_______________________________________________________________
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
SEAGATE TECHNOLOGY, INC.,
ATHENA ACQUISITION CORPORATION
AND
XXXXXX PERIPHERALS, INC.
OCTOBER 3, 1995
________________________________________________________________
TABLE OF CONTENTS
PAGE
ARTICLE 1 - THE MERGER..................................... 1
1.1 The Merger..................................... 1
1.2 Effective Time of the Merger................... 2
1.3 Closing........................................ 2
1.4 Effects of the Merger.......................... 2
1.5 Certificate of Incorporation and
Bylaws of Surviving Corporation.............. 2
1.6 Tax-Free Reorganization; Pooling of
Interests.................................... 3
ARTICLE 2 - EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES................................... 3
2.1 Effect on Capital Stock........................ 3
(a) Capital Stock of Sub....................... 3
(b) Cancellation of Certain Shares
of Xxxxxx Common Stock................... 3
(c) Exchange Ratio for Xxxxxx Common Stock..... 3
(d) Adjustment of Exchange Ratio............... 4
2.2 Exchange of Certificates....................... 4
(a) Exchange Agent............................. 4
(b) Exchange Procedures........................ 4
(c) Distributions with Respect to
Unsurrendered Certificates................. 5
(d) No Further Ownership Rights in Xxxxxx
Common Stock............................... 6
(e) No Issuance of Fractional Shares........... 6
(f) Termination of Exchange Fund............... 7
(g) No Liability............................... 7
(h) Lost, Stolen or Destroyed Certificates..... 7
2.3 Taking of Necessary Action; Further Action..... 7
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF XXXXXX....... 7
3.1 Organization and Qualification; Subsidiaries... 8
3.2 Certificate of Incorporation and Bylaws........ 9
3.3 Capitalization................................. 9
3.4 Authority Relative to this Agreement........... 10
3.5 No Conflict; Required Filings and Consents..... 11
3.6 Compliance; Permits............................ 12
3.7 SEC Filings; Financial Statements.............. 13
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3.8 Absence of Certain Changes or Events........... 13
3.9 No Undisclosed Liabilities..................... 14
3.10 Absence of Litigation.......................... 14
3.11 Employee Benefit Plans......................... 14
3.12 Labor Matters.................................. 16
3.13 Registration Statement; Proxy Statement........ 16
3.14 Restrictions on Business Activities............ 17
3.15 Title to Property.............................. 17
3.16 Taxes.......................................... 17
3.17 Environmental Matters.......................... 18
3.18 Brokers........................................ 19
3.19 Intellectual Property.......................... 19
3.20 Pooling Matters................................ 20
3.21 Xxxxxx Rights Agreement........................ 20
3.22 Insurance...................................... 21
3.23 Opinion of Financial Advisor................... 21
3.24 Board Approval................................. 21
3.25 Vote Required.................................. 21
3.26 Section 203 of the Delaware Statute
Not Applicable............................... 21
3.27 Xxxxxx Ownership of Seagate Common Stock;
Seagate Not an Acquiring Person.............. 21
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF SEAGATE
AND SUB........................................ 22
4.1 Organization and Qualification; Subsidiaries... 22
4.2 Certificate of Incorporation and Bylaws........ 23
4.3 Capitalization................................. 23
4.4 Authority Relative to this Agreement........... 24
4.5 No Conflict; Required Filings and Consents..... 25
4.6 Compliance; Permits............................ 26
4.7 SEC Filings; Financial Statements.............. 27
4.8 Absence of Certain Changes or Events........... 28
4.9 No Undisclosed Liabilities..................... 28
4.10 Absence of Litigation.......................... 28
4.11 Employee Benefit Plans......................... 28
4.12 Labor Matters.................................. 30
4.13 Registration Statement; Proxy Statement........ 30
4.14 Restrictions on Business Activities............ 31
4.15 Title to Property.............................. 31
4.16 Taxes.......................................... 32
4.17 Environmental Matters.......................... 32
4.18 Brokers........................................ 33
4.19 Intellectual Property.......................... 33
4.20 Pooling Matters................................ 34
4.21 Insurance...................................... 34
4.22 Opinion of Financial Advisor................... 34
4.23 Board Approval................................. 35
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4.24 Vote Required.................................. 35
4.25 Interim Operations of Sub...................... 35
4.26 Section 203 of the Delaware Statute
Not Applicable............................... 35
4.27 Seagate Ownership of Xxxxxx Common Stock....... 35
ARTICLE 5 - CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE
TIME; ADDITIONAL AGREEMENTS.................... 36
5.1 Information and Access......................... 36
5.2 Conduct of Business of the Companies........... 36
5.3 Negotiation With Others........................ 40
5.4 Preparation of S-4 and the Proxy Statement;
Other Filings................................ 42
5.5 Advice of Changes; SEC Filings................. 43
5.6 Letter of Xxxxxx'x Independent Auditors........ 43
5.7 Letter of Seagate's Independent Auditors....... 43
5.8 Stockholders Meetings.......................... 44
5.9 Agreements to Take Reasonable Action........... 44
5.10 Consents....................................... 46
5.11 NYSE Listing................................... 46
5.12 Public Announcements........................... 46
5.13 Affiliates..................................... 46
5.14 Xxxxxx Options................................. 47
5.15 Xxxxxx Employee Stock Purchase Plan............ 48
5.16 Indemnification and Insurance.................. 48
5.17 Notification of Certain Matters................ 50
5.18 Pooling Accounting............................. 50
5.19 Xxxxxx Debentures.............................. 50
5.20 Benefit Plans Generally........................ 51
ARTICLE 6 - CONDITIONS PRECEDENT........................... 51
6.1 Conditions to Each Party's Obligation to
Effect the Merger............................ 51
(a) HSR Act.................................. 51
(b) Stockholder Approval..................... 51
(c) Effectiveness of the S-4................. 52
(d) Governmental Entity Approvals............ 52
(e) No Injunctions or Restraints; Illegality 52
(f) Tax Opinions............................. 52
(g) Pooling-of-Interests Accounting Treatment 53
(h) NYSE Listing............................. 53
6.2 Conditions of Obligations of Seagate and Sub... 53
(a) Representations and Warranties........... 53
(b) Performance of Obligations of Xxxxxx..... 53
(c) Consents................................. 53
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6.3 Conditions of Obligation of Xxxxxx............. 54
(a) Representations and Warranties........... 54
(b) Performance of Obligations of
Seagate and Sub.......................... 54
(c) Consents................................. 54
ARTICLE 7 - TERMINATION.................................... 54
7.1 Termination.................................... 54
7.2 Effect of Termination.......................... 57
7.3 Fees and Expenses.............................. 57
ARTICLE 8 - GENERAL PROVISIONS............................. 58
8.1 Amendment...................................... 58
8.2 Extension; Waiver.............................. 58
8.3 Nonsurvival of Representations, Warranties
and Agreements............................... 58
8.4 Entire Agreement............................... 59
8.5 Severability................................... 59
8.6 Notices........................................ 59
8.7 Headings....................................... 60
8.8 Counterparts................................... 60
8.9 Benefits; Assignment........................... 60
8.10 Governing Law.................................. 61
EXHIBITS
A Xxxxxx Stock Option Agreement
B Form of Agreement of Merger
C Form of Xxxxxx Affiliate Agreement
D Form of Seagate Affiliate Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the
"Agreement") is dated as of October 3, 1995, among SEAGATE
TECHNOLOGY, INC., a Delaware corporation ("Seagate"), ATHENA
ACQUISITION CORPORATION, a Delaware corporation and wholly-
owned subsidiary of Seagate ("Sub"), and XXXXXX PERIPHERALS,
INC., a Delaware corporation ("Xxxxxx"). Seagate and Xxxxxx
are sometimes referred to individually as a "Company" and
collectively as the "Companies."
RECITALS:
A. The Boards of Directors of Xxxxxx, Seagate and
Sub have each approved the terms and conditions of the business
combination between Seagate and Xxxxxx to be effected by the
merger (the "Merger") of Sub with and into Xxxxxx, pursuant to
the terms and subject to the conditions of this Agreement and
the General Corporation Law of the State of Delaware (the
"Delaware Statute").
B. Concurrently herewith and as a condition and
inducement to Seagate's willingness to enter into this
Agreement, Seagate and Xxxxxx are entering into a Xxxxxx Stock
Option Agreement in the form attached as Exhibit A (the "Xxxxxx
Option Agreement"), pursuant to which Xxxxxx is granting to
Seagate an option to purchase shares of Common Stock of Xxxxxx
upon the occurrence of certain conditions.
C. The Boards of Directors of Xxxxxx and Seagate
have each approved the Xxxxxx Option Agreement.
NOW, THEREFORE, in consideration of the premises and
mutual covenants and agreements contained in this Agreement,
the parties agree as follows:
ARTICLE 1
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the
conditions of this Agreement and the Agreement of Merger in
substantially the form attached as Exhibit B (the "Merger
Agreement") and in accordance with the Delaware Statute, Sub
shall be merged with and into Xxxxxx. The Merger Agreement
provides for the mode of consummating the Merger and the
effects thereof. Xxxxxx and Sub shall execute the Merger
Agreement immediately prior to the Closing. Following the
Merger, Xxxxxx shall continue as the surviving corporation (the
"Surviving Corporation") and the separate corporate existence
of Sub shall cease. Sub and Xxxxxx are collectively referred
to as the "Constituent Corporations." Unless the context
otherwise requires, the term "Agreement" includes the Merger
Agreement.
1.2 EFFECTIVE TIME OF THE MERGER. Subject to the
provisions of this Agreement and the Merger Agreement, the
Merger Agreement, together with any required certificates,
shall be duly filed in accordance with the Delaware Statute
simultaneously with or as soon as practicable following the
Closing (as defined in Section 1.3 below). The Merger shall
become effective (the "Effective Time") upon the filing of the
Merger Agreement (together with any required certificates) with
the Secretary of State of the State of Delaware.
1.3 CLOSING. Unless this Agreement shall have been
terminated pursuant to Section 7.1, the closing of the Merger
(the "Closing") will take place at 10:00 a.m. on a date (the
"Closing Date") to be mutually agreed upon by the parties,
which date shall be no later than the third Business Day (as
defined below) after all of the conditions set forth in Article
6 shall have been satisfied (or waived in accordance with
Section 8.2), unless another date is agreed to in writing by
the parties. The Closing shall take place at the offices of
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx, 00000-0000, unless another place is agreed to
in writing by the parties. As used in this Agreement,
"Business Day" shall mean any day, other than a Saturday,
Sunday or legal holiday on which banks are permitted to close
in the City and State of New York.
1.4 EFFECTS OF THE MERGER. At the Effective Time:
(i) the separate existence of Sub shall cease and Sub shall be
merged with and into Xxxxxx as the Surviving Corporation, and
(ii) the Merger shall have all of the effects provided by the
Delaware Statute.
1.5 CERTIFICATE OF INCORPORATION AND BYLAWS OF
SURVIVING CORPORATION. At the Effective Time, (i) the
Certificate of Incorporation of Xxxxxx shall be amended so that
Article Fourth of such Certificate of Incorporation reads in
its entirety as follows: "The total number of shares of all
classes of stock which the corporation shall have authority to
issue is 1,000, all of which shall consist of Common Stock, par
value $.001 per share.", and, as so amended, such Certificate
of Incorporation shall be the Certificate of Incorporation of
the Surviving Corporation until altered, amended or repealed as
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provided in the Delaware Statute; (ii) the Bylaws of Sub shall
become the Bylaws of the Surviving Corporation until altered,
amended or repealed as provided in the Delaware Statute or in
the Certificate of Incorporation or Bylaws of the Surviving
Corporation; (iii) the directors of Sub shall become the
initial directors of the Surviving Corporation and will hold
office from the Effective Time until their respective
successors are duly elected or appointed as provided in the
Certificate of Incorporation and Bylaws of the Surviving Cor-
poration; and (iv) the officers of Sub shall become the initial
officers of the Surviving Corporation.
1.6 TAX-FREE REORGANIZATION; POOLING OF INTERESTS.
The parties intend that the Merger be treated as a tax free
reorganization under Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and to be accounted for
as a pooling of interests pursuant to Opinion No. 16 of the
Accounting Principles Board.
ARTICLE 2
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 EFFECT ON CAPITAL STOCK. At the Effective Time,
subject and pursuant to the terms of this Agreement and the
Merger Agreement, by virtue of the Merger and without any
action on the part of the Constituent Corporations or the
holders of any shares of capital stock of the Constituent
Corporations:
(a) CAPITAL STOCK OF SUB. Each issued and
outstanding share of the common stock, $.001 par value, of Sub
shall be converted into one share of common stock, $.001 par
value, of the Surviving Corporation. Each stock certificate of
Sub evidencing ownership of any such shares shall continue to
evidence ownership of such shares of common stock of the
Surviving Corporation.
(b) CANCELLATION OF CERTAIN SHARES OF XXXXXX
COMMON STOCK. Each share of Xxxxxx Common Stock (as defined in
Section 2.1(c)) that is owned by Xxxxxx as treasury stock and
each share of Xxxxxx Common Stock that is owned by Seagate, Sub
or any other subsidiary of Seagate or Xxxxxx shall be canceled
and no capital stock of Seagate or other consideration shall be
delivered in exchange therefor.
(c) EXCHANGE RATIO FOR XXXXXX COMMON STOCK.
Each share of common stock, $.001 par value, of Xxxxxx ("Xxxxxx
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Common Stock") issued and outstanding at the Effective Time
(other than shares canceled pursuant to Section 2.1(b)),
including the corresponding right (the "Xxxxxx Right") to
purchase one one-hundredth of a share of Preferred Stock, $.001
par value (the "Xxxxxx Series A Preferred") of Xxxxxx pursuant
to the terms of the Preferred Shares Rights Agreement dated as
of November 29, 1994, between Xxxxxx and The First National
Bank of Boston as Rights Agent, as it may be amended from time
to time (the "Xxxxxx Rights Agreement"), shall be converted
into the right to receive 0.442 shares of common stock, $.01
par value, of Seagate ("Seagate Common Stock") (the "Exchange
Ratio"). Prior to the Distribution Date (as defined in the
Xxxxxx Rights Agreement) and unless the context otherwise
requires, all references in this Agreement to the Xxxxxx Common
Stock shall be deemed to include the Xxxxxx Rights.
(d) ADJUSTMENT OF EXCHANGE RATIO. If between
the date of this Agreement and the Effective Time, the
outstanding shares of Seagate Common Stock or Xxxxxx Common
Stock shall have been changed into a different number of shares
or a different class by reason of any reclassification,
recapitalization, split-up, stock dividend, stock combination,
exchange of shares, readjustment or otherwise, then the
Exchange Ratio shall be correspondingly adjusted; provided,
however, that any such changes shall be subject to Section 5.2
below.
2.2 EXCHANGE OF CERTIFICATE.
(a) EXCHANGE AGENT. Prior to the Closing Date,
Seagate shall select a bank or trust company reasonably
acceptable to Xxxxxx to act as exchange agent (the "Exchange
Agent") in the Merger. Promptly after the Effective Time,
Seagate shall deposit with the Exchange Agent, for the benefit
of the holders of shares of Xxxxxx Common Stock, for exchange
in accordance with this Article 2 and the Merger Agreement,
certificates representing the shares of Seagate Common Stock
(such shares of Seagate Common Stock, together with any
dividends or distributions with respect thereto, are referred
to as the "Exchange Fund") issuable pursuant to this Article 2
and the Merger Agreement in exchange for outstanding shares of
Xxxxxx Common Stock, and cash in an amount sufficient for
payment in lieu of fractional shares pursuant to Section
2.2(e).
