S-4

As filed with the Securities and Exchange Commission on May 16, 2002

Registration No. 333-        

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

SEAGATE TECHNOLOGY HDD HOLDINGS

(Exact name of Registrant as specified in its charter)

Cayman Islands (State or other jurisdiction of incorporation or organization) 3572 (Primary Standard Industrial Classification Code Number) 98-0355609 (I.R.S. Employer Identification Number)

P.O. Box 309GT

Ugland House, South Church Street

George Town, Grand Cayman

Cayman Islands

(345) 949-8066

(Address, including Zip Code and Telephone Number, including Area Code, of Registrant’s principal executive offices)

CT Corporation System

818 West Seventh Street, Suite 200

Los Angeles, California 90017

(800) 888-9207

(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)

With a copy to:

William L. Hudson, Esq. Senior Vice President, General Counsel 920 Disc Drive P.O. Box 66360 Scotts Valley, California 95067 (831) 438-6550 William H. Hinman, Jr., Esq. Simpson Thacher & Bartlett 3330 Hillview Avenue Palo Alto, CA 94304 (650) 251-5000

        Approximate date of commencement of proposed sale to the public:    As soon as practicable after the effective date of this Registration Statement.

         If any of the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨

         If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

         If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Note	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee
8% Senior Notes due 2009	$400,000,000	100%	$400,000,000	$36,800
Guarantee of 8% Senior Notes due 2009 (2)	$400,000,000	100%	$400,000,000	(3)

(1) Estimated solely for the purpose of calculating the registration fee.

(2) The notes to be registered are guaranteed by Seagate Technology Holdings, a Cayman Islands limited liability company. Seagate Technology Holdings is also a registrant under this Registration Statement. The I.R.S. Employer Identification Number for Seagate Technology Holdings is 98-0232277. Seagate Technology Holdings’ primary standard industrial classification code number, address, telephone number and agent for service of process are the same as those of Seagate Technology HDD Holdings.

(3) Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no separate fee for the guarantee is payable.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. This prospectus is not an offer to sell these securities and it  is not soliciting an offer to buy these securities in any jurisdiction where the offer, solicitation or sale is not permitted.

Subject to Completion, dated May 16, 2002

PROSPECTUS

$400,000,000

Seagate Technology HDD Holdings

Offer to Exchange All Outstanding Privately Placed 8% Senior Notes due 2009

for an Equal Amount of Registered 8% Senior Notes due 2009

The Exchange Offer

· We will exchange all outstanding notes that are validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradable.

· You may withdraw tenders of outstanding notes at any time prior to the expiration of the exchange offer.

· The exchange offer expires at 5:00 p.m., New York City time, on                      , 2002, unless extended.

· The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes.

The Exchange Notes

· The exchange notes are being offered in order to satisfy our obligations under the registration rights agreement entered into in connection with the placement of the outstanding notes.

· The terms of the exchange notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that the exchange notes will be freely tradable.

Resales of Exchange Notes

· The exchange notes may be sold in the over-the-counter market, in negotiated transactions or through a combination of these methods.

If you are a broker-dealer and you receive the exchange notes for your own account, you must acknowledge that you will deliver a prospectus in connection with any resale of the exchange notes. By making this acknowledgement, you will not be deemed to admit that you are an “underwriter” under the Securities Act of 1933. Broker-dealers may use this prospectus in connection with any resale of exchange notes received in exchange for outstanding notes where the outstanding notes were acquired by the broker-dealer as a result of market-making activities or trading activities. We will make this prospectus available to any broker-dealer for use in the resale of exchange notes for a period of up to 180 days after the date of the prospectus. A broker-dealer may not participate in the exchange offer with respect to outstanding notes acquired other than as a result of market-making activities or trading activities. See “Plan of Distribution.”

If you are an affiliate of Seagate Technology HDD Holdings or Seagate Technology Holdings or are engaged in, or intend to engage in, or have an agreement or understanding to participate in, a distribution of the exchange notes, you cannot rely on the applicable interpretations of the Securities and Exchange Commission, and you must comply with the registration requirements of the Securities Act of 1933 in connection with any resale transaction.

You should consider carefully the risk factors beginning on page 11 of this prospectus before participating in the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                             , 2002.

TABLE OF CONTENTS

	Page
Summary	1
Risk Factors	11
Use of Proceeds	28
Capitalization	29
Selected Historical Consolidated Financial Information	31
Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Quantitative and Qualitative Disclosures About Market Risk	56
Business	57
Management	71
Security Ownership of Principal Shareholders and Management	84

	Page
Related Party Transactions	87
The Exchange Offer	92
Description of the Notes	102
Book-Entry; Delivery and Form	147
Description of the New Senior Secured Credit Facilities	150
The November 2000 Transactions	153
Unaudited Pro Forma Condensed Consolidated Statement of Operations	156
Certain U.S. Income Tax Considerations	163
Plan of Distribution	164
Legal Matters	165
Experts	165
Where You Can Find More Information	165
Index to Financial Statements	F-1

Shorthand References

Unless otherwise indicated, as used in this prospectus, the terms “we,” “our” and “us” refer to Seagate Technology Holdings, an exempted limited liability company incorporated under the laws of the Cayman Islands that is the guarantor of the notes, and its subsidiaries, which include Seagate Technology HDD Holdings, an exempted limited liability company incorporated under the laws of the Cayman Islands that is the issuer of the notes. The subsidiaries of Seagate Technology Holdings that operate its storage area network business, including Seagate Technology SAN Holdings and XIOtech Corporation, are not subject to the restrictive covenants or other provisions in the indenture that governs the notes and are not guarantors under the credit agreement that governs our new senior secured credit facilities. Therefore, the operations of those subsidiaries have not been described under “Summary” or “Business” in this prospectus. They are, however, included in “Selected Historical Consolidated Financial Information” and the consolidated financial statements and related notes of Seagate Technology Holdings and its predecessor included elsewhere in this prospectus. For more information, see “Risk Factors—Risks Relating to the Notes—Special Factors.”

        Suez Acquisition Company refers to Suez Acquisition Company (Cayman) Limited, an exempted limited liability company incorporated under the laws of the Cayman Islands, before the series of transactions that closed on November 22, 2000, and to New SAC, an exempted limited liability company incorporated under the laws of the Cayman Islands, after those transactions. For shorthand purposes, we refer to those transactions as the “November 2000 transactions” throughout this prospectus. See the “November 2000 Transactions” section of this prospectus for more details about those transactions. Prior to November 22, 2000, Suez Acquisition Company had entered into a stock purchase agreement to purchase substantially all of the operating assets of Seagate Technology, Inc., a Delaware corporation. Suez Acquisition Company then assigned its rights and obligations under that stock purchase agreement to New SAC, a holding company that was formed in connection with the November 2000 transactions. After the closing of the November 2000 transactions, New SAC became the direct parent company of Seagate Technology Holdings and the indirect parent company of Seagate Technology HDD Holdings and various other former subsidiaries of Seagate Technology, Inc.

i

As used in this prospectus, the term “outstanding notes” refers to the $400 million aggregate principal amount of 8% senior notes due 2009 originally issued by Seagate Technology HDD Holdings to the initial purchasers in a private offering that was consummated on May 13, 2002, and the term “exchange notes” refers to the $400 million aggregate principal amount of 8% senior notes due 2009 being offered by Seagate Technology HDD Holdings in the exchange offer pursuant to this prospectus. The provisions of the exchange notes are the same as those of the outstanding notes, except that the exchange notes are registered under the Securities Act of 1933 and do not have provisions relating to transfer restrictions, registration rights and additional interest for failure to observe specified obligations in the registration rights agreement. Unless otherwise indicated, references to the “notes” in this prospectus are references to both the outstanding notes and the exchange notes.

Forward-Looking Statements

This prospectus includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this prospectus, including statements under “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” regarding our financial condition, strategy, the industry in which we compete, restructuring activities and other statements regarding other future events or prospects, are forward-looking statements. We have used the words “may,” “will,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend” and similar expressions in this prospectus to identify forward-looking statements. Although we believe that the forward-looking statements are based on reasonable assumptions, these statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes to differ materially from those projected. These factors, risks and uncertainties include the following and other risks that are discussed in more detail under “Risk Factors:”

· our substantial leverage, the restrictive covenants in our debt instruments and other risks related to our ability to comply with our debt obligations;

· competition within our industry and, in particular, the related effects of declining average unit sales prices of rigid disc drives and short product life cycles;

· weakness in the demand for computer or other systems in which our products are components;

· our ability to achieve a competitive time to market with new products;

· our need to successfully develop and market smaller form factor rigid disc drives;

· the uncertainty of the realization of cost savings from restructuring plans and other cost savings initiatives;

· our need to continually reduce operating expenses in order to compete effectively in our industry;

· technological changes and other trends in the information storage industry, in general, and the rigid disc drive industry, in particular, that may reduce demand for our traditional rigid disc drive products;

· the effects of high fixed costs associated with our vertical integration strategy;

· our dependence on obtaining a future supply of product components;

· our dependence on key customers;

· risks associated with our international operations and the risks related to us and some of our subsidiaries having been incorporated in jurisdictions outside the United States;

· the difficulty in predicting quarterly demand for our products;

ii

· control by New SAC and our sponsor group, whose interests may differ from yours; and

· other risks and uncertainties described in this prospectus.

Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. We cannot assure you that any of the events anticipated by the forward- looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as required by the U.S. federal securities laws, we are not obligated to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this prospectus. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements.

Industry and Market Share Data

In this prospectus we rely on and refer to information and statistics regarding the information storage industry and the rigid disc drive sector of the information storage industry that we obtained from Dataquest Incorporated, a division of The Gartner Group, Inc. The Gartner Group, founded in 1979, is a research group that focuses on the computer hardware, software, communications and related information technology industries. Although most of the industry information was obtained from market statistics reports periodically published by Dataquest, some of the information was prepared by Dataquest specifically for inclusion in this prospectus. Although we believe this information is generally reliable, we cannot guarantee the accuracy and completeness of the information and have not independently verified it. Silver Lake Partners, which indirectly owns approximately 39.0% of our outstanding share capital, owns, together with Integral Capital Partners, whose partners are also principals of Silver Lake Partners, convertible securities that would represent, upon conversion, approximately 31.1% of the voting capital stock of The Gartner Group on a fully diluted basis. In addition, two members of our board of directors, Glenn D. Hutchins and David J. Roux, are members of the board of directors of The Gartner Group and Gartner, Inc., respectively.

Service of Process and Enforcement of Liabilities

Seagate Technology Holdings and Seagate Technology HDD Holdings are incorporated under the laws of the Cayman Islands. Some of the directors and officers and a substantial portion of the assets of these companies are located outside the United States. Although we are organized outside the United States, we have agreed to accept service of process in the United States through our agent designated for that purpose. We have designated CT Corporation as our agent for service of process in any action brought against us under the U.S. federal securities and other laws, with respect to the notes, the indenture that governs the notes and Seagate Technology Holdings’ guarantee of the notes. Nevertheless, it may be difficult for you to effect service of process within the United States upon our directors and officers or to enforce against them in courts outside the United States judgments of courts of the United States predicated upon civil liabilities under the U.S. federal securities or other laws.

We have been advised by our Cayman Islands legal counsel, Walkers, that there is doubt with respect to Cayman Islands law as to (1) whether a judgment of a U.S. court predicated solely upon the civil liability provisions of the U.S. federal securities or other laws would be enforceable in the Cayman Islands against us and (2) whether an action could be brought in the Cayman Islands against us in the first instance on the basis of liability predicated solely upon the provisions of the U.S. federal securities or other laws.

Trademarks

The “S” logo, “Seagate,” “Seagate Technology,” “Barracuda” and “Cheetah,” among others, are our registered trademarks.

iii

SUMMARY

This summary highlights selected information from this prospectus and does not contain all of the information that may be important to you. You should read this entire prospectus, including the information set forth in “Risk Factors” and our consolidated financial statements included elsewhere in this prospectus, as well as the other documents to which we refer you.

Our Company

We are a worldwide leader in the design, manufacturing and marketing of rigid disc drives. Businesses, other organizations and individuals use rigid disc drives as the primary medium for storing electronic information in computer systems ranging from desktop computers to data centers delivering information over corporate networks and the Internet. We produce a broad range of rigid disc drive products that make us a leader in both the enterprise sector of our industry, where our products are primarily used in Internet servers, mainframes and workstations, and the desktop sector, where our products are used in personal computers, or PCs.

We believe our advanced research and development capabilities, combined with our vertically integrated manufacturing facilities, provide us with a leadership position in bringing a broad range of next generation information storage products to market. Recently we have made extensive improvements to our manufacturing efficiency through our “Factory of the Future” initiative. As part of this effort, we increased the degree of automation in our manufacturing facilities while reducing the overall number of facilities we operate, reconfigured our production lines to accommodate multiple products without causing any operating disruptions and reduced worldwide employee headcount. We have successfully implemented these improvements while increasing our total unit production.

We sell our rigid disc drives primarily to major original equipment manufacturers, or OEMs, with whom we have longstanding relationships. These customers include Compaq, Dell, EMC, Hewlett-Packard, IBM and Sun Microsystems. We also have key relationships with major distributors, who sell our rigid disc drive products to small OEMs, dealers, system integrators and retailers in most geographic areas of the world.

The November 2000 Transactions

Seagate Technology Holdings was formed in August 2000 to be a holding company for the rigid disc drive and storage area networks operating businesses of Seagate Technology, Inc. In a series of transactions, which closed on November 22, 2000, Seagate Technology Holdings became a subsidiary of New SAC. These transactions consisted of the following:

· Capital Contribution—the contribution by a group of private equity investment firms, which we refer to as our sponsor group, of approximately $875 million in cash to Suez Acquisition Company in exchange for ordinary and preferred shares of Suez Acquisition Company;

· Asset Purchase—the purchase by Suez Acquisition Company of substantially all of the operating assets of Seagate Technology, Inc., including its rigid disc drive and other businesses, a portion of the cash on the balance sheet of Seagate Technology, Inc. and some other assets of Seagate Technology, Inc.; the assumption by Suez Acquisition Company of substantially all of the liabilities of Seagate Technology, Inc.; and the assignment by Suez Acquisition Company of all its rights and obligations under the stock purchase agreement to New SAC, a holding company formed in connection with these transactions;

· VERITAS Merger—the acquisition by a third party, VERITAS Software Corporation, which we refer to in this prospectus as VERITAS, of the assets of Seagate Technology, Inc. that Suez Acquisition Company did not purchase, by way of a merger of Seagate Technology, Inc. and a subsidiary of VERITAS, and the payment by VERITAS to the shareholders of Seagate Technology, Inc. of cash and VERITAS common stock as the merger consideration;

1

· Management Rollover—the conversion, which we refer to as the management rollover, by a group of officers of Seagate Technology, Inc., whom we refer to as the management group, of a portion of their shares of Seagate Technology, Inc. common stock and options to purchase these shares, valued in the aggregate at approximately $184 million, into interests in our deferred compensation plans and ordinary and preferred shares of New SAC; in addition, the management group invested approximately $41 million in cash in exchange for additional ordinary and preferred shares of New SAC; and

· Financing Transactions—the financing of the purchase of the assets described above by New SAC, the redemption by Seagate Technology, Inc. of its then existing senior notes, which constituted substantially all of its outstanding debt, and the payment of fees and expenses related to the transactions.

These events, which are described in more detail under “The November 2000 Transactions,” are collectively referred to in this prospectus as the “November 2000 transactions.”

Our Sponsor Group

Silver Lake Partners organized a group of private equity investment firms that, together with members of our current and former management group, indirectly own over 99% of Seagate Technology Holdings’ outstanding share capital. Specifically, our sponsor group consists of affiliates of Silver Lake Partners, Texas Pacific Group, August Capital, J.P. Morgan Partners, LLC and investment funds affiliated with Goldman, Sachs & Co. These sponsors indirectly own approximately 39%, 26%, 10%, 4% and 3%, respectively, of our outstanding shares.

The Refinancing

The private placement of the outstanding notes was part of a plan to refinance our then existing $900 million senior secured credit facilities and $210 million in aggregate principal amount of outstanding 12 ¹/2% senior subordinated notes due 2007. Those senior secured credit facilities consisted of a $200 million revolving credit facility and $700 million in term loan facilities. Seagate Technology International, a co-borrower under those senior secured credit facilities and the issuer of the then outstanding 12 ¹/2% senior subordinated notes, and Seagate Technology (US) Holdings, Inc., the other co-borrower under those senior secured credit facilities, are wholly owned subsidiaries of Seagate Technology HDD Holdings, the issuer of these notes. Seagate Technology HDD Holdings is a direct subsidiary of Seagate Technology Holdings, the guarantor of these notes. The refinancing consisted of the following transactions, which are collectively referred to in this prospectus as the “refinancing:”

· The Private Offering.    We issued $400 million in aggregate principal amount of 8% senior notes due 2009, which we refer to as the outstanding notes, pursuant to a private placement that closed on May 13, 2002.

· Repayment of the Existing Senior Secured Credit Facilities.    At the time of the consummation of the private placement of the outstanding notes, all indebtedness under the existing senior secured credit facilities of Seagate Technology International and Seagate Technology (US) Holdings, Inc., as co-borrowers, was repaid. The amount of this indebtedness that was outstanding as of March 29, 2002 was approximately $673 million.

· Senior Secured Credit Facilities.    At the time of the consummation of the private placement of the outstanding notes, Seagate Technology HDD Holdings and Seagate Technology (US) Holdings, Inc. also entered into new senior secured credit facilities that permit up to $500 million of borrowings, consisting of a $150 million revolving credit facility that was not drawn as part of the refinancing and a $350 million term loan facility that was drawn in full as part of the refinancing, each with a term of 5 years. The new senior secured credit facilities are, subject to a number of exceptions, secured by a first priority security interest in substantially all the tangible and intangible assets of Seagate Technology HDD Holdings and its subsidiaries, as well as a pledge of the shares of Seagate Technology HDD Holdings and many of its subsidiaries. In the case of Seagate Technology (US) Holdings, Inc., this pledge of shares is limited to

2

65% of the shares of its non-U.S. subsidiaries. Borrowings under our new senior secured credit facilities are also secured by a first priority pledge of all intercompany indebtedness of Seagate Technology Holdings and many of its subsidiaries. Seagate Technology Holdings and many of its direct and indirect subsidiaries have guaranteed the obligations under the new senior secured credit facilities.

· Tender Offer.    Seagate Technology International made an offer to purchase for cash any and all of its then outstanding 12 ¹/2% senior subordinated notes due 2007. In connection with that offer to purchase, Seagate Technology International solicited the consent of at least a majority of the registered holders of those notes to amend the indenture governing those notes. All of those notes were tendered and accepted for payment in connection with the tender offer.

· Distribution.    On or about May 20, 2002, we expect to make a $167 million distribution to our shareholders, including New SAC, to enable New SAC to make a distribution to its preferred shareholders. At the same time, distributions totaling approximately $33 million are expected to be made to participants in Seagate Technology HDD Holdings’ and Seagate Technology SAN Holdings’ deferred compensation plans. Prior to these distributions, the maximum potential obligation of Seagate Technology HDD Holdings to participants in its deferred compensation plan is approximately $178 million, assuming full vesting of all currently outstanding compensation accounts. We may make significant additional distributions in the future, including shareholder and deferred compensation plan distributions of up to $380 million in connection with and in addition to the proceeds of any initial public offering that we might undertake in the future. See “Management—Employment and Other Agreements—Rollover Agreements and Deferred Compensation Plans” and “Description of the Notes—Certain Covenants—Limitation on Restricted Payments.”

Sources and Uses

The refinancing had approximately the following sources and uses of funds:

	Amount
	(in millions)
Sources of Funds:
New senior secured credit facilities	$	350
8% senior notes due 2009		400
Cash used in the refinancing		428
Total Sources	$	1,178
Uses of Funds:
Repurchase 12 1/2% senior subordinated notes	$	274
Repay former senior secured credit facilities		679
Refinancing fees and expenses		25
Shareholder and deferred compensation plan distributions		200
Total Uses	$	1,178

Principal Executive Offices

Seagate Technology Holdings and Seagate Technology HDD Holdings are exempted limited liability companies incorporated under the laws of the Cayman Islands and were formed on August 20, 2000. The address of the principal executive offices of these entities is c/o Maples & Calder, P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, and the telephone number at that address is (345) 949-8066. Our world wide web site address is http://www.seagate.com. The information in, or that can be accessed through, our website is not part of this prospectus.

3

Our Corporate Structure

The following diagram provides a summary illustration of our corporate structure after giving effect to the refinancing. All companies shown below are 100% owned by their direct parent companies other than Seagate Technology Holdings, which is 99.7% owned by New SAC.

(1) New SAC is also the parent company of Seagate Technology Investment Holdings LLC, Seagate Removable Storage Solutions Holdings and its subsidiaries, and Seagate Software (Caymans) Holdings and its subsidiaries (including Crystal Decisions, Inc.). These other subsidiaries of New SAC are not subject to the restrictive covenants or other provisions in the indenture that governs the notes and are not guarantors under the credit agreement that governs our new senior secured credit facilities.

(2) Seagate Technology Holdings is also the parent company of Seagate Technology SAN Holdings and its subsidiaries, including XIOtech Corporation. These other subsidiaries of Seagate Technology Holdings are not subject to the restrictive covenants or other provisions in the indenture that governs the notes and are not guarantors under the credit agreement that governs our new senior secured credit facilities.

4

Summary of the Terms of the Exchange Offer

On May 13, 2002, we completed the private offering of the outstanding notes.

The issuer, Seagate Technology HDD Holdings, and the guarantor, Seagate Technology Holdings, of the outstanding notes entered into a registration rights agreement with the initial purchasers of the outstanding notes in which the issuer and the guarantor agreed to deliver to you this prospectus as part of the exchange offer, and the issuer agreed to use its reasonable best efforts to complete the exchange offer within 250 days after the date of original issuance of the outstanding notes. You are entitled to exchange the outstanding notes in the exchange offer that you currently hold for exchange notes that are identical in all material respects to the outstanding notes except:

· the exchange notes have been registered under the Securities Act of 1933 and will not bear legends restricting their transfer;

· the exchange notes are not entitled to registration rights that are applicable to the outstanding notes under the registration rights agreement; and

· the exchange notes will not provide for additional interest upon the failure of the issuer to fulfill its obligations to file and cause to be effective a registration statement.

The Exchange Offer	The issuer is offering to exchange up to $400 million aggregate principal amount of outstanding notes for up to $400 million aggregate principal amount of exchange notes. Outstanding notes may be exchanged only in integral multiples of $1,000.
Resale	Based on an interpretation by the staff of the SEC contained in no-action letters issued to third parties, we believe that the exchange notes issued under the exchange offer in exchange for outstanding notes may be offered for resale, resold and otherwise transferred by you, unless you are an “affiliate” of the issuer or the guarantor within the meaning of Rule 405 under the Securities Act of 1933, without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, provided that you are acquiring the exchange notes in the ordinary course of your business and that you have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the exchange notes.
	Each participating broker-dealer that receives exchange notes for its own account pursuant to the exchange offer in exchange for outstanding notes that were acquired as a result of market-making or other trading activity must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. See “Plan of Distribution.”
	Any holder of outstanding notes who: ·  is an affiliate of the issuer or the guarantor of the outstanding notes, ·  does not acquire exchange notes in the ordinary course of its business, or ·  tenders in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of exchange notes, cannot rely on the position of the staff of the SEC enunciated in Exxon Capital Holdings Corporation, Morgan Stanley & Co. Incorporated

5

	or similar no-action letters and, in the absence of an exemption from the registration and prospectus delivery requirements of the Securities Act of 1933, must comply with those requirements in connection with the resale of the exchange notes.
Expiration Date; Withdrawal of     Tender	The exchange offer will expire at 5:00 p.m., New York City time, on                             , 2002, or such later date and time to which the issuer may extend the offer. We refer to this date as the expiration date. The issuer does not currently intend to extend the expiration date. A tender of outstanding notes pursuant to the exchange offer may be withdrawn at any time prior to the expiration date. Any outstanding notes not accepted for exchange for any reason will be returned without expense to the tendering holder promptly after the expiration or termination of the exchange offer.
Conditions to the Exchange Offer	The exchange offer is subject to customary conditions. The issuer, however, may waive these conditions. Please read the section captioned “The Exchange Offer—Conditions to the Exchange Offer” of this prospectus for more information regarding the conditions to the exchange offer.
Procedures for Tendering Outstanding Notes	If you wish to accept the exchange offer, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You must also mail or otherwise deliver the letter of transmittal, or a facsimile of the letter of transmittal, together with the outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of the letter of transmittal. If you hold outstanding notes through The Depository Trust Company, or DTC, and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC, by which you will agree to be bound by the letter of transmittal. By signing, or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:
	·  any exchange notes that you receive will be acquired in the ordinary course of your business; ·  you have no arrangement or understanding with any person or entity to participate in a distribution of the exchange notes; ·  if you are a broker-dealer that will receive exchange notes for your own account in exchange for outstanding notes that were acquired as a result of market-making activities, that you will deliver a prospectus, as required by law, in connection with any resale of the exchange notes; and ·  you are not an “affiliate,” as defined in Rule 405 of the Securities Act of 1933, of the issuer, or, if you are an affiliate, you will comply with any applicable registration and prospectus delivery requirements of the Securities Act of 1933.

6

Special Procedures for Beneficial Owners	If you are a beneficial owner of outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender the outstanding notes in the exchange offer, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either make appropriate arrangements to register ownership of the outstanding notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.
Guaranteed Delivery Procedures	If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other documents required by the letter of transmittal, or you cannot comply with the applicable procedures under DTC’s Automated Tender Offer Program prior to the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures set forth in this prospectus under “The Exchange Offer—Guaranteed Delivery Procedures.”
Effect on Holders of Outstanding Notes	As a result of the making of, and upon acceptance for exchange of all validly tendered outstanding notes pursuant to the terms of, the exchange offer, we will have fulfilled a covenant contained in the registration rights agreement. Accordingly, there will be no increase in the interest rate on the outstanding notes under the circumstances described in the registration rights agreement. If you are a holder of outstanding notes and you do not tender your outstanding notes in the exchange offer, you will continue to hold the outstanding notes and you will be entitled to all the rights and limitations applicable to the outstanding notes in the indenture, except for any rights under the registration rights agreement that by their terms terminate upon the consummation of the exchange offer.
	To the extent that outstanding notes are tendered and accepted in the exchange offer, the trading market for outstanding notes could be adversely affected.
Consequences of Failure to     Exchange	All untendered outstanding notes will continue to be subject to the restrictions on transfer provided for in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act of 1933, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act of 1933 and applicable state securities laws. Other than in connection with the exchange offer, the issuer does not currently anticipate that it will register the outstanding notes under the Securities Act of 1933.

7

U.S. Income Tax Considerations	The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes.
Use of Proceeds	We will not receive any cash proceeds from the issuance of exchange notes pursuant to the exchange offer.
Exchange Agent	U.S. Bank, N.A. is the exchange agent for the exchange offer.

8

Summary of the Terms of the Exchange Notes

The following summary is provided solely for your convenience. This summary is not intended to be complete. You should read the full text and more specific details contained elsewhere in this prospectus. For a more detailed description of the notes, see “Description of the Notes.”

Issuer	Seagate Technology HDD Holdings.
Guarantor	Seagate Technology Holdings.
Securities Offered	$400 million aggregate principal amount of 8% senior notes due 2009.
Maturity	May 15, 2009.
Interest	8% per annum, payable semi-annually in arrears on May 15 and November 15, commencing November 15, 2002.
Ranking	The outstanding notes are, and the exchange notes will be, senior unsecured obligations ranking equally with Seagate Technology HDD Holdings’ existing and future senior indebtedness and senior to any present and future subordinated indebtedness of Seagate Technology HDD Holdings. The notes will effectively be subordinated to Seagate Technology Holdings’ and Seagate Technology HDD Holdings’ present and future secured debt, to the extent of the value of the assets securing that debt, and will be structurally subordinated to all present and future liabilities, including trade payables, of Seagate Technology HDD Holdings’ subsidiaries.
	As of March 29, 2002, after giving effect to the refinancing, Seagate Technology HDD Holdings would have had outstanding:
	·  $751 million of senior indebtedness, including $350 million of secured indebtedness;
	·  $1.86 billion of liabilities of subsidiaries, including $350 million of secured indebtedness comprised of various subsidiaries’ guarantees of and borrowings under the new senior secured credit facilities;
	·  no senior subordinated indebtedness; and
	·  no subordinated indebtedness.
	·  As of March 29, 2002, after giving effect to the refinancing, Seagate Technology Holdings would have had outstanding:
	·  $751 million of senior indebtedness, including $350 million of secured indebtedness comprised of its guarantee of the new senior secured credit facilities;
	·  no senior subordinated indebtedness; and
	·  no subordinated indebtedness.
Optional Redemption	Seagate Technology HDD Holdings may redeem any of the notes beginning on May 15, 2006. The initial redemption price is 104% of their principal amount, plus accrued interest to the date of redemption. The redemption price will decline each year after May 15, 2006 and will be 100% of their principal amount, plus accrued interest, beginning on May 15, 2008.

9

	In addition, before May 15, 2005, Seagate Technology HDD Holdings may redeem up to 35% of the notes at a redemption price of 108% of their principal amount, plus accrued interest to the date of redemption, using the proceeds from sales of specified kinds of capital stock. Seagate Technology HDD Holdings may make this redemption only if, after the redemption, at least 65% of the aggregate principal amount of notes issued remains outstanding.
	Seagate Technology HDD Holdings may redeem all, but not part, of the notes if there are specified changes in tax laws, at a redemption price equal to 100% of the principal amount of the notes, plus accrued interest to the date of redemption.
Change of Control	Upon a change of control, Seagate Technology HDD Holdings will be required to make an offer to purchase the notes at a price equal to 101% of their principal amount, plus accrued interest to the date of repurchase. Seagate Technology HDD Holdings may not have sufficient funds available at the time of any change of control to make any required debt repayment.
	Upon a change of control that occurs prior to May 15, 2006, Seagate Technology HDD Holdings is entitled to redeem all, but not part, of the notes at a redemption price determined in the manner described under “Description of the Notes—Optional Redemption,” plus accrued interest to the date of redemption.
Guarantee	Seagate Technology Holdings will provide a guarantee of the payment of the principal, premium and interest on the notes on a senior unsecured basis.
	The guarantee will rank equally with all existing and future senior indebtedness of Seagate Technology Holdings.
Restrictive Covenants	The terms of the notes will limit our ability and the ability of Seagate Technology HDD Holdings’ subsidiaries to:
	·  incur additional indebtedness;
	·  pay dividends and make distributions in respect of capital stock;
	·  redeem or repurchase capital stock;
	·  make investments or specified other restricted payments;
	·  sell assets;
	·  issue or sell stock of restricted subsidiaries;
	·  enter into transactions with affiliates;
	·  create liens;
	·  enter into sale/leaseback transactions;
	·  effect a consolidation or merger; and
	·  amend deferred compensation plans.
	These covenants are subject to a number of important qualifications and exceptions, including exceptions that will permit us to make significant distributions of cash. In addition, the obligation to comply with many of these covenants will not apply if the notes achieve investment grade status. See “Description of the Notes—Certain Covenants.”

10

RISK FA CTORS

Risks Relating to the Notes

Failure to Exchange—There may be adverse consequences if you do not exchange your outstanding notes.

If you do not exchange your outstanding notes for the exchange notes under the exchange offer, you will continue to be subject to the transfer restrictions on the outstanding notes as set forth in the offering memorandum distributed in connection with the offering of the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered, or are exempt from registration, under the Securities Act of 1933 and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act of 1933.

In addition, the tender of outstanding notes under the exchange offer will reduce the principal amount of those notes outstanding, which may have an adverse effect upon, and increase the volatility of, the market price of the outstanding notes due to a reduction in liquidity.

Substantial Leverage—Our substantial leverage could adversely affect our ability to fulfill our obligations under the notes and operate our business.

We are highly leveraged and have significant debt service obligations. For the combined results for fiscal year 2001, and for the nine months ended March 29, 2002, our interest expense was $78 million and $61 million, respectively. Earnings were insufficient to cover fixed charges by $627 million for the combined results in fiscal year 2001. Our ratio of earnings to fixed charges was 6.5 to 1 for the nine months ended March 29, 2002. As of March 29, 2002, our total debt, excluding liabilities of our subsidiaries, after giving effect to the refinancing, would have been approximately $751 million, excluding unused commitments, and our total shareholders’ equity, after giving effect to the refinancing, would have been $705 million. In addition, we may incur additional debt from time to time to finance working capital, product development efforts, strategic acquisitions, investments and alliances, capital expenditures or other general corporate purposes, subject to the restrictions contained in the credit agreement that governs our new senior secured credit facilities, in the indenture that governs the notes and in any other agreement under which we incur indebtedness.

Our substantial debt could have important consequences to you, including the following:

· we are required to use a substantial portion of our cash flow from operations to pay principal and interest on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances and other general corporate requirements;

· our interest expense could increase if prevailing interest rates increase, because a substantial portion of our debt will bear interest at floating rates;

· our substantial leverage increases our vulnerability to economic downturns and adverse competitive and industry conditions and could place us at a competitive disadvantage compared to those of our competitors that are less leveraged;

· our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business and the information storage industry;

· our level of debt may restrict us from raising additional financing on satisfactory terms to fund working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances and other general corporate requirements; and

11

· our level of debt may prevent us from raising the funds necessary to repurchase all of the notes tendered to Seagate Technology HDD Holdings upon the occurrence of a change of control, which would constitute an event of default under the notes.

Ability to Service Debt—Servicing our debt requires a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.

We expect to obtain the cash necessary to make payments on the notes and the new senior secured credit facilities and to fund working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances and other general corporate requirements from our operations and from other sources of funding available to us. Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations, that we will realize currently anticipated cost savings, revenue growth and operating improvements on schedule or at all, that future borrowings will be available to us under the new senior secured credit facilities or that other sources of funding will be available to us, in each case, in amounts sufficient to enable us to service our debt, including the notes, or to fund our other liquidity needs. If we cannot service our debt, we will have to take actions such as reducing or delaying capital expenditures, product development efforts, strategic acquisitions or investments and alliances, selling assets or restructuring or refinancing our debt, which could include the notes, or seeking additional equity capital. We cannot assure you that any of these remedies could, if necessary, be effected on commercially reasonable terms, or at all. In addition, the terms of existing or future debt agreements, including the credit agreement relating to the new senior secured credit facilities and the indenture that governs the notes, may restrict us from pursuing any or all of these alternatives.

Additional Borrowing Capacity—Despite our substantial leverage, we are permitted to incur more debt, which may intensify the risks associated with our substantial leverage, including the risk that we will be unable to service our debt.

Our new senior secured credit facilities and the indenture that governs the notes permit us to incur a significant amount of additional debt. If we incur additional debt above the levels in effect upon the closing of the refinancing, the risks associated with our substantial leverage, including the risk that we will be unable to service our debt, could intensify.

Unsecured Obligations—Because the notes and the note guarantee are not secured and are effectively subordinated to the rights of secured creditors, the secured lenders may in some circumstances control or limit our ability to pay amounts due on the notes or under the note guarantee.

The notes and the note guarantee are unsecured obligations, whereas the loans outstanding under the new senior secured credit facilities are secured. These loans are, subject to a number of exceptions, secured by a first priority security interest in substantially all the tangible and intangible assets of Seagate Technology HDD Holdings and its subsidiaries, as well as a pledge of the shares of Seagate Technology HDD Holdings and many of its subsidiaries. In the case of non-U.S. subsidiaries of Seagate Technology (US) Holdings, Inc., this pledge of shares is limited to a pledge of 65% of the shares of its non-U.S. subsidiaries. Borrowings under our new senior secured credit facilities are also secured by a first priority pledge of all intercompany indebtedness of Seagate Technology Holdings and many of its subsidiaries. In addition, borrowings under the new senior secured credit facilities will be secured by all the capital stock of any newly formed subsidiary of ours, subject to specified exceptions.

As a result of the refinancing, we have $350 million of senior secured debt outstanding, excluding unused commitments. In addition, we may incur other senior debt, which may be substantial in amount, and which may, in some circumstances, be secured.

12

Because the notes and the note guarantee are unsecured obligations, your right of repayment may be adversely affected if any of the following situations were to occur:

· a dissolution, bankruptcy, liquidation, reorganization or other winding-up involving Seagate Technology HDD Holdings or Seagate Technology Holdings or any of their subsidiaries;

· a default in payment under the new senior secured credit facilities or other secured debt; or

· an acceleration of any debt under the new senior secured credit facilities or other secured debt.

If any of these events were to occur, the secured lenders could foreclose on the assets to your exclusion, even if an event of default exists under the indenture governing the notes. As a result, the secured lenders may control or limit our ability to pay amounts due on the notes or the note guarantee, and we could have insufficient funds after repaying our secured indebtedness to pay amounts due on the notes or the note guarantee.

Structural Subordination—Seagate Technology HDD Holdings and Seagate Technology Holdings will depend on the receipt of dividends or other intercompany transfers from their subsidiaries to meet their obligations under the notes and the note guarantee. Claims of creditors of these subsidiaries may have priority over your claims with respect to the assets and earnings of these subsidiaries.

Seagate Technology HDD Holdings and Seagate Technology Holdings conduct a substantial portion of their operations through their subsidiaries. They will therefore be dependent upon dividends or other intercompany transfers of funds from their subsidiaries in order to meet their obligations under the notes and the note guarantee and to meet their other obligations. Generally, creditors of these subsidiaries will have claims to the assets and earnings of these subsidiaries that are superior to the claims of Seagate Technology HDD Holdings’ and Seagate Technology Holdings’ creditors, except to the extent the claims of those creditors are guaranteed by these subsidiaries. None of these subsidiaries will be guaranteeing the notes.

In the event of the dissolution, bankruptcy, liquidation, other winding-up or reorganization of Seagate Technology HDD Holdings or Seagate Technology Holdings, the holders of the notes may not receive any amounts with respect to the notes or the note guarantee until after the payment in full of the claims of creditors of the subsidiaries of Seagate Technology HDD Holdings and Seagate Technology Holdings, as the case may be. The notes are unsecured obligations that are effectively subordinated to all of the secured indebtedness of Seagate Technology HDD Holdings, including the indebtedness under our new senior secured credit facilities, and the note guarantee of Seagate Technology Holdings is an unsecured obligation that is effectively subordinated to all of the secured indebtedness of Seagate Technology Holdings.

Although the indenture governing the notes limits the ability of the subsidiaries of Seagate Technology HDD Holdings to enter into consensual restrictions on their ability to pay dividends and make other payments to Seagate Technology HDD Holdings, these limitations have a number of significant qualifications and exceptions. For more information, see “Description of the Notes—Certain Covenants—Limitations on Restrictions on Distributions from Restricted Subsidiaries.”

Restrictive Covenants in our Debt Instruments—Restrictions imposed by the indenture that governs the notes and the credit agreement that governs the new senior secured credit facilities will limit our ability to finance future operations or capital needs or engage in other business activities that may be in our interest.

The indenture governing the notes and the credit agreement governing the new senior secured credit facilities impose, and the terms of any future debt may impose, operating and other restrictions on Seagate Technology HDD Holdings and its subsidiaries. These restrictions will affect, and in many respects limit or prohibit, among other things, the ability of Seagate Technology HDD Holdings and its subsidiaries to:

· incur additional indebtedness;

· pay dividends or make distributions in respect of capital stock;

13

· redeem or repurchase capital stock;

· make investments or selected other restricted payments;

· sell assets;

· issue or sell stock of restricted subsidiaries;

· enter into transactions with affiliates;

· create liens;

· enter into sale/leaseback transactions;

· effect a consolidation or merger; and

· amend deferred compensation plans.

These covenants are subject to a number of important qualifications and exceptions, including exceptions that permit us to make significant distributions of cash. In addition, the obligation to comply with many of these covenants will not apply if the notes achieve investment grade status.

Our new senior secured credit facilities include other, different covenants and limit Seagate Technology HDD Holdings’ ability to prepay debt, including the notes, while debt under our new senior secured credit facilities is outstanding. The credit agreement governing the new senior secured credit facilities also requires us to achieve specified financial and operating results and maintain compliance with specified financial ratios. Our ability to comply with these ratios may be affected by events beyond our control.

The restrictions contained in the indenture governing the notes and the credit agreement governing the new senior secured credit facilities could:

· limit our ability to plan for or react to market conditions, meet capital needs or otherwise restrict our activities or business plans; and

· adversely affect our ability to finance our operations, product development efforts, strategic acquisitions, investments, alliances or other capital needs or to engage in other business activities that would be in our interest.

A breach of any of these restrictive covenants or our inability to comply with the required financial ratios could result in a default under the credit agreement that governs the new senior secured credit facilities. If a default occurs, the lenders under the new senior secured credit facilities may elect to declare all borrowings outstanding, together with accrued interest and other fees, to be immediately due and payable, which would result in an event of default under the notes. The lenders under the new senior secured credit facilities will also have the right in these circumstances to terminate any commitments they have to provide further borrowings and may take other action that would restrict our ability to access cash for purposes of paying interest due on the notes. If Seagate Technology HDD Holdings and Seagate Technology (US) Holdings, Inc. are unable to repay outstanding borrowings when due, the lenders under the new senior secured credit facilities will also have the right to call on the guarantees and, ultimately, to proceed against the collateral granted to them to secure the debt. If the debt under the new senior secured credit facilities and the notes were to be accelerated, we cannot assure you that Seagate Technology HDD Holdings’ assets would be sufficient to repay in full that debt and its other debt, including the notes, or that Seagate Technology Holdings’ assets would be sufficient to satisfy its obligations under the note guarantee.

Change of Control Provisions—The change of control provisions in the indenture that governs the notes will not necessarily protect you in the event of a highly leveraged transaction.

The change of control provisions contained in the indenture that governs the notes will not necessarily afford you protection in the event of a highly leveraged transaction that may adversely affect you, including a

14

reorganization, restructuring, merger or other similar transaction involving us or Seagate Technology HDD Holdings. These transactions may not involve a change in voting power or beneficial ownership or, even if they do, may not involve a change of the magnitude required under the definition of change of control in the indenture to trigger these provisions. Except as described under “Description of the Notes—Change of Control,” the indenture does not contain provisions that permit the holders of the notes to require Seagate Technology HDD Holdings to repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

No Prior Market for the Exchange Notes—There is no prior market for the exchange notes. If one develops, it may not be liquid.

We do not intend to list the exchange notes on any national securities exchange or to seek their quotation on any automated dealer quotation system. In addition, the market for non-investment grade debt has historically been subject to disruptions that have caused volatility in their prices independent of the operating and financial performance of the issuers of these securities. It is possible that the market for the exchange notes will be subject to these kinds of disruptions. Accordingly, declines in the liquidity and market price of the exchange notes may occur independent of our operating and financial performance. We cannot assure you that any liquid market for the exchange notes will develop.

Covenant Flexibility—The covenants under the credit agreement that governs our new senior secured credit facilities and the indenture that governs the notes allow us significant flexibility in terms of distributing cash and we expect to distribute significant amounts of cash in the future.

The covenants under the indenture that governs the notes and the credit agreement that governs our new senior secured credit facilities allow us significant flexibility to distribute cash. On or about May 20, 2002, we expect to make a distribution to our shareholders, including New SAC, to enable New SAC to make a distribution to its preferred shareholders. At the same time, distributions are expected to be made to participants in Seagate Technology HDD Holdings’ and Seagate Technology SAN Holdings’ deferred compensation plans. The aggregate amount of these shareholder and deferred compensation plan distributions is expected to be approximately $200 million. Subject to the restrictive covenants contained in the indenture that governs the notes, the credit agreement that governs our new senior secured credit facilities and any other agreements under which we may incur indebtedness, we will continue to have the ability to, and we believe that we are likely to, distribute significant amounts of cash to New SAC to enable New SAC to make distributions to its preferred shareholders in the future. This will trigger an obligation to make proportional distributions to participants in Seagate Technology HDD Holdings’ and Seagate Technology SAN Holdings’ deferred compensation plans. See “Management—Employment and Other Agreements—Rollover Agreements and Deferred Compensation Plans” and “Description of the Notes—Certain Covenants—Limitation on Restricted Payments.”

Special Factors—The subsidiaries of Seagate Technology Holdings that operate its storage area network business are not subject to the restrictive covenants or other provisions in the indenture that governs the notes and are not guarantors under the credit agreement that governs our new senior secured credit facilities.

The subsidiaries of Seagate Technology Holdings that operate its storage area network, or SAN, business, including Seagate Technology SAN Holdings and XIOtech Corporation, are not subject to the restrictive covenants or other provisions in the indenture that governs the notes and are not guarantors under the credit agreement that governs our new senior secured credit facilities. While we do not believe that the exclusion of these entities will adversely affect your ability to recover amounts due on the notes or the ability of our secured creditors to recover amounts payable under our new senior secured credit facilities, the quality of the credit represented by our new senior secured credit facilities and the notes is unlikely to be improved if the SAN business experiences a significant upturn. Accordingly, you should not view any earnings or assets related to the subsidiaries that operate Seagate Technology Holdings’ SAN business as being available to meet our obligations under the notes. For the period from November 23, 2000 to June 29, 2001, the SAN business had revenue of $37 million, gross profit of $20 million and a net loss of $51 million. As of June 29, 2001, it had total assets of $45 million.

15

Risks Related to Our Business

Competition—Our industry is highly competitive and our products have experienced significant price erosion.

Even during periods when demand is stable, the rigid disc drive industry is intensely competitive and vendors typically experience substantial price erosion over the life of a product. Historically our competitors have offered new or existing products at lower prices as part of a strategy to gain or retain market share and customers. We expect these practices to continue. We also expect that price erosion in the rigid disc drive industry will continue for the foreseeable future. Because we may need to reduce our prices to retain our market share, competition could adversely affect our results of operations. We have experienced and expect to continue to experience intense competition from a number of domestic and foreign companies, including other independent rigid disc drive manufacturers and large integrated manufacturers, such as:

Integrated	Independent
Fujitsu Limited	Maxtor Corporation
Hitachi, Ltd.	Western Digital Corporation
International Business Machines Corporation
Samsung Electronics Incorporated
Toshiba Corporation

The term “independent” in this context refers to manufacturers that primarily produce rigid disc drives as a stand-alone product, and the term “integrated” refers to manufacturers that produce complete computer or other systems which contain rigid disc drives or other information storage products. Integrated manufacturers are formidable competitors because they have the ability to determine pricing for complete systems without regard to the margins on individual components. Because components other than rigid disc drives generally contribute a greater portion of the operating margin on a complete computer system than do rigid disc drives, integrated manufacturers do not necessarily need to realize a profit on the rigid disc drives included in a computer system and, as a result, may be willing to sell rigid disc drives to third parties at very low margins. Many integrated manufacturers are also formidable competitors because they have more substantial resources and greater access to customers than we do.

Consolidation among integrated manufacturers may serve to increase this disparity. For example, IBM recently announced that it has reached a preliminary agreement with Hitachi to merge their disc drive businesses through the formation of a joint venture that would be 70% owned by Hitachi. Because IBM is one of our most significant customers and Hitachi is one our most significant competitors, if the joint venture is able to successfully integrate the rigid disc drive operations of the two companies, there is a significant risk that IBM will decrease the number of rigid disc drives purchased from us and increase the number purchased from the joint venture. Moreover, economies of scale and the combination of the two companies’ technological capabilities, particularly in the enterprise sector of our industry, could make the joint venture a more formidable competitor than either manufacturer operating alone.

We face risks that integrated manufacturers will enter into agreements with our customers to supply those customers’ rigid disc drive requirements as part of more expansive agreements. In addition, in response to customer demand for high-quality, high-volume and low-cost rigid disc drives as subsystems for their computer and data communications equipment, manufacturers of rigid disc drives have had to develop large, in some cases global, production facilities with highly developed technological capabilities and internal controls, and the industry has undergone consolidation. The development of large production facilities and industry consolidation can contribute to the intensification of competition.

We also face indirect competition from present and potential customers, including several of the computer manufacturers listed above, that evaluate from time to time whether to manufacture their own rigid disc drives

16

and other information storage products or purchase them from outside sources. If our customers decide to manufacture their own rigid disc drives or other information storage products, it could have a material adverse effect on our business, results of operations, financial condition and prospects. We also compete with manufacturers of products that use or are in the process of developing alternative data storage and retrieval technologies.

Industry Demand—Slowdown in demand for computer systems has caused and may continue to cause a decline in demand for our products.

Our rigid disc drives are components in computer systems. The demand for our products, therefore, depends to a significant degree upon demand for computer systems, which has been volatile. A primary market for the computer systems that contain our rigid disc drives is the retail consumer market. The strength of this market depends in large part on the level of consumer interest in personal computing and the ability of consumers to afford personal computers. In a weak economy, consumer spending tends to decline and demand for personal computers tends to decrease, as does the demand for computer systems with commercial applications. In the past, unexpected slowdowns in demand for computer systems have generally caused sharp declines in demand for rigid disc drive products. During economic slowdowns such as the one that occurred in 2001, our industry has experienced periods in which the supply of rigid disc drives has exceeded demand.

Additional causes of declines in demand for our products in the past have included announcements or introductions of major operating system or semiconductor improvements. We believe these announcements and introductions have from time to time caused consumers to defer their purchases and made inventory obsolete. Whenever an oversupply of rigid disc drives causes participants in our industry to have higher than anticipated inventory levels, we experience even more intense price competition from other rigid disc drive manufacturers than usual.

Short Product Life Cycles—Short product life cycles make it difficult to recover the cost of development and force us to continually qualify new products with our customers.

Over the last several years, the rate of increase of areal density, or the storage capacity per square inch on a rigid disc drive, has grown at a much more rapid pace than it had previously. Higher areal densities mean that fewer read/write heads and rigid discs are required to achieve a given rigid disc drive storage capacity. In addition, advances in computer hardware and software have led to the demand for successive generations of storage products with increased storage capacity and/or improved performance and reliability. Product life cycles have shortened because of recent rapid increases in areal density. The consequence is more frequent introductions of new generations of rigid disc drives that are more efficient and cost effective than those of previous generations. Shorter product cycles make it more difficult to recover the cost of product development because those costs must be recovered over increasingly shorter periods of time during the life cycles of products. We expect this trend to continue and cannot assure you that we will be able to recover the cost of product development in the future.

Short product life cycles also require us to engage regularly in new product qualification of next generation products with our customers. We believe that one consequence of shorter product life cycles is that OEMs will be less likely to qualify multiple sources of supply, thereby increasing our need to develop new products quickly to ensure that we are the primary source of supply for our customers. This means that in order for our products to be considered by our customers for qualification, we must be among the leaders in time-to-market with those new products. Once a product is accepted for qualification testing, any failure or delay in the qualification process can result in our losing sales to that customer until the next generation of products is introduced. The effect of missing a product qualification opportunity is magnified by the limited number of high volume computer manufacturers, many of which continue to increase their share of the personal computer market. These risks are further magnified because we expect cost improvements and competitive pressures to result in declining sales and declining gross margins on our current generation products. We cannot assure you that we will be among the

17

leaders in time-to-market with new products, or that we will be able to successfully qualify new products with our customers in the future.

Smaller Form Factor Rigid Disc Drives—If we do not successfully develop and market smaller form factor rigid disc drives, our business may suffer.

Increases in sales of notebook computers and in areal density may result in a shift to smaller form factor rigid disc drives for an expanding number of applications, including personal computers and enterprise storage applications. These applications have typically used rigid disc drives with a 3 ¹/2 inch form factor, which we currently manufacture. If we do not suitably adapt our technology and product offerings to successfully develop and introduce smaller form factor rigid disc drives, customers may decrease the amounts of our products that they purchase. No assurance can be given that we will be able to manufacture smaller form factor rigid disc drives than we now produce.

Importance of Time-to-Market—Our operating results depend on our being among the first-to-market and achieving sufficient production volume with our new products.

To achieve consistent success with our OEM customers, we must be an early provider of next generation rigid disc drives featuring leading, high quality technology. Our market share will be adversely affected, which would harm our operating results, if we fail to:

· consistently maintain or improve our time-to-market performance with our new products;

· produce these products in sufficient volume;

· qualify these products with key customers on a timely basis by meeting our customers’ performance and quality specifications; or

· achieve acceptable manufacturing yields and costs with these products.

In addition, if delivery of our products is delayed, our OEM customers may use our competitors’ products to meet their production requirements. If the delay of our products causes delivery of those OEMs’ computer systems into which our products are integrated to be delayed, consumers and businesses may purchase comparable products from the OEMs’ competitors.

Moreover, we face the related risk that consumers and businesses may wait to make their purchases if they want to buy a new product that has been shipped or announced but not yet released. If this were to occur, we may be unable to sell our existing inventory of products that may have become less efficient and cost effective compared to new products. As a result, even if we are among the first-to-market with a given product, subsequent introductions or announcements by our competitors of next generation products could cause us to lose revenue and not achieve a positive return on our investment in existing products and inventory.

Importance of Reducing Operating Costs—If we do not reduce our operating expenses, we will not be able to compete effectively in our industry.

Our strategy involves, to a substantial degree, increasing revenue while at the same time reducing operating expenses. In furtherance of this strategy, we have engaged in ongoing, company-wide manufacturing efficiency activities to increase productivity and reduce costs. These activities have included closures and transfers of facilities, significant personnel reductions and efforts to increase automation. We cannot assure you that our efforts will result in the increased profitability, cost savings or other benefits that management expects. Moreover, the reduction of personnel and closure of facilities may adversely affect our ability to manufacture our products in required volumes to meet customer demand and may result in other disruptions that affect our products and customer service. In addition, the transfer of manufacturing capacity of a product to a different facility frequently requires qualification of the new facility by some of our OEM customers. We cannot assure

18

you that these activities and transfers will be implemented on a cost-effective basis without delays or disruption in our production and without adversely affecting our results of operations.

New Product Development and Technological Change—If we do not develop products in time to keep pace with technological changes, our operating results will be adversely affected.

Our customers have demanded new generations of rigid disc drive products as advances in computer hardware and software have created the need for improved storage products with features such as increased storage capacity, improved performance and reliability or smaller form factors. We and our competitors have developed improved products, and we will need to continue to do so in the future. As a result of these advances, the life cycles of our products have been shortened, and we have been required to constantly develop and introduce new cost-effective products within time to market windows that become progressively shorter. Excluding product development allocated compensation expense related to the November 2000 transactions, we would have had combined product development expenses of $681 million for fiscal year 2001. For the nine months ended March 29, 2002, we had product development expenses of $492 million. We cannot assure you that we will be able to successfully complete the design or introduction of new products in a timely manner, that we will be able to manufacture new products in sufficient volumes with acceptable manufacturing yields, that we will be able to successfully market these new products or that these products will perform to specifications on a long-term basis.

When we develop new products with higher capacity and more advanced technology, our operating results may decline because the increased difficulty and complexity associated with producing these products increases the likelihood of reliability, quality or operability problems. If our products suffer increases in failures, are of low quality or are not reliable, customers may reduce their purchases of our products and our manufacturing rework and scrap costs and service and warranty costs may increase. In addition, a decline in the reliability of our products may make us less competitive as compared with other rigid disc drive manufacturers.

Impact of Technological Change—Increases in the areal density of disc drives may outpace customers’ demand for storage capacity.

The rate of increase in the areal density of disc drives may be greater than the increase in our customers’ demand for aggregate storage capacity. As a result, even with increasing aggregate demand for storage capacity, our customers’ unit volumes could decline which could adversely affect our results of operations.

Changes in Information Storage Products—Future changes in the nature of information storage products may reduce demand for traditional rigid disc drive products.

We expect that in the future new personal computing devices and products will be developed, some of which, such as Internet appliances, may not contain a rigid disc drive. While we are investing development resources in designing information storage products for new applications, it is too early to assess the impact of these new applications on future demand for rigid disc drive products. We cannot assure you that we will be successful in developing other information storage products. In addition, there are currently no widely accepted standards in various technical areas that may be important to the future of our business, including the developing sector of intelligent storage solutions. Products using alternative technologies, such as semiconductor memory, could become a significant source of competition. Semiconductor memory is much faster than rigid disc drives, but currently is volatile in that it is subject to loss of data in the event of power failure and is much more costly than rigid disc drive technologies. Flash EEPROM, a nonvolatile semiconductor memory, is currently much more costly than rigid disc drive technologies and, while it has higher read performance than rigid disc drives, it has lower write performance. Flash EEPROM could become competitive in the near future for applications requiring less storage capacity than is required in traditional markets for our products.

19

High Fixed Costs—Our vertical integration strategy entails a high level of fixed costs.

Our vertical integration strategy entails a high level of fixed costs and requires a high volume of production and sales to be successful. During periods of decreased production, these high fixed costs have had, and could in the future have, a material adverse effect on our operating results and financial condition. In addition, a strategy of vertical integration has in the past and could in the future delay our ability to introduce products containing market-leading technology, because we may not have developed the technology and source of components for our products and do not have access to external sources of supply without incurring substantial costs.

Research and development expenses represent a significant portion of our fixed costs. As part of our vertical integration strategy, we explore a broad range of ways to improve rigid disc drives as well as possible alternatives to rigid disc drives for storing and retrieving electronic data. If we fail to develop new technologies in a timely manner, and our competitors succeed in doing so, our ability to sell our products could be significantly diminished. Conversely, if we over-invest in technologies that can never be profitably manufactured and marketed, our results of operations could suffer. By way of example, we have incurred significant expenses in exploring perpendicular and optical recording technologies, which we believe could significantly improve the storage capacity of rigid disc drives. If we have invested too much in these or other technologies, our results of operations could be adversely affected.

Dependence on Supply of Components—If we experience shortages or delays in the receipt of critical components for our products, we may suffer lower operating margins, production delays and other material adverse effects.

The cost, quality and availability of some components for rigid disc drives and other information storage products are critical to the successful manufacture of these products. Particularly important components include read/write heads, recording media, application specific integrated circuits, or ASICs, spindle motors, printed circuit boards and resistors. We rely on sole suppliers and a limited number of suppliers for some of these components, such as the read/write heads and recording media that we do not manufacture, ASICs, spindle motors and printed circuit boards. In the past, we have experienced increased costs and production delays when we were unable to obtain sufficient quantities of some components and have been forced to pay higher prices for some components that were in short supply in the industry in general. Due to the recent downturn in the economy in general and in the technology sector of the economy in particular, the entire industry has experienced economic pressure, which has resulted in consolidation among component manufacturers and may result in some component manufacturers exiting the industry. For example, Komag, Incorporated, one of our media suppliers, recently filed for bankruptcy. These events could affect our ability to obtain critical components for our products, which in turn could have a material adverse effect on our financial condition, results of operations and prospects.

If there is a shortage of, or delay in supplying us with, critical components, then:

· it is likely that our suppliers would raise their prices and, if we could not pass these price increases to our customers, our operating margin would decline;

· we might have to reengineer some products, which would likely cause production and shipment delays, make the reengineered products more costly and provide us with a lower rate of return on these products;

· we would likely have to allocate the components we receive some of our products and ship less of others, which could reduce our revenues and could cause us to lose sales to customers who could purchase more of their required products from manufacturers that either did not experience these shortages or delays or that made different allocations; and

· we might be late in shipping products, causing potential customers to make purchases from our competitors and, thus, causing our revenue and operating margin to decline.

We cannot assure you that we will be able to obtain critical components in a timely and economic manner, or at all.

20

Dependence on Key Customers—We may be adversely affected by the loss of, or reduced, delayed or canceled purchases by, one or more of our larger customers.

For fiscal year 2001, our top 10 customers accounted for approximately 65% of our rigid disc drive revenue. Compaq, our largest customer, accounted for approximately 16% of our rigid disc drive revenue and EMC Corporation accounted for approximately 13% of our rigid disc drive revenue in fiscal year 2001. If any of our key customers were to significantly reduce its purchases from us, our results of operations would be adversely affected. While sales to major customers may vary from period to period, a major customer that permanently discontinues or significantly reduces its relationship with us could be difficult to replace. In line with industry practice, new customers usually require that we pass a lengthy and rigorous qualification process at the customer’s cost. Accordingly, it may be difficult for us to attract new major customers.

Mergers, acquisitions, consolidations or other significant transactions involving our customers generally entail risks to our business. The stockholders of Hewlett-Packard and Compaq, both of which are key customers, have approved a proposed merger between the two companies, which is expected to be consummated in the first half of 2002. If the proposed merger is successfully completed, we cannot assure you that the combined entity will not decrease its aggregate demand for rigid disc drives from us. Moreover, if the businesses of Hewlett-Packard and Compaq are adversely impacted either due to a delay in, or uncertainty regarding, the proposed merger, sales of our products could decline. In addition, IBM, which is one of our significant customers, recently announced that it has reached a preliminary agreement with Hitachi to merge their disc drive businesses through the formation of a joint venture, which could cause IBM to decrease its purchases from us in favor of the joint venture.

Typically, our OEM purchase agreements permit OEMs to cancel orders and reschedule delivery dates without significant penalties. In the past, orders from many of our OEMs were canceled and delivery schedules were delayed as a result of changes in the requirements of the OEMs’ customers. These order cancellations and delays in delivery schedules have had a material adverse effect on our results of operations in the past and may do so again in the future. Our OEMs and foreign distributors typically furnish us with non-binding indications of their near term requirements, with product deliveries based on weekly confirmations. If actual orders from foreign distributors and OEMs decrease from their non-binding forecasts, or actual orders placed by end-users with our domestic distributors are not in line with expectations, these variances could have a material adverse effect on our business, results of operations, financial condition and prospects.

Risks Associated with International Operations—Our international operations subject us to social, political and economic risks of doing business in foreign countries.

We have significant operations in foreign countries, including manufacturing facilities, sales personnel and customer support operations. For fiscal year 2001 and the nine months ended March 29, 2002, approximately 34% and 33%, respectively, of our rigid disc drive revenue was from sales to customers located in Europe and approximately 26% and 29%, respectively, was from sales to customers located in the Far East. We have manufacturing facilities in China, Malaysia, Mexico, Northern Ireland, Singapore and Thailand, in addition to those in the United States. A substantial portion of our desktop drive assembly occurs in our facility in China.

Our offshore operations are subject to risks inherent in doing business in foreign countries, including the following:

· fluctuations in currency exchange rates;

· longer payment cycles for sales in foreign countries;

· difficulties in staffing and managing international manufacturing operations;

· seasonal reductions in business activity in the summer months in Europe and other countries;

21

· increases in tariffs and duties, price controls, restrictions on foreign currencies and trade barriers imposed by foreign countries;

· political unrest, particularly in countries in which we have manufacturing facilities;

· local legal and regulatory requirements;

· increased costs of transportation and shipping;

· the credit risk of local customers and distributors;

· potential difficulties in protecting intellectual property;

· the risk of nationalization of private enterprises by foreign governments; and

· potential adverse tax consequences, including imposition of withholding or other taxes on payments by subsidiaries.

The terrorist attacks on September 11, 2001 and the U.S. and international responses to the attacks could exacerbate these risks. There may be an increased risk of political unrest in countries where we have significant manufacturing operations. This could disrupt our ability to manufacture important components as well as cause interruptions and/or delays in our ability to ship components to other locations for continued manufacture and assembly. Any such delays or interruptions could result in delays in our ability to fill orders and have an adverse effect on our results of operations and financial condition.

Prices for our products are denominated predominately in U.S. dollars, even when sold to customers that are located outside the United States. Currency instability in Asian and other geographic markets may make our products more expensive than products sold by other manufacturers that are priced in the local currency. Therefore, foreign customers may reduce purchases of our products in response to currency fluctuations that are unfavorable to them. Disruption in financial markets and the deterioration of the underlying economic conditions in the past in some countries, including those in Asia, have had an impact on our sales to customers located in, or whose end-user customers are located in, these countries. Disruptions in financial markets and the deterioration of the underlying economic conditions may affect our future operating results due to:

· the impact of currency fluctuations on the relative prices of our products, because the increased strength of the U.S. dollar increases the effective price to local customers of a product, the price of which is typically denominated in U.S. dollars; and

· customers’ reduced access to working capital to fund purchases of our products due to:

— higher interest rates;

— reduced bank lending resulting from contractions in the money supply or the deterioration in the customer’s or its bank’s financial condition; or

— the inability to access other financing.

Many of the costs associated with our operations located outside the United States are denominated in local currencies. The increased strength of local currencies against the U.S. dollar in countries where we have foreign operations would result in higher effective operating costs and, potentially, reduced earnings. Currently, we do not hedge our foreign exchange risk. We cannot assure you that fluctuations in foreign exchange rates will not have a negative effect on our operations and profitability.

In addition, our international operations and, specifically, the ability of our non-U.S. subsidiaries to pay cash dividends to or otherwise to transfer cash among our subsidiaries, including transfers of cash to Seagate Technology HDD Holdings to pay principal and interest on the notes, may be affected by limitations on imports, currency exchange control regulations, transfer pricing regulations and potentially adverse tax consequences, among other things. In addition, the governments of many countries, including China, Malaysia, Singapore and

22

Thailand, in which we have significant operating assets, have exercised and continue to exercise significant influence over many aspects of their domestic economies and international trade.

We cannot assure you that we will continue to be found to be operating in compliance with applicable customs, currency exchange control regulations, transfer pricing regulations or any other laws or regulations to which we may be subject. We also cannot assure you that these laws will not be modified.

Difficulty in Predicting Quarterly Demand—If we fail to predict demand accurately for our products in any quarter, we may not be able to recapture the cost of capital investments.

The rigid disc drive industry operates on quarterly purchasing cycles, with much of the order flow in any given quarter coming at the end of that quarter. Our manufacturing process requires us to make significant product-specific capital investments in each quarter for that quarter’s production. Because we typically receive the bulk of our orders late in a quarter after we have made our capital investments and because of short product life cycles, there is a risk that our orders will not be sufficient to allow us to recapture the costs of our investment before the products resulting from that investment have become obsolete. We cannot assure you that we will be able to accurately predict demand in the future. Other factors that may negatively impact our ability to recapture the cost of capital investments in any given quarter include:

· our inability to reduce our fixed costs to match sales in any quarter because of our vertical manufacturing strategy, which means that we make more capital investments than we would if we were not vertically integrated;

· the timing of orders from and shipment of products to major customers, such as Compaq and EMC;

· our product mix, and the related margins of the various products;

· accelerated reduction in the price of our rigid disc drives due to an oversupply of rigid disc drives in the market;

· manufacturing delays or interruptions, particularly at our major manufacturing facilities in China, Malaysia, Singapore and Thailand;

· variations in the cost of components for our products;

· limited access to components that we obtain from a single or a limited number of suppliers;

· the impact of changes in foreign currency exchange rates on the cost of producing our products and the effective price of these products to foreign consumers; and

· operational issues arising out of the increasingly automated nature of our manufacturing process.

Control by Our Sponsor Group—We are indirectly controlled by our sponsor group and their interests may conflict with yours.

Affiliates of Silver Lake Partners, Texas Pacific Group, August Capital, J.P. Morgan Partners, LLC and investment funds affiliated with Goldman, Sachs & Co., through their ownership interests in New SAC, indirectly own approximately 39%, 26%, 10%, 4% and 3%, respectively, of our outstanding shares. If members of our sponsor group vote together, our sponsor group will indirectly have the power to control all matters submitted to our shareholders, elect our directors and exercise control over our business, policies and affairs. The shareholders agreement between our sponsor group and New SAC requires the approval of the members of New SAC’s board of directors designated by our sponsor group before New SAC takes specific actions that could affect us, such as entering into a material business combination, selling a material amount of assets or issuing equity securities. Accordingly, our ability to engage in some transactions requiring shareholder approval or the approval of New SAC’s board of directors will be limited without the consent of specified members of our sponsor group. The interests of the members of our sponsor group may differ from each other’s interests and from your interests as a holder of the notes.

23

Because Seagate Technology Holdings is currently a direct subsidiary of New SAC and Seagate Technology HDD Holdings is currently an indirect subsidiary of New SAC, New SAC has the power to control all matters affecting us, including:

· the composition of our respective boards of directors and, through them, any determination with respect to our business direction and policies, including the appointment and removal of our officers;

· the allocation of business opportunities that may be suitable for us, New SAC or other subsidiaries of New SAC;

· the allocation and sharing of resources, including management personnel, among us, New SAC and other subsidiaries of New SAC;

· any determination with respect to mergers or other business combinations;

· our acquisition or disposition of assets;

· our financing;

· changes to agreements providing for the provision of services by New SAC to us;

· the payment of dividends on our common shares; and

· determinations with respect to our tax returns.

Also, New SAC is not prohibited from selling a controlling interest in us to a third party.

Conflicts of Interest of our Directors and Officers—Our directors and executive officers may have conflicts of interest because of their ownership of New SAC ordinary shares.

Many of our directors and executive officers hold New SAC ordinary shares. Ownership of New SAC ordinary shares by our directors and officers could create, or appear to create, potential conflicts of interest when directors and officers are faced with decisions that could have different implications for New SAC and us.

Risks Associated with Future Acquisitions—We may not be able to identify suitable strategic alliance, acquisition or investment opportunities, or successfully acquire and integrate companies that provide complementary products or technologies.

Our growth strategy involves pursuing strategic alliances with, and making acquisitions of or investments in, other companies that are complementary to our business. There is substantial competition for attractive strategic alliance, acquisition and investment candidates. We cannot assure you that we will be able to partner with, acquire or invest in suitable candidates, or integrate acquired technologies or operations successfully into our existing technologies and operations. Our ability to finance potential acquisitions will be limited by our high degree of leverage, the covenants contained in the indenture that governs the notes, the credit agreement that governs our new senior secured credit facilities and any agreements governing any other debt we may incur.

If we are successful in acquiring other companies, these acquisitions may have an adverse effect on our operating results, particularly while the operations of the acquired business are being integrated. It is also likely that integration of acquired companies would lead to the loss of key employees from those companies or the loss of customers of these companies. In addition, the integration of any acquired companies would require substantial attention from our senior management, which may limit the amount of time available to be devoted to our day-to-day operations or to the execution of our strategy. In addition, the expansion of our business involves the risk that we might not manage our growth effectively, that we would incur additional debt to finance these acquisitions or investments and that we would incur substantial charges relating to the write-off of in-process research and development, similar to that which we incurred in connection with several of our prior acquisitions. Each of these items could have a material adverse effect on our financial position and results of operations.

24

Potential Loss of Material Licensed Technology—The closing of the November 2000 transactions may have triggered change of control or anti-assignment provisions in some of our material license agreements, which may result in a loss of our right to use material, licensed technology.

We license technology from third parties that is integral to the production of our products. A number of these licenses contain change of control or anti-assignment provisions. A number of the licenses that contain those types of provisions are material to our business, including agreements with other companies in the rigid disc drive industry. We took steps to transfer these licenses in connection with the closing of the November 2000 transactions. Papst Licensing GmbH is currently taking the position that their license agreements did not transfer to our new business entities. We have entered into new license agreements with IBM and Hitachi, who had initially made claims similar to those currently being made by Papst Licensing GmbH.

Our inability to renegotiate any terminated agreements or to obtain new licenses could result in delays in product development or prevent us from selling our products until equivalent substitute technology can be identified, licensed and/or integrated or until we are able to substantially engineer our products to avoid infringing the rights of these parties. We might not be able to renegotiate agreements, be able to obtain necessary licenses in a timely manner, on acceptable terms, or at all, or be able to engineer our products successfully. The loss of material licenses could have a material adverse effect on our business.

Risk of Intellectual Property Litigation—Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products.

We cannot be certain that our products do not and will not infringe issued patents or other intellectual property rights of others. Historically, patent applications in the United States and some foreign countries have not been publicly disclosed until the patent is issued, and we may not be aware of currently filed patent applications that relate to our products or technology. If patents later issue on these applications, we may be liable for infringement. We may be subject to legal proceedings and claims, including claims of alleged infringement of the patents, trademarks and other intellectual property rights of third parties by us or our licensees in connection with their use of our products. Intellectual property litigation is expensive and time- consuming, regardless of the merits of any claim, and could divert our management’s attention from operating our business. Moreover, software patent litigation has increased due to the current uncertainty of the law and the increasing competition and overlap of product functionality in the field. If we were to discover that our products infringe the intellectual property rights of others, we would need to obtain licenses from these parties or substantially reengineer our products in order to avoid infringement. We might not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to reengineer our products successfully. Moreover, if we are sued for infringement and lose the suit, we could be required to pay substantial damages and/or be enjoined from using or selling the infringing products or technology. Any of the foregoing could cause us to incur significant costs and prevent us from selling our products.

Dependence on Intellectual Property—If our intellectual property and other proprietary information were copied or independently developed by competitors, our operating results would be negatively affected.

Our success depends to a significant degree upon our ability to protect and preserve the proprietary aspects of our technology. However, we may be unable to prevent third parties from using our technology without our authorization or independently developing technology that is similar to ours, particularly in those countries where the laws do not protect our proprietary rights as fully as in the United States. The use of our technology or similar technology by others could reduce or eliminate any competitive advantage we have developed, cause us to lose sales or otherwise harm our business. If it became necessary for us to resort to litigation to protect these rights, any proceedings could be burdensome and costly, and we may not prevail.

Although we have numerous U.S. and foreign patents and numerous pending patents that relate to our technology, we cannot assure you that any patents, issued or pending, will provide us with any competitive

25

advantage or will not be challenged by third parties. Moreover, our competitors may already have applied for patents that, once issued, will prevail over our patent rights or otherwise limit our ability to sell our products in the United States or abroad. Our competitors also may attempt to design around our patents or copy or otherwise obtain and use our proprietary technology. With respect to our pending patent applications, we may not be successful in securing patents for these claims. Our failure to secure these patents may limit our ability to protect the intellectual property rights that these applications were intended to cover.

We have entered into confidentiality agreements with our employees and non-disclosure agreements with customers, suppliers and potential strategic partners, among others. If any party to these agreements were to violate their agreement with us and disclose our proprietary technology to a third party, we may be unable to prevent the third party from using this information. Because a significant portion of our proprietary technology consists of specialized knowledge and technical expertise developed by our employees, we have a program in place designed to insure that our employees communicate any developments or discoveries they make to other employees. However, employees may choose to leave our company before transferring their knowledge and expertise to our other employees. Violations by others of our confidentiality or non-disclosure agreements and the loss of employees who have specialized knowledge and expertise could harm our competitive position and cause our sales and operating results to decline. Our trade secrets may otherwise become known or independently developed by others, and trade secret laws provide no remedy against independent development or discovery.

We have registered and applied for some service marks and trademarks, and will continue to evaluate the registration of additional service marks and trademarks, as appropriate. We cannot guarantee the approval of any of our pending applications by the applicable governmental authorities. Moreover, even if the applications are approved, third parties may seek to oppose or otherwise challenge these registrations. A failure to obtain trademark registrations in the United States and in other countries could limit our ability to use our trademarks and impede our marketing efforts in those jurisdictions.

Environmental Matters—We could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, as a result of violations of or liabilities under environmental laws.

Our operations inside and outside the United States are subject to laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes and the cleanup of contaminated sites. In addition to the U.S. federal, state and local laws to which our domestic operations are subject, our extensive international manufacturing operations subject us to environmental regulations imposed by foreign governments. Although our policy is to apply strict standards for environmental protection at our sites inside and outside the United States, we could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, third party property damage or personal injury claims, as a result of violations of or liabilities under environmental laws or non-compliance with environmental permits required at our facilities. Contaminants have been detected at some of our present and former sites, principally in connection with historical operations. In addition, we have been named as a potentially responsible party at a number of superfund sites. While we are not currently aware of any contaminated or superfund sites as to which material outstanding claims or obligations exist, the discovery of additional contaminants or the imposition of additional cleanup obligations at these or other sites could result in significant liability. In addition, the ultimate costs under environmental laws and the timing of these costs are difficult to predict. Liability under some environmental laws relating to contaminated sites can be imposed retroactively and on a joint and several basis. In other words, one liable party could be held liable for all costs at a site. Potentially significant expenditures could be required in order to comply with environmental laws that may be adopted or imposed in the future.

Dependence on Key Personnel—The loss of some key executive officers and employees could negatively impact our business prospects.

Our future performance depends to a significant degree upon the continued service of key members of management as well as marketing, sales, and product development personnel. The loss of one or more of our key

26

personnel would have a material adverse effect on our business, operating results and financial condition. We believe our future success will also depend in large part upon our ability to attract and retain highly skilled management, marketing, sales and product development personnel. We have experienced intense competition for personnel, and we cannot assure you that we will be able to retain our key employees or that we will be successful in attracting, assimilating and retaining them in the future.

System Failures—System failures caused by events beyond our control could adversely affect computer equipment and electronic data on which our operations depend.

Our operations are dependent on our ability to protect our computer equipment and the information stored in our databases from damage by, among other things, earthquake, fire, natural disaster, power loss, telecommunications failures, unauthorized intrusion and other catastrophic events. As our operations become more automated and increasingly interdependent, our exposure to the risks posed by these types of events will increase. A significant part of our operations is based in an area of California that has experienced earthquakes and is considered seismically active. We do not have a contingency plan for addressing the kinds of events referred to in this paragraph that would be sufficient to prevent system failures and other interruptions in our operations that could have a material adverse effect on our business, results of operations and financial condition.

Risks of Legal Proceedings—Our operating results may be negatively affected by claims and lawsuits against us.

We are subject to a number of claims and lawsuits, the outcomes of which are, at this time, difficult to predict. Even if we are successful in defending these claims and lawsuits, they are costly to manage, investigate and pursue. In the past we have recorded significant litigation settlement costs. Our future operating earnings may also be adversely affected if we receive an adverse judgment in or settle these claims and lawsuits. For a description of the litigation we face, see “Business—Legal Proceedings.”

27

USE OF PROCEEDS

We will not receive any proceeds from the issuance of the exchange notes.

The net proceeds that Seagate Technology HDD Holdings received from the issuance of the outstanding notes was approximately $392 million after deducting the initial purchasers’ discount and fees and expenses related to the offering of the outstanding notes. We used those net proceeds, together with $350 million of borrowings under our new senior secured credit facilities and a portion of our cash on hand, to finance Seagate Technology International’s purchase of, and consent solicitation in relation to, its then outstanding 12 ¹/2% senior subordinated notes due 2007, to repay outstanding borrowings under our existing senior secured credit facilities and to pay related fees and expenses. We also plan to use a portion of these sources of funds to make a distribution to shareholders and to make distributions to participants in Seagate Technology HDD Holdings’ and Seagate Technology SAN Holdings’ deferred compensation plans in the near future. The aggregate amount of these shareholder and deferred compensation distributions is expected to be approximately $200 million. Subject to restrictions imposed by the agreements governing our present and future indebtedness, we may make significant additional distributions in the future. See “Management—Employment and Other Agreements—Rollover Agreements and Deferred Compensation Plans.”

As of March 29, 2002, we had approximately $673 million of outstanding borrowings under our then existing senior secured credit facilities bearing interest at an effective rate of approximately 4.82%, and Seagate Technology International had approximately $210 million in aggregate principal amount of its senior subordinated notes then outstanding bearing interest at an annual rate of 12 ¹/2% plus liquidated damages payable through November 22, 2002 as a result of the fact that those senior subordinated notes were not registered under the Securities Act of 1933. The total amount of funds required to purchase all of Seagate Technology International’s outstanding senior subordinated notes, including the redemption premium on the notes and accrued interest, to pay the consent payments pursuant to the solicitation for related consents and to pay related fees and expenses was approximately $276 million. Were it not for the refinancing, our outstanding borrowings under our then existing senior secured credit facilities would have matured on November 22, 2006, and Seagate Technology International’s senior subordinated notes would have matured on November 15, 2007.

28

CAPITALIZATION

The following table sets forth, as of March 29, 2002, our cash, cash equivalents and short term investments and capitalization, excluding 98,618,819 common shares reserved for issuance under the Seagate Technology Holdings 2001 share option plan, and as adjusted to give effect to the refinancing. You should read this table in conjunction with “Summary—The Refinancing,” “Selected Historical Consolidated Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange a like principal amount of the outstanding notes, the terms of which are substantially identical to the terms of the exchange notes, except that the exchange notes will be freely tradable, will not bear legends restricting their transfer and will not be subject to payments described in “Description of the Notes—Principal, Maturity and Interest.” The outstanding notes surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. Accordingly, issuance of the exchange notes will not result in any change in our capitalization.

	As of March 29, 2002
	Actual			As Adjusted
	(in millions)
Cash, cash equivalents and short-term investments(1)	$	1,103		$	675
Total debt (including current portion of long-term debt):
Former senior secured credit facilities(2):
Revolving credit facility	$	—			$     —
Term loan A facility		180			—
Term loan B facility		493			—
Former 12 1/2% senior subordinated notes due 2007(3)		203			—
New senior secured credit facilities:
Revolving credit facility		—			—
Term loan facility		—			350
8% senior notes due 2009		—			400
Capitalized lease obligations		1			1
Total debt		877			751
Shareholders’ equity:
Preferred shares: $0.00001 par value; 450 million authorized; 400 million issued and outstanding at March 29, 2002		—			—
Common shares: $0.00001 par value; 600 million authorized; 1,381,189 issued and outstanding at March 29, 2002		—			—
Additional paid-in capital(4)		747			580
Accumulated other comprehensive loss		(5	)		—
Retained earnings(5)		241			125
Total shareholders’ equity		983			705
Total capitalization	$	1,860			$1,456
(1)  This amount represents a reduction in cash, cash equivalents, and short-term investments relating to the use of cash to complete the refinancing as follows:
Cash, cash equivalents and short-term investments at March 29, 2002	$	1,103
Sources of cash:
New senior secured credit facilities and 8% senior notes due 2009		750
Uses of cash:
Repurchase of previously outstanding senior subordinated notes, including premium, accrued interest and consent fees		(274	)
Repay previously existing senior secured credit facilities		(679	)
Refinancing fees and expenses		(25	)
Distributions to our shareholders, including New SAC		(167	)
Payment of deferred compensation to employees		(33	)
As adjusted cash, cash equivalents and short-term investments as of March 29, 2002	$	675

29

(2) This amount represents the former senior secured credit facilities of Seagate Technology International and Seagate Technology (US) Holdings, Inc., amounts outstanding under which were repaid in connection with the refinancing. Seagate Technology Holdings was a guarantor under these senior secured credit facilities.

(3) This amount represents the former $210 million aggregate principal amount at maturity of 12 ¹/2% senior subordinated notes of Seagate Technology International, net of unaccreted amounts, which were repurchased in connection with the refinancing. Seagate Technology Holdings was a guarantor of these notes.

(4) We expect to pay a total of $167 million as a pro rata distribution to our preferred and common shareholders in the near future. Because New SAC, our parent company, owns all of our preferred shares, over 99% of the $167 million will be paid to New SAC. New SAC will distribute to its shareholders all of the amounts it receives. Subject to restrictive covenants contained in the new senior secured credit facilities, the indenture that governs the notes and any other agreement governing indebtedness to which we are or may become subject, additional similar distributions may be made in the future.

(5) As adjusted retained earnings reflects the following adjustments:

Retained earnings at March 29, 2002, actual	$	241
Losses on extinguishment of debt:
Redemption premium on senior subordinated notes		(50	)
Write-off of capitalized debt issue cost		(31	)
Write-off of unamortized discount on senior subordinated notes		(7	)
Fees and expenses incurred to tender the senior subordinated notes		(2	)
Subtotal—Loss on extinguishment of debt		(90	)
Loss on interest rate swap on Term loan B		(5	)
Compensation expense related to distributions to be made to employees under deferred compensation plans, net of $12 million income tax benefit		(21	)
Retained earnings at March 29, 2002, as adjusted	$	125

The compensation expense for distributions to be made in the near future to employees under deferred compensation plans relates to the Seagate Technology HDD Holdings’ and Seagate Technology SAN Holdings’ deferred compensation plans. This compensation expense is expected to be approximately $33 million. We expect that we will receive a $12 million related tax benefit. Subject to restrictive covenants contained in the new senior secured credit facilities, the indenture that governs the notes and any other agreement governing indebtedness to which we are or may become subject, additional similar distributions may be made in the future.

30

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

We list in the table below selected historical consolidated and combined financial information of Seagate Technology Holdings and its predecessor as of the end of and for each of the four fiscal years ended June 30, 2000, for the period from July 1, 2000 to November 22, 2000 (the closing date of the November 2000 transactions), as of the end of and for the period from November 23, 2000 to June 29, 2001, as of the end of and for the period from November 23, 2000 to March 30, 2001 and as of the end of and for the period from June 30, 2001 to March 29, 2002. Through November 22, 2000, the business now operated by Seagate Technology Holdings operated as the rigid disc drive and storage area networks division of Seagate Technology, Inc. That division is Seagate Technology Holdings’ predecessor. The operations of Seagate Technology Holdings are substantially identical to what the operations of its predecessor were before the November 2000 transactions.

We have derived the historical financial information of Seagate Technology Holdings below as of July 3, 1998 and July 2, 1999 and for fiscal year 1998 from audited consolidated financial statements and related notes of Seagate Technology Holdings and its predecessor, which are not included in this prospectus. The historical financial information below as of June 27, 1997 and for fiscal year 1997 is unaudited. We have derived the historical financial information of Seagate Technology Holdings below as of June 30, 2000 and for fiscal years 1999 and 2000 and for the period from July 1, 2000 through November 22, 2000 and as of the end of and for the period from November 23, 2000 through June 29, 2001 from the audited consolidated financial statements and related notes of Seagate Technology Holdings and its predecessor, included elsewhere in this prospectus. We have derived the historical financial information of Seagate Technology Holdings below as of the end of and for the period from November 23, 2000 to March 30, 2001 and as of the end of and for the period from June 30, 2001 to March 29, 2002 from the unaudited consolidated financial statements and related notes of Seagate Technology Holdings included elsewhere in this prospectus.We have derived the unaudited pro forma condensed consolidated financial information of Seagate Technology Holdings for the fiscal year ended June 29, 2001 based on the historical consolidated financial statements of Seagate Technology Holdings for the period from November 23, 2000 through June 29, 2001 and the historical consolidated financial statements of its predecessor for the period from July 1, 2000 through November 22, 2000, adjusted to give pro forma effect to the November 2000 transactions and the compensation charges related to the acceleration and net exercise of stock options by employees who held Seagate Technology, Inc. common stock on November 22, 2000, in each case as if they had occurred on July 1, 2000. See “Unaudited Pro Forma Condensed Consolidated Statement of Operations” elsewhere in this prospectus.

You should read the selected historical consolidated financial information below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes of Seagate Technology Holdings and its predecessor included elsewhere in this prospectus.

31

	Predecessor															Seagate Technology Holdings
	Fiscal Year Ended(a)												July 1, 2000 to Nov. 22, 2000			Nov. 23, 2000 to June 29, 2001(a)			Nov. 23, 2000 to Mar. 30, 2001			June 30, 2001 to Mar. 29, 2002			Pro Forma Fiscal Year Ended June 29, 2001
	June 27, 1997			July 3, 1998			July 2, 1999			June 30, 2000
	(in millions, except for ratios)
Statement of Operations Data:
Revenue	$	8,346		$	6,267		$	6,180		$	6,073		$	2,310		$	3,656		$	2,442		$	4,614		$	5,966
Cost of revenue		6,531			5,523			4,902			4,820			2,035			2,924			1,964			3,368			4,457
Product development		395			555			566			663			409			388			231			492			664
Marketing and administrative		341			330			345			424			450			288			216			302			424
Amortization of goodwill and other intangibles		22			21			20			33			20			12			7			15			20
In-process research and development(b)		—			216			2			105			—			52			52			—			—
Restructuring(c)		(12	)		347			59			206			19			66			54			4			85
Unusual items(d)		153			(22	)		75			107			—			—			—			—			—
Income (loss) from operations		916			(703	)		211			(285	)		(623	)		(74	)		(82	)		433			316
Other income (expense):
Interest income		92			98			102			101			57			31			20			21			43
Interest expense		(32	)		(51	)		(48	)		(52	)		(24	)		(54	)		(33	)		(61	)		(94	)
Other non-operating income (expense)(e)		(26	)		(66	)		10			877			(28	)		(4	)		(11	)		10			—
Income (loss) before income taxes		950			(722	)		275			641			(618	)		(101	)		(106	)		403			265
Benefit (provision) for income taxes		(242	)		191			(61	)		(275	)		206			(9	)		(11	)		(52	)		(45	)
Net income (loss)	$	708		$	(531	)	$	214		$	366		$	(412	)	$	(110	)	$	(117	)	$	351		$	220
Balance Sheet Data (at end of Period):
Cash and cash equivalents	$	1,034		$	656		$	368		$	868					$	726		$	793		$	978
Short-term investments		1,236			1,161			1,227			1,140						183			124			125
Total assets		6,619			5,442			5,122			5,818						2,966			3,100			3,389
Total debt (including current portion of long-term debt)		703			705			704			703						900			899			877
Total shareholder’s equity(j)		3,437			2,839			2,362			2,942						653			640			983
Other Financial Data:
EBITDA(k)	$	1,567		$	458		$	1,007		$	831		$	305		$	403		$	329		$	744
Depreciation and amortization(f)		536			620			653			666			261			182			128			307
Capital expenditures, net		917			680			623			612			230			260			127			321
Working capital(g)		2,792			2,234			1,770			2,013						624			706			838
Cash interest expense		26			52			52			52			26			50			18			37
Ratio of earnings to fixed charges(h)		21.7x			(h	)		5.3x			11.0x			(h	)		(h	)		(h	)		6.5x
EBITDA/interest expense		49.0x			9.0x			21.0x			16.0x			12.7x			7.5x			10.0x			12.2x
Total debt/EBITDA		0.4x			1.5x			0.7x			0.8x						2.2x			2.7x			1.2x
Net debt/EBITDA(i)		(1.0x	)		(2.4x	)		(0.9x	)		(1.6x	)					—			(0.1x	)		(0.3x	)
Net cash provided by (used in) operating activities	$	1,829		$	446		$	1,248		$	226		$	121		$	269		$	97		$	572
Net cash provided by (used in) investing activities		(1,510	)		(820	)		(695	)		173			829			(1,140	)		(914	)		(274	)
Net cash provided by (used in) financing activities		217			(10	)		(838	)		103			(1,818	)		1,599			1,610			(46	)

32

(a) Seagate Technology Holdings and its predecessor reported financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30 of that year. Accordingly, fiscal year 1997 ended on June 27, 1997, fiscal year 1998 ended on July 3, 1998, fiscal year 1999 ended on July 2, 1999, fiscal year 2000 ended on June 30, 2000 and fiscal year 2001 ended on June 29, 2001. Fiscal years 1997, 1999, 2000 and 2001 were 52 weeks, and fiscal year 1998 was 53 weeks. All references to years represent fiscal years unless otherwise noted.

(b) These amounts represent portions of the purchase price of prior acquisitions that were attributed to in-process research and development projects of acquired companies. The allocated amount is written off in the period the acquisition closes because we cannot assure you that the technologies under development will achieve technological feasibility. Our predecessor recorded the following charges related to the write-off of in-process research and development: (1) in fiscal year 1998, principally consisting of $216 million in connection with the acquisition of Quinta Corporation; (2) in fiscal year 1999, of $2 million in connection with the acquisition of a minority interest in Seagate Software Holdings; and (3) in fiscal year 2000, of $105 million in connection with the acquisition of XIOtech; and Seagate Technology Holdings recorded an in-process research and development charge of $52 million for the periods from November 23, 2000 to June 29, 2001 and November 23, 2000 to March 30, 2001 in connection with the November 2000 transactions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Prior Acquisitions” for more information.

(c) Restructuring charges are the result of board approved restructuring plans we have implemented to align our global work force and manufacturing capacity with existing and anticipated future market requirements. These charges are described in more detail in the notes to the audited consolidated financial statements of Seagate Technology Holdings and its predecessor included elsewhere in this prospectus and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Restructuring Charges.”

(d) Unusual items include: (1) in fiscal year 1997, expenses of $153 million in connection with the settlement of litigation; (2) in fiscal year 1998, a $22 million reversal of expense recognized in fiscal year 1997, but paid in a lesser amount in fiscal year 1998 relating to the settlement of litigation; (3) in fiscal year 1999, a gross charge of $78 million of cash compensation expense related to the acquisition of Quinta, which was offset by $3 million of other one-time charges; and (4) in fiscal year 2000, $64 million of expense related to the settlement of litigation, and $43 million of non-cash compensation expense and payroll taxes related to the reorganization of Seagate Software Holdings, Inc.

(e) Other non-operating income (expense) includes (1) in fiscal year 1998, mark-to-market losses on foreign exchange hedging contracts, offset by gains on the sale of investments in equity securities; (2) in fiscal year 2000, the gains on sales and exchanges of investments in equity securities; and (3) for the period from July 1, 2000 through November 22, 2000, losses recognized on our Lernout & Hauspie Speech Products N.V., or LHSP, investment, losses on our investment in Gadzoox Networks, Inc. and losses on the sale of marketable securities, offset by gains on sales of SanDisk Corporation and Veeco Instruments, Inc. stock.

(f) Depreciation and amortization expense has declined in the post-November 2000 period primarily because of the revaluation and reduction of the recorded book values of property, plant and equipment as compared with historical pre-November 2000 amounts as a result of allocating purchase price for the November 2000 transactions.

(g) Working capital represents total current assets less total current liabilities.

(h) Earnings used in computing the ratio of earnings to fixed charges consist of income (loss) before provision (benefit) for income taxes plus fixed charges. Fixed charges consist of interest expense, amortization of debt discount and debt issuance costs and interest portion of rent expense. For fiscal year 1998, the period from July 1, 2000 through November 22, 2000, the period from November 23, 2000 through June 29, 2001, and the period from November 23, 2000 through March 30, 2001, earnings were insufficient to cover fixed charges by $654 million, $590 million, $37 million, and $67 million, respectively.

(i) Net debt is defined as total debt less cash and cash equivalents less short-term investments.

(j) To the extent permitted by the new credit agreement, we may also make tax distributions to our shareholders. In December 2001, New SAC declared a tax distribution of approximately $33 million payable to its shareholders of record as of December 11, 2001.The related distribution from Seagate Technology Holdings to its shareholders, including New SAC, which owns more than 99% of its shares, amounted to approximately $33 million or approximately $0.08119 per share and was made on March 19, 2002.

33

(k) EBITDA represents income (loss) before income taxes, interest income (expense), and depreciation and amortization and excludes the impact of the non-recurring events summarized below. We have included information concerning EBITDA because

management believes EBITDA is generally accepted as providing useful information regarding a company’s ability to service and incur debt. EBITDA should not be considered, however, in isolation or as a substitute for net income, cash flows or other consolidated income or cash flow data prepared in accordance with generally accepted accounting principles or as a measure of a company’s profitability or liquidity. Although EBITDA is frequently used as a measure of operating performance and ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. EBITDA, as calculated below, differs from the definition of EBITDA and the related definition of Consolidated Coverage Ratio described under the caption “Description of the Notes-Certain Definitions.” We have calculated EBITDA for the periods presented as follows:

	Predecessor															Seagate Technology Holdings
	Fiscal Year Ended(a)												July 1, 2000 to Nov. 22, 2000			Nov. 23, 2000 to June 29, 2001			Nov. 23, 2000 to Mar. 30, 2001			June 30, 2001 to Mar. 29, 2002
	June 27, 1997			July 3, 1998			July 2, 1999			June 30, 2000
	(in millions)
Income (loss) before income taxes(1)	$	950		$	(722	)	$	275		$	641		$	(618	)	$	(101	)	$	(106	)	$	403
Interest income		(92	)		(98	)		(102	)		(101	)		(57	)		(31	)		(20	)		(21	)
Interest expense		32			51			48			52			24			54			33			61
Depreciation and amortization		536			620			653			666			261			182			128			307
Non-recurring items
Non-cash items:
Gain on exchange of certain investments in equity securities, net(2)		—			—			—			(199	)		—			—			—			—
In-process research and development		—			216			2			105			—			52			52			—
Write-up of inventory to fair value(3)		—			—			—			—			—			131			131			—
Loss on LHSP investment		—			—			—			—			138			—			—			—
Restructuring		—			203			35			109			7			29			29			—
Unusual items(4)		—			—			—			43			567			—			—			—
Other, net(5)		—			66			(6	)		27			16			4			11			(10	)
Cash items:
Gain on sale of SanDisk stock		—			—			—			(679	)		(102	)		—			—			—
Gain on sale of Veeco stock		—			—			—			—			(20	)		—			—			—
Transaction related costs		—			—			—			6			77			6			6			—
Restructuring		(12	)		144			24			97			12			37			25			4
Unusual items(4)		153			(22	)		78			64			—			40			40			—
EBITDA	$	1,567		$	458		$	1,007		$	831		$	305		$	403		$	329		$	744

(1) Income (loss) before income taxes includes the following activity in investments in equity securities: (1) in fiscal year 2000, gains on the sale of portions of our investment in SanDisk and gains on the exchange of investments in equity securities of $679 million and $199 million, respectively; and (2) in the period from July 1, 2000 to November 22, 2000, gains on the sale of portions of our investment in SanDisk and Veeco of $102 million and $20 million, respectively, offset by losses on our investment in LHSP of $138 million.

(2)	Represents gain recognized by our predecessor in fiscal year 2000 comprised of: (1) the exchange of all the shares of stock of Dragon Systems for shares of stock of LHSP in connection with the merger of Dragon Systems and LHSP; (2) the exchange of all the shares of stock of CVC for shares of stock of Veeco in connection with the merger of CVC and Veeco.
(3)	Represents the write-up of inventories to fair value for inventories acquired at the close of the November 2000 transactions.
(4)	Represents (1) in fiscal year 1997, $153 million relating to the settlement of litigation; (2) in fiscal year 1998, a $22 million reversal of expense accrued in fiscal year 1997, but paid in a lesser amount in fiscal year 1998 relating to a settlement of litigation; (3) in fiscal year 1999, $78 million of compensation expense related to the acquisition of Quinta; (4) in fiscal year 2000, $64 million of cash expense related to the settlement of litigation, and $43 million of non-cash compensation expense and payroll taxes related to the reorganization of Seagate Software Holdings, Inc.; (5) for the period from July 1, 2000 through November 22, 2000, $567 million of non-cash compensation expense related to the acceleration of options to purchase Seagate Technology, Inc. common stock in connection with the November 2000 transactions, which is allocated to cost of revenue and other operating expenses in our statement of operations; and (6) for the period from November 23, 2000 through March 30, 2001 and from November 23, 2000 through June 29, 2001, $40 million in consulting and advisory fees paid to selected members of our sponsor group in connection with the November 2000 transactions that are allocated to operating expenses in our statement of operations.

(5) Other, net (1) in fiscal year 1998, includes mark-to-market losses on foreign exchange hedging contracts of $76 million offset by gains on the sale of investments in equity securities of $8 million; (2) in fiscal year 2000, includes non- cash compensation charges for termination of employees of $26 million; and (3) for the period from July 1, 2000 through November 22, 2000, includes losses on our investment in Gadzoox Networks, Inc. of $8 million and a loss on sale of marketable securities of $8 million.

34

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the financial condition and results of operations for the fiscal years ended July 2, 1999, June 30, 2000, June 29, 2001 and the nine months ended March 30, 2001 and March 29, 2002 for Seagate Technology Holdings and its predecessor. Financial information for the fiscal years ended July 2, 1999 and June 30, 2000 is the historical financial information of Seagate Technology Holdings’ predecessor. Through November 22, 2000, the business now operated by Seagate Technology Holdings operated as the rigid disc drive and storage area networks division of Seagate Technology, Inc. That division is Seagate Technology Holdings’ predecessor. The current operations of Seagate Technology Holdings and its subsidiaries are substantially identical to what the operations of that division were before the November 2000 transactions and thus we have presented the results of Seagate Technology Holdings and its predecessor on a combined basis for the fiscal year ended June 29, 2001 and for the nine months ended March 30, 2001 in the discussion below. Although Seagate Technology Holdings was incorporated on August 10, 2000, prior to November 23, 2000, its operations were not material.

You should read this discussion in conjunction with the selected historical consolidated financial information and the consolidated financial statements and related notes of Seagate Technology Holdings and its predecessor included elsewhere in this prospectus. Except as noted, references to any fiscal year mean the twelve month period ending on the Friday closest to June 30 of that year.

The discussion below includes the subsidiaries of Seagate Technology Holdings that operate its storage area networks business, namely Seagate Technology SAN Holdings and its subsidiaries (including XIOtech Corporation), because they currently comprise a portion of Seagate Technology Holdings’ consolidated financial statements. These subsidiaries are not subject to the restrictive covenants or other provisions in the indenture that governs the notes and are not guarantors under the credit agreement that governs the new senior secured credit facilities. The indenture that governs the notes and the new credit agreement do, however, permit us to use funds generated by, or otherwise located within, the rigid disc drive business to invest in third parties, subject to financial and other limitations, which could include investments in Seagate Technology Holdings’ storage area networks business as well as in other businesses owned by our parent company, New SAC.

Our Company

We are a worldwide leader in the design, manufacturing and marketing of rigid disc drives. Businesses, other organizations and individuals use rigid disc drives as the primary medium for storing electronic information in computer systems ranging from desktop computers to data centers delivering information over corporate networks and the Internet. We produce a broad range of rigid disc drive products that make us a leader in both the enterprise sector of our industry, where our products are primarily used in Internet servers, mainframes and workstations, and the desktop sector, where our products are used in personal computers, or PCs.

We believe our advanced research and development capabilities, combined with our vertically integrated manufacturing facilities, provide us with a leadership position in bringing a broad range of next generation information storage products to market. Recently, we have made extensive improvements to our manufacturing efficiency through our “Factory of the Future” initiative. As part of this effort, we increased the degree of automation in our manufacturing facilities while reducing the overall number of facilities we operate, reconfigured our production lines to accommodate multiple products and reduced worldwide employee headcount. We successfully implemented these improvements while increasing our total unit production. We cannot assure you that we will continue to be able to do that in the future.

We sell our rigid disc drives primarily to major original equipment manufacturers, or OEMs, and also market to distributors under our globally recognized brand name. For fiscal year 2001 and the nine months ended

35

March 29, 2002, approximately 70% and 67%, respectively, of our combined rigid disc drive revenue was from sales to OEMs, including customers such as Compaq, Dell, EMC, Hewlett Packard, IBM and Sun Microsystems. We have longstanding relationships with many of these OEM customers. We also have key relationships with major distributors, who sell our rigid disc drive products to small OEMs, dealers, system integrators and retailers in most geographic areas of the world. For fiscal year 2001 and the nine months ended March 29, 2002, approximately 40% and 38%, respectively, of our combined revenue was from customers located in North America, approximately 34% and 33%, respectively, was from customers located in Europe and approximately 26% and 29%, respectively, was from customers located in the Far East. Substantially all of our revenue is denominated in U.S. dollars.

Overview

The November 2000 Transactions

Prior to November 22, 2000, Suez Acquisition Company entered into a stock purchase agreement with Seagate Technology, Inc. and Seagate Software Holdings, Inc., a subsidiary of Seagate Technology, Inc., to purchase substantially all of the operating assets of Seagate Technology, Inc., and Seagate Technology, Inc. and VERITAS Software Corporation entered into an agreement and plan of merger and reorganization. Suez Acquisition Company was a limited liability company incorporated under the laws of the Cayman Islands and formed solely for the purpose of entering into the stock purchase agreement and undertaking the related acquisitions. As discussed below, Suez Acquisition Company later assigned all of its rights and obligations under the stock purchase agreement to New SAC, a second limited liability company incorporated under the laws of the Cayman Islands and formed for the same purpose.

In connection with the stock purchase agreement, Suez Acquisition Company agreed to purchase for $1.840 billion in cash substantially all of the operating assets of Seagate Technology, Inc. and its consolidated subsidiaries, including Seagate Technology, Inc.’s disc drive, tape drive and software businesses and operations and selected cash balances, but excluding the approximately 128 million shares of VERITAS common stock held by Seagate Software Holdings, Inc. and Seagate Technology, Inc.’s equity investments in Gadzoox Networks, Inc. and Lernout & Hauspie Speech Products N.V., or LHSP. The $1.840 billion included transaction costs of $25 million. In addition, under the stock purchase agreement, Suez Acquisition Company agreed to assume substantially all of the operating liabilities of Seagate Technology, Inc. and its consolidated subsidiaries. Suez Acquisition Company also agreed to acquire Seagate Technology Investments Holdings, Inc., or STIH, a former subsidiary of Seagate Technology, Inc., which at the time of the November 2000 transactions held strategic investments in various companies, such as e2open.com and Iolon, Inc. Prior to the closing of the November 2000 transactions, Suez Acquisition Company assigned all its rights and obligations under the stock purchase agreement to New SAC. After the closing of those transactions, New SAC became the direct parent company of Seagate Technology Holdings and the indirect parent company of Seagate Technology HDD Holdings and various other former subsidiaries of Seagate Technology, Inc.

Immediately following the consummation of the November 2000 transactions, VERITAS acquired the remainder of Seagate Technology, Inc. by way of a merger of a wholly-owned subsidiary of VERITAS with and into Seagate Technology, Inc., with Seagate Technology, Inc. surviving and becoming a wholly-owned subsidiary of VERITAS. We refer to this transaction as the VERITAS merger. VERITAS did not acquire Seagate Technology, Inc.’s disc drive business or any other Seagate Technology, Inc. operating business, but it did acquire:

· the approximately 128 million shares of VERITAS common stock held by Seagate Software Holdings, Inc.;

· the capital stock of Seagate Software Holdings, Inc.;

· cash on the balance sheet of Seagate Technology, Inc. in excess of the required cash balance of $765 million, as adjusted, that was purchased by Suez Acquisition Company;

36

· Seagate Technology, Inc.’s equity investments in Gadzoox Networks and LHSP; and

· rights to the value of specified tax refunds claimed and credits used by VERITAS that are attributable to Seagate Technology, Inc.

In the VERITAS merger, Seagate Technology, Inc.’s stockholders received merger consideration consisting of VERITAS stock and cash.

An indemnification agreement provided that New SAC is required to indemnify VERITAS and its affiliates for specified liabilities of Seagate Technology, Inc. and Seagate Software Holdings, Inc., including selected taxes. In return, VERITAS, Seagate Technology, Inc. and their affiliates agreed to indemnify New SAC and its subsidiaries for specified liabilities, including all taxes of Seagate Technology, Inc. for which New SAC is not obligated to indemnify VERITAS and its affiliates. VERITAS deposited $150 million in an escrow account, which may be applied by New SAC to satisfy these tax liabilities, and which remains in the escrow account in full. See “Related Party Transactions—Indemnification Agreement.”

At the closing of the November 2000 transactions, the board of directors of New SAC adopted the New SAC 2000 Restricted Share Plan. The 2000 Restricted Share Plan allows for the awarding of grants of ordinary and preferred shares of New SAC to those members of management participating in the rollover agreements described below. New SAC issued 1,841,600 ordinary shares, net of cancellations, and 48,463 preferred shares, net of cancellations, under this plan.

Following the closing of the November 2000 transactions, the board of directors of New SAC approved the 2001 Restricted Share Plan. Unlike the 2000 Restricted Share Plan, the 2001 Restricted Share Plan only provides for the grant of restricted ordinary shares of New SAC and does not provide for the grant of restricted preferred shares of New SAC. As of March 29, 2002, New SAC had issued 483,523 ordinary shares under this plan. Options granted under the 2001 Restricted Share Plan will vest as follows:

· 25% of the shares will vest on the first anniversary of the vesting commencement date; and

· 75% of the shares will vest proportionately each month over the following 36 months.

Management Rollover—Shares and Deferred Compensation

Members of the management group of Seagate Technology, Inc. entered into rollover agreements in connection with the November 2000 transactions. Under these agreements, members of the management group agreed not to receive the merger consideration in connection with the VERITAS merger for a portion of their shares of Seagate Technology, Inc. common stock and options to purchase these shares valued in the aggregate at approximately $184 million. In the management rollover, the members of the management group converted these shares and options into an interest in newly established deferred compensation plans and restricted ordinary and preferred shares of New SAC. Of the total value of the management rollover, approximately $179 million was credited to the management group’s accounts under the deferred compensation plans described below. The restricted ordinary and preferred shares vest as follows:

· one-third of the shares vested on November 22, 2001;

· one-third have been vesting and will continue to vest proportionately each month over the 18 months following November 22, 2001; and

· the final one-third vests on May 22, 2003.

With respect to the restricted ordinary and preferred shares of New SAC received in connection with the management rollover, Seagate Technology Holdings has been recognizing, and will continue to recognize, compensation expense of approximately $23 million proportionately over 30 months beginning November 23, 2000 as these shares vest. Through March 29, 2002, Seagate Technology Holdings had recognized $10 million of this compensation expense.

37

In connection with the management rollover, members of the management group received interests in deferred compensation plans adopted by two of Seagate Technology Holdings’ subsidiaries, Seagate Technology HDD Holdings (the issuer of the outstanding notes) and Seagate Technology SAN Holdings. Each member of the management group received an interest in one plan or the other depending on which subsidiary employed the individual, with the substantial majority of the members receiving interests in the Seagate Technology HDD Holdings plan. The terms of the deferred compensation plans, including which events trigger a distribution under them, vesting and other matters, are more fully described in “Management—Employment and Other Agreements—Rollover Agreements and Deferred Compensation Plans.”

Share Option Plan

In December 2000, the board of directors of Seagate Technology Holdings adopted the Seagate Technology Holdings Share Option Plan. Under the terms of this share option plan, eligible employees, directors, and consultants can be awarded options to purchase shares of common stock of Seagate Technology Holdings under vesting terms to be determined at the date of grant. In January 2002, this share option plan was amended to increase the maximum number of common shares issuable under the share option plan from 72 million to 100 million. No options to purchase Seagate Technology Holdings common shares had been issued through June 29, 2001. During the nine months ended March 29, 2002, however, options to purchase approximately 79 million Seagate Technology Holdings common shares, representing approximately 16% of the total voting power of Seagate Technology Holdings, assuming the exercise of all options, were granted to employees under this share option plan. As of March 29, 2002, options to purchase 1,381,189 common shares had been exercised.

Options granted to exempt, or salaried, employees vest as follows:

· 25% of the shares vest on the first anniversary of the vesting commencement date; and

· 75% of the shares vest proportionately each month over the following 36 months.

Options granted to non-exempt, or hourly, employees vest on the first anniversary of the vesting commencement date. The vesting commencement date was November 22, 2000 for options to purchase approximately 67 million Seagate Technology Holdings common shares.

Allocation of Net Purchase Price

New SAC accounted for the November 2000 transactions as a purchase in accordance with Accounting Principles Board, or APB, Opinion No. 16, “Business Combinations.” All acquired tangible assets, identifiable intangible assets and assumed liabilities were valued based on their relative fair values and reorganized into the following businesses: (1) the rigid disc drive and storage area networks business, or STH, which is now Seagate Technology Holdings, (2) the removable storage solutions business, or RSS, which is now Seagate Removable Storage Solutions Holdings, (3) the software business, or Crystal Decisions, and (4) an investment holding company, or STIH. The fair value of the net assets exceeded the net purchase price by approximately $909 million. Accordingly, the resultant negative goodwill was allocated on a pro rata basis to the acquired long-lived assets and reduced the recorded amounts by approximately 46%.

38

The table below summarizes the allocation of net purchase price by New SAC (dollars in millions).

Description	Useful Life in Years	Total New SAC			STH			SRSS			Crystal Decisions			STIH
Net current assets(1)(4)		$	939		$	869		$	36		$	9		$	25
Long-term investments(2)			42			—			—			—			42
Other long-lived assets			42			42			—			—			—
Property, plant and equipment(3)	Up to 30		778			763			10			5			—
Identified intangibles:
Trade names(5)	10		47			47			—			—			—
Developed technologies(5)	3-7		76			49			12			15			—
Assembled workforces(5)	1-3		53			43			3			7			—
Other	5		1			1			—			—			—
Total identified intangibles			177			140			15			22			—
Long-term deferred taxes(4)			(75	)		(63	)		(10	)		(2	)		—
Long-term liabilities			(122	)		(119	)		(3	)		—			—
Net assets			1,781			1,632			48			34			67
In-process research and development(5)			59			52			—			7			—
Net Purchase Price		$	1,840		$	1,684		$	48		$	41		$	67

(1) Acquired current assets included cash and cash equivalents, accounts receivable, inventories and other current assets. The fair values of current assets generally approximated the recorded historic book values. Short-term investments were valued based on quoted market prices. Inventory values were estimated based on the current market value of the inventories less completion costs and less a profit margin for activities remaining to be completed until the inventory is sold. Valuation allowances were established for current deferred tax assets in excess of long-term deferred tax liabilities. Assumed current liabilities included accounts payable, accrued compensation and expenses and accrued income taxes. The fair values of current liabilities generally approximated the historic recorded book values because of the monetary nature of most of the liabilities.

(2) The value of individual long-term equity investments was based upon quoted market prices, where available, and where market prices were not available, an independent appraisal was performed to estimate the fair values of the individual investments.

(3) New SAC obtained an independent valuation of the acquired property, plant and equipment. In arriving at the determination of market value for these assets, the appraisers considered the estimated cost to construct or acquired comparable property. Machinery and equipment were assessed using replacement cost estimates reduced by depreciation factors representing the condition, functionality and operability of the assets. The sales comparison approach was used for office and data communication equipment. Land, land improvements, buildings and building and leasehold improvements were valued based upon discussions with knowledgeable independent personnel.

(4) Long-term deferred tax liabilities arose as a result of the excess of the fair values of inventory and acquired intangible assets over their related tax basis. Seagate Technology Holdings has $434 million of federal and state deferred tax assets for which a full valuation allowance has been established.

(5) New SAC obtained an independent valuation of acquired identified intangibles. The significant assumptions relating to each category are discussed in the following paragraphs. Also, these assets are being amortized on the straight-line basis over their estimated useful life and resultant amortization is included in amortization of goodwill and other intangibles.

Trade names.     The value of the trade names was based upon discounting to their net present value the licensing income that would arise by charging the operating businesses that use the trade names.

Developed technologies.    The value of this asset for each operating business was determined by discounting to their net present value the expected future cash flows attributable to all existing

39

technologies which had reached technological feasibility, after considering risks relating to: (1) the characteristics and applications of the technology, (2) existing and future markets and (3) life cycles of the technologies. Estimates of future revenues and expenses used to determine the value of developed technology were consistent with the historical trends in the industry and expected performance.

Assembled workforces.    The value of the assembled work force was determined by estimating the recruiting, hiring and training costs to replace each group of existing employees.

In-process research and development.     The value of in-process research and development was based on an evaluation of all developmental projects using the guidance set forth in Interpretation No. 4 of Financial Accounting Standards Board, or FASB, Statement No. 2, “Accounting for Research and Development Costs” and FASB Statement No. 86, “Accounting for the Cost of Computer Software to Be Sold, Leased, or Otherwise Marketed.”

The amount was determined by: (1) obtaining management estimates of future revenues and operating profits associated with existing developmental projects, (2) projecting the cash flows and costs to completion of the underlying technologies and resultant products and (3) discounting these cash flows to their net present value.

Estimates of future revenues and expenses used to determine the value of in-process research and development were consistent with the historical trends in the industry and expected performance. The entire amount was charged to operations because related technologies had not reached technological feasibility and they had no alternative future use.

Allocation of Purchase Price to Seagate Technology Holdings Pursuant to the Application of Push Down Accounting

The November 2000 transactions constituted a purchase transaction by New SAC of Seagate Technology, Inc. for accounting purposes. Under purchase accounting rules, the net purchase price under these transactions has been allocated to the acquired assets and liabilities of Seagate Technology, Inc. and its subsidiaries based on their estimated fair values at the date of the November 2000 transactions. However, the estimated fair values of identifiable tangible and intangible assets and liabilities of Seagate Technology, Inc. and its subsidiaries at the date of the November 2000 transactions were greater than the amount paid, resulting in negative goodwill. The negative goodwill has been allocated to the long-lived tangible and intangible assets, including Seagate Technology Holdings’ assets, on the basis of relative fair values. The fair values of tangible and intangible assets, including in-process research and development, have been determined based upon independent appraisals.

The accounting for the purchase transaction has been “pushed down” from New SAC to Seagate Technology Holdings’ financial statements. Seagate Technology Holdings’ June 29, 2001 condensed consolidated financial statements reflect the new basis in its assets and liabilities at that date in accordance with the pushed down purchase accounting adjustments, followed by the results of operations and financial position for the period from November 23, 2000 to June 29, 2001.

As a result of the November 2000 transactions and the push down accounting, Seagate Technology Holdings’ results of operations following the November 2000 transactions, particularly the depreciation and amortization charges, are not necessarily comparable to its predecessors’ results of operations prior to the November 2000 transactions. Depreciation charges following the November 2000 transactions are lower as a result of write-downs of Seagate Technology Holdings’ depreciable assets pursuant to purchase accounting rules. The favorable effect on results of operations from these lower charges will gradually decrease in future periods as Seagate Technology Holdings’ older assets become fully depreciated and new, higher-priced assets are acquired.

40

Prior Acquisitions

New SAC and its predecessor entered into several business combinations during the last three fiscal years, including the acquisition of XIOtech Corporation in fiscal year 2000. In connection with this and other transactions, New SAC’s predecessor and Seagate Technology Holdings’ predecessor recognized significant write-offs of in-process research and development. Management is primarily responsible for estimating the fair value of the purchased in-process research and development in all transactions accounted for under the purchase method.

Acquisition of XIOtech Corporation.    Seagate Technology, Inc. acquired XIOtech Corporation, a provider of virtual storage and storage area network solutions, in January 2000, in exchange for 8,031,804 shares of its common stock issued from treasury shares and options to purchase its common stock with a combined fair value of $359 million. Seagate Technology, Inc. accounted for this acquisition as a purchase and, accordingly, the results of operations of XIOtech have been included in Seagate Technology, Inc.’s consolidated financial statements, as well as those of Seagate Technology Holdings’ predecessor, from the date of the acquisition. The purchase price has been allocated based on the estimated fair market value of net tangible and intangible assets acquired and in-process research and development costs. As a result of the acquisition, Seagate Technology Holdings’ predecessor incurred a one-time write-off of in-process research and development of $105 million in fiscal year 2000. Amortization of goodwill and other intangibles was $19 million in fiscal year 2001, including $4 million for developed technology contained in cost of sales. Since its acquisition, XIOtech’s revenue and expenses have not been material to the consolidated revenue and expenses of New SAC and its predecessor, Seagate Technology, Inc., or of Seagate Technology Holdings and its predecessor.

As noted above, XIOtech is not subject to the restrictive covenants and the other provisions in the indenture that governs the notes and is not a guarantor under the credit agreement that governs the new senior secured credit facilities. The indenture that governs the notes and the new credit agreement do, however, permit us to invest in third parties, subject to financial and other limitations, including investments in XIOtech.

Investments

In fiscal year 2000, various marketable equity securities held by the predecessor of Seagate Technology Holdings, including securities issued by SanDisk Corporation, Gadzoox Networks, Inc., Veeco Instruments, Inc. and LHSP, were marked to market resulting in a $95 million unrealized gain, net of taxes. Seagate Technology Holdings records unrealized gains and losses on the mark to market of investments as a component of accumulated other comprehensive income and makes appropriate adjustments to the value of these assets. The investments are subject to changes in valuation based upon the market price of their common stock.

In fiscal year 2000, the predecessor of Seagate Technology Holdings sold 10,675,000 shares of SanDisk common stock, adjusted for a 2 for 1 stock split on February 23, 2000, for proceeds of $680 million, net of underwriting discounts and commissions. The sale of shares of SanDisk common stock in fiscal year 2000 resulted in a pre-tax gain of $679 million.

In fiscal year 2000, the predecessor of Seagate Technology Holdings recognized gains of $199 million on the exchange of some investments in equity securities. Specifically, the gain related to (1) the exchange of shares of stock of Dragon Systems for shares of stock of LHSP in connection with the merger of Dragon Systems and LHSP and (2) the exchange of shares of stock of CVC, Inc. for shares of stock of Veeco Instruments, Inc. in connection with the merger of CVC and Veeco. The shares of stock in LHSP, Gadzoox and Veeco were not acquired by New SAC in the November 2000 transactions under the stock purchase agreement. In addition, in fiscal year 2000, the predecessor of Seagate Technology Holdings recognized a charge of $64 million related to the settlement of litigation.

41

In the period from July 1, 2000 to November 22, 2000, the predecessor of Seagate Technology Holdings recognized gains on the sales of investments in SanDisk common stock and Veeco of $102 million and $20 million, respectively.

The investments described above, to the extent they were still owned by Seagate Technology, Inc. and its subsidiaries as of the closing of the November 2000 transactions, were acquired by VERITAS as a part of the November 2000 transactions.

Results of Operations

We list in the first table below the consolidated statements of operations data for Seagate Technology Holdings’ predecessor for fiscal years 1999 and 2000, the combined consolidated statements of operations data for Seagate Technology Holdings and its predecessor for fiscal year 2001 and the nine months ended March 30, 2001 and the consolidated statements of operations data for Seagate Technology Holdings for the nine months ended March 29, 2002.

We list in the second table below the consolidated statements of operations data as a percentage of revenue for Seagate Technology Holdings’ predecessor for fiscal years 1999 and 2000, the combined consolidated statements of operations data as a percentage of revenue for Seagate Technology Holdings and its predecessor for fiscal year 2001 and the nine months ended March 30, 2001 and the consolidated statements of operations data as a percentage of revenue for Seagate Technology Holdings for the nine months ended March 29, 2002.

As the operations of Seagate Technology Holdings are substantially identical to what the operations of its predecessor, which consisted of the rigid disc drive and storage area networks businesses of Seagate Technology, Inc., were prior to the November 2000 transactions, we have combined the results of its predecessor from July 1, 2000 to November 22, 2000 and the results of Seagate Technology Holdings from November 23, 2000 to June 29, 2001 and from November 23, 2000 to March 30, 2001 in the tables and the discussions below for easier comparison with the results of Seagate Technology Holdings’ predecessor for fiscal years 1999 and 2000 and Seagate Technology Holdings for the nine months ended March 29, 2002. We therefore refer to the results of operations for the fiscal year ended June 29, 2001 and the nine months ended March 30, 2001 as “combined” in the discussion below. References to “we,” “us” and “our” in the discussion below refer to Seagate Technology Holdings and its subsidiaries or, where applicable, to the predecessor of Seagate Technology Holdings and its subsidiaries.

	Fiscal Year								Nine Months Ended
	1999		2000			2001			Mar. 30, 2001			Mar. 29, 2002
Revenue	$	6,180	$	6,073		$	5,966		$	4,752		$	4,614
Cost of revenue		4,902		4,820			4,959			3,999			3,368
Gross margin		1,278		1,253			1,007			753			1,246
Product development		566		663			797			640			492
Marketing and administrative		345		424			738			666			302
Amortization of goodwill and other intangibles		20		33			32			27			15
In-process research and development		2		105			52			52			—
Restructuring		59		206			85			73			4
Unusual items		75		107			—			—			—
Income (loss) from operations		211		(285	)		(697	)		(705	)		433
Other income (expense), net		64		926			(22	)		(19	)		(30	)
Income (loss) before income taxes		275		641			(719	)		(724	)		403
Provision for (benefit from) income taxes		61		275			(197	)		(195	)		52
Net income (loss)	$	214	$	366		$	(522	)	$	(529	)	$	351

42

	Percentage of Revenue
	Fiscal Year						Nine Months Ended
	1999		2000		2001		Mar. 30, 2001		Mar. 29, 2002
Revenue	100	%	100	%	100	%	100	%	100	%
Cost of revenue	79		79		83		84		73
Gross margin	21		21		17		16		27
Product development	9		11		13		13		11
Marketing and administrative	6		7		12		14		7
Amortization of goodwill and other intangibles	—		1		1		1		—
In-process research and development	—		2		1		1		—
Restructuring	1		3		1		2		—
Unusual items	1		2		—		—		—
Income (loss) from operations	4		(5	)	(11	)	(15	)	9
Other income (expense), net	1		15		—		—		—
Income (loss) before income taxes	5		10		(11	)	(15	)	9
Provision for (benefit from) income taxes	1		4		(3	)	(4	)	1
Net income (loss)	4	%	6	%	(8	)%	(11	)%	8	%

Nine Months Ended March 29, 2002 Compared to Nine Months Ended March 30, 2001

Revenue.    Revenue for the nine months ended March 29, 2002 was $4.614 billion, as compared with $4.752 billion for the combined nine months ended March 30, 2001. The decrease in revenue was primarily due to approximately $0.4 billion in price erosion, which was substantially offset by approximately $0.3 billion in improved unit sales volume and product mix. Our overall average unit sales price on our rigid disc drive products was $118, $109 and $111 for the first three quarters of fiscal year 2002, respectively. Average price erosion from the nine months ended March 30, 2001 to the nine months ended March 29, 2002 was approximately 19%. We expect that price erosion in the data storage industry will continue for the foreseeable future. Industry competition and continuing price erosion could adversely affect our results of operations in any given quarter and such adverse effects often cannot be anticipated until late in any given quarter. Furthermore, we believe that our results of operations could be adversely affected by the declining demand for information technology products in both the personal storage and enterprise sectors of the market. 

Gross Margin.    Gross margin as a percentage of revenue for the nine months ended March 29, 2002 was 27% as compared with 16% for the combined nine months ended March 30, 2001. Excluding the negative impact in the combined nine months ended March 30, 2001 of $265 million of compensation expense from the acceleration of stock options and $131 million of increased costs due to our higher basis in beginning inventory, both of which occurred in connection with the November 2000 transactions, gross margin as a percentage of revenue for the nine months ended March 30, 2001 would have been 24%. Additionally, our gross margin as a percentage of revenue for the nine months ended March 29, 2002 is approximately two percentage points higher on a net basis than it would have been due to lower charges to cost of sales for depreciation resulting from write-downs to fair value of our depreciable assets in connection with the November 2000 transactions. Excluding the effect of the lower charges to cost of sales, the increase in gross margin as a percentage of revenue for the nine months ended March 29, 2002 compared to the combined comparable year-ago period was primarily due to improved unit sales volume and product mix as well as ongoing cost savings as a result of our restructuring activities and our program to implement operational efficiencies.

43

Product Development Expenses.    Product development expenses decreased by $148 million for the nine months ended March 29, 2002 when compared with our combined comparable year-ago period. The decrease in product development expenses from the combined comparable year-ago period was primarily due to:

· $116 million in compensation expense related to the acceleration of stock options in connection with the November 2000 transactions in the year-ago period;

· $24 million in pre-production expenses as a result of our restructuring activities;

· $17 million as a result of consolidating our disc drive design centers; and

· $10 million in depreciation expense as a result of revaluing our depreciable assets in connection with the November 2000 transactions.

These decreases were partially offset by increases of $11 million in information technology expenses and $10 million in salaries and wages.

Marketing and Administrative Expenses.    Marketing and administrative expenses decreased by $364 million for the nine months ended March 29, 2002 when compared with our combined comparable year-ago period. The decrease in marketing and administrative expenses from the combined comparable year-ago period was primarily due to $185 million in compensation expense related to the acceleration of stock options in connection with the November 2000 transactions and $123 million in charges related to the November 2000 transactions, both in the year-ago period, as well as a decrease of $21 million in information technology expenses. The $123 million in charges related to the November 2000 transactions included $40 million in management and advisory fees paid to selected members of our sponsor group at the time of the closing.

Amortization of Goodwill and Other Intangibles.    Amortization of intangibles decreased by $12 million for the nine months ended March 29, 2002 when compared with our combined comparable year-ago period. The decrease in amortization was primarily due to a revaluation and write down of intangible assets to fair values in connection with the November 2000 transactions.

Net Other Income (Expense).    Net other expense increased by $11 million for the nine months ended March 29, 2002 when compared with our combined comparable year-ago period. The increase in net other expense from the combined comparable year-ago period was primarily due to a $102 million gain on the sale of SanDisk stock and a $20 million gain on the sale of Veeco stock, each previously held by Seagate Technology, Inc., in the combined comparable year-ago period and a decrease of $56 million in interest income as a result of lower average cash invested in the nine-month period ended March 29, 2002. These items were partially offset by a $138 million loss on LHSP stock, an $8 million loss on Gadzoox Networks, each previously held by Seagate Technology, Inc., and an $8 million loss on short-term investments in the nine months ended March 30, 2001.

Income Taxes.    We recorded a provision for income taxes of $52 million for the nine months ended March 29, 2002. The effective tax rate used to record the provision for income taxes differs from the U.S. federal statutory rate primarily due to the net effect of income generated from our manufacturing plants located in China, Malaysia, Singapore and Thailand that operate under tax holidays (scheduled to expire in whole or in part at various dates through 2010) and, accordingly, are not currently subject to tax, an increase in our valuation allowance for the domestic deferred tax assets of some of our subsidiaries and the realization of tax credits. As a result of the November 2000 transactions and the ensuing corporate structure, we now have a foreign parent holding company with various domestic and foreign affiliates. Our foreign parent has elected to be treated as a pass-through entity for U.S. tax purposes and is not expected to be subject to U.S. federal income taxes on dividends or other earnings distributions that it may receive from our foreign subsidiaries. Dividend distributions by our U.S. subsidiaries to our foreign parent may be subject to U.S. withholding taxes when and if distributed. A substantial portion of our manufacturing operations located in the Far East currently operate free from tax under various tax holidays. Based on our foreign ownership structure and subject to potential future increases in our valuation allowance for domestic deferred tax assets, we anticipate that our effective tax rate in future periods will generally be less than the U.S. federal statutory rate.

44

We recorded an $11 million provision for income taxes for the period from November 23, 2000 to March 30, 2001. The $11 million provision for income taxes differs from the benefit from income taxes that would be derived by applying the U.S. federal statutory rate to the loss before income taxes primarily due to the net effect of nondeductible charges related to the acquisition of the operating assets of Seagate Technology, Inc., an increase in our valuation allowance for domestic deferred tax assets and the income generated from our manufacturing plants located in China, Malaysia, Singapore and Thailand that operate under tax holidays and, accordingly, are not subject to tax.

In connection with the purchase of the operating assets of Seagate Technology, Inc., we recorded a $434 million valuation allowance for deferred tax assets. The $434 million of deferred tax assets subject to the valuation allowance arose primarily as a result of the excess of tax basis over the fair values of acquired property, plant and equipment and as a result of liabilities assumed for which we expect to receive tax deductions in our federal and state returns in future periods. We also recorded $63 million of deferred tax liabilities as a result of the excess of the fair market value of inventory and acquired intangible assets over their related tax bases. Our realization of the tax benefits for the federal and state deferred tax assets subject to the valuation allowance will depend primarily on our ability to generate sufficient taxable income in the United States in future periods. We are currently in the process of evaluating and updating our forecasts of projected domestic taxable income to determine the amount of deferred tax assets that management believes would more likely than not be realizable. We anticipate completing this process in the fourth quarter of fiscal year 2002. We anticipate that the tax benefits of the deferred tax assets when realized will first result in an adjustment to increase the amount of unamortized negative goodwill relating to the purchase and will be allocated on a pro rata basis to reduce the purchase price of remaining long-lived assets acquired. As a result, future depreciation and amortization expense will be reduced. Any excess tax benefit after reduction of the acquired long-lived assets to zero would then be realized as a reduction of future income tax expense in the period the tax benefits are realized.

Our predecessor recorded a benefit from income taxes of $206 million for the period from July 1, 2000 to November 22, 2000. The recorded benefit from income taxes differs from the benefit from income taxes that would be derived by applying the U.S. federal statutory rate to the loss before income taxes primarily due to certain losses recorded in connection with the sale by Seagate Technology, Inc. of its operating assets located in the Far East that were not deductible for U.S. tax purposes.

A substantial portion of our predecessor’s Far East manufacturing operations at plant locations in China, Malaysia, Singapore and Thailand operated under various tax holidays that are scheduled to expire in whole or in part at various dates through 2010. As of November 22, 2000, our predecessor’s foreign manufacturing subsidiaries had approximately $3.050 billion of undistributed foreign earnings of which approximately $1.722 billion were considered permanently reinvested offshore. In connection with the sale of the operating assets of Seagate Technology, Inc., approximately $1.650 billion of the unremitted foreign earnings were deemed to be distributed for U.S. tax purposes to Seagate Technology, Inc.’s U.S. parent. Seagate Technology, Inc. had previously recorded deferred income tax liabilities of approximately $542 million for its foreign earnings not considered permanently reinvested offshore. The deferred tax liabilities were eliminated and the remaining unremitted earnings of our predecessor’s foreign subsidiaries will no longer be subject to U.S. corporate level tax if remitted to our foreign parent holding company after November 22, 2000.

Fiscal Year Ended June 29, 2001 Compared to Fiscal Year Ended June 30, 2000

Revenue.    Combined revenue in fiscal year 2001 was $5.966 billion, 2% lower than revenue in fiscal year 2000. The decrease in revenue from the prior year was primarily due to $1.0 billion related to price erosion, which was partially offset by $0.9 billion related to higher unit sales volumes particularly in the first and second quarters of fiscal year 2001. Our results of operations were adversely affected by the declining demand for information technology products in both the personal storage and enterprise sectors of the market. Revenue and the number of units sold declined 15% and 16%, respectively, in the fourth quarter of fiscal year 2001 as compared with the third quarter of fiscal year 2001. Our overall average unit sales price on our rigid disc drive

45

products was $140, $149, $127, and $125 for the four quarters of fiscal year 2001, respectively. Average price erosion from fiscal year 2000 to fiscal year 2001 was approximately 8%.

Gross Margin.    Combined gross margin as a percentage of revenue for fiscal year 2001 was 17%, as compared with gross margin as a percentage of revenue of 21% for the fiscal year 2000. Combined gross margin was impacted negatively in fiscal year 2001 by charges related to the November 2000 transactions. These charges included higher cost of sales due to inventories written up to fair value pursuant to purchase accounting rules and compensation charges related to the acceleration of stock options. These increased charges were partially offset by lower charges to cost of sales for depreciation as a result of write-downs to fair value of our depreciable assets pursuant to purchase accounting rules. Excluding these charges, our combined gross margin as a percent of revenue would have been approximately 22%, or approximately five percentage points higher on a net basis than it was for fiscal year 2001. The increase in combined gross margin as a percentage of revenue, after excluding these charges, was primarily due to ongoing cost savings as a result of our restructuring activities and our program to implement operational efficiencies. These efficiencies include implementation of advanced manufacturing processes resulting in lower average unit costs per disc drive produced.

Product Development Expenses.    Combined product development expenses for fiscal year 2001 increased by $134 million or 20% when compared with fiscal year 2000, primarily due to increases of $116 million in compensation expense related to the acceleration of stock options, $13 million in information technology expenses, $8 million in materials costs and $4 million in recruitment and relocation costs. These increases were partially offset by decreases of $5 million in depreciation expense and $5 million in employee profit sharing and management bonuses. The acceleration of stock options was in connection with the closing of the November 2000 transactions. Excluding those items related to the closing of the November 2000 transactions, our combined product development expenses as a percentage of revenue for both fiscal year 2001 and fiscal year 2000 would have been 11%.

Marketing and Administrative Expenses.    Combined marketing and administrative expenses for fiscal year 2001 increased by $314 million or 74% when compared with fiscal year 2000, primarily due to increases of:

· $185 million in compensation expenses related to the acceleration of stock options in connection with the closing of the November 2000 transactions;

· $123 million in costs relating to the November 2000 transactions;

· $37 million in salaries and related costs;

· $27 million in outside services;

· $24 million in advertising and promotion costs; and

· $12 million in equipment expenses.

These increases were partially offset by decreases of $90 million in depreciation expense and $19 million in occupancy costs as a result of the implementation of restructuring activities and the write down to fair value of our assets at the date of acquisition. Excluding those items related to the closing of the November 2000 transactions, our combined marketing and administrative expenses as a percentage of revenue for both fiscal year 2001 and fiscal year 2000 would have been 7%.

In-process Research and Development.    The $52 million charge to in-process research and development in fiscal year 2001 was in connection with the November 2000 transactions. The $105 million charge to in-process research and development in fiscal year 2000 was in connection with the acquisition of XIOtech Corporation.

Amortization of Goodwill and Other Intangibles.    Combined amortization of goodwill and other intangibles for fiscal year 2001 decreased by $1 million or 3% when compared with fiscal year 2000, primarily due to reduced amortization in fiscal year 2001 resulting from a revaluation of assets in November 2000 as a result of the November 2000 transactions.

46

Restructuring Charges.    As a result of the November 2000 transactions, we assumed all restructuring liabilities previously recorded by our predecessor, including $41 million related to restructuring activities announced in fiscal year 2000 and $3 million related to restructuring activities announced in fiscal year 2001. In fiscal year 2001, we recorded restructuring charges totaling $107 million and reversed $22 million of our restructuring accruals comprised of:

· $11 million of restructuring reserves recorded in the same period;

· $5 million of restructuring reserves recorded in fiscal year 2000;

· $2 million of restructuring reserves recorded in fiscal year 1999; and

· $4 million of restructuring reserves recorded in fiscal year 1996.

This resulted in a net restructuring charge of $85 million. These reversals of previously recorded reserves were related to better estimates as the activities were completed. Of the $107 million, $98 million was a result of a restructuring plan established to continue the alignment of our global workforce and manufacturing capacity with existing and anticipated future market requirements, primarily in our Far East operations in Thailand and Malaysia. We refer to this plan as the fiscal year 2001 restructuring plan. The remaining $9 million consisted of a $3 million employee termination benefit adjustment to the original estimate related to the fiscal year 2000 restructuring plan and $6 million in additional restructuring charges for adjustments to original lease termination cost estimates to the fiscal year 1998 restructuring plan. The fiscal year 2001 restructuring plan included workforce reductions, capacity reductions including closure of facilities or portions of facilities, write-off of excess equipment and consolidation of operations. Prior to these restructuring activities, there was no indication of permanent impairment of the assets associated with the closure and consolidation of facilities. In connection with the fiscal year 2001 restructuring plan, we planned to reduce our workforce by approximately 9,900 employees, primarily in manufacturing. All of the 9,900 employees had been terminated as of March 29, 2002. As a result of employee terminations and the write-off of equipment and facilities in connection with the fiscal year 2001 restructuring plan, we estimate that after completion of these restructuring activities, annual salary and depreciation expense have been reduced by approximately $100 million and $14 million, respectively. The fiscal year 2001 restructuring plan was substantially complete at December 28, 2001.

Net Other Income (Expense).    Combined net other income decreased by $948 million to combined net other expense of $22 million for fiscal year 2001 when compared with net other income of $926 million for fiscal year 2000. The decrease in combined net other income from fiscal year 2000 was primarily due to gains on sales of SanDisk stock and investments in equity securities, previously held by our predecessor, of $679 million and $199 million in fiscal year 2000, respectively, the $138 million loss on the LHSP investment and the $8 million loss on the Gadzoox Networks investment, each in fiscal year 2001, a decrease in interest income of $13 million as a result of lower average cash invested in fiscal year 2001 and an increase of interest expense of $26 million as a result of the debt incurred in the November 2000 transactions. These decreases were partially offset by a $102 million gain on the sale of SanDisk stock, and a $20 million gain on the sale of Veeco stock in fiscal year 2001.

Income Taxes.    We recorded a $9 million provision for income taxes for the period from November 23, 2000 to June 29, 2001. The $9 million provision for income taxes differs from the benefit from income taxes that would be derived by applying the federal statutory rate to the loss before income taxes primarily due to the net effect of nondeductible charges related to the acquisition of the operating assets of Seagate Technology, Inc., an increase in our allowance for domestic deferred tax assets, and income generated from our manufacturing plants located in China, Malaysia, Singapore and Thailand that operate under tax holidays (scheduled to expire in whole or in part at various dates through 2010) and, accordingly, are not currently subject to tax. As a result of the November 2000 transactions and our ensuing corporate structure, we now have a foreign parent holding company with various domestic and foreign affiliates. Our foreign parent has elected to be treated as a pass-through entity for U.S. tax purposes and is not expected to be subject to U.S. federal income taxes on dividends or other earnings distributions that it may receive from our foreign subsidiaries. Dividend distributions by our U.S.

47

subsidiaries to our foreign parent may be subject to U.S. withholding taxes when and if distributed. A substantial portion of our manufacturing operations located in the Far East currently operate free from tax under various tax holidays. Based on our new foreign ownership structure and subject to potential future increases in our valuation allowance for domestic deferred tax assets, we anticipate that our effective tax rate in future periods will generally be less than the U.S. federal statutory rate.

In connection with the purchase of the operating assets of Seagate Technology, Inc., we recorded a valuation allowance for deferred tax assets of $434 million. The $434 million of deferred tax assets subject to the valuation allowance arose primarily as a result of the excess of tax basis over the fair values of acquired property, plant and equipment and as a result of liabilities assumed for which we expect to receive tax deductions in our federal and state returns in future periods. We also recorded $63 million of deferred tax liabilities as a result of the excess of the fair market value of inventory and acquired intangible assets over their related tax basis. Our realization of the tax benefits for the federal and state deferred tax assets subject to the valuation allowance will depend primarily on our ability to generate sufficient taxable income in the United States in future periods, the timing and amount of which are uncertain. We anticipate that the tax benefits of the deferred tax assets when realized will first result in an increased adjustment to the amount of unamortized negative goodwill that has been allocated on a pro rata basis to reduce the purchase price of remaining long-lived assets acquired. As a result, future depreciation and amortization expense will be reduced. Any excess tax benefit after reduction of the acquired long-lived assets to zero would then be realized as a reduction of future income tax expense in the period the tax benefits are realized.

Our predecessor recorded a benefit from income taxes of $206 million for the period from July 1, 2000 to November 22, 2000. The recorded benefit from income taxes differs from the benefit from income taxes that would be derived by applying the federal statutory rate to the loss before income taxes primarily due to losses recorded in connection with the sale by Seagate Technology, Inc. of its operating assets located in the Far East that were not deductible for U.S. tax purposes and the write-off of deferred tax assets that could not be recognized in the federal and state tax returns of our predecessor for the taxable year ended November 22, 2000.

As of November 22, 2000, our predecessor’s foreign manufacturing subsidiaries had approximately $3.050 billion of undistributed foreign earnings of which approximately $1.722 billion were considered permanently reinvested offshore. In connection with the sale of the operating assets of Seagate Technology, Inc., approximately $1.650 billion of the unremitted foreign earnings were deemed to be distributed for U.S. tax purposes to the U.S. parent. Seagate Technology, Inc. had previously recorded deferred income tax liabilities of approximately $542 million for its foreign earnings not considered permanently reinvested offshore. The deferred tax liabilities were eliminated and the remaining unremitted earnings of our predecessor’s foreign subsidiaries will no longer be subject to U.S. corporate level tax if remitted to our foreign parent holding company after November 22, 2000.

Our predecessor recorded a $275 million provision for income taxes for the fiscal year ended June 30, 2000. The $275 million provision for income taxes differed from the provision for income taxes that would be derived by applying the federal statutory rate to income before taxes primarily due to in-process research and development expenses that were not deductible for tax purposes, partially offset by the benefit related to research and development tax credits.

Our predecessor provided for income taxes at the U.S. federal statutory rate of 35% on substantially all of its current year foreign earnings for fiscal year 2000. A substantial portion of our Far East manufacturing operations at plant locations in China, Malaysia, Singapore and Thailand operate under various tax holidays, which expire in whole or in part at various dates through 2010. The tax holidays had no impact on net income in fiscal year 2000. Cumulative undistributed earnings of our Far East subsidiaries for which no income taxes were provided aggregated approximately $1.631 billion at June 30, 2000. These earnings were considered to be permanently invested in non-U.S. operations. Additional federal and state taxes of approximately $584 million would have had to be provided if these earnings had been repatriated to the United States in fiscal year 2000.

48

Fiscal Year Ended June 30, 2000 Compared to Fiscal Year Ended July 2, 1999

Revenue.    Revenue in fiscal year 2000 was $6.073 billion, 2% lower than revenue in fiscal year 1999. The decrease in revenue from the prior year was due primarily to a continuing decline in the average unit sales prices of our products as a result of intensely competitive market conditions and a shift in product mix away from our higher priced products. The decrease in average unit sales price and effect of the shift in mix on revenue was partially offset by a higher level of unit shipments, an increase of 28% as compared to fiscal year 1999. Our predecessor’s overall average unit sales prices on rigid disc drive products was $160, $148, $140 and $140 for the four quarters of fiscal year 2000, respectively. Average price erosion from fiscal year 1999 to fiscal year 2000 was approximately 23%.

Gross Margin.    Gross margin was 21% of revenue in both fiscal year 2000 and fiscal year 1999. In fiscal year 2000, gross margin as a percentage of revenue was negatively affected as a result of price erosion due to intense price competition, as discussed in the paragraph above. However, this was offset by cost savings as a result of our restructuring activities and our program to implement operational efficiencies. These efficiencies included implementation of advanced manufacturing processes resulting in lower average unit costs per rigid disc drive produced.

Product Development Expenses.    Product development expenses for fiscal year 2000 increased by $97 million, or 17%, compared with fiscal year 1999, primarily due to increases of $66 million in salaries and related costs, $33 million in depreciation expense and $2 million in occupancy costs. These expenses were offset by decreases of $4 million in equipment expense and $3 million in recruitment and relocation costs.

Marketing and Administrative Expenses.    Marketing and administrative expenses for fiscal year 2000 increased by $79 million, or 23% when compared with fiscal year 1999, primarily due to increases of $36 million in salaries and related costs, $30 million in outside services, $3 million in travel and entertainment, $2 million in commissions, $2 million in employee profit sharing, $2 million in depreciation and $2 million in equipment expenses.

Amortization of Goodwill and Other Intangibles.    Amortization of goodwill and other intangibles increased by $13 million, or 65%, when compared with fiscal year 1999, primarily due to additional amortization of $15 million related to goodwill and intangibles arising from the acquisition of XIOtech in January 2000 offset by $3 million in write-offs in fiscal year 1999 of intangible assets related to past acquisitions of companies whose value had become permanently impaired.

Restructuring Charges.    In fiscal year 2000, we recorded restructuring charges of $216 million, net of $2 million of reversals of amounts recorded in the same period, $5 million of restructuring accruals recorded in fiscal year 1999 and $3 million of restructuring accruals recorded in fiscal year 1998, resulting in a net restructuring charge of $206 million. The $206 million restructuring charge was a result of a restructuring plan established to align our global workforce and manufacturing capacity with existing and anticipated future market requirements and was necessitated by our improved productivity and operating efficiencies. We refer to this plan as the fiscal year 2000 restructuring plan. These actions include workforce reductions, capacity reductions including closure of facilities or portions of facilities, write-off of excess equipment and consolidation of operations in our recording media operations, disc drive assembly and test facilities, printed circuit board assembly manufacturing facilities, recording head operations, software operations, customer service operations, sales and marketing activities and research and development activities. In connection with the fiscal year 2000 restructuring plan, we planned to reduce our workforce by approximately 23,000 employees primarily in manufacturing. All of the 23,000 employees had been terminated as of March 29, 2002. As a result of employee terminations and the write-off of equipment and facilities in connection with the restructuring charges recorded during fiscal year 2000 related to the fiscal year 2000 restructuring plan, we estimate that after the completion of these restructuring activities, annual salary and depreciation expense have been reduced by approximately $151 million and $40 million, respectively. The implementation of the fiscal year 2000 restructuring plan was substantially complete as of December 29, 2000. In connection with the restructuring plan implemented in fiscal

49

year 1999, our predecessor’s planned workforce reduction was completed as of March 31, 2000 and the other restructuring activities were substantially complete as of March 31, 2000.

Unusual Items.    The $107 million charge to unusual items in fiscal year 2000 consisted of a $43 million compensation charge related to our predecessor’s employees who held Seagate Software Holdings, Inc. stock in connection with the reorganization of Seagate Software Holdings and a $64 million charge related to various legal settlements.

Net Other Income.    Net other income in fiscal year 2000 increased by $862 million when compared to fiscal year 1999. The increase was primarily due to a gain on the sale of portions of our investment in SanDisk of $679 million in fiscal year 2000 as well as gains totaling $199 million on the exchange of our investments in the equity securities of Dragon Systems for those of LHSP, on the exchange of our investments in the equity securities of CVC for those of Veeco Instruments and on the exchange of our investments in the equity securities of iCompression for those of Globespan in fiscal year 2000.

Income Taxes.    We recorded a provision for income taxes of $275 million for fiscal year 2000 compared to a provision for income taxes of $61 million for fiscal year 1999. The effective tax rate used to record the provision for income taxes for fiscal year 2000 differed from the U.S. federal statutory rate primarily due to in-process research and development expenses that were not deductible for tax purposes, partially offset by the benefit related to research and development tax credits. The effective tax rate used to record the provision for income taxes for fiscal year 1999 differed from the U.S. federal statutory rate primarily due to the tax benefit from permanently reinvested earnings in certain foreign subsidiaries, partially offset by in-process research and development expenses that were not deductible for tax purposes.

We provided for income taxes at the U.S. federal statutory rate of 35% on substantially all of our current year foreign earnings for fiscal year 2000 compared to approximately 55% of foreign earnings for fiscal year 1999. A substantial portion of our Far East manufacturing operations at plant locations in China, Malaysia, Singapore and Thailand operate under various tax holidays, which expire in whole or in part at various dates through 2010. The tax holidays had no impact on net income in fiscal year 2000. The net impact of these tax holidays was to increase net income by approximately $34 million in fiscal year 1999. Cumulative undistributed earnings of our Far East subsidiaries for which no income taxes were provided aggregated approximately $1.631 billion at June 30, 2000. These earnings were considered to be permanently invested in non-U.S. operations. Additional federal and state taxes of approximately $584 million would have had to be provided if these earnings had been repatriated to the United States in fiscal year 2000.

Other.    We record unrealized gains and losses on the mark-to-market of our investments as a component of accumulated other comprehensive income. As of June 30, 2000 and July 2, 1999, total accumulated other comprehensive income (loss) was $86 million and $(7) million, respectively. During fiscal year 2000, several marketable equity securities held by us, including SanDisk Corporation, Gadzoox, Veeco and LHSP, were included in this mark-to-market calculation resulting in a $95 million unrealized gain, net of taxes. No similar amounts were recorded in fiscal year 1999. In July 2000, we sold our remaining investment in SanDisk for net proceeds of approximately $105 million. In November 2000, the remaining investments were contributed to VERITAS in connection with the November 2000 transactions and thus no future effects of changes in valuation will occur related to these investments.

Critical Accounting Policies

The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. The SEC has defined the most critical accounting policies as the ones that are most important to the portrayal of our financial condition and operating results, and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our most critical policies include:

50

valuation of deferred tax assets, establishment of warranty accruals, and establishment of sales program accruals. Below, we discuss these policies further, as well as the estimates and judgments involved. We also have other key accounting policies and accounting estimates relating to uncollectible customer accounts, valuation of inventory and, when we issue stock awards, the fair value of our stock. To assist us with the latter, we have engaged an outside valuation expert. We believe that these other policies and other accounting estimates either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period.

Valuation of Deferred Tax Assets.    In connection with the acquisition of the operating assets of Seagate Technology, we recorded a $434 million valuation allowance for deferred tax assets. The $434 million of deferred tax assets subject to this valuation allowance arose primarily as a result of the excess tax basis over the fair values of acquired property, plant and equipment, and liabilities assumed for which we expect to receive tax deductions in our federal and state returns in future periods. Our realization of the tax benefits from the federal and state deferred tax assets subject to the valuation allowance will depend primarily on our ability to generate sufficient taxable income in the United States in future periods, the timing of which is inherently uncertain and difficult to project notwithstanding worldwide operating profits. Each period we assess whether it is more likely than not that we will realize some or all of the $434 million in deferred tax assets. If we determine that it is more likely than not that we will receive tax benefits for some or all of the deferred tax assets, we will record an adjustment to recognize all or a portion of the deferred tax assets. This will result in an increased adjustment to the amount of unamortized negative goodwill that has been allocated on a pro rata basis to reduce the purchase price of long-lived assets acquired, and will reduce future depreciation and amortization expense. Any tax benefits in excess of the remaining long-lived assets will be recognized as a reduction of income tax expense.

Establishment of Warranty Accruals.    We estimate probable product warranty costs at the time revenue is recognized. We generally warrant our products for a period of one to five years. Our estimate considers product failure rates and trends, estimated repair costs and probable return rates. We use a statistical model to help us with our estimates. We exercise considerable judgment in the underlying estimates. Should actual experience in any period differ significantly from our estimates, our future results of operations could be materially affected.

Establishment of Sales Program Accruals.    We establish various sales programs and practices aimed at increasing customer demand. These programs are typically related to a customer’s level of sales, order sizes and advertising or point of sale activity. We provide for these obligations at the time that revenue is recorded based on estimated requirements. These estimates are based on various factors, including estimated future price erosion based on past experience and future projected market conditions, customer revenue levels, program participation and customer claim submittals. Significant variations in any of these factors could have a material effect on our operating results.

Liquidity and Capital Resources

Since the closing of the November 2000 transactions, our principal liquidity requirements have been to service our debt and meet our working capital, research and development and capital expenditure needs. As a result of the November 2000 transactions, we became significantly leveraged. Our liquidity requirements significantly increased, primarily due to increased debt service obligations. We believe that cash flow from operating activities, together with our existing cash, the proceeds of the offering of the outstanding notes and our borrowings under the new senior secured credit facilities will be sufficient to fund our currently anticipated capital, debt restructuring, debt service, working capital, and research and development requirements at least through fiscal year 2003. Our ability to fund these requirements and to comply with the financial covenants under our debt agreements will depend on our future operations, performance and cash flow. These are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control. In addition, as part of our strategy, we intend to selectively pursue strategic alliances, acquisitions and investments that are complementary to our business. Any material future acquisitions, alliances or investments will likely require additional capital.

51

As of March 29, 2002, the outstanding principal balance on our then existing senior bank debt was approximately $673 million. Substantially all of our assets, the assets of our parent company and the assets of many of our and our parent’s direct and indirect subsidiaries secured that bank debt, and we, our parent company and many of our and our parent’s direct and indirect subsidiaries wholly and unconditionally guaranteed on a joint and several basis the repayment of both that bank debt and Seagate Technology International’s 12 ¹/2% senior subordinated notes.

In May 2002, we refinanced all indebtedness under our former senior secured bank debt and entered into a new senior secured credit facility with a term loan in an aggregate principal amount of up to $350 million. The borrowers under this new senior secured credit facility are Seagate Technology HDD Holdings and Seagate Technology (US) Holdings, Inc. The new senior secured credit facilities are secured by a first priority pledge of substantially all the tangible and intangible assets of Seagate Technology HDD Holdings and many of its subsidiaries, as well as a pledge of the shares of Seagate Technology HDD Holdings and many of its subsidiaries, which in the case of non-U.S. subsidiaries of Seagate Technology (US) Holdings, Inc. is limited to a pledge of 65% of the shares of those subsidiaries, in each case subject to a number of exceptions. Seagate Technology Holdings and many of the direct and indirect subsidiaries of Seagate Technology HDD Holdings have guaranteed the obligations under the new senior secured credit agreement.

The new credit agreement contains covenants that we must satisfy in order to remain in compliance with the agreement. These covenants require us, among other things, to maintain the following ratios: (1) an interest expense coverage ratio for any period of four consecutive fiscal quarters of at least 2.50 to 1.00; (2) a fixed charge coverage ratio for any four consecutive fiscal quarters of at least (a) 1.20 to 1.00 for the period from March 30, 2002 to June 29, 2002, (b) 1.25 to 1.00 for the period from June 30, 2002 to June 29, 2003 and (c) 1.50 to 1.00 for any period after June 30, 2003; and (3) a net leverage ratio of not more than (a) 1.75 to 1.00 as of the end of any fiscal quarter during the period from March 30, 2002 to June 29, 2002, and (b) 1.50 to 1.00 as of the end of any fiscal quarter commencing on or after June 30, 2002. Non-compliance with the terms of the new credit agreement, unless cured or waived, could trigger an event of default for both the senior bank debt and the notes and require repayment of the debt, the provision of additional guarantees and collateral or other changes in terms.

In addition, subject to specified exceptions and qualifications, we and our subsidiaries that guarantee the new senior bank debt are restricted in our ability to, among other things, incur additional debt, pay dividends, repurchase equity interests, incur any liens on our assets, sell or otherwise dispose of assets, including capital stock of subsidiaries, enter into mergers or consolidations and enter into transactions with affiliates.

In connection with the new senior credit facility, we entered into a new revolving credit facility, under which $150 million is available to us. No borrowings were made under this revolving credit facility at the close of the refinancing.

In connection with the bank debt refinancing described above, Seagate Technology International launched an offer to purchase any and all of its $210 million aggregate principal amount of 12 ¹/2% senior subordinated notes and commenced a consent solicitation to obtain the consent of holders representing at least a majority of the aggregate principal amount of those notes to amend the indenture governing those notes. Those notes had not been registered under the Securities Act of 1933 and, accordingly, were subject to restrictions on transfer. While they remained subject to restrictions on transfer, Seagate Technology International was obligated to pay holders an additional $.192 per week per $1,000 principal amount of notes. The obligation to pay this additional amount would have terminated on November 23, 2002 when those notes would have become freely transferable under Rule 144(k) under the Securities Act.

Following the consummation of the tender offer for those notes, our obligations under those notes were eliminated. However, we will continue to be highly leveraged in part due to the issuance of the notes and the obligations under our new senior secured credit facility.

On or about May 20, 2002, we expect to make a distribution to our shareholders, including New SAC, to enable New SAC to make a distribution to its preferred shareholders. At the same time, distributions are expected

52

to be made to participants in Seagate Technology HDD Holdings’ and Seagate Technology SAN Holdings’ deferred compensation plans. The aggregate amount of the shareholder distribution will be approximately $167 million and the aggregate amount of the deferred compensation plan distributions is expected to be approximately $33 million. Additional shareholder and deferred compensation plan distributions may occur in the future, subject to the restrictions in the new senior secured credit agreement and the indenture governing the notes.

The net effect of the refinancing, planned distribution to shareholders and planned distribution to deferred compensation plan participants is a decrease in cash, cash equivalents and short-term investments of $428 million, consisting of an increase of $750 million from the new senior secured credit facilities and the private placement of the outstanding notes, offset by $1.178 billion of cash outlays. The cash outlays consist of $274 million for the repurchase of the outstanding 12 ¹/2% senior subordinated notes, including premium, consent fees, accrued interest and liquidated damages, $679 million for the repayment of the existing senior secured credit facilities, $25 million for refinancing fees and expenses, $167 million for the planned distribution to our shareholders and $33 million for the planned distribution to deferred compensation plan participants.

As a result of the refinancing and the planned distributions to deferred compensation plan participants, $116 million will be charged to operations. The $116 million is comprised of a $90 million loss on early extinguishment of debt, net of taxes, a $5 million loss on the interest rate swap on one of the term loans comprising the former senior secured credit facilities and a $21 million charge, net of taxes, for compensation expense related to the planned distributions to deferred compensation plan participants. The $90 million loss on early extinguishment of debt consists of a $50 million redemption premium on the 12 ¹/2% senior subordinated notes, a $31 million write-off of capitalized debt issue costs, a $7 million write-off of unamortized discount on the 12 ¹/2% senior subordinated notes and $2 million of fees and expenses incurred to tender the 12 ¹/2% senior subordinated notes.

To the extent permitted by the new credit agreement, we may also make tax distributions to our shareholders. In December 2001, New SAC declared a tax distribution of approximately $33 million payable to its shareholders of record as of December 11, 2001. The related distribution from Seagate Technology Holdings to its shareholders, including New SAC, which owns more than 99% of its shares, was made on March 19, 2002.

At March 29, 2002, our working capital was $838 million, which included cash, cash equivalents and short-term investments of $1.103 billion. The increase in cash, cash equivalents and short-term investments of $194 million from June 29, 2001 was primarily a result of $572 million of cash provided by operating activities in the nine months ended March 29, 2002, offset by expenditures of $321 million for property, equipment and leasehold improvements, $33 million for the tax distribution to New SAC shareholders and $23 million for the repayment of long-term debt. The $572 million of cash provided by operating activities is net of $33 million in additional cash paid to Seagate Technology, Inc.’s former stockholders in connection with the final accounting for the November 2000 transactions. Until required for other purposes, our cash and cash equivalents are maintained in highly liquid investments with remaining maturities of 90 days or less at the time of purchase. Our short-term investments consist primarily of readily marketable debt securities with remaining maturities of more than 90 days at the time of purchase.

Net cash provided by operating activities was $572 million for the nine months ended March 29, 2002, $390 million for fiscal year 2001, $226 million for fiscal year 2000 and $1.248 billion for fiscal year 1999. Net cash provided by operating activities for the nine months ended March 29, 2002 was primarily attributable to net income and depreciation and amortization. Net cash provided by operating activities for fiscal year 2001 was primarily attributable to a net loss more than offset by non-cash charges such as depreciation and amortization, deferred taxes and compensation expense related to accelerated vesting of stock options in connection with the November 2000 transactions. Net cash provided by operating activities for fiscal years 2000 and 1999 was primarily attributable to net income, net of non-cash adjustments such as depreciation and amortization, deferred income taxes, in-process research and development, restructuring charges and, in fiscal year 2000, gains on investments in equity securities.

Net cash provided by (used in) investing activities was ($274) million for the nine months ended March 29, 2002, ($311) million for fiscal year 2001, $173 million for fiscal year 2000 and ($695) million for fiscal year

53

1999. Net cash used in investing activities for the nine months ended March 29, 2002 was primarily attributable to expenditures for property, equipment and leasehold improvements. Net cash used in investing activities for fiscal year 2001 was primarily attributable to the purchase of the rigid disc drive operations of our predecessor, and expenditures for property, equipment and leasehold improvements, partially offset by maturities and sales of short-term investments in excess of purchases of short-term investments. Net cash provided by investing activities for fiscal year 2000 was primarily attributable to proceeds from the sale of SanDisk stock partially offset by expenditures for property, equipment and leasehold improvements. Net cash used in investing activities for fiscal year 1999 was primarily attributable to expenditures for property, equipment and leasehold improvements.

Net cash provided by (used in) financing activities was ($46) million for the nine months ended March 29, 2002, ($219) million for fiscal year 2001, $103 million for fiscal year 2000 and ($838) million for fiscal year 1999. Net cash used in financing activities for the nine months ended March 29, 2002 was primarily attributable to repayment of long-term debt and payment of a distribution to our shareholders. Net cash used in financing activities for fiscal year 2001 was primarily attributable to excess cash provided to our predecessor’s parent company, Seagate Technology, Inc., for distribution to its shareholders as a result of the November 2000 transactions and repayment of our predecessor’s senior notes and debentures, partially offset by cash provided from the issuance of our term loans under our former senior secured credit facilities and 12 ¹/2% senior subordinated notes and cash provided by our parent company, New SAC, in connection with our initial issuance of shares. Net cash provided by financing activities for fiscal year 2000 was primarily attributable to cash invested in our business by our predecessor’s parent company partially offset by repayment of intercompany loan amounts. Net cash used in financing activities for fiscal year 1999 was primarily attributable to a reduction of the investment in our business by our predecessor’s parent as it used our cash to fund its purchases of treasury stock.

During the nine months ended March 29, 2002, we invested approximately $321 million in property, equipment and leasehold improvements. The $321 million investment comprised:

· $171 million for manufacturing facilities and equipment related to our subassembly and disc drive final assembly and test facilities in the United States and the Far East;

· $90 million for our manufacturing facilities and equipment for the recording head operations in the United States, the Far East and Northern Ireland;

· $42 million to upgrade the capabilities of our thin–film media operations in the United States, Singapore and Northern Ireland; and

· $18 million for other purposes.

We anticipate investments of approximately $550 million in property and equipment for all of fiscal year 2002. We plan to finance these investments from existing cash balances and cash flows from operations.

As a result of our current and expected future level of indebtedness, our principal and interest payment obligations are, and will continue to be, substantial. The degree to which we are leveraged could materially and adversely affect our ability to obtain financing for working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances or other purposes and could make us more vulnerable to industry downturns and competitive pressures. We will require substantial amounts of cash to fund scheduled payments of principal and interest on our indebtedness, future capital expenditures and any increased working capital requirements. If we are unable to meet our cash requirements out of existing cash or cash flow from operations, we cannot assure you that we will be able to obtain alternative financing on terms acceptable to us, if at all.

As noted above, the subsidiaries of Seagate Technology Holdings that operate its storage area networks business, including XIOtech Corporation, are not subject to the restrictive covenants and other provisions in the indenture that governs the notes and are not guarantors under the credit agreement that governs the new senior secured credit facilities. The indenture governing the notes and the new credit agreement do, however, permit us to use funds generated by, or otherwise located within, the rigid disc drive business to invest in third parties,

54

subject to financial and other limitations, which could include investments in Seagate Technology Holdings’ storage area networks business as well as in other businesses owned by our parent company, New SAC.

Effects of Accounting Pronouncements

Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities” is effective for all fiscal quarters beginning after June 15, 2000 and was adopted by us in fiscal year 2001. This statement establishes accounting and reporting standards for derivative instruments and hedging activities. It requires that derivatives be recognized in the balance sheet at fair value and specifies the accounting for changes in fair value. The adoption of SFAS 133 did not have a material impact on our consolidated results of operations, financial position and cash flows.

In December 1999, the SEC issued Staff Accounting Bulletin No. 101 “Revenue Recognition in Financial Statements” (SAB 101). SAB 101 provides guidance on the recognition, presentation and disclosure of revenue in financial statements. All registrants are expected to apply the accounting and disclosures described in SAB 101. We adopted SAB 101 in the fourth quarter of fiscal 2001, retroactive to the beginning of the year. SAB 101 did not have a material impact on our consolidated results of operations, financial position and cash flows.

In March 2000, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 44, “Accounting for Certain Transactions Involving Stock Compensation—an Interpretation of APB Opinion No. 25” (FIN 44). FIN 44 clarifies the application of APB Opinion No. 25 and, among other issues, clarifies the following:

· the definition of an employee for purposes of applying APB Opinion No. 25;

· the criteria for determining whether a plan qualifies as a noncompensatory plan;

· the accounting consequence of various modifications to the terms of the previously fixed stock options or awards; and

· the accounting for an exchange of stock compensation awards in a business combination.

FIN 44 was effective July 1, 2000 and was adopted by us in fiscal year 2001. The adoption of FIN 44 did not have a material impact on our consolidated results of operations, financial position and cash flows.

In July 2001, the FASB issued SFAS No. 141, “Business Combinations” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS 141 requires that all business combinations be accounted for by the purchase method of accounting and changes the criteria for recognition of intangible assets acquired in a business combination. The provisions of SFAS 141 apply to all business combinations initiated after June 30, 2001. We do not expect that the adoption of SFAS 141 will have a material effect on our consolidated financial position or results of operations. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized; however, these assets must be reviewed at least annually for impairment. Intangible assets with finite useful lives will continue to be amortized over their respective useful lives. The standard also establishes specific guidance for testing for impairment of goodwill and intangible assets with indefinite useful lives. The provisions of SFAS 142 will be effective for our fiscal year 2003. Goodwill and intangible assets acquired after June 30, 2001 are subject immediately to the non-amortization provisions of SFAS 142. We are currently in the process of evaluating the potential impact that the adoption of SFAS 142 will have on our consolidated financial position and results of operations.

In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS 144 amends existing accounting guidance on asset impairment and provides a single accounting model for long-lived assets to be disposed of. Among other provisions, the new rules change the criteria for classifying an asset as held-for-sale. The standard also broadens the scope of businesses to be disposed of that qualify for reporting as discontinued operations, and changes the timing of recognizing losses on those operations. The provisions of SFAS 144 will be effective for our fiscal year 2003 and will be applied prospectively. We are currently in the process of evaluating the potential impact that the adoption of SFAS 144 will have on our consolidated financial position and results of operations.

55

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio and long-term debt. We do not use derivative financial instruments in our investment portfolio, but have used them to hedge floating rate debt to the extent required by our senior credit facilities.

We invest in high credit quality issuers and, by policy, limit the amount of credit exposure to any one issuer. As stated in our policy, we are averse to principal loss and ensure the safety and preservation of our invested funds by limiting default risk, market risk and reinvestment risk.

We mitigate default risk by maintaining a diversified portfolio and by investing in only high quality securities. We constantly monitor our investment portfolio and position our portfolio to respond appropriately to a reduction in credit rating of any investment issuer, guarantor or depository. We maintain a highly liquid portfolio by investing only in marketable securities with active secondary or resale markets.

We have both fixed and floating rate debt obligations. We enter into debt obligations to support general corporate purposes including capital expenditures and working capital needs. We have used derivative financial instruments to hedge a portion of our floating rate debt obligations as required under our senior credit facilities. In December 2000, we entered into a fixed rate interest rate swap agreement with a notional amount of $245 million and an interest rate of 5.43% for a term of two years. The maturity date of the swap matched the principal serial maturities on the underlying debt. Credit exposure resulting from the derivative financial instruments was diversified among various commercial banking institutions in the United States and Europe. At March 29, 2002, the outstanding interest rate swap agreement had a fair value loss position of approximately $5 million recorded as a component of other comprehensive income.

The table below presents principal (or notional) amounts and related weighted average interest rates by year of maturity for our investment portfolio, debt obligations, and interest rate swap as of March 29, 2002. All investments mature in two years or less.

	2002			2003			2004			2005			2006			Thereafter			Total			Fair Value March 29, 2002
	(in millions)
Assets
Cash equivalents:
Fixed rate	$	901																	$	901		$	899
Average interest rate		1.87	%																	1.87	%
Short-term investments:
Fixed rate	$	53		$	6		$	14											$	73		$	73
Average interest rate		1.86	%		2.74	%		3.25	%											2.20	%
Variable rate	$	52																	$	52		$	52
Average interest rate		2.01	%																	2.01	%
Total investment securities	$	1,006		$	6		$	14											$	1,026		$	1,024
Average interest rate		1.88	%		2.74	%		3.25	%											1.90	%
Long-Term Debt
Fixed rate																$	210		$	210		$	236
Average interest rate																	12.50	%		12.50	%
Floating rate:
Tranche A (LIBOR + 250 bp)				$	35		$	45		$	55		$	45					$	180		$	180
					4.50	%		4.50	%		4.50	%		4.50	%					4.50	%
Tranche B (LIBOR + 300 bp)				$	5		$	5		$	5		$	240		$	238		$	493		$	493
					4.94	%		4.94	%		4.94	%		4.94	%		4.94	%		4.94	%
Swap (3 month LIBOR)				$	245														$	245		$	(5	)
					5.43	%														5.43	%

Foreign Currency Risk

We transact business in various foreign countries. Our primary foreign currency cash flows are in emerging market countries in the Far East and in European countries. During fiscal year 2001, we did not hedge any of our local currency cash flows. All foreign currency cash flow requirements were met using spot foreign exchange transactions. We are currently reviewing the potential for hedging local currency cash flows.

56

BUSINESS

Our Company

We are a worldwide leader in the design, manufacturing and marketing of rigid disc drives. Businesses, other organizations and individuals use rigid disc drives as the primary medium for storing electronic information in computer systems ranging from desktop computers to data centers delivering information over corporate networks and the Internet. We produce a broad range of rigid disc drive products that make us a leader in both the enterprise sector of our industry, where our products are primarily used in Internet servers, mainframes and workstations, and the desktop sector, where our products are used in personal computers, or PCs.

We believe our advanced research and development capabilities, combined with our vertically integrated manufacturing facilities, provide us with a leadership position in bringing a broad range of next generation information storage products to market. Recently we have made extensive improvements to our manufacturing efficiency through our “Factory of the Future” initiative. As part of this effort, we increased the degree of automation in our manufacturing facilities while reducing the overall number of facilities we operate, reconfigured our production lines to accommodate multiple products without causing any operating disruptions and reduced worldwide employee headcount. We have successfully implemented these improvements while increasing our total unit production.

We sell our rigid disc drives primarily to major original equipment manufacturers, or OEMs, with whom we have longstanding relationships. These customers include Compaq, Dell, EMC, Hewlett-Packard, IBM and Sun Microsystems. We also have key relationships with major distributors, who sell our rigid disc drive products to small OEMs, dealers, system integrators and retailers in most geographic areas of the world.

According to Dataquest, our share of unit shipments to the desktop sector of the rigid disc drive industry in calendar year 2001 reached 25.5%, compared to 22.5% for calendar year 2000. In the enterprise sector, according to Dataquest, our market share in calendar year 2001 reached 46.9%, compared to 44.3% for calendar year 2000. For the fiscal year ended June 29, 2001, we generated combined revenue of approximately $5.966 billion, EBITDA of approximately $708 million, and a net loss of $522 million.

Industry

Increasing Demand for Electronic Data Storage

The amount of data stored and accessed electronically is growing exponentially. According to Dataquest, the total storage capacity of all rigid disc drives shipped grew by more than 98% on an annual, compounded basis between 1997 and 2001, reaching 5,200 petabytes shipped in 2001. The annual total storage capacity of all rigid disc drives to be shipped between 2002 and 2006 is expected to grow at a compounded annual rate of approximately 77%, according to Dataquest. We believe there are a number of key factors driving this demand, including:

· the rapid expansion of the Internet as a medium for information technology infrastructure related to business management, for communication and for entertainment, particularly music and video;

· the widespread adoption of enterprise applications, such as supply chain management, customer relationship management, enterprise resource management and data warehousing; and

· the continuing growth in software applications, such as databases and computer aided design programs, used by individuals and small groups that are delivered over a network from shared data servers.

Rigid disc drives are the primary devices used for storing, managing and protecting the electronic data associated with all of these applications.

57

There are currently two areas, in particular, where demand for rigid disc drives is rapidly expanding. These are advanced storage management for enterprises and consumer appliances.

Growth of Storage Area Networks and Network Attached Storage.    The need to address the dramatic expansion in data storage management requirements has spurred the evolution of new storage and data management technologies. In order to achieve improved performance in their networks, enterprises are increasingly offloading network traffic to dedicated storage area networks, or SANs. In addition, many enterprises are moving away from the use of server attached storage to network attached storage, or NAS. These solutions combine high performance storage products that are comprised principally of rigid disc drives with sophisticated software and communications technologies. We expect that the market for these solutions will grow rapidly and will result in greater opportunities for the sale of high-performance, high-capacity rigid disc drives. Dataquest estimates that the total number of rigid disc drives shipped in SAN and NAS applications will grow from 21 million units in 2002 to 42 million units in 2006.

Growth in Rigid Disc Drives for Consumer Appliances.    High performance computing and communications functions and, increasingly, rigid disc drives are being incorporated into consumer appliances such as video game consoles, including Microsoft’s Xbox, digital video recorders and advanced television set-top boxes. In addition, faster connections to the Internet and increased broadband capacity have stimulated consumers to download greater amounts of text, video and audio data. These trends have expanded the market for low cost rigid disc drives for use in new consumer and entertainment appliances. Dataquest estimates that the total number of rigid disc drives shipped in consumer appliance applications will reach 67.5 million units in 2006.

Rigid Disc Drive Manufacturing

The technology incorporated into the components that make up rigid disc drives continues to advance dramatically, resulting from improvements in read/write heads, recording media, spindle motors, integrated circuits and software. These innovations allow manufacturers to design and produce rigid disc drives with rapidly increasing storage capacity at a steeply declining cost per megabyte. Given the challenges of increasing capacity while decreasing costs, we believe success in the rigid disc drive industry increasingly favors manufacturers who pursue an integrated approach to technological innovation, product design and high-volume production.

Broadly, the rigid disc drive industry consists of independent manufacturers, who primarily produce rigid disc drives as a stand-alone product, and integrated manufacturers, who produce complete computer or other systems, which contain rigid disc drives or other information storage devices. In both cases, these manufacturers have created large scale, often global, production capabilities that combine advanced engineering and production technologies with sophisticated inventory and logistics management.

Competitive Strengths

We are one of the world’s largest manufacturers of rigid disc drives. We believe our leadership position is largely the result of our technological innovation and our manufacturing flexibility, which enable us to deliver a broad range of products and meet increases in demand. We believe that the following competitive strengths enable us to consistently meet the needs of our customers.

Technological Leadership.    We believe that we invest substantially more in research and development than our independent competitors while maintaining our strong financial performance. We have particularly focused on read/write heads and recording media, where we believe we invest more than any of our competitors. During fiscal year 2001 and for the first nine months of fiscal year 2002, we invested $797 million and $492 million, respectively, in research and development. Our size and market leadership enable us to make these investments over a broad product portfolio and to make timely improvements in product and component design, manufacturing techniques and efficiency. Through our control of key technologies, including read/write heads and recording media, and our innovations in manufacturing, we have been able to achieve competitive product

58

performance and time-to-market advantages. Some of our most recent innovations came in June of 2001, when we became the first company to ship rigid disc drives with 40 gigabytes of storage capacity per platter, and in November of 2001, when we successfully demonstrated an areal density of 100 gigabits of storage capacity per square inch.

Control Over Critical Components.    We internally design and/or manufacture several of the critical components used in our rigid disc drives that are essential to meeting the technology requirements for rapidly improving performance and storage capacity. For example, we internally design and manufacture at least 80% of the read/write heads and recording media that we use in any given quarter and assemble a significant portion of our printed circuit boards. Our control over these components provides us with several key benefits. This reduces our dependence on the research and development efforts of component suppliers, who may lag the market or fail to develop new technologies. It also allows us to accelerate our time to market for new products. Additionally, we can offer greater value to our customers by enhancing the quality of our products, meeting our customers’ precise requirements and reducing our costs. This control over critical components also enhances our supply chain management and the operation of our just-in-time inventory centers.

Low Cost Producer.    We believe that the combination of our technological leadership, our control over the design and manufacture of critical components, our vertically integrated operations and our ability to manufacture large volumes of rigid disc drives, while retaining the flexibility to rapidly integrate design changes, provides us with significant cost advantages over most of our competitors. Over the past several years we have made significant improvements to our manufacturing efficiency through our “Factory of the Future” initiative. As part of this effort, we have increased the degree of automation in our manufacturing facilities while reducing the overall number of facilities we operate, reconfigured our production lines to handle multiple products without creating operating disruptions and reduced worldwide employee headcount. We have also introduced a total quality management effort and company philosophy known as Six Sigma. Taken together, we believe these improvements place us among the leaders in our industry in terms of manufacturing efficiency.

Broad Product Offering.    We produce a broad range of enterprise and desktop rigid disc drive products that range from high-performance to low-cost applications. Our broad product range contributes to our market leadership and enables us to leverage our research and development efforts, global distribution channels and manufacturing capacity. We endeavor to design and develop our product lines to meet the precise and changing requirements of our customers, who must deliver to their end-users the right storage solutions based on application and cost. We also work to extend our technology to deliver new disc drive products in high growth areas such as SAN and NAS applications as well as consumer storage devices.

Longstanding Customer Relationships.    Our rigid disc drives are essential components of the personal computers, workstations, mainframe computers and Internet storage access and networking products manufactured by our customers. Our customers include many of the world’s leading computer OEMs and also distributors that sell our products in most geographic areas of the world. We have longstanding relationships with nearly all of the leading OEM customers for enterprise products and most of the world’s leading OEM customers for desktop products. We collaborate with many of our OEM customers in developing new and advanced storage solutions for their next generation products. Increasingly, we are becoming integrated into our customers’ supply chain management, which provides us with increased manufacturing visibility and our customers with improved inventory management capabilities.

Experienced Management Team.    Our seven most senior executive officers have an average of 20 years of experience in the information storage industry. Our management team has successfully implemented manufacturing efficiency plans resulting in increased unit production per employee and has facilitated the acquisition and integration of complementary businesses, technologies and strategic component manufacturers.

59

Business Strategy

To maintain our position as a leading manufacturer of rigid disc drives and to meet the growing unit volume and efficiency requirements of our customers, we intend to pursue the following business strategies.

Continue to Lead Technological Innovation.    We intend to further strengthen our market leading position by continuing to invest in research and development while leveraging our vertically integrated manufacturing operations. By focusing on innovation and manufacturing together, we are able to further optimize the performance of our read/write heads and recording media along with the way our rigid disc drives are assembled and the way components operate together. This is a key factor in our ability to meet the technological challenges posed by increasing storage capacity and performance while at the same time reducing costs and accelerating time to market with new products. We believe that one example of our success with this strategy is our U-Series rigid disc drive product family, which targets the market for desktop PCs costing less than $1,000. We believe that we were able to capture additional market share in this low-cost portion of the PC sector by rapidly bringing to market a product with improved storage capacity at a price suitable for this category.

Increase Manufacturing Efficiency and Flexibility.    We intend to continue our manufacturing improvement and cost reduction efforts through our “Factory of the Future” initiative. We have already significantly improved efficiency, reduced our operating expenses and enhanced the quality of the products we manufacture, all while increasing total unit production. Importantly, we believe our improved efficiency enables us to maintain our financial flexibility during industry downturns. We intend to integrate our manufacturing processes even further, allowing us to produce any of our rigid disc drive models on any of the lines at our manufacturing facilities. Our use of automation is enabling us to meet increases in demand and reduce the time it takes to implement design improvements. From July 3, 1999, the beginning of fiscal year 2000, through June 30, 2001, the beginning of fiscal year 2002, we reduced manufacturing headcount by approximately 37,000 employees and closed 14 facilities while increasing the number of units produced per headcount by approximately 169%.

Expand and Deepen Relationships with Customers. We intend to increase the strength and broaden the scope of our customer relationships by expanding our design and engineering services. Our goal is to leverage our design and engineering capabilities, together with our vertical integration, to become an integrated part of our customers’ supply chains. To implement this strategy, we intend to continue to collaborate with our major customers at the design and development stage of next generation products and to seek to add value to their end-user applications. In addition, we have established just-in-time inventory centers near many of our largest customers’ production facilities and have placed design engineers on-site with several of our largest customers.

Capitalize on Emerging Information Storage Demand.    We believe that the growth of electronic data requirements is creating the need for increased volumes of information storage products with greater capacity and other capabilities. We expect the demand for intelligent storage solutions, such as NAS devices and SANs, both of which use rigid disc drives as their primary storage medium, will increase as the need for greater network storage capacity expands. We believe that the increase in demand for these products will provide us with additional opportunities for rigid disc drive sales and will offer us greater opportunities for product differentiation. We will also continue to target potential rigid disc drive customers in growth industries, such as consumer and entertainment appliances, Internet access and networking. We are currently shipping rigid disc drives for consumer electronic products, including Microsoft’s Xbox and personal video recorders.

Continue to Pursue Select Alliances, Acquisitions and Investments.    We will continue to evaluate and selectively pursue strategic alliances, acquisitions and investments that are complementary to our business. We will continue to seek opportunities that provide us with enhanced technological expertise, new markets for rigid disc drive sales, a stronger product portfolio, increased market share, next generation products and a diversification of risk.

60

Overview of Rigid Disc Drive Technology

All rigid disc drives incorporate the same basic technology although individual products vary. One or more rigid discs are attached to a spindle assembly powered by a spindle motor that rotates the discs at a high constant speed around a hub. The discs, or recording media, are the components on which data is stored and from which it is retrieved. Each disc typically consists of a substrate of finely machined aluminum or glass with a layer of a thin-film magnetic material. Read/write heads, mounted on an arm assembly similar in concept to that of a record player, fly extremely close to each disc surface and record data on and retrieve it from concentric tracks in the magnetic layers of the rotating discs. The read/write heads are mounted vertically on an e-shaped assembly. The e-block and the recording media are mounted inside a metal casing, called the base casting.

Upon instructions from the drive’s electronic circuitry, a head positioning mechanism, or actuator, guides the heads to the selected track of a disc where the data is recorded or retrieved. Application specific integrated circuits, or ASICs, and ancillary electronic control chips are collectively mounted on printed circuit boards. Our ASICs move data to and from the read/write head and the internal controller, or interface, which communicates with the host computer. Rigid disc drive manufacturers typically use one or more of several industry standard interfaces, such as advanced technology architecture, or ATA, small computer system interface, or SCSI, and Fibre Channel.

Rigid disc drive performance is commonly assessed by five key characteristics:            

· storage capacity, commonly expressed in megabytes, gigabytes or terabytes, which is the amount of data that can be stored on the disc;

· spindle rotation speed, commonly expressed in revolutions per minute, which has an effect on speed of access to data;

· interface transfer rate, commonly expressed in megabytes per second, which is the rate at which data moves between the rigid disc drive and the computer controller;            

· average seek time, commonly expressed in milliseconds, which is the time needed to position the heads over a selected track on the disc surface; and

· media data transfer rate, commonly expressed in megabytes per second, which is the rate at which data is transferred to and from the disc.

Areal density is a measure of storage capacity per square inch on the recording surface of a disc. Current areal densities are sufficient to meet the requirements of most applications today. We expect, however, the long-term demand for increased drive capacities to increase at an accelerating rate, as audio and visual data require many multiples of the storage capacity of simple text. We have pursued, and expect to continue to pursue, a range of technologies to increase areal densities across the entire range of our products to increase drive capacities and to allow the elimination of components at a stated capacity as areal density increases, thus reducing costs.

61

Products

Rigid Disc Drives

We offer a broad range of rigid disc drive products for both the enterprise and desktop sectors of the rigid disc drive industry. We offer more than one product within each product family, and differentiate products on the basis of price/performance and form factor, or the dimensions of the rigid disc drive. Because of rapid advancements in rigid disc drive technology, product life cycles have been as short as six months. To address this issue, we introduce new products and enhancements to our product families as we develop new technology. We list in the table below our main rigid disc drive products.

Enterprise Rigid Disc Drive Products

Product Name	Fiscal Quarter Introduced	Storage Capacity (gigabytes)	Rotation Speed (RPM)	Interface
Barracuda 180	2nd Qtr 2001	181.6	7,200	SCSI/Fibre Channel
Barracuda 18XL	2nd Qtr 2000	9.1 and 18.2	7,200	SCSI/Fibre Channel
Barracuda 36ES	2nd Qtr 2001	18.4 and 36.0	7,200	SCSI/Fibre Channel
Cheetah 18LP/36HH	4th Qtr 1999	9.1, 18.0 and 36.0	10,000	SCSI/Fibre Channel
Cheetah 18XL	3rd Qtr 2000	9.1 and 18.2	10,000	SCSI/Fibre Channel
Cheetah 36LP	3rd Qtr 2000	18.2 and 36.7	10,000	SCSI/Fibre Channel
Cheetah 72HH	3rd Qtr 2000	73.4	10,000	SCSI/Fibre Channel
Cheetah 36XL	3rd Qtr 2001	9.2, 18.4 and 36.7	10,000	SCSI/Fibre Channel
Cheetah 73LP	3rd Qtr 2001	73.4	10,000	SCSI/Fibre Channel
Cheetah X15	4th Qtr 2000	18.4	15,000	SCSI/Fibre Channel
Desktop Rigid Disc Drive Products
Product Name	Fiscal Quarter Introduced	Storage Capacity (gigabytes)	Rotation Speed (RPM)	Interface
U-5 Series	1st Qtr 2001	10.2, 20.0, 30.0 and 40.0	5,400	ATA
U-6 Series	4th Qtr 2001	10.2, 20.4, 30.6, 40.8, 60.0, and 80.0	5,400	ATA
Barracuda ATA III	2nd Qtr 2001	10.2, 15.3, 20.0, 30.0 and 40.0	7,200	ATA
Barracuda ATA IV	4th Qtr 2001	20.0, 40.0, 60.0 and 80.0	7,200	ATA

Barracuda Family.    Commercial uses for Barracuda rigid disc drives include workstations, mainframes and supercomputers, network file servers, digital audio and video image processing and high-performance desktop PCs.

Cheetah Family.    Commercial uses for Cheetah rigid disc drives include Internet and e-commerce servers, data mining and data warehousing, mainframes and supercomputers, department/enterprise servers and workstations, transaction processing, professional video and graphics and medical imaging.

U-Series Family.    Commercial uses for the U-Series rigid disc drives include entry-level desktop PCs running popular office applications, entry-level PCs for government and education environments and desktop PCs connected to a mainframe server. Consumer uses for the U-Series family include entry-level PCs, home PCs purchased as second or third systems and discounted PCs sold in conjunction with an Internet service provider or other service provider. The U-Series family of rigid disc drives are also used in new market uses, including television set-top boxes, printers, copiers and arcade and other dedicated gaming uses.

Barracuda ATA Family.    Commercial and consumer uses for the Barracuda ATA family include desktop PCs used in businesses and consumer PCs used for gaming, other entertainment applications, digital photo and video editing, viewing and capturing television images and advanced spreadsheet modeling and graphics.

62

Marketing and Customers

We sell our rigid disc drive products primarily to major OEMs and distributors. OEM customers incorporate our rigid disc drives into computer systems and storage systems for resale. Distributors typically sell our rigid disc drives to small OEMs, dealers, system integrators and other resellers. Shipments to OEMs were approximately 70%, 65% and 65% of our revenue in fiscal years 2001, 2000 and 1999, respectively. Shipments to distributors were approximately 30%, 35% and 35% of our revenue in fiscal years 2001, 2000 and 1999, respectively. Sales to Compaq accounted for approximately 16%, 18% and 19% of our revenue in each of fiscal years 2001, 2000 and 1999, respectively. The stockholders of Hewlett-Packard and Compaq have approved a proposed merger between the two companies, which is expected to be consummated in the first half of 2002. See “Risk Factors—Risks Related to Our Business—Dependence on Key Customers.” Sales to EMC Corporation accounted for 13% of our revenue for fiscal year 2001. No other customer accounted for 10% or more of our revenue in fiscal years 2001, 2000 or 1999.

OEM customers typically enter into master purchase agreements with us. These agreements provide for pricing, volume discounts, order lead times, product support obligations and other terms and conditions. The term of these agreements is usually 12 to 36 months, although our product support obligations generally extend substantially beyond this period. These master agreements typically do not commit the customer to buy any minimum quantity of products, or create exclusive relationships. Deliveries are scheduled only after receipt of purchase orders. In addition, with limited lead time, customers may cancel or defer most purchase orders without significant penalty. Anticipated orders from many of our customers have in the past failed to materialize or OEM delivery schedules have been deferred or altered as a result of changes in their business needs.

Our distributors generally enter into non-exclusive agreements for the redistribution of our products. They typically furnish us with a non-binding indication of their near-term requirements and product deliveries are generally scheduled based on a weekly confirmation by the distributor of its requirements for that week. The agreements typically provide the distributors with price protection with respect to their inventory of our rigid disc drives at the time of a reduction by us in our selling price for the rigid disc drives and also provide limited rights to return the product.

Sales Offices

We maintain sales offices throughout the United States and in Australia, China, England, France, Germany, India, Ireland, Japan, Singapore, Sweden, Switzerland and Taiwan. Foreign sales are subject to foreign exchange controls and other restrictions, including, in the case of some countries, approval by the Office of Export Administration of the U.S. Department of Commerce and other U. S. governmental agencies.

Backlog

In view of customers’ rights to cancel or defer orders with little or no penalty, we believe backlog in the disc drive industry may be of limited indicative value in estimating future performance and results. Our backlog includes only those orders for which the customer has specified a delivery schedule. Because many customers place large orders for delivery throughout the year, and because of the possibility of customer cancellation of orders or changes in delivery schedules, our backlog as of any particular date is not indicative of our potential sales for any succeeding fiscal period. Our order backlog at June 29, 2001 was approximately $917 million compared with approximately $1.148 billion at June 30, 2000.

Manufacturing

Our business objectives require us to establish manufacturing capacity in anticipation of market demand. The key elements of our manufacturing strategy are as follows:

· vertical integration through the design and/or manufacturing of some of the critical components for our products to allow us to maintain as much control as possible over the cost, quality and availability of these components;

63

· high-volume and low-cost assembly and testing; and

· the establishment and maintenance of key vendor relationships.

Succeeding in the highly competitive rigid disc drive industry requires that we combine advanced technology with the capacity to manufacture significant volumes of reliable rigid disc drives at low per unit costs. To accomplish this, we must maintain our uninterrupted access to high-quality components at competitive prices and our high manufacturing efficiency.

Manufacturing our rigid disc drives is a complex process that begins with the production of individual components and ends with a fully assembled unit. The most advanced technology incorporated into rigid disc drives is found in the read/write head and the recording media. When a disc drive operates, the head scans across the disc as it spins, magnetically recording or reading information. The domains where each bit of magnetic code are stored are extremely small and precisely placed. The tolerances of the discs and recording heads are extremely demanding, and the interaction between these components is one of the most critical design aspects in a rigid disc drive.

Our read/write heads are manufactured with thin film and photolithographic processes similar to those used to produce semiconductor integrated circuits. Beginning with six inch round ceramic wafers, we process more than 25,000 head elements at one time. Each of these head elements goes through more than 300 steps, all in “clean room” environments. Our read/write heads require highly advanced processes with tolerances approaching the thickness of a single atom. The manufacturing of recording media requires sophisticated thin film processes. Each disc is a sequentially processed set of layers that consist of structural, magnetic, protective and lubricating materials. Once complete, the disc must have a high degree of physical uniformity to assure reliable and error-free storage.

The first step in the manufacture of a rigid disc drive is the assembly of the actuator arm, read/write heads, discs and spindle motor in a housing to form the head-disc assembly. The production of the head-disc assembly involves a combination of manual and semi-automated processes. After the head-disc assembly is produced, a pattern is magnetically recorded on the disc surfaces. Printed circuit boards are then mated to the head-disc assembly and the completed unit is tested prior to packaging and shipment. Final assembly and test operations of our rigid disc drives occur primarily at facilities located in China and Singapore. We perform subassembly and component manufacturing operations at our facilities in Malaysia, Northern Ireland, Singapore, Thailand and, in the United States, in California and Minnesota. In addition, third parties manufacture and assemble components for us in various Asian countries, including China, Japan, Korea, Malaysia, The Philippines, Singapore, Taiwan and Thailand, and in Europe and the United States.

Our design capabilities and vertical integration have allowed us to design, assemble and/or manufacture a number of the most important components found in our rigid disc drives, including read/write heads, recording media, printed circuit boards, spindle motors and ASICs, as we describe below.

Read/Write Heads.    We perform all primary stages of design and manufacture of read/write heads at our facilities. Although the percentage of our requirements for read/write heads that we produce internally varies from quarter to quarter, in each quarter we purchase up to 20% of our read/write heads from third party suppliers to afford us access to the widest possible technology. We plan to continue to manufacture at least 80% of our read/write head requirements.

Recording Media.    We purchase aluminum substrate blanks for recording media production from third parties, mainly in Japan. These blanks are machined, plated and polished to produce finished substrates at our plant in Northern Ireland. Although the percentage of our requirements for recording media that we produce internally varies from quarter to quarter, in each quarter we purchase up to 20% of our recording media requirements from third party suppliers in Asia and the United States. We plan to continue to manufacture at least 80% of our recording media requirements.

64

Printed Circuit Boards.    We assemble a significant portion of the printed circuit boards we use to manufacture rigid disc drives. Printed circuit boards are the boards that contain the electronic circuitry and ASICs that provide the electronic controls of the rigid disc drive and on which the head-disc assembly is mounted. We assemble printed circuit boards at our facilities in Malaysia and Singapore.

Spindle Motors.    We design most of our spindle motors and purchase them principally from outside vendors in Asia, whom we have licensed to use our intellectual property and technology.

ASICs.    We participate in the design of many of the ASICs used for motor and actuator control used in our rigid disc drive products, such as interface controllers, read/write channels and pre-amplifiers. We do not manufacture any ASICs but, rather, buy them from third party suppliers.

We purchase the components for our products that we do not manufacture internally from outside suppliers. Some of these components, such as ASICs, spindle motors and printed circuit boards, and the read/write heads and recording media that we do not manufacture, are purchased from either sole suppliers or a limited number of suppliers. In the past, we have experienced increased costs and production delays when we were unable to obtain sufficient quantities of some components and have been forced to pay higher prices for some components that were in short supply in the industry in general. Due to the recent downturn in the economy in general and in the technology sector of the economy in particular, the entire industry is experiencing economic pressure, which is resulting in consolidation among component manufacturers and may result in some component manufacturers exiting the industry. Komag, Incorporated, a media supplier of ours, recently filed for bankruptcy. These events could affect our ability to obtain critical components for our products, which in turn could have a material adverse effect on our financial condition, results of operations and prospects. See “Risk Factors—Risks Related to Our Business—Dependence on Supply of Components.”

Because of the significant fixed costs associated with the manufacture of our products and components and the competition and the price erosion in our industry, we must continue to produce and sell our rigid disc drives in significant volume, continue to lower manufacturing costs, carefully monitor inventory levels and increase the availability and sourcing of product components. During the past three years, we have undertaken extensive efforts to centralize and rationalize our manufacturing operations, including the closure of facilities and reductions in our work force. In the future, we plan to continue to evaluate the availability and sourcing of components and our manufacturing processes as well as the desirability of transferring volume production of rigid disc drives and related components between facilities, including transferring current U.S. production overseas to countries such as China, Indonesia, Malaysia, Singapore and Thailand, where labor costs and other manufacturing costs are significantly lower than in the United States.

Competition

The rigid disc drive industry is intensely competitive, with manufacturers competing for a limited number of major customers. The principal competitive factors in the rigid disc drive market are:

· product quality and reliability;

· form factor;

· storage capacity;

· storage/retrieval access times;

· data transfer rates;

· price per unit;

· price per megabyte;

· production volume capability; and

· responsiveness to customer preferences and demands.

65

We believe that our products are generally competitive as to these factors. We summarize below our principal competitors, the effect of competition on price erosion for our products and product life cycles and technology.

Principal Competitors.    We have experienced and expect to continue to experience intense competition from a number of domestic and foreign companies, some of which have greater financial and other resources than we have. These competitors include other independent rigid disc drive manufacturers and large integrated manufacturers, such as:

Integrated	Independent
Fujitsu Limited	Maxtor Corporation
Hitachi, Ltd.	Western Digital Corporation
International Business Machines Corporation
Samsung Electronics Incorporated
Toshiba Corporation

The term “independent” in this context refers to manufacturers that primarily produce rigid disc drives as a stand-alone product, and the term “integrated” refers to manufacturers that produce complete computer or other systems which contain rigid disc drives or other information storage products. Integrated manufacturers are formidable competitors because they have the ability to determine pricing for complete systems without regard to the margins on individual components. Because components other than rigid disc drives generally contribute a greater portion of the operating margin on a complete computer system than do rigid disc drives, integrated manufacturers do not necessarily need to realize a profit on the rigid disc drives included in a computer system and, as a result, may be willing to sell rigid disc drives to third parties at very low margins. Many integrated manufacturers are also formidable competitors because they have more substantial resources and greater access to customers than we do. We also face indirect competition from present and potential customers, including several of the computer manufacturers listed above, who evaluate from time to time whether to manufacture their own rigid disc drives and other information storage products or purchase them from outside sources other than us. These manufacturers also sell rigid disc drives to third parties, which results in direct competition with us.

Consolidation both among independent manufacturers and among integrated manufacturers increases the threat posed to our business by these types of competitors. An example of consolidation among independent manufacturers is Maxtor’s acquisition of Quantum’s rigid disc drive operations, which closed in the first half of 2001. By increasing the scalability of Maxtor’s rigid disc drive manufacturing capacity, this acquisition could make Maxtor a more formidable competitor. An example of consolidation among integrated manufacturers is the recent announcement that IBM has reached a preliminary agreement with Hitachi to merge the two companies’ rigid disc businesses through the formation of a joint venture that would be 70% owned by Hitachi. Because IBM is one of our most significant customers and Hitachi is one of our most significant competitors, the formation of this joint venture creates two distinct but related risks. The first risk is that, due to IBM’s equity stake in the joint venture, IBM could elect to decrease the number of rigid disc drives purchased from us and increase the number purchased from the joint venture. The second risk is that, by combining the technological capabilities of the two companies and achieving economies of scale, the joint venture will be able to compete with us more effectively than either manufacturer could on a stand-alone basis.

We also compete with manufacturers of products that use or are in the process of developing alternative data storage and retrieval technologies. Products using alternative technologies could be a significant source of competition. For example, high-speed semiconductor memory could compete with our products in the future. Semiconductor memory is much faster than rigid disc drives, but currently is volatile, or subject to loss of data in the event of power failure, and much more costly than rigid disc drive technology. Flash EEPROM, a nonvolatile semiconductor memory, is currently much more costly than rigid disc drive technology and, while it has higher read performance than rigid disc drives, it has lower write performance. Flash EEPROM could become competitive in the near future for applications requiring less storage capacity, such as that for less than

66

200 megabytes, than is required in traditional markets for our products. The introduction of products using alternative technologies could be a significant source of competition.

Price Erosion.    Even during periods when demand is stable, the rigid disc drive industry is intensely competitive and vendors experience price erosion over the life of a product. Historically, our competitors have offered new or existing products at lower prices as part of a strategy to gain or retain market share and customers. We expect these practices to occur again in the future. We also expect that price erosion in the rigid disc drive industry will continue for the foreseeable future. To remain competitive, we believe it will be necessary to continue to reduce our prices. Our establishment of production facilities in China, Malaysia, Singapore and Thailand has been directed toward achieving cost reductions.

Product Life Cycles and Changing Technology.    Competition and changing customer preference and demand in the rigid disc drive industry have also shortened product life cycles and caused an acceleration in the development and introduction of new technology. We believe that our future success will depend upon our ability to develop, manufacture and market products of high quality and reliability which meet changing user needs and which successfully anticipate or respond to changes in technology and standards on a cost-effective and timely basis.

Research and Development

We believe that our success depends on our ability to develop products that meet changing user needs and to anticipate and respond to changes in technology on a cost-effective and timely basis. Accordingly, we are committed to developing new component technologies and new products and to continually evaluating alternative technologies. During fiscal years 1999 and 2000, we spent $566 million and $663 million on product development. Including product development allocated compensation expense related to the November 2000 transactions, we had combined product development expenses of $797 million for fiscal year 2001. During the nine months ended March 29, 2002, we had product development expenses of $492 million. We develop new rigid disc drive products, and the processes to produce them, at three locations: Longmont, Colorado; Shakopee, Minnesota; and Singapore.

Patents and Licenses

We have approximately 1,766 U.S. patents and 772 patents issued in various foreign jurisdictions, as well as approximately 1,371 U.S. and 1,141 foreign patent applications pending. Due to the rapid technological change that characterizes the information storage industry, we believe that the improvement of existing products, reliance upon trade secret law, the protection of unpatented proprietary know-how and development of new products are generally more important than patent protection in establishing and maintaining a competitive advantage. Nevertheless, we believe that patents are valuable to our business and intend to continue our efforts to obtain patents, where available, in connection with our research and development program.

The information storage industry is characterized by significant litigation relating to patent and other intellectual property rights. Because of rapid technological development in the information storage industry, some of our products have been, and in the future could be, alleged to infringe existing patents of third parties. From time to time, we receive claims that our products infringe patents of third parties. Although we have been able to resolve some of those claims or potential claims by obtaining licenses or rights under the patents in question without a material adverse affect on us, other claims have resulted in adverse decisions or settlements. In addition, other claims are pending which if resolved unfavorably to us could have a material adverse effect on our business and results of operations. For more information on these claims, see “—Legal Proceedings.” The costs of engaging in intellectual property litigation may be substantial regardless of the merit of the claim or the outcome. We have patent cross-licenses with a number of companies in the computer industry. Additionally, we have agreements in principle with other major rigid disc drive companies. For a discussion of the related risks, see “Risk Factors—Risks Related to Our Business—Potential Loss of Material Licensed Technology.”

67

Employees

At March 29, 2002, we employed approximately 47,000 persons worldwide, of which approximately 34,000 employees were located in our Asian operations. In addition, we make use of temporary employees, principally in manufacturing, who are hired on an as-needed basis. We believe that our future success will depend in part on our ability to attract and retain qualified employees at all levels, and even then we cannot assure you of any such success. We believe that our employee relations are good.

Facilities

Our headquarters is located in the Cayman Islands, while our executive offices are in Scotts Valley, California. Our principal manufacturing facilities are located in China, Malaysia, Northern Ireland, Singapore and Thailand and, in the United States, in California, Minnesota and Oklahoma. Portions of our facilities are occupied under leases that expire at various times through 2015. The following is a summary of square footage owned or leased by us as of March 29, 2002 for the categories listed in the columns below.

	Administrative	Product Development	Manufacturing and Warehouse	Total
North America
California	383,955	224,053	203,361	811,369
Colorado	—	443,100	—	443,100
Minnesota	149,614	414,644	740,177	1,304,435
Oklahoma	87,082	110,097	203,341	400,520
Northeastern states	1,046	—	—	1,046
Southeastern states	4,305	—	—	4,305
Other U.S. states	8,160	253,027	—	261,187
Canada and Mexico	40,000	—	335,000	375,000
Total North America	674,162	1,444,921	1,481,879	3,600,962
Europe
England	7,072	—	—	7,072
Ireland	1,600	—	—	1,600
Northern Ireland	68,200	4,900	494,900	568,000
Netherlands	28,355	—	92,234	120,589
Other European countries	32,880	—	—	32,880
Total Europe	138,107	4,900	587,134	730,141
Asia
China	25,972	—	256,374	282,346
Malaysia	59,625	—	460,629	520,254
Singapore	230,271	42,384	1,031,208	1,303,863
Thailand	81,467	—	974,711	1,056,178
Other Pacific Rim countries	32,495	—	—	32,495
Total Asia	429,830	42,384	2,722,922	3,195,136
Total	1,242,099	1,492,205	4,791,935	7,526,239	(1)

(1) Includes 6,823,468 square feet owned by us and 3,059,329 square feet leased by us, but excludes 2,356,558 square feet of space that is unoccupied, subleased or under construction.

68

Environmental Matters

Our operations are subject to comprehensive U.S. and foreign laws and regulations relating to the protection of the environment, including those governing discharges of pollutants into the air and water, the management and disposal of hazardous substances and wastes and the cleanup of contaminated sites. Some of our operations require environmental permits and controls to prevent and reduce air and water pollution, and these permits are subject to modification, renewal and revocation by issuing authorities.

We believe that our operations are currently in substantial compliance with all environmental laws, regulations and permits. We incur operating and capital costs on an ongoing basis to comply with environmental laws. If additional or more stringent requirements are imposed on us in the future, we could incur additional operating costs and capital expenditures.

Some environmental laws, such as the U.S. federal superfund law and similar state statutes, can impose liability for the entire cost of cleanup of contaminated sites upon any of the current or former site owners or operators or upon parties who sent waste to these sites, regardless of whether the owner or operator owned the site at the time of the release of hazardous substances or the lawfulness of the original disposal activity. We have been identified as a potentially responsible party at a number of superfund sites. Generally, where there are multiple potentially responsible parties, liability has been apportioned based on the type and amount of hazardous substances disposed of by each party at the site and the number of financially viable parties. We cannot assure you that this will be the method of apportioning liability with respect to any particular site. While our ultimate costs in connection with these sites is difficult to predict, based on our current estimates of cleanup costs and our expected allocation of these costs, we do not expect costs in connection with these superfund sites to be material.

Many of our current and former sites have a history of commercial and industrial operations, including the use of hazardous substances. Groundwater and soil contamination resulting from historical operations has been identified at some of our current and former facilities. For example, at our former Omaha, Nebraska facility, under a consent order with the U.S. Environmental Protection Agency, we are addressing soil and groundwater contaminated with chlorinated solvents, which extends off-site beneath several neighboring commercial and industrial properties.

Legal Proceedings

The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to our legal proceedings described below. Litigation is inherently uncertain and may result in adverse rulings or decisions. Additionally, we may enter into settlements or be subject to judgments that may, individually or in the aggregate, have a material adverse effect on our results of operations. Accordingly, actual results could differ materially from those projected in the forward-looking statements.

Intellectual Property Litigation

Papst Licensing, GmbH.    Papst Licensing GmbH has given us notice that it believes selected former Conner Peripherals, Inc., or Conner, disc drives infringe several of its patents covering the use of spindle motors in disc drives. Conner is a business that we acquired in February 1996. We believe that the former Conner disc drives in question do not infringe any valid and/or enforceable claims of the patents. We also believe that subsequent to our acquisition of Conner, our earlier paid-up license under Papst’s patents extinguishes any ongoing liability. We also believe we enjoy the benefit of a license under Papst’s patents since Papst had granted a license to motor vendors of Conner. Papst is currently involved in litigation with other disc drive and disc drive motor manufacturers. After the closing of the November 2000 transactions, Papst took the position that the 1993 Papst-Seagate Technology license was not properly assigned in the November 2000 transactions and any new Seagate Technology disc drives would be assumed to be unlicensed. We believe that the assignment of the Papst license is legally effective.

69

Convolve, Inc.    On July 13, 2000, Convolve, Inc. and Massachusetts Institute of Technology filed suit against Compaq Computer Corporation and Seagate Technology, Inc. in the U.S. District Court for the Southern District of New York, alleging patent infringement, misappropriation of trade secrets, breach of contract, tortious interference with contract and fraud relating to Convolve’s Input Shaping^® and Quick and Quiet^™ technology. The plaintiffs claim their technology is incorporated in Seagate Technology, Inc.’s sound barrier technology, which was publicly announced on June 7, 2000. The complaint seeks injunctive relief, $800 million in compensatory damages and unspecified punitive damages. We answered the complaint on August 2, 2000 and filed cross-claims for declaratory judgment that two Convolve/MIT patents are invalid and not infringed and that we own any intellectual property based on the information that was disclosed to Convolve. The court denied plaintiffs’ motion for expedited discovery. The court ordered plaintiffs to identify their trade secrets to defendants before discovery can begin. Convolve served a trade secrets disclosure on August 4, 2000 and we filed a motion challenging the disclosure statement. On May 3, 2001, the court appointed a special master to review the trade secret issues. The special master resigned on June 5, 2001, and the court appointed another special master on July 26, 2001. After a hearing on our motion challenging the trade secrets disclosure on September 21, 2001, the special master issued a report and recommendation to the court that the trade secret list was insufficient. Convolve revised the trade secret list, and the court entered an order on January 1, 2002, accepting the special master’s recommendation that this trade secret list was adequate. Discovery has now begun on the trade secret issues. On November 6, 2001, the USPTO issued US Patent No. 6,314,473 to Convolve. Convolve filed an amended complaint alleging defendants’ infringement of this patent, and we answered and filed counterclaims on February 8, 2002. No trial date has been set. We believe this matter is without merit and intend to defend it vigorously.

Other Matters

We are involved in a number of other judicial and administrative proceedings incidental to our business. Although occasional adverse decisions or settlements may occur, we believe that the final disposition of these matters will not have a material adverse effect on our financial position or results of operations.

70

MANAGEMENT

Executive Officers and Directors

The executive officers and members of the board of directors of Seagate Technology Holdings and their ages and positions are listed below. Each executive officer listed below holds the same management position at Seagate Technology HDD Holdings. Mr. Luczo, Mr. Watkins and Mr. Waite comprise the board of directors of Seagate Technology HDD Holdings.

With the exception of Mr. Dexheimer, Mr. Porter, Mr. Wickersham, Mr. Chirico and Mr. Glembocki, each individual named below holds the same position at New SAC and at Seagate Removable Storage Solutions Holdings and Seagate Software (Cayman) Holdings (the parent company of Crystal Decisions), the separate New SAC subsidiaries that operate the former tape drive and software businesses of Seagate Technology, Inc.

Name	Age	Position
Stephen J. Luczo	45	Chief Executive Officer and Director
William D. Watkins	49	President, Chief Operating Officer and Director
Brian S. Dexheimer	39	Executive Vice President, Worldwide Sales, Marketing and Product Line Management
Charles C. Pope	47	Executive Vice President, Finance and Chief Financial Officer
Townsend H. Porter, Jr.	56	Executive Vice President, Product Technology Development and Chief Technology Officer
Jeremy Tennenbaum	47	Executive Vice President, Business Development and Strategic Planning
Donald L. Waite	69	Executive Vice President and Chief Administrative Officer
David Wickersham	45	Executive Vice President, Global Disc Operations
James Chirico	44	Senior Vice President and General Manager, Worldwide Operations
Jaroslaw Glembocki	46	Senior Vice President, Heads and Media
William L. Hudson	50	Senior Vice President, General Counsel and Corporate Secretary
David J. Roux	45	Chairman of the Board of Directors
David Bonderman	59	Director
James G. Coulter	42	Director
James A. Davidson	42	Director
Glenn H. Hutchins	46	Director
David F. Marquardt	53	Director
John W. Thompson	52	Director

Mr. Luczo became a member of the board of directors of Seagate Technology Holdings and Seagate Technology HDD Holdings on the closing of the November 2000 transactions. Mr. Luczo joined us in October 1993 as Senior Vice President of Corporate Development. In March 1995, he was appointed Executive Vice President of Corporate Development and Chief Operating Officer of Seagate Software Holdings. In July 1997, he was appointed Chairman of the board of directors of Seagate Software Holdings. In September 1997, Mr. Luczo was promoted to President and Chief Operating Officer of Seagate Technology, Inc. and, in July 1998, he was promoted to Chief Executive Officer. Mr. Luczo resigned from the office of President of Seagate Technology, Inc., and Mr. Watkins was elected to that office in May 2000. Prior to joining us, Mr. Luczo was Senior Managing Director of the Global Technology Group of Bear Stearns & Co., Inc., an investment banking firm, from February 1992 to October 1993. Mr. Luczo serves as a member of the board of directors of e2open. Mr. Luczo is the chairman of the executive committee of Seagate Technology Holdings’ board of directors and participates on its compensation committee as an ex officio member.

Mr. Watkins became a member of the board of directors of Seagate Technology Holdings and Seagate Technology HDD Holdings on the closing of the November 2000 transactions. Mr. Watkins, our President, Chief Operating Officer and Director, joined us as Executive Vice President of our Recording Media Group in

71

February 1996 with our merger with Conner Peripherals Inc. In October 1997, Mr. Watkins took on additional responsibility as Executive Vice President of the Disc Drive Operations and, in August 1998, he was appointed to the position of Chief Operating Officer, with responsibility for our disc drive manufacturing, recording media and recording head operations. Prior to joining us, he was President and General Manager of the Disc Division at Conner Peripherals Inc., an information storage solutions company, from January 1990 until December 1992. In January 1993, Mr. Watkins was promoted to Senior Vice President of Manufacturing Operations at Conner Peripherals Inc. Mr. Watkins is a member of the boards of directors of a number of private companies.

Mr. Dexheimer came to Seagate with our acquisition of Imprimis in 1989. His career includes more than 15 years of experience in data storage, holding various sales, sales management and marketing positions with us. Mr. Dexheimer held the position of Vice President, Marketing and Product Line Management in the Removable Storage Solutions group from 1996 to July 1997. In July 1997, he was promoted to Senior Vice President and General Manager of Removable Storage Solutions until August 1998 when he was promoted to Senior Vice President, Product Marketing and Product Line Management for Desktop disc drives. In August 1999, he was promoted to Senior Vice President, Worldwide Sales and Marketing. He was promoted to Executive Vice President Worldwide Sales, Marketing and Product Line Management in May 2000.

Mr. Pope, our Executive Vice President of Finance since April 1999 and our Chief Financial Officer since February 1998, joined us as Director of Budgets and Analysis in 1985 with our acquisition of Grenex, Inc. From January 1997 to April 1999, Mr. Pope was our Senior Vice President of Finance. He has held a variety of positions in his 17-year executive experience with us, including as Director of Finance of the Thailand operations, Vice President of Finance of the Asia Pacific operations, Vice President of Finance and Treasurer of Seagate Technology, Inc., Vice President and General Manager of Seagate Magnetics and, most recently, Senior Vice President of Finance of the Storage Products Group.

Mr. Porter joined us on June 2, 1997 as Chief Technology Officer, Storage Products Group. In September 1997 he was promoted to Executive Vice President. Mr. Porter was Vice President of Research and Development, Enterprise Storage Group at Western Digital from November 1994 to May 1997. From 1968 to 1994, Mr. Porter held engineering, program management and executive positions at IBM.

Mr. Tennenbaum, our Executive Vice President of Business Development and Strategic Planning, joined us in January 2001. Prior to joining us, Mr. Tennenbaum worked as vice president of Wellington Management Company for nine years. Prior to Wellington, Mr. Tennenbaum worked as a new business specialist in corporate finance at Salomon Brothers, an investment banking firm. Mr. Tennenbaum is a member of the boards of directors of a number of private companies.

Mr. Waite, our Executive Vice President and Chief Administrative Officer since 1998, joined us as our Vice President and Chief Financial Officer in 1983. He was promoted to Senior Vice President in 1984. Mr. Waite is a member of Seagate Technology HDD Holdings’ board of directors. Mr. Waite is also a member of the boards of directors of California Micro Devices Corporation and a number of private companies.

Mr. Wickersham joined us on May 18, 1998 as Senior Vice President, Worldwide Materials. He assumed responsibilities for Worldwide Product Line Management in August 1999. In May 2000, he was promoted to Executive Vice President. Mr. Wickersham was Vice President, Worldwide Materials at Maxtor Corporation from 1996 to May 1998. From 1993 to 1996, Mr. Wickersham was Director of Corporate Materials at Exabyte Corporation. From 1978 to 1993, he held various management positions at IBM.

Mr. Chirico, our Senior Vice President and General Manager of Worldwide Operations, joined us in 1998 as Senior Vice President of Worldwide Manufacturing Quality based in Singapore. In April 1999, he was appointed Senior Vice President and General Manager of Recording Head Operations based in Minnesota. In September 2000, he was appointed to his current position of Senior Vice President and General Manager of Worldwide Operations. Mr. Chirico is presently based in Singapore. Prior to joining us, Mr. Chirico spent 17 years with IBM

72

where he held a number of management positions within manufacturing operations. Mr. Chirico is currently chairman of IDEMA (International Disc Drives and Equipment Manufacturer Association) Asia Pacific Management Committee. He is also a member of the Singapore Economic Review Committee 2001 (Manufacturing Sector).

Mr. Glembocki was promoted to Senior Vice President of our Recording Heads and Recording Media Operations in October 2000. In this position, Mr. Glembocki is responsible for overseeing all component research, product development, disc drive integration, production launch, materials and volume production activities for the worldwide operations relating to heads and media, which are located in the United States, Asia and Europe. Glembocki joined us in the February 1996 merger with Conner Peripherals. As Vice President of Engineering for our Recording Media Group, Mr. Glembocki was responsible for our media research, product development, drive integration and production launch. A key member of the team that founded the Conner Disk Division, Mr. Glembocki managed all of the engineering research and development activities. During 1994 and 1995, Mr. Glembocki held the position of General Manager of the Conner Disk Division. Prior to joining us, Mr. Glembocki held positions at Domain Technology and IBM.

Mr. Hudson, our Senior Vice President, General Counsel and Corporate Secretary, joined us in January 2000. Prior to joining us, Mr. Hudson was a partner of the law firm Gibson Dunn & Crutcher, LLP from August 1997 to December 1999 and, from October 1984 to July 1997, he was a partner of the law firm Brobeck, Phleger & Harrison, LLP.

Mr. Roux became the Chairman of Seagate Technology Holdings’ board of directors on the closing of the November 2000 transactions. Mr. Roux is a founder and managing member of Silver Lake Partners, a private equity firm founded in January 1999. From February 1998 to November 1998, he served as the Chief Executive Officer and President of Liberate Technologies, a software platform provider. From September 1994 until December 1998, Mr. Roux held various management positions with Oracle Corporation, a software provider for information management, most recently as Executive Vice President of Corporate Development. Before joining Oracle, Mr. Roux served as Senior Vice President of Marketing and Business Development at Central Point Software, a software provider, from April 1992 to July 1994. Mr. Roux currently serves as Chairman of the board of directors of Liberate Technologies and is also a member of the boards of VERITAS Software Corporation, Gartner, Inc. and a number of private companies. Mr. Roux is a member of the executive committee of Seagate Technology Holdings’ board of directors.

Mr. Bonderman became a member of Seagate Technology Holdings’ board of directors on the closing of the November 2000 transactions. Mr. Bonderman is a principal of Texas Pacific Group, a private investment firm he co-founded in 1993. Prior to forming Texas Pacific Group, Mr. Bonderman was Chief Operating Officer and Chief Investment Officer of Robert M. Bass Group, now doing business as Keystone Inc., a private investment firm, from 1983 to August 1992. Mr. Bonderman is a member of the boards of directors of Bell & Howell Company, Continental Airlines, Inc., Co-Star Group, Inc., Denbury Resources Inc., Ducati Motor Holdings S.p.A., J. Crew Group, Inc., Korea First Bank, Magellan Health Services, Inc., ON Semiconductor Corporation, Oxford Health Plans, Inc., Paradyne Networks, Inc., Ryanair Holdings plc, Washington Mutual Inc. and a number of private companies. Mr. Bonderman is a member of the compensation committee of Seagate Technology Holdings’ board of directors.

Mr. Coulter became a member of Seagate Technology Holdings’ board of directors on the closing of the November 2000 transactions. Mr. Coulter is a principal of the Texas Pacific Group, a private investment firm he co-founded in 1993. From 1986 to 1992, Mr. Coulter was a Vice President of Keystone, Inc. From 1986 to 1988, Mr. Coulter was also associated with SPO Partners, an investment firm that focuses on public market and private minority investments. Mr. Coulter is a member of the boards of directors of Genesis Health Ventures, Inc., GlobeSpan, Inc., J. Crew Group, Inc., Oxford Health Plans, Inc., and a number of private companies. Mr. Coulter is a member of the executive committee and the audit committee of Seagate Technology Holdings’ board of directors.

73

Mr. Davidson became a member of Seagate Technology Holdings’ board of directors on the closing of the November 2000 transactions. Mr. Davidson is a founder and managing member of Silver Lake Partners, a private equity firm founded in January 1999. From June 1990 to January 1999, Mr. Davidson was an investment banker with Hambrecht & Quist LLC, most recently serving as a Managing Director and Head of Technology Investment Banking. He is also a member of the boards of directors of Cabletron Systems, Inc. and a number of private companies. Mr. Davidson is a member of the compensation committee of Seagate Technology Holdings’ board of directors.

Mr. Hutchins became a member of Seagate Technology Holdings’ board of directors on the closing of the November 2000 transactions. Mr. Hutchins is a founder and managing member of Silver Lake Partners, a private equity firm founded in January 1999. From 1994 to 1999, Mr. Hutchins was a Senior Managing Director of The Blackstone Group L.P., where he focused on its private equity investing. Mr. Hutchins is a member of the boards of directors of Gartner Group, Inc. and a number of private companies. Mr. Hutchins is the chairman of the audit committee of Seagate Technology Holdings’ board of directors.

Mr. Marquardt became a member of Seagate Technology Holdings’ board of directors on the closing of the November 2000 transactions. Mr. Marquardt was a co-founder of August Capital, a California based venture capital firm, in 1995. Prior to August Capital, Mr. Marquardt was a partner of Technology Venture Investors, a venture capital firm which he co-founded in 1980. Mr. Marquardt is a member of the boards of directors of Microsoft Corporation, Netopia, Inc., Tumbleweed Communications Corp. and a number of private companies. Mr. Marquardt is a member of the executive committee and the audit committee of Seagate Technology Holdings’ board of directors.

Mr. Thompson became a member of Seagate Technology Holdings’ board of directors on the closing of the November 2000 transactions. Mr. Thompson is Chairman of the Board of Directors, President and Chief Executive Officer of Symantec Corporation, an Internet security technology provider. Before joining Symantec in April 1999, Mr. Thompson held various executive and management positions with IBM from 1971. Mr. Thompson is a member of the boards of directors of NiSource, Inc., United Parcel Service, Inc. and a private company. Mr. Thompson is the chairman of the compensation committee of Seagate Technology Holdings’ board of directors.

Election of Executive Officers

Officers are elected annually by the board of directors and serve at the discretion of the board of directors.

Board of Directors Compensation

All members of the boards of directors of Seagate Technology Holdings and Seagate Technology HDD Holdings are reimbursed for their reasonable out-of-pocket expenses incurred in attending meetings of the board of directors and its committees but receive no other compensation or fees for their service. These provisions are subject to change by our board of directors.

Committees of the Board of Directors

Seagate Technology Holdings’ board of directors has a compensation committee, an audit committee and an executive committee. Seagate Technology HDD Holdings does not have any board committees. The composition, function and duties for Seagate Technology Holdings’ board committees are as follows:

Compensation Committee.    The compensation committee consists of at least three members of the board of directors, of which one is a non-management member designated by Silver Lake Partners and one is a non-management member designated by Texas Pacific Group. The current members of Seagate Technology Holdings’ compensation committee are Messrs. Bonderman, Davidson and Thompson, who serves as chairman.

74

Our chief executive officer, Mr. Luczo, participates on the committee as an ex officio member. The compensation committee is responsible for:            

· reviewing the company’s policies and procedures on attracting, retaining, developing and motivating personnel for senior management positions;            

· developing, approving and recommending to the board of directors the compensation plans for Seagate Technology Holdings’ directors, chief executive officer and senior management members; and            

· approving and authorizing awards under the Seagate Technology Holdings’ long-term incentive plans.

Audit Committee.    The audit committee consists of at least three non-management members of the board of directors, of which one is designated by Silver Lake Partners and one is designated by Texas Pacific Group. According to the audit committee charter, all members of the audit committee must be financially literate and independent of the management of Seagate Technology Holdings. Furthermore, they are appointed and removed by the non-management members of Seagate Technology Holdings’ board of directors. An audit committee member is considered to be independent if the member does not have a relationship that may interfere with exercising his or her independence from the management of Seagate Technology Holdings. The current members of Seagate Technology Holdings’ audit committee are Messrs. Coulter, Marquardt and Hutchins, who serves as chairman. The audit committee is responsible for:            

· reviewing the company’s financial statements with the management and the independent auditors;            

· selecting and confirming the independence of the company’s independent auditors;            

· meeting with the independent auditors to review the auditors’ audit results, reports and recommendations;

· monitoring the company’s policies and procedures for the review of expenses and perquisites of selected members of senior management;            

· performing reviews, investigations or oversight responsibilities required by the board of directors, such as investment policies and budgetary measures;            

· addressing conflicts of interest and unethical, questionable or illegal activities by the company’s employees; and

· periodically reviewing legal matters with Seagate Technology Holdings’ general counsel.

Executive Committee.    The executive committee consists of at least four members of the board of directors, of which one is a non-management member designated by Silver Lake Partners, another is a non-management member designated by Texas Pacific Group, and a third is our chief executive, who serves as the chairman of the committee until a new chairman is selected. The current members of Seagate Technology Holdings’ executive committee are Messrs. Coulter, Marquardt, Roux and Luczo, who serves as chairman. The executive committee has the power to review and manage the business and affairs of the company, which may include the power to authorize the issuance of capital stock, provided that the executive committee does not have the power to authorize transactions outside the ordinary course of business that involve consideration of more than $25 million. In addition, the executive committee is responsible for:            

· taking any action necessary or appropriate for the development of the company’s governance practices, including monitoring developments with regard to corporate governance issues in general and directors’ duties and responsibilities in particular;            

· reviewing, assessing and monitoring governance issues, including, without limitation, issues relevant to the composition, criteria, role and appraisal of the board of directors and its various committees;

· reviewing, assessing and monitoring policies relating to charitable contributions; and

· making recommendations to the board of directors regarding any of the issues listed above.

The executive committee also reviews the strategic planning process of the company, proposed acquisitions and, on an annual basis, the organization and management succession of the company.

75

Compensation of Executive Officers

We list in the following table information regarding the compensation of the chief executive officer and the four other most highly compensated executive officers of Seagate Technology Holdings for the period from November 22, 2000, the date we closed the November 2000 transactions, to June 29, 2001, the last day of our most recently completed fiscal year. We refer to these executive officers, together with the chief executive officer, as the named executive officers.

Summary Compensation Table

	Annual Compensation (1)					Long-Term Compensation
						Restricted Stock Awards			Securities Underlying Options Granted
Name and Principal Position	Fiscal Year Ended (1)	Salary ($) (2)			Other Annual Compensation ($) (3) (4)	New SAC ($)			Seagate Technology Holdings (#) (5)
Stephen J. Luczo	2001	$	577,541		$34	$	5,781,783	(6)	—
Chief Executive Officer
William D. Watkins	2001	$	490,392		$34	$	1,958,864	(7)	—
President and Chief Operating Officer
Charles C. Pope	2001	$	328,684		$34	$	1,775,040	(8)	—
Chief Financial Officer
Townsend H. Porter, Jr.	2001	$	299,840		$34	$	1,073,836	(9)	—
Executive Vice President and
Chief Technology Officer
Donald L. Waite	2001	$	276,929	(10)	$34	$	1,241,253	(11)	—
Executive Vice President

  (1) Compensation information is provided for the period from November 22, 2000, the date of the closing of the November 2000 transactions, to June 29, 2001, the last day of our most recently completed fiscal year.

  (2) Amounts in this column cover only salary paid for the period from November 22, 2000 to June 29, 2001. For the fiscal year ending June 28, 2002, the annual base salary for the named executive officers is as follows: Stephen J. Luczo, $1,000,002, William D. Watkins, $850,013, Charles C. Pope, $550,014, Townsend H. Porter, Jr., $500,011, and Donald L. Waite, $500,011.

  (3) Represents term life insurance premiums paid by us.

  (4) The named executive officers elected to forgo any bonuses for fiscal year 2001. Because some other executive officers received bonuses for fiscal year 2001, the overall compensation for certain other executives exceeded the amounts set forth for two of the four named executives, other than the chief executive officer, shown in the table above. As this is an unusual circumstance, we have not included any of these other executive officers or their amounts of compensation in the table above.

  (5) Each of the named executive officers is eligible to receive grants of options to purchase common shares of Seagate Technology Holdings, Seagate Removable Storage Solutions Holdings, a Cayman Islands limited liability company and a direct subsidiary of New SAC, and Crystal Decisions, Inc., a Delaware corporation and an indirect subsidiary of New SAC. No grants were made to the named executive officers under any of these plans during the period from November 22, 2000 to June 29, 2001. Each of the named executive officers was, however, granted the following number of options to purchase Seagate Technology Holdings common shares on July 24, 2001 at $2.30 per share: Stephen J. Luczo, 450,326, William D. Watkins, 652,174, Charles C. Pope, 391,304, Townsend H. Porter, 529,565 and Donald L. Waite, 182,935. In addition, the following named executive officers were granted the following number of options to purchase shares of Crystal Decisions common stock prior to the closing of the November 2000 transactions: Stephen J. Luczo, 275,000, Charles C. Pope, 50,000 and Donald L. Waite, 50,000.

  (6) Under its 2000 Restricted Share Plan, New SAC issued 374,600 ordinary shares and 9,851.99 preferred shares to Mr. Luczo on November 22, 2000. One-third of these shares vested on November 22, 2001, one-third is vesting and will continue to vest proportionately each month over the 18 months following November 22, 2001 and one- third will vest on May 22, 2003. Under its 2001 Restricted Share Plan, New SAC issued 93,600 ordinary shares to

76

Mr. Luczo on January 3, 2001. A quarter of these shares vested on November 22, 2001 and three-quarters is vesting and will continue to vest proportionately each month over the 36 months following November 22, 2001. The amount shown in the table represents (a) the dollar value of the award of restricted ordinary shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on the date of issuance of $11.3944655 (or approximately $11.39) per share by the number of ordinary shares awarded, plus (b) the dollar value of the award of restricted preferred shares, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on the date of issuance of $45.360825 (or approximately $45.36) per share by the number of preferred shares awarded. As of June 29, 2001, Mr. Luczo held 468,200 unvested ordinary shares of New SAC having a value of $5,334,889, based on the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on that date of approximately $11.39 per share. As of June 29, 2001, Mr. Luczo held 9,851.99 unvested preferred shares of New SAC having a value of $446,894 based on the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on that date of approximately $45.36 per share.

  (7) Under its 2000 Restricted Share Plan, New SAC issued 101,300 ordinary shares and 2,666.12 preferred shares to Mr. Watkins on November 22, 2000. One-third of these shares vested on November 22, 2001, one-third is vesting and will continue to vest proportionately each month over the 18 months following November 22, 2001 and one-third will vest on May 22, 2003. Under its 2001 Restricted Share Plan, New SAC issued 60,000 ordinary shares to Mr. Watkins on January 3, 2001. A quarter of these shares vested on November 22, 2001 and three-quarters is vesting and will continue to vest proportionately each month over the 36 months following November 22, 2001. The amount shown in the table represents (a) the dollar value of the award of restricted ordinary shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on the date of issuance of approximately $11.39 per share by the number of ordinary shares awarded, plus (b) the dollar value of the award of restricted preferred shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on the date of issuance of approximately $45.36 per share by the number of preferred shares awarded. As of June 29, 2001, Mr. Watkins held 161,300 unvested ordinary shares of New SAC having a value of $1,837,927, based on the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on that date of approximately $11.39 per share. As of June 29, 2001, Mr. Watkins held 2,666.12 unvested preferred shares of New SAC having a value of $120,937 based on the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on that date of approximately $45.36 per share. Following the end of fiscal year 2001, on July 24, 2001, Mr. Watkins was also issued 12,500 ordinary shares of New SAC under its 2001 Restricted Share Plan.

  (8) Under its 2000 Restricted Share Plan, New SAC issued 104,800 ordinary shares and 2,758.34 preferred shares to Mr. Pope on November 22, 2000. One-third of these shares vested on November 22, 2001, one-third is vesting and will continue to vest proportionately each month over the 18 months following November 22, 2001 one-third and will vest on May 22, 2003. Under its 2001 Restricted Share Plan, New SAC issued 40,000 ordinary shares to Mr. Pope on January 3, 2001. A quarter of these shares vested on November 22, 2001 and three-quarters is vesting and will continue to vest proportionately each month over the 36 months following November 22, 2001. The amount shown in the table represents (a) the dollar value of the award of restricted ordinary shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on the date of issuance of approximately $11.39 per share by the number of ordinary shares awarded, plus (b) the dollar value of the award of restricted preferred shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on the date of issuance of approximately $45.36 per share by the number of preferred shares awarded. As of June 29, 2001, Mr. Pope held 144,800 unvested ordinary shares of New SAC, having a value of $1,649,919, based on the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on that date of approximately $11.39 per share. As of June 29, 2001, Mr. Pope held 2,758.34 unvested preferred shares of New SAC having a value of $125,121 based on the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on that date of approximately $45.36 per share. Following the end of fiscal year 2001, on July 24, 2001, Mr. Pope was also issued 7,500 ordinary shares of New SAC under its 2001 Restricted Share Plan.

  (9) Under its 2000 Restricted Share Plan, New SAC issued 73,700 ordinary shares and 1,939.72 preferred shares to Mr. Porter on November 22, 2000. One-third of these shares vested on November 22, 2001, one-third is vesting and will continue to vest proportionately each month over the 18 months following November 22, 2001 and one- third will vest on May 22, 2003. Under its 2001 Restricted Share Plan, New SAC issued 12,820 ordinary shares to

77

	Mr. Porter on January 3, 2001. A quarter of these shares vested on November 22, 2001 and three-quarters is vesting and will continue to vest proportionately each month over the 36 months following November 22, 2001. The amount shown in the table represents (a) the dollar value of the award of restricted ordinary shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on the date of issuance of approximately $11.39 per share by the number of ordinary shares awarded, plus (b) the dollar value of the award of restricted preferred shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on the date of issuance of approximately $45.36 per share by the number of preferred shares awarded. As of June 29, 2001, Mr. Porter held 86,520 unvested ordinary shares of New SAC having a value of $985,849, based on the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on that date of approximately $11.39 per share. As of June 29, 2001, Mr. Porter held 1,939.72 unvested preferred shares of New SAC having a value of $87,987 based on the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on that date of approximately $45.36 per share.
(10)	25% of this amount is allocable to the Seagate Removable Storage Solutions business.
(11)	Under its 2000 Restricted Share Plan, New SAC issued 80,500 ordinary shares and 2,118.76 preferred shares to Mr. Waite on November 22, 2000. One-third of these shares vested on November 22, 2001, one-third is vesting and will continue to vest proportionately each month over the 18 months following November 22, 2001 and one-third will vest on May 22, 2003. Under its 2001 Restricted Share Plan, New SAC issued 20,000 ordinary shares to Mr. Waite on January 3, 2001. A quarter of these shares vested on November 22, 2001 and three-quarters is vesting and will continue to vest proportionately each month over the 36 months following November 22, 2001. The amount shown in the table represents (a) the dollar value of the award of restricted ordinary shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on the date of issuance of approximately $11.39 per share by the number of ordinary shares awarded, plus (b) the dollar value of the award of restricted preferred shares of New SAC, calculated by multiplying the fair market value, as determined by the board of directors of New SAC, of a preferred share of New SAC on the date of issuance of approximately $45.36 per share by the number of preferred shares awarded. As of June 29, 2001, Mr. Waite held 100,500 unvested ordinary shares of New SAC having a value of $1,145,144, based on the fair market value, as determined by the board of directors of New SAC, of an ordinary share of New SAC on that date of approximately $11.39 per share. As of June 29, 2001, Mr. Waite held 2,118.76 unvested preferred shares of New SAC having a value of $96,109 based on the fair market value, as determined by the board of directors, of a preferred share of New SAC on that date of approximately $45.36 per share.

78

Option Grants in Fiscal Year 2001

No options to purchase common shares of Seagate Technology Holdings were granted to the named executive officers during the period from November 22, 2000, the closing of the November 2000 transactions, to June 29, 2001, the end of fiscal year 2001. The following table provides information concerning options to purchase common shares of Seagate Technology Holdings that were granted to the named executive officers following the end of fiscal year 2001:

	Individual Grants						Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term (1)
Name	Number of Securities Underlying Options Granted (#) (2)	Percent of Total Options Granted to Employees in Fiscal Year (%)		Exercise or Base Price ($/Sh) (3)		Expiration Date
							5% ($)		10% ($)
Stephen J. Luczo	450,326	0.66	%	$	2.30	7/24/2011	$	651,377	$	1,650,718
William D. Watkins	652,174	0.96	%	$	2.30	7/24/2011	$	943,342	$	2,390,614
Charles C. Pope	391,304	0.58	%	$	2.30	7/24/2011	$	566,005	$	1,434,367
Townsend H. Porter, Jr.	529,565	0.78	%	$	2.30	7/24/2011	$	765,993	$	1,941,178
Donald L. Waite	182,935	0.27	%	$	2.30	7/24/2011	$	264,608	$	670,568

(1) Potential realizable value is based on the assumption that the Seagate Technology Holdings common shares appreciate at the annual rate shown, compounded annually, from the date of grant until the expiration of the ten-year option term. These amounts were calculated based on the requirements promulgated by the SEC and do not reflect the estimate of future price growth.

(2) No options were granted to the named executive officers during fiscal year 2001; all the above options were granted during fiscal year 2002. The numbers listed in this column represent options to purchase Seagate Technology Holdings common shares that were granted on July 24, 2001. One-quarter of these options will vest on July 24, 2002. The remaining options will vest proportionately each month over the 36 months following July 24, 2002.

(3) There is no public trading market for the Seagate Technology Holdings common shares. On the date of grant, the board of directors of Seagate Technology Holdings determined the fair market value of a common share of Seagate Technology Holdings to be no greater than $2.30 per share.

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

There were no options to purchase Seagate Technology Holdings’ common shares held by the named executive officers at the end of fiscal year 2001. None of the options to purchase Seagate Technology Holdings common shares that were granted to these individuals after the end of fiscal year 2001 had been exercised by any of them as of May 1, 2002.

Employment and Other Agreements

Employment Agreements.    In connection with the November 2000 transactions, we and each of Messrs. Luczo, Watkins, Pope, Porter, Waite and a number of other senior executives entered into employment agreements on February 2, 2001. Each of the employment agreements has a three-year term, subject to automatic, successive one year renewals after that first term.

We list below a chart showing these executives’ initial base salaries and maximum possible bonuses if specified target performance goals are met under these employment agreements.

Executive	Base Salary		Target Bonus
Stephen J. Luczo	$	1,000,000	125% of Base Salary
William D. Watkins	$	850,000	125% of Base Salary
Charles C. Pope	$	550,000	100% of Base Salary
Townsend H. Porter	$	500,000	100% of Base Salary
Donald L. Waite	$	500,000	100% of Base Salary

79

An executive may elect to defer the payment of all or a portion of his bonus. The executives are also entitled to participate in employee benefits programs comparable, in the aggregate, to those employee benefits programs made available to senior executives of Seagate Technology, Inc. immediately prior to the closing of the November 2000 transactions. These programs include health, life and disability insurance and retirement and fringe benefits.

Under the employment agreements, in the event an executive’s employment is terminated by us without cause or by the executive with good reason, as each term is defined in the employment agreements, the executive will receive, subject to compliance with the restrictive covenants described below, the following:            

· continued payment of base salary and target bonus; and            

· continued participation in our health, dental and life insurance programs.

for one to two years and, in the case of Mr. Luczo, two to three years following the termination of his employment, depending on when the termination occurs.

In addition, under the management retention agreements, which are summarized below, if the executive’s employment is terminated by us without cause or by the executive with good reason prior to November 22, 2002, the executive will be entitled to the additional severance benefits under these management retention agreements.

Under the employment agreements, the executives are subject to customary confidentiality, nondisclosure, noncompete and nonsolicitation covenants during the term of employment and for the period in which the executive would receive severance in the event that the executive’s employment is terminated.

Management Retention Agreements.    Between November 2, 1998 and December 1, 1999, Seagate Technology, Inc. entered into management retention agreements with Messrs. Luczo, Watkins, Pope, Porter, Waite and a number of other key executive officers. These agreements provided, among other things, that Seagate Technology, Inc. could terminate the executive’s employment at any time with or without cause. At the closing of the November 2000 transactions, New SAC assumed all obligations and liabilities under these management retention agreements. In consideration of these assumptions, the executives agreed to the following modifications of their management retention agreements:

· the closing of the November 2000 transactions was deemed to be a change of control for purposes of the management retention agreements, provided that no further transactions will constitute a change of control;

· the November 2000 transactions did not constitute a termination of employment for purposes of the management retention agreements;

· modification of the definition of good reason; and

· the provisions relating to the accelerated vesting of restricted shares of New SAC apply only to restricted shares of New SAC granted to the executives in substitution for restricted shares of Seagate Technology, Inc. common stock and unvested options to acquire Seagate Technology, Inc. common stock in connection with the management rollover described below.

Rollover Agreements and Deferred Compensation Plans.    Under rollover agreements entered into in connection with the closing of the November 2000 transactions with members of the management group, executives with titles of senior vice president or higher agreed to roll at least 50%, and more junior executives agreed to roll at least 25%, of their shares of Seagate Technology, Inc. common stock and options to purchase these shares, valued in the aggregate at approximately $184 million, into:

· an interest in newly created deferred compensation plans established and maintained by either Seagate Technology HDD Holdings or one of Seagate Technology Holdings’ other subsidiaries, Seagate Technology SAN Holdings; and

· ordinary and preferred shares of New SAC.

80

At the closing of the November 2000 transactions, the value of the rolled securities was approximately $184 million. The rolled securities were converted into:

· interests in the Seagate Technology HDD Holdings’ and Seagate Technology SAN Holdings’ deferred compensation plans representing approximately 97.4% of the value of the rolled securities;

· preferred shares of New SAC representing approximately 2.6% of the value of the rolled securities; and

· ordinary shares of New SAC representing approximately 16.8% of the total ordinary shares of New SAC outstanding at the closing of the November 2000 transactions.

In addition, the management group invested approximately $41 million in cash in exchange for additional ordinary and preferred shares of New SAC.

The principal elements of the Seagate Technology HDD Holdings deferred compensation plan are as follows:

· Seagate Technology HDD Holdings is obligated to make distributions to participants in its deferred compensation plan, when vested, shortly after our sponsor group receives distributions or returns on their New SAC preferred shares;

· the amount distributed at any time to participants under Seagate Technology HDD Holdings’ deferred compensation plan bears the same proportion to the aggregate obligations under the plan as the distributions to our sponsor group at that same time bear to their initial preferred share investment in New SAC. In approximate terms, for each $100 of preferred share distributions made by New SAC, Seagate Technology HDD Holdings will make approximately $19 of distributions to vested participants in its deferred compensation plan;

· prior to the distributions to be made in the near future that are described below, the maximum aggregate obligation of Seagate Technology HDD Holdings under its deferred compensation plan was approximately $178 million, assuming full vesting of all outstanding deferred compensation accounts;

· the interests of the participants in Seagate Technology HDD Holdings’ deferred compensation plan vest according to the following schedule:

— one-third vested on November 22, 2001,

— one-third has been vesting and will continue to vest proportionally each month over the 18 months following November 22, 2001, and

— one-third will vest on May 23, 2003;

· Seagate Technology HDD Holdings has the ability, subject to the restrictive covenants set forth under “Description of the Notes—Certain Covenants—Amendment of Deferred Compensation Plans,” and subject to similar covenants in the credit agreement that governs our new senior secured credit facilities, to amend its deferred compensation plan and to accelerate the vesting of all interests under the plan;

· upon a change of control of Seagate Technology HDD Holdings, all interests under its deferred compensation plan will be paid, other than unvested interests which will be paid once vested;

· Seagate Technology HDD Holdings may make distributions, at its option, in cash or the same securities or other property distributed by New SAC as preferred share distributions to our sponsor group;

· if Seagate Technology HDD Holdings has insufficient assets to make distributions under its deferred compensation plan and it has not experienced a change of control, it may demand that New SAC loan or otherwise provide the funding, on arm’s length terms for the distribution, subject to limitations;

· Seagate Technology HDD Holdings’ obligations under its deferred compensation plan are subordinated in right of payment to the prior payment in full of certain of its senior debt obligations, including our new senior secured credit facilities and the notes; and

81

· compensation expense related to Seagate Technology HDD Holdings’ obligations under its deferred compensation plan is recognized only when distributions are actually made.

Although Seagate Technology SAN Holdings sponsors a deferred compensation plan with substantially similar provisions, the maximum aggregate obligations under the plan are less than $2 million.

On or about May 20, 2002, Seagate Technology Holdings expects to make a distribution to its shareholders, including New SAC, to enable New SAC to make a distribution to its preferred shareholders, of approximately $167 million. As a result, Seagate Technology HDD Holdings and Seagate Technology SAN Holdings will become obligated to make distributions to participants in their deferred compensation plans in an aggregate amount of approximately $33 million. In addition, under the terms of the new credit agreement and the indenture that governs the notes, Seagate Technology Holdings is permitted to make significant shareholder distributions in the future. See “Description of the Notes—Certain Covenants—Limitation on Restricted Payments.” To the extent any corresponding distributions are made by New SAC, Seagate Technology HDD Holdings will have an obligation to make distributions to participants under its deferred compensation plan. In addition to the approximately $200 million of shareholder distributions and deferred compensation plan distributions to be made in the near future, the new credit agreement and the indenture for the notes permit, subject to specified conditions, additional shareholder and deferred compensation plan distributions in an aggregate amount of up to $380 million in connection with and in addition to the proceeds of any initial public offering that we might undertake in the future.

Director and Officer Indemnification and Insurance.    As part of the November 2000 transactions, New SAC agreed to fulfill the indemnification obligations of Seagate Technology, Inc. and all of its subsidiaries acquired in the November 2000 transactions and to maintain liability insurance for the directors and officers of those entities. As a consequence, our charter documents include indemnification and exculpation clauses similar to those formerly contained in Seagate Technology, Inc.’s charter documents and the premiums for our directors’ and officers’ liability insurance policies are paid by New SAC.

Seagate Technology Holdings 2001 Share Option Plan.    This plan provides for grants of non-qualified and incentive stock options to key employees, directors and consultants to acquire common shares of Seagate Technology Holdings. This plan is administered by Seagate Technology Holdings’ board of directors, which is entitled to delegate this administration at any time to a board committee or sub-committee designated to administer it. The board or committee that administers the plans will determine the participants and the terms of options granted, including the exercise price, number of shares subject to the option and the exercisability of them.

The board or committee that administers the plan determines the price of the options granted under the plan at the time of grant. The board or committee also establish the vesting schedules for the options, provided that the board or committee may not set a vesting schedule that is more restrictive than 20% per year.

If a transaction occurs that would have a dilutive effect on the value of the options granted under the plan, the board or committee that administers the plan will have, in its sole discretion, the right to make a substitution or adjustment, as it deems to be equitable, regarding the number or kind of shares or other securities issued or reserved for issuance pursuant to the plans or pursuant to outstanding options, the option price and/or any other affected terms of the options.

In the event of a change in control, the board or committee administering the plan, may, in its sole discretion, take action, as it deems necessary or desirable regarding any option, including the following:            

· acceleration of the vesting of an option;            

· the payment of a cash amount in exchange for the cancellation of an option equal to the product of (a) the excess, if any, of the fair market value per share at the time over the option price multiplied by (b) the number of shares then subject to the option; and            

82

· requiring the assumption of the outstanding options by the successor entity or the issuance of substitute options or other equity based awards that will substantially preserve the value, rights and benefits of any affected options previously granted.

If the option is not assumed, substituted, cashed-out or otherwise continued following the change in control, the plan provides that the option will become immediately vested and exercisable immediately prior to the change in control.

As of March 29, 2002, options to purchase an aggregate of 69,542,772 common shares at a price of $2.30 per share and an aggregate of 9,147,045 common shares at a price of $5.00 per share were outstanding under the plan, being held by approximately 33,000 employees, non-employee directors and consultants of Seagate Technology Holdings and its subsidiaries. As of March 29, 2002, options to purchase 1,381,189 common shares had been exercised.

83

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of Seagate Technology Holdings’ outstanding common and preferred shares as of March 29, 2002 by:

· each person who is known to us to be the beneficial owner of 5% or more of our outstanding voting power;

· each of our executive officers named in the summary compensation table;

· each of our directors; and

· all directors and executive officers as a group.

All of the outstanding shares of the issuer, Seagate Technology HDD Holdings, are owned by Seagate Technology Holdings.

Name and Address of Beneficial Owner	Number of Common Shares	Number of Preferred Shares		Percentage of Total Voting Power (1)
5% Holders:
New SAC	—	400,000,000	(2)	99.7	%
c/o Maples & Calder
P.O. Box 309GT
Ugland House
South Church Street
George Town, Grand Cayman
Cayman Islands
Affiliates of Silver Lake Partners, L.P.	—	400,000,000	(3)	99.7	%
c/o Silver Lake Partners, L.P.
2725 Sand Hill Road
Menlo Park, California 94025
TPG SAC Advisors Corp.	—	400,000,000	(4)	99.7	%
c/o Texas Pacific Group
301 Commerce Street—Suite 3300
Fort Worth, Texas 76102
August Capital III, L.P.	—	400,000,000	(5)	99.7	%
2480 Sand Hill Road—Suite 101
Menlo Park, California 94025
Named Executive Officers and Members of the Board of Directors:
Stephen J. Luczo(6)	168,871	—	(7)	*
William D. Watkins(6)	244,563	—	(8)	*
Charles C. Pope(6)	146,738	—		*
Townsend H. Porter, Jr.(6)	198,585	—		*
Donald L. Waite(6)	68,600	—		*
David Bonderman(9)	—	—	(10)	—
James G. Coulter(9)	—	—	(11)	—
James A. Davidson(12)	—	—	(13)	—
Glenn H. Hutchins(12)	—	—	(14)	—
David F. Marquardt(15)	—	—	(16)	—
David J. Roux(12)	—	—	(17)	—
John W. Thompson(6)	—	—	(18)	—
All Executive Officers and Members of the Board of Directors As a Group (18 Persons)	1,757,022	—	(19)	*

  * Less than 1%.

  (1) Total voting power is based on 1,381,189 common shares and 400 million preferred shares outstanding as of March 29, 2002, together with applicable options to purchase common shares for each shareholder exercisable on

84

March 29, 2002 or within 60 days thereafter. Each common share and each preferred share is entitled to one vote. We have determined beneficial ownership in accordance with the rules of the SEC based on factors, including voting and investment power, with respect to shares subject to applicable community property laws. Common shares issuable upon the exercise of options currently exercisable or exercisable within 60 days after March 29, 2002 are deemed outstanding for computing the percentage ownership of the person holding the options, but are not deemed outstanding for computing the percentage of any other person.

  (2) New SAC owns all the outstanding preferred shares of Seagate Technology Holdings.

  (3) Includes 400 million preferred shares beneficially owned by New SAC, to which affiliates of Silver Lake Partners, L.P. may be deemed, as a result of their ownership of 39.1% of New SAC’s total outstanding voting power, to have shared voting or dispositive power. The affiliates of Silver Lake Partners, L.P., however, disclaim this beneficial ownership. The affiliates of Silver Lake Partners, L.P. include Silver Lake Partners Caymans, L.P., Silver Lake Investors Caymans, L.P. and Silver Lake Investors Technology Caymans, L.P. In addition, affiliates of Integral Capital Partners own directly and indirectly, through their investment in these investment funds of Silver Lake Partners, L.P., ordinary and preferred shares of New SAC.

  (4) Includes 400 million preferred shares beneficially owned by New SAC, to which TPG SAC Advisors Corp. may be deemed, as a result of its ownership of 26.4% of New SAC’s total outstanding voting power, to have shared voting or dispositive power. TPG SAC Advisors Corp., however, disclaims this beneficial ownership.

  (5) Includes 400 million preferred shares beneficially owned by New SAC, to which August Capital III, L.P. may be deemed, as a result of its ownership of 10.2% of New SAC’s total outstanding voting power, to have shared voting or dispositive power. August Capital III, L.P., however, disclaims this beneficial ownership.

  (6) The business address of each of these individuals is our office at 920 Disc Drive, Scotts Valley, California 95067.

  (7) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Luczo may be deemed, in his capacity as a director and the chief executive officer of New SAC, to have shared voting or dispositive power. Mr. Luczo disclaims this beneficial ownership.

  (8) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Watkins may be deemed, in his capacity as a director and the chief operating officer of New SAC, to have shared voting or dispositive power. Mr. Watkins disclaims this beneficial ownership.

  (9) Messrs. Bonderman and Coulter are shareholders of TPG SAC Advisors Corp., which is the sole general partner of TPG SAC GenPar, L.P., which is the sole general partner of SAC Investments, L.P., which owns ordinary and preferred shares of New SAC. Messrs. Bonderman and Coulter are also shareholders of each of TPG Advisors III, Inc. and T3 Advisors, Inc., each of which controls the investment funds that are the limited partners of SAC Investments, L.P. In addition, David Bonderman, James G. Coulter, Justin T. Chang, John W. Marren and William S. Price are principals of Texas Pacific Group and are shareholders of TPG SAC Advisors Corp. As a result of the above, each of these individuals may be deemed to share beneficial ownership of the shares owned by SAC Investments, L.P. Each of them disclaims this beneficial ownership. The business address of each of these individuals is c/o TPG SAC Advisors Corp. at the address listed in the table.

(10) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Bonderman may be deemed, in his capacity as a director of New SAC, to have shared voting or dispositive power. Mr. Bonderman disclaims this beneficial ownership.

(11) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Coulter may be deemed, in his capacity as a director of New SAC, to have shared voting or dispositive power. Mr. Coulter disclaims this beneficial ownership.

(12) Messrs. Davidson, Hutchins and Roux are (a) shareholders and directors of Silver Lake (Offshore) AIV GP Ltd., which is the sole general partner of Silver Lake Technology Associates Caymans, L.P., which is the sole general partner of each of Silver Lake Partners Caymans, L.P., Silver Lake Investors Caymans, L.P. and Silver Lake Technology Investors Caymans, L.P., which we refer to as the Silver Lake funds, which own ordinary and preferred shares of New SAC and (b) limited partners of Silver Lake Technology Associates Caymans, L.P. Messrs. Hutchins and Roux are also limited partners of Silver Lake Technology Investors Caymans, L.P. In addition, Messrs. Davidson, Hutchins and Roux are founders and partners of Silver Lake Partners, L.P., an affiliate of each of the Silver Lake funds. As a result of the above, Messrs. Davidson, Hutchins and Roux may be deemed to share beneficial ownership of the shares owned by the Silver Lake funds. Each of them disclaims this beneficial ownership. The business address of each of these individuals is c/o Silver Lake Partners, L.P. at the address listed in the table.

(13) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Davidson may be deemed, in his capacity as a director of New SAC, to have shared voting or dispositive power. Mr. Davidson disclaims this beneficial ownership.

85

(14) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Hutchins may be deemed, in his capacity as a director of New SAC, to have shared voting or dispositive power. Mr. Hutchins disclaims this beneficial ownership.

(15) Mr. Marquardt is an Investment Member of August Capital Management, L.L.C., which is the sole general partner of August Capital III, L.P. As a result, he may be deemed to share beneficial ownership of August Capital III, L.P.’s ownership of ordinary and preferred shares. He disclaims this beneficial ownership. The business address of Mr. Marquardt is c/o August Capital Management, L.L.C. at the address listed in the table.

(16) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Marquardt may be deemed, in his capacity as a director of New SAC, to have shared voting or dispositive power. Mr. Marquardt disclaims this beneficial ownership.

(17) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Roux may be deemed, in his capacity as a director of New SAC, to have shared voting or dispositive power. Mr. Roux disclaims this beneficial ownership.

(18) Does not include 400 million preferred shares beneficially owned by New SAC, to which Mr. Thompson may be deemed, in his capacity as a director of New SAC, to have shared voting or dispositive power. Mr. Thompson disclaims this beneficial ownership.

(19) Does not include 400 million preferred shares beneficially owned by New SAC, to which each of the directors may be deemed, in his capacity as a director of New SAC, to have shared voting or dispositive power. Each director disclaims this beneficial ownership.

86

RELATED PARTY TRANSACTIONS

Shareholders Agreement

As of the date of the closing of the November 2000 transactions, our parent company, New SAC, entered into a shareholders agreement with our sponsor group, the principal terms of which are summarized below. The shareholders agreement will terminate in the event that 50% or more of New SAC’s shares are sold or distributed to the public or are actively traded on a national securities exchange.

Corporate Governance.    New SAC’s board of directors consists of nine members, three of whom are designated by Silver Lake Partners, two of whom are designated by Texas Pacific Group, one of whom is an executive officer of New SAC whose appointment is reasonably acceptable to a majority of the directors, one of whom is an independent director proposed by Silver Lake Partners, approved by Texas Pacific Group and reasonably acceptable to a majority of the directors, one of whom is the CEO of New SAC and one of whom is a member selected by a majority of the directors. The consent of at least seven members of New SAC’s board of directors is required before New SAC may voluntarily commence a bankruptcy proceeding or take other actions that could materially affect us such as entering into a material business combination, selling a material amount of assets, entering into a material transaction with a member of our sponsor group or any of its affiliates, authorizing, issuing or selling equity securities or options or warrants to purchase equity securities, paying dividends or amending its memorandum and articles of association. Accordingly, our ability to engage in some transactions requiring shareholder approval or the approval of New SAC’s board of directors will effectively be limited without the consent of specified members of our sponsor group. In addition, the consent of eight directors is required to increase or decrease the size of New SAC’s board, and the consent of seven directors is required for the exercise of the drag-along rights described below, and the consent of at least five directors, with no management directors participating, is required to terminate the CEO of New SAC or appoint a replacement for that position.

Preemptive Rights.    The members of our sponsor group have preemptive rights allowing them to acquire for cash, in proportion to their respective shareholdings in New SAC, additional securities proposed to be issued and sold by New SAC, excluding shares issued upon the exercise of outstanding options granted under employee benefit plans or similar arrangements. If a shareholder fails to exercise its preemptive rights, New SAC has the right to sell these additional securities.

Transfer Restrictions; Tag-Along Rights; Drag-Along Rights.    No party to the shareholders agreement is permitted to sell, transfer or otherwise dispose of any of New SAC’s shares until the earlier of November 22, 2003 or 180 days after an initial public offering of New SAC, without the prior consent of both Silver Lake Partners and Texas Pacific Group, subject to customary exceptions. After November 22, 2003, each member of our sponsor group will have a right of first offer to acquire any shares that another member of our sponsor group proposes to sell or otherwise transfer, and any third party buyer will be subject to approval of New SAC’s board of directors, excluding those members affiliated with the transferring shareholder. In addition, each member of our sponsor group and member of the management group has customary tag-along rights, which are the rights to include its shares, on the same terms and conditions, in any sale by a member of our sponsor group to a third party, on a proportional basis based on relative ownership levels at that time. Finally, beginning after the earlier of November 22, 2003 or 180 days after an initial public offering of New SAC, any member of our sponsor group who becomes a majority shareholder of New SAC will also have drag-along rights, meaning that if this member receives an offer from a third party to purchase a majority of New SAC’s outstanding shares or enter into a business combination, such member will have the right to cause New SAC’s other shareholders to join in the sale or business combination on the same terms and conditions.

Registration Rights.    Subject to specified limitations, New SAC agreed in the shareholders agreement to include its shares owned by the members of our sponsor group, on a proportional basis, in any public offering, other than the initial public offering of its shares, by granting all members of our sponsor group unlimited

87

piggyback registration rights, members of our sponsor group holding at least 20% of New SAC’s outstanding shares three demand registrations, and members of our sponsor group holding at least 10% of New SAC’s outstanding shares one demand registration right. New SAC has agreed to pay all registration expenses relating to these registrations and to indemnify the selling shareholders.

Management Shareholders Agreement

On the closing of the November 2000 transactions, New SAC entered into a management shareholders agreement with members of the management group. After the closing of the November 2000 transactions, other senior officers and employees of New SAC, who were granted shares or options to purchase shares, were required to join the management shareholders agreement. We refer to the members of the management group and these other persons as management shareholders. The management shareholders agreement, except for specified provisions relating to piggyback registration rights, will terminate when at least 50% of New SAC’s issued and outstanding ordinary shares have been sold or distributed to the public or are actively traded on a national securities exchange or interdealer quotation system.

Transfer Restrictions.    Under the management shareholders agreement, each management shareholder agreed, subject to customary exceptions, not to transfer any of shares of New SAC acquired in connection with the November 2000 transactions prior to the earliest to occur of the sale of at least 15% of New SAC’s outstanding ordinary shares in a qualified public offering, a change of control of New SAC, or November 22, 2005.

Tag-Along Rights.    Prior to a qualified public offering, management shareholders will have the tag-along rights that are provided in the shareholders agreement between New SAC and our sponsor group, but only with respect to unrestricted and vested ordinary shares of New SAC.

Drag-Along Rights.    If any member of our sponsor group who becomes a majority shareholder of New SAC receives an offer from a third party to purchase at least a majority of New SAC’s outstanding ordinary shares, and such member decides to accept that offer, then the management shareholders will be required to transfer a proportionate number of their preferred and vested ordinary shares of New SAC in that sale.

Right of First Refusal.    If, following the earliest to occur of a qualified public offering of New SAC, a change of control of New SAC and the fifth anniversary (with respect to management shareholders who are senior managers of New SAC) or the second anniversary (with respect to other management shareholders) of the closing of the November 2000 transactions, but prior to an initial public offering of New SAC, a management shareholder receives an offer from a third party to purchase any of his unrestricted and vested ordinary or preferred shares of New SAC, then New SAC will have the right of first refusal to purchase all such shares on substantially the same terms and conditions.

Call Rights.    If the employment of a management shareholder terminates for any reason prior to the lapse date, New SAC will have the option, for 60 days, to purchase any ordinary or preferred shares of New SAC held by that individual. If New SAC does not exercise that option within the 60-day period, then the members of our sponsor group and management shareholders who are our senior managers will have the same call right.

Piggyback Registration Rights.    Each management shareholder will have the piggyback registration rights (and, under specified circumstances, the demand registration rights) contained in the shareholders agreement between New SAC and our sponsor group.

Monitoring, Consulting and Financial Service Fees

On the closing of the November 2000 transactions, our sponsor group was paid a consulting and financial advisory fee of $40 million. In addition, we pay an annual fee of $2 million to Silver Lake, Texas Pacific Group and August Capital in exchange for the monitoring, management, business strategy, consulting and financial

88

services that they provide. Silver Lake, Texas Pacific Group and August Capital share the $2 million annual fee among themselves in the manner provided in the shareholders agreement. Silver Lake owns shares of New SAC representing approximately 39.1% of its total voting power, and three of New SAC’s board members (Messrs. Roux, Davidson and Hutchins) are managing members of Silver Lake Partners. Texas Pacific Group owns shares of New SAC representing approximately 26% of its total voting power, and two of New SAC’s board members (Messrs. Bonderman and Coulter) are principals of Texas Pacific Group. August Capital owns shares of New SAC representing approximately 10% of of its total voting power, and one of New SAC’s board members (Mr. Marquardt) is a co-founder of August Capital.

Other Related Matters

Shortly after the November 2000 transactions, New SAC made interest-free payments on behalf of a number of our employees for state and federal taxes payable by them. All relevant employees have since reimbursed New SAC for these payments. In particular, payments were made on behalf of Stephen J. Luczo in the amount of $1,672,327, William D. Watkins in the amount of $452,265, Charles C. Pope in the amount of $467,892, William L. Hudson in the amount of $108,048, Brian S. Dexheimer in the amount of $291,541, Townsend H. Porter in the amount of $338,323, Donald L. Waite in the amount of $359,402 and David A. Wickersham in the amount of $200,908. Each of these individuals repaid these amounts between December 19, 2000 and January 5, 2001.

In addition, in connection with the November 2000 transactions, New SAC and its subsidiaries entered into transactions relating to employment agreements and benefit and compensation plans, the principal terms of which are described under “The November 2000 Transactions” and “Management—Employment and Other Agreements.”

Indemnification Agreement

In connection with the stock purchase agreement and the merger agreement, on March 29, 2000 New SAC entered into an indemnification agreement with Seagate Technology, Inc. and VERITAS. Under the indemnification agreement, New SAC and its subsidiaries jointly and severally agreed to indemnify Seagate Technology, Inc. and VERITAS and their affiliates from and against specified losses relating to taxes and other liabilities incurred as a result of the ownership and operation by Seagate Technology, Inc. and its predecessors or affiliates, other than VERITAS and its subsidiaries, of their businesses, properties and assets prior to, and certain conduct by New SAC and its affiliates after, the closing of the November 2000 transactions. In addition, Seagate Technology, Inc., VERITAS and their affiliates jointly and severally agreed to indemnify New SAC and its subsidiaries from and against specified losses relating to taxes and other liabilities incurred as a result of their ownership and operation of their businesses, properties and assets prior to, and certain conduct by them after, the closing of the November 2000 transactions.

On the closing of the November 2000 transactions, VERITAS deposited $150 million of cash into an escrow account. The escrow agreement permits New SAC to withdraw all or a portion of the escrowed funds to satisfy tax liabilities that were assumed by New SAC as part of the November 2000 transactions that relate to and for which New SAC will become liable, if at all, on completion of the tax audits of Seagate Technology, Inc. for those taxable periods beginning on or after July 1, 1999 and ending on or before the closing of the November 2000 transactions.

Indemnification of Directors and Officers

The articles of association of New SAC and its subsidiaries provide for the indemnification of the directors and officers of these entities against liabilities that they may incur while discharging the duties of their offices. See “Management—Employment and Other Agreements—Director and Officer Indemnification and Insurance.”

89

Transactions with Our Affiliates

Asset and Stock Purchase Agreements

On June 29, 2000, one of our subsidiaries, Seagate Technology International, or STI, formed Seagate Removable Storage Solutions International, or RSSI, to hold the international tape drive business of STI. RSSI then created a subsidiary, Seagate RSS (M) Sdn Bhd, or RSS (M), to manage the Malaysian operations of the international tape drive business. On November 20, 2000, shortly before the consummation of the November 2000 transactions, STI transferred to RSSI a portion of its international tape drive operations, consisting of plant and machinery from STI’s Singapore branch, in exchange for 1,000 shares of RSSI’s capital stock. Also on November 20, 2000, STI, in exchange for 2,000 additional shares of RSSI’s capital stock, contributed $1.9 million to RSSI and assumed $3.2 million of liabilities that RSSI had assumed from RSS (M) after RSS (M) purchased $3.2 million worth of land and buildings, comprising another portion of STI’s international tape drive business, from STI’s subsidiary, Penang Seagate Industries (M) Sdn Bhd. As part of the November 2000 transactions, STI transferred all of the outstanding shares of RSSI’s capital stock to Seagate Removable Storage Solutions Holdings, a subsidiary of New SAC, which is now the direct parent of RSSI.

On June 30, 2001, RSSI purchased all of the outstanding shares of the capital stock of Seagate Distribution (UK) Limited, another of our affiliates, from STI for $11.3 million. Prior to consummating this sale, both STI and RSSI investigated the value of Seagate Distribution (UK) Limited to an unrelated third party and concluded that the purchase price paid by RSSI accurately reflected the value of Seagate Distribution (UK) Limited.

Stephen J. Luczo, a director of Seagate Technology Holdings and a director of Seagate Technology HDD Holdings, is the Chief Executive Officer of RSSI. William D. Watkins, a director of Seagate Technology Holdings and a director of Seagate Technology HDD Holdings, is the Chief Operating Officer and President of both RSSI and STI.

Research and Development Cost Sharing Agreement and World-Wide Services Agreement

Seagate Technology LLC, a subsidiary of Seagate Technology HDD Holdings, and STI are parties to a Research and Development Cost Sharing Agreement dated June 29, 1996. Under this agreement, the parties agree to share the research and development costs associated with manufacturing rigid disc drives. In fiscal year 2001, this cost-sharing arrangement resulted in a net payment of approximately $610 million from STI to Seagate Technology LLC. The purpose of this agreement is to properly apportion the costs associated with product development between the two companies.

Seagate Technology LLC and STI are also parties to a World-Wide Services Agreement dated July 1, 1993. Under this agreement, the parties agree to provide each other with a wide variety of services, including management, marketing, technical and support services. In fiscal year 2001, this cross-service arrangement resulted in a net payment of approximately $360 million from STI to Seagate Technology LLC. The purpose of this agreement is to minimize the duplication and overlap of various services and to properly apportion the costs for providing those services between the two companies.

Stephen J. Luczo, a director of Seagate Technology Holdings and Seagate Technology HDD Holdings, is the Chief Executive Officer of Seagate Technology LLC. William D. Watkins, a director of Seagate Technology Holdings and Seagate Technology HDD Holdings, is the Chief Operating Officer and President of STI and the Chief Operating Officer and Vice President of Seagate Technology LLC. Donald L. Waite is a director of Seagate Technology HDD Holdings and is also the Chief Administrative Officer and an Executive Vice President of Seagate Technology LLC.

90

Transactions with Our Management

Indebtedness of Our Management

David Wickersham, an Executive Vice President of Seagate Technology Holdings and Seagate Technology HDD Holdings, borrowed $120,000 from our predecessor, Seagate Technology, Inc., pursuant to a promissory note dated May 8, 1998. Mr. Wickersham paid off his obligations under this note prior to the expiration of the note on May 31, 2001.

Brian S. Dexheimer, an Executive Vice President of Seagate Technology Holdings and Seagate Technology HDD Holdings, borrowed $500,000 from Seagate Technology LLC pursuant to a promissory note dated October 10, 2000. The principal of, and the accrued but unpaid interest on, this note will be due and payable on October 10, 2005. Interest on this note accrues at a rate of 8% per year but will be forgiven every year so long as Mr. Dexheimer remains employed by Seagate Technology LLC. Additionally, $83,333 of the principal of the note will be forgiven on the second, third and fourth anniversaries of the effective date of the note as long as Mr. Dexheimer remains employed by Seagate Technology LLC. In the event that Mr. Dexheimer voluntarily resigns or is terminated for cause before October 10, 2005, all of the unforgiven principal plus any accrued interest will become immediately due and payable. If, however, Mr. Dexheimer is terminated as a result of a reduction in workforce initiated by Seagate Technology LLC or becomes deceased, then the principal amount of the note will be due and payable on October 10, 2005 and all interest will be forgiven. The full amount of this loan is currently outstanding.

Jeremy Tennenbaum, an Executive Vice President of Seagate Technology Holdings and Seagate Technology HDD Holdings, borrowed $1.2 million from Seagate Technology LLC pursuant to a promissory note dated February 16, 2001. The principal of, and the accrued but unpaid interest on, this note will be due and payable on February 16, 2006. Interest on this note accrues at a rate of 8% per year but will be forgiven every year so long as Mr. Tennenbaum remains employed by Seagate Technology LLC. Additionally, $200,000 of the principal of the note will be forgiven on the second, third and fourth anniversaries of the effective date of the note as long as he remains employed by Seagate Technology LLC. In the event that Mr. Tennenbaum voluntarily resigns or is terminated for cause before February 16, 2006, all of the unforgiven principal plus any accrued interest will become immediately due and payable. If, however, Mr. Tennenbaum is terminated as a result of a reduction in workforce initiated by Seagate Technology LLC or becomes deceased, then the principal of the note will be due and payable on February 16, 2006 and all interest will be forgiven. The full amount of this loan is currently outstanding.

Intercompany Indebtedness

On January 23, 2002, two of Seagate Technology Holdings’ subsidiaries, Seagate Technology LLC and XIOtech Corporation, entered into an intercompany loan agreement, pursuant to which Seagate Technology LLC agreed to advance up to $80 million, on a revolving basis, to XIOtech Corporation at an interest rate equal to 3.5% plus the then-applicable LIBOR rate. Interest on the advances is payable monthly. Upon any default by XIOtech Corporation, including any failure by XIOtech Corporation to pay any amounts payable under the loan agreement when due, the breach by XIOtech Corporation of any covenant or condition contained in the loan agreement or the initiation of any voluntary or involuntary bankruptcy or insolvency proceeding relating to XIOtech Corporation, Seagate Technology LLC may accelerate all outstanding amounts payable under the loan agreement so that these amounts become immediately due and payable. In addition, Seagate Technology LLC may set off any amount owing to XIOtech Corporation against any amounts owed by XIOtech Corporation to Seagate Technology LLC under the loan agreement. The initial term of the loan will expire on January 23, 2003, but the parties have the option of renewing the loan for successive one-year periods. As of April 26, 2002, XIOtech Corporation owed approximately $65 million, including interest, under the loan.

91

THE EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

In connection with the private offering of the outstanding notes, on May 13, 2002, we entered into a registration rights agreement with the initial purchasers of the outstanding notes. The following description of the registration rights agreement is only a brief summary of the agreement. It does not purport to be complete and is qualified in its entirety by reference to all of the terms, conditions and provisions of the registration rights agreement. For further information, please refer to the registration rights agreement that we filed as an exhibit to the registration statement of which this prospectus is a part.

Pursuant to the registration rights agreement, we agreed to:

· file with the SEC a registration statement on an appropriate form under the Securities Act of 1933 relating to a registered exchange offer whereby the outstanding notes may be exchanged for the exchange notes;

· use our reasonable best efforts to cause the registration statement to be declared effective under the Securities Act of 1933 within 210 days after the issuance of the outstanding notes; and

· keep the registration statement effective for 20 business days (or longer, if required by applicable law) after the date on which the notice of the exchange offer is mailed to the holders of the outstanding notes.

The exchange notes will have terms substantially identical to the outstanding notes, except that the exchange notes will not contain terms relating to transfer restrictions, registration rights and additional interest for failure to observe specified obligations in the registration rights agreement.

In the event that:

· the applicable interpretations of the SEC staff do not permit us to effect the exchange offer;

· we do not consummate the exchange offer within 250 days after the original issuance of the outstanding notes;

· any initial purchaser requests that we file a shelf registration statement with respect to outstanding notes that are not eligible to be exchanged for the exchange notes in the exchange offer and are held by the initial purchaser after the consummation of the exchange offer;

· any holder is prohibited by law or SEC policy from participating in the exchange offer and the holder requests that we file a shelf registration statement; or

· any holder that participates in the exchange offer and does not receive freely tradable exchange notes on the day of the exchange and the holder requests that we file a shelf registration statement

we will use our reasonable best efforts to file a shelf registration statement with respect to the resale of the outstanding notes or the exchange notes with the SEC. Upon the occurrence of the first event listed above, we will use our reasonable best efforts to cause the shelf registration statement to be declared effective on or before the 210th calendar day after the original issuance of the outstanding notes. Upon the occurrence of any of the other events listed above, we will use our reasonable best efforts to cause the shelf registration statement to be declared effective on or before the 60th day after the date that the shelf registration statement is required to be filed.

We will keep the shelf registration statement effective until the earliest of:

· the date when the notes covered by the shelf registration statement can be freely sold under Rule 144 under the Securities Act;

· two years from the effective date of the shelf registration statement; and

· the date when all of the notes registered under the shelf registration statement are disposed of.

92

If Seagate Technology HDD Holdings fails to comply with specified obligations under the registration rights agreement, it will be required to pay additional interest to holders of the outstanding notes.

These obligations include:

· the obligation to cause the exchange offer registration statement to be declared effective within 210 days after the issuance of the outstanding notes;

· the obligation to consummate the exchange offer within 40 days after the SEC declares the registration statement effective;

· the obligation to cause the shelf registration statement (if a shelf registration statement is required) to be filed within the timeframe required by the registration rights agreement; and

· the obligation to keep the registration statement or the shelf registration statement, as the case may be, effective and usable during the periods specified in the registration rights agreement.

Each holder of the outstanding notes that wishes to exchange the outstanding notes for transferable exchange notes in the exchange offer will be required to make the following representations:

· any exchange notes will be acquired in the ordinary course of its business;

· the holder has no arrangement with any person to participate in the distribution of the exchange notes; and

· the holder is not an “affiliate”, as the term is defined in Rule 405 of the Securities Act, of the issuer or, if it is an affiliate, that it will comply with applicable registration and prospectus delivery requirements of the Securities Act.

Resale of Exchange Notes

Based on interpretations of the SEC staff set forth in no-action letters issued to unrelated third parties, we believe that the exchange notes issued under the exchange offer in exchange for the outstanding notes may be offered for resale, resold and otherwise transferred by any exchange note holder without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

· the holder is not an “affiliate”, as such term is defined in Rule 405 under the Securities Act, of the issuer or, if the holder is an affiliate, that it will comply with the applicable registration and prospectus delivery requirements of the Securities Act;

· the exchange notes are acquired in the ordinary course of the holder’s business; and

· the holder does not intend to participate in the distribution of the exchange notes.

Any holder who tenders in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes:

· cannot rely on the position of the staff of the SEC enunciated in Exxon Capital Holdings Corporation or similar interpretive letters; and

· must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

This prospectus may be used for an offer to resell, for the resale or for other retransfer of the exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives the exchange notes for its own account in exchange for the outstanding notes, where such outstanding notes were acquired by that broker-dealer as a result of market- making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes.

93

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, the issuer will accept for exchange any outstanding notes properly tendered and not withdrawn prior to the expiration date. The issuer will issue $1,000 in principal amount of the exchange notes in exchange for each $1,000 in principal amount of the outstanding notes surrendered under the exchange offer. The outstanding notes may be tendered only in integral multiples of $1,000.

The form and terms of the exchange notes will be substantially identical to the form and terms of the outstanding notes, except the exchange notes will be registered under the Securities Act, will not bear legends restricting their transfer and will not provide for any additional interest upon failure by the issuer to fulfill its obligations under the registration rights agreement to file, and cause to be effective, a registration statement. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be issued under, and be entitled to the benefits of, the same indenture that authorized the issuance of the outstanding notes. Consequently, both series will be treated as a single class of debt securities under that indenture.

The exchange offer is not conditioned upon any minimum aggregate principal amount of the outstanding notes being tendered for exchange.

This prospectus and the letter of transmittal are being sent to all registered holders of the outstanding notes. There will be no fixed record date for determining registered holders of the outstanding notes entitled to participate in the exchange offer.

Holders do not have any appraisal rights or dissenters’ rights under the indenture in connection with the exchange offer. The issuer intends to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Securities Exchange Act and the rules and regulations of the SEC. Outstanding notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits under the indenture relating to the outstanding notes. See, however, “—Consequences of Failure to Exchange.”

The issuer will be deemed to have accepted for exchange properly tendered outstanding notes when it has given notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from the issuer and delivering the exchange notes to the tendering holders. Subject to the terms of the registration rights agreement, the issuer expressly reserves the right to amend or terminate the exchange offer, and not to accept for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under “—Conditions to the Exchange Offer.”

Holders who tender the outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. The issuer will pay all charges and expenses, other than the applicable taxes described below, in connection with the exchange offer. See “—Fees and Expenses” below for more details regarding fees and expenses incurred in the exchange offer.

Expiration Date; Extensions; Amendments

The exchange offer will expire at 5:00 p.m., New York City time, on                                         , 2002, unless the issuer, in its sole discretion, extends it.

To extend the exchange offer, the issuer will notify the exchange agent of any extension. The issuer will notify the registered holders of the outstanding notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

94

The issuer reserves the right, in its sole discretion, to delay the acceptance of any outstanding notes tendered, to extend the exchange offer or to terminate the exchange offer and to refuse to accept any outstanding notes not previously accepted, if any of the conditions set forth in the section “—Conditions to the Exchange Offer” below has not been satisfied, by notifying the exchange agent of such delay, extension or termination, or subject to the terms of the registration rights agreement, to amend the terms of the exchange offer in any manner.

Any delay in acceptance, extension, termination or amendment will be followed by an oral notice or a written notice of such delay, extension, termination or amendment to the registered holders of the outstanding notes as promptly as practicable under the circumstances. If the issuer amends the exchange offer in a manner that it determines to constitute a material change, it will promptly disclose the amendment in a manner that is reasonably calculated to inform the holders of the outstanding notes.

Without limiting the manner in which it may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, the issuer has no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to a financial news service.

Conditions to the Exchange Offer

The issuer is not required to accept for exchange, or to exchange any exchange notes for, any outstanding notes, and it may terminate the exchange offer as provided in this prospectus before accepting any outstanding notes if in its reasonable judgment:

· the exchange notes to be received will not be tradable by the holder without restriction under the Securities Act or the Securities Exchange Act or without material restrictions under the blue sky or securities laws of substantially all of the states of the United States;

· the exchange offer, or the making of any exchange by a holder of the outstanding notes, would violate applicable law or any applicable interpretation of the staff of the SEC; or

· any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in the issuer’s judgment, would reasonably be expected to impair the ability of the issuer to proceed with the exchange offer.

In addition, the issuer will not be obligated to accept for exchange the outstanding notes of any holder that has not made to the issuer:

· the representations described under “—Purpose and Effect of the Exchange Offer”, “—Procedures for Tendering” and “Plan of Distribution”; and

· such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to it an appropriate form for registration of the exchange notes under the Securities Act.

The issuer expressly reserves the right, at any time or at various times, to extend the period of time during which the exchange offer is open. Consequently, the issuer may delay acceptance of any outstanding notes by notifying the holders of the extension. During any such extensions, all outstanding notes previously tendered will remain subject to the exchange offer, and the issuer may accept them for exchange. The issuer will return any outstanding notes that it does not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

The issuer expressly reserves the right to amend or terminate the exchange offer and to reject any outstanding notes not previously accepted for exchange upon the occurrence of any of the conditions of the exchange offer specified above. The issuer will notify the holders of the outstanding notes of any extension, amendment, non-acceptance or termination as promptly as practicable. In the case of any extension, this notice

95

will be issued no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

These conditions are for the sole benefit of the issuer, and the issuer may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in its sole discretion. If the issuer fails at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of these rights. Each of these rights will be deemed an ongoing right that the issuer may assert at any time or at various times.

In addition, the issuer will not accept any outstanding notes tendered, and will not issue any exchange notes in exchange for the tendered outstanding notes, if any stop order will be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939.

Procedures for Tendering

Only a holder of the outstanding notes may tender the outstanding notes in the exchange offer. To tender in the exchange offer, a holder must:

· complete, sign and date the letter of transmittal or a facsimile of the letter of transmittal, have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires and mail or deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration date; or

· comply with DTC’s Automated Tender Offer Program procedures described below.

In addition, either:

· the exchange agent must receive the outstanding notes along with the letter of transmittal; or

· the exchange agent must receive, prior to the expiration date, a timely confirmation of book-entry transfer of the outstanding notes into the exchange agent’s account at DTC according to the procedures for book-entry transfer described below or a properly transmitted agent’s message; or

· the holder must comply with the guaranteed delivery procedures described below.

To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at the address set forth below under “—Exchange Agent” prior to the expiration date.

A tender that is not withdrawn prior to the expiration date will constitute an agreement between the tendering holder and the issuer in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal.

The method of delivering the outstanding notes, the letter of transmittal and all other required documents to the exchange agent is at the holder’s election and risk. Rather than mailing these items, the issuer recommends that holders use an overnight or hand-delivery service. In all cases, the holders should allow sufficient time to assure delivery to the exchange agent before the expiration date. The holders should not send the letter of transmittal or the outstanding notes to the issuer. The holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.

Any beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owner’s behalf. If the beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the letter of transmittal and delivering its outstanding notes, either:

· make appropriate arrangements to register ownership of the outstanding notes in such owner’s name; or

96

· obtain a properly completed bond power from the registered holder of outstanding notes.

The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.

Signatures on a letter of transmittal or a notice of withdrawal described below must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another “eligible institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act, unless the outstanding notes are tendered:

· by a registered holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or

· for the account of an eligible institution.

If the letter of transmittal is signed by a person other than the registered holder listed on the outstanding notes, those outstanding notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder’s name appears on the outstanding notes and an eligible institution must guarantee the signature on the bond power.

If the letter of transmittal or any outstanding notes or any bond power is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. Unless waived by the issuer, they should also submit evidence satisfactory to the issuer of their authority to deliver the letter of transmittal.

The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC’s system may use DTC’s Automated Tender Offer Program to tender. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the outstanding notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent’s message to the exchange agent. The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation to the effect that:

· DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering the outstanding notes that are the subject of the book-entry confirmation;

· the participant has received and agrees to be bound by the terms of the letter of transmittal (or, in the case of an agent’s message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery); and

· the agreement may be enforced against such participant.

Seagate Technology HDD Holdings will, in its sole discretion, determine all questions as to the validity, form, eligibility (including time of receipt), acceptance of any tendered outstanding notes and withdrawal of tendered outstanding notes. The issuer’s determination will be final and binding. The issuer reserves the absolute right to reject any outstanding notes not properly tendered or any outstanding notes the acceptance of which would, in the opinion of the issuer’s counsel, be unlawful. The issuer also reserves the right to waive any defects, irregularities or conditions of tender as to particular outstanding notes. The issuer’s interpretation of the terms and conditions of the exchange offer (including the instructions in the letter of transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within such time as the issuer shall determine. Although the issuer intends to notify the tendering holders of any defects or irregularities, neither the issuer, the exchange agent nor any other person will incur any liability for failure to give the notification. Tenders of outstanding notes will not be deemed made until the defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that is not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

97

In all cases, the issuer will issue the exchange notes for the outstanding notes that it has accepted under the exchange offer only after the exchange agent timely receives:

· the outstanding notes or a timely book-entry confirmation of the outstanding notes into the exchange agent’s account at DTC; and

· a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message.

By signing the letter of transmittal, each tendering holder of the outstanding notes will represent to the issuer that, among other things:

· any exchange notes that the holder receives will be acquired in the ordinary course of its business;

· the holder has no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;

· if the holder is not a broker-dealer, that it is not engaged in and does not intend to engage in the distribution of the exchange notes;

· if the holder is a broker-dealer that will receive the exchange notes for its own account in exchange for the outstanding notes that were acquired as a result of market-making activities, that it will deliver a prospectus, as required by law, in connection with any resale of the exchange notes; and

· the holder is not an “affiliate”, as such term is defined in Rule 405 of the Securities Act, of the issuer or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act.

Book-Entry Transfer

The exchange agent will establish an account with respect to the outstanding notes at DTC for purposes of the exchange offer promptly after the date of this prospectus; and any financial institution participating in DTC’s system may make a book-entry delivery of the outstanding notes by causing DTC to transfer the outstanding notes into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer. Any holder who is unable to deliver the confirmation of the book-entry tender of its outstanding notes into the exchange agent’s account at DTC or is unable to deliver the documents required by the letter of transmittal to the exchange agent on or prior to the expiration date may tender their outstanding notes according to the guaranteed delivery procedures described below.

Guaranteed Delivery Procedures

Any holder that wishes to tender its outstanding notes but cannot deliver the outstanding notes, the letter of transmittal or the required documents to the exchange agent or comply with the applicable procedures under DTC’s Automated Tender Offer Program prior to the expiration date may still tender if:

· the tender is made through an eligible institution;

· prior to the expiration date, the exchange agent receives from the eligible institution either a properly completed and duly executed notice of guaranteed delivery (by facsimile transmission, mail or hand-delivery) or a properly transmitted agent’s message and notice of guaranteed delivery:

— setting forth the name and address of the holder, the registered number(s) of the outstanding notes and the principal amount of the outstanding notes tendered;

98

— stating that the tender is being made by guaranteed delivery; and

— guaranteeing that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal, or facsimile of the letter of transmittal, together with the outstanding notes or a book-entry confirmation, and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and

· the exchange agent receives the properly completed and executed letter of transmittal, or facsimile of the letter of transmittal, as well as all tendered outstanding notes in proper form for transfer or a book-entry confirmation, and all other documents required by the letter of transmittal, within three New York Stock Exchange trading days after the expiration date.

Upon request to the exchange agent, a notice of guaranteed delivery will be sent to any holder that wishes to tender its outstanding notes according to the guaranteed delivery procedures set forth above.

Withdrawal of Tenders

Except as otherwise provided in this prospectus, any tendering holder may withdraw its tender at any time prior to the expiration date. For a withdrawal to be effective:

· the exchange agent must receive a written notice by telegram, telex, facsimile transmission or letter of withdrawal at one of the addresses set forth below under “—Exchange Agent,” or

· the withdrawing holder must comply with the appropriate procedures of DTC’s Automated Tender Offer Program system.

Any notice of withdrawal must:

· specify the name of the person who tendered the outstanding notes to be withdrawn;

· identify the outstanding notes to be withdrawn, including the principal amount of such outstanding notes; and

· where certificates for the outstanding notes have been transmitted, specify the name in which the outstanding notes were registered, if different from that of the withdrawing holder.

If certificates for the outstanding notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of the certificates, the withdrawing holder must also submit:

· the serial numbers of the particular certificates to be withdrawn; and

· a signed notice of withdrawal with signatures guaranteed by an eligible institution unless the holder is an eligible institution.

If the outstanding notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of such facility. The issuer will determine all questions as to the validity, form and eligibility (including time of receipt) of such notices, and its determination is final and binding on all parties. The issuer will deem any outstanding notes so withdrawn not to have been validly tendered for purposes of the exchange offer. All outstanding notes that have been tendered but that are not exchanged for any reason will be returned to their holder without cost to the holder or, in the case of book-entry transfer, the outstanding notes will be credited to an account maintained with DTC as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn tenders may be retendered by following one of the procedures described under “—Procedures for Tendering” above at any time on or prior to the expiration date.

99

Exchange Agent

U.S. Bank, N.A. has been appointed as the exchange agent for the exchange offer. You should direct any questions and requests for assistance, requests for additional copies of this prospectus, the letter of transmittal or the notice of guaranteed delivery to the exchange agent as follows:

By Registered or Certified Mail:	Facsimile Transmission Number:	By Hand or Over Night Delivery
	(Eligible Institutions Only)
U. S. Bank, N.A. 180 East Fifth Street	(651) 244-1142	U. S. Bank, N.A. 180 East Fifth Street
St. Paul, MN 55101 Attention: Specialized Finance	(Confirm transmission by calling the number below)	St. Paul, MN 55101 Attention: Specialized Finance
Services Mail Station: EP-MN-T4CT	(651) 244-8112	Services Mail Station: EP-MN-T4CT

Delivery of the letter of transmittal to an address other than as set forth above or transmission via facsimile other than as set forth above does not constitute a valid delivery of the letter of transmittal.

Fees and Expenses

The issuer will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, the issuer may make additional solicitations by telegraph, telephone or in person by its officers and regular employees and those of its affiliates.

The issuer has not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. The issuer will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses.

The issuer will pay the cash expenses to be incurred in connection with the exchange offer. These expenses include:

· SEC registration fees;

· fees and expenses of the exchange agent and trustee;

· accounting and legal fees and printing costs; and

· related fees and expenses.

The expenses are estimated in the aggregate to be approximately $1,000,000.

Transfer Taxes

The issuer will pay the transfer taxes, if any, applicable to the exchange of the outstanding notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

· the certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the outstanding notes tendered;

· the tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or

· a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer.

100

If satisfactory evidence of payment of transfer taxes is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed to that tendering holder.

Holders who tender their outstanding notes for exchange will not be required to pay any transfer taxes. However, holders who instruct the issuer to register the exchange notes in the name of, or request that the outstanding notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be required to pay the applicable transfer taxes.

Consequences of Failure to Exchange

If you do not exchange your outstanding notes for the exchange notes under the exchange offer, your outstanding notes will remain subject to the transfer restrictions applicable to the outstanding notes:

· as set forth in the legend printed on the notes as a consequence of the issuance of the outstanding notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and

· as set forth in the offering memorandum distributed in connection with the private offering of the outstanding notes.

In general, you may not offer or sell your outstanding notes unless they are registered under the Securities Act or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, the issuer does not intend to register resales of the outstanding notes under the Securities Act. Based on interpretations of the SEC staff, the exchange notes issued pursuant to the exchange offer may be offered for resale, resold or otherwise transferred by their holders, other than to any holder that is our “affiliate” within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the holders acquired the exchange notes in the ordinary course of the holders’ business and the holders have no arrangement or understanding with respect to the distribution of the exchange notes to be acquired in the exchange offer. Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes:

· could not rely on the applicable interpretations of the SEC; and

· must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

Accounting Treatment

The issuer will record the exchange notes in its accounting records at the same carrying value as the outstanding notes, which is the aggregate principal amount, as reflected in our accounting records on the date of exchange. Accordingly, the issuer will not recognize any gain or loss for accounting purposes in connection with the exchange offer. The issuer will record the expenses of the exchange offer as incurred.

Other

Participation in the exchange offer is voluntary, and you should carefully consider whether to accept the offer. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

The issuer may in the future seek to acquire the untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. The issuer has no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.

101

DESCRIPTION OF THE NOTES

Seagate Technology HDD Holdings issued the outstanding notes, and will issue the exchange notes under an Indenture (the “Indenture”) dated May 13, 2002, among itself, Seagate Technology Holdings, as guarantor, and U.S. Bank, N.A., as trustee (the “Trustee”). The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (the “Trust Indenture Act”).

Certain terms used in this description are defined under the subheading “—Certain Definitions.” In this description, the word “Company” refers only to Seagate Technology HDD Holdings and not to any of its Subsidiaries and the word “Parent” refers only to Seagate Technology Holdings and not to any of its Subsidiaries.

The following description is only a summary of the material provisions of the Indenture. We urge you to read the Indenture, which was filed as an exhibit to the registration statement of which this prospectus forms a part, because it, not this description, defines your rights as a holder of the notes.

Brief Description of the Notes

The notes:

· are unsecured senior obligations of the Company;

· are senior in right of payment to any future Subordinated Obligations of the Company; and

· are guaranteed by Parent.

Principal, Maturity and Interest

The Company initially issued the outstanding notes and will issue the exchange notes with a maximum aggregate principal amount of $400 million. The Company will issue the exchange notes in denominations of $1,000 and any integral multiple of $1,000. The notes will mature on May 15, 2009. Subject to our compliance with the covenant described under the subheading “—Certain Covenants—Limitation on Indebtedness,” we are entitled to, without the consent of the Holders, issue more notes under the Indenture on the same terms and conditions and with the same CUSIP numbers as the outstanding notes and in an unlimited aggregate principal amount (the “Additional Notes”). The outstanding notes and the Additional Notes, if any, will be treated as a single class for all purposes of the Indenture, including waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the Indenture and this “Description of the Notes,” references to the notes include any Additional Notes actually issued.

Interest on the notes will accrue at the rate of 8% per annum and will be payable semiannually in arrears on May 15 and November 15, commencing on November 15, 2002. We will make each interest payment to the holders of record of the notes on the immediately preceding May 1 and November 1. We will pay interest on overdue installments of interest at the above rate to the extent lawful.

Interest on each exchange note will accrue from the last interest payment date on which interest was paid on the outstanding note surrendered in exchange therefor, or, if no interest has been paid on such outstanding note, from the date of its original issue. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Additional interest may accrue on the outstanding notes in certain circumstances pursuant to the Registration Rights Agreement at a rate of 1.0% per annum. We will pay such additional interest, if applicable, on regular interest payment dates. Such additional interest will be in addition to any other interest payable from time to time with respect to the outstanding notes and the exchange notes.

102

All references in the Indenture, in any context, to any interest or other amount payable on or with respect to the notes shall be deemed to include any additional interest pursuant to the Registration Rights Agreement.

Optional Redemption

Except as set forth below or under “—Redemption for Changes in Withholding Taxes,” the Company will not be entitled to redeem the notes at its option prior to May 15, 2006.

On and after May 15, 2006, the Company will be entitled at its option to redeem all or a portion of the notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on May 15 of the years set forth below:

Period	Redemption Price
2006	104	%
2007	102	%
2008 and thereafter	100	%

In addition, before May 15, 2005, the Company may at its option on one or more occasions redeem notes (which includes Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the notes (which includes Additional Notes, if any) originally issued with the Net Cash Proceeds from one or more Equity Offerings (1) by the Company or (2) by Parent to the extent the Net Cash Proceeds thereof are contributed to the Company or used to purchase Capital Stock (other than Disqualified Stock) of the Company from the Company, at a redemption price equal to 108% of the principal amount thereof, plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that after giving effect to any such redemption:

(1)  at least 65% of such aggregate principal amount of notes (which includes Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption (other than notes held, directly or indirectly, by the Company or its Affiliates); and

(2)  each such redemption occurs within 90 days after the date of the related Equity Offering.

At any time prior to May 15, 2006, the notes may be redeemed, as a whole but not in part, at the option of the Company upon the occurrence of a, or if applicable each, Change of Control, upon not less than 30 or more than 60 days’ prior notice (but in no event may any such redemption occur more than 90 days after the occurrence of such Change of Control) mailed by first-class mail to each Holder’s registered address, at a redemption price equal to the sum of (1) the principal amount thereof and (2) the Applicable Premium as of, and accrued and unpaid interest, if any, to, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

“Applicable Premium” means, with respect to a note at any redemption date, the greater of (1) 1.0% of the principal amount of such note and (2) the excess of (A) the present value of (1) the redemption price of such note at May 15, 2006, as set forth in the table above (but excluding accrued interest) plus (2) all required interest payments due on such note through May 15, 2006, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the then-outstanding principal amount of such note.

“Treasury Rate” means the yield to maturity at the time of computation of U.S. Treasury securities with a constant maturity (as compiled by, and published in, the most recent Federal Reserve Statistical Release H.15(519) which has become publicly available at least two Business Days prior to the date fixed for redemption

103

of the Notes following a Change of Control (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to May 15, 2006; provided, however, that if the period from the redemption date to May 15, 2006, is not equal to the constant maturity of a U.S. Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of U.S. Treasury securities for which such yields are given, except that if the period from the redemption date to May 15, 2006 is less than one year, the weekly average yield on actually traded U.S. Treasury adjusted to a constant maturity of one year shall be used.

Selection and Notice of Redemption

If we are redeeming less than all the notes at any time, the Trustee will select notes on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate.

We will redeem notes of $1,000 or less in whole and not in part. We will cause notices of redemption to be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address.            

If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount thereof to be redeemed. We will issue a new note in a principal amount equal to the unredeemed portion of the original note in the name of the Holder upon cancelation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

We are not required to make any mandatory redemption or sinking fund payments with respect to the notes. However, under certain circumstances, we may be required to offer to purchase notes as described under the captions “—Change of Control” and “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock.” We may at any time and from time to time purchase notes in the open market or otherwise.

Additional Amounts

The Company and Parent are required to make all payments under or with respect to the notes and the Parent Guaranty free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and other liabilities related thereto) (hereinafter “Taxes”) imposed or levied by or on behalf of the government of the Cayman Islands or any political subdivision or any authority or agency therein or thereof having power to tax, or within any other jurisdiction in which we are organized or are otherwise resident for tax purposes or any jurisdiction from or through which payment is made (each a “Relevant Taxing Jurisdiction”), unless the obligor is required to withhold or deduct Taxes by law or by the interpretation or administration thereof.

If the Company or Parent are so required to withhold or deduct any amount for or on account of Taxes imposed by a Relevant Taxing Jurisdiction from any payment made under or with respect to the notes or the Parent Guaranty, the Company or Parent, as the case may be, will be required to pay such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by you (including Additional Amounts) after such withholding or deduction will not be less than the amount you would have received if such Taxes had not been withheld or deducted; provided, however, that the foregoing obligation to pay Additional Amounts does not apply to (1) any Taxes that would not have been so imposed but for the existence of any present or former connection between the relevant Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over the relevant Holder, if the relevant Holder is an estate, nominee, trust or corporation) and the Relevant Taxing Jurisdiction (other than the mere receipt of such payment or the

104

ownership or holding outside of the Cayman Islands of such note, but including, without limitation, such relevant Holder (or such fiduciary, settlor, beneficiary, member or shareholder or possessor) being or having been a citizen or resident thereof or being or having been present or engaged in a trade or business therein or having or having had a permanent establishment therein); (2) any estate, inheritance, gift, sales, excise, transfer, personal property tax or similar tax, assessment or governmental charge; (3) any Tax that is imposed or withheld by reason of the failure by the Holder or the beneficial owner of the note to comply with a request of the Company or Parent addressed to the Holder (x) to provide information, documents or other evidence concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make and deliver any declaration or other similar claim (other than a claim for refund of a tax, assessment or other governmental charge withheld by the Company or Parent) or satisfy any information or reporting requirements, which, in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Relevant Taxing Jurisdiction as a precondition to exemption from all or part of such Tax; or (4) any Tax that is payable otherwise than by withholding from payment of principal of, premium, if any, or interest on such note; nor will the Company or Parent pay Additional Amounts (a) if the payment could have been made without such deduction or withholding if the beneficiary of the payment had presented the note for payment within 30 days after the date on which such payment or such note became due and payable or the date on which payment thereof is duly provided for, whichever is later (except to the extent that the holder would have been entitled to Additional Amounts had the note been presented on the last day of such 30 day period), (b) if, at the election of the relevant Holder, the payment of principal of (or premium, if any, on) or interest on such note could have been made through another paying agent without such deduction or withholding or (c) with respect to any payment of principal of (or premium, if any, on) or interest on or with respect to such note to any holder who is a fiduciary or partnership (for U.S. federal tax purposes) or any person other than the sole beneficial owner of such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a partner of such a partnership or the beneficial owner of such payment would not have been entitled to the Additional Amounts had such beneficiary, settlor, partner or beneficial owner been the actual holder of such note.

Upon request, we will provide the Trustee with official receipts or other documentation satisfactory to the Trustee evidencing the payment of the Taxes with respect to which Additional Amounts are paid.            

Whenever in the Indenture there is mentioned, in any context:

(1)  the payment of principal;

(2)  purchase prices in connection with a purchase of notes;

(3)  interest; or

(4)  any other amount payable on or with respect to any of the notes,

such reference shall be deemed to include payment of Additional Amounts as described under this heading to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.

The Company will pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery, enforcement or registration of the notes, the Indenture or any other document or instrument in relation thereof, or the receipt of any payments with respect to the notes, excluding such taxes, charges or similar levies imposed by any jurisdiction outside of the Cayman Islands or the United States (or any political subdivision or taxing authority of either jurisdiction), the jurisdiction of incorporation of any successor of the Company or any jurisdiction in which a paying agent is located or the Company is organized or engaged in business for tax purposes, and the Company will agree to indemnify the Holders for any such taxes paid by such Holders.

The obligations described under this heading will survive any termination, defeasance or discharge of the Indenture and will apply mutatis mutandis to any jurisdiction in which any successor Person to the Company or Parent is organized or any political subdivision or taxing authority or agency thereof or therein.

105

For a discussion of Cayman Islands withholding taxes applicable to payments under or with respect to the Notes and the Parent Guaranty, see “Certain U.S. Income Tax Considerations.”

Redemption for Changes in Withholding Taxes

The Company is entitled to redeem the notes, at its option, at any time as a whole but not in part, upon not less than 30 nor more than 60 days’ notice, at 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), in the event the Company has become or would become obligated to pay, on the next date on which any amount would be payable with respect to the notes, any Additional Amounts as a result of:

(1)  a change in or an amendment to the laws (including any regulations or rulings promulgated thereunder) of (x) the Cayman Islands, (y) any jurisdiction, other than the United States, from or through which a payment on the notes is made or (z) any other jurisdiction, other than the United States, in which the Company or Parent is organized (or any political subdivision or taxing authority thereof or therein), in any such case which change or amendment is announced or becomes effective on or after May 3, 2002; or

(2)  any change in or amendment to any official position regarding the application or interpretation of such laws, regulations or rulings, or any execution of or amendment to any treaty or treaties affecting taxation to which such jurisdiction (or such political subdivision or taxing authority) is a party, which change or amendment is announced or becomes effective on or after May 3, 2002,

and we cannot avoid such obligation by taking reasonable measures available to us.

Before we publish or mail notice of redemption of the notes as described above, we will deliver to the Trustee an officers’ certificate to the effect that we cannot avoid our obligation to pay Additional Amounts by taking reasonable measures available to us. We will also deliver an opinion of independent legal counsel of recognized standing stating that we would be obligated to pay Additional Amounts as a result of a change in tax laws, regulations or rulings or the application or interpretation of such laws regulations, rulings or treaties, as applicable.

Guarantee

Parent has fully and unconditionally guaranteed, on a senior unsecured basis, the Company’s obligations under the notes. In connection with either an initial public offering of the Company that involves an underwritten public offering of common stock of the Company or a merger or consolidation between Parent and New SAC in a transaction permitted by the provisions set forth under “—Certain Covenants—Merger and Consolidation,” Parent will, at Parent’s option, be released from the Parent Guaranty.

Pursuant to the Indenture, Parent may consolidate with, merge with or into, or transfer all or substantially all its assets to any other Person to the extent described below under “—Certain Covenants—Merger and Consolidation;” provided, however, that if such other Person is not the Company, Parent’s obligations under the Parent Guaranty must be expressly assumed by such other Person.

If Parent and the Company merge or consolidate in a transaction permitted by the provisions set forth under “—Certain Covenants—Merger and Consolidation,” then the Parent Guaranty shall automatically be terminated upon the consummation of such merger or consolidation and shall no longer have any effect from such time.

Ranking

Senior Indebtedness versus Notes

The indebtedness evidenced by the notes and the Parent Guaranty is unsecured and ranks pari passu in right of payment to the Senior Indebtedness of the Company and Parent, as the case may be.

106

As of March 29, 2002, after giving pro forma effect to the Refinancing Transactions:

(1)  the Company’s Senior Indebtedness would have been approximately $751 million, including $350 million of secured indebtedness; and

(2)  Parent’s Senior Indebtedness would have been approximately $751 million, including $350 million of secured indebtedness.

Virtually all of Parent’s Senior Indebtedness consists of Parent’s guarantees of Senior Indebtedness under the Credit Agreement and with respect to the notes.

The notes are unsecured obligations of the Company. Secured debt and other secured obligations of the Company (including obligations with respect to the Credit Agreement) are effectively senior to the notes to the extent of the value of the assets securing such debt or other obligations.

The Parent Guaranty is an unsecured obligation of Parent. Secured debt and other secured obligations of Parent (including obligations with respect to the Credit Agreement) are effectively senior to Parent’s guarantee of the notes to the extent of the value of the assets securing such debt or other obligations.

Liabilities of Subsidiaries versus Notes

A substantial portion of the Company’s operations are conducted through its subsidiaries. Claims of creditors of such subsidiaries, including trade creditors and creditors holding indebtedness or guarantees issued by such subsidiaries, and claims of any preferred stockholders of such subsidiaries generally will have priority with respect to the assets and earnings of such subsidiaries over the claims of creditors of the Company, including holders of the notes. Accordingly, the notes are effectively subordinated to creditors (including trade creditors) and preferred stockholders, if any, of subsidiaries of the Company.

At March 29, 2002, after giving pro forma effect to the Refinancing Transactions, the total liabilities of our subsidiaries were approximately $1.86 billion, including trade payables and $350 million of secured indebtedness of certain of such subsidiaries pursuant to their guarantees of and borrowings under the Credit Agreement. Although the Indenture limits the incurrence of Indebtedness and preferred stock of certain subsidiaries of the Company, such limitation is subject to a number of significant qualifications. Moreover, the Indenture does not impose any limitation on the incurrence by such subsidiaries of liabilities that are not considered Indebtedness under the Indenture. See “—Certain Covenants—Limitation on Indebtedness.”

Change of Control

Upon the occurrence of any of the following events (each a “Change of Control”), each Holder shall have the right to require that the Company repurchase such Holder’s notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date):

(1)  prior to the earlier to occur of (A) the first public offering of common stock of Parent or (B) the first public offering of common stock of the Company, the Permitted Holders cease to be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority in the aggregate of the total voting power of the Voting Stock of Parent or the Company, whether as a result of issuance of securities of Parent or the Company, any merger, consolidation, liquidation or dissolution of Parent or the Company, or any direct or indirect transfer of securities by Parent or the Company or otherwise (for purposes of this clause (1) and clause (2) below, the Permitted Holders shall be deemed to beneficially own any Voting Stock of a Person (the “specified person”) held by any other Person (the “parent entity”) so long as the Permitted Holders beneficially own (as so defined), directly or indirectly, in the aggregate a majority of the voting power of the Voting Stock of the parent entity);

107

(2)  any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in clause (1) above, except that for purposes of this clause (2) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company; provided, however, that the Permitted Holders beneficially own (as defined in clause (1) above), directly or indirectly, in the aggregate a lesser percentage of the total voting power of the Voting Stock of the Company than such other person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of the Company (for the purposes of this clause (2), such other person shall be deemed to beneficially own any Voting Stock of a specified person held by a parent entity, if such other person is the beneficial owner (as defined in this clause (2)), directly or indirectly, of more than 35% of the voting power of the Voting Stock of such parent entity and the Permitted Holders beneficially own (as defined in clause (1) above), directly or indirectly, in the aggregate a lesser percentage of the voting power of the Voting Stock of such parent entity and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the board of directors of such parent entity);

(3)  individuals who on the Issue Date constituted the Board of Directors of the Company or the Parent Board (together with any new directors whose election by such Board of Directors of the Company or the Parent Board or whose nomination for election by the shareholders of the Company or Parent, as the case may be, was approved by a vote of a majority of the directors of the Company or of Parent, as the case may be, then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company or the Parent Board then in office;

(4)  the adoption of a plan relating to the liquidation or dissolution of the Company; or

(5)  the merger or consolidation of Parent or the Company with or into another Person or the merger of another Person with or into Parent or the Company, or the sale of all or substantially all the assets of Parent or the Company (determined on a consolidated basis) to another Person (other than, in all such cases, a Person that is controlled by the Permitted Holders), other than a transaction following which, in the case of a merger or consolidation transaction, holders of securities that represented 100% of the Voting Stock of Parent or the Company immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction and in substantially the same proportion as before the transaction.

Following the first day that Parent is permitted to be released from the Parent Guaranty in connection with an initial public offering of the Company, as described above under “—Guarantee,” all references to Parent and Parent Board in clauses (1) to (5) above shall be deemed to be deleted.

Within 30 days following any Change of Control, we will mail a notice to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

(1)  that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder’s notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date);

(2)  the circumstances and relevant facts regarding such Change of Control;

(3)  the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

(4)  the instructions, as determined by the Company, consistent with the covenant described hereunder, that a Holder must follow in order to have its notes purchased.

108

The Company will not be required to make a Change of Control Offer following a Change of Control if (a) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn under such Change of Control Offer or (b) the Company has exercised its option to redeem all the notes pursuant to the provisions described above under “—Optional Redemption.”

The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described hereunder, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the covenant described hereunder by virtue of its compliance with such securities laws or regulations.

The Change of Control purchase feature of the notes may in certain circumstances make more difficult or discourage a sale or takeover of Parent and the Company and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of negotiations between Parent, the Company and the Initial Purchasers. Neither the Company nor Parent have the present intention to engage in a transaction involving a Change of Control, although it is possible that we or they could decide to do so in the future. Subject to the limitations discussed below, we or Parent could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to Incur additional Indebtedness are contained in the covenants described under “—Certain Covenants—Limitation on Indebtedness,” “—Limitation on Liens” and “—Limitation on Sale/Leaseback Transactions,” which limitations may be terminated as described below under the first paragraph of “—Certain Covenants.” Such restrictions can only be waived with the consent of the holders of a majority in principal amount of the notes then outstanding. Except for the limitations contained in such covenants, however, the Indenture will not contain any covenants or provisions that may afford holders of the notes protection in the event of a highly leveraged transaction.

The Credit Agreement prohibits the Company from purchasing any notes pursuant to a Change of Control Offer and also provides that the occurrence of certain change of control events with respect to Parent or the Company constitute a default thereunder. In the event a Change of Control occurs at a time when the Company is prohibited from purchasing notes, the Company may seek the consent of its lenders to the purchase of notes or may attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing notes. In such case, the failure to offer to purchase notes would constitute a Default under the Indenture, which would, in turn, constitute a default under the Credit Agreement.

Future indebtedness that we may incur may contain prohibitions on the occurrence of certain events that would constitute a Change of Control or require the repurchase of such indebtedness upon a Change of Control. Moreover, the exercise by the Holders of their right to require us to repurchase the notes could cause a default under such indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on us. Finally, our ability to pay cash to the Holders of notes following the occurrence of a Change of Control may be limited by our then existing financial resources. We cannot assure you that sufficient funds will be available when necessary to make any required repurchases.

The provisions under the Indenture relative to our obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the notes.

109

Certain Covenants

Set forth below are summaries of certain covenants contained in the indenture. Following the first day that:

(a)  the notes have an Investment Grade Rating from both of the Rating Agencies, and

(b)  no Default has occurred and is continuing under the Indenture,

the Company and its Restricted Subsidiaries will not be subject to the provisions of the Indenture summarized under the subcaptions:

· “—Certain Covenants—Limitation on Indebtedness”

· “—Certain Covenants—Limitation on Restricted Payments”

· “—Certain Covenants—Limitation on Restrictions on Distributions from Restricted Subsidiaries”

· “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock”

· “—Certain Covenants—Limitations on Affiliate Transactions”

· clause (a)(3) under “—Certain Covenants—Merger and Consolidation”

· “—Certain Covenants—Amendment of Deferred Compensation Plans.”

Limitation on Indebtedness

(a)  The Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that the Company will be entitled to Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto, the Consolidated Coverage Ratio exceeds 3.0 to 1.0.

(b)  Notwithstanding the foregoing paragraph (a), the Company and the Restricted Subsidiaries will be entitled to Incur any or all of the following Indebtedness:

(1)  Indebtedness of the Company or any Restricted Subsidiary Incurred pursuant to the Credit Agreement; provided, however, that, immediately after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (1) and then outstanding does not exceed $600 million;

(2)  Indebtedness owed to and held by the Company or a Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon and (B) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the notes;

(3)  the outstanding notes and the exchange notes (other than any Additional Notes);

(4)  the Existing Notes and any other Indebtedness to the extent outstanding on the Issue Date after application of the proceeds from the sale of the notes (other than Indebtedness described in clause (1), (2) or (3) of this covenant);

(5)  Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred in contemplation of, in connection with, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that on the date of such acquisition and after giving pro forma effect thereto, either (x) the Company would have been able to Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a)

110

of this covenant after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5) or (y) the Consolidated Coverage Ratio after giving effect to such acquisition would be (i) greater than the Consolidated Coverage Ratio immediately prior to such acquisition and (ii) at least 2.5:1.0;

(6)  Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (4) or (5) or this clause (6);

(7)  Purchase Money Indebtedness and Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to this clause (7) in an aggregate principal amount not in excess of $150 million at any time outstanding;

(8)  Hedging Obligations entered into in good faith to hedge risks with respect to the Company’s and the Restricted Subsidiaries’ interest rate, currency and commodity price exposure;

(9)  obligations in respect of workman’s compensation, performance, bid and surety bonds, completion guarantees and payment obligations in connection with self-insurance or similar requirements provided by the Company or any Restricted Subsidiary in the ordinary course of business;

(10)  Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of its Incurrence;

(11)  Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for customary indemnification, adjustment of purchase price or similar obligations, in each case Incurred in connection with the acquisition or disposition of any business, assets or a Subsidiary by the Company or any Restricted Subsidiary in compliance with the terms of the Indenture, other than Indebtedness consisting of Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

(12)  obligations arising from or representing deferred compensation to employees of the Company or its Subsidiaries (i) that constitute or are deemed to be Indebtedness under GAAP and that are Incurred in the ordinary course of business or (ii) pursuant to the Deferred Compensation Plans; and

(13)  Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount which, when taken together with all other Indebtedness of the Company and the Restricted Subsidiaries outstanding on the date of such Incurrence (other than Indebtedness permitted by clauses (1) through (12) above or paragraph (a)) does not exceed $100 million.

(c)  Notwithstanding the foregoing, the Company and the Restricted Subsidiaries will not incur any Indebtedness pursuant to the foregoing paragraph (b) if the proceeds thereof are used, directly or indirectly, to Refinance any Subordinated Obligations unless such Indebtedness shall be subordinated to the notes to at least the same extent as such Subordinated Obligations.

(d)  For purposes of determining compliance with this covenant, (1) any Indebtedness outstanding under the Credit Agreement on the Issue Date will be treated as Incurred on the Issue Date under clause (1) of paragraph (b) above, (2) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described above, the Company, in its sole discretion, will classify such item of Indebtedness at the time of Incurrence and only be required to include the amount and type of such Indebtedness in one of the above clauses, (3) the Company will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described above and (4) at any time that the Consolidated Coverage Ratio exceeds 3.0 to 1.0, the Company may reclassify Indebtedness originally Incurred pursuant to one or more clauses of paragraph (b) of this covenant as Indebtedness Incurred pursuant to paragraph (a) of this covenant but only to the extent such Indebtedness could have been Incurred pursuant to such paragraph (a).

(e)  Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may Incur pursuant to this covenant shall not be deemed to be exceeded

111

solely as a result of fluctuations in the exchange rates of currencies after the date on which such Indebtedness was Incurred. For purposes of determining compliance with any U.S. dollar denominated restriction on the Incurrence of Indebtedness where the Indebtedness Incurred is denominated in a different currency, the amount of such Indebtedness will be the U.S. Dollar Equivalent determined on the date of the Incurrence of such Indebtedness, provided, however, that if any such Indebtedness denominated in a different currency is subject to a Currency Agreement with respect to the U.S. dollar covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Agreement. The principal amount of any Refinancing Indebtedness Incurred in the same currency as the Indebtedness being Refinanced will be the U.S. Dollar Equivalent of the Indebtedness being Refinanced, except to the extent that (1) such U.S. Dollar Equivalent was determined based on a Currency Agreement, in which case the Refinancing Indebtedness will be determined in accordance with the preceding sentence, and (2) the principal amount of the Refinancing Indebtedness exceeds the principal amount of the Indebtedness being Refinanced, in which case the U.S. Dollar Equivalent of such excess will be determined on the date such Refinancing Indebtedness is Incurred.

Limitation on Restricted Payments

(a)  The Company will not, and will not permit any Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if at the time the Company or such Restricted Subsidiary makes such Restricted Payment:

(1)  a Default shall have occurred and be continuing (or would result therefrom);

(2)  the Company is not entitled to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “—Limitation on Indebtedness;” or

(3)  the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed the sum of (without duplication):

(A)  50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of Fiscal 2002 to the end of the most recent fiscal quarter ended for which financial statements are internally available to the Company prior to the date of such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus

(B)  100% of the aggregate Net Cash Proceeds received by the Company from the issuance or sale of its Capital Stock (other than Disqualified Stock, Excluded Contributions and Designated Preferred Stock) subsequent to the beginning of Fiscal 2002 (other than an issuance or sale to a Subsidiary of the Company and other than an issuance or sale to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees) and 100% of any cash capital contribution (other than Excluded Contributions) received by the Company from its shareholders subsequent to the beginning of Fiscal 2002; plus

(C)  the amount by which Indebtedness of the Company is reduced on the Company’s balance sheet upon the conversion or exchange subsequent to the beginning of Fiscal 2002 of any Indebtedness of the Company convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the fair value of any other property, distributed by the Company upon such conversion or exchange); provided, however, that the foregoing amount shall not exceed the Net Cash Proceeds received by the Company or any Restricted Subsidiary from the sale of such Indebtedness (excluding Net Cash Proceeds from sales to a Subsidiary of the Company or to an employee stock ownership plan or a trust established by the Company or any of its Subsidiaries for the benefit of their employees); plus

(D)  an amount equal to the sum of (x) the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the

112

sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any Restricted Subsidiary, and (y) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.

(b)  The preceding provisions will not prohibit:

(1)  any Restricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or made by exchange for, Capital Stock of the Company (other than Disqualified Stock, other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees and other than any such Net Cash Proceeds that have previously been applied under clause (1), (4), (12) or (14) of this paragraph (b)) or a substantially concurrent cash capital contribution received by the Company from its shareholders; provided, however, that (A) such Restricted Payment shall be excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from the calculation of amounts under clause (3)(B) of paragraph (a) above;

(2)  any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations made by exchange for, or out of the proceeds of the substantially concurrent sale of, Indebtedness which is permitted to be Incurred pursuant to the covenant described under “—Limitation on Indebtedness;” provided, however, that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded in the calculation of the amount of Restricted Payments;

(3)  dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with this covenant; provided, however, that such dividend shall be included in the calculation of the amount of Restricted Payments;

(4)  so long as no Default has occurred and is continuing, the repurchase or other acquisition of shares of Capital Stock of New SAC, Parent or the Company or any of its Subsidiaries from employees, former employees, directors or former directors of New SAC, Parent or the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors of the Company under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate amount of such repurchases and other acquisitions shall not exceed $25 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years); provided further, however, that such amount in any calendar year may be increased by an amount not to exceed (i) the Net Cash Proceeds received by the Company or any of its Restricted Subsidiaries in such calendar year from the sale of Capital Stock of the Company or any of its Restricted Subsidiaries (other than Disqualified Stock or Preferred Stock and other than any such Net Cash Proceeds that have previously been applied under clause (1), (4), (12) or (14) of this paragraph (b)) to members of management or directors of the Company or any of its Restricted Subsidiaries that occurs after the Issue Date (provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (3) of paragraph (a) of this covenant) plus (ii) the cash proceeds of key man life insurance policies received by the Company and its Restricted Subsidiaries in such calendar year after the Issue Date; provided further, however, that such repurchases and other acquisitions shall be excluded in the calculation of the amount of Restricted Payments;

113

(5)  dividends to Parent to be used by Parent solely to pay its franchise taxes and other fees required to maintain its corporate existence and to pay for general corporate and overhead expenses (including salaries and other compensation of the employees) incurred by Parent in the ordinary course of its business; provided, however, that such dividends shall not exceed $3 million in any calendar year; provided further, however, that such dividends shall be excluded in the calculation of the amount of Restricted Payments;

(6)  the payment of dividends on the Company’s common stock following the first bona fide underwritten public offering of common stock of the Company or Parent, as the case may be, after the Issue Date, of up to 6% per annum of the net proceeds received by the Company or Parent, as the case may be, from such public offering; provided, however, that (A) the aggregate amount of all such dividends shall not exceed the aggregate amount of net proceeds received by or, in the case of a public offering by Parent, contributed by Parent to the Company in connection with such public offering and (B) such dividends shall be included in the calculation of the amount of Restricted Payments;

(7)  the payment of, or the making of distributions to Parent solely to allow Parent to pay, annual management, consulting, monitoring and advisory fees to any of the Sponsors; provided, however, that any such payment is permitted by the covenant described under “—Limitation on Affiliate Transactions;” provided further, however, that any such payment shall be excluded in the calculation of the amount of Restricted Payments;

(8)  the making of distributions to Parent and the making of distributions or other payments to participants under the Deferred Compensation Plans, in each case on or about the Issue Date in the amounts and on the terms described in the Offering Memorandum; provided, however, that such distributions and payments shall be excluded in the calculation of the amount of Restricted Payments;

(9)  any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Subordinated Obligations from Net Available Cash to the extent that any surplus Net Available Cash exists after the consummation of an offer to purchase notes under clause (a)(3)(c) of the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock;” provided, however, that such prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value shall be excluded in the calculation of the amount of Restricted Payments;

(10)  any repurchase of Capital Stock of the Company deemed to occur upon the exercise of stock options to acquire Capital Stock of the Company if such Capital Stock represents a portion of the exercise price of such options, provided, however, that such repurchase shall be excluded in the calculation of the amount of Restricted Payments;

(11)  the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Company or its Restricted Subsidiaries issued or Incurred after the Issue Date in accordance with the covenant described under “—Limitation on Indebtedness;” provided, however, that such dividends or distributions shall be excluded in the calculation of the amount of Restricted Payments;

(12)  the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock issued after the Issue Date; provided, however, that (A) for the most recently ended four full fiscal quarters for which financial statements are internally available to the Company immediately preceding the declaration of any such dividend after giving effect to such dividend on a pro forma basis, the Consolidated Coverage Ratio would have been at least 3.0:1.0 and (B) the aggregate amount of dividends declared and paid pursuant to this clause (12) on a particular class or series of Designated Preferred Stock does not exceed the Net Cash Proceeds received by the Company from the sale of such class or series of Designated Preferred Stock issued after the Issue Date that have not, at the date of such payment, been applied under clause (1), (4) or (12) of this paragraph (b); provided further, however, that such dividends shall be excluded in the calculation of the amount of Restricted Payments;

(13)  payments, or the making of distributions to Parent solely to allow payments, which are contemplated by the Indemnification Agreement; provided, however, that such payments shall be excluded in the calculation of the amount of Restricted Payments;

114

(14)  investments that are made with Excluded Contributions (other than Excluded Contributions that have previously been applied under clause (1), (4) or (14) of this paragraph (b)); provided, however, that such Investments shall be excluded in the calculation of the amount of Restricted Payments;

(15)  if the Company or any of its Subsidiaries is a controlled foreign corporation for U.S. federal income tax purposes for all or a portion of the Company’s or any such Subsidiary’s taxable year, the declaration and payment of dividends or distributions on the Company’s Capital Stock within 30 days after the end of the calendar year during which such taxable year ends, in a maximum amount equal to the product of (x) the aggregate amount of “Subpart F income” (within the meaning of Section 952 of the Code, which for the purposes of this clause (15) shall include income includable under Section 951(a)(1)(B) of the Code) of the Company for the portion of such taxable year for which the Company was a controlled foreign corporation plus the amount of Subpart F income of any of the Company’s Subsidiaries for the portion of such taxable year for which such Subsidiary was a controlled foreign corporation, multiplied by (y) 40% (such dividends, “Tax Distributions”); provided that (A) the Company shall have delivered to the Trustee at least 30 calendar days prior to the declaration of such Tax Distribution or any interim Tax Distribution pursuant to clause (C) below, a notice, certified by the Chief Financial Officer of the Company, setting forth in detail reasonably satisfactory to the Trustee the basis for the determination of the amount of such Tax Distribution, (B) Tax Distributions in respect of any Subpart F income of an Unrestricted Subsidiary shall only be permitted if they are made with the proceeds of dividends or distributions from an Unrestricted Subsidiary that are received by the Company or a Restricted Subsidiary; provided that the amount of such dividends and distributions will not increase the amount available for Restricted Payments under clause (3) of paragraph (a) of this covenant, (C)(i) interim Tax Distributions may be made during each calendar year on or shortly after April 10, June 10, September 10 and December 31 of such year based on good-faith estimates of the Subpart F income, if any, of the Company and its Subsidiaries for the taxable year to which such interim Tax Distribution relates and (ii) if any such interim Tax Distributions are made by the Company during a calendar year, then within 30 calendar days after the end of such calendar year the Company shall deliver to the Trustee a determination of the maximum amount of Tax Distributions that may be made for such calendar year, and if the aggregate interim Tax Distributions made for such calendar year exceed such maximum, then such excess amount (“Excess Interim Tax Distributions”) shall be applied to reduce amounts payable under any clause of paragraph (b) of this covenant for the next calendar year and to the extent not so applied, shall be carried forward for application against such amounts in a future calendar year, and (D)(i) any Tax Distributions (excluding any Excess Interim Tax Distributions) paid pursuant to this clause (15) shall be excluded in the calculation of the amount of Restricted Payments and (ii) any Excess Interim Tax Distributions shall be included in the amount of Restricted Payments;

(16)  immediately prior to or concurrently with the initial public offering of the Company that would permit Parent to be released from the Parent Guaranty, as described under “—Guarantee,” the making of distributions by the Company to Parent and the making of distributions or other payments to participants under the Deferred Compensation Plans; provided, however, that (A) on the date of such distributions and payments and after giving effect to such distributions and payments and to such initial public offering and the Net Cash Proceeds therefrom (a) the ratio of (i) the average amount of cash and cash equivalents held by the Company and the Restricted Subsidiaries at the close of business during the five Business Day period ending three Business Days prior to the date of payment of such distributions and payments to (ii) the aggregate amount of all Indebtedness of the Company and the Restricted Subsidiaries outstanding as of such date of payment is no less than 1.1 to 1.0, and (b) no Event of Default has occurred and is continuing and (B) no later than two Business Days prior to the date of payment of such distributions and payments, the Company shall have delivered to the Trustee an Officers’ Certificate dated as of such date that (i) sets forth, in reasonable detail, the calculation of the amount of such distribution and payment and (ii) certifies compliance with the ratio set forth in clause (A) above; provided further, however, that (x) the aggregate amount of all such distributions and payments under this clause (16) shall not exceed $580,000,000 minus the aggregate amount of all distributions and payments made pursuant to clause (b)(8) of this covenant and (y) the amount of any distribution and payment pursuant to this clause (16) shall be included in the calculation of the amount of Restricted Payments;

115

(17)  Restricted Payments consisting of distributions or other payments (whether in cash, securities or other property or any combination thereof) under any Deferred Compensation Plan; provided, however, that such distributions or payments under this clause (17) shall be included in the calculation of the amount of Restricted Payments;

(18)  Restricted Payments in an aggregate amount not to exceed $60 million consisting of dividends or distributions made or paid to Parent prior to or in connection with an underwritten initial public offering of the Company’s common stock; provided that (A) the entire amount of such dividends or distributions are immediately contributed or otherwise provided, directly or indirectly, to XIOtech Corporation, (B) the entire amount of such dividends or distributions are immediately used by XIOtech Corporation to repay in full all amounts then owed by XIOtech Corporation to the Company or its Restricted Subsidiaries, and (C) all dividends, distributions or payments made or paid pursuant to this clause (18) shall be excluded in the calculation of the amount of Restricted Payments; and

(19)  other Restricted Payments in an aggregate amount not to exceed $75 million; provided, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments.

Limitation on Restrictions on Distributions from Restricted Subsidiaries

The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to (a) pay dividends or make any other distributions on its Capital Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to the Company, (b) make any loans or advances to the Company or (c) transfer any of its property or assets to the Company, except:

(1)  with respect to clauses (a), (b) and (c),

(i)  any encumbrance or restriction pursuant to the Credit Agreement, as in effect at the Issue Date, and any other agreement in effect at or entered into on the Issue Date;

(ii)  any encumbrance or restriction with respect to a Restricted Subsidiary contained in the terms of any Indebtedness of such Restricted Subsidiary, which Indebtedness was permitted to be Incurred pursuant to the covenant described above under “—Limitation on Indebtedness” or any agreement pursuant to which such Indebtedness was Incurred if (A) either (I) the encumbrance or restriction applies only in the event of and during the continuance of a payment default or a default with respect to a financial covenant contained in such Indebtedness or agreement or (II) the Company determines at the time any such Indebtedness is Incurred (and at the time of any modification of the terms of any such encumbrance or restriction) that any such encumbrance or restriction will not materially affect the Company’s ability to make principal, premium (if any) or interest payments on the notes and (B) the encumbrance or restriction is not materially more disadvantageous to the Holders of the notes than is customary in comparable financings or agreements (as determined by the Board of Directors of the Company in good faith);

(iii)  any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred in contemplation of, in connection with, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company) and out­standing on such date;

(iv)  any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (i), (ii) or (iii) of clause (1) of this covenant or this clause (iv) or contained in any amendment to an agreement referred to in clause (i), (ii) or (iii) of clause (1) of this covenant or this clause (iv); provided, however, that the encumbrances and

116

restrictions with respect to such Restricted Subsidiary contained in any such refinancing agreement or amendment are no less favorable to the noteholders than encumbrances and restrictions with respect to such Restricted Subsidiary contained in such predecessor agreements;

(v)  any encumbrance or restriction pursuant to applicable law, rule, regulation or order;

(vi)  any encumbrance or restriction on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and

(vii)  customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business.

(2)  with respect to clause (c) only,

(i)  any such encumbrance or restriction consisting of customary nonassignment provisions in leases governing leasehold interests to the extent such provisions restrict the transfer of the lease or the property leased thereunder;

(ii)  restrictions contained in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such security agreements or mortgages; and

(iii)  any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition.

Limitation on Sales of Assets and Subsidiary Stock

(a)  The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Disposition unless:

(1)  the Company or such Restricted Subsidiary receives consideration at the time of such Asset Disposition at least equal to the fair market value (including as to the value of all non-cash consideration), as determined in good faith by the Board of Directors of the Company, of the shares and assets subject to such Asset Disposition;

(2)  at least 75% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of cash or cash equivalents; and

(3)  an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company (or such Restricted Subsidiary, as the case may be):

(A)  first, to the extent the Company elects (or is required by the terms of any Indebtedness), to prepay, repay, redeem or purchase Senior Indebtedness of the Company or Indebtedness (other than any Disqualified Stock) of a Wholly Owned Subsidiary (in each case other than Indebtedness owed to the Company or an Affiliate of the Company) within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash;

(B)  second, to the extent of the balance of such Net Available Cash after application in accordance with clause (A), to the extent the Company elects, to acquire Additional Assets within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; and

(C)  third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B), to make an offer to the holders of the notes (and to holders of other Senior Indebtedness of the Company designated by the Company) to purchase notes (and such other Senior Indebtedness of the Company) pursuant to and subject to the conditions contained in the Indenture;

provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (A) or (C) above, the Company or such Restricted Subsidiary shall permanently retire

117

such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased.

Notwithstanding the foregoing provisions of this covenant, the Company and the Restricted Subsidiaries will not be required to apply any Net Available Cash in accordance with this covenant except to the extent that the aggregate Net Available Cash from all Asset Dispositions which are not applied in accordance with this covenant exceeds $25 million. Pending application of Net Available Cash pursuant to this covenant, such Net Available Cash shall be invested in Temporary Cash Investments or applied to temporarily reduce revolving credit indebtedness.

For the purposes of this covenant, the following are deemed to be cash or cash equivalents:

(1)  the assumption of Indebtedness of the Company or any Restricted Subsidiary and the release of the Company or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition;

(2)  securities received by the Company or any Restricted Subsidiary in an Asset Disposition from the transferee with respect to which the Company or such Restricted Subsidiary shall use its reasonable best efforts to convert into cash within 90 days after the later to occur of (A) the consummation of such Asset Disposition or (B) the expiration of any lock-up or similar restriction on the right of the Company or such Restricted Subsidiary to dispose of such securities; provided, however, that all the cash received upon such conversion shall be Net Available Cash for the purposes of, and applied in accordance with, this covenant; and

(3)  any assets related to a Related Business received in exchange for assets of comparable fair market value in the good faith determination of the Board of Directors of the Company.

(b)  In the event of an Asset Disposition that requires the purchase of notes (and other Senior Indebtedness of the Company) pursuant to clause (a)(3)(C) above, the Company will purchase notes tendered pursuant to an offer by the Company for the notes (and such other Senior Indebtedness) at a purchase price of 100% of their principal amount (or, in the event such other Senior Indebtedness of the Company was issued with significant original issue discount, 100% of the accreted value thereof) without premium, plus accrued but unpaid interest (or, in respect of such other Senior Indebtedness of the Company, such lesser price, if any, as may be provided for by the terms of such Senior Indebtedness) in accordance with the procedures (including prorating in the event of oversubscription) set forth in the Indenture. If the aggregate purchase price of the securities tendered exceeds the Net Available Cash allotted to their purchase, the Company will select the securities to be purchased on a pro rata basis but in round denominations, which in the case of the notes will be denominations of $1,000 principal amount or multiples thereof. The Company shall not be required to make such an offer to purchase notes (and other Senior Indebtedness of the Company) pursuant to this covenant if the Net Available Cash available therefor is less than $25 million (which lesser amount shall be carried forward for purposes of determining whether such an offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). Upon completion of such offer to purchase, Net Available Cash will be deemed to be reduced by the aggregate amount of such offer.

(c)  The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this clause by virtue of its compliance with such securities laws or regulations.

118

Limitation on Affiliate Transactions

(a)  The Company will not, and will not permit any Restricted Subsidiary to, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with, or for the benefit of, any Affiliate of the Company (an “Affiliate Transaction”) unless:

(1)  the terms of the Affiliate Transaction are no less favorable to the Company or such Restricted Subsidiary than those that could be obtained at the time of the Affiliate Transaction in arm’s-length dealings with a Person who is not an Affiliate;

(2)  if such Affiliate Transaction involves an amount in excess of $25 million, the terms of the Affiliate Transaction are set forth in writing and a majority of the non-employee directors of the Company disinterested with respect to such Affiliate Transactions have determined in good faith that the criteria set forth in clause (1) are satisfied and have approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors of the Company; and

(3)  if such Affiliate Transaction involves an amount in excess of $50 million, the Board of Directors of the Company shall also have received a written opinion from an Independent Qualified Party to the effect that such Affiliate Transaction is fair, from a financial standpoint, to the Company and its Restricted Subsidiaries or not less favorable to the Company and its Restricted Subsidiaries than could reasonably be expected to be obtained at the time in an arm’s-length transaction with a Person who was not an Affiliate.

(b)  The provisions of the preceding paragraph (a) will not prohibit:

(1)  any Investment (other than a Permitted Investment) or other Restricted Payment, in each case permitted to be made pursuant to the covenant described under “—Limitation on Restricted Payments;”

(2)  any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the Board of Directors of the Company;

(3)  loans or advances to employees in the ordinary course of business of the Company or its Restricted Subsidiaries, but in any event not to exceed $15 million in the aggregate outstanding at any one time;

(4)  the payment of reasonable and customary fees and compensation to, or the provision of employee benefit arrangements and indemnity for the benefit of, directors, officers, employees and consultants of the Company and its Restricted Subsidiaries in the ordinary course of business;

(5)  any transaction with a Restricted Subsidiary or joint venture or similar entity which would constitute an Affiliate Transaction solely because the Company or a Restricted Subsidiary owns an equity interest in or otherwise controls such Restricted Subsidiary, joint venture or similar entity;

(6)  the payment by the Company or any of its Restricted Subsidiaries of (i) annual management, consulting, monitoring and advisory fees and any related and reasonable out-of-pocket expenses to any of the Sponsors in an aggregate amount, for all the Sponsors, not to exceed $5 million in any calendar year and (ii) fees to any of the Sponsors paid for any financial advisory, financing, underwriting or placement services including, without limitation, in connection with any acquisition transaction or divestiture entered into by the Company or any Restricted Subsidiary; provided, however, that the aggregate amount of fees paid to all of the Sponsors under this clause (ii) in respect of any transaction shall not exceed the lesser of (A) 25% of the total amount of such transaction and (B) the greater of 2% of the total amount of such transaction and $2 million;

(7)  the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Company;

(8)  transactions with customers, clients, suppliers or purchasers or sellers of goods or services in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture which are fair to the Company or its Restricted Subsidiaries, in the good faith determination of the Board of

119

Directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(9)  any agreement as in effect as of the Issue Date on the terms described in the Offering Memorandum or any amendment thereto (so long as any such amendment is not disadvantageous to the Holders of the notes in any material respect) or any transaction contemplated thereby;

(10)  any licensing agreement or similar agreement entered into in the ordinary course of business relating to the use of technology or intellectual property between any of the Company and its Subsidiaries, on the one hand, and any company or other Person, on the other hand, which is an Affiliate of the Company or its Subsidiaries by virtue of the fact that a Sponsor has made an investment in or owns any Capital Stock of such company or other Person which are fair to the Company or its Restricted Subsidiaries, in the reasonable determination of the Board of Directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(11)  the grant of stock options or similar rights to employees and directors of the Company or any of its Restricted Subsidiaries pursuant to plans approved by the Board of Directors of the Company in good faith; and

(12)  the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under, any future amendment to such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (12) to the extent that the terms of any such amendment or new agreement are not disadvantageous to the Holders of the notes in any material respect.

Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries

The Company:

(1)  will not, and will not permit any Restricted Subsidiary to, sell, lease, transfer or otherwise dispose of any Capital Stock of any Restricted Subsidiary to any Person (other than the Company or a Wholly Owned Subsidiary); and

(2)  will not permit any Restricted Subsidiary to issue any of its Capital Stock (other than, if necessary, shares of its Capital Stock constituting directors’ or other legally required qualifying shares) to any Person (other than to the Company or a Wholly Owned Subsidiary),

unless:

(A)  immediately after giving effect to such issuance, sale or other disposition, neither the Company nor any of its Subsidiaries own any Capital Stock of such Restricted Subsidiary; or

(B)  made in compliance with the covenant under “—Limitation on Sales of Assets and Subsidiary Stock” and, immediately after giving effect to such issuance, sale or other disposition, such Restricted Subsidiary either (a) continues to be a Restricted Subsidiary or (b) would no longer constitute a Restricted Subsidiary and any Investment in such Person remaining after giving effect thereto is treated as a new Investment by the Company and such Investment would be permitted to be made under the covenant described under “—Limitation on Restricted Payments” if made on the date of such issuance, sale or other disposition.

The proceeds of any sale of such Capital Stock permitted hereby will be treated as Net Available Cash from an Asset Disposition and must be applied in accordance with the terms of the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock.”

120

Limitation on Liens

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien (the “Initial Lien”) of any nature whatsoever on any of its properties (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, securing any Indebtedness, other than Permitted Liens, without effectively providing that the notes shall be secured equally and ratably with (or prior to) the obligations so secured for so long as such obligations are so secured.

Any Lien created for the benefit of the Holders of the notes pursuant to the preceding sentence shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien.

Limitation on Sale/Leaseback Transactions

The Company will not, and will not permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any property unless:

(1)  the Company or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale/Leaseback Transaction pursuant to the covenant described under “—Limitation on Indebtedness” and (B) create a Lien on such property securing such Attributable Debt without equally and ratably securing the notes pursuant to the covenant described under “—Limitation on Liens;”

(2)  the net proceeds received by the Company or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the fair value (as determined by the Board of Directors of the Company) of such property; and

(3)  the Company applies the proceeds of such transaction in compliance with the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock.”

Merger and Consolidation

(a)  The Company will not consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, directly or indirectly, all or substantially all its assets to, any Person, unless:

(1)  the resulting, surviving or transferee Person (the “Successor Company”) shall be a Person organized and existing under either the laws of Cayman Islands or the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the notes and the Indenture;

(2)  immediately after giving pro forma effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by such Successor Company or such Subsidiary at the time of such transaction), no Default shall have occurred and be continuing;

(3)  immediately after giving pro forma effect to such transaction, either (a) the Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “—Limitation on Indebtedness” or (b) the Consolidated Coverage Ratio would be (i) greater than the Consolidated Coverage Ratio immediately prior to such transaction and (ii) at least 2.5 to 1.0; and

(4)  the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture;

provided, however, that clause (3) will not be applicable to (A) a Restricted Subsidiary consolidating with, merging into or transferring all or part of its properties and assets to the Company or (B) the Company merging

121

with an Affiliate of the Company solely for the purpose and with the sole effect of reincorporating the Company in another jurisdiction.

For the purposes of this covenant, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

The Successor Company will be the successor to the Company and shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture, and the predecessor Company, except in the case of a lease, shall be released from the obligation to pay the principal of and interest on the notes.

(b)  Parent will not merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to any Person unless:

(1)  the resulting, surviving or transferee Person (if not Parent) shall be a Person organized and existing under the laws of the Cayman Islands or under the laws of the United States of America, or any State thereof or the District of Columbia, and such Person shall expressly assume all the obligations of Parent, if any, under the Parent Guaranty;

(2)  immediately after giving effect to such transaction or transactions on a pro forma basis (and treating any Indebtedness which becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been issued by such Person at the time of such transaction), no Default shall have occurred and be continuing; and

(3)  the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guaranty Agreement, if any, complies with the Indenture.

SEC Reports

Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC (unless not permitted by SEC practice), and provide the Trustee and noteholders within 15 days after it files them (or would have filed them if permitted by SEC practice) with the SEC with, such annual reports and such information, documents and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections, such information, documents and other reports to be so filed at the times specified for the filings of such information, documents and reports under such Sections; provided, however, that in lieu of any annual report required of U.S. corporations, if the Company is a “foreign private issuer” for purposes of the Exchange Act, the Company may file and provide such annual report required of foreign private issuers subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; provided further, however, that (a) so long as Parent is the Guarantor of the notes, the reports, information and other documents required to be filed and provided as described in this covenant may, at the Company’s option, be filed and provided by, and be those of, Parent rather than the Company, and (b) in that event and if Parent conducts any business or holds any significant assets other than the capital stock of the Company at the time of filing any such report, information or other document, such reports, information and other documents must include summarized financial information (consistent with that provided in the Offering Memorandum) with respect to the Company and its Subsidiaries.

In addition, the Company shall furnish to the Holders of the notes and to prospective investors, upon the requests of such Holders, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the notes are not freely transferable under the Securities Act.

122

Amendment of Deferred Compensation Plans

The Company will not, and will not permit any Restricted Subsidiary to, (i) amend, modify or waive any of its rights under any Deferred Compensation Plan, except to the extent that such amendments, modifications or waivers, individually and in the aggregate, (1) would not reasonably be expected to be materially adverse to the Holders and (2) would not require the Company or any of its Subsidiaries to make any distributions or other payments (whether in cash, securities or other property or any combination thereof) that would be in violation of the covenants set forth in the Indenture, or (ii) adopt any Deferred Compensation Plan if the terms (including subordination terms) of such Deferred Compensation Plan that are material to the Holders are in any way less favorable to the Indenture than the terms of the Deferred Compensation Plans in effect on the Issue Date. Notwithstanding clause (i) above, the Company will not, and will not permit any Restricted Subsidiary to, amend, modify or waive any of the subordination terms of any Deferred Compensation Plan in effect on the Issue Date.

Defaults

Each of the following is an Event of Default:

(1)  a default in the payment of interest or any Additional Amounts on the notes when due, continued for 30 days;

(2)  a default in the payment of principal of any note when due at its Stated Maturity, upon optional redemption, upon required purchase, upon declaration of acceleration or otherwise;

(3)  the failure by the Company or Parent to comply with its obligations under “—Certain Covenants—Merger and Consolidation” above;

(4)  the failure by the Company to comply for 45 days after notice with any of its obligations in the covenants described above under “—Change of Control” (other than a failure to purchase notes) or under “—Certain Covenants” under “—Limitation on Indebtedness,” “—Limitation on Restricted Payments,” “—Limitation on Restrictions on Distributions from Restricted Subsidiaries,” “—Limitation on Sales of Assets and Subsidiary Stock” (other than a failure to purchase notes), “—Limitation on Affiliate Transactions,” “—Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries,” or “—Limitation on Liens,” “—Limitation on Sale/Leaseback Transactions,” “—SEC Reports” or “—Amendment of Deferred Compensation Plans;”

(5)  the failure by the Company to comply for 60 days after notice with its other agreements contained in the Indenture;

(6)  Indebtedness of the Company or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $50 million or its foreign currency equivalent (the “cross acceleration provision”) and such failure continues for 30 days after notice;

(7)  certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (the “bankruptcy provisions”);

(8)  any judgment or decree for the payment of money (other than judgments which are covered by enforceable insurance policies issued by creditworthy, solvent and reputable insurance carriers) in excess of $50 million or its foreign currency equivalent is entered against the Company or a Significant Subsidiary, remains outstanding for a period of 60 consecutive days following such judgment and is not discharged, waived or stayed within 10 days after notice (the “judgment default provision”); or

(9)  the Parent Guaranty ceases to be in full force and effect (other than in accordance with the terms of the Indenture) or Parent denies or disaffirms its obligations under the Parent Guaranty and such Default continues for 10 days after notice.

123

However, a default under clauses (4), (5), (6), (8) and (9) will not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the notes outstanding notify the Company of the default and the Company does not cure such default within the time specified after receipt of such notice.

If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the notes outstanding may declare the principal of and accrued but unpaid interest on all the notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs and is continuing, the principal of and interest on all the notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holders of the notes. Under certain circumstances, the Holders of a majority in principal amount of the outstanding notes may rescind any such acceleration with respect to the notes and its consequences.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders of the notes unless such holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder of a note may pursue any remedy with respect to the Indenture or the notes unless:

(1)  such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2)  Holders of at least 25% in principal amount of the notes outstanding have requested the Trustee to pursue the remedy;

(3)  such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

(4)  the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5)  Holders of a majority in principal amount of the notes outstanding have not given the Trustee a direction inconsistent with such request within such 60-day period.

Subject to certain restrictions, the Holders of a majority in principal amount of the notes outstanding are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a note or that would involve the Trustee in personal liability.

If a Default occurs, is continuing and is known to the Trustee, the Trustee must mail to each holder of the notes notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of or interest on any note, the Trustee may withhold notice if and so long as a committee of its trust officers determines that withholding notice is not opposed to the interest of the holders of the notes. In addition, we are required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. We are required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action we are taking or propose to take in respect thereof.

Amendments and Waivers

Subject to certain exceptions, the Indenture may be amended with the consent of the Holders of a majority in principal amount of the notes then outstanding (including consents obtained in connection with a tender offer or exchange for the notes) and any past default or compliance with any provisions may also be waived with the consent of the Holders of a majority in principal amount of the notes then outstanding. However, without the

124

consent of each Holder of an outstanding note affected thereby, an amendment or waiver may not, among other things:

(1)  reduce the amount of notes whose Holders must consent to an amendment;

(2)  reduce the rate of or extend the time for payment of interest on any note;

(3)  reduce the principal of or extend the Stated Maturity of any note;

(4)  reduce the amount payable upon the redemption of any note or change the time at which or the preconditions upon which any note may be redeemed as described under “—Optional Redemption” or “—Redemption for Changes in Withholding Taxes” above;

(5)  make any note payable in money other than that stated in the note;

(6)  impair the right of any Holder of the notes to receive payment of principal of and interest on such holder’s notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s notes;

(7)  make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions;

(8)  make any change in the ranking or priority of any note that would adversely affect the noteholders; or

(9)  make any change in the Parent Guaranty that would adversely affect the noteholders; or

(10)  make any change in the provisions of the Indenture described under the “—Redemption for Changes in Withholding Taxes” that adversely affects the rights of any noteholder or amend the terms of the notes or the Indenture in a way that would result in the loss of an exemption from any of the Taxes described thereunder.

Notwithstanding the preceding, without the consent of any Holder of the notes, the Company, Parent and Trustee may amend the Indenture:

(1)  to cure any ambiguity, omission, defect or inconsistency;

(2)  to provide for the assumption by a successor corporation of the obligations of the Company or Parent under the Indenture;

(3)  to provide for uncertificated notes in addition to or in place of certificated notes (provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code);

(4)  to add guarantees with respect to the notes or to secure the notes;

(5)  to add to the covenants of the Company or Parent for the benefit of the holders of the notes or to surrender any right or power conferred upon the Company or Parent;

(6)  to make any change that does not adversely affect the rights of any Holder of the notes; or

(7)  to comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act.

The consent of the Holders of the notes is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

After an amendment under the Indenture becomes effective, we are required to mail to Holders of the notes a notice briefly describing such amendment. However, the failure to give such notice to all Holders of the notes, or any defect therein, will not impair or affect the validity of the amendment.

125

Transfer

The notes will be issued in registered form and will be transferable only upon the surrender of the notes being transferred for registration of transfer. We may require payment of a sum sufficient to cover any tax, assessment or other governmental charge payable in connection with certain transfers and exchanges.

Defeasance

At any time, we may terminate all our obligations under the notes and the Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and to maintain a registrar and paying agent in respect of the notes.

In addition, at any time we may terminate our obligations under “—Change of Control” and under the covenants described under “—Certain Covenants” (other than the covenant described under “—Merger and Consolidation”), the operation of the cross acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision described under “—Defaults” above and the limitations contained in clause (a)(3) and all the limitations contained in clause (b) under “—Certain Covenants—Merger and Consolidation” above (“covenant defeasance”).

We may exercise our legal defeasance option notwithstanding our prior exercise of our covenant defeasance option. If we exercise our legal defeasance option, payment of the notes may not be accelerated because of an Event of Default with respect thereto. If we exercise our covenant defeasance option, payment of the notes may not be accelerated because of an Event of Default specified in clause (4), (6), (7) (with respect only to Significant Subsidiaries) or (8) under “—Defaults” above or because of the failure of the Company to comply with clause (a)(3) or (a)(4) under “—Certain Covenants—Merger and Consolidation” above. If we exercise our legal defeasance option or our covenant defeasance option, Parent will be released from all of its obligations with respect to the Parent Guaranty.

In order to exercise either of our defeasance options, we must irrevocably deposit in trust (the “defeasance trust”) with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of (1) an Opinion of Counsel to the effect that holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable U.S. federal income tax law) and (2) an Opinion of Counsel in the jurisdiction of organization of the Company (if other than the United States) to the effect that Holders of the notes will not recognize income, gain or loss for income tax purposes of such jurisdiction as a result of such deposit and defeasance and will be subject to income tax of such jurisdiction on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred.

Concerning the Trustee

U.S. Bank, N.A. is the Trustee under the Indenture. We have appointed U.S. Bank, N.A. as Registrar and Paying Agent with regard to the notes.

The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; provided, however, if it acquires any conflicting interest it must either eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

126

The Holders of a majority in principal amount of the notes outstanding will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. If an Event of Default occurs (and is not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense and then only to the extent required by the terms of the Indenture.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company or Parent will have any liability for any obligations of the Company or Parent under the notes, the Parent Guaranty or the Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder of the notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. Such waiver and release may not be effective to waive liabilities under the U.S. federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

Governing Law

The Indenture and the Notes are governed by, and construed in accordance with, the laws of the State of New York.

Enforceability of Judgments

Parent and the Company are organized under the laws of the Cayman Islands. Some of the directors and officers and assets of Parent and the Company are located outside the United States. Although Parent and the Company have agreed to accept service of process within the United States by their agent designated for that purpose, it may be difficult for Holders to effect service of process within the United States upon these persons or to enforce against them, in courts outside the United States, judgments of courts of the United States predicated upon civil liabilities under the U.S. federal securities or other laws.

Parent and the Company have been advised by their Cayman Islands legal counsel, Walkers, that there is doubt with respect to Cayman Islands law as to (a) whether a judgment of a U.S. court predicated solely upon the civil liability provisions of the U.S. federal securities or other laws would be enforceable in the Cayman Islands against Parent or the Company and (b) whether an action could be brought in the Cayman Islands against Parent or the Company in the first instance on the basis of liability predicated solely upon the provisions of the U.S. federal securities or other laws.

Consent to Jurisdiction and Service

Parent and the Company have appointed CT Corporation, 818 West Seventh Street, Suite 200, Los Angeles, CA 90017, as its agent for actions brought under U.S. federal or state securities laws brought in any U.S. federal or state court located in the Borough of Manhattan in The City of New York and will submit to such jurisdiction.

Certain Definitions

“Additional Assets” means:

(1)  any property, plant or equipment used in a Related Business;

(2)  the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or

127

(3)  Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided, however, that any such Restricted Subsidiary described in clause (2) or (3) above is primarily engaged in a Related Business.

“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. For purposes of the covenants described under “—Certain Covenants—Limitation on Restricted Payments,” “—Certain Covenants—Limitation on Affiliate Transactions” and “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock” only, “Affiliate” shall also mean any beneficial owner of Capital Stock representing 10% or more of the total voting power of the Voting Stock (on a fully diluted basis) of the Company or of rights or warrants to purchase such Capital Stock (whether or not currently exercisable) and any Person who would be an Affiliate of any such beneficial owner pursuant to the first sentence hereof.

“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of:

(1)  any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary);

(2)  all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary; or

(3)  any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary,

other than, in the case of clauses (1), (2) and (3) above

(A)  a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Wholly Owned Subsidiary;

(B)  sales or other dispositions of obsolete, uneconomical, negligible, worn-out or surplus assets, in each case in the ordinary course of business;

(C)  issuances of (i) options, warrants or other rights to purchase common stock of a Restricted Subsidiary or (ii) shares of common stock of such Restricted Subsidiary upon exercise of such options, warrants or other rights to officers, directors and employees of such Restricted Subsidiary pursuant to the terms of agreements (including employment agreements) or employee or director benefit plans (or amendments thereto) approved by the Board of Directors of the Company in good faith; provided, however, that shares of common stock of such Restricted Subsidiary issued pursuant to the exercise of such options, warrants or other rights to purchase such common stock which are subject to this clause (C) shall not exceed 20% of the outstanding shares of common stock of such Restricted Subsidiary, on a fully-diluted basis;

(D)  for purposes of the covenant described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock” only, (x) a disposition that constitutes a Restricted Payment permitted by the covenant described under “—Certain Covenants—Limitation on Restricted Payments” or a Permitted Investment, (y) a disposition of all or substantially all the assets of the Company in accordance with the covenant described under “—Certain Covenants—Merger and Consolidation” and (z) a disposition of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary;

128

(E)  a disposition of Temporary Cash Investments;

(F)  sales of assets received by the Company or any Restricted Subsidiary upon foreclosure of a Lien;

(G)  the lease or sublease of office and factory space in the ordinary course of business; and

(H)  a disposition of assets with a fair market value of less than $1 million.

“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended); provided, however, that if such Sale/ Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby with be determined in accordance with the definition of “Capital Lease Obligation.”

“Average Life” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing:

(1)  the sum of the products of the number of years from the date of determination to the dates of each successive scheduled principal payment of or redemption or similar payment with respect to such Indebtedness multiplied by the amount of such payment by

(2)  the sum of all such payments.

“Board of Directors” with respect to a Person means the Board of Directors of such Person or any committee thereof duly authorized to act on behalf of such Board.

“Business Day” means each day which is not a Legal Holiday.

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. For purposes of the covenant described under “—Certain Covenants—Limitations on Liens,” a Capital Lease Obligation will be deemed to be secured by a Lien on the property being leased.

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commodity Agreements” means, with respect to any Person, any agreement for protection against fluctuations in commodity prices or any similar agreements or arrangements to which such Person is a party or of which it is a beneficiary.

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (x) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters for which financial statements are internally available to the Company ending prior to the date of such determination to (y) Consolidated Interest Expense for such four fiscal quarters; provided, however, that:

(1)  if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding or if the transaction giving rise to the need to calculate the

129

Consolidated Coverage Ratio is an Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period;

(2)  if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary has not earned the interest income actually earned during such period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness;

(3)  if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Disposition for such period, or increased by an amount equal to EBITDA (if negative), directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

(4)  if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any person which becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction requiring a calculation to be made hereunder, which constitutes all or substantially all of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period; and

(5)  if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Asset Disposition, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (3) or (4) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition occurred on the first day of such period.

For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets or other Investment, the amount of income or earnings relating thereto, the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith and any operating expense reductions and other adjustments as described below, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Company and (i) shall, except as described below in clause (iii), comply with the requirements of Rule 11-02 of Regulation S-X of the SEC, (ii) may include adjustments for operating expense reductions that would be permitted by such Rule and (iii) in connection with acquisitions, purchases or mergers, may reflect adjustments not permitted by such Rule for the elimination of operating expenses attributable to any terminated lease or contract, the related reduction in personnel or facility expenses as a result of such termination and the elimination of personnel expenses as a result of severance and of facilities expense as a result of the termination, closure or relocation of facilities, in each case if such termination, severance, closure or relocation has occurred at the time of such acquisition, purchase or merger or occurs within three months thereof.

130

“Consolidated Interest Expense” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in such total interest expense, and to the extent incurred by the Company or its Restricted Subsidiaries, without duplication:

(1)  interest expense attributable to Capital Lease Obligations and the interest expense attributable to leases constituting part of a Sale/Leaseback Transaction;

(2)  amortization of debt discount and debt issuance cost (other than any costs associated with the Incurrence of Indebtedness with respect to the notes and the Credit Agreement);

(3)  capitalized interest;

(4)  non-cash interest expense;

(5)  commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;

(6)  net payments pursuant to Hedging Obligations;

(7)  Preferred Stock dividends in respect of all Preferred Stock held by Persons other than the Company or a Restricted Subsidiary (other than dividends payable solely in Capital Stock (other than Disqualified Stock) of the issuer of such Preferred Stock); provided, however, that such dividends will be multiplied by a fraction the numerator of which is one and the denominator of which is one minus the effective combined tax rate of the issuer of such Preferred Stock (expressed as a decimal) for such period (as estimated by the Chief Financial Officer of the Company in good faith);

(8)  interest incurred in connection with Investments in discontinued operations;

(9)  interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary; and

(10)  the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Indebtedness Incurred by such plan or trust.

“Consolidated Net Income” means, for any period, the net income of the Company and its consolidated Subsidiaries; provided, however, that there shall not be included in such Consolidated Net Income:

(1)  any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that:

(A)  subject to the exclusion contained in clause (4) below, the Company’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (3) below); and

(B)  the Company’s equity in a net loss of any such Person to the extent accounted for pursuant to the equity method of accounting for such period shall be included in determining such Consolidated Net Income;

(2)  any net income (or loss) of any Person acquired by the Company or a Subsidiary in a pooling of interests transaction for any period prior to the date of such acquisition;

(3)  any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:

(A)  subject to the exclusion contained in clause (4) below, the Company’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net

131

Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause); and

(B)  the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income;

(4)  any gain (or loss) realized upon the sale or other disposition of any assets of the Company, its consolidated Subsidiaries or any other Person (including pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary course of business and any gain (or loss) realized upon the sale or other disposition of any Capital Stock of any Person;

(5)  extraordinary gains or losses; and

(6)  the cumulative effect of a change in accounting principles.

Notwithstanding the foregoing, for the purposes of the covenant described under “—Certain Covenants—Limitation on Restricted Payments” only, there shall be excluded from Consolidated Net Income any repurchases, repayments or redemptions of Investments, proceeds realized on the sale of Investments or return of capital to the Company or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or returns increase the amount of Restricted Payments permitted under such covenant pursuant to clause (a)(3)(D) thereof.

“Credit Agreement” means the Credit Agreement entered into by and among, Parent, the Company, Seagate Technology (US) Holdings, Inc., certain of its Subsidiaries, the lenders referred to therein, JPMorgan Chase Bank, as Administrative Agent, Morgan Stanley Senior Funding, Inc., as Syndication Agent, and Citicorp USA, Inc., Credit Suisse First Boston and Merrill Lynch Capital Corporation, as Documentation Agents, together with the related documents thereto (including the term loans and revolving loans thereunder, any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any other agreement or agreements (and related document or documents) governing Indebtedness incurred to Refinance, in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such Credit Agreement or a successor Credit Agreement, whether by the same or any other lender or group of lenders.

“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap agreement or other similar agreement designed to protect such Person against fluctuations in currency values.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Deferred Compensation Plans” means (i) the deferred compensation plan dated as of November 22, 2000, of the Company (as amended, waived, supplemented or otherwise modified from time to time in compliance with the provisions set forth above under “—Certain Covenants—Amendment of Deferred Compensation Plans”), and (ii) any other plan established in lieu of, or to renew or replace, in whole or in part, any plan referred to in clause (i) above or this clause (ii) and any other similar plan the purpose or effect of which is to provide the participants therein the benefits that they are entitled to on the Closing Date under the plans described in clause (i) above or this clause (ii) and (iii) any Guarantee by the Company or any of its Subsidiaries, that is in effect on the Issue Date and is described in the Offering Memorandum, of any obligation under any Deferred Compensation Plan referred to in clause (i) and (ii) above.

“Designated Preferred Stock” means Preferred Stock of the Company (other than Disqualified Stock and Excluded Contributions) that is issued for cash (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries) and is so designated as Designated

132

Preferred Stock, pursuant to an Officer’s Certificate executed by an Officer of the Company on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of paragraph (a) of the covenant described under “—Certain Covenants—Limitation on Restricted Payments.”

“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:

(1)  matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

(2)  is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock; or

(3)  is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part;

in each case on or prior to 91 days after the Stated Maturity of the notes; provided, however, that if such Capital Stock is issued to any employee of the Company or any of its Subsidiaries or to any plan for the benefit of employees of the Company or any of its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company in order to satisfy obligations as a result of such employees’ death or disability; and provided further, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to 91 days after the Stated Maturity of the notes shall not constitute Disqualified Stock if:

(1)  the “asset sale” or “change of control” provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the terms applicable to the notes and described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock” and “—Change of Control;” and

(2)  any such requirement only becomes operative after compliance with such terms applicable to the notes, including the purchase of any notes tendered pursuant thereto.

The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Stock is to be determined pursuant to the Indenture; provided, however, that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person.

“EBITDA” for any period means the sum of Consolidated Net Income, plus the following to the extent deducted in calculating such Consolidated Net Income:

(1)  all income tax expense of the Company and its consolidated Restricted Subsidiaries;

(2)  Consolidated Interest Expense;

(3)  depreciation and amortization expense of the Company and its consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid operating activity item that was paid in cash in a prior period);

(4)  all other non-cash charges and other non-operating losses and expenses of the Company and its consolidated Restricted Subsidiaries (excluding any such non-cash charge or other non-operating loss or expense to the extent that it represents an accrual of or reserve for cash expenditures in any future period);

(5)  all expenses and charges as a result of the Refinancing Transactions;

133

(6)  any annual management, consulting, monitoring and advisory fees paid by the Company and its Restricted Subsidiaries to any of the Sponsors, in an amount not to exceed $5 million in the aggregate in any calendar year; and

(7)  any non-recurring charge relating to a restructuring plan of the Company and its Restricted Subsidiaries;

in each case for such period. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and non- cash charges of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended or distributed to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders.

“Equity Offering” means any public or private sale of common stock or Preferred Stock of the Company or Parent other than (i) public offerings with respect to the Company’s or Parent’s common stock registered on Form S-8, (ii) any public or private sale that constitutes Disqualified Stock, Designated Preferred Stock or an Excluded Contribution and (iii) other issuances upon exercise of options by employees of Parent, the Company or any of the Restricted Subsidiaries.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Contributions” means the Net Cash Proceeds received by the Company after the Issue Date from (i) contributions (other than from a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries) to its common equity capital and (ii) the sale (other than to a Subsidiary of the Company or to any Company or Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Company, in each case designated as Excluded Contributions pursuant to an Officers’ Certificate executed by an Officer of the Company on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of paragraph (a) of the covenant described under “—Certain Covenants—Limitation on Restricted Payments.”

“Existing Notes” means Seagate Technology International’s former 12 ¹/2% Senior Subordinated Notes due 2007 issued under the Indenture dated as of November 22, 2000, among Seagate Technology International, the guarantors party thereto and The Bank of New York, as trustee.

“Fiscal 2002” means the fiscal year commencing on June 30, 2001, and ending on June 28, 2002.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date, including those set forth in:

(1)  the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2)  statements and pronouncements of the Financial Accounting Standards Board;

(3)  such other statements by such other entity as approved by a significant segment of the accounting profession; and

(4)  the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

134

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(1)  to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or

(2)  entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. The term “Guarantor” shall mean any Person Guaranteeing any obligation.

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement, Commodity Agreement or similar agreement.

“Holder” or “noteholder” means the Person in whose name a note is registered on the Registrar’s books.

“Incur” means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of determining compliance with “—Certain Covenants—Limitation on Indebtedness:”

(1)  amortization of debt discount or the accretion of principal with respect to a non-interest bearing or other discount security;

(2)  the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of the same clause and with the same terms; and

(3)  the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or the making of a mandatory offer to purchase such Indebtedness

will not be deemed to be the Incurrence of Indebtedness.

“Indebtedness” means, with respect to any Person on any date of determination (without duplication):

(1)  the principal in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, including, in each case, any premium on such indebtedness to the extent such premium has become due and payable;

(2)  all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/Leaseback Transactions entered into by such Person;

(3)  all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

(4)  all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1) through (3) above) entered into in the ordinary

135

course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the 30th Business Day following payment on the letter of credit);

(5)  the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued dividends);

(6)  all obligations of the type referred to in clauses (1) through (5) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;

(7)  all obligations of the type referred to in clauses (1) through (6) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets and the amount of the obligation so secured; and

(8)  to the extent not otherwise included in this definition, Hedging Obligations of such Person.

Notwithstanding the foregoing, in connection with the purchase by the Company or any Restricted Subsidiary of any business, the term “Indebtedness” will exclude post-closing payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 60 days thereafter.

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided, however, that in the case of Indebtedness sold at a discount, the amount of such Indebtedness at any time will be the accreted value thereof at such time. Notwithstanding the foregoing, in no event shall Indebtedness include any liabilities incurred under the Deferred Compensation Plans.

“Indemnification Agreement” means that certain Indemnification Agreement dated as of March 29, 2000, among Seagate Technology, Inc., VERITAS Software Corporation and Suez Acquisition Company (Cayman) Limited.

“Independent Qualified Party” means an investment banking firm, accounting firm or appraisal firm of national standing; provided, however, that such firm is not an Affiliate of the Company.

“Initial Purchasers” means Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc.

“Interest Rate Agreement” means in respect of a Person any interest rate swap agreement, interest rate cap agreement or other financial agreement or arrangement designed to protect such Person against fluctuations in interest rates.

“Investment” in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person. Except as otherwise provided for herein, the amount of an Investment shall be its fair value at the time the Investment is made and without giving effect to subsequent changes in value.

136

For purposes of the definition of “Unrestricted Subsidiary,” the definition of “Restricted Payment” and the covenant described under “—Certain Covenants—Limitation on Restricted Payments:”

(1)  “Investment” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to (A) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (B) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

(2)  any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Company.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB— (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

“Issue Date” means the date on which the outstanding notes were originally issued.

“Legal Holiday” means a Saturday, Sunday, or a day on which banking institutions are not required to be open in the State of New York.

“Lenders” has the meaning specified in the Credit Agreement.

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Net Available Cash” from an Asset Disposition means cash payments received therefrom (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to such properties or assets or received in any other noncash form), in each case net of:

(1)  all legal, accounting, investment banking and brokerage fees and expenses and all title and recording tax expenses, commissions and other fees and expenses incurred, and all federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a consequence of such Asset Disposition;

(2)  all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition;

(3)  all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Disposition; and

(4)  the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition.

137

“Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’, initial purchasers’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“New SAC” means New SAC, an exempted limited liability company organized under the laws of the Cayman Islands.

“Offering Memorandum” means the Company’s Offering Memorandum, dated as of May 3, 2002, relating to the issuance of the outstanding Notes.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Company.

“Officers’ Certificate” means a certificate signed by two Officers.

“Parent” means Seagate Technology Holdings and its Successors.

“Parent Board” means the Board of Directors of Parent or any committee thereof duly authorized to act on behalf of such Board.

“Parent Guaranty” means the Guarantee by Parent of the Company’s obligations with respect to the notes.

“Permitted Holders” means (i) the Sponsors, (ii) members of management of the Company, Parent, New SAC or Seagate Technology International who own Capital Stock of Parent on the Issue Date and (iii) each of their Affiliates.

“Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

(1)  the Company, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Related Business;

(2)  another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; provided, however, that such Person’s primary business is a Related Business;

(3)  cash and Temporary Cash Investments;

(4)  receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

(5)  payroll, travel, moving and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(6)  loans or advances to employees and directors made in the ordinary course of business and not exceeding $15 million at any time outstanding;

(7)  stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments;

(8)  any Person to the extent such Investment represents the non-cash portion of the consideration received for an Asset Disposition as permitted pursuant to the covenant described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock;”

138

(9)  any Person to the extent such Investment exists on the Issue Date and any Investment that replaces or refunds such an Investment; provided, however, that the replacing or refunding Investment is in an amount that does not exceed the amount of the replaced or refunded Investment (valued at the time made and without giving effect to subsequent changes in value) and is made in the same Person as the replaced or refunded Investment;

(10)  any Person; provided, however, that the payment for such Investments consists solely of Capital Stock of the Company or its Subsidiaries (other than Disqualified Stock);

(11)  any Person to the extent such Investment consists of the licensing of intellectual property pursuant to joint venture, strategic alliances or joint marketing arrangements with such Person, in each case made in the ordinary course of business;

(12)  a vendor or supplier to the extent such Investment consists of loans or advances to such vendor or supplier in connection with any guarantees to the Company or any Restricted Subsidiary of supply by, or to fund the supply capacity of, such vendor or supplier, in any case not to exceed $50 million at any one time outstanding;

(13)  any Person where such Investment was acquired by the Company or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(14)  Hedging Agreements permitted under clause (b)(8) of the covenant described under “—Certain Covenants—Limitation on Indebtedness;”

(15)  any Person; provided, however, that such Investment is acquired by the Company or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries on a Lien;

(16)  any Person consisting of Guarantees issued in accordance with the covenant described under “—Certain Covenants—Limitation on Indebtedness;” and

(17)  any other Persons (in addition to the Investments permitted by clauses (1) through (16) of this definition) in aggregate amount not to exceed $200 million at any time outstanding; provided, however, that not more than $100 million in aggregate amount of such Investments may be made in any calendar year.

“Permitted Liens” means, with respect to any Person:

(1)  pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2)  Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and other similar Liens, in each case for sums not yet overdue by more than 30 days or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review and Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (A) such deposit account is not a dedicated cash collateral account and is

139

not subject to restrictions against access by the Company in excess of those set forth by regulations promulgated by the Federal Reserve Board and (B) such deposit account is not intended by the Company or any Restricted Subsidiary to provide collateral to the depository institution;

(3)  Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings;

(4)  Liens to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(5)  minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6)  Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property (real or personal, tangible or intangible), plant or equipment (whether through the direct purchase of assets or the Capital Stock of any person owning such assets) of such Person; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property affixed or appurtenant thereto), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 180 days after the later of the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien;

(7)  Liens to secure Indebtedness permitted under the provisions described in clause (b)(1) under “—Certain Covenants—Limitation on Indebtedness;”

(8)  Liens existing on the Issue Date;

(9)  Liens on property or shares of Capital Stock of another Person at the time such other Person becomes a Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(10)  Liens securing Hedging Obligations so long as such Hedging Obligations relate to Indebtedness that is, and is permitted to be under the Indenture, secured by a Lien on the same property securing such Hedging Obligations;

(11)  Liens on property at the time the Company or a Restricted Subsidiary acquires such property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided further, however, that the Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

(12)  Liens on specific items of inventory or other goods of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person solely to facilitate the purchase, shipment or storage of such inventory or other goods;

(13)  Liens consisting of leases and subleases of real property by the Company or any of its Restricted Subsidiaries which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

(14)  Liens arising from Uniform Commercial Code financing statement filings by lessors regarding operating leases entered into by such lessors and the Company and its Restricted Subsidiaries in the ordinary course of business;

140

(15)  Liens in favor of the Company or any of its Restricted Subsidiaries;

(16)  Liens over goods in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of such goods;

(17)  licenses of intellectual property of the Company and its Restricted Subsidiaries granted in the ordinary course of business;

(18)  to the extent not included in clauses (1) through (17) above, any other Lien that is permitted under the Credit Agreement in effect as of the Issue Date; and

(19)  Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clause (6), (7), (8), (9), (10), (11) or (14); provided, however, that:

(A)  such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and

(B)  the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (x) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clause (6), (7), (8), (9), (10), (13), or (16) at the time the original Lien became a Permitted Lien and (y) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement.

Notwithstanding the foregoing, “Permitted Liens” will not include any Lien described in clauses (6), (9) or (10) above to the extent such Lien applies to any Additional Assets acquired directly or indirectly from Net Available Cash pursuant to the covenant described under “—Certain Covenants—Limitation on Sale of Assets and Subsidiary Stock.” For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

“principal” of a note means the principal of the note plus the premium, if any, payable on the note which is due or overdue or is to become due at the relevant time.

“Publicly Traded Equity Securities” means equity securities of companies (other than any Affiliate of the Company) which are listed on the New York Stock Exchange, the Nasdaq National Market or another recognized national securities exchange.

“Purchase Money Indebtedness” means Indebtedness:

(1)  consisting of the deferred purchase price of an asset, conditional sale obligations, obligations under any title retention agreement and other purchase money obligations, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed; and

(2)  incurred to finance the acquisition by the Company or a Restricted Subsidiary of such asset, including additions and improvements;

provided, however, that such Indebtedness is incurred within 180 days after the acquisition by the Company or such Restricted Subsidiary of such asset.

141

“Rating Agency” means S&P and Moody’s or, if S&P or Moody’s or both shall not make a rating on the notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as certified by a resolution of the Board of Directors of the Company) which shall be substituted for S&P or Moody’s or both, as the case may be.

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

“Refinancing Indebtedness” means Indebtedness that Refinances any Indebtedness of the Company or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with the Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided, however, that:

(1)  such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced;

(2)  such Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced; and

(3)  such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding or committed (plus fees and expenses, including any premium and defeasance costs) under the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of the Company or (B) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

“Refinancing Transactions” means, collectively, the transactions described under the caption “The Refinancing” in the Offering Memorandum.

“Registration Rights Agreement” means the Registration Rights Agreement dated May 13, 2002, among the Company and the Initial Purchasers.

“Related Business” means any business related, ancillary or complementary to the businesses of the Company and its Restricted Subsidiaries on the Issue Date or which constitutes a reasonable extension or expansion of such businesses.

“Restricted Payment” with respect to any Person means:

(1)  the declaration or payment of any dividends or any other distributions of any sort in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving such Person) or similar payment to the direct or indirect holders of its Capital Stock (other than dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock) and dividends or distributions payable solely to the Company or a Restricted Subsidiary, and other than pro rata dividends or other distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation));

(2)  the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company held by any Person or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the Company (other than a Restricted Subsidiary), including in connection with any merger or consolidation and including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Company that is not Disqualified Stock);

(3)  the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Subordinated

142

Obligations of such Person (other than the purchase, repurchase or other acquisition of Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such purchase, repurchase or other acquisition);

(4)  any distribution or other payment (whether in cash, securities or other property or any combination thereof) under or in respect of any Deferred Compensation Plan; or

(5)  the making of any Investment (other than a Permitted Investment) in any Person.

“Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

“S&P” means Standard & Poor’s Rating Group, Inc. and its successors.

“Sale/Leaseback Transaction” means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or a Restricted Subsidiary leases it from such Person, other than leases between the Company and a Wholly Owned Subsidiary.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Senior Indebtedness” means with respect to any Person:

(1)  Indebtedness of such Person, whether outstanding on the Issue Date or thereafter Incurred; and

(2)  accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not post-filing interest is allowed in such proceeding) in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable,

unless, in the case of clauses (1) and (2), in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are subordinate in right of payment to the notes; provided, however, that Senior Indebtedness shall not include:

(1)  any obligation of such Person to any Subsidiary;

(2)  any liability for federal, state, local or other taxes owed or owing by such Person;

(3)  any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities);

(4)  any Indebtedness of such Person (and any accrued and unpaid interest in respect thereof) which is subordinate or junior in any respect to any other Indebtedness or other obligation of such Person; or

(5)  that portion of any Indebtedness which at the time of Incurrence is Incurred in violation of the Indenture.

“Shareholders’ Agreement” means each of (1) that certain Shareholders’ Agreement dated as of November 22, 2000, among each of the Sponsors and New SAC and (2) that certain Management Shareholders Agreement dated as of November 22, 2000, among each of the members of the management group that held ordinary shares of New SAC on November 22, 2000, and New SAC, each as in effect on the Issue Date.

“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

143

“Sponsors” means Silver Lake Capital Partners, L.P., Integral Capital Partners, TPG Partners III, L.P., August Capital, JPMorgan Capital Partners and GS Capital Partners III, L.P. and each of their respective Affiliates that is a party to a Shareholders’ Agreement.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred).

“Subordinated Obligation” means any Indebtedness of the Company (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the notes pursuant to a written agreement to that effect.

“Subsidiary” means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Voting Stock is at the time owned or controlled, directly or indirectly, by:

(1)  such Person;

(2)  such Person and one or more Subsidiaries of such Person; or

(3)  one or more Subsidiaries of such Person.

“Tender Offer” means the Offer to Purchase and Consent Solicitation made by Seagate Technology International on April 15, 2002, for, among other things, the purchase of all of the Existing Notes on the terms set forth in the Offer to Purchase and Consent Solicitation Statement dated as of April 15, 2002.

“Temporary Cash Investments” means any of the following:

(1)  any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof;

(2)  investments in (a) time deposit accounts, bankers’ acceptances, certificates of deposit and money market deposits maturing within one year of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any State thereof or any foreign country recognized by the United States of America, or (b) obligations of U.S. federal agencies sponsored by the federal government (including, without limitation, the Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation and Federal National Mortgage Association) but that are not direct obligations of the United States of America or any agency thereof and are not obligations guaranteed by the United States of America or any agency thereof; in each case which bank, trust company or federally sponsored agency has capital, surplus and undivided profits aggregating in excess of $250 million (or the foreign currency equivalent thereof) and has outstanding debt which is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor;

(3)  fully collateralized repurchase obligations with a term of not more than 45 days for securities of the types described in clause (1) above or clauses (5), (6) or (7) below entered into with a financial institution meeting the qualifications described in clause (2) above;

(4)  investments in commercial paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “P-1” (or higher) according to Moody’s or “A-1” (or higher) according to S&P;

144

(5)  investments in securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s;

(6)  investments in securities with maturities of three years or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “AA” by S&P or “Aa” by Moody’s;

(7)  securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest credit ratings obtainable from Moody’s or S&P;

(8)  investments in corporate bonds or notes maturing not more than three years from the date of acquisition thereof and having, at the date of such acquisition, a rating of at least “AA” by S&P or “Aa” by Moody’s;

(9)  auction rate preferred stock maturing not more than 90 days from the date of acquisition thereof and having a rating of at least “A” by S&P or “A” by Moody’s; and

(10)  money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2A-7 under the Investment Company Act and (ii) have portfolio assets of at least $1 billion.

“Unrestricted Subsidiary” means:

(1)  any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below; and

(2)  any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that (A) the Subsidiary to be so designated has total assets of $1,000 or less, (B) the Subsidiary to be so designated became a Subsidiary of the Company upon the consolidation of or merger with or into Parent or the merger of Parent into the Company if such designation is made at the time of such consolidation or merger and the shareholders of Parent and the Company receive no consideration in connection with any such consolidation or merger other than Capital Stock of the successor company (but excluding any Disqualified Stock) or (C) if such Subsidiary has assets greater than $1,000, such designation would be permitted under the covenant described under “—Certain Covenants—Limitation on Restricted Payments.”

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation (A) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of the covenant described under “—Certain Covenants—Limitation on Indebtedness” and (B) no Default shall have occurred and be continuing. Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Dollar Equivalent” means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the “Exchange Rates” column under the heading “Currency Trading” on the date two Business Days prior to such determination.

145

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer’s option.

“Voting Stock” of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

“Wholly Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or one or more Wholly Owned Subsidiaries.

146

BOOK-ENTRY; DELIVERY AND FORM

The exchange notes will initially be represented in the form of one or more global notes in definitive, fully-registered book-entry form, without interest coupons, that will be deposited with or on behalf of The Depository Trust Company, or DTC, and registered in the name of DTC or its participants.

Except as set forth below, the global notes may be transferred, in whole and not in part, solely to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may not be exchanged for notes in physical, certificated form, except in the limited circumstances described below.

Certain Book-Entry Procedures for the Global Notes

The descriptions of the operations and procedures of DTC, the Euroclear System and Clearstream Banking, S.A. set forth below are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to change by them from time to time. We are not responsible for these operations or procedures, and you are urged to contact the relevant system or its participants directly to discuss these matters.

DTC has advised us that it is:

· a limited purpose trust company organized under the laws of the State of New York;

· a “banking organization” within the meaning of the New York Banking Law;

· a member of the Federal Reserve System;

· a “clearing corporation” within the meaning of the Uniform Commercial Code, as amended; and

· a “clearing agency” registered pursuant to Section 17A of the Securities Exchange Act.

DTC was created to hold securities for its participants and facilitates the clearance and settlement of securities transactions between participants through electronic book-entry changes to the accounts of its participants, thereby eliminating the need for physical transfer and delivery of certificates. DTC’s participants include securities brokers and dealers, banks and trust companies, clearing corporations and other organizations. Indirect access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Investors who are not participants may beneficially own securities held by or on behalf of DTC only through DTC’s participants or indirect participants.

We expect that, pursuant to the procedures established by DTC:

· upon deposit of each global note, DTC will credit the accounts of the designated participants with an interest in the global note; and

· ownership of the notes will be shown on, and the transfer of ownership of the notes will be effected only through, records maintained by DTC, with respect to the interests of the participants, and the records of the participants and the indirect participants, with respect to the interests of persons who are not participants.

The laws of some jurisdictions may require that purchasers of securities take physical delivery of the securities in definitive form. Accordingly, the ability to transfer interests in the notes represented by a global note to those purchasers may be limited. In addition, because DTC can act only on behalf of its participants, who in turn act on behalf of persons who hold interests through the participants, the ability of a person having an interest in notes represented by a global note to pledge or transfer such interest to persons or entities that do not participate in DTC’s system, or to otherwise take actions in respect of such interest, may be affected by the lack of a physical definitive security in respect of that interest.

147

So long as DTC or its nominee is the registered owner of a global note, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the notes represented by the global note for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global note will not be entitled to have notes represented by the global note registered in their names, will not receive or be entitled to receive physical delivery of certificated notes and will not be considered the owners or holders of the notes under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee under the indenture. Accordingly, each holder owning a beneficial interest in a global note must rely on the procedures of DTC and, if the holder is not a participant or an indirect participant, on the procedures of the participant through which the holder owns its interest, to exercise any rights of a holder of notes under the indenture or the global note. We understand that, under existing industry practice, in the event that we request any action of the holders of the notes or in the event that a holder that is an owner of a beneficial interest in a global note desires to take any action that DTC, as the holder of the global note, is entitled to take, DTC would authorize the participants to take the action and the participants would authorize the holders owning through such participants to take the action or would otherwise act upon the instruction of such holders. Neither we nor the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of the notes by DTC or for maintaining, supervising or reviewing any records of DTC relating to the notes.

Payments with respect to the principal of, premium, if any, and interest on, any notes represented by a global note registered in the name of DTC or its nominee on the applicable record date will be payable by the trustee to or at the direction of DTC or its nominee in its capacity as the registered holder of the global note representing the notes under the indenture. Under the terms of the indenture, the issuer and the trustee may treat the persons in whose names the notes, including the global notes, are registered as the owners of the notes for the purpose of receiving payment on the notes and for any and all other purposes whatsoever. Accordingly, neither the issuer nor the trustee has or will have any responsibility or liability for the payment of such amounts to the owners of beneficial interests in a global note (including principal, premium, if any, and interest). Payments by the participants and the indirect participants to the owners of beneficial interests in a global note will be governed by standing instructions and customary industry practice and will be the responsibility of the participants or the indirect participants and DTC.

Transfers between the participants of DTC will be effected in accordance with DTC’s procedures and will be settled in same-day funds. Transfers between the participants of Euroclear or Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

Subject to compliance with the transfer restrictions applicable to the notes, cross-market transfers between the participants of DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect the final settlement on its behalf by delivering or receiving interests in the relevant global notes in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositaries for Euroclear or Clearstream.

Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a global note from a DTC participant will be credited, and this crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day, which must be a business day for Euroclear and Clearstream, immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of sales of interest in a global security by or through a Euroclear or Clearstream participant to a DTC participant will be received with value on the settlement date of DTC but

148

will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the global notes among the participants of DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform those procedures, and those procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Certificated Notes

If the issuer notifies the trustee in writing that DTC is no longer willing or able to act as a depositary or DTC ceases to be registered as a clearing agency under the Securities Exchange Act and a successor depositary is not appointed within 90 days of this notice or cessation; the issuer, at its option, notifies the trustee in writing that it elects to cause the issuance of notes in definitive form under the indenture; or upon the occurrence of other specified events as provided in the indenture, then, upon surrender by DTC of the global notes, certificated notes will be issued to each person that DTC identifies as the beneficial owner of the notes represented by the global notes. Upon any issuance described above, the trustee is required to register the certificated notes in the name of, and cause the certificated notes to be delivered to, person or persons identified by DTC or its nominee.

Neither we nor the trustee will be liable for any delay by DTC or any participant or indirect participant in identifying the beneficial owners of the related notes and we and the trustee may conclusively rely on, and will be protected in relying on, instructions from DTC for all purposes, including with respect to the registration and delivery, and the respective principal amounts, of the notes to be issued.

149

DESCRIPTION OF THE NEW SENIOR SECURED CREDIT FACILITIES

We summarize below the principal terms of the agreements that govern our new senior secured credit facilities. For further information regarding the terms and provisions of these senior secured credit facilities, please refer to the agreements themselves, which we have filed as exhibits to the registration statement of which this prospectus forms a part.

