EXHIBIT 2.6
CONSOLIDATED AMENDMENT AND CONSENT NO. 2
CONSOLIDATED AMENDMENT NO. 2 TO
STOCK PURCHASE AGREEMENT, AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION, AND INDEMNIFICATION AGREEMENT, AND CONSENT
THIS AMENDMENT NO. 2 TO STOCK PURCHASE AGREEMENT, AGREEMENT AND PLAN OF
MERGER AND REORGANIZATION, AND INDEMNIFICATION AGREEMENT, AND CONSENT (this
"AGREEMENT") is made and entered into as of October 18, 2000 by and among Suez
Acquisition Company (Cayman) Limited, a limited company organized under the laws
of the Cayman Islands ("SUEZ"), Seagate Technology, Inc., a Delaware corporation
("SEAGATE"), Seagate Software Holdings, Inc., a Delaware corporation ("SSHI"),
VERITAS Software Corporation, a Delaware corporation ("VERITAS"), and Victory
Merger Sub, Inc., a Delaware corporation ("MERGER SUB").
RECITALS
A. On March 29, 2000, Suez, Seagate and SSHI entered into a Stock Purchase
Agreement (the "STOCK PURCHASE AGREEMENT") pursuant to which, among other
things, Seagate and SSHI agreed to sell to Suez (or one of its Designees), and
Suez agreed to purchase (or cause one of its Designees to purchase) from Seagate
and SSHI, all outstanding Shares of the Sold Subsidiaries (as such terms are
defined in the Stock Purchase Agreement) upon the terms and subject to the
conditions set forth therein. Capitalized terms used but not otherwise defined
in Article I hereof shall have the respective meanings ascribed thereto in the
Stock Purchase Agreement. In April 2000, Suez, Seagate and SSHI agreed to reduce
the amount stated in the definition of Required Cash under the Stock Purchase
Agreement from $800,000,000 to $775,000,000. On August 29, 0000, Xxxx, Xxxxxxx,
XXXX, Xxxxxxx and Merger Sub entered into a Consolidated Amendment to Stock
Purchase Agreement, Agreement and Plan of Merger and Reorganization, and
Indemnification Agreement, and Consent (the "First Consolidated Amendment"),
pursuant to which Suez, Seagate and SSHI agreed to amend certain terms of the
Stock Purchase Agreement.
B. On October 13, 0000, Xxxx, Xxxxxxx, XXXX, Xxxxxxx and other defendants
in purported class action lawsuits currently pending in the Chancery Court in
Delaware entered into a memorandum of understanding with the plaintiffs in these
lawsuits regarding the settlement of those lawsuits (the "Settlement"). Suez,
Seagate and SSHI desire to further amend certain terms of the Stock Purchase
Agreement to reflect the Settlement, as more fully set forth herein.
C. On March 29, 2000, Veritas, Merger Sub and Seagate entered into an
Agreement and Plan of Merger and Reorganization (the "MERGER AGREEMENT")
pursuant to which, among other things, upon the terms and subject to the
conditions of the Merger Agreement and in accordance with Delaware Law (as
defined in the Merger Agreement), Veritas and Seagate agreed to consummate the
Merger. Capitalized terms used but not otherwise defined in Article II hereof
shall have the respective meanings ascribed thereto in the Merger Agreement. On
August 29, 2000, Veritas, Merger Sub and Seagate agreed to amend certain terms
of the Merger Agreement as provided in the First Consolidated Amendment.
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D. Veritas, Merger Sub and Seagate desire to further amend certain terms of
the Merger Agreement to reflect the Settlement, as more fully set forth herein.
E. On March 29, 2000, Veritas, Seagate and Suez entered into an
Indemnification Agreement (the "Indemnification Agreement") which, among other
things, sets forth certain agreements to govern various tax matters, indemnity
matters and other matters that may arise in connection with the transactions
contemplated by the Stock Purchase Agreement and the Merger Agreement. On August
29, 2000, Veritas, Seagate and Suez agreed to amend certain terms of the
Indemnification Agreement as provided in the First Consolidated Amendment.
F. Veritas, Seagate and Suez desire to further amend certain terms of the
Indemnification Agreement to reflect the terms of the Settlement, as more fully
set forth herein.
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
AMENDMENTS TO STOCK PURCHASE AGREEMENT
Seagate, Suez and SSHI hereby agree as follows:
1. Purchase and Sale of SSHI Shares. Section 2.2 of the Stock Purchase
Agreement is amended and restated in its entirety as follows:
"2.2 Purchase Price. The aggregate purchase price for the Shares shall
be $2,050,000,000 in cash, minus the Rolled Option Value (the "Purchase
Price"), plus the assumption of all Liabilities (other than Designated
Liabilities) of Seller and SSHI."