(b) EXCHANGE PROCEDURES. As soon as
practicable after the Effective Time, the Exchange Agent shall
mail to each holder of record (other than Xxxxxx, any
subsidiary of Xxxxxx, Sub, Seagate and any other subsidiary of
Seagate) (including holders of record pursuant to purchases
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made under the Xxxxxx Purchase Plan (as defined in Section
5.15) immediately prior to the Effective Time pursuant to
Section 5.15) of a certificate or certificates which
immediately prior to the Effective Time represented issued and
outstanding shares of Xxxxxx Common Stock (collectively, the
"Certificates") whose shares are being converted into Seagate
Common Stock pursuant to Section 2.1(c) of this Agreement and
the provisions of the Merger Agreement, (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 shall be in such form and have such other provisions
as Seagate and Xxxxxx may reasonably specify) and (ii)
instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing Seagate
Common Stock. Upon surrender of a Certificate for cancellation
to the Exchange Agent, together with a duly executed letter of
transmittal and such other documents as may be reasonably
required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Seagate Common
Stock which such holder has the right to receive pursuant to
the provisions of this Article 2 and the Merger Agreement, and
the Certificate so surrendered shall forthwith be canceled. In
the event of a transfer of ownership of shares of Xxxxxx Common
Stock which is not registered on the transfer records of
Xxxxxx, a certificate representing the proper number of shares
of Seagate Common Stock may be issued to a transferee if the
Certificate representing such Xxxxxx Common Stock is presented
to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 2.2 and the Merger
Agreement, each Certificate shall be deemed, on and after the
Effective Time, to represent only the right to receive upon
such surrender the certificate representing shares of Seagate
Common Stock and cash in lieu of any fractional shares of
Seagate Common Stock as contemplated by this Article 2, the
Merger Agreement and the Delaware Statute.
(c) DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED
CERTIFICATES. No dividends or other distributions declared or
made after the Effective Time with respect to Seagate Common
Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate with respect to
the shares of Seagate Common Stock represented thereby and no
cash payment in lieu of fractional shares shall be paid to any
such holder pursuant to Section 2.2(e) or the Merger Agreement
until the holder of record of such Certificate shall surrender
such Certificate. Subject to the effect, if any, of applicable
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laws, following surrender of any such Certificate, there shall
be paid to the record holder of the certificates representing
whole shares of Seagate Common Stock issued in exchange
therefor, without interest, (i) at the time of such surrender,
the amount of any cash payable in lieu of a fractional share of
Seagate Common Stock to which such holder is entitled pursuant
to Section 2.2(e) and the Merger Agreement and the amount of
dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole
shares of Seagate Common Stock and (ii) at the appropriate
payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable
with respect to such whole shares of Seagate Common Stock.
(d) NO FURTHER OWNERSHIP RIGHTS IN XXXXXX
COMMON STOCK. All shares of Seagate Common Stock issued upon
the surrender for exchange of shares of Xxxxxx Common Stock in
accordance with the terms of this Article 2 and the Merger
Agreement (including any cash paid pursuant to Section 2.2(c)
or 2.2(e)) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Xxxxxx
Common Stock. There shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares of Xxxxxx 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 ex-
changed as provided in this Article 2 and the Merger Agreement.
(e) NO ISSUANCE OF FRACTIONAL SHARES. No
certificates or scrip for fractional shares of Seagate Common
Stock shall be issued, but in lieu thereof each holder of
shares of Xxxxxx Common Stock who would otherwise be entitled
to receive certificates or scrip for a fraction of a share of
Seagate Common Stock shall receive from Seagate, at such time
as such holder shall receive a certificate representing shares
of Seagate Common Stock, an amount of cash equal to the per
share market value of Seagate Common Stock determined by
multiplying (i) the closing price of a share of Seagate Common
Stock as reported on the New York Stock Exchange, Inc. (the
"NYSE") composite tape on the last full trading day prior to
the Effective Time by (ii) the fraction of a share of Seagate
Common Stock to which such holder would otherwise be entitled.
The fractional share interests of each stockholder of Xxxxxx
shall be aggregated, so that no Xxxxxx stockholder shall
receive cash in an amount equal to or greater than the value of
one full share of Seagate Common Stock.
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(f) TERMINATION OF EXCHANGE FUND. Any portion
of the Exchange Fund which remains undistributed to the
stockholders of Xxxxxx for twelve months after the Effective
Time shall be delivered to Seagate, upon demand, and any former
stockholders of Xxxxxx who have not previously complied with
this Article 2 and the Merger Agreement shall thereafter look
only to Seagate for payment of their claim for Seagate Common
Stock, any cash in lieu of fractional shares of Seagate Common
Stock and any dividends or distributions with respect to
Seagate Common Stock.
(g) NO LIABILITY. Neither the Exchange Agent,
Seagate, Sub nor Xxxxxx shall be liable to any holder of shares
of Xxxxxx Common Stock or Seagate Common Stock, as the case may
be, for shares (or dividends or distributions with respect
thereto) from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or
similar law.
(h) LOST, STOLEN OR DESTROYED CERTIFICATES. In
the event any Certificates evidencing shares of Xxxxxx Common
Stock shall have been lost, stolen or destroyed, the holder of
such lost, stolen or destroyed Certificate(s) shall execute an
affidavit of that fact upon request. The holder of any such
lost, stolen or destroyed Certificate(s) shall also deliver a
bond in such sum as Seagate may reasonably require as indemnity
against any claim that may be made against Seagate or the
Exchange Agent with respect to the Certificate(s) alleged to
have been lost, stolen or destroyed. The affidavit and any
bond which may be required hereunder shall be delivered to the
Exchange Agent, who shall be responsible for making payment for
such lost, stolen or destroyed Certificate(s).
2.3 TAKING OF NECESSARY ACTION; FURTHER ACTION. If,
at any time after the Effective Time, any such further action
is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights,
privileges, powers and franchises of Xxxxxx and Sub, the
officers and directors of Xxxxxx and Sub are fully authorized
in the name of their respective corporations or otherwise to
take, and will take, all such lawful and necessary action.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx represents and warrants to Seagate and Sub,
except as set forth in the Xxxxxx SEC Reports (as defined in
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Section 3.7(a)) or the disclosure letter delivered by Xxxxxx to
Seagate on or prior to the date of this Agreement (the "Xxxxxx
Disclosure Letter"), as follows:
3.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(i) Each of Xxxxxx and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite
corporate power and authority to own, lease and operate its
assets and properties and to carry on its business as it is now
being conducted. Each of Xxxxxx and its subsidiaries is in
possession of all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates, approvals and
orders ("Approvals") necessary to own, lease and operate the
properties it purports to own, operate or lease and to carry on
its business as it is now being conducted, except where the
failure to have such Approvals would not, individually or in
the aggregate, have a Material Adverse Effect (as defined
below). Each of Xxxxxx and its subsidiaries is duly qualified
or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary,
except for such failures to be so duly qualified or licensed
and in good standing that would not, either individually or in
the aggregate, have a Material Adverse Effect. When used in
connection with Xxxxxx or any of its subsidiaries, the term
"Material Adverse Effect" means any change, event or effect
that is materially adverse to the business, assets (including
intangible assets), liabilities, financial condition or results
of operations of Xxxxxx and its subsidiaries taken as a whole;
provided, however, that a "Material Adverse Effect" shall not
include any adverse effect on the revenues or gross margins of
Xxxxxx (or the direct consequences thereof) following the date
of this Agreement which is attributable to (i) a delay of,
reduction in or cancellation or change in the terms of product
orders by customers of Xxxxxx or (ii) an increase in the price
of, a delay of, reduction in or cancellation of or change in
terms with respect to products or components supplied by
vendors of Xxxxxx, which in either case is attributable to the
transactions contemplated by this Agreement. Other than
wholly-owned subsidiaries and except as permitted after the
date of this Agreement under Section 5.2 of this Agreement,
Xxxxxx does not directly or indirectly own any equity or
similar interest in, or any interest convertible or
exchangeable or exercisable for, any equity or similar interest
in, any corporation, partnership, joint venture or other busi-
ness, association or entity.
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3.2 CERTIFICATE OF INCORPORATION AND BYLAWS. Xxxxxx
has previously furnished to Seagate a complete and correct copy
of its Certificate of Incorporation and Bylaws as amended to
date. Such Certificate of Incorporation, Bylaws and equivalent
organizational documents of each of its subsidiaries are in
full force and effect. Neither Xxxxxx nor any of its
subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or equivalent
organizational documents.
3.3 CAPITALIZATION. The authorized capital stock of
Xxxxxx consists of 100,000,000 shares of Xxxxxx Common Stock
and 20,000,000 shares of Preferred Stock ("Xxxxxx Preferred
Stock"), each having a par value of $.001 per share, of Xxxxxx.
At the close of business on September 2, 1995, (i) 53,436,131
shares of Xxxxxx Common Stock were issued and outstanding all
of which are validly issued, fully paid and nonassessable, (ii)
no shares of Xxxxxx Common Stock were held in treasury by
Xxxxxx or by subsidiaries of Xxxxxx, (iii) 2,328,643 shares of
Xxxxxx Common Stock were available for future issuance pursuant
to Xxxxxx'x employee stock purchase plan, (iv) 7,168,859 shares
of Xxxxxx Common Stock were reserved for issuance upon the
exercise of outstanding options to purchase Xxxxxx Common Stock
under the Xxxxxx 1986 Incentive Stock Plan, as amended (the
"1986 Plan"), the 1981 Archive Incentive Stock Plan and 1981
Archive Nonqualified Stock Plan (the "Archive Plans"), and the
Xxxxxx 1995 Director Stock Plan (the "1995 Plan"), (v)
5,901,585 shares of Xxxxxx Common Stock were available for
future grant under the 1986 Plan, the Archive Plans and the
1995 Plan, (vi) 783,000 shares of Xxxxxx Common Stock were
available for future issuance under the Xxxxxx 1992 Restricted
Stock Plan, (vii) 20,116,353 shares of Xxxxxx Common Stock were
reserved for future issuance upon conversion of Xxxxxx
Debentures (as defined in Section 5.19) and (viii) 8,015,420
shares of Xxxxxx Common Stock were reserved for future issuance
pursuant to the Xxxxxx Option Agreement. As of the date
hereof, no shares of Xxxxxx Preferred Stock were issued or
outstanding and 1,000,000 shares of Xxxxxx Series A Preferred
were reserved for issuance upon exercise of the Xxxxxx Rights.
No change in such capitalization has occurred between September
2, 1995 and the date hereof except (A) the issuance of shares
of Xxxxxx Common Stock pursuant to the exercise of outstanding
options, (B) shares issued under Xxxxxx'x employee stock
purchase plan, (C) shares issued upon conversion of Xxxxxx
Debentures and (D) the issuance of options as permitted under
Section 5.2(c) hereof (and exercise of such options). Except
as set forth in this Section 3.3 and except for the options
(the "Arcada Options") to acquire common stock of Arcada
("Arcada Common Stock") listed on the Xxxxxx Disclosure Letter,
as of the date of this Agreement, there are no options,
-9-
warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued
capital stock of Xxxxxx or any of its subsidiaries or
obligating Xxxxxx or any of its subsidiaries to issue or sell
any shares of capital stock of, or other equity interests in,
Xxxxxx or any of its subsidiaries. All shares of Xxxxxx Common
Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instruments pursuant to
which they are issuable, shall be duly authorized, validly
issued, fully paid and nonassessable. Other than with respect
to the Arcada Options and such actions as are permitted under
Section 5.2, there are no obligations, contingent or otherwise,
of Xxxxxx or any of its subsidiaries to repurchase, redeem or
otherwise acquire any shares of Xxxxxx Common Stock or the
capital stock of any subsidiary or to provide funds to or make
any investment (in the form of a loan, capital contribution or
otherwise) in any such subsidiary or any other entity other
than guarantees of obligations of subsidiaries entered into in
the ordinary course of business. All of the outstanding shares
of capital stock (other than directors' qualifying shares) of
each of Xxxxxx'x subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and, other than the shares
subject to the Arcada Options, all such shares (other than
directors' qualifying shares) are owned by Xxxxxx or another
subsidiary free and clear of all security interests, liens,
claims, pledges, agreements, limitations in Xxxxxx'x voting
rights, charges or other encumbrances of any nature whatsoever.
3.4 AUTHORITY RELATIVE TO THIS AGREEMENT. Xxxxxx
has all necessary corporate power and authority to execute and
deliver this Agreement and the Xxxxxx Option Agreement and to
perform its obligations hereunder and thereunder and, subject
to obtaining the approval of the stockholders of Xxxxxx of the
Merger, to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the
Xxxxxx Option Agreement by Xxxxxx and the consummation by
Xxxxxx of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate
action on the part of Xxxxxx and no other corporate proceedings
on the part of Xxxxxx are necessary to authorize this
Agreement, the Xxxxxx Option Agreement or to consummate the
transactions so contemplated (other than, with respect to the
Merger, the approval and adoption of this Agreement by holders
of a majority of the outstanding shares of Xxxxxx Common Stock
in accordance with the Delaware Statute and Xxxxxx'x
Certificate of Incorporation and Bylaws). This Agreement and
the Xxxxxx Option Agreement have been duly and validly executed
and delivered by Xxxxxx and, assuming the due authorization,
execution and delivery by Seagate and Sub, constitute legal and
binding obligations of Xxxxxx, enforceable against Xxxxxx in
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accordance with their respective terms, subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to creditors rights
generally and (ii) the availability of injunctive relief and
other equitable remedies. The Merger Agreement, when executed
and delivered by Xxxxxx as contemplated hereby, will be duly
executed and delivered by Xxxxxx and when approved by the
stockholders of Xxxxxx and assuming the due authorization,
execution and delivery by Sub, will be the valid and binding
obligation of Xxxxxx, enforceable against Xxxxxx in accordance
with its terms, subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or
relating to creditors rights generally and (ii) the
availability of injunctive relief and other equitable remedies.
3.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this
Agreement and the Xxxxxx Option Agreement by Xxxxxx do not, and
the performance of this Agreement and the Xxxxxx Option
Agreement by Xxxxxx shall not, (i) conflict with or violate the
Certificate of Incorporation or Bylaws or equivalent
organizational documents of Xxxxxx or any of its subsidiaries,
(ii) subject to obtaining the approval of Xxxxxx'x stockholders
of the Merger and compliance with the requirements set forth in
Section 3.5(b) below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Xxxxxx or
any of its subsidiaries or by which its or any of their
respective properties is 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 Xxxxxx'x rights or alter the rights or obligations of
any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the
properties or assets of Xxxxxx or any of its subsidiaries
pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Xxxxxx or any of its
subsidiaries is a party or by which Xxxxxx or any of its
subsidiaries or its or any of their respective properties are
bound or affected, except for any such breaches, defaults or
other occurrences that could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect. The Xxxxxx Disclosure Letter lists all material
consents, waivers and approvals under any of Xxxxxx'x or any of
its subsidiaries' agreements, contracts, licenses or leases
required to be obtained in connection with the consummation of
the transactions contemplated hereby and by the Xxxxxx Option
Agreement.
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(b) The execution and delivery of this
Agreement and the Xxxxxx Option Agreement by Xxxxxx do not, and
the performance of this Agreement by Xxxxxx shall not, require
any consent, approval, authorization or permit of, or filing
with or notification to, any court, administrative agency,
commission, governmental or regulatory authority, domestic or
foreign (a "Governmental Entity"), except (A) for applicable
requirements, if any, of the Securities Act of 1933, as amended
(the "Securities Act"), the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), state securities laws ("Blue Sky
Laws"), the pre-merger notification requirements (the "HSR
Approval") of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR Act") and of foreign Governmental
Entities and the rules and regulations thereunder, the NYSE
rules and regulations and the filing and recordation of the
Merger Agreement as required by the Delaware Statute and (B)
where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, (i) would not prevent consummation of the Merger
or otherwise prevent Xxxxxx from performing its obligations
under this Agreement or (ii) could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
3.6 COMPLIANCE; PERMITS.
(a) Neither Xxxxxx nor any of its subsidiaries
is in conflict with, or in default or violation of, (i) any
law, rule, regulation, order, judgment or decree applicable to
Xxxxxx or any of its subsidiaries or by which its or any of
their respective properties is bound or affected, or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to
which Xxxxxx or any of its subsidiaries is a party or by which
Xxxxxx or any of its subsidiaries or its or any of their
respective properties is bound or affected, except for any
conflicts, defaults or violations which could not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect. To the best knowledge of Xxxxxx, no
investigation or review by any governmental or regulatory body
or authority is pending or threatened against Xxxxxx or its
subsidiaries, nor has any governmental or regulatory body or
authority indicated an intention to conduct the same, other
than, in each such case, those the outcome of which could not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) Xxxxxx and its subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals
from governmental authorities which are material to operation
-12-
of the business of Xxxxxx and its subsidiaries taken as a whole
(collectively, the "Xxxxxx Permits"). Xxxxxx and its
subsidiaries are in compliance with the terms of the Xxxxxx
Permits, except where the failure to so comply could not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
3.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Xxxxxx has made available to Seagate a
correct and complete copy of each report, schedule,
registration statement and definitive proxy statement filed by
Xxxxxx with the Securities and Exchange Commission ("SEC") on
or after January 1, 1992 and prior to the date of this
Agreement (the "Xxxxxx SEC Reports"), which are all the forms,
reports and documents required to be filed by Xxxxxx with the
SEC since January 1, 1992. The Xxxxxx SEC Reports (A) were
prepared in accordance with the requirements of the Securities
Act or the Exchange Act, as the case may be, and (B) did not at
the time they were 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 light of
the circumstances under which they were made, not misleading.
None of Xxxxxx'x subsidiaries is required to file any reports
or other documents with the SEC.
(b) Each set of consolidated financial
statements (including, in each case, any related notes thereto)
contained in the Xxxxxx SEC Reports was prepared in accordance
with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto) and each fairly
presents the consolidated financial position of Xxxxxx and its
subsidiaries as 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 adjustments which were not or
are not expected to be material in amount.
(c) Xxxxxx has previously 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 Xxxxxx with the
SEC pursuant to the Securities Act or the Exchange Act.
3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since
December 31, 1994, Xxxxxx and its subsidiaries have conducted
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their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has
not been (i) any Material Adverse Effect or (ii) any material
change by Xxxxxx in its accounting methods, principles or
practices except as required by concurrent changes in GAAP.
3.9 NO UNDISCLOSED LIABILITIES. Neither Xxxxxx nor
any of its subsidiaries has any liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed
on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the
business, results of operations or financial condition of
Xxxxxx and its subsidiaries taken as a whole, except
liabilities (i) provided for in Xxxxxx'x balance sheet as of
December 31, 1994, or (ii) incurred since December 31, 1994 in
the ordinary course of business, none of which are material to
the business, results of operations or financial condition of
Xxxxxx and its subsidiaries, taken as a whole.
3.10 ABSENCE OF LITIGATION. There are no claims,
actions, suits or proceedings pending or, to the best knowledge
of Xxxxxx, threatened (or, to the best knowledge of Xxxxxx, any
investigation pending or threatened) against Xxxxxx or any of
its subsidiaries, or any properties or rights of Xxxxxx or any
of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body,
domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
3.11 EMPLOYEE BENEFIT PLANS.
(a) Section 3.11 of the Xxxxxx Disclosure
Letter lists, with respect to Xxxxxx, any trade or business
(whether or not incorporated) which is treated as a single
employer with Xxxxxx (an "ERISA Affiliate") within the meaning
of Section 414(b), (c), (m) or (o) of the Code or any
subsidiary of Xxxxxx (i) all employee benefit plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), (ii) all loans to employees in
excess of $100,000, loans to officers, and any stock option,
stock purchase, phantom stock, stock appreciation right,
supplemental retirement, severance, material bonus, material
deferred compensation and material incentive plans, programs or
arrangements, (iii) other fringe or employee benefit plans,
programs or arrangements that apply to senior management of
Xxxxxx and that do not generally apply to all employees, and
(iv) any current or former employment or executive compensation
or severance agreements, written or otherwise, as to which
unsatisfied obligations of Xxxxxx of greater than $50,000
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remain for the benefit of, or relating to, any employee,
consultant or director of Xxxxxx (together, the plans and
arrangements described in (i) through (iv) above are referred
to as the "Xxxxxx Employee Plans"), and a copy of each such
Xxxxxx Employee Plan and each summary plan description and
annual report on the Form 5500 series required to be filed with
any government agency for each Xxxxxx Employee Plan for the
three most recent Plan years has been made available to
Seagate.
(b) (i) None of the Xxxxxx Employee Plans
promises or provides retiree medical or other retiree welfare
benefits to any person; (ii) there has been no "prohibited
transaction," as such term is defined in Section 406 of ERISA
and Section 4975 of the Code, with respect to any Xxxxxx
Employee Plan, which could reasonably be expected to have, in
the aggregate, a Material Adverse Effect; (iii) all Xxxxxx
Employee Plans have been administered in compliance with the
requirements prescribed by any and all statutes (including
ERISA and the Code, orders, or governmental rules and
regulations currently in effect with respect thereto (including
all applicable requirements for notification to participants or
the Department of Labor, Internal Revenue Service or Secretary
of the Treasury)), except as would not have, in the aggregate,
a Material Adverse Effect and Xxxxxx and each of its
subsidiaries have performed all obligations required to be
performed by them under, are not in any material respect in
default under or violation of, and have no knowledge of any
material default or violation by any other party to, any of the
Xxxxxx Employee Plans; (iv) each Xxxxxx Employee Plan intended
to qualify under Section 401(a) of the Code and each trust
intended to qualify under Section 501(a) of the Code so
qualifies; (v) all material contributions required to be made
by Xxxxxx or any of its subsidiaries to any Xxxxxx Employee
Plan have been made on or before their due dates and a
reasonable amount has been accrued for contributions to each
Xxxxxx Employee Plan for the current plan years; (vi) with
respect to each Xxxxxx Employee Plan, no "reportable event"
within the meaning of Section 4043 of ERISA (excluding any such
event for which the thirty (30) day notice requirement has been
waived under the regulations to Section 4043 of ERISA) nor any
event described in Section 4062, 4063 or 4041 of ERISA has
occurred; and (vii) no Xxxxxx Employee Plan is covered by, and
neither Xxxxxx nor any subsidiary has incurred or expects to
incur any liability under Title IV of ERISA or Section 412 of
the Code.
(c) With respect to each Xxxxxx Employee Plan,
Xxxxxx has complied with the applicable health care
continuation and notice provisions of the Consolidated Omnibus
-15-
Budget Reconciliation Act of 1985 and the proposed regulations
thereunder, except to the extent that a failure to comply would
not have a Material Adverse Effect.
(d) There are no Xxxxxx Employee Plans that
provide for benefits to vest, accrue or become payable upon the
occurrence of the events described in this Agreement.
3.12 LABOR MATTERS. (i) There are no controversies
pending or, to the best knowledge of each of Xxxxxx and its
respective subsidiaries, threatened, between Xxxxxx or any of
its subsidiaries and any of their respective employees, which
controversies have or could reasonably be expected to have a
Material Adverse Effect; (ii) as of the date of this Agreement,
neither Xxxxxx nor any of subsidiaries is a party to any
collective bargaining agreement or other labor union contract
applicable to persons employed by Xxxxxx or its subsidiaries
nor does Xxxxxx or its subsidiaries know of any activities or
proceedings of any labor union to organize any such employees
(A) as of the date of this Agreement and (B) which, as of the
Closing Date, have or could reasonably be expected to have a
Material Adverse Effect on Xxxxxx and its subsidiaries; and
(iii) as of the date of this Agreement, neither Xxxxxx nor any
of its subsidiaries has any knowledge of any strikes,
slowdowns, work stoppages or lockouts, or threats thereof, by
or with respect to any employees of Xxxxxx or any of its
subsidiaries (X) as of the date of this Agreement and (Y)
which, as of the Closing Date, have or could reasonably be
expected to have a Material Adverse Effect on Xxxxxx and its
subsidiaries.
3.13 REGISTRATION STATEMENT; PROXY STATEMENT. None
of the information supplied or to be supplied by Xxxxxx for
inclusion or incorporation by reference in (i) the registration
statement on Form S-4 to be filed with the SEC by Seagate in
connection with the issuance of the Seagate Common Stock in or
as a result of the Merger (the "S-4") will, at the time the S-4
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 are made, not misleading; and (ii) the Proxy Statement
(the "Proxy Statement") to be filed with the SEC by Seagate and
Xxxxxx pursuant to Section 5.4 hereof will, at the dates mailed
to the stockholders of Seagate and Xxxxxx, at the times of the
stockholders meetings of Seagate and Xxxxxx (each a
"Stockholders Meeting" and collectively, the "Stockholders
Meetings") in connection with the transactions contemplated
hereby and as of the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact
-16-
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. 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 by the
SEC thereunder.
3.14 RESTRICTIONS ON BUSINESS ACTIVITIES. Other
than as may be permitted under Section 5.9, there is no
material agreement, judgment, injunction, order or decree
binding upon Xxxxxx or any of its subsidiaries which has or
could reasonably be expected to have the effect of prohibiting
or materially impairing any business practice of Xxxxxx or any
of its subsidiaries, any acquisition of property by Xxxxxx or
any of its subsidiaries or the conduct of business by Xxxxxx or
any of its subsidiaries as currently conducted.
3.15 TITLE TO PROPERTY. Xxxxxx owns no material
real property. Xxxxxx and each of its subsidiaries have good
and defensible title to all of their material properties and
assets, free and clear of all liens, charges and encumbrances
except liens for taxes not yet due and payable and such liens
or other imperfections of title, if any, as do not materially
detract from the value of or interfere with the present use of
the property affected thereby or which, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect; and all leases pursuant to which Xxxxxx or any
of its subsidiaries lease from others material amounts of real
or personal property are in good standing, valid and effective
in accordance with their respective terms, and there is not,
under any of such leases, any existing material default or
event of default (or any event which with notice or lapse of
time, or both, would constitute a material default and in
respect of which Xxxxxx or subsidiary has not taken adequate
steps to prevent such default from occurring) except where the
lack of such good standing, validity and effectiveness or the
existence of such default or event of default could not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. All the plants, structures and
equipment of Xxxxxx and its subsidiaries, except such as may be
under construction, are in good operating condition and repair,
except where the failure of such plants, structures and
equipment to be in such good operating condition and repair
could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
3.16 TAXES. Xxxxxx and each of its subsidiaries,
and any consolidated, combined, unitary or aggregate group for
Tax purposes of which Xxxxxx or any of its subsidiaries is or
has been a member has timely filed all Tax Returns required to
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be filed by it (other than those that are not, individually or
in the aggregate, material), has paid all Taxes shown thereon
to be due and has provided adequate accruals in all material
respects in accordance with GAAP in its financial statements
for any Taxes that have not been paid, whether or not shown as
being due on any returns. In addition, (i) no material claim
for unpaid Taxes has become a lien against the property of
Xxxxxx or any of its subsidiaries or is being asserted against
Xxxxxx or any of its subsidiaries, (ii) no audit of any Tax
Return of Xxxxxx or any of its subsidiaries is being conducted
by a Tax authority (A) as of the date of this Agreement and (B)
which, as of the Closing Date, has not had and could not
reasonably be expected to have a Material Adverse Effect on
Xxxxxx and its subsidiaries, (iii) no extension of the statute
of limitations on the assessment of any Taxes has been granted
by Xxxxxx or any of its subsidiaries and is currently in effect
(A) as of the date of this Agreement and (B) which, as of the
Closing Date, has not had and could not reasonably be expected
to have a Material Adverse Effect on Xxxxxx and its
subsidiaries and (iv) there is no agreement, contract or
arrangement to which Xxxxxx or any of its subsidiaries is a
party that may result in the payment of any amount that would
not be deductible pursuant to Sections 280G, 162 or 404 of the
Code. As used herein, "Taxes" shall mean all taxes of any
kind, including, without limitation, those on or measured by or
referred to as income, gross receipts, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, value added,
property or windfall profits taxes, customs, duties or similar
fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or
additional amounts imposed by any governmental authority,
domestic or foreign. As used herein, "Tax Return" shall mean
any return, report or statement required to be filed with any
governmental authority with respect to Taxes.
3.17 ENVIRONMENTAL MATTERS. Except in all cases as,
in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect, Xxxxxx and each of
its subsidiaries to their respective best knowledge (i) have
obtained all applicable permits, licenses and other
authorizations which are required under Federal, state or local
laws relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, or hazardous
or toxic materials or wastes into ambient air, surface water,
ground water, or land or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous
or toxic materials or wastes by Xxxxxx or its subsidiaries (or
-18-
their respective agents); (ii) are in compliance with all terms
and conditions of such required permits, licenses and
authorizations, and also are in compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained
in such laws or contained in any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder; (iii) as of the date
hereof, are not aware of nor have received notice of any event,
condition, circumstance, activity, practice, incident, action
or plan which is reasonably likely to interfere with or prevent
continued compliance or which would give rise to any common law
or statutory liability, or otherwise form the basis of any
claim, action, suit or proceeding, based on or resulting from
Xxxxxx'x or any of its subsidiaries (or any of their respective
agents) manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling, or the emission,
discharge, or release into the environment, of any pollutant,
contaminant, or hazardous or toxic material or waste; and (iv)
have taken all actions necessary under applicable requirements
of Federal, state or local laws, rules or regulations to
register any products or materials required to be registered by
Xxxxxx or its subsidiaries (or any of their respective agents)
thereunder.
3.18 BROKERS. No broker, finder or investment
banker (other than Xxxxxxx, Xxxxx & Co. ("Xxxxxxx Sachs")) is
entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of
Xxxxxx.
3.19 INTELLECTUAL PROPERTY.
(a) Xxxxxx and its subsidiaries own, or have
the right to use, sell or license all material intellectual
property rights necessary or required for the conduct of their
respective businesses as presently conducted (such intellectual
property rights are collectively referred to as the "Xxxxxx IP
Rights");
(b) the execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of
any instrument or agreement governing any Xxxxxx IP Right (the
"Xxxxxx IP Rights Agreements"), will not cause the forfeiture
or termination or give rise to a right of forfeiture or
termination of any Xxxxxx IP Right or materially impair the
right of Xxxxxx and its subsidiaries or the Surviving
Corporation to use, sell or license any Xxxxxx IP Right or
-19-
portion thereof (except where such breaches, forfeitures or
terminations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect);
(c) neither the manufacture, marketing,
license, sale or intended use of any product currently licensed
or sold by Xxxxxx or any of its subsidiaries or currently under
development by Xxxxxx or any of its subsidiaries violates any
license or agreement between Xxxxxx or any of its subsidiaries
and any third party or infringes any intellectual property
right of any other party; and there is no pending or, to the
best knowledge of Xxxxxx, threatened claim or litigation
contesting the validity, ownership or right to use, sell,
license or dispose of any Xxxxxx IP Right nor, to the best
knowledge of Xxxxxx, is there any basis for any such claim, nor
has Xxxxxx received any notice asserting that any Xxxxxx IP
Right or the proposed use, sale, license or disposition thereof
conflicts or will conflict with the rights of any other party,
nor, to the best knowledge of Xxxxxx, is there any basis for
any such assertion, except to the extent that such
violation(s), or notice or basis therefor, have not had and
could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect; and
(d) Xxxxxx has taken reasonable and practicable
steps designed to safeguard and maintain the secrecy and
confidentiality of, and its proprietary rights in, all material
Xxxxxx IP Rights.
3.20 POOLING MATTERS. Neither Xxxxxx nor any of its
affiliates has, to its best knowledge and based upon
consultation with its independent auditors, taken or agreed to
take any action that (without giving effect to this Agreement,
the transactions contemplated hereby or actions related
thereto, or any action taken or agreed to be taken by Seagate
or any of its affiliates) would prevent Seagate from accounting
for the business combination to be effected by the Merger as a
pooling of interests.
3.21 XXXXXX RIGHTS AGREEMENT. Xxxxxx will amend
prior to the Effective Time, the Xxxxxx Rights Agreement to the
extent necessary to provide that the execution, delivery and
performance of this Agreement and the transactions contemplated
hereby will not (i) cause Seagate or any of its affiliates to
become an Acquiring Person (as defined in the Xxxxxx Rights
Agreement), or (ii) otherwise affect the rights of the holders
of Xxxxxx Rights, including by causing such Xxxxxx Rights to
separate from the underlying shares or by giving such holders
the right to acquire securities of any party hereto.
-20-
3.22 INSURANCE. Xxxxxx maintains insurance policies
and fidelity bonds covering the assets, business, equipment,
properties, operations, employees, officers and directors of
Xxxxxx and its subsidiaries (collectively, the "Insurance
Policies") which are of the type and in amounts customarily
carried by persons conducting businesses similar to those of
Xxxxxx and its subsidiaries. There is no material claim by
Xxxxxx or any of its subsidiaries pending under any of the
material Insurance Policies as to which coverage has been
questioned, denied or disputed by the underwriters of such
policies or bonds.
3.23 OPINION OF FINANCIAL ADVISOR. Xxxxxx has been
advised in writing by its financial advisor, Xxxxxxx Sachs,
that in its opinion, as of the date of this Agreement, the
Exchange Ratio is fair to the stockholders of Xxxxxx.