Overview

As part of the refinancing, we entered into new senior secured credit facilities with a syndicate of banks and other financial institutions led by JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc. and Morgan Stanley Senior Funding, Inc., as joint bookrunners and co-lead arrangers, Morgan Stanley Senior Funding, Inc., as syndication agent, and Citicorp USA, Inc., Credit Suisse First Boston and Merrill Lynch Capital Corporation, as documentation agents. The borrowers under the new senior secured credit facilities are Seagate Technology HDD Holdings and Seagate Technology (US) Holdings, Inc. The senior secured credit facilities provide senior secured financing of up to $500 million, consisting of:

· a $150 million revolving credit facility available to Seagate Technology HDD Holdings for working capital and other general corporate purposes, with a sublimit of $100 million for letters of credit, which will mature in May 2007; and

· a $350 million term loan facility maturing in May 2007 made available to Seagate Technology HDD Holdings and Seagate Technology (US) Holdings, Inc. as co-borrowers.

We drew the full amount of the term loan facility on the closing of the refinancing. We did not draw any amounts under the revolving facility upon the completion of the refinancing.

Guarantees and Security

The borrowers’ obligations under the new senior secured credit facilities are guaranteed on a senior secured basis by Seagate Technology Holdings, Seagate Technology HDD Holdings (with respect to the obligations of Seagate Technology (US) Holdings, Inc. only), Seagate Technology (US) Holdings, Inc. (with respect to the obligations of Seagate Technology HDD Holdings only) and certain other existing and subsequently organized subsidiaries of Seagate Technology HDD Holdings. In addition, borrowings under the new senior secured credit facilities are, subject to a number of exceptions, secured by a first priority security interest in substantially all the tangible and intangible assets of Seagate Technology HDD Holdings and many of its subsidiaries, as well as a pledge of the shares of Seagate Technology HDD Holdings and many of its subsidiaries. In the case of Seagate Technology (US) Holdings, Inc., this pledge of shares is limited to a pledge of 65% of the shares of its non-U.S. subsidiaries. Borrowings under the senior secured credit facilities are also secured by a first priority pledge of all intercompany indebtedness of Seagate Technology Holdings and many of its subsidiaries.

Interest Rates and Fees

The revolving credit facility and the term loan facility initially bear interest at a rate equal to:

· in the case of the revolving credit facility, at our option, either adjusted LIBOR plus 2.00% or ABR plus 1.00%, subject to adjustment based upon Seagate Technology HDD Holdings’ ratio of total funded debt to consolidated EBITDA; and

· in the case of the term loan facility, at our option, either, adjusted LIBOR plus 2.00% or ABR plus 1.00%, subject to adjustment based upon Seagate Technology HDD Holdings’ ratio of total funded debt to consolidated EBITDA.

Adjusted LIBOR is the London inter-bank offer rate as adjusted for statutory reserves. ABR is the greater of (i) JPMorgan Chase Bank’s prime rate and (ii) and the federal funds rate plus 0.50%. In addition to paying

150

interest on outstanding principal under the senior secured credit facilities, Seagate Technology HDD Holdings will be required to pay a commitment fee to the lenders under the revolving credit facility in respect of any unused commitments at a rate equal to 0.50% per year. Seagate Technology HDD Holdings will also be required to pay an annual letter of credit fee equal to 2.00%, subject to adjustment based upon Seagate Technology Holdings’ ratio of total funded debt to consolidated EBITDA, plus fronting fees and customary issuance and administration fees.

Amortization Schedule and Prepayments

Any principal amounts outstanding under the revolving credit facility will be due and payable in full at the date of maturity, which is the fifth anniversary of the closing of the new senior secured credit facilities. The amortization schedule for the term loan facility contemplates semi-annual payments until the date of maturity. We list below the amortization for the term loan facility on an annual basis.

Years After Closing
1	$	3.5
2		3.5
3		3.5
4		3.5
5		336.0
Total	$	350.0

We will be allowed to voluntarily repay outstanding loans under the new senior secured credit facilities without penalty, other than breakage costs. Amounts repaid or prepaid under the term loan facility may not be reborrowed.

Covenants and Other Matters

The agreements governing the new senior secured credit facilities contain a number of covenants that, among other things, restrict the ability of us, the borrowers and our other subsidiaries, subject to a number of exceptions, to:

· dispose of assets;

· incur additional debt or issue preferred stock;

· incur guarantee obligations;

· repay or prepay other debt;

· redeem or repurchase capital stock or debt;

· make specified restricted payments and dividends;

· enter into swap agreements;

· create liens on assets;

· make investments, loans or advances;

· engage in mergers, acquisitions or consolidations;

· engage to any material extent in businesses other than our current businesses;

· make capital expenditures;

· amend Seagate Technology HDD Holdings’ deferred compensation plan;

151

· enter into sale and leaseback transactions; or

· engage in certain transactions with affiliates.

Many of these covenants will be modified or eliminated in the event that and for so long as the senior unsecured long-term indebtedness of Seagate Technology HDD Holdings is rated investment grade by both Moody’s Investors Services, Inc. and Standard and Poor’s Ratings Group, Inc.

In addition, under the new senior secured credit facilities, we are required to comply with specified financial covenants, including:

· a minimum net interest coverage ratio;

· a minimum ratio of adjusted consolidated EBITDA to fixed charges; and

· a maximum net leverage ratio.

The senior secured credit facilities also contain customary representations and warranties, affirmative covenants and events of default, including a cross default and defaults upon material judgments or a change in control.

152

THE NOVEMBER 2000 TRANSACTIONS

We summarize below the principal terms of the stock purchase agreement and other agreements that relate to the November 2000 transactions. This summary is not a complete description of all of the terms of these agreements. For further information regarding the terms and provisions of these agreements, please refer to the agreements themselves, which we have filed as exhibits to the registration statement of which this prospectus forms a part.

Overview

Seagate Technology Holdings was formed in August 2000 to be a holding company for the rigid disc drive operating business and the storage area networks business of Seagate Technology, Inc. In a series of transactions, which closed on November 22, 2000, Seagate Technology Holdings became a subsidiary of New SAC. These transactions consisted of the following:

· the assignment by Suez Acquisition Company of all its rights and obligations under the stock purchase agreement to New SAC, our parent company; the purchase by New SAC of substantially all of the operating assets of Seagate Technology, Inc., including its rigid disc drive, tape drive, software and intelligent storage solutions businesses, a portion of the cash on the balance sheet of Seagate Technology, Inc. and some other assets of Seagate Technology, Inc.; and the assumption by New SAC of substantially all of the liabilities of Seagate Technology, Inc.;

· the acquisition by VERITAS, under a merger agreement dated March 29, 2000 among VERITAS, Seagate Technology, Inc. and Victory Merger Sub., Inc., a wholly owned subsidiary of VERITAS, of the assets of Seagate Technology, Inc. that Suez Acquisition Company did not purchase (effected through a merger of Seagate Technology, Inc. and Victory Merger Sub, Inc.) and the payment by VERITAS to the shareholders of Seagate Technology, Inc. of cash and VERITAS common stock as merger consideration for their shares of Seagate Technology, Inc. common stock and options to purchase shares of Seagate Technology, Inc. common stock;

· cash contributions from our sponsor group in exchange for ordinary and preferred shares of New SAC;

· cash contributions from the management group in exchange for ordinary and preferred shares of New SAC;

· the conversion by the management group of a portion of their shares of Seagate Technology, Inc. common stock and options to purchase these shares, valued in the aggregate at approximately $184 million, for interests in deferred compensation plans of Seagate Technology Holdings and Seagate Technology SAN Holdings and for ordinary and preferred shares of New SAC;

· the issuance of 12 ¹/2% senior subordinated notes by Seagate Technology International, all of which it repurchased as part of the recent refinancing;

· the obtaining by Seagate Technology International and Seagate Technology (US) Holdings, Inc. of senior secured credit facilities, the indebtedness under which was repaid in full as part of the recent refinancing;

· the redemption by Seagate Technology International of the senior notes it had previously issued, which constituted substantially all of its outstanding debt prior to the November 2000 transactions; and

· the payment of fees and expenses in connection with the November 2000 transactions, including the fees and expenses of the lenders under the existing senior secured credit facilities, the initial purchasers of the senior subordinated notes issued by Seagate Technology International and the trustee with respect to those notes, as well as legal, accounting and printing fees and expenses.

Suez Acquisition Company purchased the assets under the stock purchase agreement for a purchase price of $1.840 billion in cash, including transaction costs of $25 million. On the closing of the November 2000

153

Transactions, Suez Acquisition Company deposited $50 million of the purchase price into an escrow account to be held by VERITAS, which has since been released by VERITAS to the former shareholders of Seagate Technology, Inc. in accordance with a stipulation of settlement. In addition, New SAC, as the successor in interest to Suez Acquisition Company, may owe VERITAS additional amounts related to the businesses it acquired in the November 2000 transactions under an indemnification agreement dated as of March 29, 2000 among Suez Acquisition Company, Seagate Technology, Inc. and VERITAS. For more information about this agreement, see “Related Party Transactions—Indemnification Agreement.”

On the close of the November 2000 transactions, our sponsor group indirectly beneficially owned approximately 82%, and the management group indirectly beneficially owned approximately 18%, of our outstanding shares.

Sponsor Group

Silver Lake Partners organized a group of investors that, together with the management group, owns 100% of New SAC. Specifically, affiliates of Silver Lake Partners, Texas Pacific Group, August Capital and J.P. Morgan Partners, LLC and investment funds affiliated with Goldman, Sachs & Co., which we refer to collectively as our sponsor group, made cash contributions to New SAC, our parent company, on the closing of the November 2000 transactions in exchange for ordinary and preferred shares of New SAC. Our sponsor group contributed $875 million in cash and received, in exchange, approximately 79% of the outstanding ordinary shares of New SAC on the closing of the November 2000 transactions. New SAC indirectly owns over 99% of the outstanding common shares of Seagate Technology Holdings.

Management Group

At the time of the November 2000 transactions, the management group consisted of approximately 200 officers of Seagate Technology, Inc., including members of its senior management team. Under rollover agreements entered into with each of the members of the management group at the closing of the November 2000 transactions, the management group converted, or rolled, a portion of their unvested options to purchase these shares, valued in the aggregate at approximately $184 million, into interests in deferred compensation plans and into New SAC ordinary and preferred shares, which we refer to as the management rollover, and invested approximately $41 million in cash in exchange for ordinary and preferred shares of New SAC. The portion of the management rollover consisting of the interests in deferred compensation plans was credited into deferred compensation accounts established and maintained by Seagate Technology HDD Holdings and Seagate Technology SAN Holdings. For a description of the vesting, payment and other provisions of the deferred compensation plans, see “Management—Employment and Other Agreements—Rollover Agreements and Deferred Compensation Plans.”

Merger Agreement

On March 29, 2000, Seagate Technology, Inc., VERITAS and Victory Merger Sub, Inc., a wholly owned subsidiary of VERITAS, entered into a merger agreement. Under the merger agreement, Seagate Technology, Inc., which at that time owned only the assets of Seagate Technology, Inc. not purchased by Suez Acquisition Company under the stock purchase agreement, became a wholly owned subsidiary of VERITAS. As a result of the merger, VERITAS indirectly acquired the following assets:

· 128.1 million shares of common stock of VERITAS, which were held by Seagate Software Holdings and which had been received in connection with the sale of Seagate Technology, Inc.’s Network and Storage Management Group to VERITAS in fiscal year 1999;

· the capital stock of Seagate Software Holdings, provided that the capital stock of Crystal Decisions, Inc. and the capital stock of any other indirect subsidiaries of Seagate Software Holdings were sold to Suez Acquisition Company before the capital stock of Seagate Software Holdings was acquired by VERITAS;

154

· cash on the balance sheet of Seagate Technology, Inc. in excess of the required cash balance of $765 million as adjusted, which was purchased by Suez Acquisition Company;

· Seagate Technology, Inc.’s investments in Gadzoox Networks, Inc. and Lernout & Hauspie Speech Products N.V., to the extent they were owned by Seagate Technology, Inc. at the closing of the November 2000 transactions; and

· rights to the value of specified tax refunds claimed and credits used by VERITAS which are attributable to Seagate Technology, Inc.

Redemption of Former Senior Notes

Under the stock purchase agreement, Seagate Technology, Inc. agreed to redeem the four series of its then outstanding senior notes at the closing of the November 2000 transactions. Seagate Technology, Inc. redeemed these notes under the optional call provisions of the indenture under which they were issued, and none remain outstanding.

Other Agreements and Plans

In connection with the November 2000 transactions, New SAC entered into the following agreements and benefit and compensation plans, at or following the closing of the November 2000 transactions:

· a shareholders agreement with our sponsor group;

· a management shareholders agreement with the management group;

· an indemnification agreement with VERITAS and Seagate Technology, Inc.;

· employment agreements and management retention agreements with members of our senior management team;

· rollover agreements and the related deferred compensation plans;

· restricted stock plans, under which New SAC granted restricted stock awards; and

· the assumption of indemnification and insurance obligations of Seagate Technology, Inc. regarding New SAC’s directors and officers.

In addition, Seagate Technology Holdings and another subsidiary of New SAC have adopted share option plans. We describe the principal terms of Seagate Technology Holdings’ share option plan under “Management—Employment and Other Agreements.”

155

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

The following unaudited pro forma condensed consolidated financial information of Seagate Technology Holdings for the fiscal year ended June 29, 2001 has been prepared based on the historical consolidated financial statements of Seagate Technology Holdings for the period from November 23, 2000 through June 29, 2001 and the historical consolidated financial statements of its predecessor for the period from July 1, 2000 through November 22, 2000, adjusted to give pro forma effect to the November 2000 transactions and the compensation charges related to the acceleration and net exercise of stock options by employees who held Seagate Technology, Inc. common stock on November 22, 2000, in each case as if they had occurred on July 1, 2000. Through November 22, 2000, the business now operated by Seagate Technology Holdings operated as the rigid disc drive and storage area networks division of Seagate Technology, Inc. That division is Seagate Technology Holdings’ predecessor. For a description of the November 2000 transactions, see “The November 2000 Transactions.”

The unaudited pro forma adjustments, which are based upon available information and upon assumptions that management believes are reasonable, are described in the accompanying notes. The unaudited pro forma condensed consolidated financial information is for informational purposes only and does not purport to represent what our financial position or results of operations would actually have been had the November 2000 transactions occurred as of July 1, 2000, nor does the unaudited pro forma condensed consolidated financial information purport to project our results for any future period. Pro forma balance sheet and income statement information as of and for the nine month period ended March 29, 2002 is not included in these pro forma financial statements because the November 2000 transactions are already reflected in the actual results for this period.

You should read the unaudited pro forma condensed consolidated financial information in conjunction with the consolidated financial statements of Seagate Technology Holdings and its predecessor for the period from November 23, 2000 through June 29, 2001 and for the period from July 1, 2000 through November 22, 2000, included elsewhere in this prospectus.

The purchase by New SAC under the stock purchase agreement was accounted for using the purchase method of accounting. The purchase price under the stock purchase agreement was allocated to the assets acquired and liabilities assumed, based on their respective fair values. The purchase accounting adjustments reflect the fair values of the assets that were acquired and liabilities assumed were based upon independent appraisals. An allocation of the purchase price was made to major categories of assets and liabilities in the accompanying unaudited pro forma condensed consolidated financial information.

156

Unaudited Pro Forma Condensed Consolidated Statement of Operations

For The Fiscal Year Ended June 29, 2001

(In millions)

	Predecessor to Seagate Technology Holdings for the Period from July 1, 2000 through November 22, 2000			Merger with VERITAS			Financings and Redemption of Existing Senior Notes			New Accounting Basis in Assets and Liabilities as a Result of the Stock Purchase			Seagate Technology Holdings for the Period from November 23, 2000 through June 29, 2001			Pro Forma Seagate Technology Holdings Prior to Non-recurring Adjustments			Adjustments for Non-recurring Charges Related to November 2000 Transactions			Pro Forma Seagate Technology Holdings
Revenue	$	2,310		$	—		$	—		$	—		$	3,656		$	5,966		$	—		$	5,966
Cost of sales		2,035			(265	)(a)					1	(o)		2,924			4,457						4,457
											(107	)(p)
											(131	)(q)
Product development		409			(116	)(a)					(17	)(p)		388			664						664
Marketing and administrative		450			(4	)(b)		4	(j)		(6	)(p)		288			464			(40	)(s)		424
					(83	)(c)
					(185	)(a)
Amortization of goodwill and other intangibles		20			(1	)(d)					(11	)(o)		12			20						20
Restructuring		19												66			85						85
In-process research and development		—												52			52			(52	)(t)
Total operating expenses		2,933			(654	)		4			(271	)		3,730			5,742			(92	)		5,650
Income (loss) from operations		(623	)		654			(4	)		271			(74	)		224			92			316
Interest income		57						(45	)(k)					31			43						43
Interest expense		(24	)					(13 (3	)(l) )(m)					(54	)		(94	)					(94	)
Gain on sale of SanDisk stock		102			(102	)(e)																	—
Gain on sale of Veeco stock		20			(20	)(e)																	—
Loss on LHSP investment		(138	)		138	(f)																	—
Other, net		(12	)		8 8	(g) (h)								(4	)								—
Other income (expense), net		5			32			(61	)		—			(27	)		(51	)		—			(51	)
Income (loss) before income taxes		(618	)		686			(65	)		271			(101	)		173			92			265
Benefit (provision) for income taxes		206			(217	)(i)		19	(n)		(80	)(r)		(9	)		(81	)		36	(u)		(45	)
Net income (loss)	$	(412	)	$	469		$	(46	)	$	191		$	(110	)	$	92		$	128		$	220

(See accompanying footnotes)

157

Notes to Unaudited Pro Forma Condensed Consolidated

Statement of Operations

(a)  To eliminate the non-recurring compensation expense recorded as a result of the acceleration and net exercise of Seagate Technology, Inc. stock options held by employees of Seagate Technology Holdings at November 22, 2000.

(b)  To eliminate amortization of deferred compensation related to the Seagate Technology, Inc. restricted stock plan as it relates to employees of Seagate Technology Holdings.

(c)  To eliminate non-recurring costs related to the November 2000 transactions.

(d)  To eliminate amortization of intangibles relating to investments in SanDisk, Veeco and LHSP that were not acquired by New SAC and Seagate Technology Holdings.

(e)  To eliminate the gains on the sale of a portion of our predecessor’s equity investments in Veeco and SanDisk that were not acquired by New SAC or by Seagate Technology Holdings.

(f)  To eliminate loss on investments in LHSP that were not acquired by New SAC or by Seagate Technology Holdings.

(g)  To eliminate the non-operating other than temporary loss recorded by our predecessor on its investment in Gadzoox that was not acquired by New SAC or Seagate Technology Holdings.

(h)  To eliminate the non-operating loss on sale of marketable securities that were sold by our predecessor in anticipation of the November 2000 transactions.

(i)  To eliminate the tax effects of the events referred to in notes (a) through (h) above.

(j)  To record the push down of compensation expense associated with unvested restricted ordinary and preferred shares of New SAC. The compensation expense of $23 million is amortized over the vesting period, 30 months, at approximately $9 million per year.

(k)  On the closing of the November 2000 transactions, New SAC acquired $765 million of cash. Approximately $149 million of this amount was used as a source of cash in connection with the November 2000 transactions. Interest income was reduced to reflect the average rate of return earned by Seagate Technology Holdings on its cash equivalents and short-term investments applied to the pro forma cash balance of Seagate Technology Holdings on the closing of the November 2000 transactions.

158

Notes to Unaudited Pro Forma Condensed Consolidated

Statement of Operations—(Continued)

(l)  To record interest expense that Seagate Technology Holdings incurred as a result of its subsidiaries entering into the former senior secured credit facilities and issuing the former 12 ¹/2% senior subordinated notes, and the elimination of historical interest expense related to the prior senior notes of Seagate Technology, Inc., which were redeemed as part of the November 2000 transactions.

	Principal Amount		Assumed Interest Rate		Five Months Ended November 22, 2000
	(in millions)
Former senior credit facilities:
Term loan A facility (*)	$	500	9.2	%	$	19
Term loan B facility (*)		200	9.7	%		8
Revolving credit facility (*)		—	—			—
Former 12 1/2% senior subordinated notes (*)		210	12.5	%		11
Amortization of $9 million discount on 12 1/2% senior subordinated notes over a 7-year life						—
Less: historical interest expense on prior senior notes of Seagate Technology, Inc.:
March 1, 2004		200	7.125	%		(7	)
March 1, 2007		200	7.37	%		(7	)
March 1, 2017		100	7.875	%		(3	)
March 1, 2037		200	7.45	%		(8	)
Net adjustments					$	13

(*)  We have assumed the use of the LIBOR options for the term loan A facility and the term loan B facility, which were LIBOR plus 2.50% and LIBOR plus 3.00%, respectively. We have assumed a rate of 6.7% for LIBOR. The effect of a 0.1250% increase or decrease in interest rates would have increased or decreased total interest expense by approximately $0.9 million for the year ended June 29, 2001. The interest rate on the 12 ¹/2% senior subordinated notes was a fixed rate.

(m)  To record amortization of debt issuance costs, not including the $9 million discount on the face value of the former 12 ¹/2% senior subordinated notes, of $37 million over the weighted average life of the former senior credit facilities and the former 12 ¹/2% senior subordinated notes.

(n)  Tax effects of adjustments (j) through (m) above.

(o)  To record for the amortization of intangibles acquired at the closing of the November 2000 transactions based upon the purchase accounting used to record the November 2000 transactions.

We accounted for the November 2000 transactions as a purchase in accordance with Accounting Principles Board, or APB, Opinion No. 16, “Business Combinations.” All acquired tangible assets, identifiable intangible assets as well as assumed liabilities were valued based on their relative fair values and reorganized into the following businesses: (1) the rigid disc drive business, which includes the storage area networks business, (2) the removable storage solutions business, (3) the software business, and (4) an investment holding company. The fair value of the net assets exceeded the net purchase price by approximately $909 million. Accordingly, the resultant negative goodwill was allocated on a pro rata basis to the acquired long-lived assets and reduced the recorded amounts by approximately 46%.

The completion of the underlying in-process projects acquired within each business combination was the most significant and uncertain assumption utilized in the valuation of the in-process research and

159

Notes to Unaudited Pro Forma Condensed Consolidated

Statement of Operations—(Continued)

development. Those uncertainties could give rise to unforeseen budget overruns and/or revenue shortfalls in the event that we are unable to successfully complete a certain research and development project. We are primarily responsible for estimating the fair value of the purchased research and development in all business combinations accounted for under the purchase method.

The table below summarizes the allocation of net purchase price to Seagate Technology Holdings (in millions).

Description	Useful Life In Years	Predecessor Estimated Fair Value
Net current assets(1)(3)		$	869
Other long-lived assets			42
Property, plant and equipment(2)	Up to 30		763
Identified intangibles:
Trade names(4)	10		47
Developed technologies(4)	3-7		49
Assembled workforces(4)	1-3		43
Other	5		1
Total identified intangibles			140
Long-term deferred taxes(3)			(63	)
Long-term liabilities			(119	)
Net assets			1,632
In-process research and development(4)			52
Net Purchase Price		$	1,684

(1)  Acquired current assets included cash and cash equivalents, accounts receivable, inventories and other current assets. The fair values of current assets generally approximated the recorded historic book values. Short-term investments were valued based on quoted market prices. Inventory values were estimated based on the current market value of the inventories less completion costs and less a profit margin for activities remaining to be completed until the inventory is sold. Valuation allowances were established for current deferred tax assets in excess of long-term deferred tax liabilities.

Assumed current liabilities included accounts payable, accrued compensation and expenses and accrued income taxes. The fair values of current liabilities generally approximated the historic recorded book values because of the monetary nature of most of the liabilities.

(2)  We obtained an independent valuation of the acquired property, plant and equipment. In arriving at the determination of market value for the assets, the appraisers considered the estimated cost to construct or acquired comparable property. Machinery and equipment were assessed using replacement cost estimates reduced by depreciation factors representing the condition, functionality and operability of the assets. The sales comparison approach was used for office and data communication equipment. Land, land improvements, buildings, and building and leasehold improvements were valued based upon discussions with knowledgeable personnel.

(3)  Long-term deferred tax liabilities arose as a result of the excess of the fair values of inventory and acquired intangible assets over their related tax basis. We have $434 million of federal and state deferred tax assets for which a full valuation allowance has been established.

160

Notes to Unaudited Pro Forma Condensed Consolidated

Statement of Operations—(Continued)

(4)  We obtained an independent valuation of acquired identified intangibles. The significant assumptions relating to each category are discussed in the following paragraphs. Also, these assets are being amortized on the straight-line basis over their estimated useful life and resultant amortization is included in amortization of goodwill and other intangibles.

Trade names—The value of the trade names was based upon discounting to their net present value the licensing income that would arise by charging the operating businesses that use the trade names.

Developed technologies—The value of this asset for each operating business was determined by discounting the expected future cash flows attributable to all existing technologies which had reached technological feasibility, after considering risks relating to: (1) the characteristics and applications of the technology, (2) existing and future markets, and (3) life cycles of the technologies. Estimates of future revenues and expenses used to determine the value of developed technology was consistent with the historical trends in the industry and expected outlooks.

Assembled workforces—The value of the assembled work force was determined by estimating the recruiting, hiring and training costs to replace each group of existing employees.

In-process research & development—The value of in-process research and development was based on an evaluation of all developmental projects using the guidance set forth in Interpretation No. 4 of Financial Accounting Standards Board, or FASB, Statement No. 2, “Accounting for Research and Development Costs” and FASB Statement No. 86, “Accounting for the Cost of Computer Software to Be Sold, Leased, or Otherwise Marketed.”

The amount was determined by: (1) obtaining management estimates of future revenues and operating profits associated with existing developmental projects, (2) projecting the cash flows and costs to complete the underlying technologies and resultant products, and (3) discounting these cash flows to their net present value.

Estimates of future revenues and expenses used to determine the value of in-process research and development was consistent with the historical trends in the industry and expected outlooks. The entire amount was charged to operations because related technologies had not reached technological feasibility and they had no alternative future use.

At the valuation date, our predecessor’s developmental projects focused on increasing capacity, reducing size and power consumption, improving performance and reliability, and reducing production costs. They were grouped into three categories. Those included in category one had completed conceptualization and there was substantial progress in coding, building, simulating, and testing the technologies functionality and performance. For those included in category two, subsystem requirements had been identified, design plans had been completed, and substantial progress had been made in coding and/or building the technologies. Those included in category three had completed design plans and system requirements. Based upon an analysis of efforts to date, developmental projects in these three categories were 70%, 50%, and 30% complete, respectively, and were scheduled for completion throughout the period ended in fiscal 2003 at an additional estimated cost of $107 million.

At the valuation date, the storage area networks business was in the process of developing two next generation versions of existing technologies, which, based on an effort to date, were 50% and 75% complete. Activities necessary to convert this in-process research and

161

Notes to Unaudited Pro Forma Condensed Consolidated

Statement of Operations—(Continued)

development into commercially viable technologies include the writing and testing of code diagnostic software design development testing and system integration. Seagate Technology SAN Holdings expects resultant products will be successfully developed in fiscal 2002 at an additional estimated cost of $1 million.

(p)  To record reduction in depreciation as the new accounting basis in the property, plant and equipment and leasehold improvements is lower than the historical basis of Seagate Technology Holdings.

(q)  To eliminate the write up of inventories to fair value for inventories acquired at the close of the November 2000 transactions.

(r)  To record tax effects on adjustments (o) through (q) above.

(s)  To eliminate management consulting and advisory fees paid to selected members of our sponsor group at the close of the transactions.

(t)  To eliminate the write-off of in-process research and development acquired in connection with the transactions.

(u)  To record tax effects on adjustment (s) and (t) above.

162

CERTAIN U.S. INCOME TAX CONSIDERATIONS

The exchange of the outstanding notes for the exchange notes in the exchange offer will not constitute a taxable event to the holders. Consequently, no gain or loss will be recognized by you upon receipt of an exchange note, the holding period of the exchange notes will include the holding period of the outstanding notes and the basis of the exchange notes will be the same as the basis of the outstanding notes immediately before the exchange.

In any event, you should consult your own tax advisors concerning the U.S. federal income tax consequences in light of your particular situations as well as any consequences arising under the laws of any other taxing jurisdiction.

163

PLAN OF DISTRIBUTION

Each broker-dealer that receives the exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. The prospectus contained in this registration statement may be used by a broker-dealer in connection with resales of the exchange notes received in exchange for the outstanding notes if the outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration of the exchange offer, we will make the prospectus, as amended or supplemented, available to any broker-dealer for use in connection with the resale. In addition, until 90 days after the date of the prospectus, all dealers effecting transactions in the exchange notes may be required to deliver a prospectus.

We will not receive any proceeds from any sale of the exchange notes by broker-dealers. The exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or at negotiated prices. Any of the resale transactions may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from the broker-dealer or the purchaser of the exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act, and any profit on the resale of the exchange notes and any commission or concessions received by any of these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days after the expiration of the exchange offer, we will promptly send additional copies of the prospectus and any amendment or supplement to the prospectus to any broker-dealer that requests copies in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of the notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

164

LEGAL MATTERS

The validity of the exchange notes will be passed upon for us by Simpson Thacher & Bartlett, Palo Alto, California. Selected partners of Simpson Thacher & Bartlett, members of their families, related persons and others own through an investment vehicle less than 1% of the capital commitments of one of our sponsors, Silver Lake Partners.

EXPERTS

The consolidated and combined financial statements of Seagate Technology Holdings and its predecessor, the Seagate Technology Hard Disc Drive Business, an operating business of Seagate Technology, Inc., as of June 29, 2001 and June 30, 2000 and for the period from November 23, 2000 through June 29, 2001, for the period from July 1, 2000 through November 22, 2000 and for each of the two years in the period ended June 30, 2000, appearing in this registration statement have been audited by Ernst & Young LLP, independent auditors, as stated in their report appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-4 under the Securities Act of 1933 with respect to the exchange notes. This prospectus, which forms a part of the registration statement, does not contain all of the information in the registration statement. You should refer to the registration statement for further information. Statements contained in this prospectus about the contents of any contract or other document are not necessarily complete, and, where a contract or other document is an exhibit to the registration statement, each of these statements is qualified by the provision in the exhibit to which the statement relates.

We are not currently subject to the full informational requirements of the Securities Exchange Act. As a result of this offering, we will become subject to the informational requirements of the Securities Exchange Act. Accordingly, we will file reports and other information with the SEC unless and until we obtain an exemption from the requirement to do so. The registration statement and other reports or information can be inspected, and copies may be obtained, at the Public Reference Room of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates, and at the regional public reference facilities maintained by the SEC located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, Suite 1300, New York, New York 10048. Information on the operation of the Public Reference Room of the SEC may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site (http://www.sec.gov) that contains reports and information statements and other information that we have filed electronically with the SEC.

Furthermore, we agree that, even if we are not required to file periodic reports and information with the SEC, for so long as any exchange note remains outstanding, we will furnish to you the information that would be required to be filed by us under Sections 13 and 15(d) of the Securities Exchange Act of 1934 within 15 days of the date it would have been required to be filed with the SEC.

165

SEAGATE TECHNOLOGY HOLDINGS

INDEX TO FINANCIAL STATEMENTS

	Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS AS OF MARCH 29, 2002 AND JUNE 29, 2001	F-2
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 29, 2002 AND FOR THE PERIOD FROM NOVEMBER 23, 2000 TO MARCH 30, 2001, AND THE COMBINED STATEMENT OF OPERATIONS FOR THE PERIOD FROM JULY 1, 2000 TO NOVEMBER 22, 2000	F-3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 29, 2002 AND FOR THE PERIOD FROM NOVEMBER 23, 2000 TO MARCH 30, 2001, AND THE COMBINED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM JULY 1, 2000 TO NOVEMBER 22, 2000	F-4
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY FOR THE NINE MONTHS ENDED MARCH 29, 2002	F-6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	F-7
CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS	F-23
CONSOLIDATED BALANCE SHEETS AS OF JUNE 29, 2001 AND COMBINED BALANCE SHEET AS OF JUNE 30, 2000	F-24
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD FROM NOVEMBER 23, 2000 TO JUNE 29, 2001 AND COMBINED STATEMENTS OF OPERATIONS FOR THE PERIOD FROM JULY 1, 2000 TO NOVEMBER 22, 2000, FISCAL YEARS ENDED JUNE 30, 2000 AND JULY 2, 1999	F-25
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM NOVEMBER 23, 2000 TO JUNE 29, 2001 AND COMBINED STATEMENTS OF CASH FLOWS FOR THE PERIOD FROM JULY 1, 2000 TO NOVEMBER 22, 2000, FISCAL YEARS ENDED JUNE 30, 2000 AND JULY 2, 1999	F-26
COMBINED STATEMENT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) AND BUSINESS EQUITY FOR THE PERIOD FROM JULY 1, 2000 THROUGH NOVEMBER 22, 2000, FISCAL YEARS ENDED JUNE 30, 2000 AND JULY 2, 1999	F-28
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY FOR THE PERIOD FROM NOVEMBER 23, 2000 THROUGH JUNE 29, 2001	F-29
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS	F-30

F-1

SEAGATE TECHNOLOGY HOLDINGS

CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS

(In millions, except share and per share amounts)

(Unaudited)

	Seagate Technology Holdings
	March 29, 2002			June 29, 2001(1)
ASSETS (See Note 4)
Cash and cash equivalents	$	978		$	726
Short-term investments		125			183
Accounts receivable, net		703			539
Inventories		315			322
Deferred income taxes		26			31
Other current assets		151			137
Total Current Assets		2,298			1,938
Property, equipment and leasehold improvements, net		888			802
Intangibles, net		109			123
Other assets		94			103
Total Assets (See Note 4)	$	3,389		$	2,966
LIABILITIES
Accounts payable	$	615		$	507
Affiliate accounts payable		11			23
Accrued employee compensation		165			139
Accrued expenses		428			458
Accrued income taxes		223			164
Current portion of long-term debt		18			23
Total Current Liabilities		1,460			1,314
Deferred income taxes		14			28
Other liabilities		73			94
Long-term debt, less current portion		859			877
Total Liabilities		2,406			2,313
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Common shares, $.00001 par value—600 million authorized; 1,381,189 issued and outstanding at March 29, 2002; none issued or outstanding at June 29, 2001 and none authorized, issued or outstanding at June 30, 2000		—			—
Preferred shares, $.00001 par value—450 million authorized; 400 million issued and outstanding at March 29, 2002 and June 29, 2001, none authorized, issued or outstanding at June 30, 2000, liquidation preference $ 1,035		—			—
Paid-in capital		747			763
Accumulated other comprehensive income (loss)		(5	)		—
Retained earnings (accumulated deficit)		241			(110	)
Total Shareholders’ Equity		983			653
Total Liabilities and Shareholders’ Equity	$	3,389		$	2,966

(1) The information in this column was derived from the Company’s audited balance sheet as of June 29, 2001.

See notes to condensed consolidated and combined financial statements.

F-2

SEAGATE TECHNOLOGY HOLDINGS

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In millions)

(Unaudited)

	Seagate Technology Holdings						Predecessor
	Nine Months Ended March 29, 2002			Period from November 23, 2000 to March 30, 2001			Period from July 1, 2000 to November 22, 2000(1)
Revenue	$	4,614		$	2,442		$	2,310
Cost of revenue		3,368			1,964			2,035
Product development		492			231			409
Marketing and administrative		302			216			450
Amortization of intangibles		15			7			20
In-process research and development		—			52			—
Restructuring		4			54			19
Unusual items		—			—			—
Total operating expenses		4,181			2,524			2,933
Income (loss) from operations		433			(82	)		(623	)
Interest income		21			20			57
Interest expense		(61	)		(33	)		(24	)
Gain on sale of SanDisk stock		—			—			102
Gain on sale of Veeco stock		—			—			20
Gain on exchange of certain investments in equity securities		—			—			—
Loss on LHSP investment		—			—			(138	)
Other, net		10			(11	)		(12	)
Other income (expense), net		(30	)		(24	)		5
Income (loss) before income taxes		403			(106	)		(618	)
Provision for (benefit from) income taxes		52			11			(206	)
Net income (loss)	$	351		$	(117	)	$	(412	)

(1) The information in this column was derived from the Company’s audited statement of operations for the period from July 1, 2000 to November 22, 2000.

See notes to condensed consolidated and combined financial statements.

F-3

SEAGATE TECHNOLOGY HOLDINGS

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Seagate Technology Holdings						Predecessor
	Nine Months Ended March 29, 2002			Period from November 23, 2000 to March 30, 2001			Period from July 1, 2000 to November 22, 2000(1)
OPERATING ACTIVITIES
Net income (loss)	$	351		$	(117	)	$	(412	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		307			128			261
Deferred income taxes		(9	)		(40	)		(320	)
In-process research and development charge		—			52			—
Non-cash portion of restructuring charge					29			7
Loss on certain equity investments, net		—			—			18
Compensation expense related to accelerated vesting and exchange of stock options		—			—			567
Other, net		7			8			41
Changes in operating assets and liabilities:
Accounts receivable, net		(164	)		(200	)		181
Inventories		(21	)		337			(195	)
Accounts payable		96			(142	)		40
Accrued expenses, employee compensation and warranty		(76	)		(102	)		(218	)
Accrued income taxes		59			52			212
Other assets and liabilities, net		22			92			(61	)
Net cash provided by operating activities		572			97			121
INVESTING ACTIVITIES
Acquisition of property, equipment and leasehold improvements		(321	)		(117	)		(265	)
Purchase of short-term investments		(627	)		(411	)		(1,612	)
Maturities and sales of short-term investments		685			406			2,628
Purchase of rigid disc drive operating assets and liabilities, net of cash acquired of $852		—			(800	)		—
Restricted cash (TRA)		—			—			(150	)
Proceeds from sale of certain investments		—			—			234
Other, net		(11	)		8			(6	)
Net cash provided by (used in) investing activities	$	(274	)	$	(914	)	$	829

(1) The information in this column was derived from the Company’s audited statement of cash flows for the period from July 1, 2000 to November 22, 2000.

See notes to condensed consolidated and combined financial statements.

F-4

SEAGATE TECHNOLOGY HOLDINGS

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS—(Continued)

(In millions)

(Unaudited)

	Seagate Technology Holdings						Predecessor
	Nine Months Ended March 29, 2002			Period from November 23, 2000 to March 30, 2001			Period from July 1, 2000 to November 22, 2000(1)
FINANCING ACTIVITIES
Issuance of long-term debt, net of issuance costs	$	—		$	860		$	—
Repayment of long-term debt		(23	)		(4	)		(812	)
Short-term borrowings		—			66			—
Repayment of short-term borrowings		—			(66	)		—
Net change in investment by New SAC and its predecessor		—			—			(1,007	)
Net repayments under loan agreements with affiliates		—			—			—
Investment by New SAC and issuance of common stock		—			751			—
Distribution to shareholders		(33	)		—			—
Other, net		10			3			1
Net cash provided by (used in) financing activities		(46	)		1,610			(1,818	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—
Increase (decrease) in cash and cash equivalents		252			793			(868	)
Cash and cash equivalents at the beginning of the period		726			—			868
Cash and cash equivalents at the end of the period	$	978		$	793		$	—

(1) The information in this column was derived from the Company’s audited statement of cash flows for the period from July 1, 2000 to November 22, 2000.

See notes to condensed consolidated and combined financial statements.

F-5

SEAGATE TECHNOLOGY HOLDINGS

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In millions)

(Unaudited)

	Preferred Shares			Common Shares			Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Total
	Shares	Amount		Shares	Amount
Balance at June 29, 2001	400	$	—		$	—	$	763		$	(110	)	$	—		$	653
Net income											351						351
Accumulated other
Comprehensive loss														(5	)		(5	)
Comprehensive income																	346
Distribution to shareholders								(33	)								(33	)
Proceeds from exercise of
stock options				1				3									3
Amortization of deferred
compensation related to
New SAC restricted share
plans and other								14									14
Balance at March 29, 2002	400	$	—	1	$	—	$	747		$	241		$	(5	)	$	983

See notes to condensed consolidated financial statements.

F-6

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    Basis of Presentation

Nature of Operations—Seagate Technology Holdings was formed in August 2000, to be a holding company for the rigid disc drive operating business and the storage area networks operating business of Seagate Technology, Inc., which we refer to herein as Seagate Technology. Prior to November 22, 2000, Seagate Technology Holdings did not have significant operations. As a result, the predecessor to Seagate Technology Holdings, the Seagate Technology Hard Disc Drive Business, an operating business of Seagate Technology, Inc. (“Predecessor”), is the combined rigid disc drive and storage area networks operating businesses of Seagate Technology, and the combined financial position, results of operations, and cash flows of the Predecessor are presented in these financial statements on a comparative basis. Throughout these financial statements we make reference to the “Company” to refer to both Seagate Technology Holdings and its Predecessor.

The Company is over 99% owned by its consolidating Parent, New SAC. New SAC was formed in 2000 and is the parent holding company for all the former operating businesses acquired from Seagate Technology, Inc. in November 2000.

The Company designs, manufactures and markets products for storage, retrieval and management of data on computer and data communications systems. The Company sells its products to original equipment manufacturers (“OEM”) for inclusion in their computer systems or subsystems, and to distributors who typically sell to small OEMs, dealers, system integrators and other resellers.

Basis of Presentation—The condensed consolidated and the condensed combined financial statements have been prepared by the Company and are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The condensed consolidated and the condensed combined financial statements reflect, in the opinion of management, all material adjustments necessary to present fairly the condensed consolidated and condensed combined financial position of the Company as of March 29, 2002, and the results of operations and cash flows for the nine months ended March 29, 2002, the period from July 1, 2000 to November 22, 2000, and the period from November 23, 2000 to March 30, 2001. Such adjustments are of a normal recurring nature. The Company believes the disclosures included in the unaudited condensed consolidated and the condensed combined financial statements, when read in conjunction with the audited consolidated combined financial statements of the Company as of June 29, 2001 and notes thereto, are adequate to make the information presented not misleading.

Impact of Recently Issued Accounting Standards—In July 2001, the FASB issued SFAS No. 141, “Business Combinations” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS 141 requires that all business combinations be accounted for by the purchase method of accounting and changes the criteria for recognition of intangible assets acquired in a business combination. The provisions of SFAS 141 apply to all business combinations initiated after June 30, 2001. The Company does not expect that the adoption of SFAS 141 will have a material effect on its consolidated financial position or results of operations. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized; however, these assets must be reviewed at least annually for impairment. Intangible assets with finite useful lives will continue to be amortized over their respective useful lives. The standard also establishes specific guidance for testing for impairment of goodwill and intangible assets with indefinite useful lives. The provisions of SFAS 142 will be effective for the Company’s fiscal year 2003. Goodwill and intangible assets acquired after June 30, 2001 are subject immediately to the non-amortization provisions of SFAS 142. Through the end of the nine months period ended March 29, 2002, the Company was in the process of evaluating the potential impact that the adoption of SFAS 142 will have on its consolidated financial position and results of operations.

F-7

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS 144 amends existing accounting guidance on asset impairment and provides a single accounting model for long-lived assets to be disposed of. Among other provisions, the new rules change the criteria for classifying an asset as held-for-sale. The standard also broadens the scope of businesses to be disposed of that qualify for reporting as discontinued operations, and changes the timing of recognizing losses on such operations. The provisions of SFAS 144 will be effective for the Company’s fiscal year 2003 and will be applied prospectively. The Company is currently in the process of evaluating the potential impact that the adoption of SFAS 144 will have on its consolidated financial position and results of operations.

2.    Net Income Per Share

On November 22, 2000, New SAC contributed the hard disc drive business to the Company in exchange for all the outstanding capital stock comprised of 400 million shares of Seagate Technology Holdings Series A preferred stock and the Company was a wholly owned subsidiary of New SAC through June 29, 2001. During the nine months ended March 29, 2002, the Company granted 69,542,772 options to purchase common shares at a price of $2.30 per share and 9,147,045 options to purchase common shares at a price of $5.00 per share. As of March 29, 2002, options to purchase 1,381,189 shares of common stock had been exercised. Accordingly, the Company is currently less than 100% owned by New SAC.

The Series A preferred stock owned by New SAC is convertible into common stock on a one-to-one basis, is entitled to receive dividends and distributions ratably with holders of the common stock, and has voting rights on a basis as if converted into common stock. The Series A preferred stock has a preference of $2.30 per share in the event of a liquidation, dissolution, or wind-up of the Company. For the purpose of computing basic and diluted net income per share, in periods when the Company has net income the Series A preferred stock has been included in the denominator because, other than for the $2.30 per share preference in the event of a liquidation, dissolution, or winding up of the Company, the Series A preferred stock is effectively the same as common stock.

Prior to the stock purchase agreement executed by Suez Acquisition Company, the Predecessor had no outstanding share capital. On November 22, 2000, New SAC contributed the hard disc drive business to the Company in exchange for all the outstanding capital stock, currently comprised of 400 million shares of Seagate Technology Holdings Series A preferred stock. Basic earnings (loss) per share for the period from July 1, 2000 to November 22, 2000 is not presented because the Company had no outstanding common shares. Diluted net loss per common share for the period from November 23, 2000 to March 30, 2001 is not presented because the Company had a net loss and had no outstanding common shares. The potential common shares represented by the assumed conversion of the Series A preferred stock into common shares would be antidilutive for the period from November 23, 2000 to March 30, 2001.

F-8

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following table sets forth the computation of basic and diluted net income per share for the nine months ended March 29, 2002 (in millions, except per share data):

Numerator:
Net income	$	351
Denominator:
Denominator for basic net income per share—weighted average number of common shares outstanding during the period		400
Incremental common shares attributable to exercise of outstanding options (assuming proceeds would be used to purchase treasury stock)		11
Denominator for diluted net income per share—adjusted weighted average shares		411
Basic net income per share	$	0.88
Diluted net income per share	$	0.85

3.    Balance Sheet Information

Accounts Receivable

	March 29, 2002			June 29, 2001
	(In millions)
Accounts receivable	$	731		$	631
Allowance for non-collection		(28	)		(92	)
	$	703		$	539

Inventories

	March 29, 2002		June 29, 2001
	(In millions)
Components	$	60	$	63
Work-in process		56		61
Finished goods		199		198
	$	315	$	322

F-9

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Property, equipment and leasehold improvements

Property, equipment and leasehold improvements consisted of the following:

	Useful Life in Years	March 29, 2002			June 29, 2001
		(In millions)
Land		$	22		$	22
Equipment	3–4		867			585
Building and leasehold improvements	Life of lease–30		252			234
Construction in progress			146			138
			1,287			979
Less accumulated depreciation and amortization			(399	)		(177	)
		$	888		$	802

Equipment and leasehold improvements include assets under capitalized leases. Amortization of leasehold improvements is included in depreciation expense. Depreciation expense was $239 million, $107 million, and $238 million for the nine months ended March 29, 2002, the period from November 23, 2000 to March 30, 2001 and the period from July 1, 2000 to November 22, 2000, respectively.

4.    Long-Term Debt

Under the Company’s long-term debt borrowing arrangements, the Company, New SAC, and certain of New SAC’s subsidiaries (including subsidiaries of the Company), are guarantors on a joint and several, whole and unconditional basis, for the debt. In addition, the substantial majority of the Company and its subsidiary’s assets have been pledged as collateral under the senior bank long-term debt borrowing arrangements, and the Company and these same subsidiaries have agreed to covenants that restrict future equity and borrowing transactions, business acquisitions and disposals, making certain restricted payments and dividends, making capital expenditures, incurring guarantee obligations and engaging in mergers or consolidations. In addition, New SAC, is subject to certain financial covenant ratios under the Company’s long-term debt borrowing arrangements. As of March 29, 2002, the Company and New SAC were in compliance with all covenants.

5.    Stock Option Plan

In December 2000, the Board of Directors of the Company adopted the Seagate Technology Holdings Share Option Plan (the “STH Option Plan”). Under the terms of the STH Option Plan eligible employees, directors, and consultants can be awarded options to purchase shares of common stock of the Company under vesting terms to be determined at the date of grant. In January 2002, the STH Option Plan was amended to increase the maximum number of common shares issuable under the STH Option Plan from 72 million to 100 million. No options to purchase common stock of the Company had been issued through June 29, 2001. During the nine months ended March 29, 2002, options to purchase approximately 79 million shares of common stock were granted to employees under the STH Option Plan. Options granted to exempt employees vest as follows: 25% of the shares will vest on the first anniversary of the vesting commencement date and the remaining 75% will vest proportionately each month over the next 36 months. Options granted to non-exempt employees will vest on the first anniversary of the vesting commencement date. The vesting commencement date was November 22, 2000, for options to purchase approximately 67 million shares of the Company’s common stock.

F-10

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

6.    Income Taxes

The Company recorded a provision for income taxes of $52 million for the nine months ended March 29, 2002. The effective tax rate used to record the provision for income taxes differs from the U.S. federal statutory rate primarily due to the net effect of income generated from the Company’s manufacturing plants located in China, Malaysia, Singapore and Thailand that operate under tax holidays and, accordingly, are not subject to tax, an increase in the Company’s valuation allowance for the domestic deferred tax assets of certain of its subsidiaries, and the realization of tax credits. As a result of the November 2000 transactions and the ensuing corporate structure, the Company now consists of a foreign parent holding company with various domestic and foreign affiliates. The Company’s foreign parent has elected to be treated as a pass-through entity for U.S. tax purposes and is not expected to be subject to U.S. federal income taxes on dividends or other earnings distributions that it may receive from its foreign subsidiaries. Dividend distributions by the Company’s U.S. subsidiaries to the Company’s foreign parent may be subject to U.S. withholding taxes when and if distributed. A substantial portion of the Company’s manufacturing operations located in the Far East currently operate free from tax under various tax holidays. Based on the Company’s foreign ownership structure and subject to potential future increases in the valuation allowance for domestic deferred tax assets, the Company anticipates that its effective tax rate in future periods will generally be less than the U.S. federal statutory rate.

The Company recorded an $11 million provision for income taxes for the period November 23, 2000 to March 30, 2001. The $11 million provision for income taxes differs from the benefit from income taxes that would be derived by applying the U.S. federal statutory rate to the loss before income taxes primarily due to the net effect of nondeductible charges related to the acquisition of the operating assets of Seagate Technology, an increase in the valuation allowance for domestic deferred tax assets, and the income generated from the Company’s manufacturing plants located in Singapore, Thailand, China and Malaysia that operate under tax holidays and, accordingly, are not subject to tax.

In connection with the purchase of the operating assets of Seagate Technology, the Company recorded a $434 million valuation allowance for deferred tax assets. The $434 million of deferred tax assets subject to the valuation allowance arose primarily as a result of the excess of tax basis over the fair values of acquired property, plant and equipment, and liabilities assumed for which the Company expects to receive tax deductions in its federal and state returns in future periods. The Company also recorded $63 million of deferred tax liabilities as a result of the excess of the fair market value of inventory and acquired intangible assets over their related tax bases. Realization of the tax benefits for the federal and state deferred tax assets subject to the valuation allowance will depend primarily on the Company’s ability to generate sufficient taxable income in the United States in future periods. The Company is currently in the process of evaluating and updating its forecasts of projected domestic taxable income to determine the amount of deferred tax assets that management believes would be more likely than not realizable. The Company anticipates that it will complete this process in the fourth quarter of fiscal 2002. The Company anticipates that the tax benefits of the deferred tax assets when realized, will first result in an adjustment to increase the amount of unamortized negative goodwill relating to the purchase and will be allocated on a pro rata basis to reduce the purchase price of remaining long-lived assets acquired. Any excess tax benefit after reduction of the acquired long-lived assets to zero would then be realized as a reduction of future income tax expense in the period the tax benefits are realized.

Seagate Technology recorded a benefit from income taxes of $206 million for the period from July 1, 2000 to November 22, 2000. The recorded benefit from income taxes in each period differs from the benefit from income taxes that would be derived by applying the U.S. federal statutory rate to the loss before income taxes primarily due to certain losses recorded in connection with the sale by Seagate Technology of its operating assets located in the Far East that were not deductible for U.S. tax purposes.

F-11

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

A substantial portion of our predecessor’s Far East manufacturing operations at plant locations in China, Malaysia, Singapore and Thailand operated under various tax holidays, that were scheduled to expire in whole or in part at various dates through 2010. As of November 22, 2000, our predecessor’s foreign manufacturing subsidiaries had approximately $3.050 billion of undistributed foreign earnings of which approximately $1.722 billion were considered permanently reinvested offshore. In connection with the sale of the operating assets of Seagate Technology, Inc., approximately $1.650 billion of the unremitted foreign earnings were deemed to be distributed for U.S. tax purposes to Seagate Technology, Inc.’s U.S. parent. Seagate Technology, Inc. had previously recorded deferred income tax liabilities of approximately $542 million for its foreign earnings not considered permanently reinvested offshore. The deferred tax liabilities were eliminated and the remaining unremitted earnings of our predecessor’s foreign subsidiaries will no longer be subject to U.S. corporate level tax if remitted to our foreign parent holding company after November 22, 2000.

7.    Supplemental Cash Flow Information

	Seagate Technology Holdings				Predecessor
	Nine Months Ended March 29, 2002		Period from November 23, 2000 to March 30, 2001		Period from July 1, 2000 to November 22, 2000
	(In millions)
Cash Transactions:
Cash paid for interest	$	37	$	18	$	26
Cash paid (received) for income taxes, net of refunds		—		2		(63	)

The components of depreciation and amortization expense are as follows:

	Seagate Technology Holdings				Predecessor
	Nine Months Ended March 29, 2002		Period from November 23, 2000 to March 30, 2001		Period from July 1, 2000 to November 22, 2000
			(In millions)
Depreciation	$	239	$	107	$	238
Amortization:
Goodwill and intangibles		21		10		26
Deferred compensation		9		3		2
Other assets		38		8		(5	)
	$	307	$	128	$	261

F-12

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

8.     Restructuring Costs

In connection with the fiscal 2001 restructuring plan, the Company’s planned workforce reduction and the other restructuring activities were substantially complete as of March 29, 2002.

The following table summarizes the Company’s restructuring activities for the nine months ended March 29, 2002.

	Severance and Benefits			Excess Facilities			Equipment			Contract Cancellations			Other			Total
	(In millions)
Reserve balances, June 29, 2001	$	33		$	8		$	—		$	5		$	11		$	57
FY2002 restructuring charge		3						1									4
Cash charges		(33	)		(7	)					(1	)		(3	)		(44	)
Non-cash charges		—			—			(1	)		—			—			(1	)
Adjustments and reclassifications		(1	)		6						1			2			8
Reserve balances, March 29, 2002	$	2		$	7		$	—		$	5		$	10		$	24

The Company may not be able to realize all of the expected savings from its restructuring activities and cannot insure that the restructuring activities and transfers will be implemented on a cost-effective basis without delays or disruption in its production and without adversely affecting its results of operations.

9.    Business Segments

The Company has two operating segments: rigid disc drives and storage area networks, however, only the rigid disc drive business is a reportable segment. The “other” category in the following revenue and gross profit tables consists primarily of the storage area networks business. The accounting policies of the segments are the same as those used in preparation of the Company’s consolidated financial statements. The Company has identified its Chief Executive Officer (the “CEO”) as the Chief Operating Decision Maker. The CEO evaluates performance and allocates resources based on revenue and gross profit from operations of each segment. Gross profit from operations is defined as revenue less cost of sales.

F-13

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

The following tables summarize the Company’s operations by business segment:

Revenue and Gross Profit	STH						Predecessor
	Nine Months Ended March 29, 2002			Period from November 23, 2000 to March 30, 2001			Period from July 1, 2000 to November 22, 2000
	(in millions)
Revenue:
Rigid Disc Drives	$	4,564		$	2,425		$	2,292
Other		50			17			18
Consolidated	$	4,614		$	2,442		$	2,310
Gross Profit:
Rigid Disc Drives	$	1,217		$	467		$	264
Other		29			11			11
Consolidated	$	1,246		$	478		$	275
Total Assets	March 29, 2002			June 29, 2001
Total Assets:
Rigid Disc Drives	$	3,403		$	2,932
Other		45			45
Operating Segments		3,448			2,977
Eliminations		(59	)		(11	)
Consolidated	$	3,389		$	2,966

10.    Accumulated Other Comprehensive Income

At March 29, 2002, the outstanding interest rate swap agreement had a fair value loss position of approximately $5 million recorded as a component of other comprehensive income. At June 29, 2001, there was no accumulated other comprehensive income. Accumulated other comprehensive loss, net of related tax, at March 29, 2002 was $5 million which primarily consisted of the $5 million unrealized loss on the interest rate swap agreement.

11.    Litigation

Intellectual Property Litigation

Papst Licensing, GmbH—Papst Licensing GmbH has given us notice that it believes certain former Conner Peripherals, Inc. disc drives infringe several of its patents covering the use of spindle motors in disc drives. We believe that the accused former Conner disc drives do not infringe any valid and/or enforceable claims of Papst’s patents. We also believe that subsequent to the merger with Conner, our earlier paid-up license under Papst’s patents extinguishes any ongoing liability. We also believe we enjoy the benefit of a license under Papst’s patents since Papst had granted a license to Conner’s motor vendors. Papst is currently involved in litigation with other disc drive and disc drive motor manufacturers. After the closing of the November 2000 Transactions, Papst has taken the position that the 1993 Papst-Seagate Technology license was not properly assigned to the new entity and any new Seagate disc drives would be assumed to be unlicensed. We believe that the assignment of the Papst license is legally effective.

F-14

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Convolve, Inc.—On July 13, 2000, Convolve and Massachusetts Institute of Technology filed suit against Compaq Computer Corporation and Seagate Technology in the U.S. District Court for the Southern District of New York, alleging patent infringement, misappropriation of trade secrets, breach of contract, tortious interference with contract and fraud relating to Convolve’s Input Shaping^® and Quick and Quiet^™ technology. The plaintiffs claim their technology is incorporated in our sound barrier technology, which was publicly announced on June 7, 2000. The complaint seeks injunctive relief, $800 million in compensatory damages and punitive damages. We answered the complaint on August 2, 2000 and filed cross-claims for declaratory judgment that two Convolve/MIT patents are invalid and not infringed and that we own any intellectual property based on the information that was disclosed to Convolve. The court denied plaintiffs’ motion for expedited discovery. The court ordered plaintiffs to identify their trade secrets to defendants before discovery could begin on those issues. Convolve served a trade secrets disclosure on August 4, 2000 and we filed a motion challenging the disclosure statement. On May 3, 2001, the court appointed a Special Master to review the trade secret issues. The Special Master resigned on June 5, 2001, and the court appointed another Special Master on July 26, 2001. After a hearing on our motion challenging the trade secrets disclosure on September 21, 2001, the Special Master issued a report and recommendation to the court that the trade secret list was insufficient. Convolve revised the trade secret list and the court entered an order on January 1, 2002, accepting the Special Master’s recommendation that this trade secret list was adequate. Discovery has now begun on the trade secret issues. On November 6, 2001, the USPTO issued US Patent No. 6,314,473 to Convolve. Convolve filed an Amended Complaint alleging defendants’ infringement of this patent, and Seagate Technology answered and filed counterclaims on February 8, 2002. No trial date has been set. We believe this matter is without merit and intend to defend it vigorously.

Other Matters

We are involved in a number of other judicial and administrative proceedings incidental to our business. Although occasional adverse decisions or settlements may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position or results of operations.

12.    Related Party Transactions

The Company’s provides certain services to other affiliated companies of New SAC. The services provided generally include general management, treasury, tax, financial reporting, benefits administration, insurance, information technology, legal, accounts payable and receivable and credit functions, among others. The Company charges for these services through corporate expense allocations. The amount of corporate expense allocations depends upon the total amount of allocable costs incurred by the Company on behalf of the affiliated company less amounts charged as specified cost or expense rather than by allocation. Management believes that the allocations charged to other affiliated companies are reasonable. Purchases and sales to other affiliated companies for the nine months ended March 29, 2002, were not material.

13.    Subsequent Events

Refinancing

On May 13, 2002, we completed a refinancing of all our outstanding senior debt obligations (the Term A and Term B loans) and a tender offer for all our outstanding $210 million aggregate principal amount of senior subordinated notes. The refinancing was completed when our wholly-owned subsidiary, Seagate Technology HDD Holdings (“HDD”), entered into a $500 million senior secured credit facility with a group of banks consisting of a $150 million revolving credit facility that was not drawn upon and a five-year, $350 million, LIBOR + 2% term loan facility that was drawn in full. At the same time, HDD issued $400 million aggregate

F-15

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

principal amount of 8% senior notes due 2009. In addition, Seagate Technology International (“STI”), a wholly-owned subsidiary of HDD, initiated a tender offer to purchase its outstanding 12 ¹/2% senior subordinated notes due 2007. As of May 13, 2002, all of the 12 ¹/2% senior subordinated notes had been tendered and accepted for payment. In addition, on May 13, 2002, STI and Seagate Technology (US) Holdings, Inc., a wholly-owned subsidiary of HDD, repaid the remaining balance outstanding of $679 million, including accrued interest, on our Term A and Term B bank loans.

In the near term, we also expect to make a $167 million distribution to our shareholders and $33 million in payments of deferred compensation to our employees. The net effect of the refinancing, and the planned distribution to shareholders and payment of deferred compensation will be a decrease in cash, cash equivalents and short-term investments of $428 million, consisting of an increase of $750 million from the new senior secured credit facility and 8% senior notes, offset by $1.178 billion of cash outlays. The cash outlays will include $274 million to repurchase the former 12 ¹/2% senior subordinated notes, including premium, accrued interest and consent fees, $679 million to repay the existing senior secured credit facilities (Term A and Term B loans), $25 million in refinancing fees and expenses, $167 million for the planned distribution to our shareholders, including New SAC, and $33 million in planned payments of deferred compensation to our employees.

As a result of the refinancing and the planned distribution to employees under our deferred compensation plan, $116 million will be charged to operations in the quarter ended June 28, 2002. The $116 million will be comprised of a $90 million loss on extinguishment of debt, net of taxes, a $5 million loss on the interest rate swap on the Term B Loan and a $21 million charge, net of taxes, for compensation expense related to the distributions to be made to employees under our deferred compensation plans. The $90 million loss on extinguishment of debt consists of a $50 million redemption premium on the 12 ¹/2% senior subordinated notes, a $31 million write-off of capitalized debt issue costs related to our prior senior debt obligations (Term A and Term B loans) and the 12 ¹/2% senior subordinated notes, a $7 million write-off of unamortized discount on the 12 ¹/2% senior subordinated notes and $2 million of fees and expenses incurred to tender the 12 ¹/2% senior subordinated notes.

Condensed Consolidating Financial Information

The 8% senior notes described above were issued by HDD, a wholly owned direct subsidiary of Seagate Technology Holdings (“STH”). The 8% senior notes are guaranteed on a full and unconditional basis by STH, the parent company of HDD. The following tables present parent guarantor, subsidiary issuer and combined non-guarantors condensed consolidating balance sheets of STH and its subsidiaries at March 29, 2002 and June 29, 2001, and the condensed consolidating results of its operations and its cash flows for the nine months ended March 29, 2002 and the period from November 23, 2000 to March 30, 2001. The information classifies the subsidiaries of STH into STH-parent company guarantor, HDD-subsidiary issuer, and the combined non-guarantors based upon the classification of those subsidiaries under the provisions of the 8% senior notes. Condensed consolidating financial information for the periods prior to the transactions of November 2000 is not presented because the STH-parent company guarantor and the HDD-subsidiary issuer did not legally exist until August 2000, their operations prior to November 23, 2000 were not significant (see “The November 2000 Transactions”), and on an individual legal entity basis neither STH nor HDD had a predecessor company. Accordingly, for periods prior to November 23, 2000, the financial information for the combined non-guarantors is equivalent to the combined balance sheet, statement of operations, and cash flows of the entire predecessor company, which is the combined rigid disc drive and storage area network operations of Seagate Technology, Inc. In addition, all outstanding long-term debt for periods prior to March 29, 2002, primarily comprised of the Term A and Term B loans, and the 12 ¹/2% senior subordinated notes, was issued by subsidiaries that are classified as non-guarantors in the following condensed consolidating financial information.

F-16

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidating Balance Sheet

March 29, 2002

(In millions)

(Unaudited)

	STH Parent Company Guarantor		HDD Subsidiary Issuer		Combined Non-Guarantors		Eliminations			STH Consolidated
Cash and cash equivalents	$	3	$	—	$	975	$	—		$	978
Short-term investments		—		—		125		—			125
Accounts receivable, net		—		—		703		—			703
Inventories		—		—		315		—			315
Deferred income taxes		—		—		26		—			26
Other current assets		—		—		151		—			151
Total Current Assets		3		—		2,295		—			2,298
Property, equipment and leasehold improvements, net		—		—		888		—			888
Equity investment in HDD		960		—		—		(960	)		—
Equity investments in Non-Guarantors		25		993		—		(1,018	)		—
Intangibles		—		—		109		—			109
Loan receivable from affiliate		—		—		33		(33	)		—
Other assets		—		—		94		—			94
Total Assets	$	988	$	993	$	3,419	$	(2,011	)	$	3,389
Accounts payable	$	—	$	—	$	615	$	—		$	615
Affiliate accounts payable		—		—		11		—			11
Accrued employee compensation		—		—		165		—			165
Accrued expenses		—		—		428		—			428
Accrued income taxes		—		—		223		—			223
Current portion of long-term debt		—		—		18		—			18
Total Current Liabilities		—		—		1,460		—			1,460
Deferred income taxes		—		—		14		—			14
Other liabilities		—		—		73		—			73
Loan payable to affiliate		—		33		—		(33	)		—
Long-term debt, less current portion		—		—		859		—			859
Total Liabilities		—		33		2,406		(33	)		2,406
Shareholders’/Group Equity		988		960		1,013		(1,978	)		983
Total Liabilities and Shareholders’/Group Equity	$	988	$	993	$	3,419	$	(2,011	)	$	3,389

F-17

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidating Balance Sheet

June 29, 2001

(In millions)

(Unaudited)

	STH Parent Company Guarantor		HDD Subsidiary Issuer		Combined Non- Guarantors		Eliminations			STH Consolidated
Cash and cash equivalents	$	—	$	—	$	726	$	—		$	726
Short-term investments		—		—		183		—			183
Accounts receivable, net		—		—		539		—			539
Inventories		—		—		322		—			322
Deferred income taxes		—		—		31		—			31
Other current assets		—		—		137		—			137
Total Current Assets		—		—		1,938		—			1,938
Property, equipment and leasehold improvements, net		—		—		802		—			802
Equity investment in HDD		620		—		—		(620	)		—
Equity investments in Non-Guarantors		33		620		—		(653	)		—
Intangibles		—		—		123		—			123
Other assets		—		—		103		—			103
Total Assets	$	653	$	620	$	2,966	$	(1,273	)	$	2,966
Accounts payable	$	—	$	—	$	507	$	—		$	507
Affiliate accounts payable		—		—		23		—			23
Accrued employee compensation		—		—		139		—			139
Accrued expenses		—		—		458		—			458
Accrued income taxes		—		—		164		—			164
Current portion of long-term debt		—		—		23		—			23
Total Current Liabilities		—		—		1,314		—			1,314
Deferred income taxes		—		—		28		—			28
Other liabilities		—		—		94		—			94
Long-term debt, less current portion		—		—		877		—			877
Total Liabilities		—		—		2,313		—			2,313
Shareholders’/Group Equity		653		620		653		(1,273	)		653
Total Liabilities and Shareholders’/Group Equity	$	653	$	620	$	2,966	$	(1,273	)	$	2,966

F-18

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidating Statement of Operations

Nine Months Ended March 29, 2002

(In millions)

(Unaudited)

	STH Parent Company Guarantor			HDD Subsidiary Issuer		Combined Non- Guarantors			Eliminations			STH Consolidated
Revenue	$	—		$	—	$	4,614		$	—		$	4,614
Cost of revenue		—			—		3,368			—			3,368
Product development		—			—		492			—			492
Marketing and administrative		—			—		302			—			302
Amortization of intangibles		—			—		15			—			15
Restructuring		—			—		4			—			4
Total operating expenses		—			—		4,181			—			4,181
Income (loss) from operations		—			—		433			—			433
Interest income		—			—		21			—			21
Interest expense		—			—		(61	)		—			(61	)
Equity in income of HDD		386			—		—			(386	)		—
Equity in income (loss) of Non-Guarantors		(35	)		386		—			(351	)		—
Other, net		—			—		10			—			10
Other income (expense), net		351			386		(30	)		(737	)		(30	)
Income (loss) before income taxes		351			386		403			(737	)		403
Provision for (benefit from) income taxes		—			—		52			—			52
Net income (loss)	$	351		$	386	$	351		$	(737	)	$	351

F-19

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidating Statements of Cash Flows

Nine Months Ended March 29, 2002

(In millions)

(Unaudited)

	STH Parent Company Guarantor			HDD Subsidiary Issuer			Combined Non- Guarantors			Eliminations			STH Consolidated
Net Income	$	351		$	386		$	351		$	(737	)	$	351
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		—			—			307			—			307
Deferred income taxes		—			—			(9	)		—			(9	)
Equity in income of HDD		(386	)		—			—			386			—
Equity in income (loss) of Non-Guarantors		35			(386	)		—			351			—
Other, net		—			—			7			—			7
Changes in operating assets and liabilities:
Accounts receivable		—			—			(164	)		—			(164	)
Inventories		—			—			(21	)		—			(21	)
Accounts payable		—			—			96			—			96
Accrued expenses, employee compensation and warranty		—			—			(76	)		—			(76	)
Accrued income taxes		—			—			59			—			59
Other assets and liabilities, net		—			—			22			—			22
Net cash provided by operating activities		—			—			572			—			572
Investing Activities
Acquisition of property, equipment and leasehold improvements		—			—			(321	)		—			(321	)
Purchase of short-term investments		—			—			(627	)		—			(627	)
Maturities and sales of short-term investments		—			—			685			—			685
Other, net		—			—			(11	)		—			(11	)
Net cash (used in) investing activities		—			—			(274	)		—			(274	)
Financing Activities
Repayment of long-term debt		—			—			(23	)		—			(23	)
Loan from Non-Guarantor to HDD		—			33			(33	)		—			—
Distribution from HDD to STH		33			(33	)		—			—			—
Distribution to STH shareholders		(33	)		—			—			—			(33	)
Exercise of STH stock options		3			—			—			—			3
Other, net		—			—			7			—			7
Net cash provided by (used in) financing activities		3			—			(49	)		—			(46	)
Increase in cash and cash equivalents		3			—			249			—			252
Cash and cash equivalents at the beginning of the period		—			—			726			—			726
Cash and cash equivalents at the end of the period	$	3		$	—		$	975		$	—		$	978

F-20

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidating Statement of Operations

Period from November 23, 2000 to March 30, 2001

(In millions)

(Unaudited)

	STH Parent Company Guarantor	HDD Subsidiary Issuer	Combined Non- Guarantors	Eliminations	STH Consolidated
Revenue	$—	$—	$2,442	$—	$2,442
Cost of revenue	—	—	1,964	—	1,964
Product development	—	—	231	—	231
Marketing and administrative	—	—	216	—	216
Amortization of intangibles	—	—	7	—	7
In-process research and development	—	—	52	—	52
Restructuring	—	—	54	—	54
Total operating expenses	—	—	2,524	—	2,524
Income (loss) from operations	—	—	(82)	—	(82)
Interest income	—	—	20	—	20
Interest expense	—	—	(33)	—	(33)
Equity in loss of HDD	(77)	—	—	77	—
Equity in losses of Non-Guarantors	(40)	(77)	—	117	—
Other, net	—	—	(11)	—	(11)
Other income (expense), net	(117)	(77)	(24)	194	(24)
Income (loss) before income taxes	(117)	(77)	(106)	194	(106)
Provision for (benefit from) income taxes	—	—	11	—	11
Net income (loss)	$(117)	$(77)	$(117)	$194	$(117)

F-21

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidated Statements of Cash Flows

Period from November 23, 2000 to March 30, 2001

(In millions)

(Unaudited)

	STH Parent Company Guarantor			HDD Subsidiary Issuer			Combined Non- Guarantors			Eliminations			STH Consolidated
Net Loss	$	(117	)	$	(77	)	$	(117	)	$	194		$	(117	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization		—			—			128			—			128
Deferred income taxes		—			—			(40	)		—			(40	)
In-process research and development		—			—			52			—			52
Non-cash portion of restructuring charge		—			—			29			—			29
Equity in loss of HDD		77			—			—			(77	)		—
Equity in losses of Non-Guarantors		40			77			—			(117	)		—
Other, net		—			—			8			—			8
Changes in operating assets and liabilities:
Accounts receivable		—			—			(200	)		—			(200	)
Inventories		—			—			337			—			337
Accounts payable		—			—			(142	)		—			(142	)
Accrued expenses, employee compensation and warranty		—			—			(102	)		—			(102	)
Accrued income taxes		—			—			52			—			52
Other assets and liabilities, net		—			—			92			—			92
Net cash provided by operating activities		—			—			97			—			97
Investing Activities
Acquisition of property, equipment and leasehold improvements		—			—			(117	)		—			(117	)
Purchase of short-term investments		—			—			(411	)		—			(411	)
Maturities and sales of short-term investments		—			—			406			—			406
Purchase of rigid disc drive operating assets and liabilities		—			(265	)		(535	)		—			(800	)
Other, net		—			—			8			—			8
Net cash used in investing activities		—			(265	)		(649	)		—			(914	)
Financing Activities
Issuance of long-term debt, net of issuance costs		—			—			860			—			860
Repayment of long-term debt		—			—			(4	)		—			(4	)
Short-term borrowings		—			—			66			—			66
Repayment of short-term borrowings		—			—			(66	)		—			(66	)
Investment by New SAC and issuance of common stock by STH		751			—			—			—			751
Investment by STH in HDD		(559	)		559			—			—			—
Investment by STH in Non-Guarantor		(192	)		—			192			—			—
Investment by HDD in Non-Guarantors		—			(294	)		294			—			—
Other, net		—			—			3			—			3
Net cash provided by financing activities		—			265			1,345			—			1,610
Increase in cash and cash equivalents					—			793			—			793
Cash and cash equivalents at the beginning of the period		—			—			—			—			—
Cash and cash equivalents at the end of the period	$	—		$	—		$	793		$	—		$	793

F-22

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders

Seagate Technology Holdings

We have audited the accompanying consolidated balance sheet of Seagate Technology Holdings as of June 29, 2001, and the accompanying combined balance sheet of its predecessor, Seagate Technology Hard Disc Drive Business, an operating business of Seagate Technology, Inc. as of June 30, 2000, and the related consolidated and combined statements of operations, shareholders’ equity, accumulated other comprehensive income (loss) and business equity and cash flows of Seagate Technology Holdings for the period from November 23, 2000 to June 29, 2001, and the related combined statements of operations, accumulated other comprehensive income (loss) and business equity and shareholders’ equity and cash flows of Seagate Technology Hard Disc Drive Business, an operating business of Seagate Technology, Inc. for the period from July 1, 2000 to November 22, 2000, and for each of the two years in the period ended June 30, 2000. These consolidated and combined financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated and combined financial statements referred to above present fairly, in all material respects, the consolidated and combined financial position of Seagate Technology Holdings at June 29, 2001, and its predecessor, Seagate Technology Hard Disc Drive Business, an operating business of Seagate Technology, Inc. at June 30, 2000, and the consolidated and combined results of operations and cash flows of Seagate Technology Holdings for the period from November 23, 2000 to June 29, 2001, and the consolidated results of operations and cash flows of Seagate Technology Hard Disc Drive Business, an operating business of Seagate Technology, Inc. for the period from July 1, 2000 to November 22, 2000, and for each of the two years in the period ended June 30, 2000, in conformity with accounting standards generally accepted in the United States.

San Jose, California

July 16, 2001, except for Note 16, 

as to which the date is May 14, 2002.

F-23

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

CONSOLIDATED AND COMBINED BALANCE SHEETS

(In millions)

	Seagate Technology Holdings			Predecessor
	June 29, 2001			June 30, 2000
ASSETS (See Note 3)
Cash and cash equivalents	$	726		$	868
Short-term investments		183			1,140
Accounts receivable, net		539			642
Inventories		322			413
Deferred income taxes		31			211
Other current assets		137			156
Total Current Assets		1,938			3,430
Property, equipment and leasehold improvements, net		802			1,585
Intangibles, net		123			294
Other assets		103			509
Total Assets (See Note 3)	$	2,966		$	5,818
LIABILITIES
Accounts payable	$	507		$	679
Affiliate accounts payable		23			36
Accrued employee compensation		139			182
Accrued expenses		350			325
Accrued warranty		108			124
Accrued income taxes		164			71
Current portion of long-term debt		23			—
Total Current Liabilities		1,314			1,417
Deferred income taxes		28			640
Accrued warranty		85			109
Other liabilities		9			7
Long-term debt, less current portion		877			703
Total Liabilities		2,313			2,876
Commitments and Contingencies
SHAREHOLDERS’ / BUSINESS EQUITY
Preferred shares, $.00001 par value—450 million authorized; 400 million issued and outstanding at June 29, 2001, none authorized, issued or outstanding at June 30, 2000, liquidation preference $1,035		—			—
Paid-in capital		763			—
Accumulated other comprehensive income		—			86
Business equity		—			2,856
Accumulated deficit		(110	)		—
Total Shareholders’ / Business Equity		653			2,942
Total Liabilities and Shareholders’ / Business Equity	$	2,966		$	5,818

See notes to consolidated and combined financial statements.

F-24

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

CONSOLIDATED AND COMBINED STATEMENTS Of OPERATIONS

(In millions)

	Seagate Technology Holdings			Predecessor
	Period from November 23, 2000 to June 29, 2001			Period from July 1, 2000 to November 22, 2000			Year Ended June 30, 2000			Year Ended July 2, 1999
Revenue	$	3,656		$	2,310		$	6,073		$	6,180
Cost of revenue		2,924			2,035			4,820			4,902
Product development		388			409			663			566
Marketing and administrative		288			450			424			345
Amortization of intangibles		12			20			33			20
In-process research and development		52			—			105			2
Restructuring		66			19			206			59
Unusual items		—			—			107			75
Total operating expenses		3,730			2,933			6,358			5,969
Income (loss) from operations		(74	)		(623	)		(285	)		211
Interest income		31			57			101			102
Interest expense		(54	)		(24	)		(52	)		(48	)
Gain on sale of SanDisk stock		—			102			679			—
Gain on sale of Veeco stock		—			20			—			—
Gain on exchange of certain investments in equity securities		—			—			199			—
Loss on LHSP investment		—			(138	)		—			—
Other, net		(4	)		(12	)		(1	)		10
Other income (expense), net		(27	)		5			926			64
Income (loss) before income taxes		(101	)		(618	)		641			275
Provision for (benefit from) income taxes		9			(206	)		275			61
Net income (loss)	$	(110	)	$	(412	)	$	366		$	214

See notes to consolidated and combined financial statements.

F-25

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(In millions)

	Seagate Technology Holdings			Predecessor
	Period from November 23, 2000 to June 29, 2001			Period from July 1, 2000 to November 22, 2000			Year Ended June 30, 2000			Year Ended July 2, 1999
OPERATING ACTIVITIES
Net income (loss)	$	(110	)	$	(412	)	$	366		$	214
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		182			261			666			653
Deferred income taxes		10			(320	)		(51	)		56
In-process research and development charge		52			—			105			2
Non-cash portion of restructuring charge		29			7			109			35
Gain on sale of SanDisk stock		—			—			(679	)		—
Gain on exchange of certain investments in equity securities		—			—			(199	)		—
Loss on certain equity investments, net		—			18			—			—
Compensation expense related to accelerated vesting and exchange of stock options		—			567			—			—
Compensation expense related to exchange offer		—			—			44			—
Other, net		31			41			53			43
Changes in operating assets and liabilities:
Accounts receivable, net		(84	)		181			150			(44	)
Inventories		444			(195	)		(9	)		26
Accounts payable		(196	)		40			(45	)		91
Accrued expenses, employee compensation and warranty		(182	)		(218	)		(206	)		(119	)
Accrued income taxes		1			212			(154	)		50
Other assets and liabilities		92			(61	)		76			241
Net cash provided by operating activities		269			121			226			1,248
INVESTING ACTIVITIES
Acquisition of property, equipment and leasehold improvements		(239	)		(265	)		(565	)		(591	)
Purchase of short-term investments		(738	)		(1,612	)		(3,352	)		(6,596	)
Maturities and sales of short-term investments		673			2,628			3,429			6,519
Purchase of rigid disc drive operating assets and liabilities, net of cash acquired of $852		(800	)		—			—			—
Restricted cash (TRA)		—			(150	)		—			—
Proceeds from sale of certain investments		—			234			—			—
Proceeds from sale of SanDisk stock		—			—			680			—
Other, net		(36	)		(6	)		(19	)		(27	)
Net cash provided by (used in) investing activities	$	(1,140	)	$	829		$	173		$	(695	)

F-26

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS—(Continued)

(In millions)

	Seagate Technology Holdings			Predecessor
	Period from November 23, 2000 to June 29, 2001			Period from July 1, 2000 to November 22, 2000			Year Ended June 30, 2000			Year Ended July 2, 1999
FINANCING ACTIVITIES
Issuance of long-term debt, net of issuance costs	$	861		$	—		$	—		$	—
Repayment of long-term debt		(5	)		(812	)		—			—
Short-term borrowings		66			—			—			—
Repayment of short-term borrowings		(66	)		—			—			—
Net change in investment by New SAC and its predecessor		—			(1,007	)		141			(861	)
Net repayments under loan agreements with affiliates		(7	)		—			(24	)		(3	)
Investment by New SAC and issuance of common stock		751			—			—			—
Other, net		(1	)		1			(14	)		26
Net cash provided by (used in) financing activities		1,599			(1,818	)		103			(838	)
Effect of exchange rate changes on cash and cash equivalents		(2	)		—			(2	)		(3	)
Increase (decrease) in cash and cash equivalents		726			(868	)		500			(288	)
Cash and cash equivalents at the beginning of the period		—			868			368			656
Cash and cash equivalents at the end of the period	$	726		$	—		$	868		$	368

See notes to consolidated and combined financial statements.

F-27

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

COMBINED STATEMENT OF ACCUMULATED OTHER

COMPREHENSIVE INCOME (LOSS) AND BUSINESS EQUITY

For the Period from July 1, 2000 through November 22, 2000 and

Fiscal Years Ended June 30, 2000 and July 2, 1999

(In millions)

	Accumulated Other Comprehensive Income (Loss)			Business Equity
Balance at July 3, 1998	$	—		$	2,839
Comprehensive Income (Loss):
Net income		—			214
Unrealized loss on marketable securities		(6	)		(6	)
Foreign currency translation		(1	)		(1	)
Comprehensive income (loss)		(7	)		207
Net change in investment by Seagate Technology, Inc.		—			(684	)
Balance at July 2, 1999		(7	)		2,362
Comprehensive Income (Loss):
Net income		—			366
Unrealized gain on marketable securities, net		93			93
Comprehensive income		93			459
Net change in investment by Seagate Technology, Inc.		—			121
Balance at June 30, 2000		86			2,942
Comprehensive Income (Loss):
Net loss for period ended November 22, 2000		—			(412	)
Unrealized loss on marketable securities		(88	)		(88	)
Foreign currency translation		2			2
Comprehensive loss		(86	)		(498	)
Net change in investment by Seagate Technology, Inc.		—			(2,444	)
Balance at November 22, 2000	$	—		$	—

See notes to consolidated and combined financial statements.

F-28

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the Period from November 23, 2000 through June 29, 2001

(In millions)

	Preferred Shares			Common Shares
	Shares	Amount		Shares	Amount		Paid-in Capital		Accumulated Deficit			Total
Balance at November 23, 2000		$	—		$	—	$	—	$	—		$	—
Investment by New SAC and issuance of stock(1)	400							751					751
Adjustment for pushdown of purchase price allocation from New SAC								7					7
Net and comprehensive loss										(110	)		(110	)
Amortization of deferred compensation related to New SAC restricted share plans								5					5
Balance at June 29, 2001	400	$	—		$	—	$	763	$	(110	)	$	653

(1) See note 12, Equity—Redesignation of Capital Stock.

See notes to consolidated and combined financial statements.

F-29

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

1.    Basis of Presentation and Summary of Significant Accounting Policies

Nature of Operations—Seagate Technology Holdings was formed in August 2000, to be a holding company for the rigid disc drive operating business and the storage area networks operating business of Seagate Technology, Inc., which we refer to herein as Seagate Technology. Prior to November 22, 2000, Seagate Technology Holdings did not have significant operations. As a result, the predecessor to Seagate Technology Holdings, the Seagate Technology Hard Disc Drive Business, an operating business of Seagate Technology, Inc. (“Predecessor”), is the combined rigid disc drive and storage area networks operating businesses of Seagate Technology, and the combined financial position, results of operations, and cash flows of the Predecessor are presented in these financial statements on a comparative basis. Throughout these financial statements we make reference to the “Company” to refer to both Seagate Technology Holdings and its Predecessor.

On November 22, 2000, the predecessor to the Company’s parent, Seagate Technology, Seagate Software Holdings, Inc., which we refer to herein as Seagate Software Holdings, a subsidiary of Seagate Technology, and Suez Acquisition Company (Cayman) Limited, which we refer to herein as SAC, completed a stock purchase agreement and Seagate Technology and VERITAS Software Corporation, which we refer to as VERITAS, completed an agreement and plan of merger and reorganization, which we refer to as the Merger Agreement. SAC was a limited liability company organized under the laws of the Cayman Islands and formed solely for the purpose of entering into the stock purchase agreement and related acquisitions. SAC assigned all of its rights under the stock purchase agreement to New SAC, the parent of the Company. In addition, the rigid disc drive operating business was formed as a subsidiary of the Company, and was named Seagate Technology HDD Holdings and the storage area networks business was formed also as a subsidiary of the Company and was named Seagate Technology SAN Holdings.

The Company designs, manufactures and markets products for storage, retrieval and management of data on computer and data communications systems. The Company sells its products to original equipment manufacturers (“OEM”) for inclusion in their computer systems or subsystems, and to distributors who typically sell to small OEMs, dealers, system integrators and other resellers.

Basis of Presentation—These financial statements have been prepared using the historical basis of accounting and are presented as if the Company existed separate from New SAC and Seagate Technology during the periods presented. These financial statements include the historical assets, liabilities, revenues and expenses that are directly related to the Company’s operations. For certain assets and liabilities that are not specifically identifiable with the Company, estimates have been used to allocate such assets and liabilities to the Company by applying methodologies management believes are appropriate.

The statements of operations include all revenues and expenses attributable to the Company, including allocations of certain corporate administration, finance, and management costs. Such costs were proportionately allocated to the Company based on detailed inquiries and estimates of time incurred by corporate marketing and general administrative departmental managers. In addition, certain of the Company’s operations are shared locations involving activities that pertain to the Company as well as to other businesses of New SAC and its Predecessor, Seagate Technology. Costs incurred in shared locations are allocated based on specific identification, or where specific identification is not possible, such costs are allocated between the Company and other businesses of New SAC and its Predecessor, Seagate Technology based on the volume of activity, head count, square footage, and other methodologies that management believes are reasonable. Transactions and balances between entities and locations within the Company have been eliminated. Management believes that the foregoing allocations were made on a reasonable basis.

Certain non-operating assets and related non-operating income and expense are included in the historical results of the Company but are not part of continuing assets of the Company subsequent to the transaction. These

F-30

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

assets and non-operating income and expense relate to equity investments in SanDisk Corporation (“SanDisk”), Gadzoox Networks, Inc. (“Gadzoox”), Veeco Instruments, Inc. (“Veeco”) and Lernout & Hauspie Speech Products N.V. (“LHSP”).

Accounting Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates.

The actual results with regard to warranty expenditures could have a material adverse effect on the Company if the actual rate of unit failure or the cost to repair a unit is greater than what the Company has used in estimating the warranty expense accrual.

The actual results with regard to restructuring charges could have a material adverse effect on the Company if the actual expenditures to implement the restructuring plan are greater than what the Company estimated when establishing the restructuring accrual.

Given the volatility of the markets in which the Company participates, the Company makes adjustments to the value of inventory based on estimates of potentially excess and obsolete inventory after considering forecasted demand and forecasted average selling prices. However, forecasts are subject to revisions, cancellations, and rescheduling. Actual demand will inevitably differ from such anticipated demand, and such differences may have a material effect on the financial statements.

Basis of Consolidation—The consolidated financial statements include the accounts of the Company and all its wholly-owned subsidiaries, after eliminations of intercompany transactions and balances.

The Predecessor operated and reported financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. Accordingly, fiscal year 2000 ended on June 30, 2000, and fiscal year 1999 ended on July 2, 1999. The Company operates and reports financial results on the same basis. Fiscal year 2001 comprised 52 weeks for the combined Company and ended on June 29, 2001. All references to years in these notes to consolidated financial statements represent fiscal years unless otherwise noted.

Reclassifications—Certain costs aggregating $10 million for the period from November 23, 2000 to June 29, 2001, $72 million for the period from July 1, 2000 to November 22, 2000, $135 million in fiscal year 2000, and $72 million in fiscal year 1999, associated with: (1) searching for or evaluating product or process alternatives: (2) modifying the formulation or design of products or processes; and (3) activities required to advance the design of products that were previously classified by the Predecessor in cost of sales have been classified to product development.

Foreign Currency Remeasurement and Translation—The U.S. dollar is the functional currency for most of the Company’s foreign operations. Gains and losses on the remeasurement into U.S. dollars of amounts denominated in foreign currencies are included in net income for those operations whose functional currency is the U.S. dollar and translation adjustments are included in other comprehensive income and as accumulated other comprehensive income, a separate component of shareholders’ equity, for those operations whose functional currency is the local currency.

Derivative Financial Instruments—On July 1, 2000, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”). The standard requires that all derivatives be recorded on the balance sheet at fair value and

F-31

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

establishes criteria for designation and effectiveness of hedging relationships. The cumulative effect of adopting SFAS 133 as of July 1, 2000 was not material to the Company’s combined financial statements.

The Company is exposed to foreign currency exchange rate risk inherent in forecasted sales, cost of sales, and assets and liabilities denominated in currencies other than the U.S. dollar, principally for cash flows in Asia and in certain European countries. The Company is also exposed to interest rate risk inherent in its debt and investment portfolios. The Company’s risk management strategy considers the use of derivative financial instruments, including forwards, swaps and purchased options, to hedge certain foreign currency and interest rate exposures. The Company’s intent is to offset gains and losses that occur on the underlying exposures, with gains and losses on derivative contracts hedging these exposures. The Company does not enter into any speculative positions with regard to derivative instruments. The Company may enter into foreign currency forward exchanges, primarily forwards and purchased options, to hedge against exposure to changes in foreign currency exchange rates.

Such contracts are designated at inception to the related foreign currency exposures being hedged, which include sales by subsidiaries, and assets and liabilities that are denominated in currencies other than the U.S. dollar. Interest rate swaps are used to modify market risk exposures in connection with any long term debt issued to achieve primarily U.S. dollar LIBOR-based floating interest expense. The swap transactions generally involve the exchange of fixed for floating interest payment obligations.

Under SFAS 133, the Company records all derivatives on the balance sheet at fair value. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is recorded in accumulated other comprehensive income as a separate component of shareholders’ equity and reclassified into earnings in the period during which the hedged transaction affects earnings. For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in earnings in the current period. For derivative instruments not designated as hedging instruments, changes in their fair values are recognized in earnings in the current period.

For foreign currency forward contracts, hedge effectiveness is measured by comparing the cumulative change in the hedged contract with the cumulative change in the hedged item, both of which are based on forward rates. For foreign currency option contracts, only the intrinsic value of the option based on spot rates is used in assessing hedge effectiveness. Accordingly, the time value of the option is excluded in calculating effectiveness and reported in earnings immediately. For interest rate swaps, the critical terms of the interest rate swap and hedged item are designed to match up when possible, enabling the short-cut method of accounting as defined by SFAS 133. To the extent that the critical terms of the hedged item and the derivative are not identical, hedge ineffectiveness is reported in earnings immediately.

The Company reports hedge ineffectiveness from foreign currency derivatives for both options and forward contracts in other income or expense. Ineffectiveness related to interest rate swaps is reported in interest income or expense. The effective portion of all derivatives is reported in the same financial statement line item as the changes in the hedged item.

Premiums on foreign currency option contracts used to hedge firm commitments and anticipated transactions are amortized on a straight-line basis over the life of the contract. Forward points on foreign currency forward exchange contracts, which qualify as hedges of firm commitments, are recognized in income as adjustments to the carrying amount when the hedged transaction occurs.

F-32

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The Company may, from time to time, adjust its foreign currency hedging position by taking out additional contracts or by terminating or offsetting existing foreign currency forward exchange and option contracts. These adjustments may result from changes in the Company’s underlying foreign currency exposures or from fundamental shifts in the economics of particular exchange rates. For foreign currency forward exchange and option contracts qualifying as accounting hedges, gains or losses on terminated contracts and offsetting contracts are deferred and are recognized in income as adjustments to the carrying amount of the hedged item in the period the hedged transaction occurs. For foreign currency forward exchange and option contracts not qualifying as accounting hedges, gains and losses on terminated contracts, or on contracts that are offset, are recognized in income in the period of contract termination or offset.

Revenue Recognition and Product Warranty—Revenue from sales of products is recognized when persuasive evidence of an arrangement exists including a fixed price to the buyer, delivery has occurred, and collectibility is reasonably assured. Estimated product returns are provided for in accordance with SFAS No. 48, “Revenue Recognition When Right of Return Exists.” The Company warrants its rigid disc drive and tape drive products against defects in design, materials and workmanship generally for one to five years. Enterprise products that are used in large scale servers and data warehousing systems are warranted for three to five years while personal storage products used in consumer and commercial desktop systems are warranted for one to three years. A provision for estimated future costs relating to warranty expense is recorded when revenue is recorded and is included in cost of sales. Shipping and handling costs are also included in cost of sales.

Inventory—Inventories are valued at the lower of standard cost (which approximates actual cost using the first-in, first-out method) or market. Market value is based upon an estimated average selling price reduced by estimated cost of completion.

Property, Equipment, and Leasehold Improvements—Land, equipment, buildings and leasehold improvements are stated at cost. Equipment and buildings are depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated life of the asset or the remaining term of the lease.

Advertising Expense—The cost of advertising is expensed as incurred. Advertising costs were approximately $30 million and $15 million for the period from November 23, 2000 to June 29, 2001 and July 1, 2000 to November 22, 2000, respectively and $9 million and $29 million in fiscal years ended 2000 and 1999, respectively.

Stock-Based Compensation—The Company accounts for employee stock-based compensation under Accounting Principles Board Opinion (“APBO”) No. 25, “Accounting for Stock Issued to Employees” (“APBO 25”), and related interpretations.

Impact of Recently Issued Accounting Standards—SFAS 133 is effective for all fiscal quarters beginning after June 15, 2000 and was adopted by the Company in its fiscal year 2001. This statement establishes accounting and reporting standards for derivative instruments and for hedging activities. It requires that derivatives be recognized in the balance sheet at fair value and specifies the accounting for changes in fair value. The adoption of SFAS 133 did not have a material impact on the Company’s consolidated and combined statements of operations, financial position, and cash flows.

In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 “Revenue Recognition in Financial Statements” (“SAB 101”). SAB 101 provides guidance on the recognition, presentation and disclosure of revenue in financial statements. All registrants are expected to apply the accounting and disclosures described in SAB 101. The Company adopted SAB 101 in the fourth quarter of fiscal

F-33

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

year 2001, retroactive to the beginning of the year. SAB 101 did not have a material impact on the Company’s consolidated and combined statements of operations, financial position and cash flows.

In March 2000, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 44 (“FIN 44”), “Accounting for Certain Transactions Involving Stock Compensation—an Interpretation of APBO 25.” FIN 44 clarifies the application of APBO 25 and, among other issues, clarifies the following: the definition of an employee for purposes of applying APBO 25; the criteria for determining whether a plan qualifies as a noncompensatory plan; the accounting consequence of various modifications to the terms of the previously fixed stock options or awards; and the accounting for an exchange of stock compensation awards in a business combination. FIN 44 was effective July 1, 2000 and was adopted by the Company in its fiscal year 2001. The adoption of FIN 44 did not have a material impact on the Company’s consolidated and combined statements of operations, financial position, and cash flows.

In June 2001, the FASB issued SFAS No. 141, “Accounting for Business Combinations” (“SFAS 141”). SFAS 141 establishes new criteria for the accounting and reporting standards of business combinations and eliminates the pooling-of-interests method of accounting for business combinations. SFAS 141 requires intangible assets to be recognized apart from goodwill. This statement is effective for all business combinations accounted for by the purchase method completed after June 29, 2001, and is effective for all fiscal years beginning after December 15, 2001. The Company is in the process of assessing the impact of this pronouncement on its consolidated results of operations, financial position, and cash flows.

In June 2001, the FASB issued SFAS No. 142, “Accounting for Goodwill and Other Intangible Assets” (“SFAS 142”). SFAS 142 establishes new criteria for the accounting and reporting standards of goodwill and intangibles. Under SFAS 142, goodwill and indefinite lived intangible assets are no longer amortized but are reviewed annually, or more frequently if impairment indicators arise, for impairment. The Company is required to adopt this statement at the beginning of fiscal year 2003. The Company is in the process of assessing the impact of this pronouncement on its consolidated results of operations, financial position, and cash flows.

In October 2001 the FASB approved the issuance of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” (“SFAS 144”) on asset impairment that is applicable to financial statements issued for fiscal years beginning after December 15, 2001. SFAS 144 supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” (“SFAS 121”), and provides a single accounting model for long-lived assets to be disposed of. Although retaining many of the fundamental recognition and measurement provisions of SFAS 121, the new rules significantly change the criteria that would have to be met to classify an asset as held-for-sale. The new rules also supersede the provisions of APB Opinion No. 30 with regard to reporting the effects of a disposal of a segment of a business and require expected future operating losses from discontinued operations to be displayed in discontinued operations in the period(s) in which the losses are incurred (rather than as of the measurement date as presently required by APB Opinion No. 30). In addition, more dispositions will qualify for discontinued operations treatment in the income statement. The Company is not required to adopt SFAS 144 until June 29, 2002, the first day of fiscal year 2003. The Company is still assessing the impact of this Statement on its consolidated and combined results of operations, financial position and cash flows.

Cash, Cash Equivalents and Short-Term Investments—The Company considers all highly liquid investments with a remaining maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The Company’s short-term investments are primarily comprised of readily marketable debt securities with remaining maturities of more than 90 days at the time of purchase. The Company has classified its entire investment portfolio as available-for-sale. Available-for-

F-34

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

sale securities are classified as cash equivalents or short-term investments and are stated at fair value with unrealized gains and losses included in accumulated other comprehensive income, which is a component of shareholder’s equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in interest income. Realized gains and losses are included in other income (expense). The cost of securities sold is based on the specific identification method.

Strategic Investments—The Company enters into certain strategic investments for the promotion of business and strategic objectives and typically does not attempt to reduce or eliminate the inherent market risks on these investments. Both marketable and non-marketable investments are included in other assets. A substantial majority of the Company’s marketable investments are classified as available-for-sale as of the balance sheet date and are reported at fair value, with unrealized gains and losses, net of tax, recorded in shareholder’s equity. The cost of securities sold is based on the specific identification method. Realized gains or losses and declines in value, if any, judged to be other than temporary on available-for-sale securities are reported in other income or expense. Non-marketable investments are recorded at cost.

Concentration of Credit Risk—The Company’s customer base for disc drive products is concentrated with a small number of systems manufacturers and distributors. Financial instruments, which potentially subject the Company to concentrations of credit risk, are primarily accounts receivable, cash equivalents and short-term investments. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. The allowance for noncollection of accounts receivable is based upon the expected collectibility of all accounts receivable. The Company places its cash equivalents and short-term investments in investment grade, short-term debt instruments and limits the amount of credit exposure to any one commercial issuer.

Supplier Concentration—Certain of the raw materials used by the Company in the manufacture of its products are available from a limited number of suppliers. Shortages could occur in these essential materials due to an interruption of supply or increased demand in the industry.

For example, all of the Company’s disc drive products require ASIC chips, which are produced by a limited number of manufacturers. During the fourth quarter of fiscal year 2000 and the first half of fiscal year 2001, the Company experienced shortages and delays with regard to receipt of such chips. If the Company were unable to procure certain of such materials, it would be required to reduce its manufacturing operations, which could have a material adverse effect upon its results of operations.

2.    Net Income (Loss) Per Share

Prior to the stock purchase agreement executed by Suez Acquisition Company, the Predecessor had no outstanding share capital. On November 22, 2000, New SAC contributed the hard disc drive business to the Company in exchange for all the outstanding capital stock of the Company, currently comprised of 400 million shares of Seagate Technology Holdings Series A preferred stock. Basic earnings (loss) per share is not presented because the Company has no outstanding common shares. Diluted net loss per common share for the seven months ended June 29, 2001 is not presented because the Company had a net loss and has no outstanding common shares. The potential common shares represented by the assumed conversion of the Series A preferred shares into common shares would be antidilutive for the seven months ended June 29, 2001.

Pro forma basic earnings per share, as if the current capital structure of the Company was outstanding for the period from July 1, 2000 to November 22, 2000, and fiscal years 2000 and 1999, is not presented because

F-35

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

there are no common shares currently outstanding. Pro forma diluted net loss per share, as if the current capital structure of the Company had been outstanding for the period from July 1, 2000 to November 22, 2000, is not presented because the Predecessor had a net loss for the five months ended November 22, 2000.

Pro forma diluted net income per share is computed using the equivalent number of common shares outstanding during fiscal years 2000 and 1999 assuming the conversion of the preferred stock. The following table sets forth the computation of pro forma diluted net income per share for fiscal years 2000 and 1999:

	June 30, 2000		July 2, 1999
	(In millions, except per share data)
Pro forma Diluted Net Income Per Share Computation
Numerator:
Net income	$	366	$	214
Pro forma Denominator:
Common shares(1)		—		—
Convertible preferred stock		400		400
Total		400		400
Pro forma diluted net income per share	$	0.92	$	0.54

(1) No common shares have been issued; therefore no basic earnings per share amounts is presented.

3.    Balance Sheet Information

Financial Instruments

The following is a summary of the fair value of available-for-sale securities at June 29, 2001:

	Seagate Technology Holdings
	Amortized Cost		Fair Value
	(In millions)
Money market mutual funds	$	230	$	230
U.S. government and agency obligations		10		10
Auction rate preferred stock		52		52
Corporate securities		568		568
Subtotal		860		860
Marketable equity securities		6		6
Total available-for-sale securities	$	866	$	866
Included in other assets			$	6
Included in cash and cash equivalents				677
Included in short-term investments				183
			$	866

F-36

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The following is a summary of the fair value of available-for-sale securities at June 30, 2000:

	Predecessor
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
	(In millions)
Money market mutual funds	$	266	$	—	$	—		$	266
U.S. government and agency obligations		323		—		(6	)		317
Repurchase agreements		16		—		—			16
Auction rate preferred stock		374		—		—			374
Municipal bonds		1		—		—			1
Corporate securities		733		—		(2	)		731
Mortgage-backed and asset-backed securities		218		—		(4	)		214
Euro/Yankee time deposits		12		—		—			12
Subtotal		1,943		—		(12	)		1,931
Marketable equity securities		334		471		(376	)		429
Total available-for-sale securities	$	2,277	$	471	$	(388	)	$	2,360
Included in other assets								$	429
Included in cash and cash equivalents									791
Included in short-term investments									1,140
								$	2,360

The fair value of the Company’s investment in debt securities, by contractual maturity, is as follows:

	Seagate Technology Holdings		Predecessor
	June 29, 2001		June 30, 2000
	(In millions)
Due in less than 1 year	$	578	$	939
Due in 1 to 3 years		—		352
	$	578	$	1,291

Fair Value Disclosures—The carrying value of cash and cash equivalents approximates fair value. The fair values of short-term investments, notes, debentures (see Long-Term Debt and Credit Facilities later in this footnote) and foreign currency forward exchange and option contracts are estimated based on quoted market prices.

F-37

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The carrying values and fair values of the Company’s financial instruments are as follows:

	Seagate Technology Holdings						Predecessor
	June 29, 2001						June 30, 2000
	Carrying amount			Estimated fair value			Carrying amount			Estimated fair value
	(In millions)
Cash equivalents	$	677		$	677		$	791		$	791
Short-term investments		183			183			1,140			1,140
Marketable equity securities		6			6			429			429
12.5% senior subordinated notes, due 2007		(203	)		(210	)		—			—
Senior Credit Facilities
Libor plus 2.5% Term Loan A		(198	)		(198	)		—			—
Libor plus 3% Term Loan B		(497	)		(497	)		—			—
7.125% senior notes, due 2004		—			—			(200	)		(187	)
7.37% senior notes, due 2007		—			—			(200	)		(180	)
7.45% senior debentures, due 2037		—			—			(200	)		(177	)
7.875% senior debentures, due 2017		—			—			(100	)		(85	)
Swap (3 month LIBOR)		(245	)		(245	)		—			—

Derivative Financial Instruments—The Company may enter into foreign currency forward exchange and option contracts to manage exposure related to certain foreign currency commitments, certain foreign currency denominated balance sheet positions and anticipated foreign currency denominated expenditures. The Company does not enter into derivative financial instruments for trading purposes. As of June 29, 2001, the Company had no outstanding foreign currency forward exchange or purchased currency option contracts.

During fiscal year 2001, the Company entered into interest rate swap agreements to hedge a portion of its floating rate debt as required under the terms of the loan agreement. As of June 29, 2001, the Company had a total of $245 million in interest rate swaps, the minimum required. The Company reviews its interest rate exposures and the adequacy of the interest rate swaps on an on-going basis. The Company does not enter into swap agreements for trading purposes.

Net foreign currency transaction gains and losses included in the determination of net income (loss) were gains of $3 million and $1 million for the period from November 23, 2000 to June 29, 2001 and July 1, 2000 to November 22, 2000, respectively. Net foreign currency transaction gains and losses included in the determination of net income (loss) were a gain of $1 million for fiscal year 2000 and a loss of $1 million for fiscal year 1999. The Company transacts business in various foreign countries. Its primary foreign currency cash flows are in emerging market countries in Asia and in certain European countries.

F-38

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Accounts Receivable

	Seagate Technology Holdings			Predecessor
	June 29, 2001			June 30, 2000
	(In millions)
Accounts Receivable:
Accounts receivable	$	631		$	712
Allowance for non-collection		(92	)		(70	)
	$	539		$	642

Activity in the allowance for doubtful accounts is as follows:

			Additions
	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions(1)		Balance at End of Period
	(In millions)
Period from November 23, 2000 to June 29, 2001	$	74	$	18	$	—	$	92
Period from July 1, 2000 to November 22, 2000	$	70	$	5	$	1	$	74
Year Ended June 30, 2000	$	50	$	20	$	—	$	70
Year Ended July 2, 1999	$	52	$	—	$	2	$	50

(1) Uncollectible accounts written off, net of recoveries.

Inventories

Inventories are summarized below:

	Seagate Technology Holdings		Predecessor
	June 29, 2001		June 30, 2000
	(In millions)
Inventories:
Components	$	63	$	139
Work-in-process		61		48
Finished goods		198		226
	$	322	$	413

F-39

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Property, equipment and leasehold improvements

Property, equipment and leasehold improvements consisted of the following:

		Seagate Technology Holdings			Predecessor
	Useful Life in Years	June 29, 2001			June 30, 2000
		(In millions)
Land		$	22		$	47
Equipment	3–4		585			2,415
Building and leasehold improvements	Life of lease–30		234			974
Construction in progress			138			250
			979			3,686
Less accumulated depreciation and amortization			(177	)		(2,101	)
		$	802		$	1,585

Equipment and leasehold improvements include assets under capitalized leases. Amortization of leasehold improvements is included in depreciation expense. Depreciation expense was $164 million and $238 million for the period from November 23, 2000 to June 29, 2001 and July 1, 2000 to November 22, 2000, respectively. Depreciation expense was $586 million and $560 million in 2000 and 1999, respectively.

Intangibles

Goodwill represents the excess of the purchase price of acquired companies over the estimated fair value of the tangible and specifically identified intangible net assets acquired. Seagate Technology previously recorded goodwill related to several of its acquisitions. Other intangible assets consist of trademarks, assembled workforces, distribution networks, developed technology, and customer bases related to acquisitions accounted for by the purchase method. Amortization of purchased intangibles, other than acquired developed technology, is provided on a straight-line basis over the respective useful lives of the assets ranging from 36 to 60 months for trademarks, 24 to 60 months for assembled workforces and distribution networks, and 12 to 48 months for customer bases. In-process research and development without alternative future use is expensed when acquired.

In accordance with SFAS 121, the carrying value of other intangibles and related goodwill is reviewed if the facts and circumstances suggest that they may be permanently impaired. If this review indicates these assets’ carrying value will not be recoverable, as determined based on the undiscounted net cash flows of the entity acquired over the remaining amortization period, the Company’s carrying value is reduced to its estimated fair value, first by reducing goodwill, and second by reducing long-term assets and other intangibles (generally based on an estimate of discounted future net cash flows). Goodwill and other intangibles are being amortized on a straight-line basis over periods ranging from two to fifteen years. Accumulated amortization was $17 million, $173 million and $147 million at June 29, 2001, June 30, 2000 and July 2, 1999, respectively.

Developed Technology

Certain internal development costs are capitalized once technological feasibility is established, which based on the Company’s development process generally occurs upon the completion of a working model. As the time period between the completion of a working model and the general availability of software has been short, capitalization of internal development costs has not been material to date. Capitalized costs are amortized based

F-40

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

on the greater of the straight-line basis over the estimated product life (generally 36 to 48 months) or the ratio of current revenue to the total of current and anticipated future revenue.

Purchased developed software technology is amortized based on the greater of the straight-line basis over the estimated useful life (36 to 48 months) or the ratio of current revenue to the total of current and anticipated future revenue. The recoverability of the carrying value of purchased developed software technology is reviewed periodically. The carrying value of developed software technology is compared to the estimated future gross revenue from that product reduced by the estimated future costs of completing and disposing of that product, including the costs of performing maintenance and customer support (net undiscounted cash flows) and to the extent that the carrying value exceeds the undiscounted cash flows the difference is written off.

Long-Term Debt and Credit Facilities

Upon the closing of the transactions, New SAC, through two wholly owned subsidiaries, entered into senior credit facilities with a syndicate of banks and other financial institutions. The senior credit facilities provide senior secured financing of up to $900 million, consisting of:

· a $200 million revolving credit facility for general corporate purposes, with a sublimit of $100 million for letters of credit, which will terminate in November 2005;

· a $200 million term loan A facility due in scheduled installments with a maturity of November 2005; and

· a $500 million term loan B facility due in scheduled installments with a maturity of November 2006.

At the closing of the transactions, New SAC did not borrow under the revolving credit facility. At June 29, 2001 approximately $147 million of the revolving credit facility was available because approximately $53 million of existing letters of credit were outstanding and reduced availability under it. New SAC’s subsidiaries drew the full amount of the term loan A facility and the term loan B facility on the closing of the transactions to finance the acquisition of Seagate Technology’s operating assets.

In connection with the closing and financing of the transactions, Seagate Technology International, a subsidiary of Seagate Technology Holdings, which is in turn a subsidiary of New SAC, issued unsecured senior subordinated notes under an Indenture dated November 22, 2000 at a discount to the aggregate principal amount of $210 million, for gross proceeds of approximately $201 million. The notes mature on November 15, 2007 and bear interest payable semi-annually at a rate of 12.5% per annum. New SAC, and certain of its subsidiaries, including Seagate Technology Holdings, are guarantors on a joint and several, whole and unconditional basis, of the notes. In addition, New SAC and certain of its subsidiaries, including Seagate Technology Holdings, have agreed to certain restrictive covenants under the terms of these notes including restrictions on future equity and borrowing transactions, business acquisitions and disposals, making certain restricted payments and dividends, making certain capital expenditures, incurring guarantee obligations and engaging in mergers or consolidations.

F-41

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Long-term debt consisted of the following:

	Seagate Technology Holdings		Predecessor
	June 29, 2001		June 30, 2000
	(In millions)
LIBOR plus 2.5% term loan A	$	198	$	—
LIBOR plus 3% term loan B		497		—
12.5% senior subordinated notes		203		—
7.125% senior notes, due 2004		—		200
7.37% senior notes, due 2007		—		200
7.45% senior debentures, due 2037		—		200
7.875% senior debentures, due 2017		—		100
Capitalized lease obligations with interest at 14% to 19.25% collateralized by certain manufacturing equipment and buildings		2		4
		900		704
Less current portion		23		1
	$	877	$	703

At June 29, 2001, future minimum principal payments on long-term debt and capital lease obligations were as follows:

Fiscal Year
2002	$	23
2003		41
2004		51
2005		60
2006		285
After 2006		447
	$	907

The Company’s loans bear interest at variable rates depending on market interest rates and the nature of the borrowings, as well as the Company’s consolidated financial position at applicable measurement dates. The interest rates being charged under these borrowings from the date of the transactions ranged from 6.56% (LIBOR plus 2.5%) to 9.69% (LIBOR plus 3%). As of June 29, 2001, the outstanding loan balance under the term loan A and B facilities was $695 million as a result of a debt repayment of $5 million in the quarter ended March 30, 2001.

The Company, New SAC, and certain of its subsidiaries and affiliates, are guarantors on a joint and several, whole and unconditional basis under the senior credit facilities. In addition, New SAC’s, the majority of the Company’s, and certain of its subsidiaries’, assets have been pledged against the debt under this credit agreement. The Company, New SAC, and certain of its subsidiaries and affiliates, have agreed to certain covenants under this agreement including restrictions on future equity and borrowing transactions, business acquisitions and disposals, making certain restricted payments and dividends, making certain capital expenditures, incurring guarantee obligations and engaging in mergers or consolidations. As of June 29, 2001, the Company was in compliance with these covenants.

F-42

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

4.    Compensation

Tax-Deferred Savings Plan

The Company’s parent, New SAC, has a tax-deferred savings plan, the Seagate 401(k) Plan (“the 40l(k) plan”), for the benefit of qualified employees. The 40l(k) plan is designed to provide employees with an accumulation of funds at retirement. Qualified employees may elect to make contributions to the 401(k) plan on a monthly basis. New SAC may make annual contributions to the 401(k) plan at the discretion of the Board of Directors. For the period from November 23, 2000 to June 29, 2001, New SAC made contributions of $9 million. For the period from July 1, 2000 to November 22, 2000, Seagate Technology made contributions of $5 million. During each of the fiscal years ended June 30, 2000 and July 2, 1999, Seagate Technology made contributions totaling approximately $13 million and $12 million to the 401(k) plan in each year, respectively.

Stock-Based Benefit Plans

Stock Option Plans—Employees of the Company were eligible to participate in Seagate Technology’s stock option plans. Options granted under Seagate Technology’s stock option plans were granted at fair market value, expired ten years from the date of the grant and generally vested in four equal annual installments, commencing one year from the date of the grant. On November 22, 2000, in connection with the VERITAS merger, vesting of Seagate Technology options were accelerated. Prior to the acceleration, options outstanding as of June 30, 2000 and November 22, 2000 were approximately 32 million and 23 million, respectively.

Executive Stock Plan—Seagate Technology had an Executive Stock Plan under which senior executives of the Company were granted the right to purchase shares of the Seagate Technology’s common stock at $0.01 per share. The difference between the fair market value of the shares on the measurement date and the exercise price is recorded as deferred compensation by Seagate Technology and was charged to operations of the Company over the vesting period of four to seven years. Seagate Technology has the right to repurchase the restricted stock from an executive upon his or her voluntary or involuntary termination of employment with the Company for any reason at the same price paid by the executive. If an executive voluntarily resigns at or above age 65, Seagate Technology may release from the repurchase option, or if his or her employment terminates as a result of death, disability, termination by the Company other than for cause or constructive termination within the two-year period following a change of control, the Company will release from the repurchase option a pro rata number of shares based on the number of months that have passed since the grant date divided by the number of months in the vesting period. At June 30, 2000 and November 22, 2000, 1,755,000 and 1,590,000 restricted shares were outstanding to the employees of the Company, respectively.

In addition, Seagate Technology had a Restricted Stock Plan, which also had a deferred compensation component. Under this plan the deferred compensation was amortized over a period of seven years. At November 22, 2000, there were two employees remaining in the plan and no shares were available for grant. The aggregate amount charged to operations for amortization of deferred compensation under both plans was $4 million, $6 million and $10 million for the period from July 1, 2000 to November 22, 2000, fiscal year 2000 and fiscal year 1999, respectively.

On November 22, 2000, and in connection with the merger with VERITAS, Seagate Technology accelerated vesting on 207,000 restricted shares and recorded $3.4 million compensation expense in connection with the exchange of such shares for merger consideration. All remaining restricted stock was canceled and holders of such stock were eligible to participate in a deferred cash compensation plan and received ordinary and preferred shares of New SAC.

F-43

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Stock Purchase Plan—Seagate Technology also maintained an Employee Stock Purchase Plan. A total of 19,600,000 shares of common stock were authorized for issuance under the Purchase Plan. The Purchase Plan permitted eligible employees who had completed thirty days of employment prior to the inception of the offering period to purchase common stock through payroll deductions generally at the lower of 85% of the fair market value of the common stock at the beginning or at the end of each six-month offering period. Under the plan, 484,137, 1,515,000 and 1,604,000 shares of common stock were issued from treasury shares in the period from July 1, 2000 to November 22, 2000, fiscal year 2000 and fiscal year 1999, respectively. The stock purchase plan was terminated in October 2000.

Pro Forma Information—The Company has elected to follow APBO 25 and related interpretations in accounting for employee stock options granted by Seagate Technology because, as discussed below, the alternative fair value accounting provided for under SFAS No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”) requires use of option valuation models that were not developed for use in valuing employee stock options. Under APBO 25, the Company generally recognized no compensation expense with respect to options granted by Seagate Technology.

As a result of the consummation of the transactions, all stock options other than stock options included in the management rollover, were accelerated and exercised. The full fair value of these stock options amounting to $567 million was recorded as compensation in the period from November 22, 2000. In these circumstances and because of the significant change in the Company’s ownership and equity structure, the Company believes the pro forma net income (loss) information as required by SFAS 123 is not meaningful and such information has not been provided.

New SAC 2000 and 2001 Restricted Share Plans and Deferred Compensation Plans

At the closing of the transactions, the Board of Directors of New SAC adopted the New SAC 2000 Restricted Share Plan (the “2000 Restricted Share Plan”). The 2000 Restricted Share Plan allows for the awarding of grants of ordinary and preferred shares to key employees, directors, and consultants. New SAC has issued 1,841,600 ordinary shares (net of cancellations) and 48,463 preferred shares (net of cancellations) under the 2000 Restricted Share Plan to members of management who entered into rollover agreements as described below.

Members of the management group entered into rollover agreements in connection with the transactions. Under these agreements, members of the management group agreed not to receive the merger consideration for a portion of their shares of Seagate Technology, Inc. common stock and options to purchase these shares, valued at approximately $184 million. In exchange for the management rollover, the members of the management group received the right to participate in a deferred compensation plan and receive unvested ordinary and preferred shares of New SAC granted under the 2000 Restricted Share Plan. Of the total value of the management rollover, approximately $179 million relates to the deferred compensation plan. With respect to the restricted ordinary and preferred shares of New SAC issued in connection with the rollover agreements, New SAC recorded deferred compensation expense totaling $23 million, based on the fair value of the restricted ordinary and preferred shares at the date of issuance, as a component of shareholders’ equity and is pushing down the related compensation expense amount to the Company over a 30 month vesting period using the graded vesting method. Through June 29, 2001, the Company had recognized $5.4 million of such compensation expense. The unvested preferred and ordinary shares vest as follows:

·  ¹/3 vests on the first anniversary of the closing of the transactions;

·  ¹/3 vests proportionately each month over the next 18 months; and

· the final  ¹/3 vests on the date which is 30 months after the closing of the transactions.

F-44

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

In connection with the management rollover, members of the management group also received interests in deferred compensation plans adopted at Seagate Technology Holdings, Seagate SAN Holdings, and Seagate Removable Storage Solutions Holdings, depending on which subsidiary employed the individual. Under the terms of the deferred compensation plans the employee vests in certain deferred compensation at the same rate as vesting in the ordinary and preferred shares. However, such vesting can be accelerated at any time at the election of the subsidiary. Payments, if any, under the deferred compensation plan are contingent and will be made only when distributions are made to preferred shareholders and only to the extent of vesting. New SAC’s ability to make distributions is subject to limitations under the debt agreement. As a result, compensation expense for the deferred cash compensation plan will be deferred until distributions are made to preferred shareholders. Payment will be made in cash, securities or other property at the discretion of the Company.

In February 2001, the Board of Directors of New SAC approved the adoption of the New SAC 2001 Restricted Share Plan (the “2001 Restricted Share Plan”). Under the terms of the 2001 Restricted Share Plan, key employees, directors, and consultants, may be awarded restricted ordinary shares. Such shares are subject to vesting provisions to be defined at the date of grant and are subject to repurchase by New SAC. Five hundred thousand (500,000) ordinary shares are available for grant under the plan. As of June 29, 2001, New SAC had issued 456,923 restricted ordinary shares under this plan on behalf of the Company. Options granted under the 2001 Restricted Share Plan will vest as follows: 25% of the shares will vest on the first anniversary of the vesting commencement date and the remaining 75% will vest proportionately each month over the next 36 months.

Deferred Compensation Plan

On January 1, 2001, the Company adopted a deferred compensation plan for the benefit of eligible employees. This plan is designed to permit certain discretionary employer contributions, in excess of the tax limits applicable to the 401(k) plan and to permit employee deferrals in excess of certain tax limits. Company assets earmarked to pay benefits under the plan are held by a rabbi trust. The Company has adopted the provisions of Emerging Issues Task Force Issue No. 97-14, “Accounting for Deferred Compensation Arrangements Where Amounts Earned are Held in a Rabbi Trust” (“EITF 97-14”). Under EITF 97-14, the assets and liabilities of a rabbi trust must be accounted for as if they are assets and liabilities of the Company. In addition all earnings and expenses of the rabbi trust are recorded in the Company’s financial statements.

Seagate Technology Holdings Share Option Plan

In December 2000, the Board of Directors of the Company adopted the Seagate Technology Holdings Share Option Plan (the “STH Option Plan”). Under the terms of the STH Option Plan eligible employees, directors, and consultants can be awarded options to purchase shares of common stock of Seagate Technology Holdings under vesting terms to be determined at the date of grant. Seventy-two (72) million common shares have been reserved for issuance under the STH Option Plan. At June 29, 2001, there were no options outstanding under the STH Option Plan. Through August 2001, options to purchase approximately 68 million shares of common stock were granted under the STH Option Plan. Options granted to exempt employees will vest as follows: 25% of the shares will vest on the first anniversary of the vesting commencement date and the remaining 75% will vest proportionately each month over the next 36 months. Options granted to non-exempt employees will vest on the first anniversary of the vesting commencement date.

F-45

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Post-Retirement Health Care Plan

In fiscal year 2000, Seagate Technology adopted a post-retirement health care plan which offers medical coverage to eligible U.S. retirees and their eligible dependents. Substantially all U.S. employees become eligible for these benefits after 15 years of service and attaining age 60 and older.

The following table provides a reconciliation of the changes in the post-retirement health care plan’s benefit obligation and a statement of the funded status as of June 29, 2001 and June 30, 2000:

	Seagate Technology Holdings			Predecessor
	June 29, 2001			June 30, 2000
	(In millions)
Change in Benefit Obligation
Benefit obligation at beginning of year	$	6		$	—
Service and interest cost		4			4
Actuarial (gain)		(5	)		—
Amortization of unrecognized prior service cost		—			2
Assumption of unrecognized prior service cost in purchase business combination		21			—
Benefit obligation at end of year	$	26		$	6
Funded Status of the Plan
Fair value of plan assets at end of year	$	—		$	—
Unrecognized prior service cost		—			22
Unamortized actuarial gain		(5	)		—
Accrued benefit liability recognized in the balance sheet at end of year		26			6
Accrued benefit cost	$	21		$	28

Net periodic benefit cost for the years ended June 29, 2001 and June 30, 2000 was as follows:

	2001		2000
	(In millions)
Service cost	$	2	$	2
Interest cost		2		2
Amortization of prior service cost		—		2
Net periodic benefit cost	$	4	$	6

Weighted-Average Actuarial Assumptions:

A discount rate of 7.0% was used in the determination of the accumulated benefit obligation.

The Company’s future medical benefit costs were estimated to increase at an annual rate of 10% during 2000, decreasing to an annual growth rate of 5% in 2010 and thereafter. The Company’s cost is capped at 200% of the fiscal year 1999 employer cost and, therefore, will not be subject to medical and dental trends after the capped cost is attained. A 1% change in these annual trend rates would not have a significant impact on the accumulated post-retirement benefit obligation at June 29, 2001, or 2001 benefit expense. Claims are paid as incurred.

F-46

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

5.    Income Taxes

The provision for (benefit from) income taxes consisted of the following:

	Seagate Technology Holdings		Predecessor
	Period from November 23, 2000 to June 29, 2001		Period from July 1, 2000 to November 22, 2000			For the Year Ended June 30, 2000		For the Year Ended July 2, 1999
	(In millions)
Current Tax Expense:
Federal	$	—	$	(188	)	$	140	$	29
State		—		(75	)		19		(12	)
Foreign		9		12			3		12
		9		(251	)		162		29
Deferred Tax Expense (Benefit):
Federal		—		7			88		10
State		—		38			25		20
Foreign		—		—			—		2
		—		45			113		32
Provision for (Benefit from) income taxes	$	9	$	(206	)	$	275	$	61

Income (loss) before income taxes consisted of the following:

	Seagate Technology Holdings			Predecessor
	Period from November 23, 2000 to June 29, 2001			Period from July 1, 2000 to November 22, 2000			For the Year Ended June 30, 2000		For the Year Ended July 2, 1999
	(In millions)
Domestic	$	(296	)	$	609		$	562	$	(33	)
Foreign		195			(1,227	)		79		308
	$	(101	)	$	(618	)	$	641	$	275

The pro forma information assuming a tax provision/(benefit) based on a separate return basis is as follows:

	Seagate Technology Holdings
	Period from November 23, 2000 to June 29, 2001
	(In millions)
Loss before income taxes	$	(101	)
Provision for income taxes		9
Net Loss	$	(110	)

F-47

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The income tax benefits related to the exercise of certain employee stock options decreased accrued income taxes and were credited to additional paid-in capital. Such amounts approximated $134 million, $55 million and $24 million for the period from July 1, 2000 through November 22, 2000, fiscal year 2000 and fiscal year 1999, respectively.

At June 29, 2001, accrued income taxes include $125 million for tax indemnification amounts due to VERITAS Software Corporation pursuant to the Indemnification Agreement between Seagate Technology, Suez Acquisition Company and VERITAS Software Corporation. The tax indemnification amount was recorded by the Company in connection with the purchase of the operating assets of Seagate Technology and represents tax liabilities previously accrued by Seagate Technology for periods prior to the acquisition date of the operating assets.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the Company’s deferred tax assets and liabilities were as follows:

	Seagate Technology Holdings			Predecessor
	June 29, 2001			June 30, 2000
	(In millions)
Deferred Tax Assets
Accrued warranty	$	77		$	97
Inventory valuation accounts		36			33
Receivable reserves		21			21
Accrued compensation and benefits		21			44
Depreciation		122			20
Restructuring reserves		29			28
Other reserves and accruals		77			25
Acquisition related items		64			—
Net operating losses and tax credit carry-forwards		77			3
Other assets		8			11
Total Deferred Tax Assets		532			282
Valuation allowance		(506	)		—
Net Deferred Tax Assets	$	26		$	282
Deferred Tax Liabilities
Unremitted income of foreign subsidiaries	$	—		$	(542	)
Acquisition related items		(23	)		(169	)
Other liabilities		—			—
Total Deferred Tax Liabilities		(23	)		(711	)
Net Deferred Tax Assets (Liabilities)	$	3		$	(429	)
As Reported on the Balance Sheet
Deferred Income Tax Assets	$	31		$	211
Deferred Income Tax Liabilities		(28	)		(640	)
Net Deferred Tax Assets (Liabilities)	$	3		$	(429	)

F-48

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

In connection with the purchase of the operating assets of Seagate Technology, we recorded a $434 million valuation allowance for deferred tax assets. The $434 million of deferred tax assets subject to the valuation allowance arose primarily as a result of the excess tax basis over the fair values of acquired property, plant and equipment, and liabilities assumed for which we expect to receive tax deductions in our federal and state returns in future periods. We also recorded $63 million of deferred tax liabilities as a result of the excess of the fair market value of inventory and acquired intangible assets over their related tax bases. Our realization of the tax benefits for the federal and state deferred tax assets subject to the valuation allowance will depend primarily on our ability to generate sufficient taxable income in the United States in future periods, the timing and amount of which are uncertain. We anticipate that the tax benefits of the deferred tax assets if realized, will first result in an increased adjustment to the amount of unamortized negative goodwill that has been allocated on a pro rata basis to reduce the remaining long-lived assets acquired. Any excess tax benefit after reduction of the acquired long- lived assets to zero would then be realized as reductions of future income tax expense in the period the tax benefits are realized.

In the period from June 30, 2000 to June 29, 2001, the valuation allowance increased by $506 million. The valuation allowance decreased by $4 million and $12 million in fiscal years 2000 and 1999, respectively.

At June 29, 2001, the Company had federal and state net operating loss carryforwards of approximately $196 million. The net operating loss carryforwards will expire at various dates beginning in 2012, if not utilized.

Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

The reconciliation between the provision for (benefit from) income taxes at the U.S. federal statutory rate and the effective tax rate are summarized as follows:

	Seagate Technology Holdings			Predecessor
	Period from November 23, 2000 to June 29, 2001			Period from July 1, 2000 to November 22, 2000			For the Year Ended June 30, 2000			For the Year Ended July 2, 1999
	(In millions)
Provision (benefit) at U.S. statutory rate	$	(35	)	$	(218	)	$	224		$	96
State income tax provision (benefit), net of federal income tax benefit		—			(24	)		29			5
Write-off of in-process research and development		10			—			37			21
Nondeductible acquisition related items		16			—			—			—
Valuation allowance		72			—			(4	)		3
Nondeductible goodwill		—			9			—			—
Foreign earnings not subject to U.S. tax		(59	)		—			—			—
Foreign losses not benefited		—			13			—			—
Benefit from net earnings of foreign subsidiaries considered to be permanently reinvested in non-U.S. operations		—			(2	)		—			(67	)
Use of R&D credit carryforwards		—			—			(16	)		—
Other individually immaterial items		5			16			5			3
Provision for (benefit from) income taxes	$	9		$	(206	)	$	275		$	61

F-49

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

A substantial portion of the Company’s Asia Pacific manufacturing operations in China, Malaysia, Singapore and Thailand operate under various tax holidays, which expire in whole or in part during fiscal years 2002 through 2010. Certain tax holidays may be extended if specific conditions are met. As a result of the sale of the operating assets of Seagate Technology and the ensuing corporate structure, the Company now consists of a foreign parent holding company with various foreign and U.S. subsidiaries. The foreign parent holding company has made a special election to be treated as a pass-through entity for U.S. tax purposes and is not subject to U.S. federal income tax. Deferred tax liabilities have not been recorded on unremitted earnings of the Company’s foreign subsidiaries as these earnings will not be subject to U.S. federal income tax if remitted to the foreign parent holding company.

The federal tax Allocation Agreement (“Tax Allocation Agreement”) between the Predecessor and its U.S. subsidiaries was terminated on November 22, 2000, and the Company will no longer file federal income tax returns on a consolidated basis with affiliates of New SAC. Therefore, the Company will not benefit from nor will it reimburse any affiliates of New SAC pursuant to the Tax Allocation Agreement for federal tax losses that may be sustained subsequent to consummation of the transactions. In prior periods, the Predecessor had recorded substantial intercompany payables for utilization of tax losses of its U.S. subsidiaries that have been netted against the Predecessor’s business equity interest in the U.S. subsidiaries.

The Company is included in certain state combined returns with affiliates of New SAC and will enter into a state tax allocation agreement with these affiliates of New SAC, as applicable. Under the terms of the state tax sharing agreement (the “State Tax Allocation Agreement”), the Company computes hypothetical tax returns (with certain modifications) as if the Company was not included in combined returns with the other New SAC affiliates. The Company must pay the positive amount of any such hypothetical taxes. If the hypothetical tax returns show entitlement to refunds, including any refunds attributable to carrybacks, then the other New SAC affiliates will pay the Company the amount of such refunds in the fiscal year the Company otherwise would have been able to utilize the net operating losses or tax credits on a separate return filing basis. At June 29, 2001, there were no intercompany receivables or payables related to state income taxes due from or to New SAC affiliates.

6.    Business Combinations by the Predecessor (also see Note 11, Purchase Accounting)

The Company has a history of business combinations and during the three most recent fiscal years this included the acquisition of XIOtech Corporation in fiscal year 2000. In connection with certain business combinations, the Company recognized significant write-offs of in-process research and development. The completion of the underlying in-process projects acquired within each business combination was the most significant and uncertain assumption utilized in the valuation of the in-process research and development. Such uncertainties could give rise to unforeseen budget over runs and/or revenue shortfalls in the event that the Company is unable to successfully complete a certain research and development project. The Company is primarily responsible for estimating the fair value of the purchased research and development in all business combinations accounted for under the purchase method. The nature of research and development projects acquired, the estimated time and costs to complete the projects and significant risks associated with the projects are described below.

Valuation Methodology

In accordance with the provisions of APB Opinion No. 16, “Business Combinations” (“APBO 16”), all identifiable assets, including identifiable intangible assets, were assigned a portion of the cost of the acquired enterprise (purchase price) on the basis of their respective fair values. This included the portion of the purchase price properly attributed to incomplete research and development projects expensed according to the requirements of Interpretation 4 of SFAS No. 2, “Accounting for Research and Development Costs,” (“FIN 4”).

F-50

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Valuation of acquired intangible assets.    Intangible assets were identified through (i) analysis of the acquisition agreement, (ii) consideration of the Company’s intentions for future use of the acquired assets, and (iii) analysis of data available concerning XIOtech’s products, technologies, markets, historical financial performance, estimates of future performance and the assumptions underlying those estimates. The economic and competitive environment in which the Company and XIOtech operate was also considered in the valuation analysis.

To determine the value of in-process research and development, the Company considered, among other factors, the state of development of each project, the time and cost needed to complete each project, expected income, associated risks which included the inherent difficulties and uncertainties in completing each project and thereby achieving technological feasibility and risks related to the viability of and potential changes to future target markets. This analysis resulted in amounts assigned to in-process research and development for projects that had not yet reached technological feasibility and which did not have alternative future uses. The Income Approach, which includes analysis of markets, cash flows, and risks associated with achieving such cash flows, was the primary technique utilized in valuing each in-process research and development project. The assumptions regarding the underlying in-process projects acquired were the most significant and uncertain assumptions utilized in the valuation analysis of in-process research and development projects.

To determine the value of developed technologies, the expected future cash flows of existing product technologies were evaluated, taking into account risks related to the characteristics and applications of each product, existing and future markets and assessments of the life cycle stage of each product. Based on this analysis, the existing technologies that had reached technological feasibility were capitalized.

To determine the value of the distribution networks and customer bases, the Company considered, among other factors, the size of the current and potential future customer bases, the quality of existing relationships with customers, the historical costs to develop customer relationships, the expected income and associated risks. Associated risks included the inherent difficulties and uncertainties in transitioning the business relationships from the acquired entity to the Company and risks related to the viability of and potential changes to future target markets.

To determine the value of trademarks, the Company considered, among other factors, the assumption that in lieu of ownership of a trademark, the Company would be willing to pay a royalty in order to exploit the related benefits of such trademark.

To determine the value of assembled workforces, the Company considered, among other factors, the costs to replace existing employees including search costs, interview costs and training costs.

Goodwill is determined based on the residual difference between the amount paid and the values assigned to identified tangible and intangible assets. If the values assigned to identified tangible and intangible assets exceed the amounts paid, including the effect of deferred taxes, the values assigned to long-term assets were reduced proportionately.

The assumptions regarding the underlying in-process projects acquired within each acquisition were the most significant and uncertain assumptions utilized in the valuation analysis. Such uncertainties could give rise to unforeseen budget overruns and/or revenue shortfalls in the event that the Company is unable to successfully complete a certain research and development project. The Company’s management recognizes that the Company is primarily responsible for estimating the fair value of the purchased research and development in all acquisitions accounted for under the purchase method.

F-51

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The following details specific information about significant acquisitions including related assumptions used in the purchase price allocation.

Acquisition of XIOtech Corporation:

In January 2000, the Company, through its parent Seagate Technology, acquired XIOtech, for 8,031,804 shares of Seagate Technology common stock, issued from treasury shares, and options, with a combined fair value of $359 million. XIOtech designs, manufactures and markets a centralized data storage system. This system is based on an exclusive set of sophisticated data management and data movement tools. It offers storage virtualization, multi-node server clustering, and zero backup window solutions. The main component of the system is MAGNITUDE, a fully implemented storage area network (“SAN”). MAGNITUDE is sold in a cabinet containing software-based architecture that allows the incorporation of all of the components of a SAN in one centralized configuration.

XIOtech also designs, develops and produces software, namely the REDI suite of software, which runs MAGNITUDE’s software based architecture. The REDI software suite is application specific and gives customers the capability of better managing their data. XIOtech is currently developing the next generation technologies for both products, named Thunderbolt and REDI 7.0, respectively.

Assumptions used in estimating the fair value of intangible assets:

Revenue

Future revenue estimates were generated for the following technologies: (i) MAGNITUDE, (ii) REDI, (iii) Thunderbolt, the next generation development of MAGNITUDE and (iv) REDI 7.0, the next generation development of REDI. These revenue estimates were based on (i) aggregate revenue growth rates for the business as a whole, (ii) individual product revenue, (iii) growth rates for the storage management software market, (iv) the aggregate size of the storage management software market, (v) anticipated product development and introduction schedules, (vi) product sales cycles, and (vii) the estimated life of a product’s underlying technology.

Operating expenses

Estimated operating expenses used in the valuation analysis of XIOtech included (i) cost of goods sold, (ii) general and administrative expense, (iii) selling and marketing expense, and (iv) research and development expense. In developing future expense estimates, an evaluation of Seagate Technology and XIOtech’s overall business model, specific product results, including both historical and expected direct expense levels (as appropriate), and an assessment of general industry metrics was conducted.

Cost of goods sold.    Estimated cost of goods sold, expressed as a percentage of revenue, for the developed and in-process technologies ranged from approximately 46% to 55%.

General and administrative (“G&A”) expense.    Estimated G&A expense, expressed as a percentage of revenue, for the developed and in-process technologies ranged from 5% in fiscal year 2000 to less than 1% in fiscal year 2004 declining as production levels and related revenue increased and thus efficiencies in production are assumed to be attained.

Selling and marketing (“S&M”) expense.    Estimated S&M expense, expressed as a percentage of revenue, for the developed and in-process technologies ranged from 20% in fiscal year 2001 to a sustainable 15% in fiscal

F-52

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

year 2002 and beyond. For fiscal year 2000, however, when certain in-process technology was originally estimated to become commercially available, S&M expense was estimated to be 45% due to the relatively low revenue expectation in the initial commercialization period.

Research and development (“R&D”) expense.    Estimated R&D expense consists of the costs associated with activities undertaken to correct errors or keep products updated with current information (also referred to as “maintenance” R&D). Maintenance R&D includes all activities undertaken after a product is available for general release to customers to correct errors or keep the product updated with current information. These activities include routine changes and additions. The maintenance R&D expense was estimated to be 2% of revenue for the developed and in-process technologies in fiscal year 2000 and 3% throughout the remainder of the estimation period.

In addition, as of the date of the acquisition, Seagate Technology’s management and XIOtech’s management anticipated the costs to complete the in-process technologies at approximately $0.95 million.

Effective tax rate

The effective tax rate utilized in the analysis of the in-process technologies was 40%, which reflects Seagate Technology’s combined federal and state statutory income tax rates, exclusive of non-recurring charges at the time of the acquisition and estimated for future years.

Discount rate

The discount rates selected for XIOtech’s developed and in-process technologies were 16% and 23%, respectively. In the selection of the appropriate discount rates, consideration was given to the Weighted Average Cost of Capital (“WACC”) of approximately 16% at the date of acquisition. The discount rate utilized for the in-process technology was determined to be higher than Seagate Technology’s WACC due to the fact that the technology had not yet reached technological feasibility as of the date of valuation. In utilizing a discount rate greater than the Company’s WACC, management has reflected the risk premium associated with achieving the forecasted cash flows associated with these projects.

As a result of this acquisition, the Predecessor incurred a one-time write-off of in-process research and development of approximately $105 million. This acquisition was accounted for as a purchase and, accordingly, the results of operations of XIOtech have been included in the Predecessor’s combined financial statements from the date of acquisition.

The following is a summary of the purchase price allocation (in millions):

Tangible assets less liabilities assumed	$	12
Developed technology		37
Trade names		5
Assembled workforce		2
Customer list		2
In-process research and development		105
Goodwill		214
Deferred tax liability		(18	)
	$	359

F-53

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

7.    Supplemental Cash Flow Information

	Seagate Technology Holdings		Predecessor
	Period from November 23, 2000 to June 29, 2001		Period from July 1, 2000 to November 22, 2000			For the Year Ended June 30, 2000		For the Year Ended July 2, 1999
	(In millions)
Cash Transactions:
Cash paid for interest	$	50	$	26		$	52	$	52
Cash paid (received) for income taxes, net of refunds		6		(63	)		577		(109	)
Non-Cash Transactions:
Acquisition of XIOtech		—		—			359		—

The components of depreciation and amortization expense are as follows:

	Seagate Technology Holdings			Predecessor
	Period from November 23, 2000 to June 29, 2001			Period from July 1, 2000 to November 22, 2000			For the Year ended June 30, 2000		For the Year Ended July 2, 1999
	(In millions)
Depreciation	$	164		$	238		$	586	$	560
Amortization:
Goodwill and intangibles		17			26			36		22
Deferred compensation		5			2			6		10
Other assets		(4	)		(5	)		38		61
	$	182		$	261		$	666	$	653

8.    Restructuring Costs

As part of the transactions, the Company assumed all restructuring liabilities previously recorded by Seagate Technology relating to the Predecessor, including $41 million related to restructuring activities announced in fiscal year 2000 and $3 million related to restructuring activities announced in fiscal year 2001. During the year ended June 29, 2001, the Company recorded restructuring charges totaling $107 million. Of the $107 million, $98 million was a result of a restructuring plan established to continue the alignment of the Company’s global workforce and manufacturing capacity with existing and anticipated future market requirements, primarily in its Far East operations in Thailand and Malaysia (the “fiscal 2001 restructuring plan”). The remaining $9 million consisted of a $3 million employee termination benefit adjustment to the original estimate related to the fiscal 2000 restructuring plan and $6 million in additional restructuring charges for adjustments to original lease termination cost estimates to the fiscal year 1998 restructuring plan. The fiscal 2001 restructuring plan includes workforce reductions, capacity reductions including closure of facilities or portions of facilities, write-off of excess equipment and consolidation of operations. The restructuring charges were comprised of $59 million for employee termination costs; $22 million for the write-off of owned facilities located in Thailand and Malaysia; $13 million for the write-off of excess manufacturing, assembly and test equipment; $3 million in lease

F-54

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

termination costs; and $1 million in other expenses. Prior to these restructuring activities, there was no indication of permanent impairment of the assets associated with the closure and consolidation of facilities.

In June 2001, the Company reversed $22 million of its restructuring accruals comprised of $11 million of restructuring reserves recorded in the current fiscal year and $11 million of restructuring reserves recorded in prior fiscal years. This reversal included $13 million of valuation reserves classified elsewhere on the balance sheet. In addition, reclassifications between cost categories within the restructuring reserve were made as a result of differences between original estimates and amounts actually incurred or expected to be incurred.

In connection with the fiscal 2001 restructuring plan, the Company plans to reduce its workforce by approximately 9,900 employees, primarily in manufacturing. Approximately 9,600 of the 9,900 employees have been terminated as of June 29, 2001. As a result of employee terminations and the write-off of equipment and facilities in connection with the fiscal 2001 restructuring plan, the Company estimates that after completion of these restructuring activities, annual salary and depreciation expense will be reduced by approximately $100 million and $14 million, respectively. The Company expects the fiscal 2001 restructuring plan will be substantially complete by December 28, 2001.

In connection with the fiscal year 2000 restructuring plan, the Predecessor recorded an adjustment of $3 million in the quarter ended September 29, 2000 as a result of an increase in the estimated number of employees to be terminated. As a result of employee terminations and the write-off of equipment and facilities in connection with the fiscal year 2000 restructuring plan, the Company estimates that after completion of these restructuring activities, annual salary and depreciation expense will be reduced by approximately $151 million and $40 million, respectively. The fiscal year 2000 restructuring plan was substantially complete as of December 29, 2000.

In connection with the restructuring plan implemented in fiscal 1998, the Predecessor revised its original lease termination cost estimates on certain of its facilities and recorded an additional $6 million in restructuring charges in the quarter ended September 29, 2000.

F-55

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the Company’s and the Predecessor’s restructuring activities for the years ended June 29, 2001, June 30, 2000, and July 2, 1999.

	Severance and Benefits			Excess Facilities			Equipment			Intangibles and Other Assets			Contract Cancellations			Other			Total
	(In millions)
The Predecessor
Reserve balances, July 3, 1998	$	9		$	20		$	—		$	—		$	5		$	10		$	44
FY1999 restructuring charge		9			19			37			4			1			1			71
Cash charges		(11	)		(20	)		—			—			—			(1	)		(32	)
Non-cash charges		—			(4	)		(37	)		(4	)		—			—			(45	)
Adjustments and reclassifications		(3	)		3			—			—			(3	)		1			(2	)
Reserve balances, July 2, 1999	$	4		$	18		$	—		$	—		$	3		$	11		$	36
FY2000 restructuring charge		88			40			81			—			2			5			216
Cash charges		(67	)		(11	)		—			—			—			(2	)		(80	)
Non-cash charges		—			(29	)		(81	)		—			—			—			(110	)
Adjustments and reclassifications		(2	)		(8	)		—			—			—			1			(9	)
Reserve balances, June 30, 2000	$	23		$	10		$	—		$	—		$	5		$	15		$	53
FY2001 restructuring charge		3			6			1			—			—			1			11
Cash charges		(14	)		(5	)		—			—			—			(3	)		(22	)
Non-cash charges		—			(6	)		(1	)		—			—			—			(7	)
Adjustments		3			6			—			—			—			—			9
Reserve balances, November 22, 2000	$	15		$	11		$	—		$	—		$	5		$	13		$	44
Seagate Technology Holdings
FY2001 restructuring charge		56			19			12			—			—			—			87
Cash charges		(30	)		(2	)		—			—			—			(4	)		(36	)
Non-cash charges		—			(17	)		(12	)					—			—			(29	)
Adjustments and reclassifications		(8	)		(3	)		—			—			—			2			(9	)
Reserve balances, June 29, 2001	$	33		$	8		$	—		$	—		$	5		$	11		$	57

9.    Business Segment and Geographic Information

The Company has two operating segments: rigid disc drives and storage area networks, however, only the rigid disc drive business is a reportable segment. The “other” category in the following revenue and gross profit tables consists primarily of the storage area networks business from the date of its acquisition by the Company in January 2000. The accounting policies of the segments are the same as those used in preparation of the Company’s consolidated financial statements. The Company has identified its Chief Executive Officer (the “CEO”) as the Chief Operating Decision Maker. The CEO evaluates performance and allocates resources based on revenue and gross profit from operations of each segment. Gross profit from operations is defined as revenue less cost of sales.

For the period from November 23, 2000 to June 29, 2001, Compaq Computer Corporation and EMC Corporation each accounted for more than 10% of consolidated revenue for a total of $527 million and $434 million, respectively. For the period from July 1, 2000 to November 22, 2000, Compaq Computer Corporation and EMC Corporation each accounted for more than 10% of combined revenue for a total of $422 million and $328 million, respectively. In fiscal years 2000 and 1999, Compaq Computer Corporation accounted for more than 10% of combined revenue for a total of $1.100 billion and $1.144 billion, respectively.

F-56

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Long-lived assets consist of property, equipment and leasehold improvements, capital leases, equity investments, goodwill and other intangibles, and other non-current assets as recorded by the Company’s operations in each area.

The following tables summarize the Company’s operations by business segment:

Revenue and Gross Profit	STH			Predecessor
	Period from Nov 23, 2000 to June 29, 2001			Period from July 1, 2000 to November 22, 2000		Year Ended June 30, 2000
	(in millions)
Revenue:
Rigid Disc Drives	$	3,626		$	2,292	$	6,060
Other		30			18		13
Consolidated	$	3,656		$	2,310	$	6,073
Gross Profit:
Rigid Disc Drives	$	712		$	264	$	1,249
Other		20			11		4
Consolidated	$	732		$	275	$	1,253
Total Assets	June 29, 2001			June 30, 2000
Total Assets:
Rigid Disc Drives	$	2,932		$	5,557
Other		45			261
Operating Segments		2,977			5,818
Eliminations		(11	)		—
Consolidated	$	2,966		$	5,818

F-57

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the Company’s operations by geographic area:

	Seagate Technology Holdings		Predecessor
	Period from November 23, 2000 to June 29, 2001		Period from July 1, 2000 to November 22, 2000		2000		1999
	(In millions)
Revenue from external customers:(1)
United States	$	1,441	$	1,103	$	2,652	$	3,016
The Netherlands		881		461		1,302		1,291
Singapore		970		445		1,376		1,192
Other		364		301		743		681
Consolidated	$	3,656	$	2,310	$	6,073	$	6,180

	Seagate Technology Holdings		Predecessor
	June 29, 2001		June 30, 2000		July 2, 1999
	(In millions)
Long-lived assets:
United States	$	524	$	1,391	$	754
Singapore		194		392		546
Other		310		605		640
Consolidated	$	1,028	$	2,388	$	1,940

(1) Revenue is attributed to countries based on the shipping location.

10.    Accumulated Other Comprehensive Income

The Company records unrealized gains and losses on the mark-to-market of its investments as a component of accumulated other comprehensive income. As of June 29, 2001 there was no accumulated other comprehensive income. As of June 30, 2000, total accumulated other comprehensive income was $86 million. During fiscal 2000, several marketable equity securities held by the Company including SanDisk, Gadzoox, Veeco, and LHSP were included in this mark-to-market calculation resulting in a $93 million unrealized gain, net of taxes. Such investments are subject to changes in valuation based upon the market price of their common stock. Between June 30, 2000 and August 9, 2000, these investments, excluding the investment in SanDisk, which was sold during the same period, had temporarily decreased in fair value by $56 million, net of taxes. In July 2000, the Company sold its remaining investment in SanDisk for net proceeds of approximately $105 million.

F-58

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The components of accumulated other comprehensive income, net of related tax, at June 30, 2000 were as follows:

	Predecessor
	June 30, 2000
	(In millions)
Unrealized gain on securities	$	88
Foreign currency translation adjustments		(2	)
Accumulated other comprehensive income	$	86

Accumulated other comprehensive income as of June 30, 2000 includes deferred tax liabilities of $57 million.

11.    Purchase Accounting

On November 22, 2000, under the stock purchase agreement, the Company’s parent, New SAC completed the purchase of substantially all of the operating assets of, and assumption of the operating liabilities of, Seagate Technology and its consolidated subsidiaries. The net purchase price was $1.840 billion in cash, including transaction costs of approximately $25 million. Immediately thereafter, in a separate and independent transaction, Seagate Technology and VERITAS completed their merger under the Merger Agreement. At the time of the merger, Seagate Technology’s assets included a specified amount of cash, an investment in VERITAS, and certain specified investments and liabilities. In connection with the Merger Agreement, Seagate Technology, VERITAS and New SAC entered into an Indemnification Agreement, pursuant to which these entities and certain other subsidiaries of Seagate Technology, agreed to certain indemnification provisions regarding tax and other matters that may arise in connection with the stock purchase agreement and Merger Agreement.

New SAC accounted for this transaction as a purchase in accordance with APBO 16. All acquired tangible assets, identifiable intangible assets as well as assumed liabilities were valued based on their relative fair values and reorganized into the following businesses: (1) the rigid disc drive business, which is now Seagate Technology Holdings, which includes the storage area networks business, (2) the removable storage solutions business, which is now Seagate Removable Storage Solutions Holdings, (3) the software business (Crystal Decisions), and (4) an investment holding company. The fair value of the net assets exceeded the net purchase price by approximately $909 million. Accordingly, the resultant negative goodwill was allocated on a pro rata basis to acquired long-lived assets of New SAC primarily property, plant and equipment, and identified intangible assets, and reduced the recorded fair value amounts by approximately 46% for all the acquired businesses. In accordance with Staff Accounting Bulletin No. 73, “Push Down Basis of Accounting”, the Company has reflected its parent company’s basis in the rigid disc drive and storage area networks operating businesses in the related balance sheet at the date of acquisition.

F-59

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

The table below summarizes the allocation of net purchase price as it relates to Seagate Technology Holdings.

Description	Useful Life in Years	Estimated Fair Value
	(In millions)
Net current assets(1)(3)		$	869
Other long-lived assets			42
Property, plant & equipment(2)	Up to 30		763
Identified intangibles:
Trade names(4)	10		47
Developed technologies(4)	3–7		49
Assembled workforces(4)	1–3		43
Other	5		1
Total identified intangibles			140
Long-term deferred taxes(3)			(63	)
Long term liabilities			(119	)
Net assets			1,632
In-process research & development(4)			52
Net Purchase Price		$	1,684

(1) Acquired current assets included cash and cash equivalents, accounts receivable, inventories and other current assets. The fair values of current assets generally approximated the recorded historic book values. Short-term investments were valued based on quoted market prices. Inventory values were estimated based on the current market value of the inventories less completion costs and less a profit margin for activities remaining to be completed until the inventory is sold. Valuation allowances were established for current deferred tax assets in excess of long-term deferred tax liabilities (See Note 5 Income Taxes).

Assumed current liabilities included accounts payable, accrued compensation and expenses and accrued income taxes. The fair values of current liabilities generally approximated the historic recorded book values because of the monetary nature of most of the liabilities.

Details of the net current assets are as follows (in millions):

Cash and cash equivalents	$	852
Marketable securities		118
Accounts receivable, net		456
Inventories		734
Other current assets		271
Accounts payable		(686	)
Accrued employee compensation		(167	)
Accrued expenses		(537	)
Accrued income taxes		(172	)
Total tangible assets acquired	$	869

F-60

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

(2) The Company, through its parent, obtained an independent valuation of the acquired property, plant and equipment. In arriving at the determination of market value for the assets, the appraisers considered the estimated cost to construct or acquired comparable property. Machinery and equipment were assessed using replacement cost estimates reduced by depreciation factors representing the condition, functionality and operability of the assets. The sales comparison approach was used for office and data communication equipment. Land, land improvements, buildings, and building and leasehold improvements were valued based upon discussions with knowledgeable personnel.

(3) Long-term deferred tax liabilities arose as a result of the excess of the fair values of inventory and acquired intangible assets over their related tax basis. We have $434 million of federal and state deferred tax assets for which a full valuation allowance has been established.

(4) We obtained an independent valuation of acquired identified intangibles. The significant assumptions relating to each category are discussed in the following paragraphs. Also, these assets are being amortized on the straight-line basis over their estimated useful life and resultant amortization is included in amortization of goodwill and other intangibles.

Trade names—The value of the trade names was based upon discounting to their net present value the licensing income that would arise by charging the operating businesses that use the trade names.

Developed technologies—The value of this asset for each operating business was determined by discounting the expected future cash flows attributable to all existing technologies which had reached technological feasibility, after considering risks relating to: (1) the characteristics and applications of the technology, (2) existing and future markets, and (3) life cycles of the technologies. Estimates of future revenues and expenses used to determine the value of developed technology were consistent with the historical trends in the industry and expected outlooks.

Assembled workforces—The value of the assembled work force was determined by estimating the recruiting, hiring and training costs to replace each group of existing employees.

In-process research and development—The value of in-process research and development was based on an evaluation of all developmental projects using the guidance set forth in FIN 4 and SFAS No. 86, “Accounting for the Cost of Computer Software to Be Sold, Leased, or Otherwise Marketed.” The amount was determined by: (1) obtaining management estimates of future revenues and operating profits associated with existing developmental projects, (2) projecting the cash flows and costs to completion of the underlying technologies and resultant products, and (3) discounting these cash flows to their net present value.

Estimates of future revenues and expenses used to determine the value of in-process research and development were consistent with the historical trends in the industry and expected outlooks. The entire amount was charged to operations because related technologies had not reach technological feasibility and they had no alternative future use.

Pro forma financial information

The pro forma financial information presented below is presented as if the acquisition of substantially all of the operating assets of the Predecessor had occurred at the beginning of fiscal year 2000. The pro forma

F-61

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

statement of operations for the year ended June 29, 2001, includes the historical results of the Company in addition to the historical results of the Predecessor and are adjusted to reflect the new accounting basis for the assets and liabilities of the Company, and exclude acquisition related charges for recurring amortization of goodwill and intangibles related to the Predecessor’s prior acquisitions. The pro forma financial results are as follows:

	Seagate Technology Holdings		Predecessor
	June 29, 2001		June 30, 2000
	(In millions)
Revenue	$	5,966	$	6,073
Income before income taxes		265		122
Net income		220		101

12.    Equity

Capital Stock

The Company’s authorized share capital is $10,500 and consists of 600 million common shares, par value $0.00001, of which no shares were outstanding as of June 29, 2001, and 450 million preferred shares, par value $0.00001, of which 400 million shares are designated Series A preferred shares. All Series A preferred shares are outstanding as of June 29, 2001. No other preferred shares were issued or outstanding as of June 29, 2001.

Common shares—Holders of common shares are entitled to receive dividends and distributions when and as declared by the Company’s Board of Directors. Upon any liquidation, dissolution, or winding up of the Company, after required payments are made to holders of preferred shares, any remaining assets of the Company will be distributed ratably to holders of the preferred and common shares. Holders of common shares are entitled to one vote per share on all matters presented to the Company’s shareholders.

Preferred shares—The Company’s Board of Directors may issue one or more series of preferred shares, at any time and for the consideration determined by the Board of Directors. Holders of the outstanding preferred shares are entitled to receive dividends and distributions when and as declared by the Company’s Board of Directors on a basis equal to the Company’s common shares and in preference to the common shares in certain situations. Upon any liquidation, dissolution, or winding up of the Company, the holders of Series A preferred shares shall receive, out of any remaining legally available assets of the Company, a liquidation preference of $2.30 per Series A preferred share, less the aggregate amount of any distributions or dividends already made per Series A preferred share. After the payment in full of the liquidation preference the holders of Series A preferred shares are entitled to share, ratably with the holders of common shares, in any remaining assets available for distribution. To the extent there are not sufficient remaining assets of the Company to pay the liquidation preference, holders of preferred shares shall share ratably in the distribution of the Company’s remaining assets. Upon payment of the liquidation preference and any other amounts payable on liquidation, dissolution or winding up, on each preferred share, the preferred shares shall be cancelled. Holders of preferred shares will have one vote per share, and all such shares are convertible on a one-to-one basis into common shares.

Redesignation of Capital Stock

The Company’s original outstanding capital stock, as of November 23, 2000, was 4,000 shares of common stock with a par value of $1.00 per share. In February 2001, the Company’s sole shareholder, New SAC, approved a plan to redesignate the Company’s capital stock. As a result, in May 2001, the Company executed a

F-62

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

resolution and the authorized share capital of the Company was reduced from $50,000 to $10,500, and the par value was reduced from $1.00 per share to $0.00001 per share. The authorized share capital of the Company was then changed to 1,050,000,000 shares, of which 600,000,000 were common shares with a par value of $0.00001 each, and 450,000,000 preferred shares with a par value of $0.00001 each. Concurrently, the 4,000 shares of common stock then outstanding and held by New SAC were divided into 400,000,000 shares and were redesignated as Series A preferred stock.

13.    Commitments

Leases—The Company leases certain property, facilities and equipment under non-cancelable lease agreements. Land and facility leases expire at various dates through 2015 and contain various provisions for rental adjustments including, in certain cases, a provision based on increases in the Consumer Price Index. All of the leases require the Company to pay property taxes, insurance and normal maintenance costs.

Future minimum lease payments for operating leases with initial or remaining terms of one year or more were as follows at June 29, 2001 (lease payments are shown net of sublease income):

	Operating Leases
	(In millions)
2002	$	17
2003		18
2004		14
2005		11
2006		19
After 2006		136
	$	215

Total rent expense for all land, facility and equipment operating leases was $17 million and $11 million for the period from November 23, 2000 to June 29, 2001 and July 1, 2000 to November 22, 2000, respectively. Total rent expense for all land, facility and equipment operating leases was $36 million and $42 million for fiscal years 2000 and 1999, respectively. Total sublease rental income for the periods from November 23, 2000 to June 29, 2001 and July 1, 2000 to November 22, 2000 was $6 million and $4 million, respectively. Total sublease rental income for fiscal years 2000 and 1999 was $9 million and $7 million, respectively. The Company subleases a portion of its facilities that it considers to be in excess of current requirements. Total lease income to be recognized for the Company’s existing subleases as of June 29, 2001 is approximately $41 million.

Capital Expenditures—The Company’s commitments for construction of manufacturing facilities and equipment approximated $143 million at June 29, 2001.

14.    Litigation

Intellectual Property Litigation

Papst Licensing, GmbH—Papst Licensing GmbH has given us notice that it believes certain former Conner Peripherals, Inc. disc drives infringe several of its patents covering the use of spindle motors in disc drives. We believe that the accused former Conner disc drives do not infringe any valid and/or enforceable claims of the patents. We also believe that subsequent to the merger with Conner, our earlier paid-up license under Papst’s patents extinguishes any ongoing liability. We also believe we enjoy the benefit of a license under Papst’s patents

F-63

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

since Papst had granted a license to motor vendors of Conner. Papst is currently involved in litigation with other disc drive and disc drive motor manufacturers. After the closing of the privatization transactions, Papst questioned the effectiveness of the assignment of the 1993 Papst-Seagate Technology license to the new entity until it receives further information about our new business structure and stated that any new Seagate Technology disc drives would be assumed to be unlicensed. We provided Papst with additional information regarding our new business structure, but Papst has taken the position that the license was not properly assigned. We believe that the assignment of the Papst license is legally effective.

Convolve, Inc.—On July 13, 2000, Convolve and Massachusetts Institute of Technology filed suit against Compaq Computer Corporation and Seagate Technology in the U.S. District Court for the Southern District of New York, alleging patent infringement, misappropriation of trade secrets, breach of contract, tortious interference with contract and fraud relating to Convolve’s Input Shaping^® and Quick and Quiet^™ technology. The plaintiffs claim their technology is incorporated in Seagate Technology’s sound barrier technology, which was publicly announced on June 7, 2000. The complaint seeks injunctive relief, $800 million in compensatory damages and punitive damages. We answered the complaint on August 2, 2000 and filed cross-claims for declaratory judgment that two Convolve/MIT patents are invalid and not infringed and that we own any intellectual property based on the information that was disclosed to Convolve. The Court denied plaintiffs’ motion for expedited discovery. The court ordered plaintiffs to identify their trade secrets to defendants before discovery can begin. Convolve served a trade secrets disclosure on August 4, 2000 and we filed a motion challenging the disclosure statement. On May 3, 2001, the court appointed a Special Master to review the trade secret issues. The Special Master resigned on June 5, 2001, and the court appointed another Special Master on July 26, 2001. A hearing before the Special Master on our motion challenging the trade secrets disclosure was held on September 21, 2001. Convolve filed a revised trade secrets disclosure on October 26, 2001, and the Special Master found it to be sufficient. Discovery on all issues will now proceed. We believe this matter is without merit and intend to defend it vigorously.

Storage Computer Corporation—On March 22, 2001, Storage Computer Corporation (“SCC”) filed suit in the U.S. District Court for the Northern District of Texas against XIOtech Corporation and Seagate Technology. The complaint alleges that XIOtech’s MAGNITUDE^™ product infringes U.S. Patent No. 5,893,919 and that we induce infringement of the patent by promoting and marketing XIOtech’s MAGNITUDE^™ product, particularly through a hyperlink on our Internet website to XIOtech’s internet website. The plaintiff alleges willful infringement and seeks unspecified damages and an injunction. On June 19, 2001, SCC filed a first amended complaint adding Seagate Technology LLC as a defendant. On July 3, 2001, XIOtech answered the complaint, denying infringement and asserting counterclaims for a declaratory judgment of patent invalidity or unenforceability and non-infringement. The Seagate entities filed a motion to dismiss for failure to state a claim. The court allowed SCC to file a second amended complaint on September 19, 2001, and ordered limited discovery from the Seagate entities. On October 3, 2001, all defendants answered the second amended complaint and Seagate Technology LLC filed a counterclaim against SCC for infringement of its U.S. Patent No. RE 34,100, entitled “Data Error Correction System.” Court-ordered mediation is scheduled for November 27 and 28, 2001. We believe the lawsuit filed by SCC is without merit and intend to defend it vigorously and pursue Seagate Technology LLC’s patent infringement claims.

Labor Litigation

White—On March 15, 2000 Royston White filed a breach of contract action against Seagate Technology in Oklahoma State Court. The complaint was styled as a class action, and White, as the sole named defendant, alleged that some 600 former employees had been damaged through breach of separation and release agreements entered into in connection with a work force reduction. Both parties have agreed to the terms of a settlement, and

F-64

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

the settlement has been presented to the Court for evaluation and approval. Court approval of the settlement will be required before settlement can be finalized and settlement proceeds distributed to class members.

Other Matters

We are involved in a number of other judicial and administrative proceedings incidental to our business. Although occasional adverse decisions or settlements may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position or results of operations.

15.    Related Party Transactions

Historically, the Predecessor has provided substantial services to other affiliated companies. Upon the closing of the stock purchase agreement by New SAC, these services continue to be provided by the Company through New SAC. The services provided generally include general management, treasury, tax, financial reporting, benefits administration, insurance, information technology, legal, accounts payable and receivable and credit functions, among others. The Company charges for these services through corporate expense allocations. The amount of corporate expense allocations depends upon the total amount of allocable costs incurred by the Company on behalf of the affiliated company less amounts charged as specified cost or expense rather than by allocation. Such costs have been proportionately allocated to the affiliated companies based on detailed inquiries and estimates of time incurred by the Company’s corporate marketing and general administrative departmental managers. Management believes that the allocations charged to other affiliated companies are reasonable. Allocations charged to other affiliated companies’ marketing and administrative expenses for the periods from November 23, 2000 to June 29, 2001 and from July 1, 2000 to November 22, 2000 and years ended June 30, 2000 and July 2, 1999 were $3.5 million, $1.3 million, $4.5 million and $4.0 million, respectively. Purchases and sales to other affiliated companies were not material for any of the periods presented.

16.    Subsequent Events

Refinancing

On May 13, 2002, we completed a refinancing of all our outstanding senior debt obligations (the Term A and Term B loans) and a tender offer for all our outstanding $210 million aggregate principal amount of senior subordinated notes. The refinancing was completed when our wholly-owned subsidiary, Seagate Technology HDD Holdings (“HDD”), entered into a $500 million senior secured credit facility with a group of banks consisting of a $150 million revolving credit facility that was not drawn upon and a five-year, $350 million, LIBOR + 2% term loan facility that was drawn in full. At the same time, HDD issued $400 million aggregate principal amount of 8% senior notes due 2009. In addition, Seagate Technology International (“STI”), a wholly-owned subsidiary of HDD, initiated a tender offer to purchase its outstanding 12½% senior subordinated notes due 2007. As of May 13, 2002, all of these notes had been tendered and accepted for payment. Entering into the new $500 million credit facility and issuing the $400 million in new notes was contingent upon at least a majority of the 12½% notes being tendered and accepted for payment. In addition, on May 13, 2002, STI and Seagate Technology (US) Holdings, Inc., a wholly-owned subsidiary of HDD, repaid the remaining balance outstanding of $679 million, including accrued interest, on our Term A and Term B bank loans.

In the near term, we expect to make a $167 million distribution to our shareholders and $33 million in payments of deferred compensation to our employees. The net effect of the refinancing, distribution to shareholders and payment of deferred compensation will be a decrease in cash, cash equivalents and short-term investments of $428 million, consisting of an increase of $750 million from the new senior secured credit facilities and 8% senior notes, offset by $1.178 billion of cash outlays. The cash outlays consist of

F-65

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

$274 million to repurchase the former senior subordinated notes, including premium, accrued interest and consent fees, $679 million to repay the existing senior secured credit facilities (Term A and Term B loans), $25 million in refinancing fees and expenses, $167 million for the planned distribution to our shareholders, including New SAC, and $33 million in planned payments of deferred compensation to our employees.

As a result of the refinancing and the planned distribution to employees under our deferred compensation plan, $116 million will be charged to operations in the quarter ended June 28, 2002. The $116 million will be comprised of a $90 million loss on extinguishment of debt, net of taxes, a $5 million loss on the interest rate swap on the Term B Loan and a $21 million charge, net of taxes, for compensation expense related to the distributions to be made to our employees under deferred compensation plans. The $90 million loss on extinguishment of debt consists of a $50 million redemption premium on the 12 ¹/2% senior subordinated notes, a $31 million write-off of capitalized debt issue costs related to our prior senior debt obligations (Term A and Term B loans) and the 12 ¹/2% senior subordinated notes, a $7 million write-off of unamortized discount on the 12 ¹/2% senior subordinated notes and $2 million of fees and expenses incurred to tender the 12 ¹/2% senior subordinated notes.

Condensed Consolidating Financial Information

The 8% senior notes described above were issued by HDD, a wholly owned direct subsidiary of Seagate Technology Holdings (“STH”). The 8% senior notes are guaranteed on a full and unconditional basis by STH, the parent company of HDD. The following tables present parent guarantor, subsidiary issuer and combined non-guarantors condensed consolidating balance sheets of STH and its subsidiaries at March 29, 2002 and June 29, 2001, and the condensed consolidating results of its operations and its cash flows for the nine months ended March 29, 2002 and the period from November 23, 2000 to March 30, 2001. The information classifies the subsidiaries of STH into STH-parent company guarantor, HDD-subsidiary issuer, and the combined non-guarantors based upon the classification of those subsidiaries under the provisions of the 8% senior notes. Condensed consolidating financial information for the periods prior to the transactions of November 2000 is not presented because the STH-parent company guarantor and the HDD-subsidiary issuer did not legally exist until August 2000, their operations prior to November 23, 2000 were not significant (see “The November 2000 Transactions”), and on an individual legal entity basis neither STH nor HDD had a predecessor company. Accordingly, for periods prior to November 23, 2000, the financial information for the combined non-guarantors is equivalent to the combined balance sheet, statement of operations, and cash flows of the entire predecessor company, which is the combined rigid disc drive and storage area network operations of Seagate Technology, Inc. In addition, all outstanding long-term debt for periods prior to March 29, 2002, primarily comprised of the Term A and Term B loans, and the 12½% senior subordinated notes, was issued by subsidiaries that are classified as non-guarantors in the following condensed consolidating financial information.

F-66

SEAGATE TECHNOLOGY HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidating Balance Sheet  

June 29, 2001  

(In millions)

	STH Parent Company Guarantor		HDD Subsidiary Issuer		Combined Non- Guarantors		Eliminations			STH Consolidated
Cash and cash equivalents	$	—	$	—	$	726	$	—		$	726
Short-term investments		—		—		183		—			183
Accounts receivable, net		—		—		539		—			539
Inventories		—		—		322		—			322
Deferred income taxes		—		—		31		—			31
Other current assets		—		—		137		—			137
Total Current Assets		—		—		1,938		—			1,938
Property, equipment and leasehold improvements, net		—		—		802		—			802
Equity investment in HDD		620		—		—		(620	)		—
Equity investments in Non-Guarantors		33		620		—		(653	)		—
Intangibles		—		—		123		—			123
Other assets		—		—		103		—			103
Total Assets	$	653	$	620	$	2,966	$	(1,273	)	$	2,966
Accounts payable	$	—	$	—	$	507	$	—		$	507
Affiliate accounts payable		—		—		23		—			23
Accrued employee compensation		—		—		139		—			139
Accrued expenses		—		—		458		—			458
Accrued income taxes		—		—		164		—			164
Current portion of long-term debt		—		—		23		—			23
Total Current Liabilities		—		—		1,314		—			1,314
Deferred income taxes		—		—		28		—			28
Other liabilities		—		—		94		—			94
Long-term debt, less current portion		—		—		877		—			877
Total Liabilities		—		—		2,313		—			2,313
Shareholders’ / Group Equity		653		620		653		(1,273	)		653
Total Liabilities and Shareholders’ / Group Equity	$	653	$	620	$	2,966	$	(1,273	)	$	2,966

F-67

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidating Statement of Operations

Period from November 23, 2000 to June 29, 2001

(In millions)

	STH Parent Company Guarantor			HDD Subsidiary Issuer			Combined Non- Guarantors			Eliminations		STH Consolidated
Revenue	$	—		$	—		$	3,656		$	—	$	3,656
Cost of revenue		—			—			2,924			—		2,924
Product development		—			—			388			—		388
Marketing and administrative		—			—			288			—		288
Amortization of intangibles		—						12			—		12
In–process research and development		—			—			52			—		52
Restructuring		—			—			66			—		66
Total operating expenses		—			—			3,730			—		3,730
Income (loss) from operations		—			—			(74	)		—		(74	)
Interest income		—			—			31			—		31
Interest expense		—			—			(54	)		—		(54	)
Equity in loss of HDD		(59	)		—			—			59		—
Equity in losses of Non-Guarantors		(51	)		(59	)		—			110		—
Other, net		—			—			(4	)		—		(4	)
Other income (expense), net		(110	)		(59	)		(27	)		169		(27	)
Income (loss) before income taxes		(110	)		(59	)		(101	)		169		(101	)
Provision for (benefit from) income taxes		—			—			9			—		9
Net income (loss)	$	(110	)	$	(59	)	$	(110	)	$	169	$	(110	)

F-68

SEAGATE TECHNOLOGY HOLDINGS AND ITS PREDECESSOR

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS—(Continued)

Condensed Consolidating Statements of Cash Flows

Period from November 23, 2000 to June 29, 2001

(In millions)

	STH Parent Company Guarantor			HDD Subsidiary Issuer			Combined Non-Guarantor			Eliminations			STH Consolidated
Net Loss	$	(110	)	$	(59	)	$	(110	)	$	169		$	(110	)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation and amortization		—			—			182			—			182
Deferred income taxes		—			—			10			—			10
In-process research and development		—			—			52			—			52
Non-cash portion of restructuring charge		—			—			29			—			29
Equity in loss of HDD		59			—			—			(59	)		—
Equity in losses of Non-Guarantors		51			59			—			(110	)		—
Other, net		—			—			31			—			31
Changes in operating assets and liabilities:
Accounts receivable		—			—			(84	)		—			(84	)
Inventories		—			—			444			—			444
Accounts payable		—			—			(196	)		—			(196	)
Accrued expenses, employee compensation and warranty		—			—			(182	)		—			(182	)
Accrued income taxes		—			—			1			—			1
Other assets and liabilities, net		—			—			92			—			92
Net cash provided by operating activities		—			—			269			—			269
Investing Activities
Acquisition of property, equipment and leasehold improvements		—			—			(239	)		—			(239	)
Purchase of short-term investments		—			—			(738	)		—			(738	)
Maturities and sales of short-term investments		—			—			673			—			673
Purchase of rigid disc drive operating assets and liabilities		—			(265	)		(535	)		—			(800	)
Other, net		—			—			(36	)		—			(36	)
Net cash used in investing activities		—			(265	)		(875	)		—			(1,140	)
Financing Activities
Issuance of long-term debt, net of issuance costs		—			—			861			—			861
Repayment of long-term debt		—			—			(5	)		—			(5	)
Short-term borrowings		—			—			66			—			66
Repayment of short-term borrowings		—			—			(66	)		—			(66	)
Net repayments under loan agreements with affiliates		—			—			(7	)		—			(7	)
Investment by New SAC and issuance of common stock by STH		751			—			—			—			751
Investment by STH in HDD		(559	)		559			—			—			—
Investment by STH in Non-Guarantor		(192	)		—			192			—			—
Investment by HDD in Non-Guarantors		—			(294	)		294			—			—
Other, net		—			—			(1	)		—			(1	)
Net cash provided by financing activities		—			265			1,334			—			1,599
Effect of exchange rate changes on cash and cash equivalents		—			—			(2	)		—			(2	)
Increase in cash and cash equivalents		—			—			726			—			726
Cash and cash equivalents at the beginning of the period		—			—			—			—			—
Cash and cash equivalents at the end of the period	$	—		$	—		$	726		$	—		$	726

F-69

$400,000,000 Seagate Technology HDD Holdings

Offer to Exchange

All Outstanding 8% Senior Notes due 2009 for

8% Senior Notes due 2009

Which Have Been Registered Under the Securities Act of 1933

P R O S P E C T U S

                        , 2002

Until 90 days after the date of this prospectus, all dealers effecting transactions in the exchange notes, whether or not participating in this distribution, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and regarding their unsold allotments or subscriptions.

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to exchange the exchange notes for the outstanding notes only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.    Indemnification of Directors and Officers

Indemnification of the Directors and Officers of the Issuer and the Guarantor

The articles of association of Seagate Technology HDD Holdings, as the issuer of the notes, and Seagate Technology Holdings, as the guarantor of the notes, provide for the indemnification of their respective directors and officers. Specifically, under the indemnification provisions, the issuer and the guarantor will indemnify their respective directors and officers against liabilities that are incurred by the directors or officers while carrying out the affairs of the company or discharging the duties of their respective offices. The directors and officers, however, will not be entitled to the indemnification if they incurred the liabilities through their own willful neglect or default.

In addition, the board resolutions of the issuer and the guarantor provide for the indemnification of their respective directors and officers against any claims arising out of or relating to (a) the preparation, filing and distribution of this registration statement or the prospectus contained in this registration statement, (b) the issue and exchange of the exchange guarantee or the exchange notes, (c) the exchange offer and (d) any activities that the directors and officers deem necessary or advisable to carry out the intent and purposes of the resolutions. The resolutions also expressly authorize the issuer and the guarantor to indemnify their directors and officers to the fullest extent permitted by law.

Both the issuer and the guarantor are limited liability companies incorporated in the Cayman Islands. As such, they are governed by the laws of the Cayman Islands with respect to the indemnification provisions. Although The Companies Law (2000 Revision) of the Cayman Islands does not specifically restrict a Cayman Islands company’s ability to indemnify its directors or officers, it does not expressly provide for such indemnification either. Certain Commonwealth case law (which is likely to be persuasive in the Cayman Islands), however, indicate that the indemnification is generally permissible, unless there had been fraud, willful default or reckless disregard on the part of the director or officer in question.

Liability Insurance Covering Directors and Officers

In addition to the indemnification provisions set forth above, each of the issuer and the guarantor maintains insurance policies that indemnify its directors and officers against various liabilities arising under the Securities Act of 1933 and the Securities Exchange Act of 1934 that might be incurred by any director or officer in his capacity as such.

Item 21.    Exhibits and Financial Statement Schedules

The following exhibits are being filed with this registration statement pursuant to Item 601 of Regulation S-K.

Exhibit Number	Description
1.1	Purchase Agreement, dated as of May 3, 2002, by and among Seagate Technology HDD Holdings, Seagate Technology Holdings and Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc. and the other initial purchasers named therein
2.1	Stock Purchase Agreement, dated as of March 29, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc. and Seagate Software Holdings, Inc.
2.2	Agreement and Plan of Merger and Reorganization, dated as of March 29, 2000, by and among VERITAS Software Corporation, Victory Merger Sub, Inc. and Seagate Technology, Inc.

II-1

Exhibit Number	Description
2.3	Indemnification Agreement, dated as of March 29, 2000, by and among VERITAS Software Corporation, Seagate Technology, Inc. and Suez Acquisition Company (Cayman) Limited
2.4	Joinder Agreement to the Indemnification Agreement, dated as of November 22, 2000, by and among VERITAS Software Corporation, Seagate Technology, Inc. and the SAC Indemnitors listed therein
2.5	Consolidated Amendment to Stock Purchase Agreement, Agreement and Plan of Merger and Reorganization, and Indemnification Agreement, and Consent, dated as of August 29, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc., Seagate Software Holdings, Inc., VERITAS Software Corporation and Victory Merger Sub, Inc.
2.6	Consolidated Amendment No. 2 to Stock Purchase Agreement, Agreement and Plan of Merger and Reorganization, and Indemnification Agreement, and Consent, dated as of October 18, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc., Seagate Software Holdings, Inc., VERITAS Software Corporation and Victory Merger Sub, Inc.
2.7	Letter Agreement, dated as of March 29, 2000, by and between VERITAS Software Corporation and Suez Acquisition Company (Cayman) Limited
3.1(a)	Memorandum of Association of Seagate Technology HDD Holdings
3.1(b)	Articles of Association of Seagate Technology HDD Holdings
3.2(a)	Amended and Restated Memorandum of Association of Seagate Technology Holdings
3.2(b)	Amended and Restated Articles of Association of Seagate Technology Holdings
4.1	Form of 8% Senior Notes due 2009 (included in Exhibit 4.2)
4.2	Indenture, dated as of May 13, 2002, by and among Seagate Technology HDD Holdings, Seagate Technology Holdings and U.S. Bank, N.A.
4.3	Registration Rights Agreement, dated as of May 13, 2002, by and among Seagate Technology HDD Holdings, Seagate Technology Holdings, Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc.
5.1	Opinion of Simpson Thacher & Bartlett
10.1	Credit Agreement, dated as of May 13, 2002, by and among Seagate Technology Holdings, Seagate Technology HDD Holdings, Seagate Technology (US) Holdings, Inc., the Lenders party thereto, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc., as joint bookrunner and co-lead arranger, Morgan Stanley Senior Funding, Inc., as syndication agent, joint bookrunner and co-lead arranger, Citicorp USA, Inc., as documentation agent, Merrill Lynch Capital Corporation, as documentation agent, and Credit Suisse First Boston, as documentation agent
10.2(a)	Form of Employment Agreement by and between Seagate Technology (US) Holdings, Inc. and the Executive listed therein
10.2(b)	Employment Agreement, dated as of February 2, 2001, by and between Seagate Technology (US) Holdings, Inc. and Stephen J. Luczo
10.2(c)	Employment Agreement, dated as of February 2, 2001, by and between Seagate Technology (US) Holdings, Inc. and William D. Watkins
10.3(a)	Form of Management Retention Agreement by and between the Employee listed therein and Seagate Technology, Inc.

II-2

Exhibit Number	Description
10.3(b)	Management Retention Agreement, dated November 1998, by and between Seagate Technology, Inc. and Stephen J. Luczo
10.4	Management Participation Agreement, dated as of March 29, 2000, by and among Seagate Technology, Inc., Suez Acquisition Company (Cayman) Limited and the Senior Managers party thereto
10.5	Form of Rollover Agreement, dated as of November 13, 2000, by and among New SAC, Seagate Technology HDD Holdings and the Senior Manager listed therein
10.6	Seagate Technology HDD Holdings Deferred Compensation Plan
10.7(a)	New SAC 2000 Restricted Share Plan
10.7(b)	Form of New SAC 2000 Restricted Share Agreement
10.8(a)	New SAC 2001 Restricted Share Plan
10.8(b)	Form of New SAC 2001 Restricted Share Agreement (Tier 1 Senior Managers)
10.8(c)	Form of New SAC 2001 Restricted Share Agreement (Other Employees)
10.9	Seagate Technology Holdings 2001 Share Option Plan
10.10	Shareholders Agreement, dated as of November 22, 2000, by and among New SAC, Silver Lake Technology Investors Cayman, L.P., Silver Lake Investors Cayman, L.P., Silver Lake Partners Cayman, L.P., SAC Investments, L.P., August Capital III, L.P., Chase Equity Associates, L.P., GS Capital Partners III, L.P., GS Capital Partners III Offshore, L.P., Goldman, Sachs & Co. Verwaltungs GmbH, Stone Street Fund 2000 L.P., Bridge Street Special Opportunities Fund 2000, L.P., Staenberg Venture Partners II, L.P., Staenberg Seagate Partners, LLC, Integral Capital Partners V, L.P., Integral Capital Partners V Side Fund, L.P. and the individuals listed therein
10.11	Management Shareholders Agreement, dated as of November 22, 2000, by and among New SAC and the Management Shareholders listed therein
10.12	Disc Drive Research and Development Cost Sharing Agreement, dated as of June 29, 1996, by and among Seagate Technology, Inc., Seagate Technology International, Seagate Technology (Ireland), Seagate Technology (Clonmel), Seagate Technology International (Wuxi) Co., Ltd., Seagate Microelectronics Limited and Seagate Peripherals, Inc.
10.13	World-Wide Services Agreement, dated as of July 1, 1993, by and among Seagate Technology, Inc. and Seagate Technology International
10.14	Promissory Note, dated as of May 8, 1998, by and between Seagate Technology, Inc., as lender, and David Wickersham, as borrower
10.15	Promissory Note, dated as of October 10, 2000, by and between Seagate Technology LLC, as lender, and Brian Dexheimer, as borrower
10.16	Promissory Note, dated as of February 16, 2001, by and between Seagate Technology LLC, as lender, and Jeremy Tennenbaum, as borrower
12.1	Statement of Computation of Ratio of Earnings to Fixed Charges
21.1	List of Subsidiaries
23.1	Consent of Ernst & Young LLP, Independent Auditors

II-3

Exhibit Number	Description
23.2	Consent of Simpson Thacher & Bartlett (included in Exhibit 5.1)
24.1	Powers of Attorney (included on signature pages to this registration statement)
25.1	Form of T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank, N.A.
99.1	Form of Letter of Transmittal
99.2	Form of Notice of Guaranteed Delivery

Item 22.    Undertakings

(1) The undersigned registrants hereby undertake:

(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933.

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) that, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.

(2)   (a) The undersigned registrants hereby undertake as follows: that prior to any public reoffering of the  securities registered hereunder through use of a prospectus that is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

(b) The registrants undertake that every prospectus: (i) that is filed pursuant to paragraph (a) immediately preceding or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415 will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes

II-4

of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to the directors, officers and controlling persons of the registrants pursuant to the foregoing provisions or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(4) The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form within one business day of receipt of such request and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(5) The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the following registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, on the 15th day of May, 2002.

SEAGATE TECHNOLOGY HDD HOLDINGS
By:	/s/    STEPHEN J. LUCZO
	Name:   Stephen J. Luczo Title:     Chief Executive Officer

POWER OF ATTORNEY

The undersigned do hereby constitute and appoint Stephen J. Luczo, Charles C. Pope and William L. Hudson our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below that said attorneys and agents may deem necessary or advisable to enable Seagate Technology HDD Holdings to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission in connection with this registration statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names in the capacities indicated below any and all amendments (including post-effective amendments) hereto, and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated below on May 15, 2002.

Signature	Title and Capacity
/s/    STEPHEN J. LUCZO Stephen J. Luczo	Chief Executive Officer and Director (Principal Executive Officer)
/s/    CHARLES C. POPE Charles C. Pope	Chief Financial Officer (Principal Financial Officer)
/s/    GLEN A. PETERSON Glen A. Peterson	Treasurer (Principal Accounting Officer)
/s/    DONALD L. WAITE Donald L. Waite	Director
William D. Watkins	Director
/s/    STEPHEN J. LUCZO Stephen J. Luczo, on behalf of Seagate Technology (US) Holdings, Inc.	Seagate Technology (US) Holdings, Inc. (Authorized U.S. Representative)

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the following registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, on the 15th day of May, 2002.

SEAGATE TECHNOLOGY HOLDINGS
By:	/s/    STEPHEN J. LUCZO
	Name:   Stephen J. LUCZO Title:     Chief Executive Officer

POWER OF ATTORNEY

The undersigned do hereby constitute and appoint Stephen J. Luczo, Charles C. Pope and William L. Hudson our true and lawful attorneys and agents, to do any and all acts and things in our name and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated below that said attorneys and agents may deem necessary or advisable to enable Seagate Technology Holdings to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission in connection with this registration statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names in the capacities indicated below any and all amendments (including post-effective amendments) hereto, and we do hereby ratify and confirm all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated below on May 15, 2002.

Signature	Title and Capacity
/s/    STEPHEN J. LUCZO         Stephen J. Luczo	Chief Executive Officer and Director (Principal Executive Officer)
/s/    CHARLES C. POPE         CHARLES C. POPE	Chief Financial Officer (Principal Financial Officer)
/s/    GLEN A. PETERSON         Glen A. Peterson	Treasurer (Principal Accounting Officer)
/s/    DAVID J. ROUX         David J. Roux	Chairman of the Board
/s/    DAVID BONDERMAN         David Bonderman	Director
/s/    JAMES G. COULTER         James G. Coulter	Director
/s/    JAMES A. DAVIDSON         James A. Davidson	Director

II-7

Signature	Title and Capacity
/s/    GLENN H. HUTCHINS Glenn H. Hutchins	Director
/s/    DAVID F. MARQUARDT David F. Marquardt	Director
John W. Thompson	Director
William D. Watkins	Director
/s/    STEPHEN J. LUCZO Stephen J. Luczo, on behalf of Seagate Technology (US) Holdings, Inc.	Seagate Technology (US) Holdings, Inc. (Authorized U.S. Representative)

II-8

EXHIBIT INDEX

Exhibit Number	Description
1.1	Purchase Agreement, dated as of May 3, 2002, by and among Seagate Technology HDD Holdings, Seagate Technology Holdings and Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc. and the other initial purchasers named therein
2.1	Stock Purchase Agreement, dated as of March 29, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc. and Seagate Software Holdings, Inc.
2.2	Agreement and Plan of Merger and Reorganization, dated as of March 29, 2000, by and among VERITAS Software Corporation, Victory Merger Sub, Inc. and Seagate Technology, Inc.
2.3	Indemnification Agreement, dated as of March 29, 2000, by and among VERITAS Software Corporation, Seagate Technology, Inc. and Suez Acquisition Company (Cayman) Limited
2.4	Joinder Agreement to the Indemnification Agreement, dated as of November 22, 2000, by and among VERITAS Software Corporation, Seagate Technology, Inc. and the SAC Indemnitors listed therein
2.5	Consolidated Amendment to Stock Purchase Agreement, Agreement and Plan of Merger and Reorganization, and Indemnification Agreement, and Consent, dated as of August 29, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc., Seagate Software Holdings, Inc., VERITAS Software Corporation and Victory Merger Sub, Inc.
2.6	Consolidated Amendment No. 2 to Stock Purchase Agreement, Agreement and Plan of Merger and Reorganization, and Indemnification Agreement, and Consent, dated as of October 18, 2000, by and among Suez Acquisition Company (Cayman) Limited, Seagate Technology, Inc., Seagate Software Holdings, Inc., VERITAS Software Corporation and Victory Merger Sub, Inc.
2.7	Letter Agreement, dated as of March 29, 2000, by and between VERITAS Software Corporation and Suez Acquisition Company (Cayman) Limited
3.1(a)	Memorandum of Association of Seagate Technology HDD Holdings
3.1(b)	Articles of Association of Seagate Technology HDD Holdings
3.2(a)	Amended and Restated Memorandum of Association of Seagate Technology Holdings
3.2(b)	Amended and Restated Articles of Association of Seagate Technology Holdings
4.1	Form of 8% Senior Notes due 2009 (included in Exhibit 4.2)
4.2	Indenture, dated as of May 13, 2002, by and among Seagate Technology HDD Holdings, Seagate Technology Holdings and U.S. Bank, N.A.
4.3	Registration Rights Agreement, dated as of May 13, 2002, by and among Seagate Technology HDD Holdings, Seagate Technology Holdings, Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc.
5.1	Opinion of Simpson Thacher & Bartlett
10.1	Credit Agreement, dated as of May 13, 2002, by and among Seagate Technology Holdings, Seagate Technology HDD Holdings, Seagate Technology (US) Holdings, Inc., the Lenders party thereto, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Securities Inc., as joint bookrunner and co-lead arranger, Morgan Stanley Senior Funding, Inc., as syndication agent, joint bookrunner and co-lead arranger, Citicorp USA, Inc., as documentation agent, Merrill Lynch Capital Corporation, as documentation agent, and Credit Suisse First Boston, as documentation agent
10.2(a)	Form of Employment Agreement by and between Seagate Technology (US) Holdings, Inc. and the Executive listed therein

Exhibit Number	Description
10.2(b)	Employment Agreement, dated as of February 2, 2001, by and between Seagate Technology (US) Holdings, Inc. and Stephen J. Luczo
10.2(c)	Employment Agreement, dated as of February 2, 2001, by and between Seagate Technology (US) Holdings, Inc. and William D. Watkins
10.3(a)	Form of Management Retention Agreement by and between the Employee listed therein and Seagate Technology, Inc.
10.3(b)	Management Retention Agreement, dated November 1998, by and between Seagate Technology, Inc. and Stephen J. Luczo
10.4	Management Participation Agreement, dated as of March 29, 2000, by and among Seagate Technology, Inc., Suez Acquisition Company (Cayman) Limited and the Senior Managers party thereto
10.5	Form of Rollover Agreement, dated as of November 13, 2000, by and among New SAC, Seagate Technology HDD Holdings and the Senior Manager listed therein
10.6	Seagate Technology HDD Holdings Deferred Compensation Plan
10.7(a)	New SAC 2000 Restricted Share Plan
10.7(b)	Form of New SAC 2000 Restricted Share Agreement
10.8(a)	New SAC 2001 Restricted Share Plan
10.8(b)	Form of New SAC 2001 Restricted Share Agreement (Tier 1 Senior Managers)
10.8(c)	Form of New SAC 2001 Restricted Share Agreement (Other Employees)
10.9	Seagate Technology Holdings 2001 Share Option Plan
10.10	Shareholders Agreement, dated as of November 22, 2000, by and among New SAC, Silver Lake Technology Investors Cayman, L.P., Silver Lake Investors Cayman, L.P., Silver Lake Partners Cayman, L.P., SAC Investments, L.P., August Capital III, L.P., Chase Equity Associates, L.P., GS Capital Partners III, L.P., GS Capital Partners III Offshore, L.P., Goldman, Sachs & Co. Verwaltungs GmbH, Stone Street Fund 2000 L.P., Bridge Street Special Opportunities Fund 2000, L.P., Staenberg Venture Partners II, L.P., Staenberg Seagate Partners, LLC, Integral Capital Partners V, L.P., Integral Capital Partners V Side Fund, L.P. and the individuals listed therein
10.11	Management Shareholders Agreement, dated as of November 22, 2000, by and among New SAC and the Management Shareholders listed therein
10.12	Disc Drive Research and Development Cost Sharing Agreement, dated as of June 29, 1996, by and among Seagate Technology, Inc., Seagate Technology International, Seagate Technology (Ireland), Seagate Technology (Clonmel), Seagate Technology International (Wuxi) Co., Ltd., Seagate Microelectronics Limited and Seagate Peripherals, Inc.
10.13	World-Wide Services Agreement, dated as of July 1, 1993, by and among Seagate Technology, Inc. and Seagate Technology International
10.14	Promissory Note, dated as of May 8, 1998, by and between Seagate Technology, Inc., as lender, and David Wickersham, as borrower
10.15	Promissory Note, dated as of October 10, 2000, by and between Seagate Technology LLC, as lender, and Brian Dexheimer, as borrower
10.16	Promissory Note, dated as of February 16, 2001, by and between Seagate Technology LLC, as lender, and Jeremy Tennenbaum, as borrower
12.1	Statement of Computation of Ratio of Earnings to Fixed Charges

Exhibit Number	Description
21.1	List of Subsidiaries
23.1	Consent of Ernst & Young LLP
23.2	Consent of Simpson Thacher & Bartlett (included in Exhibit 5.1)
24.1	Powers of Attorney (included on signature pages to this registration statement)
25.1	Form of T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank, N.A.
99.1	Form of Letter of Transmittal
99.2	Form of Notice of Guaranteed Delivery

EX-1.1

                                                                     Exhibit 1.1

                                                                  EXECUTION COPY

                                  $400,000,000

                         SEAGATE TECHNOLOGY HDD HOLDINGS

                            8% SENIOR NOTES DUE 2009



                               PURCHASE AGREEMENT

                                   May 3, 2002



                                                                     May 3, 2002


Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Dear Sirs and Mesdames:

     Seagate Technology HDD Holdings, an exempted limited liability company
organized under the laws of the Cayman Islands (the "Company"), proposes to
issue and sell to the several purchasers named in Schedule I hereto (the
"Initial Purchasers") $400,000,000 principal amount of its 8% Senior Notes due
2009 (the "Securities") to be issued pursuant to the provisions of an Indenture
to be dated May 13, 2002 (the "Indenture"), among the Company, Seagate
Technology Holdings, an exempted limited liability company organized under the
laws of the Cayman Islands (the "Parent Guarantor"), and U.S. Bank, N.A., as
Trustee (the "Trustee").

     The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), to qualified
institutional buyers in compliance with the exemption from registration provided
by Rule 144A under the Securities Act and in offshore transactions in reliance
on Regulation S under the Securities Act ("Regulation S").

     The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement to be dated May 13,
2002 among the Parent Guarantor, the Company and the Initial Purchasers (the
"Registration Rights Agreement").

     In connection with the sale of the Securities, the Parent Guarantor and the
Company have prepared a preliminary offering memorandum (the "Preliminary
Memorandum") and a final offering memorandum (together with any amendments or
supplements thereto that are approved by you in accordance with Section 6(b)
hereof, the "Final Memorandum" and, with the Preliminary Memorandum, each a
"Memorandum"), in each case including a description of the terms of the
Securities, the terms of the offering and a description of the business of the
Parent Guarantor, the Company and the Company's subsidiaries (the
"Subsidiaries"). The Parent Guarantor and the Company hereby confirm that they
have authorized the use of the Preliminary Memorandum and the Final Memorandum
in connection with the offering and resale of the Securities by the Initial
Purchasers in accordance with Section 2.

     1. Representations and Warranties. The Parent Guarantor and the Company
represent and warrant to, and agree with, you that:

          (a) (i) The Preliminary Memorandum does not contain and the Final
     Memorandum, as of its date and on the Closing Date (as defined in Section
     4), will not contain any untrue statement of a material fact or omit to
     state a material fact necessary to



                                                                               2

make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in either
Memorandum based upon information relating to any Initial Purchaser furnished to
the Company or its counsel in writing by such Initial Purchaser through you or
your counsel expressly for use therein, and (ii) each Memorandum, as of its date
and on the Closing Date, contained or contains all of the information that, if
requested by a prospective purchaser of the Securities, would be required to be
provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the
Securities Act.

     (b) Each of the Parent Guarantor and the Company has been duly organized,
is validly existing as an exempted limited liability company in good standing
under the laws of the Cayman Islands, has the corporate power and authority to
own its property and to conduct its business as described in each Memorandum and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Parent Guarantor, the Company and the Subsidiaries, taken as a whole.

     (c) Each Subsidiary has been duly organized, is validly existing as a
corporation, limited liability company or other similar entity in good standing
under the laws of the jurisdiction of its organization, has the corporate or
other power and authority to own its property and to conduct its business as
described in each Memorandum and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Parent Guarantor, the Company and the
Subsidiaries, taken as a whole; all of the issued shares of capital stock of
each Subsidiary have been duly and validly authorized and issued, are fully paid
and non-assessable and (except for directors' qualifying shares) are owned
directly by the Company, free and clear of all liens, encumbrances, equities or
claims.

     (d) This Agreement and the Registration Rights Agreement have been duly
authorized, executed and delivered by the Parent Guarantor and the Company and,
assuming due execution and delivery by any Initial Purchaser seeking to enforce
this Agreement or the Registration Rights Agreement (as the case may be), will
constitute the valid and binding obligations of the Parent Guarantor and the
Company, enforceable by such Initial Purchaser against the Parent Guarantor and
the Company in accordance with its terms, subject to the effects of applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights generally and equitable principles of
general applicability (whether considered in a proceeding in equity or at law)
and except to the extent that the indemnification and contribution provisions
hereof and under the Registration Rights Agreement may be unenforceable or may
be limited under applicable law.



                                                                               3

     (e) The Securities have been duly authorized and, when duly executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company, enforceable
against the Company and (with respect to the Guarantee contained in the
Indenture) the Parent Guarantor in accordance with their terms, subject to the
effects of applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
generally and equitable principles of general applicability (whether considered
in a proceeding in equity or at law), and will be entitled to the benefits of
the Indenture and the Registration Rights Agreement.

     (f) The Indenture has been duly authorized and, when duly executed and
delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and binding agreement of the Parent Guarantor and the
Company, enforceable against the Parent Guarantor and the Company in accordance
with its terms, subject to the effects of applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights generally and equitable principles of general applicability
(whether considered in a proceeding in equity or at law).

     (g) The execution and delivery by the Parent Guarantor and the Company of,
and the performance by the Parent Guarantor and the Company of their respective
obligations under, this Agreement, the Indenture, the Registration Rights
Agreement and the Securities, as applicable, will not contravene any provision
of applicable law (except for such contraventions of applicable law that would
not reasonably be expected to have a material adverse effect on the Parent
Guarantor, the Company and the Subsidiaries, taken as a whole, or on the power
or ability of the Parent Guarantor and the Company to perform their respective
obligations under this Agreement, the Indenture, the Registration Rights
Agreement or the Securities, as applicable), or the charter or by-laws of the
Parent Guarantor or the Company or any agreement or other instrument binding
upon the Parent Guarantor, the Company or any of the Subsidiaries that is
material to the Parent Guarantor, the Company and the Subsidiaries, taken as a
whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Parent Guarantor, the Company or any
Subsidiary (except for contraventions of any such judgment, order or decree that
would not reasonably be expected to have a material adverse effect on the Parent
Guarantor, the Company and the Subsidiaries, taken as a whole, or on the power
or ability of the Parent Guarantor and the Company to perform their respective
obligations under this Agreement, the Indenture, the Registration Rights
Agreement or the Securities, as applicable), and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Parent Guarantor and the Company
of their respective obligations under this Agreement, the Indenture, the
Registration Rights Agreement or the Securities, as applicable, except such as
(i) have been obtained prior to the Closing Date, (ii) may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Securities and by Federal and state securities laws with respect
to the Parent Guarantor's and the Company's respective obligations under the
Registration Rights Agreement or (iii) the failure of which to obtain would not
reasonably be expected to have a material adverse effect on the power



                                                                               4

or ability of the Parent Guarantor and the Company to perform their respective
obligations under this Agreement, the Indenture, the Registration Rights
Agreement or the Securities, as applicable, including, but not limited to, the
issuance and sale of the Securities.

     (h) Since the date as of which information is given in the Final
Memorandum, except as otherwise stated therein (i) there has been no material
adverse change or, to the knowledge of the Company or the Parent Guarantor, any
development involving a prospective material adverse change in the financial
condition or in the earnings, business affairs or management of the Parent
Guarantor, the Company and the Subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business, (ii) none of the Parent Guarantor,
the Company or any of the Subsidiaries has incurred any material liability or
obligation, direct or contingent, other than in the ordinary course of business,
and (iii) none of the Parent Guarantor, the Company or any of the Subsidiaries
has entered into any material transaction other than in the ordinary course of
business.

     (i) There are no legal or governmental actions, suits or proceedings
pending or, to the Parent Guarantor's or the Company's knowledge, threatened to
which the Parent Guarantor, the Company or any of the Subsidiaries is a party or
to which any of the properties of the Parent Guarantor, the Company or any of
the Subsidiaries is subject other than proceedings accurately described in all
material respects in the Final Memorandum and proceedings that would not have a
material adverse effect on the Parent Guarantor, the Company and the
Subsidiaries, taken as a whole, or on the power or ability of the Parent
Guarantor and the Company to perform their respective obligations under this
Agreement, the Indenture, the Registration Rights Agreement or the Securities,
as applicable.

     (j) The financial statements (including the summary financial information
of both the Parent Guarantor and the Company and the selected historical
consolidated financial information of both the Parent Guarantor and the Company)
included in each Memorandum present fairly in all material respects the
financial position of the entities purported to be covered as of the dates shown
and their results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis (except, in each case, that the summary and selected historical
consolidated financial information of the Company does not include the notes to
consolidated financial statements that would appear if full financial statements
had been presented for the Company and that interim periods of the Company and
its predecessor have been combined therein into full year and nine-month
periods); and the unaudited pro forma consolidated financial statements comply
as to form in all material respects with the applicable requirements of Rule
11-02 of Regulation S-X.

     (k) The Parent Guarantor, the Company and the Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with



                                                                               5

all terms and conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Parent Guarantor, the Company and the
Subsidiaries, taken as a whole.

     (l) Except as disclosed in the Final Memorandum, there are no costs or
liabilities associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
material adverse effect on the Parent Guarantor, the Company and the
Subsidiaries, taken as a whole.

     (m) Each of the Parent Guarantor and the Company is not, and after giving
effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum will not be, required to
register as an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.

     (n) Neither the Parent Guarantor, the Company nor any affiliate (as defined
in Rule 501(b) of Regulation D under the Securities Act, an "Affiliate") of the
Parent Guarantor or the Company has directly, or through any agent, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act) which is or will be integrated
with the sale of the Securities in a manner that would require the registration
under the Securities Act of the Securities or (ii) offered, solicited offers to
buy or sold the Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act, except that no representation, warranty or agreement is
made by the Parent Guarantor or the Company in this paragraph with respect to
the activities of the Initial Purchasers.

     (o) None of the Parent Guarantor, the Company, any of their respective
Affiliates or any person acting on its or their behalf has engaged or will
engage in any directed selling efforts (within the meaning of Regulation S) with
respect to the Securities and the Parent Guarantor, the Company and their
respective Affiliates and any person acting on its or their behalf have complied
and will comply with the offering restrictions requirement of Regulation S,
except that no representation, warranty or agreement is made by the Parent
Guarantor or the Company in this paragraph with respect to the activities of the
Initial Purchasers.

     (p) Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in Section 7 and their compliance with the
agreements set forth herein, it is not necessary in connection with the offer,
sale and delivery of the Securities to the Initial Purchasers in the manner
contemplated by this Agreement and the Memoranda to register the Securities
under the Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended.



                                                                               6

     (q) The Securities satisfy the eligibility requirements set forth in Rule
144A(d)(3) under the Securities Act.

     (r) Subsequent to the respective dates as of which information is given in
the Final Memorandum, (i) neither the Parent Guarantor nor the Company has
purchased any of its outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends and (ii) there has not been any material change
in the capital stock or long-term debt of the Parent Guarantor, the Company and
the Subsidiaries, except in each case as described in the Final Memorandum.

     (s) The Parent Guarantor, the Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Parent Guarantor, the Company and the Subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are described in the
Final Memorandum, such as do not materially interfere with the use made and
proposed to be made of such property by the Parent Guarantor, the Company and
the Subsidiaries or such as would not reasonably be expected to have a material
adverse effect on the Parent Guarantor, the Company and the Subsidiaries, taken
as a whole; and any real property and buildings held under lease by the Parent
Guarantor, the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Parent Guarantor, the Company and the Subsidiaries, in each
case except as described in the Final Memorandum.

     (t) Except as disclosed in the Final Memorandum, the Parent Guarantor, the
Company and the Subsidiaries own or possess, or can acquire on reasonable terms,
all material patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names and other intellectual property currently employed by them in
connection with the business now operated by them, and none of the Parent
Guarantor, the Company nor, to the knowledge of the Parent Guarantor and the
Company, any of the Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to have a material adverse
affect on the Parent Guarantor, the Company and the Subsidiaries, taken as a
whole.

     (u) No material labor dispute with the employees of the Parent Guarantor,
the Company or any of the Subsidiaries exists, except as described in each
Memorandum, or, to the knowledge of the Parent Guarantor or the Company, is
imminent.

     (v) The Parent Guarantor, the Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; none of


                                                                               7


         the Parent Guarantor, the Company or any of the Subsidiaries has been
         refused any insurance coverage sought or applied for, other than as
         would not reasonably be expected to have a material adverse effect on
         the Parent Guarantor, the Company and the Subsidiaries, taken as a
         whole; and none of the Parent Guarantor, the Company or any of the
         Subsidiaries has any reason to believe that it will not be able to
         renew its existing insurance coverage as and when such coverage
         expires or to obtain similar coverage from similar insurers as may be
         necessary to continue its business at a cost that would not have a
         material adverse effect on the Parent Guarantor, the Company and the
         Subsidiaries, taken as a whole, except as described in the Final
         Memorandum.

              (w) The Parent Guarantor, the Company and the Subsidiaries possess
         all certificates, authorizations and permits issued by the appropriate
         federal, state or foreign regulatory authorities necessary to conduct
         their respective businesses except such as the failure of which to
         obtain would not reasonably be expected to have a material adverse
         effect on the Parent Guarantor, the Company and the Subsidiaries, taken
         as a whole, and none of the Parent Guarantor, the Company nor, to the
         knowledge of the Parent Guarantor and the Company, any of the
         Subsidiaries has received any notice of proceedings relating to the
         revocation or modification of any such certificate, authorization or
         permit which, singly or in the aggregate, if the subject of an
         unfavorable decision, ruling or finding, would have a material adverse
         effect on the Parent Guarantor, the Company and the Subsidiaries, taken
         as a whole, except as described in each Memorandum.

              (x) The Parent Guarantor, the Company and each of the Subsidiaries
         maintain a system of internal accounting controls sufficient to provide
         reasonable assurance that (i) transactions are executed in accordance
         with management's general or specific authorizations, (ii) transactions
         are recorded as necessary to permit preparation of financial statements
         in conformity with generally accepted accounting principles and to
         maintain asset accountability, (iii) access to assets is permitted only
         in accordance with management's general or specific authorization and
         (iv) the recorded accountability for assets is compared with the
         existing assets at reasonable intervals and appropriate action is taken
         with respect to any differences.

              (y) None of the Parent Guarantor, the Company or any of the
         Subsidiaries is a party to any contract, agreement or understanding
         with any person that would give rise to a valid claim against the
         Parent Guarantor, the Company or any of the Subsidiaries or the Initial
         Purchasers for a brokerage commission, finder's fee or like payment in
         connection with the offering and sale of the Securities.

              (z) On the Closing Date, all of the material assets used in the
         rigid disc drive operations of New SAC, an exempted liability company
         organized under the laws of the Cayman Islands that is the indirect
         parent company of the Parent Guarantor and the Company ("New SAC"), and
         its subsidiaries will be held by the Company and the Subsidiaries.

         2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the several Initial Purchasers, and each Initial Purchaser, upon the basis of
the representations and warranties


                                                                               8

herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from the Company the respective principal
amount of Securities set forth in Schedule I hereto opposite its name at a
purchase price of 98.25% of the principal amount thereof (the "Purchase Price").

         3. Terms of Offering. You have advised the Company that the Initial
Purchasers will make an offering of the Securities purchased by the Initial
Purchasers hereunder on the terms to be set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into as in your judgment is
advisable.

         4. Payment and Delivery. Payment for the Securities shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Securities for the respective accounts of the several
Initial Purchasers at 10:00 a.m., New York City time, on May 13, 2002, or at
such other time on the same or such other date as shall be mutually agreed upon
by the Company and you. The time and date of such payment are hereinafter
referred to as the "Closing Date".

         The Securities shall be in definitive form or global form, as specified
by you, and registered in such names and in such denominations as you shall
request in writing not later than one full business day prior to the Closing
Date. The Securities shall be delivered to you on the Closing Date for the
respective accounts of the several Initial Purchasers, with any transfer taxes
payable in connection with the transfer of the Securities to the Initial
Purchasers duly paid, against payment of the Purchase Price therefor plus
accrued interest, if any, to the date of payment and delivery.

         5. Conditions to the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Securities on
the Closing Date are subject to the following conditions:

              (a) Subsequent to the execution and delivery of this Agreement and
     prior to the Closing Date:

                    (i) there shall not have occurred any downgrading, nor shall
              any notice have been given of any intended or potential
              downgrading or of any review for a possible change that does not
              indicate the direction of the possible change, in the rating
              accorded the Parent Guarantor or the Company or any of the Parent
              Guarantor's or the Company's securities by any "nationally
              recognized statistical rating organization", as such term is
              defined for purposes of Rule 436(g)(2) under the Securities Act;
              and

                    (ii) there shall not have occurred any change, or any
              development involving a prospective change, in the financial
              condition, earnings, business or operations of the Parent
              Guarantor, the Company and the Subsidiaries, taken as a whole,
              from that set forth in the Final Memorandum provided to
              prospective purchasers of the Securities that, in your reasonable
              judgment, is material and adverse and


                                                                               9

               that makes it, in your reasonable judgment, impracticable to
               market the Securities on the terms and in the manner contemplated
               in the Final Memorandum.

              (b) The Initial Purchasers shall have received on the Closing Date
     a certificate, dated the Closing Date and signed by an executive officer of
     each of the Parent Guarantor and the Company, to the effect set forth in
     Section 5(a)(i) and to the effect that, to such officer's knowledge after
     due inquiry, the representations and warranties of the Parent Guarantor and
     the Company contained in this Agreement are true and correct in all
     material respects as of the Closing Date and that the Parent Guarantor and
     the Company have complied with all of the agreements and satisfied all of
     the conditions on their respective parts to be performed or satisfied
     hereunder in all material respects on or before the Closing Date.

              (c) The Initial Purchasers shall have received on the Closing Date
     an opinion of Simpson Thacher & Bartlett, outside U.S. counsel for the
     Company, Walkers, outside Cayman Islands counsel for the Company, and
     William Hudson, General Counsel of the Company, in each case dated the
     Closing Date, to the effect set forth in Exhibits A, B and C, respectively.
     Such opinions shall be rendered to the Initial Purchasers at the request of
     the Company.

              (d) The Initial Purchasers shall have received on the Closing Date
     an opinion of Cravath, Swaine & Moore, counsel for the Initial Purchasers,
     dated the Closing Date, to the effect set forth in Exhibit D.

              (e) The Initial Purchasers shall have received from the Company on
     each of the date hereof and the Closing Date a letter addressed to the
     Initial Purchasers, dated the date hereof or the Closing Date, as the case
     may be, in form and substance satisfactory to the Initial Purchasers, from
     Ernst & Young LLP, independent public accountants, containing statements
     and information of the type ordinarily included in accountants' "comfort
     letters" to underwriters with respect to the financial statements and
     certain financial information contained in the Final Memorandum; provided
     that the letter delivered on the Closing Date shall use a "cut-off date"
     not earlier than May 2, 2002.

              (f) The Initial Purchasers shall have received a counterpart of
     the Registration Rights Agreement which shall have been executed and
     delivered by a duly authorized officer of the Parent Guarantor and the
     Company.

              (g) The Indenture shall have been duly executed and delivered by
     the Parent Guarantor, the Company and the Trustee, and the Securities shall
     have been duly executed and delivered by the Company and duly authenticated
     by the Trustee.

              (h) The Securities shall have been approved by the National
     Association of Securities Dealers, Inc. ("NASD") for trading in the PORTAL
     Market.

              (i) Seagate Technology International, an exempted limited
     liability company organized under the laws of the Cayman Islands that is a
     direct wholly owned subsidiary of


                                                                              10

     the Company ("STI"), shall have irrevocably accepted for purchase not less
     than a majority in principal amount of its outstanding 12-1/2% Senior
     Subordinated Notes due 2007 in the debt tender offer commenced by STI on
     April 15, 2002.

              (j) STI and Seagate Technology (U.S.) Holdings, Inc., a Delaware
     corporation that is a direct wholly owned subsidiary of the Company
     ("STUSH"), shall have repaid in full all amounts outstanding under the
     credit agreement dated as of November 22, 2000, among STI, STUSH, New SAC
     and the lenders and agents party thereto, and such credit agreement, all
     other documentation evidencing any indebtedness under such credit agreement
     and any related guarantee and collateral documents shall have been
     terminated.

              (k) The Company and STUSH shall have received not less than
     $350,000,000 in aggregate in gross proceeds from term loan borrowings under
     a credit agreement to be entered into as of the Closing Date among the
     Company and STUSH, each as a borrower, JPMorgan Chase Bank, as
     administrative agent, J.P. Morgan Securities Inc. and Morgan Stanley Senior
     Funding, Inc., as joint book managers and co-lead arrangers, Morgan Stanley
     Senior Funding, Inc., as syndication agent, and Citicorp USA, Inc., Credit
     Suisse First Boston and Merrill Lynch Capital Corporation, as
     co-documentation agents.

         6. Covenants of the Parent Guarantor and the Company. In further
consideration of the agreements of the Initial Purchasers contained in this
Agreement, the Parent Guarantor and the Company each covenant with each Initial
Purchaser as follows:

              (a) To furnish to you in New York City, without charge, as
     promptly as practicable following the date of this Agreement and during the
     period mentioned in Section 6(c), as many copies of the Final Memorandum
     and any supplements and amendments thereto as you may reasonably request.

              (b) Before amending or supplementing the Final Memorandum, to
     furnish to you a copy of each such proposed amendment or supplement and not
     to use any such proposed amendment or supplement to which you reasonably
     object.

              (c) If, during such period after the date hereof and prior to the
     date on which all of the Securities shall have been sold by the Initial
     Purchasers, any event shall occur or condition exist as a result of which
     it is necessary to amend or supplement the Final Memorandum in order to
     make the statements therein, in the light of the circumstances under which
     they were made, not misleading, or if, in the opinion of counsel for the
     Initial Purchasers, it is necessary to amend or supplement the Final
     Memorandum to comply with applicable law, forthwith to prepare and furnish,
     at its own expense, to the Initial Purchasers, either amendments or
     supplements to the Final Memorandum so that the statements in the Final
     Memorandum as so amended or supplemented will not, in the light of the
     circumstances under which they were made, be misleading or so that the
     Final Memorandum, as amended or supplemented, will comply with applicable
     law; to advise the Initial Purchasers promptly of any order preventing or
     suspending the use of the Preliminary Memorandum or the Final Memorandum,
     of any suspension of the qualification of the Securities for offering or
     sale in any jurisdiction and of the initiation or


                                                                              11

     threatening of any proceeding for any such purpose; and to use their
     reasonable best efforts to prevent the issuance of any such order
     preventing or suspending the use of the Preliminary Memorandum or the Final
     Memorandum or suspending any such qualification and, if any such suspension
     is issued, to use their reasonable best efforts to obtain the lifting
     thereof at the earliest possible time.

              (d) To endeavor to qualify the Securities for offer and sale under
     the securities or Blue Sky laws of such jurisdictions as you shall
     reasonably request.

              (e) Whether or not the transactions contemplated in this Agreement
     are consummated or this Agreement is terminated, to pay or cause to be paid
     all expenses incident to the performance of its obligations under this
     Agreement, including: (i) the fees, disbursements and expenses of the
     Parent Guarantor's and the Company's counsel and the Parent Guarantor's and
     the Company's accountants in connection with the issuance and sale of the
     Securities and all other fees or expenses in connection with the
     preparation of each Memorandum and all amendments and supplements thereto,
     including all printing costs associated therewith, and the delivering of
     copies thereof to the Initial Purchasers, in the quantities herein above
     specified, (ii) all costs and expenses related to the transfer and delivery
     of the Securities to the Initial Purchasers, including any transfer or
     other taxes payable thereon, (iii) the cost of printing or producing any
     Blue Sky or legal investment memorandum in connection with the offer and
     sale of the Securities under state securities laws and all expenses in
     connection with the qualification of the Securities for offer and sale
     under state securities laws as provided in Section 6(d) hereof, including
     filing fees and the reasonable fees and disbursements of counsel for the
     Initial Purchasers in connection with such qualification and in connection
     with the Blue Sky or legal investment memorandum, provided that such fees
     and disbursement shall not exceed $10,000 in the aggregate, (iv) any fees
     charged by rating agencies for the rating of the Securities, (v) the fees
     and expenses, if any, incurred in connection with the admission of the
     Securities for trading in PORTAL or any appropriate market system, (vi) the
     costs and charges of the Trustee and any transfer agent, registrar or
     depositary, (vii) the cost of the preparation, issuance and delivery of the
     Securities, (viii) the costs and expenses of the Company relating to
     investor presentations on any "road show" undertaken in connection with the
     marketing of the offering of the Securities, including, without limitation,
     expenses associated with the production of road show slides and graphics,
     fees and expenses of any consultants engaged in connection with the road
     show presentations with the prior approval of the Company, travel and
     lodging expenses of the representatives and officers of the Parent
     Guarantor and the Company and any such consultants, and the cost of any
     aircraft chartered in connection with the road show with the prior written
     approval of the Company, and (ix) all other costs and expenses incident to
     the performance of the obligations of the Parent Guarantor and the Company
     hereunder for which provision is not otherwise made in this Section. It is
     understood, however, that except as provided in this Section, Section 8,
     and the last paragraph of Section 10, the Initial Purchasers will pay all
     of their costs and expenses, including fees and disbursements of their
     counsel, road show expenses (including travel and lodging), transfer taxes
     payable on resale of any of the Securities by them and any advertising
     expenses connected with any offers they may make.


                                                                              12

              (f) Not to, and not to permit its Affiliates to, sell, offer for
     sale or solicit offers to buy or otherwise negotiate in respect of any
     security (as defined in the Securities Act) which could be integrated with
     the sale of the Securities in a manner which would require the registration
     under the Securities Act of the Securities.

              (g) Not to solicit any offer to buy or offer or sell the
     Securities by means of any form of general solicitation or general
     advertising (as those terms are used in Regulation D under the Securities
     Act) or in any manner involving a public offering within the meaning of
     Section 4(2) of the Securities Act.

              (h) While any of the Securities remain "restricted securities"
     within the meaning of the Securities Act, to make available, upon request,
     to any seller of such Securities the information specified in Rule
     144A(d)(4) under the Securities Act, unless the Parent Guarantor or the
     Company is then subject to Section 13 or 15(d) of the Exchange Act.

              (i) If requested by you, to use its reasonable best efforts to
     permit the Securities to be designated PORTAL securities in accordance with
     the rules and regulations adopted by the NASD relating to trading in the
     PORTAL Market.

              (j) Not to, and not to permit its Affiliates or any person acting
     on its or their behalf (other than the Initial Purchasers) to, engage in
     any directed selling efforts (as that term is defined in Regulation S) with
     respect to the Securities, and to comply, and to direct its Affiliates and
     each person acting on its or their behalf (other than the Initial
     Purchasers) to comply, with the offering restrictions requirement of
     Regulation S.

              (k) During the period of two years after the Closing Date, not to,
     and not to permit any of its affiliates (as defined in Rule 144 under the
     Securities Act) to, resell any of the Securities which constitute
     "restricted securities" under Rule 144 that have been reacquired by any of
     them, except for Securities purchased by the Company or any of its
     affiliates and resold in a transaction registered under the Securities Act.

              (l) Not to take any action that would cause Regulation M under the
     Exchange Act to apply in connection with the distribution of the Securities
     contemplated hereby.

              (m) To apply the net proceeds of the sale of Securities as set
     forth in the Final Memorandum under "Use of Proceeds".

              (n) For a period of 90 days from the date of the Final Memorandum
     and except as contemplated by the Registration Rights Agreement, not to
     offer for sale, sell, contract to sell or otherwise dispose of, directly or
     indirectly, or file a registration statement for, or announce any offer,
     sale, contract for sale of or other disposition of any debt securities
     issued or guaranteed by the Parent Guarantor, the Company or any of the
     Subsidiaries (other than the Securities) without your prior written
     consent.

              (o) In connection with the offering of the Securities, to make its
     officers, employees, independent accountants and legal counsel reasonably
     available upon request by the Initial Purchasers.


                                                                        13

         7. Offering of Securities; Restrictions on Transfer.

              (a) Each Initial Purchaser, severally and not jointly, represents
     and warrants that such Initial Purchaser is a qualified institutional buyer
     as defined in Rule 144A under the Securities Act (a "QIB"). Each Initial
     Purchaser, severally and not jointly, agrees with the Company that (i) it
     will not solicit offers for, or offer or sell, such Securities by any form
     of general solicitation or general advertising (as those terms are used in
     Regulation D under the Securities Act) or in any manner involving a public
     offering within the meaning of Section 4(2) of the Securities Act and (ii)
     it will solicit offers for such Securities only from, and will offer such
     Securities only to, persons that it reasonably believes to be (A) in the
     case of offers inside the United States, QIBs and (B) in the case of offers
     outside the United States, to persons other than U.S. persons ("foreign
     purchasers", which term shall include dealers or other professional
     fiduciaries in the United States acting on a discretionary basis for
     foreign beneficial owners (other than an estate or trust)) in reliance upon
     Regulation S under the Securities Act that, in each case, in purchasing
     such Securities are deemed to have represented and agreed as provided in
     the Final Memorandum under the caption "Transfer Restrictions".

              (b) Each Initial Purchaser, severally and not jointly, represents,
     warrants, and agrees with respect to offers and sales outside the United
     States that:

                    (i) such Initial Purchaser understands that no action has
              been or will be taken in any jurisdiction by the Company that
              would permit a public offering of the Securities, or possession or
              distribution of either Memorandum or any other offering or
              publicity material relating to the Securities, in any country or
              jurisdiction where action for that purpose is required;

                    (ii) such Initial Purchaser will comply with all applicable
              laws and regulations in each jurisdiction in which it acquires,
              offers, sells or delivers Securities or has in its possession or
              distributes either Memorandum or any such other material, in all
              cases at its own expense;

                    (iii) the Securities have not been registered under the
              Securities Act and may not be offered or sold within the United
              States or to, or for the account or benefit of, U.S. persons
              except in accordance with Rule 144A or Regulation S under the
              Securities Act or pursuant to another exemption from the
              registration requirements of the Securities Act;

                    (iv) such Initial Purchaser has offered the Securities and
              will offer and sell the Securities (A) as part of their
              distribution at any time and (B) otherwise until 40 days after the
              later of the commencement of the offering and the Closing Date,
              only in accordance with Rule 903 of Regulation S or as otherwise
              permitted in Section 7(a); accordingly, neither such Initial
              Purchaser, its Affiliates nor any persons acting on its or their
              behalf have engaged or will engage in any directed selling efforts
              (within the meaning of Regulation S) with respect to the
              Securities,


                                                                        14

              and any such Initial Purchaser, its Affiliates and any such
              persons have complied and will comply with the offering
              restrictions requirement of Regulation S;

                    (v) such Initial Purchaser (A) has not offered or sold and,
              prior to the date six months after the Closing Date, will not
              offer or sell any Securities to persons in the United Kingdom
              except to persons whose ordinary activities involve them in
              acquiring, holding, managing or disposing of investments (as
              principal or agent) for the purposes of their businesses or
              otherwise in circumstances which have not resulted and will not
              result in an offer to the public in the United Kingdom within the
              meaning of the Public Offers of Securities Regulations 1995; (B)
              has complied and will comply with all applicable provisions of the
              Financial Services and Markets Act 2000 (the "FSMA") with respect
              to anything done by it in relation to the Securities in, from or
              otherwise involving the United Kingdom, and (C) will only
              communicate or cause to be communicated any invitation or
              inducement to engage in investment activity (within the meaning of
              section 21 of the FSMA) received by it in connection with the
              issue or sale of the Securities in circumstances in which section
              21(1) of the FSMA does not apply to the Company;

                    (vi) such Initial Purchaser understands that the Securities
              have not been and will not be registered under the Securities and
              Exchange Law of Japan, and represents that it has not offered or
              sold, and agrees not to offer or sell, directly or indirectly, any
              Securities in Japan or for the account of any resident thereof
              except pursuant to any exemption from the registration
              requirements of the Securities and Exchange Law of Japan and
              otherwise in compliance with applicable provisions of Japanese
              law; and

                    (vii) such Initial Purchaser agrees that, at or prior to
              confirmation of sales of the Securities, it will have sent to each
              distributor, dealer or person receiving a selling concession, fee
              or other remuneration that purchases Securities from it during the
              restricted period a confirmation or notice to substantially the
              following effect:

                    "The Securities covered hereby have not been registered
                    under the U.S. Securities Act of 1933 (the "Securities Act")
                    and may not be offered and sold within the United States or
                    to, or for the account or benefit of, U.S. persons (i) as
                    part of their distribution at any time or (ii) otherwise
                    until 40 days after the later of the commencement of the
                    offering and the date of original issuance of the
                    Securities, except in either case in accordance with
                    Regulation S (or Rule 144A if available) under the
                    Securities Act. Terms used above have the meaning given to
                    them by Regulation S".

         Terms used in this Section 7(b) have the meanings given to them by
Regulation S.

              (c) Each Initial Purchaser has not and, severally and not jointly,
     agrees that it will not enter into any contractual arrangement with any
     distributor with respect to the


                                                                        15

     distribution of the Securities, except with its affiliates or with the
     prior written consent of the Company.

              (d) Each Initial Purchaser, severally and not jointly, agrees
     that, prior to or simultaneously with the confirmation of sale by such
     Initial Purchaser to any purchaser of any of the Securities purchased by
     such Initial Purchaser from the Company pursuant hereto, such Initial
     Purchaser shall furnish to that purchaser a copy of the Final Memorandum
     (and any amendment or supplement thereto that the Company shall have
     furnished to such Initial Purchaser prior to the date of such confirmation
     of sale). In addition to the foregoing, each Initial Purchaser acknowledges
     and agrees that the Company and, for purposes of the opinions to be
     delivered to the Initial Purchasers pursuant to Sections 5(c) and (d),
     counsel for the Company and for the Initial Purchasers, respectively, may
     rely upon the accuracy of the representations and warranties of the Initial
     Purchasers and their compliance with their agreements contained in this
     Section 7, and each Initial Purchaser hereby consents to such reliance.

      8. Indemnity and Contribution.

              (a) The Parent Guarantor and the Company shall jointly and
     severally indemnify and hold harmless each Initial Purchaser and each
     person, if any, who controls any Initial Purchaser within the meaning of
     either Section 15 of the Securities Act or Section 20 of the Exchange Act
     from and against any and all losses, claims, damages and liabilities
     (including, without limitation, any legal or other expenses reasonably
     incurred in connection with defending or investigating any such action or
     claim) caused by any untrue statement or alleged untrue statement of a
     material fact contained in either Memorandum (as amended or supplemented if
     the Parent Guarantor or the Company shall have furnished any amendments or
     supplements thereto), or caused by any omission or alleged omission to
     state therein a material fact necessary to make the statements therein in
     the light of the circumstances under which they were made not misleading;
     provided, insofar as such losses, claims, damages or liabilities are caused
     by any such untrue statement or omission or alleged untrue statement or
     omission based upon information relating to any Initial Purchaser furnished
     to the Parent Guarantor or the Company in writing by such Initial Purchaser
     through you or your counsel expressly for use therein; provided further,
     that, with respect to any such untrue statement in or omission from the
     Preliminary Memorandum, the indemnity agreement contained in this Section
     8(a) shall not inure to the benefit of any such Initial Purchaser that sold
     the Securities to the person asserting any such loss, claim, damage,
     liability or action to the extent that such sale was an initial resale by
     such Initial Purchaser and any such loss, claim, damage, liability or
     action of or with respect to such Initial Purchaser results from the fact
     that both (A) a copy of the Final Memorandum was not sent or given to such
     person at or prior to the written confirmation of the sale of such
     Securities to such person and (B) the untrue statement in or omission from
     the Preliminary Memorandum was corrected in the Final Memorandum, as the
     same may be amended, unless, in either case, such failure to deliver the
     Final Memorandum was a result of non-compliance of the Parent Guarantor or
     the Company with Section 6(a).


                                                                        16



              (b) Each Initial Purchaser agrees, severally and not jointly, to
     indemnify and hold harmless each of the Parent Guarantor and the Company,
     its directors, its officers and each person, if any, who controls the
     Company within the meaning of either Section 15 of the Securities Act or
     Section 20 of the Exchange Act to the same extent as the foregoing
     indemnity from the Parent Guarantor and the Company to such Initial
     Purchaser, but only with reference to information relating to such Initial
     Purchaser furnished to the Parent Guarantor or the Company in writing by
     such Initial Purchaser through you or your counsel expressly for use in
     either Memorandum or any amendments or supplements thereto.

              (c) In case any proceeding (including any governmental
     investigation) shall be instituted involving any person in respect of which
     indemnity may be sought pursuant to Section 8(a) or 8(b), such person (the
     "indemnified party") shall promptly notify the person against whom such
     indemnity may be sought (the "indemnifying party") in writing and the
     indemnifying party, upon request of the indemnified party, shall retain
     counsel reasonably satisfactory to the indemnified party to represent the
     indemnified party and any others the indemnifying party may designate in
     such proceeding and shall pay the reasonable fees and disbursements of such
     counsel related to such proceeding. In any such proceeding, any indemnified
     party shall have the right to retain its own counsel, but the fees and
     expenses of such counsel shall be at the expense of such indemnified party
     unless (i) the indemnifying party and the indemnified party shall have
     mutually agreed to the retention of such counsel or (ii) the named parties
     to any such proceeding (including any impleaded parties) include both the
     indemnifying party and the indemnified party and representation of both
     parties by the same counsel would be inappropriate due to an actual or
     potential conflict (based upon advise of outside counsel to the indemnified
     party). It is understood that the indemnifying party shall not, in respect
     of the legal expenses of any indemnified party in connection with any
     proceeding or related proceedings in the same jurisdiction, be liable for
     the fees and expenses of more than one separate firm (in addition to any
     local counsel) for all such indemnified parties and that all such fees and
     expenses shall be reimbursed promptly after they are billed. Such firm
     shall be designated in writing by Morgan Stanley & Co. Incorporated, in the
     case of parties indemnified pursuant to Section 8(a), and by the Company,
     in the case of parties indemnified pursuant to Section 8(b). The
     indemnifying party shall not be liable for any settlement of any proceeding
     effected without its written consent, but if settled with such consent or
     if there be a final judgment for the plaintiff, the indemnifying party
     agrees to indemnify the indemnified party from and against any loss or
     liability by reason of such settlement or judgment. No indemnifying party
     shall, without the prior written consent of the indemnified party, effect
     any settlement of any pending or threatened proceeding in respect of which
     any indemnified party is or could have been a party and indemnity could
     have been sought hereunder by such indemnified party, unless such
     settlement includes an unconditional release of such indemnified party from
     all liability on claims that are the subject matter of such proceeding.

               (d) To the extent the indemnification provided for in Section
     8(a) or 8(b) is unavailable to an indemnified party or insufficient in
     respect of any losses, claims, damages or liabilities referred to
     therein, then each indemnifying party under such paragraph, in lieu of
     indemnifying such indemnified party thereunder, shall contribute to


                                                                        17

     the amount paid or payable by such indemnified party as a result of such
     losses, claims, damages or liabilities (i) in such proportion as is
     appropriate to reflect the relative benefits received by the Parent
     Guarantor or the Company on the one hand and the Initial Purchasers on the
     other hand from the offering of the Securities or (ii) if the allocation
     provided by clause 8(d)(i) above is not permitted by applicable law, in
     such proportion as is appropriate to reflect not only the relative benefits
     referred to in clause 8(d)(i) above but also the relative fault of the
     Parent Guarantor or the Company on the one hand and of the Initial
     Purchasers on the other hand in connection with the statements or omissions
     that resulted in such losses, claims, damages or liabilities, as well as
     any other relevant equitable considerations. The relative benefits received
     by the Parent Guarantor or the Company on the one hand and the Initial
     Purchasers on the other hand in connection with the offering of the
     Securities shall be deemed to be in the same respective proportions as the
     net proceeds from the offering of the Securities (before deducting
     expenses) received by the Parent Guarantor or the Company and the total
     discounts and commissions received by the Initial Purchasers, bear to the
     aggregate offering price of the Securities. The relative fault of the
     Parent Guarantor or the Company on the one hand and of the Initial
     Purchasers on the other hand shall be determined by reference to, among
     other things, whether the untrue or alleged untrue statement of a material
     fact or the omission or alleged omission to state a material fact relates
     to information supplied by the Parent Guarantor or the Company, on the one
     hand, or by the Initial Purchasers, on the other hand, and the parties'
     relative intent, knowledge, access to information and opportunity to
     correct or prevent such statement or omission. The Initial Purchasers'
     respective obligations to contribute pursuant to this Section 8 are several
     in proportion to the respective principal amount of Securities they have
     purchased hereunder, and not joint.

              (e) The Parent Guarantor, the Company and the Initial Purchasers
     agree that it would not be just or equitable if contribution pursuant to
     this Section 8 were determined by pro rata allocation (even if the Initial
     Purchasers were treated as one entity for such purpose) or by any other
     method of allocation that does not take account of the equitable
     considerations referred to in Section 8(d). The amount paid or payable by
     an indemnified party as a result of the losses, claims, damages and
     liabilities referred to in Section 8(d) shall be deemed to include, subject
     to the limitations set forth above, any legal or other expenses reasonably
     incurred by such indemnified party in connection with investigating or
     defending any such action or claim. Notwithstanding the provisions of this
     Section 8, no Initial Purchaser shall be required to contribute any amount
     in excess of the amount by which the total price at which the Securities
     resold by it in the initial placement of such Securities were offered to
     investors exceeds the amount of any damages that such Initial Purchaser has
     otherwise been required to pay by reason of such untrue or alleged untrue
     statement or omission or alleged omission. No person guilty of fraudulent
     misrepresentation (within the meaning of Section 11(f) of the Securities
     Act) shall be entitled to contribution from any person who was not guilty
     of such fraudulent misrepresentation. The remedies provided for in this
     Section 8 are not exclusive and shall not limit any rights or remedies
     which may otherwise be available to any indemnified party at law or in
     equity.


                                                                        18


          (f) The indemnity and contribution provisions contained in this
     Section 8 and the representations, warranties and other statements of the
     Parent Guarantor and the Company contained in this Agreement shall remain
     operative and in full force and effect regardless of (i) any termination of
     this Agreement, (ii) any investigation made by or on behalf of any Initial
     Purchaser or any person controlling any Initial Purchaser or any affiliate
     of any Initial Purchaser or by or on behalf of the Parent Guarantor, the
     Company, their respective officers or directors or any person controlling
     the Parent Guarantor or the Company and (iii) acceptance of and payment for
     any of the Securities.

     9. Termination. The Initial Purchasers may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your reasonable
judgment, is material and adverse and which, singly or together with any other
event specified in this clause (v), makes it, in your reasonable judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Securities on the terms and in the manner contemplated in the Final Memorandum.

     10. Effectiveness; Defaulting Initial Purchasers. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.

     If, on the Closing Date, any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase is not more than one-tenth of the aggregate principal amount
of Securities to be purchased on such date, the other Initial Purchasers shall
be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Initial Purchasers, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase on such date;
provided that in no event shall the principal amount of Securities that any
Initial Purchaser has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such
principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Securities
with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of Securities to be purchased on such date,


                                                                        19


and arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or of the Company. In any such case either you or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Final Memorandum or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Initial Purchaser from liability in
respect of any default of such Initial Purchaser under this Agreement.

         If this Agreement shall be terminated by the Initial Purchasers, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Parent Guarantor and the Company shall be unable to perform their
respective obligations under this Agreement, the Parent Guarantor and the
Company will reimburse the Initial Purchasers or such Initial Purchasers as have
so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the reasonable fees and disbursements of their
counsel) reasonably incurred by such Initial Purchasers in connection with this
Agreement or the offering contemplated hereunder.

         11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.

         13. Consent to Jurisdiction; Appointment of Agent for Service of
Process; Judgment Currency.

              (a) The Parent Guarantor and the Company each agree that any suit,
         action or proceeding against the Parent Guarantor or the Company
         arising out of or relating to this Agreement may be instituted in any
         state or U.S. Federal court in the Borough of Manhattan, The City of
         New York, New York, and any appellate court from any thereof, and each
         of them irrevocably submits to the non-exclusive jurisdiction of such
         courts in any suit, action or proceeding. The Parent Guarantor and the
         Company each irrevocably waives, to the fullest extent permitted by
         law, any objection to any suit, action or proceeding that may be
         brought in connection with this Agreement, including such actions,
         suits or proceedings relating to securities laws of the United States
         of America or any state thereof, in such courts whether on the grounds
         of venue, residence or domicile or on the ground that any such suit,
         action or proceeding has been brought in an inconvenient forum. The
         Parent Guarantor and the Company each agree that final judgment in any
         such suit, action or proceeding brought in such court shall be
         conclusive and binding upon the Parent Guarantor or the Company, as the
         case may be, and may be enforced in any court to the jurisdiction of
         which the Parent Guarantor or the Company, as the case may be, is
         subject by a suit upon such judgment; provided that service of process
         is affected upon the Parent Guarantor or the Company, as the case may
         be, in the manner provided by this Section 13.



                                                                              20

              (b) The Parent Guarantor and the Company each have appointed CT
          Corporation System, with offices on the date hereof at 818 West
          Seventh Street, Suite 200, Los Angeles, California 90017, as its
          authorized agent (the "Authorized Agent"), upon whom process may be
          served in any suit, action or proceeding arising out of or relating to
          this Agreement or the transactions contemplated herein which may be
          instituted in any state or U.S. Federal court in the Borough of
          Manhattan, The City of New York, New York, and each expressly accepts
          the non-exclusive jurisdiction of any such court in respect of any
          such suit, action or proceeding. The Parent Guarantor and the Company
          hereby represent and warrant that the Authorized Agent has accepted
          such appointment and has agreed to act as said agent for service of
          process, and the Parent Guarantor and the Company agree to take any
          and all action, including the filing of any and all documents that may
          be necessary to continue such respective appointment in full force and
          effect for a period of seven years from the date of this Agreement.
          Service of process upon the Authorized Agent shall be deemed, in every
          respect, effective service of process upon the Parent Guarantor and
          the Company. Notwithstanding the foregoing, any action involving the
          Parent Guarantor or the Company arising out of or relating to this
          Agreement may be instituted in any court of competent jurisdiction in
          any other jurisdiction.

              (c) Any action, suit or proceeding brought by the Parent Guarantor
          or the Company against any Initial Purchaser arising out of or based
          upon this Agreement and the transactions contemplated herein shall be
          brought solely in a U.S. Federal or state court in the Borough of
          Manhattan, The City of New York, New York, and neither the Parent
          Guarantor nor the Company shall initiate or seek to initiate, in the
          Cayman Islands or any other jurisdiction other than in such New York
          courts, any action, suit or proceeding against any Initial Purchaser
          arising out of or based upon this Agreement and the transactions
          contemplated herein. The foregoing shall apply, without limitation, to
          any action seeking to obtain any injunction or declaratory judgment
          against the enforcement of, or a declaratory judgment concerning, any
          claim by any Initial Purchaser in respect of this Agreement and any
          transaction contemplated herein, and any action challenging the
          enforceability of or seeking to invalidate in any respect the
          submission by the Parent Guarantor or the Company hereunder to the
          jurisdiction of such New York courts or the designation, pursuant to
          this Section 13, of the laws of the State of New York as the law
          applicable to this Agreement.

              (d) The provisions of this Section 13 shall survive any
          termination or cancellation of this Agreement.

          14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:

              (a) if to the Parent Guarantor or to the Company, shall be
          delivered or sent by mail or telecopy transmission to 920 Disc Drive,
          Scotts Valley, California 95066, Attention: William L. Hudson, Senior
          Vice President, General Counsel and Secretary (Facsimile: (831)
          438-6675) and Glen A. Peterson, Vice President, Corporate Finance and
          Treasurer (Facsimile: (831) 438-8931); with a copy to Simpson Thacher
          & Bartlett, 3330


                                                                        21


     Hillview Avenue, Palo Alto, California 94304, Attention: William H. Hinman,
     Jr. (Facsimile: (650) 251-5002); or


              (b) if to the Initial Purchasers, shall be delivered or sent by
     mail or telecopy transmission to Morgan Stanley & Co. Incorporated, 1585
     Broadway, New York, New York 10036, Attention: Kathryn Walsh (Facsimile:
     (212) 507-0462) and J.P. Morgan Securities Inc., 270 Park Avenue, New York,
     New York 10017, Attention: Benjamin Ben-Attar (Facsimile: (212) 270-3603);
     with copies to Morgan Stanley & Co. Incorporated, 2725 Sand Hill Road,
     Menlo Park, California 94125, Attention: William Salisbury (Facsimile:
     (650) 234-5605) and Cravath, Swaine & Moore, 825 Eighth Avenue, New York,
     New York 10019, Attention: Kris F. Heinzelman (Facsimile: (212) 474-3700).

     Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof. The Company shall be entitled to act and rely upon
any request, consent, notice or agreement given or made on behalf of the
Initial Purchasers by Morgan Stanley & Co. Incorporated or J.P. Morgan
Securities Inc.


                                                                        22


         15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.

                                         Very truly yours,

                                         SEAGATE TECHNOLOGY HDD HOLDINGS



                                         By: /s/ William L. Hudson
                                             -----------------------------------
                                             Name: William L. Hudson
                                             Title: Secretary

                                         SEAGATE TECHNOLOGY HOLDINGS

                                         By: /s/ William L. Hudson
                                             -----------------------------------
                                             Name: William L. Hudson
                                             Title: Secretary

Accepted as of the date hereof

Morgan Stanley & Co. Incorporated
and J.P. Morgan Securities Inc.

Acting severally on behalf of themselves and
   the several Initial Purchasers
   named in Schedule I hereto.

By:  Morgan Stanley & Co. Incorporated


By:   /s/ David Schwarzbach
      -----------------------------------
      Name: David Schwarzbach
      Title: Vice President

By:  J.P. Morgan Securities Inc.



By:   /s/ Benjamin Ben-Attar
      -----------------------------------
      Name: Benjamin Ben-Attar
      Title: Vice President




                                                                              23


                                   SCHEDULE I



             Initial Purchaser                              Principal Amount of Securities
                                                                  to be Purchased

                                                         
Morgan Stanley & Co. Incorporated ......................           $140,000,000
J.P. Morgan Securities Inc..............................           $140,000,000
Credit Suisse First Boston Corporation..................           $ 40,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated......           $ 40,000,000
Salomon Smith Barney Inc................................           $ 40,000,000
                                                            --------------------------
    Total:                                                         $400,000,000

EX-2.1

                                                                     EXHIBIT 2.1

                                                                  EXECUTION COPY

                            STOCK PURCHASE AGREEMENT

                                  BY AND AMONG

                   SUEZ ACQUISITION COMPANY (CAYMAN) LIMITED,
                            SEAGATE TECHNOLOGY, INC.,

                                       AND

                         SEAGATE SOFTWARE HOLDINGS, INC.

                           DATED AS OF MARCH 29, 2000



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
STOCK PURCHASE AGREEMENT .................................................     1
ARTICLE I  DEFINITIONS ...................................................     1
  1.1    Certain Defined Terms ...........................................     1
ARTICLE II  PURCHASE AND SALE ............................................     5
  2.1    Purchase and Sale of the Shares .................................     5
  2.2    Purchase Price; Allocation of Purchase Price ....................     5
  2.3    Closing .........................................................     5
  2.4    Closing Deliveries by Seller and SSHI ...........................     6
  2.5    Closing Deliveries by Purchaser .................................     6
  2.6    Adjustment of Required Cash .....................................     6
  2.7    Transaction Structure ...........................................     7
ARTICLE III  REPRESENTATIONS AND WARRANTIES OF SELLER ....................     8
  3.1    Organization; Good Standing .....................................     8
  3.2    Charter Documents ...............................................     8
  3.3    Subsidiaries ....................................................     8
  3.4    Capital Structure ...............................................     8
  3.5    Authority .......................................................     9
  3.6    Conflicts .......................................................     9
  3.7    Consents ........................................................    10
  3.8    SEC Filings; Seller Financial Statements ........................    10
  3.9    [Reserved] ......................................................    11
  3.10   Absence of Certain Changes or Events ............................    11
  3.11   Tax Matters .....................................................    11
  3.12   Compliance ......................................................    13
  3.13   Permits .........................................................    13
  3.14   Litigation ......................................................    13
  3.15   Brokers' and Finders' Fees ......................................    13
  3.16   Employee Benefit Plans ..........................................    13
  3.17   Absence of Liens ................................................    15
  3.18   Environmental Matters ...........................................    15
  3.19   Labor Matters ...................................................    17
  3.20   Agreements, Contracts and Commitments ...........................    17
         Statements; Registration Statement; Proxy
  3.21   Statement/Prospectus ............................................    17
  3.22   Board Approval ..................................................    18
  3.23   State Takeover Statutes .........................................    18
  3.24   Fairness Opinion ................................................    18
  3.25   Intellectual Property ...........................................    18
  3.26   Assets ..........................................................    19
  3.27   Insurance .......................................................    19
ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF PURCHASER ..................    19
  4.1    Organization; Good Standing .....................................    19
  4.2    Charter Documents ...............................................    20
  4.3    Authority .......................................................    20
  4.4    Conflicts .......................................................    20
  4.5    Consents ........................................................    20


                                       i







                                                                            PAGE
                                                                            ----
                                                                         
  4.6    Litigation ......................................................    21
  4.7    Statements; Registration Statement; Proxy Statement .............    21
  4.8    Financing .......................................................    21
  4.9    Delaware Law ....................................................    21
  4.10   Newly Organized .................................................    21
  4.11   Related Agreements ..............................................    21
  4.12   Solvency ........................................................    21
  4.13   No Amendment to VERITAS Merger Agreement ........................    22
ARTICLE V CONDUCT PRIOR TO CLOSING .......................................    22
  5.1    Conduct of Business .............................................    22
  5.2    Restrictions on Conduct of Business .............................    22
ARTICLE VI  ADDITIONAL AGREEMENTS ........................................    25
  6.1    Registration Statement; Proxy Statement; Other Filings ..........    25
  6.2    Meeting of Seller Stockholders ..................................    26
  6.3    Access to Information ...........................................    27
  6.4    Confidentiality .................................................    27
  6.5    No Solicitation .................................................    28
  6.6    Public Disclosure ...............................................    29
  6.7    Legal Requirements ..............................................    29
  6.8    Notification of Certain Matters .................................    29
  6.9    Commercially Reasonable Efforts and Further Assurances ..........    29
  6.10   Indemnification .................................................    30
  6.11   Regulatory Filings; Reasonable Efforts ..........................    30
  6.12   Use of Names ....................................................    31
  6.13   Debt Offer ......................................................    31
  6.14   Commitment Letters; Rolled Options ..............................    31
  6.15   Transaction Expenses ............................................    31
  6.16   Non-Assignable Assets ...........................................    32
ARTICLE VII EMPLOYEE MATTERS .............................................    32
  7.1    Employee Liabilities ............................................    32
  7.2    Employee Benefit Plans ..........................................    32
  7.3    WARN Act ........................................................    33
ARTICLE VIII  TAX MATTERS ................................................    33
  8.1    Conveyance Taxes ................................................    33
  8.2    Section 338(h)(10) Election .....................................    33
  8.3    Tax Matters Schedule ............................................    34
ARTICLE IX  CONDITIONS TO CLOSING ........................................    34
         Conditions to Obligations of Each Party to Effect the
  9.1    Closing .........................................................    34
  9.2    Additional Conditions to Obligations of Seller ..................    35
  9.3    Additional Conditions to the Obligations of Purchaser ...........    35
ARTICLE X TERMINATION, AMENDMENT AND WAIVER ..............................    36
  10.1   Termination .....................................................    36
  10.2   Notice of Termination; Effect of Termination ....................    38
  10.3   Fees and Expenses ...............................................    38
  10.4   Amendment .......................................................    39
  10.5   Extension; Waiver ...............................................    39


                                       ii





                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE XI  INDEMNIFICATION ..............................................    40
  11.1   Survival ........................................................    40
  11.2   Indemnification .................................................    40
ARTICLE XII GENERAL PROVISIONS ...........................................    40
  12.1   Notices .........................................................    40
  12.2   Interpretation ..................................................    42
  12.3   Counterparts ....................................................    42
  12.4   Entire Agreement ................................................    42
  12.5   Severability ....................................................    42
  12.6   Other Remedies; Specific Performance ............................    42
  12.7   Governing Law ...................................................    43
  12.8   Rules of Construction ...........................................    43
  12.9   Assignment ......................................................    43
  12.10  Waiver of Jury Trial ............................................    43
  12.11  No Third Party Rights ...........................................    43
  12.12  Attorneys' Fees .................................................    43


                                       iii



                            STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of March 29, 2000 by and among Suez Acquisition Company (Cayman) Limited, a
limited company organized under the laws of the Cayman Islands ("Purchaser"),
Seagate Technology, Inc., a Delaware corporation ("Seller"), and Seagate
Software Holdings, Inc., a Delaware corporation ("SSHI").

                                    RECITALS:

     A. Seller owns beneficially all of the issued and outstanding shares
(collectively, the "Shares") of capital stock of each Sold Subsidiary (as
defined herein).

     B. Seller and SSHI wish to sell to Purchaser, and Purchaser wishes to
purchase from Seller and SSHI, the Shares, upon the terms and subject to the
conditions set forth herein.

     C. Seller and Purchaser desire to make certain representations and
warranties, and mutual covenants and agreements in connection with the
transactions contemplated hereby.

     D. Simultaneously and in connection with entering into this Agreement,
Seller is entering into the VERITAS Merger Agreement (as defined below) with
VERITAS (as defined below).

     NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and accepted, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     1.1  Certain Defined Terms. For all purposes of and under this Agreement,
the following terms shall have the following respective meanings:

          (a) "Action" means any claim, action, suit, arbitration, inquiry,
     proceeding or investigation by or before any Governmental Authority.

          (b) "Adjustment Amount" means, to the extent not paid or discharged on
     or prior to the Closing Date, the sum of (i) accrued and unpaid Taxes of
     Seller and its Subsidiaries (including the Sold Subsidiaries) determined in
     accordance with the principles arrived at in determining the February 28,
     2000 balance sheet of Seller (i.e., $278,000,000 minus Taxes reflected in
     such amount to the extent paid or settled since such date, plus additions
     to such amount in respect of items identified or arising since such date,
     plus an amount equal to 40% of the aggregate income of Seller and its
     Subsidiaries since such date) excluding Taxes caused by or relating to the
     Split and including, without limitation, any Taxes payable by virtue of the
     transactions contemplated hereby and any U.S. alternative minimum tax for
     which Seller or any of its Subsidiaries may be liable arising out of or
     attributable to the 1999 reorganization of Seagate Software Information
     Management Group (Canada), Inc. (the "Canadian Reorganization"), (ii)
     Indebtedness of Seller and its Subsidiaries (including any interest thereon
     and any premium payable in connection with the retirement thereof), (iii)
     the Overage Amount, if any, (iv) the Bonus Amount, and (v) any Transaction
     Expenses.

                                        1



          (c) "Affiliate" means, with respect to any specified Person, any other
     Person that directly, or indirectly through one or more intermediaries,
     controls, is controlled by, or is under common control with, such specified
     Person.

          (d) "Bonus Amount" means the aggregate amount of year-end bonuses and
     profit sharing payments required to be paid by Seller and its Subsidiaries
     in July of 2000.

          (e) "Cash" means cash, cash equivalents and short-term investments
     (including all securities available for sale) as determined in accordance
     with GAAP and consistent with the determination thereof in the Recent SEC
     Reports (as defined in Section 3.8(a) hereof).

          (f) "Code" means the Internal Revenue Code of 1986, as amended, or any
     successor statute thereto.

          (g) "Commitment Letters" means the debt commitment letter attached as
     Schedule I hereto.

          (h) "control" (including the correlative terms "controlled by" and
     "under common control with"), with respect to the relationship between or
     among two or more persons, means the possession, directly or indirectly or
     as trustee or executor, of the power to direct or cause the direction of
     the affairs or management of a person, whether through the ownership of
     voting securities, as trustee or executor, by contract or otherwise,
     including, without limitation, the ownership, directly or indirectly, of
     securities having the power to elect a majority of the board of directors
     or similar body governing the affairs of such person.

          (i) "Delaware Law" means the General Corporation Law of the State of
     Delaware, as amended, or any successor statute thereto.

          (j) "Designated Assets" means the securities set forth on Schedule II
     hereto.

          (k) "Designated Liabilities" means all Liabilities (including with
     respect to Taxes) of Seller and its Subsidiaries relating to (i) the
     Designated Assets, (ii) transactions pursuant to the OD Documents, (iii)
     obligations to VERITAS (indemnification or otherwise) in respect of the
     software business sold to VERITAS in exchange for shares of VERITAS common
     stock, (iv) any Non-Assumed Plan (as defined in Section 7.1 hereof), and
     (v) Seller's stock purchase plan. Without expanding the definition of
    Designated Liabilities, Designated Liabilities shall not include
     Liabilities relating to the transactions contemplated by this Agreement or
     any Liabilities included in the Adjustment Amount.

          (l) "DOJ" means the United States Department of Justice, or any
     successor agency thereto.

          (m) "Equity Commitments" means the equity commitment letters attached
     as Schedule III hereto.

          (n) "ERISA" means the Employee Retirement Income Security Act of 1974,
     as amended, or any successor statute thereto.

          (o) "Exchange Act" means the Securities Exchange Act of 1934, as
     amended, or any successor statute thereto.

          (p) "FTC" means the United States Federal Trade Commission, or any
     successor agency thereto.

                                        2



          (q) "GAAP" means United States generally accepted accounting
     principles.

          (r) "Governmental Authority" or "Governmental Authorities" means any
     United States federal, state or local or any foreign government,
     governmental, regulatory or administrative authority, agency or commission
     or any court, tribunal, or judicial or arbitral body.

          (s) "Governmental Order" means any order, writ, judgment, injunction,
     decree, stipulation, determination or award entered by or with any
     Governmental Authority.

          (t) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
     of 1976, as amended, and any successor statute thereto.

          (u) "Indebtedness" means, with respect to any person, (i) all
     indebtedness of such person, whether or not contingent, for borrowed money,
     (ii) all obligations of such person evidenced by notes, bonds, debentures
     or other similar instruments, (iii) all obligations, contingent or
     otherwise, of such person under acceptance, letter of credit or similar
     facilities, and (iv) all Indebtedness of others referred to in clauses (i)
     through (iii) above, inclusive, guaranteed directly or indirectly in any
     manner by such person (excluding guarantees of collection), or in effect
     guaranteed directly or indirectly by such person, including by way of an
     agreement (A) to pay or purchase such Indebtedness or to advance or supply
     funds for the payment or purchase of such Indebtedness, (B) to purchase,
     sell or lease (as lessee or lessor) property, or to purchase or sell
     services, primarily for the purpose of enabling the debtor to make payment
     of such Indebtedness or to assure the holder of such Indebtedness against
     loss, (C) to supply funds to or in any other manner invest in the debtor
     (including any agreement to pay for property or services irrespective of
     whether such property is received or such services are rendered), or (D)
     otherwise to assure a creditor against loss.

          (v) "Indenture" means the Indenture dated as of March 1, 1997 between
     Seller and First Trust of California, National Association, pursuant to
     which the Debentures (as defined in Section 3.4(b) hereof) have been
     issued.

          (w) "IRS" means the United States Internal Revenue Service, or any
     successor agency thereto.

          (x) "knowledge" (or any word or phrase of similar import) means, with
     respect to any matter in question, the knowledge of the executive officers
     or directors of the person in question and its Subsidiaries.

          (y) "Law" or "Laws" means any federal, state, local or foreign
     statute, law, ordinance, regulation, rule, code, order, judgment, decree or
     other requirement or rule of law.

          (z) "Liability" or "Liabilities" means any and all debts, liabilities
     and obligations of any type or nature whatsoever, whether accrued or fixed,
     absolute or contingent, matured or unmatured or determined or determinable,
     including, without limitation, those arising under any Law (including,
     without limitation, any Environmental Law), Action or Governmental Order
     and those arising under any contract, agreement, arrangement, commitment or
     undertaking.

          (aa) "Lien" means any lien, security interest, adverse claim, charge,
     mortgage or other encumbrance.