2. Corrections and Clarifications. The definition of Adjustment Amount in
Section 1.1(b) of the Stock Purchase Agreement is hereby amended to insert
immediately following the language "excluding Taxes caused by or relating to the
Split," the following: "and, other than as provided below, Taxes relating to the
Canadian Reorganization (as defined below)".
3. Consent. VERITAS hereby consents to the amendments to the Stock Purchase
Agreement set forth in this Article I for all purposes of and under the Merger
Agreement.
ARTICLE II
AMENDMENT TO MERGER AGREEMENT
Seagate, Merger Sub and VERITAS hereby agree as follows:
1. Amendment to Average Veritas Stock Price Definition. The definition of
"Average Veritas Stock Price" in Section 1.11(a)(iv) of the Merger Agreement
hereby is amended by deleting therefrom the phrase: ", or with respect to the VP
Amount, preceding the date that Veritas makes its election".
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2. Amendment to VP Amount Definition. The definition of "VP Amount" in
Section 1.11(a)(xxxiii) of the Merger Agreement hereby is amended by deleting
such definition in its entirety and replacing it with the following:
" 'VP Amount' means either $0, $250 million or $500 million, at the
election of Veritas, which election may be made at any time during the
fifteen (15) consecutive trading days ending two (2) trading days
immediately preceding the date of the Seagate Stockholders' Meeting."
3. Amendment to Available Amount Definition. The definition of "Available
Amount" in Section 1.11(a)(ii) of the Merger Agreement hereby is amended by
deleting such definition in its entirety and replacing it with the following:
" '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 sum of (i) the VP Amount, (ii) the
Estimated Tax Withholding Amount, (iii) the Reserve Amount and (iv) the
Litigation Holdback Amount."
4. Amendment to Stock Portion Definition. The definition of "Stock Portion"
in Section 1.11(a)(xxvii) of the Merger Agreement hereby is amended by deleting
from clause (ii)(x)(B) thereof the phrase "Average Veritas Stock Price" and
substituting therefor the phrase "Average VP Veritas Stock Price".
5. Additional Definitions. Section 1.11(a) is hereby amended by adding the
following new definitions at the end thereof:
" 'Average VP 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 the trading day immediately preceding
the date that the election referred to in the definition of "VP Amount" is
made.
"Settlement Documents" means the Memorandum of Understanding signed by
litigation counsel to Seagate, Veritas, Suez and the other parties thereto
on October 13, 2000 setting forth the principal terms relating to the
settlement of the class action litigation referred to therein, as amended
by any subsequent settlement documents executed and delivered by the
parties thereto.
"Litigation Holdback Amount" means $50,000,000.
6. TRA Amount.
(a) Section 1.11(a)(xxxiv) of the Merger Agreement is hereby amended
and restated in its entirety as follows:
"Reserve Amount" shall mean $150 million.
(b) The definition of "TRA Right" in Section 1.11(a)(xxi) of the
Merger Agreement is hereby restated in its entirety as follows:
" 'TRA Right' means a non-transferable right to receive from
Veritas, when, as and if received by Veritas or its Affiliates, a
stockholder's Pro Rata Portion of the TRA Amount as reduced pursuant to
Section 5.15(e)(ii)(x) and (y) hereof and subject to Section 5.15(e)(i)
hereof."
(c) Section 5.15 of the Merger Agreement hereby is amended and
restated in its entirety to read as follows:
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"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 rights of the holders of the TRA Rights to receive a
distribution from the Collection Account (as defined in Section 5.15(b)
hereof) shall terminate with respect to TRA Amounts on the 30(th) day after
the settlement, expiration of the statute of limitations, or final
determination (as defined in Section 1313(a) of the Code) with respect to
the last audit, examination or contest in respect of a claim for refund,
credit or amended return that would give rise to a TRA Amount. After the
expiration date of the TRA Rights, any TRA Amounts received by Veritas and
its Affiliates shall be the property of Veritas or such Affiliate without
any obligation whatsoever to account therefor to holders of the TRA Rights;
provided, however, that any TRA Amounts to be received after such
expiration date in respect of any settlement, or final determination with
respect to the last audit, examination or contest described in the prior
sentence shall be the property of the holders of the TRA Rights and an
amount of cash equal to any such TRA Amount shall be deposited in the
Collection Account pursuant to Section 5.15(c) below.
(b) Administration generally.
(i) On or prior to the Effective Time, Seagate shall designate one or
more persons (the "Administrators") who shall be responsible for overseeing
collection of the TRA Amount and distributions with respect to the TRA
Rights 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 realize 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 cash amounts equal to the TRA Amount.
