EXHIBIT 2.1
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
TABLE OF CONTENTS
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STOCK PURCHASE AGREEMENT............................................. 1
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................ 5
2.3 Closing..................................................... 5
2.4 Closing Deliveries by Seller and SSHI....................... 6
2.5 Closing Deliveries by Purchaser............................. 6
2.6 Adjustment of Required Cash................................. 6
2.7 Transaction Structure....................................... 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER................ 8
3.1 Organization; Good Standing................................. 8
3.2 Charter Documents........................................... 8
3.3 Subsidiaries................................................ 8
3.4 Capital Structure........................................... 8
3.5 Authority................................................... 9
3.6 Conflicts................................................... 9
3.7 Consents.................................................... 10
3.8 SEC Filings; Seller Financial Statements.................... 10
3.9 [Reserved].................................................. 11
3.10 Absence of Certain Changes or Events........................ 11
3.11 Tax Matters................................................. 11
3.12 Compliance.................................................. 13
3.13 Permits..................................................... 13
3.14 Litigation.................................................. 13
3.15 Brokers' and Finders' Fees.................................. 13
3.16 Employee Benefit Plans...................................... 13
3.17 Absence of Liens............................................ 15
3.18 Environmental Matters....................................... 15
3.19 Labor Matters............................................... 17
3.20 Agreements, Contracts and Commitments....................... 17
Statements; Registration Statement; Proxy
3.21 Statement/Prospectus........................................ 17
3.22 Board Approval.............................................. 18
3.23 State Takeover Statutes..................................... 18
3.24 Fairness Opinion............................................ 18
3.25 Intellectual Property....................................... 18
3.26 Assets...................................................... 19
3.27 Insurance................................................... 19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER.............. 19
4.1 Organization; Good Standing................................. 19
4.2 Charter Documents........................................... 20
4.3 Authority................................................... 20
4.4 Conflicts................................................... 20
4.5 Consents.................................................... 20
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4.6 Litigation.................................................. 21
4.7 Statements; Registration Statement; Proxy Statement......... 21
4.8 Financing................................................... 21
4.9 Delaware Law................................................ 21
4.10 Newly Organized............................................. 21
4.11 Related Agreements.......................................... 21
4.12 Solvency.................................................... 21
4.13 No Amendment to VERITAS Merger Agreement.................... 22
ARTICLE V CONDUCT PRIOR TO CLOSING.................................. 22
5.1 Conduct of Business......................................... 22
5.2 Restrictions on Conduct of Business......................... 22
ARTICLE VI ADDITIONAL AGREEMENTS.................................... 25
6.1 Registration Statement; Proxy Statement; Other Filings...... 25
6.2 Meeting of Seller Stockholders.............................. 26
6.3 Access to Information....................................... 27
6.4 Confidentiality............................................. 27
6.5 No Solicitation............................................. 28
6.6 Public Disclosure........................................... 29
6.7 Legal Requirements.......................................... 29
6.8 Notification of Certain Matters............................. 29
6.9 Commercially Reasonable Efforts and Further Assurances...... 29
6.10 Indemnification............................................. 30
6.11 Regulatory Filings; Reasonable Efforts...................... 30
6.12 Use of Names................................................ 31
6.13 Debt Offer.................................................. 31
6.14 Commitment Letters; Rolled Options.......................... 31
6.15 Transaction Expenses........................................ 31
6.16 Non-Assignable Assets....................................... 32
ARTICLE VII EMPLOYEE MATTERS........................................ 32
7.1 Employee Liabilities........................................ 32
7.2 Employee Benefit Plans...................................... 32
7.3 WARN Act.................................................... 33
ARTICLE VIII TAX MATTERS............................................ 33
8.1 Conveyance Taxes............................................ 33
8.2 Section 338(h)(10) Election................................. 33
8.3 Tax Matters Schedule........................................ 34
ARTICLE IX CONDITIONS TO CLOSING.................................... 34
Conditions to Obligations of Each Party to Effect the
9.1 Closing..................................................... 34
9.2 Additional Conditions to Obligations of Seller.............. 35
9.3 Additional Conditions to the Obligations of Purchaser....... 35
ARTICLE X TERMINATION, AMENDMENT AND WAIVER......................... 36
10.1 Termination................................................. 36
10.2 Notice of Termination; Effect of Termination................ 38
10.3 Fees and Expenses........................................... 38
10.4 Amendment................................................... 39
10.5 Extension; Waiver........................................... 39
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ARTICLE XI INDEMNIFICATION.......................................... 40
11.1 Survival.................................................... 40
11.2 Indemnification............................................. 40
ARTICLE XII GENERAL PROVISIONS...................................... 40
12.1 Notices..................................................... 40
12.2 Interpretation.............................................. 42
12.3 Counterparts................................................ 42
12.4 Entire Agreement............................................ 42
12.5 Severability................................................ 42
12.6 Other Remedies; Specific Performance........................ 42
12.7 Governing Law............................................... 43
12.8 Rules of Construction....................................... 43
12.9 Assignment.................................................. 43
12.10 Waiver of Jury Trial........................................ 43
12.11 No Third Party Rights....................................... 43
12.12 Attorneys' Fees............................................. 43
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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 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.
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(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.
(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.
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(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.
(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.
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(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.
(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
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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 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."
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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.
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
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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 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.
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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.
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
8
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 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,
9
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 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
10
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 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
11
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.
(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.
12
(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.
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
13
(as defined below)), any Subsidiary of Seller or 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 to
Purchaser in writing, or as required by the terms of any Seller Plan or this
Agreement), or to enter into any new
14
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.
(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
15
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. sec.sec. 9601 et seq.; the Resource Conservation and Recovery Act,
42 U.S.C. sec.sec. 6901 et seq.; the Hazardous Materials Transportation
Act, 49 U.S.C. sec.sec. 5101 et seq.; the Clean Water Act, 33 U.S.C.
sec.sec. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
sec.sec. 2601 et seq.; the Clean Air Act, 42 U.S.C. sec.sec. 7401 et seq.;
the Safe Drinking Water Act, 42 U.S.C. sec.sec. 300f et seq.; the
Occupational Safety and Health Act, 29 U.S.C. sec.sec. 1651 et seq., the
Atomic Energy Act, 42 U.S.C. sec.sec. 2014 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. sec.sec. 136 et seq.
and the Federal Food, Drug and Cosmetic Act, 21 U.S.C. sec.sec. 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, 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
16
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;
(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
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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.
(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,
18
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.
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
19
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).
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,
20
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 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
21
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.
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
22
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
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
23
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 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;
24
(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.
(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
25
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.
(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
26
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 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.
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6.5 No Solicitation.
(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
28
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
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.
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
29
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 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
30
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 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.
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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 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
32
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 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
33
(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 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.
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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:
(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
35
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;
(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
36
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 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
37
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.
(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
38
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
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
39
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:
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
40
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:
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
41
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.
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
42
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 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]
43
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: /s/ David Roux
--------------------------------------
Name: David Roux
Title: Managing Member
SEAGATE TECHNOLOGY, INC.
By: /s/ Stephen J. Luczo
--------------------------------------
Name: Stephen J. Luczo
Title: CEO and President
SEAGATE SOFTWARE HOLDINGS, INC.
By: /s/ Charles C. Pope
--------------------------------------
Name: Charles C. Pope
Title:
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
44
List of Omitted Schedules
-------------------------
Schedule I! Commitment Letters*
Schedule II! Designated Assets*
Schedule IV! Sold Subsidiaries*
Schedule V! Seller's Covenant with Respect to Tax Matters*
Seller Disclosure Schedule*
Purchaser Disclosure Schedule*
* To be furnished to the Securities and Exchange Commission upon request.