                                        3



          (bb) "Material Adverse Effect" means any change in, or effect on
     Seller or any of its Subsidiaries that, individually or in the aggregate
     with any other circumstances, changes in, or effects on, Seller or any of
     its Subsidiaries is materially adverse to the operations or Liabilities,
     financial condition or results of operations of the Sold Subsidiaries and
     their respective Subsidiaries, taken as a whole (after giving effect to the
     Split), excluding (i) any change in or effect on Seller or any of its
     Subsidiaries that is related to compliance by Seller or its Subsidiaries
     with the terms of this Agreement, and (ii) any Liability which results in
     an increase in the Required Cash pursuant to Section 2.6 hereof or which is
     a Designated Liability.

          (cc) "OD Documents" means the Agreement and Plan of Merger and
     Reorganization, dated as of March 29, 2000, by and among Seller and VERITAS
     Software Corporation, a Delaware corporation ("VERITAS"), as the same may
     be amended, supplemented and modified from time to time in accordance with
     its terms (the "VERITAS Merger Agreement").

          (dd) "Overage Amount" means any "excess parachute payments" within the
     meaning of Section 280G of the Code payable as a result of the acceleration
     of Star Options (as defined in the VERITAS Merger Agreement) pursuant to
     the OD Documents in excess of $100,000,000.

          (ee) "Required Cash" means $800,000,000, as adjusted pursuant to
     Section 2.6 hereof.

          (ff) "Roll Agreement" means the Rollover Commitment Agreements
     previously delivered to the parties hereto.

          (gg) "Rolled Option Value" means the aggregate Rollover Value (as
     defined in the Roll Agreement).

          (hh) "SEC" means the United States Securities and Exchange Commission,
     or any successor agency thereto.

          (ii) "Securities Act" means the Securities Act of 1933, as amended, or
     any successor statute thereto.

          (jj) "Split" means the transfer to the Sold Subsidiaries, prior to the
     Closing Date, of all assets (including, without limitation, the securities
     of iCompression, TurboLinux and MetaByte currently held by Seller (the
     "Private Securities") or the Cash or other proceeds realized by Seller from
     the sale, disposition or transfer of such Private Securities) (and such
     Cash or other proceeds shall be in addition to any Required Cash) and
     Liabilities of Seller and Seagate Software Holdings, Inc., other than the
     Designated Assets and the Designated Liabilities, to be transferred
     pursuant to an agreement in a form consistent with the terms hereof to be
     agreed upon by Seller and Purchaser prior to Closing and reasonably
     satisfactory to VERITAS.

          (kk) "Subsidiary" or "Subsidiaries" means any and all corporations,
     limited liability companies, general or limited partnerships, joint
     ventures, business trusts, associations and other business enterprises and
     entities controlled by a person directly or indirectly through one or more
     intermediaries.

          (ll) "TA Statement" means an estimate of the Adjustment Amount by the
     Chief Financial Officer of Seller to be prepared in collaboration with
     Purchaser based on Seller's month-end immediately preceding delivery of
     such estimate together with a certificate of the Chief Financial Officer of
     Seller specifying (i) that the TA Statement fairly presents his or her good
     faith best effort estimate of the Adjustment

                                        4



     Amount as at the then scheduled Closing Date and (ii) the assumed VERITAS
     Price utilized therein for the purposes of calculating any Overage Amount.

          (mm) "Tax" or "Taxes" shall mean any and all federal, state, local and
     foreign taxes, assessments and other governmental charges, duties,
     impositions and Liabilities relating to taxes, including, without
     limitation, taxes based upon or measured by gross receipts, income,
     profits, sales, use and occupation, and value added, ad valorem, transfer,
     franchise, withholding, payroll, recapture, employment, excise and property
     taxes, together with all interest, penalties and additions imposed with
     respect to such amounts and any obligations under any agreements or
     arrangements with any other person with respect to such amounts, and any
     Liability for taxes of a predecessor entity (if any).

          (nn) "Transaction Expenses" means the fees and expenses of Seller's or
     its Subsidiaries' investment bankers, attorneys, consultants, accountants
     and advisors incurred in connection with this Agreement, the OD Documents
     and the transactions contemplated hereby and thereby.

          (oo) "VERITAS Price" means the closing price for a share of VERITAS
     Common Stock, as reported on the Nasdaq National Market.

                                   ARTICLE II

                                PURCHASE AND SALE

     2.1  Purchase and Sale of the Shares. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as defined in Section 2.3 hereof),
(i) Seagate Technology, Inc. shall sell to Purchaser or one of its Designees (as
defined in Section 12.10 hereof), and Purchaser shall, or shall cause one of its
Designees to, purchase from Seller, all of the outstanding capital stock of each
of the Subsidiaries of Seller listed on Schedule IV hereto, and (ii) SSHI shall
sell to Purchaser or one of its Designees, and Purchaser shall, or shall cause
one of its Designees to, purchase from SSHI, all of the outstanding capital
stock of Seagate Software Information Management Group, Inc., a Delaware
corporation ("SSIMG") (such Subsidiaries set forth on Schedule IV and SSIMG
being referred to herein, collectively, as the "Sold Subsidiaries"), in exchange
for payment of the "Purchase Price" set forth in Section 2.2 hereof.

     2.2  Purchase Price; Allocation of Purchase Price. The aggregate purchase
price for the Shares shall be $2,000,000,000 in cash, minus the Rolled Option
Value (the "Purchase Price"), plus the assumption of all Liabilities (other than
the Designated Liabilities) of Seller and SSHI.

     2.3  Closing. Upon the terms and subject to the conditions of this
Agreement, the sale and purchase of the Shares contemplated by this Agreement
shall take place at a closing (the "Closing") to be held at the offices of
Wilson Sonsini Goodrich & Rosati, Professional Corporation, located at One
Market Street, Spear Tower, Suite 1600, San Francisco, California 94105, at a
time and date to be specified by the parties hereto, which shall be no later
than second (2nd) business day following the satisfaction or, if permitted
pursuant hereto, waiver of the conditions set forth in Article IX hereof, or at
such other location, date and time as Purchaser and Seller shall mutually agree.
The date upon which the Closing actually occurs shall be referred to herein as
the "Closing Date."

                                        5



     2.4  Closing Deliveries by Seller and SSHI. At the Closing, Seller or SSHI
(as applicable) shall deliver, or cause to be delivered, to Purchaser and/or its
Designees, as appropriate, the following:

          (a) stock certificates evidencing the Shares, duly endorsed in blank
     or accompanied by stock powers duly executed in blank, and with all
     required stock transfer tax stamps affixed thereto, representing all of the
     issued and outstanding shares of capital stock of each of the Sold
     Subsidiaries, free and clear of all Liens;

          (b) a receipt for the Purchase Price; and

          (c) the certificates and other documents required to be delivered as a
     condition to the Closing pursuant to Section 9.3 hereof.

     2.5  Closing Deliveries by Purchaser. At the Closing, Purchaser shall
deliver, or cause to be delivered, to Seller the following:

          (a) cash in an amount equal to the Purchase Price, by wire transfer in
     immediately available funds to an account designated in writing by Seller
     at least two (2) business days prior to the Closing;

          (b) an assumption of the Seagate Software Information Management
     Group, Inc. Stock Option Plan; and

          (c) the certificates and other documents required to be delivered as a
     condition to the Closing pursuant to Section 9.2 hereof.

     2.6  Adjustment of Required Cash. The amount of Required Cash shall be
subject to adjustment prior to Closing in the manner set forth below:

          (a) TA Statement. No later than fifteen (15) calendar days prior to
     the date of Seller Stockholder Meeting, Seller shall deliver to Purchaser
     the TA Statement. If the Closing does not occur within twenty (20) calendar
     days of delivery of the TA Statement, a revised TA Statement shall be
     delivered to Purchaser, and such revised TA Statement shall constitute the
     TA Statement for all purposes hereof and shall be subject to Sections
     2.6(b) and 2.6(c) below.

          (b) TA Statement Disputes.

              (i) Subject to the terms of Section 2.6(b)(ii) hereof, the TA
        Statement shall be deemed to be and shall be final, binding and
        conclusive on Seller and Purchaser.

              (ii) Purchaser shall be entitled to dispute any amounts reflected
        on the TA Statement, but only on the basis that the amounts reflected on
        the TA Statement contain errors or are based on erroneous assumptions or
        were not arrived at in accordance with Seller's accounting practices and
        policies applied on a basis consistent with Seller's past accounting
        practices and policies; provided, however, that Purchaser shall have
        notified Seller in writing of each disputed item, specifying the amount
        thereof in dispute and setting forth, in reasonable detail, the basis
        for such dispute, within seven (7) calendar days of Seller's delivery of
        the TA Statement to Purchaser. In the event of such a dispute, Seller
        and Purchaser shall attempt to reconcile their disputed amounts, and any
        resolution by them as to any disputed amounts shall be final, binding
        and conclusive on Seller and Purchaser. In the event that Seller and
        Purchaser are unable to reach a resolution of any disputed amounts
        within five (5) calendar days after receipt by Seller of Purchaser's
        written notice of dispute delivered in accordance with the

                                        6



        foregoing, Seller and Purchaser shall submit the items remaining in
        dispute for resolution to Arthur Andersen LLP (or, if such firm shall
        decline to act or is not, at the time of such submission, independent of
        Seller and Purchaser, to another independent accounting firm of
        international reputation mutually acceptable to Seller and Purchaser)
        (either Arthur Andersen LLP or such other accounting firm being referred
        to herein as the "Independent Accounting Firm"), which shall, on an
        expedited basis, within five (5) calendar days after such submission,
        determine and report to Seller and Purchaser upon such remaining
        disputed items, and such report shall be final, binding and conclusive
        on Seller and Purchaser. The fees and disbursements of the Independent
        Accounting Firm shall be allocated between Seller and Purchaser in the
        same proportion that the aggregate amount of such remaining disputed
        items so submitted to the Independent Accounting Firm that is
        unsuccessfully disputed by each such party (as finally determined by the
        Independent Accounting Firm) bears to the total amount of such remaining
        disputed items so submitted.

             (iii) In acting under this Agreement, the Independent Accounting
        Firm shall be entitled to the privileges and immunities of an
        arbitrator.

             (iv)  The TA Statement shall be deemed final for the purposes of
        and under this Section 2.6 upon the earlier to occur of (i) the failure
        of Purchaser to notify Seller of a dispute within seven (7) calendar
        days of Seller's delivery of the TA Statement to Purchaser pursuant to
        Section 2.6(b)(ii) hereof, (ii) the resolution of all disputes, pursuant
        to Section 2.6(b)(ii) hereof, by Seller and Purchaser, and (iii) the
        resolution of all disputes, pursuant to Section 2.6(b)(ii) hereof, by
        the Independent Accounting Firm. At the Closing, (i) the Adjustment
        Amount set forth in the final TA Statement shall be recalculated by
        using the VERITAS Price on the trading day immediately preceding the
        Effective Time under the VERITAS Merger Agreement in substitution for
        that utilized in the estimated TA Statement, as may be adjusted by the
        Independent Accounting Firm and (ii) the amount of Required Cash shall
        be increased upward on a dollar for dollar basis, in an amount equal to
        the Adjustment Amount (as recalculated pursuant to the foregoing clause
        of this Section 2.6(b)(iv)).

     2.7 Transaction Structure. The parties agree to cooperate and take all
requisite actions prior to the Closing Date to merge, form, consolidate or alter
the tax status of any of the Sold Subsidiaries or any Subsidiaries of the Sold
Subsidiaries to the extent desirable in the Purchaser's judgment for commercial,
regulatory, tax or other reasons, and further agree that the Purchaser may at
any time change the structure of the transactions contemplated by this
Agreement, including without limitation, by determining the order in which the
Sold Subsidiaries (and any assets of the Sold Subsidiaries) are transferred, and
the Seller shall cooperate in such efforts, including by entering into
appropriate amendments to this Agreement, provided, however, that such actions
shall not decrease the amount or change the kind of the consideration paid to
Seller pursuant to this Agreement, increase Designated Liabilities or add
transaction costs to those costs arising out of the transactions contemplated by
this Agreement (unless Purchaser agrees to pay such additional costs). On or
prior to the Closing Date, Seller shall effectuate the Split.

                                        7



                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller hereby represents and warrants to Purchaser, subject to the
exceptions and qualifications specifically set forth or disclosed in writing in
the disclosure letter delivered by Seller to Purchaser, dated as of the date
hereof (the "Seller Disclosure Schedule"), and after giving effect to the OD
Documents, the Split and the transactions contemplated thereby, if relevant for
the purposes of determining compliance herewith as follows:

     3.1 Organization; Good Standing. Seller and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, with the corporate or
other power and authority to own, lease and operate its assets and properties
and to carry on its business as now being conducted, and is duly qualified to do
business and in good standing in each jurisdiction in which the failure to be so
qualified would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.

     3.2 Charter Documents. Seller has delivered or made available to Purchaser
a true and correct copy of the Certificate of Incorporation and Bylaws of Seller
and SSHI and the organizational documents of each of the Sold Subsidiaries, each
as amended to date and in effect as of the date hereof, and each such instrument
is in full force and effect. Seller and SSHI are not in violation of any of the
provisions of their Certificate of Incorporation or Bylaws.

     3.3 Subsidiaries. Section 3.3 of the Seller Disclosure Schedule contains a
complete and accurate list of each Subsidiary of Seller, indicating the
jurisdiction of incorporation of each such Subsidiary and Seller's proportionate
equity interest therein. Each Subsidiary of Seller that is not a Sold Subsidiary
(other than SSHI) is owned, directly or indirectly, by a Sold Subsidiary.

     3.4  Capital Structure.

     (a) The authorized capital stock of each Sold Subsidiary is as set forth in
Section 3.4(a) of the Seller Disclosure Schedule. All of the Shares are owned
beneficially and of record by Seller or one of its Subsidiaries, except for
director's qualifying shares and similar statutory de minimis holdings. All of
the Shares are duly authorized and validly issued, fully paid and nonassessable,
and are not subject to any preemptive rights created by statute, the
organizational documents of Seller or any of its Subsidiaries, or any agreement
or document to which Seller or any of its Subsidiaries is a party or by which of
Seller or any of its Subsidiaries is bound and, when transferred to Purchaser
will be free and clear of all Liens. Except as set forth in Section 3.4(a) of
the Seller Disclosure Schedule, there are no equity securities, partnership
interests or other similar ownership interests of any class or series of any
Sold Subsidiary, or any securities convertible into, or exercisable or
exchangeable for, such equity securities, partnership interests or similar
ownership interests of any Sold Subsidiary, which are issued, reserved for
issuance or outstanding. Except as set forth in Section 3.4(a) of the Seller
Disclosure Schedule, there are no options, warrants, equity securities,
partnership interests or other similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any kind or
character to which Seller or any of its Subsidiaries is a party or by which
Seller or any of its Subsidiaries is bound obligating Seller or any of its
Subsidiaries to issue, deliver or sell (or cause to be issued, delivered or
sold), or repurchase, redeem or otherwise acquire (or cause the repurchase,
redemption or acquisition of), any shares of capital stock of any Sold
Subsidiary or any Subsidiaries thereof, or obligating Seller or any of its

                                        8



Subsidiaries to grant, extend, accelerate the vesting of or enter into any such
option, warrant, equity security, partnership interest or similar ownership
interest, call, right, commitment or agreement. There are no registration
rights, proxies or other agreements or understandings with respect to any equity
security, partnership interest or other similar ownership interest of any class
or series of any capital stock of any Sold Subsidiary or any Subsidiaries
thereof.

     (b) The only outstanding Indebtedness of Seller and its Subsidiaries is (i)
$200 million in principal amount of 7.125% Senior Notes Due March 1, 2004 (the
"2004 Senior Notes") issued pursuant to the Indenture, dated as of March 1, 1997
(the "Indenture"), (ii) $200 million in aggregate principal amount of 7.37%
Senior Notes Due March 1, 2007 (the "2007 Senior Notes") issued pursuant to the
Indenture, (iii) $100 million in principal amount of 7.875% Senior Debentures
due March 1, 2017 (the "2017 Senior Debentures") issued pursuant to the
Indenture, (iv) $200 million in principal amount of 7.45% Senior Debentures due
March 1, 2037 (the "2037 Senior Debentures") and, together with the 2004 Notes,
the 2007 Notes and the 2017 Senior Debentures, the "Debentures") issued pursuant
to the Indenture. Other than the Debentures, which are redeemable in full in
accordance with their respective terms, there is no Indebtedness of Seller or
its Subsidiaries.

     3.5 Authority. Each of Seller and SSHI has all necessary corporate power
and authority to enter into this Agreement and the OD Documents, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the OD Documents by Seller and SSHI, and the performance by Seller and SSHI
of its obligations hereunder and thereunder and the consummation by Seller and
SSHI of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary corporate action on the part of Seller and SSHI,
subject only to the approval and adoption of this Agreement and the OD Documents
by the stockholders of Seller in accordance with Delaware Law. The affirmative
vote of the holders of at least a majority of the outstanding shares of Seller
Common Stock is the only vote required for the stockholders of Seller to approve
this Agreement, the OD Documents and the transactions contemplated hereby and
thereby under the applicable rules of The New York Stock Exchange, Inc. (the
"NYSE"), Delaware Law and all other legal and regulatory requirements applicable
thereto (the "Required Stockholder Approval"). This Agreement and the OD
Documents have been duly executed and delivered by Seller and SSHI and, assuming
the due authorization, execution and delivery of this Agreement by Purchaser and
the OD Documents by the other party or parties thereto, constitute the valid and
binding obligations of Seller and SSHI, enforceable in accordance with their
respective terms, subject to (i) the effect of any applicable laws of general
application relating to bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting creditors' rights and the relief of debtors
generally, and (ii) the effect of rules of law and general principles of equity,
including, without limitation, rules of law and general principles of equity
governing specific performance, injunctive relief and other equitable remedies
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

     3.6 Conflicts. The execution and delivery of this Agreement by Seller and
SSHI does not, and the performance by Seller and SSHI of its obligations
hereunder and the consummation by Seller and SSHI of the transactions
contemplated hereby will not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of Seller and SSHI or the organizational documents of
any of its Subsidiaries, (ii) subject to compliance with the requirements set
forth in Section 3.7 hereof, conflict with or violate any Law, rule,

                                        9



regulation, order, judgment or decree applicable to Seller or any of its
Subsidiaries, or by which Seller, any of its Subsidiaries or any of their
respective assets and properties are bound or affected, or (iii) result in any
breach of, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or impair the rights of Seller or
any of its Subsidiaries under, or alter the obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any of the assets or
properties of Seller or any of its Subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Seller or any of its Subsidiaries is a
party or by which Seller, any of its Subsidiaries or any of their respective
assets and properties are bound or affected, except to the extent such conflict,
violation, breach, default, impairment or other effect could not, in the case of
clause (ii) or (iii) of this Section 3.6, individually or in the aggregate, (a)
reasonably be expected to have a Material Adverse Effect, or (b) reasonably be
expected to have a material adverse effect on, or materially delay, the ability
of Purchaser, Seller or SSHI to consummate the transactions contemplated hereby.

     3.7  Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by or with respect to Seller or any of its Subsidiaries in connection with the
execution and delivery of this Agreement and the OD Documents by Seller, or the
performance by Seller of its obligations hereunder and thereunder or the
consummation by Seller of the transactions contemplated hereby and thereby,
except for (i) the filing of the Proxy Statement (as defined in Section 6.1(a)
hereof) with the SEC in accordance with the Exchange Act, (ii) consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under the HSR Act or any applicable state antitrust Laws, (iii)
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under the Laws of any foreign country, and (iv) such
other consents, authorizations, filings, approvals and registrations which, if
not obtained or made, would not have a Material Adverse Effect or have a
material adverse effect on, or materially delay, the ability of Seller or
Purchaser to consummate the transactions contemplated hereby.

     3.8  SEC Filings; Seller Financial Statements.

     (a) Seller has filed all forms, reports and documents required to be filed
with the SEC since July 3, 1998, and has made available (through on-line
databases) to Purchaser such forms, reports and documents in the form filed with
the SEC. All such required forms, reports and documents (including all exhibits
and schedules thereto and all documents incorporated by reference therein) are
referred to herein as the "Seller SEC Reports." As of their respective dates,
the Seller SEC Reports (i) complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act, and the rules and
regulations of the SEC promulgated thereunder, and (ii) did not at the time each
such Seller SEC Report was filed (or if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
the Subsidiaries of Seller is required to file any forms, reports or other
documents with the SEC. Except to the extent revised or superseded by a
subsequent filing with the SEC, none of the Seller SEC Reports filed by Seller
since July 3, 1999 and prior to the date of this Agreement (collectively, the
"Recent SEC Reports") contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary in order
to make the statements

                                       10



therein, in the light of the circumstances under which they were made, not
misleading. The consolidated financial statements of Seller included in all
Seller SEC Reports comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the case
of unaudited consolidated quarterly statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of Seller and its consolidated Subsidiaries as of the dates thereof and
the consolidated financial position of Seller and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
quarterly statements, to normal year-end audit adjustments). Except as reflected
in the most recent consolidated balance sheet of Seller included in the Recent
SEC Reports most recently filed by Seller with the SEC prior to the date hereof
(such consolidated balance sheet being referred to herein as the "Current Seller
Balance Sheet" and the date thereof being referred to herein as the "Current
Balance Sheet Date"), as of the Current Balance Sheet Date, neither Seller nor
any of its Subsidiaries had, and since such date neither Seller nor any of such
Subsidiaries has incurred, any Liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.

     3.9   [Reserved]

     3.10  Absence of Certain Changes or Events. Except as reflected in the
Recent SEC Reports or Section 3.10 of the Seller Disclosure Schedule, since the
date of the last audited financial statements of Seller included in the Recent
SEC Reports, Seller has conducted its business only in the ordinary course
consistent with past practice, and there is not and has not been (i) any
condition, event or occurrence which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, or (ii) any condition,
event or occurrence which could reasonably be expected to prevent, hinder or
materially delay the ability of Seller to consummate the transactions
contemplated by this Agreement or the VERITAS Merger Agreement. Except as set
forth in Section 3.10 of the Seller Disclosure Schedule, since the date of
Seller's most recent periodic report on Form 10-Q included in the Recent SEC
Reports, there is not and has not been any event or action described in Section
5.2 hereof.

     3.11  Tax Matters.

     (a) Seller and each of its Subsidiaries have timely filed all federal,
state, local and foreign returns, estimates, information statements and reports
("Returns") relating to Taxes required to be filed by Seller and each of its
Subsidiaries with any Tax authority, except such Returns which are not material
to Seller or any such Subsidiaries, and all such Returns are true, correct and
complete in all material respects. Seller and each of its Subsidiaries have paid
all Taxes due and payable on such Returns.

     (b) As of the Closing Date, Seller and each of its Subsidiaries will have
withheld with respect to its employees all federal and state income Taxes, Taxes
payable pursuant to the Federal Insurance Contribution Act, Taxes payable
pursuant to the Federal Unemployment Tax Act and other Taxes required to be
withheld, except such Taxes which are not material to Seller or any such
Subsidiaries.

     (c) Neither Seller nor any of its Subsidiaries has been delinquent in the
payment of any material Tax. Section 3.11(c) of the Seller Disclosure Schedule
contains a complete

                                       11



and accurate list of all material Tax deficiencies outstanding, proposed or
assessed against Seller or any of its Subsidiaries, and a complete and accurate
list of all Seller's or any of its Subsidiaries' executed and unexpired waiver
of any statute of limitations on or extending the period for the assessment or
collection of any Liabilities for any Tax.

     (d) Section 3.11(d) of the Seller Disclosure Schedule contains a complete
and accurate list of all audits or other examinations of any Return of Seller or
any of its Subsidiaries by any Tax authority is presently in progress, and a
complete and accurate list of all Seller's or any of its Subsidiaries'
notifications of any request for such an audit or other examination.

     (e) Section 3.11(e) of the Seller Disclosure Schedule contains a complete
and accurate list of all adjustments relating to any Returns filed by Seller or
any of its Subsidiaries that have been proposed in writing formally or
informally by any Tax authority to Seller or any of its Subsidiaries or any
representative thereof.

     (f) Neither Seller nor any of its Subsidiaries has any Liability for any
material unpaid Taxes which has not been accrued for or reserved on the Current
Seller Balance Sheet in accordance with GAAP, contingent or otherwise, which is
material to Seller or any of its Subsidiaries, other than any Liability for
unpaid Taxes that may have accrued in connection with the operation of the
business of Seller and its Subsidiaries in the ordinary course.

     (g) Section 3.11(g) of the Seller Disclosure Schedule contains a complete
and accurate list of all contracts, agreements, plans or arrangements to which
Seller or any of its Subsidiaries is a party as of the date of this Agreement
(including, without limitation, the provisions of this Agreement), covering any
employee or former employee of Seller or any of its Subsidiaries that,
individually or collectively, would reasonably be expected to give rise to the
payment of any amount that would not be deductible pursuant to Sections 280G,
404 or 162(m) of the Code. The Seller Disclosure Schedule contains a complete
and accurate list of contracts, agreements, plans or arrangements to which
Seller is a party or by which it is bound to compensate any individual for
excise taxes paid pursuant to Section 4999 of the Code. Except as set forth in
Section 3.11(g) of the Seller Disclosure Schedule, no Seller Plan (as defined in
Section 3.16(a) hereof) exists that could result in the payment to any present
or former employee of Seller or any of its Subsidiaries of any money or other
property, or accelerate or provide any other rights or benefits to any present
or former employee of Seller or any of its Subsidiaries as a result of the
transaction contemplated by this Agreement or the OD Documents.

     (h) There are no Liens with respect to Taxes upon the assets of Seller or
any of its Subsidiaries, other than with respect to Taxes not yet due and
payable or which are being contested in good faith.

     (i) Neither Seller nor any of its Subsidiaries has filed any consent
agreement under Section 341(f) of the Code, or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by Seller or any of its Subsidiaries.

     (j) Section 3.11(j) of the Seller Disclosure Schedule contains a complete
and accurate list of all Seller's and any of its Subsidiaries' Tax-sharing, Tax
indemnity or Tax allocation agreements or arrangements.

     (k) None of the assets or properties of Seller or any of its Subsidiaries
are Tax exempt use property within the meaning of Section 168(h) of the Code.

                                       12



     (l) Seller has no excess loss accounts with respect to the stock of any of
its Subsidiaries. The transactions contemplated by this Agreement will not
result in the recognition of a material amount of deferred intercompany gain
under the deferred intercompany transaction rules of the Code.

     3.12  Compliance. Neither Seller nor any of its Subsidiaries is, in any
material respect, in conflict with, or in default or violation of (i) any Law
(including the Foreign Corrupt Practices Act of 1977), rule, regulation, order,
judgment or decree applicable to Seller or any of its Subsidiaries or by which
Seller or any of its Subsidiaries or any of their respective assets and
properties are bound or affected, or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Seller or any of its Subsidiaries is a party or by which
Seller or any of its Subsidiaries or its or any of their respective assets and
properties are bound or affected. No investigation or review by any Governmental
Authority is pending or, to the knowledge of Seller, threatened, against Seller
or any of its Subsidiaries, nor has any Governmental Authority indicated an
intention to conduct the same, other than routine investigations in the ordinary
course of Seller's business. There is no agreement, judgment, injunction, order
or decree binding upon Seller or any of its Subsidiaries which has, or could
reasonably be expected to have, the effect of prohibiting or materially
impairing any business practice of Seller or any of its Subsidiaries, any
acquisition of material property by Seller or any of its Subsidiaries or the
conduct of business by Seller or any of its Subsidiaries as currently conducted.

     3.13  Permits. Seller and its Subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from Governmental Authorities which
are material to the operation of the business of Seller and its Subsidiaries,
and Seller and its Subsidiaries are in compliance in all material respects with
the terms of such permits, licenses, variances, exemptions, order and approvals.

     3.14  Litigation. There is no Action, suit, proceeding, claim, arbitration
or investigation pending against Seller or any of its Subsidiaries or as to
which Seller or any of its Subsidiaries has received any notice of assertion,
nor to the knowledge of Seller, is there any threatened Action, suit,
proceeding, claim, arbitration or investigation pending against Seller or any of
its Subsidiaries, in either case which individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

     3.15  Brokers' and Finders' Fees. Except for fees payable to Morgan Stanley
& Co. Incorporated, neither Seller nor any of its Subsidiaries has incurred, nor
will Seller or any of its Subsidiaries incur, directly or indirectly, any
Liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.

     3.16  Employee Benefit Plans.

     (a) Section 3.16(a) of the Seller Disclosure Schedule contains a complete
and accurate list of all employee compensation, incentive, fringe or benefit
plans, programs, policies, commitments, agreements (including, without
limitation, all employment, severance, change of control or similar agreements)
or other arrangements (whether or not set forth in a written document and
including, without limitation, all "employee benefit plans" within the meaning
of Section 3(3) of ERISA) maintained or contributed to by Seller or a Seller
affiliate covering any active or former employee, director or consultant of
Seller (each, a "Seller Employee" and, collectively, the "Seller Employees"
which shall, for all purposes of and under this Section 3.16, mean an employee
of Seller or a Seller Affiliate

                                       13



(as defined below)), any Subsidiary of Seller or any trade or business (whether
or not incorporated) which is a member of a controlled group or which is under
common control with Seller within the meaning of Section 414(b), (c) or (m) of
the Code (each, a "Seller Affiliate" and, collectively, the "Seller Affiliates")
(each, a "Seller Plan" and, collectively, the "Seller Plans"). Seller has
provided or made available to Purchaser: (i) correct and complete copies of all
documents embodying each Seller Plan, including, without limitation, all
amendments thereto, all trust documents related thereto, and all material
written agreements and contracts related thereto; (ii) the most recent annual
reports (Form Series 5500 and all schedules and financial statements attached
thereto), if any, required under ERISA or the Code in connection with each
Seller Plan; (iii) the most recent summary plan description together with the
summary(ies) of material modifications thereto, if any, required under ERISA
with respect to each Seller Plan; (iv) all IRS determination, opinion,
notification and advisory letters with respect to each Seller Plan; (v) all
material correspondence to or from any Governmental Authority relating to any
Seller Plan; (vi) all forms and related notices required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, with respect to each
Seller Plan; (vii) the most recent discrimination tests for each Seller Plan
required to perform such tests; (viii) the most recent actuarial valuations, if
any, prepared for each Seller Plan; (ix) if the Seller Plan is funded, the most
recent annual and periodic accounting of the assets of each Seller Plan; and (x)
all communication to Seller Employees relating to any Seller Plan and any
proposed Seller Plan, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments or
vesting schedules, or other events which would result in any material Liability
to Seller or any Seller Affiliate in respect of any Seller Plan.

     (b) Each Seller Plan has been maintained and administered in all material
respects in compliance with its terms and with the requirements prescribed by
any and all Laws applicable thereto (including, without limitation, ERISA and
the Code). No Action, suit or other litigation (excluding claims for benefits
incurred in the ordinary course of Seller Plan activities) has been brought, or
to the knowledge of Seller, is threatened, against or with respect to any such
Seller Plan. There are no audits, inquiries or proceedings pending or, to the
knowledge of Seller, threatened by the IRS or the United States Department of
Labor with respect to any Seller Plans. All contributions, reserves or premium
payments required to be made or accrued as of the date hereof to the Seller
Plans have been timely made or accrued. Any Seller Plan intended to be qualified
under Section 401(a) of the Code, and each trust intended to qualify under
Section 501(a) of the Code (i) has either obtained from the IRS a favorable
determination, notification, advisory and/or opinion letter, as applicable, as
to its qualified status under the Code, or still has a remaining period of time
under applicable treasury regulations or IRS pronouncements in which to apply
for such letter and to make any amendments necessary to obtain a favorable
determination as to its qualified status under the Code, and (ii) except with
respect to amendments for which the Internal Revenue Service has allowed until
December 31, 2000, incorporates or has been amended to incorporate all
provisions required to comply with the Tax Reform Act of 1986 and subsequent
legislation. To the knowledge of Seller, no condition or circumstance exists
giving rise to a material likelihood that any such Seller Plan would not be
treated by the IRS as qualified under the Code, except as set forth in Section
3.16(b) of the Seller Disclosure Schedule. Seller does not have any plan or
commitment to establish any new Seller Plan, to modify any existing Seller Plan
(except to the extent required by Law or to conform any such Seller Plan to the
requirements of any applicable Law, in each case as previously disclosed to
Purchaser in writing, or as required by the terms of any Seller Plan or this
Agreement), or to enter into any new

                                       14



Seller Plan. Each Seller Plan can be amended, terminated or otherwise
discontinued after the Closing Date in accordance with its terms, without
Liability to Purchaser, Seller or any of the Seller Affiliates (other than
ordinary administration expenses).

     (c) Neither Seller, any of its Subsidiaries, nor any of the Seller
Affiliates has at any time ever maintained, established, sponsored, participated
in, or contributed to any plan subject to Title IV of ERISA or Section 412 of
the Code, and at no time has Seller contributed to or been requested to
contribute to any "multiemployer plan," as such term is defined in ERISA. To
Seller's knowledge, there are no circumstances which could reasonably be
expected to subject Seller, any of its Subsidiaries, or any officer or director
of Seller or any of its Subsidiaries, to any material Liability or penalty under
Section 4975 through 4980B of the Code or Title I of ERISA. No "prohibited
transaction," within the meaning of Section 4975 of the Code or Sections 406 and
407 of ERISA, and not otherwise exempt under Section 4975 of the Code and
Section 408 of ERISA, has occurred with respect to any Seller Plan which could
reasonably be expected to subject Seller or any Seller Affiliates to material
Liability.

     (d) Except as set forth in Section 3.16(d) of the Seller Disclosure
Schedule, none of the Seller Plans promises or provides retiree medical or other
retiree welfare benefits to any person except as required by applicable Law, and
neither Seller nor any of its Subsidiaries has represented, promised or
contracted (whether in oral or written form) to provide such retiree benefits to
any Seller Employee, former employee, director, consultant or other person,
except to the extent required by applicable Law.

     (e) Each Seller International Employee Plan (as defined below) has been
established, maintained and administered in compliance in all material respects
with its terms and conditions and with the requirements prescribed by any and
all applicable Laws. No Seller International Employee Plan has unfunded
Liabilities that, as of the Closing, will not be offset by insurance or fully
accrued. Except as required by applicable Law, no condition exists that would
prevent Seller or Purchaser from terminating or amending any Seller
International Employee Plan at any time for any reason. For all purposes of and
under this Agreement, the term "Seller International Employee Plan" shall mean
each Seller Plan that has been adopted or maintained by Seller or any of its
Subsidiaries, whether informally or formally, for the benefit of current or
former employees of Seller or any of its Subsidiaries who are not United States
citizens and who are employed outside the United States.

     3.17  Absence of Liens. Seller and each of its Subsidiaries has good and
valid title to, or in the case of leased assets and properties valid leasehold
interests in, all of its material tangible assets and properties, real, personal
and mixed, used in their respective businesses, free and clear of any Liens,
except (i) as reflected in the consolidated balance sheet of Seller included in
the Recent SEC Reports, (ii) for Liens for Taxes not yet due and payable, and
(iii) for such imperfections of title and encumbrances, if any, which would not
be material to Seller or any of its Subsidiaries.

     3.18  Environmental Matters.

     (a) For all purposes of and under this Agreement, the following terms shall
have the following respective meanings:

          (i) "Environmental Claim" or "Environmental Claims" means any and all
     administrative, regulatory or judicial actions, suits, causes of action,
     demands, demand letters, claims, Liens, notices of non-compliance,
     potential liability or violation, investigations, proceedings, consent
     orders or consent or settlement agreements

                                       15



     relating in any way to any Environmental Laws or any Environmental Permits,
     including, without limitation, (A) any and all claims or directions by
     Governmental Authorities for enforcement, investigation, cleanup, removal,
     response, remedial or other actions or damages pursuant to any applicable
     Environmental Law, and (B) any and all Claims by any Person seeking damages
     (including with respect to natural resource damages, property damage,
     diminution in value and personal injury) contribution, indemnification,
     cost recovery, compensation or injunctive relief resulting from Hazardous
     Materials or arising from alleged injury or threat of injury to health,
     safety or the environment.

          (ii) "Environmental Law" or "Environmental Laws" means any Law, now or
     hereafter in effect and as amended, and any judicial or administrative
     interpretation thereof, including any judicial or administrative order,
     consent decree or judgment, relating to the environment, natural resources,
     health, safety or Hazardous Materials, including, without limitation, the
     Comprehensive Environmental Response, Compensation and Liability Act, 42
     U.S.C. sec.sec. 9601 et seq.; the Resource Conservation and Recovery Act,
     42 U.S.C. sec.sec. 6901 et seq.; the Hazardous Materials Transportation
     Act, 49 U.S.C. sec.sec. 5101 et seq.; the Clean Water Act, 33 U.S.C.
     sec.sec. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
     sec.sec. 2601 et seq.; the Clean Air Act, 42 U.S.C. sec.sec. 7401 et seq.;
     the Safe Drinking Water Act, 42 U.S.C. sec.sec. 300f et seq.; the
     Occupational Safety and Health Act, 29 U.S.C. sec.sec. 1651 et seq., the
     Atomic Energy Act, 42 U.S.C. sec.sec. 2014 et seq.; the Federal
     Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. sec.sec. 136 et seq.
     and the Federal Food, Drug and Cosmetic Act, 21 U.S.C. sec.sec. 301 et seq.
     and analogous state, provincial and foreign laws.

          (iii) "Environmental Permit" or "Environmental Permits" means all
     permits, approvals, registrations, identification numbers, licenses and
     other authorizations required under any applicable Environmental Laws.

          (iv) "Hazardous Material" or "Hazardous Materials" means (A) petroleum
     and petroleum products, radioactive materials, asbestos in any form that is
     or could become friable, urea formaldehyde foam insulation, transformers or
     other equipment that contain polychlorinated biphenyls, and radon gas, (B)
     any other chemicals, materials or substances defined as or included in the
     definition of "hazardous substances", "hazardous wastes", "hazardous
     materials", "extremely hazardous wastes", "restricted hazardous wastes",
     "toxic substances", "toxic pollutants", "contaminants" or "pollutants", or
     words of similar import, under any applicable Environmental Law, and (C)
     any other chemical, material or substance the use, handling, generation,
     treatment, storing, release or exposure to which is regulated by any
     Governmental Authority.

     (b) Except as would not reasonably be expected to result in a Material
Adverse Effect, (i) neither Seller nor any of its Subsidiaries has transported,
stored, used, manufactured, disposed of, released or exposed its employees or
others to any Hazardous Materials in violation of any Law, and (ii) neither
Seller nor any of its Subsidiaries has disposed of, transported, sold, used,
released, exposed its employees or others to or manufactured any product
containing a Hazardous Material (collectively, "Hazardous Materials Activities")
in violation of any Environmental Law.

     (c) Except as set forth in Section 3.18(c) of the Seller Disclosure
Schedule, (i) no material Action, proceeding, revocation proceeding, amendment
procedure, writ, injunction or claim is pending, or to the knowledge of Seller,
threatened, concerning any Environmental Permit, Hazardous Material or any
Hazardous Materials Activities of Seller

                                       16



or any of its Subsidiaries; and (ii) Seller is not aware of any fact or
circumstance which could involve Seller or any of its Subsidiaries in any
material Environmental Claim or impose upon Seller or any of its Subsidiaries
any material Liabilities under any Environmental Law.

     (d) Except as would not reasonably be expected to result in a Material
Adverse Effect, (i) each of Seller and its Subsidiaries are consistently and
reliably in compliance in all respects with all applicable Environmental Laws;
and (ii) Seller has obtained and is, as presently operating, consistently and
reliably in compliance with the conditions of all Environmental Permits
necessary under any Environmental Law for the continued conduct of the business
and operations of Seller in the manner now conducted.

     (e) No investigation or review with respect to such matters is pending or
threatened, nor has any Governmental Authority or other person indicated an
intention to conduct the same, other than routine investigations and reviews
taken in the ordinary course of business.

     3.19 Labor Matters. (i) There are no controversies pending or, to the
knowledge of Seller, threatened, between Seller or any of its Subsidiaries and
any of their respective employees; (ii) as of the date hereof, neither Seller
nor any of its Subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by Seller or any of
its Subsidiaries, nor does Seller know of any activities or proceedings of any
labor union to organize any such employees; and (iii) as of the date hereof,
Seller has no any knowledge of any strikes, slowdowns, work stoppages or
lockouts, or threats thereof, by or with respect to any employees of Seller or
any of its Subsidiaries.

     3.20 Agreements, Contracts and Commitments. Except as set forth in Section
3.20 of the Seller Disclosure Schedule, neither Seller nor any of its
Subsidiaries is a party to or is bound by any of the following to the extent
currently in force:

          (a) any employment or consulting agreement, contract or commitment
     with any officer or director of Seller, other than those that are
     terminable on no more than thirty (30) days' notice;

          (b) any agreement, contract or commitment relating to the disposition
     or acquisition by Seller or any of its Subsidiaries, after the date hereof,
     of a material amount of assets or properties other than in the ordinary
     course of business;

          (c) any agreement, contract or commitment to license any third party
     to manufacture or reproduce any Seller product, service or technology, or
     any agreement, contract or commitment to sell or distribute any Seller
     products, service or technology, except in each case for agreements entered
     into in the ordinary course of business; or

          (d) any mortgages, indentures, guarantees, loans or credit agreements,
     security agreements or other agreements, contracts or commitments relating
     to the borrowing of money or extension of credit.

     3.21 Statements; Registration Statement; Proxy Statement/Prospectus. None
of the information supplied or to be supplied by Seller for inclusion or
incorporation by reference in (i) the Registration Statement (as defined in
Section 6.1(a) hereof) will, at the time it is declared or ordered effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, or (ii) the Proxy Statement (as defined in
Section 6.1(a) hereof) will, on the date it is first mailed to the stockholders
of Seller, at the time of the Seller

                                       17



Stockholders' Meeting (as defined in Section 6.1(a) hereof) and at the Closing
Date, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
false or misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Seller Stockholders' Meeting which has become false or
misleading. The Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
promulgated thereunder. Notwithstanding the foregoing, Seller makes no
representation or warranty with respect to any information supplied by Purchaser
which is contained in the Proxy Statement.

     3.22 Board Approval. The Board of Directors of Seller has (i) determined
that this Agreement and the transactions contemplated hereby are fair to,
advisable and in the best interests of Seller and its stockholders, (ii) duly
approved this Agreement and the transactions contemplated hereby, and (iii)
resolved to recommend that the stockholders of Seller approve this Agreement and
the transactions contemplated hereby.

     3.23 State Takeover Statutes. The Board of Directors of Seller has approved
this Agreement and the transactions contemplated hereby, and such approval is
sufficient to render inapplicable to this Agreement and the transactions
contemplated hereby the provisions of Section 203 of Delaware Law to the extent,
if any, such provisions are applicable to this Agreement and the transactions
contemplated hereby. No other state takeover statute or similar statute or
regulation applies to or purports to apply to this Agreement or the transactions
contemplated hereby.

     3.24 Fairness Opinion. Seller has received a written opinion from Morgan
Stanley & Co. Incorporated, dated as of the date hereof, to the effect that, as
of the date hereof, the Merger Consideration (as defined in the VERITAS Merger
Agreement) payable pursuant to the VERITAS Merger Agreement is fair to the
stockholders of Seller from a financial point of view.

     3.25 Intellectual Property.

     (a)  Seller or its Subsidiaries own, or possess licenses or other valid
rights to use, and immediately prior to Closing the Sold Subsidiaries or one or
more of their Subsidiaries will own, or possess licenses or other valid rights
to use, all Intellectual Property (as defined in Section 3.25(d) hereof)
necessary for the conduct of the business of Seller and its Subsidiaries as
currently conducted. Except as set forth in Section 3.25(a) of the Seller
Disclosure Schedule, (i) the conduct of the business of Seller and its
Subsidiaries as currently conducted does not infringe or otherwise violate any
Intellectual Property of any third party except where such infringement would
not reasonably be expected to have a Material Adverse Effect, and (ii) no person
is infringing or otherwise violating any Intellectual Property of Seller or its
Subsidiaries, except where such infringement would not reasonably be expected to
have a Material Adverse Effect. Except as set forth in Section 3.25(a) of the
Seller Disclosure Schedule, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and thereby will not result
in the loss of, or any encumbrance on, the rights of Seller or any of its
Subsidiaries with respect to the Intellectual Property owned or used by them and
no claims, order, actions or proceedings are pending or, to the knowledge of
Seller, threatened, that seek to question the ownership or scope, cancel or
limit the scope or validity of the Intellectual Property owned or used by Seller
or any of its Subsidiaries or the rights of Seller or any of its Subsidiaries
therein, except in each case for such claims,

                                       18



orders, actions, proceedings, losses, encumbrances or rights as would not have a
Material Adverse Effect.

     (b)  Seller and each of its Subsidiaries has implemented policies and
consistently followed practices regarding the preservation of its Proprietary
Information (as defined in Section 3.25(d) hereof) from unauthorized disclosure
to third parties and regarding the use and disclosure of its Proprietary
Information by its employees and contractors.

     (c)  Section 3.25(c) of the Seller Disclosure Schedule contains a complete
and accurate list of all material Intellectual Property held or owned by Seller
and its Subsidiaries that has been issued or registered by, or filed with, any
Governmental Authority and all material Intellectual Property licenses to which
Seller or any of its Subsidiaries is a party.

     (d)  For all purposes of and under this Agreement, (i) "Intellectual
Property" shall mean intellectual or property of a similar nature including
without limitation all United States and foreign patents and patent
applications, United States and foreign trademark registrations or any analogous
rights and applications therefor, United States and foreign copyright
registrations and applications therefor, Proprietary Information and all other
intellectual property rights, including, without limitation, inventions,
processes, formulae, technology, know-how, techniques or other data and
information, confidential and proprietary trade secrets, computer software,
technical manuals and documentation used in connection with any of the
foregoing, and licenses and rights with respect to the foregoing or property of
like nature, and (ii) "Proprietary Information" shall mean the trade secrets,
proprietary technology, know-how and other confidential information relation to
the business of Seller and its subsidiaries as currently conducted.

     3.26 Assets. The assets held directly or indirectly by the Sold
Subsidiaries (after giving effect to the Split), constitute all of the assets of
Seller and its Subsidiaries other than the Designated Assets.

     3.27 Insurance. Seller and each of its Subsidiaries maintain, and all times
during the prior three years have maintained, fire and casualty, general
liability, business interruption, product liability, and sprinkler and water
damage insurance which it believes to be reasonably prudent for similarly sized
and similarly situated businesses. All premiums due and payable under all such
policies and bonds have been paid, Seller and each of its Subsidiaries is
otherwise in material compliance with the terms of such policies and bonds and,
to the knowledge of Seller, there is no threatened termination of, or material
premium increase with respect to, any of such policies.

                                   ARTICLE IV

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser hereby represents and warrants to Seller, subject to the
exceptions and qualifications set forth or disclosed in the disclosure letter
delivered by Purchaser to Seller, dated as of the date hereof (the "Purchaser
Disclosure Schedule"), as follows:

     4.1  Organization; Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the corporate power and authority to
own, lease and operate its assets and property and to carry on its business as
now being conducted and as proposed to be conducted, and is duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction in
which the failure to be so qualified would not reasonably be expected to have a
material

                                       19



adverse effect on, or materially delay, the ability of Purchaser or Seller to
consummate the transactions contemplated by this Agreement.

     4.2  Charter Documents. Purchaser has delivered to Seller a true and
correct copy of the organizational documents of Purchaser, each as amended to
date and in effect as of the date hereof, and each such instrument is in full
force and effect. Purchaser is not in violation of any of the provisions of its
organizational documents.

     4.3  Authority. Purchaser has all requisite corporate power and authority
to enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Purchaser, and the performance by Purchaser of its obligations
hereunder and the consummation by Purchaser of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action on the part
of Purchaser. No vote of the holders of the outstanding shares of capital stock
of Purchaser is required to approve this Agreement or the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and, assuming the due authorization, execution and delivery by Seller,
constitutes the valid and binding obligations of Purchaser, enforceable in
accordance with their respective terms, subject to (i) the effect of any
applicable laws of general application relating to bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights and the
relief of debtors generally, and (ii) the effect of rules of law and general
principles of equity, including, without limitation, rules of law and general
principles of equity governing specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

     4.4  Conflicts. The execution and delivery of this Agreement by Purchaser
does not, and the performance by Purchaser of its obligations hereunder the
consummation by Purchaser of the transactions contemplated hereby will not, (i)
conflict with or violate the organizational documents of Purchaser, (ii) subject
compliance with the requirements set forth in Section 4.5 hereof, conflict with
or violate any Law, rule, regulation, order, judgment or decree applicable to
Purchaser or by which Purchaser or its assets and properties are bound or
affected, or (iii) result in any breach of, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair the rights of Purchaser under, or alter the rights or obligations of any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the assets or properties of Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Purchaser is a party or by which Purchaser or
its assets and properties are bound or affected, except to the extent such
conflict, violation, breach, default, impairment or other effect could not, in
the case of clause (ii) or (iii) of this Section 4.4, individually or in the
aggregate, reasonably be expected to have a material adverse effect on, or
materially delay, the ability of Purchaser or Seller to consummate the
transactions contemplated by this Agreement.

     4.5  Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by or with respect to Purchaser in connection with the execution and delivery of
this Agreement by Purchaser, or the performance by Seller of its obligations
hereunder or the consummation by Seller of the transactions contemplated hereby,
except for (i) consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under the HSR Act or any applicable
state antitrust Laws, (ii) consents, approvals, orders, authorizations,

                                       20



registrations, declarations and filings as may be required under the Laws of any
foreign country, and (iii) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, would not reasonably
be expected to have a material adverse effect on, or materially delay, the
ability of Purchaser or Seller to consummate the transactions contemplated
hereby.

     4.6  Litigation. There is no Action, suit, proceeding, claim, arbitration
or investigation pending against Purchaser or as to which Purchaser has received
any notice of assertion, nor to the knowledge of Purchaser, is there any
threatened Action, suit, proceeding, claim, arbitration or investigation pending
against Purchaser, which could reasonably be expected to have a material adverse
effect on Purchaser.

     4.7  Statements; Registration Statement; Proxy Statement. None of the
information supplied or to be supplied by Purchaser or its Affiliates for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time it is declared or ordered effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or (ii) the Proxy Statement will, on the date the Proxy Statement is
first mailed to the stockholders of Seller, at the time of the Seller
Stockholders' Meeting and at the Closing Date, will contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Seller
Stockholders' Meeting which has become false or misleading. Notwithstanding the
foregoing, Purchaser makes no representation or warranty with respect to any
information supplied by Seller which is contained in the Proxy Statement.

     4.8  Financing. For all purposes of and under this Agreement, the
Commitment Letters and the Equity Commitments shall be referred to together as
the "Financing Agreements" and the financing to be provided thereunder shall be
referred to as the "Financing." The aggregate proceeds of Financing are in an
amount sufficient to consummate the transactions contemplated hereby in
accordance with the terms hereof. None of the Commitment Letters or the Equity
Commitments has been withdrawn and Purchaser does not know of any facts or
circumstances that may reasonably be expected to result in any of the conditions
set forth in the Commitment Letters or the Equity Commitments not being
satisfied.

     4.9  Delaware Law. Purchaser was not immediately, prior to the execution
and delivery of this Agreement, an "interested stockholder" of Seller within the
meaning of Section 203 of Delaware Law, and neither Purchaser nor any of its
Affiliates beneficially owns any shares of Common Stock of Seller on the date
hereof.

     4.10 Newly Organized. Purchaser was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement and has engaged in
no other business activities.

     4.11 Related Agreements. Purchaser has delivered to Seller true and correct
copies of any and all contracts and agreements between VERITAS and Purchaser and
their respective Affiliates.

     4.12 Solvency. Immediately after giving effect to the transactions
contemplated by this Agreement and the closing of the Financing in order to
effect the transactions

                                       21



contemplated by this Agreement, the Sold Subsidiaries and their respective
Subsidiaries shall be able to pay their debts as they become due in the ordinary
course of business and shall own assets having a present fair saleable value
greater than the combined stated liabilities and identified contingent
liabilities of such entities. Immediately after giving effect to the
transactions contemplated by this Agreement and the closing of the Financing to
be obtained in order to effect the transactions contemplated by this Agreement,
the Sold Subsidiaries and their respective Subsidiaries shall have adequate
capital to carry on their businesses. No transfer of property is being made and
no obligation is being incurred in connection with the transactions contemplated
by this Agreement and the closing of any Financing to be obtained in order to
effect the transactions contemplated by this Agreement with the intent to
hinder, delay or defraud either present or future creditors of Purchaser,
Seller, the Sold Subsidiaries or any of their respective Subsidiaries.

     4.13 No Amendment to VERITAS Merger Agreement. Seller shall not, without
the prior written consent of Purchaser, amend, modify, supplement, mutually
terminate or waive any term or condition set forth in the OD Documents, as in
effect as of the date hereof.

                                    ARTICLE V

                            CONDUCT PRIOR TO CLOSING

     5.1  Conduct of Business. Except (i) as set forth in Section 5.1 of the
Seller Disclosure Schedule, (ii) to the extent that Purchaser shall otherwise
consent in writing, and (iii) to the extent contemplated by the OD Documents as
in effect on the date hereof, or for the sale of all or a portion of the
Designated Assets, at all times during the period commencing with the execution
and delivery hereof and continuing until the earlier of the termination of this
Agreement pursuant to the terms hereof or the Closing, Seller shall, and shall
cause each of its Subsidiaries to, (a) carry on its business diligently and in
the usual, regular and ordinary course, in substantially the same manner as
heretofore conducted and in compliance with all applicable Laws, (b) pay or
perform its material obligations when due, and (c) use its commercially
reasonable efforts, consistent with past practices and policies, to preserve
intact its present business organization, keep available the services of its
present officers and employees and preserve its relationships with customers,
suppliers, distributors, licensors, licensees and others with which it has
business dealings. In furtherance of the foregoing and subject to applicable
Law, Seller shall confer with Purchaser, as promptly as practicable, prior to
taking any material actions or making any material management decisions with
respect to the conduct of its business and the business of its Subsidiaries.

     5.2  Restrictions on Conduct of Business. Without limiting the generality
of the terms of Section 5.1 hereof, except (i) as set forth in Section 5.2 of
the Seller Disclosure Schedule or as required by the terms hereof, or (ii) to
the extent that Purchaser shall otherwise consent in writing (which, in the case
of Section 5.2(q) hereof, shall not be unreasonably withheld), or (iii) to the
extent contemplated by the OD Documents as in effect on the date hereof, or for
the sale of all or a portion of the Designated Assets, at all times during the
period commencing with the execution and delivery hereof and continuing until
the earlier of the termination of this Agreement pursuant to the terms hereof or
the

                                       22



Closing, Seller shall not do any of the following, or permit its Subsidiaries to
do any of the following:

          (a) except as required by applicable Law, waive any stock repurchase
     rights, accelerate, amend or change the period of exercisability of options
     or restricted stock, or reprice options granted under any employee,
     consultant or director stock plans or authorize cash payments in exchange
     for any options granted under any of such plans;

          (b) enter into any material partnership arrangements, joint
     development agreements or strategic alliances, other than in the ordinary
     course of business consistent with past practice;

          (c) (i) increase the compensation or fringe benefits of any present or
     former director, officer or employee of Seller or its Subsidiaries (except
     for increases in salary or wages in the ordinary course of business
     consistent with past practice), (ii) grant any severance or termination pay
     to any present or former director, officer or employee of Seller or its
     Subsidiaries (except for the payment of severance or termination pay in the
     ordinary course of business consistent with past practice), or (iii)
     establish, adopt, enter into, amend or terminate any Seller Plan or any
     plan, agreement, program, policy, trust, fund or other arrangement that
     would be a Seller Plan if it were in existence as of the date of this
     Agreement, except as required by applicable Law;

          (d) issue, deliver, sell, authorize, pledge or otherwise encumber, or
     propose any of the foregoing with respect to, any shares of capital stock
     or any securities convertible into, or exercisable or exchangeable for,
     shares of capital stock of any of its Subsidiaries, or subscriptions,
     rights, warrants or options to acquire any shares of capital stock or any
     securities convertible into, or exercisable or exchangeable for, shares of
     capital stock of any of its Subsidiaries, or enter into other agreements or
     commitments of any character obligating it to issue any such shares of
     capital stock of any of its Subsidiaries, or securities convertible into,
     or exercisable or exchangeable for, shares of capital stock of any of its
     Subsidiaries;

          (e) cause, permit or propose any amendments to any charter document or
     bylaws (or similar governing instruments) of Seller or any of its
     Subsidiaries;

          (f) acquire or agree to acquire by merging or consolidating with, or
     by purchasing any equity interest in or a material portion of the assets
     of, or by any other manner, any business or any corporation, limited
     liability company, general or limited partnership, joint venture,
     association, business trust or other business enterprise or entity, or
     otherwise acquire or agree to acquire any assets having a value exceeding
     $5,000,000 in the aggregate or which are otherwise material, individually
     or in the aggregate, to the business of Seller and its Subsidiaries to be
     included in the Sold Subsidiaries;

          (g) adopt a plan of merger, complete or partial liquidation,
     dissolution, consolidation, restructuring, recapitalization or other
     reorganization;

          (h) except as required by applicable Law, adopt or amend any employee
     benefit plan or employee stock purchase or employee stock option plan, or
     enter into any employment contract or collective bargaining agreement
     (other than offer letters and letter agreements entered into in the
     ordinary course of business consistent with past practice with employees
     who are terminable "at will"), pay any special bonus or special
     remuneration to any director or employee other than in the ordinary course
     of

                                       23



     business consistent with past practice, or increase the salaries or wage
     rates or fringe benefits (including rights to severance or indemnification)
     of its officers;

          (i) except in the ordinary course of business consistent with past
     practice, modify, amend or terminate any material contract or agreement to
     which Seller or any of its Subsidiaries is a party, or waive, delay the
     exercise of, release or assign any material rights or claims thereunder;

          (j) sell, lease, license, mortgage or otherwise encumber or subject to
     any Lien or otherwise dispose of any of its properties or assets, other
     than (i) the sale or transfer of any Designated Assets (but not including
     shares of VERITAS capital stock), or (ii) any such properties or assets the
     value of which do not exceed $5,000,000 individually and $10,000,000 in the
     aggregate, except sales of inventory in the ordinary course of business
     consistent with past practice; provided, that Seller may divest any of the
     Private Securities without the consent of Purchaser if required to do so on
     an involuntary basis pursuant to any merger, securities purchase or other
     similar type of agreement;

          (k) (i) incur any Indebtedness or guarantee any such Indebtedness of
     another person, issue or sell any debt securities or warrants or other
     rights to acquire any debt securities of Seller or any of its Subsidiaries,
     guarantee any debt securities of another person, enter into any "keep well"
     or other agreement to maintain any financial statement condition of another
     person or enter into any arrangement having the economic effect of any of
     the foregoing, except for endorsements and guarantees for collection,
     short-term borrowings and lease obligations, in each case incurred in the
     ordinary course of business consistent with past practice, or (ii) make any
     loans, advances or capital contributions to, or investment in, any other
     person, other than to Seller or any direct or indirect wholly-owed
     Subsidiary of Seller;

          (l) fail in any material respect to make any capital expenditures in
     the amounts budgeted and at the times contemplated therefor in Seller's
     annual capital expenditures budget for fiscal year 2000 previously provided
     to Purchaser, or expend funds for unbudgeted capital expenditures in an
     amount greater than $5,000,000;

          (m) pay, discharge or satisfy any claims (including claims of
     stockholders), liabilities or obligations (absolute, accrued, asserted or
     unasserted, contingent or otherwise), except for the payment, discharge or
     satisfaction of liabilities or obligations in the ordinary course of
     business consistent with past practices or in accordance with their terms
     as in effect on the date hereof, or waive, release, grant, or transfer any
     rights of material value or modify or change in any material respect any
     existing license, lease, contract or other document, other than in the
     ordinary course of business consistent with past practice;

          (n) change any financial reporting or material accounting principle
     used by it unless otherwise required by applicable Law or GAAP;

          (o) settle or compromise any litigation (whether or not commenced
     prior to the date of this Agreement) other than settlements or compromises
     of litigation where the amount paid (after giving effect to insurance
     proceeds actually received) in settlement or compromise does not exceed
     $1,000,000, provided that the aggregate amount paid in connection with the
     settlement or compromise of all such litigation shall not exceed
     $10,000,000;

                                       24



          (p) declare, set aside or pay any dividends on, or make any other
     distributions in respect of, any of its capital stock, other than dividends
     and distributions by a direct or indirect wholly owned subsidiary of Seller
     to its parent (i) split, combine or reclassify any of its capital stock or
     issue or authorize the issuance of any other securities in respect of, in
     lieu of or in substitution for shares of its capital stock, or (ii)
     purchase, redeem or otherwise acquire any shares of capital stock of Seller
     or any of its subsidiaries or any other securities thereof or any rights,
     warrants or options to acquire any such shares or other securities; or

          (q) make, or permit to be made, without the prior written consent of
     Purchaser any material Tax election which would affect the Sold
     Subsidiaries or any of their respective Subsidiaries.

          (r) agree in writing or otherwise to take any of the actions described
     in Section 5.2(a) through Section 5.2(q) hereof, inclusive.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

     6.1  Registration Statement; Proxy Statement; Other Filings.

     (a)  As promptly as practicable after the execution and delivery of this
Agreement, (i) Seller (in cooperation with Purchaser and the other party or
parties to the OD Documents) shall prepare and file with the SEC a proxy
statement/prospectus to be sent to the stockholders of Seller in connection with
the meeting of the stockholders of Seller to consider the approval of this
Agreement, the OD Documents and the transactions contemplated hereby and thereby
(such proxy statement/prospectus being referred to herein as the "Proxy
Statement" and such meeting of the stockholders of Seller being referred to
herein as the "Seller Stockholders' Meeting"), and (ii) Seller shall cooperate
with Purchaser and the other party or parties to the OD Documents in the
preparation and filing a registration statement on Form S-4 (the "Registration
Statement") to be filed with the SEC in connection with the transactions
contemplated by the OD Documents. Seller shall respond to any comments of the
SEC with respect to the Registration Statement or the Proxy Statement, shall use
its commercially reasonable efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after such filing
and shall cause the Proxy Statement to be mailed to its stockholders at the
earliest practicable time. As promptly as practicable after the execution and
delivery of this Agreement, Seller shall prepare and file any other filings
required under the Exchange Act, the Securities Act or any other federal,
foreign or state "blue sky" securities Laws relating to the transactions
contemplated hereby (collectively, the "Other Filings"). Seller shall promptly
notify Purchaser upon the receipt of any comments from the SEC or its staff, and
of any request by the SEC or its staff or any other government officials for
amendments or supplements to the Registration Statement, the Proxy Statement or
any Other Filing, or for additional information, and shall supply the other with
copies of all correspondence between such party or any of its representatives,
on the one hand, and the SEC, or its staff or any other government officials, on
the other hand, with respect to the Registration Statement, the Proxy Statement
or any Other Filing. The Proxy Statement, the Registration Statement and the
Other Filings shall comply in all material respects with all requirements of
applicable Law and the rules and regulations promulgated thereunder. Whenever
any event occurs which is required to be set forth in an amendment or supplement
to the Proxy Statement, the Registration Statement or any Other Filing, Seller

                                       25



or Purchaser, as the case may be, shall promptly inform the other party of such
occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of Seller, such amendment
or supplement.

     (b) Subject to Section 6.2(c) hereof, the Proxy Statement shall also
include the recommendation of the Board of Directors of Seller in favor of the
approval of this Agreement, the OD Documents and the transactions contemplated
hereby and thereby.

     6.2 Meeting of Seller Stockholders.

     (a) Subject to the terms of Section 6.2(c) hereof, promptly after the date
hereof and in consultation with Purchaser, Seller shall take all action
necessary in accordance with Delaware Law and its Certificate of Incorporation
and Bylaws to convene the Seller Stockholders' Meeting, to be held as promptly
as practicable, for the purpose of voting upon this Agreement, the OD Documents
and the transactions contemplated hereby and thereby. Subject to the terms of
Section 6.2(c) hereof, Seller shall solicit proxies from its stockholders in
favor of the approval of this Agreement, the OD Documents and the transactions
contemplated hereby and thereby, and shall take all other action necessary or
advisable to secure the Required Stockholder Approval.

     (b) Subject to the terms of Section 6.2(c) hereof, (i) the Board of
Directors of Seller shall recommend that Seller's stockholders vote in favor of
and approve this Agreement, the OD Documents and the transactions contemplated
hereby and thereby at the Seller Stockholders' Meeting, (ii) the Proxy Statement
shall include a statement to the effect that the Board of Directors of Seller
has recommended that Seller's stockholders vote in favor of and approve this
Agreement, the OD Documents and the transactions contemplated hereby and
thereby, and (iii) neither the Board of Directors of Seller nor any committee
thereof shall withdraw, amend or modify, or propose or resolve to withdraw,
amend or modify in a manner adverse to Purchaser, the recommendation of the
Board of Directors of Seller that Seller's stockholders vote in favor of and
approve this Agreement, the OD Documents and the transactions contemplated
hereby and thereby.

     (c) Notwithstanding the foregoing or anything to the contrary set forth in
this Agreement, nothing in this Agreement shall prevent the Board of Directors
of Seller from withdrawing, amending or modifying its recommendation in favor of
this Agreement and the transactions contemplated hereby if (i) Seller receives a
Seller Superior Offer (as defined below) and such Seller Superior Offer is not
withdrawn, (ii) neither Seller nor any of its agents or representatives shall
have violated any of the restrictions set forth in Section 6.5(a) hereof, and
(iii) the Board of Directors of Seller concludes in good faith, after
consultation with its outside counsel, that, in light of such Seller Superior
Offer, the withdrawal, amendment or modification of such recommendation is
necessary in order for the Board of Directors of Seller to comply with its
fiduciary obligations to the stockholders of Seller under applicable Law. For
all purposes of and under this Agreement, the term "Seller Superior Offer" shall
mean a bona fide written offer made by a third party to consummate any of the
following transactions: (a) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Seller, pursuant to which the stockholders of Seller immediately preceding such
transaction would hold less than fifty percent (50%) of the equity interest in
the surviving or resulting entity of such transaction (or the ultimate parent
entity thereof); (b) a sale or other disposition by Seller of assets (excluding
inventory and used equipment sold in the ordinary course of business)
representing all or substantially all of Seller's consolidated assets
immediately prior to such sale, (c) a sale or other disposition by Seller of all
or more than ninety-five percent (95%) of the assets to be held (directly or
indirectly) by the Sold Subsidiaries

                                       26



after giving effect to the spilt, or (d) the acquisition by any person or group
(including by way of a tender offer or an exchange offer or issuance by Seller),
directly or indirectly, of beneficial ownership or a right to acquire beneficial
ownership of shares representing in excess of fifty percent (50%) of the voting
power of the then outstanding shares of capital stock of Seller, in each case on
terms that the Board of Directors of Seller determines, in its reasonable
judgment (after consultation with its financial advisor and after taking into
account all aspects of the proposal and the person making the proposal and any
proposed changes to this Agreement that may be proposed by Purchaser in response
to such Seller Superior Offer) to be more favorable to the stockholders of
Seller, from a financial point of view, than, (i) in the case of a Seller
Superior Offer of the type referred to in clauses (a), (b) or (d), this
Agreement and the OD Documents and the transactions contemplated hereby and
thereby and (ii) in the case of a Seller Superior Offer of the type referred to
in clause (c), this Agreement and the transactions contemplated hereby;
provided, however, that any such offer shall not be deemed to be a "Seller
Superior Offer" if any financing required to consummate the transaction
contemplated by such offer is not committed and is not likely in the judgment of
Seller's Board of Directors to be obtained by such third party on a timely
basis. Notwithstanding the foregoing or anything to the contrary set forth in
this Agreement, except for a mutual termination as provided for in Section 4.13
hereof, nothing in this Agreement shall prevent the Board of Directors of Seller
from withdrawing, amending or modifying its recommendation in favor of the OD
Documents, or terminating the OD Documents in accordance with its terms.

     6.3  Access to Information.

     (a) Seller shall afford Purchaser and its accountants, counsel and other
representatives (including potential financing sources), reasonable access,
during normal business hours, to the properties, books, records and personnel of
Seller and its Subsidiaries at any time prior to the Closing in order to enable
Purchaser obtain all information concerning the business, assets and properties,
results of operations and personnel of Seller and its Subsidiaries as Purchaser
may reasonably request. No information or knowledge obtained in the foregoing
investigation by Purchaser pursuant to this Section 6.3 shall affect or be
deemed to modify any representation or warranty contained herein or the
conditions to the obligations of Seller and Purchaser to consummate the
transactions contemplated hereby.

     (b) Seller shall provide, and shall cause its Subsidiaries and its and
their respective officers and employees to provide, all necessary cooperation in
connection with the arrangement of the Financing and related matters, including,
without limitation, the execution and delivery of any commitment letters,
underwriting or placement agreements, pledge and security documents, other
definitive financing documents, or other requested certificates or documents,
including a certificate of the chief financial officer of Seller with respect to
solvency matters, as may be requested by Purchaser, provided, however, that such
letters, agreements or documents expressly provide that, from and after
consummation of the transactions contemplated by this Agreement, Seller shall
have no Liability thereunder and the other parties thereto shall look solely to
Purchaser in respect of any obligations of Seller thereunder.

     6.4  Confidentiality. Seller and Purchaser acknowledge that they have
previously entered into a Confidentiality Agreement (the "Confidentiality
Agreement"), which shall continue in full force and effect in accordance with
its terms.

                                       27



     6.5  No Solicitation.

     (a) From and after the date of this Agreement until the earlier to occur of
the Closing and termination of this Agreement pursuant to Section 10.1 hereof,
Seller and its Subsidiaries shall not, and shall cause their respective
officers, directors, affiliates or employees or any investment banker, attorney
or other advisor or representative retained by any of them not to, directly or
indirectly (i) solicit, initiate, encourage or induce the making, submission or
announcement of any Seller Acquisition Proposal (as defined in Section 6.5(b)
hereof), (ii) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes or
may reasonably be expected to lead to, any Seller Acquisition Proposal, (iii)
engage in discussions with any person with respect to any Seller Acquisition
Proposal, except as to the existence of the terms of this Section 6.5, (iv)
subject to the terms of Section 6.2(c) hereof, approve, endorse or recommend any
Seller Acquisition Proposal, or (v) enter into any letter of intent or similar
document or any contract, agreement or commitment contemplating or otherwise
relating to any Seller Acquisition Transaction (as defined in Section 6.5(b)
hereof); provided, however, that until the date on which this Agreement is
approved by the requisite vote of the stockholders of Seller, the terms of this
Section 6.5(a) shall not prohibit Seller from furnishing information regarding
Seller and its Subsidiaries to, entering into a confidentiality or
non-disclosure agreement with, or entering into discussions with, any person or
group in response to a Seller Superior Offer submitted by such person or group
(and not withdrawn) if (a) Seller has not violated any of the restrictions set
forth in this Section 6.5(a), (b) the Board of Directors of Seller concludes in
good faith, after consultation with its outside legal counsel, that such action
is reasonably necessary in order for the Board of Directors of Seller to comply
with its fiduciary obligations to the stockholders of Seller under applicable
Law, (c) Seller receives from such person or group an executed confidentiality
or non-disclosure agreement containing customary limitations on the use and
disclosure of all non-public written and oral information furnished to such
person or group by or on behalf of Seller and containing terms no less favorable
to the disclosing party than the terms of the Confidentiality Agreement
(including with respect to any standstill arrangements, which may not be waived
by Seller unless the standstill arrangements in the Confidentiality Agreement
are waived), and (d) prior to furnishing any such non-public information to such
person or group or entering into negotiations or discussions, Seller notifies
Purchaser promptly of such inquiries, proposals or offers received by, any such
information requested from, or any such discussions or negotiations sought to be
initiated or continued with, any of its representatives indicating, in
connection with such notice, the name of the person and the terms and conditions
of any inquiries, proposals or offers, and furnishes such non-public information
to Purchaser to the extent such information has not been previously furnished to
Purchaser. Seller and its Subsidiaries shall (and shall cause their respective
officers, directors, affiliates, employees, investment bankers, attorneys and
representatives to) immediately cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Seller Acquisition Proposal.

     (b) For all purposes of and under this Agreement, the term "Seller
Acquisition Proposal" shall mean any offer or proposal relating to any Seller
Acquisition Transaction. For all purposes of and under this Agreement, "Seller
Acquisition Transaction" shall mean any transaction or series of related
transactions, other than the transactions permitted to be effected under Section
5.2 hereof involving: (i) any acquisition or purchase from Seller by any person
or "group" (as defined under Section 13(d) of the Exchange Act and the rules

                                       28



and regulations promulgated thereunder) of more than fifteen percent (15%) in
interest of the total outstanding voting securities of Seller, or any tender
offer or exchange offer that if consummated would result in any person or
"group" (as defined under Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder) beneficially owning more than fifteen
percent (15%) of the total outstanding voting securities of Seller, or any
merger, consolidation, business combination or similar transaction involving
Seller pursuant to which the stockholders of Seller immediately preceding such
transaction would hold less than eighty-five percent (85%) of the equity
interests in the surviving or resulting entity of such transaction (or the
ultimate parent entity thereof); (ii) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than fifteen
percent (15%) of the fair market value of the consolidated assets and properties
of Seller; (iii) a sale or other disposition by Seller of all or more than
fifteen percent (15%) of the assets to be held by the Sold Subsidiaries after
giving effect to the Split; and (iv) the acquisition by any person or group
(including by way of a tender offer or exchange offer or issuance by Seller),
directly or indirectly, of beneficial ownership or a right to acquire beneficial
ownership of shares representing in excess of fifteen percent (15%) of the
voting power of the then outstanding shares of capital stock of Seller.

     6.6 Public Disclosure. Purchaser and Seller shall consult with each other
and agree before issuing any press release or otherwise making any public
statement with respect to this Agreement, and shall not issue any such press
release or make any such public statement prior to such agreement, except as may
be required by applicable Law or Seller's listing agreement with The New York
Stock Exchange, Inc., in which case reasonable efforts to consult with the other
party shall be made prior to such release or public statement.

     6.7 Legal Requirements. Purchaser and Seller shall take all reasonable
actions necessary or desirable to comply promptly with all legal requirements
which may be imposed on them with respect to the consummation of the
transactions contemplated by this Agreement (including, without limitation,
furnishing all information required in connection with approvals of or filings
with any Governmental Authority, and prompt resolution of any litigation
prompted hereby), and shall promptly cooperate with, and furnish information to,
the other party hereto to the extent necessary in connection with any such
requirements imposed upon any of them or their respective Subsidiaries in
connection with the consummation of the transactions contemplated by this
Agreement.

     6.8 Notification of Certain Matters. Purchaser shall give prompt notice to
Seller, and Seller shall give prompt notice to Purchaser, of the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (i) any representation or warranty contained in this
Agreement to be untrue or inaccurate at the Closing, such that the conditions
set forth in Section 9.2(a) or Section 9.3(a) hereof, as the case may be, would
not be satisfied or fulfilled as a result thereof, or (ii) any material failure
of Purchaser or Seller, as the case may be, or of any officer, director,
employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement.
Notwithstanding the foregoing, the delivery of any notice pursuant to this
Section 6.8 shall not limit or otherwise affect the rights and remedies
available hereunder to the party receiving such notice.

     6.9  Commercially Reasonable Efforts and Further Assurances. Subject to the
respective rights and obligations of Purchaser and Seller under this Agreement,
each of Purchaser and Seller shall use its respective commercially reasonable
efforts to effectuate

                                       29



the transactions contemplated hereby, and to fulfill and cause to be fulfilled
the conditions to Closing under this Agreement. Each of Purchaser and Seller, at
the reasonable request of the other party hereto, shall execute and deliver such
other instruments and do and perform such other acts and things as may be
necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby.

     6.10  Indemnification.

     (a) From and after the Closing, Purchaser and the Sold Subsidiaries shall
fulfill and honor in all respects the obligations of Seller pursuant to any
indemnification agreements (substantially in the form delivered to Purchaser
prior to the date hereof) between Seller, the Sold Subsidiaries and their
respective directors and officers in effect immediately prior to the Closing and
the Split (the "Indemnified Parties") and any indemnification provisions under
Seller's charter documents as in effect on the date hereof. The organizational
documents of Purchaser shall contain provisions with respect to exculpation and
indemnification that are at least as favorable to the Indemnified Parties as
those contained in Seller's organizational documents as in effect on the date
hereof, which provisions shall not be amended, repealed or otherwise modified
for a period of six (6) years from the Closing Date in any manner that would
adversely affect the rights thereunder of individuals who, immediately prior to
the Closing, were directors, officers, employees or agents of Seller or the Sold
Subsidiaries, unless such modification is required by applicable Law.

     (b) In the event that Purchaser or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers all or substantially all of its properties and assets to any
person in a single transaction or a series of transactions, then, and in each
such case, Purchaser shall make or cause to be made proper provision so that the
successors and assigns of Purchaser assume the indemnification obligations of
Purchaser and the Sold Subsidiaries under this Section 6.10 for the benefit of
the Indemnified Parties.

     (c) The provisions of this Section 6.10 are (i) intended to be for the
benefit of, and will be enforceable by, each of the Indemnified Parties, and
(ii) in addition to, and not in substitution for, any other rights to
indemnification or contribution that any such person may have by contract or
otherwise.

     (d) For a period of six (6) years following the Closing Date, Purchaser
shall use its best efforts to maintain in effect the directors' and officers'
liability insurance policies maintained by Seller; provided, however, that in no
event shall Purchaser be required to expend in any one year in excess of one
hundred and fifty percent (150%) of the annual premium currently paid by Seller
for such coverage.

     6.11 Regulatory Filings; Reasonable Efforts. As soon as may be reasonably
practicable following the execution and delivery of this Agreement, Seller and
Purchaser each shall file with the FTC and DOJ Notification and Report Forms
relating to the transactions contemplated hereby as required by the HSR Act, as
well as comparable pre-merger notification forms required by the merger
notification or control laws and regulations of any applicable jurisdiction, as
agreed to by Seller and Purchaser. Seller and Purchaser each shall promptly (i)
supply the other with any information which may be required in order to
effectuate such filings, and (ii) supply any additional information which
reasonably may be required by the FTC, the DOJ or the competition or merger

                                       30



control authorities of any other jurisdiction and which Seller and Purchaser may
reasonably deem appropriate.

     6.12 Use of Names. Seller acknowledges that from and after the Closing, the
name "Seagate" and all similar or related names, marks and logos (all of such
names, marks and logos being referred to herein as the "Seller Names") shall be
owned by the Sold Subsidiaries, that neither Seller nor any of its Affiliates
shall have any rights in the Seller Names, and that neither Seller nor any of
its Affiliates will be entitled to contest the ownership or validity or any
rights of Purchaser, the Sold Subsidiaries or any of their respective
Subsidiaries in or to the Seller Names.

     6.13 Debt Offer. Subject to the terms and conditions of this Agreement,
Seller shall commence an irrevocable tender offer (the "Debt Offer") to purchase
all of the principal amount of the Debentures. The obligations of Seller (i) to
commence the Debt Offer and (ii) to accept for payment, and pay for, any
securities tendered pursuant to the Debt Offer, shall be subject to customary
conditions and be conditioned upon closing of the transactions contemplated
hereby and the OD Documents (any of which may be waived by Seller in its sole
discretion). If fewer than one hundred percent (100%) of the Debentures are
purchased pursuant to the Debt Offer, then at the Closing Purchaser shall (i) in
accordance with the terms and provisions of Section 8.01 and Section 9.01 of the
Indenture, assume the Debentures and enter into a Supplemental Indenture in
accordance with such Section 8.01 and Section 9.01, (ii) give an irrevocable
notice of redemption pursuant to Section 11.01 of the Indenture to the Trustee
thereunder and each holder of a Debenture thereunder, specifying a "Redemption
Date" thirty one (31) days after the Closing and other matters specified in
Section 11.08 of the Indenture, and (iii) deposit the principal amount of the
"Redemption Price" with the Trustee under the Indenture.

     6.14 Commitment Letters; Rolled Options. Purchaser shall promptly forward
Seller's counsel a copy of all credit documentation prepared pursuant to the
Commitment Letters. In the event that one or more of the lenders under the
Commitment Letters withdraws its Commitment Letter (or commitment thereunder) or
invokes a condition that would prevent the Closing from occurring, Purchaser
shall promptly notify Seller thereof. In the event that Purchaser invokes the
condition set forth in Section 9.3(c) hereof, or one or more lenders withdraws
its commitment, Purchaser shall use all commercially reasonable efforts to enter
into contracts with one or more substitute lenders designated by Purchaser and
reasonably acceptable to Seller ("Substitute Lenders"), provided, however, that
Purchaser shall be required to enter into such contracts with one or more
Substitute Lenders only if the economic terms and other conditions offered by
such Substitute Lenders are no less favorable than those set forth in the
Commitment Letters. From and after the date hereof until the Closing, Purchaser
shall not amend, modify or supplement, or permit the amendment, modification or
supplementation of, the Roll Agreement without Seller's prior written consent.

     6.15 Transaction Expenses. No later than fifteen (15) calendar days prior
to the Closing Seller shall deliver to Purchaser final invoices from Seller's
investment bankers (including their counsel, if any), attorneys, accountants and
other advisors with respect to the transactions contemplated hereby, together
with a statement from each such person to the effect that (i) the amounts shown
due and owing therein constitute a "final" bill, and (ii) after payment in full
of the amounts indicated therein, each such person will not look to Purchaser,
Seller or any of their Affiliates or any party to the OD Documents for the
payment of further amounts with respect to the transactions contemplated hereby
or the OD Documents.

                                       31



     6.16 Non-Assignable Assets. Nothing in this Agreement shall be construed as
an attempt or agreement to assign any asset, contract, lease, permit, license or
other right which would otherwise be included in the assets transferred pursuant
to the Split, but which is by its terms non-assignable without the consent of
the other party or parties thereto, unless such consent shall have been given
(the "Non-Assignable Assets"). Seller agrees to use commercially reasonably
efforts before the Closing to obtain such consent or consents. Following the
Closing and until such time as the Non-Assignable Assets may be properly
assigned to Purchaser, such Non-Assignable Assets shall be held in trust for the
benefit of Purchaser, the covenants and obligations thereunder shall be
performed by Purchaser, and all benefits and obligations existing thereunder
shall be for the account of Purchaser. Following the Closing, Seller authorizes
Purchaser, to the extent permitted by applicable Law and the terms of the
Non-Assignable Assets, to perform all of the obligations and receive all of the
benefits under the Non-Assignable Assets, and appoints Purchaser as its
attorney-in-fact to act in its name and on its behalf (and on behalf of its
Affiliates) with respect thereto.

                                   ARTICLE VII

                                EMPLOYEE MATTERS

     7.1  Employee Liabilities. Seller and its Subsidiaries shall take all
corporate actions necessary to provide for the transfer of all assets relating
to the Assumed Plans (as defined below) to the Purchaser as of, or as soon as
practicable following, the Closing. From and after the date of the transfer of
such assets, Purchaser shall assume sole sponsorship of all Seller Plans (other
than any stock incentive plan, including, without limitation, the 1983 Incentive
Stock Option Plan, the Employee Stock Purchase Plan, the Executive Stock Plan,
the Conner Peripherals, Inc. 1986 Incentive Stock Plan, the 1991 Incentive Stock
Option Plan, the Amended and Restated Directors' Option Plan, the Amended and
Restated Archive Corporation Stock Option and Restricted Stock Purchase Plan --
1981, the Amended and Restated Archive Corporation Incentive Stock Option Plan
- -- 1981, the Conner Peripherals, Inc. -- Arcada Holdings, Inc. Stock Option
Plan, 1998 Non-Statutory Stock Option Plan, 1999 Stock Option Plan, Arcada
Holdings Inc. 1994 Stock Option Plan, Xiotech Corporation Amended and Restated
1996 Stock Option Plan) (such assumed Seller Plans, the "Assumed Plans")
(provided, however, that the Assumed Plans shall include the [Suez] Software
Information Management Group, Inc. 1999 Stock Option Plan and any outstanding
options to acquire Seller Common Stock which are converted into options to
acquire Purchaser shares pursuant to the Roll Agreement), and shall assume and
be responsible for all Liabilities whatsoever to Seller Employees, including,
without limitation, claims incurred under any Assumed Plan (including, without
limitation, any statutory worker's compensation claims), other than Liabilities
under any Seller Plan which is not an Assumed Plan (each, a "Non-Assumed Plan").

     7.2  Employee Benefit Plans.

     (a) From and after the Closing, (i) Purchaser shall offer all Seller
Employees employment with a Sold Subsidiary following the Closing ("Transferred
Employees"), initially on the same terms and conditions of employment that such
Transferred Employee had immediately prior to the Closing (including salary,
title and location), and all Transferred Employees shall be entitled to, service
credit under all employee benefit plans of Purchaser, the Sold Subsidiaries or
any of their respective Subsidiaries equal to credited service time for Seller
Employees under all Assumed Plans prior to the Closing, (ii) any service of a
Transferred Employee prior to the Closing Date which was recognized under

                                       32



any medical plan of Seller for purposes of medical or dental coverage shall be
recognized by the corresponding employee benefit plans of Purchaser, the Sold
Subsidiaries and their respective Subsidiaries, and (iii) any service of a
Transferred Employee prior to the Closing Date which was recognized under
Seller's vacation policy shall be recognized under the vacation policy of
Purchaser, the Sold Subsidiaries and their respective Subsidiaries.

     (b) Purchaser agrees that all Transferred Employees who continue employment
with Purchaser or any affiliate of Purchaser after the Closing ("Continuing
Employees") shall be eligible to continue to participate in all Assumed Plans,
provided that (i) nothing in this Section 7.2 shall limit the right of Purchaser
to amend or terminate any such Assumed Plan, and (ii) if Purchaser terminates
any such Assumed Plan, then the Continuing Employees shall immediately be
eligible to participate in the corresponding Purchaser employee benefit plan or
arrangement on substantially the same terms and conditions as similarly situated
employees of Purchaser and its affiliates. If a Continuing Employee ceases to be
covered by an Assumed Plan providing health or welfare benefits prior to the end
of the plan year, and subsequently becomes covered by any Purchaser employee
health or welfare benefit plan or arrangement, then (A) the Continuing Employee
shall be given full credit under Purchaser's plan or arrangement for any
co-pays, deductibles and out-of-pocket maximums incurred by him or her for such
plan year, and (B) Purchaser's plan or arrangement shall waive any preexisting
condition limitation or restriction otherwise applicable to the Continuing
Employee.

     7.3 WARN Act. Purchaser shall assume and be responsible for any Liabilities
arising under the Worker Adjustment and Retraining Notification Act in
connection with the termination of any Seller Employee on or after the Closing
Date.

                                  ARTICLE VIII

                                   TAX MATTERS

     8.1 Conveyance Taxes. Purchaser shall pay all real property transfer or
gains, sales, use, transfer, value added, stock transfer, and stamp taxes, any
transfer, recording, registration, and other fees, and any similar Taxes which
become payable in connection with the transactions contemplated by this
Agreement, and shall file such applications and documents as shall permit any
such Tax to be assessed and paid on or prior to the Closing Date in accordance
with any available pre-sale filing procedure. Purchaser shall execute and
deliver all instruments and certificates necessary to enable Seller to comply
with this Section 8.1.

     8.2 Section 338(h)(10) Election.

     (a) At the request of Purchaser, Seller will join with Purchaser in making
an election under Section 338(h)(10) of the Code and Treasury Regulation Section
1.338(h)(10)-1(d) (and, if permissible, any corresponding elections under any
applicable state and local income tax laws) (collectively, the "Section
338(h)(10) Elections") with respect to the purchase and sale of Shares of any of
the Sold Subsidiaries which is a United States person within the meaning of
Section 7701(a)(30) of the Code (collectively, the "U.S. Sold Subsidiaries")
hereunder.

     (b) To the extent possible, Purchaser, Seller and the U.S. Sold
Subsidiaries shall execute on or prior to the Closing any and all forms
necessary to effectuate the Section 338(h)(10) Elections (including, without
limitation, Internal Revenue Service Form 8023 and any similar forms under the
applicable state and local income tax laws

                                       33



(the "Section 338 Forms")). In the event, however, any Section 338 Forms are not
executed at the Closing, Purchaser and Seller shall prepare and complete each
such Section 338 Form no later than 15 days prior to the date such Section 338
Form is required to be filed. Purchaser and Seller shall each cause the Section
338 Forms to be duly executed by an authorized person for Purchaser and Seller
in each case, and shall duly and timely file the Section 338 Forms in accordance
with applicable tax Laws and the terms of this Agreement.

     (c) As soon as practicable after the Closing Date, Purchaser shall (i)
allocate the Purchase Price among the Sold Subsidiaries (the "Stock
Allocation"), and (ii) determine the allocation of that portion of the Stock
Allocation attributable to any of the U.S. Sold Subsidiaries resulting from the
Section 338(h)(10) Elections (as required pursuant to Section 338(h)(10) of the
Code and the regulations promulgated thereunder) among the assets of such U.S.
Sold Subsidiaries (the "Section 338 Allocation") after considering in good faith
Seller's comments thereto. Purchaser, Seller and the U.S. Sold Subsidiaries
shall be bound by and shall file all Tax Returns (including amended Tax Returns
and amended Section 338 Forms, as necessary) consistently with the Section 338
Allocation.

     8.3  Tax Matters Schedule. Prior to the Closing Date, Seller shall promptly
take all actions set forth in Schedule V hereto with respect to the transactions
described herein.

                                   ARTICLE IX

                              CONDITIONS TO CLOSING

     9.1 Conditions to Obligations of Each Party to Effect the Closing. The
respective obligations of each party to this Agreement to effect the Closing
shall be subject to the satisfaction or fulfillment, at or prior to the Closing
Date, of each of the following conditions:

         (a) Stockholder Approval. The Required Stockholder Approval shall have
     been obtained.

         (b) Registration Statement Effective; Proxy Statement. The SEC shall
     have declared the Registration Statement effective. No stop order
     suspending the effectiveness of the Registration Statement or any part
     thereof shall have been issued and no proceeding for that purpose, and no
     similar proceeding in respect of the Proxy Statement, shall have been
     initiated or threatened in writing by the SEC.

         (c) No Order; HSR Act. No Governmental Authority shall have enacted,
     issued, promulgated, enforced or entered any statute, rule, regulation,
     executive order, decree, injunction or other order (whether temporary,
     preliminary or permanent) which is in effect and which has the effect of
     making the transactions contemplated hereby illegal or otherwise
     prohibiting consummation of the transactions contemplated hereby. All
     requirements, if any, under the HSR Act or equivalent foreign statute,
     rule, regulation or order relating to the transactions contemplated hereby
     shall have been satisfied.

         (d) Other Transaction. All of the conditions set forth in Article VI
     of the VERITAS Merger Agreement (other than Section 6.1(f) thereof and the
     filing of the Merger Certificate thereunder) shall have been satisfied or
     waived. Purchaser shall have received a certificate with respect to the
     foregoing, signed on behalf of Seller by the President and the Chief
     Financial Officer of Seller.

                                       34



     9.2 Additional Conditions to Obligations of Seller. The obligation of
Seller to consummate and effect the transactions contemplated by this Agreement
shall be subject to the satisfaction or fulfillment, at or prior to the Closing
Date, of each of the following conditions, any of which may be waived, in
writing, exclusively by Seller:

          (a) Representations and Warranties. The representations and warranties
     of Purchaser contained in this Agreement shall have been true and correct
     in all material respects as of the date of this Agreement, except where the
     failure to be so true and correct would not, in the aggregate, reasonably
     be expected to have a material adverse effect on Purchaser. In addition,
     the representations and warranties of Purchaser contained in this Agreement
     shall be true and correct in all material respects on and as of the Closing
     Date (except for changes contemplated by this Agreement and except for
     those representations and warranties which address matters only as of a
     particular date, which shall have been true and correct only as of such
     particular date), with the same force and effect as if made on and as of
     the Closing Date, except in such cases where the failure to be so true and
     correct would not, in the aggregate, reasonably be expected to have a
     material adverse effect on Purchaser. Seller shall have received a
     certificate with respect to the foregoing, signed on behalf of Purchaser by
     the Chief Executive Officer and the Chief Financial Officer of Purchaser.

          (b) Agreements and Covenants. Purchaser shall have performed or
     complied in all material respects with all agreements and covenants
     required by this Agreement to be performed or complied with by it on or
     prior to the Closing Date, and Seller shall have received a certificate to
     such effect, signed on behalf of Purchaser by the Chief Executive Officer
     or the Chief Financial Officer of Purchaser.

          (c) OD Documents. The OD Documents shall be in full force and effect,
     enforceable in accordance with their terms, and Seller shall not have
     received any notice from the other party or parties to such OD Documents of
     its or their intention to terminate the OD Documents.

     9.3 Additional Conditions to the Obligations of Purchaser. The obligations
of Purchaser to consummate and effect the transactions contemplated hereby shall
be subject to the satisfaction or fulfillment, at or prior to the Closing Date,
of each of the following conditions, any of which may be waived, in writing,
exclusively by Purchaser:

          (a) Representations and Warranties. The representations and warranties
     of Seller contained in this Agreement shall have been true and correct in
     all material respects as of the date of this Agreement, except, in the case
     of all such representations and warranties other than those set forth in
     Sections 3.3, 3.4, 3.15, 3.22, 3.23, 3.24 and 3.26 hereof, where the
     failure to be so true and correct would not, in the aggregate, reasonably
     be expected to have a Material Adverse Effect. In addition, the
     representations and warranties of Seller contained in this Agreement shall
     be true and correct in all material respects on and as of the Closing Date
     (except for changes contemplated by this Agreement and except for those
     representations and warranties which address matters only as of a
     particular date, which shall remain true and correct as of such particular
     date), with the same force and effect as if made on and as of the Closing
     Date, except, in the case of all such representations and warranties other
     than those set forth in Sections 3.3, 3.4, 3.15, 3.22, 3.23, 3.24 and 3.26
     hereof, where the failure to be so true and correct would not, in the
     aggregate, reasonably be expected to have a Material Adverse Effect.
     Purchaser

                                       35



     shall have received a certificate with respect to the foregoing, signed on
     behalf of Seller by the President or the Chief Financial Officer of Seller.

          (b) Agreements and Covenants. Seller shall have performed or complied
     in all material respects with all agreements and covenants required by this
     Agreement to be performed or complied with by it on or prior to the Closing
     Date, and Purchaser shall have received a certificate to such effect,
     signed on behalf of Seller by the President and the Chief Financial Officer
     of Seller.

          (c) Financing. Purchaser shall have received the proceeds of the
     Financing contemplated by the Commitment Letters.

          (d) Sold Subsidiaries Cash Amount. The Sold Subsidiaries shall have
     available, free and clear of any and all Liens, an amount of Cash at least
     equal to the Required Cash.

                                    ARTICLE X

                        TERMINATION, AMENDMENT AND WAIVER

     10.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date, whether before or after approval of the transactions contemplated
hereby by the stockholders of Seller:

          (a) by mutual written consent, duly authorized by the Boards of
     Directors of Purchaser and Seller;

          (b) by either Seller or Purchaser, if the transactions contemplated
     hereby shall not have been consummated by December 31, 2000; provided,
     however, that the right to terminate this Agreement pursuant to this
     Section 10.1(b) shall not be available to any party hereto whose failure to
     fulfill any obligation under this Agreement (including, without limitation,
     such party's obligations under in Section 6.5 hereof) has been a principal
     cause of, or resulted in, the failure of the transactions contemplated
     hereby to occur on or before such date;

          (c) by either Seller or Purchaser, if a Governmental Authority shall
     have issued an order, decree or ruling or taken any other action, in any
     case having the effect of permanently restraining, enjoining or otherwise
     prohibiting the transactions contemplated hereby or by the OD Documents,
     which order, decree or ruling is final and nonappealable;

          (d) by either Seller or Purchaser, if the Required Stockholder
     Approval shall not have been obtained by reason of the failure to obtain
     the Required Stockholder Approval upon a vote taken at a meeting of
     stockholders duly convened therefor or at any adjournment or postponement
     thereof; provided, however, that the right to terminate this Agreement
     pursuant to this Section 10.1(d) shall not be available to Seller where the
     failure to obtain the Required Stockholder Approval shall have been caused
     by the action or failure to act in a manner which constitutes a material
     breach of this Agreement;

          (e) by Seller, upon a breach of any representation, warranty, covenant
     or agreement on the part of Purchaser contained in this Agreement, or if
     any representation or warranty of Purchaser shall have become untrue, in
     either case such that the conditions set forth in Section 9.2(a) or Section
     9.2(b) would not be satisfied as of the time of such breach or as of the
     time such representation or warranty shall

                                       36



     have become untrue, provided, however, that if such inaccuracy in
     Purchaser's representations and warranties or breach by Purchaser is
     curable, then Seller may not terminate this Agreement pursuant to this
     Section 10.1(e) for thirty-five (35) calendar days after delivery of
     written notice from Seller to Purchaser of such breach, provided that
     Purchaser continues to exercise commercially reasonable efforts to cure
     such breach (it being understood that Seller may not terminate this
     Agreement pursuant to this Section 10.1(e) if such breach by Purchaser is
     cured during such thirty-five (35)-day period);

          (f) by Purchaser, upon a breach of any representation, warranty,
     covenant or agreement on the part of Seller set forth in this Agreement, or
     if any representation or warranty of Seller shall have become untrue, in
     either case such that the conditions set forth in Section 9.3(a) or Section
     9.3(b) would not be satisfied as of the time of such breach or as of the
     time such representation or warranty shall have become untrue, provided,
     however, that if such inaccuracy in Seller's representations and warranties
     or breach by Seller is curable, then Purchaser may not terminate this
     Agreement pursuant to this Section 10.1(f) for thirty-five (35) calendar
     days after delivery of written notice from Purchaser to Seller of such
     breach, provided that Seller continues to exercise commercially reasonable
     efforts to cure such breach (it being understood that Purchaser may not
     terminate this Agreement pursuant to this Section 10.1(f) if such breach by
     Seller is cured during such thirty-five (35)-day period);

          (g) by Seller, if (i) prior to obtaining the Required Stockholder
     Approval, Seller receives a Seller Superior Offer, the Board of Directors
     of Seller concludes in good faith, after consultation with its outside
     counsel, that in light of such Seller Superior Offer, the termination of
     this Agreement in order to accept such Seller Superior Offer is necessary
     in order for the Board of Directors of Seller to comply with its fiduciary
     obligations to the stockholders of Seller under applicable Law, and (ii)
     Seller has complied with all of its obligations under Section 6.5 hereof,
     and (iii) prior to the termination of this Agreement pursuant to this
     Section 10.1(g), Seller pays Purchaser the Seller Termination Fee pursuant
     to Section 10.3(b)(ii) hereof; provided, however, that such termination may
     take place only after two (2) business days following Purchaser's receipt
     of written notice advising Purchaser that the Board of Directors of the
     Seller has received a Seller Superior Offer specifying the material terms
     and conditions of such Seller Superior Offer (and including a copy thereof
     with all accompanying documentation, if in writing), identifying the person
     making such Seller Superior Offer and stating that it intends to make the
     determination set forth in clause (i) of this Section 10.1(g). After
     providing such notice, Seller shall provide an opportunity to Purchaser to
     make such adjustments in the terms and conditions of this Agreement as
     would enable Seller to proceed with its recommendation to its stockholders
     without making the determination set forth in clause (i) of this Section
     10.1(g); provided, further, however, that any such adjustment shall be at
     the discretion of Purchaser at the time; or

          (h) by Purchaser, if a Seller Triggering Event (as defined below)
     shall have occurred. For the purposes of this Agreement, a "Seller
     Triggering Event" shall be deemed to have occurred if (i) the Board of
     Directors of Seller or any committee thereof shall for any reason have
     withdrawn or shall have amended or modified in a manner adverse to
     Purchaser its recommendation in favor of the approval of this Agreement or
     the OD Documents and the transactions contemplated hereby or thereby, (ii)
     Purchaser shall have failed to include in the Proxy Statement the

                                       37



     recommendation of the Board of Directors of Seller in favor of the approval
     of this Agreement or the OD Documents and the transactions contemplated
     hereby or thereby, or shall have taken any action or made any statement
     inconsistent with such recommendation, or (iii) a tender or exchange offer
     for in excess of the fifteen percent (15%) of the equity securities of
     Seller shall have been commenced by a person unaffiliated with Purchaser,
     and Seller shall not have sent to its securityholders pursuant to Rule
     14e-2 promulgated under the Securities Act, within ten (10) business days
     after such tender or exchange offer is first published sent or given, a
     statement disclosing that Seller recommends rejection of such tender or
     exchange offer.

     10.2 Notice of Termination; Effect of Termination. Any termination of this
Agreement pursuant to Section 10.1 hereof shall be effective immediately upon
the delivery of written notice of the terminating party to the other party
hereto. In the event of the termination of this Agreement pursuant to Section
10.1 hereof, this Agreement shall be of no further force or effect, except (i)
as set forth in this Section 10.2, Section 10.3 hereof and Article XII hereof,
each of which shall survive the termination of this Agreement without
limitation, and (ii) nothing herein shall relieve any party from Liability for
any breach of this Agreement.

     10.3  Fees and Expenses.

     (a) General. Except as set forth in this Section 10.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the transactions contemplated by this Agreement are consummated.

     (b) Seller Payments.

          (i)   Seller shall pay to Purchaser or its Designees in immediately
     available funds, within one (1) business day after demand by Purchaser, an
     amount equal to $80,000,000 (the "Seller Termination Fee") if this
     Agreement is terminated by Purchaser pursuant to Section 10.1(h) hereof.

          (ii)  Seller shall pay to Purchaser or its Designees in immediately
     available funds, prior to the termination of this Agreement, an amount
     equal to the Seller Termination Fee if this Agreement is terminated by
     Seller pursuant to Section 10.1(g) hereof.

          (iii) Seller shall pay to Purchaser or its Designees in immediately
     available funds, within one (1) business day after the date Seller directly
     or indirectly enters into an agreement with any third party with respect to
     a Seller Acquisition Transaction or a Seller Acquisition Transaction is
     consummated, an amount equal to the Seller Termination Fee if (A) this
     Agreement is terminated by either party pursuant to Section 10.1(d) hereof,
     (B) at any time after the date of this Agreement and at or before the
     Seller Stockholders' Meeting a Seller Acquisition Proposal shall have been
     publicly announced or otherwise communicated to Seller and not withdrawn,
     and (C) within twelve (12) months of the termination of this Agreement,
     Seller directly or indirectly enters into an agreement with any third party
     with respect to a Business Combination Transaction (as defined in Section
     10.3(b)(vi) hereof) or a Business Combination Transaction is consummated.

          (iv)  Seller shall pay to Purchaser or its Designees in immediately
     available funds, within one (1) business day after the first to occur of
     the events set forth in clause (D) below, an amount equal to the Seller
     Termination Fee if (A) this

                                       38



     Agreement is terminated by either party pursuant to Section 10.1(b) hereof,
     (B) at any time after the date of this Agreement and at or before the
     Termination Date a Seller Acquisition Proposal shall have been publicly
     announced or otherwise communicated to Seller and not publicly withdrawn,
     (C) following the public announcement or communication of such Seller
     Acquisition Proposal and prior to any such termination, Seller shall have
     intentionally breached (and not cured after notice thereof) any of its
     covenants or agreements set forth in this Agreement in any material
     respect, which breach shall have contributed to the failure of the Closing
     to occur on or before the Termination Date, and (D) within twelve (12)
     months of the termination of this Agreement, Seller directly or indirectly
     enters into an agreement with any third party with respect to a Business
     Combination Transaction or a Business Combination Transaction is
     consummated.

          (v) Seller acknowledges that the agreements contained in this Section
     10.3(b) are an integral part of the transactions contemplated by this
     Agreement, and that, without these agreements, Purchaser would not enter
     into this Agreement.

          (vi) "Business Combination Transaction" shall mean any transaction or
     series of related transactions involving: (i) any acquisition or purchase
     from Seller by any person or "group" (as defined under Section 13(d) of the
     Exchange Act and the rules and regulations promulgated thereunder) of more
     than fifty percent (50%) in interest of the total outstanding voting
     securities of Seller, or any tender offer or exchange offer that if
     consummated would result in any person or "group" (as defined under Section
     13(d) of the Exchange Act and the rules and regulations promulgated
     thereunder) beneficially owning more than fifty percent (50%) of the total
     outstanding voting securities of Seller, or any merger, consolidation,
     business combination or similar transaction involving Seller pursuant to
     which the stockholders of Seller immediately preceding such transaction
     would hold less than fifty percent (50%) of the equity interests in the
     surviving or resulting entity of such transaction (or the ultimate parent
     entity thereof); (ii) any sale, lease (other than in the ordinary course of
     business), exchange, transfer, license (other than in the ordinary course
     of business), acquisition or disposition of more than fifty percent (50%)
     of the fair market value of the consolidated assets and properties of
     Seller; (iii) a sale or other disposition by Seller of all or more than
     fifty percent (50%) of the assets that would have been held by the Sold
     Subsidiaries if the Split had taken place; and (iv) the acquisition by any
     person or group (including by way of a tender offer or an exchange offer or
     issuance by Seller), directly or indirectly, of beneficial ownership or a
     right to acquire beneficial ownership of shares representing in excess of
     fifty percent (50%) of the voting power of the then outstanding shares of
     capital stock of Seller.

     10.4 Amendment. Subject to applicable Law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of the parties hereto.

     10.5 Extension; Waiver. At any time prior to the Closing Date any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an

                                       39



instrument in writing signed on behalf of such party. Delay in exercising any
right under this Agreement shall not constitute a waiver of such right.

                                   ARTICLE XI

                                 INDEMNIFICATION

     11.1 Survival. The representations and warranties of Seller contained in
this Agreement, and any representation or warranty, statement or other
information contained in any Exhibit to this Agreement, the Seller Disclosure
Schedule, the TA Statement and any certificate, instrument or other report or
document delivered by Seller pursuant to this Agreement or in connection with
the transactions contemplated hereby (collectively, the "Acquisition
Documents"), shall not survive the Closing. Neither the period of non-survival
nor the Liability of Seller with respect to Seller's representations or
warranties, statements or other information contained in any of the Acquisition
Documents shall be increased by any investigation made at any time by or on
behalf of Purchaser, either before or after the Closing.

     11.2 Indemnification. Purchaser shall indemnify and hold harmless Seller
and each other party to the Indemnification Agreement against all losses and
claims to the extent provided in the Indemnification Agreement.

                                   ARTICLE XII

                               GENERAL PROVISIONS

     12.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via facsimile (receipt confirmed) to the parties at
the following addresses or facsimile numbers (or at such other address or
facsimile numbers for a party as shall be specified by like notice):

        (a) if to Purchaser (or the Sold Subsidiaries following the Closing),
            to:

            Suez Acquisition Company (Cayman) Limited
            c/o Silver Lake Partners, L.P.
            2725 Sand Hill Road
            Building C, Suite 950
            Menlo Park, California 94025
            Attention: Dave Roux
            Facsimile: 650-233-8125
            Telephone: 650-233-8121

            with a copy to:

            Simpson Thacher & Bartlett
            425 Lexington Avenue
            New York, New York 10017-3954
            Attention: William E. Curbow, Esq.
            Facsimile: 212-455-2502
            Telephone: 212-455-2000

                                       40



            and to:

            TPG Partners III, L.P.
            201 Main Street, Suite 2420
            Fort Worth, Texas 76102
            Attention: Richard A. Ekleberry, Esq.
            Facsimile: 817-871-4010
            Telephone: 817-871-4000

            with a copy to:

            Cleary, Gottlieb, Steen & Hamilton
            One Liberty Plaza
            New York, New York 10006
            Attention: Paul J. Shim, Esq.
            Facsimile: 212-225-3999
            Telephone: 212-225-2000

            and to:

            VERITAS Software Corporation
            1600 Plymouth Street
            Mountain View, California 94043
            Attention: General Counsel
            Facsimile: 650-526-2581
            Telephone: 650-335-8000

            with a copy to:

            Willkie Farr & Gallagher
            787 Seventh Avenue
            New York, New York 10019
            Attention: Michael A. Schwartz
            Facsimile: 212-728-8111
            Telephone: 212-728-8000

        (b) if to Seller, SSHI (or the Sold Subsidiaries prior to the Closing),
            to:

            Seagate Technology, Inc.
            920 Disc Drive
            P.O. Box 66360
            Scotts Valley, California 95067
            Attention: General Counsel
            Facsimile: 831-438-6675
            Telephone: 831-439-5370

            with a copy to:

            Wilson Sonsini Goodrich & Rosati
            Professional Corporation
            650 Page Mill Road
            Palo Alto, California 94304-1050
            Attention: Larry W. Sonsini, Esq.
            Facsimile: 650-493-6811
            Telephone: 650-493-9300

                                       41



            and to:

            Wilson Sonsini Goodrich & Rosati
            Professional Corporation
            One Market Street
            Spear Tower, Suite 3300
            San Francisco, California 94105
            Attention: Michael J. Kennedy, Esq.
            Facsimile: 415-947-2099
            Telephone: 415-947-2000

     12.2 Interpretation. When a reference is made in this Agreement to
Schedules or Exhibits, such reference shall be to a Schedule or Exhibit to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The table of contents and headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement or any term or provision hereof.
When reference is made herein to "the business of" an entity, such reference
shall be deemed to include the business of all direct and indirect Subsidiaries
of such entity.

     12.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when each counterpart has been signed by each of the
parties and delivered to the other party, it being understood that all parties
need not sign the same counterpart.

     12.4 Entire Agreement. This Agreement and the documents and instruments and
other agreements among the parties hereto as contemplated by or referred to
herein, including, without limitation, the Seller Disclosure Schedule and the
Purchaser Disclosure Schedule, (i) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (ii) are not
intended to confer upon any other person any rights or remedies hereunder,
except as set forth herein.

     12.5 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.

     12.6 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and

                                       42



to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.

     12.7  Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to conflicts
of law principles.

     12.8  Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any Law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

     12.9  Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder, in whole or in part, by operation
of law or otherwise, without the prior written approval of the other party
hereto; provided, however, that Purchaser shall have the right to assign any or
all of its rights to acquire the Shares is one or more designee (each, a
"Designee"); and provided, further, however, that no such assignment shall
release Purchaser from any of its Liabilities or obligations under this
Agreement. Subject to the preceding sentence, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

     12.10 WAIVER OF JURY TRIAL. EACH OF SELLER AND PURCHASER HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS OF SELLER OR PURCHASER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

     12.11 No Third Party Rights. Except as expressly set forth herein and as
provided in Section 6.10 hereof, this Agreement does not create any rights,
claims or benefits incurring to any person that is not a party hereto nor create
or establish any third party claim.

     12.12 Attorneys' Fees. Should suit be brought to enforce or interpret any
party of this Agreement, the prevailing party will be entitled to recover, as an
element of the costs of suit and not as damages, reasonably attorneys' fees to
be fixed by the court, including, without limitation, costs, expenses and fees
on any appeal. The prevailing party will be entitled to recover its costs of
suit, regardless of whether such suit proceeds to final judgment.

                  [Remainder of Page Intentionally Left Blank]

                                       43



     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized respective officers, as of the date first
above written.

                                          SUEZ ACQUISITION COMPANY
                                          (CAYMAN) LIMITED

                                          By: /s/ DAVID ROUX
                                          --------------------------------------
                                          Name: David Roux
                                          Title: Managing Member

                                          SEAGATE TECHNOLOGY, INC.

                                          By: /s/ STEPHEN J. LUCZO
                                          --------------------------------------
                                          Name: Stephen J. Luczo
                                          Title: CEO and President

                                          SEAGATE SOFTWARE HOLDINGS, INC.

                                          By: /s/ CHARLES C. POPE
                                          --------------------------------------
                                          Name: Charles C. Pope
                                          Title:

                   SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT

EX-2.2

                                                                     EXHIBIT 2.2

                                                                  EXECUTION COPY

                 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

                                  BY AND AMONG

                          VERITAS SOFTWARE CORPORATION
                            VICTORY MERGER SUB, INC.
                                       AND

                            SEAGATE TECHNOLOGY, INC.
                           DATED AS OF MARCH 29, 2000




                                TABLE OF CONTENTS




                                                                      PAGE
                                                                      ----
                                                                    
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION.....................    1

ARTICLE I  THE MERGER...............................................    1
  1.1   The Merger..................................................    1
  1.2   Effective Time; Closing.....................................    1
  1.3   Effect of the Merger........................................    2
  1.4   Certificate of Incorporation and Bylaws of Surviving
        Corporation.................................................    2
  1.5   Effect on Capital Stock.....................................    2
  1.6   Surrender of Certificates...................................    4
  1.7   No Further Ownership Rights in Seagate Common Stock.........    6
  1.8   Lost, Stolen or Destroyed Certificates......................    6
  1.9   Tax Consequences............................................    6
  1.10  Taking of Necessary Action; Further Action..................    7
  1.11  Definitions.................................................    7
  1.12  Dissenting Shares...........................................   10

ARTICLE II  REPRESENTATIONS AND WARRANTIES OF SEAGATE...............   11
  2.1   Organization; Good Standing.................................   11
  2.2   Charter Documents...........................................   11
  2.3   Capital Structure...........................................   11
  2.4   Authority...................................................   12
  2.5   Conflicts...................................................   13
  2.6   Consents....................................................   13
  2.7   SEC Filings; Financial Statements...........................   13
  2.8   Liabilities.................................................   14
  2.9   Absence of Material Adverse Effect on Seagate...............   14
  2.10  Compliance..................................................   14
  2.11  Permits.....................................................   15
  2.12  Litigation..................................................   15
  2.13  Brokers' and Finders' Fees..................................   15
  2.14  Absence of Liens and Encumbrances...........................   15
  2.15  Statements; Registration Statement; Proxy
        Statement/Prospectus........................................   15
  2.16  Board Approval..............................................   16
  2.17  State Takeover Statutes.....................................   16
  2.18  Fairness Opinion............................................   16
  2.19  Veritas Common Stock........................................   16
  2.20  Intercompany Transactions...................................   16
  2.21  Taxes.......................................................   16
  2.22  Code Section 897 Company....................................   16

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF VERITAS AND MERGER
  SUB...............................................................   17
  3.1   Organization; Good Standing.................................   17
  3.2   Charter Documents...........................................   17
  3.3   Capital Structure...........................................   17
  3.4   Authority...................................................   17
  3.5   Conflicts...................................................   18


                                        i





                                                                      PAGE
                                                                      ----
                                                                   
  3.6   Consents....................................................   18
  3.7   SEC Filings; Veritas Financial Statements...................   18
  3.8   Absence of Certain Changes or Events........................   19
  3.9   Litigation..................................................   19
  3.10  Brokers' and Finders' Fees..................................   19
  3.11  Statements; Registration Statement; Proxy
        Statement/Prospectus........................................   19
  3.12  Board Approval..............................................   20
  3.13  Fairness Opinion............................................   20
  3.14  Merger Sub Operations.......................................   20

ARTICLE IV  CONDUCT OF BUSINESS AND OTHER TRANSACTIONS..............   20
  4.1   Conduct of Business.........................................   20
  4.2   No Amendment to OD Documents................................   20
  4.3   Waivers and Releases........................................   20

ARTICLE V  ADDITIONAL AGREEMENTS....................................   21
  5.1   Proxy Statement/Prospectus; Registration Statement; Other
        Filings.....................................................   21
  5.2   Stockholder Meetings........................................   22
  5.3   Confidentiality.............................................   23
  5.4   No Solicitation.............................................   23
  5.5   Public Disclosure...........................................   25
  5.6   Legal Requirements..........................................   25
  5.7   Notification of Certain Matters.............................   25
  5.8   Commercially Reasonable Efforts and Further Assurances......   25
  5.9   Indemnification.............................................   26
  5.10  Tax-Free Reorganization.....................................   26
  5.11  Nasdaq Listing..............................................   27
  5.12  Seagate Affiliate Agreement.................................   27
  5.13  Regulatory Filings; Reasonable Efforts......................   27
  5.14  Access to Information.......................................   27
  5.15  TRA Matters.................................................   27

ARTICLE VI  CONDITIONS TO THE MERGER................................   29
  6.1   Conditions to Obligations of Each Party to Effect the
        Merger......................................................   29
  6.2   Additional Conditions to Obligations of Seagate.............   30
  6.3   Additional Conditions to the Obligations of Veritas and
        Merger Sub..................................................   30

ARTICLE VII  TERMINATION, FEES AND EXPENSES; AMENDMENT AND WAIVER...   31
  7.1   Termination.................................................   31
  7.2   Notice of Termination; Effect of Termination................   33
  7.3   Fees and Expenses...........................................   34
  7.4   Amendment...................................................   35
  7.5   Extension; Waiver...........................................   35


ARTICLE VIII  GENERAL PROVISIONS....................................   35
  8.1   Non-Survival of Representations and Warranties..............   35
  8.2   Notices.....................................................   35


                                     ii






                                                                      PAGE
                                                                      ----
                                                                   
  8.3   Certain Interpretations.....................................   37
  8.4   Counterparts................................................   37
  8.5   Entire Agreement............................................   38
  8.6   Severability................................................   38
  8.7   Other Remedies; Specific Performance........................   38
  8.8   Governing Law...............................................   38
  8.9   Rules of Construction.......................................   38
  8.10  Assignment..................................................   38
  8.11  Waiver of Jury Trial........................................   38


                                       iii




                 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

     THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this "Agreement") is
made and entered into as of March 29, 2000 among VERITAS Software Corporation, a
Delaware corporation ("Veritas"), Victory Merger Sub, Inc., a Delaware
corporation and a wholly owned subsidiary of Veritas ("Merger Sub"), and Seagate
Technology, Inc., a Delaware corporation ("Seagate").

                                    RECITALS

     A.  Upon the terms and subject to the conditions of this Agreement and in
accordance with the General Corporation Law of the State of Delaware ("Delaware
Law"), Veritas and Seagate have agreed to enter into a business combination
transaction pursuant to which Merger Sub will merge with and into Seagate (the
"Merger").

     B.  The Boards of Directors of Veritas and Merger Sub (i) have determined
that the Merger is fair to, advisable and in the best interests of, Veritas,
Merger Sub and their stockholders, (ii) have approved this Agreement, the Merger
and the other transactions contemplated by this Agreement, and (iii) have
determined to recommend approval of the Merger. In addition, the Board of
Directors of Veritas has determined to recommend approval of, to the extent not
previously authorized, an amendment to Veritas' Certificate of Incorporation to
increase the authorized number of shares of Veritas common stock from
500,000,000 to an additional amount sufficient to permit the issuance of Veritas
Common Stock contemplated hereby (the "Share Increase").

     C.  The Board of Directors of Seagate (i) has determined that the Merger is
fair to, advisable and in the best interests of, Seagate and its stockholders,
(ii) has approved this Agreement, the Merger and the other transactions
contemplated by this Agreement, and (iii) has determined to recommend the
approval of this Agreement and the Merger by the stockholders of Seagate.

     D.  Veritas, Merger Sub and Seagate intend, by entering into this
Agreement, to adopt a plan of "reorganization" within the meaning of Section 368
of the Internal Revenue Code of 1986, as amended (the "Code").

     NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   THE MERGER

     1.1 The Merger. At the Effective Time (as defined in Section 1.2 hereof),
and upon the terms and subject to the conditions of this Agreement and in
accordance with the applicable provisions of Delaware Law, Merger Sub shall be
merged with and into Seagate, the separate corporate existence of Merger Sub
shall cease and Seagate shall continue as the surviving corporation. Seagate as
the surviving corporation after the Merger is hereinafter sometimes referred to
as the "Surviving Corporation."

     1.2 Effective Time; Closing. As soon as practicable on or after the
Closing Date (as defined in this Section 1.2), and upon the terms and subject to
the conditions of this Agreement, the parties hereto shall cause the Merger to
be consummated by filing a

                                        1



Certificate of Merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware in accordance with the relevant provisions of Delaware
Law (the time of such filing (or such later time as may be agreed upon in
writing by Veritas and Seagate and specified in the Certificate of Merger) being
referred to herein as the "Effective Time"). The closing of the Merger and the
other transactions contemplated hereby (the "Closing") shall take place at the
offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, located
at One Market Plaza, Spear Tower, Suite 1600, San Francisco, California 94105,
at a date and time to be specified by Veritas and Seagate, which shall be no
later than the second (2nd) business day following the satisfaction or, if
permitted pursuant hereto, waiver of the conditions set forth in Article VI
hereof, or at such other location, date and time as Veritas and Seagate shall
mutually agree in writing. The date upon which the Closing actually occurs shall
be referred to herein as the "Closing Date."

     1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all of the property, rights, privileges, powers and
franchises of Seagate and Merger Sub shall vest in the Surviving Corporation,
and all of the debts, Liabilities and duties of Seagate and Merger Sub shall
become the debts, Liabilities and duties of the Surviving Corporation.

     1.4 Certificate of Incorporation and Bylaws of Surviving Corporation.

     (a) Certificate of Incorporation. As of the Effective Time, the Certificate
of Incorporation of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation,
until thereafter amended as provided by Delaware Law and such Certificate of
Incorporation.

     (b) Bylaws. As of the Effective Time, the Bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation, until thereafter amended as provided by Delaware Law, the
Certificate of Incorporation of the Surviving Corporation and such Bylaws.

     (c) Directors and Officers. As of the Effective Time, Mr. Jay Jones shall
be the sole director of the Surviving Corporation, and the officers of the
Surviving Corporation shall be as designated by Veritas.

     1.5 Effect on Capital Stock. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time, by virtue of the Merger and without
any action on the part of Merger Sub, Seagate or the holders of any of the
following securities, the following shall occur:

         (a) Conversion of Seagate Common Stock. Except as otherwise provided
     in this Agreement, each share of Common Stock, par value $0.01 per share,
     of Seagate (the "Seagate Common Stock") outstanding immediately prior to
     the Effective Time (other than any shares of Seagate Common Stock to be
     canceled pursuant to Section 1.5(b) hereof) shall be canceled and
     extinguished and automatically converted (subject to the terms of this
     Section 1.5) into the right to receive (i) the Stock Portion (as defined in
     Section 1.11 hereof), (ii) the Cash Portion (as defined in Section 1.11
     hereof) and (iii) the TRA Right (the Stock Portion, the Cash Portion and a
     TRA Right being referred to herein, collectively, as the "Merger
     Consideration") upon the surrender of the certificate representing such
     share of Seagate Common Stock in the manner set forth in Section 1.6 hereof
     (or in the case of a lost,

                                        2



     stolen or destroyed certificate, upon delivery of an affidavit (and bond,
     if required) in the manner set forth in Section 1.8 hereof).

          (b) Cancellation of Certain Seagate Common Stock. Unless otherwise
     determined by Veritas, each share of Seagate Common Stock (i) held in the
     treasury of Seagate, or (ii) owned by Merger Sub, Veritas or any direct or
     indirect wholly-owned subsidiary of Seagate or of Veritas, in either case
     immediately prior to the Effective Time, shall be canceled and extinguished
     without any conversion thereof.

          (c) Seagate Stock Options; Seagate Employee Stock Purchase Plan. At
     the Effective Time, (i) the vesting restrictions applicable to all options
     to purchase Seagate Common Stock ("Seagate Options") outstanding
     immediately prior to the Effective Time under all Seagate stock option and
     stock purchase plans (collectively, the "Seagate Stock Option Plans"),
     excluding the Rolled Options (as defined in Section 1.11 hereof), shall be
     accelerated such that no vesting restrictions remain thereon, (ii) each
     such Seagate Option (excluding the Rolled Options) shall, for all purposes
     of and under this Agreement, be converted into a number of shares of
     Seagate Common Stock ("Seagate Option Shares") equal to (x) the aggregate
     number of shares of Seagate Common Stock issuable upon the exercise in full
     of such Seagate Option, minus (y) the NE Amount in respect of such Seagate
     Option, (iii) the Seagate Option Shares so converted shall be considered
     outstanding shares of Seagate Common Stock for all purposes of and under
     this Agreement, including, without limitation, the right to receive the
     Merger Consideration pursuant to the Merger in accordance with Section
     1.11(a)(xvii) and Section 1.5(a) hereof, (iv) the Rolled Options shall be
     canceled and extinguished without any payment of Merger Consideration or
     any other consideration therefor, and (v) in accordance with the terms of
     Seagate's 1999 Employee Stock Purchase Plan (the "Seagate ESPP"), all
     rights to purchase shares of Seagate Common Stock outstanding under the
     Seagate ESPP immediately prior to the Effective Time shall be exercised and
     each share of Seagate Common Stock purchased pursuant to such exercise
     shall by virtue of the Merger, and without any action on the part of the
     holder thereof, be converted into the right to receive the Merger
     Consideration payable in respect thereof, without the issuance of
     certificates representing issued and outstanding shares of Seagate Common
     Stock. The Seagate ESPP shall be terminated immediately following such
     exercises.

          (d) Required Withholding. Each of the Exchange Agent (as defined in
     Section 1.6(a) hereof) and Veritas shall be entitled to deduct and withhold
     from the Merger Consideration or any other consideration deliverable or
     otherwise payable pursuant to the Merger and this Agreement to any holder
     or former holder of Seagate Common Stock or Seagate Option Shares such
     amounts as may be required to be deducted or withheld therefrom under the
     Code or under any applicable provision of state, local or foreign tax law
     or under any other applicable legal requirement. To the extent such amounts
     are so deducted or withheld, such amounts shall be treated for all purposes
     under this Agreement as having been delivered or otherwise paid to the
     person to whom such amounts would otherwise have been delivered or
     otherwise paid pursuant to the Merger and this Agreement.

          (e) Adjustments to Exchange Ratio. The Merger Consideration shall be
     adjusted to reflect appropriately the effect of any stock split, reverse
     stock split, stock dividend (including any dividend or distribution of
     securities convertible into Veritas Common Stock or Seagate Common Stock),
     extraordinary cash dividend, reorganization, recapitalization,
     reclassification, combination, consolidation or subdivision,

                                        3



     exchange of shares or other like change with respect to Veritas Common
     Stock or Seagate Common Stock occurring on or after the date hereof and
     prior to the Effective Time.

          (f) Fractional Shares. No fraction of a share of Veritas Common Stock
     shall be issued pursuant to the Merger, but in lieu thereof each holder of
     shares of Seagate Common Stock and Seagate Option Shares who would
     otherwise be entitled to a fraction of a share of Veritas Common Stock
     (after aggregating all fractional shares of Veritas Common Stock to be
     received by such holder) pursuant to the Merger shall receive from Veritas
     an amount in cash (rounded to the nearest whole cent), without interest,
     equal to the product obtained by multiplying (x) such fraction by (y) the
     Average Veritas Stock Price (as defined in Section 1.11 hereof).

          (g) Capital Stock of Merger Sub. Each share of Common Stock, $0.01 par
     value per share, of Merger Sub (the "Merger Sub Common Stock") issued and
     outstanding immediately prior to the Effective Time shall be converted into
     one validly issued, fully paid and nonassessable share of Common Stock,
     $0.01 par value per share, of the Surviving Corporation. Each certificate
     evidencing ownership of shares of Merger Sub Common Stock shall evidence
     ownership of such shares of capital stock of the Surviving Corporation.

     1.6  Surrender of Certificates.

     (a)  Exchange Agent. Veritas shall select an institution reasonably
satisfactory to Seagate to act as the exchange agent (the "Exchange Agent") for
the Merger.

     (b)  Veritas to Provide Merger Consideration. Promptly following the
Effective Time, Veritas shall make available to the Exchange Agent for exchange
in accordance with this Article I, (i) the shares of Veritas Common Stock
issuable pursuant to Section 1.5(a) or Section 1.5(c) hereof in exchange for
outstanding shares of Seagate Common Stock and Seagate Option Shares, (ii) the
cash payable pursuant to Section 1.5(a) hereof in exchange for outstanding
shares of Seagate Common Stock and Seagate Option Shares, (iii) cash in an
amount sufficient to make the cash payments in lieu of fractional shares
pursuant to Section 1.5(f) hereof, and (iv) cash in an amount sufficient to pay
any dividends or distributions to which holders of shares of Seagate Common
Stock and Seagate Option Shares may be entitled pursuant to Section 1.6(e)
hereof. From and after the date that is 6 months after the Effective Date,
Veritas shall have the right to cause the Exchange Agent to transfer to Veritas
all funds deposited by Veritas with the Exchange Agent pursuant to this Section
1.6(b) that have not been distributed pursuant to Section 1.6(d), and all
holders of Seagate Common Stock and Seagate Options entitled to receive the
Merger Consideration shall thereafter become general creditors of Veritas in
respect of the Merger Consideration.

     (c)  Exchange Procedures for Seagate Common Stock Certificates. Promptly
following the Effective Time, Veritas shall cause the Exchange Agent to mail to
each holder of record (as of the Effective Time) of a certificate or
certificates (the "Certificates") which immediately prior to the Effective Time
represented outstanding shares of Seagate Common Stock and which were converted
into the right to receive shares of Veritas Common Stock and cash pursuant to
Section 1.5(a) hereof, cash in lieu of any fractional shares pursuant to Section
1.5(f) hereof and any dividends or other distributions pursuant to Section
1.6(e) hereof, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent, and which shall be
in

                                        4



such form and have such other provisions as Veritas may reasonably specify), and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Veritas Common Stock issuable
and cash payable in respect of such shares of Seagate Common Stock pursuant to
Section 1.5(a) hereof, cash in lieu of any fractional shares payable in respect
of such shares of Seagate Common Stock pursuant to Section 1.5(f) hereof and any
dividends or other distributions payable in respect of such Seagate Common Stock
pursuant to Section 1.6(e) hereof. Upon the surrender and delivery of
Certificates for cancellation to the Exchange Agent (or to such other agent or
agents as may be appointed by Veritas), and such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, the
holders of such Certificates shall be entitled to receive in exchange therefor
certificates representing the number of whole shares of Veritas Common Stock
issuable and cash payable in respect of such shares of Seagate Common Stock
pursuant to Section 1.5(a) hereof, cash in lieu of fractional shares payable in
respect of such shares of Seagate Common Stock pursuant to Section 1.5(f) hereof
and any dividends or distributions payable in respect of such shares of Seagate
Common Stock pursuant to Section 1.6(e) hereof, and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time, for all corporate
purposes, subject to Section 1.6(e) hereof as to the payment of dividends and
other distributions, to evidence the ownership of a number of full shares of
Veritas Common Stock and the right to receive an amount in cash into which such
shares of Seagate Common Stock shall have been so converted pursuant to Section
1.5(a) hereof, and the right to receive an amount in cash in lieu of the
issuance of any fractional shares payable in respect of such shares of Seagate
Common Stock pursuant to Section 1.5(f) hereof and any dividends or
distributions payable in respect of such shares of Seagate Common Stock pursuant
to Section 1.6(e) hereof.

     (d) Exchange Procedures for Seagate Options. Promptly following the
Effective Time, Veritas shall cause the Exchange Agent to mail to each holder
(as of the Effective Time) of a Seagate Option which was converted into the
right to receive the Merger Consideration pursuant to Section 1.5(a) hereof,
cash in lieu of any fractional shares pursuant to Section 1.5(f) hereof and any
dividends or other distributions pursuant to Section 1.6(e) hereof, (i) a letter
of transmittal (which shall be in such form and have such other provisions as
Veritas may reasonably specify), and (ii) instructions for use in receiving the
certificates representing shares of Veritas Common Stock issuable and cash
payable in respect of such Seagate Options pursuant to Section 1.5(a) and
Section 1.5(c), cash in lieu of any fractional shares payable in respect of such
Seagate Options pursuant to Section 1.5(f) hereof and any dividends or other
distributions payable pursuant to Section 1.6(e) hereof. Upon the delivery of
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, to the Exchange Agent (or to such other agent or
agents as may be appointed by Veritas), the holders of Seagate Options shall be
entitled to receive the Merger Consideration payable to them pursuant to Common
Stock issuable and cash issuable in respect of such Seagate Options pursuant to
Section 1.5(a) and Section 1.5(c), cash in lieu of fractional shares payable in
respect of such Seagate Options pursuant to Section 1.5(f) hereof and any
dividends or distributions payable in respect of such Seagate Options pursuant
to Section 1.6(e) hereof.

     (e) Distributions With Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the date of this Agreement in respect of
Veritas Common Stock with a record date after the Effective Time shall be paid
to the holders of any unsurrendered Certificates or Seagate Options with respect
to the shares of Veritas

                                        5



Common Stock represented thereby until the holders of record of such
Certificates shall surrender such Certificates or the holders of such Seagate
Options shall return a letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto. Subject to applicable law,
following surrender of any such Certificates and return of such letter of
transmittal, the Exchange Agent shall deliver to the record holders of such
Certificates or the holders of such Seagate Options, as the case may be, without
interest, certificates representing whole shares of Veritas Common Stock issued
in exchange therefor, along with payment in lieu of fractional shares payable in
respect of shares of Seagate Common Stock or Seagate Options pursuant to Section
1.5(g) hereof and the amount of any such dividends or other distributions with a
record date after the Effective Time payable in respect of such whole shares of
Veritas Common Stock.

     (f) Transfers of Ownership. If certificates for shares of Veritas Common
Stock are to be issued in a name other than that in which the Certificates
surrendered in exchange therefor are registered, it will be a condition of the
issuance thereof that the Certificates so surrendered will be properly endorsed
and otherwise in proper form for transfer and that the persons requesting such
exchange will have paid to Veritas (or any agent designated by it) any transfer
or other taxes required by reason of the issuance of certificates for shares of
Veritas Common Stock in any name other than that of the registered holders of
the Certificates surrendered, or established to the satisfaction of Veritas or
any agent designated by it that such tax has been paid or is not payable.

     (g) No Liability. Notwithstanding anything to the contrary in this Section
1.6, neither the Exchange Agent, Veritas, the Surviving Corporation nor any
party hereto shall be liable to a holder of shares of Veritas Common Stock or
Seagate Common Stock for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat or similar law.

     1.7 No Further Ownership Rights in Seagate Common Stock. All cash and
shares of Veritas Common Stock issued pursuant to and in accordance with the
terms of this Article I (including any cash paid in respect thereof pursuant to
Section 1.5(f) and Section 1.6(e) hereof) shall be deemed to have been issued in
full satisfaction of all rights pertaining to shares of Seagate Common Stock,
and there shall be no further registration of transfers on the records of the
Surviving Corporation of shares of Seagate Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article I.

     1.8 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, shares of Veritas
Common Stock and cash payable in respect thereof pursuant to Section 1.5(a) or
Section 1.5(b) hereof, cash in lieu of fractional shares, if any, payable in
respect thereof pursuant to Section 1.5(f) hereof and any dividends or
distributions payable in respect thereof pursuant to Section 1.6(e) hereof;
provided, however, that Veritas may, in its discretion and as a condition
precedent to the issuance and payment thereof, require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Veritas or the Exchange Agent with respect to the Certificates alleged to have
been so lost, stolen or destroyed.

     1.9 Tax Consequences. Veritas and Seagate intend that the Merger shall
constitute a "reorganization" within the meaning of Section 368 of the Code.
Veritas and Seagate

                                        6



adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.

     1.10 Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes and intent of this Agreement and to vest in the Surviving Corporation
full right, title and possession in and to all of the assets, properties,
rights, privileges, powers and franchises of Seagate and Merger Sub, the
officers and directors of Merger Sub and Seagate shall be authorized to take,
and shall take, all such lawful and necessary action.

     1.11 Definitions.

     (a) For all purposes of and under this Agreement, the following terms shall
have the following respective meanings:

          (i)    "Administrators" has the meaning set forth in Section 5.15.

          (ii)   "Available Amount" means an amount equal to Cash held by
     Seagate immediately prior to the Effective Time including net amounts
     received under the OD Documents minus the VP Amount.

          (iii)  "Average Seagate Stock Price" means the average closing price
     of a share of Seagate Common Stock, as reported on the NYSE, for the five
     (5) consecutive trading days ending two (2) trading days immediately
     preceding the Closing Date.

          (iv)   "Average Veritas Stock Price" means the average closing price
     of a share of Veritas Common Stock, as reported on the Nasdaq, for the five
     (5) consecutive trading days ending two (2) trading days immediately
     preceding the Closing Date, as with respect to the VP Amount, preceding the
     date that Veritas makes its election.

          (v)    "Cash" means cash, cash equivalents and short-term investments
     (including all debt securities available for sale) as determined in
     accordance with GAAP and consistent with the determination thereof in the
     Recent SEC Reports.

          (vi)   "Cash Portion" means an amount, in cash, equal to the quotient
     obtained by dividing (x) the Available Amount by (y) the Outstanding
     Shares.

          (vii)  "Designated Liabilities" mean all Liabilities (including with
     respect to Taxes) relating solely to (i) the Designated Assets and (ii) the
     transactions pursuant to this Agreement. Without expanding the definition
     of Designated Liabilities, Designated Liabilities shall not include
     Liabilities relating to the transactions contemplated by the OD Documents
     or any Liabilities included in the Adjustment Amount (as defined in the OD
     Documents).

          (viii) "Governmental Entity" means any court, administrative agency or
     commission or other governmental authority or instrumentality.

          (ix)   "Indemnification Agreement" means the Indemnification Agreement
     dated as of even date herewith by and among Veritas, Seagate and Purchaser
     and each of its Subsidiaries.

          (x)    "ISA Amount" means a number of shares of Veritas Common Stock
     equal to the quotient obtained by dividing (x) (A) the Stipulated Amount,
     divided by (B) the Average Veritas Stock Price, by (y) the Outstanding
     Shares.

          (xi)   "knowledge" means, with respect to either party hereto, the
     actual knowledge of the executive officers of such party.

                                        7



          (xii)   "Liability" or "Liabilities" means any and all debts,
     liabilities and obligations of any type or nature whatsoever, whether
     accrued or fixed, absolute or contingent, matured or unmatured or
     determined or determinable, including, without limitation, those arising
     under any Law (including, without limitation, any Environmental Law),
     Action or Governmental Order and those arising under any contract,
     agreement, arrangement, commitment or undertaking.

          (xiii)  "Lien" means any lien, security interest, adverse claim,
     charge, mortgage or other encumbrance.

          (xiv)   "Material Adverse Effect on Veritas" means any change, event,
     violation, inaccuracy, circumstance or effect that is materially adverse to
     the business, assets (including intangible assets), capitalization,
     financial condition or results of operations of Veritas and its
     Subsidiaries, taken as a whole; provided, however, that in no event shall
     (i) a decrease in Veritas' stock price or the failure to meet or exceed
     Wall Street research analysts' or Veritas' internal earnings or other
     estimates or projections in and of itself constitute a "Material Adverse
     Effect on Veritas," or (ii) any change, event, violation, inaccuracy,
     circumstance or effect that results from (A) the public announcement or
     pendency of the transactions contemplated hereby, (B) changes affecting the
     software industry generally or the segments thereof in which Veritas
     competes, or (C) changes affecting the United States economy generally,
     constitute a "Material Adverse Effect on Veritas."

          (xv)    "Material Adverse Effect on Seagate" means any change, event,
     violation, inaccuracy, circumstance or effect that, after giving effect to
     the consummation of the transactions contemplated by the OD Documents,
     gives rise to, or is reasonably likely to give rise to, any Liability
     (absolute, accrued, contingent or otherwise, but excluding the Designated
     Liabilities) of Seagate (or Veritas following the Effective Time) for which
     Veritas is not entitled to indemnification under the Indemnification
     Agreement following the Effective Time.

          (xvi)   "Nasdaq" means the Nasdaq National Market System of the
     National Association of Securities Dealers, Inc.

          (xvii)  "NE Amount" means an amount equal to the quotient obtained by
     dividing (x) (A) the per share exercise price of a Seagate Option,
     multiplied by (B) the aggregate number of shares of Seagate Common Stock
     issuable upon the exercise in full of such Seagate Option immediately prior
     to the Effective Time, by (y) the Average Seagate Stock Price.

          (xviii) "NYSE" means the New York Stock Exchange.

          (xix)   "OD Documents" means the Stock Purchase Agreement of even date
     herewith by and among Seagate, Seagate Software and Suez Acquisition
     Company (Cayman) Limited.

          (xx)    "Outstanding Shares" means the aggregate number of shares of
     Seagate Common Stock outstanding immediately prior to the Effective Time,
     after giving effect to the treatment of Seagate Options under Section
     1.5(c) hereof.

          (xxi)   "Pro Rata Portion" means with respect to each person receiving
     a TRA Right, the number of shares of Seagate Common Stock held by such
     person immediately prior to the Effective Time, including shares deemed
     outstanding by virtue of Section 1.5(c) divided by the Outstanding Shares.

          (xxii)  "Purchaser" has the meaning provided in the Stock Purchase
     Agreement.
                                        8



          (xxiii) "Rolled Options" means the Seagate Options and Seagate Common
     Stock held by the individuals and in the amounts indicated in the Rollover
     Commitment Agreements previously delivered to the parties hereto.

          (xxiv)  "Seagate Restricted Stock" means shares of Seagate Common
     Stock subject to a right of repurchase or other restriction.

          (xxv)   "Seagate Software" means Seagate Software Holdings, Inc.

          (xxvi)  "Stipulated Amount" means the sum of:

             (1)  with respect to all shares of SanDisk Corp. ("SanDisk") held
        by Seagate immediately prior to the Effective Time (the "SanDisk
        Shares"), (A) the product obtained by multiplying (x) the average
        closing price of a share of SanDisk common stock, as reported on the
        Nasdaq, for the five (5) consecutive trading days ending two (2) trading
        days immediately preceding the Closing Date (the "Reference Average"),
        by (y) 0.8 (the product of (x) and (y) being the "Value"), minus (B) 0.4
        multiplied by the difference between the Value and Seagate's tax basis
        in a SanDisk Share; multiplied by (C) the number of SanDisk Shares;

             (2)  with respect to all shares of CVC, Inc. ("CVCI") and Gadzoox
        Networks Inc. ("Gadzoox") held by Seagate immediately prior to the
        Effective Time (respectively, the "CVCI Shares" and the "Gadzoox
        Shares"), (A) the product obtained by multiplying (x) the Reference
        Average for shares of CVCI or Gadzoox common stock, respectively, by (y)
        0.6 (the product of (x) and (y) being the "Value"), minus (B) 0.4
        multiplied by the difference between the Value and Seagate's tax basis
        in a CVCI or Gadzoox Share, as the case may be, multiplied by (C) the
        number of CVCI Shares and Gadzoox Shares, respectively; and

             (3)  with respect to shares of Lernout & Hauspie, Inc. ("Dragon")
        held by Seagate immediately prior to the Effective Time ( including
        shares into which such shares may have been converted, the "Dragon
        Shares"), (i) if such Dragon Shares are not listed for trading on a
        national securities exchange or over-the-counter market, then an amount
        mutually agreed upon by the parties hereto at least ten days prior to
        the Seagate Stockholders Meeting, (ii) if shares of Dragon are listed
        for trading on a national securities exchange or over-the-counter-
        market, then (A) the product obtained by multiplying (x) the Reference
        Average for shares of Dragon common stock, by (y) 0.6 (the product of
        (x) and (y) being the "Value"), minus (B) 0.4 multiplied by the
        difference between the Value and Seagate's tax basis in a Dragon Share
        multiplied by (C) the number of Dragon Shares (other than those subject
        to any escrow agreement). If the parties are unable to agree upon a
        value under clause (i) above or the valuation of any escrowed Dragon
        Shares, then the parties agree to include the Dragon Shares and such
        escrowed shares in the TRA Amount as provided in Section 5.15 hereof.

          (xxvii) "Stock Portion" means a number of shares of Veritas Common
     Stock equal to the sum of (i) the quotient obtained by dividing (x) (A) the
     number of shares of Veritas Common Stock held by Seagate immediately prior
     to the Effective Time, multiplied by (B) 0.853743, by (y) the Outstanding
     Shares, (ii) the quotient obtained by dividing (x) (A) the VP Amount,
     divided by (B) the Average Veritas Stock Price, by (y) the Outstanding
     Shares, and (iii) the ISA Amount.

                                        9



          (xxviii)  "Subsidiary" or "Subsidiaries" means any and all
     corporations, limited liability companies, general or limited partnerships,
     joint ventures, business trusts, associations and other business
     enterprises and entities controlled by a person directly or indirectly
     through one or more intermediaries.

          (xxix)    "Tax" or "Taxes" has the meaning provided in the Stock
     Purchase Agreement.

          (xxx)     "TRA Amount" means the amount of cash received with respect
     to all refunds or the utilization of credits for Seagate Taxes for or
     attributable to taxable years or periods of Seagate ending on or prior to
     the Effective Time, or the pre-closing period, in the case of a taxable
     period commencing before the Effective Time and ending after the Effective
     Time, less any administrative charges of the Administrators.

          (xxxi)    "TRA Right" means a non-transferable right to receive, when,
     as and if received by Veritas or its Affiliates, a stockholder's Pro Rata
     Portion of the TRA Amount.

          (xxxii)   "Veritas Common Stock" means common stock, par value $.001
     per share, of Veritas.

          (xxxiii)  "VP Amount" means either $0, $500 million or, if Seagate has
     received gross proceeds in excess of $200,000,000 with respect to the
     securities listed in Part B of Schedule I hereto on or prior to the
     election of the VP Amount, $750 million, at the election of Veritas, which
     election shall be made no later than the tenth (10th) day prior to the date
     of the Seagate Stockholders' Meeting.

     1.12  Dissenting Shares. Shares of Seagate Common Stock which have not been
voted in favor of the Merger and with respect to which the holder thereof has
exercised and demanded appraisal rights under Delaware Law ("Dissenting Shares")
shall not be converted into the Merger Consideration pursuant to the Merger, but
shall instead be converted into the right to receive such consideration as may
be determined to be due with respect to such Dissenting Shares pursuant to
Delaware Law. Seagate agrees that, except with the prior written consent of
Veritas, or as required under Delaware Law, it will not voluntarily make any
payment with respect to, or settle or offer to settle, any appraisal demand.
Each holder of Dissenting Shares ("Dissenting Stockholder") who, pursuant to the
provisions of Delaware Law, becomes entitled to payment of the fair value for
shares of Seagate Common Stock shall receive payment therefor from Veritas (but
only after the value therefor shall have been agreed upon or finally determined
pursuant to Delaware Law). If, after the Effective Time, any Dissenting Shares
shall lose their status as Dissenting Shares, Veritas shall issue and deliver,
upon surrender by such stockholder of a certificate or certificates representing
shares of Seagate Common Stock pursuant to Section 1.6 hereof, the Merger
Consideration to which such stockholder would otherwise be entitled under
Section 1.5.

                                       10



                                   ARTICLE II

                    REPRESENTATIONS AND WARRANTIES OF SEAGATE

     As of the date hereof and as of the Closing Date, Seagate hereby represents
and warrants to Veritas and Merger Sub, subject to the exceptions and
qualifications specifically set forth or disclosed in writing in the disclosure
letter delivered by Seagate to Veritas, dated as of the date hereof (the
"Seagate Disclosure Schedule"), as follows:

     2.1   Organization; Good Standing. Each of Seagate and Seagate Software is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, with the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as
presently being conducted and as proposed to be conducted, and is duly qualified
to do business and in good standing as a foreign corporation in each
jurisdiction in which the failure to be so qualified or in good standing would
reasonably be expected to have a Material Adverse Effect on Seagate.

     2.2   Charter Documents. Seagate has delivered or made available to Veritas
a true and correct copy of the Certificate of Incorporation and Bylaws of
Seagate and Seagate Software each as amended and in effect as of the date
hereof. Neither Seagate nor Seagate Software is in violation of any of the
provisions of its Certificate of Incorporation or Bylaws, each as amended and in
effect as of the date hereof.

     2.3   Capital Structure.

     (a)(i) The authorized capital stock of Seagate consists of 600,000,000
shares of Common Stock, par value $0.01 per share, of which there were
226,977,176 shares issued and outstanding as of February 29, 2000, and 1,000,000
shares of Preferred Stock, par value $0.01 per share, of which no shares are
issued or outstanding. All outstanding shares of Seagate Common Stock are duly
authorized and validly issued, fully paid and nonassessable, are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Seagate or any contract, agreement or other commitment to which Seagate is a
party or by which it is bound and have been offered, issued, sold and delivered
by Seagate in compliance with all registration or qualification required (or
applicable exemptions therefrom) of applicable federal and State securities
laws. As of February 29, 2000, Seagate had reserved an aggregate of 47,709,220
shares of Seagate Common Stock, net of exercises, for issuance to employees,
consultants and non-employee directors pursuant to the Seagate Stock Option
Plans, under which there were (i) outstanding Seagate Options to purchase an
aggregate of 34,415,211 shares of Seagate Common Stock, and (ii) 13,294,009
shares of Seagate Common Stock available for future grant. All shares of Seagate
Common Stock subject to issuance under the Seagate Stock Option Plans, upon
issuance in accordance with the terms and conditions set forth in the
instruments pursuant to which such shares of Seagate Common Stock are issuable,
would be duly authorized and validly issued, fully paid and nonassessable.

     (ii) The authorized capital stock of Seagate Software consists of
300,000,000 shares of Common Stock, par value $0.01 per share, and 73,000,000
shares of Preferred Stock, par value $0.01 per share, all of the issued or
outstanding shares of which capital stock are owned by Seagate. All outstanding
shares of Seagate Software Common Stock are duly authorized and validly issued,
fully paid and nonassessable, are not subject to preemptive rights created by
statute, the Certificate of Incorporation or Bylaws of Seagate Software or any
contract, agreement or other commitment to which Seagate Software is a party or
by which it is bound and have been offered, issued, sold and delivered by
Seagate Software in

                                       11



compliance with all registration or qualification required (or applicable
exemptions therefrom) of applicable federal and State securities laws.

     (b)  Except as set forth in Section 2.3(a) hereof, there are no equity
securities, partnership interests or other similar ownership interests of any
class or series of Seagate or Seagate Software, or any securities exchangeable
or convertible into, or exercisable for, any such equity securities, partnership
interests or other similar ownership interests, issued, reserved for issuance or
outstanding. Except as set forth in Section 2.3(a) hereof, there are no options,
warrants, equity securities, partnership interests or other similar ownership
interests, calls, rights (including preemptive rights), commitments or
agreements of any kind or character to which Seagate or Seagate Software is a
party or by which it is bound obligating Seagate or Seagate Software to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or cause the repurchase, redemption or acquisition, of any
shares of capital stock of Seagate or Seagate Software, or obligating Seagate or
Seagate Software to grant, extend, accelerate the vesting of, or enter into, any
such option, warrant, equity security, partnership interest or other similar
ownership interest, call, right, commitment or agreement. Except as set forth in
Section 2.3(b) of the Seagate Disclosure Schedule, there are no registration
rights and, to the knowledge of Seagate, there are no voting trusts, proxies or
other agreements or understandings, with respect to any capital stock of Seagate
or Seagate Software.

     (c)  Except for the Designated Assets (as defined in Section 4.1 hereof),
as of the Closing Date, Seagate will not own or hold, directly or indirectly
through one or more subsidiaries, any equity securities, partnership interests
or other similar ownership interests of or in any class or series of any other
corporation, limited liability company, general or limited partnership, joint
venture, business trust, association or other business entity or enterprise, or
any security exchangeable or convertible into, or exercisable for, any such
equity securities, partnership interests or other similar ownership interests.

     2.4   Authority. Seagate has all requisite corporate power and authority to
enter into this Agreement and the OD Documents, to perform its obligations
hereunder and thereunder, and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Seagate of this Agreement and the OD
Documents, the performance by Seagate of its obligations hereunder and
thereunder, and the consummation by Seagate of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate action
on the part of Seagate, subject only to the approval and adoption of the
transaction contemplated by the OD Documents and this Agreement and the Merger
by Seagate's stockholders and the filing and recordation of the Certificate of
Merger in accordance with Delaware Law and the transactions contemplated by the
OD Documents. The affirmative approval of the holders of a majority of the
outstanding shares of the Seagate Common Stock is required for Seagate's
stockholders to approve and adopt this Agreement and the Merger under Delaware
Law and the transactions contemplated by the OD Documents. This Agreement and
the OD Documents been duly executed and delivered by Seagate and, assuming the
due authorization, execution and delivery of this Agreement by Veritas and
Merger Sub and the OD Documents by the other parties thereto, this Agreement and
the OD Documents constitute the valid and binding obligations of Seagate,
enforceable in accordance with their respective terms, subject to (i) the effect
of any applicable laws of general application relating to bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights and the relief of debtors generally, and (ii) the effect of
rules of law and general principles of equity, including, without limitation,
rules of law and general principal of equity governing specific performance,
injunctive relief and other

                                       12



equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

     2.5   Conflicts. The execution and delivery of this Agreement and the OD
Documents by Seagate do not, and the performance by Seagate of its obligations
hereunder and thereunder and the consummation by Seagate of the transactions
contemplated hereby and thereby will not, (i) conflict with or violate the
Certificate of Incorporation or Bylaws of Seagate, each as amended and in effect
as of the date hereof, (ii) subject to obtaining the consents, approvals, orders
or authorizations, and making the registrations, declarations or filings, set
forth in Section 2.6 hereof, conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Seagate or by which Seagate or its
assets and properties are bound or affected, or (iii) result in any breach of,
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Seagate's rights or alter the rights or
obligations of any third party under, or give to any third party any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the assets or properties of Seagate pursuant to,
any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Seagate is
a party or by which Seagate or its assets and properties are bound or affected,
except to the extent such conflict, violation, breach, default, impairment or
other effect would not, in the case of clause (ii) or (iii) of this Section 2.5,
individually or in the aggregate, (a) reasonably be expected to have a Material
Adverse Effect, or (b) reasonably be expected to have a material adverse effect
on, or materially delay, the ability of Veritas or Seagate to consummate the
transactions contemplated hereby or on Seagate's ability to consummate the
transactions contemplated by the OD Documents.

     2.6   Consents. Except as set forth in the Seagate Disclosure Statement, no
material consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Seagate in connection with the execution and delivery of this
Agreement or the OD Documents by Seagate, or the performance by Seagate of its
obligations hereunder or thereunder or the consummation by Seagate of the
transactions contemplated hereby or thereby, except for (i) the filing and
effectiveness of the Registration Statement (as defined in Section 5.1 hereof)
with the United States Securities and Exchange Commission (the "SEC") in
accordance with the Securities Act of 1933, as amended (the "Securities Act"),
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iii) the filing of the Proxy Statement (as defined in
Section 5.1 hereof) with the SEC in accordance with the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (iv) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state "blue sky" securities laws and the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the equivalent laws of any foreign country, and (v) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings which, if not obtained or made, would not have a material adverse effect
on the ability of Veritas and Seagate to consummate the Merger and the other
transactions contemplated hereby or by the OD Documents.

     2.7   SEC Filings; Financial Statements. Seagate has filed all forms,
reports and documents required to be filed with the SEC since July 3, 1998, and
has made available (through on-line databases) to Veritas such forms, reports
and documents in the form filed with the SEC. All such required forms, reports
and documents (including all exhibits and schedules thereto and all documents
incorporated by reference therein) are referred to herein as the "Seagate SEC
Reports." As of their respective dates, the Seagate SEC

                                      13



Reports (i) complied in all material respects with the applicable requirements
of the Securities Act or the Exchange Act, and the rules and regulations of the
SEC promulgated thereunder, and (ii) did not at the time each such Seagate SEC
Report was filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of the
Subsidiaries of Seagate is required to file any forms, reports or other
documents with the SEC. Except to the extent revised or superseded by a
subsequent filing with the SEC (a copy of which has been made available to
Veritas prior to the date of this Agreement), none of the Seagate SEC Reports
filed by Seagate since July 3, 1999 and prior to the date of this Agreement
(collectively, the "Recent SEC Reports") contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Seagate included in all Seagate SEC Reports comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited consolidated
quarterly statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of Seagate
and its consolidated Subsidiaries as of the dates thereof and the consolidated
financial position of Seagate and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited quarterly statements, to
normal year-end audit adjustments). Except as reflected in the most recent
consolidated balance sheet of Seagate included in the Recent SEC Reports most
recently filed by Seagate with the SEC prior to the date hereof (such
consolidated balance sheet being referred to herein as the "Current Seagate
Balance Sheet" and the date thereof being referred to herein as the "Current
Balance Sheet Date"), as of the Current Balance Sheet Date, neither Seagate nor
any of its Subsidiaries had, and since such date neither Seagate nor any of such
Subsidiaries has incurred, any Liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.

     2.8   Liabilities. Except as identified on the Seagate Disclosure Schedule,
as of the Effective Time, Seagate will not have any material Liabilities or
other obligations of any nature whatsoever (absolute, accrued, contingent or
otherwise) other than (i) Designated Liabilities and (ii) Liabilities for which
Veritas is entitled to indemnification under the Indemnification Agreement.

     2.9   Absence of Material Adverse Effect on Seagate. Since the date of the
Current Seagate Balance Sheet, there has not been, occurred or arisen any
Material Adverse Effect on Seagate.

     2.10  Compliance. Seagate is not in conflict in any material respect with,
or in material default or violation of, (i) any law, rule, regulation, order,
judgment or decree applicable to Seagate or by which Seagate or its assets and
properties are bound or affected, or (ii) any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Seagate is a party or by which Seagate or its
assets and properties are bound or affected. No investigation or review by any
Governmental Entity is pending or, to the knowledge of Seagate, threatened,

                                       14



against Seagate, nor has any Governmental Entity indicated an intention to
conduct the same. There is no material agreement, judgment, injunction, order or
decree binding upon Seagate or any of assets and properties which has had, or
would reasonably be expected to have, the effect of prohibiting or materially
impairing the consummation of the Merger, or the other transactions contemplated
hereby or by the OD Documents.

     2.11  Permits. Seagate holds all permits, licenses, variances, exemptions,
orders and approvals from Governmental Entities which are material to the
operation of the business of Seagate, and Seagate is in compliance in all
material respects with the terms of such permits, licenses, variances,
exemptions, orders and approvals.

     2.12  Litigation. As of the date of this Agreement, there is no action,
suit, proceeding, claim, arbitration or investigation pending, or as to which
Seagate has received any notice of assertion nor, to the knowledge of Seagate,
is there any threatened action, suit, proceeding, claim, arbitration or
investigation against Seagate, which in any case would reasonably be expected to
have a Material Adverse Effect on Seagate.

     2.13  Brokers' and Finders' Fees. Except for fees payable to Morgan Stanley
& Co. Incorporated, Seagate has not incurred, nor will it incur, directly or
indirectly, any liability for any brokerage or finders' fees or agents'
commissions or any similar charges in connection with the Merger or the other
transactions contemplated hereby or by the OD Documents.

     2.14  Absence of Liens and Encumbrances. Except as disclosed on Section
2.14 of the Seagate Disclosure Schedule, Seagate and Seagate Software Holdings,
Inc. have good and valid title to all of their assets and properties that will
not be sold or otherwise disposed of pursuant to the OD Documents including,
without limitation, their shares of Veritas, Gadzoox, Dragon, CVCI and SanDisk,
and such assets and properties at the Effective Time will be free and clear of
any liens, encumbrances or financial commitments, except for liens for taxes not
yet due and payable and as otherwise reflected in the Seagate SEC Reports.

     2.15  Statements; Registration Statement; Proxy Statement/Prospectus. None
of the information supplied or to be supplied by Seagate for inclusion or
incorporation by reference in (i) the Registration Statement (as defined in
Section 5.1 hereof) will, at the time it is declared or ordered effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or (ii) the Proxy Statement (as defined in Section 5.1
hereof) will, on the date the Proxy Statement is first mailed to the
stockholders of Seagate, at the time of the Seagate Stockholders' Meeting (as
defined in Section 5.1 hereof), at the time of the Veritas Stockholders' Meeting
and at the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Seagate Stockholders' Meeting or the Veritas
Stockholders' Meeting which has become false or misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated thereunder.
Notwithstanding the foregoing or anything to contrary set forth in this
Agreement, Seagate makes no representation or warranty with respect to any
information supplied by Veritas or Merger Sub which is contained in any of the
foregoing documents.

                                       15



     2.16  Board Approval. The Board of Directors of Seagate has (i) determined
that the Merger and the other transactions contemplated hereby and by the OD
Documents are fair to, advisable and in the best interests of Seagate and its
stockholders, (ii) duly approved the Merger, this Agreement, the OD Documents
and the other transactions contemplated hereby and thereby, and (iii) determined
to recommend that the stockholders of Seagate approve the Merger, this
Agreement, the OD Documents and the other transactions contemplated hereby and
thereby.

     2.17  State Takeover Statutes. The Board of Directors of Seagate has
approved the Merger, this Agreement, and the other transactions contemplated
hereby and thereby, and such approval is sufficient to render inapplicable to
the Merger, this Agreement, the OD Documents and the other transactions
contemplated hereby and thereby the provisions of Section 203 of Delaware Law to
the extent, if any, such provisions are applicable to the Merger, this
Agreement, the OD Documents and the other transactions contemplated hereby and
thereby. No other state takeover statute or similar statute or regulation
applies to or purports to apply to the Merger, this Agreement, the OD Documents
or the other transactions contemplated hereby and thereby.

     2.18  Fairness Opinion. Seagate has received a written opinion from Morgan
Stanley & Co., Incorporated dated as of the date hereof, to the effect that, as
of the date hereof, the Merger Consideration is fair to the stockholders of
Seagate from a financial point of view and will deliver to Veritas a copy of
such opinion.

     2.19  Veritas Common Stock. All of the Veritas Common Stock held directly
or indirectly by Seagate is owned, beneficially and of record, by Seagate
Software, and has been held continuously by Seagate Software since May 28, 1999.

     2.20  Intercompany Transactions. At no time has Seagate, Seagate Software
or any member of an affiliated group of corporations as defined in Section 1504
of the Code filing returns on a consolidated basis of which Seagate or Seagate
Software is a member engaged in an intercompany transaction with respect to the
Veritas Common Stock giving rise to an intercompany item or corresponding item
within the meaning of Section 1.1502-13 of the United States Income Tax
Regulations with respect to the Veritas Common Stock, including but not limited
to such items that may be subject to gain recognition upon the application of
Section 1.1502-13(f)(4) of the United States Income Tax Regulations.

     2.21  Taxes. Each of Seagate and its Subsidiaries has filed all Tax Returns
required to be filed by any of them and has paid (or Seagate has paid on its
behalf), or has set up an adequate reserve for the payment of, all Taxes
required to be paid in respect of the periods covered by such returns (except
where the failure to pay would not have a Material Adverse Effect on Seagate).
The information contained in such Tax Returns is true, complete and accurate in
all material respects except where the failure to be so would not have a
Material Adverse Effect on Seagate. Neither Seagate nor any subsidiary of
Seagate is delinquent in the payment of any tax, assessment or governmental
charge except where the delinquency would not have a Material Adverse Effect on
Seagate. No deficiencies for any taxes have been proposed, asserted or assessed
against Seagate or any of its subsidiaries that have not been finally settled or
paid in full which would have a Material Adverse Effect on Seagate, and no
requests for waivers of the time to assess any such tax are pending.

     2.22  Code Section 897 Company. Seagate is not and has not been during the
period referred to in section 897(c)(1)(A)(ii) a United States real property
holding corporation within the meaning of section 897(c)(2) of the Code.

                                       16



                                   ARTICLE III

            REPRESENTATIONS AND WARRANTIES OF VERITAS AND MERGER SUB

     As of the date hereof and as of the Closing Date, Veritas and Merger Sub
hereby jointly and severally represent and warrant to Seagate, subject to the
exceptions and qualifications specifically set forth or disclosed in writing in
the disclosure letter delivered by Veritas to Seagate, dated as of the date
hereof (the "Veritas Disclosure Schedule"), as follows:

     3.1   Organization; Good Standing. Veritas and each of its material
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the respective jurisdiction of its incorporation,
with the corporate power and authority to own, lease and operate its respective
assets and property and to carry on its respective business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would reasonably be expected to have a Material
Adverse Effect on Veritas.

     3.2   Charter Documents. Veritas has delivered or made available to Seagate
a true and correct copy of the Certificate of Incorporation and Bylaws of
Veritas, as amended and in effect as of the date hereof. Neither Veritas nor any
of its material subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or equivalent organizational documents,
in each case as amended and in effect as of the date hereof.

     3.3   Capital Structure. The authorized capital stock of Veritas consists
of 500,000,000 shares of Common Stock, par value $0.001 per share, of which
there were 396,532,084 shares issued and outstanding as of March 24, 2000,
10,000,000 shares of Preferred Stock, par value $0.001 per share, of which no
shares are issued or outstanding, and one share of the special voting stock, par
value $0.001 per share. The authorized capital stock of Merger Sub consists of
1,000 shares of common stock, par value $0.01 per share, of which, as of the
date hereof, 100 shares are issued and outstanding. All outstanding shares of
Veritas Common Stock and Merger Sub's capital stock are duly authorized and
validly issued, fully paid and non-assessable, and are not subject to preemptive
rights created by statute, the Certificate of Incorporation or Bylaws of Veritas
or any contract, agreement or other commitment to which Veritas is a party or by
which it is bound. All outstanding shares of capital stock of Merger Sub have
been issued and granted in compliance with all applicable securities and other
laws.

     3.4   Authority. Each of Veritas and Merger Sub has all requisite corporate
power and authority to enter into this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby. The execution
and delivery by Veritas and Merger Sub of this Agreement, the performance by
Veritas and Merger Sub of the transactions contemplated hereby, and the
consummation by Veritas and Merger Sub of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of
Veritas and Merger Sub, subject only to the approval of the Merger and, to the
extent not previously authorized, the Share Increase by Veritas' stockholders
and the filing of an amendment to the Certificate of Incorporation of Venus with
respect to the Share Increase and the Certificate of Merger in accordance with
Delaware Law. The approval of the holders of a majority of the outstanding
shares of Veritas Common Stock is required to approve the Merger and the Share
Increase. This Agreement has been duly executed and delivered by Veritas and
Merger Sub and, assuming the due authorization, execution and delivery of this
Agreement by Seagate, this Agreement constitutes the valid

                                       17



and binding obligations of Veritas and Merger Sub, enforceable in accordance
with their respective terms, subject to (i) the effect of any applicable laws of
general application relating to bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights and the relief of
debtors generally, and (ii) the effect of rules of law and general principles of
equity, including, without limitation, rules of law and general principal of
equity governing specific performance, injunctive relief and other equitable
remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

     3.5   Conflicts. The execution and delivery of this Agreement by Veritas
and Merger Sub do not, and the performance by Veritas and Merger Sub of their
obligations hereunder and the consummation by Veritas and Merger Sub of the
transactions contemplated hereby will not, (i) conflict with or violate the
Certificate of Incorporation or Bylaws of Veritas and Merger Sub, (ii) subject
to obtaining the consents, approvals, orders and authorizations, and making the
registrations, recordations and filings, set forth in Section 3.6 hereof,
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Veritas and Merger Sub or by which Veritas or Merger Sub or their
assets and properties are bound or affected, or (iii) result in any breach of,
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Veritas' or Merger Sub's rights or
alter the rights or obligations of any third party under, or give to any third
parties any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a Lien on any of the assets or properties of
Veritas or Merger Sub pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Veritas or Merger Sub is a party or by which Veritas or
Merger Sub or either of their assets and properties are bound or affected,
except to the extent such conflict, violation, breach, default, impairment or
other effect would not, in the case of clause (ii) or (iii) of this Section 3.5,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Veritas.

     3.6   Consents. Except as set forth in the Veritas Disclosure Schedule, no
material consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Veritas in connection with the execution and delivery of this
Agreement or the performance by Veritas of its obligations hereunder or the
consummation of the transactions contemplated hereby, except for (i) the filing
of a Registration Statement with the SEC in accordance with the Securities Act,
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iii) the filing of the Proxy Statement with the SEC in
accordance with the Exchange Act, (iv) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state "blue sky" securities laws and the HSR Act and the
antitrust or competition laws of any foreign country, and (v) such other
consents, authorizations, filings, approvals and registrations which, if not
obtained or made, would not be material to Veritas or Merger Sub or have a
material adverse effect on the ability of Veritas, Merger Sub and Seagate to
consummate the Merger and the other transactions contemplated hereby.

     3.7   SEC Filings; Veritas Financial Statements.

     (a) Veritas has filed all forms, reports and documents required to be filed
with the SEC since December 31, 1998, and has made a copy of all such forms,
reports and documents available to Seagate. All such forms, reports and
documents (including those that Veritas may file subsequent to the date hereof)
are referred to herein as the "Veritas

                                       18



SEC Reports." As of their respective dates, the Veritas SEC Reports (i) were or
will be (as the case may be) prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder, and (ii) did not or will not (as
the case may be) at the time they were filed (or if amended or superseded, then
on the date of filing of such amendment or superseding form, report or document)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

     (b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Veritas SEC Reports (the "Veritas
Financials"), including any Veritas SEC Reports filed after the date hereof
until the Closing, (i) complied or will comply (as the case may be) as to form
in all material respects with the published rules and regulations of the SEC
with respect thereto, (ii) was prepared or will be prepared (as the case may be)
in accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form
10-Q under the Exchange Act), and (iii) fairly presented or will fairly present
(as the case may be) in all material respects the consolidated financial
position of Veritas and its subsidiaries at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not, or are not expected to
be, material in amount. The balance sheet of Veritas as of December 31, 1998
contained in the Veritas SEC Reports is hereinafter referred to as the "Veritas
Balance Sheet."

     (c) Veritas has heretofore furnished to Seagate a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Veritas with the SEC pursuant to
the Securities Act or the Exchange Act.

     3.8   Absence of Certain Changes or Events. Since the date of the Veritas
Balance Sheet, there has not been, occurred or arisen any Material Adverse
Effect on Veritas.

     3.9   Litigation. There is no action, suit, proceeding, claim, arbitration
or investigation pending, or as to which Veritas or any of its subsidiaries has
received any written notice of assertion nor, to the knowledge of Veritas, is
there any threatened action, suit, proceeding, claim, arbitration or
investigation against Veritas or any of its subsidiaries, which in any case
would reasonably would be expected to have a Material Adverse Effect on Veritas.

     3.10  Brokers' and Finders' Fees. Except for fees payable to Credit Suisse
First Boston Corporation, Veritas has not incurred, nor will it incur, directly
or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with the Merger or the other
transactions contemplated hereby.

     3.11  Statements; Registration Statement; Proxy Statement/Prospectus. None
of the information supplied or to be supplied by Veritas for inclusion or
incorporation by reference in (i) the Registration Statement (as defined in
Section 5.1 hereof) will at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (ii) the Proxy Statement (as defined in Section 5.1 hereof)

                                      19



shall not, on the date the Proxy Statement is first mailed to each of Seagate's
stockholders and Veritas' stockholders, at the times of the Seagate
Stockholder's Meeting (as defined in Section 5.1 hereof) and the Veritas
Stockholders' Meeting and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Seagate
Stockholders' Meeting or Veritas Stockholders' Meeting which has become false or
misleading. Notwithstanding the foregoing or anything else to the contrary set
forth in this Agreement, Veritas makes no representation or warranty with
respect to any information supplied by Seagate which is contained in any of the
foregoing documents.

     3.12  Board Approval. The Board of Directors of Veritas has (i) determined
that the Merger and the other transactions contemplated hereby are advisable and
in the best interests of Veritas and its stockholders, (ii) duly approved the
Merger, this Agreement and the other transactions contemplated hereby, and (iii)
resolved to recommend that the Stockholders of Veritas approve the Share
Increase.

     3.13  Fairness Opinion. Veritas has received a written opinion from Credit
Suisse First Boston Corporation, dated as of the date hereof, to the effect
that, as of the date hereof, the Stock Portion to be paid by Veritas is fair to
Veritas from a financial point of view and will deliver to Seagate a copy of
such opinion.

     3.14  Merger Sub Operations. Merger Sub was formed solely for the purpose
of engaging in the transactions contemplated hereby and has not (a) engaged in
any business activities, (b) conducted any operations other than in connection
with the transactions contemplated hereby or (c) incurred any Liabilities other
than in connection with the transactions contemplated hereby.

                                   ARTICLE IV

                   CONDUCT OF BUSINESS AND OTHER TRANSACTIONS

     4.1   Conduct of Business. On or before the Effective Time, Seagate and
Seagate Software shall take all actions necessary to transfer all of their
respective assets and Liabilities to one or more of Seagate's Subsidiaries such
that at the Effective Time the only assets and properties owned or held by
Seagate (the "Designated Assets") and the only Liabilities not assumed by such
other Subsidiaries shall be Designated Liabilities; provided, however, that
prior to the Effective Time, Seagate may sell, transfer or otherwise dispose of
any of the Designated Assets set forth on Part B of Schedule I hereto. From and
after the execution and delivery of this Agreement until the earlier of the
Effective Time or the termination of this Agreement, Seagate shall not sell,
transfer or otherwise dispose of any shares of Veritas Common Stock owned by
Seagate as of the date hereof.

     4.2   No Amendment to OD Documents. From the date hereof until the earlier
to occur of the Effective Time or the termination of this Agreement pursuant to
and in accordance with Section 7.1 hereof, neither Seagate nor Seagate Software
shall terminate, amend, modify or otherwise supplement or waive any of the terms
and conditions of the OD Documents (or any of them); provided, however, that
notwithstanding the foregoing, Seagate may terminate the OD Documents pursuant
to their respective terms.

     4.3   Waivers and Releases. Seagate shall use its best efforts to obtain
and to deliver to Veritas, as soon as practicable after the date hereof and in
any event at least 15 days

                                       20



prior to the Effective Time, (i) with respect to each individual who will be a
holder of Rolled Options, a waiver and release of claims in favor of Veritas and
Seagate in form and in substance reasonably satisfactory to Veritas (a "Proper
Waiver"), with respect to the cancellation of Rolled Options held by such
individual described in Section 1.5(c) hereof, and (ii) with respect to each
individual who is a party to any employment, severance or change in control or
similar agreement, or who participates in any plan providing severance or change
in control benefits, a Proper Waiver with respect to any claims which any such
individual may have against Veritas and/or Seagate with respect to any such
agreements or plans.

                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

     5.1   Proxy Statement/Prospectus; Registration Statement; Other Filings.

     (a) As promptly as practicable following the execution and delivery of this
Agreement, Seagate and Veritas shall prepare and file with the SEC a document to
be sent to the stockholders of Seagate and Veritas in connection with the
meeting of Seagate's stockholders to consider the approval and adoption of this
Agreement and the Merger (the "Seagate Stockholders' Meeting") and the meeting
of Veritas Stockholders to consider approval of the Merger and the Share
Increase (the "Veritas Stockholders' Meeting") (such proxy statement/prospectus,
as amended or supplemented, being referred to herein as the "Proxy Statement"),
and Veritas shall prepare and file with the SEC a registration statement on Form
S-4 (the "Registration Statement") in which the Proxy Statement will be included
as a prospectus. Each of Seagate and Veritas shall promptly respond to any
comments of the SEC with respect to the Registration Statement or the Proxy
Statement, shall use its respective commercially reasonable efforts to have the
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing and, in the case of Seagate, shall cause the
Proxy Statement to be mailed to the stockholders of Seagate at the earliest
practicable time. As promptly as practicable after the execution and delivery of
this Agreement, Seagate and Veritas shall prepare and file any other filings
required under the Exchange Act, the Securities Act or any other federal,
foreign or state "blue sky" securities laws relating to the Merger and the other
transactions contemplated hereby (collectively, the "Other Filings"). Each of
Seagate and Veritas shall notify the other promptly upon the receipt of any
comments from the SEC or its staff, and of any request by the SEC or its staff
or any other government officials for amendments or supplements to the
Registration Statement, the Proxy Statement or any Other Filing, or for
additional information, and shall supply the other with copies of all
correspondence between such party or any of its agents or representatives, on
the one hand, and the SEC, or its staff or any other government officials, on
the other hand, with respect to the Registration Statement, the Proxy Statement,
or any Other Filing. The Registration Statement, the Proxy Statement and the
Other Filings shall comply in all material respects with all applicable
requirements of law and the rules and regulations promulgated thereunder.
Whenever any event occurs which is required to be set forth in an amendment or
supplement to the Registration Statement, the Proxy Statement or any Other
Filing, Seagate or Veritas, as the case may be, shall promptly inform the other
of such event, and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of Seagate, such amendment
or supplement.

                                       21



     (b) Subject to the terms of Section 5.2(c) hereof, the Proxy Statement
shall include the recommendation of the Board of Directors of Seagate in favor
of adoption and approval of this Agreement and the Merger. The Proxy Statement
shall also include the recommendation of the Board of Directors of Veritas in
favor of approval of the Share Increase and the Merger.

     5.2   Stockholder Meetings.

     (a) Subject to the terms of Section 5.2(c) hereof, promptly after the date
hereof and in consultation with Veritas, Seagate shall take all action necessary
in accordance with Delaware Law and its Certificate of Incorporation and Bylaws
to convene the Seagate Stockholders' Meeting and Veritas shall call the Veritas
Stockholders' Meeting, to be held as promptly as practicable, for the purpose of
voting upon (i) this Agreement, the Merger and the transactions contemplated
under the OD Documents, (ii) the Merger and (iii) if necessary, the Share
Increase, as the case may be. Seagate and Veritas shall use all reasonable
efforts to hold the Veritas Stockholders' Meeting and the Seagate Stockholders'
Meeting on the same day and as soon as practicable after the date on which the
Registration Statement becomes effective. Nothing herein shall prevent Seagate
or Veritas from adjourning or postponing the Seagate Stockholders' Meeting or
the Veritas Stockholders' Meeting, as the case may be, to the extent necessary
to ensure that any necessary supplement or amendment to the Proxy Statement is
provided to the stockholders of Veritas and Seagate in advance of a vote
relevant to the Merger and this Agreement. Subject to the terms of Section
5.2(c) hereof, Seagate and Veritas shall each use its commercially reasonable
efforts to solicit proxies from its stockholders in favor of the adoption and
approval of the items in clauses (i) and (ii) of the preceding sentence, as
relevant, and shall take all other action necessary or advisable to secure the
vote or consent of its stockholders required by the rules of the National
Association of Securities Dealers, Inc., Delaware Law, The New York Stock
Exchange, Inc. and all other applicable legal requirements to obtain such
approval.

     (b) Subject to the terms of Section 5.2(c) hereof: (i) the Board of
Directors of Seagate shall recommend that Seagate's stockholders vote in favor
of and adopt and approve this Agreement and the Merger and the transactions
contemplated under the OD Documents at the Seagate Stockholders' Meeting; (ii)
the Proxy Statement shall include a statement to the effect that the Board of
Directors of Seagate has recommended that Seagate's stockholders vote in favor
of and adopt and approve this Agreement and the Merger and the transactions
contemplated under the OD Documents at the Seagate Stockholders' Meeting, (iii)
neither the Board of Directors of Seagate nor any committee thereof shall
withdraw, amend or modify, or propose or resolve to withdraw, amend or modify in
a manner adverse to Veritas, the recommendation of the Board of Directors of
Seagate that the stockholders of Seagate vote in favor of and adopt and approve
this Agreement and the Merger, and, unless this Agreement shall have been
terminated, Seagate shall cause Seagate Software to vote the shares of Veritas
Common Stock it holds in favor of the Share Increase and the Merger.

     (c) Notwithstanding the foregoing or anything to the contrary set forth in
this Agreement, nothing in this Agreement shall prevent the Board of Directors
of Seagate from withdrawing, amending or modifying its recommendation in favor
of this Agreement and the Merger (i) Seagate receives a Seagate Superior Offer
(as defined below) and such Seagate Superior Offer is not withdrawn, (ii)
neither Seagate nor any of its agents or representatives has violated any of the
restrictions set forth in Section 5.4(a) hereof, and (iii) the Board of
Directors of Seagate concludes in good faith, after consultation with its

                                       22



outside counsel, that, in light of such Seagate Superior Offer, the withholding,
withdrawal, amendment or modification of such recommendation is necessary in
order for the Board of Directors of Seagate to comply with its fiduciary
obligations to the stockholders of Seagate under applicable law. For all
purposes of and under this Agreement, the term "Seagate Superior Offer" shall
mean a bona fide written offer made by a third party to consummate any of the
following transactions: (a) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Seagate, pursuant to which the stockholders of Seagate immediately preceding the
consummation of such transaction would hold less than fifty percent (50%) of the
equity interest in the surviving or resulting entity of such transaction (or the
ultimate parent entity thereof); (b) a sale or other disposition by Seagate of
assets and properties (excluding inventory and used equipment sold in the
ordinary course of business) representing more than fifty percent (50%) of
Seagate's assets immediately prior to such sale or other disposition, or (c) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by Seagate), directly or indirectly, of beneficial
ownership or a right to acquire beneficial ownership of shares representing more
than fifty percent (50%) of the voting power of the then outstanding shares of
capital stock of the Seagate, in each case on terms that the Board of Directors
of Seagate determines, in its reasonable judgment, after consultation with its
financial advisor, to be more favorable to the stockholders of Seagate, from a
financial point of view, than the terms of this Agreement and the Merger;
provided, however, that any such offer shall not be deemed to be a "Seagate
Superior Offer" if any financing required to consummate the transaction
contemplated by such offer is not committed and is not likely in the judgment of
the Board of Directors of Seagate to be obtained by such third party on a timely
basis. Notwithstanding the foregoing or anything to the contrary set forth in
this Agreement, nothing in this Agreement shall prevent the Board of Directors
of Seagate from withdrawing, amending or modifying its recommendation in favor
of the transactions contemplated by the OD Documents, or terminating the OD
Documents in accordance with their terms.

     5.3 Confidentiality. Veritas and Seagate acknowledge that they have
previously entered into a Confidentiality Agreement (the "Confidentiality
Agreement"), which shall continue in full force and effect in accordance with
its terms.

     5.4 No Solicitation.

     (a) From the execution and delivery of this Agreement and until the earlier
to occur of the Effective Time and termination of this Agreement pursuant to
Section 7.1 hereof, Seagate and its Subsidiaries shall not, and they shall cause
their respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them not
to, directly or indirectly (i) solicit, initiate, encourage or induce the
making, submission or announcement of any Seagate Acquisition Proposal (as
defined in Section 5.4(b) hereof), (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any Seagate
Acquisition Proposal, (iii) engage in discussions with any person with respect
to any Seagate Acquisition Proposal, (iv) subject to the terms of Section 5.2(c)
hereof, approve, endorse or recommend any Seagate Acquisition Proposal, or (v)
enter into any letter of intent or similar document or any contract, agreement
or commitment contemplating or otherwise relating to any Seagate Acquisition
Transaction (as defined in Section 5.4(b) hereof); provided, however, that until
the date on which this Agreement is approved by the requisite vote of the
stockholders of Seagate, the terms of this Section 5.4(a) shall not prohibit
Seagate from

                                       23



furnishing information regarding Seagate and its Subsidiaries to, entering into
a confidentiality or non-disclosure agreement with, or entering into discussions
with, any person or group in response to a Seagate Superior Offer submitted by
such person or group (and not withdrawn) if (a) neither Seagate nor any agents
or representative of Seagate and its Subsidiaries shall have violated any of the
restrictions set forth in this Section 5.4(a), (b) the Board of Directors of
Seagate concludes in good faith, after consultation with its outside legal
counsel, that such action is necessary in order for the Board of Directors of
Seagate to comply with its fiduciary obligations to the stockholders of Seagate
under applicable Law, (c) Seagate receives from such person or group an executed
confidentiality or non-disclosure agreement containing customary limitations on
the use and disclosure of all non-public written and oral information furnished
to such person or group by or on behalf of Seagate and containing terms no less
favorable to the disclosing party than the terms of the Confidentiality
Agreement (including with respect to any standstill arrangements, unless the
standstill arrangements in the Confidentiality Agreement are waived and (d)
prior to furnishing any such non-public information to such person or group, or
entering into negotiations or discussions, Seller notifies Purchaser promptly of
such inquiries, proposals or offers received by, any such information requested
from, or any such discussions or negotiations sought to be initiated or
continued with, any of its representatives indicating, in connection with such
notice, the name of the person and the terms and conditions of any inquiries,
proposals or offers, and furnishes such non-public information to Veritas to the
extent such information has not been previously furnished to Veritas. Seagate
and its subsidiaries shall immediately cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Seagate Acquisition Proposal.

     (b) For all purposes of and under this Agreement, the term "Seagate
Acquisition Proposal" shall mean any offer or proposal (other than an offer or
proposal by Veritas) relating to any Seagate Acquisition Transaction. For all
purposes of and under this Agreement, "Seagate Acquisition Transaction" shall
mean any transaction or series of related transactions, other than the
transactions contemplated by this Agreement or the OD Documents, involving: (i)
any acquisition or purchase from Seagate by any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) of more than fifteen percent (15%) in interest of the
total outstanding voting securities of Seagate, or any tender offer or exchange
offer that if consummated would result in any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) beneficially owning more than fifteen percent (15%) of
the total outstanding voting securities of Seagate, or any merger,
consolidation, business combination or similar transaction involving Seagate
pursuant to which the stockholders of Seagate immediately preceding such
transaction would hold less than fifteen percent (15%) of the equity interests
in the surviving or resulting entity of such transaction; (ii) any sale, lease
(other than in the ordinary course of business), exchange, transfer, license
(other than in the ordinary course of business), acquisition or disposition of
more than fifteen percent (15%) of the assets and properties of Seagate; or (iv)
any liquidation or dissolution of Seagate, excluding, in all cases any
disposition of the assets covered by the OD Documents.

     (c) In addition to the restrictions and obligations of Seagate set forth in
Section 5.4(a) hereof, Seagate as promptly as practicable, and in any event
within twenty-four (24) hours, shall advise Veritas orally and in writing of any
request received by Seagate for non-public information which Seagate reasonably
believes could lead to a Seagate Acquisition Proposal or of any Seagate
Acquisition Proposal, the material terms

                                       24



and conditions of such request or Seagate Acquisition Proposal, and the identity
of the person or group making any such request or Seagate Acquisition Proposal.
Seagate shall keep Veritas informed in all material respects of the status and
details (including material amendments or proposed amendments) of any such
request or Seagate Acquisition Proposal.

     5.5  Public Disclosure. Veritas and Seagate shall consult with each other
and agree before issuing any press release or otherwise making any public
statement with respect to the Merger, this Agreement, or a Seagate Acquisition
Proposal and shall not issue any such press release or make any such public
statement prior to such agreement, except as may be required by law or any
listing agreement with a national securities exchange or the Nasdaq, in which
case reasonable efforts to consult with the other party hereto shall be made
prior to such release or public statement; provided, however, that no such
consultation or agreement shall be required if, prior to the date of such
release or public statement, Seagate shall have withheld, withdrawn, amended or
modified its recommendation in favor of this Agreement and the Merger or the OD
Documents and the transactions contemplated thereunder.

     5.6  Legal Requirements. Each of Veritas, Merger Sub and Seagate shall take
all reasonable actions necessary or desirable to comply promptly with all legal
requirements which may be imposed on them with respect to the consummation of
the Merger and the other transactions contemplated hereby (including, without
limitation, furnishing all information required in connection with approvals of,
or filings with, any Governmental Entity, and prompt resolution of any
litigation prompted hereby), and shall promptly cooperate with, and furnish
information to, the other party hereto to the extent necessary in connection
with any such requirements imposed upon either of them or their respective
subsidiaries in connection with the consummation of the Merger and the other
transactions contemplated hereby. Veritas shall use its commercially reasonable
efforts to take such steps as may be necessary to comply with the securities and
state "blue sky" securities laws of all jurisdictions which are applicable to
the issuance of Veritas Common Stock pursuant to the Merger in accordance with
this Agreement. Seagate shall use its commercially reasonable efforts to assist
Veritas as may be necessary to comply with the securities and state "blue sky"
securities laws of all jurisdictions which are applicable in connection with the
issuance of Veritas Common Stock pursuant to the Merger in accordance with this
Agreement.

     5.7  Notification of Certain Matters. Veritas shall give prompt notice to
Seagate, and Seagate shall give prompt notice to Veritas, of the occurrence, or
failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (i) any representation or warranty contained in this
Agreement to be untrue or inaccurate at the Effective Time, such that the
conditions set forth in Section 6.2(a) or Section 6.3(a) hereof, as the case may
be, would not be satisfied or fulfilled as a result thereof, or (ii) any
material failure of Veritas, Merger Sub or Seagate, as the case may be, or of
any officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement. Notwithstanding the foregoing, the delivery of any notice
pursuant to this Section 5.7 shall not limit or otherwise affect the rights and
remedies available hereunder to the party receiving such notice.

     5.8  Commercially Reasonable Efforts and Further Assurances. Subject to the
respective rights and obligations of Veritas and Seagate under this Agreement,
each of Veritas and Seagate shall use its respective commercially reasonable
efforts to effectuate

                                       25



the Merger and the other transactions contemplated hereby, and to fulfill and
cause to be fulfilled the conditions to the Closing under this Agreement. Each
of Veritas and Seagate, at the reasonable request of the other party hereto,
shall execute and deliver such other instruments, and do and perform such other
acts and things, as may be necessary or desirable for effecting completely the
consummation of the Merger and the other transactions contemplated hereby.

     5.9  Indemnification.

     (a) From and after the Effective Time, the Surviving Corporation shall
fulfill and honor in all respects the obligations of Seagate pursuant to any
indemnification agreements between Seagate and any of its directors and officers
existing prior to the date hereof to the extent the obligations thereunder
relate to the approval and adoption of the Merger. The Certificate of
Incorporation and Bylaws of the Surviving Corporation shall contain the
provisions with respect to indemnification, exculpation, expense advancement and
elimination of liability for monetary damages relating to the approval and
adoption of the Merger at least as favorable as is set forth in the Certificate
of Incorporation and Bylaws of Seagate, which provisions shall not be amended,
repealed or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who, at the Effective Time, were directors, officers, employees or
agents of Seagate, unless such modification is required by law.

     (b) For a period of six (6) years after the Effective Time, Veritas shall
use its commercially reasonable efforts to maintain in effect, if available,
directors' and officers' liability insurance (or purchase tail coverage)
covering those persons who are currently covered by Seagate's directors' and
officers' liability insurance policy on terms comparable to those applicable to
the then current directors and officers of Veritas.

     (c) In the event that the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers a material amount of its assets and properties to any
person in a single transaction or a series of related transactions, then, and in
each such case, the Surviving Corporation shall either guaranty the
indemnification obligations of the Surviving Corporation under this Section
5.10, or shall make, or cause to be made, proper provision so that the
successors and assigns of the Surviving Corporation assume the indemnification
obligations of the Surviving Corporation under this Section 5.11 for the benefit
of the parties entitled to the benefits of this Section 5.10 (the "Indemnified
Parties"). The terms and provisions of this Section 5.10 are (a) intended to be
for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, and (b) in addition to, and not in substitution for, any other rights
to indemnification or contribution that any of the Indemnified Parties may have
by contract or otherwise.

     (d) This Section 5.9 shall survive any termination of this Agreement and
the consummation of the Merger at the Effective Time, and shall be binding on
all successors and assigns of the Surviving Corporation.

     5.10 Tax-Free Reorganization. Neither Seagate nor Veritas shall, nor shall
either permit any of its Subsidiaries to take or cause to be taken any action
that would disqualify the Merger as a "reorganization" within the meaning of
Section 368(a) of the Code; provided, however, that neither party shall have any
liability under this Section 5.10 as a result of any action contemplated
hereunder or by the OD Documents.

                                       26



     5.11 Nasdaq Listing. Veritas shall authorize for listing on the Nasdaq the
shares of Veritas Common Stock issuable pursuant to the Merger in accordance
with this Agreement, upon official notice of issuance.

     5.12 Seagate Affiliate Agreement. Prior to the Seagate Stockholders
Meeting, Seagate shall provide Veritas a complete and accurate list of those
persons who may be deemed to be, in Seagate's reasonable judgment, affiliates of
Seagate within the meaning of Rule 145 promulgated under the Securities Act (a
"Seagate Affiliate"). Seagate shall provide Veritas with such information and
documents as Veritas reasonably requests for purposes of reviewing and verifying
the foregoing list. Seagate shall deliver or cause to be delivered to Veritas as
promptly as practicable on or following the date hereof, but in no event later
than the date the Proxy Statement is filed with the SEC, from each Seagate
Affiliate an executed Affiliate Agreement, in customary form and substance
reasonably satisfactory to Veritas (the "Seagate Affiliate Agreement"), each of
which will be effective as of the Effective Time. Veritas shall be entitled to
place appropriate legends on the certificates evidencing any Veritas Common
Stock to be received by a Seagate Affiliate pursuant to the Merger in accordance
with this Agreement, and to issue appropriate stop transfer instructions to the
transfer agent for the Veritas Common Stock.

     5.13 Regulatory Filings; Reasonable Efforts. As soon as practicable
following the execution and delivery of this Agreement, Seagate and Veritas each
shall file with the United States Federal Trade Commission (the "FTC") and the
Antitrust Division of the United States Department of Justice ("DOJ") a
Notification and Report Form relating to the Merger and the other transactions
contemplated hereby as required by the HSR Act, as well as any comparable
pre-merger notification forms required by the merger notification or control
laws and regulations of any applicable jurisdiction, as agreed to by Seagate and
Veritas. Seagate and Veritas each shall promptly (i) supply the other with any
information which may be required in order to effectuate the foregoing filings,
and (ii) supply any additional information which reasonably may be required by
the FTC, the DOJ or the competition or merger control authorities of any other
jurisdiction and which the parties may reasonably deem appropriate.

     5.14 Access to Information. From the date hereof until the Effective Date,
Seagate will, and will cause each of its subsidiaries to (i) allow Veritas and
its officers, employees, counsel, accountants, actuaries, consultants and other
authorized representatives ("Representatives") to have full access to the books,
records, contracts, properties, facilities, accountants, actuaries, consultants,
advisors, management and personnel of Seagate and its subsidiaries at all
reasonable times, (ii) furnish promptly to Veritas and its Representatives all
information and documents concerning Seagate and its subsidiaries as Veritas or
its Representatives may reasonably request and (iii) cause the respective
officers, employees and Representatives of Seagate and its subsidiaries to
cooperate in good faith with Veritas and its Representatives in connection with
all such access.

     5.15 TRA Matters.

     (a) Form. The TRA Rights shall be evidenced by a non-transferable document
in form and substance reasonably satisfactory to Veritas and Seagate, and shall
contain legends to the effect that they are non-negotiable instruments as well
as such other legends as may be required by law. The TRA Rights shall have an
expiration date of March 31, 2003, after which time they shall expire without
further act. After the expiration date of the TRA Rights, any TRA Amounts
received by Veritas and its Affiliates shall be the property of Veritas without
any obligation whatsoever to account therefor to former holders of the TRA
Rights.

                                       27



     (b)  Administration generally. On or prior to the Effective Time, Seagate
shall designate one or more designees (the "Administrators") who shall be
responsible for overseeing collection of the TRA Amounts and coordinating
activities with representatives of Veritas and Purchaser with respect to Seagate
Taxes. Veritas and Seagate will, prior to the Effective Time, cooperate in good
faith with respect to establishing procedures and structures designed to
maximize the aggregate value of the TRA Amount and minimize the amount of
administrative costs. This may include the establishment of segregated accounts,
pass-through trusts or similar devices (collectively, a "Collection Account") to
receive periodic payments of TRA Amounts. The Administrators shall be entitled
to charge the Collection Account a fee of 1% for all amounts deposited therein
and distributed to holders of the TRA Rights.

     (c)  Collection Amount. Following the Effective Time, Veritas shall forward
to the Collection Account (and notify the Administrators of) any such refunds or
credits after receipt or realization thereof by Veritas.

     (d)  Payments. Any payments from Veritas required to be paid shall be made
within 10 business days of the receipt of any refund or realization of credit as
the case may be. Any such payments not made within such time period, shall be
subject to an interest charge of 8% per annum.

     (e)  Investments/Distributions. Amounts deposited in the Collection Account
shall be invested in short-term money markets instruments, and shall be
distributed to holders of TRA Rights on each calendar quarterly end commencing
September 30, 2000.

     (f)  Conduct of Audits and Other Procedural Matters. The Administrators
shall have the right to initiate any claim for refund, credit or amended return
that would give rise to a TRA Amount, and to control any audit, examination or
contest with respect thereto, except if such audit, examination or contest may
give rise to an indemnification obligation by Purchaser under the
Indemnification Agreement, in which case the provisions of Section 6(d)(i) of
the Indemnification Agreement shall control. Venus shall promptly forward to the
Administrators all written notifications and other written communications,
including if available the original envelope showing any postmark, from any
taxing authority received by Venus or its affiliates relating to the TRA Amount.

     (g)  Assistance and Cooperation. After the Effective Time, Veritas shall
(and shall cause their respective Affiliates to):

          (i)   Assist the Administrators in calculating the potential amount of
     the TRA Amount and included any Tax Returns prepaid by Veritas claims for
     refunds or credits designed to maximize the TRA Amount;

          (ii)  Cooperate fully in preparing for any audits of, or disputes
     with taxing authorities regarding the TRA Amount;

          (iii) Make available to the other and to any taxing authority as
     reasonably requested all information, records, and documents relating to
     Taxes of Veritas, Seagate or any of their respective subsidiaries;

          (iv)  Provide timely notice to the other in writing of any pending or
     threatened Tax audits or assessments relating to refunds or credits
     included or potentially includable by individuals in the TRA Amount; and

          (v)   Furnish the other with copies of all correspondence received
     from any taxing authority in connection with any Tax audit which may affect
     refunds or credits included or potentially includable in the TRA Amount.

                                       28



     (h)  Exculpation. In performing any duties under this Agreement, the
Administrator shall not be liable to any party for damages, losses, or expenses,
except for negligence or willful misconduct on the part of the Administrator.
The Administrator shall not incur any such liability for (A) any act or failure
to act made or omitted in good faith, or (B) any action taken or omitted in
reliance upon any instrument, including any written statement or affidavit
provided for in this Agreement that the Administrator shall in good faith
believe to be genuine, nor will the Administrator be liable or responsible for
forgeries, fraud, impersonations, or determining the scope of any representative
authority. In addition, the Administrator may consult with legal counsel in
connection with performing the Administrator's duties under this Agreement and
shall be fully protected in any act taken, suffered, or permitted by him/her in
good faith in accordance with the advice of counsel. The Administrator is not
responsible for determining and verifying the authority of any person acting or
purporting to act on behalf of any party to this Agreement.

     (i)  Dragon Shares. Any Dragon Shares escrowed at the Effective Time or
with respect to which the parties did not mutually agree to a value, shall be
added to the TRA Amount, mutatis mutandis.

                                   ARTICLE VI

                            CONDITIONS TO THE MERGER

     6.1  Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction
or fulfillment, at or prior to the Effective Time, of the following conditions:

          (a) Stockholder Approvals. This Agreement shall have been approved and
     adopted, and the Merger shall have been duly approved, by the requisite
     vote under applicable law by the stockholders of Seagate. The Share
     Increase and the Merger shall have been approved by the requisite vote of
     the Veritas stockholders.

          (b) Registration Statement Effective; Proxy Statement. The SEC shall
     have declared the Registration Statement effective. No stop order
     suspending the effectiveness of the Registration Statement or any part
     thereof shall have been issued and no proceeding for that purpose, and no
     similar proceeding in respect of the Proxy Statement, shall have been
     initiated or threatened in writing by the SEC.

          (c) No Order; HSR Act. No Governmental Entity shall have enacted,
     issued, promulgated, enforced or entered any statute, rule, regulation,
     executive order, decree, injunction or other order (whether temporary,
     preliminary or permanent) which is in effect and which has the effect of
     making the Merger illegal or otherwise prohibiting consummation of the
     Merger. All requirements, if any, under the HSR Act or equivalent foreign
     statute, rule, regulation or order relating to the transactions
     contemplated hereby shall have expired or terminated early.

          (d) Tax Opinions. Veritas and Seagate shall each have received
     substantially identical written opinions from their respective counsels,
     Willkie Farr & Gallagher and Wilson Sonsini Goodrich & Rosati, Professional
     Corporation, in form and substance reasonably satisfactory to them, to the
     effect that the Merger should constitute a "reorganization" within the
     meaning of Section 368(a) of the Code, and such opinions shall not have
     been withdrawn. The parties to this Agreement agree to make reasonable
     representations as requested by such counsel for the purpose of rendering
     such opinions.

                                       29



          (e) Closing of OD Documents. The closing of the transactions
     contemplated by the OD Documents shall have occurred without waiver of
     Section 9.2(a) and (b) or 9.3(a) and (b) of the OD Documents, and pursuant
     thereto, Seagate and Star Software shall not have (i) any assets or
     properties other than the Designated Assets, or (ii) any Liabilities (other
     than the Designated Liabilities) or other obligations (absolute, accrued
     contemplated or otherwise) for which Veritas is not entitled to
     indemnification under the Indemnification Agreement, and Seagate and
     Purchaser shall have provided Veritas with certificates by their respective
     Chief Financial Officers to the foregoing effect.

     6.2  Additional Conditions to Obligations of Seagate. The obligation of
Seagate to consummate and effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction or fulfillment, at or
prior to the Effective Time, of the following conditions, any of which may be
waived, in writing, exclusively by Seagate:

          (a) Representations and Warranties. The representations and warranties
     of Veritas and Merger Sub contained in this Agreement shall have been true
     and correct in all material respects as of the date hereof, except where
     the failure to be so true and correct would not, in the aggregate,
     reasonably be expected to have a Material Adverse Effect on Veritas. In
     addition, the representations and warranties of Veritas contained in this
     Agreement shall be true and correct in all material respects on and as of
     the Effective Time (except for changes contemplated by this Agreement and
     except for those representations and warranties which address matters only
     as of a particular date, which shall have been true and correct only as of
     such particular date), with the same force and effect as if made on and as
     of the Effective Time, except in such cases where the failure to be so true
     and correct would not, in the aggregate, reasonably be expected to have a
     Material Adverse Effect on Veritas. Seagate shall have received a
     certificate with respect to the foregoing signed on behalf of Veritas by
     the Chief Executive Officer and the Chief Financial Officer of Veritas.

          (b) Agreements and Covenants. Veritas and Merger Sub shall have
     performed or complied in all material respects with all agreements and
     covenants required by this Agreement to be performed or complied with by it
     on or prior to the Effective Time, and Seagate shall have received a
     certificate to such effect signed on behalf of Veritas by the Chief
     Executive Officer and the Chief Financial Officer of Veritas.

     6.3 Additional Conditions to the Obligations of Veritas and Merger Sub. The
obligations of Veritas and Merger Sub to consummate and effect the Merger shall
be subject to the satisfaction or fulfillment, at or prior to the Effective
Time, of the following conditions, any of which may be waived, in writing,
exclusively by Veritas:

          (a) Representations and Warranties. The representations and warranties
     of Seagate contained in this Agreement shall have been true and correct in
     all material respects as of the date hereof, except where the failure to be
     so true and correct would not, in the aggregate, reasonably be expected to
     have a Material Adverse Effect on Seagate. In addition, the representations
     and warranties of Seagate contained in this Agreement shall be true and
     correct in all material respects on and as of the Effective Time (except
     for changes contemplated by this Agreement and except for those
     representations and warranties which address matters only as of a
     particular date, which shall have been true and correct as of such
     particular date), with the same force and effect as if made on and as of
     the Effective Time, except in such cases where the failure to be so true
     and correct would not, in the aggregate, reasonably be expected to have a
     Material Adverse Effect on Seagate. Veritas shall

                                       30



     have received a certificate with respect to the foregoing signed on behalf
     of Seagate by the President and the Chief Financial Officer of Seagate. The
     representations and warranties in Section 2.3(b) hereof shall be true and
     correct in all material respects.

          (b) Agreements and Covenants. Seagate shall have performed or complied
     in all material respects with all agreements and covenants required by this
     Agreement to be performed or complied with by it on or prior to the
     Effective Time, and the Veritas shall have received a certificate to such
     effect signed on behalf of Seagate by the President and the Chief Financial
     Officer of Seagate.

          (c) Indemnification Agreement Representations and Warranties. Each of
     the representations and warranties of the parties (other than Veritas) in
     the Indemnification Agreement (i) to the extent qualified by materiality
     shall be true and correct, and (ii) to the extent not qualified by
     materiality, shall be true and correct in all material respects, in each of
     cases (i) and (ii), on the date of this Agreement and as of the Closing
     Date, as if made at and as of such time (except to the extent expressly
     made as of an earlier date, in which case as of such date), except as
     otherwise contemplated by this Agreement. The Indemnification Agreement
     shall be in full force and effect, and each Subsidiary of Purchaser shall
     have executed and delivered a joinder agreement in accordance with the
     terms of the Indemnification Agreement.

          (d) Financing. The Financing (as defined in the OD Documents) shall
     have closed on the terms and conditions specified in the Commitment Letters
     (as defined in the OD Documents) and no material change in the terms of
     such Financing shall have occurred which, in Veritas' reasonable judgment,
     would materially and adversely impact Purchaser's ability to timely satisfy
     its obligations under the Indemnification Agreement.

                                   ARTICLE VII

              TERMINATION, FEES AND EXPENSES; AMENDMENT AND WAIVER

     7.1  Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of this Agreement and the
Merger by the stockholders of Seagate:

          (a) by mutual written consent, duly authorized by the Boards of
     Directors of Veritas and Seagate;

          (b) by either Seagate or Veritas, if the Merger shall not have been
     consummated by December 31, 2000; provided, however, that the right to
     terminate this Agreement pursuant to this Section 7.1(b) shall not be
     available to any party hereto whose failure to fulfill any obligation under
     this Agreement (including, without limitation, such party's obligation
     under Section 5.4 hereof) has been a principal cause of, or resulted in,
     the failure of the Merger to be consummated on or before such date;

          (c) by either Seagate or Veritas, if a Governmental Entity shall have
     issued an order, decree or ruling or taken any other action, in any case
     having the effect of permanently restraining, enjoining or otherwise
     prohibiting the Merger, which order, decree or ruling is final and
     nonappealable;

          (d) by either Seagate or Veritas, if (i) the requisite approval of the
     stockholders of Seagate under applicable law to approve this Agreement and
     the Merger shall not have been obtained by reason of the failure to obtain
     the requisite vote upon a vote

                                       31



     taken at a meeting of the stockholders of Seagate duly convened therefor or
     at any adjournment or postponement thereof; and (ii) the required approval
     by the stockholders of Veritas of the Share Increase (if not previously
     approved) and the Merger shall not have been obtained by reason of the
     failure to obtain the required vote at a meeting of Veritas stockholders
     duly convened therefor or at any adjournment thereto; provided, however,
     that a party's right to terminate this Agreement pursuant to this Section
     7.1(d) shall not be available to Seagate if the failure to obtain the
     foregoing approval of the stockholders of that party shall have been caused
     by that party's action or failure to act in a manner which constitutes a
     material breach of this Agreement;

          (e) by Seagate, upon a breach by Veritas of any representation,
     warranty, covenant or agreement of Veritas in this Agreement, or if any
     representation or warranty of Veritas shall have become untrue, in either
     case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
     hereof would not be satisfied as of the time of such breach or as of the
     time such representation or warranty shall have become untrue; provided,
     however, that if such inaccuracy in Veritas' representations and
     warranties, or breach by Veritas, is curable, then Seagate may not
     terminate this Agreement pursuant to this Section 7.1(e) for thirty-five
     (35) calendar days after delivery of written notice to Veritas of such
     breach, provided that Veritas continues to exercise commercially reasonable
     efforts to cure such breach (it being understood that Seagate may not
     terminate this Agreement pursuant to this Section 7.1(e) if such breach by
     Veritas is cured during such thirty-five (35)-day period);

          (f) by Veritas, upon a breach by Seagate of any representation,
     warranty, covenant or agreement of Seagate contained in this Agreement, or
     if any representation or warranty of Seagate shall have become untrue, in
     either case such that the conditions set forth in Section 6.3(a) or Section
     6.3(b) hereof would not be satisfied as of the time of such breach or as of
     the time such representation or warranty shall have become untrue,
     provided, however, that if such inaccuracy in Seagate's representations and
     warranties, or breach by Seagate, is curable then Veritas may not terminate
     this Agreement pursuant to this Section 7.1(f) for thirty-five (35)
     calendar days after delivery of written notice to Seagate of such breach,
     provided that Seagate continues to exercise commercially reasonable efforts
     to cure such breach (it being understood that Veritas may not terminate
     this Agreement pursuant to this Section 7.1(f) if such breach by Seagate is
     cured during such thirty-five (35)-day period);

          (g) by Seagate, if (i) prior to the receipt of the requisite approval
     of the stockholders of Seagate to this Agreement and the Merger, Seagate
     receives a Seagate Superior Offer and the Board of Directors of Seagate
     concludes in good faith, after consultation with its outside counsel, that
     in light of such Seagate Superior Offer, the termination of this Agreement
     in order to accept such Seagate Superior Offer is necessary in order for
     the Board of Directors of Seagate to comply with its fiduciary obligations
     to the stockholders of Seller under applicable law, and Seagate enters into
     an agreement contemplating, or consummates, a Seagate Acquisition
     Transaction, and (ii) Seagate has complied with all of its obligations
     under Section 5.4 hereof, and (iii) prior to the termination of this
     Agreement pursuant to this Section 7.1(g), pays Veritas the Seagate
     Termination Fee pursuant to Section 7.3(b)(ii) hereof; provided, that such
     termination may take place only after two (2) business days following
     Veritas' receipt of written notice advising Veritas that the Board of
     Directors of Seagate has received a Seller Superior Offer specifying the

                                       32



     material terms and conditions of such Seagate Superior Offer (and including
     a copy thereof with all accompanying documentation, if in writing),
     identifying the person making such Seagate Superior Offer and stating that
     it intends to make the determination set forth in clause (i) of this
     Section 7.1(g). After providing such notice, Seagate shall provide an
     opportunity to Veritas to make such adjustments in the terms and conditions
     of this Agreement as would enable Seagate to proceed with its
     recommendation to its stockholders without making the determination set
     forth in clause (i) of this Section 7.1(g); provided, further, however,
     that any such adjustment shall be at the discretion of Veritas at the time;
     or

          (h) by Veritas, if a Veritas Triggering Event shall have occurred. For
     all purposes of and under this Agreement, a "Veritas Triggering Event"
     shall be deemed to have occurred if: (i) the Board of Directors of Seagate
     (or any committee thereof) shall for any reason have withdrawn or shall
     have amended or modified in a manner adverse to Veritas its recommendation
     in favor of the adoption and approval of this Agreement or the Merger; (ii)
     Seagate shall have failed to include in the Proxy Statement the
     recommendation of the Board of Directors of Seagate in favor of the
     adoption and approval of this Agreement and the Merger or shall have taken
     any action or made any statement inconsistent with such recommendation; or
     (iii) a tender or exchange offer relating to securities of Seagate shall
     have been commenced by a person unaffiliated with Veritas, and Seagate
     shall not have sent to its securityholders pursuant to Rule 14e-2
     promulgated under the Securities Act, within ten (10) business days after
     such tender or exchange offer is first published sent or given, a statement
     disclosing that Seagate recommends rejection of such tender or exchange
     offer; or

          (i) by Seagate, if: (i) the Board of Directors of Veritas (or any
     committee thereof) shall for any reason have withdrawn or shall have
     amended or modified in a manner adverse to Seagate its recommendation in
     favor of the Share Increase (if not previously approved) and the Merger; or
     (ii) Veritas shall have failed to include in the Proxy Statement the
     recommendation of the Board of Directors of Veritas in favor of the Share
     Increase (if not previously approved) and the Merger.

     7.2 Notice of Termination; Effect of Termination. Except as set forth in
Section 7.3(b), any termination of this Agreement pursuant to Section 7.1 hereof
shall be effective immediately upon the delivery of written notice of the
terminating party to the other party hereto. In the event of the termination of
this Agreement pursuant to Section 7.1 hereof, this Agreement shall be of no
further force or effect, except (i) as set forth in this Section 7.2, Section
7.3 hereof and Article VIII hereof, each of which shall survive the termination
of this Agreement without limitation, and (ii) that nothing herein shall relieve
any party from liability for any intentional breach of this Agreement. A change
by the Veritas board of directors of its recommendation of approval of the
Merger and/or the Share Increase shall be an intentional breach by Veritas of
the terms hereof unless Veritas, at the time of such change, had the right to
terminate this Agreement. In the event of the termination of this Agreement
under circumstances whereby the Seagate Termination Fee shall be payable, either
immediately or based upon the occurrence of a subsequent event, the provisions
of any standstill or similar agreement that would prevent an acquisition by
Veritas or any of its affiliates of capital stock or assets of Seagate or any
affiliate of Seagate (such provisions being "standstill provisions") shall
terminate without any further action on the Part of Veritas or Seagate,
providing that (i) only such standstill provisions of any such agreement shall
terminate and the remaining provisions thereof shall remain in full force and
effect in accordance with their terms and (ii) no severability

                                       33



provisions of any such agreement shall be interpreted to require the replacement
of such standstill provisions with any other provision.

     7.3  Fees and Expenses.

     (a)  General. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the Merger is consummated.

     (b) Seagate Payments.

          (i)   Seagate shall pay to Veritas in immediately available funds,
     within one (1) business day after such notice of termination is delivered,
     an amount equal to $440,000,000 (the "Seagate Termination Fee") if this
     Agreement is terminated by Veritas pursuant to Section 7.1(h) hereof.

          (ii)  Seagate shall pay Veritas in immediately available funds, prior
     to the termination of this Agreement, an amount equal to the Seagate
     Termination Fee if this Agreement is terminated by Seagate pursuant to
     Section 7.1(g) hereof.

          (iii) Seagate shall pay to Veritas in immediately available funds,
     within one (1) business day after the date Seagate directly or indirectly
     enters into an agreement with any third party with respect to a Seagate
     Acquisition Transaction or a Seagate Acquisition Transaction is
     consummated, an amount equal to the Seagate Termination Fee if (A) this
     Agreement is terminated by Veritas pursuant to Section 7.1(d)(i) hereof and
     at such time was not terminable by Seagate pursuant to Section 7.1(d)(ii),
     (B) at any time after the date of this Agreement and at or before the
     Seagate Stockholder Meeting a Seagate Acquisition Proposal shall have been
     publicly announced or otherwise communicated to the Seagate, and (C) within
     twelve (12) months of the termination of this Agreement, Seagate directly
     or indirectly enters into an agreement with any third party with respect to
     a Seagate Acquisition Transaction or a Seagate Acquisition Transaction is
     consummated.

          (iv)  Seagate shall pay to Veritas in immediately available funds,
     within one (1) business day after the first to occur of the events set
     forth in clause (d) below, an amount equal to the Seagate Termination Fee
     if (A) this Agreement is terminated by either party pursuant to Section
     7.1(b) hereof and at such time was not terminable by Seagate pursuant to
     Section 7.1(d)(ii), (B) at any time after the date of this Agreement and at
     or before the Termination Date a Seagate Acquisition Proposal shall have
     been publicly announced or otherwise communicated to the Seagate, (C)
     following the public announcement or communication of such Seagate
     Acquisition Proposal and prior to any such terminations, Seagate shall have
     intentionally breached (and not cured after notice thereof) any of its
     covenants or agreements set forth in this Agreement in any material
     respect, which breach shall have contributed to the failure of the Closing
     to occur on or before the Termination Date, and (D) within twelve (12)
     months of the termination of this Agreement, Seagate directly or indirectly
     enters into an agreement with any third party with respect to a Seagate
     Acquisition Transaction or a Seagate Acquisition Transaction is
     consummated.

          (v)   For all purposes of and under this Section 7.3, the term
     "Seagate Acquisition Proposal" shall mean any offer or proposal (other than
     an offer or proposal by Veritas relating to any Seagate Acquisition
     Transaction. For all purposes of and under this Section 7.3, "Seagate
     Acquisition Transaction" shall mean any transaction or series of

                                       34



     related transactions involving: (i) any acquisition or purchase from
     Seagate by any person or "group" (as defined under Section 13(d) of the
     Exchange Act and the rules and regulations promulgated thereunder) of more
     than fifty percent (50%) in interest of the total outstanding voting
     securities of Seagate, or any tender offer or exchange offer that if
     consummated would result in any person or "group" (as defined under Section
     13(d) of the Exchange Act and the rules and regulations promulgated
     thereunder) beneficially owning more than fifty percent (50%) of the total
     outstanding voting securities of Seagate, or any merger, consolidation,
     business combination or similar transaction involving Seagate pursuant to
     which the stockholders of Seagate immediately preceding such transaction
     would hold less than fifty percent (50%) of the equity interests in the
     surviving or resulting entity of such transaction (or the ultimate parent
     entity thereof); (ii) any sale, lease (other than in the ordinary course of
     business), exchange, transfer, license (other than in the ordinary course
     of business), acquisition or disposition of more than fifty percent (50%)
     of the assets and properties of Seagate; or (iii) any liquidation or
     dissolution of Seagate, excluding in all cases any disposition of the
     assets covered by the OD Documents.

          (vi) Seagate acknowledges that the agreements contained in this
     Section 7.3(b) are an integral part of the transactions contemplated by
     this Agreement, and that, without these agreements, Veritas would not enter
     into this Agreement.

     7.4  Amendment. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of the parties hereto.

     7.5  Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.

                                  ARTICLE VIII

                               GENERAL PROVISIONS

     8.1  Non-Survival of Representations and Warranties. The representations
and warranties of Seagate and Veritas contained in this Agreement shall
terminate at the Effective Time, and only the covenants and agreements that by
their terms survive the Effective Time shall survive the Effective Time.

     8.2  Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via facsimile (receipt confirmed) to the parties at
the following addresses or facsimile numbers

                                       35



(or at such other address or facsimile numbers for a party as shall be specified
by like notice):

        (a) if to Seagate, to:

            Seagate Technology, Inc.
            920 Disc Drive
            Scotts Valley, California 95066
            Attention: General Counsel
            Facsimile No.: 831-438-6675
            Telephone No.: 831-438-6550

            with copies to:

            Wilson Sonsini Goodrich & Rosati
            Professional Corporation
            650 Page Mill Road
            Palo Alto, California 94304-1050
            Attention: Larry W. Sonsini, Esq.
            Facsimile No.: 650-493-6811
            Telephone No.: 650-493-9300

            and to:

            Wilson Sonsini Goodrich & Rosati
            Professional Corporation
            One Market Plaza
            Spear Tower
            San Francisco, California 94105
            Attention: Michael J. Kennedy, Esq.
            Facsimile No.: 415-947-2099
            Telephone No.: 415-947-2000

            and to:

            Suez Acquisition Company (Cayman) Limited
            c/o Silver Lake Partners, L.P.
            2725 Sand Hill Road
            Building C, Suite 950
            Menlo Park, California 94025
            Attention: Dave Roux
            Facsimile: 650-233-8125
            Telephone: 650-233-8121

            with a copy to:

            Simpson Thacher & Bartlett
            425 Lexington Avenue
            New York, New York 10017-3954
            Attention: William E. Curbow, Esq.
            Facsimile: 212-455-2502
            Telephone: 212-455-2000

                                       36



            and to:

            TPG Partners, III, L.P.
            201 Main Street, Suite 2420
            Fort Worth, Texas 76102
            Attention: Richard A. Ekleberry, Esq.
            Facsimile: 817-871-4010
            Telephone: 817-871-4000

            with a copy to:

            Cleary, Gottlieb, Steen & Hamilton
            One Liberty Plaza
            New York, New York 10006
            Attention: Paul J. Shim, Esq.
            Facsimile: 212-225-3999
            Telephone: 212-225-2000

        (b) if to Veritas, Merger Sub or the Surviving Corporation, to:

            VERITAS Software Corporation
            1600 Plymouth Street
            Mountain View, California 94043
            Attention: General Counsel
            Facsimile: 650-526-2581
            Telephone: 650-335-8000

            with a copy to:

            Willkie Farr & Gallagher
            787 Seventh Avenue
            New York, New York 10019
            Attention: Michael A. Schwartz
            Facsimile: 212-728-8111
            Telephone: 212-728-8000

     8.3  Certain Interpretations.

     (a) When a reference is made in this Agreement to a Section or an Exhibit,
such reference shall be to a Section or an Exhibit to this Agreement unless
otherwise indicated.

     (b) The words "include," "includes" and "including" when used herein shall
be deemed in each case to be followed by the words "without limitation."

     (c) The table of contents and headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement, or any term or provision hereof.

     (d) Reference to the subsidiaries of an entity shall be deemed to include
all direct and indirect subsidiaries of such entity.

     8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties hereto and delivered to the other party hereto, it being understood
that each party hereto need not sign the same counterpart.

                                      37



     8.5 Entire Agreement. This Agreement and the documents and instruments and
other agreements among the parties hereto as contemplated by or referred to
herein, including the Seagate Disclosure Schedule and the Veritas Disclosure
Schedule (i) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, it being understood that the Confidentiality Agreement shall continue in
full force and effect until the Closing and shall survive any termination of
this Agreement, and (ii) except as is provided in Section 5.9 hereof, are not
intended to confer upon any other person any rights or remedies hereunder.

     8.6 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.

     8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.

     8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.

     8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

     8.10 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the of the parties. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

     8.11 Waiver of Jury Trial. EACH OF VERITAS AND SEAGATE HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS OF VERITAS AND SEAGATE IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

                  [Remainder of Page Intentionally Left Blank]

                                       38



     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized respective officers, as of the date first
above written.

                                          VERITAS SOFTWARE CORPORATION

                                          By: /s/ MARK LESLIE
                                          Name: Mark Leslie
                                          Title: CEO and Chairman

                                          VICTORY MERGER SUB, INC.

                                          By: /s/ JAY A. JONES
                                          Name: Jay A. Jones
                                          Title: President, Chief Administrative
                                          Officer and Secretary

                                          SEAGATE TECHNOLOGY, INC.

                                          By: /s/ STEPHEN J. LUZCO
                                          Name: Stephen J. Luzco
                                          Title: CEO and President

EX-2.3

                                                                    EXHIBIT 2.3

                            INDEMNIFICATION AGREEMENT

     Indemnification Agreement, dated as of March 29, 2000, by and among VERITAS
Software Corporation, a Delaware corporation ("Veritas"), Seagate Technology,
Inc., a Delaware corporation ("Seagate"), Suez Acquisition Company (Cayman)
Limited, a limited company organized under the laws of the Cayman Islands
("SAC"), and each Person who executes a Joinder Agreement (as defined below)
pursuant to Section 4(f) hereof.

     WHEREAS, Seagate has determined to sell to SAC (the "Stock Purchase") all
of the outstanding shares of capital stock of the Sold Subsidiaries (as defined
below) pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement")
between Seagate and SAC, dated as of the date hereof;

     WHEREAS, Seagate, Veritas and Victory Merger Sub, Inc., a Delaware
corporation and a wholly owned subsidiary of Veritas ("Victory Sub"), have
previously entered into an Agreement and Plan of Merger and Reorganization (the
"Merger Agreement") dated as of the date hereof, providing for the merger of
Victory Sub with and into Seagate (the "Merger");

     WHEREAS, consummation of the Stock Purchase is a condition precedent to the
consummation of the Merger;

     WHEREAS, it is a condition precedent to the consummation of the Stock
Purchase and the Merger that this Indemnification Agreement shall be in full
force and effect; and

     WHEREAS, the parties to this Agreement have determined that it is necessary
and desirable to set forth certain agreements that will govern various tax
matters, indemnity matters and other matters that may arise in connection with
the Stock Purchase and the Merger.

     NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, provisions and covenants contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

     SECTION 1. Definitions. Capitalized terms used but not defined herein shall
have the meanings ascribed thereto in the Stock Purchase Agreement. The
following terms shall have the following definitions:

          "Financing Agreements" means the documents, instruments and agreements
     evidencing the Financing as the same may be amended, refinanced, replaced,
     modified or supplemented from time to time.

          "Loss" or "Losses" means any losses, claims, damages, deficiencies,
     liabilities, costs obligations, fines, penalties and expenses of any nature
     whatsoever (including reasonable expenses of investigation and reasonable
     attorney's fees and disbursements).

          "Material Adverse Effect" means a material adverse change in or effect
     with respect to the business, results of operations, properties, financial
     condition or prospects of SAC and its Subsidiaries, taken as a whole.

          "Person" means any individual, corporation, partnership, joint
     venture, limited liability company, association or other business entity.

                                        1



          "Pre-Purchase Tax Period" means any Tax Period ending on or before the
     end of the date of the Stock Purchase.

          "Pre-Purchase Taxes" shall mean (i) all liability for Taxes of Seagate
     and the Retained Subsidiaries for Pre-Purchase Tax Periods and (ii) all
     liability of Seagate and the Retained Subsidiaries for the Pre-Purchase
     portion of Taxes of such companies attributable to any Straddle Period as
     determined in accordance with Section 6(b) hereof, provided, however, that
     Taxes in respect of any transactions as of the date hereof undertaken at
     the written direction of Veritas shall be excluded.

          "Retained Subsidiary" means any Subsidiary of Seagate that is not a
     Sold Subsidiary.

          "SAC Indemnitor" means SAC and each Person who executes a Joinder
     Agreement pursuant to Section 4(f) hereof.

          "Stock Purchase Date" shall mean the date of the Stock Purchase.

          "Straddle Period" shall mean a taxable period of Seagate or a Retained
     Subsidiary that begins before the Stock Purchase Date and ends after the
     Stock Purchase Date.

          "Tax" or "Taxes" means (i) any tax, governmental fee or other like
     assessment or charge of any kind whatsoever (including, without limitation,
     withholding on amounts paid to or by any Person), together with any
     interest, penalty, addition to tax or additional amount imposed by any
     governmental authority (a "Taxing Authority") responsible for the
     imposition of any such tax (domestic or foreign), (ii) liability for the
     payment of any amounts of the type described in clause (i) above as a
     result of Seagate or any of its Subsidiaries, including the Sold
     Subsidiaries, being a member prior to the Stock Purchase Date of an
     affiliated, consolidated, combined or unitary group, or being a party to
     any agreement or arrangement entered into prior to the Stock Purchase Date
     as a result of which liability of Seagate or any of its Subsidiaries,
     including the Sold Subsidiaries, to a Taxing Authority is determined or
     taken into account with reference to the liability of any other person,
     (iii) liability of Seagate or any of its Subsidiaries, including the Sold
     Subsidiaries, for the payment of any amount as a result of being party to
     any tax sharing agreement or arrangement entered into prior to the Stock
     Purchase Date, or with respect to the payment of any amount of the type
     described in clause (i) or (ii) above as a result of any express or implied
     obligation arising prior to the Stock Purchase Date to indemnify any other
     Person and (iv) liability of Seagate or any of its Subsidiaries, including
     the Sold Subsidiaries, as a result of any express or implied obligation
     arising prior to the Stock Purchase Date to pay any Taxes of any Person or
     to "gross up" any Person for income received or deemed received as a result
     of any other Person paying Tax Liabilities of such Person.

     SECTION 2. Representations and Warranties of the SAC Indemnitors. The SAC
Indemnitors jointly and severally represent and warrant to Veritas as of the
date hereof, as of the Closing Date and as of the date of each Joinder Agreement
as follows, each of which such representations and warranties shall survive the
Closing Date:

          (a) Organization and Authority of the SAC Indemnitors. Each of the SAC
     Indemnitors is a corporation duly organized, validly existing and in good
     standing under the laws of its jurisdiction of incorporation and has all
     necessary corporate power and authority to enter into this Agreement, the
     Stock Purchase Agreement and

                                        2



     each Joinder Agreement to which it is a party, to carry out its obligations
     hereunder and thereunder and to consummate the transactions contemplated
     hereby and thereby. The execution and delivery of this Agreement and the
     Stock Purchase Agreement by SAC and each Joinder Agreement by each Person
     who executes such Agreement, the performance by the SAC Indemnitors of
     their respective obligations hereunder and thereunder and the consummation
     by the SAC Indemnitors of the transactions contemplated hereby and thereby
     have been duly authorized by all requisite corporate action on the part of
     the SAC Indemnitors. This Agreement and the Stock Purchase Agreement have
     been, and each Joinder Agreement will be, duly executed and delivered by
     the SAC Indemnitor party thereto, and (assuming due authorization,
     execution and delivery by each of the other respective parties thereto)
     each of this Agreement, the Stock Purchase Agreement and each Joinder
     Agreement constitutes or, when executed and delivered in accordance with
     the terms hereof, will constitute a legal, valid and binding obligation of
     the SAC Indemnitor Party thereto enforceable against the SAC Indemnitor
     party thereto in accordance with its terms.

          (b) No Conflict. The execution, delivery and performance of this
     Agreement and the Stock Purchase Agreement by SAC and each Joinder
     Agreement by each Person who executes such Agreement does not and will not
     after giving effect to the transactions contemplated by the Stock Purchase
     Agreement and the Financing (i) violate, conflict with or result in the
     breach of any provision of the charter or by-laws (or similar
     organizational documents) of any SAC Indemnitor, (ii) violate or conflict
     with any provision of law, or any order, judgment or decree of any court or
     other governmental or other regulatory authority applicable to any SAC
     Indemnitor or (iii) violate, conflict with, result in any breach of,
     constitute a default (or event which with the giving of notice or lapse of
     time, or both, would constitute a default) under any material contract,
     lease, loan agreement, mortgage, security agreement, trust indenture or
     other agreement or instrument to which any SAC Indemnitor is a party or by
     which any SAC Indemnitor is bound or to which any SAC Indemnitor's
     properties or assets is subject or (iv) result in the creation of any lien,
     charge or encumbrance of any kind whatsoever on any of the properties or
     assets of any SAC Indemnitor.

          (c) Consents and Approvals. The execution, delivery and performance of
     this Agreement and the Stock Purchase Agreement by SAC and each Joinder
     Agreement by each Person who executes such Agreement does not and will not
     require any material consent, approval, authorization, waiver or other
     order of, action by, filing with or notification to any governmental or
     regulatory authority, domestic or foreign, except as will be made or
     obtained prior to Closing by the SAC Indemnitor party thereto and remains
     in full force and effect.

     SECTION 3. Representations and Warranties of Veritas. Veritas represents
and warrants to SAC as of the date hereof and as of the Closing Date as follows,
each of which such representations and warranties shall survive the Closing
Date:

          (a) Organization and Authority of Veritas. Veritas is a corporation
     duly organized, validly existing and in good standing under the laws of its
     jurisdiction of incorporation and has all necessary corporate power and
     authority to enter into this Agreement and the Merger Agreement, to carry
     out its obligations hereunder and thereunder and to consummate the
     transactions contemplated hereby and thereby. The execution and delivery of
     this Agreement and the Merger Agreement by Veritas, the performance by
     Veritas of its obligations hereunder and thereunder and the

                                        3



     consummation by Veritas of the transactions contemplated hereby and thereby
     have been duly authorized by all requisite corporate action on the part of
     Veritas. This Agreement and the Merger Agreement have been duly executed
     and delivered by Veritas, and (assuming due authorization, execution and
     delivery by each of the other respective parties hereto and thereto) this
     Agreement and the Merger Agreement constitute legal, valid and binding
     obligations of Veritas enforceable against Veritas in accordance with their
     terms.

          (b) No Conflict. The execution, delivery and performance of this
     Agreement and the Merger Agreement by Veritas does not and will not (i)
     violate, conflict with or result in the breach of any provision of the
     charter or by-laws of Veritas, (ii) violate or conflict with any provision
     of law, or any order, judgment or decree of any court or other governmental
     or other regulatory authority applicable to Veritas or (iii) violate,
     conflict with, result in any breach of, constitute a default (or event
     which with the giving of notice or lapse of time, or both, would constitute
     a default) under any material contract, lease, loan agreement, mortgage,
     security agreement, trust indenture or other agreement or instrument to
     which Veritas is a party or by which Veritas is bound or to which any of
     Veritas properties or assets is subject or (iv) result in the creation of
     any lien, charge or encumbrance of any kind whatsoever on any of the
     properties or assets of Veritas.

          (c) Consents and Approvals. The execution, delivery and performance of
     this Agreement and the Merger Agreement by Veritas does not and will not
     require any material consent, approval, authorization, waiver or other
     order of, action by, filing with or notification to any governmental or
     regulatory authority, domestic or foreign, except as has been made or
     obtained prior to Closing by Veritas and remains in full force and effect.

     SECTION 4. Certain Covenants.

     (a)  Access to Books and Records of SAC; Financial Statements and Reports.
Upon the request of Veritas, SAC shall provide to representatives of Veritas and
its Affiliates reasonable access to its books and records and shall cause its
auditors to provide to the auditors of Veritas and its Affiliates reasonable
access to SAC's auditors' work papers. For as long as SAC is required to do so,
SAC shall provide Veritas with copies of any annual or quarterly financial
statements and reports that it is required to deliver to the lenders providing
senior financing in the Financing, and any requests for waivers of any term or
provisions in the Financing Documents, in each case, at the same times provided
for in the Financing Agreements. The provisions contained in this Section 4(a)
shall terminate and be of no further effect from and after the fifth anniversary
of the Stock Purchase Date.

     (b)  Retention of Documents. Subject to Section 6(f) hereof, each of the
SAC Indemnitors agrees that it will preserve all documentation relating to the
transactions contemplated by the Stock Purchase Agreement or this Agreement and
each of Veritas and Seagate agrees that it will preserve all documentation
relating to (i) Seagate, the Sold Subsidiaries, and the Retained Subsidiaries
for any Pre-Purchase Tax Period and any Straddle Period, and (ii) the Merger
Agreement, Designated Assets and Designated Liabilities (other than
documentation transferred to SAC pursuant to the terms of the Stock Purchase
Agreement), in each case to the extent required by applicable law or by such
party's document retention policies, whichever is longer, as in effect from time
to time. The provisions contained in this Section 4(b) shall terminate and be of
no further effect from and after the eighth anniversary of the Stock Purchase
Date.

                                        4



     (c)  Notice of Certain Events. SAC shall promptly, but in no event more
than five business days after receiving notification or obtaining knowledge
thereof, provide written notice to Veritas of any event which would have a
Material Adverse Effect or materially impair the ability of any SAC Indemnitor
to perform fully its obligations hereunder.

     (d)  Conduct of Business. Upon and after the Closing Date, SAC will
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business.

     (e)  Financing Agreements. Prior to the Closing, SAC shall furnish to
Veritas true and complete copies of the Financing Agreements and, promptly
following any amendments thereto, true and complete copies of such amendments.
The provisions contained in this Section 4(e) shall terminate and be of no
further effect from and after the fifth anniversary of the Stock Purchase Date.

     (f)  Joinder Agreements. On the Closing Date, SAC shall cause each of the
Sold Subsidiaries to execute and deliver to Veritas a Joinder Agreement in the
form of Annex I hereto (a "Joinder Agreement"). Thereafter, SAC shall cause any
Person that becomes a Subsidiary of SAC to, on the date such Person becomes a
Subsidiary of SAC, execute and deliver to Veritas a Joinder Agreement. Any
Person executing a Joinder Agreement shall, upon executing the same, deliver to
Veritas a certified copy of the charter and by-laws, or similar organizational
documents, of such Person together with resolutions of the Board of Directors
(or comparable governing body) of such Person approving the execution and
delivery of the Joinder Agreement.

     SECTION 5. Indemnification. In addition to the obligations of the parties
contained in Section 6 hereof, from and after the Closing Date:

          (a) Each of the SAC Indemnitors jointly and severally agrees to
     indemnify, defend and hold harmless Veritas and Seagate and their
     respective Affiliates including the Retained Subsidiaries (the "Veritas
     Indemnitees") from and against any and all Losses as they are incurred or
     suffered by any Veritas Indemnitee arising out of or in connection with or
     related to (but only to the extent arising out of or in connection with or
     related to):

              (i)   all Liabilities (other than Designated Liabilities and other
        than in respect of Taxes, which are the subject of Section 6 hereof)
        arising out of or related to (A) the ownership, operations or conduct by
        Seagate and its predecessors or Affiliates (other than Veritas and its
        Subsidiaries) of their respective businesses, properties, assets or
        liabilities on or prior to the Closing Date, or (B) the ownership,
        operations or conduct by SAC or any of its Subsidiaries of their
        respective businesses, properties, assets or liabilities from and after
        the Closing Date;

              (ii)  the enforcement by the Veritas Indemnitees of their
        respective rights under this Agreement;

              (iii) any breach by SAC of any agreement, obligation, covenant,
        representation or warranty contained in this Agreement, the Stock
        Purchase Agreement or any agreement or document entered into in
        connection therewith or delivered pursuant thereto to which SAC is a
        party.

          (b) Veritas and Seagate agree to indemnify, defend and hold harmless
     SAC and each of its Subsidiaries from and against any and all Losses, as
     they are incurred or

                                        5



     suffered by SAC or its Subsidiaries, arising out of or in connection with
     or related to (but only to the extent arising out of or in connection with
     or related to):

              (i)   all Designated Liabilities;

              (ii)  all Liabilities of or related to the ownership, operations
        or conduct by Seagate or the Retained Subsidiaries of their respective
        businesses, properties, assets or liabilities subsequent to the Closing
        Date;

              (iii) the enforcement by SAC and its Subsidiaries of their
        respective rights under this Agreement; and

              (iv)  any breach by Veritas of any agreement, obligation,
        covenant, representation or warranty contained in this Agreement, the
        Merger Agreement or any agreement or document entered into in connection
        therewith or delivered pursuant thereto to which Veritas is a party.

     SECTION 6. Taxes.

     From and after the Closing Date:

          (a) Each of the SAC Indemnitors jointly and severally agrees to
     indemnify and hold the Veritas Indemnitees harmless from all Losses (other
     than Designated Liabilities) attributable to (i) Pre-Purchase Taxes of
     Seagate and the Retained Subsidiaries, and (ii) Taxes, whenever arising, of
     the Sold Subsidiaries or attributable to assets transferred to the Sold
     Subsidiaries in connection with the Stock Purchase and the Merger;
     provided, however, that the SAC Indemnitors shall not be obligated to
     indemnify the Veritas Indemnitees for any Taxes attributable to, or arising
     from, the transactions contemplated by the OD Documents (as defined in the
     Stock Purchase Agreement), other than the Split and the sale of shares of
     the capital stock of the Sold Subsidiaries (including any gain from any
     Section 338(h)(10) election made with respect to such sale).

          (b) For purposes of determining whether Taxes are Pre-Purchase Taxes
     described in clause 6(a)(i) above, in the case of a Straddle Period of
     Seagate or a Retained Subsidiary, the SAC Indemnitors shall be solely
     responsible for all Taxes attributable to the portion of the period ending
     on, and which includes, the Stock Purchase Date, and Veritas shall be
     solely responsible for all Taxes attributable to the portion of the period
     which begins after the Stock Purchase Date. For purposes hereof, the
     portion of any Tax that is attributable to the portion of a Straddle Period
     up to and including the Stock Purchase Date shall be (i) in the case of a
     Tax that is not based on net income, gross income, sales or gross receipts
     (including real property taxes), the total amount of such Tax for the
     period in question multiplied by a fraction, the numerator of which is the
     number of days in the Straddle Period up to and including the Stock
     Purchase Date, and the denominator of which is the total number of days in
     such Straddle Period, and (ii) in the case of a Tax that is based on any of
     net income, gross income, sales or gross receipts, the Tax that would be
     due with respect to the portion of the Straddle Period through and
     including the Stock Purchase Date, if such portion of the Straddle Period
     were a separate taxable period, except that exemptions, allowances,
     deductions or credits that are calculated on an annual basis (such as the
     deduction for depreciation or capital allowances) shall be apportioned on a
     per diem basis.

          The Veritas Indemnitees shall indemnify and hold harmless the SAC
     Indemnitors from and against (i) any Taxes of Seagate for which the SAC
     Indemnitors are

                                        6



     not obligated to indemnify the Veritas Indemnitees under Section 6(a), and
     (ii) any Taxes arising out of or attributable to the breach of any
     representation or covenant contained in this Indemnification Agreement by
     the Veritas Indemnitees.

          With regard to any Loss for which indemnification is payable
     hereunder, such payment shall be treated for federal, state, local and
     foreign tax purposes as an adjustment to the Purchase Price in the Stock
     Purchase Agreement, unless otherwise required under applicable law. The
     amount of any such payment shall be net of any Tax on the Indemnified Party
     arising from such payment and shall be adjusted to take into account any
     net Tax benefit or net Tax detriment realized by the Indemnified Party that
     arises from the occurrence of the Loss for which such payment was made;
     provided that no payment shall be made by the SAC Indemnitors in respect of
     any Taxes payable by any Veritas Indemnitee in respect of an
     indemnification payment hereunder (the "Gross-Up Amount") except if and to
     the extent that the aggregate cumulative taxable income of the Veritas
     Indemnitees that would otherwise give rise to Gross-Up Amounts exceeds the
     Available Loss Amount (as reduced from time to time to the extent used to
     reduce Pre-Purchase Taxes). The "Available Loss Amount" shall mean an
     amount determined by the Closing Date or as soon as practicable thereafter
     by a Big Five accounting firm mutually selected by SAC and Veritas as being
     equal to the best available estimate as of the date of determination of the
     excess of (x) the aggregate losses of Seagate and its consolidated group
     arising on or before the Stock Purchase Date or arising from the
     transactions contemplated by the Stock Purchase Agreement or Merger
     Agreement (but not taking into account any gain or income recognized in
     respect of the Designated Assets in Parts A, B and C of Schedule II of the
     Merger Agreement), including the exercise of options in connection with the
     Merger or the Stock Purchase Agreement, over (y) the amount of such losses
     as are estimated will be taken into account in determining the TRA Amount.

          (c)(i) A draft of all Tax Returns relating to Seagate and the Retained
     Subsidiaries which are to be filed after the Stock Purchase Date, but which
     relate to a Pre-Purchase Tax Period or 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 prepared by Ernst & Young or any other Big Five accounting firm (the
     "Tax Return Preparer") chosen by SAC. Any such Tax Return shall be prepared
     in a manner consistent with past practice and without a change of any
     election or any accounting method. A copy of such draft shall be furnished
     to Veritas at least 30 days prior to the due date for each such Tax Return
     for review and comment. Veritas shall be entitled to suggest such revisions
     to each such Tax Return as it, in its good faith belief, considers
     appropriate to minimize the risk of an audit adjustment to such Tax Return,
     which suggestions shall be considered in good faith by SAC. If Veritas
     reasonably objects to any position taken in such draft Tax Return, Seagate
     shall amend such draft Tax Return to reflect an alternative position
     suggested by Veritas, unless Seagate provides Veritas with an opinion from
     the Tax Return Preparer that there is substantial authority (within the
     meaning of Section 6662 of the Code and applicable Treasury regulations) to
     support the initial position. All other decisions regarding Tax Returns
     shall be made by SAC. Veritas shall execute and file such Tax Returns as so
     revised on a timely basis and shall pay the Taxes shown due on such Tax
     Return. SAC will pay over to Veritas the amount of Taxes shown due at least
     five days prior to the date such Tax Return is to be filed. SAC agrees that
     it shall be responsible for the preparation and filing of all Tax Returns
     of the Sold Subsidiaries and pay the Tax shown due thereon.

                                        7




          (ii) The parties shall cooperate with each other in the preparation of
     any Tax Return and the conduct of any audit or other proceeding, judicial
     or administrative (collectively, a "Tax Proceeding"), involving Taxes of
     Seagate, the Sold Subsidiaries and the Retained Subsidiaries. Veritas and
     SAC, without charge, shall provide the requesting party with such
     assistance and documents as may be reasonably requested by such party in
     connection with the preparation of any return or the conduct of any audit
     or other Tax Proceeding. Veritas and SAC agree to keep each other fully
     informed of all matters relating to any Tax Return, or Tax Proceeding,
     including without limitation any settlement negotiations in the event that
     such Tax Proceeding may involve Taxes for which an indemnity obligation may
     arise under this Section 6.

          Notwithstanding anything else to the contrary in this Section 6, the
     obligations of the SAC Indemnitors pursuant to this Section 6 shall be
     calculated by assuming no election has been made pursuant to Section
     172(b)(3) of the Code, Treasury Regulation section 1.1502-21(b)(3), or any
     similar or successor provision, to waive the carryback of losses arising
     from the exercise of options in connection to the Merger or the Stock
     Purchase or any losses arising on or before the Stock Purchase Date and by
     assuming that all losses, credits and other tax attributes are used in the
     order provided under the applicable provisions of the Code and Treasury
     Regulations.

          (d) (i) If a claim in respect of Taxes (a "Tax Claim") is made or
     threatened by any Taxing Authority that, if successful, could result in an
     indemnity obligation under Section 6, Veritas shall promptly notify SAC,
     stating the nature and basis of such claim and the amount thereof, to the
     extent known. Failure to give such notice shall not relieve the SAC
     Indemnitors from any liability that they may have on account of this
     indemnification or otherwise, except to the extent that the SAC Indemnitors
     are materially prejudiced in the defense of such claim thereby. SAC will
     have the right, at its option, upon timely notice to Veritas, to assume at
     its own expense control of any audit or other defense of such Tax Claim
     with its own counsel, and by assuming such control will be deemed to have
     acknowledged its indemnification liability for such claim. SAC's right to
     control such a Tax Claim will be limited to issues in respect of which
     amounts in dispute would be paid by the SAC Indemnitors or for which the
     SAC Indemnitors would be liable pursuant to Section 6. Costs of such Tax
     Claims are to be borne by the SAC Indemnitors unless the Tax Claim relates
     to a Straddle Period.

          (ii) In the case of any Tax Proceeding involving liability for Tax of
     Seagate, a Retained Subsidiary or any Sold Subsidiary for which Seagate or
     a Retained Subsidiary could be liable if such Tax were unpaid (without
     regard to any indemnity obligation of SAC), (A) Veritas at its expense and
     through counsel of its choosing, shall have the right to observe all
     hearings, trials and other proceedings, attend all settlement and other
     conferences and receive copies of all material briefs and submissions and
     (B) notwithstanding the control rights granted to SAC in clause (i) above,
     Veritas shall have the right to control the Tax Proceeding and make all
     decisions in respect thereof in the case of any Tax proceeding involving
     the liability for Tax of Seagate or the Retained Subsidiaries if Veritas
     waives its right to obtain indemnity under this Section 6.

          (e)  If the parties disagree as to the amount of any payment to be
     made under or on any other matter arising under this Section 6, the parties
     shall attempt in good faith to resolve such dispute, and any agreed-upon
     amount shall be paid to the appropriate party. If such dispute is not
     resolved within 15 days following written

                                        8



     notice from any party hereto to an other party hereto that a dispute
     subject to this subsection (f) exists, then the parties shall jointly
     retain an independent accounting firm to resolve the dispute. If and to the
     extent that a dispute presents legal issues, the independent accounting
     firm shall have authority to consult an independent law firm. The fees of
     the independent accounting firm and the independent law firm shall be borne
     by the party that does not substantially prevail in the dispute; the
     independent accounting firm shall make a determination regarding liability
     for expenses. The decision of such independent accounting firm and/or the
     independent law firm shall be rendered within ten (10) days following final
     submissions by the parties to such firm and shall be final and binding on
     all parties; provided, however, that if there is a subsequent adjudication
     or other determination of a fact or matter assumed, but not decided in the
     decision of such accounting firm or law firm, the decision of such
     accounting firm or law firm shall be appropriately adjusted and the parties
     shall adjust the payments made accordingly. Following the decision of the
     independent accounting firm and/or the independent law firm, the parties
     shall each take or cause to be taken any action that is necessary or
     appropriate to implement such decision of the independent accounting firm
     and/or the independent law firm.

          (f)  Notwithstanding any other provision of this Agreement, Veritas,
     on the one hand, and SAC, on the other hand, shall retain all Tax Returns,
     schedules and workpapers, and all material records or other documents
     relating thereto, until the later of (i) sixty (60) days following the
     expiration of the statute of limitations (including extensions, waivers and
     mitigations thereof) of the taxable years to which such Tax Returns and
     other documents relate or (ii) one hundred twenty (120) days after the
     delivery of notice to the other party to the effect that it shall dispose
     of such Tax Returns or other documents, unless it is requested by such
     party within one hundred twenty (120) days of delivery of such notice (with
     which request it shall comply within thirty (30) days of receipt) that it
     transfer such Tax Returns or other documents to such other party. Any
     information obtained under this Section 6 shall be kept confidential,
     except as may be otherwise necessary in connection with the filing of Tax
     Returns or claims for refund or in conducting any audit or other
     proceeding.

     SECTION 7. Termination of Tax Sharing Agreement. All tax sharing or similar
agreements (if any) between Seagate and its Affiliates, on the one hand, and the
Sold Subsidiaries, on the other, are terminated as of the Closing Date without
any further liability to any party thereto and shall be of no further force and
effect. All claims for indemnification for Taxes between the parties shall be
made and resolved in accordance with the terms of this Agreement.

     SECTION 8. [Reserved]

     SECTION 9. Indemnification Procedure.

     (a)  Except as may be otherwise provided pursuant to Section 6 hereof, any
party entitled to indemnification hereunder (each, an "Indemnified Party")
shall, with respect to claims asserted against any such Indemnified Party by any
third party (a "Third-Party Claim"), give written notice to the party against
whom indemnification is sought (the "Indemnifying Party") of any liability which
might give rise to a claim for indemnity hereunder within thirty (30) days of
the receipt of any written claim or notice from any such third party, but no
later than twenty (20) days prior to the date any answer, responsive pleading or
other response may be due with respect thereto, and with respect to any other
matter for which any Indemnified Party may seek indemnification hereunder, the

                                        9



Indemnified Party shall give prompt written notice to the Indemnifying Party of
any liability which might give rise to a claim for indemnity; provided, however
that any failure to give such notice will not release the Indemnifying Party
from its obligations hereunder except to the extent that the rights of the
Indemnifying Party are materially prejudiced thereby.

     (b)  Except with respect to claims governed by Section 6 hereof which shall
be governed by the provisions thereof, the Indemnifying Party, upon receipt of
such notice, shall be entitled to participate in or, at the Indemnifying Party's
option, assume at its own expense the defense, appeal or settlement of such
Third-Party Claim with respect to which such indemnity has been invoked with
counsel of its own choosing (who shall be reasonably satisfactory to the
Indemnified Party); provided, however, that if the Indemnifying Party assumes
the defense, appeal or settlement of such Third-Party Claim, (i) the Indemnified
Party shall be entitled to employ one counsel to represent itself if an actual
conflict of interest exists in the opinion of counsel to the Indemnified Party
between the Indemnifying Party and the Indemnified Party in respect of such
Third-Party Claim and in that event and only in that event the reasonable fees
and expenses of such counsel shall be paid by the Indemnifying Party (it being
understood that all Indemnified Parties may employ not more than one counsel to
represent them at the expense of the Indemnifying Party) and (ii) the
Indemnified Party shall nevertheless be entitled to participate in (but not
direct) the defense thereof with counsel of its own choice and, subject to
clause (i) above, at its own expense. Any Indemnified Party is hereby authorized
prior to the date on which it receives written notice from the Indemnifying
Party that it intends to assume the defense, appeal or settlement of such
Third-Party Claim, to file any motion, answer or other pleading and take such
other action which it shall reasonably deem necessary to protect its interest or
that of the Indemnifying Party until the date on which the Indemnified Party
receives such notice from the Indemnifying Party.

     (c)  No claim or demand may be settled by the Indemnified Party without the
consent of the Indemnifying Party, which consent shall not be unreasonably
delayed or withheld. Unless the claim or demand seeks only dollar damages (all
of which are to be paid by the Indemnifying Party), no such claim or demand may
be settled by the Indemnifying Party without the consent of the Indemnified
Party, which consent shall not be unreasonably delayed or withheld.

     (d)  The parties agree to cooperate in defending such Third-Party Claims
and the Indemnified Party shall provide such cooperation and such access to its
books, records and properties as the Indemnifying Party may reasonably request
with respect to any matter for which indemnification is sought hereunder, and
the parties hereto agree to cooperate with each other in order to insure the
proper and adequate defense thereof.

     (e)  With regard to Third-Party Claims for which indemnification is payable
hereunder, indemnification shall be paid by the Indemnifying Party within five
(5) business days following the earlier to occur of:

           (i)  entry of a final non-appealable judgment by a court of competent
     jurisdiction or arbitration panel against an Indemnified Party which has
     not been stayed pending appeal; or

           (ii) a settlement of the claim, in accordance with the terms of such
     settlement.

     With regard to any claim for Taxes subject to Section 6 hereof,
indemnification shall be paid by the SAC Indemnitees within five (5) business
days following receipt by SAC

                                       10



of written notice from Veritas stating that any amount subject to
indemnification under such Section 6 has been paid by Veritas and the amount
thereof and the indemnity payment requested.

     With regard to any other claim for which indemnification is payable
hereunder, indemnification shall be paid promptly by the Indemnifying Party upon
demand by the Indemnified Party but in any event within thirty (30) business
days following any such demand, provided that any such demand shall include a
reasonably detailed description of the claims giving rise to such demand.

     (f) The Indemnifying Parties agree to reimburse the Indemnified Parties for
any indemnifiable Losses under the provisions of this Agreement as such Losses
are incurred, provided, however, that if it is finally determined that any
Indemnified Party was not entitled to any amount paid as indemnity with respect
to such Losses, such Indemnified Party shall promptly refund all amounts to
which such Indemnified Party was not entitled to the Indemnifying Parties that
paid such amounts.

     SECTION 10. No Contribution. The Indemnifying Parties shall not be entitled
to seek or obtain any contribution, reimbursement or other participation, direct
or indirect, from any Indemnified Party in respect of any payment made or to be
made by any Indemnifying Party hereunder or arising out of this Agreement,
notwithstanding the fact that the Loss for which any Indemnifying Party is
liable results from or is contributed to by any breach by any Indemnified Party
or any misrepresentation by any Indemnified Party contained in the Merger
Agreement, the Stock Purchase Agreement, this Agreement or any agreement,
document, instrument or schedule referred to herein or therein or contemplated
hereby or thereby.

     SECTION 11. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect;
provided, however that if any mutual covenant contained herein is declared
invalid or unenforceable with respect to Veritas and its Affiliates (including
Seagate and any Retained Subsidiary following the Closing), on the one hand, or
SAC and its Affiliates, on the other hand, by any court of competent
jurisdiction or governmental authority, such mutual covenant shall become
invalid or unenforceable with respect to the opposite group to such covenant and
provided further, that this Section 11 shall not be construed to affect any
other rights of any party hereto under applicable principles of contract law,
including without limitation the principles of failure of consideration and
mutual dependency.

     SECTION 12. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by verified telecopy, by expedited delivery
service (such as Federal Express) or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:

        (i)    if to Veritas (and, after Closing, Seagate), to:

               VERITAS Software Corporation
               1600 Plymouth Street
               Mountain View, California 94043
               Attention: General Counsel
               Facsimile: 650-526-2581
               Telephone: 650-335-8000

                                       11




               with a copy to:

               Willkie Farr & Gallagher
               787 Seventh Avenue
               New York, NY 10019
               Attention: Michael A. Schwartz, Esq.
               Facsimile: 212-728-8111
               Telephone: 212-728-8000
        (ii)   if to Seagate (prior to Closing), to:

               Seagate Technology, Inc.
               920 Disc Drive
               P.O. Box 66360
               Scotts Valley, California 95067
               Attention: General Counsel
               Facsimile: 831-438-6675
               Telephone: 831-439-5370

               with a copy to:

               Wilson Sonsini Goodrich & Rosatti
               Professional Corporation
               650 Page Mill Road
               Palo Alto, California 94304-1050
               Attention: Larry W. Sonsini, Esq.

               and to:

               Wilson Sonsini Goodrich & Rosatti
               Professional Corporation
               One Market Street
               Spear Tower, Suite 3300
               San Francisco, California 94105
               Attention: Michael J. Kennedy, Esq.
               Facsimile: 415-947-2099
               Telephone: 415-947-2000

        (iii)  if to SAC, to:

               Suez Acquisition Company (Cayman) Limited
               c/o Silver Lake Partners, L.P.
               2725 Sand Hill Road
               Building C, Suite 950
               Attention: Dave Roux
               Facsimile: 650-2338125
               Telephone: 650-233-8121

               with a copy to:

               Simpson Thacher & Bartlett
               425 Lexington Avenue
               New York, New York 10017-3954
               Attention: William Curbow, Esq.
               Facsimile: 212-455-2502
               Telephone: 212-455-2000

                                       12



               and to:

               TPG Partners III, L.P.
               201 Main Street, Suite 2420
               Fort Worth, Texas 76102
               Attention: Richard A. Ekleberry, Esq.
               Facsimile: 817-871-4010
               Telephone: 817-871-4000

               with a copy to:

               Cleary, Gottlieb, Steen & Hamilton
               One Liberty Plaza
               New York, New York 10006
               Attention: Paul J. Shim, Esq.
               Facsimile: 212-225-3999
               Telephone: 212-225-2000

Such notice shall be effective on the day following receipt of delivery in
person, by verified telecopy or by expedited delivery service and shall be
effective four days after mailing in accordance with the foregoing. The person
to whom notice is to be given, and any address, may be changed from time to time
in the manner set forth above (provided that any such change shall be effective
only upon receipt thereof).

     SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. Venue for any legal action under this Agreement shall be in the
federal or state courts located in the State and County of New York, All parties
hereunder hereto hereby submit themselves to the jurisdiction of such courts for
the purpose of this Agreement and hereby waive trial by jury in any action,
counterclaim or proceeding of any kind arising under or out of or in connection
with this Agreement, the negotiations leading thereto, the inducements to the
parties to enter into this Agreement and to the transactions it contemplates.

     SECTION 14. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.

     SECTION 15. Parties-in-Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

     SECTION 16. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original, but both of which
shall constitute one and the same agreement, provided that at least one
counterpart is executed by each party herein named.

     SECTION 17. Successors. All agreements of the parties in this Agreement
shall bind their respective successors, provided that upon written request by
SAC following the sale of any of its Subsidiaries to an unaffiliated third
party, Veritas shall execute and deliver a release of such Subsidiary of its
obligations hereunder.

     SECTION 18. Assignment. This Agreement is not assignable by either party
hereto without the prior written consent of the other party hereto.

                                       13



     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above mentioned.

                                          VERITAS SOFTWARE CORPORATION

                                          By: /s/ MARK LESLIE
                                          Its: CEO and Chairman of the Board

                                          SEAGATE TECHNOLOGY, INC.

                                          By: /s/ JAY A. JONES
                                          Its: President, Chief Administrative
                                               Officer and Secretary

                                          SUEZ ACQUISITION COMPANY (CAYMAN)
                                          LIMITED

                                          By: /s/ STEPHEN J. LUCZO
                                          Its: CEO and President

EX-2.4

                                                                     EXHIBIT 2.4

                                JOINDER AGREEMENT

        JOINDER AGREEMENT, dated this 22/nd/ day of November, 2000, by and among
VERITAS Software Corporation, a Delaware corporation ("Veritas"), Seagate
Technology, Inc., a Delaware corporation ("Seagate") and the entities listed
below as SAC Indemnitors (each, a "SAC Indemnitor").

        Reference is made to that certain Indemnification Agreement (the
"Indemnification Agreement"), dated as of March 29, 2000, by and among Veritas,
Seagate, Suez Acquisition Company (Cayman) Limited, a limited company organized
under the laws of the Cayman Islands ("SAC"), as amended. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed thereto in the
Indemnification Agreement.

        By executing this Joinder Agreement, each SAC Indemnitor, severally and
not jointly, hereby agrees to be bound by the terms of the Indemnity Agreement
as if it was an original signatory to such Agreement and shall be deemed to be a
SAC Indemnitor thereunder.

        This Joinder Agreement shall be governed by and construed in accordance
with the laws of the State of New York. This Joinder Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same agreement.

        IN WITNESS WHEREOF, the parties hereto have executed this Joinder
Agreement as of the date first above written.