(ii) The Administrators shall be entitled (x) to charge the Collection
Account a fee of 1% for all amounts deposited therein and distributed to
holders of the TRA Rights, and (y) to charge the Collection Account
third-party expenses associated with administration of the TRA Rights.
(iii) The Administrators shall pay to Veritas an amount on account of
Taxes imposed on income earned on the assets held in the Collection
Account, equal to 36% of all income and gain earned by the Collection
Account. Such amount shall be paid no later than January 15 of each year in
respect of income and gain earned in the preceding year or portion thereof
during which the account is in existence.
(c) Collection Account. Following the Effective Time, Veritas shall
forward to the Collection Account (and notify the Administrators of) an
amount in cash equal to any TRA Amount receipt (including the realization
of any credit) by Seagate, within ten (10) business days of such receipt
or, in the case of the Reserve Amount, within 2 business days of the
Closing.
(d) Interest. Any amounts in respect of the TRA Amounts not deposited
in the Collection Account within the time period specified in Section
5.15(c) shall be subject to an interest charge of 8% per annum.
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(e) Investment/Distributions. (i) Amounts deposited in the Collection
Account shall be invested by the Administrators in short-term money markets
instruments, and shall be distributed to holders of TRA Rights on each
calendar quarterly end commencing with the first such day that is at least
45 days following the Closing Date (as defined in the Stock Purchase
Agreement); provided, however, the amount available for distribution
exceeds $5.0 million. Notwithstanding the immediately preceding sentence,
the Administrators shall not distribute to the holders of the TRA Rights
any amounts held in the Collection Account if such distribution would cause
the balance in the Collection Account to be less than $150 million
(including interest earned thereon, net of amounts in respect of applicable
income taxes) (the "Retained TRA Amount") until such time as there is a
settlement, expiration of the applicable statute of limitations, or final
determination (as defined in Section 1313(a) of the Code) with respect to
the last audit, examination or contest in respect of Seagate income taxes
relating to the taxable period beginning July 1, 2000 and ending on the
Closing Date (as defined herein) and any carryback arising in such taxable
period and the taxable period beginning July 1, 1999 and ending June 30,
2000, provided, however, upon a settlement or a final determination (as
defined in Section 1313(a) of the Code) with respect Seagate's Federal
income taxes for the taxable period in which the Closing occurs and the
taxable years to which any attribute arising in the taxable year in which
the Closing occurs is carried back and the taxable period beginning July 1,
1999 and ending June 30, 2000, the remaining amount held in the Collection
Account, less $25 million, shall be distributed immediately to the holders
of the TRA Rights.
(ii) The Retained TRA Amount shall be paid (x) first to the extent the
Collection Account does not contain amounts in excess of the Retained TRA
Amount, to pay third-party expenses associated with the administration of
the TRA Right and to pay amounts in respect of Taxes imposed on income
earned on the assets held in the Collection Account pursuant to Section
5.15(b)(ii)(y) and (iii) above, (y) second to Veritas for application in
respect of Seagate income taxes (including interest and penalties, if any)
relating to (A) the taxable period (or that portion of a taxable period)
beginning July 1, 2000 and ending on or before the Closing Date (as defined
herein) and any carryback arising in such taxable period or (B) the taxable
period beginning on July 1, 1999 and ending on or before June 30, 2000 but
solely with respect to Seagate income taxes attributable to the Canadian
Reorganization as defined in the Stock Purchase Agreement; and (z) then
third, the remainder (less the Administrators' fee as described in Section
5.15(b)(ii)(x) above) thereof, to the holders of the TRA Rights, pursuant
to Section 5.15(e)(i) hereof.
(f) Conduct of Audits and Other Procedural Matters. The Administrators
shall have the right to control any audit, examination or contest with
respect to any claim for refund, credit or amended return that would give
rise to a TRA Amount, 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. Purchaser will consider in
good faith any comments or recommendations of the Administrators with
respect thereto. Veritas and Purchaser, as the case may be, 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 Veritas or its Affiliates
relating to the TRA Amount.
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(g) Assistance and Cooperation. After the Effective Time, Veritas
shall (and shall cause its respective Affiliates to):
(i) Use reasonable efforts to include in any Tax Returns filed by
Veritas or its Affiliates applicable claims for refunds or credits in
respect of the TRA Amount proposed by the Administrators subject to any
applicable requirements of Section 6(c)(i) of the Indemnification
Agreement;
(ii) Cooperate fully in preparing for any audits of, or disputes
with taxing authorities regarding the TRA Amount;
(iii) Make available to the Administrators 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 Administrators in writing of any
pending or threatened Tax audits or assessments relating to refunds or
credits included or potentially includable in the TRA Amount; and
(v) Furnish the Administrators 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.
