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EXHIBIT 2.05
CONSOLIDATED AMENDMENT TO
STOCK PURCHASE AGREEMENT, AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION, AND INDEMNIFICATION AGREEMENT, AND CONSENT
THIS AMENDMENT TO STOCK PURCHASE AGREEMENT, AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION, AND INDEMNIFICATION AGREEMENT, AND CONSENT (this
"AGREEMENT") is made and entered into as of August 29, 2000 by and among Suez
Acquisition Company (Cayman) Limited, a limited company organized under the laws
of the Cayman Islands ("SUEZ"), Seagate Technology, Inc., a Delaware corporation
("SEAGATE"), Seagate Software Holdings, Inc., a Delaware corporation ("SSHI"),
VERITAS Software Corporation, a Delaware corporation ("VERITAS"), and Victory
Merger Sub, Inc., a Delaware corporation ("MERGER SUB").
RECITALS
A. On March 29, 2000, Suez, Seagate and SSHI entered into a Stock Purchase
Agreement (the "STOCK PURCHASE AGREEMENT") pursuant to which, among other
things, Seagate and SSHI agreed to sell to Suez (or one of its Designees), and
Suez agreed to purchase (or cause one of its Designees to purchase) from Seagate
and SSHI, all outstanding Shares of the Sold Subsidiaries (as such terms are
defined in the Stock Purchase Agreement) upon the terms and subject to the
conditions set forth therein. Capitalized terms used but not otherwise defined
in Article I hereof shall have the respective meanings ascribed thereto in the
Stock Purchase Agreement. In April 2000, Suez, Seagate and SSHI agreed to reduce
the amount stated in the definition of Required Cash under the Stock Purchase
Agreement from $800,000,000 to $775,000,000.
B. Suez, Seagate and SSHI desire to amend certain terms of the Stock
Purchase Agreement, as more fully set forth herein.
C. On March 29, 2000, Veritas, Merger Sub and Seagate entered into an
Agreement and Plan of Merger and Reorganization (the "MERGER AGREEMENT")
pursuant to which, among other things, upon the terms and subject to the
conditions of the Merger Agreement and in accordance with Delaware Law (as
defined in the Merger Agreement), Veritas and Seagate agreed to consummate the
Merger. Capitalized terms used but not otherwise defined in Article II hereof
shall have the respective meanings ascribed thereto in the Merger Agreement.
D. Veritas, Merger Sub and Seagate desire to amend certain terms of the
Merger Agreement, as more fully set forth herein.
E. On March 29, 2000, Veritas, Seagate and Suez entered into an
Indemnification Agreement (the "Indemnification Agreement") which, among other
things, sets forth certain agreements to govern various tax matters, indemnity
matters and other matters that may arise in connection with the transactions
contemplated by the Stock Purchase Agreement and the Merger Agreement.
F. Veritas, Seagate and Suez desire to amend certain terms of the
Indemnification Agreement, as more fully set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, promises and representations set forth herein, and for other good and
valuable
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consideration, the receipt and sufficiency of which are hereby acknowledged and
accepted, the parties hereto hereby agree as follows:
ARTICLE I
AMENDMENTS TO STOCK PURCHASE AGREEMENT
Seagate, Suez and SSHI hereby agree as follows:
1. Purchase and Sale of SSHI Shares. Pursuant to Section 2.1 of the Stock
Purchase Agreement, SSHI agreed to sell to Suez or one of its Designees all of
the outstanding capital stock of SSIMG. Suez hereby acknowledges that SSIMG has
adopted and administers the Seagate Software Information Management Group, Inc.
1999 Stock Option Plan pursuant to which options to purchase shares of common
stock of SSIMG have been heretofore granted to employees of SSIMG. Suez hereby
further acknowledges that a holder(s) of an option(s) granted under the
foregoing stock option plan has/have heretofore exercised such option(s) to
purchase shares of common stock of SSIMG and, as a result, SSHI will be unable
to sell such shares to Suez or one of its Designees in accordance with, and in
the manner contemplated by, the Stock Purchase Agreement. On the basis of the
foregoing, Suez, Seller and SSHI hereby agree as follows:
(a) Recital A of the Stock Purchase Agreement hereby is amended to
insert immediately following the parenthetical language "(as defined
herein)" the following: ", except as otherwise set forth herein."
(b) Section 2.1 of the Stock Purchase Agreement hereby is amended to
insert immediately following the parenthetical in which "SSIMG" is defined
and immediately prior to the parenthetical in which "Sold Subsidiaries" is
defined, the following: ", other than shares of capital stock of SSIMG
issued pursuant to the exercise of options granted under the Seagate
Software Information Management Group Inc. 1999 Stock Option Plan."
(c) Section 3.4(a) of the Stock Purchase Agreement hereby is amended
to (i) insert at the end of the second sentence thereof, the following:
"and shares of common stock of SSIMG held by persons who have exercised
stock options under the Seagate Software Information Management, Inc. 1999
Stock Option Plan" and (ii) insert in the third sentence thereof
immediately following the language that currently reads "or any agreement
or document to which Seller or any of its Subsidiaries is a party or by
which of Seller or any of its Subsidiaries is bound and," the following:
"if and".
