and Exchange Commission (the "SEC") in
accordance with the Securities Act of 1933, as amended (the "SECURITIES ACT"),
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iii) the filing of the Proxy Statement (as defined in
Section 5.1 hereof) with the SEC in accordance with the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), (iv) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state "blue sky" securities laws and the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), and the equivalent laws of any foreign country, and (v) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings which, if not obtained or made, would not have a material adverse effect
on the ability of Veritas and Seagate to consummate the Merger and the other
transactions contemplated hereby or by the OD Documents.
2.7 SEC Filings; Financial Statements. Seagate has filed all forms,
reports and documents required to be filed with the SEC since July 3, 1998, and
has made available (through on-line databases) to Veritas such forms, reports
and documents in the form filed with the SEC. All such required forms, reports
and documents (including all exhibits and schedules thereto and all documents
incorporated by reference therein) are referred to herein as the "SEAGATE SEC
REPORTS." As of their respective dates, the Seagate SEC Reports (i) complied in
all material respects with the applicable requirements of the Securities Act or
the Exchange Act, and the rules and regulations of the SEC promulgated
thereunder, and (ii) did not at the time each such
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Seagate SEC Report was filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
the Subsidiaries of Seagate is required to file any forms, reports or other
documents with the SEC. Except to the extent revised or superseded by a
subsequent filing with the SEC (a copy of which has been made available to
Veritas prior to the date of this Agreement), none of the Seagate SEC Reports
filed by Seagate since July 3, 1999 and prior to the date of this Agreement
(collectively, the "RECENT SEC REPORTS") contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Seagate included in all Seagate SEC Reports comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited consolidated
quarterly statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of Seagate
and its consolidated Subsidiaries as of the dates thereof and the consolidated
financial position of Seagate and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments). Except as reflected in the most recent
consolidated balance sheet of Seagate included in the Recent SEC Reports most
recently filed by Seagate with the SEC prior to the date hereof (such
consolidated balance sheet being referred to herein as the "CURRENT SEAGATE
BALANCE SHEET" and the date thereof being referred to herein as the "CURRENT
BALANCE SHEET DATE"), as of the Current Balance Sheet Date, neither Seagate nor
any of its Subsidiaries had, and since such date neither Seagate nor any of such
Subsidiaries has incurred, any Liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
2.8 Liabilities. Except as identified on the Seagate Disclosure
Schedule, as of the Effective Time, Seagate will not have any material
Liabilities or other obligations of any nature whatsoever (absolute, accrued,
contingent or otherwise) other than (i) Designated Liabilities and (ii)
Liabilities for which Veritas is entitled to indemnification under the
Indemnification Agreement.
2.9 Absence of Material Adverse Effect on Seagate. Since the date of the
Current Seagate Balance Sheet, there has not been, occurred or arisen any
Material Adverse Effect on Seagate.
2.10 Compliance. Seagate is not in conflict in any material respect
with, or in material default or violation of, (i) any law, rule, regulation,
order, judgment or decree applicable to Seagate or by which Seagate or its
assets and properties are bound or affected, or (ii) any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Seagate is a party or by which Seagate
or its assets and properties are bound or affected. No investigation or review
by any Governmental Entity is
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pending or, to the knowledge of Seagate, threatened, against Seagate, nor has
any Governmental Entity indicated an intention to conduct the same. There is no
material agreement, judgment, injunction, order or decree binding upon Seagate
or any of assets and properties which has had, or would reasonably be expected
to have, the effect of prohibiting or materially impairing the consummation of
the Merger, or the other transactions contemplated hereby or by the OD
Documents.
2.11 Permits. Seagate holds all permits, licenses, variances,
exemptions, orders and approvals from Governmental Entities which are material
to the operation of the business of Seagate, and Seagate is in compliance in all
material respects with the terms of such permits, licenses, variances,
exemptions, orders and approvals.
2.12 Litigation. As of the date of this Agreement, there is no action,
suit, proceeding, claim, arbitration or investigation pending, or as to which
Seagate has received any notice of assertion nor, to the knowledge of Seagate,
is there any threatened action, suit, proceeding, claim, arbitration or
investigation against Seagate, which in any case would reasonably be expected to
have a Material Adverse Effect on Seagate.
2.13 Brokers' and Finders' Fees. Except for fees payable to Morgan
Stanley & Co., Incorporated, Seagate has not incurred, nor will it incur,
directly or indirectly, any liability for any brokerage or finders' fees or
agents' commissions or any similar charges in connection with the Merger or the
other transactions contemplated hereby or by the OD Documents.
2.14 Absence of Liens and Encumbrances. Except as disclosed on Section
2.14 of the Seagate Disclosure Schedule, Seagate and Seagate Software Holdings,
Inc. have good and valid title to all of their assets and properties that will
not be sold or otherwise disposed of pursuant to the OD Documents including,
without limitation, their shares of Veritas, Gadzoox, Dragon, CVCI and SanDisk,
and such assets and properties at the Effective Time will be free and clear of
any liens, encumbrances or financial commitments, except for liens for taxes not
yet due and payable and as otherwise reflected in the Seagate SEC Reports.
2.15 Statements; Registration Statement; Proxy Statement/Prospectus.
None of the information supplied or to be supplied by Seagate for inclusion or
incorporation by reference in (i) the Registration Statement (as defined in
Section 5.1 hereof) will, at the time it is declared or ordered effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or (ii) the Proxy Statement (as defined in Section 5.1
hereof) will, on the date the Proxy Statement is first mailed to the
stockholders of Seagate, at the time of the Seagate Stockholders' Meeting (as
defined in Section 5.1 hereof), at the time of the Veritas Stockholders' Meeting
and at the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Seagate Stockholders' Meeting or the Veritas
Stockholders' Meeting which has become false or misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated
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thereunder. Notwithstanding the foregoing or anything to contrary set forth in
this Agreement, Seagate makes no representation or warranty with respect to any
information supplied by Veritas or Merger Sub which is contained in any of the
foregoing documents.
2.16 Board Approval. The Board of Directors of Seagate has (i)
determined that the Merger and the other transactions contemplated hereby and by
the OD Documents are fair to, advisable and in the best interests of Seagate and
its stockholders, (ii) duly approved the Merger, this Agreement, the OD
Documents and the other transactions contemplated hereby and thereby, and (iii)
determined to recommend that the stockholders of Seagate approve the Merger,
this Agreement, the OD Documents and the other transactions contemplated hereby
and thereby.
2.17 State Takeover Statutes. The Board of Directors of Seagate has
approved the Merger, this Agreement, and the other transactions contemplated
hereby and thereby, and such approval is sufficient to render inapplicable to
the Merger, this Agreement, the OD Documents and the other transactions
contemplated hereby and thereby the provisions of Section 203 of Delaware Law to
the extent, if any, such provisions are applicable to the Merger, this
Agreement, the OD Documents and the other transactions contemplated hereby and
thereby. No other state takeover statute or similar statute or regulation
applies to or purports to apply to the Merger, this Agreement, the OD Documents
or the other transactions contemplated hereby and thereby.
2.18 Fairness Opinion. Seagate has received a written opinion from
Morgan Stanley & Co. Incorporated dated as of the date hereof, to the effect
that, as of the date hereof, the Merger Consideration is fair to the
stockholders of Seagate from a financial point of view and will deliver to
Veritas a copy of such opinion.
2.19 Veritas Common Stock. All of the Veritas Common Stock held directly
or indirectly by Seagate is owned, beneficially and of record, by Seagate
Software, and has been held continuously by Seagate Software since May 28, 1999.
2.20 Intercompany Transactions. At no time has Seagate, Seagate Software
or any member of an affiliated group of corporations as defined in Section 1504
of the Code filing returns on a consolidated basis of which Seagate or Seagate
Software is a member engaged in an intercompany transaction with respect to the
Veritas Common Stock giving rise to an intercompany item or corresponding item
within the meaning of Section 1.1502-13 of the United States Income Tax
Regulations with respect to the Veritas Common Stock, including but not limited
to such items that may be subject to gain recognition upon the application of
Section 1.1502-13(f)(4) of the United States Income Tax Regulations.
2.21 Taxes. Each of Seagate and its Subsidiaries has filed all Tax
Returns required to be filed by any of them and has paid (or Seagate has paid on
its behalf), or has set up an adequate reserve for the payment of, all Taxes
required to be paid in respect of the periods covered by such returns (except
where the failure to pay would not have a Material Adverse Effect on Seagate).
The information contained in such Tax Returns is true, complete and accurate in
all material respects except where the failure to be so would not have a
Material
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Adverse Effect on Seagate. Neither Seagate nor any subsidiary of Seagate is
delinquent in the payment of any tax, assessment or governmental charge except
where the delinquency would not have a Material Adverse Effect on Seagate. No
deficiencies for any taxes have been proposed, asserted or assessed against
Seagate or any of its subsidiaries that have not been finally settled or paid in
full which would have a Material Adverse Effect on Seagate, and no requests for
waivers of the time to assess any such tax are pending.
2.22 Code Section 897 Company . Seagate is not and has not been during
the period referred to in section 897(c)(1)(A)(ii) a United States real property
holding corporation within the meaning of section 897(c)(2) of the Code.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VERITAS AND MERGER SUB
As of the date hereof and as of the Closing Date, Veritas and Merger Sub
hereby jointly and severally represent and warrant to Seagate, subject to the
exceptions and qualifications specifically set forth or disclosed in writing in
the disclosure letter delivered by Veritas to Seagate, dated as of the date
hereof (the "VERITAS DISCLOSURE SCHEDULE"), as follows:
3.1 Organization; Good Standing. Veritas and each of its material
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the respective jurisdiction of its incorporation,
with the corporate power and authority to own, lease and operate its respective
assets and property and to carry on its respective business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would reasonably be expected to have a Material
Adverse Effect on Veritas.
3.2 Charter Documents. Veritas has delivered or made available to
Seagate a true and correct copy of the Certificate of Incorporation and Bylaws
of Veritas, as amended and in effect as of the date hereof. Neither Veritas nor
any of its material subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or equivalent organizational documents,
in each case as amended and in effect as of the date hereof.
3.3 Capital Structure. The authorized capital stock of Veritas consists
of 500,000,000 shares of Common Stock, par value $0.001 per share, of which
there were 396,532,084 shares issued and outstanding as of March 24, 2000,
10,000,000 shares of Preferred Stock, par value $0.001 per share, of which no
shares are issued or outstanding, and one share of the special voting stock, par
value $0.001 per share. The authorized capital stock of Merger Sub consists of
1,000 shares of common stock, par value $0.01 per share, of which, as of the
date hereof, 100 shares are issued and outstanding. All outstanding shares of
Veritas Common Stock and Merger Sub's capital stock are duly authorized and
validly issued, fully paid and non-assessable, and are not subject to preemptive
rights created by statute, the Certificate of Incorporation or Bylaws of Veritas
or any contract, agreement or other commitment to which Veritas is a party or by
which it is bound. All outstanding shares of capital stock of Merger Sub have
been issued and granted in compliance with all applicable securities and other
laws.
3.4 Authority. Each of Veritas and Merger Sub has all requisite
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby.
The execution and delivery by Veritas and Merger Sub of
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this Agreement, the performance by Veritas and Merger Sub of the transactions
contemplated hereby, and the consummation by Veritas and Merger Sub of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Veritas and Merger Sub, subject only to the
approval of the Merger and, to the extent not previously authorized, the Share
Increase by Veritas' stockholders and the filing of an amendment to the
Certificate of Incorporation of Venus with respect to the Share Increase and the
Certificate of Merger in accordance with Delaware Law. The approval of the
holders of a majority of the outstanding shares of Veritas Common Stock is
required to approve the Merger and the Share Increase. This Agreement has been
duly executed and delivered by Veritas and Merger Sub and, assuming the due
authorization, execution and delivery of this Agreement by Seagate, this
Agreement constitutes the valid and binding obligations of Veritas and Merger
Sub, enforceable in accordance with their respective terms, subject to (i) the
effect of any applicable laws of general application relating to bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights and the relief of debtors generally, and (ii) the effect of
rules of law and general principles of equity, including, without limitation,
rules of law and general principal of equity governing specific performance,
injunctive relief and other equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
3.5 Conflicts. The execution and delivery of this Agreement by Veritas
and Merger Sub do not, and the performance by Veritas and Merger Sub of their
obligations hereunder and the consummation by Veritas and Merger Sub of the
transactions contemplated hereby will not, (i) conflict with or violate the
Certificate of Incorporation or Bylaws of Veritas and Merger Sub, (ii) subject
to obtaining the consents, approvals, orders and authorizations, and making the
registrations, recordations and filings, set forth in Section 3.6 hereof,
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Veritas and Merger Sub or by which Veritas or Merger Sub or their
assets and properties are bound or affected, or (iii) result in any breach of,
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Veritas' or Merger Sub's rights or
alter the rights or obligations of any third party under, or give to any third
parties any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a Lien on any of the assets or properties of
Veritas or Merger Sub pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Veritas or Merger Sub is a party or by which Veritas or
Merger Sub or either of their assets and properties are bound or affected,
except to the extent such conflict, violation, breach, default, impairment or
other effect would not, in the case of clause (ii) or (iii) of this Section 3.5,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Veritas.
3.6 Consents. Except as set forth in the Veritas Disclosure Schedule, no
material consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Veritas in connection with the execution and delivery of this
Agreement or the performance by Veritas of its obligations hereunder or the
consummation of the transactions contemplated hereby, except for (i) the filing
of a Registration Statement with the SEC in accordance with the Securities Act,
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iii) the filing of the Proxy
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Statement with the SEC in accordance with the Exchange Act, (iv) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state "blue sky" securities laws
and the HSR Act and the antitrust or competition laws of any foreign country,
and (v) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not be material to Veritas
or Merger Sub or have a material adverse effect on the ability of Veritas,
Merger Sub and Seagate to consummate the Merger and the other transactions
contemplated hereby.
3.7 SEC Filings; Veritas Financial Statements.
(a) Veritas has filed all forms, reports and documents required
to be filed with the SEC since December 31, 1998, and has made a copy of all
such forms, reports and documents available to Seagate. All such forms, reports
and documents (including those that Veritas may file subsequent to the date
hereof) are referred to herein as the "VERITAS SEC REPORTS." As of their
respective dates, the Veritas SEC Reports (i) were or will be (as the case may
be) prepared in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder, and (ii) did not or will not (as the case may be) at the
time they were filed (or if amended or superseded, then on the date of filing of
such amendment or superseding form, report or document) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Veritas SEC Reports (the
"VERITAS FINANCIALS"), including any Veritas SEC Reports filed after the date
hereof until the Closing, (i) complied or will comply (as the case may be) as to
form in all material respects with the published rules and regulations of the
SEC with respect thereto, (ii) was prepared or will be prepared (as the case may
be) in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form
10-Q under the Exchange Act), and (iii) fairly presented or will fairly present
(as the case may be) in all material respects the consolidated financial
position of Veritas and its subsidiaries at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not, or are not expected to
be, material in amount. The balance sheet of Veritas as of December 31, 1998
contained in the Veritas SEC Reports is hereinafter referred to as the "VERITAS
BALANCE SHEET."
(c) Veritas has heretofore furnished to Seagate a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Veritas with the SEC
pursuant to the Securities Act or the Exchange Act.
3.8 Absence of Certain Changes or Events. Since the date of the Veritas
Balance Sheet, there has not been, occurred or arisen any Material Adverse
Effect on Veritas.
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3.9 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which Veritas or any of its
subsidiaries has received any written notice of assertion nor, to the knowledge
of Veritas, is there any threatened action, suit, proceeding, claim, arbitration
or investigation against Veritas or any of its subsidiaries, which in any case
would reasonably would be expected to have a Material Adverse Effect on Veritas.
3.10 Brokers' and Finders' Fees. Except for fees payable to Credit
Suisse First Boston Corporation, Veritas has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with the Merger or the other
transactions contemplated hereby.
3.11 Statements; Registration Statement; Proxy Statement/Prospectus.
None of the information supplied or to be supplied by Veritas for inclusion or
incorporation by reference in (i) the Registration Statement (as defined in
Section 5.1 hereof) will at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (ii) the Proxy Statement (as defined in Section 5.1 hereof)
shall not, on the date the Proxy Statement is first mailed to each of Seagate's
stockholders and Veritas' stockholders, at the times of the Seagate
Stockholder's Meeting (as defined in Section 5.1 hereof) and the Veritas
Stockholders' Meeting and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Seagate
Stockholders' Meeting or Veritas Stockholders' Meeting which has become false or
misleading. Notwithstanding the foregoing or anything else to the contrary set
forth in this Agreement, Veritas makes no representation or warranty with
respect to any information supplied by Seagate which is contained in any of the
foregoing documents.
3.12 Board Approval. The Board of Directors of Veritas has (i)
determined that the Merger and the other transactions contemplated hereby are
advisable and in the best interests of Veritas and its stockholders, (ii) duly
approved the Merger, this Agreement and the other transactions contemplated
hereby, and (iii) resolved to recommend that the Stockholders of Veritas approve
the Share Increase.
3.13 Fairness Opinion. Veritas has received a written opinion from
Credit Suisse First Boston Corporation, dated as of the date hereof, to the
effect that, as of the date hereof, the Stock Portion to be paid by Veritas is
fair to Veritas from a financial point of view and will deliver to Seagate a
copy of such opinion.
3.14 Merger Sub Operations. Merger Sub was formed solely for the purpose
of engaging in the transactions contemplated hereby and has not (a) engaged in
any business activities, (b) conducted any operations other than in connection
with the transactions contemplated hereby or (c) incurred any Liabilities other
than in connection with the transactions contemplated hereby.
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ARTICLE IV
CONDUCT OF BUSINESS AND OTHER TRANSACTIONS
4.1 Conduct of Business. On or before the Effective Time, Seagate and
Seagate Software shall take all actions necessary to transfer all of their
respective assets and Liabilities to one or more of Seagate's Subsidiaries such
that at the Effective Time the only assets and properties owned or held by
Seagate (the "DESIGNATED ASSETS") and the only Liabilities not assumed by such
other Subsidiaries shall be Designated Liabilities; provided, however, that
prior to the Effective Time, Seagate may sell, transfer or otherwise dispose of
any of the Designated Assets set forth on Part B of Schedule I hereto. From and
after the execution and delivery of this Agreement until the earlier of the
Effective Time or the termination of this Agreement, Seagate shall not sell,
transfer or otherwise dispose of any shares of Veritas Common Stock owned by
Seagate as of the date hereof.
4.2 No Amendment to OD Documents. From the date hereof until the earlier
to occur of the Effective Time or the termination of this Agreement pursuant to
and in accordance with Section 7.1 hereof, neither Seagate nor Seagate Software
shall terminate, amend, modify or otherwise supplement or waive any of the terms
and conditions of the OD Documents (or any of them); provided, however, that
notwithstanding the foregoing, Seagate may terminate the OD Documents pursuant
to their respective terms.
4.3 Waivers and Releases. Seagate shall use its best efforts to obtain
and to deliver to Veritas, as soon as practicable after the date hereof and in
any event at least 15 days prior to the Effective Time, (i) with respect to each
individual who will be a holder of Rolled Options, a waiver and release of
claims in favor of Veritas and Seagate in form and in substance reasonably
satisfactory to Veritas (a "PROPER WAIVER"), with respect to the cancellation of
Rolled Options held by such individual described in Section 1.5(c) hereof, and
(ii) with respect to each individual who is a party to any employment, severance
or change in control or similar agreement, or who participates in any plan
providing severance or change in control benefits, a Proper Waiver with respect
to any claims which any such individual may have against Veritas and/or Seagate
with respect to any such agreements or plans.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Proxy Statement/Prospectus; Registration Statement; Other Filings.
(a) As promptly as practicable following the execution and
delivery of this Agreement, Seagate and Veritas shall prepare and file with the
SEC a joint proxy statement/prospectus to be sent to the stockholders of Seagate
and Veritas in connection with the meeting of Seagate's stockholders to consider
the approval and adoption of this Agreement and the Merger (the "SEAGATE
STOCKHOLDERS' MEETING") and the meeting of Veritas Stockholders to consider
approval of the Merger and the Share Increase (the "VERITAS STOCKHOLDERS'
MEETING") (such proxy statement/prospectus, as amended or supplemented, being
referred to herein as the "PROXY STATEMENT"), and Veritas shall prepare and file
with the SEC a registration statement on Form S-4 (the "REGISTRATION STATEMENT")
in which the Proxy Statement will be included as a prospectus. Each of Seagate
and Veritas shall promptly respond to any comments of the SEC
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with respect to the Registration Statement or the Proxy Statement, shall use its
respective commercially reasonable efforts to have the Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filing and, in the case of Seagate, shall cause the Proxy Statement to be
mailed to the stockholders of Seagate at the earliest practicable time. As
promptly as practicable after the execution and delivery of this Agreement,
Seagate and Veritas shall prepare and file any other filings required under the
Exchange Act, the Securities Act or any other federal, foreign or state "blue
sky" securities laws relating to the Merger and the other transactions
contemplated hereby (collectively, the "OTHER FILINGS"). Each of Seagate and
Veritas shall notify the other promptly upon the receipt of any comments from
the SEC or its staff, and of any request by the SEC or its staff or any other
government officials for amendments or supplements to the Registration
Statement, the Proxy Statement or any Other Filing, or for additional
information, and shall supply the other with copies of all correspondence
between such party or any of its agents or representatives, on the one hand, and
the SEC, or its staff or any other government officials, on the other hand, with
respect to the Registration Statement, the Proxy Statement, or any Other Filing.
The Registration Statement, the Proxy Statement and the Other Filings shall
comply in all material respects with all applicable requirements of law and the
rules and regulations promulgated thereunder. Whenever any event occurs which is
required to be set forth in an amendment or supplement to the Registration
Statement, the Proxy Statement or any Other Filing, Seagate or Veritas, as the
case may be, shall promptly inform the other of such event, and cooperate in
filing with the SEC or its staff or any other government officials, and/or
mailing to stockholders of Seagate, such amendment or supplement.
(b) Subject to the terms of Section 5.2(c) hereof, the Proxy
Statement shall include the recommendation of the Board of Directors of Seagate
in favor of adoption and approval of this Agreement and the Merger. The Proxy
Statement shall also include the recommendation of the Board of Directors of
Veritas in favor of approval of the Share Increase and the Merger.
5.2 Stockholder Meetings.
(a) Subject to the terms of Section 5.2(c) hereof, promptly after
the date hereof and in consultation with Veritas, Seagate shall take all action
necessary in accordance with Delaware Law and its Certificate of Incorporation
and Bylaws to convene the Seagate Stockholders' Meeting and Veritas shall call
the Veritas Stockholders' Meeting, to be held as promptly as practicable, for
the purpose of voting upon (i) this Agreement, the Merger and the transactions
contemplated under the OD Documents, (ii) the Merger and (iii) if necessary, the
Share Increase, as the case may be. Seagate and Veritas shall use all reasonable
efforts to hold the Veritas Stockholders' Meeting and the Seagate Stockholders'
Meeting on the same day and as soon as practicable after the date on which the
Registration Statement becomes effective. Nothing herein shall prevent Seagate
or Veritas from adjourning or postponing the Seagate Stockholders' Meeting or
the Veritas Stockholders' Meeting, as the case may be, to the extent necessary
to ensure that any necessary supplement or amendment to the Proxy Statement is
provided to the stockholders of Veritas and Seagate in advance of a vote
relevant to the Merger and this Agreement. Subject to the terms of Section
5.2(c) hereof, Seagate and Veritas shall each use its commercially reasonable
efforts to solicit proxies from its stockholders in favor of the adoption and
approval of the items in clauses (i) and (ii) of the preceding sentence, as
relevant,
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and shall take all other action necessary or advisable to secure the vote or
consent of its stockholders required by the rules of the National Association of
Securities Dealers, Inc., Delaware Law, The New York Stock Exchange, Inc. and
all other applicable legal requirements to obtain such approval.
(b) Subject to the terms of Section 5.2(c) hereof: (i) the Board
of Directors of Seagate shall recommend that Seagate's stockholders vote in
favor of and adopt and approve this Agreement and the Merger and the
transactions contemplated under the OD Documents at the Seagate Stockholders'
Meeting; (ii) the Proxy Statement shall include a statement to the effect that
the Board of Directors of Seagate has recommended that Seagate's stockholders
vote in favor of and adopt and approve this Agreement and the Merger and the
transactions contemplated under the OD Documents at the Seagate Stockholders'
Meeting, (iii) neither the Board of Directors of Seagate nor any committee
thereof shall withdraw, amend or modify, or propose or resolve to withdraw,
amend or modify in a manner adverse to Veritas, the recommendation of the Board
of Directors of Seagate that the stockholders of Seagate vote in favor of and
adopt and approve this Agreement and the Merger, and, unless this Agreement
shall have been terminated, Seagate shall cause Seagate Software to vote the
shares of Veritas Common Stock it holds in favor of the Share Increase and the
Merger.
(c) Notwithstanding the foregoing or anything to the contrary set
forth in this Agreement, nothing in this Agreement shall prevent the Board of
Directors of Seagate from withdrawing, amending or modifying its recommendation
in favor of this Agreement and the Merger (i) Seagate receives a Seagate
Superior Offer (as defined below) and such Seagate Superior Offer is not
withdrawn, (ii) neither Seagate nor any of its agents or representatives has
violated any of the restrictions set forth in Section 5.4(a) hereof, and (iii)
the Board of Directors of Seagate concludes in good faith, after consultation
with its outside counsel, that, in light of such Seagate Superior Offer, the
withholding, withdrawal, amendment or modification of such recommendation is
necessary in order for the Board of Directors of Seagate to comply with its
fiduciary obligations to the stockholders of Seagate under applicable law. For
all purposes of and under this Agreement, the term "SEAGATE SUPERIOR OFFER"
shall mean a bona fide written offer made by a third party to consummate any of
the following transactions: (a) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Seagate, pursuant to which the stockholders of Seagate immediately preceding the
consummation of such transaction would hold less than fifty percent (50%) of the
equity interest in the surviving or resulting entity of such transaction (or the
ultimate parent entity thereof); (b) a sale or other disposition by Seagate of
assets and properties (excluding inventory and used equipment sold in the
ordinary course of business) representing more than fifty percent (50%) of
Seagate's assets immediately prior to such sale or other disposition, or (c) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by Seagate), directly or indirectly, of beneficial
ownership or a right to acquire beneficial ownership of shares representing more
than fifty percent (50%) of the voting power of the then outstanding shares of
capital stock of the Seagate, in each case on terms that the Board of Directors
of Seagate determines, in its reasonable judgment, after consultation with its
financial advisor, to be more favorable to the stockholders of Seagate, from a
financial point of view, than the terms of this Agreement and the Merger;
provided, however, that any such offer shall not be deemed to be a "Seagate
Superior Offer" if any financing required to consummate
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the transaction contemplated by such offer is not committed and is not likely in
the judgment of the Board of Directors of Seagate to be obtained by such third
party on a timely basis. Notwithstanding the foregoing or anything to the
contrary set forth in this Agreement, nothing in this Agreement shall prevent
the Board of Directors of Seagate from withdrawing, amending or modifying its
recommendation in favor of the transactions contemplated by the OD Documents, or
terminating the OD Documents in accordance with their terms.
5.3 Confidentiality. Veritas and Seagate acknowledge that they have
previously entered into a Confidentiality Agreement (the "CONFIDENTIALITY
AGREEMENT"), which shall continue in full force and effect in accordance with
its terms.
5.4 No Solicitation.
(a) From the execution and delivery of this Agreement and until
the earlier to occur of the Effective Time and termination of this Agreement
pursuant to Section 7.1 hereof, Seagate and its Subsidiaries shall not, and they
shall cause their respective officers, directors, affiliates or employees or any
investment banker, attorney or other advisor or representative retained by any
of them not to, directly or indirectly (i) solicit, initiate, encourage or
induce the making, submission or announcement of any Seagate Acquisition
Proposal (as defined in Section 5.4(b) hereof), (ii) participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes or may reasonably be expected to lead
to, any Seagate Acquisition Proposal, (iii) engage in discussions with any
person with respect to any Seagate Acquisition Proposal, (iv) subject to the
terms of Section 5.2(c) hereof, approve, endorse or recommend any Seagate
Acquisition Proposal, or (v) enter into any letter of intent or similar document
or any contract, agreement or commitment contemplating or otherwise relating to
any Seagate Acquisition Transaction (as defined in Section 5.4(b) hereof);
provided, however, that until the date on which this Agreement is approved by
the requisite vote of the stockholders of Seagate, the terms of this Section
5.4(a) shall not prohibit Seagate from furnishing information regarding Seagate
and its Subsidiaries to, entering into a confidentiality or non-disclosure
agreement with, or entering into discussions with, any person or group in
response to a Seagate Superior Offer submitted by such person or group (and not
withdrawn) if (a) neither Seagate nor any agents or representative of Seagate
and its Subsidiaries shall have violated any of the restrictions set forth in
this Section 5.4(a), (b) the Board of Directors of Seagate concludes in good
faith, after consultation with its outside legal counsel, that such action is
necessary in order for the Board of Directors of Seagate to comply with its
fiduciary obligations to the stockholders of Seagate under applicable Law, (c)
Seagate receives from such person or group an executed confidentiality or
non-disclosure agreement containing customary limitations on the use and
disclosure of all non-public written and oral information furnished to such
person or group by or on behalf of Seagate and containing terms no less
favorable to the disclosing party than the terms of the Confidentiality
Agreement (including with respect to any standstill arrangements, unless the
standstill arrangements in the Confidentiality Agreement are waived and (d)
prior to furnishing any such non-public information to such person or group, or
entering into negotiations or discussions, Seller notifies Purchaser promptly of
such inquiries, proposals or offers received by, any such information requested
from, or any such discussions or negotiations sought to be initiated or
continued with, any of its representatives indicating, in connection with such
notice, the name of the person and the terms and conditions of any inquiries,
proposals or offers, and
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furnishes such non-public information to Veritas to the extent such
information has not been previously furnished to Veritas. Seagate and its
subsidiaries shall immediately cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Seagate Acquisition Proposal.
(b) For all purposes of and under this Agreement, the term
"SEAGATE ACQUISITION PROPOSAL" shall mean any offer or proposal (other than an
offer or proposal by Veritas) relating to any Seagate Acquisition Transaction.
For all purposes of and under this Agreement, "SEAGATE ACQUISITION TRANSACTION"
shall mean any transaction or series of related transactions, other than the
transactions contemplated by this Agreement or the OD Documents, involving: (i)
any acquisition or purchase from Seagate by any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) of more than fifteen percent (15%) in interest of the
total outstanding voting securities of Seagate, or any tender offer or exchange
offer that if consummated would result in any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) beneficially owning more than fifteen percent (15%) of
the total outstanding voting securities of Seagate, or any merger,
consolidation, business combination or similar transaction involving Seagate
pursuant to which the stockholders of Seagate immediately preceding such
transaction would hold less than fifteen percent (15%) of the equity interests
in the surviving or resulting entity of such transaction; (ii) any sale, lease
(other than in the ordinary course of business), exchange, transfer, license
(other than in the ordinary course of business), acquisition or disposition of
more than fifteen percent (15%) of the assets and properties of Seagate; or (iv)
any liquidation or dissolution of Seagate, excluding, in all cases any
disposition of the assets covered by the OD Documents.
(c) In addition to the restrictions and obligations of Seagate
set forth in Section 5.4(a) hereof, Seagate as promptly as practicable, and in
any event within twenty-four (24) hours, shall advise Veritas orally and in
writing of any request received by Seagate for non-public information which
Seagate reasonably believes could lead to a Seagate Acquisition Proposal or of
any Seagate Acquisition Proposal, the material terms and conditions of such
request or Seagate Acquisition Proposal, and the identity of the person or group
making any such request or Seagate Acquisition Proposal. Seagate shall keep
Veritas informed in all material respects of the status and details (including
material amendments or proposed amendments) of any such request or Seagate
Acquisition Proposal.
5.5 Public Disclosure. Veritas and Seagate shall consult with each other
and agree before issuing any press release or otherwise making any public
statement with respect to the Merger, this Agreement, or a Seagate Acquisition
Proposal and shall not issue any such press release or make any such public
statement prior to such agreement, except as may be required by law or any
listing agreement with a national securities exchange or the Nasdaq, in which
case reasonable efforts to consult with the other party hereto shall be made
prior to such release or public statement; provided, however, that no such
consultation or agreement shall be required if, prior to the date of such
release or public statement, Seagate shall have withheld, withdrawn, amended or
modified its recommendation in favor of this Agreement and the Merger or the OD
Documents and the transactions contemplated thereunder.
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5.6 Legal Requirements. Each of Veritas, Merger Sub and Seagate shall
take all reasonable actions necessary or desirable to comply promptly with all
legal requirements which may be imposed on them with respect to the consummation
of the Merger and the other transactions contemplated hereby (including, without
limitation, furnishing all information required in connection with approvals of,
or filings with, any Governmental Entity, and prompt resolution of any
litigation prompted hereby), and shall promptly cooperate with, and furnish
information to, the other party hereto to the extent necessary in connection
with any such requirements imposed upon either of them or their respective
subsidiaries in connection with the consummation of the Merger and the other
transactions contemplated hereby. Veritas shall use its commercially reasonable
efforts to take such steps as may be necessary to comply with the securities and
state "blue sky" securities laws of all jurisdictions which are applicable to
the issuance of Veritas Common Stock pursuant to the Merger in accordance with
this Agreement. Seagate shall use its commercially reasonable efforts to assist
Veritas as may be necessary to comply with the securities and state "blue sky"
securities laws of all jurisdictions which are applicable in connection with the
issuance of Veritas Common Stock pursuant to the Merger in accordance with this
Agreement.
5.7 Notification of Certain Matters. Veritas shall give prompt notice to
Seagate, and Seagate shall give prompt notice to Veritas, of the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (i) any representation or warranty contained in this
Agreement to be untrue or inaccurate at the Effective Time, such that the
conditions set forth in Section 6.2(a) or Section 6.3(a) hereof, as the case may
be, would not be satisfied or fulfilled as a result thereof, or (ii) any
material failure of Veritas, Merger Sub or Seagate, as the case may be, or of
any officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement. Notwithstanding the foregoing, the delivery of any notice
pursuant to this Section 5.7 shall not limit or otherwise affect the rights and
remedies available hereunder to the party receiving such notice.
5.8 Commercially Reasonable Efforts and Further Assurances. Subject to
the respective rights and obligations of Veritas and Seagate under this
Agreement, each of Veritas and Seagate shall use its respective commercially
reasonable efforts to effectuate the Merger and the other transactions
contemplated hereby, and to fulfill and cause to be fulfilled the conditions to
the Closing under this Agreement. Each of Veritas and Seagate, at the reasonable
request of the other party hereto, shall execute and deliver such other
instruments, and do and perform such other acts and things, as may be necessary
or desirable for effecting completely the consummation of the Merger and the
other transactions contemplated hereby.
5.9 Indemnification.
(a) From and after the Effective Time, the Surviving Corporation
shall fulfill and honor in all respects the obligations of Seagate pursuant to
any indemnification agreements between Seagate and any of its directors and
officers existing prior to the date hereof to the extent the obligations
thereunder relate to the approval and adoption of the Merger. The Certificate of
Incorporation and Bylaws of the Surviving Corporation shall contain the
provisions with respect to indemnification, exculpation, expense advancement and
elimination of liability for monetary damages relating to the approval and
adoption of the Merger at least as favorable as
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is set forth in the Certificate of Incorporation and Bylaws of Seagate, which
provisions shall not be amended, repealed or otherwise modified for a period of
six (6) years from the Effective Time in any manner that would adversely affect
the rights thereunder of individuals who, at the Effective Time, were directors,
officers, employees or agents of Seagate, unless such modification is required
by law.
(b) For a period of six (6) years after the Effective Time,
Veritas shall use its commercially reasonable efforts to maintain in effect, if
available, directors' and officers' liability insurance (or purchase tail
coverage) covering those persons who are currently covered by Seagate's
directors' and officers' liability insurance policy on terms comparable to those
applicable to the then current directors and officers of Veritas.
(c) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers a material amount of its assets and
properties to any person in a single transaction or a series of related
transactions, then, and in each such case, the Surviving Corporation shall
either guaranty the indemnification obligations of the Surviving Corporation
under this Section 5.10, or shall make, or cause to be made, proper provision so
that the successors and assigns of the Surviving Corporation assume the
indemnification obligations of the Surviving Corporation under this Section 5.11
for the benefit of the parties entitled to the benefits of this Section 5.10
(the "INDEMNIFIED PARTIES"). The terms and provisions of this Section 5.10 are
(a) intended to be for the benefit of, and shall be enforceable by, each of the
Indemnified Parties, and (b) in addition to, and not in substitution for, any
other rights to indemnification or contribution that any of the Indemnified
Parties may have by contract or otherwise.
(d) This Section 5.9 shall survive any termination of this
Agreement and the consummation of the Merger at the Effective Time, and shall be
binding on all successors and assigns of the Surviving Corporation.
5.10 Tax-Free Reorganization. Neither Seagate nor Veritas shall, nor
shall either permit any of its Subsidiaries to take or cause to be taken any
action that would disqualify the Merger as a "reorganization" within the meaning
of Section 368(a) of the Code; provided, however, that neither party shall have
any liability under this Section 5.10 as a result of any action contemplated
hereunder or by the OD Documents.
5.11 Nasdaq Listing. Veritas shall authorize for listing on the Nasdaq
the shares of Veritas Common Stock issuable pursuant to the Merger in accordance
with this Agreement, upon official notice of issuance.
5.12 Seagate Affiliate Agreement. Prior to the Seagate Stockholders
Meeting, Seagate shall provide Veritas a complete and accurate list of those
persons who may be deemed to be, in Seagate's reasonable judgment, affiliates of
Seagate within the meaning of Rule 145 promulgated under the Securities Act (a
"SEAGATE AFFILIATE"). Seagate shall provide Veritas with such information and
documents as Veritas reasonably requests for purposes of reviewing and verifying
the foregoing list. Seagate shall deliver or cause to be delivered to Veritas as
promptly as practicable on or following the date hereof, but in no event later
than the date the Proxy
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Statement is filed with the SEC, from each Seagate Affiliate an executed
Affiliate Agreement, in customary form and substance reasonably satisfactory to
Veritas (the "SEAGATE AFFILIATE AGREEMENT"), each of which will be effective as
of the Effective Time. Veritas shall be entitled to place appropriate legends on
the certificates evidencing any Veritas Common Stock to be received by a Seagate
Affiliate pursuant to the Merger in accordance with this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for the Veritas
Common Stock.
5.13 Regulatory Filings; Reasonable Efforts. As soon as practicable
following the execution and delivery of this Agreement, Seagate and Veritas each
shall file with the United States Federal Trade Commission (the "FTC") and the
Antitrust Division of the United States Department of Justice ("DOJ") a
Notification and Report Form relating to the Merger and the other transactions
contemplated hereby as required by the HSR Act, as well as any comparable
pre-merger notification forms required by the merger notification or control
laws and regulations of any applicable jurisdiction, as agreed to by Seagate and
Veritas. Seagate and Veritas each shall promptly (i) supply the other with any
information which may be required in order to effectuate the foregoing filings,
and (ii) supply any additional information which reasonably may be required by
the FTC, the DOJ or the competition or merger control authorities of any other
jurisdiction and which the parties may reasonably deem appropriate.
5.14 Access to Information. From the date hereof until the Effective
Date, Seagate will, and will cause each of its subsidiaries to (i) allow Veritas
and its officers, employees, counsel, accountants, actuaries, consultants and
other authorized representatives ("REPRESENTATIVES") to have full access to the
books, records, contracts, properties, facilities, accountants, actuaries,
consultants, advisors, management and personnel of Seagate and its subsidiaries
at all reasonable times, (ii) furnish promptly to Veritas and its
Representatives all information and documents concerning Seagate and its
subsidiaries as Veritas or its Representatives may reasonably request and (iii)
cause the respective officers, employees and Representatives of Seagate and its
subsidiaries to cooperate in good faith with Veritas and its Representatives in
connection with all such access.
5.15 TRA Matters.
(a) Form. The TRA Rights shall be evidenced by a non-transferable
document in form and substance reasonably satisfactory to Veritas and Seagate,
and shall contain legends to the effect that they are non-negotiable instruments
as well as such other legends as may be required by law. The TRA Rights shall
have an expiration date of March 31, 2003, after which time they shall expire
without further act. After the expiration date of the TRA Rights, any TRA
Amounts received by Veritas and its Affiliates shall be the property of Veritas
without any obligation whatsoever to account therefor to former holders of the
TRA Rights.
(b) Administration generally. On or prior to the Effective Time,
Seagate shall designate one or more designees (the "ADMINISTRATORS") who shall
be responsible for overseeing collection of the TRA Amounts and coordinating
activities with representatives of Veritas and Purchaser with respect to Seagate
Taxes. Veritas and Seagate will, prior to the Effective Time, cooperate in good
faith with respect to establishing procedures and structures designed to
maximize the aggregate value of the TRA Amount and minimize the amount of
administrative costs. This may include the establishment of segregated accounts,
pass-through trusts or similar
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devices (collectively, a "COLLECTION ACCOUNT") to receive periodic payments of
TRA Amounts. The Administrators shall be entitled to charge the Collection
Account a fee of 1% for all amounts deposited therein and distributed to holders
of the TRA Rights.
(c) Collection Amount. Following the Effective Time, Veritas
shall forward to the Collection Account (and notify the Administrators of) any
such refunds or credits after receipt or realization thereof by Veritas.
(d) Payments. Any payments from Veritas required to be paid shall
be made within 10 business days of the receipt of any refund or realization of
credit as the case may be. Any such payments not made within such time period,
shall be subject to an interest charge of 8% per annum.
(e) Investments/Distributions. Amounts deposited in the
Collection Account shall be invested in short-term money markets instruments,
and shall be distributed to holders of TRA Rights on each calendar quarterly end
commencing September 30, 2000.
(f) Conduct of Audits and Other Procedural Matters. The
Administrators shall have the right to initiate any claim for refund, credit or
amended return that would give rise to a TRA Amount, and to control any audit,
examination or contest with respect thereto, except if such audit, examination
or contest may give rise to an indemnification obligation by Purchaser under the
Indemnification Agreement, in which case the provisions of Section 6(d)(i) of
the Indemnification Agreement shall control. Venus shall promptly forward to the
Administrators all written notifications and other written communications,
including if available the original envelope showing any postmark, from any
taxing authority received by Venus or its affiliates relating to the TRA Amount.
(g) Assistance and Cooperation. After the Effective Time, Veritas
shall (and shall cause their respective Affiliates to):
(i) Assist the Administrators in calculating the potential
amount of the TRA Amount and included any Tax Returns prepaid by Veritas claims
for refunds or credits designed to maximize the TRA Amount;
(ii) Cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding the TRA Amount;
(iii) Make available to the other and to any taxing
authority as reasonably requested all information, records, and documents
relating to Taxes of Veritas, Seagate or any of their respective subsidiaries;
(iv) Provide timely notice to the other in writing of any
pending or threatened Tax audits or assessments relating to refunds or credits
included or potentially includable by individuals in the TRA Amount; and
(v) Furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax audit which may
affect refunds or credits included or potentially includable in the TRA Amount.
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(h) Exculpation. In performing any duties under this Agreement,
the Administrator shall not be liable to any party for damages, losses, or
expenses, except for negligence or willful misconduct on the part of the
Administrator. The Administrator shall not incur any such liability for (A) any
act or failure to act made or omitted in good faith, or (B) any action taken or
omitted in reliance upon any instrument, including any written statement or
affidavit provided for in this Agreement that the Administrator shall in good
faith believe to be genuine, nor will the Administrator be liable or responsible
for forgeries, fraud, impersonations, or determining the scope of any
representative authority. In addition, the Administrator may consult with legal
counsel in connection with performing the Administrator's duties under this
Agreement and shall be fully protected in any act taken, suffered, or permitted
by him/her in good faith in accordance with the advice of counsel. The
Administrator is not responsible for determining and verifying the authority of
any person acting or purporting to act on behalf of any party to this Agreement.
(i) Dragon Shares. Any Dragon Shares escrowed at the Effective
Time or with respect to which the parties did not mutually agree to a value,
shall be added to the TRA Amount, mutatis mutandis.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction
or fulfillment, at or prior to the Effective Time, of the following conditions:
(a) Stockholder Approvals. This Agreement shall have been
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law by the stockholders of Seagate. The Share
Increase and the Merger shall have been approved by the requisite vote of the
Veritas stockholders.
(b) Registration Statement Effective; Proxy Statement. The SEC
shall have declared the Registration Statement effective. No stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose, and no similar
proceeding in respect of the Proxy Statement, shall have been initiated or
threatened in writing by the SEC.
(c) No Order; HSR Act. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
requirements, if any, under the HSR Act or equivalent foreign statute, rule,
regulation or order relating to the transactions contemplated hereby shall have
expired or terminated early.
(d) Tax Opinions. Veritas and Seagate shall each have received
substantially identical written opinions from their respective counsels, Willkie
Farr & Gallagher and Wilson Sonsini Goodrich & Rosati, Professional Corporation,
in form and substance reasonably
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satisfactory to them, to the effect that the Merger should constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and such
opinions shall not have been withdrawn. The parties to this Agreement agree to
make reasonable representations as requested by such counsel for the purpose of
rendering such opinions.
(e) Closing of OD Documents. The closing of the transactions
contemplated by the OD Documents shall have occurred without waiver of Section
9.2(a) and (b) or 9.3(a) and (b) of the OD Documents, and pursuant thereto,
Seagate and Star Software shall not have (i) any assets or properties other than
the Designated Assets, or (ii) any Liabilities (other than the Designated
Liabilities) or other obligations (absolute, accrued contemplated or otherwise)
for which Veritas is not entitled to indemnification under the Indemnification
Agreement, and Seagate and Purchaser shall have provided Veritas with
certificates by their respective Chief Financial Officers to the foregoing
effect.
6.2 Additional Conditions to Obligations of Seagate. The obligation of
Seagate to consummate and effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction or fulfillment, at or
prior to the Effective Time, of the following conditions, any of which may be
waived, in writing, exclusively by Seagate:
(a) Representations and Warranties. The representations and
warranties of Veritas and Merger Sub contained in this Agreement shall have been
true and correct in all material respects as of the date hereof, except where
the failure to be so true and correct would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect on Veritas. In addition, the
representations and warranties of Veritas contained in this Agreement shall be
true and correct in all material respects on and as of the Effective Time
(except for changes contemplated by this Agreement and except for those
representations and warranties which address matters only as of a particular
date, which shall have been true and correct only as of such particular date),
with the same force and effect as if made on and as of the Effective Time,
except in such cases where the failure to be so true and correct would not, in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Veritas. Seagate shall have received a certificate with respect to the foregoing
signed on behalf of Veritas by the Chief Executive Officer and the Chief
Financial Officer of Veritas.
(b) Agreements and Covenants. Veritas and Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or prior to
the Effective Time, and Seagate shall have received a certificate to such effect
signed on behalf of Veritas by the Chief Executive Officer and the Chief
Financial Officer of Veritas.
6.3 Additional Conditions to the Obligations of Veritas and Merger Sub.
The obligations of Veritas and Merger Sub to consummate and effect the Merger
shall be subject to the satisfaction or fulfillment, at or prior to the
Effective Time, of the following conditions, any of which may be waived, in
writing, exclusively by Veritas:
(a) Representations and Warranties. The representations and
warranties of Seagate contained in this Agreement shall have been true and
correct in all material respects as of the date hereof, except where the failure
to be so true and correct would not, in the aggregate,
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reasonably be expected to have a Material Adverse Effect on Seagate. In
addition, the representations and warranties of Seagate contained in this
Agreement shall be true and correct in all material respects on and as of the
Effective Time (except for changes contemplated by this Agreement and except for
those representations and warranties which address matters only as of a
particular date, which shall have been true and correct as of such particular
date), with the same force and effect as if made on and as of the Effective
Time, except in such cases where the failure to be so true and correct would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
on Seagate. Veritas shall have received a certificate with respect to the
foregoing signed on behalf of Seagate by the President and the Chief Financial
Officer of Seagate. The representations and warranties in Section 2.3(b) hereof
shall be true and correct in all material respects.
(b) Agreements and Covenants. Seagate shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and the Veritas shall have received a certificate to such effect
signed on behalf of Seagate by the President and the Chief Financial Officer of
Seagate.
(c) Indemnification Agreement Representations and Warranties.
Each of the representations and warranties of the parties (other than Veritas)
in the Indemnification Agreement (i) to the extent qualified by materiality
shall be true and correct, and (ii) to the extent not qualified by materiality,
shall be true and correct in all material respects, in each of cases (i) and
(ii), on the date of this Agreement and as of the Closing Date, as if made at
and as of such time (except to the extent expressly made as of an earlier date,
in which case as of such date), except as otherwise contemplated by this
Agreement. The Indemnification Agreement shall be in full force and effect, and
each Subsidiary of Purchaser shall have executed and delivered a joinder
agreement in accordance with the terms of the Indemnification Agreement.
(d) Financing. The Financing (as defined in the OD Documents)
shall have closed on the terms and conditions specified in the Commitment
Letters (as defined in the OD Documents) and no material change in the terms of
such Financing shall have occurred which, in Veritas' reasonable judgment, would
materially and adversely impact Purchaser's ability to timely satisfy its
obligations under the Indemnification Agreement.
ARTICLE VII
TERMINATION, FEES AND EXPENSES; AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of this Agreement and the
Merger by the stockholders of Seagate:
(a) by mutual written consent, duly authorized by the Boards of
Directors of Veritas and Seagate;
(b) by either Seagate or Veritas, if the Merger shall not have
been consummated by December 31, 2000; provided, however, that the right to
terminate this Agreement pursuant to this Section 7.1(b) shall not be available
to any party hereto whose failure
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to fulfill any obligation under this Agreement (including, without limitation,
such party's obligation under Section 5.4 hereof) has been a principal cause of,
or resulted in, the failure of the Merger to be consummated on or before such
date
(c) by either Seagate or Veritas, if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger, which order, decree or ruling is final and nonappealable;
(d) by either Seagate or Veritas, if (i) the requisite approval
of the stockholders of Seagate under applicable law to approve this Agreement
and the Merger shall not have been obtained by reason of the failure to obtain
the requisite vote upon a vote taken at a meeting of the stockholders of Seagate
duly convened therefor or at any adjournment or postponement thereof; and (ii)
the required approval by the stockholders of Veritas of the Share Increase (if
not previously approved) and the Merger shall not have been obtained by reason
of the failure to obtain the required vote at a meeting of Veritas stockholders
duly convened therefor or at any adjournment thereto; provided, however, that a
party's right to terminate this Agreement pursuant to this Section 7.1(d) shall
not be available to Seagate if the failure to obtain the foregoing approval of
the stockholders of that party shall have been caused by that party's action or
failure to act in a manner which constitutes a material breach of this
Agreement;
(e) by Seagate, upon a breach by Veritas of any representation,
warranty, covenant or agreement of Veritas in this Agreement, or if any
representation or warranty of Veritas shall have become untrue, in either case
such that the conditions set forth in Section 6.2(a) or Section 6.2(b) hereof
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue; provided, however, that if
such inaccuracy in Veritas' representations and warranties, or breach by
Veritas, is curable, then Seagate may not terminate this Agreement pursuant to
this Section 7.1(e) for thirty-five (35) calendar days after delivery of written
notice to Veritas of such breach, provided that Veritas continues to exercise
commercially reasonable efforts to cure such breach (it being understood that
Seagate may not terminate this Agreement pursuant to this Section 7.1(e) if such
breach by Veritas is cured during such thirty-five (35)-day period);
(f) by Veritas, upon a breach by Seagate of any representation,
warranty, covenant or agreement of Seagate contained in this Agreement, or if
any representation or warranty of Seagate shall have become untrue, in either
case such that the conditions set forth in Section 6.3(a) or Section 6.3(b)
hereof would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue, provided, however,
that if such inaccuracy in Seagate's representations and warranties, or breach
by Seagate, is curable then Veritas may not terminate this Agreement pursuant to
this Section 7.1(f) for thirty-five (35) calendar days after delivery of written
notice to Seagate of such breach, provided that Seagate continues to exercise
commercially reasonable efforts to cure such breach (it being understood that
Veritas may not terminate this Agreement pursuant to this Section 7.1(f) if such
breach by Seagate is cured during such thirty-five (35)-day period);
(g) by Seagate, if (i) prior to the receipt of the requisite
approval of the stockholders of Seagate to this Agreement and the Merger,
Seagate receives a Seagate Superior
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<PAGE> 39
Offer and the Board of Directors of Seagate concludes in good faith, after
consultation with its outside counsel, that in light of such Seagate Superior
Offer, the termination of this Agreement in order to accept such Seagate
Superior Offer is necessary in order for the Board of Directors of Seagate to
comply with its fiduciary obligations to the stockholders of Seller under
applicable law, and Seagate enters into an agreement contemplating, or
consummates, a Seagate Acquisition Transaction, and (ii) Seagate has complied
with all of its obligations under Section 5.4 hereof, and (iii) prior to the
termination of this Agreement pursuant to this Section 7.1(g), pays Veritas the
Seagate Termination Fee pursuant to Section 7.3(b)(ii) hereof; provided, that
such termination may take place only after two (2) business days following
Veritas' receipt of written notice advising Veritas that the Board of Directors
of Seagate has received a Seller Superior Offer specifying the material terms
and conditions of such Seagate Superior Offer (and including a copy thereof with
all accompanying documentation, if in writing), identifying the person making
such Seagate Superior Offer and stating that it intends to make the
determination set forth in clause (i) of this Section 7.1(g). After providing
such notice, Seagate shall provide an opportunity to Veritas to make such
adjustments in the terms and conditions of this Agreement as would enable
Seagate to proceed with its recommendation to its stockholders without making
the determination set forth in clause (i) of this Section 7.1(g); provided,
further, however, that any such adjustment shall be at the discretion of Veritas
at the time; or
(h) by Veritas, if a Veritas Triggering Event shall have
occurred. For all purposes of and under this Agreement, a "VERITAS TRIGGERING
EVENT" shall be deemed to have occurred if: (i) the Board of Directors of
Seagate (or any committee thereof) shall for any reason have withdrawn or shall
have amended or modified in a manner adverse to Veritas its recommendation in
favor of the adoption and approval of this Agreement or the Merger; (ii) Seagate
shall have failed to include in the Proxy Statement the recommendation of the
Board of Directors of Seagate in favor of the adoption and approval of this
Agreement and the Merger or shall have taken any action or made any statement
inconsistent with such recommendation; or (iii) a tender or exchange offer
relating to securities of Seagate shall have been commenced by a person
unaffiliated with Veritas, and Seagate shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the Securities Act,
within ten (10) business days after such tender or exchange offer is first
published sent or given, a statement disclosing that Seagate recommends
rejection of such tender or exchange offer; or
(i) by Seagate, if: (i) the Board of Directors of Veritas (or any
committee thereof) shall for any reason have withdrawn or shall have amended or
modified in a manner adverse to Seagate its recommendation in favor of the Share
Increase (if not previously approved) and the Merger; or (ii) Veritas shall have
failed to include in the Proxy Statement the recommendation of the Board of
Directors of Veritas in favor of the Share Increase (if not previously approved)
and the Merger.
7.2 Notice of Termination; Effect of Termination. Except as set forth in
Section 7.3(b), any termination of this Agreement pursuant to Section 7.1 hereof
shall be effective immediately upon the delivery of written notice of the
terminating party to the other party hereto. In the event of the termination of
this Agreement pursuant to Section 7.1 hereof, this Agreement shall be of no
further force or effect, except (i) as set forth in this Section 7.2, Section
7.3 hereof and Article VIII hereof, each of which shall survive the termination
of this Agreement without limitation, and (ii) that nothing herein shall relieve
any party from liability for any intentional
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<PAGE> 40
breach of this Agreement. A change by the Veritas board of directors of its
recommendation of approval of the Merger and/or the Share Increase shall be an
intentional breach by Veritas of the terms hereof unless Veritas, at the time of
such change, had the right to terminate this Agreement. In the event of the
termination of this Agreement under circumstances whereby the Seagate
Termination Fee shall be payable, either immediately or based upon the
occurrence of a subsequent event, the provisions of any standstill or similar
agreement that would prevent an acquisition by Veritas or any of its affiliates
of capital stock or assets of Seagate or any affiliate of Seagate (such
provisions being "standstill provisions") shall terminate without any further
action on the Part of Veritas or Seagate, providing that (i) only such
standstill provisions of any such agreement shall terminate and the remaining
provisions thereof shall remain in full force and effect in accordance with
their terms and (ii) no severability provisions of any such agreement shall be
interpreted to require the replacement of such standstill provisions with any
other provision.
7.3 Fees and Expenses.
(a) General. Except as set forth in this Section 7.3, all fees
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the Merger is consummated.
(b) Seagate Payments.
(i) Seagate shall pay to Veritas in immediately available
funds, within one (1) business day after such notice of termination is
delivered, an amount equal to $440,000,000 (the "SEAGATE TERMINATION FEE") if
this Agreement is terminated by Veritas pursuant to Section 7.1(h) hereof.
(ii) Seagate shall pay Veritas in immediately available
funds, prior to the termination of this Agreement, an amount equal to the
Seagate Termination Fee if this Agreement is terminated by Seagate pursuant to
Section 7.1(g) hereof.
(iii) Seagate shall pay to Veritas in immediately
available funds, within one (1) business day after the date Seagate directly or
indirectly enters into an agreement with any third party with respect to a
Seagate Acquisition Transaction or a Seagate Acquisition Transaction is
consummated, an amount equal to the Seagate Termination Fee if (A) this
Agreement is terminated by Veritas pursuant to Section 7.1(d)(i) hereof and at
such time was not terminable by Seagate pursuant to Section 7.1(d)(ii), (B) at
any time after the date of this Agreement and at or before the Seagate
Stockholder Meeting a Seagate Acquisition Proposal shall have been publicly
announced or otherwise communicated to the Seagate, and (C) within twelve (12)
months of the termination of this Agreement, Seagate directly or indirectly
enters into an agreement with any third party with respect to a Seagate
Acquisition Transaction or a Seagate Acquisition Transaction is consummated.
(iv) Seagate shall pay to Veritas in immediately
available funds, within one (1) business day after the first to occur of the
events set forth in clause (d) below, an amount equal to the Seagate Termination
Fee if (A) this Agreement is terminated by either party pursuant to Section
7.1(b) hereof and at such time was not terminable by Seagate pursuant to
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Section 7.1(d)(ii), (B) at any time after the date of this Agreement and at or
before the Termination Date a Seagate Acquisition Proposal shall have been
publicly announced or otherwise communicated to the Seagate, (C) following the
public announcement or communication of such Seagate Acquisition Proposal and
prior to any such terminations, Seagate shall have intentionally breached (and
not cured after notice thereof) any of its covenants or agreements set forth in
this Agreement in any material respect, which breach shall have contributed to
the failure of the Closing to occur on or before the Termination Date, and (D)
within twelve (12) months of the termination of this Agreement, Seagate directly
or indirectly enters into an agreement with any third party with respect to a
Seagate Acquisition Transaction or a Seagate Acquisition Transaction is
consummated.
(v) For all purposes of and under this Section 7.3, the
term "SEAGATE ACQUISITION PROPOSAL" shall mean any offer or proposal (other than
an offer or proposal by Veritas relating to any Seagate Acquisition Transaction.
For all purposes of and under this Section 7.3, "SEAGATE ACQUISITION
TRANSACTION" shall mean any transaction or series of related transactions
involving: (i) any acquisition or purchase from Seagate by any person or "group"
(as defined under Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder) of more than fifty percent (50%) in interest
of the total outstanding voting securities of Seagate, or any tender offer or
exchange offer that if consummated would result in any person or "group" (as
defined under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) beneficially owning more than fifty percent (50%) of the
total outstanding voting securities of Seagate, or any merger, consolidation,
business combination or similar transaction involving Seagate pursuant to which
the stockholders of Seagate immediately preceding such transaction would hold
less than fifty percent (50%) of the equity interests in the surviving or
resulting entity of such transaction (or the ultimate parent entity thereof);
(ii) any sale, lease (other than in the ordinary course of business), exchange,
transfer, license (other than in the ordinary course of business), acquisition
or disposition of more than fifty percent (50%) of the assets and properties of
Seagate; or (iii) any liquidation or dissolution of Seagate, excluding in all
cases any disposition of the assets covered by the OD Documents.
(vi) Seagate acknowledges that the agreements contained in
this Section 7.3(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Veritas would not enter into
this Agreement.
7.4 Amendment. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto.
7.5 Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
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<PAGE> 42
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations and Warranties. The representations
and warranties of Seagate and Veritas contained in this Agreement shall
terminate at the Effective Time, and only the covenants and agreements that by
their terms survive the Effective Time shall survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via facsimile (receipt confirmed) to the parties at
the following addresses or facsimile numbers (or at such other address or
facsimile numbers for a party as shall be specified by like notice):
(a) if to Seagate, to:
Seagate Technology, Inc.
920 Disc Drive
Scotts Valley, California 95066
Attention: General Counsel
Facsimile No.: 831-438-6675
Telephone No.: 831-438-6550
with copies to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Larry W. Sonsini, Esq.
Facsimile No.: 650-493-6811
Telephone No.: 650-493-9300
and to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market Plaza
Spear Tower
San Francisco, California 94105
Attention: Michael J. Kennedy, Esq.
Facsimile No.: 415-947-2099
Telephone No.: 415-947-2000
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<PAGE> 43
and to:
Suez Acquisition Company (Cayman) Limited
c/o Silver Lake Partners, L.P.
2725 Sand Hill Road
Building C, Suite 950
Menlo Park, California 94025
Attention: Dave Roux
Facsimile: 650-233-8125
Telephone: 650-233-8121
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: William E. Curbow, Esq.
Facsimile: 212-455-2502
Telephone: 212-455-2000
and to:
TPG Partners, III, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: Richard A. Ekleberry, Esq.
Facsimile: 817-871-4010
Telephone: 817-871-4000
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Paul J. Shim, Esq.
Facsimile: 212-225-3999
Telephone: 212-225-2000
(b) if to Veritas, Merger Sub or the Surviving Corporation,
to:
VERITAS Software Corporation
1600 Plymouth Street
Mountain View, California 94043
Attention: General Counsel
Facsimile: 650-526-2581
Telephone: 650-335-8000
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<PAGE> 44
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Attention: Michael A. Schwartz
Facsimile: 212-728-8111
Telephone: 212-728-8000
8.3 Certain Interpretations.
(a) When a reference is made in this Agreement to a Section or an
Exhibit, such reference shall be to a Section or an Exhibit to this Agreement
unless otherwise indicated.
(b) The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation."
(c) The table of contents and headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement, or any term or provision
hereof.
(d) Reference to the subsidiaries of an entity shall be deemed to
include all direct and indirect subsidiaries of such entity.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties hereto and delivered to the other party hereto, it being understood
that each party hereto need not sign the same counterpart.
8.5 Entire Agreement. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein, including the Seagate Disclosure Schedule and the Veritas Disclosure
Schedule (i) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, it being understood that the Confidentiality Agreement shall continue in
full force and effect until the Closing and shall survive any termination of
this Agreement, and (ii) except as is provided in Section 5.9 hereof, are not
intended to confer upon any other person any rights or remedies hereunder.
8.6 Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will
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achieve, to the extent possible, the economic, business and other purposes of
such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the of the parties. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
8.11 Waiver of Jury Trial. EACH OF VERITAS AND SEAGATE HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF VERITAS AND SEAGATE IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
[Remainder of Page Intentionally Left Blank]
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<PAGE> 46
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized respective officers, as of the date first
above written.
VERITAS SOFTWARE CORPORATION
By:
------------------------------
Name:
Title:
VICTORY MERGER SUB, INC.
By:
------------------------------
Name:
Title:
SEAGATE TECHNOLOGY, INC.
By:
------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 2.2
EXECUTION COPY
STOCK PURCHASE AGREEMENT
BY AND AMONG
SUEZ ACQUISITION COMPANY (CAYMAN) LIMITED,
SEAGATE TECHNOLOGY, INC.,
AND
SEAGATE SOFTWARE HOLDINGS, INC.
DATED AS OF MARCH 29, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I DEFINITIONS............................................................................1
1.1 Certain Defined Terms.............................................................1
ARTICLE II PURCHASE AND SALE.....................................................................5
2.1 Purchase and Sale of the Shares...................................................5
2.2 Purchase Price; Allocation of Purchase Price......................................6
2.3 Closing...........................................................................6
2.4 Closing Deliveries by Seller and SSHI.............................................6
2.5 Closing Deliveries by Purchaser...................................................6
2.6 Adjustment of Required Cash.......................................................7
2.7 Transaction Structure.............................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER.............................................8
3.1 Organization; Good Standing.......................................................8
3.2 Charter Documents.................................................................8
3.3 Subsidiaries......................................................................9
3.4 Capital Structure.................................................................9
3.5 Authority.........................................................................9
3.6 Conflicts........................................................................10
3.7 Consents.........................................................................10
3.8 SEC Filings; Seller Financial Statements.........................................11
3.9 [Reserved].......................................................................12
3.10 Absence of Certain Changes or Events.............................................12
3.11 Tax Matters......................................................................12
3.12 Compliance.......................................................................14
3.13 Permits..........................................................................14
3.14 Litigation.......................................................................14
3.15 Brokers' and Finders' Fees.......................................................14
3.16 Employee Benefit Plans...........................................................14
3.17 Absence of Liens.................................................................16
3.18 Environmental Matters............................................................16
3.19 Labor Matters....................................................................18
3.20 Agreements, Contracts and Commitments............................................18
3.21 Statements; Registration Statement; Proxy Statement/Prospectus...................19
3.22 Board Approval...................................................................19
3.23 State Takeover Statutes..........................................................19
3.24 Fairness Opinion.................................................................19
3.25 Intellectual Property............................................................19
3.26 Assets...........................................................................20
</TABLE>
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TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
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<S> <C>
3.27 Insurance........................................................................21
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................................21
4.1 Organization; Good Standing......................................................21
4.2 Charter Documents................................................................21
4.3 Authority........................................................................21
4.4 Conflicts........................................................................22
4.5 Consents.........................................................................22
4.6 Litigation.......................................................................22
4.7 Statements; Registration Statement; Proxy Statement..............................22
4.8 Financing........................................................................23
4.9 Delaware Law.....................................................................23
4.10 Newly Organized..................................................................23
4.11 Related Agreements...............................................................23
4.12 Solvency.........................................................................23
4.13 No Amendment to VERITAS Merger Agreement.........................................23
ARTICLE V CONDUCT PRIOR TO CLOSING..............................................................24
5.1 Conduct of Business..............................................................24
5.2 Restrictions on Conduct of Business..............................................24
ARTICLE VI ADDITIONAL AGREEMENTS................................................................27
6.1 Registration Statement; Proxy Statement; Other Filings...........................27
6.2 Meeting of Seller Stockholders...................................................27
6.3 Access to Information............................................................29
6.4 Confidentiality..................................................................29
6.5 No Solicitation..................................................................29
6.6 Public Disclosure................................................................31
6.7 Legal Requirements...............................................................31
6.8 Notification of Certain Matters..................................................31
6.9 Commercially Reasonable Efforts and Further Assurances...........................32
6.10 Indemnification..................................................................32
6.11 Regulatory Filings; Reasonable Efforts...........................................32
6.12 Use of Names.....................................................................33
6.13 Debt Offer.......................................................................33
6.14 Commitment Letters; Rolled Options...............................................33
6.15 Transaction Expenses.............................................................33
6.16 Non-Assignable Assets............................................................34
ARTICLE VII EMPLOYEE MATTERS....................................................................34
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
7.1 Employee Liabilities.............................................................34
7.2 Employee Benefit Plans...........................................................34
7.3 WARN Act.........................................................................35
ARTICLE VIII TAX MATTERS........................................................................35
8.1 Conveyance Taxes.................................................................35
8.2 Section 338(h)(10) Election......................................................35
8.3 Tax Matters Schedule. Prior to the Closing Date, Seller shall promptly
take all actions set forth in Schedule VI hereto with respect to the
transactions described herein....................................................36
ARTICLE IX CONDITIONS TO CLOSING................................................................36
9.1 Conditions to Obligations of Each Party to Effect the Closing....................36
9.2 Additional Conditions to Obligations of Seller...................................37
9.3 Additional Conditions to the Obligations of Purchaser............................37
ARTICLE X TERMINATION, AMENDMENT AND WAIVER.....................................................38
10.1 Termination......................................................................38
10.2 Notice of Termination; Effect of Termination.....................................40
10.3 Fees and Expenses................................................................40
10.4 Amendment........................................................................42
10.5 Extension; Waiver................................................................42
ARTICLE XI INDEMNIFICATION......................................................................42
11.1 Survival.........................................................................42
11.2 Indemnification..................................................................42
ARTICLE XII GENERAL PROVISIONS..................................................................42
12.1 Notices..........................................................................42
12.2 Interpretation...................................................................44
12.3 Counterparts.....................................................................45
12.4 Entire Agreement.................................................................45
12.5 Severability.....................................................................45
12.6 Other Remedies; Specific Performance.............................................45
12.7 Governing Law....................................................................45
12.8 Rules of Construction............................................................45
12.9 Assignment.......................................................................45
12.10 WAIVER OF JURY TRIAL.............................................................46
12.11 No Third Party Rights............................................................46
12.12 Attorneys' Fees..................................................................46
</TABLE>
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<PAGE> 5
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of March 29, 2000 by and among Suez Acquisition Company (Cayman)
Limited, a limited company organized under the laws of the Cayman Islands
("PURCHASER"), Seagate Technology, Inc., a Delaware corporation ("SELLER"), and
Seagate Software Holdings, Inc., a Delaware corporation ("SSHI").
RECITALS:
A. Seller owns beneficially all of the issued and outstanding shares
(collectively, the "SHARES") of capital stock of each Sold Subsidiary (as
defined herein).
B. Seller and SSHI wish to sell to Purchaser, and Purchaser wishes to
purchase from Seller and SSHI, the Shares, upon the terms and subject to the
conditions set forth herein.
C. Seller and Purchaser desire to make certain representations and
warranties, and mutual covenants and agreements in connection with the
transactions contemplated hereby.
D. Simultaneously and in connection with entering into this Agreement,
Seller is entering into the VERITAS Merger Agreement (as defined below) with
VERITAS (as defined below).
NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and accepted, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. For all purposes of and under this Agreement,
the following terms shall have the following respective meanings:
(a) "ACTION" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
(b) "ADJUSTMENT AMOUNT" means, to the extent not paid or
discharged on or prior to the Closing Date, the sum of (i) accrued and unpaid
Taxes of Seller and its Subsidiaries (including the Sold Subsidiaries)
determined in accordance with the principles arrived at in determining the
February 28, 2000 balance sheet of Seller (i.e., $278,000,000 minus Taxes
reflected in such amount to the extent paid or settled since such date, plus
additions to such amount in respect of items identified or arising since such
date, plus an amount equal to 40% of the aggregate income of Seller and its
Subsidiaries since such date) excluding Taxes caused by or relating to the Split
and including, without limitation, any Taxes payable by virtue of the
transactions contemplated hereby and any U.S. alternative minimum tax for which
Seller or any of its Subsidiaries may be liable arising out of or attributable
to the 1999 reorganization of
<PAGE> 6
Seagate Software Information Management Group (Canada), Inc. (the "CANADIAN
REORGANIZATION"), (ii) Indebtedness of Seller and its Subsidiaries (including
any interest thereon and any premium payable in connection with the retirement
thereof), (iii) the Overage Amount, if any, (iv) the Bonus Amount, and (v) any
Transaction Expenses.
(c) "AFFILIATE" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
(d) "BONUS AMOUNT" means the aggregate amount of year-end bonuses
and profit sharing payments required to be paid by Seller and its Subsidiaries
in July of 2000.
(e) "CASH" means cash, cash equivalents and short-term
investments (including all securities available for sale) as determined in
accordance with GAAP and consistent with the determination thereof in the Recent
SEC Reports (as defined in Section 3.8(a) hereof).
(f) "CODE" means the Internal Revenue Code of 1986, as amended,
or any successor statute thereto.
(g) "COMMITMENT LETTERS" means the debt commitment letter
attached as Schedule I hereto.
(h) "CONTROL" (including the correlative terms "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), with respect to the relationship between or
among two or more persons, means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
affairs or management of a person, whether through the ownership of voting
securities, as trustee or executor, by contract or otherwise, including, without
limitation, the ownership, directly or indirectly, of securities having the
power to elect a majority of the board of directors or similar body governing
the affairs of such person.
(i) "DELAWARE LAW" means the General Corporation Law of the State
of Delaware, as amended, or any successor statute thereto.
(j) "DESIGNATED ASSETS" means the securities set forth on
Schedule II hereto.
(k) "DESIGNATED LIABILITIES" means all Liabilities (including
with respect to Taxes) of Seller and its Subsidiaries relating to (i) the
Designated Assets, (ii) transactions pursuant to the OD Documents, (iii)
obligations to VERITAS (indemnification or otherwise) in respect of the software
business sold to VERITAS in exchange for shares of VERITAS common stock, (iv)
any Non-Assumed Plan (as defined in Section 7.1 hereof), and (v) Seller's stock
purchase plan. Without expanding the definition of Designated Liabilities,
Designated Liabilities shall not include Liabilities relating to the
transactions contemplated by this Agreement or any Liabilities included in the
Adjustment Amount.
(l) "DOJ" means the United States Department of Justice, or any
successor agency thereto.
(m) "EQUITY COMMITMENTS" means the equity commitment letters
attached as Schedule III hereto.
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<PAGE> 7
(n) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute thereto.
(o) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor statute thereto.
(p) "FTC" means the United States Federal Trade Commission, or
any successor agency thereto.
(q) "GAAP" means United States generally accepted accounting
principles.
(r) "GOVERNMENTAL AUTHORITY" or "GOVERNMENTAL AUTHORITIES" means
any United States federal, state or local or any foreign government,
governmental, regulatory or administrative authority, agency or commission or
any court, tribunal, or judicial or arbitral body.
(s) "GOVERNMENTAL ORDER" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
(t) "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and any successor statute thereto.
(u) "INDEBTEDNESS" means, with respect to any person, (i) all
indebtedness of such person, whether or not contingent, for borrowed money, (ii)
all obligations of such person evidenced by notes, bonds, debentures or other
similar instruments, (iii) all obligations, contingent or otherwise, of such
person under acceptance, letter of credit or similar facilities, and (iv) all
Indebtedness of others referred to in clauses (i) through (iii) above,
inclusive, guaranteed directly or indirectly in any manner by such person
(excluding guarantees of collection), or in effect guaranteed directly or
indirectly by such person, including by way of an agreement (A) to pay or
purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss, (C) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are
rendered), or (D) otherwise to assure a creditor against loss.
(v) "INDENTURE" means the Indenture dated as of March 1, 1997
between Seller and First Trust of California, National Association, pursuant to
which the Debentures (as defined in Section 3.4(b) hereof) have been issued.
(w) "IRS" means the United States Internal Revenue Service, or
any successor agency thereto.
(x) "KNOWLEDGE" (or any word or phrase of similar import) means,
with respect to any matter in question, the knowledge of the executive officers
or directors of the person in question and its Subsidiaries.
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<PAGE> 8
(y) "LAW" or "LAWS" means any federal, state, local or foreign
statute, law, ordinance, regulation, rule, code, order, judgment, decree or
other requirement or rule of law.
(z) "LIABILITY" or "LIABILITIES" means any and all debts,
liabilities and obligations of any type or nature whatsoever, whether accrued or
fixed, absolute or contingent, matured or unmatured or determined or
determinable, including, without limitation, those arising under any Law
(including, without limitation, any Environmental Law), Action or Governmental
Order and those arising under any contract, agreement, arrangement, commitment
or undertaking.
(aa) "LIEN" means any lien, security interest, adverse claim,
charge, mortgage or other encumbrance.
(bb) "MATERIAL ADVERSE EFFECT" means any change in, or effect on
Seller or any of its Subsidiaries that, individually or in the aggregate with
any other circumstances, changes in, or effects on, Seller or any of its
Subsidiaries is materially adverse to the operations or Liabilities, financial
condition or results of operations of the Sold Subsidiaries and their respective
Subsidiaries, taken as a whole (after giving effect to the Split), excluding (i)
any change in or effect on Seller or any of its Subsidiaries that is related to
compliance by Seller or its Subsidiaries with the terms of this Agreement, and
(ii) any Liability which results in an increase in the Required Cash pursuant to
Section 2.6 hereof or which is a Designated Liability.
(cc) "OD DOCUMENTS" means the Agreement and Plan of Merger and
Reorganization, dated as of March 29, 2000, by and among Seller and VERITAS
Software Corporation, a Delaware corporation ("VERITAS"), as the same may be
amended, supplemented and modified from time to time in accordance with its
terms (the "VERITAS MERGER AGREEMENT").
(dd) "OVERAGE AMOUNT" means any "excess parachute payments"
within the meaning of Section 280G of the Code payable as a result of the
acceleration of Star Options (as defined in the VERITAS Merger Agreement)
pursuant to the OD Documents in excess of $100,000,000.
(ee) "REQUIRED CASH" means $800,000,000, as adjusted pursuant to
Section 2.6 hereof.
(ff) "ROLL AGREEMENT" means the Rollover Commitment Agreements
previously delivered to the parties hereto.
(gg) "ROLLED OPTION VALUE" means the aggregate Rollover Value (as
defined in the Roll Agreement).
(hh) "SEC" means the United States Securities and Exchange
Commission, or any successor agency thereto.
(ii) "SECURITIES ACT" means the Securities Act of 1933, as
amended, or any successor statute thereto.
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<PAGE> 9
(jj) "SPLIT" means the transfer to the Sold Subsidiaries, prior
to the Closing Date, of all assets (including, without limitation, the
securities of iCompression, TurboLinux and MetaByte currently held by Seller
(the "PRIVATE SECURITIES") or the Cash or other proceeds realized by Seller from
the sale, disposition or transfer of such Private Securities) (and such Cash or
other proceeds shall be in addition to any Required Cash) and Liabilities of
Seller and Seagate Software Holdings, Inc., other than the Designated Assets and
the Designated Liabilities, to be transferred pursuant to an agreement in a form
consistent with the terms hereof to be agreed upon by Seller and Purchaser prior
to Closing and reasonably satisfactory to VERITAS.
(kk) "SUBSIDIARY" or "SUBSIDIARIES" means any and all
corporations, limited liability companies, general or limited partnerships,
joint ventures, business trusts, associations and other business enterprises and
entities controlled by a person directly or indirectly through one or more
intermediaries.
(ll) "TA STATEMENT" means an estimate of the Adjustment Amount by
the Chief Financial Officer of Seller to be prepared in collaboration with
Purchaser based on Seller's month-end immediately preceding delivery of such
estimate together with a certificate of the Chief Financial Officer of Seller
specifying (i) that the TA Statement fairly presents his or her good faith best
effort estimate of the Adjustment Amount as at the then scheduled Closing Date
and (ii) the assumed VERITAS Price utilized therein for the purposes of
calculating any Overage Amount.
(mm) "TAX" or "TAXES" shall mean any and all federal, state,
local and foreign taxes, assessments and other governmental charges, duties,
impositions and Liabilities relating to taxes, including, without limitation,
taxes based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, together with all
interest, penalties and additions imposed with respect to such amounts and any
obligations under any agreements or arrangements with any other person with
respect to such amounts, and any Liability for taxes of a predecessor entity (if
any).
(nn) "TRANSACTION EXPENSES" means the fees and expenses of
Seller's or its Subsidiaries' investment bankers, attorneys, consultants,
accountants and advisors incurred in connection with this Agreement, the OD
Documents and the transactions contemplated hereby and thereby.
(oo) "VERITAS PRICE" means the closing price for a share of
VERITAS Common Stock, as reported on the Nasdaq National Market.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale of the Shares. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as defined in Section 2.3 hereof),
(i) Seagate Technology, Inc. shall sell to Purchaser or one of its Designees (as
defined in Section 12.10 hereof), and Purchaser shall, or shall cause one of its
Designees to, purchase from Seller, all of the outstanding capital stock of each
of the Subsidiaries of Seller listed on Schedule IV hereto, and (ii) SSHI shall
sell to
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<PAGE> 10
Purchaser or one of its Designees, and Purchaser shall, or shall cause one of
its Designees to, purchase from SSHI, all of the outstanding capital stock of
Seagate Software Information Management Group, Inc., a Delaware corporation
("SSIMG") (such Subsidiaries set forth on Schedule IV and SSIMG being referred
to herein, collectively, as the "SOLD SUBSIDIARIES"), in exchange for payment of
the "Purchase Price" set forth in Section 2.2 hereof.
2.2 Purchase Price; Allocation of Purchase Price. The aggregate purchase
price for the Shares shall be $2,000,000,000 in cash, minus the Rolled Option
Value (the "PURCHASE PRICE"), plus the assumption of all Liabilities (other than
the Designated Liabilities) of Seller and SSHI.
2.3 Closing. Upon the terms and subject to the conditions of this
Agreement, the sale and purchase of the Shares contemplated by this Agreement
shall take place at a closing (the "CLOSING") to be held at the offices of
Wilson Sonsini Goodrich & Rosati, Professional Corporation, located at One
Market Street, Spear Tower, Suite 1600, San Francisco, California 94105, at a
time and date to be specified by the parties hereto, which shall be no later
than second (2nd) business day following the satisfaction or, if permitted
pursuant hereto, waiver of the conditions set forth in Article IX hereof, or at
such other location, date and time as Purchaser and Seller shall mutually agree.
The date upon which the Closing actually occurs shall be referred to herein as
the "CLOSING DATE."
2.4 Closing Deliveries by Seller and SSHI. At the Closing, Seller or
SSHI (as applicable) shall deliver, or cause to be delivered, to Purchaser
and/or its Designees, as appropriate, the following:
(a) stock certificates evidencing the Shares, duly endorsed in
blank or accompanied by stock powers duly executed in blank, and with all
required stock transfer tax stamps affixed thereto, representing all of the
issued and outstanding shares of capital stock of each of the Sold Subsidiaries,
free and clear of all Liens;
(b) a receipt for the Purchase Price; and
(c) the certificates and other documents required to be delivered
as a condition to the Closing pursuant to Section 9.3 hereof.
2.5 Closing Deliveries by Purchaser. At the Closing, Purchaser shall
deliver, or cause to be delivered, to Seller the following:
(a) cash in an amount equal to the Purchase Price, by wire
transfer in immediately available funds to an account designated in writing by
Seller at least two (2) business days prior to the Closing;
(b) an assumption of the Seagate Software Information Management
Group, Inc. Stock Option Plan; and
(c) the certificates and other documents required to be delivered
as a condition to the Closing pursuant to Section 9.2 hereof.
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<PAGE> 11
2.6 Adjustment of Required Cash. The amount of Required Cash shall be
subject to adjustment prior to Closing in the manner set forth below:
(a) TA Statement. No later than fifteen (15) calendar days prior
to the date of Seller Stockholder Meeting, Seller shall deliver to Purchaser the
TA Statement. If the Closing does not occur within twenty (20) calendar days of
delivery of the TA Statement, a revised TA Statement shall be delivered to
Purchaser, and such revised TA Statement shall constitute the TA Statement for
all purposes hereof and shall be subject to Sections 2.6(b) and 2.6(c) below.
(b) TA Statement Disputes.
(i) Subject to the terms of Section 2.6(b)(ii) hereof, the
TA Statement shall be deemed to be and shall be final, binding and conclusive on
Seller and Purchaser.
(ii) Purchaser shall be entitled to dispute any amounts
reflected on the TA Statement, but only on the basis that the amounts reflected
on the TA Statement contain errors or are based on erroneous assumptions or were
not arrived at in accordance with Seller's accounting practices and policies
applied on a basis consistent with Seller's past accounting practices and
policies; provided, however, that Purchaser shall have notified Seller in
writing of each disputed item, specifying the amount thereof in dispute and
setting forth, in reasonable detail, the basis for such dispute, within seven
(7) calendar days of Seller's delivery of the TA Statement to Purchaser. In the
event of such a dispute, Seller and Purchaser shall attempt to reconcile their
disputed amounts, and any resolution by them as to any disputed amounts shall be
final, binding and conclusive on Seller and Purchaser. In the event that Seller
and Purchaser are unable to reach a resolution of any disputed amounts within
five (5) calendar days after receipt by Seller of Purchaser's written notice of
dispute delivered in accordance with the foregoing, Seller and Purchaser shall
submit the items remaining in dispute for resolution to Arthur Andersen LLP (or,
if such firm shall decline to act or is not, at the time of such submission,
independent of Seller and Purchaser, to another independent accounting firm of
international reputation mutually acceptable to Seller and Purchaser) (either
Arthur Andersen LLP or such other accounting firm being referred to herein as
the "INDEPENDENT ACCOUNTING FIRM"), which shall, on an expedited basis, within
five (5) calendar days after such submission, determine and report to Seller and
Purchaser upon such remaining disputed items, and such report shall be final,
binding and conclusive on Seller and Purchaser. The fees and disbursements of
the Independent Accounting Firm shall be allocated between Seller and Purchaser
in the same proportion that the aggregate amount of such remaining disputed
items so submitted to the Independent Accounting Firm that is unsuccessfully
disputed by each such party (as finally determined by the Independent Accounting
Firm) bears to the total amount of such remaining disputed items so submitted.
(iii) In acting under this Agreement, the Independent
Accounting Firm shall be entitled to the privileges and immunities of an
arbitrator.
(iv) The TA Statement shall be deemed final for the
purposes of and under this Section 2.6 upon the earlier to occur of (i) the
failure of Purchaser to notify Seller of a dispute within seven (7) calendar
days of Seller's delivery of the TA Statement to Purchaser pursuant to Section
2.6(b)(ii) hereof, (ii) the resolution of all disputes, pursuant to
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<PAGE> 12
Section 2.6(b)(ii) hereof, by Seller and Purchaser, and (iii) the resolution of
all disputes, pursuant to Section 2.6(b)(ii) hereof, by the Independent
Accounting Firm. At the Closing, (i) the Adjustment Amount set forth in the
final TA Statement shall be recalculated by using the VERITAS Price on the
trading day immediately preceding the Effective Time under the VERITAS Merger
Agreement in substitution for that utilized in the estimated TA Statement, as
may be adjusted by the Independent Accounting Firm and (ii) the amount of
Required Cash shall be increased upward on a dollar for dollar basis, in an
amount equal to the Adjustment Amount (as recalculated pursuant to the foregoing
clause of this Section 2.6(b)(iv)).
2.7 Transaction Structure. The parties agree to cooperate and take all
requisite actions prior to the Closing Date to merge, form, consolidate or alter
the tax status of any of the Sold Subsidiaries or any Subsidiaries of the Sold
Subsidiaries to the extent desirable in the Purchaser's judgment for commercial,
regulatory, tax or other reasons, and further agree that the Purchaser may at
any time change the structure of the transactions contemplated by this
Agreement, including without limitation, by determining the order in which the
Sold Subsidiaries (and any assets of the Sold Subsidiaries) are transferred, and
the Seller shall cooperate in such efforts, including by entering into
appropriate amendments to this Agreement, provided, however, that such actions
shall not decrease the amount or change the kind of the consideration paid to
Seller pursuant to this Agreement, increase Designated Liabilities or add
transaction costs to those costs arising out of the transactions contemplated by
this Agreement (unless Purchaser agrees to pay such additional costs). On or
prior to the Closing Date, Seller shall effectuate the Split.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser, subject to the
exceptions and qualifications specifically set forth or disclosed in writing in
the disclosure letter delivered by Seller to Purchaser, dated as of the date
hereof (the "SELLER DISCLOSURE SCHEDULE"), and after giving effect to the OD
Documents, the Split and the transactions contemplated thereby, if relevant for
the purposes of determining compliance herewith as follows:
3.1 Organization; Good Standing. Seller and each of its Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization, with the
corporate or other power and authority to own, lease and operate its assets and
properties and to carry on its business as now being conducted, and is duly
qualified to do business and in good standing in each jurisdiction in which the
failure to be so qualified would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
3.2 Charter Documents. Seller has delivered or made available to
Purchaser a true and correct copy of the Certificate of Incorporation and Bylaws
of Seller and SSHI and the organizational documents of each of the Sold
Subsidiaries, each as amended to date and in effect as of the date hereof, and
each such instrument is in full force and effect. Seller and SSHI are not in
violation of any of the provisions of their Certificate of Incorporation or
Bylaws.
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<PAGE> 13
3.3 Subsidiaries. Section 3.3 of the Seller Disclosure Schedule contains
a complete and accurate list of each Subsidiary of Seller, indicating the
jurisdiction of incorporation of each such Subsidiary and Seller's proportionate
equity interest therein. Each Subsidiary of Seller that is not a Sold Subsidiary
(other than SSHI) is owned, directly or indirectly, by a Sold Subsidiary.