(h) Exculpation. In performing any duties under this Agreement, the
Administrator shall not be liable to any party for damages, losses, or
expenses, except to the extent resulting from the gross 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 being held in escrow at the
Effective Time shall, following release from escrow and delivery to
Veritas, and subject to applicable legal and contractual restrictions, be
transferred to the Administrator. Following receipt thereof, the
Administrator shall use reasonable efforts to distribute these shares to
holders of TRA Rights and/or sell such shares as promptly as practicable,
in each case, in accordance with any applicable legal and contractual
restrictions, and, following any such sale, shall deposit the net proceeds
thereof into the Collection Account and distribute the same in accordance
with paragraph (e) of this Section 5.15."
7. Litigation Holdback Amount. A new Section 5.16 is hereby added to the
Merger Agreement as follows:
"5.16 Litigation Holdback Amount. Promptly following the satisfaction of
all of the conditions described in paragraph (8) of the Settlement Documents,
Veritas shall make available to the Exchange Agent for payment to each holder of
record of Seagate Common Stock at the Effective Time such holder's pro rata
portion of the Litigation
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Holdback Amount plus interest thereon computed as described in such paragraph
(8) of the Settlement Documents.
8. Consent. Suez hereby consents to the amendments to the Merger Agreement
set forth in this Article II for all purposes of and under the Stock Purchase
Agreement, and hereby further agrees to be bound by the terms of Sections
1.11(a)(xxxiv) (definition of "Reserve Amount") and Sections 5.15(e) and (f) of
the Merger Agreement, each as amended hereby.
ARTICLE III
AMENDMENT TO INDEMNIFICATION AGREEMENT
Capitalized terms used in this Article III and not otherwise defined shall
have the respective meanings assigned thereto in the Indemnification Agreement.
1. Section 6(b) of the Indemnification Agreement is hereby amended to add
at the end of the first sentence in the third paragraph thereof the following:
"provided, however, that to the extent that any payment of a Loss made in
respect of an assumed contingent liability relating to Taxes of Seagate does not
exceed the amount of contingent liability for Taxes that was included in the
amount realized in respect of the Stock Purchase, such payment shall (unless
otherwise determined by the relevant tax authority) instead be treated as a
payment of the amount realized, and not as an adjustment to such Purchase Price.
2. Section 6(c)(ii) of the Indemnification Agreement is hereby amended by
redesignating paragraph (ii) as paragraph (iii) and adding a new paragraph (ii)
as follows:
"(ii) A copy of a draft of all Tax Returns relating to Seagate and the
Retained Subsidiaries which are to be filed after the Stock Purchase Date, but
which relate to a Pre-Purchase Tax Period or its Straddle Period, including the
federal consolidated income Tax Return of the affiliated group of which Seagate
is the common parent for the period ending with the Merger, shall be furnished
to the Administrators (as defined in the Merger Agreement) at least 30 days
prior to the due date for each such Tax Return for review and comment. SAC will
consider in good faith any comments of the Administrators with respect to each
such Tax Return."
ARTICLE IV
GENERAL PROVISIONS
1. 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.
2. Except as expressly modified by this Agreement, all of the
representations, warranties, terms, covenants, conditions and other provisions
of the Merger Agreement and Stock Purchase Agreement shall remain in full force
and effect in accordance with their respective terms.
3. Nothing in this Agreement shall be deemed to or construed as in any way
making (i) Suez a party to the Merger Agreement or (ii) Veritas a party to the
Stock Purchase Agreement.
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4. Promptly, and in any event within ten (10) calendar days following such
time (if any) as the conditions satisfied in paragraph (8) of the Settlement
Documents have become incapable of being satisfied (as determined by Veritas, in
its reasonable judgement), the Litigation Holdback Amount, together with
interest thereon computed as provided in Section 5.16 of the Merger Agreement,
shall be paid by Veritas to Suez.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized respective officers, as of the date first
above written.
VERITAS SOFTWARE CORPORATION
By: /s/ Xxx X. Xxxxx
----------------------------------
Name: Xxx X. Xxxxx
Title:
VICTORY MERGER SUB, INC.
By: /s/ Xxx X. Xxxxx
----------------------------------
Name: Xxx X. Xxxxx
Title:
SEAGATE TECHNOLOGY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title:
SUEZ ACQUISITION COMPANY (CAYMAN)
LIMITED
By: /s/ Xxxxx Xxxx
----------------------------------
Name: Xxxxx Xxxx
Title:
SEAGATE SOFTWARE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title:
