Exhibit 2.2
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BY AND AMONG
VERITAS SOFTWARE CORPORATION
VICTORY MERGER SUB, INC.
AND
SEAGATE TECHNOLOGY, INC.
DATED AS OF MARCH 29, 2000
TABLE OF CONTENTS
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION..................... 1
ARTICLE I THE MERGER............................................... 1
1.1 The Merger.................................................. 1
1.2 Effective Time; Closing..................................... 1
1.3 Effect of the Merger........................................ 2
1.4 Certificate of Incorporation and Bylaws of Surviving
Corporation................................................. 2
1.5 Effect on Capital Stock..................................... 2
1.6 Surrender of Certificates................................... 4
1.7 No Further Ownership Rights in Seagate Common Stock......... 6
1.8 Lost, Stolen or Destroyed Certificates...................... 6
1.9 Tax Consequences............................................ 6
1.10 Taking of Necessary Action; Further Action.................. 7
1.11 Definitions................................................. 7
1.12 Dissenting Shares........................................... 10
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SEAGATE............... 11
2.1 Organization; Good Standing................................. 11
2.2 Charter Documents........................................... 11
2.3 Capital Structure........................................... 11
2.4 Authority................................................... 12
2.5 Conflicts................................................... 13
2.6 Consents.................................................... 13
2.7 SEC Filings; Financial Statements........................... 13
2.8 Liabilities................................................. 14
2.9 Absence of Material Adverse Effect on Seagate............... 14
2.10 Compliance.................................................. 14
2.11 Permits..................................................... 15
2.12 Litigation.................................................. 15
2.13 Brokers' and Finders' Fees.................................. 15
2.14 Absence of Liens and Encumbrances........................... 15
2.15 Statements; Registration Statement; Proxy
Statement/Prospectus........................................ 15
2.16 Board Approval.............................................. 16
2.17 State Takeover Statutes..................................... 16
2.18 Fairness Opinion............................................ 16
2.19 Veritas Common Stock........................................ 16
2.20 Intercompany Transactions................................... 16
2.21 Taxes....................................................... 16
2.22 Code Section 897 Company.................................... 16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF VERITAS AND MERGER
SUB............................................................... 17
3.1 Organization; Good Standing................................. 17
3.2 Charter Documents........................................... 17
3.3 Capital Structure........................................... 17
3.4 Authority................................................... 17
3.5 Conflicts................................................... 18
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3.6 Consents.................................................... 18
3.7 SEC Filings; Veritas Financial Statements................... 18
3.8 Absence of Certain Changes or Events........................ 19
3.9 Litigation.................................................. 19
3.10 Brokers' and Finders' Fees.................................. 19
3.11 Statements; Registration Statement; Proxy
Statement/Prospectus........................................ 19
3.12 Board Approval.............................................. 20
3.13 Fairness Opinion............................................ 20
3.14 Merger Sub Operations....................................... 20
ARTICLE IV CONDUCT OF BUSINESS AND OTHER TRANSACTIONS.............. 20
4.1 Conduct of Business......................................... 20
4.2 No Amendment to OD Documents................................ 20
4.3 Waivers and Releases........................................ 20
ARTICLE V ADDITIONAL AGREEMENTS.................................... 21
5.1 Proxy Statement/Prospectus; Registration Statement; Other
Filings..................................................... 21
5.2 Stockholder Meetings........................................ 22
5.3 Confidentiality............................................. 23
5.4 No Solicitation............................................. 23
5.5 Public Disclosure........................................... 25
5.6 Legal Requirements.......................................... 25
5.7 Notification of Certain Matters............................. 25
5.8 Commercially Reasonable Efforts and Further Assurances...... 25
5.9 Indemnification............................................. 26
5.10 Tax-Free Reorganization..................................... 26
5.11 Nasdaq Listing.............................................. 27
5.12 Seagate Affiliate Agreement................................. 27
5.13 Regulatory Filings; Reasonable Efforts...................... 27
5.14 Access to Information....................................... 27
5.15 TRA Matters................................................. 27
ARTICLE VI CONDITIONS TO THE MERGER................................ 29
6.1 Conditions to Obligations of Each Party to Effect the
Merger...................................................... 29
6.2 Additional Conditions to Obligations of Seagate............. 30
6.3 Additional Conditions to the Obligations of Veritas and
Merger Sub.................................................. 30
ARTICLE VII TERMINATION, FEES AND EXPENSES; AMENDMENT AND WAIVER...
31
7.1 Termination................................................. 31
7.2 Notice of Termination; Effect of Termination................ 33
7.3 Fees and Expenses........................................... 34
7.4 Amendment................................................... 35
7.5 Extension; Waiver........................................... 35
ARTICLE VIII GENERAL PROVISIONS.................................... 35
8.1 Non-Survival of Representations and Warranties.............. 35
8.2 Notices..................................................... 35
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8.3 Certain Interpretations..................................... 37
8.4 Counterparts................................................ 37
8.5 Entire Agreement............................................ 38
8.6 Severability................................................ 38
8.7 Other Remedies; Specific Performance........................ 38
8.8 Governing Law............................................... 38
8.9 Rules of Construction....................................... 38
8.10 Assignment.................................................. 38
8.11 Waiver of Jury Trial........................................ 38
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this "Agreement") is
made and entered into as of March 29, 2000 among VERITAS Software Corporation, a
Delaware corporation ("Veritas"), Victory Merger Sub, Inc., a Delaware
corporation and a wholly owned subsidiary of Veritas ("Merger Sub"), and Seagate
Technology, Inc., a Delaware corporation ("Seagate").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the General Corporation Law of the State of Delaware ("Delaware
Law"), Veritas and Seagate have agreed to enter into a business combination
transaction pursuant to which Merger Sub will merge with and into Seagate (the
"Merger").
B. The Boards of Directors of Veritas and Merger Sub (i) have determined
that the Merger is fair to, advisable and in the best interests of, Veritas,
Merger Sub and their stockholders, (ii) have approved this Agreement, the Merger
and the other transactions contemplated by this Agreement, and (iii) have
determined to recommend approval of the Merger. In addition, the Board of
Directors of Veritas has determined to recommend approval of, to the extent not
previously authorized, an amendment to Veritas' Certificate of Incorporation to
increase the authorized number of shares of Veritas common stock from
500,000,000 to an additional amount sufficient to permit the issuance of Veritas
Common Stock contemplated hereby (the "Share Increase").
C. The Board of Directors of Seagate (i) has determined that the Merger is
fair to, advisable and in the best interests of, Seagate and its stockholders,
(ii) has approved this Agreement, the Merger and the other transactions
contemplated by this Agreement, and (iii) has determined to recommend the
approval of this Agreement and the Merger by the stockholders of Seagate.
D. Veritas, Merger Sub and Seagate intend, by entering into this Agreement,
to adopt a plan of "reorganization" within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2 hereof),
and upon the terms and subject to the conditions of this Agreement and in
accordance with the applicable provisions of Delaware Law, Merger Sub shall be
merged with and into Seagate, the separate corporate existence of Merger Sub
shall cease and Seagate shall continue as the surviving corporation. Seagate as
the surviving corporation after the Merger is hereinafter sometimes referred to
as the "Surviving Corporation."
1.2 Effective Time; Closing. As soon as practicable on or after the
Closing Date (as defined in this Section 1.2), and upon the terms and subject to
the conditions of this Agreement, the parties hereto shall cause the Merger to
be consummated by filing a
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Certificate of Merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware in accordance with the relevant provisions of Delaware
Law (the time of such filing (or such later time as may be agreed upon in
writing by Veritas and Seagate and specified in the Certificate of Merger) being
referred to herein as the "Effective Time"). The closing of the Merger and the
other transactions contemplated hereby (the "Closing") shall take place at the
offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, located
at One Market Plaza, Spear Tower, Suite 1600, San Francisco, California 94105,
at a date and time to be specified by Veritas and Seagate, which shall be no
later than the second (2nd) business day following the satisfaction or, if
permitted pursuant hereto, waiver of the conditions set forth in Article VI
hereof, or at such other location, date and time as Veritas and Seagate shall
mutually agree in writing. The date upon which the Closing actually occurs shall
be referred to herein as the "Closing Date."
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all of the property, rights, privileges, powers and
franchises of Seagate and Merger Sub shall vest in the Surviving Corporation,
and all of the debts, Liabilities and duties of Seagate and Merger Sub shall
become the debts, Liabilities and duties of the Surviving Corporation.
1.4 Certificate of Incorporation and Bylaws of Surviving Corporation.
(a) Certificate of Incorporation. As of the Effective Time, the Certificate
of Incorporation of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation,
until thereafter amended as provided by Delaware Law and such Certificate of
Incorporation.
(b) Bylaws. As of the Effective Time, the Bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation, until thereafter amended as provided by Delaware Law, the
Certificate of Incorporation of the Surviving Corporation and such Bylaws.
(c) Directors and Officers. As of the Effective Time, Mr. Jay Jones shall
be the sole director of the Surviving Corporation, and the officers of the
Surviving Corporation shall be as designated by Veritas.
1.5 Effect on Capital Stock. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time, by virtue of the Merger and without
any action on the part of Merger Sub, Seagate or the holders of any of the
following securities, the following shall occur:
(a) Conversion of Seagate Common Stock. Except as otherwise provided
in this Agreement, each share of Common Stock, par value $0.01 per share,
of Seagate (the "Seagate Common Stock") outstanding immediately prior to
the Effective Time (other than any shares of Seagate Common Stock to be
canceled pursuant to Section 1.5(b) hereof) shall be canceled and
extinguished and automatically converted (subject to the terms of this
Section 1.5) into the right to receive (i) the Stock Portion (as defined in
Section 1.11 hereof), (ii) the Cash Portion (as defined in Section 1.11
hereof) and (iii) the TRA Right (the Stock Portion, the Cash Portion and a
TRA Right being referred to herein, collectively, as the "Merger
Consideration") upon the surrender of the certificate representing such
share of Seagate Common Stock in the manner set forth in Section 1.6 hereof
(or in the case of a lost,
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stolen or destroyed certificate, upon delivery of an affidavit (and bond,
if required) in the manner set forth in Section 1.8 hereof).
(b) Cancellation of Certain Seagate Common Stock. Unless otherwise
determined by Veritas, each share of Seagate Common Stock (i) held in the
treasury of Seagate, or (ii) owned by Merger Sub, Veritas or any direct or
indirect wholly-owned subsidiary of Seagate or of Veritas, in either case
immediately prior to the Effective Time, shall be canceled and extinguished
without any conversion thereof.
(c) Seagate Stock Options; Seagate Employee Stock Purchase Plan. At
the Effective Time, (i) the vesting restrictions applicable to all options
to purchase Seagate Common Stock ("Seagate Options") outstanding
immediately prior to the Effective Time under all Seagate stock option and
stock purchase plans (collectively, the "Seagate Stock Option Plans"),
excluding the Rolled Options (as defined in Section 1.11 hereof), shall be
accelerated such that no vesting restrictions remain thereon, (ii) each
such Seagate Option (excluding the Rolled Options) shall, for all purposes
of and under this Agreement, be converted into a number of shares of
Seagate Common Stock ("Seagate Option Shares") equal to (x) the aggregate
number of shares of Seagate Common Stock issuable upon the exercise in full
of such Seagate Option, minus (y) the NE Amount in respect of such Seagate
Option, (iii) the Seagate Option Shares so converted shall be considered
outstanding shares of Seagate Common Stock for all purposes of and under
this Agreement, including, without limitation, the right to receive the
Merger Consideration pursuant to the Merger in accordance with Section
1.11(a)(xvii) and Section 1.5(a) hereof, (iv) the Rolled Options shall be
canceled and extinguished without any payment of Merger Consideration or
any other consideration therefor, and (v) in accordance with the terms of
Seagate's 1999 Employee Stock Purchase Plan (the "Seagate ESPP"), all
rights to purchase shares of Seagate Common Stock outstanding under the
Seagate ESPP immediately prior to the Effective Time shall be exercised and
each share of Seagate Common Stock purchased pursuant to such exercise
shall by virtue of the Merger, and without any action on the part of the
holder thereof, be converted into the right to receive the Merger
Consideration payable in respect thereof, without the issuance of
certificates representing issued and outstanding shares of Seagate Common
Stock. The Seagate ESPP shall be terminated immediately following such
exercises.
(d) Required Withholding. Each of the Exchange Agent (as defined in
Section 1.6(a) hereof) and Veritas shall be entitled to deduct and withhold
from the Merger Consideration or any other consideration deliverable or
otherwise payable pursuant to the Merger and this Agreement to any holder
or former holder of Seagate Common Stock or Seagate Option Shares such
amounts as may be required to be deducted or withheld therefrom under the
Code or under any applicable provision of state, local or foreign tax law
or under any other applicable legal requirement. To the extent such amounts
are so deducted or withheld, such amounts shall be treated for all purposes
under this Agreement as having been delivered or otherwise paid to the
person to whom such amounts would otherwise have been delivered or
otherwise paid pursuant to the Merger and this Agreement.
(e) Adjustments to Exchange Ratio. The Merger Consideration shall be
adjusted to reflect appropriately the effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into Veritas Common Stock or Seagate Common Stock),
extraordinary cash dividend, reorganization, recapitalization,
reclassification, combination, consolidation or subdivision,
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exchange of shares or other like change with respect to Veritas Common
Stock or Seagate Common Stock occurring on or after the date hereof and
prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Veritas Common Stock
shall be issued pursuant to the Merger, but in lieu thereof each holder of
shares of Seagate Common Stock and Seagate Option Shares who would
otherwise be entitled to a fraction of a share of Veritas Common Stock
(after aggregating all fractional shares of Veritas Common Stock to be
received by such holder) pursuant to the Merger shall receive from Veritas
an amount in cash (rounded to the nearest whole cent), without interest,
equal to the product obtained by multiplying (x) such fraction by (y) the
Average Veritas Stock Price (as defined in Section 1.11 hereof).
(g) Capital Stock of Merger Sub. Each share of Common Stock, $0.01 par
value per share, of Merger Sub (the "Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and nonassessable share of Common Stock,
$0.01 par value per share, of the Surviving Corporation. Each certificate
evidencing ownership of shares of Merger Sub Common Stock shall evidence
ownership of such shares of capital stock of the Surviving Corporation.
1.6 Surrender of Certificates.
(a) Exchange Agent. Veritas shall select an institution reasonably
satisfactory to Seagate to act as the exchange agent (the "Exchange Agent") for
the Merger.
(b) Veritas to Provide Merger Consideration. Promptly following the
Effective Time, Veritas shall make available to the Exchange Agent for exchange
in accordance with this Article I, (i) the shares of Veritas Common Stock
issuable pursuant to Section 1.5(a) or Section 1.5(c) hereof in exchange for
outstanding shares of Seagate Common Stock and Seagate Option Shares, (ii) the
cash payable pursuant to Section 1.5(a) hereof in exchange for outstanding
shares of Seagate Common Stock and Seagate Option Shares, (iii) cash in an
amount sufficient to make the cash payments in lieu of fractional shares
pursuant to Section 1.5(f) hereof, and (iv) cash in an amount sufficient to pay
any dividends or distributions to which holders of shares of Seagate Common
Stock and Seagate Option Shares may be entitled pursuant to Section 1.6(e)
hereof. From and after the date that is 6 months after the Effective Date,
Veritas shall have the right to cause the Exchange Agent to transfer to Veritas
all funds deposited by Veritas with the Exchange Agent pursuant to this Section
1.6(b) that have not been distributed pursuant to Section 1.6(d), and all
holders of Seagate Common Stock and Seagate Options entitled to receive the
Merger Consideration shall thereafter become general creditors of Veritas in
respect of the Merger Consideration.
(c) Exchange Procedures for Seagate Common Stock Certificates. Promptly
following the Effective Time, Veritas shall cause the Exchange Agent to mail to
each holder of record (as of the Effective Time) of a certificate or
certificates (the "Certificates") which immediately prior to the Effective Time
represented outstanding shares of Seagate Common Stock and which were converted
into the right to receive shares of Veritas Common Stock and cash pursuant to
Section 1.5(a) hereof, cash in lieu of any fractional shares pursuant to Section
1.5(f) hereof and any dividends or other distributions pursuant to Section
1.6(e) hereof, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent, and which shall be
in
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such form and have such other provisions as Veritas may reasonably specify), and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Veritas Common Stock issuable
and cash payable in respect of such shares of Seagate Common Stock pursuant to
Section 1.5(a) hereof, cash in lieu of any fractional shares payable in respect
of such shares of Seagate Common Stock pursuant to Section 1.5(f) hereof and any
dividends or other distributions payable in respect of such Seagate Common Stock
pursuant to Section 1.6(e) hereof. Upon the surrender and delivery of
Certificates for cancellation to the Exchange Agent (or to such other agent or
agents as may be appointed by Veritas), and such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, the
holders of such Certificates shall be entitled to receive in exchange therefor
certificates representing the number of whole shares of Veritas Common Stock
issuable and cash payable in respect of such shares of Seagate Common Stock
pursuant to Section 1.5(a) hereof, cash in lieu of fractional shares payable in
respect of such shares of Seagate Common Stock pursuant to Section 1.5(f) hereof
and any dividends or distributions payable in respect of such shares of Seagate
Common Stock pursuant to Section 1.6(e) hereof, and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time, for all corporate
purposes, subject to Section 1.6(e) hereof as to the payment of dividends and
other distributions, to evidence the ownership of a number of full shares of
Veritas Common Stock and the right to receive an amount in cash into which such
shares of Seagate Common Stock shall have been so converted pursuant to Section
1.5(a) hereof, and the right to receive an amount in cash in lieu of the
issuance of any fractional shares payable in respect of such shares of Seagate
Common Stock pursuant to Section 1.5(f) hereof and any dividends or
distributions payable in respect of such shares of Seagate Common Stock pursuant
to Section 1.6(e) hereof.
(d) Exchange Procedures for Seagate Options. Promptly following the
Effective Time, Veritas shall cause the Exchange Agent to mail to each holder
(as of the Effective Time) of a Seagate Option which was converted into the
right to receive the Merger Consideration pursuant to Section 1.5(a) hereof,
cash in lieu of any fractional shares pursuant to Section 1.5(f) hereof and any
dividends or other distributions pursuant to Section 1.6(e) hereof, (i) a letter
of transmittal (which shall be in such form and have such other provisions as
Veritas may reasonably specify), and (ii) instructions for use in receiving the
certificates representing shares of Veritas Common Stock issuable and cash
payable in respect of such Seagate Options pursuant to Section 1.5(a) and
Section 1.5(c), cash in lieu of any fractional shares payable in respect of such
Seagate Options pursuant to Section 1.5(f) hereof and any dividends or other
distributions payable pursuant to Section 1.6(e) hereof. Upon the delivery of
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, to the Exchange Agent (or to such other agent or
agents as may be appointed by Veritas), the holders of Seagate Options shall be
entitled to receive the Merger Consideration payable to them pursuant to Common
Stock issuable and cash issuable in respect of such Seagate Options pursuant to
Section 1.5(a) and Section 1.5(c), cash in lieu of fractional shares payable in
respect of such Seagate Options pursuant to Section 1.5(f) hereof and any
dividends or distributions payable in respect of such Seagate Options pursuant
to Section 1.6(e) hereof.
(e) Distributions With Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the date of this Agreement in respect of
Veritas Common Stock with a record date after the Effective Time shall be paid
to the holders of any unsurrendered Certificates or Seagate Options with respect
to the shares of Veritas
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Common Stock represented thereby until the holders of record of such
Certificates shall surrender such Certificates or the holders of such Seagate
Options shall return a letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto. Subject to applicable law,
following surrender of any such Certificates and return of such letter of
transmittal, the Exchange Agent shall deliver to the record holders of such
Certificates or the holders of such Seagate Options, as the case may be, without
interest, certificates representing whole shares of Veritas Common Stock issued
in exchange therefor, along with payment in lieu of fractional shares payable in
respect of shares of Seagate Common Stock or Seagate Options pursuant to Section
1.5(g) hereof and the amount of any such dividends or other distributions with a
record date after the Effective Time payable in respect of such whole shares of
Veritas Common Stock.
(f) Transfers of Ownership. If certificates for shares of Veritas Common
Stock are to be issued in a name other than that in which the Certificates
surrendered in exchange therefor are registered, it will be a condition of the
issuance thereof that the Certificates so surrendered will be properly endorsed
and otherwise in proper form for transfer and that the persons requesting such
exchange will have paid to Veritas (or any agent designated by it) any transfer
or other taxes required by reason of the issuance of certificates for shares of
Veritas Common Stock in any name other than that of the registered holders of
the Certificates surrendered, or established to the satisfaction of Veritas or
any agent designated by it that such tax has been paid or is not payable.
(g) No Liability. Notwithstanding anything to the contrary in this Section
1.6, neither the Exchange Agent, Veritas, the Surviving Corporation nor any
party hereto shall be liable to a holder of shares of Veritas Common Stock or
Seagate Common Stock for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat or similar law.
1.7 No Further Ownership Rights in Seagate Common Stock. All cash and
shares of Veritas Common Stock issued pursuant to and in accordance with the
terms of this Article I (including any cash paid in respect thereof pursuant to
Section 1.5(f) and Section 1.6(e) hereof) shall be deemed to have been issued in
full satisfaction of all rights pertaining to shares of Seagate Common Stock,
and there shall be no further registration of transfers on the records of the
Surviving Corporation of shares of Seagate Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article I.
1.8 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, shares of Veritas
Common Stock and cash payable in respect thereof pursuant to Section 1.5(a) or
Section 1.5(b) hereof, cash in lieu of fractional shares, if any, payable in
respect thereof pursuant to Section 1.5(f) hereof and any dividends or
distributions payable in respect thereof pursuant to Section 1.6(e) hereof;
provided, however, that Veritas may, in its discretion and as a condition
precedent to the issuance and payment thereof, require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Veritas or the Exchange Agent with respect to the Certificates alleged to have
been so lost, stolen or destroyed.
1.9 Tax Consequences. Veritas and Seagate intend that the Merger shall
constitute a "reorganization" within the meaning of Section 368 of the Code.
Veritas and Seagate
6
adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.
1.10 Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes and intent of this Agreement and to vest in the Surviving Corporation
full right, title and possession in and to all of the assets, properties,
rights, privileges, powers and franchises of Seagate and Merger Sub, the
officers and directors of Merger Sub and Seagate shall be authorized to take,
and shall take, all such lawful and necessary action.
1.11 Definitions.
(a) For all purposes of and under this Agreement, the following terms shall
have the following respective meanings:
(i) "Administrators" has the meaning set forth in Section 5.15.
(ii) "Available Amount" means an amount equal to Cash held by Seagate
immediately prior to the Effective Time including net amounts received
under the OD Documents minus the VP Amount.
(iii) "Average Seagate Stock Price" means the average closing price of
a share of Seagate Common Stock, as reported on the NYSE, for the five (5)
consecutive trading days ending two (2) trading days immediately preceding
the Closing Date.
(iv) "Average Veritas Stock Price" means the average closing price of
a share of Veritas Common Stock, as reported on the Nasdaq, for the five
(5) consecutive trading days ending two (2) trading days immediately
preceding the Closing Date, as with respect to the VP Amount, preceding the
date that Veritas makes its election.
(v) "Cash" means cash, cash equivalents and short-term investments
(including all debt securities available for sale) as determined in
accordance with GAAP and consistent with the determination thereof in the
Recent SEC Reports.
(vi) "Cash Portion" means an amount, in cash, equal to the quotient
obtained by dividing (x) the Available Amount by (y) the Outstanding
Shares.
(vii) "Designated Liabilities" mean all Liabilities (including with
respect to Taxes) relating solely to (i) the Designated Assets and (ii) the
transactions pursuant to this Agreement. Without expanding the definition
of Designated Liabilities, Designated Liabilities shall not include
Liabilities relating to the transactions contemplated by the OD Documents
or any Liabilities included in the Adjustment Amount (as defined in the OD
Documents).
(viii) "Governmental Entity" means any court, administrative agency or
commission or other governmental authority or instrumentality.
(ix) "Indemnification Agreement" means the Indemnification Agreement
dated as of even date herewith by and among Veritas, Seagate and Purchaser
and each of its Subsidiaries.
(x) "ISA Amount" means a number of shares of Veritas Common Stock
equal to the quotient obtained by dividing (x) (A) the Stipulated Amount,
divided by (B) the Average Veritas Stock Price, by (y) the Outstanding
Shares.
(xi) "knowledge" means, with respect to either party hereto, the
actual knowledge of the executive officers of such party.
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(xii) "Liability" or "Liabilities" means any and all debts,
liabilities and obligations of any type or nature whatsoever, whether
accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising
under any Law (including, without limitation, any Environmental Law),
Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking.
(xiii) "Lien" means any lien, security interest, adverse claim,
charge, mortgage or other encumbrance.
(xiv) "Material Adverse Effect on Veritas" means any change, event,
violation, inaccuracy, circumstance or effect that is materially adverse to
the business, assets (including intangible assets), capitalization,
financial condition or results of operations of Veritas and its
Subsidiaries, taken as a whole; provided, however, that in no event shall
(i) a decrease in Veritas' stock price or the failure to meet or exceed
Wall Street research analysts' or Veritas' internal earnings or other
estimates or projections in and of itself constitute a "Material Adverse
Effect on Veritas," or (ii) any change, event, violation, inaccuracy,
circumstance or effect that results from (A) the public announcement or
pendency of the transactions contemplated hereby, (B) changes affecting the
software industry generally or the segments thereof in which Veritas
competes, or (C) changes affecting the United States economy generally,
constitute a "Material Adverse Effect on Veritas."
(xv) "Material Adverse Effect on Seagate" means any change, event,
violation, inaccuracy, circumstance or effect that, after giving effect to
the consummation of the transactions contemplated by the OD Documents,
gives rise to, or is reasonably likely to give rise to, any Liability
(absolute, accrued, contingent or otherwise, but excluding the Designated
Liabilities) of Seagate (or Veritas following the Effective Time) for which
Veritas is not entitled to indemnification under the Indemnification
Agreement following the Effective Time.
(xvi) "Nasdaq" means the Nasdaq National Market System of the National
Association of Securities Dealers, Inc.