3.24 BOARD APPROVAL. The Board of Directors of
Xxxxxx has, as of the date of this Agreement (i) approved this
Agreement, the Merger Agreement and the Xxxxxx Option Agreement
and the transactions contemplated hereby and thereby, (ii)
determined that the Merger is in the best interests of the
stockholders of Xxxxxx and is on terms that are fair to such
stockholders and (iii) recommended that the stockholders of
Xxxxxx approve this Agreement, the Merger Agreement and the
Merger.
3.25 VOTE REQUIRED. The affirmative vote of a
majority of the votes that holders of the outstanding shares of
Xxxxxx Common Stock are entitled to vote thereon is the only
vote of the holders of any class or series of Xxxxxx'x capital
stock necessary to approve this Agreement and the Merger
Agreement and the transactions contemplated hereby and thereby.
3.26 SECTION 203 OF THE DELAWARE STATUTE NOT
APPLICABLE. The provisions of Section 203 of the Delaware
Statute will not, prior to the termination of this Agreement,
assuming the accuracy of the representation of Seagate given in
Section 4.27 (without giving effect to the knowledge
qualification thereof), apply to this Agreement or to the
transactions contemplated hereby.
3.27 XXXXXX OWNERSHIP OF SEAGATE COMMON STOCK;
SEAGATE NOT AN ACQUIRING PERSON. Xxxxxx and, to the best
knowledge of Xxxxxx, its "affiliates" and "associates" (as
defined under both Section 203 of the Delaware Statute and Rule
405 under the Securities Act) collectively beneficially own and
have beneficially owned at all times during the three-year
period prior to the date hereof less than 1% of the shares of
Seagate Common Stock outstanding. So long as Seagate's and
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Sub's representations set forth in the first sentence of
Section 4.27 are accurate (without giving effect to the
knowledge qualification thereof) neither the execution and
delivery of this Agreement by the parties hereto nor the
consummation by Seagate and Sub of the transactions
contemplated hereby will cause Seagate or any of its affiliates
to be within the definition of "Acquiring Person" (as such term
is defined in the Xxxxxx Rights Agreement).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SEAGATE AND SUB
Seagate and Sub jointly and severally represent and
warrant to Xxxxxx, except as set forth in the Seagate SEC
Reports (as defined in Section 4.7(a)) or the disclosure letter
delivered by Seagate and Sub to Xxxxxx on or prior to the date
of this Agreement (the "Seagate Disclosure Letter"), as
follows:
4.1 ORGANIZATION AND QUALIFICATIONS; SUBSIDIARIES.
Each of Seagate and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite
corporate power and authority to own, lease and operate its
assets and properties and to carry on its business as it is now
being conducted. Each of Seagate and its subsidiaries is in
possession of all Approvals necessary to own, lease and operate
the properties it purports to own, operate or lease and to
carry on its business as it is now being conducted, except
where the failure to have such Approvals would not,
individually or in the aggregate, have a Material Adverse
Effect (as defined below). Each of Seagate and its
subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good
standing that would not, either individually or in the
aggregate, have a Material Adverse Effect. When used in
connection with Seagate or any of its subsidiaries, the term
"Material Adverse Effect" means any change, event or effect
that is materially adverse to the business, assets (including
intangible assets), liabilities, financial condition or results
of operations of Seagate and its subsidiaries taken as a whole;
provided, however, that a "Material Adverse Effect" shall not
include any adverse effect on the revenues or gross margins of
Seagate (or the direct consequences thereof) following the date
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of this Agreement which are attributable to (i) a delay of,
reduction in or cancellation or the change in the terms of
product orders by customers of Seagate or (ii) an increase in
the price of, a delay of, reduction in or cancellation of or
change in terms with respect to products or components supplied
by vendors of Seagate, which in either case are attributable to
the transactions contemplated by this Agreement. Other than
wholly-owned subsidiaries and except as permitted after the
date of this Agreement under Section 5.2 of this Agreement,
Seagate does not directly or indirectly own any equity or
similar interest in, or any interest convertible or
exchangeable or exercisable for, any equity or similar interest
in, any corporation, partnership, joint venture or other
business, association or entity.
4.2 CERTIFICATE OF INCORPORATION AND BYLAWS.
Seagate has previously furnished to Xxxxxx a complete and
correct copy of its Certificate of Incorporation and Bylaws as
amended to date. Such Certificate of Incorporation, Bylaws and
equivalent organizational documents of each of its subsidiaries
are in full force and effect. Neither Seagate nor any of its
subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or equivalent
organizational documents.
4.3 CAPITALIZATION. The authorized capital stock of
Seagate consists of (i) 200,000,000 shares of Seagate Common
Stock and of (ii) 1,000,000 shares of Preferred Stock, par
value $.01 per share ("Seagate Preferred Stock"), 800,000 of
which have been designated as Seagate Series A Preferred. At
the close of business on September 1, 1995, (i) 72,637,095
shares of Seagate Common Stock were issued and outstanding, all
of which are validly issued, fully paid and nonassessable, (ii)
209,410 shares of Seagate Common Stock were held in treasury by
Seagate or by subsidiaries of Seagate, (iii) 2,366,695 shares
of Seagate Common Stock were reserved for future issuance
pursuant to Seagate's employee stock purchase plan, (iv)
8,000,303 shares of Seagate Common Stock were reserved for
issuance upon the exercise of outstanding options ("Seagate
Options") to purchase Seagate Common Stock, 7,135,532 shares of
Seagate Common Stock were reserved for future grant under the
1991 Incentive Stock Option Plan (including 6,000,000 shares
subject to stockholder approval at the 1995 Annual Meeting of
Stockholders to be held October 26, 1995), 550,000 shares of
Seagate Common Stock were reserved for future grant under the
Directors' Option Plan and no shares of Seagate Common Stock
were reserved for future grant under the 1984 Stock Option
Plan, (v) 6,278,071 shares and 10,314,286 shares were reserved
for future issuance upon conversion of Seagate's 6-3/4%
Convertible Subordinated Debentures Due 2012 and 5% Convertible
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Subordinated Debentures Due 2003, respectively (collectively
the "Seagate Debentures"). No change in such capitalization
has occurred between September 1, 1995 and the date hereof
except issuances of Seagate Common Stock that would be
permitted pursuant to Section 5.2(c) hereof. As of the date
hereof, no shares of Seagate Preferred Stock were issued or
outstanding. The authorized capital stock of Sub consists of
1,000 shares of common stock, par value $0.001 per share, 100
shares of which, as of the date hereof, are issued and
outstanding. All of the outstanding shares of Seagate's and
Sub's respective capital stock have been duly authorized and
validly issued and are fully paid and nonassessable. Except as
set forth in this Section 4.3, as of the date of this Agree-
ment, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character
relating to the issued or unissued capital stock of Seagate or
any of its subsidiaries or obligating Seagate or any of its
subsidiaries to issue or sell any shares of capital stock of,
or other equity interests in, Seagate or any of its
subsidiaries. All shares of Seagate Common Stock subject to
issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they
are issuable, shall, and the shares of Seagate Common Stock to
be issued pursuant to the Merger will be, duly authorized,
validly issued, fully paid and nonassessable. Except for such
actions as are permitted under Section 5.2, there are no
obligations, contingent or otherwise, of Seagate or any of its
subsidiaries to repurchase, redeem or otherwise acquire any
shares of Seagate Common Stock or the capital stock of any
subsidiary or to provide funds to or make any investment (in
the form of a loan, capital contribution or otherwise) in any
such subsidiary or any other entity other than guarantees of
obligations of subsidiaries entered into in the ordinary course
of business. All of the outstanding shares of capital stock
(other than directors' qualifying shares) of each of Seagate's
subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and all such shares (other than directors'
qualifying shares) are owned by Seagate or another subsidiary
free and clear of all security interests, liens, claims,
pledges, agreements, limitations in Seagate's voting rights,
charges or other encumbrances of any nature whatsoever.
4.4 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of
Seagate and Sub has all necessary corporate power and authority
to execute and deliver this Agreement and the Xxxxxx Option
Agreement, and to perform its obligations hereunder and
thereunder, subject to obtaining the approval of Seagate's
stockholders of the issuance of Seagate Common Stock in the
Merger, to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the
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Xxxxxx Option Agreement by Seagate and Sub and the consummation
by Seagate and Sub of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary
corporate action on the part of Seagate and Sub and no other
corporate proceedings on the part of Seagate or Sub are
necessary to authorize this Agreement and the Xxxxxx Option
Agreement, or to consummate the transactions so contemplated
(other than with respect to the Merger, the approval by the
holders of a majority of the outstanding shares of Seagate
Common Stock of the issuance of Seagate Common Stock in the
Merger in accordance with the applicable rules of the NYSE and
Seagate's Certificate of Incorporation and Bylaws). This
Agreement and the Xxxxxx Option Agreement have been duly and
validly executed and delivered by Seagate and Sub and, assuming
the due authorization, execution and delivery by Xxxxxx,
constitute legal and binding obligations of Seagate and Sub,
enforceable against Seagate and Sub in accordance with their
respective terms, subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or
relating to creditors rights generally and (ii) the
availability of injunctive relief and other equitable remedies.
The Merger Agreement, when executed and delivered by Sub as
contemplated hereby, will be duly executed and delivered by Sub
and when approved by the stockholders of Seagate and assuming
the due authorization, execution and delivery by Sub, will be
the valid and binding obligation of Sub enforceable against Sub
in accordance with its terms, subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting or relating to creditors rights generally and (ii)
the availability of injunctive relief and other equitable
remedies.
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this
Agreement by Seagate and Sub and the Xxxxxx Option Agreement by
Seagate do not, and the performance of this Agreement by
Seagate and Sub and the Xxxxxx Option Agreement by Seagate
shall not, (i) conflict with or violate the Certificate of
Incorporation, Bylaws or equivalent organizational documents of
Seagate or any of its subsidiaries, (ii) subject to obtaining
Seagate's stockholders approval of the issuance of the shares
of Seagate Common Stock in the Merger and compliance with the
requirements set forth in Section 4.5(b) below, conflict with
or violate any law, rule, regulation, order, judgment or decree
applicable to Seagate or any of its subsidiaries or by which it
or their respective 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 or any such subsidiary's
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rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a
lien or encumbrance on any of the properties or assets of
Seagate or any of its subsidiaries pursuant to, any material
note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to
which Seagate or any of its subsidiaries is a party or by which
Seagate or any of its subsidiaries or its or any of their
respective properties are bound or affected, except for any
such breaches, defaults or other occurrences that could not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. The Seagate Disclosure
Letter lists all material consents, waivers and approvals under
any of Seagate's or any of its subsidiaries' agreements,
contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions
contemplated by this Agreement and the Xxxxxx Option Agreement.
(b) The execution and delivery of this
Agreement by Seagate and Sub and the Xxxxxx Option Agreement by
Seagate do not, and the performance of this Agreement by
Seagate and Sub shall not, require any consent, approval,
authorization or permit of, or filing with or notification to,
any Governmental Entity except (i) for applicable requirements,
if any, of the Securities Act, the Exchange Act, Blue Sky Laws,
the pre-merger notification requirements of the HSR Act and of
foreign governmental entities and the rules and regulations
thereunder, the NYSE rules and regulations, and the filing and
recordation of the Merger Agreement as required by the Delaware
Statute and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings
or notifications, (i) would not prevent consummation of the
Merger or otherwise prevent Seagate or Sub from performing
their respective obligations under this Agreement or (ii) could
not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
4.6 COMPLIANCE; PERMITS.
(a) Neither Seagate nor any of its subsidiaries
is in conflict with, or in default or violation of, (i) any
law, rule, regulation, order, judgment or decree applicable to
Seagate or any of its subsidiaries or by which its or any of
their respective properties is bound or affected, or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to
which Seagate or any of its subsidiaries is a party or by which
Seagate or any of its subsidiaries or its or any of their
respective properties is bound or affected, except for any such
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conflicts, defaults or violations which could not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect. To the best knowledge of Seagate, no
investigation or review by any governmental or regulatory body
or authority is pending or threatened against Seagate or any of
its subsidiaries, nor has any governmental or regulatory body
or authority indicated an intention to conduct the same, other
than, in each such case, those the outcome of which could not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) Seagate and its subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals
from governmental authorities which are material to the
operation of the business of Seagate and its subsidiaries taken
as a whole (collectively, the "Seagate Permits"). Seagate and
its subsidiaries are in compliance with the terms of the
Seagate Permits, except where the failure to so comply could
not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
4.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Seagate has made available to Xxxxxx a
correct and complete copy of each report, schedule,
registration statement and definitive proxy statement filed by
Seagate with the SEC on or after January 1, 1992 and prior to
the date of this Agreement (the "Seagate SEC Reports"), which
are all the forms, reports and documents required to be filed
by Seagate with the SEC since January 1, 1992. The Seagate SEC
Reports (A) were prepared in accordance with the requirements
of the Securities Act or the Exchange Act, as the case may be,
and (B) did not at the time they were 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 light of the circumstances under which they were
made, not misleading. None of Seagate's subsidiaries is
required to file any reports or other documents with the SEC.
(b) Each set of consolidated financial
statements (including, in each case, any related notes thereto)
contained in the Seagate SEC Reports was prepared in accordance
with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and
each fairly presents the consolidated financial position of
Seagate and its subsidiaries as at the respective dates thereof
and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim
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financial statements were or are subject to adjustments which
were not or are not expected to be material in amount.
(c) Seagate has previously furnished to Xxxxxx
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 Seagate with the
SEC pursuant to the Securities Act or the Exchange Act.
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since
June 30, 1995, Seagate and its subsidiaries have conducted
their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has
not been (i) any Material Adverse Effect or (ii) any material
change by Seagate in its accounting methods, principles or
practices except as required by concurrent changes in GAAP.
4.9 NO UNDISCLOSED LIABILITIES. Neither Seagate nor
any of its subsidiaries has any liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed
on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the
business, results of operations or financial condition of
Seagate and its subsidiaries taken as a whole, except
liabilities (i) provided for in Seagate's balance sheet as of
June 30, 1995 or (ii) incurred since June 30, 1995 in the
ordinary course of business, none of which are material to the
business, results of operations or financial condition of
Seagate and its subsidiaries, taken as a whole.
4.10 ABSENCE OF LITIGATION. There are no claims,
actions, suits or proceedings pending or, to the best knowledge
of Seagate, threatened (or to the best knowledge of Seagate,
any investigation pending or threatened) against Seagate or any
of its subsidiaries, or any properties or rights of Seagate or
any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body,
domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
4.11 EMPLOYEE BENEFIT PLANS.
(a) Section 4.11 of the Seagate Disclosure
Letter lists, with respect to Seagate, any trade or business
(whether or not incorporated) which is treated as a single
employer with Seagate (an "ERISA Affiliate") within the meaning
of Section 414(b), (c), (m) or (o) of the Code, or any
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subsidiary of Seagate (i) all employee benefit plans (as de-
fined in Section 3(3) of ERISA), (ii) all loans to employees in
excess of $100,000, loans to officers, and any stock option,
stock purchase, phantom stock, stock appreciation right,
deferred compensation, supplemental retirement, severance,
material bonus, material incentive and material deferred
compensation plans, programs or arrangements, and (iii) other
fringe or employee benefit plans, programs or arrangements that
apply to senior management of Seagate and that do not generally
apply to all employees, for the benefit of, or relating to, any
employee, consultant or director of Seagate (together, the
plans and arrangements described in (i) through (iii) above are
referred to as the "Seagate Employee Plans"), and a copy of
each such Seagate Employee Plan and each summary plan descrip-
tion, and annual report on the Form 5500 series required to be
filed with any government agency for each Seagate Employee Plan
for the three most recent Plan years, and the most recent
actuarial report, plan committee meeting minutes and trustee's
reports has been made available to Xxxxxx.
(b) (i) None of the Seagate Employee Plans
promises or provides retiree medical or other retiree welfare
benefits to any person; (ii) there has been no "prohibited
transaction," as such term is defined in Section 406 of ERISA
and Section 4975 of the Code, with respect to any Seagate
Employee Plan, which could reasonably be expected to have, in
the aggregate, a Material Adverse Effect; (iii) all Seagate
Employee Plans have been administered in compliance with the
requirements prescribed by any and all statutes (including
ERISA and the Code, orders, or governmental rules and
regulations currently in effect with respect thereto (including
all applicable requirements for notification to participants or
the Department of Labor, Internal Revenue Service or Secretary
of the Treasury)), except as would not have, in the aggregate,
a Material Adverse Effect and Seagate and each of its
subsidiaries have performed all obligations required to be
performed by them under, are not in any material respect in
default under or violation of, and have no knowledge of any
material default or violation by any other party to, any of the
Seagate Employee Plans; (iv) each Seagate Employee Plan
intended to qualify under Section 401(a) of the Code and each
trust intended to qualify under Section 501(a) of the Code so
qualifies; (v) all material contributions required to be made
by Seagate or any of its Seagate subsidiaries to any Seagate
Employee Plan have been made on or before their due dates and a
reasonable amount has been accrued for contributions to each
Seagate Employee Plan for the current plan years; (vi) with
respect to each Seagate Employee Plan, no "reportable event"
within the meaning of Section 4043 of ERISA (excluding any such
event for which the thirty (30) day notice requirement has been
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waived under the regulations to Section 4043 of ERISA) nor any
event described in Section 4062, 4063 or 4041 of ERISA has
occurred; and (vii) no Seagate Employee Plan is covered by, and
neither Seagate nor any subsidiary has incurred or expects to
incur any liability under Title IV of ERISA or Section 412 of
the Code.
(c) With respect to each Seagate Employee Plan,
Seagate has complied with the applicable health care
continuation and notice provisions of the Consolidated Omnibus
Budget Reconciliation Act of 1985 and the proposed regulations
thereunder, except to the extent that a failure to comply would
not have a Material Adverse Effect.
(d) There are no Seagate Employee Plans that
provide for benefits to vest, accrue or become payable upon the
occurrence of the events described in this Agreement.
4.12 LABOR MATTERS. (i) There are no controversies
pending or, to the best knowledge of each of Seagate and its
respective subsidiaries, threatened, between Seagate or any of
its subsidiaries and any of their respective employees, which
controversies have or could reasonably be expected to have a
Material Adverse Effect; (ii) as of the date of this Agreement,
neither Seagate nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor union contract
applicable to persons employed by Seagate or its subsidiaries
nor does Seagate or its subsidiaries know of any activities or
proceedings of any labor union to organize any such employees
(A) as of the date of this Agreement and (B) which, as of the
Closing Date, have or could reasonably be expected to have a
Material Adverse Effect on Seagate and its subsidiaries; and
(iii) as of the date of this Agreement, neither Seagate nor any
of its subsidiaries has any knowledge of any strikes,
slowdowns, work stoppages or lockouts, or threats thereof, by
or with respect to any employees of Seagate or any of its
subsidiaries (X) as of the date of this Agreement and (Y)
which, as of the Closing Date, have or could reasonably be
expected to have a Material Adverse Effect on Seagate and its
subsidiaries.
4.13 REGISTRATION STATEMENT; PROXY STATEMENT. None
of the information supplied or to be supplied by Seagate for
inclusion or incorporation by reference (i) in the S-4 will, at
the time the S-4 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 are made, not misleading;
and (ii) the Proxy Statement will, at the dates mailed to the
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stockholders of Seagate and Xxxxxx, at the times of the
Stockholders Meetings and as of 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. 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 by the SEC thereunder, and the S-4 will
comply as to form in all material respects with the provisions
of the Securities Act and the rules and regulations promulgated
by the SEC thereunder.
4.14 RESTRICTIONS ON BUSINESS ACTIVITIES. Other
than as may be permitted under Section 5.9, there is no
material agreement, judgment, injunction, order or decree
binding upon Seagate or any of its subsidiaries which has or
could reasonably be expected to have the effect of prohibiting
or materially impairing any business practice of Seagate or any
of its subsidiaries, any acquisition of property by Seagate or
any of its subsidiaries or the conduct of business by Seagate
or any of its subsidiaries as currently conducted.
4.15 TITLE TO PROPERTY. Seagate owns no material
real property. Seagate and each of its subsidiaries have good
and defensible title to all of their material properties and
assets, free and clear of all liens, charges and encumbrances
except liens for taxes not yet due and payable and such liens
or other imperfections of title, if any, as do not materially
detract from the value of or interfere with the present use of
the property affected thereby or which, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect; and all leases pursuant to which Seagate or any
of its subsidiaries lease from others material amounts of real
or personal property are in good standing, valid and effective
in accordance with their respective terms, and there is not,
under any of such leases, any existing material default or
event of default (or any event which with notice or lapse of
time, or both, would constitute a material default and in
respect of which Seagate or its subsidiary has not taken
adequate steps to prevent such default from occurring) except
where the lack of such good standing, validity and
effectiveness or the existence of such default or event of
default could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. All the plants,
structures and equipment of Seagate and its subsidiaries,
except such as may be under construction, are in good operating
condition and repair, except where the failure of such plants,
structures and equipment to be in such good operating condition
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and repair could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
4.16 TAXES. Seagate and each of its subsidiaries,
and any consolidated, combined, unitary or aggregate group for
Tax purposes of which Seagate or any of its subsidiaries is or
has been a member has timely filed all Tax Returns required to
be filed by it (other than those that are not, individually or
in the aggregate, material), has paid all Taxes shown thereon
to be due and has provided adequate accruals in all material
respects in accordance with GAAP in its financial statements
for any Taxes that have not been paid, whether or not shown as
being due on any returns. In addition, (i) no material claim
for unpaid Taxes has become a lien against the property of
Seagate or any of its subsidiaries or is being asserted against
Seagate or any of its subsidiaries, (ii) no audit of any Tax
Return of Seagate or any of its subsidiaries is being conducted
by a Tax authority (A) as of the date of this Agreement and (B)
which, as of the Closing Date, has not had and could not
reasonably be expected to have, a Material Adverse Effect on
Seagate and its subsidiaries, (iii) no extension of the statute
of limitations on the assessment of any Taxes has been granted
by Seagate or any of its subsidiaries and is currently in
effect (A) as of the date of this Agreement and (B) which, as
of the Closing Date, has not had and could not reasonably be
expected to have a Material Adverse Effect on Seagate and its
subsidiaries and (iv) there is no agreement, contract or
arrangement to which Seagate or any of its subsidiaries is a
party that may result in the payment of any amount that would
not be deductible pursuant to Sections 280G, 162 or 404 of the
Code.
4.17 ENVIRONMENTAL MATTERS. Except in all cases as,
in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect, Seagate and each of
its subsidiaries to their respective best knowledge (i) have
obtained all applicable permits, licenses and other
authorizations which are required under Federal, state or local
laws relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, or hazardous
or toxic materials or wastes into ambient air, surface water,
ground water, or land or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous
or toxic materials or wastes by Seagate or its subsidiaries (or
their respective agents); (ii) are in compliance with all terms
and conditions of such required permits, licenses and
authorizations, and also are in compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
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requirements, obligations, schedules and timetables contained
in such laws or contained in any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder; (iii) as of the date
hereof, are not aware of and have not received notice of any
event, condition, circumstance, activity, practice, incident,
action or plan which is reasonably likely to interfere with or
prevent continued compliance or which would give rise to any
common law or statutory liability, or otherwise form the basis
of any claim, action, suit or proceeding, based on or resulting
from Seagate's or any of its subsidiaries (or any of their
respective agents) manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the
emission, discharge, or release into the environment, of any
pollutant, contaminant or hazardous or toxic material or waste;
and (iv) have taken all actions necessary under applicable
requirements of Federal, state or local laws, rules or
regulations to register any products or materials required to
be registered by Seagate or its subsidiaries (or any of their
respective agents) thereunder.
4.18 BROKERS. No broker, finder or investment
banker (other than Xxxxxx Xxxxxxx & Co., Incorporated ("Xxxxxx
Xxxxxxx")) is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf
of Seagate or Sub.
4.19 INTELLECTUAL PROPERTY.
(a) Seagate and its subsidiaries own, or have
the right to use, sell or license all material intellectual
property rights necessary or required for the conduct of their
respective businesses as presently conducted (such intellectual
property rights are collectively referred to as the "Seagate IP
Rights");
(b) the execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of
any instrument or agreement governing any Seagate IP Right (the
"Seagate IP Rights Agreements"), will not cause the forfeiture
or termination or give rise to a right of forfeiture or
termination of any Seagate IP Right or materially impair the
right of Seagate and its subsidiaries or the Surviving
Corporation to use, sell or license any Seagate IP Right or
portion thereof (except where such breaches, forfeitures or
terminations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect);
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(c) neither the manufacture, marketing,
license, sale or intended use of any product currently licensed
or sold by Seagate or any of its subsidiaries or currently
under development by Seagate or any of its subsidiaries
violates any license or agreement between Seagate or any of its
subsidiaries and any third party or infringes any intellectual
property right of any other party; and there is no pending or,
to the best knowledge of Seagate, threatened claim or
litigation contesting the validity, ownership or right to use,
sell, license or dispose of any Seagate IP Right nor, to the
best knowledge of Seagate, is there any basis for any such
claim, nor has Seagate received any notice asserting that any
Seagate IP Right or the proposed use, sale, license or
disposition thereof conflicts or will conflict with the rights
of any other party, nor, to the best knowledge of Seagate, is
there any basis for any such assertion, except to the extent
that such violation(s), or notice or basis therefor, have not
had and could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; and
(d) Seagate has taken reasonable and
practicable steps designed to safeguard and maintain the
secrecy and confidentiality of, and its proprietary rights in,
all material Seagate IP Rights.
4.20 POOLING MATTERS. Neither Seagate nor any of
its affiliates has, to its best knowledge and based upon
consultation with its independent auditors, taken or agreed to
take any action that (without giving effect to this Agreement,
the transactions contemplated hereby or actions related
thereto, or any action taken or agreed to be taken by Xxxxxx or
any of its affiliates) would prevent Seagate from accounting
for the business combination to be effected by the Merger as a
pooling of interests.
4.21 INSURANCE. Seagate maintains insurance
policies and fidelity bonds covering the assets, business,
equipment, properties, operations, employees, officers and
directors of Seagate and its subsidiaries ("Seagate Insurance
Policies") which are of the type and in amounts customarily
carried by persons conducting businesses similar to those of
Seagate and its subsidiaries. There is no material claim by
Seagate or any of its subsidiaries pending under any of the
material Seagate Insurance Policies.
4.22 OPINION OF FINANCIAL ADVISOR. Seagate has been
advised in writing by its financial advisor, Xxxxxx Xxxxxxx,
that in its opinion as of the date hereof, the Exchange Ratio
is fair, from a financial point of view, to Seagate.
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4.23 BOARD APPROVAL. The Board of Directors of
Seagate has, as of the date hereof, approved this Agreement,
the Merger Agreement, the Xxxxxx Option Agreement and the
transactions contemplated hereby and thereby, (ii) determined
that the Merger is in the best interests of the stockholders of
Seagate and is on terms that are fair to such stockholders and
(iii) recommended that the stockholders of Seagate approve the
issuance of Seagate Common Stock in connection with the Merger.
4.24 VOTE REQUIRED. The affirmative vote of the
holders of a majority of the shares of Seagate Common Stock
present in person or represented by proxy at the meeting of
Seagate's stockholders contemplated by Section 5.8 (provided
that the shares so present or represented constitute a majority
of the shares of Seagate Common Stock) is the only vote of the
holders of any class or series of Seagate's capital stock
necessary to approve the Merger and the issuance of Seagate
Common Stock in connection with the Merger.
4.25 INTERIM OPERATIONS OF SUB. Sub was formed
solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business
activities and has conducted its operations only as
contemplated hereby.
4.26 SECTION 203 OF THE DELAWARE STATUTE NOT
APPLICABLE. The provisions of Section 203 of the Delaware
Statute will not, prior to the termination of this Agreement,
assuming the accuracy of the representation of Xxxxxx in
Section 3.27 (without giving effect to the knowledge
qualification thereof), apply to this Agreement or to the
transactions contemplated hereby.
4.27 SEAGATE OWNERSHIP OF XXXXXX COMMON STOCK.
Seagate and, to the best knowledge of Seagate, its "affiliates"
and "associates" (as defined under both Section 203 of the
Delaware Statute and Rule 405 under the Securities Act),
collectively beneficially own and have beneficially owned at
all times during the three-year period prior to the date hereof
less than 1% of the shares of Xxxxxx Common Stock outstanding
(other than shares of Xxxxxx Common Stock issuable pursuant to
the Xxxxxx Option Agreement to be entered into concurrently
herewith).
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ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO
EFFECTIVE TIME; ADDITIONAL AGREEMENTS
5.1 INFORMATION AND ACCESS. Subject to and in
accordance with the terms and conditions of that certain letter
agreement dated July 17, 1995, between Seagate and Xxxxxx (the
"Confidentiality Agreement"), from the date of this Agreement
and continuing until the Effective Time, each Company shall
afford and, with respect to clause (b) below, such Company
shall cause its independent auditors to afford, (a) to the
officers, independent auditors, counsel and other
representatives of the other Company reasonable access to the
properties, books, records (including Tax Returns filed and
those in preparation) and personnel of such Company and its
subsidiaries in order that the other Company may have a full
opportunity to make such investigation as it reasonably desires
to make of such Company and its subsidiaries and (b) to the
independent auditors of the other Company, reasonable access to
the audit work papers and other records of the independent
auditors of such Company and its subsidiaries. Additionally,
subject to and in accordance with the Confidentiality
Agreement, each Company and its subsidiaries will permit the
other Company to make such reasonable inspections of such
Company and its subsidiaries and their respective operations
during normal business hours as the other Company may reason-
ably require and each Company and its subsidiaries will cause
its officers and the officers of its subsidiaries to furnish
the other Company with such financial and operating data and
other information with respect to the business and properties
of such Company and its subsidiaries as the other Company may
from time to time reasonably request. No investigation
pursuant to this Section 5.1 shall affect or otherwise obviate
or diminish any representations and warranties of any party or
conditions to the obligations of any party.
5.2 CONDUCT OF BUSINESS OF THE COMPANIES. Except as
contemplated by this Agreement during the period from the date
of this Agreement and continuing until the Effective Time or
until the termination of this Agreement pursuant to Section
7.1, (i) each Company shall use reasonable efforts promptly to
report to the other on the status of operational matters and
changes of materiality (subject to the terms of the
Confidentiality Agreement) and (ii) each Company and its
subsidiaries shall conduct their respective businesses in the
ordinary and usual course consistent with past practice and
each Company and its subsidiaries shall use reasonable efforts
to maintain and preserve intact its business organization, to
keep available the services of its officers and employees and
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to maintain satisfactory relations with licensors, franchisees,
licensees, suppliers, contractors, distributors, customers and
others having business relationships with it. Without limiting
the generality of the foregoing and except as provided in this
Agreement, and except as disclosed in Section 5.2 of the Xxxxxx
Disclosure Letter, prior to the Effective Time, neither Company
nor any of its subsidiaries shall, unless this Agreement is
terminated pursuant to Section 7.1, without the prior written
consent of the other Company (which consent shall not be
unreasonably withheld):
(a) declare, set aside or pay any dividends on
or make any other distribution in respect of any of its capital
stock except (i) as permitted by subsection (c) below and (ii)
dividends or distributions by subsidiaries of Seagate to
Seagate or any subsidiary of Seagate;
(b) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance or
authorization of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock or
repurchase, redeem (except in compliance with Section 5.2(n)
below) or otherwise acquire any shares of its capital stock;
(c) issue, deliver, pledge, encumber or sell,
or authorize or propose the issuance, delivery, pledge,
encumbrance or sale of, or purchase or propose the purchase of,
any shares of its capital stock or securities convertible into,
or rights, warrants or options to acquire, any such shares of
capital stock or other convertible securities (other than (i)
the issuance of such capital stock upon the exercise or
conversion of Seagate Options, Seagate Debentures, Xxxxxx
Options (as defined in Section 5.14), Xxxxxx Debentures or
Arcada Options, as the case may be, outstanding on the date of
this Agreement in accordance with their present terms or
pursuant to the Seagate Employee Stock Purchase Plan or the
Xxxxxx Employee Stock Purchase Plan, as the case may be, in
accordance with their present terms, (ii) the granting of
Seagate Options in the ordinary course of business consistent
with past practice, pursuant to Seagate Employee Plans in
effect on the date of this Agreement, and the issuance of
Seagate Common Stock upon exercise thereof, (iii) the granting
of Xxxxxx Options to purchase up to an aggregate of 500,000
shares of Xxxxxx Common Stock in the ordinary course of
business consistent with past practice, pursuant to Xxxxxx
Employee Plans in effect on the date of this Agreement, the
issuance of Xxxxxx Common Stock upon the exercise of Xxxxxx
Options, the granting of Arcada Options to purchase up to an
aggregate of 200,000 shares of Arcada Common Stock (plus shares
of Arcada Common Stock returned to the Arcada 1994 Stock Option
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Plan or Xxxxxx Peripherals, Inc./Arcada Stock Option Plan (the
"Xxxxxx Arcada Plan") (other than 75,000 shares subject to an
option awarded to Xxxxx Xxxxxx on August 8, 1995) after the
date of this Agreement upon termination of the employment of
optionees in the ordinary course of business consistent with
past practice (provided that (A) such Arcada options shall be
granted only to employees of Arcada (B) such Arcada Options
shall only be granted at an exercise price per share equal to
100% of the fair market value per share of Arcada Common Stock
on the date of grant as determined by the Board of Directors of
the company granting such option, (C) options granted under the
Xxxxxx Arcada Plan shall only be granted to employees of Arcada
hired after June 19, 1995 and (D) any persons to whom such
options are granted shall acknowledge and agree in writing, as
a condition to the granting of such option, that such option
may be converted into the right to receive 0.1545 shares of
Seagate Common Stock) and the issuance of Arcada Common Stock
upon the exercise of Arcada Options outstanding as of the date
of this Agreement and (iv) in the case of Seagate only, the
issuance of Seagate Common Stock or other equity instruments in
connection with a Permitted Seagate Acquisition (as defined in
clause (e) below)) or authorize or propose any change in its
equity capitalization;
(d) except as otherwise provided in this
Agreement, amend its Certificate of Incorporation or Bylaws or
the Xxxxxx Rights Agreement in any manner adverse to the other
Company;
(e) acquire or agree to acquire by merging or
consolidating with, or by purchasing any material portion of
the capital stock or assets of, or by any other manner, any
business or any corporation, partnership, association or other
business organization or division thereof, provided that
Seagate shall be permitted to acquire (i) any rigid disc drive
component business (but not a rigid disc drive business) for
consideration having a fair market value of $50 million or less
or (ii) any software business for consideration having a fair
market value of $150 million or less (any such transaction is
referred to as a "Permitted Seagate Acquisition"); and,
provided further, that Xxxxxx shall be permitted to acquire two
substrate businesses pursuant to the terms described in the
Xxxxxx Disclosure Letter (any such transaction is referred to
as a "Permitted Xxxxxx Acquisition").
(f) sell, lease, pledge or otherwise dispose of
or encumber any of its assets, except in the ordinary course of
business (including, without limitation, any indebtedness owed
to it or any claims held by it);
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(g) with respect to Xxxxxx only, transfer the
stock of any subsidiary to any other subsidiary or any assets
or liabilities to any new or, except in the ordinary course of
business consistent with past practice, existing subsidiary,
and except as set forth in Section 5.2 of the Xxxxxx Disclosure
Letter;
(h) incur any indebtedness for borrowed money
or guarantee any such indebtedness or issue or sell any of its
debt securities or guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of others,
or make loans or advances, other than (i) in the ordinary
course of business consistent with past practice, (ii) with
respect to a business or other entity acquired pursuant to a
Permitted Seagate Acquisition or a Permitted Xxxxxx
Acquisition, and (iii) as set forth in Section 5.2 of the
Xxxxxx Disclosure Letter;
(i) pay, discharge or satisfy any material
claims, liabilities or obligations (whether absolute, accrued,
contingent or otherwise), other than (i) the payment, discharge
or satisfaction of liabilities in the ordinary course of
business, (ii) the payment of the fees and expenses of counsel
and financial advisors relating to this Agreement and the
transactions contemplated hereby, (iii) with respect to Seagate
only, any payment with respect to a settlement of any of the
outstanding litigation described in the Seagate SEC Reports and
(iv) any payment, discharge or satisfaction of any liabilities
of any business or other entity acquired pursuant to a
Permitted Seagate Acquisition or a Permitted Xxxxxx
Acquisition;
(j) with respect to Xxxxxx only, adopt or amend
in any material respect any collective bargaining agreement or
Xxxxxx Employee Plan, other than in the ordinary course of
business consistent with past practice; or with respect to
Xxxxxx only enter into or amend any employment, severance,
special pay arrangement with respect to termination of
employment or other similar arrangements or agreements with any
directors, officers or key employees of Xxxxxx (other than,
with respect to key employees, employment terms consistent with
Xxxxxx'x past practice), or enter into or amend any severance
or termination arrangement that provides for payments to any
person different from those contained in the Xxxxxx Disclosure
Letter;
(k) change in any material respect the
accounting methods or practices followed by such Company,
including any material change in any assumption underlying, or
method of calculating, any bad debt, contingency or other
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reserve, except as may be required by changes in GAAP; make any
material Tax election or settle or compromise any material
federal, state, local or foreign income tax liability or agree
to an extension of a statute of limitations;
(l) enter into any material contract or
agreement, except in the ordinary course of business, other
than as expressly permitted in this Section 5.2 and other than
renewals or replacements of leases scheduled to expire in the
near-term in the ordinary course of business;
(m) with respect to Xxxxxx only, redeem any
rights under the Xxxxxx Rights Agreement or take any action
which would permit an event (other than the Merger or the
transactions contemplated by the Xxxxxx Option Agreement) which
would otherwise be a "Triggering Event" under the Xxxxxx Rights
Agreement to be excluded from the definition of a "Triggering
Event," other than in connection with a Superior Proposal (as
defined in Section 5.3) which the Board of Directors of Xxxxxx
shall approve or recommend in accordance with Section 5.3 or
pursuant to Section 1(a)(ii) of the Xxxxxx Rights Agreement; or
(n) authorize or enter into any contract,
agreement, commitment or arrangement to do any of the
foregoing.
Notwithstanding the foregoing, the parties understand
that Seagate shall have the right to enter into agreements with
respect to and to consummate Permitted Seagate Acquisitions,
and Xxxxxx shall have the right to enter into agreements with
respect to and to consummate Permitted Xxxxxx Acquisitions.
Nothing contained in Section 5.2(a) to (n) above shall limit,
prohibit or restrict (i) Seagate's and its affiliates' ability
to enter into agreements with respect to and to consummate
Permitted Seagate Acquisitions or to operate in the ordinary
course of business any business or other entity acquired
pursuant to a Permitted Seagate Acquisition or (ii) Xxxxxx'x
and its affiliates' ability to enter into agreements with
respect to and to consummate Permitted Xxxxxx Acquisitions or
to operate in the ordinary course of business any business or
other entity acquired pursuant to a Permitted Xxxxxx
Acquisition.
5.3 NEGOTIATION WITH OTHERS.
(a) From and after the date of this Agreement
until the earlier of the Effective Time or the termination of
this Agreement in accordance with its terms, Xxxxxx shall not,
directly or indirectly, through any officer, director,
employee, representative or agent of Xxxxxx or any of its
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subsidiaries, solicit or encourage (including by way of
furnishing nonpublic information) or take other action, either
directly or indirectly, to facilitate any inquiries or the
making of any proposal that constitutes or may reasonably be
expected to lead to an Acquisition Proposal (as defined below)
from any person, or engage in any discussions or negotiations
relating thereto or in furtherance thereof or accept any
Acquisition Proposal. For purposes of this Agreement,
"Acquisition Proposal" means any inquiries or proposals
regarding (i) any merger, consolidation, sale of substantial
assets or similar transactions involving Xxxxxx or any
subsidiaries of Xxxxxx (other than sales of assets or inventory
in the ordinary course of business), (ii) sale of 20% or more
of the outstanding shares of capital stock of Xxxxxx (including
without limitation by way of a tender offer or an exchange
offer) or similar transactions involving Xxxxxx or any
subsidiaries of Xxxxxx, (iii) the acquisition by any person of
beneficial ownership or a right to acquire beneficial ownership
of, or the formation of any "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations
thereunder) which beneficially owns, or has the right to
acquire beneficial ownership of 20% or more of the then
outstanding shares of capital stock of Xxxxxx; or (iv) any
public announcement of a proposal, plan or intention to do any
of the foregoing or any agreement to engage in any of the
foregoing.
(b) Notwithstanding Section 5.3(a), the
restrictions set forth in this Agreement shall not prevent the
Board of Directors of Xxxxxx, in the exercise of and as
required by its fiduciary duties as determined by the Board of
Directors of Xxxxxx after consultation with its outside legal
counsel, engaging in discussions or negotiations with, and
furnishing information concerning Xxxxxx and its business,
properties and assets (but not directly or indirectly
soliciting or initiating such discussions or negotiations or
directly or indirectly encouraging inquiries or the making of
any Acquisition Proposal), to a third party who makes a
written, unsolicited, bona fide Acquisition Proposal that is
reasonably capable of being consummated and is reasonably
likely to be financially superior to the Merger, as determined
in each case in good faith by Xxxxxx'x Board of Directors after
consultation with Xxxxxx'x financial advisors (a "Superior
Proposal"), provided that Seagate shall have been notified in
writing of such Acquisition Proposal, including the principal
financial terms and conditions thereof.
Upon compliance with the foregoing, Xxxxxx shall be
entitled to (1) withdraw, modify or refrain from making its
recommendation referred to in Section 5.4 following receipt of
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a Superior Proposal, and approve and recommend to the
stockholders of Xxxxxx a Superior Proposal and (2) enter into
an agreement with such third party concerning a Superior
Proposal provided that Xxxxxx shall immediately make payment in
full to Seagate of the Breakup Fee as defined in Section 7.3
below.
(c) If Xxxxxx or any of its subsidiaries
receives any unsolicited offer or proposal to enter
negotiations relating to an Acquisition Proposal, Xxxxxx shall
immediately notify Seagate thereof, including information as to
the identity of the offeror or the party making any such offer
or proposal and the principal financial terms and conditions of
such offer or proposal, as the case may be.
(d) Notwithstanding the foregoing, Xxxxxx shall
not provide any non-public information to a third party unless
Xxxxxx provides such non-public information pursuant to a
nondisclosure agreement with terms regarding the protection of
confidential information at least as restrictive as such terms
in the nondisclosure agreement previously entered into between
Seagate and Xxxxxx. Xxxxxx shall be entitled to provide copies
of this Section 5.3 to third parties who, on an unsolicited
basis after the date of this Agreement, contact Xxxxxx
regarding an Acquisition Proposal, provided that Seagate shall
concurrently be notified of such contact and delivery of such
copy.
(e) Xxxxxx shall immediately cease and cause to
be terminated any existing discussions or negotiations with any
parties (other than Seagate and Sub) conducted prior to the
date of this Agreement with respect to any of the foregoing.
5.4 PREPARATION OF S-4 AND THE PROXY STATEMENT;
OTHER FILINGS. As promptly as practicable after the date of
this Agreement Seagate and Xxxxxx shall prepare and file with
the SEC a preliminary Proxy Statement in form and substance
satisfactory to each of Seagate and Xxxxxx and Seagate shall
prepare and file with the SEC the S-4, in which the Proxy
Statement will be included as a prospectus. Each of Seagate
and Xxxxxx shall use its reasonable efforts to respond to any
comments of the SEC, to have the S-4 declared effective under
the Securities Act as promptly as practicable after such filing
and to cause the Proxy Statement to be mailed to such Company's
stockholders at the earliest practicable time. As promptly as
practicable after the date of this Agreement, Seagate and
Xxxxxx shall prepare and file any other filings required under
the Exchange Act, the Securities Act or any other Federal or
Blue Sky Laws relating to the Merger and the transactions
contemplated by this Agreement and the Merger Agreement,
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including, without limitation, under the HSR Act and state
takeover laws (the "Other Filings"). Each Company will notify
the other Company promptly of 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 S-4, the Proxy Statement or any Other Filing or for
additional information and will supply the other Company with
copies of all correspondence between such Company or any of its
representatives, on the one hand, and the SEC, or its staff or
any other government officials, on the other hand, with respect
to the S-4, the Proxy Statement, the Merger or any Other
Filing. The Proxy Statement, the S-4 and the Other Filings
shall comply in all material respects with all applicable
requirements of law. Whenever any event occurs which is
required to be set forth in an amendment or supplement to the
Proxy Statement, the S-4 or any Other Filing, Seagate or
Xxxxxx, as the case may be, shall promptly inform the other
Company of such occurrence and cooperate in filing with the SEC
or its staff or any other government officials, and/or mailing
to stockholders of Seagate and Xxxxxx, such amendment or
supplement. The Proxy Statement shall include the
recommendations of the Board of Directors of Seagate in favor
of the issuance of Seagate Common Stock in connection with the
Merger and of the Board of Directors of Xxxxxx in favor of the
Merger, provided that the recommendation of the Board of
Directors of Xxxxxx may not be included or may be withdrawn if
previously included if the Board of Directors of Xxxxxx has
accepted a Superior Proposal in accordance with the terms of
Section 5.3.
5.5 ADVICE OF CHANGES; SEC FILINGS. Each Company
shall promptly provide the other Company (or its counsel)
copies of all filings made by such Company with any
Governmental Entity in connection with this Agreement, the
Merger Agreement and the transactions contemplated hereby and
thereby.
5.6 LETTER OF XXXXXX'X INDEPENDENT AUDITORS. Xxxxxx
shall use all reasonable efforts to cause to be delivered to
Seagate a letter of Price Waterhouse, LLP, Xxxxxx'x independent
auditors, dated a date within two Business Days before the date
on which the S-4 shall become effective and addressed to
Seagate, in form and substance reasonably satisfactory to
Seagate and customary in scope and substance for letters
delivered by independent auditors in connection with
registration statements similar to the S-4.
5.7 LETTER OF SEAGATE'S INDEPENDENT AUDITORS.
Seagate shall use all reasonable efforts to cause to be
delivered to Xxxxxx a letter of Ernst & Young, LLP, Seagate's
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independent auditors, dated a date within two Business Days
before the date on which the S-4 shall become effective and
addressed to Xxxxxx, in form and substance reasonably
satisfactory to Xxxxxx and customary in scope and substance for
letters delivered by independent auditors in connection with
registration statements similar to the S-4.
5.8 STOCKHOLDERS MEETINGS. Seagate and Xxxxxx each
shall call a meeting of its respective stockholders to be held
as promptly as practicable for the purpose of voting upon, in
the case of Seagate, the issuance of Seagate Common Stock in
connection with the Merger and, in the case of Xxxxxx, this
Agreement and the Merger Agreement. Seagate and Xxxxxx shall
coordinate and cooperate with respect to the timing of the
Stockholders Meetings and shall use their respective reasonable
efforts to hold the Stockholders Meetings on the same day as
soon as practicable after the date of this Agreement.
5.9 AGREEMENTS TO TAKE REASONABLE ACTION.
(a) Xxxxxx shall take, and shall cause its
subsidiaries to take, all reasonable actions necessary to
comply promptly with all legal requirements which may be im-
posed on Xxxxxx or its subsidiaries with respect to the Merger
(including furnishing the information required under the HSR
Act) and shall take all reasonable actions necessary to
cooperate promptly with and furnish information to Seagate in
connection with any such requirements imposed upon Seagate or
Sub or any subsidiary of Seagate or Sub in connection with the
Merger. Xxxxxx shall take, and shall cause its subsidiaries to
take, all reasonable actions necessary (i) to obtain (and will
take all reasonable actions necessary to promptly cooperate
with Seagate or Sub and their subsidiaries in obtaining) any
clearance, consent, authorization, order or approval of, or any
exemption by, any Governmental Entity, or other third party,
required to be obtained or made by Xxxxxx or any of its
subsidiaries (or by Seagate or any of its subsidiaries) in
connection with the Merger or the taking of any action
contemplated by this Agreement; (ii) to lift, rescind or
mitigate the effect of any injunction or restraining order or
other order adversely affecting the ability of Xxxxxx to
consummate the transactions contemplated hereby; (iii) to
fulfill all conditions applicable to Xxxxxx or Seagate pursuant
to this Agreement; and (iv) to prevent, with respect to a
threatened or pending temporary, preliminary or permanent
injunction or other order, decree or ruling or statute, rule,
regulation or executive order, the entry, enactment or
promulgation thereof, as the case may be; provided, however,
that with respect to clauses (i) through (iv) above, Xxxxxx and
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its subsidiaries will take only such curative measures (such as
licensing and divestiture) as Seagate determines, in good
faith, to be reasonable.
(b) Seagate and Sub shall take, and shall cause
their subsidiaries to take, all reasonable actions necessary to
comply promptly with all legal requirements which may be
imposed on them or their subsidiaries with respect to the
Merger (including furnishing the information required under the
HSR Act) and shall take all reasonable actions necessary to
cooperate promptly with and furnish information to Xxxxxx in
connection with any such requirements imposed upon Xxxxxx or
any subsidiary of Xxxxxx in connection with the Merger.
Seagate and Sub shall take, and shall cause their subsidiaries
to take, all reasonable actions necessary (i) to obtain (and
will take all reasonable actions necessary to promptly
cooperate with Xxxxxx and its subsidiaries in obtaining) any
clearance, consent, authorization, order or approval of, or any
exemption by, any Governmental Entity, or other third party,
required to be obtained or made by Seagate or any of its
subsidiaries (or by Xxxxxx or any of its subsidiaries) in
connection with the Merger or the taking of any action
contemplated by this Agreement; (ii) to lift, rescind or
mitigate the effect of any injunction or restraining order or
other order adversely affecting the ability of Seagate or Sub
to consummate the transactions contemplated hereby; (iii) to
fulfill all conditions applicable to Seagate or Sub or Xxxxxx
pursuant to this Agreement; and (iv) to prevent, with respect
to a threatened or pending temporary, preliminary or permanent
injunction or other order, decree or ruling or statute, rule,
regulation or executive order, the entry, enactment or
promulgation thereof, as the case may be; provided, however,
that with respect to clauses (i) through (iv) above Seagate and
its subsidiaries will take only such curative measures (such as
licensing and divestiture) as Seagate determines, in good
faith, to be reasonable.
(c) Subject to the terms and conditions of this
Agreement, each of the parties shall use all reasonable efforts
to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make
effective as promptly as practicable the transactions con-
templated by this Agreement, subject to the appropriate
approval of the stockholders of Seagate and Xxxxxx. Seagate
and Xxxxxx will use their reasonable best efforts to resolve
any competitive issues relating to or arising under the HSR Act
or any other federal or state antitrust or fair trade law
raised by any Governmental Entity including making offers of
curative divestitures and/or licensing of technology which
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Seagate determines, in good faith, to be reasonable. If such
offers are not accepted by such Governmental Entity, Seagate
(with Xxxxxx'x cooperation) shall pursue all litigation
resulting from such issues. The parties hereto will consult
and cooperate with one another, and consider in good faith the
views of one another, in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments,
opinions and proposals made or submitted by or on behalf of any
party hereto in connection with proceedings under or relating
to the HSR Act or any other federal or state antitrust or fair
trade law.
5.10 CONSENTS. Seagate, Sub and Xxxxxx shall each
use all reasonable efforts to obtain the consent and approval
of, or effect the notification of or filing with, each person
or authority whose consent or approval is required in order to
permit the consummation of the Merger and the transactions
contemplated by this Agreement and to enable the Surviving
Corporation to conduct and operate the business of Xxxxxx and
its subsidiaries substantially as presently conducted and as
contemplated to be conducted.
5.11 NYSE LISTING. Seagate shall use its reasonable
best efforts to cause the shares of Seagate Common Stock
issuable to the stockholders of Xxxxxx in the Merger to be
listed for trading on the NYSE.
5.12 PUBLIC ANNOUNCEMENTS. Seagate, Sub and Xxxxxx
shall consult with each other before issuing any press release
or otherwise making any public statements with respect to the
Merger and shall not issue any such press release or make any
such public statement prior to such consultation except as may
be required by law.
5.13 AFFILIATES.
(a) Each Company shall use all reasonable
efforts to obtain as soon as practicable and in any event
thirty (30) days prior to the expected Effective Time, executed
agreements with respect to the sale of capital stock with each
person who is an "affiliate" within the meaning of Rule 145
(for purposes of this Section, each such person, an "Affili-
ate") of such Company regarding compliance with pooling
restrictions, which agreements shall be in substantially the
form of Exhibit C (with respect to Xxxxxx) and Exhibit D (with
respect to Seagate), respectively, attached to this Agreement.
(b) At least ten Business Days prior to the
date of the Stockholders Meetings, Xxxxxx shall deliver to
Seagate a list of names and addresses of those persons who
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were, in Xxxxxx'x reasonable judgment after consultation with
legal counsel, at the record date for the Xxxxxx Stockholders
Meeting, Affiliates of Xxxxxx. Xxxxxx shall provide Seagate
such information and documents as Seagate shall reasonably
request for purposes of reviewing such list. Xxxxxx shall use
its reasonable efforts to deliver or cause to be delivered to
Seagate, prior to the Effective Time, from each of the
Affiliates of Xxxxxx identified in the foregoing list (other
than those that have delivered agreements previously pursuant
to Section 5.13(a) above), agreements (collectively, the
"Xxxxxx Affiliate Agreements") substantially in the form
attached to this Agreement as Exhibit C. Seagate and Sub shall
be entitled to place legends on the certificates evidencing any
Seagate Common Stock to be received by such Affiliates pursuant
to the terms of this Agreement and the Merger Agreement, and to
issue appropriate stop transfer instructions to the transfer
agent for Seagate Common Stock, consistent with the terms of
such Xxxxxx Affiliate Agreements, whether or not such Xxxxxx
Affiliate Agreements are actually delivered to Seagate.
5.14 XXXXXX OPTIONS.
(a) At the Effective Time, each outstanding
option (each, a "Xxxxxx Option") to purchase shares of Xxxxxx
Common Stock issued pursuant to the Xxxxxx stock option plans
(including without limitation the Archive Plans, and
collectively, the "Xxxxxx Option Plans"), whether vested or
unvested, shall be assumed by Seagate. Accordingly, each
Xxxxxx Option shall be deemed to constitute an option to
acquire, on the same terms and conditions as were applicable
under such Xxxxxx Option, the number, rounded down to the
nearest whole integer, of full shares of Seagate Common Stock
the holder of such Xxxxxx Option would have been entitled to
receive pursuant to the Merger had such holder exercised such
Xxxxxx Option in full, including as to unvested shares,
immediately prior to the Effective Time, at a price per share
equal to (y) the exercise price per share for the shares of
Xxxxxx Common Stock otherwise purchasable pursuant to such
Xxxxxx Option divided by (z) the Exchange Ratio, with such
exercise price per share rounded up to the nearest whole cent.
(b) As soon as practicable after the Effective
Time, Seagate shall deliver to each holder of a Xxxxxx Option a
document evidencing the foregoing assumption of such Xxxxxx
Option by Seagate.
(c) As soon as practicable after the Effective
Time, Seagate shall file a registration statement on Form S-8
(or any successor or other appropriate form), or another
appropriate form with respect to the shares of Seagate Common
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Stock subject to such Xxxxxx Options and shall use its
reasonable efforts to maintain the effectiveness of such regis-
tration statement (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as
such Xxxxxx Options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the
reporting requirements under Section 16(a) of the Exchange Act,
where applicable, Seagate shall administer the Xxxxxx Option
Plans assumed pursuant to this Section 5.14 in a manner that
complies with Rule 16b-3 promulgated by the SEC under the
Exchange Act to the extent the applicable Xxxxxx Option Plan
complied with such rule prior to the Merger.
5.15 XXXXXX EMPLOYEE STOCK PURCHASE PLAN. Xxxxxx
agrees that it shall terminate the Xxxxxx Employee Stock
Purchase Plan (the "Xxxxxx Purchase Plan") by having its Board
of Directors amend the Xxxxxx Purchase Plan as necessary (i) to
provide that the shares of Xxxxxx Common Stock to be purchased
under the Xxxxxx Purchase Plan shall be purchased under the
Xxxxxx Purchase Plan on a new "Exercise Date" (as such term is
defined in the Xxxxxx Purchase Plan) set by the Board of
Directors, which Exercise Date shall be on the last trading day
immediately prior to the Effective Time, or such earlier time
as the Board shall specify, (ii) to provide that any such
shares purchased under the Xxxxxx Purchase Plan shall be
automatically converted on the same basis as all other shares
of Xxxxxx Common Stock (other than shares canceled pursuant to
Section 2.1 (b)), except that such shares shall be converted
automatically into shares of Seagate Common Stock without
issuance of certificates representing issued and outstanding
shares of Xxxxxx Common Stock to Xxxxxx Purchase Plan
participants, and (iii) to provide that immediately following
such purchase of shares of Xxxxxx Common Stock the Xxxxxx
Purchase Plan shall terminate. Seagate agrees that from and
after the Effective Time employees of Xxxxxx may participate in
the Seagate Employee Stock Purchase Plan, subject to the terms
and conditions of such plan.
5.16 INDEMNIFICATION AND INSURANCE.
(a) Upon the Effective Time, Seagate shall
assume all of the obligations of Xxxxxx under Xxxxxx'x existing
indemnification agreements with each of the directors and
officers of Xxxxxx, as such agreements relate to the
indemnification of such persons for expenses and liabilities
arising from facts or events which occurred on or before the
Effective Time or relating to the Merger or transactions
contemplated by this Agreement.
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(b) The Bylaws of the Surviving Corporation
shall contain provisions identical with respect to
indemnification to those set forth in Article VI of the Bylaws
of Xxxxxx as in effect on December 31, 1994, which provisions
and Article Tenth of the Certificate of Incorporation of Xxxxxx
as in effect as of December 31, 1994 shall not be amended,
repealed or otherwise modified for a period of six 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, agents or employees of Xxxxxx.
(c) The Surviving Corporation or, at Seagate's
discretion, Seagate shall maintain in effect for three years
from the Effective Time policies of directors' and officers'
liability insurance for the benefit of the individuals who at
the Effective Time were directors or officers of Xxxxxx
containing terms and conditions which are not less advantageous
than those policies maintained by Xxxxxx at the date hereof,
with respect to matters occurring prior to the Effective Time,
to the extent available, and having the maximum available
coverage under the current policies of directors' and officers'
liability insurance provided that the Surviving Corporation or
Seagate, as the case may be, shall not be required to spend in
excess of a $1.6 million annual premium therefor; provided
further that if the Surviving Corporation or Seagate, as the
case may be, would be required to spend in excess of a $1.6
million premium per annum to obtain insurance having the
maximum available coverage under the current policies, the
Surviving Corporation or Seagate, as the case may be, will be
required to spend $1.6 million to maintain or procure insurance
coverage pursuant hereto, subject to availability of such (or
similar) coverage; provided that, in lieu of the purchase of
such insurance by Seagate or the Surviving Corporation, Xxxxxx
may purchase a three-year extended reporting period endorsement
("reporting tail coverage") under its existing Directors' and
Officers' liability insurance coverage at a cost of up to $4.8
million.
(d) In furtherance of and not in limitation of
the preceding paragraph, Seagate agrees that subsequent to the
Effective Time the officers and directors of Xxxxxx that are
defendants in all litigation commenced prior to the Effective
Time by stockholders of Xxxxxx with respect to (x) the
performance of their duties as such officers and/or directors
under federal or state law (including litigation under federal
and state securities laws) and (y) Seagate's offer or proposal
to acquire Xxxxxx (the "Subject Litigation") shall be entitled
to be represented at the reasonable expense of Seagate (subject
to the terms of the indemnification provisions referred to in
Section 5.16(a) and (b) above) in the Subject Litigation by one
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counsel (and one local counsel in each jurisdiction in which a
case is or shall be pending) each of which such counsel shall
be selected by a plurality of such director defendants;
provided that neither Seagate nor the Surviving Corporation
shall be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably
withheld) and that a condition to any indemnification payments
provided in this Section 5.16 shall be that such officer/
director defendant not have settled any Subject Litigation
without the consent of Seagate or the Surviving Corporation;
and provided further that the Surviving Corporation and Seagate
shall have no obligation hereunder to any officer/director
defendant to the extent a court of competent jurisdiction shall
ultimately determine, and such determination shall have become
final and non-appealable, that indemnification of such officer/
director defendant in the manner contemplated hereby is prohib-
ited by applicable law.
5.17 NOTIFICATION OF CERTAIN MATTERS. Xxxxxx shall
give prompt notice to Seagate, and Seagate and Sub shall give
prompt notice to Xxxxxx, of the occurrence, or failure to
occur, of any event, which occurrence or failure to occur would
be likely to cause (a) any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material
respect at any time from the date of this Agreement to the
Effective Time, or (b) any material failure of Xxxxxx or
Seagate and Sub, 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
above, the delivery of any notice pursuant to this Section
shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
5.18 POOLING ACCOUNTING. Each of Seagate and Xxxxxx
agrees not to take any action that would adversely affect the
ability of Seagate to treat the Merger as a pooling of
interests, and each of Seagate and Xxxxxx agrees to take such
action as may be reasonably required to negate the impact of
any past actions which would adversely impact the ability of
Seagate to treat the Merger as a pooling of interests.
5.19 XXXXXX DEBENTURES. Xxxxxx shall comply with
all notice requirements arising as a consequence of this
Agreement and the transactions contemplated hereby under those
certain Indentures, dated as of March 1, 1991 and March 1, 1992
(the "Indentures"), between Xxxxxx and The First National Bank
of Boston as trustee thereunder (the "Trustee"), pursuant to
which Xxxxxx'x 6-3/4% Convertible Subordinated Debentures due
2001 and Xxxxxx'x 6-1/2% Convertible Subordinated Debentures
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due 2002, respectively (the "Xxxxxx Debentures"), are issued
and outstanding. At the Effective Time, Xxxxxx and, if
required, Seagate shall execute and deliver to the Trustee
supplemental indentures pursuant to, and satisfying the
requirements of, Sections 12.01 and 15.06 of each Indenture,
which supplemental indentures shall be in form and substance
reasonably satisfactory to Seagate and the Trustee.
5.20 BENEFIT PLANS GENERALLY. Seagate agrees to
honor in accordance with their terms all employment, severance
and similar agreements to which Xxxxxx is a party and which are
listed on the Xxxxxx Disclosure Letter and all accrued benefits
that are vested as of the Effective Time under any Xxxxxx
Employee Plan. Seagate agrees to provide employees of Xxxxxx
with credit for all service with Xxxxxx or its affiliates for
purposes of vesting and eligibility under any employee benefit
plan, program or arrangement of Seagate or its affiliates. To
the extent not otherwise specified in this Agreement, Seagate
agrees that Xxxxxx employees who continue to be employed by
Xxxxxx after the Effective Time may continue to participate in
their current Xxxxxx sponsored employee benefit programs
through six months following the Effective Time. Subsequent to
such date, Xxxxxx employees shall participate in Seagate
employee benefit programs or comparable programs under
substantially the same terms and conditions as all other
Seagate employees. To the extent not otherwise specified in
this Agreement, all Xxxxxx employee benefit programs will cease
no earlier than six months following the Effective Time, at a
time to be determined by Seagate in its discretion.
ARTICLE 6
CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligation of each party to effect
the Merger is subject to the satisfaction prior to the Closing
Date of the following conditions
(a) HSR ACT. Any waiting period applicable to
the consummation of the Merger under the HSR Act shall have
expired or been terminated, and no action shall have been
instituted by the Department of Justice or Federal Trade
Commission challenging or seeking to enjoin the consummation of
the Merger, which action shall not have been withdrawn or
terminated.
(b) STOCKHOLDER APPROVAL. The issuance of
Seagate Common Stock in connection with the Merger shall have
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been approved by the requisite vote of the stockholders of
Seagate (as described in Section 4.24) and this Agreement and
the Merger Agreement shall have been approved and adopted by
the requisite vote of the stockholders of Xxxxxx (as described
in Section 3.25), in each case in accordance with applicable
law and the rules and, with respect to Seagate, in accordance
with the regulations of the NYSE.
(c) EFFECTIVENESS OF THE S-4. The S-4 shall
have been declared effective by the SEC under the Securities
Act and shall not be the subject of any stop order or pro-
ceeding by the SEC seeking a stop order.
(d) GOVERNMENTAL ENTITY APPROVALS. All
material authorizations, consents, orders or approvals of, or
declarations or filings with, or expiration of waiting periods
imposed by, any Governmental Entity necessary for the
consummation of the transactions contemplated by this Agreement
and the Merger Agreement shall have been filed, expired or been
obtained, other than those that, individually or in the
aggregate, the failure to be filed, expired or obtained would
not, in the reasonable opinion of Seagate, have a Material
Adverse Effect on Xxxxxx or Seagate.
(e) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY.
No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall
be in effect, nor shall any proceeding brought by an
administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any
of the foregoing be pending; and there shall not be any action
taken, or any statute, rule, regulation or order (whether
temporary, preliminary or permanent) enacted, entered or
enforced which makes the consummation of the Merger illegal or
prevents or prohibits the Merger.
(f) TAX OPINIONS. Seagate and Xxxxxx shall
each have received written opinions from their respective
counsel Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional
Corporation and Wachtell, Lipton, Xxxxx & Xxxx in form and
substance reasonably satisfactory to them to the effect that
the Merger will constitute a reorganization within the meaning
of Section 368(a) of the Code with respect to the Seagate
Common Stock to be received by holders of Xxxxxx Common Stock
in the Merger. In rendering such opinions, counsel may rely
upon representations and certificates of Seagate, Sub and
Xxxxxx.
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(g) POOLING-OF-INTERESTS ACCOUNTING TREATMENT.
Xxxxxx, Seagate and Sub shall have received a letter dated as
of the Effective Time from the independent accountants of
Seagate and Xxxxxx in form and substance satisfactory to
Xxxxxx, Seagate and Sub regarding the appropriateness of the
pooling of interests accounting for the Merger under the
Accounting Principles Board Opinion No. 16 if closed and
consummated in accordance with the terms of this Agreement.
(h) NYSE LISTING. The shares of Seagate Common
Stock issuable to the holders of Xxxxxx Stock pursuant to the
Merger shall have been authorized for listing on the NYSE, upon
official notice of issuance.
6.2 CONDITIONS OF OBLIGATIONS OF SEAGATE AND SUB.
The obligations of Seagate and Sub to effect the Merger are
subject to the satisfaction of the following additional
conditions, unless waived in writing by Seagate:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Xxxxxx set forth in this
Agreement shall be true and correct (determined without regard
to any materiality qualifiers, including without limitation
"Material Adverse Effect") (i) as of the date hereof and (ii)
as of the Closing Date, as though made on and as of the Closing
Date (provided that in the cases of clauses (i) and (ii) any
such representation and warranty made as of a specific date
shall be true and correct as of such specific date), except for
such inaccuracies as individually or in the aggregate which
would not have a Material Adverse Effect on Xxxxxx and
subsidiaries taken as a whole and Seagate shall have received a
certificate signed by the chief executive officer and the chief
financial officer of Xxxxxx to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF XXXXXX.
Xxxxxx shall have performed in all material respects all
obligations and covenants required to be performed by it under
this Agreement and the Merger Agreement prior to or as of the
Closing Date, and Seagate shall have received a certificate
signed by the chief executive officer and the chief financial
officer of Xxxxxx to such effect.
(c) CONSENTS. Seagate and Sub shall have
received duly executed copies of all material third-party
consents and approvals contemplated by this Agreement or the
Xxxxxx Disclosure Letter in form and substance reasonably
satisfactory to Seagate and Sub, except those consents that the
failure to so receive would not, individually or in the ag-
gregate, have a Material Adverse Effect on Xxxxxx.
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6.3 CONDITIONS OF OBLIGATION OF XXXXXX. The
obligation of Xxxxxx to effect the Merger is subject to the
satisfaction of the following conditions, unless waived in
writing by Xxxxxx:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Seagate and Sub set forth in
this Agreement shall be true and correct (determined without
regard to any materiality qualifiers, including without
limitation "Material Adverse Effect") (i) as of the date hereof
and (ii) as of the Closing Date, as though made on and as of
the Closing Date (provided that in the cases of clauses (i) and
(ii) any such representation and warranty made as of a specific
date shall be true and correct as of such specific date),
except for such inaccuracies as individually or in the
aggregate which would not have a Material Adverse Effect on
Seagate and its subsidiaries taken as a whole, and Xxxxxx shall
have received a certificate signed by the chief executive
officer and the chief financial officer of Seagate and the
president of Sub to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF SEAGATE AND
SUB. Each of Seagate and Sub shall have performed in all
material respects all obligations and covenants required to be
performed by it under this Agreement and the Merger Agreement
prior to or as of the Closing Date, and Xxxxxx shall have
received a certificate signed by the chief executive officer
and the chief financial officer of Seagate and the president of
Sub to such effect.
(c) CONSENTS. Xxxxxx shall have received duly
executed copies of all material third-party consents and
approvals contemplated by this Agreement and the Seagate
Disclosure Letter inform and substance satisfactory to Xxxxxx,
except those consents that the failure to so receive, would
not, individually or in the aggregate, have a Material Adverse
Effect on Seagate.
ARTICLE 7
TERMINATION
7.1 TERMINATION. This Agreement may be terminated
at any time prior to the Effective Time of the Merger, whether
before or after approval of the Merger by the stockholders of
Seagate and Xxxxxx:
(a) by mutual written consent duly authorized
by the Boards of Directors of Seagate and Xxxxxx;
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(b) by either Seagate or Xxxxxx if the Merger
shall not have been consummated by April 3, 1996 (provided that
if the Merger shall not have been consummated due to the
waiting period (or any extension thereof) under the HSR Act not
having expired or been terminated, or due to an action having
been instituted by the Department of Justice or Federal Trade
Commission challenging or seeking to enjoin the consummation of
the Merger, then such date shall be extended to June 3, 1996,
and provided further that the right to terminate this Agreement
under this Section 7.1(b) shall not be available to any party
whose action or failure to act has been the cause of or
resulted in the failure of the Merger to occur on or before
such date and such action or failure to act constitutes a
breach of this Agreement);
(c) by either Seagate or Xxxxxx if a court of
competent jurisdiction or governmental, regulatory or
administrative agency or commission shall (i) 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 or (ii) seek to enjoin the Merger
and the terminating party reasonably believes that the time
period required to resolve such governmental action and the
related uncertainty is reasonably likely to have a Material
Adverse Effect on either Seagate or Xxxxxx provided, that,
solely for purposes of this Section 7.1(c), the definition of
"Material Adverse Effect" shall not include the exclusion
contained under the proviso in the penultimate sentences of
Section 3.1 and 4.1, respectively; or
(d) by either Seagate or Xxxxxx if the required
approvals of the stockholders of Seagate or Xxxxxx contemplated
by this Agreement shall not have been obtained by reason of the
failure to obtain the required vote upon a vote taken at a
meeting of stockholders duly convened therefor or at any
adjournment thereof (provided that the right to terminate this
Agreement under this Section 7.1(d) shall not be available to
any party where the failure to obtain stockholder approval of
such party shall have been caused by the action or failure to
act of such party in breach of this Agreement); or
(e) by either Seagate or Xxxxxx, if Xxxxxx (A)
shall have accepted or recommended to the stockholders of
Xxxxxx a Superior Proposal, and (B) in the case of the
termination of this Agreement by Xxxxxx, Xxxxxx shall have paid
to Seagate all amounts owing by Xxxxxx to Seagate under Section
7.3(b); or
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(f) by Seagate, if the Board of Directors of
Xxxxxx shall have withdrawn, modified or refrained from making
its recommendation concerning the Merger referred to in Section
5.4 or if a third party (including a person or a group as
defined under Section 13(d) of the Exchange Act and the rules
and regulations thereunder) acquires beneficial ownership of,
or the right to acquire beneficial ownership of, at least
twenty percent (20%) of Xxxxxx'x outstanding voting equity
securities; or
(g) by Xxxxxx, upon a breach of any
representation, warranty, covenant or agreement on the part of
Seagate set forth 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) 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, that if such inaccuracy in Seagate's
representations and warranties or breach by Seagate is curable
by Seagate through the exercise of its reasonable efforts and
for so long as Seagate continues to exercise such reasonable
efforts, Xxxxxx may not terminate this Agreement under this
Section 7.1(g); or
(h) by Seagate, upon a breach of any
representation, warranty, covenant or agreement on the part of
Xxxxxx set forth in this Agreement, or if any representation or
warranty of Xxxxxx shall have become untrue, in either case
such that the conditions set forth in Section 6.2(a) or Section
6.2(b) would not be satisfied as of the time of such breach or
as of the time such representation or warranty shall have
become untrue, provided, that if such inaccuracy in Xxxxxx'x
representations and warranties or breach by Xxxxxx is curable
by Xxxxxx through the exercise of its reasonable efforts and
for so long as Xxxxxx continues to exercise such reasonable
efforts, Seagate may not terminate this Agreement under this
Section 7.1(h); or
(i) by Seagate, at any time if, as a result of
any structural damage to the main manufacturing building at the
Xxxxxx Penang facility (the "Penang Facility"), there is, or
there is reasonably expected to be, (i) a cost to Xxxxxx (after
insurance) in excess of $20 million; or (ii) a substantial
cessation of operations at the Penang Facility for at least
fifteen (15) days (excluding Sundays, holidays and any days not
considered normal work days in accordance with prior practice).
The foregoing sentence in this Section 7.1(i) shall in no way
limit or expand the definition of "Material Adverse Effect" or
the rights of Seagate or Xxxxxx relating thereto set forth in
other provisions of this Agreement.
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7.2 EFFECT OF TERMINATION. In the event of the
termination of this Agreement as provided in Section 7.1, this
Agreement shall be of no further force or effect, except (i) as
set forth in this Section 7.2, Section 7.3 and Article 8
(miscellaneous), each of which shall survive the termination of
this Agreement, and (ii) nothing herein shall relieve any party
from liability for any breach of this Agreement.
7.3 FEES AND EXPENSES.
(a) 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; provided, however, that Seagate and
Xxxxxx shall share equally all fees and expenses, other than
attorneys' fees, incurred in relation to the printing and
filing of the Proxy Statement (including any preliminary
materials related thereto) and the S-4 (including financial
statements and exhibits) and any amendments or supplements
thereto.
(b) Upon the occurrence of any of the following
events, Xxxxxx shall immediately make payment to Seagate (by
wire transfer or cashiers check) of a breakup fee in the amount
of $35 million (the "Breakup Fee"): (i) Xxxxxx shall have
accepted a Superior Proposal; (ii) the Board of Directors of
Xxxxxx shall have withdrawn, modified or refrained from making
its recommendation concerning the Merger referred to in Section
5.4, or shall have disclosed its intention to change such
recommendation; or (iii) a third party (including a person or a
group as defined under Section 13(d) of the Exchange Act and
the rules and regulations thereunder) acquires beneficial
ownership of, or the right to acquire beneficial ownership of,
at least twenty percent (20%) of Xxxxxx'x outstanding voting
equity securities. Payment of the Breakup Fee shall be subject
to offset as described in the Xxxxxx Option Agreement, and
shall be reduced by any amount paid by Xxxxxx pursuant to the
first sentence of Section 7.3(c).
(c) Xxxxxx shall immediately make payment to
Seagate (by wire transfer or cashiers check) of a fee in the
amount of $15 million in the event that the Merger shall have
been submitted to a vote of the Xxxxxx stockholders as required
hereunder, and the stockholders of Xxxxxx shall have failed for
any reason (other than as a result of Seagate's breach of this
Agreement) to approve the Merger by the requisite vote,
provided, however, that if the Breakup Fee has been paid in
full by Xxxxxx pursuant to Section 7.3(b), then no amount shall
be payable by Xxxxxx hereunder. Seagate shall immediately make
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payment to Xxxxxx (by wire transfer or cashiers check) of a fee
in the amount of $15 million in the event that the Merger shall
have been submitted to a vote of the Seagate stockholders as
required hereunder, and the stockholders of Seagate shall have
failed for any reason (other than as a result of Xxxxxx'x
breach of this Agreement) to approve the Merger by the requi-
site vote.
(d) Payment of the fees described in Section
7.3(b) and (c) above shall not be in lieu of damages incurred
in the event of breach of this Agreement.
ARTICLE 8
GENERAL PROVISIONS
8.1 AMENDMENT. This Agreement may be amended prior
to the Effective Time by the parties, by action taken by their
respective Boards of Directors, at any time before or after
approval of the Merger by the stockholders of Seagate and
Xxxxxx but, after any such approval, no amendment shall be made
which by law requires further approval by such stockholders
without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of
each of the parties.
8.2 EXTENSION; WAIVER. At any time prior to the
Effective Time, the parties, by action taken by their
respective Boards of Directors, may (i) extend the time for the
performance of any of the obligations or other acts of the
other parties, (ii) waive any inaccuracies in the
representations and warranties contained in this Agreement or
in any document delivered pursuant to this Agreement and (iii)
waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a
party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such
party.
8.3 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. All representations, warranties and agreements in
this Agreement or in any instrument delivered pursuant to this
Agreement shall be deemed to be conditions to the Merger and
shall not survive the Merger, except for the agreements
contained in Sections 2.3 (further assurances) 5.14 (options),
5.15 (employee stock purchase plan), 5.16 (indemnification),
5.19 (Xxxxxx Debentures), 7.3 (fees and expenses) and the
Xxxxxx Option Agreement, each of which shall survive the
Merger.
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8.4 ENTIRE AGREEMENT. This Agreement, the Xxxxxx
Option Agreement, the Merger Agreement (and the other exhibits
hereto), the Confidentiality Agreement and the other documents
referenced herein contain the entire agreement between the
parties with respect to the subject matter hereof and supersede
all prior arrangements and understandings, both written and
oral, with respect thereto.
8.5 SEVERABILITY. It is the desire and intent of
the parties that the provisions of this Agreement be enforced
to the fullest extent permissible under the law and public
policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this
Agreement would be held in any jurisdiction to be invalid,
prohibited or unenforceable for any reason, such provision, as
to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in
any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid,
prohibited or unenforceable in such jurisdiction, it shall, as
to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in
any other jurisdiction.
8.6 NOTICES. All notices and other communications
pursuant to this Agreement shall be in writing and shall be
deemed to be sufficient if contained in a written instrument
and shall be deemed given if delivered personally, telecopied,
sent by nationally-recognized, overnight courier or mailed by
registered or certified mail (return receipt requested),
postage prepaid, to the parties at the following addresses (or
at such other address for a party as shall be specified by like
notice):
(a) if to Seagate or Sub, to:
Seagate Technology, Inc.
000 Xxxx Xxxxx
X.X. Xxx 00000
Xxxxxx Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx
Telecopier: (000) 000-0000;
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with a copy to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
(b) if to Xxxxxx, to:
Xxxxxx Peripherals, Inc.
0000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: X. Xxxxxxx Xxxx and Xxxxxx
X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000;
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
All such notices and other communications shall be deemed to
have been received (a) in the case of personal delivery, on the
date of such delivery, (b) in the case of a telecopy, when the
party receiving such telecopy shall have confirmed receipt of
the communication, (c) in the case of delivery by nationally-
recognized, overnight courier, on the Business Day following
dispatch and (d) in the case of mailing, on the third Business
Day following such mailing.
8.7 HEADINGS. The headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
8.8 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 and
delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.9 BENEFITS; ASSIGNMENT. This Agreement is not
intended to confer upon any person other than the parties any
rights or remedies hereunder and shall not be assigned by
operation of law or otherwise; provided, however, that (i) the
holders of Xxxxxx Options and the participants under the Xxxxxx
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Purchase Plan are intended beneficiaries of the covenants and
agreements contained in Sections 5.14 and 5.15; (ii) the
officers and directors of Xxxxxx are intended beneficiaries of
the covenants and agreements contained in Section 5.16 and
(iii) Sub may assign all or any portion of its rights hereunder
to any other newly-formed, wholly-owned subsidiary of Seagate,
and Xxxxxx shall execute any amendment to this Agreement
necessary to provide the benefits of this Agreement to any such
assignee.
8.10 GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts made and to be
performed therein.
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IN WITNESS WHEREOF, the parties have caused this
Agreement to be signed by their respective officers thereunto
duly authorized, as of the date first written above.
SEAGATE TECHNOLOGY, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President,
Chief Administrative
Officer and Chief
Financial Officer
ATHENA ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
XXXXXX PERIPHERALS, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman and Chief
Executive Officer
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION]
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