2. Redemption of Debt. Pursuant to Section 6.13 of the Stock Purchase
Agreement, Seagate agreed to commence an irrevocable tender offer to purchase
all of the principal amount of the Debentures. Suez, Seagate and SSHI have
agreed to forego the Debt Offer, but proceed with the redemption of the
Debentures contemplated by Section 6.13 of the Stock Purchase Agreement. On the
basis of the foregoing, Suez, Seagate and SSHI hereby agree that Section 6.13 of
the Stock Purchase Agreement hereby is amended to delete therefrom the language
beginning with "Seller shall commence an irrevocable tender offer (the "DEBT
OFFER")..." in the first sentence thereof and ending with "If less than one
hundred percent (100%) of the Debentures are purchased pursuant to the Debt
Offer, then" in the third sentence thereof.
3. Designated Assets. Pursuant to Section 2.7 of the Stock Purchase
Agreement, Seagate has agreed to effectuate the Split on or before the Closing
Date. Pursuant to Section 1.1 of the Stock Purchase Agreement, (i) the term
"Split" is defined as the "the
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transfer to the Sold Subsidiaries, prior to the Closing Date, of all
assets...and Liabilities of Seller and Seagate Software Holdings, Inc., other
than the Designated Assets and the Designated Liabilities..." and (ii) the term
"Designated Assets" is defined as "the securities set forth on Schedule II [to
the Stock Purchase Agreement]". Suez, Seagate and SSHI desire to clarify, among
other things, that, in addition to the securities set forth on Schedule II to
the Stock Purchase Agreement, in connection with the Split, Seagate will also
retain (and not transfer to the Sold Subsidiaries) (i) all of Seagate's cash on
hand in excess of the Required Cash, and (ii) the capital stock of SSHI held by
Seagate. On the basis of the foregoing, Suez, Seagate and SSHI hereby agree as
follows:
(a) The definition of "Designated Assets" in Section 1.1(j) of the
Stock Purchase Agreement hereby is amended to replace the word "securities"
with the word "items".
(b) Schedule II to the Stock Purchase Agreement hereby is amended to
add the following immediately following the existing language on Schedule
II:
"D. All outstanding capital stock of SSHI held by Seller.
E. Cash in excess of the Required Cash."
4. Required Cash. Pursuant to Section 1.1 of the Stock Purchase Agreement,
the term "Required Cash" is defined as "$800,000,000, as adjusted pursuant to
Section 2.6 [of the Stock Purchase Agreement]". Suez, Seagate and SSHI desire to
amend the definition of Required Cash in the Stock Purchase Agreement. Suez,
Seagate and SSHI hereby agree that the definition of "Required Cash" in Section
1.1(ee) of the Stock Purchase Agreement hereby is amended in its entirety to
read as follows:
"Required Cash" means (x)(i) $765,000,000, in the event that the $25.25
million settlement amount payable by Seagate to TeraStor Corporation,
MaxOptics Corporation and Kubota Corporation is fully paid by Seagate prior
to the Closing Date, or (ii) $775,000,000, in the event that the $25.25
million settlement amount payable by Seagate to TeraStor Corporation,
MaxOptics Corporation and Kubota Corporation is not fully paid by Seagate
prior to the Closing Date, minus (y) one-third ( 1/3) (up to a maximum of
$2.5 million in the aggregate) of the Printing and Filing Expenses, as
adjusted pursuant to Section 2.6 hereof."
5. Certain Expenses. Suez, Seagate and SSHI desire to clarify that Suez,
Seagate and VERITAS have agreed to split the Transaction Expenses associated
with the printing and filing of all documents with the SEC in connection with
the transactions contemplated by the Stock Purchase Agreement and the Merger
Agreement. Accordingly, Suez, Seagate and SSHI hereby agree as follows:
(a) Section 1.1(nn) of the Stock Purchase Agreement hereby is amended
in its entirety to read as follows: "'TRANSACTION EXPENSES' means the fees
and expenses of Seller's or its Subsidiaries' investment bankers,
attorneys, consultants, accountants and advisors, and the printing and
filing fees and expenses associated with the printing and filing of all
documents required to be filed with the SEC or mailed to the stockholders
of Seller in connection with the transactions contemplated by this
Agreement and the OD Documents ("PRINTING AND FILING EXPENSES"), in each
case incurred in connection with this Agreement, the OD Documents and the
transactions contemplated hereby and thereby."
(b) Section 1.1(b) of the Stock Purchase Agreement hereby is amended
to insert at the end of such provision the following: "provided, however,
that
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notwithstanding the foregoing or anything to the contrary set forth in this
Agreement, for purposes of determining of the Adjustment Amount,
Transaction Expenses shall be deemed to exclude one-third ( 1/3) (up to a
maximum of $2.5 million in the aggregate) of the Printing and Filing
Expenses."
6. Taxes. Suez, Seagate and SSHI desire to clarify certain mechanics
associated with the election specified in Section 8.2 of the Stock Purchase
Agreement. Section 8.2 of the Stock Purchase Agreement is hereby amended in its
entirety to read as follows:
8.2 Section 338(h)(10) Election.
(a) Seller and Purchaser shall make an election under Section
338(h)(10) of the Code and Treasury Regulation Section 1.338(h)(10)-1(d)
(and, if permissible, any corresponding elections under any applicable
state and local income tax laws) (collectively, the "SECTION 338(H)(10)
ELECTIONS") with respect to the purchase and sale of Shares of any of the
Sold Subsidiaries which is a United States person within the meaning of
Section 7701(a)(30) of the Code (collectively, the "U.S. SOLD
SUBSIDIARIES") hereunder listed on Schedule VI hereto, and any other U.S.
Sold Subsidiary designated by the Purchaser (other than Quinta
Corporation).
(b) To the extent possible, Purchaser, Seller and the U.S. Sold
Subsidiaries shall execute on or prior to the Closing any and all forms
necessary to effectuate the Section 338(h)(10) Elections (including,
without limitation, Internal Revenue Service Form 8023 and any similar
forms under the applicable state and local income tax laws (the "SECTION
338 FORMS"). In the event, however, any Section 338 Forms are not executed
by the Closing, Purchaser and Seller shall prepare and complete each such
Section 338 Form no later than 15 days prior to the date such Section 338
Form is required to be filed. Purchaser and Seller shall each cause the
Section 338 Forms to be duly executed by an authorized person for Purchaser
and Seller in each case, and shall duly and timely file the Section 338
Forms in accordance with applicable tax Laws and the terms of this
Agreement.
(c) As soon as practicable after the date hereof, Purchaser shall (i)
allocate the Purchase Price among the Sold Subsidiaries (the "STOCK
ALLOCATION"), and (ii) determine the allocation of that portion of the
Stock Allocation attributable to any of the U.S. Sold Subsidiaries
resulting from the Section 338(h)(10) Elections (as required pursuant to
Section 338(h)(10) of the Code and the regulations promulgated thereunder)
among the assets of such U.S. Sold Subsidiaries (the "SECTION 338
ALLOCATION") after considering in good faith Seller's comments thereto.
Purchaser, Seller and the U.S. Sold Subsidiaries shall be bound by and
shall file all Tax Returns (including amended Tax Returns and amended
Section 338 Forms as necessary) consistently with the Section 338
Allocation, unless in the opinion of a nationally recognized law firm,
there is no reasonable basis therefor.
7. The Stock Purchase Agreement is hereby amended by adding the following
as Schedule VI thereto:
"SCHEDULE VI
(i) Seagate Software Information Management Group Holdings, Inc.
(ii) XIOtech Corporation"
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8. Corrections and Clarifications. Purchaser, Seller and SSHI desire to
make certain corrections and other clarifications to the terms of the Stock
Purchase Agreement. Suez, Seagate and SSHI hereby agree as follows:
(a) The definition of "Affiliate" in Section 1.1(c) of the Stock Purchase
Agreement hereby is amended to replace each instance in which the capitalized
term "Person" appears with the word "person".
(b) The definition of "Liability" in Section 1.1(z) of the Stock Purchase
Agreement hereby is amended to insert immediately following the language
"Environmental Law", the following: "(as defined in Section 3.18(a) hereof)".
(c) The definition of "OD Documents" in Section 1.1(cc) of the Stock
Purchase Agreement hereby is amended to (i) delete the word "and" immediately
following the language "by and among Seller" and immediately preceding the
language "VERITAS Software Corporation" and substituting in its place a comma
and (ii) insert immediately following the parenthetical in which "VERITAS" is
defined, the following: "and Victory Merger Sub, Inc., a Delaware corporation
and wholly owned subsidiary of VERITAS".
(d) The definition of "Overage Amount" in Section 1.1(dd) of the Stock
Purchase Agreement hereby is amended to replace the reference to "Star Options"
with a reference to "Seagate Options".
(e) The definition of "Split" in Section 1.1(jj) of the Stock Purchase
Agreement hereby is amended to delete the reference to "Seagate Software
Holdings, Inc." and replace the foregoing with the defined term "SSHI".
(f) Section 2.1 of the Stock Purchase Agreement hereby is amended to (i)
delete the language "Seagate Technology, Inc." and replace the foregoing with
the word "Seller" and (ii) delete the cross-reference language "Section 12.10"
in the first sentence thereof and replace the foregoing with a cross-reference
to "Section 12.9".
(g) Section 2.6(a) of the Stock Purchase Agreement hereby is amended to (i)
delete the reference to "Seller Stockholder Meeting" in the first sentence
thereof and replace the foregoing with the following: "Seller Stockholders'
Meeting (as defined in Section 6.1(a) hereof)" and (ii) delete the
cross-reference to Section 2.6(c) at the end of the such section.
(h) Section 2.6(b)(i) of the Stock Purchase Agreement hereby is amended to
insert immediately following the word "Seller", the following: ", SSHI".
(i) Section 2.6(b)(ii) of the Stock Purchase Agreement hereby is amended to
delete the language "Seller and Purchaser" at the end of the second and third
sentences thereof, and insert the following: "Seller, SSHI and Purchaser".
(j) Section 2.7 of the Stock Purchase Agreement hereby is amended to
replace each reference to "costs" contained in the proviso to the first sentence
thereof with the defined term "Transaction Expenses".
(k) Section 3.4(b) of the Stock Purchase Agreement hereby is amended to (i)
delete the parenthetical language "(the "2037 SENIOR DEBENTURES") and, together
with the 2004 Notes, the 2007 Notes and the 2017 Senior Debentures, the
"DEBENTURES")" and replace the foregoing with the following: "(the "2037 SENIOR
DEBENTURES" and, together with the 2004 Senior Notes, the 2007 Senior Notes and
the 2017 Senior Debentures, the "DEBENTURES"), and (ii) delete ", dated as of
March 1, 1997 (the "Indenture")".