3.4 Capital Structure.
(a) The authorized capital stock of each Sold Subsidiary is as
set forth in Section 3.4(a) of the Seller Disclosure Schedule. All of the Shares
are owned beneficially and of record by Seller or one of its Subsidiaries,
except for director's qualifying shares and similar statutory de minimis
holdings. All of the Shares are duly authorized and validly issued, fully paid
and nonassessable, and are not subject to any preemptive rights created by
statute, the organizational documents of Seller or any of its Subsidiaries, or
any agreement or document to which Seller or any of its Subsidiaries is a party
or by which of Seller or any of its Subsidiaries is bound and, when transferred
to Purchaser will be free and clear of all Liens. Except as set forth in Section
3.4(a) of the Seller Disclosure Schedule, there are no equity securities,
partnership interests or other similar ownership interests of any class or
series of any Sold Subsidiary, or any securities convertible into, or
exercisable or exchangeable for, such equity securities, partnership interests
or similar ownership interests of any Sold Subsidiary, which are issued,
reserved for issuance or outstanding. Except as set forth in Section 3.4(a) of
the Seller Disclosure Schedule, there are no options, warrants, equity
securities, partnership interests or other similar ownership interests, calls,
rights (including preemptive rights), commitments or agreements of any kind or
character to which Seller or any of its Subsidiaries is a party or by which
Seller or any of its Subsidiaries is bound obligating Seller or any of its
Subsidiaries to issue, deliver or sell (or cause to be issued, delivered or
sold), or repurchase, redeem or otherwise acquire (or cause the repurchase,
redemption or acquisition of), any shares of capital stock of any Sold
Subsidiary or any Subsidiaries thereof, or obligating Seller or any of its
Subsidiaries to grant, extend, accelerate the vesting of or enter into any such
option, warrant, equity security, partnership interest or similar ownership
interest, call, right, commitment or agreement. There are no registration
rights, proxies or other agreements or understandings with respect to any equity
security, partnership interest or other similar ownership interest of any class
or series of any capital stock of any Sold Subsidiary or any Subsidiaries
thereof.
(b) The only outstanding Indebtedness of Seller and its
Subsidiaries is (i) $200 million in principal amount of 7.125% Senior Notes Due
March 1, 2004 (the "2004 SENIOR NOTES") issued pursuant to the Indenture, dated
as of March 1, 1997 (the "INDENTURE"), (ii) $200 million in aggregate principal
amount of 7.37% Senior Notes Due March 1, 2007 (the "2007 SENIOR NOTES") issued
pursuant to the Indenture, (iii) $100 million in principal amount of 7.875%
Senior Debentures due March 1, 2017 (the "2017 SENIOR DEBENTURES") issued
pursuant to the Indenture, (iv) $200 million in principal amount of 7.45% Senior
Debentures due March 1, 2037 (the "2037 SENIOR DEBENTURES") and, together with
the 2004 Notes, the 2007 Notes and the 2017 Senior Debentures, the "DEBENTURES")
issued pursuant to the Indenture. Other than the Debentures, which are
redeemable in full in accordance with their respective terms, there is no
Indebtedness of Seller or its Subsidiaries.
3.5 Authority. Each of Seller and SSHI has all necessary corporate power
and authority to enter into this Agreement and the OD Documents, to perform its
obligations
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<PAGE> 14
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the OD Documents
by Seller and SSHI, and the performance by Seller and SSHI of its obligations
hereunder and thereunder and the consummation by Seller and SSHI of the
transactions contemplated hereby and thereby, have been duly authorized by all
necessary corporate action on the part of Seller and SSHI, subject only to the
approval and adoption of this Agreement and the OD Documents by the stockholders
of Seller in accordance with Delaware Law. The affirmative vote of the holders
of at least a majority of the outstanding shares of Seller Common Stock is the
only vote required for the stockholders of Seller to approve this Agreement, the
OD Documents and the transactions contemplated hereby and thereby under the
applicable rules of The New York Stock Exchange, Inc. (the "NYSE"), Delaware Law
and all other legal and regulatory requirements applicable thereto (the
"REQUIRED STOCKHOLDER APPROVAL"). This Agreement and the OD Documents have been
duly executed and delivered by Seller and SSHI and, assuming the due
authorization, execution and delivery of this Agreement by Purchaser and the OD
Documents by the other party or parties thereto, constitute the valid and
binding obligations of Seller and SSHI, enforceable in accordance with their
respective terms, subject to (i) the effect of any applicable laws of general
application relating to bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting creditors' rights and the relief of debtors
generally, and (ii) the effect of rules of law and general principles of equity,
including, without limitation, rules of law and general principles of equity
governing specific performance, injunctive relief and other equitable remedies
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.6 Conflicts. The execution and delivery of this Agreement by Seller
and SSHI does not, and the performance by Seller and SSHI of its obligations
hereunder and the consummation by Seller and SSHI of the transactions
contemplated hereby will not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of Seller and SSHI or the organizational documents of
any of its Subsidiaries, (ii) subject to compliance with the requirements set
forth in Section 3.7 hereof, conflict with or violate any Law, rule, regulation,
order, judgment or decree applicable to Seller or any of its Subsidiaries, or by
which Seller, any of its Subsidiaries or any of their respective assets and
properties are bound or affected, or (iii) result in any breach of, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair the rights of Seller or any of its
Subsidiaries under, or alter the obligations of any third party under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a Lien on any of the assets or properties of Seller
or any of its Subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Seller or any of its Subsidiaries is a party or by which
Seller, any of its Subsidiaries or any of their respective assets and properties
are bound or affected, except to the extent such conflict, violation, breach,
default, impairment or other effect could not, in the case of clause (ii) or
(iii) of this Section 3.6, individually or in the aggregate, (a) reasonably be
expected to have a Material Adverse Effect, or (b) reasonably be expected to
have a material adverse effect on, or materially delay, the ability of
Purchaser, Seller or SSHI to consummate the transactions contemplated hereby.
3.7 Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by or with respect to Seller or
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<PAGE> 15
any of its Subsidiaries in connection with the execution and delivery of this
Agreement and the OD Documents by Seller, or the performance by Seller of its
obligations hereunder and thereunder or the consummation by Seller of the
transactions contemplated hereby and thereby, except for (i) the filing of the
Proxy Statement (as defined in Section 6.1(a) hereof) with the SEC in accordance
with the Exchange Act, (ii) consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under the HSR Act or
any applicable state antitrust Laws, (iii) consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
the Laws of any foreign country, and (iv) such other consents, authorizations,
filings, approvals and registrations which, if not obtained or made, would not
have a Material Adverse Effect or have a material adverse effect on, or
materially delay, the ability of Seller or Purchaser to consummate the
transactions contemplated hereby.
3.8 SEC Filings; Seller Financial Statements.
(a) Seller has filed all forms, reports and documents required to
be filed with the SEC since July 3, 1998, and has made available (through
on-line databases) to Purchaser such forms, reports and documents in the form
filed with the SEC. All such required forms, reports and documents (including
all exhibits and schedules thereto and all documents incorporated by reference
therein) are referred to herein as the "SELLER SEC REPORTS." As of their
respective dates, the Seller SEC Reports (i) complied in all material respects
with the applicable requirements of the Securities Act or the Exchange Act, and
the rules and regulations of the SEC promulgated thereunder, and (ii) did not at
the time each such Seller SEC Report was filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. None of the Subsidiaries of Seller is required to file any forms,
reports or other documents with the SEC. Except to the extent revised or
superseded by a subsequent filing with the SEC, none of the Seller SEC Reports
filed by Seller since July 3, 1999 and prior to the date of this Agreement
(collectively, the "RECENT SEC REPORTS") contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Seller included in all Seller SEC Reports comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited consolidated
quarterly statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of Seller
and its consolidated Subsidiaries as of the dates thereof and the consolidated
financial position of Seller and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments). Except as reflected in the most recent
consolidated balance sheet of Seller included in the Recent SEC Reports most
recently filed by Seller with the SEC prior to the date hereof (such
consolidated balance sheet being referred to herein as the "CURRENT SELLER
BALANCE SHEET" and the date thereof being referred to herein as the "CURRENT
BALANCE SHEET DATE"), as of the Current Balance Sheet Date, neither Seller nor
any of
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<PAGE> 16
its Subsidiaries had, and since such date neither Seller nor any of such
Subsidiaries has incurred, any Liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
3.9 [Reserved]
3.10 Absence of Certain Changes or Events. Except as reflected in the
Recent SEC Reports or Section 3.10 of the Seller Disclosure Schedule, since the
date of the last audited financial statements of Seller included in the Recent
SEC Reports, Seller has conducted its business only in the ordinary course
consistent with past practice, and there is not and has not been (i) any
condition, event or occurrence which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, or (ii) any condition,
event or occurrence which could reasonably be expected to prevent, hinder or
materially delay the ability of Seller to consummate the transactions
contemplated by this Agreement or the VERITAS Merger Agreement. Except as set
forth in Section 3.10 of the Seller Disclosure Schedule, since the date of
Seller's most recent periodic report on Form 10-Q included in the Recent SEC
Reports, there is not and has not been any event or action described in Section
5.2 hereof.
3.11 Tax Matters.
(a) Seller and each of its Subsidiaries have timely filed all
federal, state, local and foreign returns, estimates, information statements and
reports ("RETURNS") relating to Taxes required to be filed by Seller and each of
its Subsidiaries with any Tax authority, except such Returns which are not
material to Seller or any such Subsidiaries, and all such Returns are true,
correct and complete in all material respects. Seller and each of its
Subsidiaries have paid all Taxes due and payable on such Returns.
(b) As of the Closing Date, Seller and each of its Subsidiaries
will have withheld with respect to its employees all federal and state income
Taxes, Taxes payable pursuant to the Federal Insurance Contribution Act, Taxes
payable pursuant to the Federal Unemployment Tax Act and other Taxes required to
be withheld, except such Taxes which are not material to Seller or any such
Subsidiaries.
(c) Neither Seller nor any of its Subsidiaries has been
delinquent in the payment of any material Tax. Section 3.11(c) of the Seller
Disclosure Schedule contains a complete and accurate list of all material Tax
deficiencies outstanding, proposed or assessed against Seller or any of its
Subsidiaries, and a complete and accurate list of all Seller's or any of its
Subsidiaries' executed and unexpired waiver of any statute of limitations on or
extending the period for the assessment or collection of any Liabilities for any
Tax.
(d) Section 3.11(d) of the Seller Disclosure Schedule contains a
complete and accurate list of all audits or other examinations of any Return of
Seller or any of its Subsidiaries by any Tax authority is presently in progress,
and a complete and accurate list of all Seller's or any of its Subsidiaries'
notifications of any request for such an audit or other examination.
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<PAGE> 17
(e) Section 3.11(e) of the Seller Disclosure Schedule contains
a complete and accurate list of all adjustments relating to any Returns filed by
Seller or any of its Subsidiaries that have been proposed in writing formally or
informally by any Tax authority to Seller or any of its Subsidiaries or any
representative thereof.
(f) Neither Seller nor any of its Subsidiaries has any Liability
for any material unpaid Taxes which has not been accrued for or reserved on the
Current Seller Balance Sheet in accordance with GAAP, contingent or otherwise,
which is material to Seller or any of its Subsidiaries, other than any Liability
for unpaid Taxes that may have accrued in connection with the operation of the
business of Seller and its Subsidiaries in the ordinary course.
(g) Section 3.11(g) of the Seller Disclosure Schedule contains a
complete and accurate list of all contracts, agreements, plans or arrangements
to which Seller or any of its Subsidiaries is a party as of the date of this
Agreement (including, without limitation, the provisions of this Agreement),
covering any employee or former employee of Seller or any of its Subsidiaries
that, individually or collectively, would reasonably be expected to give rise to
the payment of any amount that would not be deductible pursuant to Sections
280G, 404 or 162(m) of the Code. The Seller Disclosure Schedule contains a
complete and accurate list of contracts, agreements, plans or arrangements to
which Seller is a party or by which it is bound to compensate any individual for
excise taxes paid pursuant to Section 4999 of the Code. Except as set forth in
Section 3.11(g) of the Seller Disclosure Schedule, no Seller Plan (as defined in
Section 3.16(a) hereof) exists that could result in the payment to any present
or former employee of Seller or any of its Subsidiaries of any money or other
property, or accelerate or provide any other rights or benefits to any present
or former employee of Seller or any of its Subsidiaries as a result of the
transaction contemplated by this Agreement or the OD Documents.
(h) There are no Liens with respect to Taxes upon the assets of
Seller or any of its Subsidiaries, other than with respect to Taxes not yet due
and payable or which are being contested in good faith.
(i) Neither Seller nor any of its Subsidiaries has filed any
consent agreement under Section 341(f) of the Code, or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by Seller or any of its
Subsidiaries.
(j) Section 3.11(j) of the Seller Disclosure Schedule contains a
complete and accurate list of all Seller's and any of its Subsidiaries'
Tax-sharing, Tax indemnity or Tax allocation agreements or arrangements.
(k) None of the assets or properties of Seller or any of its
Subsidiaries are Tax exempt use property within the meaning of Section 168(h) of
the Code.
(l) Seller has no excess loss accounts with respect to the stock
of any of its Subsidiaries. The transactions contemplated by this Agreement will
not result in the recognition of a material amount of deferred intercompany gain
under the deferred intercompany transaction rules of the Code.
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<PAGE> 18
3.12 Compliance. Neither Seller nor any of its Subsidiaries is, in any
material respect, in conflict with, or in default or violation of (i) any Law
(including the Foreign Corrupt Practices Act of 1977), rule, regulation, order,
judgment or decree applicable to Seller or any of its Subsidiaries or by which
Seller or any of its Subsidiaries or any of their respective assets and
properties are bound or affected, or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Seller or any of its Subsidiaries is a party or by which
Seller or any of its Subsidiaries or its or any of their respective assets and
properties are bound or affected. No investigation or review by any Governmental
Authority is pending or, to the knowledge of Seller, threatened, against Seller
or any of its Subsidiaries, nor has any Governmental Authority indicated an
intention to conduct the same, other than routine investigations in the ordinary
course of Seller's business. There is no agreement, judgment, injunction, order
or decree binding upon Seller or any of its Subsidiaries which has, or could
reasonably be expected to have, the effect of prohibiting or materially
impairing any business practice of Seller or any of its Subsidiaries, any
acquisition of material property by Seller or any of its Subsidiaries or the
conduct of business by Seller or any of its Subsidiaries as currently conducted.
3.13 Permits. Seller and its Subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from Governmental Authorities which
are material to the operation of the business of Seller and its Subsidiaries,
and Seller and its Subsidiaries are in compliance in all material respects with
the terms of such permits, licenses, variances, exemptions, order and approvals.
3.14 Litigation. There is no Action, suit, proceeding, claim,
arbitration or investigation pending against Seller or any of its Subsidiaries
or as to which Seller or any of its Subsidiaries has received any notice of
assertion, nor to the knowledge of Seller, is there any threatened Action, suit,
proceeding, claim, arbitration or investigation pending against Seller or any of
its Subsidiaries, in either case which individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
3.15 Brokers' and Finders' Fees. Except for fees payable to Morgan
Stanley & Co., Incorporated, neither Seller nor any of its Subsidiaries has
incurred, nor will Seller or any of its Subsidiaries incur, directly or
indirectly, any Liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
3.16 Employee Benefit Plans.
(a) Section 3.16(a) of the Seller Disclosure Schedule contains a
complete and accurate list of all employee compensation, incentive, fringe or
benefit plans, programs, policies, commitments, agreements (including, without
limitation, all employment, severance, change of control or similar agreements)
or other arrangements (whether or not set forth in a written document and
including, without limitation, all "employee benefit plans" within the meaning
of Section 3(3) of ERISA) maintained or contributed to by Seller or a Seller
affiliate covering any active or former employee, director or consultant of
Seller (each, a "SELLER EMPLOYEE" and, collectively, the "SELLER EMPLOYEES"
which shall, for all purposes of and under this Section 3.16, mean an employee
of Seller or a Seller Affiliate (as defined below)), any Subsidiary of Seller or
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<PAGE> 19
any trade or business (whether or not incorporated) which is a member of a
controlled group or which is under common control with Seller within the meaning
of Section 414(b), (c) or (m) of the Code (each, a "SELLER AFFILIATE" and,
collectively, the "SELLER AFFILIATES") (each, a "SELLER PLAN" and, collectively,
the "SELLER PLANS"). Seller has provided or made available to Purchaser: (i)
correct and complete copies of all documents embodying each Seller Plan,
including, without limitation, all amendments thereto, all trust documents
related thereto, and all material written agreements and contracts related
thereto; (ii) the most recent annual reports (Form Series 5500 and all schedules
and financial statements attached thereto), if any, required under ERISA or the
Code in connection with each Seller Plan; (iii) the most recent summary plan
description together with the summary(ies) of material modifications thereto, if
any, required under ERISA with respect to each Seller Plan; (iv) all IRS
determination, opinion, notification and advisory letters with respect to each
Seller Plan; (v) all material correspondence to or from any Governmental
Authority relating to any Seller Plan; (vi) all forms and related notices
required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, with respect to each Seller Plan; (vii) the most recent discrimination
tests for each Seller Plan required to perform such tests; (viii) the most
recent actuarial valuations, if any, prepared for each Seller Plan; (ix) if the
Seller Plan is funded, the most recent annual and periodic accounting of the
assets of each Seller Plan; and (x) all communication to Seller Employees
relating to any Seller Plan and any proposed Seller Plan, in each case, relating
to any amendments, terminations, establishments, increases or decreases in
benefits, acceleration of payments or vesting schedules, or other events which
would result in any material Liability to Seller or any Seller Affiliate in
respect of any Seller Plan.
(b) Each Seller Plan has been maintained and administered in all
material respects in compliance with its terms and with the requirements
prescribed by any and all Laws applicable thereto (including, without
limitation, ERISA and the Code). No Action, suit or other litigation (excluding
claims for benefits incurred in the ordinary course of Seller Plan activities)
has been brought, or to the knowledge of Seller, is threatened, against or with
respect to any such Seller Plan. There are no audits, inquiries or proceedings
pending or, to the knowledge of Seller, threatened by the IRS or the United
States Department of Labor with respect to any Seller Plans. All contributions,
reserves or premium payments required to be made or accrued as of the date
hereof to the Seller Plans have been timely made or accrued. Any Seller Plan
intended to be qualified under Section 401(a) of the Code, and each trust
intended to qualify under Section 501(a) of the Code (i) has either obtained
from the IRS a favorable determination, notification, advisory and/or opinion
letter, as applicable, as to its qualified status under the Code, or still has a
remaining period of time under applicable treasury regulations or IRS
pronouncements in which to apply for such letter and to make any amendments
necessary to obtain a favorable determination as to its qualified status under
the Code, and (ii) except with respect to amendments for which the Internal
Revenue Service has allowed until December 31, 2000, incorporates or has been
amended to incorporate all provisions required to comply with the Tax Reform Act
of 1986 and subsequent legislation. To the knowledge of Seller, no condition or
circumstance exists giving rise to a material likelihood that any such Seller
Plan would not be treated by the IRS as qualified under the Code, except as set
forth in Section 3.16(b) of the Seller Disclosure Schedule. Seller does not have
any plan or commitment to establish any new Seller Plan, to modify any existing
Seller Plan (except to the extent required by Law or to conform any such Seller
Plan to the requirements of any applicable Law, in each case as previously
disclosed
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<PAGE> 20
to Purchaser in writing, or as required by the terms of any Seller Plan or this
Agreement), or to enter into any new Seller Plan. Each Seller Plan can be
amended, terminated or otherwise discontinued after the Closing Date in
accordance with its terms, without Liability to Purchaser, Seller or any of the
Seller Affiliates (other than ordinary administration expenses).
(c) Neither Seller, any of its Subsidiaries, nor any of the
Seller Affiliates has at any time ever maintained, established, sponsored,
participated in, or contributed to any plan subject to Title IV of ERISA or
Section 412 of the Code, and at no time has Seller contributed to or been
requested to contribute to any "multiemployer plan," as such term is defined in
ERISA. To Seller's knowledge, there are no circumstances which could reasonably
be expected to subject Seller, any of its Subsidiaries, or any officer or
director of Seller or any of its Subsidiaries, to any material Liability or
penalty under Section 4975 through 4980B of the Code or Title I of ERISA. No
"prohibited transaction," within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under Section 4975 of
the Code and Section 408 of ERISA, has occurred with respect to any Seller Plan
which could reasonably be expected to subject Seller or any Seller Affiliates to
material Liability.
(d) Except as set forth in Section 3.16(d) of the Seller
Disclosure Schedule, none of the Seller Plans promises or provides retiree
medical or other retiree welfare benefits to any person except as required by
applicable Law, and neither Seller nor any of its Subsidiaries has represented,
promised or contracted (whether in oral or written form) to provide such retiree
benefits to any Seller Employee, former employee, director, consultant or other
person, except to the extent required by applicable Law.
(e) Each Seller International Employee Plan (as defined below)
has been established, maintained and administered in compliance in all material
respects with its terms and conditions and with the requirements prescribed by
any and all applicable Laws. No Seller International Employee Plan has unfunded
Liabilities that, as of the Closing, will not be offset by insurance or fully
accrued. Except as required by applicable Law, no condition exists that would
prevent Seller or Purchaser from terminating or amending any Seller
International Employee Plan at any time for any reason. For all purposes of and
under this Agreement, the term "SELLER INTERNATIONAL EMPLOYEE PLAN" shall mean
each Seller Plan that has been adopted or maintained by Seller or any of its
Subsidiaries, whether informally or formally, for the benefit of current or
former employees of Seller or any of its Subsidiaries who are not United States
citizens and who are employed outside the United States.
3.17 Absence of Liens. Seller and each of its Subsidiaries has good and
valid title to, or in the case of leased assets and properties valid leasehold
interests in, all of its material tangible assets and properties, real, personal
and mixed, used in their respective businesses, free and clear of any Liens,
except (i) as reflected in the consolidated balance sheet of Seller included in
the Recent SEC Reports, (ii) for Liens for Taxes not yet due and payable, and
(iii) for such imperfections of title and encumbrances, if any, which would not
be material to Seller or any of its Subsidiaries.
3.18 Environmental Matters.
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<PAGE> 21
(a) For all purposes of and under this Agreement, the following
terms shall have the following respective meanings:
(i) "ENVIRONMENTAL CLAIM" or "ENVIRONMENTAL CLAIMS" means
any and all administrative, regulatory or judicial actions, suits, causes of
action, demands, demand letters, claims, Liens, notices of non-compliance,
potential liability or violation, investigations, proceedings, consent orders or
consent or settlement agreements relating in any way to any Environmental Laws
or any Environmental Permits, including, without limitation, (A) any and all
claims or directions by Governmental Authorities for enforcement, investigation,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (B) any and all Claims by any Person seeking
damages (including with respect to natural resource damages, property damage,
diminution in value and personal injury) contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous Materials
or arising from alleged injury or threat of injury to health, safety or the
environment.
(ii) "ENVIRONMENTAL LAW" or "ENVIRONMENTAL LAWS" means any
Law, now or hereafter in effect and as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, natural
resources, health, safety or Hazardous Materials, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Sections 9601 et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. Sections 6901 et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. Sections 5101 et seq.; the Clean Water Act, 33 U.S.C. Sections 1251 et
seq.; the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.; the
Clean Air Act, 42 U.S.C. Sections 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. Sections 300f et seq.; the Occupational Safety and Health Act, 29 U.S.C.
Sections 1651 et seq., the Atomic Energy Act, 42 U.S.C. Sections 2014 et seq.;
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 et
seq. and the Federal Food, Drug and Cosmetic Act, 21 U.S.C. Sections 301 et seq.
and analogous state, provincial and foreign laws.
(iii) "ENVIRONMENTAL PERMIT" or "ENVIRONMENTAL PERMITS"
means all permits, approvals, registrations, identification numbers, licenses
and other authorizations required under any applicable Environmental Laws.
(iv) "HAZARDOUS MATERIAL" or "HAZARDOUS MATERIALS" means
(A) petroleum and petroleum products, radioactive materials, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contain polychlorinated biphenyls, and
radon gas, (B) any other chemicals, materials or substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances", "toxic pollutants", "contaminants" or "pollutants",
or words of similar import, under any applicable Environmental Law, and (C) any
other chemical, material or substance the use, handling, generation, treatment,
storing, release or exposure to which is regulated by any Governmental
Authority.
(b) Except as would not reasonably be expected to result in a
Material Adverse Effect, (i) neither Seller nor any of its Subsidiaries has
transported, stored, used,
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<PAGE> 22
manufactured, disposed of, released or exposed its employees or others to any
Hazardous Materials in violation of any Law, and (ii) neither Seller nor any of
its Subsidiaries has disposed of, transported, sold, used, released, exposed its
employees or others to or manufactured any product containing a Hazardous
Material (collectively, "HAZARDOUS MATERIALS ACTIVITIES") in violation of any
Environmental Law.
(c) Except as set forth in Section 3.18(c) of the Seller
Disclosure Schedule, (i) no material Action, proceeding, revocation proceeding,
amendment procedure, writ, injunction or claim is pending, or to the knowledge
of Seller, threatened, concerning any Environmental Permit, Hazardous Material
or any Hazardous Materials Activities of Seller or any of its Subsidiaries; and
(ii) Seller is not aware of any fact or circumstance which could involve Seller
or any of its Subsidiaries in any material Environmental Claim or impose upon
Seller or any of its Subsidiaries any material Liabilities under any
Environmental Law.
(d) Except as would not reasonably be expected to result in a
Material Adverse Effect, (i) each of Seller and its Subsidiaries are
consistently and reliably in compliance in all respects with all applicable
Environmental Laws; and (ii) Seller has obtained and is, as presently operating,
consistently and reliably in compliance with the conditions of all Environmental
Permits necessary under any Environmental Law for the continued conduct of the
business and operations of Seller in the manner now conducted.
(e) No investigation or review with respect to such matters is
pending or threatened, nor has any Governmental Authority or other person
indicated an intention to conduct the same, other than routine investigations
and reviews taken in the ordinary course of business.
3.19 Labor Matters. (i) There are no controversies pending or, to the
knowledge of Seller, threatened, between Seller or any of its Subsidiaries and
any of their respective employees; (ii) as of the date hereof, neither Seller
nor any of its Subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by Seller or any of
its Subsidiaries, nor does Seller know of any activities or proceedings of any
labor union to organize any such employees; and (iii) as of the date hereof,
Seller has no any knowledge of any strikes, slowdowns, work stoppages or
lockouts, or threats thereof, by or with respect to any employees of Seller or
any of its Subsidiaries.
3.20 Agreements, Contracts and Commitments. Except as set forth in
Section 3.20 of the Seller Disclosure Schedule, neither Seller nor any of its
Subsidiaries is a party to or is bound by any of the following to the extent
currently in force:
(a) any employment or consulting agreement, contract or
commitment with any officer or director of Seller, other than those that are
terminable on no more than thirty (30) days' notice;
(b) any agreement, contract or commitment relating to the
disposition or acquisition by Seller or any of its Subsidiaries, after the date
hereof, of a material amount of assets or properties other than in the ordinary
course of business;
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<PAGE> 23
(c) any agreement, contract or commitment to license any third
party to manufacture or reproduce any Seller product, service or technology, or
any agreement, contract or commitment to sell or distribute any Seller products,
service or technology, except in each case for agreements entered into in the
ordinary course of business; or
(d) any mortgages, indentures, guarantees, loans or credit
agreements, security agreements or other agreements, contracts or commitments
relating to the borrowing of money or extension of credit.
3.21 Statements; Registration Statement; Proxy Statement/Prospectus.
None of the information supplied or to be supplied by Seller for inclusion or
incorporation by reference in (i) the Registration Statement (as defined in
Section 6.1(a) hereof) will, at the time it is declared or ordered effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, or (ii) the Proxy Statement (as defined in
Section 6.1(a) hereof) will, on the date it is first mailed to the stockholders
of Seller, at the time of the Seller Stockholders' Meeting (as defined in
Section 6.1(a) hereof) and at the Closing Date, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Seller
Stockholders' Meeting which has become false or misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated thereunder.
Notwithstanding the foregoing, Seller makes no representation or warranty with
respect to any information supplied by Purchaser which is contained in the Proxy
Statement.
3.22 Board Approval. The Board of Directors of Seller has (i) determined
that this Agreement and the transactions contemplated hereby are fair to,
advisable and in the best interests of Seller and its stockholders, (ii) duly
approved this Agreement and the transactions contemplated hereby, and (iii)
resolved to recommend that the stockholders of Seller approve this Agreement and
the transactions contemplated hereby.
3.23 State Takeover Statutes. The Board of Directors of Seller has
approved this Agreement and the transactions contemplated hereby, and such
approval is sufficient to render inapplicable to this Agreement and the
transactions contemplated hereby the provisions of Section 203 of Delaware Law
to the extent, if any, such provisions are applicable to this Agreement and the
transactions contemplated hereby. No other state takeover statute or similar
statute or regulation applies to or purports to apply to this Agreement or the
transactions contemplated hereby.
3.24 Fairness Opinion. Seller has received a written opinion from Morgan
Stanley & Co. Incorporated, dated as of the date hereof, to the effect that, as
of the date hereof, the Merger Consideration (as defined in the VERITAS Merger
Agreement) payable pursuant to the VERITAS Merger Agreement is fair to the
stockholders of Seller from a financial point of view.
3.25 Intellectual Property.
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(a) Seller or its Subsidiaries own, or possess licenses or other
valid rights to use, and immediately prior to Closing the Sold Subsidiaries or
one or more of their Subsidiaries will own, or possess licenses or other valid
rights to use, all Intellectual Property (as defined in Section 3.25(d) hereof)
necessary for the conduct of the business of Seller and its Subsidiaries as
currently conducted. Except as set forth in Section 3.25(a) of the Seller
Disclosure Schedule, (i) the conduct of the business of Seller and its
Subsidiaries as currently conducted does not infringe or otherwise violate any
Intellectual Property of any third party except where such infringement would
not reasonably be expected to have a Material Adverse Effect, and (ii) no person
is infringing or otherwise violating any Intellectual Property of Seller or its
Subsidiaries, except where such infringement would not reasonably be expected to
have a Material Adverse Effect. Except as set forth in Section 3.25(a) of the
Seller Disclosure Schedule, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and thereby will not result
in the loss of, or any encumbrance on, the rights of Seller or any of its
Subsidiaries with respect to the Intellectual Property owned or used by them and
no claims, order, actions or proceedings are pending or, to the knowledge of
Seller, threatened, that seek to question the ownership or scope, cancel or
limit the scope or validity of the Intellectual Property owned or used by Seller
or any of its Subsidiaries or the rights of Seller or any of its Subsidiaries
therein, except in each case for such claims, orders, actions, proceedings,
losses, encumbrances or rights as would not have a Material Adverse Effect.
(b) Seller and each of its Subsidiaries has implemented policies
and consistently followed practices regarding the preservation of its
Proprietary Information (as defined in Section 3.25(d) hereof) from unauthorized
disclosure to third parties and regarding the use and disclosure of its
Proprietary Information by its employees and contractors.
(c) Section 3.25(c) of the Seller Disclosure Schedule contains a
complete and accurate list of all material Intellectual Property held or owned
by Seller and its Subsidiaries that has been issued or registered by, or filed
with, any Governmental Authority and all material Intellectual Property licenses
to which Seller or any of its Subsidiaries is a party.
(d) For all purposes of and under this Agreement, (i)
"INTELLECTUAL PROPERTY" shall mean intellectual or property of a similar nature
including without limitation all United States and foreign patents and patent
applications, United States and foreign trademark registrations or any analogous
rights and applications therefor, United States and foreign copyright
registrations and applications therefor, Proprietary Information and all other
intellectual property rights, including, without limitation, inventions,
processes, formulae, technology, know-how, techniques or other data and
information, confidential and proprietary trade secrets, computer software,
technical manuals and documentation used in connection with any of the
foregoing, and licenses and rights with respect to the foregoing or property of
like nature, and (ii) "PROPRIETARY INFORMATION" shall mean the trade secrets,
proprietary technology, know-how and other confidential information relation to
the business of Seller and its subsidiaries as currently conducted.
3.26 Assets. The assets held directly or indirectly by the Sold
Subsidiaries (after giving effect to the Split), constitute all of the assets of
Seller and its Subsidiaries other than the Designated Assets.
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3.27 Insurance. Seller and each of its Subsidiaries maintain, and all
times during the prior three years have maintained, fire and casualty, general
liability, business interruption, product liability, and sprinkler and water
damage insurance which it believes to be reasonably prudent for similarly sized
and similarly situated businesses. All premiums due and payable under all such
policies and bonds have been paid, Seller and each of its Subsidiaries is
otherwise in material compliance with the terms of such policies and bonds and,
to the knowledge of Seller, there is no threatened termination of, or material
premium increase with respect to, any of such policies.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller, subject to the
exceptions and qualifications set forth or disclosed in the disclosure letter
delivered by Purchaser to Seller, dated as of the date hereof (the "PURCHASER
DISCLOSURE SCHEDULE"), as follows:
4.1 Organization; Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the corporate power and authority to
own, lease and operate its assets and property and to carry on its business as
now being conducted and as proposed to be conducted, and is duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction in
which the failure to be so qualified would not reasonably be expected to have a
material adverse effect on, or materially delay, the ability of Purchaser or
Seller to consummate the transactions contemplated by this Agreement.
4.2 Charter Documents. Purchaser has delivered to Seller a true and
correct copy of the organizational documents of Purchaser, each as amended to
date and in effect as of the date hereof, and each such instrument is in full
force and effect. Purchaser is not in violation of any of the provisions of its
organizational documents.
4.3 Authority. Purchaser has all requisite corporate power and authority
to enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Purchaser, and the performance by Purchaser of its obligations
hereunder and the consummation by Purchaser of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action on the part
of Purchaser. No vote of the holders of the outstanding shares of capital stock
of Purchaser is required to approve this Agreement or the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and, assuming the due authorization, execution and delivery by Seller,
constitutes the valid and binding obligations of Purchaser, enforceable in
accordance with their respective terms, subject to (i) the effect of any
applicable laws of general application relating to bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights and the
relief of debtors generally, and (ii) the effect of rules of law and general
principles of equity, including, without limitation, rules of law and general
principles of equity governing specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
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4.4 Conflicts. The execution and delivery of this Agreement by Purchaser
does not, and the performance by Purchaser of its obligations hereunder the
consummation by Purchaser of the transactions contemplated hereby will not, (i)
conflict with or violate the organizational documents of Purchaser, (ii) subject
compliance with the requirements set forth in Section 4.5 hereof, conflict with
or violate any Law, rule, regulation, order, judgment or decree applicable to
Purchaser or by which Purchaser or its assets and properties are bound or
affected, or (iii) result in any breach of, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair the rights of Purchaser under, or alter the rights or obligations of any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the assets or properties of Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Purchaser is a party or by which Purchaser or
its assets and properties are bound or affected, except to the extent such
conflict, violation, breach, default, impairment or other effect could not, in
the case of clause (ii) or (iii) of this Section 4.4, individually or in the
aggregate, reasonably be expected to have a material adverse effect on, or
materially delay, the ability of Purchaser or Seller to consummate the
transactions contemplated by this Agreement.
4.5 Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by or with respect to Purchaser in connection with the execution and delivery of
this Agreement by Purchaser, or the performance by Seller of its obligations
hereunder or the consummation by Seller of the transactions contemplated hereby,
except for (i) consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under the HSR Act or any applicable
state antitrust Laws, (ii) consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under the Laws of any
foreign country, and (iii) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, would not reasonably
be expected to have a material adverse effect on, or materially delay, the
ability of Purchaser or Seller to consummate the transactions contemplated
hereby.
4.6 Litigation. There is no Action, suit, proceeding, claim, arbitration
or investigation pending against Purchaser or as to which Purchaser has received
any notice of assertion, nor to the knowledge of Purchaser, is there any
threatened Action, suit, proceeding, claim, arbitration or investigation pending
against Purchaser, which could reasonably be expected to have a material adverse
effect on Purchaser.
4.7 Statements; Registration Statement; Proxy Statement. None of the
information supplied or to be supplied by Purchaser or its Affiliates for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time it is declared or ordered effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or (ii) the Proxy Statement will, on the date the Proxy Statement is
first mailed to the stockholders of Seller, at the time of the Seller
Stockholders' Meeting and at the Closing Date, will contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any
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statement in any earlier communication with respect to the solicitation of
proxies for the Seller Stockholders' Meeting which has become false or
misleading. Notwithstanding the foregoing, Purchaser makes no representation or
warranty with respect to any information supplied by Seller which is contained
in the Proxy Statement.
4.8 Financing. For all purposes of and under this Agreement, the
Commitment Letters and the Equity Commitments shall be referred to together as
the "FINANCING AGREEMENTS" and the financing to be provided thereunder shall be
referred to as the "FINANCING." The aggregate proceeds of Financing are in an
amount sufficient to consummate the transactions contemplated hereby in
accordance with the terms hereof. None of the Commitment Letters or the Equity
Commitments has been withdrawn and Purchaser does not know of any facts or
circumstances that may reasonably be expected to result in any of the conditions
set forth in the Commitment Letters or the Equity Commitments not being
satisfied.
4.9 Delaware Law. Purchaser was not immediately, prior to the execution
and delivery of this Agreement, an "interested stockholder" of Seller within the
meaning of Section 203 of Delaware Law, and neither Purchaser nor any of its
Affiliates beneficially owns any shares of Common Stock of Seller on the date
hereof.
4.10 Newly Organized. Purchaser was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement and has engaged in
no other business activities.
4.11 Related Agreements. Purchaser has delivered to Seller true and
correct copies of any and all contracts and agreements between VERITAS and
Purchaser and their respective Affiliates.
4.12 Solvency. Immediately after giving effect to the transactions
contemplated by this Agreement and the closing of the Financing in order to
effect the transactions contemplated by this Agreement, the Sold Subsidiaries
and their respective Subsidiaries shall be able to pay their debts as they
become due in the ordinary course of business and shall own assets having a
present fair saleable value greater than the combined stated liabilities and
identified contingent liabilities of such entities. Immediately after giving
effect to the transactions contemplated by this Agreement and the closing of the
Financing to be obtained in order to effect the transactions contemplated by
this Agreement, the Sold Subsidiaries and their respective Subsidiaries shall
have adequate capital to carry on their businesses. No transfer of property is
being made and no obligation is being incurred in connection with the
transactions contemplated by this Agreement and the closing of any Financing to
be obtained in order to effect the transactions contemplated by this Agreement
with the intent to hinder, delay or defraud either present or future creditors
of Purchaser, Seller, the Sold Subsidiaries or any of their respective
Subsidiaries.
4.13 No Amendment to VERITAS Merger Agreement. Seller shall not, without
the prior written consent of Purchaser, amend, modify, supplement, mutually
terminate or waive any term or condition set forth in the OD Documents, as in
effect as of the date hereof.
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ARTICLE V
CONDUCT PRIOR TO CLOSING
5.1 Conduct of Business. Except (i) as set forth in Section 5.1 of the
Seller Disclosure Schedule, (ii) to the extent that Purchaser shall otherwise
consent in writing, and (iii) to the extent contemplated by the OD Documents as
in effect on the date hereof, or for the sale of all or a portion of the
Designated Assets, at all times during the period commencing with the execution
and delivery hereof and continuing until the earlier of the termination of this
Agreement pursuant to the terms hereof or the Closing, Seller shall, and shall
cause each of its Subsidiaries to, (a) carry on its business diligently and in
the usual, regular and ordinary course, in substantially the same manner as
heretofore conducted and in compliance with all applicable Laws, (b) pay or
perform its material obligations when due, and (c) use its commercially
reasonable efforts, consistent with past practices and policies, to preserve
intact its present business organization, keep available the services of its
present officers and employees and preserve its relationships with customers,
suppliers, distributors, licensors, licensees and others with which it has
business dealings. In furtherance of the foregoing and subject to applicable
Law, Seller shall confer with Purchaser, as promptly as practicable, prior to
taking any material actions or making any material management decisions with
respect to the conduct of its business and the business of its Subsidiaries.
5.2 Restrictions on Conduct of Business. Without limiting the generality
of the terms of Section 5.1 hereof, except (i) as set forth in Section 5.2 of
the Seller Disclosure Schedule or as required by the terms hereof, or (ii) to
the extent that Purchaser shall otherwise consent in writing (which, in the case
of Section 5.2(q) hereof, shall not be unreasonably withheld), or (iii) to the
extent contemplated by the OD Documents as in effect on the date hereof, or for
the sale of all or a portion of the Designated Assets, at all times during the
period commencing with the execution and delivery hereof and continuing until
the earlier of the termination of this Agreement pursuant to the terms hereof or
the Closing, Seller shall not do any of the following, or permit its
Subsidiaries to do any of the following:
(a) except as required by applicable Law, waive any stock
repurchase rights, accelerate, amend or change the period of exercisability of
options or restricted stock, or reprice options granted under any employee,
consultant or director stock plans or authorize cash payments in exchange for
any options granted under any of such plans;
(b) enter into any material partnership arrangements, joint
development agreements or strategic alliances, other than in the ordinary course
of business consistent with past practice;
(c) (i) increase the compensation or fringe benefits of any
present or former director, officer or employee of Seller or its Subsidiaries
(except for increases in salary or wages in the ordinary course of business
consistent with past practice), (ii) grant any severance or termination pay to
any present or former director, officer or employee of Seller or its
Subsidiaries (except for the payment of severance or termination pay in the
ordinary course of business consistent with past practice), or (iii) establish,
adopt, enter into, amend or terminate any Seller Plan or any plan, agreement,
program, policy, trust, fund or other arrangement that
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would be a Seller Plan if it were in existence as of the date of this Agreement,
except as required by applicable Law;
(d) issue, deliver, sell, authorize, pledge or otherwise
encumber, or propose any of the foregoing with respect to, any shares of capital
stock or any securities convertible into, or exercisable or exchangeable for,
shares of capital stock of any of its Subsidiaries, or subscriptions, rights,
warrants or options to acquire any shares of capital stock or any securities
convertible into, or exercisable or exchangeable for, shares of capital stock of
any of its Subsidiaries, or enter into other agreements or commitments of any
character obligating it to issue any such shares of capital stock of any of its
Subsidiaries, or securities convertible into, or exercisable or exchangeable
for, shares of capital stock of any of its Subsidiaries;
(e) cause, permit or propose any amendments to any charter
document or bylaws (or similar governing instruments) of Seller or any of its
Subsidiaries;
(f) acquire or agree to acquire by merging or consolidating with,
or by purchasing any equity interest in or a material portion of the assets of,
or by any other manner, any business or any corporation, limited liability
company, general or limited partnership, joint venture, association, business
trust or other business enterprise or entity, or otherwise acquire or agree to
acquire any assets having a value exceeding $5,000,000 in the aggregate or which
are otherwise material, individually or in the aggregate, to the business of
Seller and its Subsidiaries to be included in the Sold Subsidiaries;
(g) adopt a plan of merger, complete or partial liquidation,
dissolution, consolidation, restructuring, recapitalization or other
reorganization;
(h) except as required by applicable Law, adopt or amend any
employee benefit plan or employee stock purchase or employee stock option plan,
or enter into any employment contract or collective bargaining agreement (other
than offer letters and letter agreements entered into in the ordinary course of
business consistent with past practice with employees who are terminable "at
will"), pay any special bonus or special remuneration to any director or
employee other than in the ordinary course of business consistent with past
practice, or increase the salaries or wage rates or fringe benefits (including
rights to severance or indemnification) of its officers;
(i) except in the ordinary course of business consistent with
past practice, modify, amend or terminate any material contract or agreement to
which Seller or any of its Subsidiaries is a party, or waive, delay the exercise
of, release or assign any material rights or claims thereunder;
(j) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets,
other than (i) the sale or transfer of any Designated Assets (but not including
shares of VERITAS capital stock), or (ii) any such properties or assets the
value of which do not exceed $5,000,000 individually and $10,000,000 in the
aggregate, except sales of inventory in the ordinary course of business
consistent with past practice; provided, that Seller may divest any of the
Private Securities without the consent of
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Purchaser if required to do so on an involuntary basis pursuant to any merger,
securities purchase or other similar type of agreement;
(k) (i) incur any Indebtedness or guarantee any such Indebtedness
of another person, issue or sell any debt securities or warrants or other rights
to acquire any debt securities of Seller or any of its Subsidiaries, guarantee
any debt securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another person or
enter into any arrangement having the economic effect of any of the foregoing,
except for endorsements and guarantees for collection, short-term borrowings and
lease obligations, in each case incurred in the ordinary course of business
consistent with past practice, or (ii) make any loans, advances or capital
contributions to, or investment in, any other person, other than to Seller or
any direct or indirect wholly-owed Subsidiary of Seller;
(l) fail in any material respect to make any capital expenditures
in the amounts budgeted and at the times contemplated therefor in Seller's
annual capital expenditures budget for fiscal year 2000 previously provided to
Purchaser, or expend funds for unbudgeted capital expenditures in an amount
greater than $5,000,000;
(m) pay, discharge or satisfy any claims (including claims of
stockholders), liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), except for the payment, discharge or
satisfaction of liabilities or obligations in the ordinary course of business
consistent with past practices or in accordance with their terms as in effect on
the date hereof, or waive, release, grant, or transfer any rights of material
value or modify or change in any material respect any existing license, lease,
contract or other document, other than in the ordinary course of business
consistent with past practice;
(n) change any financial reporting or material accounting
principle used by it unless otherwise required by applicable Law or GAAP;
(o) settle or compromise any litigation (whether or not commenced
prior to the date of this Agreement) other than settlements or compromises of
litigation where the amount paid (after giving effect to insurance proceeds
actually received) in settlement or compromise does not exceed $1,000,000,
provided that the aggregate amount paid in connection with the settlement or
compromise of all such litigation shall not exceed $10,000,000;
(p) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends and
distributions by a direct or indirect wholly owned subsidiary of Seller to its
parent (i) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (ii) purchase, redeem or
otherwise acquire any shares of capital stock of Seller or any of its
subsidiaries or any other securities thereof or any rights, warrants or options
to acquire any such shares or other securities; or
(q) make, or permit to be made, without the prior written consent
of Purchaser any material Tax election which would affect the Sold Subsidiaries
or any of their respective Subsidiaries.
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(r) agree in writing or otherwise to take any of the actions
described in Section 5.2(a) through Section 5.2(q) hereof, inclusive.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Registration Statement; Proxy Statement; Other Filings.
(a) As promptly as practicable after the execution and delivery
of this Agreement, (i) Seller (in cooperation with Purchaser and the other party
or parties to the OD Documents) shall prepare and file with the SEC a proxy
statement/prospectus to be sent to the stockholders of Seller in connection with
the meeting of the stockholders of Seller to consider the approval of this
Agreement, the OD Documents and the transactions contemplated hereby and thereby
(such proxy statement/prospectus being referred to herein as the "PROXY
STATEMENT" and such meeting of the stockholders of Seller being referred to
herein as the "SELLER STOCKHOLDERS' MEETING"), and (ii) Seller shall cooperate
with Purchaser and the other party or parties to the OD Documents in the
preparation and filing a registration statement on Form S-4 (the "REGISTRATION
STATEMENT") to be filed with the SEC in connection with the transactions
contemplated by the OD Documents. Seller shall respond to any comments of the
SEC with respect to the Registration Statement or the Proxy Statement, shall use
its commercially reasonable efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after such filing
and shall cause the Proxy Statement to be mailed to its stockholders at the
earliest practicable time. As promptly as practicable after the execution and
delivery of this Agreement, Seller shall prepare and file any other filings
required under the Exchange Act, the Securities Act or any other federal,
foreign or state "blue sky" securities Laws relating to the transactions
contemplated hereby (collectively, the "OTHER FILINGS"). Seller shall promptly
notify Purchaser upon the receipt of any comments from the SEC or its staff, and
of any request by the SEC or its staff or any other government officials for
amendments or supplements to the Registration Statement, the Proxy Statement or
any Other Filing, or for additional information, and shall supply the other with
copies of all correspondence between such party or any of its representatives,
on the one hand, and the SEC, or its staff or any other government officials, on
the other hand, with respect to the Registration Statement, the Proxy Statement
or any Other Filing. The Proxy Statement, the Registration Statement and the
Other Filings shall comply in all material respects with all requirements of
applicable Law and the rules and regulations promulgated thereunder. Whenever
any event occurs which is required to be set forth in an amendment or supplement
to the Proxy Statement, the Registration Statement or any Other Filing, Seller
or Purchaser, as the case may be, shall promptly inform the other party of such
occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of Seller, such amendment
or supplement.
(b) Subject to Section 6.2(c) hereof, the Proxy Statement
shall also include the recommendation of the Board of Directors of Seller in
favor of the approval of this Agreement, the OD Documents and the transactions
contemplated hereby and thereby.
6.2 Meeting of Seller Stockholders.
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(a) Subject to the terms of Section 6.2(c) hereof, promptly after
the date hereof and in consultation with Purchaser, Seller shall take all action
necessary in accordance with Delaware Law and its Certificate of Incorporation
and Bylaws to convene the Seller Stockholders' Meeting, to be held as promptly
as practicable, for the purpose of voting upon this Agreement, the OD Documents
and the transactions contemplated hereby and thereby. Subject to the terms of
Section 6.2(c) hereof, Seller shall solicit proxies from its stockholders in
favor of the approval of this Agreement, the OD Documents and the transactions
contemplated hereby and thereby, and shall take all other action necessary or
advisable to secure the Required Stockholder Approval.
(b) Subject to the terms of Section 6.2(c) hereof, (i) the Board
of Directors of Seller shall recommend that Seller's stockholders vote in favor
of and approve this Agreement, the OD Documents and the transactions
contemplated hereby and thereby at the Seller Stockholders' Meeting, (ii) the
Proxy Statement shall include a statement to the effect that the Board of
Directors of Seller has recommended that Seller's stockholders vote in favor of
and approve this Agreement, the OD Documents and the transactions contemplated
hereby and thereby, and (iii) neither the Board of Directors of Seller nor any
committee thereof shall withdraw, amend or modify, or propose or resolve to
withdraw, amend or modify in a manner adverse to Purchaser, the recommendation
of the Board of Directors of Seller that Seller's stockholders vote in favor of
and approve this Agreement, the OD Documents and the transactions contemplated
hereby and thereby.
(c) Notwithstanding the foregoing or anything to the contrary set
forth in this Agreement, nothing in this Agreement shall prevent the Board of
Directors of Seller from withdrawing, amending or modifying its recommendation
in favor of this Agreement and the transactions contemplated hereby if (i)
Seller receives a Seller Superior Offer (as defined below) and such Seller
Superior Offer is not withdrawn, (ii) neither Seller nor any of its agents or
representatives shall have violated any of the restrictions set forth in Section
6.5(a) hereof, and (iii) the Board of Directors of Seller concludes in good
faith, after consultation with its outside counsel, that, in light of such
Seller Superior Offer, the withdrawal, amendment or modification of such
recommendation is necessary in order for the Board of Directors of Seller to
comply with its fiduciary obligations to the stockholders of Seller under
applicable Law. For all purposes of and under this Agreement, the term "SELLER
SUPERIOR OFFER" shall mean a bona fide written offer made by a third party to
consummate any of the following transactions: (a) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving Seller, pursuant to which the stockholders of Seller
immediately preceding such transaction would hold less than fifty percent (50%)
of the equity interest in the surviving or resulting entity of such transaction
(or the ultimate parent entity thereof); (b) a sale or other disposition by
Seller of assets (excluding inventory and used equipment sold in the ordinary
course of business) representing all or substantially all of Seller's
consolidated assets immediately prior to such sale, (c) a sale or other
disposition by Seller of all or more than ninety-five percent (95%) of the
assets to be held (directly or indirectly) by the Sold Subsidiaries after giving
effect to the Split, or (d) the acquisition by any person or group (including by
way of a tender offer or an exchange offer or issuance by Seller), directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of shares representing in excess of fifty percent (50%) of the voting power of
the then outstanding shares of capital stock of Seller, in
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each case on terms that the Board of Directors of Seller determines, in its
reasonable judgment (after consultation with its financial advisor and after
taking into account all aspects of the proposal and the person making the
proposal and any proposed changes to this Agreement that may be proposed by
Purchaser in response to such Seller Superior Offer) to be more favorable to the
stockholders of Seller, from a financial point of view, than, (i) in the case of
a Seller Superior Offer of the type referred to in clauses (a), (b) or (d), this
Agreement and the OD Documents and the transactions contemplated hereby and
thereby and (ii) in the case of a Seller Superior Offer of the type referred to
in clause (c), this Agreement and the transactions contemplated hereby;
provided, however, that any such offer shall not be deemed to be a "Seller
Superior Offer" if any financing required to consummate the transaction
contemplated by such offer is not committed and is not likely in the judgment of
Seller's Board of Directors to be obtained by such third party on a timely
basis. Notwithstanding the foregoing or anything to the contrary set forth in
this Agreement, except for a mutual termination as provided for in Section 4.13
hereof, nothing in this Agreement shall prevent the Board of Directors of Seller
from withdrawing, amending or modifying its recommendation in favor of the OD
Documents, or terminating the OD Documents in accordance with its terms.
6.3 Access to Information.
(a) Seller shall afford Purchaser and its accountants, counsel
and other representatives (including potential financing sources), reasonable
access, during normal business hours, to the properties, books, records and
personnel of Seller and its Subsidiaries at any time prior to the Closing in
order to enable Purchaser obtain all information concerning the business, assets
and properties, results of operations and personnel of Seller and its
Subsidiaries as Purchaser may reasonably request. No information or knowledge
obtained in the foregoing investigation by Purchaser pursuant to this Section
6.3 shall affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of Seller and Purchaser to
consummate the transactions contemplated hereby.
(b) Seller shall provide, and shall cause its Subsidiaries and
its and their respective officers and employees to provide, all necessary
cooperation in connection with the arrangement of the Financing and related
matters, including, without limitation, the execution and delivery of any
commitment letters, underwriting or placement agreements, pledge and security
documents, other definitive financing documents, or other requested certificates
or documents, including a certificate of the chief financial officer of Seller
with respect to solvency matters, as may be requested by Purchaser, provided,
however, that such letters, agreements or documents expressly provide that, from
and after consummation of the transactions contemplated by this Agreement,
Seller shall have no Liability thereunder and the other parties thereto shall
look solely to Purchaser in respect of any obligations of Seller thereunder.
6.4 Confidentiality. Seller and Purchaser acknowledge that they have
previously entered into a Confidentiality Agreement (the "CONFIDENTIALITY
AGREEMENT"), which shall continue in full force and effect in accordance with
its terms.
6.5 No Solicitation.
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(a) From and after the date of this Agreement until the earlier
to occur of the Closing and termination of this Agreement pursuant to Section
10.1 hereof, Seller and its Subsidiaries shall not, and shall cause their
respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them not
to, directly or indirectly (i) solicit, initiate, encourage or induce the
making, submission or announcement of any Seller Acquisition Proposal (as
defined in Section 6.5(b) hereof), (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any Seller
Acquisition Proposal, (iii) engage in discussions with any person with respect
to any Seller Acquisition Proposal, except as to the existence of the terms of
this Section 6.5, (iv) subject to the terms of Section 6.2(c) hereof, approve,
endorse or recommend any Seller Acquisition Proposal, or (v) enter into any
letter of intent or similar document or any contract, agreement or commitment
contemplating or otherwise relating to any Seller Acquisition Transaction (as
defined in Section 6.5(b) hereof); provided, however, that until the date on
which this Agreement is approved by the requisite vote of the stockholders of
Seller, the terms of this Section 6.5(a) shall not prohibit Seller from
furnishing information regarding Seller and its Subsidiaries to, entering into a
confidentiality or non-disclosure agreement with, or entering into discussions
with, any person or group in response to a Seller Superior Offer submitted by
such person or group (and not withdrawn) if (a) Seller has not violated any of
the restrictions set forth in this Section 6.5(a), (b) the Board of Directors of
Seller concludes in good faith, after consultation with its outside legal
counsel, that such action is reasonably necessary in order for the Board of
Directors of Seller to comply with its fiduciary obligations to the stockholders
of Seller under applicable Law, (c) Seller receives from such person or group an
executed confidentiality or non-disclosure agreement containing customary
limitations on the use and disclosure of all non-public written and oral
information furnished to such person or group by or on behalf of Seller and
containing terms no less favorable to the disclosing party than the terms of the
Confidentiality Agreement (including with respect to any standstill
arrangements, which may not be waived by Seller unless the standstill
arrangements in the Confidentiality Agreement are waived), and (d) prior to
furnishing any such non-public information to such person or group or entering
into negotiations or discussions, Seller notifies Purchaser promptly of such
inquiries, proposals or offers received by, any such information requested from,
or any such discussions or negotiations sought to be initiated or continued
with, any of its representatives indicating, in connection with such notice, the
name of the person and the terms and conditions of any inquiries, proposals or
offers, and furnishes such non-public information to Purchaser to the extent
such information has not been previously furnished to Purchaser. Seller and its
Subsidiaries shall (and shall cause their respective officers, directors,
affiliates, employees, investment bankers, attorneys and representatives to)
immediately cease any and all existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any Seller Acquisition
Proposal.
(b) For all purposes of and under this Agreement, the term
"SELLER ACQUISITION PROPOSAL" shall mean any offer or proposal relating to any
Seller Acquisition Transaction. For all purposes of and under this Agreement,
"SELLER ACQUISITION TRANSACTION" shall mean any transaction or series of related
transactions, other than the transactions permitted to be effected under Section
5.2 hereof involving: (i) any acquisition or purchase from Seller by any person
or "group" (as defined under Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder) of more than fifteen percent (15%) in
interest of the total outstanding voting securities of Seller, or any tender
offer or exchange offer that if consummated would result in any person or
"group" (as defined under Section 13(d) of the Exchange Act and the rules and
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regulations promulgated thereunder) beneficially owning more than fifteen
percent (15%) of the total outstanding voting securities of Seller, or any
merger, consolidation, business combination or similar transaction involving
Seller pursuant to which the stockholders of Seller immediately preceding such
transaction would hold less than eighty-five percent (85%) of the equity
interests in the surviving or resulting entity of such transaction (or the
ultimate parent entity thereof); (ii) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than fifteen
percent (15%) of the fair market value of the consolidated assets and properties
of Seller; (iii) a sale or other disposition by Seller of all or more than
fifteen percent (15%) of the assets to be held by the Sold Subsidiaries after
giving effect to the Split; and (iv) the acquisition by any person or group
(including by way of a tender offer or exchange offer or issuance by Seller),
directly or indirectly, of beneficial ownership or a right to acquire beneficial
ownership of shares representing in excess of fifteen percent (15%) of the
voting power of the then outstanding shares of capital stock of Seller.
6.6 Public Disclosure. Purchaser and Seller shall consult with each
other and agree before issuing any press release or otherwise making any public
statement with respect to this Agreement, and shall not issue any such press
release or make any such public statement prior to such agreement, except as may
be required by applicable Law or Seller's listing agreement with The New York
Stock Exchange, Inc., in which case reasonable efforts to consult with the other
party shall be made prior to such release or public statement.
6.7 Legal Requirements. Purchaser and Seller shall take all reasonable
actions necessary or desirable to comply promptly with all legal requirements
which may be imposed on them with respect to the consummation of the
transactions contemplated by this Agreement (including, without limitation,
furnishing all information required in connection with approvals of or filings
with any Governmental Authority, and prompt resolution of any litigation
prompted hereby), and shall promptly cooperate with, and furnish information to,
the other party hereto to the extent necessary in connection with any such
requirements imposed upon any of them or their respective Subsidiaries in
connection with the consummation of the transactions contemplated by this
Agreement.