(xvii) "NE Amount" means an amount equal to the quotient obtained by
dividing (x) (A) the per share exercise price of a Seagate Option,
multiplied by (B) the aggregate number of shares of Seagate Common Stock
issuable upon the exercise in full of such Seagate Option immediately prior
to the Effective Time, by (y) the Average Seagate Stock Price.
(xviii) "NYSE" means the New York Stock Exchange.
(xix) "OD Documents" means the Stock Purchase Agreement of even date
herewith by and among Seagate, Seagate Software and Suez Acquisition
Company (Cayman) Limited.
(xx) "Outstanding Shares" means the aggregate number of shares of
Seagate Common Stock outstanding immediately prior to the Effective Time,
after giving effect to the treatment of Seagate Options under Section
1.5(c) hereof.
(xxi) "Pro Rata Portion" means with respect to each person receiving a
TRA Right, the number of shares of Seagate Common Stock held by such person
immediately prior to the Effective Time, including shares deemed
outstanding by virtue of Section 1.5(c) divided by the Outstanding Shares.
(xxii) "Purchaser" has the meaning provided in the Stock Purchase
Agreement.
8
(xxiii) "Rolled Options" means the Seagate Options and Seagate Common
Stock held by the individuals and in the amounts indicated in the Rollover
Commitment Agreements previously delivered to the parties hereto.
(xxiv) "Seagate Restricted Stock" means shares of Seagate Common Stock
subject to a right of repurchase or other restriction.
(xxv) "Seagate Software" means Seagate Software Holdings, Inc.
(xxvi) "Stipulated Amount" means the sum of:
(1) with respect to all shares of SanDisk Corp. ("SanDisk") held by
Seagate immediately prior to the Effective Time (the "SanDisk Shares"),
(A) the product obtained by multiplying (x) the average closing price of
a share of SanDisk common stock, as reported on the Nasdaq, for the five
(5) consecutive trading days ending two (2) trading days immediately
preceding the Closing Date (the "Reference Average"), by (y) 0.8 (the
product of (x) and (y) being the "Value"), minus (B) 0.4 multiplied by
the difference between the Value and Seagate's tax basis in a SanDisk
Share; multiplied by (C) the number of SanDisk Shares;
(2) with respect to all shares of CVC, Inc. ("CVCI") and Gadzoox
Networks Inc. ("Gadzoox") held by Seagate immediately prior to the
Effective Time (respectively, the "CVCI Shares" and the "Gadzoox
Shares"), (A) the product obtained by multiplying (x) the Reference
Average for shares of CVCI or Gadzoox common stock, respectively, by (y)
0.6 (the product of (x) and (y) being the "Value"), minus (B) 0.4
multiplied by the difference between the Value and Seagate's tax basis
in a CVCI or Gadzoox Share, as the case may be, multiplied by (C) the
number of CVCI Shares and Gadzoox Shares, respectively; and
(3) with respect to shares of Lernout & Hauspie, Inc. ("Dragon")
held by Seagate immediately prior to the Effective Time ( including
shares into which such shares may have been converted, the "Dragon
Shares"), (i) if such Dragon Shares are not listed for trading on a
national securities exchange or over-the-counter market, then an amount
mutually agreed upon by the parties hereto at least ten days prior to
the Seagate Stockholders Meeting, (ii) if shares of Dragon are listed
for trading on a national securities exchange or over-the-counter-
market, then (A) the product obtained by multiplying (x) the Reference
Average for shares of Dragon common stock, by (y) 0.6 (the product of
(x) and (y) being the "Value"), minus (B) 0.4 multiplied by the
difference between the Value and Seagate's tax basis in a Dragon Share
multiplied by (C) the number of Dragon Shares (other than those subject
to any escrow agreement). If the parties are unable to agree upon a
value under clause (i) above or the valuation of any escrowed Dragon
Shares, then the parties agree to include the Dragon Shares and such
escrowed shares in the TRA Amount as provided in Section 5.15 hereof.
(xxvii) "Stock Portion" means a number of shares of Veritas Common
Stock equal to the sum of (i) the quotient obtained by dividing (x) (A) the
number of shares of Veritas Common Stock held by Seagate immediately prior
to the Effective Time, multiplied by (B) 0.853743, by (y) the Outstanding
Shares, (ii) the quotient obtained by dividing (x) (A) the VP Amount,
divided by (B) the Average Veritas Stock Price, by (y) the Outstanding
Shares, and (iii) the ISA Amount.
9
(xxviii) "Subsidiary" or "Subsidiaries" means any and all
corporations, limited liability companies, general or limited partnerships,
joint ventures, business trusts, associations and other business
enterprises and entities controlled by a person directly or indirectly
through one or more intermediaries.
(xxix) "Tax" or "Taxes" has the meaning provided in the Stock Purchase
Agreement.
(xxx) "TRA Amount" means the amount of cash received with respect to
all refunds or the utilization of credits for Seagate Taxes for or
attributable to taxable years or periods of Seagate ending on or prior to
the Effective Time, or the pre-closing period, in the case of a taxable
period commencing before the Effective Time and ending after the Effective
Time, less any administrative charges of the Administrators.
(xxxi) "TRA Right" means a non-transferable right to receive, when, as
and if received by Veritas or its Affiliates, a stockholder's Pro Rata
Portion of the TRA Amount.
(xxxii) "Veritas Common Stock" means common stock, par value $.001 per
share, of Veritas.
(xxxiii) "VP Amount" means either $0, $500 million or, if Seagate has
received gross proceeds in excess of $200,000,000 with respect to the
securities listed in Part B of Schedule I hereto on or prior to the
election of the VP Amount, $750 million, at the election of Veritas, which
election shall be made no later than the tenth (10th) day prior to the date
of the Seagate Stockholders' Meeting.
1.12 Dissenting Shares. Shares of Seagate Common Stock which have not been
voted in favor of the Merger and with respect to which the holder thereof has
exercised and demanded appraisal rights under Delaware Law ("Dissenting Shares")
shall not be converted into the Merger Consideration pursuant to the Merger, but
shall instead be converted into the right to receive such consideration as may
be determined to be due with respect to such Dissenting Shares pursuant to
Delaware Law. Seagate agrees that, except with the prior written consent of
Veritas, or as required under Delaware Law, it will not voluntarily make any
payment with respect to, or settle or offer to settle, any appraisal demand.
Each holder of Dissenting Shares ("Dissenting Stockholder") who, pursuant to the
provisions of Delaware Law, becomes entitled to payment of the fair value for
shares of Seagate Common Stock shall receive payment therefor from Veritas (but
only after the value therefor shall have been agreed upon or finally determined
pursuant to Delaware Law). If, after the Effective Time, any Dissenting Shares
shall lose their status as Dissenting Shares, Veritas shall issue and deliver,
upon surrender by such stockholder of a certificate or certificates representing
shares of Seagate Common Stock pursuant to Section 1.6 hereof, the Merger
Consideration to which such stockholder would otherwise be entitled under
Section 1.5.
10
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SEAGATE
As of the date hereof and as of the Closing Date, Seagate hereby represents
and warrants to Veritas and Merger Sub, subject to the exceptions and
qualifications specifically set forth or disclosed in writing in the disclosure
letter delivered by Seagate to Veritas, dated as of the date hereof (the
"Seagate Disclosure Schedule"), as follows:
2.1 Organization; Good Standing. Each of Seagate and Seagate Software is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with the corporate power and authority to own, lease
and operate its assets and property and to carry on its business as presently
being conducted and as proposed to be conducted, and is duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction in
which the failure to be so qualified or in good standing would reasonably be
expected to have a Material Adverse Effect on Seagate.
2.2 Charter Documents. Seagate has delivered or made available to Veritas
a true and correct copy of the Certificate of Incorporation and Bylaws of
Seagate and Seagate Software each as amended and in effect as of the date
hereof. Neither Seagate nor Seagate Software is in violation of any of the
provisions of its Certificate of Incorporation or Bylaws, each as amended and in
effect as of the date hereof.
2.3 Capital Structure.
(a)(i) The authorized capital stock of Seagate consists of 600,000,000
shares of Common Stock, par value $0.01 per share, of which there were
226,977,176 shares issued and outstanding as of February 29, 2000, and 1,000,000
shares of Preferred Stock, par value $0.01 per share, of which no shares are
issued or outstanding. All outstanding shares of Seagate Common Stock are duly
authorized and validly issued, fully paid and nonassessable, are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Seagate or any contract, agreement or other commitment to which Seagate is a
party or by which it is bound and have been offered, issued, sold and delivered
by Seagate in compliance with all registration or qualification required (or
applicable exemptions therefrom) of applicable federal and State securities
laws. As of February 29, 2000, Seagate had reserved an aggregate of 47,709,220
shares of Seagate Common Stock, net of exercises, for issuance to employees,
consultants and non-employee directors pursuant to the Seagate Stock Option
Plans, under which there were (i) outstanding Seagate Options to purchase an
aggregate of 34,415,211 shares of Seagate Common Stock, and (ii) 13,294,009
shares of Seagate Common Stock available for future grant. All shares of Seagate
Common Stock subject to issuance under the Seagate Stock Option Plans, upon
issuance in accordance with the terms and conditions set forth in the
instruments pursuant to which such shares of Seagate Common Stock are issuable,
would be duly authorized and validly issued, fully paid and nonassessable.
(ii) The authorized capital stock of Seagate Software consists of
300,000,000 shares of Common Stock, par value $0.01 per share, and 73,000,000
shares of Preferred Stock, par value $0.01 per share, all of the issued or
outstanding shares of which capital stock are owned by Seagate. All outstanding
shares of Seagate Software Common Stock are duly authorized and validly issued,
fully paid and nonassessable, are not subject to preemptive rights created by
statute, the Certificate of Incorporation or Bylaws of Seagate Software or any
contract, agreement or other commitment to which Seagate Software is a party or
by which it is bound and have been offered, issued, sold and delivered by
Seagate Software in
11
compliance with all registration or qualification required (or applicable
exemptions therefrom) of applicable federal and State securities laws.
(b) Except as set forth in Section 2.3(a) hereof, there are no equity
securities, partnership interests or other similar ownership interests of any
class or series of Seagate or Seagate Software, or any securities exchangeable
or convertible into, or exercisable for, any such equity securities, partnership
interests or other similar ownership interests, issued, reserved for issuance or
outstanding. Except as set forth in Section 2.3(a) hereof, there are no options,
warrants, equity securities, partnership interests or other similar ownership
interests, calls, rights (including preemptive rights), commitments or
agreements of any kind or character to which Seagate or Seagate Software is a
party or by which it is bound obligating Seagate or Seagate Software to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or cause the repurchase, redemption or acquisition, of any
shares of capital stock of Seagate or Seagate Software, or obligating Seagate or
Seagate Software to grant, extend, accelerate the vesting of, or enter into, any
such option, warrant, equity security, partnership interest or other similar
ownership interest, call, right, commitment or agreement. Except as set forth in
Section 2.3(b) of the Seagate Disclosure Schedule, there are no registration
rights and, to the knowledge of Seagate, there are no voting trusts, proxies or
other agreements or understandings, with respect to any capital stock of Seagate
or Seagate Software.
(c) Except for the Designated Assets (as defined in Section 4.1 hereof), as
of the Closing Date, Seagate will not own or hold, directly or indirectly
through one or more subsidiaries, any equity securities, partnership interests
or other similar ownership interests of or in any class or series of any other
corporation, limited liability company, general or limited partnership, joint
venture, business trust, association or other business entity or enterprise, or
any security exchangeable or convertible into, or exercisable for, any such
equity securities, partnership interests or other similar ownership interests.
2.4 Authority. Seagate has all requisite corporate power and authority to
enter into this Agreement and the OD Documents, to perform its obligations
hereunder and thereunder, and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Seagate of this Agreement and the OD
Documents, the performance by Seagate of its obligations hereunder and
thereunder, and the consummation by Seagate of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate action
on the part of Seagate, subject only to the approval and adoption of the
transaction contemplated by the OD Documents and this Agreement and the Merger
by Seagate's stockholders and the filing and recordation of the Certificate of
Merger in accordance with Delaware Law and the transactions contemplated by the
OD Documents. The affirmative approval of the holders of a majority of the
outstanding shares of the Seagate Common Stock is required for Seagate's
stockholders to approve and adopt this Agreement and the Merger under Delaware
Law and the transactions contemplated by the OD Documents. This Agreement and
the OD Documents been duly executed and delivered by Seagate and, assuming the
due authorization, execution and delivery of this Agreement by Veritas and
Merger Sub and the OD Documents by the other parties thereto, this Agreement and
the OD Documents constitute the valid and binding obligations of Seagate,
enforceable in accordance with their respective terms, subject to (i) the effect
of any applicable laws of general application relating to bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights and the relief of debtors generally, and (ii) the effect of
rules of law and general principles of equity, including, without limitation,
rules of law and general principal of equity governing specific performance,
injunctive relief and other
12
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
2.5 Conflicts. The execution and delivery of this Agreement and the OD
Documents by Seagate do not, and the performance by Seagate of its obligations
hereunder and thereunder and the consummation by Seagate of the transactions
contemplated hereby and thereby will not, (i) conflict with or violate the
Certificate of Incorporation or Bylaws of Seagate, each as amended and in effect
as of the date hereof, (ii) subject to obtaining the consents, approvals, orders
or authorizations, and making the registrations, declarations or filings, set
forth in Section 2.6 hereof, conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Seagate or by which Seagate or its
assets and properties are bound or affected, or (iii) result in any breach of,
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Seagate's rights or alter the rights or
obligations of any third party under, or give to any third party any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the assets or properties of Seagate pursuant to,
any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Seagate is
a party or by which Seagate or its assets and properties are bound or affected,
except to the extent such conflict, violation, breach, default, impairment or
other effect would not, in the case of clause (ii) or (iii) of this Section 2.5,
individually or in the aggregate, (a) reasonably be expected to have a Material
Adverse Effect, or (b) reasonably be expected to have a material adverse effect
on, or materially delay, the ability of Veritas or Seagate to consummate the
transactions contemplated hereby or on Seagate's ability to consummate the
transactions contemplated by the OD Documents.
2.6 Consents. Except as set forth in the Seagate Disclosure Statement, no
material consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Seagate in connection with the execution and delivery of this
Agreement or the OD Documents by Seagate, or the performance by Seagate of its
obligations hereunder or thereunder or the consummation by Seagate of the
transactions contemplated hereby or thereby, except for (i) the filing and
effectiveness of the Registration Statement (as defined in Section 5.1 hereof)
with the United States Securities and Exchange Commission (the "SEC") in
accordance with the Securities Act of 1933, as amended (the "Securities Act"),
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iii) the filing of the Proxy Statement (as defined in
Section 5.1 hereof) with the SEC in accordance with the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (iv) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state "blue sky" securities laws and the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the equivalent laws of any foreign country, and (v) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings which, if not obtained or made, would not have a material adverse effect
on the ability of Veritas and Seagate to consummate the Merger and the other
transactions contemplated hereby or by the OD Documents.
2.7 SEC Filings; Financial Statements. Seagate has filed all forms,
reports and documents required to be filed with the SEC since July 3, 1998, and
has made available (through on-line databases) to Veritas such forms, reports
and documents in the form filed with the SEC. All such required forms, reports
and documents (including all exhibits and schedules thereto and all documents
incorporated by reference therein) are referred to herein as the "Seagate SEC
Reports." As of their respective dates, the Seagate SEC
13
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 Seagate SEC
Report was filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of the
Subsidiaries of Seagate is required to file any forms, reports or other
documents with the SEC. Except to the extent revised or superseded by a
subsequent filing with the SEC (a copy of which has been made available to
Veritas prior to the date of this Agreement), none of the Seagate SEC Reports
filed by Seagate since July 3, 1999 and prior to the date of this Agreement
(collectively, the "Recent SEC Reports") contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Seagate included in all Seagate SEC Reports comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited consolidated
quarterly statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of Seagate
and its consolidated Subsidiaries as of the dates thereof and the consolidated
financial position of Seagate and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments). Except as reflected in the most recent
consolidated balance sheet of Seagate included in the Recent SEC Reports most
recently filed by Seagate with the SEC prior to the date hereof (such
consolidated balance sheet being referred to herein as the "Current Seagate
Balance Sheet" and the date thereof being referred to herein as the "Current
Balance Sheet Date"), as of the Current Balance Sheet Date, neither Seagate nor
any of its Subsidiaries had, and since such date neither Seagate nor any of such
Subsidiaries has incurred, any Liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
2.8 Liabilities. Except as identified on the Seagate Disclosure Schedule,
as of the Effective Time, Seagate will not have any material Liabilities or
other obligations of any nature whatsoever (absolute, accrued, contingent or
otherwise) other than (i) Designated Liabilities and (ii) Liabilities for which
Veritas is entitled to indemnification under the Indemnification Agreement.
2.9 Absence of Material Adverse Effect on Seagate. Since the date of the
Current Seagate Balance Sheet, there has not been, occurred or arisen any
Material Adverse Effect on Seagate.
2.10 Compliance. Seagate is not in conflict in any material respect with,
or in material default or violation of, (i) any law, rule, regulation, order,
judgment or decree applicable to Seagate or by which Seagate or its assets and
properties are bound or affected, or (ii) any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Seagate is a party or by which Seagate or its
assets and properties are bound or affected. No investigation or review by any
Governmental Entity is pending or, to the knowledge of Seagate, threatened,
14
against Seagate, nor has any Governmental Entity indicated an intention to
conduct the same. There is no material agreement, judgment, injunction, order or
decree binding upon Seagate or any of assets and properties which has had, or
would reasonably be expected to have, the effect of prohibiting or materially
impairing the consummation of the Merger, or the other transactions contemplated
hereby or by the OD Documents.
2.11 Permits. Seagate holds all permits, licenses, variances, exemptions,
orders and approvals from Governmental Entities which are material to the
operation of the business of Seagate, and Seagate is in compliance in all
material respects with the terms of such permits, licenses, variances,
exemptions, orders and approvals.
2.12 Litigation. As of the date of this Agreement, there is no action,
suit, proceeding, claim, arbitration or investigation pending, or as to which
Seagate has received any notice of assertion nor, to the knowledge of Seagate,
is there any threatened action, suit, proceeding, claim, arbitration or
investigation against Seagate, which in any case would reasonably be expected to
have a Material Adverse Effect on Seagate.
2.13 Brokers' and Finders' Fees. Except for fees payable to Morgan Stanley
& Co. Incorporated, Seagate has not incurred, nor will it incur, directly or
indirectly, any liability for any brokerage or finders' fees or agents'
commissions or any similar charges in connection with the Merger or the other
transactions contemplated hereby or by the OD Documents.
2.14 Absence of Liens and Encumbrances. Except as disclosed on Section
2.14 of the Seagate Disclosure Schedule, Seagate and Seagate Software Holdings,
Inc. have good and valid title to all of their assets and properties that will
not be sold or otherwise disposed of pursuant to the OD Documents including,
without limitation, their shares of Veritas, Gadzoox, Dragon, CVCI and SanDisk,
and such assets and properties at the Effective Time will be free and clear of
any liens, encumbrances or financial commitments, except for liens for taxes not
yet due and payable and as otherwise reflected in the Seagate SEC Reports.
2.15 Statements; Registration Statement; Proxy Statement/Prospectus. None
of the information supplied or to be supplied by Seagate for inclusion or
incorporation by reference in (i) the Registration Statement (as defined in
Section 5.1 hereof) will, at the time it is declared or ordered effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or (ii) the Proxy Statement (as defined in Section 5.1
hereof) will, on the date the Proxy Statement is first mailed to the
stockholders of Seagate, at the time of the Seagate Stockholders' Meeting (as
defined in Section 5.1 hereof), at the time of the Veritas Stockholders' Meeting
and at the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Seagate Stockholders' Meeting or the Veritas
Stockholders' Meeting which has become false or misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated thereunder.
Notwithstanding the foregoing or anything to contrary set forth in this
Agreement, Seagate makes no representation or warranty with respect to any
information supplied by Veritas or Merger Sub which is contained in any of the
foregoing documents.
15
2.16 Board Approval. The Board of Directors of Seagate has (i) determined
that the Merger and the other transactions contemplated hereby and by the OD
Documents are fair to, advisable and in the best interests of Seagate and its
stockholders, (ii) duly approved the Merger, this Agreement, the OD Documents
and the other transactions contemplated hereby and thereby, and (iii) determined
to recommend that the stockholders of Seagate approve the Merger, this
Agreement, the OD Documents and the other transactions contemplated hereby and
thereby.
2.17 State Takeover Statutes. The Board of Directors of Seagate has
approved the Merger, this Agreement, and the other transactions contemplated
hereby and thereby, and such approval is sufficient to render inapplicable to
the Merger, this Agreement, the OD Documents and the other transactions
contemplated hereby and thereby the provisions of Section 203 of Delaware Law to
the extent, if any, such provisions are applicable to the Merger, this
Agreement, the OD Documents and the other transactions contemplated hereby and
thereby. No other state takeover statute or similar statute or regulation
applies to or purports to apply to the Merger, this Agreement, the OD Documents
or the other transactions contemplated hereby and thereby.
2.18 Fairness Opinion. Seagate has received a written opinion from Morgan
Stanley & Co., Incorporated dated as of the date hereof, to the effect that, as
of the date hereof, the Merger Consideration is fair to the stockholders of
Seagate from a financial point of view and will deliver to Veritas a copy of
such opinion.
2.19 Veritas Common Stock. All of the Veritas Common Stock held directly
or indirectly by Seagate is owned, beneficially and of record, by Seagate
Software, and has been held continuously by Seagate Software since May 28, 1999.
2.20 Intercompany Transactions. At no time has Seagate, Seagate Software
or any member of an affiliated group of corporations as defined in Section 1504
of the Code filing returns on a consolidated basis of which Seagate or Seagate
Software is a member engaged in an intercompany transaction with respect to the
Veritas Common Stock giving rise to an intercompany item or corresponding item
within the meaning of Section 1.1502-13 of the United States Income Tax
Regulations with respect to the Veritas Common Stock, including but not limited
to such items that may be subject to gain recognition upon the application of
Section 1.1502-13(f)(4) of the United States Income Tax Regulations.
2.21 Taxes. Each of Seagate and its Subsidiaries has filed all Tax Returns
required to be filed by any of them and has paid (or Seagate has paid on its
behalf), or has set up an adequate reserve for the payment of, all Taxes
required to be paid in respect of the periods covered by such returns (except
where the failure to pay would not have a Material Adverse Effect on Seagate).
The information contained in such Tax Returns is true, complete and accurate in
all material respects except where the failure to be so would not have a
Material Adverse Effect on Seagate. Neither Seagate nor any subsidiary of
Seagate is delinquent in the payment of any tax, assessment or governmental
charge except where the delinquency would not have a Material Adverse Effect on
Seagate. No deficiencies for any taxes have been proposed, asserted or assessed
against Seagate or any of its subsidiaries that have not been finally settled or
paid in full which would have a Material Adverse Effect on Seagate, and no
requests for waivers of the time to assess any such tax are pending.
2.22 Code Section 897 Company. Seagate is not and has not been during the
period referred to in section 897(c)(1)(A)(ii) a United States real property
holding corporation within the meaning of section 897(c)(2) of the Code.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VERITAS AND MERGER SUB
As of the date hereof and as of the Closing Date, Veritas and Merger Sub
hereby jointly and severally represent and warrant to Seagate, subject to the
exceptions and qualifications specifically set forth or disclosed in writing in
the disclosure letter delivered by Veritas to Seagate, dated as of the date
hereof (the "Veritas Disclosure Schedule"), as follows:
3.1 Organization; Good Standing. Veritas and each of its material
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the respective jurisdiction of its incorporation,
with the corporate power and authority to own, lease and operate its respective
assets and property and to carry on its respective business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would reasonably be expected to have a Material
Adverse Effect on Veritas.
3.2 Charter Documents. Veritas has delivered or made available to Seagate
a true and correct copy of the Certificate of Incorporation and Bylaws of
Veritas, as amended and in effect as of the date hereof. Neither Veritas nor any
of its material subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or equivalent organizational documents,
in each case as amended and in effect as of the date hereof.
3.3 Capital Structure. The authorized capital stock of Veritas consists of
500,000,000 shares of Common Stock, par value $0.001 per share, of which there
were 396,532,084 shares issued and outstanding as of March 24, 2000, 10,000,000
shares of Preferred Stock, par value $0.001 per share, of which no shares are
issued or outstanding, and one share of the special voting stock, par value
$0.001 per share. The authorized capital stock of Merger Sub consists of 1,000
shares of common stock, par value $0.01 per share, of which, as of the date
hereof, 100 shares are issued and outstanding. All outstanding shares of Veritas
Common Stock and Merger Sub's capital stock are duly authorized and validly
issued, fully paid and non-assessable, and are not subject to preemptive rights
created by statute, the Certificate of Incorporation or Bylaws of Veritas or any
contract, agreement or other commitment to which Veritas is a party or by which
it is bound. All outstanding shares of capital stock of Merger Sub have been
issued and granted in compliance with all applicable securities and other laws.