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(l) Section 3.8 of the Stock Purchase Agreement hereby is amended to (i)
insert at the beginning of the fourth sentence thereof, the following: "Except
for SSIMG," (ii) delete the following redundant language in the sixth sentence
thereof: "and the consolidated financial position of Seller and its consolidated
Subsidiaries as of the dates thereof" and (iii) delete the subheading "(a)"
after "Section 3.8".
(m) Section 3.10 of the Stock Purchase Agreement hereby is amended to
delete the reference to "VERITAS Merger Agreement" in the first sentence thereof
and replace the foregoing with the following: "OD Documents."
(n) Section 3.11(d) of the Stock Purchase Agreement hereby is amended to
delete the language in the first sentence thereof beginning with "is presently
in progress" until the end of the sentence, and replace the foregoing with the
following: "which is presently in progress, and a complete and accurate list of
all notifications received by Seller or any of its Subsidiaries from any Tax
authority regarding any request for such an audit or other examination."
(o) Section 3.11(g) of the Stock Purchase Agreement hereby is amended to
delete the second sentence thereof and replace the foregoing with the following:
"Section 3.11(g) of the Seller Disclosure Schedule contains a complete and
accurate list of all contracts, agreements, plans or arrangements to which
Seller is a party or by which it is bound pursuant to which Seller is required
to compensate any individual for excise taxes pursuant to Section 4999 of the
Code."
(p) Section 3.16(d) of the Stock Purchase Agreement hereby is amended to
delete the following language in the final sentence thereof: "former employee,
director, consultant".
(q) Section 3.19 of the Stock Purchase Agreement hereby is amended to
delete the word "any" appearing immediately following the language "Seller has
no" and immediately preceding the language "knowledge of any strikes".
(r) Section 3.25(a) of the Stock Purchase Agreement hereby is amended to
delete the language "and thereby" appearing immediately following the language
"the consummation of the transactions contemplated hereby" and immediately
preceding the language "will not result in the loss of," in the third sentence
thereof.
(s) Section 3.25(d) of the Stock Purchase Agreement hereby is amended to
(i) insert the word "property" immediately following the language "shall mean
intellectual" and immediately preceding the language "or property of a similar
nature" in the first sentence thereof, and (ii) replace the reference to
"subsidiaries" in the final sentence thereof with the defined term
"Subsidiaries".
(t) The preamble to Article IV of the Stock Purchase Agreement hereby is
amended to delete the following: ", subject to the exceptions and qualifications
set forth or disclosed in the disclosure letter delivered by Purchaser to
Seller, dated as of the date hereof (the "PURCHASER DISCLOSURE LETTER"),".
(u) Section 4.5 of the Stock Purchase Agreement hereby is amended to
replace each of the first two references to "Seller" in the first sentence
thereof with references to "Purchaser".
(v) Section 5.1 of the Stock Purchase Agreement hereby is amended to (i)
delete the word "and" appearing in the first sentence thereof immediately
preceding the following language: "(iii) to the extent contemplated by the OD
Documents" and (ii) insert in the first sentence thereof immediately following
the language "as in effect on the date hereof,
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or" and immediately preceding the language "for the sale of all or a portion of
the Designated Assets", the following: "(iv)".
(w) Section 7.1 of the Stock Purchase Agreement hereby is amended to delete
the word "[Suez]" appearing in the proviso of the second sentence thereof and
replace the foregoing with the following: "Seagate".
(x) Section 7.2(a) of the Stock Purchase Agreement hereby is amended to
insert immediately following the language "(i) Purchaser shall offer all" and
immediately preceding the language "Seller Employees" in the first sentence
thereof, the following: "then current".
(y) Section 9.1(d) of the Stock Purchase Agreement hereby is amended to
delete the cross-reference to Section 6.1(f) of the VERITAS Merger Agreement and
replace the foregoing with a cross-reference to Section 6.1(e) of the VERITAS
Merger Agreement.
(z) Section 9.2 of the Stock Purchase Agreement hereby is amended to insert
immediately following the reference to "Seller" in the caption thereof and the
first sentence thereof, the following: "and SSHI".
(aa) Section 11.2 of the Stock Purchase Agreement hereby is amended to
insert immediately following the first reference to "Indemnification Agreement",
the following: "of even date herewith by and among VERITAS, Seller, Purchaser
and each person who executes a Joinder Agreement contemplated thereby".
(bb) Section 12.12 of the Stock Purchase Agreement hereby is amended to
delete the reference to "reasonably attorneys' fees" in the first sentence
thereof, and replace the foregoing with the following: "reasonable attorneys'
fees".
9. Consent. VERITAS hereby consents to the amendments to the Stock Purchase
Agreement set forth in this Article I for all purposes of and under the Merger
Agreement.
ARTICLE II
AMENDMENT TO MERGER AGREEMENT
Seagate, Merger Sub and VERITAS hereby agree as follows:
1. Tax Withholding and Available Amount
(a) The definition of "Available Amount" in Section 1.11(a)(ii) of the
Merger Agreement is hereby amended by adding, immediately after the word
"minus" a "(i)", and by adding at the end of such definition the phrase ',
(ii) the Estimated Tax Withholding Amount and (iii) the Reserve Amount."