6.8 Notification of Certain Matters. Purchaser shall give prompt notice
to Seller, and Seller shall give prompt notice to Purchaser, of the occurrence,
or failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (i) any representation or warranty contained in this
Agreement to be untrue or inaccurate at the Closing, such that the conditions
set forth in Section 9.2(a) or Section 9.3(a) hereof, as the case may be, would
not be satisfied or fulfilled as a result thereof, or (ii) any material failure
of Purchaser or Seller, as the case may be, or of any officer, director,
employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement.
Notwithstanding the foregoing, the delivery of any notice pursuant to this
Section 6.8 shall not limit or otherwise affect the rights and remedies
available hereunder to the party receiving such notice.
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6.9 Commercially Reasonable Efforts and Further Assurances. Subject to
the respective rights and obligations of Purchaser and Seller under this
Agreement, each of Purchaser and Seller shall use its respective commercially
reasonable efforts to effectuate the transactions contemplated hereby, and to
fulfill and cause to be fulfilled the conditions to Closing under this
Agreement. Each of Purchaser and Seller, at the reasonable request of the other
party hereto, shall execute and deliver such other instruments and do and
perform such other acts and things as may be necessary or desirable for
effecting completely the consummation of the transactions contemplated hereby.
6.10 Indemnification.
(a) From and after the Closing, Purchaser and the Sold
Subsidiaries shall fulfill and honor in all respects the obligations of Seller
pursuant to any indemnification agreements (substantially in the form delivered
to Purchaser prior to the date hereof) between Seller, the Sold Subsidiaries and
their respective directors and officers in effect immediately prior to the
Closing and the Split (the "INDEMNIFIED PARTIES") and any indemnification
provisions under Seller's charter documents as in effect on the date hereof. The
organizational documents of Purchaser shall contain provisions with respect to
exculpation and indemnification that are at least as favorable to the
Indemnified Parties as those contained in Seller's organizational documents as
in effect on the date hereof, which provisions shall not be amended, repealed or
otherwise modified for a period of six (6) years from the Closing Date in any
manner that would adversely affect the rights thereunder of individuals who,
immediately prior to the Closing, were directors, officers, employees or agents
of Seller or the Sold Subsidiaries, unless such modification is required by
applicable Law.
(b) In the event that Purchaser or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers all or substantially all of its properties and assets
to any person in a single transaction or a series of transactions, then, and in
each such case, Purchaser shall make or cause to be made proper provision so
that the successors and assigns of Purchaser assume the indemnification
obligations of Purchaser and the Sold Subsidiaries under this Section 6.10 for
the benefit of the Indemnified Parties.
(c) The provisions of this Section 6.10 are (i) intended to be
for the benefit of, and will be enforceable by, each of the Indemnified Parties,
and (ii) in addition to, and not in substitution for, any other rights to
indemnification or contribution that any such person may have by contract or
otherwise.
(d) For a period of six (6) years following the Closing Date,
Purchaser shall use its best efforts to maintain in effect the directors' and
officers' liability insurance policies maintained by Seller; provided, however,
that in no event shall Purchaser be required to expend in any one year in excess
of one hundred and fifty percent (150%) of the annual premium currently paid by
Seller for such coverage.
6.11 Regulatory Filings; Reasonable Efforts. As soon as may be
reasonably practicable following the execution and delivery of this Agreement,
Seller and Purchaser each shall file with the FTC and DOJ Notification and
Report Forms relating to the transactions
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contemplated hereby as required by the HSR Act, as well as comparable pre-merger
notification forms required by the merger notification or control laws and
regulations of any applicable jurisdiction, as agreed to by Seller and
Purchaser. Seller and Purchaser each shall promptly (i) supply the other with
any information which may be required in order to effectuate such filings, and
(ii) supply any additional information which reasonably may be required by the
FTC, the DOJ or the competition or merger control authorities of any other
jurisdiction and which Seller and Purchaser may reasonably deem appropriate.
6.12 Use of Names. Seller acknowledges that from and after the Closing,
the name "Seagate" and all similar or related names, marks and logos (all of
such names, marks and logos being referred to herein as the "SELLER NAMES")
shall be owned by the Sold Subsidiaries, that neither Seller nor any of its
Affiliates shall have any rights in the Seller Names, and that neither Seller
nor any of its Affiliates will be entitled to contest the ownership or validity
or any rights of Purchaser, the Sold Subsidiaries or any of their respective
Subsidiaries in or to the Seller Names.
6.13 Debt Offer. Subject to the terms and conditions of this Agreement,
Seller shall commence an irrevocable tender offer (the "DEBT OFFER") to purchase
all of the principal amount of the Debentures. The obligations of Seller (i) to
commence the Debt Offer and (ii) to accept for payment, and pay for, any
securities tendered pursuant to the Debt Offer, shall be subject to customary
conditions and be conditioned upon closing of the transactions contemplated
hereby and the OD Documents (any of which may be waived by Seller in its sole
discretion). If fewer than one hundred percent (100%) of the Debentures are
purchased pursuant to the Debt Offer, then at the Closing Purchaser shall, (i)
in accordance with the terms and provisions of Section 8.01 and Section 9.01 of
the Indenture, assume the Debentures and enter into a Supplemental Indenture in
accordance with such Section 8.01 and Section 9.01, (ii) give an irrevocable
notice of redemption pursuant to Section 11.01 of the Indenture to the Trustee
thereunder and each holder of a Debenture thereunder, specifying a "Redemption
Date" thirty one (31) days after the Closing and other matters specified in
Section 11.08 of the Indenture, and (iii) deposit the principal amount of the
"Redemption Price" with the Trustee under the Indenture.
6.14 Commitment Letters; Rolled Options. Purchaser shall promptly
forward Seller's counsel a copy of all credit documentation prepared pursuant to
the Commitment Letters. In the event that one or more of the lenders under the
Commitment Letters withdraws its Commitment Letter (or commitment thereunder) or
invokes a condition that would prevent the Closing from occurring, Purchaser
shall promptly notify Seller thereof. In the event that Purchaser invokes the
condition set forth in Section 9.3(c) hereof, or one or more lenders withdraws
its commitment, Purchaser shall use all commercially reasonable efforts to enter
into contracts with one or more substitute lenders designated by Purchaser and
reasonably acceptable to Seller ("SUBSTITUTE LENDERS"), provided, however, that
Purchaser shall be required to enter into such contracts with one or more
Substitute Lenders only if the economic terms and other conditions offered by
such Substitute Lenders are no less favorable than those set forth in the
Commitment Letters. From and after the date hereof until the Closing, Purchaser
shall not amend, modify or supplement, or permit the amendment, modification or
supplementation of, the Roll Agreement without Seller's prior written consent.
6.15 Transaction Expenses. No later than fifteen (15) calendar days
prior to the Closing Seller shall deliver to Purchaser final invoices from
Seller's investment bankers (including their counsel, if any), attorneys,
accountants and other advisors with respect to the transactions contemplated
hereby, together with a statement from each such person to the effect that (i)
the amounts shown due and owing therein constitute a "final" bill, and (ii)
after payment in full of the amounts indicated therein, each such person will
not look to Purchaser, Seller or
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any of their Affiliates or any party to the OD Documents for the payment of
further amounts with respect to the transactions contemplated hereby or the OD
Documents.
6.16 Non-Assignable Assets. Nothing in this Agreement shall be construed
as an attempt or agreement to assign any asset, contract, lease, permit, license
or other right which would otherwise be included in the assets transferred
pursuant to the Split, but which is by its terms non-assignable without the
consent of the other party or parties thereto, unless such consent shall have
been given (the "NON-ASSIGNABLE ASSETS"). Seller agrees to use commercially
reasonably efforts before the Closing to obtain such consent or consents.
Following the Closing and until such time as the Non-Assignable Assets may be
properly assigned to Purchaser, such Non-Assignable Assets shall be held in
trust for the benefit of Purchaser, the covenants and obligations thereunder
shall be performed by Purchaser, and all benefits and obligations existing
thereunder shall be for the account of Purchaser. Following the Closing, Seller
authorizes Purchaser, to the extent permitted by applicable Law and the terms of
the Non-Assignable Assets, to perform all of the obligations and receive all of
the benefits under the Non-Assignable Assets, and appoints Purchaser as its
attorney-in-fact to act in its name and on its behalf (and on behalf of its
Affiliates) with respect thereto.
ARTICLE VII
EMPLOYEE MATTERS
7.1 Employee Liabilities. Seller and its Subsidiaries shall take all
corporate actions necessary to provide for the transfer of all assets relating
to the Assumed Plans (as defined below) to the Purchaser as of, or as soon as
practicable following, the Closing. From and after the date of the transfer of
such assets, Purchaser shall assume sole sponsorship of all Seller Plans (other
than any stock incentive plan, including, without limitation, the 1983 Incentive
Stock Option Plan, the Employee Stock Purchase Plan, the Executive Stock Plan,
the Conner Peripherals, Inc. 1986 Incentive Stock Plan, the 1991 Incentive Stock
Option Plan, the Amended and Restated Directors' Option Plan, the Amended and
Restated Archive Corporation Stock Option and Restricted Stock Purchase Plan -
1981, the Amended and Restated Archive Corporation Incentive Stock Option Plan -
1981, the Conner Peripherals, Inc.--Arcada Holdings, Inc. Stock Option Plan,
1998 Non-Statutory Stock Option Plan, 1999 Stock Option Plan, Arcada Holdings
Inc. 1994 Stock Option Plan, Xiotech Corporation Amended and Restated 1996 Stock
Option Plan) (such assumed Seller Plans, the "ASSUMED PLANS") (provided,
however, that the Assumed Plans shall include the [Suez] Software Information
Management Group, Inc. 1999 Stock Option Plan and any outstanding options to
acquire Seller Common Stock which are converted into options to acquire
Purchaser shares pursuant to the Roll Agreement), and shall assume and be
responsible for all Liabilities whatsoever to Seller Employees, including,
without limitation, claims incurred under any Assumed Plan (including, without
limitation, any statutory worker's compensation claims), other than Liabilities
under any Seller Plan which is not an Assumed Plan (each, a "NON-ASSUMED PLAN").
7.2 Employee Benefit Plans.
(a) From and after the Closing, (i) Purchaser shall offer all
Seller Employees employment with a Sold Subsidiary following the Closing
("TRANSFERRED EMPLOYEES"), initially on the same terms and conditions of
employment that such Transferred Employee had
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immediately prior to the Closing (including salary, title and location), and all
Transferred Employees shall be entitled to, service credit under all employee
benefit plans of Purchaser, the Sold Subsidiaries or any of their respective
Subsidiaries equal to credited service time for Seller Employees under all
Assumed Plans prior to the Closing, (ii) any service of a Transferred Employee
prior to the Closing Date which was recognized under any medical plan of Seller
for purposes of medical or dental coverage shall be recognized by the
corresponding employee benefit plans of Purchaser, the Sold Subsidiaries and
their respective Subsidiaries, and (iii) any service of a Transferred Employee
prior to the Closing Date which was recognized under Seller's vacation policy
shall be recognized under the vacation policy of Purchaser, the Sold
Subsidiaries and their respective Subsidiaries.
(b) Purchaser agrees that all Transferred Employees who continue
employment with Purchaser or any affiliate of Purchaser after the Closing
("CONTINUING EMPLOYEES") shall be eligible to continue to participate in all
Assumed Plans, provided that (i) nothing in this Section 7.2 shall limit the
right of Purchaser to amend or terminate any such Assumed Plan, and (ii) if
Purchaser terminates any such Assumed Plan, then the Continuing Employees shall
immediately be eligible to participate in the corresponding Purchaser employee
benefit plan or arrangement on substantially the same terms and conditions as
similarly situated employees of Purchaser and its affiliates. If a Continuing
Employee ceases to be covered by an Assumed Plan providing health or welfare
benefits prior to the end of the plan year, and subsequently becomes covered by
any Purchaser employee health or welfare benefit plan or arrangement, then (A)
the Continuing Employee shall be given full credit under Purchaser's plan or
arrangement for any co-pays, deductibles and out-of-pocket maximums incurred by
him or her for such plan year, and (B) Purchaser's plan or arrangement shall
waive any preexisting condition limitation or restriction otherwise applicable
to the Continuing Employee.
7.3 WARN Act. Purchaser shall assume and be responsible for any
Liabilities arising under the Worker Adjustment and Retraining Notification Act
in connection with the termination of any Seller Employee on or after the
Closing Date.
ARTICLE VIII
TAX MATTERS
8.1 Conveyance Taxes. Purchaser shall pay all real property transfer or
gains, sales, use, transfer, value added, stock transfer, and stamp taxes, any
transfer, recording, registration, and other fees, and any similar Taxes which
become payable in connection with the transactions contemplated by this
Agreement, and shall file such applications and documents as shall permit any
such Tax to be assessed and paid on or prior to the Closing Date in accordance
with any available pre-sale filing procedure. Purchaser shall execute and
deliver all instruments and certificates necessary to enable Seller to comply
with this Section 8.1.
8.2 Section 338(h)(10) Election.
(a) At the request of Purchaser, Seller will join with Purchaser
in making an election under Section 338(h)(10) of the Code and Treasury
Regulation Section 1.338(h)(10)-1(d) (and, if permissible, any corresponding
elections under any applicable state and local income tax laws) (collectively,
the "SECTION 338(h)(10) ELECTIONS") with respect to the purchase
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and sale of Shares of any of the Sold Subsidiaries which is a United States
person within the meaning of Section 7701(a)(30) of the Code (collectively, the
"U.S. SOLD SUBSIDIARIES") hereunder.
(b) To the extent possible, Purchaser, Seller and the U.S. Sold
Subsidiaries shall execute on or prior to the Closing any and all forms
necessary to effectuate the Section 338(h)(10) Elections (including, without
limitation, Internal Revenue Service Form 8023 and any similar forms under the
applicable state and local income tax laws (the "SECTION 338 FORMS")). In the
event, however, any Section 338 Forms are not executed at the Closing, Purchaser
and Seller shall prepare and complete each such Section 338 Form no later than
15 days prior to the date such Section 338 Form is required to be filed.
Purchaser and Seller shall each cause the Section 338 Forms to be duly executed
by an authorized person for Purchaser and Seller in each case, and shall duly
and timely file the Section 338 Forms in accordance with applicable tax Laws and
the terms of this Agreement.
(c) As soon as practicable after the Closing Date, Purchaser
shall (i) allocate the Purchase Price among the Sold Subsidiaries (the "STOCK
ALLOCATION"), and (ii) determine the allocation of that portion of the Stock
Allocation attributable to any of the U.S. Sold Subsidiaries resulting from the
Section 338(h)(10) Elections (as required pursuant to Section 338(h)(10) of the
Code and the regulations promulgated thereunder) among the assets of such U.S.
Sold Subsidiaries (the "SECTION 338 ALLOCATION") after considering in good faith
Seller's comments thereto. Purchaser, Seller and the U.S. Sold Subsidiaries
shall be bound by and shall file all Tax Returns (including amended Tax Returns
and amended Section 338 Forms, as necessary) consistently with the Section 338
Allocation.
8.3 Tax Matters Schedule. Prior to the Closing Date, Seller shall
promptly take all actions set forth in Schedule V hereto with respect to the
transactions described herein.
ARTICLE IX
CONDITIONS TO CLOSING
9.1 Conditions to Obligations of Each Party to Effect the Closing. The
respective obligations of each party to this Agreement to effect the Closing
shall be subject to the satisfaction or fulfillment, at or prior to the Closing
Date, of each of the following conditions:
(a) Stockholder Approval. The Required Stockholder Approval shall
have been obtained.
(b) Registration Statement Effective; Proxy Statement. The SEC
shall have declared the Registration Statement effective. No stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose, and no similar
proceeding in respect of the Proxy Statement, shall have been initiated or
threatened in writing by the SEC.
(c) No Order; HSR Act. No Governmental Authority shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and
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which has the effect of making the transactions contemplated hereby illegal or
otherwise prohibiting consummation of the transactions contemplated hereby. All
requirements, if any, under the HSR Act or equivalent foreign statute, rule,
regulation or order relating to the transactions contemplated hereby shall have
been satisfied.
(d) Other Transaction. All of the conditions set forth in Article
VI of the VERITAS Merger Agreement (other than Section 6.1(f) thereof and the
filing of the Merger Certificate thereunder) shall have been satisfied or
waived. Purchaser shall have received a certificate with respect to the
foregoing, signed on behalf of Seller by the President and the Chief Financial
Officer of Seller.
9.2 Additional Conditions to Obligations of Seller. The obligation of
Seller to consummate and effect the transactions contemplated by this Agreement
shall be subject to the satisfaction or fulfillment, at or prior to the Closing
Date, of each of the following conditions, any of which may be waived, in
writing, exclusively by Seller:
(a) Representations and Warranties. The representations and
warranties of Purchaser contained in this Agreement shall have been true and
correct in all material respects as of the date of this Agreement, except where
the failure to be so true and correct would not, in the aggregate, reasonably be
expected to have a material adverse effect on Purchaser. In addition, the
representations and warranties of Purchaser contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date (except
for changes contemplated by this Agreement and except for those representations
and warranties which address matters only as of a particular date, which shall
have been true and correct only as of such particular date), with the same force
and effect as if made on and as of the Closing Date, except in such cases where
the failure to be so true and correct would not, in the aggregate, reasonably be
expected to have a material adverse effect on Purchaser. Seller shall have
received a certificate with respect to the foregoing, signed on behalf of
Purchaser by the Chief Executive Officer and the Chief Financial Officer of
Purchaser.
(b) Agreements and Covenants. Purchaser shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, and Seller shall have received a certificate to such effect, signed on
behalf of Purchaser by the Chief Executive Officer or the Chief Financial
Officer of Purchaser.
(c) OD Documents. The OD Documents shall be in full force and
effect, enforceable in accordance with their terms, and Seller shall not have
received any notice from the other party or parties to such OD Documents of its
or their intention to terminate the OD Documents.
9.3 Additional Conditions to the Obligations of Purchaser. The
obligations of Purchaser to consummate and effect the transactions contemplated
hereby shall be subject to the satisfaction or fulfillment, at or prior to the
Closing Date, of each of the following conditions, any of which may be waived,
in writing, exclusively by Purchaser:
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(a) Representations and Warranties. The representations and
warranties of Seller contained in this Agreement shall have been true and
correct in all material respects as of the date of this Agreement, except, in
the case of all such representations and warranties other than those set forth
in Sections 3.3, 3.4, 3.15, 3.22, 3.23, 3.24 and 3.26 hereof, where the failure
to be so true and correct would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect. In addition, the representations and warranties
of Seller contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date (except for changes contemplated by this
Agreement and except for those representations and warranties which address
matters only as of a particular date, which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Closing Date, except, in the case of all such representations and warranties
other than those set forth in Sections 3.3, 3.4, 3.15, 3.22, 3.23, 3.24 and 3.26
hereof, where the failure to be so true and correct would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. Purchaser shall have
received a certificate with respect to the foregoing, signed on behalf of Seller
by the President or the Chief Financial Officer of Seller.
(b) Agreements and Covenants. Seller shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, and Purchaser shall have received a certificate to such effect, signed on
behalf of Seller by the President and the Chief Financial Officer of Seller.
(c) Financing. Purchaser shall have received the proceeds of the
Financing contemplated by the Commitment Letters.
(d) Sold Subsidiaries Cash Amount. The Sold Subsidiaries shall
have available, free and clear of any and all Liens, an amount of Cash at least
equal to the Required Cash.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date, whether before or after approval of the transactions
contemplated hereby by the stockholders of Seller:
(a) by mutual written consent, duly authorized by the Boards of
Directors of Purchaser and Seller;
(b) by either Seller or Purchaser, if the transactions
contemplated hereby shall not have been consummated by December 31, 2000;
provided, however, that the right to terminate this Agreement pursuant to this
Section 10.1(b) shall not be available to any party hereto whose failure to
fulfill any obligation under this Agreement (including, without limitation, such
party's obligations under in Section 6.5 hereof) has been a principal cause of,
or resulted in, the failure of the transactions contemplated hereby to occur on
or before such date;
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(c) by either Seller or Purchaser, if a Governmental Authority
shall have issued an order, decree or ruling or taken any other action, in any
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby or by the OD Documents, which
order, decree or ruling is final and nonappealable;
(d) by either Seller or Purchaser, if the Required Stockholder
Approval shall not have been obtained by reason of the failure to obtain the
Required Stockholder Approval upon a vote taken at a meeting of stockholders
duly convened therefor or at any adjournment or postponement thereof; provided,
however, that the right to terminate this Agreement pursuant to this Section
10.1(d) shall not be available to Seller where the failure to obtain the
Required Stockholder Approval shall have been caused by the action or failure to
act in a manner which constitutes a material breach of this Agreement;
(e) by Seller, upon a breach of any representation, warranty,
covenant or agreement on the part of Purchaser contained in this Agreement, or
if any representation or warranty of Purchaser shall have become untrue, in
either case such that the conditions set forth in Section 9.2(a) or Section
9.2(b) would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue, provided, however,
that if such inaccuracy in Purchaser's representations and warranties or breach
by Purchaser is curable, then Seller may not terminate this Agreement pursuant
to this Section 10.1(e) for thirty-five (35) calendar days after delivery of
written notice from Seller to Purchaser of such breach, provided that Purchaser
continues to exercise commercially reasonable efforts to cure such breach (it
being understood that Seller may not terminate this Agreement pursuant to this
Section 10.1(e) if such breach by Purchaser is cured during such thirty-five
(35)-day period);
(f) by Purchaser, upon a breach of any representation, warranty,
covenant or agreement on the part of Seller set forth in this Agreement, or if
any representation or warranty of Seller shall have become untrue, in either
case such that the conditions set forth in Section 9.3(a) or Section 9.3(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, however, that if
such inaccuracy in Seller's representations and warranties or breach by Seller
is curable, then Purchaser may not terminate this Agreement pursuant to this
Section 10.1(f) for thirty-five (35) calendar days after delivery of written
notice from Purchaser to Seller of such breach, provided that Seller continues
to exercise commercially reasonable efforts to cure such breach (it being
understood that Purchaser may not terminate this Agreement pursuant to this
Section 10.1(f) if such breach by Seller is cured during such thirty-five
(35)-day period);
(g) by Seller, if (i) prior to obtaining the Required Stockholder
Approval, Seller receives a Seller Superior Offer, the Board of Directors of
Seller concludes in good faith, after consultation with its outside counsel,
that in light of such Seller Superior Offer, the termination of this Agreement
in order to accept such Seller Superior Offer is necessary in order for the
Board of Directors of Seller to comply with its fiduciary obligations to the
stockholders of Seller under applicable Law, and (ii) Seller has complied with
all of its obligations under Section 6.5 hereof, and (iii) prior to the
termination of this Agreement pursuant to this Section 10.1(g), Seller pays
Purchaser the Seller Termination Fee pursuant to Section 10.3(b)(ii) hereof;
provided, however, that such termination may take place only after two (2)
business days following Purchaser's receipt of written notice advising Purchaser
that the Board of Directors of
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the Seller has received a Seller Superior Offer specifying the material terms
and conditions of such Seller Superior Offer (and including a copy thereof with
all accompanying documentation, if in writing), identifying the person making
such Seller Superior Offer and stating that it intends to make the determination
set forth in clause (i) of this Section 10.1(g). After providing such notice,
Seller shall provide an opportunity to Purchaser to make such adjustments in the
terms and conditions of this Agreement as would enable Seller to proceed with
its recommendation to its stockholders without making the determination set
forth in clause (i) of this Section 10.1(g); provided, further, however, that
any such adjustment shall be at the discretion of Purchaser at the time; or
(h) by Purchaser, if a Seller Triggering Event (as defined below)
shall have occurred. For the purposes of this Agreement, a "SELLER TRIGGERING
EVENT" shall be deemed to have occurred if (i) the Board of Directors of Seller
or any committee thereof shall for any reason have withdrawn or shall have
amended or modified in a manner adverse to Purchaser its recommendation in favor
of the approval of this Agreement or the OD Documents and the transactions
contemplated hereby or thereby, (ii) Purchaser shall have failed to include in
the Proxy Statement the recommendation of the Board of Directors of Seller in
favor of the approval of this Agreement or the OD Documents and the transactions
contemplated hereby or thereby, or shall have taken any action or made any
statement inconsistent with such recommendation, or (iii) a tender or exchange
offer for in excess of the fifteen percent (15%) of the equity securities of
Seller shall have been commenced by a person unaffiliated with Purchaser, and
Seller shall not have sent to its securityholders pursuant to Rule 14e-2
promulgated under the Securities Act, within ten (10) business days after such
tender or exchange offer is first published sent or given, a statement
disclosing that Seller recommends rejection of such tender or exchange offer.
10.2 Notice of Termination; Effect of Termination. Any termination of
this Agreement pursuant to Section 10.1 hereof shall be effective immediately
upon the delivery of written notice of the terminating party to the other party
hereto. In the event of the termination of this Agreement pursuant to Section
10.1 hereof, this Agreement shall be of no further force or effect, except (i)
as set forth in this Section 10.2, Section 10.3 hereof and Article XII hereof,
each of which shall survive the termination of this Agreement without
limitation, and (ii) nothing herein shall relieve any party from Liability for
any breach of this Agreement.
10.3 Fees and Expenses.
(a) General. Except as set forth in this Section 10.3, all fees
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the transactions contemplated by this Agreement are consummated.
(b) Seller Payments.
(i) Seller shall pay to Purchaser or its Designees in
immediately available funds, within one (1) business day after demand by
Purchaser, an amount equal to $80,000,000 (the "SELLER TERMINATION FEE") if this
Agreement is terminated by Purchaser pursuant to Section 10.1(h) hereof.
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(ii) Seller shall pay to Purchaser or its Designees in
immediately available funds, prior to the termination of this Agreement, an
amount equal to the Seller Termination Fee if this Agreement is terminated by
Seller pursuant to Section 10.1(g) hereof.
(iii) Seller shall pay to Purchaser or its Designees in
immediately available funds, within one (1) business day after the date Seller
directly or indirectly enters into an agreement with any third party with
respect to a Seller Acquisition Transaction or a Seller Acquisition Transaction
is consummated, an amount equal to the Seller Termination Fee if (A) this
Agreement is terminated by either party pursuant to Section 10.1(d) hereof, (B)
at any time after the date of this Agreement and at or before the Seller
Stockholders' Meeting a Seller Acquisition Proposal shall have been publicly
announced or otherwise communicated to Seller and not withdrawn, and (C) within
twelve (12) months of the termination of this Agreement, Seller directly or
indirectly enters into an agreement with any third party with respect to a
Business Combination Transaction (as defined in Section 10.3(b)(vi) hereof) or a
Business Combination Transaction is consummated.
(iv) Seller shall pay to Purchaser or its Designees in
immediately available funds, within one (1) business day after the first to
occur of the events set forth in clause (D) below, an amount equal to the Seller
Termination Fee if (A) this Agreement is terminated by either party pursuant to
Section 10.1(b) hereof, (B) at any time after the date of this Agreement and at
or before the Termination Date a Seller Acquisition Proposal shall have been
publicly announced or otherwise communicated to Seller and not publicly
withdrawn, (C) following the public announcement or communication of such Seller
Acquisition Proposal and prior to any such termination, Seller shall have
intentionally breached (and not cured after notice thereof) any of its covenants
or agreements set forth in this Agreement in any material respect, which breach
shall have contributed to the failure of the Closing to occur on or before the
Termination Date, and (D) within twelve (12) months of the termination of this
Agreement, Seller directly or indirectly enters into an agreement with any third
party with respect to a Business Combination Transaction or a Business
Combination Transaction is consummated.
(v) Seller acknowledges that the agreements contained in
this Section 10.3(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Purchaser would not enter
into this Agreement.
(vi) "BUSINESS COMBINATION TRANSACTION" shall mean any
transaction or series of related transactions involving: (i) any acquisition or
purchase from Seller by any person or "group" (as defined under Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder) of more
than fifty percent (50%) in interest of the total outstanding voting securities
of Seller, or any tender offer or exchange offer that if consummated would
result in any person or "group" (as defined under Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder) beneficially owning
more than fifty percent (50%) of the total outstanding voting securities of
Seller, or any merger, consolidation, business combination or similar
transaction involving Seller pursuant to which the stockholders of Seller
immediately preceding such transaction would hold less than fifty percent (50%)
of the equity interests in the surviving or resulting entity of such transaction
(or the ultimate parent entity thereof); (ii) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than fifty
percent (50%) of the fair market value of the consolidated assets and properties
of Seller; (iii) a sale or other disposition by Seller of all or more than
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fifty percent (50%) of the assets that would have been held by the Sold
Subsidiaries if the Split had taken place; and (iv) the acquisition by any
person or group (including by way of a tender offer or an exchange offer or
issuance by Seller), directly or indirectly, of beneficial ownership or a right
to acquire beneficial ownership of shares representing in excess of fifty
percent (50%) of the voting power of the then outstanding shares of capital
stock of Seller.
10.4 Amendment. Subject to applicable Law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto.
10.5 Extension; Waiver. At any time prior to the Closing Date any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE XI
INDEMNIFICATION
11.1 Survival. The representations and warranties of Seller contained in
this Agreement, and any representation or warranty, statement or other
information contained in any Exhibit to this Agreement, the Seller Disclosure
Schedule, the TA Statement and any certificate, instrument or other report or
document delivered by Seller pursuant to this Agreement or in connection with
the transactions contemplated hereby (collectively, the "ACQUISITION
Documents"), shall not survive the Closing. Neither the period of non-survival
nor the Liability of Seller with respect to Seller's representations or
warranties, statements or other information contained in any of the Acquisition
Documents shall be increased by any investigation made at any time by or on
behalf of Purchaser, either before or after the Closing.
11.2 Indemnification. Purchaser shall indemnify and hold harmless Seller
and each other party to the Indemnification Agreement against all losses and
claims to the extent provided in the Indemnification Agreement.
ARTICLE XII
GENERAL PROVISIONS
12.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via facsimile (receipt confirmed) to the parties at
the following addresses or facsimile numbers (or at such other address or
facsimile numbers for a party as shall be specified by like notice):
(a) if to Purchaser (or the Sold Subsidiaries following the
Closing), to:
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Suez Acquisition Company (Cayman) Limited
c/o Silver Lake Partners, L.P.
2725 Sand Hill Road
Building C, Suite 950
Menlo Park, California 94025
Attention: Dave Roux
Facsimile: 650-233-8125
Telephone: 650-233-8121
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: William E. Curbow, Esq.
Facsimile: 212-455-2502
Telephone: 212-455-2000
and to:
TPG Partners III, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: Richard A. Ekleberry, Esq.
Facsimile: 817-871-4010
Telephone: 817-871-4000
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Paul J. Shim, Esq.
Facsimile: 212-225-3999
Telephone: 212-225-2000
and to:
VERITAS Software Corporation
1600 Plymouth Street
Mountain View, California 94043
Attention: General Counsel
Facsimile: 650-526-2581
Telephone: 650-335-8000
with a copy to:
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Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Attention: Michael A. Schwartz
Facsimile: 212-728-8111
Telephone: 212-728-8000
(b) if to Seller, SSHI (or the Sold Subsidiaries prior to the
Closing), to:
Seagate Technology, Inc.
920 Disc Drive
P.O. Box 66360
Scotts Valley, California 95067
Attention: General Counsel
Facsimile: 831-438-6675
Telephone: 831-439-5370
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Larry W. Sonsini, Esq.
Facsimile: 650-493-6811
Telephone: 650-493-9300
and to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market Street
Spear Tower, Suite 3300
San Francisco, California 94105
Attention: Michael J. Kennedy, Esq.
Facsimile: 415-947-2099
Telephone: 415-947-2000
12.2 Interpretation. When a reference is made in this Agreement to
Schedules or Exhibits, such reference shall be to a Schedule or Exhibit to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The table of contents and headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement or any term or provision hereof.
When reference is made herein to "the business of" an entity, such reference
shall be deemed to include the business of all direct and indirect Subsidiaries
of such entity.
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12.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when each counterpart has been signed by each of the
parties and delivered to the other party, it being understood that all parties
need not sign the same counterpart.
12.4 Entire Agreement. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein, including, without limitation, the Seller Disclosure Schedule and the
Purchaser Disclosure Schedule, (i) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (ii) are not
intended to confer upon any other person any rights or remedies hereunder,
except as set forth herein.
12.5 Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
12.6 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
12.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to conflicts
of law principles.
12.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any Law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
12.9 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder, in whole or in part, by operation
of law or otherwise, without the prior written approval of the other party
hereto; provided, however, that Purchaser shall have
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the right to assign any or all of its rights to acquire the Shares is one or
more designee (each, a "DESIGNEE"); and provided, further, however, that no such
assignment shall release Purchaser from any of its Liabilities or obligations
under this Agreement. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
12.10 WAIVER OF JURY TRIAL. EACH OF SELLER AND PURCHASER HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF SELLER OR PURCHASER IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
12.11 No Third Party Rights. Except as expressly set forth herein and as
provided in Section 6.10 hereof, this Agreement does not create any rights,
claims or benefits incurring to any person that is not a party hereto nor create
or establish any third party claim.
12.12 Attorneys' Fees. Should suit be brought to enforce or interpret
any party of this Agreement, the prevailing party will be entitled to recover,
as an element of the costs of suit and not as damages, reasonably attorneys'
fees to be fixed by the court, including, without limitation, costs, expenses
and fees on any appeal. The prevailing party will be entitled to recover its
costs of suit, regardless of whether such suit proceeds to final judgment.
[Remainder of Page Intentionally Left Blank]
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<PAGE> 51
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized respective officers, as of the date first
above written.
SUEZ ACQUISITION COMPANY
(CAYMAN) LIMITED
By:
----------------------------
Name:
Title:
SEAGATE TECHNOLOGY, INC.
By:
----------------------------
Name:
Title:
SEAGATE SOFTWARE HOLDINGS, INC.
By:
----------------------------
Name:
Title:
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
<PAGE> 1
EXHIBIT 2.3
INDEMNIFICATION AGREEMENT
Indemnification Agreement, dated as of March 29, 2000, by and among
VERITAS Software Corporation, a Delaware corporation ("Veritas"), Seagate
Technology, Inc., a Delaware corporation ("Seagate"), Suez Acquisition Company
(Cayman) Limited, a limited company organized under the laws of the Cayman
Islands ("SAC"), and each Person who executes a Joinder Agreement (as defined
below) pursuant to Section 4(f) hereof.
WHEREAS, Seagate has determined to sell to SAC (the "Stock Purchase")
all of the outstanding shares of capital stock of the Sold Subsidiaries (as
defined below) pursuant to a Stock Purchase Agreement (the "Stock Purchase
Agreement") between Seagate and SAC, dated as of the date hereof;
WHEREAS, Seagate, Veritas and Victory Merger Sub, Inc., a Delaware
corporation and a wholly owned subsidiary of Veritas ("Victory Sub"), have
previously entered into an Agreement and Plan of Merger and Reorganization (the
"Merger Agreement") dated as of the date hereof, providing for the merger of
Victory Sub with and into Seagate (the "Merger");
WHEREAS, consummation of the Stock Purchase is a condition precedent to
the consummation of the Merger;
WHEREAS, it is a condition precedent to the consummation of the Stock
Purchase and the Merger that this Indemnification Agreement shall be in full
force and effect; and
WHEREAS, the parties to this Agreement have determined that it is
necessary and desirable to set forth certain agreements that will govern various
tax matters, indemnity matters and other matters that may arise in connection
with the Stock Purchase and the Merger.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, provisions and covenants contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
SECTION 1. Definitions. Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Stock Purchase Agreement. The
following terms shall have the following definitions:
"Financing Agreements" means the documents, instruments and agreements
evidencing the Financing as the same may be amended, refinanced, replaced,
modified or supplemented from time to time.
"Loss" or "Losses" means any losses, claims, damages, deficiencies,
liabilities, costs obligations, fines, penalties and expenses of any nature
whatsoever (including reasonable expenses of investigation and reasonable
attorney's fees and disbursements).
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<PAGE> 2
"Material Adverse Effect" means a material adverse change in or effect
with respect to the business, results of operations, properties, financial
condition or prospects of SAC and its Subsidiaries, taken as a whole.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association or other business entity.
"Pre-Purchase Tax Period" means any Tax Period ending on or before the
end of the date of the Stock Purchase.
"Pre-Purchase Taxes" shall mean (i) all liability for Taxes of Seagate
and the Retained Subsidiaries for Pre-Purchase Tax Periods and (ii) all
liability of Seagate and the Retained Subsidiaries for the Pre-Purchase portion
of Taxes of such companies attributable to any Straddle Period as determined in
accordance with Section 6(b) hereof, provided, however, that Taxes in respect of
any transactions as of the date hereof undertaken at the written direction of
Veritas shall be excluded.
"Retained Subsidiary" means any Subsidiary of Seagate that is not a Sold
Subsidiary.
"SAC Indemnitor" means SAC and each Person who executes a Joinder
Agreement pursuant to Section 4(f) hereof.
"Stock Purchase Date" shall mean the date of the Stock Purchase.
"Straddle Period" shall mean a taxable period of Seagate or a Retained
Subsidiary that begins before the Stock Purchase Date and ends after the Stock
Purchase Date.
"Tax" or "Taxes" means (i) any tax, governmental fee or other like
assessment or charge of any kind whatsoever (including, without limitation,
withholding on amounts paid to or by any Person), together with any interest,
penalty, addition to tax or additional amount imposed by any governmental
authority (a "Taxing Authority") responsible for the imposition of any such tax
(domestic or foreign), (ii) liability for the payment of any amounts of the type
described in clause (i) above as a result of Seagate or any of its Subsidiaries,
including the Sold Subsidiaries, being a member prior to the Stock Purchase Date
of an affiliated, consolidated, combined or unitary group, or being a party to
any agreement or arrangement entered into prior to the Stock Purchase Date as a
result of which liability of Seagate or any of its Subsidiaries, including the
Sold Subsidiaries, to a Taxing Authority is determined or taken into account
with reference to the liability of any other person, (iii) liability of Seagate
or any of its Subsidiaries, including the Sold Subsidiaries, for the payment of
any amount as a result of being party to any tax sharing agreement or
arrangement entered into prior to the Stock Purchase Date, or with respect to
the payment of any amount of the type described in clause (i) or (ii) above as a
result of any express or implied obligation arising prior to the Stock Purchase
Date to indemnify any other Person and (iv) liability of Seagate or any of its
Subsidiaries, including the Sold Subsidiaries, as a result of any express or
implied obligation arising prior to the Stock Purchase Date to pay any Taxes of
any Person or to "gross up" any Person for income received or deemed received as
a result of any other Person paying Tax Liabilities of such Person.
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<PAGE> 3
SECTION 2. Representations and Warranties of the SAC Indemnitors. The
SAC Indemnitors jointly and severally represent and warrant to Veritas as of the
date hereof, as of the Closing Date and as of the date of each Joinder Agreement
as follows, each of which such representations and warranties shall survive the
Closing Date:
(a) Organization and Authority of the SAC Indemnitors. Each of the SAC
Indemnitors is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
necessary corporate power and authority to enter into this Agreement, the Stock
Purchase Agreement and each Joinder Agreement to which it is a party, to carry
out its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Stock Purchase Agreement by SAC and each Joinder Agreement by each
Person who executes such Agreement, the performance by the SAC Indemnitors of
their respective obligations hereunder and thereunder and the consummation by
the SAC Indemnitors of the transactions contemplated hereby and thereby have
been duly authorized by all requisite corporate action on the part of the SAC
Indemnitors. This Agreement and the Stock Purchase Agreement have been, and each
Joinder Agreement will be, duly executed and delivered by the SAC Indemnitor
party thereto, and (assuming due authorization, execution and delivery by each
of the other respective parties thereto) each of this Agreement, the Stock
Purchase Agreement and each Joinder Agreement constitutes or, when executed and
delivered in accordance with the terms hereof, will constitute a legal, valid
and binding obligation of the SAC Indemnitor Party thereto enforceable against
the SAC Indemnitor party thereto in accordance with its terms.
(b) No Conflict. The execution, delivery and performance of this
Agreement and the Stock Purchase Agreement by SAC and each Joinder Agreement by
each Person who executes such Agreement does not and will not after giving
effect to the transactions contemplated by the Stock Purchase Agreement and the
Financing (i) violate, conflict with or result in the breach of any provision of
the charter or by-laws (or similar organizational documents) of any SAC
Indemnitor, (ii) violate or conflict with any provision of law, or any order,
judgment or decree of any court or other governmental or other regulatory
authority applicable to any SAC Indemnitor or (iii) violate, conflict with,
result in any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would constitute a default) under any material
contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which any SAC Indemnitor is a party or by
which any SAC Indemnitor is bound or to which any SAC Indemnitor's properties or
assets is subject or (iv) result in the creation of any lien, charge or
encumbrance of any kind whatsoever on any of the properties or assets of any SAC
Indemnitor.
(c) Consents and Approvals. The execution, delivery and performance of
this Agreement and the Stock Purchase Agreement by SAC and each Joinder
Agreement by each Person who executes such Agreement does not and will not
require any material consent, approval, authorization, waiver or other order of,
action by, filing with or notification to any governmental or regulatory
authority, domestic or foreign, except as will be made or obtained prior to
Closing by the SAC Indemnitor party thereto and remains in full force and
effect.
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<PAGE> 4
SECTION 3. Representations and Warranties of Veritas. Veritas represents
and warrants to SAC as of the date hereof and as of the Closing Date as follows,
each of which such representations and warranties shall survive the Closing
Date:
(a) Organization and Authority of Veritas. Veritas is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all necessary corporate power and
authority to enter into this Agreement and the Merger Agreement, to carry out
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Merger Agreement by Veritas, the performance by Veritas of its
obligations hereunder and thereunder and the consummation by Veritas of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite corporate action on the part of Veritas. This Agreement and the Merger
Agreement have been duly executed and delivered by Veritas, and (assuming due
authorization, execution and delivery by each of the other respective parties
hereto and thereto) this Agreement and the Merger Agreement constitute legal,
valid and binding obligations of Veritas enforceable against Veritas in
accordance with their terms.
(b) No Conflict. The execution, delivery and performance of this
Agreement and the Merger Agreement by Veritas does not and will not (i) violate,
conflict with or result in the breach of any provision of the charter or by-laws
of Veritas, (ii) violate or conflict with any provision of law, or any order,
judgment or decree of any court or other governmental or other regulatory
authority applicable to Veritas or (iii) violate, conflict with, result in any
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would constitute a default) under any material contract,
lease, loan agreement, mortgage, security agreement, trust indenture or other
agreement or instrument to which Veritas is a party or by which Veritas is bound
or to which any of Veritas properties or assets is subject or (iv) result in the
creation of any lien, charge or encumbrance of any kind whatsoever on any of the
properties or assets of Veritas.
(c) Consents and Approvals. The execution, delivery and performance of
this Agreement and the Merger Agreement by Veritas does not and will not require
any material consent, approval, authorization, waiver or other order of, action
by, filing with or notification to any governmental or regulatory authority,
domestic or foreign, except as has been made or obtained prior to Closing by
Veritas and remains in full force and effect.
SECTION 4. Certain Covenants.
(a) Access to Books and Records of SAC; Financial Statements and
Reports. Upon the request of Veritas, SAC shall provide to representatives of
Veritas and its Affiliates reasonable access to its books and records and shall
cause its auditors to provide to the auditors of Veritas and its Affiliates
reasonable access to SAC's auditors' work papers. For as long as SAC is required
to do so, SAC shall provide Veritas with copies of any annual or quarterly
financial statements and reports that it is required to deliver to the lenders
providing senior financing in the Financing, and any requests for waivers of any
term or provisions in the Financing Documents, in each case, at the same times
provided for in the Financing Agreements.
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<PAGE> 5
The provisions contained in this Section 4(a) shall terminate and be of no
further effect from and after the fifth anniversary of the Stock Purchase Date.
(b) Retention of Documents. Subject to Section 6(f) hereof, each of the
SAC Indemnitors agrees that it will preserve all documentation relating to the
transactions contemplated by the Stock Purchase Agreement or this Agreement and
each of Veritas and Seagate agrees that it will preserve all documentation
relating to (i) Seagate, the Sold Subsidiaries, and the Retained Subsidiaries
for any Pre-Purchase Tax Period and any Straddle Period, and (ii) the Merger
Agreement, Designated Assets and Designated Liabilities (other than
documentation transferred to SAC pursuant to the terms of the Stock Purchase
Agreement), in each case to the extent required by applicable law or by such
party's document retention policies, whichever is longer, as in effect from time
to time. The provisions contained in this Section 4(b) shall terminate and be of
no further effect from and after the eighth anniversary of the Stock Purchase
Date.
(c) Notice of Certain Events. SAC shall promptly, but in no event more
than five business days after receiving notification or obtaining knowledge
thereof, provide written notice to Veritas of any event which would have a
Material Adverse Effect or materially impair the ability of any SAC Indemnitor
to perform fully its obligations hereunder.
(d) Conduct of Business. Upon and after the Closing Date, SAC will
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business.
(e) Financing Agreements. Prior to the Closing, SAC shall furnish to
Veritas true and complete copies of the Financing Agreements and, promptly
following any amendments thereto, true and complete copies of such amendments.
The provisions contained in this Section 4(e) shall terminate and be of no
further effect from and after the fifth anniversary of the Stock Purchase Date.
(f) Joinder Agreements. On the Closing Date, SAC shall cause each of the
Sold Subsidiaries to execute and deliver to Veritas a Joinder Agreement in the
form of Annex I hereto (a "Joinder Agreement"). Thereafter, SAC shall cause any
Person that becomes a Subsidiary of SAC to, on the date such Person becomes a
Subsidiary of SAC, execute and deliver to Veritas a Joinder Agreement. Any
Person executing a Joinder Agreement shall, upon executing the same, deliver to
Veritas a certified copy of the charter and by-laws, or similar organizational
documents, of such Person together with resolutions of the Board of Directors
(or comparable governing body) of such Person approving the execution and
delivery of the Joinder Agreement.
SECTION 5. Indemnification. In addition to the obligations of the
parties contained in Section 6 hereof, from and after the Closing Date:
(a) Each of the SAC Indemnitors jointly and severally agrees to
indemnify, defend and hold harmless Veritas and Seagate and their respective
Affiliates including the Retained Subsidiaries (the "Veritas Indemnitees") from
and against any and all Losses as they are incurred
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<PAGE> 6
or suffered by any Veritas Indemnitee arising out of or in connection with or
related to (but only to the extent arising out of or in connection with or
related to):
(i) all Liabilities (other than Designated Liabilities and other
than in respect of Taxes, which are the subject of Section 6 hereof) arising out
of or related to (A) the ownership, operations or conduct by Seagate and its
predecessors or Affiliates (other than Veritas and its Subsidiaries) of their
respective businesses, properties, assets or liabilities on or prior to the
Closing Date, or (B) the ownership, operations or conduct by SAC or any of its
Subsidiaries of their respective businesses, properties, assets or liabilities
from and after the Closing Date;
(ii) the enforcement by the Veritas Indemnitees of their
respective rights under this Agreement;
(iii) any breach by SAC of any agreement, obligation, covenant,
representation or warranty contained in this Agreement, the Stock Purchase
Agreement or any agreement or document entered into in connection therewith or
delivered pursuant thereto to which SAC is a party.
(b) Veritas and Seagate agree to indemnify, defend and hold harmless SAC
and each of its Subsidiaries from and against any and all Losses, as they are
incurred or suffered by SAC or its Subsidiaries, arising out of or in connection
with or related to (but only to the extent arising out of or in connection with
or related to):
(i) all Designated Liabilities;
(ii) all Liabilities of or related to the ownership, operations
or conduct by Seagate or the Retained Subsidiaries of their respective
businesses, properties, assets or liabilities subsequent to the Closing Date;
(iii) the enforcement by SAC and its Subsidiaries of their
respective rights under this Agreement; and
(iv) any breach by Veritas of any agreement, obligation,
covenant, representation or warranty contained in this Agreement, the Merger
Agreement or any agreement or document entered into in connection therewith or
delivered pursuant thereto to which Veritas is a party.
SECTION 6. Taxes .
From and after the Closing Date:
(a) Each of the SAC Indemnitors jointly and severally agrees to
indemnify and hold the Veritas Indemnitees harmless from all Losses (other than
Designated Liabilities) attributable to (i) Pre-Purchase Taxes of Seagate and
the Retained Subsidiaries, and (ii) Taxes, whenever arising, of the Sold
Subsidiaries or attributable to assets transferred to the Sold Subsidiaries in
connection with the Stock Purchase and the Merger; provided, however, that the
SAC
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<PAGE> 7
Indemnitors shall not be obligated to indemnify the Veritas Indemnitees for any
Taxes attributable to, or arising from, the transactions contemplated by the OD
Documents (as defined in the Stock Purchase Agreement), other than the Split and
the sale of shares of the capital stock of the Sold Subsidiaries (including any
gain from any Section 338(h)(10) election made with respect to such sale).
(b) For purposes of determining whether Taxes are Pre-Purchase Taxes
described in clause 6(a)(i) above, in the case of a Straddle Period of Seagate
or a Retained Subsidiary, the SAC Indemnitors shall be solely responsible for
all Taxes attributable to the portion of the period ending on, and which
includes, the Stock Purchase Date, and Veritas shall be solely responsible for
all Taxes attributable to the portion of the period which begins after the Stock
Purchase Date. For purposes hereof, the portion of any Tax that is attributable
to the portion of a Straddle Period up to and including the Stock Purchase Date
shall be (i) in the case of a Tax that is not based on net income, gross income,
sales or gross receipts (including real property taxes), the total amount of
such Tax for the period in question multiplied by a fraction, the numerator of
which is the number of days in the Straddle Period up to and including the Stock
Purchase Date, and the denominator of which is the total number of days in such
Straddle Period, and (ii) in the case of a Tax that is based on any of net
income, gross income, sales or gross receipts, the Tax that would be due with
respect to the portion of the Straddle Period through and including the Stock
Purchase Date, if such portion of the Straddle Period were a separate taxable
period, except that exemptions, allowances, deductions or credits that are
calculated on an annual basis (such as the deduction for depreciation or capital
allowances) shall be apportioned on a per diem basis.
The Veritas Indemnitees shall indemnify and hold harmless the SAC
Indemnitors from and against (i) any Taxes of Seagate for which the SAC
Indemnitors are not obligated to indemnify the Veritas Indemnitees under Section
6(a), and (ii) any Taxes arising out of or attributable to the breach of any
representation or covenant contained in this Indemnification Agreement by the
Veritas Indemnitees.
With regard to any Loss for which indemnification is payable hereunder,
such payment shall be treated for federal, state, local and foreign tax purposes
as an adjustment to the Purchase Price in the Stock Purchase Agreement, unless
otherwise required under applicable law. The amount of any such payment shall be
net of any Tax on the Indemnified Party arising from such payment and shall be
adjusted to take into account any net Tax benefit or net Tax detriment realized
by the Indemnified Party that arises from the occurrence of the Loss for which
such payment was made; provided that no payment shall be made by the SAC
Indemnitors in respect of any Taxes payable by any Veritas Indemnitee in respect
of an indemnification payment hereunder (the "Gross-Up Amount") except if and to
the extent that the aggregate cumulative taxable income of the Veritas
Indemnitees that would otherwise give rise to Gross-Up Amounts exceeds the
Available Loss Amount (as reduced from time to time to the extent used to reduce
Pre-Purchase Taxes). The "Available Loss Amount" shall mean an amount determined
by the Closing Date or as soon as practicable thereafter by a Big Five
accounting firm mutually selected by SAC and Veritas as being equal to the best
available estimate as of the date of determination of the excess of (x) the
aggregate losses of Seagate and its consolidated group arising on or before the
Stock Purchase Date or arising from the transactions contemplated by the Stock
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<PAGE> 8
Purchase Agreement or Merger Agreement (but not taking into account any gain or
income recognized in respect of the Designated Assets in Parts A, B and C of
Schedule II of the Merger Agreement), including the exercise of options in
connection with the Merger or the Stock Purchase Agreement, over (y) the amount
of such losses as are estimated will be taken into account in determining the
TRA Amount.
(c)(i) A draft of all Tax Returns relating to Seagate and the Retained
Subsidiaries which are to be filed after the Stock Purchase Date, but which
relate to a Pre-Purchase Tax Period or Straddle Period, including the federal
consolidated income Tax Return of the affiliated group of which Seagate is the
common parent for the period ending with the Merger, shall be prepared by Ernst
& Young or any other Big Five accounting firm (the "Tax Return Preparer") chosen
by SAC. Any such Tax Return shall be prepared in a manner consistent with past
practice and without a change of any election or any accounting method. A copy
of such draft shall be furnished to Veritas at least 30 days prior to the due
date for each such Tax Return for review and comment. Veritas shall be entitled
to suggest such revisions to each such Tax Return as it, in its good faith
belief, considers appropriate to minimize the risk of an audit adjustment to
such Tax Return, which suggestions shall be considered in good faith by SAC. If
Veritas reasonably objects to any position taken in such draft Tax Return,
Seagate shall amend such draft Tax Return to reflect an alternative position
suggested by Veritas, unless Seagate provides Veritas with an opinion from the
Tax Return Preparer that there is substantial authority (within the meaning of
Section 6662 of the Code and applicable Treasury regulations) to support the
initial position. All other decisions regarding Tax Returns shall be made by
SAC. Veritas shall execute and file such Tax Returns as so revised on a timely
basis and shall pay the Taxes shown due on such Tax Return. SAC will pay over to
Veritas the amount of Taxes shown due at least five days prior to the date such
Tax Return is to be filed. SAC agrees that it shall be responsible for the
preparation and filing of all Tax Returns of the Sold Subsidiaries and pay the
Tax shown due thereon.
(ii) The parties shall cooperate with each other in the preparation of
any Tax Return and the conduct of any audit or other proceeding, judicial or
administrative (collectively, a "Tax Proceeding"), involving Taxes of Seagate,
the Sold Subsidiaries and the Retained Subsidiaries. Veritas and SAC, without
charge, shall provide the requesting party with such assistance and documents as
may be reasonably requested by such party in connection with the preparation of
any return or the conduct of any audit or other Tax Proceeding. Veritas and SAC
agree to keep each other fully informed of all matters relating to any Tax
Return, or Tax Proceeding, including without limitation any settlement
negotiations in the event that such Tax Proceeding may involve Taxes for which
an indemnity obligation may arise under this Section 6.
Notwithstanding anything else to the contrary in this Section 6, the
obligations of the SAC Indemnitors pursuant to this Section 6 shall be
calculated by assuming no election has been made pursuant to Section 172(b)(3)
of the Code, Treasury Regulation section 1.1502-21(b)(3), or any similar or
successor provision, to waive the carryback of losses arising from the exercise
of options in connection to the Merger or the Stock Purchase or any losses
arising on or before the Stock Purchase Date and by assuming that all losses,
credits and other tax attributes are used in the order provided under the
applicable provisions of the Code and Treasury Regulations.
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<PAGE> 9
(d)(i) If a claim in respect of Taxes (a "Tax Claim") is made or
threatened by any Taxing Authority that, if successful, could result in an
indemnity obligation under Section 6, Veritas shall promptly notify SAC, stating
the nature and basis of such claim and the amount thereof, to the extent known.
Failure to give such notice shall not relieve the SAC Indemnitors from any
liability that they may have on account of this indemnification or otherwise,
except to the extent that the SAC Indemnitors are materially prejudiced in the
defense of such claim thereby. SAC will have the right, at its option, upon
timely notice to Veritas, to assume at its own expense control of any audit or
other defense of such Tax Claim with its own counsel, and by assuming such
control will be deemed to have acknowledged its indemnification liability for
such claim. SAC's right to control such a Tax Claim will be limited to issues in
respect of which amounts in dispute would be paid by the SAC Indemnitors or for
which the SAC Indemnitors would be liable pursuant to Section 6. Costs of such
Tax Claims are to be borne by the SAC Indemnitors unless the Tax Claim relates
to a Straddle Period.
(ii) In the case of any Tax Proceeding involving liability for
Tax of Seagate, a Retained Subsidiary or any Sold Subsidiary for which Seagate
or a Retained Subsidiary could be liable if such Tax were unpaid (without regard
to any indemnity obligation of SAC), (A) Veritas at its expense and through
counsel of its choosing, shall have the right to observe all hearings, trials
and other proceedings, attend all settlement and other conferences and receive
copies of all material briefs and submissions and (B) notwithstanding the
control rights granted to SAC in clause (i) above, Veritas shall have the right
to control the Tax Proceeding and make all decisions in respect thereof in the
case of any Tax proceeding involving the liability for Tax of Seagate or the
Retained Subsidiaries if Veritas waives its right to obtain indemnity under this
Section 6.
(e) If the parties disagree as to the amount of any payment to be made
under or on any other matter arising under this Section 6, the parties shall
attempt in good faith to resolve such dispute, and any agreed-upon amount shall
be paid to the appropriate party. If such dispute is not resolved within 15 days
following written notice from any party hereto to an other party hereto that a
dispute subject to this subsection (f) exists, then the parties shall jointly
retain an independent accounting firm to resolve the dispute. If and to the
extent that a dispute presents legal issues, the independent accounting firm
shall have authority to consult an independent law firm. The fees of the
independent accounting firm and the independent law firm shall be borne by the
party that does not substantially prevail in the dispute; the independent
accounting firm shall make a determination regarding liability for expenses. The
decision of such independent accounting firm and/or the independent law firm
shall be rendered within ten (10) days following final submissions by the
parties to such firm and shall be final and binding on all parties; provided,
however, that if there is a subsequent adjudication or other determination of a
fact or matter assumed, but not decided in the decision of such accounting firm
or law firm, the decision of such accounting firm or law firm shall be
appropriately adjusted and the parties shall adjust the payments made
accordingly. Following the decision of the independent accounting firm and/or
the independent law firm, the parties shall each take or cause to be taken any
action that is necessary or appropriate to implement such decision of the
independent accounting firm and/or the independent law firm.
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<PAGE> 10
(f) Notwithstanding any other provision of this Agreement, Veritas, on
the one hand, and SAC, on the other hand, shall retain all Tax Returns,
schedules and workpapers, and all material records or other documents relating
thereto, until the later of (i) sixty (60) days following the expiration of the
statute of limitations (including extensions, waivers and mitigations thereof)
of the taxable years to which such Tax Returns and other documents relate or
(ii) one hundred twenty (120) days after the delivery of notice to the other
party to the effect that it shall dispose of such Tax Returns or other
documents, unless it is requested by such party within one hundred twenty (120)
days of delivery of such notice (with which request it shall comply within
thirty (30) days of receipt) that it transfer such Tax Returns or other
documents to such other party. Any information obtained under this Section 6
shall be kept confidential, except as may be otherwise necessary in connection
with the filing of Tax Returns or claims for refund or in conducting any audit
or other proceeding.
SECTION 7. Termination of Tax Sharing Agreement. All tax sharing or
similar agreements (if any) between Seagate and its Affiliates, on the one hand,
and the Sold Subsidiaries, on the other, are terminated as of the Closing Date
without any further liability to any party thereto and shall be of no further
force and effect. All claims for indemnification for Taxes between the parties
shall be made and resolved in accordance with the terms of this Agreement.
SECTION 8. [Reserved]
SECTION 9. Indemnification Procedure.
(a) Except as may be otherwise provided pursuant to Section 6 hereof,
any party entitled to indemnification hereunder (each, an "Indemnified Party")
shall, with respect to claims asserted against any such Indemnified Party by any
third party (a "Third-Party Claim"), give written notice to the party against
whom indemnification is sought (the "Indemnifying Party") of any liability which
might give rise to a claim for indemnity hereunder within thirty (30) days of
the receipt of any written claim or notice from any such third party, but no
later than twenty (20) days prior to the date any answer, responsive pleading or
other response may be due with respect thereto, and with respect to any other
matter for which any Indemnified Party may seek indemnification hereunder, the
Indemnified Party shall give prompt written notice to the Indemnifying Party of
any liability which might give rise to a claim for indemnity; provided, however
that any failure to give such notice will not release the Indemnifying Party
from its obligations hereunder except to the extent that the rights of the
Indemnifying Party are materially prejudiced thereby.
(b) Except with respect to claims governed by Section 6 hereof which
shall be governed by the provisions thereof, the Indemnifying Party, upon
receipt of such notice, shall be entitled to participate in or, at the
Indemnifying Party's option, assume at its own expense the defense, appeal or
settlement of such Third-Party Claim with respect to which such indemnity has
been invoked with counsel of its own choosing (who shall be reasonably
satisfactory to the Indemnified Party); provided, however, that if the
Indemnifying Party assumes the defense, appeal or settlement of such Third-Party
Claim, (i) the Indemnified Party shall be entitled to
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<PAGE> 11
employ one counsel to represent itself if an actual conflict of interest exists
in the opinion of counsel to the Indemnified Party between the Indemnifying
Party and the Indemnified Party in respect of such Third-Party Claim and in that
event and only in that event the reasonable fees and expenses of such counsel
shall be paid by the Indemnifying Party (it being understood that all
Indemnified Parties may employ not more than one counsel to represent them at
the expense of the Indemnifying Party) and (ii) the Indemnified Party shall
nevertheless be entitled to participate in (but not direct) the defense thereof
with counsel of its own choice and, subject to clause (i) above, at its own
expense. Any Indemnified Party is hereby authorized prior to the date on which
it receives written notice from the Indemnifying Party that it intends to assume
the defense, appeal or settlement of such Third-Party Claim, to file any motion,
answer or other pleading and take such other action which it shall reasonably
deem necessary to protect its interest or that of the Indemnifying Party until
the date on which the Indemnified Party receives such notice from the
Indemnifying Party.
(c) No claim or demand may be settled by the Indemnified Party without
the consent of the Indemnifying Party, which consent shall not be unreasonably
delayed or withheld. Unless the claim or demand seeks only dollar damages (all
of which are to be paid by the Indemnifying Party), no such claim or demand may
be settled by the Indemnifying Party without the consent of the Indemnified
Party, which consent shall not be unreasonably delayed or withheld.
(d) The parties agree to cooperate in defending such Third-Party Claims
and the Indemnified Party shall provide such cooperation and such access to its
books, records and properties as the Indemnifying Party may reasonably request
with respect to any matter for which indemnification is sought hereunder, and
the parties hereto agree to cooperate with each other in order to insure the
proper and adequate defense thereof.
(e) With regard to Third-Party Claims for which indemnification is
payable hereunder, indemnification shall be paid by the Indemnifying Party
within five (5) business days following the earlier to occur of:
(i) entry of a final non-appealable judgment by a court of
competent jurisdiction or arbitration panel against an Indemnified Party which
has not been stayed pending appeal; or
(ii) a settlement of the claim, in accordance with the terms of
such settlement.
With regard to any claim for Taxes subject to Section 6 hereof,
indemnification shall be paid by the SAC Indemnitees within five (5) business
days following receipt by SAC of written notice from Veritas stating that any
amount subject to indemnification under such Section 6 has been paid by Veritas
and the amount thereof and the indemnity payment requested.
With regard to any other claim for which indemnification is payable
hereunder, indemnification shall be paid promptly by the Indemnifying Party upon
demand by the Indemnified Party but in any event within thirty (30) business
days following any such demand, provided that any such demand shall include a
reasonably detailed description of the claims giving rise to such demand.
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(f) The Indemnifying Parties agree to reimburse the Indemnified Parties
for any indemnifiable Losses under the provisions of this Agreement as such
Losses are incurred, provided, however, that if it is finally determined that
any Indemnified Party was not entitled to any amount paid as indemnity with
respect to such Losses, such Indemnified Party shall promptly refund all amounts
to which such Indemnified Party was not entitled to the Indemnifying Parties
that paid such amounts.
SECTION 10. No Contribution. The Indemnifying Parties shall not be
entitled to seek or obtain any contribution, reimbursement or other
participation, direct or indirect, from any Indemnified Party in respect of any
payment made or to be made by any Indemnifying Party hereunder or arising out of
this Agreement, notwithstanding the fact that the Loss for which any
Indemnifying Party is liable results from or is contributed to by any breach by
any Indemnified Party or any misrepresentation by any Indemnified Party
contained in the Merger Agreement, the Stock Purchase Agreement, this Agreement
or any agreement, document, instrument or schedule referred to herein or therein
or contemplated hereby or thereby.
SECTION 11. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect; provided, however that if any mutual covenant contained herein is
declared invalid or unenforceable with respect to Veritas and its Affiliates
(including Seagate and any Retained Subsidiary following the Closing), on the
one hand, or SAC and its Affiliates, on the other hand, by any court of
competent jurisdiction or governmental authority, such mutual covenant shall
become invalid or unenforceable with respect to the opposite group to such
covenant and provided further, that this Section 11 shall not be construed to
affect any other rights of any party hereto under applicable principles of
contract law, including without limitation the principles of failure of
consideration and mutual dependency.
SECTION 12. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by verified telecopy, by expedited delivery
service (such as Federal Express) or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
(i) if to Veritas (and, after Closing, Seagate), to:
VERITAS Software Corporation
1600 Plymouth Street
Mountain View, California 94043
Attention: General Counsel
Facsimile: 650-526-2581
Telephone: 650-335-8000
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<PAGE> 13
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
Attention: Michael A. Schwartz, Esq.
Facsimile: 212-728-8111
Telephone: 212-728-8000
(ii) if to Seagate (prior to Closing), to:
Seagate Technology, Inc.
920 Disc Drive
P.O. Box 66360
Scotts Valley, California 95067
Attention: General Counsel
Facsimile: 831-438-6675
Telephone: 831-439-5370
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Larry W. Sonsini, Esq.
and to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market Street
Spear Tower, Suite 3300
San Francisco, California 94105
Attention: Michael J. Kennedy, Esq.
Facsimile: 415-947-2099
Telephone: 415-947-2000
(iii) if to SAC, to:
Suez Acquisition Company (Cayman) Limited
c/o Silver Lake Partners, L.P.
2725 Sand Hill Road
Building C, Suite 950
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<PAGE> 14
Attention: Dave Roux
Facsimile: 650-2338125
Telephone: 650-233-8121
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: William Curbow, Esq.
Facsimile: 212-455-2502
Telephone: 212-455-2000
and to:
TPG Partners III, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: Richard A. Ekleberry, Esq.
Facsimile: 817-871-4010
Telephone: 817-871-4000
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Paul J. Shim, Esq.
Facsimile: 212-225-3999
Telephone: 212-225-2000
Such notice shall be effective on the day following receipt of delivery in
person, by verified telecopy or by expedited delivery service and shall be
effective four days after mailing in accordance with the foregoing. The person
to whom notice is to be given, and any address, may be changed from time to time
in the manner set forth above (provided that any such change shall be effective
only upon receipt thereof).
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<PAGE> 15
SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. Venue for any legal action under this Agreement shall be in the
federal or state courts located in the State and County of New York, All parties
hereunder hereto hereby submit themselves to the jurisdiction of such courts for
the purpose of this Agreement and hereby waive trial by jury in any action,
counterclaim or proceeding of any kind arising under or out of or in connection
with this Agreement, the negotiations leading thereto, the inducements to the
parties to enter into this Agreement and to the transactions it contemplates.
SECTION 14. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 15. Parties-in-Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 16. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original, but both of which
shall constitute one and the same agreement, provided that at least one
counterpart is executed by each party herein named.
SECTION 17. Successors. All agreements of the parties in this Agreement
shall bind their respective successors, provided that upon written request by
SAC following the sale of any of its Subsidiaries to an unaffiliated third
party, Veritas shall execute and deliver a release of such Subsidiary of its
obligations hereunder.
SECTION 18. Assignment. This Agreement is not assignable by either party
hereto without the prior written consent of the other party hereto.
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<PAGE> 16
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above mentioned.
VERITAS SOFTWARE CORPORATION
By:
-------------------------------------------
Its:
------------------------------------------
SEAGATE TECHNOLOGY, INC.
By:
-------------------------------------------
Its:
------------------------------------------
SUEZ ACQUISITION COMPANY (CAYMAN) LIMITED
By:
-------------------------------------------
Its:
------------------------------------------
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<PAGE> 17
ANNEX I
JOINDER AGREEMENT
Joinder Agreement, dated as of this day of ___________ _____, by
and among VERITAS Software Corporation, a Delaware corporation ("Veritas"),
Seagate Technology, Inc., a Delaware Corporation ("Seagate"), and the
undersigned (an "SAC Indemnitor").
Reference is made to that certain Indemnification Agreement (the
"Indemnification Agreement"), dated as of March __, 2000, by and among Veritas,
Seagate, Suez Acquisition Company (Cayman) Limited, a limited company organized
under the laws of the Cayman Islands ("SAC"), and the Subsidiaries of SAC from
time to time party thereto, as the same may from time to time be amended.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Indemnification Agreement.
By executing this Joinder Agreement, the SAC Indemnitor hereby
agrees to be bound by the terms of the Indemnity Agreement as if it was an
original signatory to such Agreement and shall be deemed to be a SAC Indemnitor
thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Joinder
Agreement as of the date first above written.
[SAC INDEMNITOR]
-----------------------------
Name:
Agreed to and Accepted by:
VERITAS SOFTWARE CORPORATION
- -----------------------------
Name:
Title:
SEAGATE TECHNOLOGY, INC.
- -----------------------------
Name:
Title:
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<PAGE> 1
EXHIBIT 2.4
Suez Acquisition Company (Cayman) Limited
c/o Silver Lake Partners, L.P.
March 29, 2000
VERITAS Software Corporation
1600 Plymouth Street
Mountain View, California 94043
Ladies and Gentlemen:
This letter sets forth our agreement with respect to certain matters
related to (i) the Stock Purchase Agreement between Suez Acquisition Company
(Cayman) Limited ("SAC") and Seagate Technology, Inc. (the "Company") dated as
of the date hereof (the "Stock Purchase Agreement") and (ii) the Agreement and
Plan of Merger among VERITAS Software Corporation ("VERITAS"), Victory
Acquisition Sub, Inc. and the Company dated as of the date hereof (the "Merger
Agreement").
1. No-Shop. Prior to termination of the Stock Purchase Agreement in accordance
with its terms, VERITAS shall not (directly or indirectly through
subsidiaries or otherwise), and shall direct its officers, directors,
affiliates or employees or any investment banker, attorney or other advisor
or representative retained by any of them not to, directly or indirectly,
(i) solicit, initiate, encourage or induce the making, submission or
announcement of any Seller Acquisition Proposal (as defined in the Stock
Purchase Agreement), (ii) participate in any discussions, negotiations or
other communications with any person regarding, or furnish to any person
any information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes or may reasonably
be expected to lead to, any Seller Acquisition Proposal, (iii) approve,
endorse or recommend any Seller Acquisition Proposal, or (iv) enter into
any letter of intent, contract, agreement, understanding or commitment
contemplating or otherwise relating to any Seller Acquisition Transaction.
VERITAS shall notify SAC promptly after receiving any inquiry or other
communication regarding any Seller Acquisition Proposal.
2. Alternative Transaction Fee. In the event that: (i) the Stock Purchase
Agreement is terminated pursuant to Sections 10.1(g) or (h), (ii) in the
case of a termination by SAC of the Stock Purchase Agreement, SAC shall not
be in breach of any of its representations and warranties, covenants or
agreements under the Stock Purchase Agreement such that the Company would
not then be required to consummate the transactions contemplated by the
Stock Purchase Agreement and (iii) within 90 days of the date of such
termination, VERITAS enters into any agreement or agreements with respect
to a Seller Acquisition Transaction, VERITAS shall,
<PAGE> 2
prior to or simultaneously with entering into any such agreement or
agreements, pay to SAC (or its designees), $50 million in immediately
available funds.
3. Governing Law. This letter agreement will be governed by and construed and
interpreted in accordance with the laws of the State of New York.
4. Counterparts. This letter agreement may be executed in separate
counterparts, each of which shall constitute an original and all of which,
taken together, shall constitute one and the same instrument.
5. Assignment. The rights and obligations of each party hereto may not be
assigned to any other party (by operation of law or otherwise) without the
written consent of the other party hereto.
6. Specific Performance. In view of the uniqueness of the agreements contained
in this letter agreement and the transactions contemplated hereby and the
fact that the parties hereto would not have an adequate remedy at law for
money damages in the event that any obligation under this letter agreement
is not performed in accordance with its terms, each of the parties hereto
therefore agrees that each party hereto shall be entitled to specific
enforcement of the terms of this letter agreement in addition to any other
remedy to which such party may be entitled, at law or in equity.
Very truly yours,
SUEZ ACQUISITION COMPANY (CAYMAN) LIMITED
By: /s/ JAMES A. DAVIDSON
--------------------------------------
Name: James A. Davidson
Title: Managing Member
Accepted and Agreed as of
the date first written above:
VERITAS SOFTWARE CORPORATION
By: /s/ MARK LESLIE
-------------------------
2
<PAGE> 1
EXHIBIT 99.1
Seagate, VERITAS Software and Silver Lake Announce Landmark Transaction
Page 1
FOR IMMEDIATE RELEASE
SEAGATE, VERITAS SOFTWARE AND INVESTOR GROUP LED BY SILVER LAKE
PARTNERS ANNOUNCE LANDMARK $20 BILLION TRANSACTION
SCOTTS VALLEY and MOUNTAIN VIEW, Calif. - March 29, 2000 - Seagate Technology
(NYSE:SEG), VERITAS Software (Nasdaq:VRTS) and an investor group led by Silver
Lake Partners that includes Seagate management and Texas Pacific Group today
announced a landmark $20 billion transaction. In the transaction, VERITAS
Software will acquire all of the VERITAS Software shares currently held by
Seagate, certain securities and cash. The investor group will acquire the
Seagate operating businesses for cash. Seagate stockholders will receive shares
of VERITAS Software common stock and cash for their shares of Seagate common
stock.
For VERITAS Software, the transaction is accretive to earnings per share, by
decreasing total shares outstanding and earning interest on any cash retained.
In addition, the transaction eliminates the share overhang of Seagate's
approximate 33 percent ownership in VERITAS Software and increases stockholder
liquidity. For Seagate, the transaction unlocks the value of Seagate's assets on
a tax efficient basis for the benefit of its stockholders.
In this unified transaction, VERITAS Software will acquire Seagate, which then
will exclusively hold 128 million shares of VERITAS Software, the investment
securities of SanDisk, Gadzoox Networks, CVC, and Dragon Systems and cash.
Immediately prior to this merger, a new company formed by an investor group led
by Silver Lake will purchase all of Seagate's operating businesses for
approximately $2 billion in cash.
In the transaction, the Seagate stockholders will receive merger consideration
consisting of:
o 109.3 million VERITAS Software shares issued for the approximately 128
million VERITAS Software shares Seagate presently owns,
o additional VERITAS Software shares issued for the investment
securities and, at VERITAS Software's election, for up to $750 million
in retained cash, and
o all cash on the Seagate balance sheet in excess of $800 million of
cash working capital and after giving effect to VERITAS Software
retained cash, debt repayment, taxes and other liabilities.
Seagate stockholders would receive total consideration of approximately $77.50
per share for each share of Seagate common stock, consisting of approximately
0.467 VERITAS Software shares and approximately $5 in cash, based on the closing
market prices of the investment securities, as of March 28, 2000, and assuming a
$500 million cash retention by VERITAS Software, and Seagate's anticipated cash
position at closing. This transaction has no collar.
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<PAGE> 2
Seagate, VERITAS Software and Silver Lake Announce Landmark Transaction
Page 2
This transaction is structured so that the issuance of the VERITAS Software
shares should be tax-free to the Seagate stockholders. Seagate stockholders may
also be entitled to receive additional cash payments for tax refunds at or after
closing. The final amount of additional VERITAS Software shares and cash per
share will be determined at closing and will depend on a number of factors
including the final cash position of Seagate and the market prices of the
involved securities.
"This transaction represents an unlocking of the value of Seagate for its
stockholders," said Lawrence Perlman, co-chairman of Seagate. "Our stockholders
will receive both the value of VERITAS Software stock in a tax efficient manner
as well as significant value for Seagate's core business."
"I believe that becoming a private company will allow us to focus on
strengthening our core storage business," said Steve Luczo, president and CEO of
Seagate Technology. "In particular, we will continue to implement advanced
manufacturing technologies, drive operational efficiencies, and position the
company for growth as storage-centric computing expands across multiple markets.
We believe that, given our financial partners' long-term view, we will have
greater flexibility to meet these operating and strategic objectives and our
employees will have a broad opportunity to participate in start-up equity
ownership."
"By leveraging the value of VERITAS Software stock, this landmark transaction
creates significant benefits for all parties involved," said Mark Leslie,
chairman and CEO, VERITAS Software. "We would like to welcome Seagate
stockholders as they join our VERITAS Software stockholder base and realize
greater value for their Seagate shares. Upon the close of this transaction, all
VERITAS Software stockholders will benefit by owning shares in the industry's
leading data availability company which, following the transaction, will have a
significantly larger available float, reduced shares outstanding and additional
cash for strategic investments and other purposes."
"This transaction epitomizes the mission of Silver Lake," said Roger McNamee,
co-founder of Silver Lake Partners. "As a private company, Seagate will be free
to make the investments and take the strategic steps necessary to extend its
leadership position in the storage industry."
Seagate is the global disc drive market share leader. Seagate's core business
strategy is based on time-to-market leadership in storage technology, maximizing
operational speed, flexibility and efficiency, and maintaining strategic
relationships with OEM and distribution customers. Seagate is committed to
continuous improvements in productivity and operational efficiency in a
challenging business environment. With a solid balance sheet, a strong cash
position, and the financial commitment of the investment group led by Silver
Lake, the new Seagate will be able to invest aggressively in the core business
and in emerging growth markets.
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<PAGE> 3
Seagate, VERITAS Software and Silver Lake Announce Landmark Transaction
Page 3
Silver Lake Partners originated and led this transaction, and organized the
investor group. Silver Lake Partners and Texas Pacific Group are the largest
investors in the investor group that also includes August Capital, Integral
Capital Partners, Chase Capital Partners, and Goldman Sachs & Co.. The Chase
Manhattan Corporation and Goldman, Sachs & Co. have committed to provide all of
the debt financing necessary to complete the transaction.
The transaction is expected to close in the third quarter of 2000, subject to
the approval of VERITAS Software and Seagate stockholders, funding of the debt
commitments and clearance by the U.S. Securities and Exchange Commission, as
well as clearance under antitrust laws and other customary closing conditions.
Morgan Stanley Dean Witter acted as financial advisor to the Board of Directors
of Seagate for this transaction. Credit Suisse First Boston acted as financial
advisor to the Board of Directors of VERITAS Software for this transaction.
There will be a conference call for news media and the financial community held
today at 2:00 p.m. PST hosted by Steve Luczo, president and CEO of Seagate; Mark
Leslie, chairman and CEO of VERITAS Software; Lawrence Perlman, co-chairman of
Seagate; and Roger McNamee, co-founder of Silver Lake Partners. In order to
participate, in North America please call 1-800-230-1096, in Europe call
612-332-0226 and in Asia call 612-288-0337 to connect to the conference call.
Questions from the financial community will be addressed at the end of the
teleconference. Questions from the media will be addressed by contacting Seagate
and VERITAS Software's media relations. A replay of the conference call will be
available after 7:30 p.m. PST. In order to listen to the replay, in the United
States call 1-800-475-6701 and internationally call 320-365-3844. The access
code for both the U.S. and international replay is: 510256.
ABOUT SEAGATE
Seagate Technology, Inc. (NYSE:SEG) is a leading provider of technology and
products enabling people to store, access, and manage information. The Company
is committed to providing best-in-class products to help people get information
when, where and how they want it. Seagate is the world's largest manufacturer of
disc drives magnetic discs and read-write heads, an innovator in tape drives,
and a leading developer of Business Intelligence software. Seagate can be found
around the globe and on the World Wide Web at http://www.Seagate.com. For
automated news, stock and financial information by phone, dial toll-free
877-SEG-NYSE. Outside the U.S. and Canada, dial 760-704-4368.
ABOUT VERITAS SOFTWARE
For enterprise customers who demand the continuous availability of
business-critical information, VERITAS Software Corporation (Nasdaq:VRTS), the
industry's leading enterprise-class application storage management software
provider, ensures information availability from business-critical applications
by delivering integrated, cross-platform storage management software solutions.
VERITAS Software's products enable Business Without Interruption(TM)and are
designed to protect, access and manage business-critical application
information. VERITAS Software products are delivered through a global end user
sales force and a worldwide network of enterprise VARs, resellers and OEM
partners. VERITAS Software's
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<PAGE> 4
Seagate, VERITAS Software and Silver Lake Announce Landmark Transaction
Page 4
corporate headquarters is located at 1600 Plymouth Street, Mountain View, CA
94043. Telephone: (650) 335-8000. Fax: (650) 335-8050. Email:
[email protected]. WWW site: http://www.VERITAS.com/.
ABOUT SILVER LAKE PARTNERS
Silver Lake Partners is the leading private equity investment firm focused on
large-scale investments in technology and related growth companies. The
principals of Silver Lake, which include Jim Davidson, Glenn Hutchins, Dave Roux
and the partners of Integral Capital Partners and Kleiner, Perkins, Caufield &
Byers, have extensive experience investing in, managing, and financing
technology and other growth companies. Silver Lake also works closely with a
network of technology industry executives, who bring valuable insight and
assistance in sourcing transactions, analyzing industry trends, building
management teams, and adding value to Silver Lake's portfolio companies. Silver
Lake has offices in Menlo Park, California and New York, New York. Additional
information about Silver Lake is available at http://www.slpartners.com
ABOUT INTEGRAL PARTNERS
Founded in 1991, Integral Capital Partners is a family of investment
partnerships created by portfolio managers Roger McNamee and John Powell and the
venture capital firm Kleiner Perkins Caufield & Byers (KPCB). Morgan Stanley
Dean Witter has been a partner of Integral from its earliest days, serving as
exclusive placement agent, prime broker and custodian for the partnerships. The
Integral partnerships seek maximum capital appreciation from investing in the
securities of expansion stage private companies and growth stage public
companies in the information and life sciences industries. Integral's past
venture investments include Agile Software, Brio, Cerent (now part of Cisco),
Extreme Networks, Flextronics, GoTo.com, Healtheon, Homestore.com, Informatica,
Inktomi, Intuit, MapInfo, Pivotal, Rambus, Sycamore Networks, Think Systems (now
part of i2 Technologies), and Visio. In addition to its founders, Integral's
principals include Pamela Hagenah, Glen Kacher and Rob McCormack. KPCB and
Morgan Stanley remain active partners. Additional information about Integral is
available at http://www.integralcapital.com
ABOUT TEXAS PACIFIC GROUP
TPG is a private equity investment firm with over $7 billion in committed equity
capital. Over the past decade, TPG has completed over 35 transactions, invested
over $3 billion in equity capital including over $1.5 billion in technology
investments. Current TPG technology portfolio companies include Advanced TelCom
Group, DoveBid.com, First World Communications, Gemplus, Globespan
Semiconductor, Interlink Group, On Semiconductor, Paradyne Networks, Zhone
Technologies and Zilog. Other TPG portfolio companies include America West
Airlines, Beringer Wine Estates, Continental Airlines, Del Monte Foods, Ducati
Motorcycles, J.Crew, Oxford Health Plans , and Virgin Entertainment.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The foregoing information contains forward-looking statements within the meaning
of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995. Such statements regarding, among other things, the timing, effect, and
potential value of the transaction, are based on the current expectations and
beliefs of managements of Seagate and VERITAS Software, and are subject to a
number of factors and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements. In
particular, the following factors, among others, could cause actual results to
differ materially from those described in the forward-looking statements: the
failure of the transaction to close due to the failure to obtain regulatory or
other approvals; the failure of the transaction to close due to the failure of
Silver Lake Partner's financing source to fulfill certain financial commitments;
the failure of the Seagate or VERITAS Software stockholders to approve the
merger; the risk of unanticipated costs of effecting the transaction; the risk
that liabilities will arise and the new private company will be unable or
unwilling to satisfy its proposed indemnification obligations to VERITAS
Software; the risk that the economic terms of the transaction will vary
substantially due to changes in the market prices of VERITAS software or the
investment securities and the impact of the operations of Seagate and the
resulting cash balances at closing;
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<PAGE> 5
Seagate, VERITAS Software and Silver Lake Announce Landmark Transaction
Page 5
and the risk that the Internal Revenue Service will determine that the
transaction is taxable to the Seagate stockholders.
For a detailed discussion of these and other cautionary statements, please refer
to the joint proxy statement/prospectus to be filed by both Seagate and VERITAS
Software as described below, as well as the companies' filings with the
Securities and Exchange Commission, especially in the "Factors Affecting Future
Operating Results" section of the Management's Discussion and Analysis of
Financial Condition and Results of Operations section of Seagate's Form 10-K its
fiscal year ended July 2, 1999 and its Form 10-Q for its fiscal quarter ended
December 31, 1999, and in the "Factors That May Affect Future Results" section
of the Management's Discussion and Analysis of Financial Condition and Results
of Operations" section of VERITAS Software's Form 10-Q for its fiscal quarter
ended September 30, 1999.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Investors and security holders of both Seagate and VERITAS Software are advised
to read the joint proxy statement/prospectus regarding the business transaction
referenced in the foregoing information, when it becomes available, because it
will contain important information. Seagate and VERITAS Software expect to mail
a joint proxy statement/prospectus about the transaction to their respective
stockholders. Such joint proxy statement/prospectus will be filed with the
Securities and Exchange Commission by both companies. Investors and security
holders may obtain a free copy of the joint proxy statement/prospectus (when
available) and other documents filed by the companies at the Securities and
Exchange Commission's web site at http://www.sec.gov. The joint proxy
statement/prospectus and such other documents may also be obtained from Seagate
or VERITAS Software by directing such requests to the respective investor
relations contacts listed below.
Seagate and its officers and directors may be deemed to be participants in the
solicitation of proxies from Seagate 's stockholders with respect to the
proposed transaction. Information regarding such officers and directors is
included in Seagate 's proxy statement for its annual meeting of stockholders
filed with the Securities and Exchange Commission on October 4, 1999, and in its
S-4 Registration Statement, as subsequently amended, on September 3, 1999. These
documents are available free of charge at the Securities and Exchange
Commission's web site at http://www.sec.gov and from the Seagate investor
relations' contacts listed below.
VERITAS Software and its officers and directors may be deemed to be participants
in the solicitation of proxies from VERITAS Software's stockholders with respect
to the proposed transaction. Information regarding such officers and directors
is included in VERITAS Software's S-1 Registration Statements filed with the
Securities and Exchange Commission on September 22, 1999, as supplemented. This
document is available free of charge at the Securities and Exchange Commission's
Web site at http://www.sec.gov and from the VERITAS Software investor relations'
contacts listed below.
Seagate and Seagate Technology are registered trademarks of Seagate Technology,
Inc. All trademarks are the property of their respective owners.
VERITAS is a registered trademark of VERITAS Software Corporation in the US and
other countries. The VERITAS logo and Business Without Interruption are
trademarks of VERITAS Software Corporation in the US and other countries. Other
product names mentioned herein may be trademarks and/or registered trademarks of
their respective companies.
- --------------------------------------------------------------------------------
EDITOR'S NOTE:
o FOR ADDITIONAL INFORMATION ON THE SEAGATE TECHNOLOGY/VERITAS
SOFTWARE/SILVER LAKE PARTNERS TRANSACTION, GO TO SEAGATE'S ONLINE
INFORMATION SITE AT www.seagate.com OR www.veritas.com
- --------------------------------------------------------------------------------
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<PAGE> 6
Seagate, VERITAS Software and Silver Lake Announce Landmark Transaction
Page 6
- --------------------------------------------------------------------------------
o B-ROLL AND VIDEO FOOTAGE FEATURING SEAGATE PRESIDENT AND CEO, STEVE LUCZO
WILL BE AVAILABLE FOR SATELLITE DOWNLOAD AT: MARCH 29, 2000, BETWEEN 14:30
- 15:30 PST AND AGAIN AT 16:30 - 17:30 PST BROADCASTED ON GALAXY 6
TRANSPONDER 12 (C BAND). THIS TAPE WILL BE RE-FED ON MARCH 30, 2000 AT THE
SAME TIMES ON THE SAME SATELLITE. VERITAS SOFTWARE B-ROLLS ARE AVAILABLE
UPON REQUEST.
- --------------------------------------------------------------------------------
FOR MORE INFORMATION CONTACT:
SEAGATE TECHNOLOGY VERITAS SOFTWARE
Media Relations Media Relations
- --------------- ---------------
Julie A. Still 831-439-2276 Erin Jones 805-783-4528
[email protected] [email protected]
- ------------------------------- ----------------------
Woody Monroy 831-439-2838 Rebecca Glenn 650-318-4362
[email protected] [email protected]
- ---------------------------- -------------------------
Philip D. Montero 831-439-2862 Martha Blackwell 805-782-4175
[email protected] [email protected]
- ---------------------------------- ----------------------------
Investor Relations Investor Relations
Bill Rowley 831-439-2371 Dave Galiotto 650-318-4047
[email protected] [email protected]
Denise Franklin 831-439-2789 Borah Kim 650-318-4514
[email protected] [email protected]
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