3.4 Authority. Each of Veritas and Merger Sub has all requisite corporate
power and authority to enter into this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby. The execution
and delivery by Veritas and Merger Sub of this Agreement, the performance by
Veritas and Merger Sub of the transactions contemplated hereby, and the
consummation by Veritas and Merger Sub of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of
Veritas and Merger Sub, subject only to the approval of the Merger and, to the
extent not previously authorized, the Share Increase by Veritas' stockholders
and the filing of an amendment to the Certificate of Incorporation of Venus with
respect to the Share Increase and the Certificate of Merger in accordance with
Delaware Law. The approval of the holders of a majority of the outstanding
shares of Veritas Common Stock is required to approve the Merger and the Share
Increase. This Agreement has been duly executed and delivered by Veritas and
Merger Sub and, assuming the due authorization, execution and delivery of this
Agreement by Seagate, this Agreement constitutes the valid
17
and binding obligations of Veritas and Merger Sub, enforceable in accordance
with their respective terms, subject to (i) the effect of any applicable laws of
general application relating to bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights and the relief of
debtors generally, and (ii) the effect of rules of law and general principles of
equity, including, without limitation, rules of law and general principal of
equity governing specific performance, injunctive relief and other equitable
remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3.5 Conflicts. The execution and delivery of this Agreement by Veritas and
Merger Sub do not, and the performance by Veritas and Merger Sub of their
obligations hereunder and the consummation by Veritas and Merger Sub of the
transactions contemplated hereby will not, (i) conflict with or violate the
Certificate of Incorporation or Bylaws of Veritas and Merger Sub, (ii) subject
to obtaining the consents, approvals, orders and authorizations, and making the
registrations, recordations and filings, set forth in Section 3.6 hereof,
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Veritas and Merger Sub or by which Veritas or Merger Sub or their
assets and properties are bound or affected, or (iii) result in any breach of,
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Veritas' or Merger Sub's rights or
alter the rights or obligations of any third party under, or give to any third
parties any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a Lien on any of the assets or properties of
Veritas or Merger Sub pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Veritas or Merger Sub is a party or by which Veritas or
Merger Sub or either of their assets and properties are bound or affected,
except to the extent such conflict, violation, breach, default, impairment or
other effect would not, in the case of clause (ii) or (iii) of this Section 3.5,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Veritas.
3.6 Consents. Except as set forth in the Veritas Disclosure Schedule, no
material consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Veritas in connection with the execution and delivery of this
Agreement or the performance by Veritas of its obligations hereunder or the
consummation of the transactions contemplated hereby, except for (i) the filing
of a Registration Statement with the SEC in accordance with the Securities Act,
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iii) the filing of the Proxy Statement with the SEC in
accordance with the Exchange Act, (iv) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state "blue sky" securities laws and the HSR Act and the
antitrust or competition laws of any foreign country, and (v) such other
consents, authorizations, filings, approvals and registrations which, if not
obtained or made, would not be material to Veritas or Merger Sub or have a
material adverse effect on the ability of Veritas, Merger Sub and Seagate to
consummate the Merger and the other transactions contemplated hereby.
3.7 SEC Filings; Veritas Financial Statements.
(a) Veritas has filed all forms, reports and documents required to be filed
with the SEC since December 31, 1998, and has made a copy of all such forms,
reports and documents available to Seagate. All such forms, reports and
documents (including those that Veritas may file subsequent to the date hereof)
are referred to herein as the "Veritas
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SEC Reports." As of their respective dates, the Veritas SEC Reports (i) were or
will be (as the case may be) prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder, and (ii) did not or will not (as
the case may be) at the time they were filed (or if amended or superseded, then
on the date of filing of such amendment or superseding form, report or document)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Veritas SEC Reports (the "Veritas
Financials"), including any Veritas SEC Reports filed after the date hereof
until the Closing, (i) complied or will comply (as the case may be) as to form
in all material respects with the published rules and regulations of the SEC
with respect thereto, (ii) was prepared or will be prepared (as the case may be)
in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form
10-Q under the Exchange Act), and (iii) fairly presented or will fairly present
(as the case may be) in all material respects the consolidated financial
position of Veritas and its subsidiaries at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not, or are not expected to
be, material in amount. The balance sheet of Veritas as of December 31, 1998
contained in the Veritas SEC Reports is hereinafter referred to as the "Veritas
Balance Sheet."
(c) Veritas has heretofore furnished to Seagate a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Veritas with the SEC pursuant to
the Securities Act or the Exchange Act.
3.8 Absence of Certain Changes or Events. Since the date of the Veritas
Balance Sheet, there has not been, occurred or arisen any Material Adverse
Effect on Veritas.
3.9 Litigation. There is no action, suit, proceeding, claim, arbitration
or investigation pending, or as to which Veritas or any of its subsidiaries has
received any written notice of assertion nor, to the knowledge of Veritas, is
there any threatened action, suit, proceeding, claim, arbitration or
investigation against Veritas or any of its subsidiaries, which in any case
would reasonably would be expected to have a Material Adverse Effect on Veritas.
3.10 Brokers' and Finders' Fees. Except for fees payable to Credit Suisse
First Boston Corporation, Veritas has not incurred, nor will it incur, directly
or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with the Merger or the other
transactions contemplated hereby.
3.11 Statements; Registration Statement; Proxy Statement/Prospectus. None
of the information supplied or to be supplied by Veritas for inclusion or
incorporation by reference in (i) the Registration Statement (as defined in
Section 5.1 hereof) will at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (ii) the Proxy Statement (as defined in Section 5.1 hereof)
19
shall not, on the date the Proxy Statement is first mailed to each of Seagate's
stockholders and Veritas' stockholders, at the times of the Seagate
Stockholder's Meeting (as defined in Section 5.1 hereof) and the Veritas
Stockholders' Meeting and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Seagate
Stockholders' Meeting or Veritas Stockholders' Meeting which has become false or
misleading. Notwithstanding the foregoing or anything else to the contrary set
forth in this Agreement, Veritas makes no representation or warranty with
respect to any information supplied by Seagate which is contained in any of the
foregoing documents.
3.12 Board Approval. The Board of Directors of Veritas has (i) determined
that the Merger and the other transactions contemplated hereby are advisable and
in the best interests of Veritas and its stockholders, (ii) duly approved the
Merger, this Agreement and the other transactions contemplated hereby, and (iii)
resolved to recommend that the Stockholders of Veritas approve the Share
Increase.
3.13 Fairness Opinion. Veritas has received a written opinion from Credit
Suisse First Boston Corporation, dated as of the date hereof, to the effect
that, as of the date hereof, the Stock Portion to be paid by Veritas is fair to
Veritas from a financial point of view and will deliver to Seagate a copy of
such opinion.
3.14 Merger Sub Operations. Merger Sub was formed solely for the purpose
of engaging in the transactions contemplated hereby and has not (a) engaged in
any business activities, (b) conducted any operations other than in connection
with the transactions contemplated hereby or (c) incurred any Liabilities other
than in connection with the transactions contemplated hereby.
ARTICLE IV
CONDUCT OF BUSINESS AND OTHER TRANSACTIONS
4.1 Conduct of Business. On or before the Effective Time, Seagate and
Seagate Software shall take all actions necessary to transfer all of their
respective assets and Liabilities to one or more of Seagate's Subsidiaries such
that at the Effective Time the only assets and properties owned or held by
Seagate (the "Designated Assets") and the only Liabilities not assumed by such
other Subsidiaries shall be Designated Liabilities; provided, however, that
prior to the Effective Time, Seagate may sell, transfer or otherwise dispose of
any of the Designated Assets set forth on Part B of Schedule I hereto. From and
after the execution and delivery of this Agreement until the earlier of the
Effective Time or the termination of this Agreement, Seagate shall not sell,
transfer or otherwise dispose of any shares of Veritas Common Stock owned by
Seagate as of the date hereof.
4.2 No Amendment to OD Documents. From the date hereof until the earlier
to occur of the Effective Time or the termination of this Agreement pursuant to
and in accordance with Section 7.1 hereof, neither Seagate nor Seagate Software
shall terminate, amend, modify or otherwise supplement or waive any of the terms
and conditions of the OD Documents (or any of them); provided, however, that
notwithstanding the foregoing, Seagate may terminate the OD Documents pursuant
to their respective terms.
4.3 Waivers and Releases. Seagate shall use its best efforts to obtain and
to deliver to Veritas, as soon as practicable after the date hereof and in any
event at least 15 days
20
prior to the Effective Time, (i) with respect to each individual who will be a
holder of Rolled Options, a waiver and release of claims in favor of Veritas and
Seagate in form and in substance reasonably satisfactory to Veritas (a "Proper
Waiver"), with respect to the cancellation of Rolled Options held by such
individual described in Section 1.5(c) hereof, and (ii) with respect to each
individual who is a party to any employment, severance or change in control or
similar agreement, or who participates in any plan providing severance or change
in control benefits, a Proper Waiver with respect to any claims which any such
individual may have against Veritas and/or Seagate with respect to any such
agreements or plans.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Proxy Statement/Prospectus; Registration Statement; Other Filings.
(a) As promptly as practicable following the execution and delivery of this
Agreement, Seagate and Veritas shall prepare and file with the SEC a document to
be sent to the stockholders of Seagate and Veritas in connection with the
meeting of Seagate's stockholders to consider the approval and adoption of this
Agreement and the Merger (the "Seagate Stockholders' Meeting") and the meeting
of Veritas Stockholders to consider approval of the Merger and the Share
Increase (the "Veritas Stockholders' Meeting") (such proxy statement/prospectus,
as amended or supplemented, being referred to herein as the "Proxy Statement"),
and Veritas shall prepare and file with the SEC a registration statement on Form
S-4 (the "Registration Statement") in which the Proxy Statement will be included
as a prospectus. Each of Seagate and Veritas shall promptly respond to any
comments of the SEC with respect to the Registration Statement or the Proxy
Statement, shall use its respective commercially reasonable efforts to have the
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing and, in the case of Seagate, shall cause the
Proxy Statement to be mailed to the stockholders of Seagate at the earliest
practicable time. As promptly as practicable after the execution and delivery of
this Agreement, Seagate and Veritas shall prepare and file any other filings
required under the Exchange Act, the Securities Act or any other federal,
foreign or state "blue sky" securities laws relating to the Merger and the other
transactions contemplated hereby (collectively, the "Other Filings"). Each of
Seagate and Veritas shall notify the other promptly upon the receipt of any
comments from the SEC or its staff, and of any request by the SEC or its staff
or any other government officials for amendments or supplements to the
Registration Statement, the Proxy Statement or any Other Filing, or for
additional information, and shall supply the other with copies of all
correspondence between such party or any of its agents or representatives, on
the one hand, and the SEC, or its staff or any other government officials, on
the other hand, with respect to the Registration Statement, the Proxy Statement,
or any Other Filing. The Registration Statement, the Proxy Statement and the
Other Filings shall comply in all material respects with all applicable
requirements of law and the rules and regulations promulgated thereunder.
Whenever any event occurs which is required to be set forth in an amendment or
supplement to the Registration Statement, the Proxy Statement or any Other
Filing, Seagate or Veritas, as the case may be, shall promptly inform the other
of such event, and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of Seagate, such amendment
or supplement.
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(b) Subject to the terms of Section 5.2(c) hereof, the Proxy Statement
shall include the recommendation of the Board of Directors of Seagate in favor
of adoption and approval of this Agreement and the Merger. The Proxy Statement
shall also include the recommendation of the Board of Directors of Veritas in
favor of approval of the Share Increase and the Merger.
5.2 Stockholder Meetings.
(a) Subject to the terms of Section 5.2(c) hereof, promptly after the date
hereof and in consultation with Veritas, Seagate shall take all action necessary
in accordance with Delaware Law and its Certificate of Incorporation and Bylaws
to convene the Seagate Stockholders' Meeting and Veritas shall call the Veritas
Stockholders' Meeting, to be held as promptly as practicable, for the purpose of
voting upon (i) this Agreement, the Merger and the transactions contemplated
under the OD Documents, (ii) the Merger and (iii) if necessary, the Share
Increase, as the case may be. Seagate and Veritas shall use all reasonable
efforts to hold the Veritas Stockholders' Meeting and the Seagate Stockholders'
Meeting on the same day and as soon as practicable after the date on which the
Registration Statement becomes effective. Nothing herein shall prevent Seagate
or Veritas from adjourning or postponing the Seagate Stockholders' Meeting or
the Veritas Stockholders' Meeting, as the case may be, to the extent necessary
to ensure that any necessary supplement or amendment to the Proxy Statement is
provided to the stockholders of Veritas and Seagate in advance of a vote
relevant to the Merger and this Agreement. Subject to the terms of Section
5.2(c) hereof, Seagate and Veritas shall each use its commercially reasonable
efforts to solicit proxies from its stockholders in favor of the adoption and
approval of the items in clauses (i) and (ii) of the preceding sentence, as
relevant, and shall take all other action necessary or advisable to secure the
vote or consent of its stockholders required by the rules of the National
Association of Securities Dealers, Inc., Delaware Law, The New York Stock
Exchange, Inc. and all other applicable legal requirements to obtain such
approval.
(b) Subject to the terms of Section 5.2(c) hereof: (i) the Board of
Directors of Seagate shall recommend that Seagate's stockholders vote in favor
of and adopt and approve this Agreement and the Merger and the transactions
contemplated under the OD Documents at the Seagate Stockholders' Meeting; (ii)
the Proxy Statement shall include a statement to the effect that the Board of
Directors of Seagate has recommended that Seagate's stockholders vote in favor
of and adopt and approve this Agreement and the Merger and the transactions
contemplated under the OD Documents at the Seagate Stockholders' Meeting, (iii)
neither the Board of Directors of Seagate nor any committee thereof shall
withdraw, amend or modify, or propose or resolve to withdraw, amend or modify in
a manner adverse to Veritas, the recommendation of the Board of Directors of
Seagate that the stockholders of Seagate vote in favor of and adopt and approve
this Agreement and the Merger, and, unless this Agreement shall have been
terminated, Seagate shall cause Seagate Software to vote the shares of Veritas
Common Stock it holds in favor of the Share Increase and the Merger.