(b) A new definition is hereby added to the end of Section 1.11(a) of
the Merger Agreement as follows:
"(xxxiv) 'ESTIMATED TAX WITHHOLDING AMOUNT' means the aggregate amount
required to be withheld under the Code or under any applicable provision of
state, local or foreign tax law or under any other applicable legal
requirement, as determined by the mutual agreement of Seagate and Veritas,
in respect of the acceleration of vesting and conversion of the Seagate
Options pursuant to Section 1.5(c) of the Merger Agreement."
(c) Section 1.5(c) is hereby amended by deleting from clause (iii)
thereof the words "and Section 1.5(a) hereof," and substituting therefor
the words "and
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Section 1.5(a) hereof (except to the extent deducted or withheld pursuant
to Section 1.5(d)),"
(d) Section 1.5(d) is hereby amended:
(i) by deleting the words "Each of the Exchange Agent (as defined
in Section 1.6(a) hereof) and Veritas" and substituting therefor the
words "Each of the Exchange Agent (as defined in Section 1.6(a) hereof),
Veritas and Seagate"; and
(ii) by adding the end thereof a new sentence as follows: "Without
limiting the foregoing, Seagate shall deduct and withhold from each
holder of Seagate Option Shares such number of Seagate Option Shares
(which may include fractional shares) as Veritas and Seagate shall
mutually agree are required to be deducted and withheld from such holder
under the Code or under any applicable provision of state, local or
foreign tax law or under any other applicable legal requirement."
2. Valuation of Dragon Shares. The definition of "Stipulated Amount" in
Section 1.11(a)(xxvi) of the Merger Agreement is hereby amended by deleting
clause (3) thereof in its entirety and substituting therefor the following:
"(3) with respect to shares of Dragon Systems, Inc. ("DRAGON") held
by Seagate immediately prior to the Effective Time (including shares
into which such shares may have been converted, the "DRAGON SHARES"),
(A) the product obtained by multiplying (x) the Reference Average for
Dragon Shares, by (y) 0.6 (the product of (x) and (y) being the
"Value"), minus (B) 0.4 multiplied by the difference between the Value
and Seagate's tax basis in a Dragon Share, multiplied by (C) the number
of Dragon Shares (other than those subject to any escrow agreement). Any
escrowed Dragon Shares shall be treated as provided in Section 5.15
hereof."
3. TRA Amount.
(a) Section 1.11(a) of the Merger Agreement is hereby amended to
insert the following definition as Section 1.11(a)(xxxiv):
"Reserve Amount" shall mean $150 million; provided, however, the
Reserve Amount shall be increased on a dollar for dollar basis to the
extent the "Agreed TRA Amount" (as defined below) is less than $200
million; provided, further, in no event shall the Reserve Amount exceed
$300 million. The "Agreed TRA Amount" shall mean the reasonably
estimated amount of the TRA Amount (determined without taking into
account the Reserve Amount) as mutually agreed upon by Seagate and
Purchaser. Within seven (7) days of the delivery of the TA Statement to
Purchaser as provided for in Section 2.6(a) of the Stock Purchase
Agreement, Seagate and Purchaser shall determine the Agreed TRA Amount
or a methodology of computing the Agreed TRA Amount with the only
variable in such computation being the Veritas Price (as defined in the
Stock Purchase Agreement) on the trading day immediately preceding the
Effective Time. To the extent the parties cannot so agree, the dispute
resolution mechanism provided for in Section 2.6(b) of the Stock
Purchase Agreement shall be followed.
(b) The definition of "TRA Amount" in Section 1.11(a)(xxx) of the
Merger Agreement is hereby restated in its entirety as follows:
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"TRA Amount" means (i) the amount of cash received with respect to
all refunds or the utilization of credits for Seagate Taxes for or
attributable to taxable years or periods of Seagate ending on or prior
to the Effective Time, or the pre-closing period, in the case of a
taxable period commencing before the Effective Time and ending after the
Effective Time, (ii) cash in an amount equal to the Reserve Amount which
shall be deposited with the Administrators by Veritas at the Closing or
within two business days of the Closing and (iii) income earned with
respect to the assets held in the Collection Account (as defined in
Section 5.15(c) hereof), less any administrative charges of the
Administrators and expenses of such Administrators, and less amounts
paid to Veritas in respect of Taxes imposed on income earned in the
Collection Account; provided, however, that the terms "refunds" and
"credits" shall not include any amount that represents a tax benefit
arising from a Correlative Adjustment.
(c) The definition of "TRA Right" in Section 1.11(a)(xxxi) of the
Merger Agreement is hereby restated in its entirety as follows:
"TRA Right" means a non-transferable right to receive, when, as and
if received by Veritas or its Affiliates, a stockholder's Pro Rata
Portion of the TRA Amount as reduced pursuant to Section 5.15(e)(ii)(x)
hereof and subject to Section 5.15(e)(i) hereof.
(d) Section 1.11(a) of the Merger Agreement is hereby amended to
insert the following definition as Section 1.11(a)(xxxv):
"Correlative Adjustment" means a tax benefit such as an increase in
the amount of tax basis of an asset, exclusion from income, tax credit
or other adjustment that results (directly or indirectly) from a tax
detriment arising in any Seagate taxable year ending prior to the
taxable year in which the Closing occurs, such as an increase in taxable
income or gain, reduction in the amount of a tax credit or the tax basis
of an asset, to the extent arising from a settlement with, a taxing
authority, a final determination (as described in Section 1313(a) of the
Code), or the filing of an amended Tax Return, in each case, subsequent
to the Closing.