(c) Notwithstanding the foregoing or anything to the contrary set forth in
this Agreement, nothing in this Agreement shall prevent the Board of Directors
of Seagate from withdrawing, amending or modifying its recommendation in favor
of this Agreement and the Merger (i) Seagate receives a Seagate Superior Offer
(as defined below) and such Seagate Superior Offer is not withdrawn, (ii)
neither Seagate nor any of its agents or representatives has violated any of the
restrictions set forth in Section 5.4(a) hereof, and (iii) the Board of
Directors of Seagate concludes in good faith, after consultation with its
22
outside counsel, that, in light of such Seagate Superior Offer, the withholding,
withdrawal, amendment or modification of such recommendation is necessary in
order for the Board of Directors of Seagate to comply with its fiduciary
obligations to the stockholders of Seagate under applicable law. For all
purposes of and under this Agreement, the term "Seagate Superior Offer" shall
mean a bona fide written offer made by a third party to consummate any of the
following transactions: (a) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Seagate, pursuant to which the stockholders of Seagate immediately preceding the
consummation of such transaction would hold less than fifty percent (50%) of the
equity interest in the surviving or resulting entity of such transaction (or the
ultimate parent entity thereof); (b) a sale or other disposition by Seagate of
assets and properties (excluding inventory and used equipment sold in the
ordinary course of business) representing more than fifty percent (50%) of
Seagate's assets immediately prior to such sale or other disposition, or (c) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by Seagate), directly or indirectly, of beneficial
ownership or a right to acquire beneficial ownership of shares representing more
than fifty percent (50%) of the voting power of the then outstanding shares of
capital stock of the Seagate, in each case on terms that the Board of Directors
of Seagate determines, in its reasonable judgment, after consultation with its
financial advisor, to be more favorable to the stockholders of Seagate, from a
financial point of view, than the terms of this Agreement and the Merger;
provided, however, that any such offer shall not be deemed to be a "Seagate
Superior Offer" if any financing required to consummate the transaction
contemplated by such offer is not committed and is not likely in the judgment of
the Board of Directors of Seagate to be obtained by such third party on a timely
basis. Notwithstanding the foregoing or anything to the contrary set forth in
this Agreement, nothing in this Agreement shall prevent the Board of Directors
of Seagate from withdrawing, amending or modifying its recommendation in favor
of the transactions contemplated by the OD Documents, or terminating the OD
Documents in accordance with their terms.
5.3 Confidentiality. Veritas and Seagate acknowledge that they have
previously entered into a Confidentiality Agreement (the "Confidentiality
Agreement"), which shall continue in full force and effect in accordance with
its terms.
5.4 No Solicitation.
(a) From the execution and delivery of this Agreement and until the earlier
to occur of the Effective Time and termination of this Agreement pursuant to
Section 7.1 hereof, Seagate and its Subsidiaries shall not, and they shall cause
their respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them not
to, directly or indirectly (i) solicit, initiate, encourage or induce the
making, submission or announcement of any Seagate Acquisition Proposal (as
defined in Section 5.4(b) hereof), (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any Seagate
Acquisition Proposal, (iii) engage in discussions with any person with respect
to any Seagate Acquisition Proposal, (iv) subject to the terms of Section 5.2(c)
hereof, approve, endorse or recommend any Seagate Acquisition Proposal, or (v)
enter into any letter of intent or similar document or any contract, agreement
or commitment contemplating or otherwise relating to any Seagate Acquisition
Transaction (as defined in Section 5.4(b) hereof); provided, however, that until
the date on which this Agreement is approved by the requisite vote of the
stockholders of Seagate, the terms of this Section 5.4(a) shall not prohibit
Seagate from
23
furnishing information regarding Seagate and its Subsidiaries to, entering into
a confidentiality or non-disclosure agreement with, or entering into discussions
with, any person or group in response to a Seagate Superior Offer submitted by
such person or group (and not withdrawn) if (a) neither Seagate nor any agents
or representative of Seagate and its Subsidiaries shall have violated any of the
restrictions set forth in this Section 5.4(a), (b) the Board of Directors of
Seagate concludes in good faith, after consultation with its outside legal
counsel, that such action is necessary in order for the Board of Directors of
Seagate to comply with its fiduciary obligations to the stockholders of Seagate
under applicable Law, (c) Seagate receives from such person or group an executed
confidentiality or non-disclosure agreement containing customary limitations on
the use and disclosure of all non-public written and oral information furnished
to such person or group by or on behalf of Seagate and containing terms no less
favorable to the disclosing party than the terms of the Confidentiality
Agreement (including with respect to any standstill arrangements, unless the
standstill arrangements in the Confidentiality Agreement are waived and (d)
prior to furnishing any such non-public information to such person or group, or
entering into negotiations or discussions, Seller notifies Purchaser promptly of
such inquiries, proposals or offers received by, any such information requested
from, or any such discussions or negotiations sought to be initiated or
continued with, any of its representatives indicating, in connection with such
notice, the name of the person and the terms and conditions of any inquiries,
proposals or offers, and furnishes such non-public information to Veritas to the
extent such information has not been previously furnished to Veritas. Seagate
and its subsidiaries shall immediately cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Seagate Acquisition Proposal.
(b) For all purposes of and under this Agreement, the term "Seagate
Acquisition Proposal" shall mean any offer or proposal (other than an offer or
proposal by Veritas) relating to any Seagate Acquisition Transaction. For all
purposes of and under this Agreement, "Seagate Acquisition Transaction" shall
mean any transaction or series of related transactions, other than the
transactions contemplated by this Agreement or the OD Documents, involving: (i)
any acquisition or purchase from Seagate by any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) of more than fifteen percent (15%) in interest of the
total outstanding voting securities of Seagate, or any tender offer or exchange
offer that if consummated would result in any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) beneficially owning more than fifteen percent (15%) of
the total outstanding voting securities of Seagate, or any merger,
consolidation, business combination or similar transaction involving Seagate
pursuant to which the stockholders of Seagate immediately preceding such
transaction would hold less than fifteen percent (15%) of the equity interests
in the surviving or resulting entity of such transaction; (ii) any sale, lease
(other than in the ordinary course of business), exchange, transfer, license
(other than in the ordinary course of business), acquisition or disposition of
more than fifteen percent (15%) of the assets and properties of Seagate; or (iv)
any liquidation or dissolution of Seagate, excluding, in all cases any
disposition of the assets covered by the OD Documents.
(c) In addition to the restrictions and obligations of Seagate set forth in
Section 5.4(a) hereof, Seagate as promptly as practicable, and in any event
within twenty-four (24) hours, shall advise Veritas orally and in writing of any
request received by Seagate for non-public information which Seagate reasonably
believes could lead to a Seagate Acquisition Proposal or of any Seagate
Acquisition Proposal, the material terms
24
and conditions of such request or Seagate Acquisition Proposal, and the identity
of the person or group making any such request or Seagate Acquisition Proposal.
Seagate shall keep Veritas informed in all material respects of the status and
details (including material amendments or proposed amendments) of any such
request or Seagate Acquisition Proposal.
5.5 Public Disclosure. Veritas and Seagate shall consult with each other
and agree before issuing any press release or otherwise making any public
statement with respect to the Merger, this Agreement, or a Seagate Acquisition
Proposal and shall not issue any such press release or make any such public
statement prior to such agreement, except as may be required by law or any
listing agreement with a national securities exchange or the Nasdaq, in which
case reasonable efforts to consult with the other party hereto shall be made
prior to such release or public statement; provided, however, that no such
consultation or agreement shall be required if, prior to the date of such
release or public statement, Seagate shall have withheld, withdrawn, amended or
modified its recommendation in favor of this Agreement and the Merger or the OD
Documents and the transactions contemplated thereunder.
5.6 Legal Requirements. Each of Veritas, Merger Sub and Seagate shall take
all reasonable actions necessary or desirable to comply promptly with all legal
requirements which may be imposed on them with respect to the consummation of
the Merger and the other transactions contemplated hereby (including, without
limitation, furnishing all information required in connection with approvals of,
or filings with, any Governmental Entity, and prompt resolution of any
litigation prompted hereby), and shall promptly cooperate with, and furnish
information to, the other party hereto to the extent necessary in connection
with any such requirements imposed upon either of them or their respective
subsidiaries in connection with the consummation of the Merger and the other
transactions contemplated hereby. Veritas shall use its commercially reasonable
efforts to take such steps as may be necessary to comply with the securities and
state "blue sky" securities laws of all jurisdictions which are applicable to
the issuance of Veritas Common Stock pursuant to the Merger in accordance with
this Agreement. Seagate shall use its commercially reasonable efforts to assist
Veritas as may be necessary to comply with the securities and state "blue sky"
securities laws of all jurisdictions which are applicable in connection with the
issuance of Veritas Common Stock pursuant to the Merger in accordance with this
Agreement.
5.7 Notification of Certain Matters. Veritas shall give prompt notice to
Seagate, and Seagate shall give prompt notice to Veritas, of the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (i) any representation or warranty contained in this
Agreement to be untrue or inaccurate at the Effective Time, such that the
conditions set forth in Section 6.2(a) or Section 6.3(a) hereof, as the case may
be, would not be satisfied or fulfilled as a result thereof, or (ii) any
material failure of Veritas, Merger Sub or Seagate, as the case may be, or of
any officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement. Notwithstanding the foregoing, the delivery of any notice
pursuant to this Section 5.7 shall not limit or otherwise affect the rights and
remedies available hereunder to the party receiving such notice.
5.8 Commercially Reasonable Efforts and Further Assurances. Subject to the
respective rights and obligations of Veritas and Seagate under this Agreement,
each of Veritas and Seagate shall use its respective commercially reasonable
efforts to effectuate
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the Merger and the other transactions contemplated hereby, and to fulfill and
cause to be fulfilled the conditions to the Closing under this Agreement. Each
of Veritas and Seagate, at the reasonable request of the other party hereto,
shall execute and deliver such other instruments, and do and perform such other
acts and things, as may be necessary or desirable for effecting completely the
consummation of the Merger and the other transactions contemplated hereby.
5.9 Indemnification.
(a) From and after the Effective Time, the Surviving Corporation shall
fulfill and honor in all respects the obligations of Seagate pursuant to any
indemnification agreements between Seagate and any of its directors and officers
existing prior to the date hereof to the extent the obligations thereunder
relate to the approval and adoption of the Merger. The Certificate of
Incorporation and Bylaws of the Surviving Corporation shall contain the
provisions with respect to indemnification, exculpation, expense advancement and
elimination of liability for monetary damages relating to the approval and
adoption of the Merger at least as favorable as is set forth in the Certificate
of Incorporation and Bylaws of Seagate, which provisions shall not be amended,
repealed or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who, at the Effective Time, were directors, officers, employees or
agents of Seagate, unless such modification is required by law.
(b) For a period of six (6) years after the Effective Time, Veritas shall
use its commercially reasonable efforts to maintain in effect, if available,
directors' and officers' liability insurance (or purchase tail coverage)
covering those persons who are currently covered by Seagate's directors' and
officers' liability insurance policy on terms comparable to those applicable to
the then current directors and officers of Veritas.
(c) In the event that the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers a material amount of its assets and properties to any
person in a single transaction or a series of related transactions, then, and in
each such case, the Surviving Corporation shall either guaranty the
indemnification obligations of the Surviving Corporation under this Section
5.10, or shall make, or cause to be made, proper provision so that the
successors and assigns of the Surviving Corporation assume the indemnification
obligations of the Surviving Corporation under this Section 5.11 for the benefit
of the parties entitled to the benefits of this Section 5.10 (the "Indemnified
Parties"). The terms and provisions of this Section 5.10 are (a) intended to be
for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, and (b) in addition to, and not in substitution for, any other rights
to indemnification or contribution that any of the Indemnified Parties may have
by contract or otherwise.
(d) This Section 5.9 shall survive any termination of this Agreement and
the consummation of the Merger at the Effective Time, and shall be binding on
all successors and assigns of the Surviving Corporation.
5.10 Tax-Free Reorganization. Neither Seagate nor Veritas shall, nor shall
either permit any of its Subsidiaries to take or cause to be taken any action
that would disqualify the Merger as a "reorganization" within the meaning of
Section 368(a) of the Code; provided, however, that neither party shall have any
liability under this Section 5.10 as a result of any action contemplated
hereunder or by the OD Documents.
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5.11 Nasdaq Listing. Veritas shall authorize for listing on the Nasdaq the
shares of Veritas Common Stock issuable pursuant to the Merger in accordance
with this Agreement, upon official notice of issuance.
5.12 Seagate Affiliate Agreement. Prior to the Seagate Stockholders
Meeting, Seagate shall provide Veritas a complete and accurate list of those
persons who may be deemed to be, in Seagate's reasonable judgment, affiliates of
Seagate within the meaning of Rule 145 promulgated under the Securities Act (a
"Seagate Affiliate"). Seagate shall provide Veritas with such information and
documents as Veritas reasonably requests for purposes of reviewing and verifying
the foregoing list. Seagate shall deliver or cause to be delivered to Veritas as
promptly as practicable on or following the date hereof, but in no event later
than the date the Proxy Statement is filed with the SEC, from each Seagate
Affiliate an executed Affiliate Agreement, in customary form and substance
reasonably satisfactory to Veritas (the "Seagate Affiliate Agreement"), each of
which will be effective as of the Effective Time. Veritas shall be entitled to
place appropriate legends on the certificates evidencing any Veritas Common
Stock to be received by a Seagate Affiliate pursuant to the Merger in accordance
with this Agreement, and to issue appropriate stop transfer instructions to the
transfer agent for the Veritas Common Stock.
5.13 Regulatory Filings; Reasonable Efforts. As soon as practicable
following the execution and delivery of this Agreement, Seagate and Veritas each
shall file with the United States Federal Trade Commission (the "FTC") and the
Antitrust Division of the United States Department of Justice ("DOJ") a
Notification and Report Form relating to the Merger and the other transactions
contemplated hereby as required by the HSR Act, as well as any comparable
pre-merger notification forms required by the merger notification or control
laws and regulations of any applicable jurisdiction, as agreed to by Seagate and
Veritas. Seagate and Veritas each shall promptly (i) supply the other with any
information which may be required in order to effectuate the foregoing filings,
and (ii) supply any additional information which reasonably may be required by
the FTC, the DOJ or the competition or merger control authorities of any other
jurisdiction and which the parties may reasonably deem appropriate.
5.14 Access to Information. From the date hereof until the Effective Date,
Seagate will, and will cause each of its subsidiaries to (i) allow Veritas and
its officers, employees, counsel, accountants, actuaries, consultants and other
authorized representatives ("Representatives") to have full access to the books,
records, contracts, properties, facilities, accountants, actuaries, consultants,
advisors, management and personnel of Seagate and its subsidiaries at all
reasonable times, (ii) furnish promptly to Veritas and its Representatives all
information and documents concerning Seagate and its subsidiaries as Veritas or
its Representatives may reasonably request and (iii) cause the respective
officers, employees and Representatives of Seagate and its subsidiaries to
cooperate in good faith with Veritas and its Representatives in connection with
all such access.
5.15 TRA Matters.
(a) Form. The TRA Rights shall be evidenced by a non-transferable document
in form and substance reasonably satisfactory to Veritas and Seagate, and shall
contain legends to the effect that they are non-negotiable instruments as well
as such other legends as may be required by law. The TRA Rights shall have an
expiration date of March 31, 2003, after which time they shall expire without
further act. After the expiration date of the TRA Rights, any TRA Amounts
received by Veritas and its Affiliates shall be the property of Veritas without
any obligation whatsoever to account therefor to former holders of the TRA
Rights.
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(b) Administration generally. On or prior to the Effective Time, Seagate
shall designate one or more designees (the "Administrators") who shall be
responsible for overseeing collection of the TRA Amounts and coordinating
activities with representatives of Veritas and Purchaser with respect to Seagate
Taxes. Veritas and Seagate will, prior to the Effective Time, cooperate in good
faith with respect to establishing procedures and structures designed to
maximize the aggregate value of the TRA Amount and minimize the amount of
administrative costs. This may include the establishment of segregated accounts,
pass-through trusts or similar devices (collectively, a "Collection Account") to
receive periodic payments of TRA Amounts. The Administrators shall be entitled
to charge the Collection Account a fee of 1% for all amounts deposited therein
and distributed to holders of the TRA Rights.
(c) Collection Amount. Following the Effective Time, Veritas shall forward
to the Collection Account (and notify the Administrators of) any such refunds or
credits after receipt or realization thereof by Veritas.
(d) Payments. Any payments from Veritas required to be paid shall be made
within 10 business days of the receipt of any refund or realization of credit as
the case may be. Any such payments not made within such time period, shall be
subject to an interest charge of 8% per annum.
(e) Investments/Distributions. Amounts deposited in the Collection Account
shall be invested in short-term money markets instruments, and shall be
distributed to holders of TRA Rights on each calendar quarterly end commencing
September 30, 2000.
(f) Conduct of Audits and Other Procedural Matters. The Administrators
shall have the right to initiate any claim for refund, credit or amended return
that would give rise to a TRA Amount, and to control any audit, examination or
contest with respect thereto, except if such audit, examination or contest may
give rise to an indemnification obligation by Purchaser under the
Indemnification Agreement, in which case the provisions of Section 6(d)(i) of
the Indemnification Agreement shall control. Venus shall promptly forward to the
Administrators all written notifications and other written communications,
including if available the original envelope showing any postmark, from any
taxing authority received by Venus or its affiliates relating to the TRA Amount.
(g) Assistance and Cooperation. After the Effective Time, Veritas shall
(and shall cause their respective Affiliates to):
(i) Assist the Administrators in calculating the potential amount of
the TRA Amount and included any Tax Returns prepaid by Veritas claims for
refunds or credits designed to maximize the TRA Amount;
(ii) Cooperate fully in preparing for any audits of, or disputes with
taxing authorities regarding the TRA Amount;
(iii) Make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating to
Taxes of Veritas, Seagate or any of their respective subsidiaries;
(iv) Provide timely notice to the other in writing of any pending or
threatened Tax audits or assessments relating to refunds or credits
included or potentially includable by individuals in the TRA Amount; and
(v) Furnish the other with copies of all correspondence received from
any taxing authority in connection with any Tax audit which may affect
refunds or credits included or potentially includable in the TRA Amount.
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(h) Exculpation. In performing any duties under this Agreement, the
Administrator shall not be liable to any party for damages, losses, or expenses,
except for negligence or willful misconduct on the part of the Administrator.
The Administrator shall not incur any such liability for (A) any act or failure
to act made or omitted in good faith, or (B) any action taken or omitted in
reliance upon any instrument, including any written statement or affidavit
provided for in this Agreement that the Administrator shall in good faith
believe to be genuine, nor will the Administrator be liable or responsible for
forgeries, fraud, impersonations, or determining the scope of any representative
authority. In addition, the Administrator may consult with legal counsel in
connection with performing the Administrator's duties under this Agreement and
shall be fully protected in any act taken, suffered, or permitted by him/her in
good faith in accordance with the advice of counsel. The Administrator is not
responsible for determining and verifying the authority of any person acting or
purporting to act on behalf of any party to this Agreement.
(i) Dragon Shares. Any Dragon Shares escrowed at the Effective Time or with
respect to which the parties did not mutually agree to a value, shall be added
to the TRA Amount, mutatis mutandis.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction
or fulfillment, at or prior to the Effective Time, of the following conditions:
(a) Stockholder Approvals. This Agreement shall have been approved and
adopted, and the Merger shall have been duly approved, by the requisite
vote under applicable law by the stockholders of Seagate. The Share
Increase and the Merger shall have been approved by the requisite vote of
the Veritas stockholders.
(b) Registration Statement Effective; Proxy Statement. The SEC shall
have declared the Registration Statement effective. No stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose, and no
similar proceeding in respect of the Proxy Statement, shall have been
initiated or threatened in writing by the SEC.
(c) No Order; HSR Act. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of
making the Merger illegal or otherwise prohibiting consummation of the
Merger. All requirements, if any, under the HSR Act or equivalent foreign
statute, rule, regulation or order relating to the transactions
contemplated hereby shall have expired or terminated early.
(d) Tax Opinions. Veritas and Seagate shall each have received
substantially identical written opinions from their respective counsels,
Willkie Farr & Gallagher and Wilson Sonsini Goodrich & Rosati, Professional
Corporation, in form and substance reasonably satisfactory to them, to the
effect that the Merger should constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and such opinions shall not have
been withdrawn. The parties to this Agreement agree to make reasonable
representations as requested by such counsel for the purpose of rendering
such opinions.
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(e) Closing of OD Documents. The closing of the transactions
contemplated by the OD Documents shall have occurred without waiver of
Section 9.2(a) and (b) or 9.3(a) and (b) of the OD Documents, and pursuant
thereto, Seagate and Star Software shall not have (i) any assets or
properties other than the Designated Assets, or (ii) any Liabilities (other
than the Designated Liabilities) or other obligations (absolute, accrued
contemplated or otherwise) for which Veritas is not entitled to
indemnification under the Indemnification Agreement, and Seagate and
Purchaser shall have provided Veritas with certificates by their respective
Chief Financial Officers to the foregoing effect.
6.2 Additional Conditions to Obligations of Seagate. The obligation of
Seagate to consummate and effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction or fulfillment, at or
prior to the Effective Time, of the following conditions, any of which may be
waived, in writing, exclusively by Seagate:
(a) Representations and Warranties. The representations and warranties
of Veritas and Merger Sub contained in this Agreement shall have been true
and correct in all material respects as of the date hereof, except where
the failure to be so true and correct would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect on Veritas. In
addition, the representations and warranties of Veritas contained in this
Agreement shall be true and correct in all material respects on and as of
the Effective Time (except for changes contemplated by this Agreement and
except for those representations and warranties which address matters only
as of a particular date, which shall have been true and correct only as of
such particular date), with the same force and effect as if made on and as
of the Effective Time, except in such cases where the failure to be so true
and correct would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect on Veritas. Seagate shall have received a
certificate with respect to the foregoing signed on behalf of Veritas by
the Chief Executive Officer and the Chief Financial Officer of Veritas.
(b) Agreements and Covenants. Veritas and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it
on or prior to the Effective Time, and Seagate shall have received a
certificate to such effect signed on behalf of Veritas by the Chief
Executive Officer and the Chief Financial Officer of Veritas.
6.3 Additional Conditions to the Obligations of Veritas and Merger
Sub. The obligations of Veritas and Merger Sub to consummate and effect the
Merger shall be subject to the satisfaction or fulfillment, at or prior to the
Effective Time, of the following conditions, any of which may be waived, in
writing, exclusively by Veritas:
(a) Representations and Warranties. The representations and warranties
of Seagate contained in this Agreement shall have been true and correct in
all material respects as of the date hereof, except where the failure to be
so true and correct would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect on Seagate. In addition, the representations
and warranties of Seagate contained in this Agreement shall be true and
correct in all material respects on and as of the Effective Time (except
for changes contemplated by this Agreement and except for those
representations and warranties which address matters only as of a
particular date, which shall have been true and correct as of such
particular date), with the same force and effect as if made on and as of
the Effective Time, except in such cases where the failure to be so true
and correct would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect on Seagate. Veritas shall
30
have received a certificate with respect to the foregoing signed on behalf
of Seagate by the President and the Chief Financial Officer of Seagate. The
representations and warranties in Section 2.3(b) hereof shall be true and
correct in all material respects.
(b) Agreements and Covenants. Seagate shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time, and the Veritas shall have received a certificate to such
effect signed on behalf of Seagate by the President and the Chief Financial
Officer of Seagate.
(c) Indemnification Agreement Representations and Warranties. Each of
the representations and warranties of the parties (other than Veritas) in
the Indemnification Agreement (i) to the extent qualified by materiality
shall be true and correct, and (ii) to the extent not qualified by
materiality, shall be true and correct in all material respects, in each of
cases (i) and (ii), on the date of this Agreement and as of the Closing
Date, as if made at and as of such time (except to the extent expressly
made as of an earlier date, in which case as of such date), except as
otherwise contemplated by this Agreement. The Indemnification Agreement
shall be in full force and effect, and each Subsidiary of Purchaser shall
have executed and delivered a joinder agreement in accordance with the
terms of the Indemnification Agreement.
(d) Financing. The Financing (as defined in the OD Documents) shall
have closed on the terms and conditions specified in the Commitment Letters
(as defined in the OD Documents) and no material change in the terms of
such Financing shall have occurred which, in Veritas' reasonable judgment,
would materially and adversely impact Purchaser's ability to timely satisfy
its obligations under the Indemnification Agreement.
ARTICLE VII
TERMINATION, FEES AND EXPENSES; AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of this Agreement and the
Merger by the stockholders of Seagate:
(a) by mutual written consent, duly authorized by the Boards of
Directors of Veritas and Seagate;
(b) by either Seagate or Veritas, if the Merger shall not have been
consummated by December 31, 2000; provided, however, that the right to
terminate this Agreement pursuant to this Section 7.1(b) shall not be
available to any party hereto whose failure to fulfill any obligation under
this Agreement (including, without limitation, such party's obligation
under Section 5.4 hereof) has been a principal cause of, or resulted in,
the failure of the Merger to be consummated on or before such date
(c) by either Seagate or Veritas, if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, which order, decree or ruling is final and
nonappealable;
(d) by either Seagate or Veritas, if (i) the requisite approval of the
stockholders of Seagate under applicable law to approve this Agreement and
the Merger shall not have been obtained by reason of the failure to obtain
the requisite vote upon a vote
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taken at a meeting of the stockholders of Seagate duly convened therefor or
at any adjournment or postponement thereof; and (ii) the required approval
by the stockholders of Veritas of the Share Increase (if not previously
approved) and the Merger shall not have been obtained by reason of the
failure to obtain the required vote at a meeting of Veritas stockholders
duly convened therefor or at any adjournment thereto; provided, however,
that a party's right to terminate this Agreement pursuant to this Section
7.1(d) shall not be available to Seagate if the failure to obtain the
foregoing approval of the stockholders of that party shall have been caused
by that party's action or failure to act in a manner which constitutes a
material breach of this Agreement;
(e) by Seagate, upon a breach by Veritas of any representation,
warranty, covenant or agreement of Veritas in this Agreement, or if any
representation or warranty of Veritas shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
hereof would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue; provided,
however, that if such inaccuracy in Veritas' representations and
warranties, or breach by Veritas, is curable, then Seagate may not
terminate this Agreement pursuant to this Section 7.1(e) for thirty-five
(35) calendar days after delivery of written notice to Veritas of such
breach, provided that Veritas continues to exercise commercially reasonable
efforts to cure such breach (it being understood that Seagate may not
terminate this Agreement pursuant to this Section 7.1(e) if such breach by
Veritas is cured during such thirty-five (35)-day period);
(f) by Veritas, upon a breach by Seagate of any representation,
warranty, covenant or agreement of Seagate contained in this Agreement, or
if any representation or warranty of Seagate shall have become untrue, in
either case such that the conditions set forth in Section 6.3(a) or Section
6.3(b) hereof would not be satisfied as of the time of such breach or as of
the time such representation or warranty shall have become untrue,
provided, however, that if such inaccuracy in Seagate's representations and
warranties, or breach by Seagate, is curable then Veritas may not terminate
this Agreement pursuant to this Section 7.1(f) for thirty-five (35)
calendar days after delivery of written notice to Seagate of such breach,
provided that Seagate continues to exercise commercially reasonable efforts
to cure such breach (it being understood that Veritas may not terminate
this Agreement pursuant to this Section 7.1(f) if such breach by Seagate is
cured during such thirty-five (35)-day period);
(g) by Seagate, if (i) prior to the receipt of the requisite approval
of the stockholders of Seagate to this Agreement and the Merger, Seagate
receives a Seagate Superior Offer and the Board of Directors of Seagate
concludes in good faith, after consultation with its outside counsel, that
in light of such Seagate Superior Offer, the termination of this Agreement
in order to accept such Seagate Superior Offer is necessary in order for
the Board of Directors of Seagate to comply with its fiduciary obligations
to the stockholders of Seller under applicable law, and Seagate enters into
an agreement contemplating, or consummates, a Seagate Acquisition
Transaction, and (ii) Seagate has complied with all of its obligations
under Section 5.4 hereof, and (iii) prior to the termination of this
Agreement pursuant to this Section 7.1(g), pays Veritas the Seagate
Termination Fee pursuant to Section 7.3(b)(ii) hereof; provided, that such
termination may take place only after two (2) business days following
Veritas' receipt of written notice advising Veritas that the Board of
Directors of Seagate has received a Seller Superior Offer specifying the
32
material terms and conditions of such Seagate Superior Offer (and including
a copy thereof with all accompanying documentation, if in writing),
identifying the person making such Seagate Superior Offer and stating that
it intends to make the determination set forth in clause (i) of this
Section 7.1(g). After providing such notice, Seagate shall provide an
opportunity to Veritas to make such adjustments in the terms and conditions
of this Agreement as would enable Seagate to proceed with its
recommendation to its stockholders without making the determination set
forth in clause (i) of this Section 7.1(g); provided, further, however,
that any such adjustment shall be at the discretion of Veritas at the time;
or
(h) by Veritas, if a Veritas Triggering Event shall have occurred. For
all purposes of and under this Agreement, a "Veritas Triggering Event"
shall be deemed to have occurred if: (i) the Board of Directors of Seagate
(or any committee thereof) shall for any reason have withdrawn or shall
have amended or modified in a manner adverse to Veritas its recommendation
in favor of the adoption and approval of this Agreement or the Merger; (ii)
Seagate shall have failed to include in the Proxy Statement the
recommendation of the Board of Directors of Seagate in favor of the
adoption and approval of this Agreement and the Merger or shall have taken
any action or made any statement inconsistent with such recommendation; or
(iii) a tender or exchange offer relating to securities of Seagate shall
have been commenced by a person unaffiliated with Veritas, and Seagate
shall not have sent to its securityholders pursuant to Rule 14e-2
promulgated under the Securities Act, within ten (10) business days after
such tender or exchange offer is first published sent or given, a statement
disclosing that Seagate recommends rejection of such tender or exchange
offer; or
(i) by Seagate, if: (i) the Board of Directors of Veritas (or any
committee thereof) shall for any reason have withdrawn or shall have
amended or modified in a manner adverse to Seagate its recommendation in
favor of the Share Increase (if not previously approved) and the Merger; or
(ii) Veritas shall have failed to include in the Proxy Statement the
recommendation of the Board of Directors of Veritas in favor of the Share
Increase (if not previously approved) and the Merger.
7.2 Notice of Termination; Effect of Termination. Except as set forth in
Section 7.3(b), any termination of this Agreement pursuant to Section 7.1 hereof
shall be effective immediately upon the delivery of written notice of the
terminating party to the other party hereto. In the event of the termination of
this Agreement pursuant to Section 7.1 hereof, this Agreement shall be of no
further force or effect, except (i) as set forth in this Section 7.2, Section
7.3 hereof and Article VIII hereof, each of which shall survive the termination
of this Agreement without limitation, and (ii) that nothing herein shall relieve
any party from liability for any intentional breach of this Agreement. A change
by the Veritas board of directors of its recommendation of approval of the
Merger and/or the Share Increase shall be an intentional breach by Veritas of
the terms hereof unless Veritas, at the time of such change, had the right to
terminate this Agreement. In the event of the termination of this Agreement
under circumstances whereby the Seagate Termination Fee shall be payable, either
immediately or based upon the occurrence of a subsequent event, the provisions
of any standstill or similar agreement that would prevent an acquisition by
Veritas or any of its affiliates of capital stock or assets of Seagate or any
affiliate of Seagate (such provisions being "standstill provisions") shall
terminate without any further action on the Part of Veritas or Seagate,
providing that (i) only such standstill provisions of any such agreement shall
terminate and the remaining provisions thereof shall remain in full force and
effect in accordance with their terms and (ii) no severability
33
provisions of any such agreement shall be interpreted to require the replacement
of such standstill provisions with any other provision.
7.3 Fees and Expenses.
(a) General. Except as set forth in this Section 7.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated.
(b) Seagate Payments.
(i) Seagate shall pay to Veritas in immediately available funds,
within one (1) business day after such notice of termination is delivered,
an amount equal to $440,000,000 (the "Seagate Termination Fee") if this
Agreement is terminated by Veritas pursuant to Section 7.1(h) hereof.
(ii) Seagate shall pay Veritas in immediately available funds, prior
to the termination of this Agreement, an amount equal to the Seagate
Termination Fee if this Agreement is terminated by Seagate pursuant to
Section 7.1(g) hereof.
(iii) Seagate shall pay to Veritas in immediately available funds,
within one (1) business day after the date Seagate directly or indirectly
enters into an agreement with any third party with respect to a Seagate
Acquisition Transaction or a Seagate Acquisition Transaction is
consummated, an amount equal to the Seagate Termination Fee if (A) this
Agreement is terminated by Veritas pursuant to Section 7.1(d)(i) hereof and
at such time was not terminable by Seagate pursuant to Section 7.1(d)(ii),
(B) at any time after the date of this Agreement and at or before the
Seagate Stockholder Meeting a Seagate Acquisition Proposal shall have been
publicly announced or otherwise communicated to the Seagate, and (C) within
twelve (12) months of the termination of this Agreement, Seagate directly
or indirectly enters into an agreement with any third party with respect to
a Seagate Acquisition Transaction or a Seagate Acquisition Transaction is
consummated.
(iv) Seagate shall pay to Veritas in immediately available funds,
within one (1) business day after the first to occur of the events set
forth in clause (d) below, an amount equal to the Seagate Termination Fee
if (A) this Agreement is terminated by either party pursuant to Section
7.1(b) hereof and at such time was not terminable by Seagate pursuant to
Section 7.1(d)(ii), (B) at any time after the date of this Agreement and at
or before the Termination Date a Seagate Acquisition Proposal shall have
been publicly announced or otherwise communicated to the Seagate, (C)
following the public announcement or communication of such Seagate
Acquisition Proposal and prior to any such terminations, Seagate shall have
intentionally breached (and not cured after notice thereof) any of its
covenants or agreements set forth in this Agreement in any material
respect, which breach shall have contributed to the failure of the Closing
to occur on or before the Termination Date, and (D) within twelve (12)
months of the termination of this Agreement, Seagate directly or indirectly
enters into an agreement with any third party with respect to a Seagate
Acquisition Transaction or a Seagate Acquisition Transaction is
consummated.
(v) For all purposes of and under this Section 7.3, the term "Seagate
Acquisition Proposal" shall mean any offer or proposal (other than an offer
or proposal by Veritas relating to any Seagate Acquisition Transaction. For
all purposes of and under this Section 7.3, "Seagate Acquisition
Transaction" shall mean any transaction or series of
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related transactions involving: (i) any acquisition or purchase from
Seagate by any person or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder) of more
than fifty percent (50%) in interest of the total outstanding voting
securities of Seagate, or any tender offer or exchange offer that if
consummated would result in any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder) beneficially owning more than fifty percent (50%) of the total
outstanding voting securities of Seagate, or any merger, consolidation,
business combination or similar transaction involving Seagate pursuant to
which the stockholders of Seagate immediately preceding such transaction
would hold less than fifty percent (50%) of the equity interests in the
surviving or resulting entity of such transaction (or the ultimate parent
entity thereof); (ii) any sale, lease (other than in the ordinary course of
business), exchange, transfer, license (other than in the ordinary course
of business), acquisition or disposition of more than fifty percent (50%)
of the assets and properties of Seagate; or (iii) any liquidation or
dissolution of Seagate, excluding in all cases any disposition of the
assets covered by the OD Documents.
(vi) Seagate acknowledges that the agreements contained in this
Section 7.3(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Veritas would not enter
into this Agreement.
7.4 Amendment. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of the parties hereto.
7.5 Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations and Warranties. The representations
and warranties of Seagate and Veritas contained in this Agreement shall
terminate at the Effective Time, and only the covenants and agreements that by
their terms survive the Effective Time shall survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via facsimile (receipt confirmed) to the parties at
the following addresses or facsimile numbers
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(or at such other address or facsimile numbers for a party as shall be specified
by like notice):
(a) if to Seagate, to:
Seagate Technology, Inc.
920 Disc Drive
Scotts Valley, California 95066
Attention: General Counsel
Facsimile No.: 831-438-6675
Telephone No.: 831-438-6550
with copies to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Larry W. Sonsini, Esq.
Facsimile No.: 650-493-6811
Telephone No.: 650-493-9300
and to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market Plaza
Spear Tower
San Francisco, California 94105
Attention: Michael J. Kennedy, Esq.
Facsimile No.: 415-947-2099
Telephone No.: 415-947-2000
and to:
Suez Acquisition Company (Cayman) Limited
c/o Silver Lake Partners, L.P.
2725 Sand Hill Road
Building C, Suite 950
Menlo Park, California 94025
Attention: Dave Roux
Facsimile: 650-233-8125
Telephone: 650-233-8121
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: William E. Curbow, Esq.
Facsimile: 212-455-2502
Telephone: 212-455-2000
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and to:
TPG Partners, III, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: Richard A. Ekleberry, Esq.
Facsimile: 817-871-4010
Telephone: 817-871-4000
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Paul J. Shim, Esq.
Facsimile: 212-225-3999
Telephone: 212-225-2000
(b) if to Veritas, Merger Sub or the Surviving Corporation, to:
VERITAS Software Corporation
1600 Plymouth Street
Mountain View, California 94043
Attention: General Counsel
Facsimile: 650-526-2581
Telephone: 650-335-8000
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Attention: Michael A. Schwartz
Facsimile: 212-728-8111
Telephone: 212-728-8000
8.3 Certain Interpretations.
(a) When a reference is made in this Agreement to a Section or an Exhibit,
such reference shall be to a Section or an Exhibit to this Agreement unless
otherwise indicated.
(b) The words "include," "includes" and "including" when used herein shall
be deemed in each case to be followed by the words "without limitation."
(c) The table of contents and headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement, or any term or provision hereof.
(d) Reference to the subsidiaries of an entity shall be deemed to include
all direct and indirect subsidiaries of such entity.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties hereto and delivered to the other party hereto, it being understood
that each party hereto need not sign the same counterpart.
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8.5 Entire Agreement. This Agreement and the documents and instruments and
other agreements among the parties hereto as contemplated by or referred to
herein, including the Seagate Disclosure Schedule and the Veritas Disclosure
Schedule (i) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, it being understood that the Confidentiality Agreement shall continue in
full force and effect until the Closing and shall survive any termination of
this Agreement, and (ii) except as is provided in Section 5.9 hereof, are not
intended to confer upon any other person any rights or remedies hereunder.
8.6 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the of the parties. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
8.11 Waiver of Jury Trial. EACH OF VERITAS AND SEAGATE HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS OF VERITAS AND SEAGATE IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized respective officers, as of the date first
above written.
VERITAS SOFTWARE CORPORATION
By: /s/ Mark Leslie
Name: Mark Leslie
Title: CEO and Chairman of the Board
VICTORY MERGER SUB, INC.
By: /s/ Jay A. Jones
Name: Jay A. Jones
Title: President, Chief Administrative
Officer and Secretary
SEAGATE TECHNOLOGY, INC.
By: /s/ Stephen J. Luzco
Name: Stephen J. Luzco
Title: CEO and President
39