(e) Section 5.15 of the Merger Agreement hereby is amended and
restated in its entirety to read as follows:
"5.15 TRA Matters
(a) Form. The TRA Rights shall be evidenced by a non-transferable
document in form and substance reasonably satisfactory to Veritas and
Seagate, and shall contain legends to the effect that they are
non-negotiable instruments as well as such other legends as may be required
by law. The rights of the holders of the TRA Rights to receive a
distribution from the Collection Account (as defined in Section 5.15(b)
hereof) shall terminate with respect to TRA Amounts on the 30(th) day after
the settlement, expiration of the statute of limitations, or final
determination (as defined in Section 1313(a) of the Code) with respect to
the last audit, examination or contest in respect of a claim for refund,
credit or amended return that would give rise to a TRA Amount. After the
expiration date of the TRA Rights, any TRA Amounts received by Veritas and
its Affiliates shall be the property of Veritas or such Affiliate without
any obligation whatsoever to account therefor to holders of the TRA Rights;
provided, however, that any TRA Amounts to be received after such
expiration date in respect of any settlement, or final determination with
respect to the last audit,
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examination or contest described in the prior sentence shall be the
property of the holders of the TRA Rights and an amount of cash equal to
any such TRA Amount shall be deposited in the Collection Account pursuant
to Section 5.15(c) below.
(b) Administration generally. On or prior to the Effective Time,
Seagate shall designate one or more persons (the "Administrators") who
shall be responsible for overseeing collection of the TRA Amount and
distributions with respect to the TRA Rights and coordinating activities
with representatives of Veritas and Purchaser with respect to Seagate
Taxes. Veritas and Seagate will, prior to the Effective Time, cooperate in
good faith with respect to establishing procedures and structures designed
to realize the aggregate value of the TRA Amount and minimize the amount of
administrative costs. This may include the establishment of segregated
accounts, pass-through trusts or similar devices (collectively, a
"Collection Account") to receive periodic payments of cash amounts equal to
the TRA Amount. The Administrators shall be entitled to charge the
Collection Account a fee of 1% for all amounts deposited therein and
distributed to holders of the TRA Rights, and to charge the Collection
Account third-party expenses associated with administration of the TRA
Rights. The Administrators shall pay to Veritas an amount on account of
Taxes imposed on income earned on the assets held in the Collection
Account, equal to 36% of all income and gain earned by the Collection
Account. Such amount shall be paid no later than January 15 of each year in
respect of income and gain earned in the preceding year or portion thereof
during which the account is in existence.
(c) Collection Account. Following the Effective Time, Veritas shall
forward to the Collection Account (and notify the Administrators of) an
amount in cash equal to any TRA Amount receipt (including the realization
of any credit) by Seagate, within ten (10) business days of such receipt
or, in the case of the Reserve Amount, within 2 business days of the
Closing.
(d) Interest. Any amounts in respect of the TRA Amounts not deposited
in the Collection Account within the time period specified in Section
5.15(c) shall be subject to an interest charge of 8% per annum.
(e) Investment/Distributions. (i) Amounts deposited in the Collection
Account shall be invested by the Administrators in short-term money markets
instruments, and shall be distributed to holders of TRA Rights on each
calendar quarterly end commencing with the first such day that is at least
45 days following the Closing Date (as defined in the Stock Purchase
Agreement); provided however, the amount available for distribution exceeds
$5.0 million. Notwithstanding the immediately preceding sentence, the
Administrators shall not distribute to the holders of the TRA Rights any
amounts held in the Collection Account if such distribution would cause the
balance in the Collection Account to be less than $300 million (including
interest earned thereon, net of amounts in respect of applicable income
taxes) (the "Retained TRA Amount") until such time as there is a
settlement, expiration of the applicable statute of limitations, or final
determination (as defined in Section 1313(a) of the Code) with respect to
the last audit, examination or contest in respect of Seagate income taxes
relating to the taxable period beginning July 1, 2000 and ending on the
Closing Date (as defined herein) and any carryback arising in such taxable
period, provided, however, upon the earlier to occur of a settlement, or a
final determination (as defined in Section 1313(a) of the Code) with
respect Seagate's federal income taxes for the taxable year in which the
Closing occurs and the taxable years to which any attribute arising in the
taxable year in which the Closing occurs is carried back,
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the remaining amount held in the Collection Account, less $50 million,
shall be distributed immediately to the holders of the TRA Rights.
(ii) The Retained TRA Amount shall be paid (x) first to Veritas for
application in respect of Seagate income Taxes (including interest and
penalties, if any) relating to the taxable period beginning July 1, 2000
and ending on the Closing Date (as defined herein) and any carryback
arising in such taxable period, and (y) then second, the remainder (less
fees and expenses, including reimbursement for taxes) thereof, to the
holders of the TRA Rights, pursuant to Section 5.15(e)(i) hereof.
(f) Conduct of Audits and Other Procedural Matters. The Administrators
shall have the right to control any audit, examination or contest with
respect to any claim for refund, credit or amended return that would give
rise to a TRA Amount, except if such audit, examination or contest may give
rise to an indemnification obligation by Purchaser under the
Indemnification Agreement, in which case the provisions of Section 6(d)(i)
of the Indemnification Agreement shall control. Veritas shall promptly
forward to the Administrators all written notifications and other written
communications, including if available the original envelope showing any
postmark from any taxing authority received by Veritas or its Affiliates
relating to the TRA Amount.
(g) Assistance and Cooperation. After the Effective Time, Veritas
shall (and shall cause its respective Affiliates to):
(i) Use reasonable efforts to include in any Tax Returns filed by
Veritas or its Affiliates applicable claims for refunds or credits in
respect of the TRA Amount proposed by the Administrators subject to any
applicable requirements of Section 6(c)(i) of the Indemnification
Agreement;
(ii) Cooperate fully in preparing for any audits of, or disputes
with taxing authorities regarding the TRA Amount;
(iii) Make available to the Administrators and to any taxing
authority as reasonably requested all information, records, and
documents relating to Taxes of Veritas, Seagate or any of their
respective subsidiaries;
(iv) Provide timely notice to the Administrators in writing of any
pending or threatened Tax audits or assessments relating to refunds or
credits included or potentially includable in the TRA Amount; and
(v) Furnish the Administrators with copies of all correspondence
received from any taxing authority in connection with any Tax audit
which may affect refunds or credits included or potentially includable
in the TRA Amount.
(h) Exculpation. In performing any duties under this Agreement, the
Administrator shall not be liable to any party for damages, losses, or
expenses, except to the extent resulting from the gross negligence or
willful misconduct on the part of the Administrator. The Administrator
shall not incur any such liability for (A) any act or failure to act made
or omitted in good faith, or (B) any action taken or omitted in reliance
upon any instrument, including any written statement or affidavit provided
for in this Agreement that the Administrator shall in good faith believe to
be genuine, nor will the Administrator be liable or responsible for
forgeries, fraud, impersonations, or determining the scope of any
representative authority. In addition, the Administrator may consult with
legal counsel in connection with performing the Administrator's duties
under this Agreement and shall be fully protected in any act taken,
suffered, or
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permitted by him/her in good faith in accordance with the advice of
counsel. The Administrator is not responsible for determining and verifying
the authority of any person acting or purporting to act on behalf of any
party to this Agreement.
(i) Dragon Shares. Any Dragon Shares being held in escrow at the
Effective Time shall, following release from escrow and delivery to
Veritas, and subject to applicable legal and contractual restrictions, be
transferred to the Administrator. Following receipt thereof, the
Administrator shall use reasonable efforts to distribute these shares to
holders of TRA Rights and/or sell such shares as promptly as practicable,
in each case, in accordance with any applicable legal and contractual
restrictions, and, following any such sale, shall deposit the net proceeds
thereof into the Collection Account and distribute the same in accordance
with paragraph (e) of this Section 5.15."
4. Corrections and Clarifications. The parties desire to make certain
corrections and other clarifications to the terms of the Merger Agreement.
Seagate, Veritas and Merger Sub hereby agree as follows:
(a) Section 1.5(b) of the Merger Agreement is hereby amended by
deleting such Section in its entirety and substituting therefor the
following:
"(b) Unless otherwise determined by Veritas, each share of Seagate
Common Stock (i) held in the treasury of Seagate immediately prior to
the Effective Time, (ii) owned by Merger Sub, Veritas or any direct or
indirect wholly-owned subsidiary of Seagate or of Veritas immediately
prior to the Effective Time or (iii) in respect of which a share of Suez
Acquisition Company (Cayman) Limited or any successor, assignee or
affiliate has been or will be issued to any party to a Rolled Agreement
(as defined in the Stock Purchase Agreement), shall, in each case, be
canceled and extinguished without any conversion thereof."
(b) The definition of "Average Veritas Stock Price" in Section
1.11(a)(iv) of the Merger Agreement is hereby amended by deleting therefrom
the phrase "as with respect to the VP Amount" and substituting therefor the
phrase "or, with respect to the VP Amount".
(c) Section 1.11 of the Merger Agreement is hereby amended to include
the following definition of "Tax Return":
"(xxx) "TAX RETURN" means all federal, state, local and foreign
returns, estimates, information statements and reports relating to Taxes
required to be filed by Seagate and each of its Subsidiaries with any
Tax authority, including any claims for refunds or credits."
(d) Section 4.1 of the Merger Agreement is hereby amended by adding
the phrase "are those set forth on Schedule I hereto" immediately after the
words "only assets and properties owned or held by Seagate".
(e) Section 5.4(b) of the Merger Agreement is hereby amended as
follows:
(i) By adding the phrase "(other than Section 7.3)" immediately
after the words "For all purposes of and under this Agreement" in the
second sentence thereof.
(ii) By deleting the phrase "pursuant to which the stockholders of
Seagate immediately preceding such transaction would hold less than
fifteen percent
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(15%) of the equity interests in the surviving or resulting entity of
such transaction" and substituting therefor the phrase "pursuant to
which the stockholders of Seagate immediately preceding such transaction
would hold less than eighty-five percent (85%) of the equity interests
in the surviving or resulting entity of such transaction".
(iii) By deleting the phrase "or (iv)" and substituting therefor
the phrase "or (iii)".
(f) Section 5.12 of the Merger Agreement is hereby amended as follows:
(i) By deleting therefrom the phrase "Prior to the Seagate
Stockholders Meeting," and substituting therefor the phrase "Prior to
the date that the Proxy Statement is first mailed to Seagate
stockholders and Veritas stockholders,".
(ii) By deleting therefrom the phrase "but in no event later than
the date the Proxy Statement is filed with the SEC," and substituting
therefor the phrase "but in no event later than the date of the Seagate
Stockholders' Meeting,".
(g) Section 7.3(b)(iii) of the Merger Agreement is hereby amended by
adding thereto the words "or Seagate" immediately after the words "if (A)
this Agreement is terminated by Veritas".
(h) Section 7.3(b)(iv) of the Merger Agreement is hereby amended by
deleting therefrom, the phrase "Termination Date" each time such phrase
appears, and substituting therefor each such time the phrase "date of such
termination", and by deleting the word "the" immediately before the phrase
"Seagate, (C) following the public announcement".
(i) Section 7.3(b)(v) of the Merger Agreement is hereby amended by
adding a ")" immediately after the words "other than an offer or proposal
by Veritas".
5. Certain Expenses. Seagate agrees that it shall be responsible for paying
two-thirds ( 2/3), and Veritas agrees that it shall be responsible for paying
one-third ( 1/3), of (a) any additional filing fee owed to the SEC in respect of
the Proxy Statement and the Registration Statement and (b) all printing costs
incurred in preparing, revising and printing the Proxy Statement.
6. Consent. Suez hereby consents to the amendments to the Merger Agreement
set forth in this Article II for all purposes of and under the Stock Purchase
Agreement, and hereby further agrees to be bound by the terms of Section
1.11(a)(xxxiv) of the Merger Agreement, as amended hereby (definition of
"Reserve Amount" and "Agreed TRA Amount").
ARTICLE III
AMENDMENT TO INDEMNIFICATION AGREEMENT
Capitalized terms used in this Article III and not otherwise defined shall
have the respective meanings assigned thereto in the Indemnification Agreement.
(a) Veritas, Seagate and Suez agree that Section 6(c) of the
Indemnification Agreement shall be amended by redesignating paragraph (ii) as
paragraph (iii) and adding a new paragraph (ii) as follows:
(ii) A copy of a draft of all Tax Returns relating to Seagate and the
Retained Subsidiaries which are to be filed after the Stock Purchase Date, but
which relate to a
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Pre-Purchase Tax Period or its Straddle Period, including the federal
consolidated income Tax Return of the affiliated group of which Seagate is the
common parent for the period ending with the Merger, shall be furnished to the
Administrators (as defined in the Merger Agreement) at least 30 days prior to
the due date for each such Tax Return for review and comment. SAC will consider
in good faith any comments of the Administrators with respect to each such Tax
Return.
(b) Veritas, Seagate and Suez agree that the Indemnification Agreement
shall be amended to add a new Section 6(h) as follows:
"(h) SAC, on behalf of itself and the SAC Indemnitors, agrees and
confirms that the inclusion in the first sentence of Section 6(a) hereof of
the phrase "(other than Designated Liabilities)" is not intended to limit
the indemnification rights of the Veritas Indemnitees under Section 6(a)
hereof with respect to TRA Amounts distributed to former Seagate
stockholders in respect of the TRA Rights. For the avoidance of doubt, any
amounts paid under Section 5.15(e)(ii)(x) of the Merger Agreement or
described in the proviso to the definition of "TRA Amount" in Section
1.11(a)(xxx) of the Merger Agreement shall reduce any Losses for which the
SAC Indemnitors are required to indemnify the Veritas Indemnitees under
Section 6(a) hereof."
(c) Veritas, Seagate and Suez agree that the Indemnification Agreement
shall be amended to add a new Section 6(i) as follows:
"(i) On the Closing Date, SAC shall deposit an amount equal to $55
million into an escrow account to be held by an escrow agent under the
terms of an escrow agreement, which agent and agreement each shall be
reasonably satisfactory to SAC and Veritas. Such escrowed amount, together
with all income earned thereon, shall be available as provided in the
escrow agreement to Veritas to satisfy Losses attributable to Pre-Purchase
Taxes to the extent that SAC fails to fulfill its obligations hereunder to
indemnify the Veritas Indemnitees for such Losses attributable to
Pre-Purchase Taxes, and any remaining amount shall be released to SAC
pursuant to the terms of such escrow agreement.
ARTICLE IV
GENERAL PROVISIONS
1. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties hereto and
delivered to the other party hereto, it being understood that each party hereto
need not sign the same counterpart.
2. Except as expressly modified by this Agreement, all of the
representations, warranties, terms, covenants, conditions and other provisions
of the Merger Agreement and Stock Purchase Agreement shall remain in full force
and effect in accordance with their respective terms.
3. Nothing in this Agreement shall be deemed to or construed as in any way
making (i) Suez a party to the Merger Agreement or (ii) Veritas a party to the
Stock Purchase Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized respective officers, as of the date first
above written.
VERITAS SOFTWARE CORPORATION
By:
-----------------------------------
Name:
Title:
VICTORY MERGER SUB, INC.
By:
-----------------------------------
Name:
Title:
SEAGATE TECHNOLOGY, INC.
By:
-----------------------------------
Name:
Title:
SUEZ ACQUISITION COMPANY (CAYMAN)
LIMITED
By:
-----------------------------------
Name:
Title:
SEAGATE SOFTWARE HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
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