                                             SAC INDEMNITORS:

                                             NEW SAC

                                             By: /s/ WILLIAM L. HUDSON
                                                ________________________
                                                Name: William L. Hudson
                                                Title:




                                     SEAGATE TECHNOLOGY HOLDINGS


                                     By: /s/ WILLIAM L. HUDSON
                                        _______________________
                                        Name: William L. Hudson
                                        Title:

                                     SEAGATE TECHNOLOGY HDD HOLDINGS


                                     By: /s/ WILLIAM L. HUDSON
                                        _______________________
                                        Name: William L. Hudson
                                        Title:

                                     SEAGATE TECHNOLOGY (US) HOLDINGS, INC.


                                     By: /s/ WILLIAM L. HUDSON
                                        _______________________
                                        Name: William L. Hudson
                                        Title:

                                     SEAGATE TECHNOLOGY LLC
                                     By:  Seagate Technology, Inc., its Managing
                                     Member

                                     By: /s/ WILLIAM L. HUDSON
                                        _______________________
                                        Name: William L. Hudson
                                        Title:

                                     [SEAGATE US LLC]


                                     By: /s/ WILLIAM L. HUDSON
                                        _______________________
                                        Name: William L. Hudson
                                        Title:

                                     REDWOOD ACQUISITION CORPORATION


                                     By: /s/ WILLIAM L. HUDSON
                                        _______________________
                                        Name: William L. Hudson

                                                                               2



                                           Title:

                                        QUINTA CORPORATION


                                        By: /s/ WILLIAM L. HUDSON
                                           _______________________
                                           Name: William L. Hudson
                                           Title:

                                        SEAGATE TECHNOLOGY INTERNATIONAL


                                        By: /s/ WILLIAM L. HUDSON
                                           _______________________
                                           Name: William L. Hudson
                                           Title:

                                        SEAGATE TECHNOLOGY (THAILAND) LIMITED


                                        By: /s/ WILLIAM L. HUDSON
                                           _______________________
                                           Name: William L. Hudson
                                           Title:

                                        SEAGATE TECHNOLOGY CHINA HOLDING CO.


                                        By: /s/ WILLIAM L. HUDSON
                                           _______________________
                                           Name: William L. Hudson
                                           Title:

                                        SEAGATE TECHNOLOGY ASIA HOLDINGS


                                        By: /s/ WILLIAM L. HUDSON
                                           _______________________
                                           Name: William L. Hudson
                                           Title:

                                        SEAGATE TECHNOLOGY (IRELAND)

                                        By: /s/ WILLIAM L. HUDSON
                                           _______________________
                                           Name: William L. Hudson
                                           Title:

                                                                               3



                               SEAGATE TECHNOLOGY MEDIA (IRELAND)


                               By: /s/ WILLIAM L. HUDSON
                                  _______________________
                                  Name: William L. Hudson
                                  Title:

                               SEAGATE TECHNOLOGY REYNOSA S. DE R.L. DE C.V.


                               By: /s/ WILLIAM L. HUDSON
                                  _______________________
                                  Name: William L. Hudson
                                  Title:

                               NIPPON SEAGATE INC.


                               By: /s/ WILLIAM L. HUDSON
                                  _______________________
                                  Name: William L. Hudson
                                  Title:

                               SEAGATE SINGAPORE DISTRIBUTION PTE. LTD.


                               By: /s/ WILLIAM L. HUDSON
                                  _______________________
                                  Name: William L. Hudson
                                  Title:

                               SEAGATE DISTRIBUTION (UK) LIMITED


                               By: /s/ WILLIAM L. HUDSON
                                  _______________________
                                  Name: William L. Hudson
                                  Title:

                               SEAGATE TECHNOLOGY (MARLOW) LIMITED


                               By: /s/ WILLIAM L. HUDSON
                                  _______________________
                                  Name: William L. Hudson

                                                                               4



                                         Title:

                                      SEAGATE TECHNOLOGY FAR EAST HOLDINGS

                                      By: /s/ WILLIAM L. HUDSON
                                         _______________________
                                         Name: William L. Hudson
                                         Title:

                                      SEAGATE TECHNOLOGY (PHILIPPINES)



                                      By: /s/ WILLIAM L. HUDSON
                                         _______________________
                                         Name: William L. Hudson
                                         Title:

                                      SEAGATE TECHNOLOGY (SAN) HOLDINGS


                                      By: /s/ WILLIAM L. HUDSON
                                         _______________________
                                         Name: William L. Hudson
                                         Title:

                                      XIOTECH CORPORATION


                                      By: /s/ WILLIAM L. HUDSON
                                         _______________________
                                         Name: William L. Hudson
                                         Title:

                                      XIOTECH (CANADA) LTD.


                                      By: /s/ WILLIAM L. HUDSON
                                         _______________________
                                         Name: William L. Hudson
                                         Title:

                                      SEAGATE REMOVABLE STORAGE SOLUTIONS
                                      HOLDINGS


                                      By: /s/ WILLIAM L. HUDSON
                                         _______________________
                                         Name: William L. Hudson

                                                                               5



                                Title:

                             SEAGATE REMOVABLE STORAGE SOLUTIONS (US) HOLDINGS,
                             INC


                             By: /s/ WILLIAM L. HUDSON
                                _______________________
                                Name: William L. Hudson
                                Title:

                             SEAGATE REMOVABLE STORAGE SOLUTIONS LLC
                             By:  Seagate Technology, Inc., its Managing Member

                             By: /s/ WILLIAM L. HUDSON
                                _______________________
                                Name: William L. Hudson
                                Title:

                             [SEAGATE RSS LLC]


                             By: /s/ WILLIAM L. HUDSON
                                _______________________
                                Name: William L. Hudson
                                Title:

                             SEAGATE REMOVABLE STORAGE SOLUTIONS INTERNATIONAL


                             By: /s/ WILLIAM L. HUDSON
                                _______________________
                                Name: William L. Hudson
                                Title:

                             SEAGATE SOFTWARE (CAYMAN) HOLDINGS


                             By: /s/ WILLIAM L. HUDSON
                                _______________________
                                Name: William L. Hudson
                                Title:

                             SEAGATE SOFTWARE INFORMATION MANAGEMENT GROUP
                             HOLDINGS, INC.

                                                                               6



                                By: /s/ WILLIAM L. HUDSON
                                   _______________________
                                   Name: William L. Hudson
                                   Title:

                                SEAGATE SOFTWARE INFORMATION MANAGEMENT GROUP
                                (CANADA), INC.


                                By: /s/ WILLIAM L. HUDSON
                                   _______________________
                                   Name: William L. Hudson
                                   Title:

                                NIPPON SEAGATE SOFTWARE KK


                                By: /s/ WILLIAM L. HUDSON
                                   _______________________
                                   Name: William L. Hudson
                                   Title:

                                SEAGATE SOFTWARE INFORMATION MANAGEMENT GROUP
                                HOLDINGS BV


                                By: /s/ WILLIAM L. HUDSON
                                   _______________________
                                   Name: William L. Hudson
                                   Title:

                                SEAGATE SOFTWARE INFORMATION PTE LTD.


                                By: /s/ WILLIAM L. HUDSON
                                   _______________________
                                   Name: William L. Hudson
                                   Title:

                                SEAGATE SOFTWARE INFORMATION MANAGEMENT GROUP UK
                                LIMITED


                                By: /s/ WILLIAM L. HUDSON
                                   _______________________
                                   Name: William L. Hudson
                                   Title:

                                                                               7



Agreed to and Accepted by:

VERITAS SOFTWARE CORPORATION


By: /s/ JAY A. JONES
   _______________________
   Name: Jay A. Jones
   Title:

SEAGATE TECHNOLOGY, INC.


By: /s/ WILLIAM L. HUDSON
   _______________________
   Name: William L. Hudson
   Title:

                                                                               8

EX-2.5

                                                                     EXHIBIT 2.5

                       CONSOLIDATED AMENDMENT AND CONSENT

                            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.

                                        1



     NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereto hereby agree as follows:

                                    ARTICLE I

                     AMENDMENTS TO STOCK PURCHASE AGREEMENT

     Seagate, Suez and SSHI hereby agree as follows:

     1. Purchase and Sale of SSHI Shares. 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.

                                        2



     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 transfer to the Sold Subsidiaries, prior to the
Closing Date, of all assetsand 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

                                        3



     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 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.

                                        4



     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"

     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".

                                        5



     (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")".

     (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"),".

                                        6



     (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, 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."

                                        7



          (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 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

                                        8



        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:

              "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

                                        9



     other legends as may be required by law. The rights of the holders of the
     TRA Rights to receive a distribution from the Collection Account (as
     defined in Section 5.15(b) hereof) shall terminate with respect to TRA
     Amounts on the 30(th) day after the settlement, expiration of the statute
     of limitations, or final determination (as defined in Section 1313(a) of
     the Code) with respect to the last audit, examination or contest in respect
     of a claim for refund, credit or amended return that would give rise to a
     TRA Amount. After the expiration date of the TRA Rights, any TRA Amounts
     received by Veritas and its Affiliates shall be the property of Veritas or
     such Affiliate without any obligation whatsoever to account therefor to
     holders of the TRA Rights; provided, however, that any TRA Amounts to be
     received after such expiration date in respect of any settlement, or final
     determination with respect to the last audit, examination or contest
     described in the prior sentence shall be the property of the holders of the
     TRA Rights and an amount of cash equal to any such TRA Amount shall be
     deposited in the Collection Account pursuant to Section 5.15(c) below.

          (b) Administration generally. 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

                                       10



     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, 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.

                                       11



          (h)  Exculpation. In performing any duties under this Agreement, the
     Administrator shall not be liable to any party for damages, losses, or
     expenses, except to the extent resulting from the gross negligence or
     willful misconduct on the part of the Administrator. The Administrator
     shall not incur any such liability for (A) any act or failure to act made
     or omitted in good faith, or (B) any action taken or omitted in reliance
     upon any instrument, including any written statement or affidavit provided
     for in this Agreement that the Administrator shall in good faith believe to
     be genuine, nor will the Administrator be liable or responsible for
     forgeries, fraud, impersonations, or determining the scope of any
     representative authority. In addition, the Administrator may consult with
     legal counsel in connection with performing the Administrator's duties
     under this Agreement and shall be fully protected in any act taken,
     suffered, or permitted by him/her in good faith in accordance with the
     advice of counsel. The Administrator is not responsible for determining and
     verifying the authority of any person acting or purporting to act on behalf
     of any party to this Agreement.

          (i)  Dragon Shares. Any Dragon Shares being held in escrow at the
     Effective Time shall, following release from escrow and delivery to
     Veritas, and subject to applicable legal and contractual restrictions, be
     transferred to the Administrator. Following receipt thereof, the
     Administrator shall use reasonable efforts to distribute these shares to
     holders of TRA Rights and/or sell such shares as promptly as practicable,
     in each case, in accordance with any applicable legal and contractual
     restrictions, and, following any such sale, shall deposit the net proceeds
     thereof into the Collection Account and distribute the same in accordance
     with paragraph (e) of this Section 5.15."

     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."

                                       12



          (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 (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").

                                       13



                                   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 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.

                                       14



     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]

                                       15



     IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized respective officers, as of the date first
above written.

                                              VERITAS SOFTWARE CORPORATION


                                              By: /s/ JAY A. JONES

                                              Name: Jay A. Jones

                                              Title:


                                              VICTORY MERGER SUB, INC.


                                              By: /s/ JAY A JONES

                                              Name: Jay A. Jones

                                              Title:


                                              SEAGATE TECHNOLOGY, INC.


                                              By: /s/ WILLIAM L. HUDSON


                                              Name: William L. Hudson

                                              Title:


                                              SUEZ ACQUISITION COMPANY


                                              (CAYMAN) LIMITED

                                              By: /s/ KENNETH HAO

                                              Name: Kenneth Hao

                                              Title:


                                              SEAGATE SOFTWARE HOLDINGS, INC.


                                              By: /s/ CHARLES C. POPE

                                              Name: Charles C. Pope

                                              Title:

                                       16

EX-2.6

                                                                     EXHIBIT 2.6

                    CONSOLIDATED AMENDMENT AND CONSENT NO. 2

                         CONSOLIDATED AMENDMENT NO. 2 TO

                  STOCK PURCHASE AGREEMENT, AGREEMENT AND PLAN
    OF MERGER AND REORGANIZATION, AND INDEMNIFICATION AGREEMENT, AND CONSENT

     THIS AMENDMENT NO. 2 TO STOCK PURCHASE AGREEMENT, AGREEMENT AND PLAN OF
MERGER AND REORGANIZATION, AND INDEMNIFICATION AGREEMENT, AND CONSENT (this
"AGREEMENT") is made and entered into as of October 18, 2000 by and among Suez
Acquisition Company (Cayman) Limited, a limited company organized under the laws
of the Cayman Islands ("SUEZ"), Seagate Technology, Inc., a Delaware corporation
("SEAGATE"), Seagate Software Holdings, Inc., a Delaware corporation ("SSHI"),
VERITAS Software Corporation, a Delaware corporation ("VERITAS"), and Victory
Merger Sub, Inc., a Delaware corporation ("MERGER SUB").

                                    RECITALS

     A.  On March 29, 2000, Suez, Seagate and SSHI entered into a Stock Purchase
Agreement (the "STOCK PURCHASE AGREEMENT") pursuant to which, among other
things, Seagate and SSHI agreed to sell to Suez (or one of its Designees), and
Suez agreed to purchase (or cause one of its Designees to purchase) from Seagate
and SSHI, all outstanding Shares of the Sold Subsidiaries (as such terms are
defined in the Stock Purchase Agreement) upon the terms and subject to the
conditions set forth therein. Capitalized terms used but not otherwise defined
in Article I hereof shall have the respective meanings ascribed thereto in the
Stock Purchase Agreement. In April 2000, Suez, Seagate and SSHI agreed to reduce
the amount stated in the definition of Required Cash under the Stock Purchase
Agreement from $800,000,000 to $775,000,000. On August 29, 2000, Suez, Seagate,
SSHI, Veritas and Merger Sub entered into a Consolidated Amendment to Stock
Purchase Agreement, Agreement and Plan of Merger and Reorganization, and
Indemnification Agreement, and Consent (the "First Consolidated Amendment"),
pursuant to which Suez, Seagate and SSHI agreed to amend certain terms of the
Stock Purchase Agreement.

     B.  On October 13, 2000, Suez, Seagate, SSHI, Veritas and other defendants
in purported class action lawsuits currently pending in the Chancery Court in
Delaware entered into a memorandum of understanding with the plaintiffs in these
lawsuits regarding the settlement of those lawsuits (the "Settlement"). Suez,
Seagate and SSHI desire to further amend certain terms of the Stock Purchase
Agreement to reflect the Settlement, as more fully set forth herein.

     C.  On March 29, 2000, Veritas, Merger Sub and Seagate entered into an
Agreement and Plan of Merger and Reorganization (the "MERGER AGREEMENT")
pursuant to which, among other things, upon the terms and subject to the
conditions of the Merger Agreement and in accordance with Delaware Law (as
defined in the Merger Agreement), Veritas and Seagate agreed to consummate the
Merger. Capitalized terms used but not otherwise defined in Article II hereof
shall have the respective meanings ascribed thereto in the Merger Agreement. On
August 29, 2000, Veritas, Merger Sub and Seagate agreed to amend certain terms
of the Merger Agreement as provided in the First Consolidated Amendment.

                                        1



     D. Veritas, Merger Sub and Seagate desire to further amend certain terms of
the Merger Agreement to reflect the Settlement, as more fully set forth herein.

     E. On March 29, 2000, Veritas, Seagate and Suez entered into an
Indemnification Agreement (the "Indemnification Agreement") which, among other
things, sets forth certain agreements to govern various tax matters, indemnity
matters and other matters that may arise in connection with the transactions
contemplated by the Stock Purchase Agreement and the Merger Agreement. On August
29, 2000, Veritas, Seagate and Suez agreed to amend certain terms of the
Indemnification Agreement as provided in the First Consolidated Amendment.

     F. Veritas, Seagate and Suez desire to further amend certain terms of the
Indemnification Agreement to reflect the terms of the Settlement, as more fully
set forth herein.

     NOW, THEREFORE, in consideration of the foregoing premises, and the
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereto hereby agree as follows:

                                    ARTICLE I

                     AMENDMENTS TO STOCK PURCHASE AGREEMENT

     Seagate, Suez and SSHI hereby agree as follows:

     1. Purchase and Sale of SSHI Shares. Section 2.2 of the Stock Purchase
Agreement is amended and restated in its entirety as follows:


          "2.2 Purchase Price. The aggregate purchase price for the Shares shall
     be $2,050,000,000 in cash, minus the Rolled Option Value (the "Purchase
     Price"), plus the assumption of all Liabilities (other than Designated
     Liabilities) of Seller and SSHI."

     2. Corrections and Clarifications. The definition of Adjustment Amount in
Section 1.1(b) of the Stock Purchase Agreement is hereby amended to insert
immediately following the language "excluding Taxes caused by or relating to the
Split," the following: "and, other than as provided below, Taxes relating to the
Canadian Reorganization (as defined below)".

     3. Consent. VERITAS hereby consents to the amendments to the Stock Purchase
Agreement set forth in this Article I for all purposes of and under the Merger
Agreement.

                                   ARTICLE II

                          AMENDMENT TO MERGER AGREEMENT

     Seagate, Merger Sub and VERITAS hereby agree as follows:

     1. Amendment to Average Veritas Stock Price Definition. The definition of
"Average Veritas Stock Price" in Section 1.11(a)(iv) of the Merger Agreement
hereby is amended by deleting therefrom the phrase: ", or with respect to the VP
Amount, preceding the date that Veritas makes its election".

                                        2



     2. Amendment to VP Amount Definition. The definition of "VP Amount" in
Section 1.11(a)(xxxiii) of the Merger Agreement hereby is amended by deleting
such definition in its entirety and replacing it with the following:

          " 'VP Amount' means either $0, $250 million or $500 million, at the
     election of Veritas, which election may be made at any time during the
     fifteen (15) consecutive trading days ending two (2) trading days
     immediately preceding the date of the Seagate Stockholders' Meeting."

     3. Amendment to Available Amount Definition. The definition of "Available
Amount" in Section 1.11(a)(ii) of the Merger Agreement hereby is amended by
deleting such definition in its entirety and replacing it with the following:

          " 'Available Amount' means an amount equal to Cash held by Seagate
     immediately prior to the Effective Time, including net amounts received
     under the OD Documents, minus the sum of (i) the VP Amount, (ii) the
     Estimated Tax Withholding Amount, (iii) the Reserve Amount and (iv) the
     Litigation Holdback Amount."

     4. Amendment to Stock Portion Definition. The definition of "Stock Portion"
in Section 1.11(a)(xxvii) of the Merger Agreement hereby is amended by deleting
from clause (ii)(x)(B) thereof the phrase "Average Veritas Stock Price" and
substituting therefor the phrase "Average VP Veritas Stock Price".

     5. Additional Definitions. Section 1.11(a) is hereby amended by adding the
following new definitions at the end thereof:

          " 'Average VP Veritas Stock Price' means the average closing price of
     a share of Veritas Common Stock, as reported on the Nasdaq, for the five
     (5) consecutive trading days ending the trading day immediately preceding
     the date that the election referred to in the definition of "VP Amount" is
     made.

          "Settlement Documents" means the Memorandum of Understanding signed by
     litigation counsel to Seagate, Veritas, Suez and the other parties thereto
     on October 13, 2000 setting forth the principal terms relating to the
     settlement of the class action litigation referred to therein, as amended
     by any subsequent settlement documents executed and delivered by the
     parties thereto.

          "Litigation Holdback Amount" means $50,000,000.

     6. TRA Amount.

          (a) Section 1.11(a)(xxxiv) of the Merger Agreement is hereby amended
     and restated in its entirety as follows:

             "Reserve Amount" shall mean $150 million.

          (b) The definition of "TRA Right" in Section 1.11(a)(xxi) of the
     Merger Agreement is hereby restated in its entirety as follows:

             " 'TRA Right' means a non-transferable right to receive from
        Veritas, when, as and if received by Veritas or its Affiliates, a
        stockholder's Pro Rata Portion of the TRA Amount as reduced pursuant to
        Section 5.15(e)(ii)(x) and (y) hereof and subject to Section 5.15(e)(i)
        hereof."

          (c) Section 5.15 of the Merger Agreement hereby is amended and
     restated in its entirety to read as follows:

                                        3



          "5.15 TRA Matters

          (a) Form. The TRA Rights shall be evidenced by a non-transferable
     document in form and substance reasonably satisfactory to Veritas and
     Seagate, and shall contain legends to the effect that they are
     non-negotiable instruments as well as such other legends as may be required
     by law. The rights of the holders of the TRA Rights to receive a
     distribution from the Collection Account (as defined in Section 5.15(b)
     hereof) shall terminate with respect to TRA Amounts on the 30(th) day after
     the settlement, expiration of the statute of limitations, or final
     determination (as defined in Section 1313(a) of the Code) with respect to
     the last audit, examination or contest in respect of a claim for refund,
     credit or amended return that would give rise to a TRA Amount. After the
     expiration date of the TRA Rights, any TRA Amounts received by Veritas and
     its Affiliates shall be the property of Veritas or such Affiliate without
     any obligation whatsoever to account therefor to holders of the TRA Rights;
     provided, however, that any TRA Amounts to be received after such
     expiration date in respect of any settlement, or final determination with
     respect to the last audit, examination or contest described in the prior
     sentence shall be the property of the holders of the TRA Rights and an
     amount of cash equal to any such TRA Amount shall be deposited in the
     Collection Account pursuant to Section 5.15(c) below.

          (b) Administration generally.

          (i) On or prior to the Effective Time, Seagate shall designate one or
     more persons (the "Administrators") who shall be responsible for overseeing
     collection of the TRA Amount and distributions with respect to the TRA
     Rights and coordinating activities with representatives of Veritas and
     Purchaser with respect to Seagate Taxes. Veritas and Seagate will, prior to
     the Effective Time, cooperate in good faith with respect to establishing
     procedures and structures designed to realize the aggregate value of the
     TRA Amount and minimize the amount of administrative costs. This may
     include the establishment of segregated accounts, pass-through trusts or
     similar devices (collectively, a "Collection Account") to receive periodic
     payments of cash amounts equal to the TRA Amount.

          (ii) The Administrators shall be entitled (x) to charge the Collection
     Account a fee of 1% for all amounts deposited therein and distributed to
     holders of the TRA Rights, and (y) to charge the Collection Account
     third-party expenses associated with administration of the TRA Rights.

          (iii) The Administrators shall pay to Veritas an amount on account of
     Taxes imposed on income earned on the assets held in the Collection
     Account, equal to 36% of all income and gain earned by the Collection
     Account. Such amount shall be paid no later than January 15 of each year in
     respect of income and gain earned in the preceding year or portion thereof
     during which the account is in existence.

          (c) Collection Account. Following the Effective Time, Veritas shall
     forward to the Collection Account (and notify the Administrators of) an
     amount in cash equal to any TRA Amount receipt (including the realization
     of any credit) by Seagate, within ten (10) business days of such receipt
     or, in the case of the Reserve Amount, within 2 business days of the
     Closing.

          (d) Interest. Any amounts in respect of the TRA Amounts not deposited
     in the Collection Account within the time period specified in Section
     5.15(c) shall be subject to an interest charge of 8% per annum.

                                        4



          (e) Investment/Distributions. (i) Amounts deposited in the Collection
     Account shall be invested by the Administrators in short-term money markets
     instruments, and shall be distributed to holders of TRA Rights on each
     calendar quarterly end commencing with the first such day that is at least
     45 days following the Closing Date (as defined in the Stock Purchase
     Agreement); provided, however, the amount available for distribution
     exceeds $5.0 million. Notwithstanding the immediately preceding sentence,
     the Administrators shall not distribute to the holders of the TRA Rights
     any amounts held in the Collection Account if such distribution would cause
     the balance in the Collection Account to be less than $150 million
     (including interest earned thereon, net of amounts in respect of applicable
     income taxes) (the "Retained TRA Amount") until such time as there is a
     settlement, expiration of the applicable statute of limitations, or final
     determination (as defined in Section 1313(a) of the Code) with respect to
     the last audit, examination or contest in respect of Seagate income taxes
     relating to the taxable period beginning July 1, 2000 and ending on the
     Closing Date (as defined herein) and any carryback arising in such taxable
     period and the taxable period beginning July 1, 1999 and ending June 30,
     2000, provided, however, upon a settlement or a final determination (as
     defined in Section 1313(a) of the Code) with respect Seagate's Federal
     income taxes for the taxable period in which the Closing occurs and the
     taxable years to which any attribute arising in the taxable year in which
     the Closing occurs is carried back and the taxable period beginning July 1,
     1999 and ending June 30, 2000, the remaining amount held in the Collection
     Account, less $25 million, shall be distributed immediately to the holders
     of the TRA Rights.

          (ii) The Retained TRA Amount shall be paid (x) first to the extent the
     Collection Account does not contain amounts in excess of the Retained TRA
     Amount, to pay third-party expenses associated with the administration of
     the TRA Right and to pay amounts in respect of Taxes imposed on income
     earned on the assets held in the Collection Account pursuant to Section
     5.15(b)(ii)(y) and (iii) above, (y) second to Veritas for application in
     respect of Seagate income taxes (including interest and penalties, if any)
     relating to (A) the taxable period (or that portion of a taxable period)
     beginning July 1, 2000 and ending on or before the Closing Date (as defined
     herein) and any carryback arising in such taxable period or (B) the taxable
     period beginning on July 1, 1999 and ending on or before June 30, 2000 but
     solely with respect to Seagate income taxes attributable to the Canadian
     Reorganization as defined in the Stock Purchase Agreement; and (z) then
     third, the remainder (less the Administrators' fee as described in Section
     5.15(b)(ii)(x) above) thereof, to the holders of the TRA Rights, pursuant
     to Section 5.15(e)(i) hereof.

          (f) Conduct of Audits and Other Procedural Matters. The Administrators
     shall have the right to control any audit, examination or contest with
     respect to any claim for refund, credit or amended return that would give
     rise to a TRA Amount, except if such audit, examination or contest may give
     rise to an indemnification obligation by Purchaser under the
     Indemnification Agreement, in which case the provisions of Section 6(d)(i)
     of the Indemnification Agreement shall control. Purchaser will consider in
     good faith any comments or recommendations of the Administrators with
     respect thereto. Veritas and Purchaser, as the case may be, shall promptly
     forward to the Administrators all written notifications and other written
     communications, including if available the original envelope showing any
     postmark from any taxing authority received by Veritas or its Affiliates
     relating to the TRA Amount.

                                        5



          (g) Assistance and Cooperation. After the Effective Time, Veritas
     shall (and shall cause its respective Affiliates to):

             (i)   Use reasonable efforts to include in any Tax Returns filed by
        Veritas or its Affiliates applicable claims for refunds or credits in
        respect of the TRA Amount proposed by the Administrators subject to any
        applicable requirements of Section 6(c)(i) of the Indemnification
        Agreement;

             (ii)  Cooperate fully in preparing for any audits of, or disputes
        with taxing authorities regarding the TRA Amount;

             (iii) Make available to the Administrators and to any taxing
        authority as reasonably requested all information, records, and
        documents relating to Taxes of Veritas, Seagate or any of their
        respective subsidiaries;

             (iv)  Provide timely notice to the Administrators in writing of any
        pending or threatened Tax audits or assessments relating to refunds or
        credits included or potentially includable in the TRA Amount; and

             (v)   Furnish the Administrators with copies of all correspondence
        received from any taxing authority in connection with any Tax audit
        which may affect refunds or credits included or potentially includable
        in the TRA Amount.

          (h) Exculpation. In performing any duties under this Agreement, the
     Administrator shall not be liable to any party for damages, losses, or
     expenses, except to the extent resulting from the gross negligence or
     willful misconduct on the part of the Administrator. The Administrator
     shall not incur any such liability for (A) any act or failure to act made
     or omitted in good faith, or (B) any action taken or omitted in reliance
     upon any instrument, including any written statement or affidavit provided
     for in this Agreement that the Administrator shall in good faith believe to
     be genuine, nor will the Administrator be liable or responsible for
     forgeries, fraud, impersonations, or determining the scope of any
     representative authority. In addition, the Administrator may consult with
     legal counsel in connection with performing the Administrator's duties
     under this Agreement and shall be fully protected in any act taken,
     suffered, or permitted by him/her in good faith in accordance with the
     advice of counsel. The Administrator is not responsible for determining and
     verifying the authority of any person acting or purporting to act on behalf
     of any party to this Agreement.

          (i) Dragon Shares. Any Dragon Shares being held in escrow at the
     Effective Time shall, following release from escrow and delivery to
     Veritas, and subject to applicable legal and contractual restrictions, be
     transferred to the Administrator. Following receipt thereof, the
     Administrator shall use reasonable efforts to distribute these shares to
     holders of TRA Rights and/or sell such shares as promptly as practicable,
     in each case, in accordance with any applicable legal and contractual
     restrictions, and, following any such sale, shall deposit the net proceeds
     thereof into the Collection Account and distribute the same in accordance
     with paragraph (e) of this Section 5.15."

     7. Litigation Holdback Amount. A new Section 5.16 is hereby added to the
Merger Agreement as follows:

        "5.16 Litigation Holdback Amount. Promptly following the satisfaction of
all of the conditions described in paragraph (8) of the Settlement Documents,
Veritas shall make available to the Exchange Agent for payment to each holder of
record of Seagate Common Stock at the Effective Time such holder's pro rata
portion of the Litigation

                                        6



Holdback Amount plus interest thereon computed as described in such paragraph
(8) of the Settlement Documents.

     8. Consent. Suez hereby consents to the amendments to the Merger Agreement
set forth in this Article II for all purposes of and under the Stock Purchase
Agreement, and hereby further agrees to be bound by the terms of Sections
1.11(a)(xxxiv) (definition of "Reserve Amount") and Sections 5.15(e) and (f) of
the Merger Agreement, each as amended hereby.

                                   ARTICLE III

                     AMENDMENT TO INDEMNIFICATION AGREEMENT

     Capitalized terms used in this Article III and not otherwise defined shall
have the respective meanings assigned thereto in the Indemnification Agreement.

     1. Section 6(b) of the Indemnification Agreement is hereby amended to add
at the end of the first sentence in the third paragraph thereof the following:
"provided, however, that to the extent that any payment of a Loss made in
respect of an assumed contingent liability relating to Taxes of Seagate does not
exceed the amount of contingent liability for Taxes that was included in the
amount realized in respect of the Stock Purchase, such payment shall (unless
otherwise determined by the relevant tax authority) instead be treated as a
payment of the amount realized, and not as an adjustment to such Purchase Price.

     2. Section 6(c)(ii) of the Indemnification Agreement is hereby amended by
redesignating paragraph (ii) as paragraph (iii) and adding a new paragraph (ii)
as follows:

        "(ii) A copy of a draft of all Tax Returns relating to Seagate and the
Retained Subsidiaries which are to be filed after the Stock Purchase Date, but
which relate to a Pre-Purchase Tax Period or its Straddle Period, including the
federal consolidated income Tax Return of the affiliated group of which Seagate
is the common parent for the period ending with the Merger, shall be furnished
to the Administrators (as defined in the Merger Agreement) at least 30 days
prior to the due date for each such Tax Return for review and comment. SAC will
consider in good faith any comments of the Administrators with respect to each
such Tax Return."

                                   ARTICLE IV

                               GENERAL PROVISIONS

     1. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties hereto and
delivered to the other party hereto, it being understood that each party hereto
need not sign the same counterpart.

     2. Except as expressly modified by this Agreement, all of the
representations, warranties, terms, covenants, conditions and other provisions
of the Merger Agreement and Stock Purchase Agreement shall remain in full force
and effect in accordance with their respective terms.

     3. Nothing in this Agreement shall be deemed to or construed as in any way
making (i) Suez a party to the Merger Agreement or (ii) Veritas a party to the
Stock Purchase Agreement.

                                        7



     4. Promptly, and in any event within ten (10) calendar days following such
time (if any) as the conditions satisfied in paragraph (8) of the Settlement
Documents have become incapable of being satisfied (as determined by Veritas, in
its reasonable judgement), the Litigation Holdback Amount, together with
interest thereon computed as provided in Section 5.16 of the Merger Agreement,
shall be paid by Veritas to Suez.

                  [Remainder of Page Intentionally Left Blank]




     IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized respective officers, as of the date first
above written.

                                          VERITAS SOFTWARE CORPORATION

                                          By: /s/ Jay A. Jones
                                              ----------------------------------
                                              Name: Jay A. Jones
                                              Title:

                                          VICTORY MERGER SUB, INC.

                                          By: /s/ Jay A. Jones
                                              ----------------------------------
                                              Name: Jay A. Jones
                                              Title:

                                          SEAGATE TECHNOLOGY, INC.

                                          By: /s/ William L. Hudson
                                              ----------------------------------
                                              Name: William L. Hudson
                                              Title:

                                          SUEZ ACQUISITION COMPANY (CAYMAN)
                                          LIMITED

                                          By: /s/ David Roux
                                              ----------------------------------
                                              Name: David Roux
                                              Title:

                                          SEAGATE SOFTWARE HOLDINGS, INC.

                                          By: /s/ Stephen J. Luczo
                                              ----------------------------------
                                              Name: Stephen J. Luczo
                                              Title:

EX-2.7

                                                                     EXHIBIT 2.7

                    Suez Acquisition Company (Cayman) Limited
                         c/o Silver Lake Partners, L.P.



                                 March 29, 2000


VERITAS Software Corporation
1600 Plymouth Street
Mountain View, California 94043

Ladies and Gentlemen:

     This letter sets forth our agreement with respect to certain matters
related to (i) the Stock Purchase Agreement between Suez Acquisition Company
(Cayman) Limited ("SAC") and Seagate Technology, Inc. (the "Company") dated as
of the date hereof (the "Stock Purchase Agreement") and (ii) the Agreement and
Plan of Merger among VERITAS Software Corporation ("VERITAS"), Victory
Acquisition Sub, Inc. and the Company dated as of the date hereof (the "Merger
Agreement").

1.   No-Shop. Prior to termination of the Stock Purchase Agreement in accordance
     with its terms, VERITAS shall not (directly or indirectly through
     subsidiaries or otherwise), and shall direct its officers, directors,
     affiliates or employees or any investment banker, attorney or other advisor
     or representative retained by any of them not to, directly or indirectly,
     (i) solicit, initiate, encourage or induce the making, submission or
     announcement of any Seller Acquisition Proposal (as defined in the Stock
     Purchase Agreement), (ii) participate in any discussions, negotiations or
     other communications with any person regarding, or furnish to any person
     any information with respect to, or take any other action to facilitate any
     inquiries or the making of any proposal that constitutes or may reasonably
     be expected to lead to, any Seller Acquisition Proposal, (iii) approve,



     endorse or recommend any Seller Acquisition Proposal, or (iv) enter into
     any letter of intent, contract, agreement, understanding or commitment
     contemplating or otherwise relating to any Seller Acquisition Transaction.
     VERITAS shall notify SAC promptly after receiving any inquiry or other
     communication regarding any Seller Acquisition Proposal.

2.   Alternative Transaction Fee. In the event that: (i) the Stock Purchase
     Agreement is terminated pursuant to Sections 10.1(g) or (h), (ii) in the
     case of a termination by SAC of the Stock Purchase Agreement, SAC shall not
     be in breach of any of its representations and warranties, covenants or
     agreements under the Stock Purchase Agreement such that the Company would
     not then be required to consummate the transactions contemplated by the
     Stock Purchase Agreement and (iii) within 90 days of the date of such
     termination, VERITAS enters into any agreement or agreements with respect
     to a Seller Acquisition Transaction, VERITAS shall, prior to or
     simultaneously with entering into any such agreement or agreements, pay to
     SAC (or its designees), $50 million in immediately available funds.

3.   Governing Law. This letter agreement will be governed by and construed and
     interpreted in accordance with the laws of the State of New York.

4.   Counterparts. This letter agreement may be executed in separate
     counterparts, each of which shall constitute an original and all of which,
     taken together, shall constitute one and the same instrument.

5.   Assignment. The rights and obligations of each party hereto may not be
     assigned to any other party (by operation of law or otherwise) without the
     written consent of the other party hereto.

6.   Specific Performance. In view of the uniqueness of the agreements contained
     in this letter agreement and the transactions contemplated hereby and the
     fact that the parties hereto would not have an adequate remedy at law for
     money damages in the event that any obligation under this letter agreement
     is not performed in accordance with its terms, each of the parties hereto
     therefore agrees that each party hereto shall be entitled to specific
     enforcement of the terms of this letter agreement in addition to any other
     remedy to which such party may be entitled, at law or in equity.

                                       Very truly yours,

                                       SUEZ ACQUISITION COMPANY (CAYMAN) LIMITED

                                       By: /s/ JAMES A. DAVIDSON
                                          --------------------------------------
                                          Name:  James A. Davidson
                                          Title: Managing Member


Accepted and Agreed as of the date first written above:

VERITAS SOFTWARE CORPORATION


By: /s/ MARK LESLIE


                                                                               2

EX-3.1(A)

                                                                  Exhibit 3.1(a)

   CONFORMED COPY AS AMENDED BY SPECIAL RESOLUTION PASSED 21ST NOVEMBER 2000.

                        THE COMPANIES LAW (2000 REVISION)
                        ---------------------------------

                            COMPANY LIMITED BY SHARES
                            -------------------------

                            MEMORANDUM OF ASSOCIATION

                                       OF

                         Seagate Technology HDD Holdings

l.       The name of the Company is Seagate Technology HDD Holdings.

2.       The Registered Office of the Company shall be at the offices of Maples
         and Calder, Attorneys-at-Law, Ugland House, P.O. Box 309, George Town,
         Grand Cayman, Cayman Islands, British West Indies or at such other
         place as the Directors may from time to time decide.

3.       The objects for which the Company is established are unrestricted and
         shall include, but without limitation, the following:

         (i)    (a)      To carry on business as inventors, designers,
                         manufacturers, traders and dealers of and in all types
                         of equipment, machinery and goods, including without
                         limitation computer hardware and equipment and any
                         related patents, industrial rights and know how whether
                         or not protected by law.

                (b)      To carry on the business of an investment company and
                         to act as promoters and entrepreneurs and to carry on
                         business as financiers, capitalists, concessionaires,
                         merchants, brokers, traders, dealers, agents, importers
                         and exporters and to undertake and carry on and execute
                         all kinds of investment, financial, commercial,
                         mercantile, trading and other operations.

                (c)      To carry on whether as principals, agents or otherwise
                         howsoever the business of realtors, developers,
                         consultants, estate agents or managers, builders,
                         contractors, engineers, manufacturers, dealers in or
                         vendors of all types of property including services.

        (ii)    To exercise and enforce all rights and powers conferred by or
                incidental to the ownership of any shares, stock, obligations or
                other securities including without prejudice to the generality
                of the foregoing all such powers of veto or control as may be
                conferred by virtue of the holding by the Company of some
                special proportion of the issued or nominal amount thereof, to
                provide managerial and other executive, supervisory and
                consultant services for or in relation to any company in which
                the Company is interested upon such terms as may be thought fit.



        (iii)   To purchase or otherwise acquire, to sell, exchange, surrender,
                lease, mortgage, charge, convert, turn to account, dispose of
                and deal with real and personal property and rights of all kinds
                and, in particular, mortgages, debentures, produce, concessions,
                options, contracts, patents, annuities, licences, stocks,
                shares, bonds, policies, book debts, business concerns,
                undertakings, claims, privileges and choses in action of all
                kinds.

        (iv)    To subscribe for, conditionally or unconditionally, to
                underwrite, issue on commission or otherwise, take, hold, deal
                in and convert stocks, shares and securities of all kinds and to
                enter into partnership or into any arrangement for sharing
                profits, reciprocal concessions or cooperation with any person
                or company and to promote and aid in promoting, to constitute,
                form or organise any company, syndicate or partnership of any
                kind, for the purpose of acquiring and undertaking any property
                and liabilities of the Company or of advancing, directly or
                indirectly, the objects of the Company or for any other purpose
                which the Company may think expedient.

        (v)     To stand surety for or to guarantee, support or secure the
                performance of all or any of the obligations of any person, firm
                or company whether or not related or affiliated to the Company
                in any manner and whether by personal covenant or by mortgage,
                charge or lien upon the whole or any part of the undertaking,
                property and assets of the Company, both present and future,
                including its uncalled capital or by any such method and whether
                or not the Company shall receive valuable consideration
                therefor.

        (vi)    To engage in or carry on any other lawful trade, business or
                enterprise which may at any time appear to the Directors of the
                Company capable of being conveniently carried on in conjunction
                with any of the aforementioned businesses or activities or which
                may appear to the Directors of the Company likely to be
                profitable to the Company.

       In the interpretation of this Memorandum of Association in general and
       of this Clause 3 in particular no object, business or power specified or
       mentioned shall be limited or restricted by reference to or inference
       from any other object, business or power, or the name of the Company, or
       by the juxtaposition of two or more objects, businesses or powers and
       that, in the event of any ambiguity in this clause or elsewhere in this
       Memorandum of Association, the same shall be resolved by such
       interpretation and construction as will widen and enlarge and not
       restrict the objects, businesses and powers of and exercisable by the
       Company.

4.     Except as prohibited or limited by the Companies Law (2000 Revision), the
       Company shall have full power and authority to carry out any object and
       shall have and be capable of from time to time and at all times
       exercising any and all of the powers at any time or from time to time
       exercisable by a natural person or body corporate in doing in any part of
       the world whether as principal, agent, contractor or otherwise whatever
       may be considered by it necessary for the attainment of its objects and
       whatever else may be considered by it as incidental or conducive thereto
       or consequential thereon, including, but without in any way

                                       2



       restricting the generality of the foregoing, the power to make any
       alterations or amendments to this Memorandum of Association and the
       Articles of Association of the Company considered necessary or convenient
       in the manner set out in the Articles of Association of the Company, and
       the power to do any of the following acts or things, viz:

to pay all expenses of and incidental to the promotion, formation and
incorporation of the Company; to register the Company to do business in any
other jurisdiction; to sell, lease or dispose of any property of the Company; to
draw, make, accept, endorse, discount, execute and issue promissory notes,
debentures, bills of exchange, bills of lading, warrants and other negotiable or
transferable instruments; to lend money or other assets and to act as
guarantors; to borrow or raise money on the security of the undertaking or on
all or any of the assets of the Company including uncalled capital or without
security; to invest monies of the Company in such manner as the Directors
determine; to promote other companies; to sell the undertaking of the Company
for cash or any other consideration; to distribute assets in specie to Members
of the Company; to make charitable or benevolent donations; to pay pensions or
gratuities or provide other benefits in cash or kind to Directors, officers,
employees, past or present and their families; to purchase Directors and
officers liability insurance and to carry on any trade or business and generally
to do all acts and things which, in the opinion of the Company or the Directors,
may be conveniently or profitably or usefully acquired and dealt with, carried
on, executed or done by the Company in connection with the business aforesaid
PROVIDED THAT the Company shall only carry on the businesses for which a licence
is required under the laws of the Cayman Islands when so licensed under the
terms of such laws.

5.     The liability of each Member is limited to the amount from time to time
       unpaid on such Member's shares.

                                       3



6.     The share capital of the Company is US$50,000.00 divided into 50,000
       shares of a nominal or par value of US$1.00 each with power for the
       Company insofar as is permitted by law, to redeem or purchase any of its
       shares and to increase or reduce the said capital subject to the
       provisions of the Companies Law (2000 Revision) and the Articles of
       Association and to issue any part of its capital, whether original,
       redeemed or increased with or without any preference, priority or special
       privilege or subject to any postponement of rights or to any conditions
       or restrictions and so that unless the conditions of issue shall
       otherwise expressly declare every issue of shares whether declared to be
       preference or otherwise shall be subject to the powers hereinbefore
       contained.

7.     If the Company is registered as exempted, its operations will be carried
       on subject to the provisions of Section 193 of the Companies Law (2000
       Revision) and, subject to the provisions of the Companies Law (2000
       Revision) and the Articles of Association, it shall have the power to
       register by way of continuation as a body corporate limited by shares
       under the laws of any jurisdiction outside the Cayman Islands and to be
       deregistered in the Cayman Islands.

WE the several persons whose names and addresses are subscribed are desirous of
being formed into a company in pursuance of this Memorandum of Association and
we respectively agree to take the number of shares in the capital of the Company
set opposite our respective names.

                                       4



DATED the 10th day of August, 2000.

SIGNATURE and ADDRESS                              NUMBER OF SHARES
OF EACH SUBSCRIBER                                 TAKEN BY EACH
- ------------------                                 -------------



Andrew Moon
/s/ Andrew S. Moon
- --------------------------------------------------
Andrew S. Moon, Attorney-at-Law                                     One
PO Box 309, Grand Cayman




Patrick Schmid
/s/ Patrick G. Schmid
- --------------------------------------------------
Patrick G. Schmid, Attorney-at-Law                                  One
PO Box 309, Grand Cayman




D. Greene
/s/ Diann Greene
- --------------------------------------------------
Witness to the above signatures





I, Cindy Y. Jefferson-Bulgin Registrar of Companies in and for the Cayman
Islands HEREBY CERTIFY that this is a true and correct copy of the Memorandum of
Association of this Company duly incorporated on the 10th day of August, 2000.


                                           Cindy Y. Jefferson-Bulgin
                                           -------------------------
                                           REGISTRAR OF COMPANIES

EX-3.1(B)

                                                                  Exhibit 3.1(b)

   CONFORMED COPY AS AMENDED BY SPECIAL RESOLUTION PASSED 21ST NOVEMBER 2000.

                        THE COMPANIES LAW (2000 REVISION)
                        ---------------------------------

                            COMPANY LIMITED BY SHARES
                            -------------------------

                             ARTICLES OF ASSOCIATION

                                       OF

                         Seagate Technology HDD Holdings

1.        In these Articles Table A in the Schedule to the Statute does not
apply and, unless there be something in the subject or context inconsistent
therewith,

       "Articles"                     means these Articles as originally framed
                                      or as from time to time altered by Special
                                      Resolution.

       "Auditors"                     means the persons for the time being
                                      performing the duties of auditors of the
                                      Company.

       "Company"                      means the above-named Company.

       "debenture"                    means debenture stock, mortgages, bonds
                                      and any other such securities of the
                                      Company whether constituting a charge on
                                      the assets of the Company or not.

       "Directors"                    means the directors for the time being of
                                      the Company.

       "dividend"                     includes bonus.

       "Member"                       shall bear the meaning as ascribed to it
                                      in the Statute.

       "month"                        means calendar month.

       "paid-up"                      means paid-up and/or credited as paid-up.

       "registered office"            means the registered office for the time
                                      being of the Company.

       "Seal"                         means the common seal of the Company and
                                      includes every duplicate seal.

       "Secretary"                    includes an Assistant Secretary and any
                                      person



                                      appointed to perform the duties of
                                      Secretary of the Company.

       "share"                        includes a fraction of a share.

       "Special Resolution"           has the same meaning as in the Statute
                                      and includes a resolution approved
                                      in writing as described therein.

       "Statute"                      means the Companies Law of the Cayman
                                      Islands as amended and every statutory
                                      modification or re-enactment thereof for
                                      the time being in force.

       "written" and "in writing"     include all modes of representing or
                                      reproducing words in visible form.

       Words importing the singular number only include the plural number and
vice-versa.

       Words importing the masculine gender only include the feminine gender.

       Words importing persons only include corporations.

2.        The business of the Company may be commenced as soon after
incorporation as the Directors shall see fit, notwithstanding that part only of
the shares may have been allotted.

3.        The Directors may pay, out of the capital or any other monies of the
Company, all expenses incurred in or about the formation and establishment of
the Company including the expenses of registration.

                             CERTIFICATES FOR SHARES
                             -----------------------

4.        Certificates representing shares of the Company shall be in such form
as shall be determined by the Directors. Such certificates may be under Seal.
All certificates for shares shall be consecutively numbered or otherwise
identified and shall specify the shares to which they relate. The name and
address of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered in the register of
Members of the Company. All certificates surrendered to the Company for transfer
shall be cancelled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
cancelled. The Directors may authorise certificates to be issued with the seal
and authorised signature(s) affixed by some method or system of mechanical
process.

5.        Notwithstanding Article 4 of these Articles, if a share certificate be
defaced, lost or destroyed, it may be renewed on payment of a fee of one dollar
(US$l.00) or such less sum and on such terms (if any) as to evidence and
indemnity and the payment of the expenses incurred by the Company in
investigating evidence, as the Directors may prescribe.


                                       2



                                 ISSUE OF SHARES
                                 ---------------

6.        Subject to the provisions, if any, in that behalf in the Memorandum of
Association and to any direction that may be given by the Company in general
meeting and without prejudice to any special rights previously conferred on the
holders of existing shares, the Directors may allot, issue, grant options over
or otherwise dispose of shares of the Company (including fractions of a share)
with or without preferred, deferred or other special rights or restrictions,
whether in regard to dividend, voting, return of capital or otherwise and to
such persons, at such times and on such other terms as they think proper.

7.        The Company shall maintain a register of its Members and every person
whose name is entered as a Member in the register of Members shall be entitled
without payment to receive within two months after allotment or lodgement of
transfer (or within such other period as the conditions of issue shall provide)
one certificate for all his shares or several certificates each for one or more
of his shares upon payment of fifty cents (US$0.50) for every certificate after
the first or such less sum as the Directors shall from time to time determine
provided that in respect of a share or shares held jointly by several persons
the Company shall not be bound to issue more than one certificate and delivery
of a certificate for a share to one of the several joint holders shall be
sufficient delivery to all such holders.

                               TRANSFER OF SHARES
                               ------------------

8.        The instrument of transfer of any share shall be in writing and shall
be executed by or on behalf of the transferor and the transferor shall be deemed
to remain the holder of a share until the name of the transferee is entered in
the register in respect thereof.

9.        [Deleted by special resolution passed 21st November 2000.]

10.       The registration of transfers may be suspended at such time and for
such periods as the Directors may from time to time determine, provided always
that such registration shall not be suspended for more than forty-five days in
any year.

                                REDEEMABLE SHARES
                                -----------------

11. (a)   Subject to the provisions of the Statute and the Memorandum of
Association, shares may be issued on the terms that they are, or at the option
of the Company or the holder are, to be redeemed on such terms and in such
manner as the Company, before the issue of the shares, may by Special Resolution
determine.

    (b)   Subject to the provisions of the Statute and the Memorandum of
Association, the Company may purchase its own shares (including fractions of a
share), including any redeemable shares, provided that the manner of purchase
has first been authorised by the Company in general meeting and may make payment
therefor in any manner authorised by the Statute, including out of capital.


                                       3



                          VARIATION OF RIGHTS OF SHARES
                          -----------------------------

12.       If at any time the share capital of the Company is divided into
different classes of shares, the rights attached to any class (unless otherwise
provided by the terms of issue of the shares of that class) may, whether or not
the Company is being wound-up, be varied with the consent in writing of the
holders of three-fourths of the issued shares of that class, or with the
sanction of a Special Resolution passed at a general meeting of the holders of
the shares of that class.

          The provisions of these Articles relating to general meetings shall
apply to every such general meeting of the holders of one class of shares except
that the necessary quorum shall be one person holding or representing by proxy
at least one-third of the issued shares of the class and that any holder of
shares of the class present in person or by proxy may demand a poll.

13.       The rights conferred upon the holders of the shares of any class
issued with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed to be
varied by the creation or issue of further shares ranking pari passu therewith.

                          COMMISSION ON SALE OF SHARES
                          ----------------------------

14.       The Company may in so far as the Statute from time to time permits pay
a commission to any person in consideration of his subscribing or agreeing to
subscribe whether absolutely or conditionally for any shares of the Company.
Such commissions may be satisfied by the payment of cash or the lodgement of
fully or partly paid-up shares or partly in one way and partly in the other. The
Company may also on any issue of shares pay such brokerage as may be lawful.

                            NON-RECOGNITION OF TRUSTS
                            -------------------------

15.       No person shall be recognised by the Company as holding any share upon
any trust and the Company shall not be bound by or be compelled in any way to
recognise (even when having notice thereof) any equitable, contingent, future,
or partial interest in any share, or any interest in any fractional part of a
share, or (except only as is otherwise provided by these Articles or the
Statute) any other rights in respect of any share except an absolute right to
the entirety thereof in the registered holder.

                                 LIEN ON SHARES
                                 --------------

16.       The Company shall have a first and paramount lien and charge on all
shares (whether fully paid-up or not) registered in the name of a Member
(whether solely or jointly with others) for all debts, liabilities or
engagements to or with the Company (whether presently payable or not) by such
Member or his estate, either alone or jointly with any other person, whether a
Member or not, but the Directors may at any time declare any share to be wholly
or in part exempt from the provisions of this Article. The registration of a
transfer of any such share shall operate as a waiver of the Company's lien (if
any) thereon. The Company's lien (if any) on a share shall extend to all
dividends or other monies payable in respect thereof.


                                       4



17.       The Company may sell, in such manner as the Directors think fit, any
shares on which the Company has a lien, but no sale shall be made unless a sum
in respect of which the lien exists is presently payable, nor until the
expiration of fourteen days after a notice in writing stating and demanding
payment of such part of the amount in respect of which the lien exists as is
presently payable, has been given to the registered holder or holders for the
time being of the share, or the person, of which the Company has notice,
entitled thereto by reason of his death or bankruptcy.

18.       To give effect to any such sale the Directors may authorise some
person to transfer the shares sold to the purchaser thereof. The purchaser shall
be registered as the holder of the shares comprised in any such transfer, and he
shall not be bound to see to the application of the purchase money, nor shall
his title to the shares be affected by any irregularity or invalidity in the
proceedings in reference to the sale.

19.       The proceeds of such sale shall be received by the Company and applied
in payment of such part of the amount in respect of which the lien exists as is
presently payable and the residue, if any, shall (subject to a like lien for
sums not presently payable as existed upon the shares before the sale) be paid
to the person entitled to the shares at the date of the sale.

                                 CALL ON SHARES
                                 --------------

20. (a)   The Directors may from time to time make calls upon the Members in
respect of any monies unpaid on their shares (whether on account of the nominal
value of the shares or by way of premium or otherwise) and not by the conditions
of allotment thereof made payable at fixed terms, provided that no call shall be
payable at less than one month from the date fixed for the payment of the last
preceding call, and each Member shall (subject to receiving at least fourteen
days notice specifying the time or times of payment) pay to the Company at the
time or times so specified the amount called on the shares. A call may be
revoked or postponed as the Directors may determine. A call may be made payable
by instalments.

    (b)   A call shall be deemed to have been made at the time when the
resolution of the Directors authorising such call was passed.

    (c)   The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof.

21.       If a sum called in respect of a share is not paid before or on a day
appointed for payment thereof, the persons from whom the sum is due shall pay
interest on the sum from the day appointed for payment thereof to the time of
actual payment at such rate not exceeding ten per cent per annum as the
Directors may determine, but the Directors shall be at liberty to waive payment
of such interest either wholly or in part.

22.       Any sum which by the terms of issue of a share becomes payable on
allotment or at any fixed date, whether on account of the nominal value of the
share or by way of premium or otherwise, shall for the purposes of these
Articles be deemed to be a call duly made, notified and payable on the date on
which by the terms of issue the same becomes payable, and in the case of


                                       5



non-payment all the relevant provisions of these Articles as to payment of
interest forfeiture or otherwise shall apply as if such sum had become payable
by virtue of a call duly made and notified.

23.       The Directors may, on the issue of shares, differentiate between the
holders as to the amount of calls or interest to be paid and the times of
payment.

24. (a)   The Directors may, if they think fit, receive from any Member willing
to advance the same, all or any part of the monies uncalled and unpaid upon any
shares held by him, and upon all or any of the monies so advanced may (until the
same would but for such advances, become payable) pay interest at such rate not
exceeding (unless the Company in general meeting shall otherwise direct) seven
per cent per annum, as may be agreed upon between the Directors and the Member
paying such sum in advance.

    (b)   No such sum paid in advance of calls shall entitle the Member paying
such sum to any portion of a dividend declared in respect of any period prior to
the date upon which such sum would, but for such payment, become presently
payable.

                              FORFEITURE OF SHARES
                              --------------------

25. (a)   If a Member fails to pay any call or instalment of a call or to make
any payment required by the terms of issue on the day appointed for payment
thereof, the Directors may, at any time thereafter during such time as any part
of the call, instalment or payment remains unpaid, give notice requiring payment
of so much of the call, instalment or payment as is unpaid, together with any
interest which may have accrued and all expenses that have been incurred by the
Company by reason of such non-payment. Such notice shall name a day (not earlier
than the expiration of fourteen days from the date of giving of the notice) on
or before which the payment required by the notice is to be made, and shall
state that, in the event of non-payment at or before the time appointed the
shares in respect of which such notice was given will be liable to be forfeited.

    (b)   If the requirements of any such notice as aforesaid are not complied
with, any share in respect of which the notice has been given may at any time
thereafter, before the payment required by the notice has been made, be
forfeited by a resolution of the Directors to that effect. Such forfeiture shall
include all dividends declared in respect of the forfeited share and not
actually paid before the forfeiture.

    (c)   A forfeited share may be sold or otherwise disposed of on such terms
and in such manner as the Directors think fit and at any time before a sale or
disposition the forfeiture may be cancelled on such terms as the Directors think
fit.

26.       A person whose shares have been forfeited shall cease to be a Member
in respect of the forfeited shares, but shall, notwithstanding, remain liable to
pay to the Company all monies which, at the date of forfeiture were payable by
him to the Company in respect of the shares together with interest thereon, but
his liability shall cease if and when the Company shall have received payment in
full of all monies whenever payable in respect of the shares.


                                       6



27.       A certificate in writing under the hand of one Director or the
Secretary of the Company that a share in the Company has been duly forfeited on
a date stated in the declaration shall be conclusive evidence of the fact
therein stated as against all persons claiming to be entitled to the share. The
Company may receive the consideration given for the share on any sale or
disposition thereof and may execute a transfer of the share in favour of the
person to whom the share is sold or disposed of and he shall thereupon be
registered as the holder of the share and shall not be bound to see to the
application of the purchase money, if any, nor shall his title to the share be
affected by any irregularity or invalidity in the proceedings in reference to
the forfeiture, sale or disposal of the share.

28.       The provisions of these Articles as to forfeiture shall apply in the
case of non-payment of any sum which, by the terms of issue of a share, becomes
payable at a fixed time, whether on account of the nominal value of the share or
by way of premium as if the same had been payable by virtue of a call duly made
and notified.

                     REGISTRATION OF EMPOWERING INSTRUMENTS
                     --------------------------------------

29.       The Company shall be entitled to charge a fee not exceeding one dollar
(US$l.00) on the registration of every probate, letters of administration,
certificate of death or marriage, power of attorney, notice in lieu of
distringas, or other instrument.

                             TRANSMISSION OF SHARES
                             ----------------------

30.       In case of the death of a Member, the survivor or survivors where the
deceased was a joint holder, and the legal personal representatives of the
deceased where he was a sole holder, shall be the only persons recognised by the
Company as having any title to his interest in the shares, but nothing herein
contained shall release the estate of any such deceased holder from any
liability in respect of any shares which had been held by him solely or jointly
with other persons.

31. (a)   Any person becoming entitled to a share in consequence of the death or
bankruptcy or liquidation or dissolution of a Member (or in any other way than
by transfer) may, upon such evidence being produced as may from time to time be
required by the Directors and subject as hereinafter provided, elect either to
be registered himself as holder of the share or to make such transfer of the
share to such other person nominated by him as the deceased or bankrupt person
could have made and to have such person registered as the transferee thereof,
but the Directors shall, in either case, have the same right to decline or
suspend registration as they would have had in the case of a transfer of the
share by that Member before his death or bankruptcy as the case may be.

    (b)   If the person so becoming entitled shall elect to be registered
himself as holder he shall deliver or send to the Company a notice in writing
signed by him stating that he so elects.

32.       A person becoming entitled to a share by reason of the death or
bankruptcy or liquidation or dissolution of the holder (or in any other case
than by transfer) shall be entitled to the same dividends and other advantages
to which he would be entitled if he were the registered


                                       7



holder of the share, except that he shall not, before being registered as a
Member in respect of the share, be entitled in respect of it to exercise any
right conferred by membership in relation to meetings of the Company PROVIDED
HOWEVER that the Directors may at any time give notice requiring any such person
to elect either to be registered himself or to transfer the share and if the
notice is not complied with within ninety days the Directors may thereafter
withhold payment of all dividends, bonuses or other monies payable in respect of
the share until the requirements of the notice have been complied with.

                AMENDMENT OF MEMORANDUM OF ASSOCIATION, CHANGE OF
              LOCATION OF REGISTERED OFFICE & ALTERATION OF CAPITAL
              -----------------------------------------------------

33. (a)   Subject to and in so far as permitted by the provisions of the
Statute, the Company may from time to time by ordinary resolution alter or amend
its Memorandum of Association otherwise than with respect to its name and
objects and may, without restricting the generality of the foregoing:

          (i)       increase the share capital by such sum to be divided into
                    shares of such amount or without nominal or par value as the
                    resolution shall prescribe and with such rights, priorities
                    and privileges annexed thereto, as the Company in general
                    meeting may determine.

          (ii)      consolidate and divide all or any of its share capital into
                    shares of larger amount than its existing shares;

          (iii)     by subdivision of its existing shares or any of them divide
                    the whole or any part of its share capital into shares of
                    smaller amount than is fixed by the Memorandum of
                    Association or into shares without nominal or par value;

          (iv)      cancel any shares which at the date of the passing of the
                    resolution have not been taken or agreed to be taken by any
                    person.

    (b)   All new shares created hereunder shall be subject to the same
provisions with reference to the payment of calls, liens, transfer,
transmission, forfeiture and otherwise as the shares in the original share
capital.

    (c)   Subject to the provisions of the Statute, the Company may by Special
Resolution change its name or alter its objects.

    (d)   Without prejudice to Article 11 hereof and subject to the provisions
of the Statute, the Company may by Special Resolution reduce its share capital
and any capital redemption reserve fund.

    (e)   Subject to the provisions of the Statute, the Company may by
resolution of the Directors change the location of its registered office.


                                       8



                CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE
                -------------------------------------------------

34.       For the purpose of determining Members entitled to notice of or to
vote at any meeting of Members or any adjournment thereof, or Members entitled
to receive payment of any dividend, or in order to make a determination of
Members for any other proper purpose, the Directors of the Company may provide
that the register of Members shall be closed for transfers for a stated period
but not to exceed in any case forty days. If the register of Members shall be so
closed for the purpose of determining Members entitled to notice of or to vote
at a meeting of Members such register shall be so closed for at least ten days
immediately preceding such meeting and the record date for such determination
shall be the date of the closure of the register of Members.

35.       In lieu of or apart from closing the register of Members, the
Directors may fix in advance a date as the record date for any such
determination of Members entitled to notice of or to vote at a meeting of the
Members and for the purpose of determining the Members entitled to receive
payment of any dividend the Directors may, at or within 90 days prior to the
date of declaration of such dividend fix a subsequent date as the record date
for such determination.

36.       If the register of Members is not so closed and no record date is
fixed for the determination of Members entitled to notice of or to vote at a
meeting of Members or Members entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Directors declaring such dividend is adopted, as the case may
be, shall be the record date for such determination of Members. When a
determination of Members entitled to vote at any meeting of Members has been
made as provided in this section, such determination shall apply to any
adjournment thereof.

                                 GENERAL MEETING
                                 ---------------

37. (a)   Subject to paragraph (c) hereof, the Company shall within one year of
its incorporation and in each year of its existence thereafter hold a general
meeting as its annual general meeting and shall specify the meeting as such in
the notices calling it. The annual general meeting shall be held at such time
and place as the Directors shall appoint and if no other time and place is
prescribed by them, it shall be held at the registered office on the second
Wednesday in December of each year at ten o'clock in the morning.

    (b)   At these meetings the report of the Directors (if any) shall be
presented.

    (c)   If the Company is exempted as defined in the Statute it may but shall
not be obliged to hold an annual general meeting.

38. (a)   The Directors may whenever they think fit, and they shall on the
requisition of Members of the Company holding at the date of the deposit of the
requisition not less than one-tenth of such of the paid-up capital of the
Company as at the date of the deposit carries the right of voting at general
meetings of the Company, proceed to convene a general meeting of the Company.

    (b)   The requisition must state the objects of the meeting and must be
signed by the


                                       9



requisitionists and deposited at the registered office of the
Company and may consist of several documents in like form each signed by one or
more requisitionists.

    (c)   If the Directors do not within twenty-one days from the date of the
deposit of the requisition duly proceed to convene a general meeting, the
requisitionists, or any of them representing more than one-half of the total
voting rights of all of them, may themselves convene a general meeting, but any
meeting so convened shall not be held after the expiration of three months after
the expiration of the said twenty-one days.

    (d)   A general meeting convened as aforesaid by requisitionists shall be
convened in the same manner as nearly as possible as that in which general
meetings are to be convened by Directors.

                           NOTICE OF GENERAL MEETINGS
                           --------------------------

39.       At least five days' notice shall be given of an annual general meeting
or any other general meeting. Every notice shall be exclusive of the day on
which it is given or deemed to be given and of the day for which it is given and
shall specify the place, the day and the hour of the meeting and the general
nature of the business and shall be given in manner hereinafter mentioned or in
such other manner if any as may be prescribed by the Company PROVIDED that a
general meeting of the Company shall, whether or not the notice specified in
this regulation has been given and whether or not the provisions of Article 38
have been complied with, be deemed to have been duly convened if it is so
agreed:

          (a)       in the case of a general meeting called as an annual general
                    meeting by all the Members entitled to attend and vote
                    thereat or their proxies; and

          (b)       in the case of any other general meeting by a majority in
                    number of the Members having a right to attend and vote at
                    the meeting, being a majority together holding not less than
                    seventy-five per cent in nominal value or in the case of
                    shares without nominal or par value seventy-five per cent of
                    the shares in issue, or their proxies.

40.       The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a meeting by any person entitled to receive notice
shall not invalidate the proceedings of that meeting.


                                       10



                         PROCEEDINGS AT GENERAL MEETINGS
                         -------------------------------

41.       No business shall be transacted at any general meeting unless a quorum
of Members is present at the time when the meeting proceeds to business; two
Members present in person or by proxy shall be a quorum provided always that if
the Company has one Member of record the quorum shall be that one Member present
in person or by proxy.

42.       A resolution (including a Special Resolution) in writing (in one or
more counterparts) signed by all Members for the time being entitled to receive
notice of and to attend and vote at general meetings (or being corporations by
their duly authorised representatives) shall be as valid and effective as if the
same had been passed at a general meeting of the Company duly convened and held.

43.       If within half an hour from the time appointed for the meeting a
quorum is not present, the meeting, if convened upon the requisition of Members,
shall be dissolved and in any other case it shall stand adjourned to the same
day in the next week at the same time and place or to such other time or such
other place as the Directors may determine and if at the adjourned meeting a
quorum is not present within half an hour from the time appointed for the
meeting the Members present shall be a quorum.

44.       The Chairman, if any, of the Board of Directors shall preside as
Chairman at every general meeting of the Company, or if there is no such
Chairman, or if he shall not be present within fifteen minutes after the time
appointed for the holding of the meeting, or is unwilling to act, the Directors
present shall elect one of their number to be Chairman of the meeting.

45.       If at any general meeting no Director is willing to act as Chairman
or if no Director is present within fifteen minutes after the time appointed for
holding the meeting, the Members present shall choose one of their number to be
Chairman of the meeting.

46.       The Chairman may, with the consent of any general meeting duly
constituted hereunder, and shall if so directed by the meeting, adjourn the
meeting from time to time and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left unfinished at
the meeting from which the adjournment took place. When a general meeting is
adjourned for thirty days or more, notice of the adjourned meeting shall be
given as in the case of an original meeting; save as aforesaid it shall not be
necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned general meeting.

47.       At any general meeting a resolution put to the vote of the meeting
shall be decided on a show of hands unless a poll is, before or on the
declaration of the result of the show of hands, demanded by the Chairman or any
other Member present in person or by proxy.

48.       Unless a poll be so demanded a declaration by the Chairman that a
resolution has on a show of hands been carried, or carried unanimously, or by a
particular majority, or lost, and an entry to that effect in the Company's
Minute Book containing the Minutes of the proceedings of the meeting shall be
conclusive evidence of that fact without proof of the number or proportion of

                                       11



the votes recorded in favour of or against such resolution.

49.       The demand for a poll may be withdrawn.

50.       Except as provided in Article 52, if a poll is duly demanded it shall
be taken in such manner as the Chairman directs and the result of the poll shall
be deemed to be the resolution of the general meeting at which the poll was
demanded.

51.       In the case of an equality of votes, whether on a show of hands or on
a poll, the Chairman of the general meeting at which the show of hands takes
place or at which the poll is demanded, shall be entitled to a second or casting
vote.

52.       A poll demanded on the election of a Chairman or on a question of
adjournment shall be taken forthwith. A poll demanded on any other question
shall be taken at such time as the Chairman of the general meeting directs and
any business other than that upon which a poll has been demanded or is
contingent thereon may be proceeded with pending the taking of the poll.

                                VOTES OF MEMBERS
                                ----------------

53.       Subject to any rights or restrictions for the time being attached to
any class or classes of shares, on a show of hands every Member of record
present in person or by proxy at a general meeting shall have one vote and on a
poll every Member of record present in person or by proxy shall have one vote
for each share registered in his name in the register of Members.

54.       In the case of joint holders of record the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders, and for this purpose
seniority shall be determined by the order in which the names stand in the
register of Members.

55.       A Member of unsound mind, or in respect of whom an order has been made
by any court, having jurisdiction in lunacy, may vote, whether on a show of
hands or on a poll, by his committee, receiver, curator bonis, or other person
in the nature of a committee, receiver or curator bonis appointed by that court,
and any such committee, receiver, curator bonis or other persons may vote by
proxy.

56.       No Member shall be entitled to vote at any general meeting unless he
is registered as a shareholder of the Company on the record date for such
meeting nor unless all calls or other sums presently payable by him in respect
of shares in the Company have been paid.

57.       No objection shall be raised to the qualification of any voter except
at the general meeting or adjourned general meeting at which the vote objected
to is given or tendered and every vote not disallowed at such general meeting
shall be valid for all purposes. Any such objection made in due time shall be
referred to the Chairman of the general meeting whose decision shall be final
and conclusive.

58.       On a poll or on a show of hands votes may be given either personally
or by proxy.

                                       12



                                     PROXIES
                                     -------

59.       The instrument appointing a proxy shall be in writing and shall be
executed under the hand of the appointor or of his attorney duly authorised in
writing, or, if the appointor is a corporation under the hand of an officer or
attorney duly authorised in that behalf. A proxy need not be a Member of the
Company.

60.       The instrument appointing a proxy shall be deposited at the registered
office of the Company or at such other place as is specified for that purpose in
the notice convening the meeting no later than the time for holding the meeting,
or adjourned meeting provided that the Chairman of the Meeting may at his
discretion direct that an instrument of proxy shall be deemed to have been duly
deposited upon receipt of telex, cable or telecopy confirmation from the
appointor that the instrument of proxy duly signed is in the course of
transmission to the Company.

61.       The instrument appointing a proxy may be in any usual or common form
and may be expressed to be for a particular meeting or any adjournment thereof
or generally until revoked. An instrument appointing a proxy shall be deemed to
include the power to demand or join or concur in demanding a poll.

62.       A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death or insanity of the principal
or revocation of the proxy or of the authority under which the proxy was
executed, or the transfer of the share in respect of which the proxy is given
provided that no intimation in writing of such death, insanity, revocation or
transfer as aforesaid shall have been received by the Company at the registered
office before the commencement of the general meeting, or adjourned meeting at
which it is sought to use the proxy.

63.       Any corporation which is a Member of record of the Company may in
accordance with its Articles or in the absence of such provision by resolution
of its Directors or other governing body authorise such person as it thinks fit
to act as its representative at any meeting of the Company or of any class of
Members of the Company, and the person so authorised shall be entitled to
exercise the same powers on behalf of the corporation which he represents as the
corporation could exercise if it were an individual Member of record of the
Company.

64.       Shares of its own capital belonging to the Company or held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting
and shall not be counted in determining the total number of outstanding shares
at any given time.

                                    DIRECTORS
                                    ---------

65.       There shall be a Board of Directors consisting of not less than one or
more than ten persons (exclusive of alternate Directors) PROVIDED HOWEVER that
the Company may from time to time by ordinary resolution increase or reduce the
limits in the number of Directors. The first Directors of the Company shall be
determined in writing by, or appointed by a resolution of,
                                       13



the subscribers of the Memorandum of Association or a majority of them.

66.       The remuneration to be paid to the Directors shall be such
remuneration as the Directors shall determine. Such remuneration shall be deemed
to accrue from day to day. The Directors shall also be entitled to be paid their
travelling, hotel and other expenses properly incurred by them in going to,
attending and returning from meetings of the Directors, or any committee of the
Directors, or general meetings of the Company, or otherwise in connection with
the business of the Company, or to receive a fixed allowance in respect thereof
as may be determined by the Directors from time to time, or a combination partly
of one such method and partly the other.

67.       The Directors may by resolution award special remuneration to any
Director of the Company undertaking any special work or services for, or
undertaking any special mission on behalf of, the Company other than his
ordinary routine work as a Director. Any fees paid to a Director who is also
counsel or solicitor to the Company, or otherwise serves it in a professional
capacity shall be in addition to his remuneration as a Director.

68.       A Director or alternate Director may hold any other office or place of
profit under the Company (other than the office of Auditor) in conjunction with
his office of Director for such period and on such terms as to remuneration and
otherwise as the Directors may determine.

69.       A Director or alternate Director may act by himself or his firm in a
professional capacity for the Company and he or his firm shall be entitled to
remuneration for professional services as if he were not a Director or alternate
Director.

70.       A  shareholding  qualification  for Directors may be fixed by the
Company in general meeting, but unless and until so fixed no qualification shall
be required.

71.       A Director or alternate Director of the Company may be or become a
director or other officer of or otherwise interested in any company promoted by
the Company or in which the Company may be interested as shareholder or
otherwise and no such Director or alternate Director shall be accountable to the
Company for any remuneration or other benefits received by him as a director or
officer of, or from his interest in, such other company.

72.       No person shall be disqualified from the office of Director or
alternate Director or prevented by such office from contracting with the
Company, either as vendor, purchaser or otherwise, nor shall any such contract
or any contract or transaction entered into by or on behalf of the Company in
which any Director or alternate Director shall be in any way interested be or be
liable to be avoided, nor shall any Director or alternate Director so
contracting or being so interested be liable to account to the Company for any
profit realised by any such contract or transaction by reason of such Director
holding office or of the fiduciary relation thereby established. A Director (or
his alternate Director in his absence) shall be at liberty to vote in respect of
any contract or transaction in which he is so interested as aforesaid PROVIDED
HOWEVER that the nature of the interest of any Director or alternate Director in
any such contract or transaction shall be disclosed by him or the alternate
Director appointed by him at or prior to its consideration and any vote thereon.


                                       14



73.       A general notice that a Director or alternate Director is a
shareholder of any specified firm or company and is to be regarded as interested
in any transaction with such firm or company shall be sufficient disclosure
under Article 72 and after such general notice it shall not be necessary to give
special notice relating to any particular transaction.

                               ALTERNATE DIRECTORS
                               -------------------

74.       Subject to the exception contained in Article 82, a Director who
expects to be unable to attend Directors' Meetings because of absence, illness
or otherwise may appoint any person to be an alternate Director to act in his
stead and such appointee whilst he holds office as an alternate Director shall,
in the event of absence therefrom of his appointor, be entitled to attend
meetings of the Directors and to vote thereat and to do, in the place and stead
of his appointor, any other act or thing which his appointor is permitted or
required to do by virtue of his being a Director as if the alternate Director
were the appointor, other than appointment of an alternate to himself, and he
shall ipso facto vacate office if and when his appointor ceases to be a Director
or removes the appointee from office. Any appointment or removal under this
Article shall be effected by notice in writing under the hand of the Director
making the same.

                         POWERS AND DUTIES OF DIRECTORS
                         ------------------------------

75.       The business of the Company shall be managed by the Directors (or a
sole Director if only one is appointed) who may pay all expenses incurred in
promoting, registering and setting up the Company, and may exercise all such
powers of the Company as are not, from time to time by the Statute, or by these
Articles, or such regulations, being not inconsistent with the aforesaid, as may
be prescribed by the Company in general meeting required to be exercised by the
Company in general meeting PROVIDED HOWEVER that no regulations made by the
Company in general meeting shall invalidate any prior act of the Directors which
would have been valid if that regulation had not been made.

76.       The Directors may from time to time and at any time by powers of
attorney appoint any company, firm, person or body of persons, whether nominated
directly or indirectly by the Directors, to be the attorney or attorneys of the
Company for such purpose and with such powers, authorities and discretions (not
exceeding those vested in or exercisable by the Directors under these Articles)
and for such period and subject to such conditions as they may think fit, and
any such powers of attorney may contain such provisions for the protection and
convenience of persons dealing with any such attorneys as the Directors may
think fit and may also authorise any such attorney to delegate all or any of the
powers, authorities and discretions vested in him.

77.       All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for monies paid to the Company shall be
signed, drawn, accepted, endorsed or otherwise executed as the case may be in
such manner as the Directors shall from time to time by resolution determine.

78.       The Directors shall cause minutes to be made in books provided for the
purpose:


                                       15



    (a)   of all appointments of officers made by the Directors;

    (b)   of the names of the  Directors  (including  those
          represented thereat by an alternate or by proxy) present at
          each meeting of the Directors and of any committee of the
          Directors;

    (c)   of all resolutions and proceedings at all meetings of the
          Company and of the Directors and of committees of Directors.

79.       The Directors on behalf of the Company may pay a gratuity or pension
or allowance on retirement to any Director who has held any other salaried
office or place of profit with the Company or to his widow or dependants and may
make contributions to any fund and pay premiums for the purchase or provision of
any such gratuity, pension or allowance.

80.       The Directors may exercise all the powers of the Company to borrow
money and to mortgage or charge its undertaking, property and uncalled capital
or any part thereof and to issue debentures, debenture stock and other
securities whether outright or as security for any debt, liability or obligation
of the Company or of any third party.

                                   MANAGEMENT
                                   ----------

81. (a)   The Directors may from time to time provide for the management of the
affairs of the Company in such manner as they shall think fit and the provisions
contained in the three next following paragraphs shall be without prejudice to
the general powers conferred by this paragraph.

    (b)   The Directors from time to time and at any time may establish any
committees, local boards or agencies for managing any of the affairs of the
Company and may appoint any persons to be members of such committees or local
boards or any managers or agents and may fix their remuneration.

    (c)   The Directors from time to time and at any time may delegate to any
such committee, local board, manager or agent any of the powers, authorities and
discretions for the time being vested in the Directors and may authorise the
members for the time being of any such local board, or any of them to fill up
any vacancies therein and to act notwithstanding vacancies and any such
appointment or delegation may be made on such terms and subject to such
conditions as the Directors may think fit and the Directors may at any time
remove any person so appointed and may annul or vary any such delegation, but no
person dealing in good faith and without notice of any such annulment or
variation shall be affected thereby.

    (d)   Any such delegates as aforesaid may be authorised by the Directors
to subdelegate all or any of the powers, authorities, and discretions for the
time being vested in them.

                               MANAGING DIRECTORS
                               ------------------

82.       The Directors may, from time to time,  appoint one or more of their
body (but not an alternate Director) to the office of Managing Director for such
term and at such remuneration

                                       16






(whether by way of salary, or commission, or participation in profits, or partly
in one way and partly in another) as they may think fit but his appointment
shall be subject to determination ipso facto if he ceases from any cause to be a
Director and no alternate Director appointed by him can act in his stead as a
Director or Managing Director.

83.       The Directors may entrust to and confer upon a Managing Director any
of the powers exercisable by them upon such terms and conditions and with such
restrictions as they may think fit and either collaterally with or to the
exclusion of their own powers and may from time to time revoke, withdraw, alter
or vary all or any of such powers.

                            PROCEEDINGS OF DIRECTORS
                            ------------------------

84.       Except as otherwise provided by these Articles, the Directors shall
meet together for the despatch of business, convening, adjourning and otherwise
regulating their meetings as they think fit. Questions arising at any meeting
shall be decided by a majority of votes of the Directors and alternate Directors
present at a meeting at which there is a quorum, the vote of an alternate
Director not being counted if his appointor be present at such meeting. In case
of an equality of votes, the Chairman shall have a second or casting vote.

85.       A Director or alternate Director may, and the Secretary on the
requisition of a Director or alternate Director shall, at any time summon a
meeting of the Directors by at least two days' notice in writing to every
Director and alternate Director which notice shall set forth the general nature
of the business to be considered unless notice is waived by all the Directors
(or their alternates) either at, before or after the meeting is held and
PROVIDED FURTHER if notice is given in person, by cable, telex or telecopy the
same shall be deemed to have been given on the day it is delivered to the
Directors or transmitting organisation as the case may be. The provisions of
Article 40 shall apply mutatis mutandis with respect to notices of meetings of
Directors.

86.       The quorum necessary for the transaction of the business of the
Directors may be fixed by the Directors and unless so fixed shall be two, a
Director and his appointed alternate Director being considered only one person
for this purpose, PROVIDED ALWAYS that if there shall at any time be only a sole
Director the quorum shall be one. For the purposes of this Article an alternate
Director or proxy appointed by a Director shall be counted in a quorum at a
meeting at which the Director appointing him is not present.

87.       The continuing Directors may act notwithstanding any vacancy in their
body, but if and so long as their number is reduced below the number fixed by or
pursuant to these Articles as the necessary quorum of Directors the continuing
Directors or Director may act for the purpose of increasing the number of
Directors to that number, or of summoning a general meeting of the Company, but
for no other purpose.

88.       The Directors may elect a Chairman of their Board and determine the
period for which he is to hold office; but if no such Chairman is elected, or if
at any meeting the Chairman is not present within five minutes after the time
appointed for holding the same, the Directors present may choose one of their
number to be Chairman of the meeting.


                                       17



89.       The Directors may delegate any of their powers to committees
consisting of such member or members of the Board of Directors (including
Alternate Directors in the absence of their appointors) as they think fit; any
committee so formed shall in the exercise of the powers so delegated conform to
any regulations that may be imposed on it by the Directors.

90.       A committee may meet and adjourn as it thinks proper. Questions
arising at any meeting shall be determined by a majority of votes of the members
present, and in the case of an equality of votes the Chairman shall have a
second or casting vote.

91.       All acts done by any meeting of the Directors or of a committee of
Directors (including any person acting as an alternate Director) shall,
notwithstanding that it be afterwards discovered that there was some defect in
the appointment of any Director or alternate Director, or that they or any of
them were disqualified, be as valid as if every such person had been duly
appointed and qualified to be a Director or alternate Director as the case may
be.

92.       Members of the Board of Directors or of any committee thereof may
participate in a meeting of the Board or of such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting. A resolution in writing (in one or more counterparts), signed by all
the Directors for the time being or all the members of a committee of Directors
(an alternate Director being entitled to sign such resolution on behalf of his
appointor) shall be as valid and effectual as if it had been passed at a meeting
of the Directors or committee as the case may be duly convened and held.

93. (a)   A Director may be  represented  at any  meetings of the Board of
Directors by a proxy appointed by him in which event the presence or vote of the
proxy shall for all purposes be deemed to be that of the Director.

    (b)   The provisions of Articles 59-62 shall mutatis mutandis apply to the
appointment of proxies by Directors.

                         VACATION OF OFFICE OF DIRECTOR
                         ------------------------------

94.       The office of a Director shall be vacated:

    (a)   if he gives notice in writing to the Company that he resigns the
          office of Director;

    (b)   if he absents himself (without being represented by proxy or an
          alternate Director appointed by him) from three consecutive
          meetings of the Board of Directors without special leave of
          absence from the Directors, and they pass a resolution that he
          has by reason of such absence vacated office;

    (c)   if he dies, becomes bankrupt or makes any arrangement or
          composition with his creditors generally;


                                       18



    (d)   if he is found a lunatic or becomes of unsound mind.

                      APPOINTMENT AND REMOVAL OF DIRECTORS
                      ------------------------------------

95.       The Company may by ordinary resolution appoint any person to be a
Director and may in like manner remove any Director and may in like manner
appoint another person in his stead.

96.       The Directors shall have power at any time and from time to time to
appoint any person to be a Director, either to fill a casual vacancy or as an
addition to the existing Directors but so that the total amount of Directors
(exclusive of alternate Directors) shall not at any time exceed the number fixed
in accordance with these Articles.

                              PRESUMPTION OF ASSENT
                              ---------------------

97.       A Director of the Company who is present at a meeting of the Board of
Directors at which action on any Company matter is taken shall be presumed to
have assented to the action taken unless his dissent shall be entered in the
Minutes of the meeting or unless he shall file his written dissent from such
action with the person acting as the Secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to such
person immediately after the adjournment of the meeting. Such right to dissent
shall not apply to a Director who voted in favour of such action.

                                      SEAL
                                      ----

98. (a)   The Company may, if the Directors so determine, have a Seal which
shall, subject to paragraph (c) hereof, only be used by the authority of the
Directors or of a committee of the Directors authorised by the Directors in that
behalf and every instrument to which the Seal has been affixed shall be signed
by one person who shall be either a Director or the Secretary or
Secretary-Treasurer or some person appointed by the Directors for the purpose.

    (b)   The Company may have for use in any place or places outside the
Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of
the Common Seal of the Company and, if the Directors so determine, with the
addition on its face of the name of every place where it is to be used.

    (c)   A Director, Secretary or other officer or representative or attorney
may without further authority of the Directors affix the Seal of the Company
over his signature alone to any document of the Company required to be
authenticated by him under Seal or to be filed with the Registrar of Companies
in the Cayman Islands or elsewhere wheresoever.

                                    OFFICERS
                                    --------

99.       The Company may have a President, a Secretary or Secretary-Treasurer
appointed by the Directors who may also from time to time appoint such other
officers as they consider necessary, all for such terms, at such remuneration
and to perform such duties, and subject to such

                                       19



provisions as to disqualification and removal as the Directors from time to time
prescribe.

                      DIVIDENDS, DISTRIBUTIONS AND RESERVE
                      ------------------------------------

100.      Subject to the Statute, the Directors may from time to time declare
dividends (including interim dividends) and distributions on shares of the
Company outstanding and authorise payment of the same out of the funds of the
Company lawfully available therefor.

101.      The Directors may, before declaring any dividends or distributions,
set aside such sums as they think proper as a reserve or reserves which shall at
the discretion of the Directors, be applicable for any purpose of the Company
and pending such application may, at the like discretion, be employed in the
business of the Company.

102.      No dividend or distribution shall be payable except out of the profits
of the Company, realised or unrealised, or out of the share premium account or
as otherwise permitted by the Statute.

103.      Subject to the rights of persons, if any, entitled to shares with
special rights as to dividends or distributions, if dividends or distributions
are to be declared on a class of shares they shall be declared and paid
according to the amounts paid or credited as paid on the shares of such class
outstanding on the record date for such dividend or distribution as determined
in accordance with these Articles but no amount paid or credited as paid on a
share in advance of calls shall be treated for the purpose of this Article as
paid on the share.

104.      The Directors may deduct from any dividend or distribution payable to
any Member all sums of money (if any) presently payable by him to the Company on
account of calls or otherwise.

105.      The Directors may declare that any dividend or distribution be paid
wholly or partly by the distribution of specific assets and in particular of
paid up shares, debentures, or debenture stock of any other company or in any
one or more of such ways and where any difficulty arises in regard to such
distribution, the Directors may settle the same as they think expedient and in
particular may issue fractional certificates and fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments
shall be made to any Members upon the footing of the value so fixed in order to
adjust the rights of all Members and may vest any such specific assets in
trustees as may seem expedient to the Directors.

106.      Any dividend, distribution, interest or other monies payable in cash
in respect of shares may be paid by cheque or warrant sent through the post
directed to the registered address of the holder or, in the case of joint
holders, to the holder who is first named on the register of Members or to such
person and to such address as such holder or joint holders may in writing
direct. Every such cheque or warrant shall be made payable to the order of the
person to whom it is sent. Any one of two or more joint holders may give
effectual receipts for any dividends, bonuses, or other monies payable in
respect of the share held by them as joint holders.

107.      No dividend or distribution shall bear interest against the Company.

                                       20



                                 CAPITALISATION
                                 --------------

108.      The Company may upon the recommendation of the Directors by ordinary
resolution authorise the Directors to capitalise any sum standing to the credit
of any of the Company's reserve accounts (including share premium account and
capital redemption reserve fund) or any sum standing to the credit of profit and
loss account or otherwise available for distribution and to appropriate such sum
to Members in the proportions in which such sum would have been divisible
amongst them had the same been a distribution of profits by way of dividend and
to apply such sum on their behalf in paying up in full unissued shares for
allotment and distribution credited as fully paid up to and amongst them in the
proportion aforesaid. In such event the Directors shall do all acts and things
required to give effect to such capitalisation, with full power to the Directors
to make such provisions as they think fit for the case of shares becoming
distributable in fractions (including provisions whereby the benefit of
fractional entitlements accrue to the Company rather than to the Members
concerned). The Directors may authorise any person to enter on behalf of all of
the Members interested into an agreement with the Company providing for such
capitalisation and matters incidental thereto and any agreement made under such
authority shall be effective and binding on all concerned.

                                BOOKS OF ACCOUNT
                                ----------------

109.      The Directors shall cause proper books of account to be kept with
respect to:

    (a)   all sums of money  received and expended by the Company and the
          matters in respect of which the receipt or expenditure takes place;

    (b)   all sales and purchases of goods by the Company;

    (c)   the assets and liabilities of the Company.

Proper books shall not be deemed to be kept if there are not kept such books of
account as are necessary to give a true and fair view of the state of the
Company's affairs and to explain its transactions.

110.      The Directors shall from time to time determine whether and to what
extent and at what times and places and under what conditions or regulations the
accounts and books of the Company or any of them shall be open to the inspection
of Members not being Directors and no Member (not being a Director) shall have
any right of inspecting any account or book or document of the Company except as
conferred by Statute or authorised by the Directors or by the Company in general
meeting.

111.      The Directors may from time to time cause to be prepared and to be
laid before the Company in general meeting profit and loss accounts, balance
sheets, group accounts (if any) and such other reports and accounts as may be
required by law.
                                       21



                                      AUDIT
                                      -----

112.      The Company may at any annual general meeting appoint an Auditor or
Auditors of the Company who shall hold office until the next annual general
meeting and may fix his or their remuneration.

113.      The Directors may before the first annual general meeting appoint an
Auditor or Auditors of the Company who shall hold office until the first annual
general meeting unless previously removed by an ordinary resolution of the
Members in general meeting in which case the Members at that meeting may appoint
Auditors. The Directors may fill any casual vacancy in the office of Auditor but
while any such vacancy continues the surviving or continuing Auditor or
Auditors, if any, may act. The remuneration of any Auditor appointed by the
Directors under this Article may be fixed by the Directors.

114.      Every Auditor of the Company shall have a right of access at all times
to the books and accounts and vouchers of the Company and shall be entitled to
require from the Directors and Officers of the Company such information and
explanation as may be necessary for the performance of the duties of the
auditors.

115.      Auditors shall at the next annual general meeting following their
appointment and at any other time during their term of office, upon request of
the Directors or any general meeting of the Members, make a report on the
accounts of the Company in general meeting during their tenure of office.

                                     NOTICES
                                     -------

116.      Notices shall be in writing and may be given by the Company to any
Member either personally or by sending it by post, cable, telex or telecopy to
him or to his address as shown in the register of Members, such notice, if
mailed, to be forwarded airmail if the address be outside the Cayman Islands.

117.(a)   Where a notice is sent by post, service of the notice shall be deemed
to be effected by properly addressing, pre-paying and posting a letter
containing the notice, and to have been effected at the expiration of sixty
hours after the letter containing the same is posted as aforesaid.

    (b)   Where a notice is sent by cable, telex, or telecopy, service of the
notice shall be deemed to be effected by properly addressing, and sending such
notice through a transmitting organisation and to have been effected on the day
the same is sent as aforesaid.

118.      A notice may be given by the Company to the joint holders of record of
a share by giving the notice to the joint holder first named on the register of
Members in respect of the share.

119.      A notice may be given by the Company to the person or persons which
the Company has been advised are entitled to a share or shares in consequence of
the death or bankruptcy of a Member by sending it through the post as aforesaid
in a pre-paid letter addressed to them by name, or by the title of
representatives of the deceased, or trustee of the bankrupt, or by any like
description at the address supplied for that purpose by the persons claiming to
be so

                                       22



entitled, or at the option of the Company by giving the notice in any manner in
which the same might have been given if the death or bankruptcy had not
occurred.

120.      Notice of every general meeting shall be given in any manner
hereinbefore authorised to:

    (a)   every person shown as a Member in the register of Members as of
          the record date for such meeting except that in the case of
          joint holders the notice shall be sufficient if given to the
          joint holder first named in the register of Members.

    (b)   every person upon whom the ownership of a share devolves by
          reason of his being a legal personal representative or a trustee
          in bankruptcy of a Member of record where the Member of record
          but for his death or bankruptcy would be entitled to receive
          notice of the meeting; and

No other person shall be entitled to receive notices of general meetings.

                                   WINDING UP
                                   ----------

121.      If the Company shall be wound up the liquidator may, with the sanction
of a Special Resolution of the Company and any other sanction required by the
Statute, divide amongst the Members in specie or kind the whole or any part of
the assets of the Company (whether they shall consist of property of the same
kind or not) and may for such purpose set such value as he deems fair upon any
property to be divided as aforesaid and may determine how such division shall be
carried out as between the Members or different classes of Members. The
liquidator may with the like sanction, vest the whole or any part of such assets
in trustees upon such trusts for the benefit of the contributories as the
liquidator, with the like sanction, shall think fit, but so that no Member shall
be compelled to accept any shares or other securities whereon there is any
liability.

122.      If the Company shall be wound up, and the assets available for
distribution amongst the Members as such shall be insufficient to repay the
whole of the paid-up capital, such assets shall be distributed so that, as
nearly as may be, the losses shall be borne by the Members in proportion to the
capital paid up, or which ought to have been paid up, at the commencement of the
winding up on the shares held by them respectively. And if in a winding up the
assets available for distribution amongst the Members shall be more than
sufficient to repay the whole of the capital paid up at the commencement of the
winding up, the excess shall be distributed amongst the Members in proportion to
the capital paid up at the commencement of the winding up on the shares held by
them respectively. This Article is to be without prejudice to the rights of the
holders of shares issued upon special terms and conditions.

                                    INDEMNITY
                                    ---------

123.      The Directors and officers for the time being of the Company and any
trustee for the time being acting in relation to any of the affairs of the
Company and their heirs, executors, administrators and personal representatives
respectively shall be indemnified out of the assets of the Company from and
against all actions, proceedings, costs, charges, losses, damages and

                                       23



expenses which they or any of them shall or may incur or sustain by reason of
any act done or omitted in or about the execution of their duty in their
respective offices or trusts, except such (if any) as they shall incur or
sustain by or through their own wilful neglect or default respectively and no
such Director, officer or trustee shall be answerable for the acts, receipts,
neglects or defaults of any other Director, officer or trustee or for joining in
any receipt for the sake of conformity or for the solvency or honesty of any
banker or other persons with whom any monies or effects belonging to the Company
may be lodged or deposited for safe custody or for any insufficiency of any
security upon which any monies of the Company may be invested or for any other
loss or damage due to any such cause as aforesaid or which may happen in or
about the execution of his office or trust unless the same shall happen through
the wilful neglect or default of such Director, Officer or trustee.

                                 FINANCIAL YEAR
                                 --------------

124.      Unless the Directors otherwise prescribe, the financial year of the
Company shall end on 31st December in each year and, following the year of
incorporation, shall begin on 1st January in each year.

                             AMENDMENTS OF ARTICLES
                             ----------------------

125.      Subject to the Statute, the Company may at any time and from time to
time by Special Resolution alter or amend these Articles in whole or in part.

                         TRANSFER BY WAY OF CONTINUATION
                         -------------------------------

126.      If the Company is exempted as defined in the Statute, it shall,
subject to the provisions of the Statute and with the approval of a Special
Resolution, have the power to register by way of continuation as a body
corporate under the laws of any jurisdiction outside the Cayman Islands and to
be deregistered in the Cayman Islands.

                                       24




DATED 10th day of August, 2000.




Andrew Moon
/s/ Andrew S. Moon
- -------------------------------------------
Andrew S. Moon
PO Box 309, Grand Cayman



Patrick Schmid
- -------------------------------------------
/s/ Patrick Schmid
Patrick G. Schmid
PO Box 309, Grand Cayman



Diann Green
/s/ Diann Green
- -------------------------------------------
Witness to the above signatures




I, Cindy Y. Jefferson-Bulgin Registrar of Companies in and for the Cayman
Islands HEREBY CERTIFY that this is a true and correct copy of the Articles of
Association of this Company duly incorporated on the 10th day of August, 2000.



                                                  Cindy Y. Jefferson-Bulgin
                                                  -------------------------
                                                  REGISTRAR OF COMPANIES

EX-3.2(A)

                                                                  Exhibit 3.2(a)

                        THE COMPANIES LAW (2000 REVISION)
                        --------------------------------

                            COMPANY LIMITED BY SHARES
                            -------------------------


                 AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

                                       OF

                           SEAGATE TECHNOLOGY HOLDINGS

       Amended and Restated by Special Resolution of the Sole Shareholder
                               dated July 2, 2001


l.   The name of the Company is Seagate Technology Holdings.

2.   The Registered Office of the Company shall be at the offices of Maples and
     Calder, Attorneys-at-Law, Ugland House, P.O. Box 309, George Town, Grand
     Cayman, Cayman Islands, British West Indies or at such other place as the
     Directors may from time to time decide.

3.   The objects for which the Company is established are unrestricted and shall
     include, but without limitation, the following:

     (a)   (i)    To carry on business as inventors, designers, manufacturers,
                  traders and dealers of and in all types of equipment,
                  machinery and goods, including without limitation computer
                  hardware and equipment and any related patents, industrial
                  rights and know how whether or not protected by law.

           (ii)   To carry on the business of an investment company and to act
                  as promoters and entrepreneurs and to carry on business as
                  financiers, capitalists, concessionaires, merchants, brokers,
                  traders, dealers, agents, importers and exporters and to
                  undertake and carry on and execute all kinds of investment,
                  financial, commercial, mercantile, trading and other
                  operations.

           (iii)  To carry on whether as principals, agents or otherwise
                  howsoever the business of realtors, developers, consultants,
                  estate agents or managers, builders, contractors, engineers,
                  manufacturers, dealers in or vendors of all types of property
                  including services.

     (b)   To exercise and enforce all rights and powers conferred by or
           incidental to the ownership of any shares, stock, obligations or
           other securities including without prejudice to the generality of the
           foregoing all such powers of veto or control as may be conferred by
           virtue of the holding by the Company of some special proportion of



           the issued or nominal amount thereof, to provide managerial and other
           executive, supervisory and consultant services for or in relation to
           any company in which the Company is interested upon such terms as may
           be thought fit.

     (c)   To purchase or otherwise acquire, to sell, exchange, surrender,
           lease, mortgage, charge, convert, turn to account, dispose of and
           deal with real and personal property and rights of all kinds and, in
           particular, mortgages, debentures, produce, concessions, options,
           contracts, patents, annuities, licences, stocks, shares, bonds,
           policies, book debts, business concerns, undertakings, claims,
           privileges and choses in action of all kinds.

     (d)   To subscribe for, conditionally or unconditionally, to underwrite,
           issue on commission or otherwise, take, hold, deal in and convert
           stocks, shares and securities of all kinds and to enter into
           partnership or into any arrangement for sharing profits, reciprocal
           concessions or cooperation with any person or company and to promote
           and aid in promoting, to constitute, form or organise any company,
           syndicate or partnership of any kind, for the purpose of acquiring
           and undertaking any property and liabilities of the Company or of
           advancing, directly or indirectly, the objects of the Company or for
           any other purpose which the Company may think expedient.

     (e)   To stand surety for or to guarantee, support or secure the
           performance of all or any of the obligations of any person, firm or
           company whether or not related or affiliated to the Company in any
           manner and whether by personal covenant or by mortgage, charge or
           lien upon the whole or any part of the undertaking, property and
           assets of the Company, both present and future, including its
           uncalled capital or by any such method and whether or not the Company
           shall receive valuable consideration therefor.

     (f)   To engage in or carry on any other lawful trade, business or
           enterprise which may at any time appear to the Directors of the
           Company capable of being conveniently carried on in conjunction with
           any of the aforementioned businesses or activities or which may
           appear to the Directors of the Company likely to be profitable to the
           Company.

     In the interpretation of this Memorandum of Association in general and of
     this Clause 3 in particular no object, business or power specified or
     mentioned shall be limited or restricted by reference to or inference from
     any other object, business or power, or the name of the Company, or by the
     juxtaposition of two or more objects, businesses or powers and that, in the
     event of any ambiguity in this clause or elsewhere in this Memorandum of
     Association, the same shall be resolved by such interpretation and
     construction as will widen and enlarge and not restrict the objects,
     businesses and powers of and exercisable by the Company.

4.   Except as prohibited or limited by the Companies Law (2000 Revision), the
     Company shall have full power and authority to carry out any object and
     shall have and be capable of from time to time and at all times exercising
     any and all of the powers at any time or from time to

                                       2



     time exercisable by a natural person or body corporate in doing in any part
     of the world whether as principal, agent, contractor or otherwise whatever
     may be considered by it necessary for the attainment of its objects and
     whatever else may be considered by it as incidental or conducive thereto or
     consequential thereon, including, but without in any way restricting the
     generality of the foregoing, the power to make any alterations or
     amendments to this Memorandum of Association and the Articles of
     Association of the Company considered necessary or convenient in the manner
     set out in the Articles of Association of the Company, and the power to do
     any of the following acts or things, viz:

     (a)   to pay all expenses of and incidental to the promotion, formation
           and incorporation of the Company;

     (b)   to register the Company to do business in any other jurisdiction;

     (c)   to sell, lease or dispose of any property of the Company;

     (e)   to draw, make, accept, endorse, discount, execute and issue
           promissory notes, debentures, bills of exchange, bills of lading,
           warrants and other negotiable or transferable instruments;

     (f)   to lend money or other assets and to act as guarantors;

     (g)   to borrow or raise money on the security of the undertaking or on all
           or any of the assets of the Company including uncalled capital or
           without security;

     (h)   to invest monies of the Company in such manner as the Directors
           determine;

     (i)   to promote other companies;

     (j)   to sell the undertaking of the Company for cash or any other
           consideration;

     (k)   to distribute assets in specie to Members of the Company;

     (l)   to make charitable or benevolent donations;

     (m)   to pay pensions or gratuities or provide other benefits in cash or
           kind to Directors, officers, employees, past or present and their
           families;

     (n)   to purchase Directors and officers liability insurance; and

     (o)   to carry on any trade or business and generally to do all acts and
           things which, in the opinion of the Company or the Directors, may be
           conveniently or profitably or usefully acquired and dealt with,
           carried on, executed or done by the Company in connection with the
           business aforesaid, provided that the Company shall only carry on the
           businesses for which a licence is required under the laws of the
           Cayman Islands when so licensed under the terms of such laws.

                                       3



5.   The liability of each Member is limited to the amount from time to time
     unpaid on such Member's shares.

6.   The authorized share capital of the Company consists of (a) 600,000,000
     common shares with a par value of US $0.00001 per share and having the
     rights and privileges attached thereto as provided in the Company's
     Articles of Association (the "Common Shares") and (b) 450,000,000 preferred
     shares with a par value of US $0.00001 per share and having the rights and
     preferences attached thereto as provided in the Company's Articles of
     Association (the "Preferred Shares"). Of the Preferred Shares, 400,000,000
     shares are designated "Series A Preferred Shares" and have the rights and
     preferences attached thereto as provided in the Company's Articles of
     Association. Subject to the provisions of The Companies Law (2000 Revision)
     and the Articles of Association, the Company shall have the power to redeem
     or purchase any of its shares, to subdivide or consolidate the said shares
     or any of them, and to issue all or any part of its capital, whether
     original, redeemed, increased, or reduced, with or without any preference,
     priority, or special privilege, or subject to any postponement of rights or
     to any conditions or restrictions whatsoever, and so that, unless the
     conditions of issue shall otherwise expressly provide, every issue of
     shares, whether stated to be Common Shares or Preferred Shares, shall be
     subject to the powers on the part of the Company hereinbefore provided.

7.   If the Company is registered as exempted, its operations will be carried on
     subject to the provisions of Section 193 of the Companies Law (2000
     Revision) and, subject to the provisions of the Companies Law (2000
     Revision) and the Articles of Association, it shall have the power to
     register by way of continuation as a body corporate limited by shares under
     the laws of any jurisdiction outside the Cayman Islands and to be
     deregistered in the Cayman Islands.

                                       4

EX-3.2(B)

                                                                  Exhibit 3.2(b)

                        THE COMPANIES LAW (2000 REVISION)
                        --------------------------------

                            COMPANY LIMITED BY SHARES
                            -------------------------

                  AMENDED AND RESTATED ARTICLES OF ASSOCIATION

                                       OF

                           SEAGATE TECHNOLOGY HOLDINGS

       Amended and Restated by Special Resolution of the Sole Shareholder
                               dated July 2, 2001


                                 INTERPRETATION

1.   In these Articles Table A in the Schedule to the Statute does not apply
     and, unless there be something in the subject or context inconsistent
     therewith,

     "Articles"                      means these Articles as originally framed
                                     or as from time to time altered by Special
                                     Resolution.

     "Auditors"                      means the persons for the time being
                                     performing the duties of auditors of the
                                     Company.

     "Board"                         means the board of directors of the
                                     Company.

     "Common Shares"                 has the meaning given in theCompany's
                                     Memorandum of Association.

     "Company"                       means the above-named Company.

     "debenture"                     means debenture stock, mortgages, bonds and
                                     any other such securities of the Company
                                     whether constituting a charge on the assets
                                     of the Company or not.

     "Directors"                     means the directors for the time being of
                                     the Company.

     "dividend"                      includes bonus.

     "Extraordinary Distribution"    means any distribution to the holders of
                                     the Preferred Shares of (i)
                                     securities of any subsidiary of the



                                     Company in a spin-off or spin-out
                                     transaction or (ii) the proceeds from the
                                     sale or other disposition of the assets or
                                     outstanding capital stock of any such
                                     subsidiary.

     "Fair Market Value"             means: (a) in the case of property other
                                     than cash or securities, the market value
                                     of such property on the date in question as
                                     determined in good faith by the Board; and
                                     (b) in the case of securities, the average
                                     of the daily closing prices of the
                                     securities for the ten consecutive trading
                                     days ending on and including such date of
                                     determination. The closing price for each
                                     day shall be: (i) if the securities are
                                     listed on the NASDAQ National Market, the
                                     last reported sale price of such securities
                                     on the NASDAQ National Market, or any
                                     similar system of automated dissemination
                                     of quotations of securities prices then in
                                     common use, if so quoted, (ii) if the
                                     securities are not listed or admitted for
                                     trading as described in clause (i), the
                                     last reported sale price of such securities
                                     on the NYSE, or if such securities are
                                     listed or admitted for trading on any other
                                     national securities exchange, the last sale
                                     price, or the closing bid price if no sale
                                     occurred, of such securities on the
                                     principal securities exchange on which the
                                     securities are listed, or (iii) if not
                                     quoted or listed as described in clauses
                                     (i) or (ii), the mean between the high bid
                                     and low asked quotations for such
                                     securities as reported by the National
                                     Quotation Bureau Incorporated if at least
                                     two securities dealers have inserted both
                                     bid and asked quotations for the securities
                                     on at least five of the ten preceding
                                     Trading Days. If none of the conditions set
                                     forth above is met, the last reported sale
                                     price of the securities on any day or the
                                     average of such last reported sale prices
                                     for any period shall be the fair market
                                     value of the securities as determined by a
                                     member firm of the NYSE selected by the
                                     Company.

     "IPO"                           means a firm commitment underwriting public
                                     offering of the Common Shares pursuant to
                                     an effective registration statement filed
                                     under the U.S. Securities Act of 1933, as
                                     amended, which yields the Company net
                                     proceeds in an amount not less than $75
                                     million.

                                       2



     "Liquidation Event"             means any liquidation, dissolution,or
                                     winding up of the Company, whether
                                     voluntary or involuntary. For purposes of
                                     these Articles, (a) a consolidation or
                                     merger of the Company with or into any
                                     other company or any subsidiary thereof,
                                     other than a merger or consolidation in
                                     which securities representing more than 50%
                                     of the total combined voting power of the
                                     voting securities of the successor
                                     corporation are immediately thereafter
                                     beneficially owned, directly or indirectly
                                     and in substantially the same proportion,
                                     by the persons who beneficially owned the
                                     Company's outstanding voting securities
                                     immediately prior to such transaction; (b)
                                     a sale of all, or substantially all, of the
                                     assets of the Company or (c) a series of
                                     transactions in which more than 50% of the
                                     voting power of the Company is disposed of
                                     shall be deemed to be within the purview of
                                     a liquidation, dissolution, or winding up.

     "Member"                        shall bear the meaning as ascribed to it in
                                     the Statute.

     "month"                         means calendar month.

     "paid-up"                       means paid-up and/or credited as paid-up.

     "Preferred Shares"              has the meaning given in the Company's
                                     Memorandum of Association.

     "registered office"             means the registered office for the
                                     time being of the Company.

     "Seal"                          means the common seal of the Company and
                                     includes every duplicate seal.

     "Secretary"                     includes an Assistant Secretary and any
                                     person appointed to perform the duties of
                                     Secretary of the Company.

     "Series A Preferred Shares"     has the meaning given in the Company's
                                     Memorandum of Association.

     "Series A Stated Amount"        means US $2.30 per Series A Preferred
                                     Share.

     "Special Resolution"            has the same meaning as in the Statute and
                                     includes a

                                       3



                                     resolution approved in writing as described
                                     therein.

     "Statute"                       means the Companies Law of the Cayman
                                     Islands as amended and every statutory
                                     modification or re-enactment thereof for
                                     the time being in force.

     "written" and "in writing"      include all modes of representing or
                                     reproducing words in visible form.

     Words importing the singular number only include the plural number and
     vice-versa. Words importing the masculine gender only include the feminine
     gender. Words importing persons only include corporations.

                                   PRELIMINARY

2.   The business of the Company may be commenced as soon after incorporation as
     the Directors shall see fit, notwithstanding that part only of the shares
     may have been allotted or issued.

3.   The Directors may pay, out of the capital or any other monies of the
     Company, all expenses incurred in or about the formation and establishment
     of the Company including the expenses of registration.

                                     SHARES

4.   Except as otherwise provided in these Articles, all shares in the capital
     of the Company for the time being and from time to time unissued shall be
     under the control of the Board and may be re-designated, allotted, or
     disposed of in such manner, to such persons, and on such terms as the
     Board, in its discretion, may think fit.

                                  COMMON SHARES

5.   The holders of Common Shares shall be entitled to receive such dividends
     and distributions as may be declared from time to time by the Board. Such
     dividends and distributions shall be from such assets lawfully available
     therefor as the Directors may determine and shall otherwise be paid and/or
     made as provided in these Articles.

6.   After payment in full of the Liquidation Preference (as such term is
     defined below) to the holders of Preferred Shares who are entitled to such
     Liquidation Preference pursuant to a resolution of the Board or pursuant to
     these Articles (the "Eligible Preferred Shareholders"), any remaining
     assets of the Company that are legally available for distribution, if any,
     shall be distributed ratably among (a) any Eligible Preferred Shareholder
     who (after having received the Liquidation Preference) has the right to
     participate in such distribution pursuant to a written resolution of the
     Board or pursuant to these Articles and (b) the holders of Common Shares on
     a pro rata basis.

                                       4



7.   Any dividend distributed other than in cash by the Company to the holders
     of Common Shares pursuant to these Articles will be valued at the Fair
     Market Value of the property being transferred as such dividend.

8.   Each holder of Common Shares shall have one vote in respect of each Common
     Share held by such holder at general meetings of the Company.

                                PREFERRED SHARES

9.   The Preferred Shares may be issued from time to time in one or more series
     pursuant to any resolution of the Board that provides for such issuance.
     The Board may determine the rights, preferences, privileges, and
     restrictions granted to, or imposed upon, any wholly unissued series of
     Preferred Shares and fix the number of shares of any series of Preferred
     Shares and the designation of any such series of Preferred Shares, in all
     cases on or prior to the issue of Preferred Shares of such series. The
     Board may increase or decrease (but not below the number of shares in any
     such series then outstanding) the number of authorized shares of any series
     subsequent to the issue of shares of that series. The authority of the
     Board with respect to each such class or series shall include, without
     limitation of the foregoing, the right to determine and fix (prior to
     issue):

     (a)     the distinctive designation of such class or series and the number
             of shares to constitute such class or series;

     (b)     the rate and frequency at which dividends on the shares of such
             class or series shall be declared and paid, or set aside for
             payment, whether dividends at the rate so determined shall be
             cumulative or accruing, and whether the shares of such class or
             series shall be entitled to any participating or other dividends in
             addition to dividends at the rate so determined, and if so, on what
             terms;

     (c)     the right or obligation, if any, of the Company to redeem shares of
             the particular class or series of Preferred Shares and, if
             redeemable, the price, terms, and manner of such redemption;

     (d)     the special and relative rights and preferences, if any, and the
             amount per share that the shares of such class or series of
             Preferred Shares shall be entitled to receive upon any Liquidation
             Event;

     (e)     the terms and conditions, if any, whereby shares of such class or
             series shall be convertible into, or exchangeable for, shares of
             any other class or series, including the price or rate of
             conversion or exchange and the terms of adjustment, if any (such
             conversion or exchange to be by means of redemption and reissue of
             shares of the other class or series);

     (f)     the obligation, if any, of the Company to redeem or purchase shares
             of such class or series and the terms and conditions of such
             obligation;

                                       5



     (g)     the voting rights, in any, on the issuance of additional shares of
             such class or series or any shares of any other class or series of
             Preferred Shares;

     (h)     the limitations, if any, on the issuance of additional shares of
             such class or series or any shares of any other class or series of
             Preferred Shares; and

     (i)     such other preferences, powers, qualifications, special or relative
             rights, and privileges thereof as the Board, acting in accordance
             with these Articles, may deem advisable and not inconsistent with
             Cayman Islands law and the Statute.

                            SERIES A PREFERRED SHARES

10.  The holders of Series A Preferred Shares shall be entitled to receive and
     to participate in such dividends and distributions as may be declared from
     time to time by the Board. Such dividends and distributions shall be paid
     and/or made on a pari passu basis with dividends and distributions on or in
     respect of Common Shares. Such dividends may be made in cash or specie as
     the Directors determine.

11.  Any dividend distributed other than in cash by the Company to the holders
     of Series A Preferred Shares pursuant to these Articles (including the
     Extraordinary Distributions) will be valued at the Fair Market Value of the
     property being transferred as such dividend.

12.  (a)     Following any Liquidation Event, before any distribution or
             payment shall be made to the holders of any Common Shares, the
             holders of Series A Preferred Shares shall be entitled to be paid
             out of the remaining assets of the Company that are legally
             available for distribution with respect to all Series A Preferred
             Shares then outstanding an amount in cash (to be shared ratably by
             the holders of Series A Preferred Shares) equal to the excess of
             (i) US $2.30 per Series A Preferred Share over (ii) the amount of
             any Extraordinary Distributions previously paid per Series A
             Preferred Share (the "Liquidation Preference").

     (b)     After payment in full of the Liquidation Preference to the Eligible
             Preferred Shareholders, any remaining assets of the Company that
             are legally available for distribution shall be further distributed
             ratably among (i) the holders of Series A Preferred Shares, (ii)
             the holders of Common Shares, and (iii) any Eligible Preferred
             Shareholder (other than holders of Series A Preferred Shares) who
             has the right to participate in such distribution pursuant to a
             written resolution of the Board or pursuant to these Articles.

     (c)     If, upon any such Liquidation Event, the remaining assets of the
             Company that are legally available for distribution to its
             shareholders are insufficient to pay the holders of Series A
             Preferred Shares the full Liquidation Preference on each Series A
             Preferred Share, then the holders of Series A Preferred Shares
             shall share ratably in any distribution of such remaining assets in
             proportion to the respective amounts that would otherwise be
             payable in respect of the shares held by them upon such
             distribution if all amounts payable on or with respect to such
             shares were paid in

                                       6



             full.

     (d)     Subject to Articles 24 and 25, at any time when Series A Preferred
             Shares are outstanding, without the written consent of the holders
             of a majority of the then outstanding Series A Preferred Shares,
             the Directors shall not create, or authorize the creation of, any
             additional class or series of shares that ranks senior to the
             Series A Preferred Shares with respect to the distribution of
             assets upon any Liquidation Event.

13.  The payment in full of the Liquidation Preference pursuant to Article 12(a)
     hereof and all other distribution pursuant to Article 12(b) hereof on each
     Series A Preferred Share shall automatically constitute the redemption in
     full of that Series A Preferred Share. To the extent that Series A
     Preferred Shares are redeemed in full, such Series A Preferred Shares shall
     be cancelled, and the issued share capital of the Company shall be reduced
     by the nominal value of the shares so redeemed. The redemption shall not be
     taken as reducing the authorized share capital of the Company.

14.  The holders of Series A Preferred Shares shall be entitled to vote upon any
     and all matters upon which holders of Common Shares have the right to vote.

15.  With respect to each Series A Preferred Share held by the holders thereof,
     each such holder shall have a number of votes that is equal to the number
     of Common Shares into which the Series A Preferred Shares could be
     converted, and such votes shall be counted together with all other shares
     (including the Common Shares) of the Company and not separately as a class.

16.  The Series A Preferred Shares shall be convertible into Common Shares as
     follows:

     (a)     Conversion Right

             Any holder of Series A Preferred Shares shall have the right, at
             such holder's option, at any time or from time to time, to convert
             any of such holder's Series A Preferred Shares into such number of
             Common Shares as is determined by (x) dividing the Series A Stated
             Amount by the Conversion Price (defined below) in effect at the
             time of the conversion and (y) multiplying such quotient by the
             number of Series A Preferred Shares to be converted. The
             "Conversion Price" shall initially be US $2.30 per share. Such
             Conversion Price shall be subject to adjustment as hereinafter
             provided.

     (b)     Mechanics of Conversion

             Any holder of Series A Preferred Shares may exercise the conversion
             right specified herein by surrendering to the Company the
             certificate(s) for the Series A Preferred Shares to be converted,
             accompanied by written notice specifying the number of the shares
             to be converted.

                                       7



             Conversion shall be deemed to have been effected on the date when
             delivery of notice of an election to convert and certificates for
             shares is made (such date is referred to herein as the "Conversion
             Date").

             Subject to the provisions of subparagraph (d)(v), as promptly as
             practicable thereafter, the Company shall make appropriate
             entries in the Register of Members, cancel the relevant Series A
             Preferred Share certificates and issue and deliver to such holder
             certificate(s) for the number of full Common Shares to which such
             holder is entitled and a check or cash with respect to any
             fractional interest in a Common Share as provided in subparagraph
             (c).

             The person whose name has been entered on the Register of Members
             shall be the legal owner of the Common Shares on the applicable
             Conversion Date.

             Upon conversion of only a portion of the number of shares covered
             by a certificate representing the Series A Preferred Shares
             surrendered for conversion, the Company shall issue and deliver to
             such holder, at the expense of the Company, a new certificate
             covering the number of Series A Preferred Shares representing the
             unconverted portion of the certificate so surrendered.

    (c)      Fractional Shares

             No fractions of Common Shares shall be issued upon conversion of
             the Series A Preferred Shares. If more than one Series A Preferred
             Share shall be surrendered for conversion at any one time by the
             same holder, the number of full Common Shares issuable upon
             conversion thereof shall be computed on the basis of the aggregate
             number of Series A Preferred Shares so surrendered. Instead of any
             fractions of Common Shares that would otherwise be issuable upon
             conversion of any Series A Preferred Shares, the Company shall pay
             a cash adjustment in respect of such fractional interest in an
             amount equal to that fractional interest multiplied by the then
             effective Conversion Price.

     (d)     Conversion Price Adjustments

             The Conversion Price shall be subject to adjustment from time to
             time as follows:

             (i)   Bonus Issue, Subdivision or Split

                   If the number of Common Shares outstanding at any time after
                   the date hereof is increased by a bonus issue of Common
                   Shares or by a subdivision of Common Shares, then, on the
                   date such issue or subdivision is made, the Conversion Price
                   shall be appropriately decreased so that the number of Common
                   Shares issuable on conversion of any Series A Preferred
                   Shares shall be increased in proportion to such increase of
                   outstanding shares.

             (ii)  Combination

                                       8



                   If the number of Common Shares outstanding at any time after
                   the date hereof is decreased by a combination of the
                   outstanding Common Shares, then, on the effective date of
                   such combination, the Conversion Price shall be appropriately
                   increased so that the number of Common Shares issuable on
                   conversion of any shares of Series A Preferred Shares shall
                   be decreased in proportion to such decrease in outstanding
                   shares.

             (iii) Consolidation, Merger, Sale, Lease or Conveyance

                   In case of any consolidation with or merger of the Company
                   with or into another company, or in case of any sale, lease,
                   or conveyance to another company of the assets of the Company
                   as an entirety or substantially as an entirety, each Series A
                   Preferred Share shall after the date of such consolidation,
                   merger, sale, lease, or conveyance be convertible into the
                   number of shares or other securities or property (including
                   cash) to which the Common Shares issuable (at the time of
                   such consolidation, merger, sale, lease, or conveyance) upon
                   conversion of such Series A Preferred Share would have been
                   entitled upon such consolidation, merger, sale, lease, or
                   conveyance; and in any such case, if necessary, the
                   provisions set forth herein with respect to the rights and
                   interests thereafter of the holders of Series A Preferred
                   Shares shall be appropriately adjusted so as to be
                   applicable, as nearly as may reasonably be, to any shares or
                   other securities or property thereafter deliverable on the
                   conversion of the Series A Preferred Shares.

             (iv)  Rounding of Calculations; Minimum Adjustment

                   All calculations under this subparagraph (d) shall be made to
                   the nearest cent (in U.S. currency) or to the nearest one
                   hundredth (1/100th) of a share, as the case may be.

             (v)   Timing of Issuance of Additional Common Shares Upon Certain
                   Adjustments

                   In any case in which the provisions of this subparagraph (d)
                   shall require that an adjustment shall become effective
                   immediately after a record date for an event, the Company may
                   defer until the occurrence of such event (A) issuing to the
                   holder of Series A Preferred Shares converted after such
                   record date and before the occurrence of such event the
                   additional Common Shares issuable upon such conversion by
                   reason of the adjustment required by such event over and
                   above the Common Shares issuable upon such conversion before
                   giving effect to such adjustment and (B) paying to such
                   holder any amount of cash in lieu of a fractional share of
                   Common Share pursuant to subparagraph (c).

                                       9



     (e)     Automatic Conversion

             Upon the closing of the IPO, each outstanding Series A Preferred
             Share shall automatically be converted into one or more Common
             Shares on the basis of the Conversion Price then in effect. Such
             automatic conversion shall be effected in substantially the same
             manner as set forth in subparagraph (b) of this Section 16, with
             the closing of the IPO to automatically constitute the Conversion
             Date.

                             CERTIFICATES FOR SHARES

17.  Certificates representing shares of the Company shall be in such form as
     shall be determined by the Directors. Such certificates may be under Seal.
     All certificates for shares shall be consecutively numbered or otherwise
     identified and shall specify the shares to which they relate. The name and
     address of the person to whom the shares represented thereby are issued,
     with the number of shares and date of issue, shall be entered in the
     register of Members of the Company. All certificates surrendered to the
     Company for transfer shall be cancelled and no new certificate shall be
     issued until the former certificate for a like number of shares shall have
     been surrendered and cancelled. The Directors may authorise certificates to
     be issued with the seal and authorised signature(s) affixed by some method
     or system of mechanical process.

18.  Notwithstanding Article 17 of these Articles, if a share certificate be
     defaced, lost or destroyed, it may be renewed on payment of a fee of one
     dollar (US$l.00) or such less sum and on such terms (if any) as to evidence
     and indemnity and the payment of the expenses incurred by the Company in
     investigating evidence, as the Directors may prescribe.

                                 ISSUE OF SHARES

19.  Subject to the provisions, if any, in that behalf hereinbefore contained or
     in the Memorandum of Association and without prejudice to any special
     rights previously conferred on the holders of existing shares, the
     Directors may allot, issue, grant options over or otherwise dispose of
     shares of the Company (including fractions of a share) with or without
     preferred, deferred or other special rights or restrictions, whether in
     regard to dividend, voting, return of capital or otherwise and to such
     persons, at such times and on such other terms as they think proper.

20.  The Company shall maintain a register of its Members and every person whose
     name is entered as a Member in the register of Members shall be entitled
     without payment to receive within two months after allotment or lodgement
     of transfer (or within such other period as the conditions of issue shall
     provide) one certificate for all his shares or several certificates each
     for one or more of his shares upon payment of fifty cents (US$0.50) for
     every certificate after the first or such less sum as the Directors shall
     from time to time determine provided that in respect of a share or shares
     held jointly by several persons the Company shall not be bound to issue
     more than one certificate and delivery of a certificate for a share to one
     of the several joint holders shall be sufficient delivery to all such
     holders.

                                       10



                               TRANSFER OF SHARES

21.  The instrument of transfer of any share shall be in writing and shall be
     executed by or on behalf of the transferor and the transferor shall be
     deemed to remain the holder of a share until the name of the transferee is
     entered in the register in respect thereof.

22.  The registration of transfers may be suspended at such time and for such
     periods as the Directors may from time to time determine, provided always
     that such registration shall not be suspended for more than forty-five days
     in any year.

                                REDEEMABLE SHARES

23.  (a)  Subject to the provisions of the Statute and the Memorandum of
          Association, shares may be issued on the terms that they are, or at
          the option of the Company or the holder are, to be redeemed on such
          terms and in such manner as the Company, before the issue of the
          shares, may by Special Resolution determine.

     (b)  Subject to the provisions of the Statute and the Memorandum of
          Association, the Company may purchase its own shares (including
          fractions of a share), including any redeemable shares, provided that
          the manner of purchase has first been authorised by the Company in
          general meeting and may make payment therefor in any manner authorised
          by the Statute, including out of capital.

                          VARIATION OF RIGHTS OF SHARES

24.  If at any time the share capital of the Company is divided into different
     classes of shares, the rights attached to any class (unless otherwise
     provided by the terms of issue of the shares of that class) may be varied
     with the consent in writing of the holders of three-fourths of the issued
     shares of that class, or with the sanction of a Special Resolution passed
     at a general meeting of the holders of the shares of that class.

     The provisions of these Articles relating to general meetings shall apply
     to every such general meeting of the holders of one class of shares except
     that the necessary quorum shall be one person holding or representing by
     proxy at least one-third of the issued shares of the class and that any
     holder of shares of the class present in person or by proxy may demand a
     poll.

25.  The rights conferred upon the holders of the shares of any class issued
     with preferred or other rights shall not, unless otherwise expressly
     provided by the terms of issue of the shares of that class, be deemed to be
     varied by the creation or issue of further shares ranking pari passu
     therewith.

                          COMMISSION ON SALE OF SHARES

26.  The Company may in so far as the Statute from time to time permits pay a
     commission to any person in consideration of his subscribing or agreeing to
     subscribe whether absolutely

                                       11



     or conditionally for any shares of the Company. Such commissions may be
     satisfied by the payment of cash or the lodgement of fully or partly
     paid-up shares or partly in one way and partly in the other. The Company
     may also on any issue of shares pay such brokerage as may be lawful.

                            NON-RECOGNITION OF TRUSTS

27.  No person shall be recognised by the Company as holding any share upon any
     trust and the Company shall not be bound by or be compelled in any way to
     recognise (even when having notice thereof) any equitable, contingent,
     future, or partial interest in any share, or any interest in any fractional
     part of a share, or (except only as is otherwise provided by these Articles
     or the Statute) any other rights in respect of any share except an absolute
     right to the entirety thereof in the registered holder.

                                 LIEN ON SHARES

28.  The Company shall have a first and paramount lien and charge on all shares
     (whether fully paid-up or not) registered in the name of a Member (whether
     solely or jointly with others) for all debts, liabilities or engagements to
     or with the Company (whether presently payable or not) by such Member or
     his estate, either alone or jointly with any other person, whether a Member
     or not, but the Directors may at any time declare any share to be wholly or
     in part exempt from the provisions of this Article. The registration of a
     transfer of any such share shall operate as a waiver of the Company's lien
     (if any) thereon. The Company's lien (if any) on a share shall extend to
     all dividends or other monies payable in respect thereof.

29.  The Company may sell, in such manner as the Directors think fit, any shares
     on which the Company has a lien, but no sale shall be made unless a sum in
     respect of which the lien exists is presently payable, nor until the
     expiration of fourteen days after a notice in writing stating and demanding
     payment of such part of the amount in respect of which the lien exists as
     is presently payable, has been given to the registered holder or holders
     for the time being of the share, or the person, of which the Company has
     notice, entitled thereto by reason of his death or bankruptcy.

30.  To give effect to any such sale the Directors may authorise some person to
     transfer the shares sold to the purchaser thereof. The purchaser shall be
     registered as the holder of the shares comprised in any such transfer, and
     he shall not be bound to see to the application of the purchase money, nor
     shall his title to the shares be affected by any irregularity or invalidity
     in the proceedings in reference to the sale.

31.  The proceeds of such sale shall be received by the Company and applied in
     payment of such part of the amount in respect of which the lien exists as
     is presently payable and the residue, if any, shall (subject to a like lien
     for sums not presently payable as existed upon the shares before the sale)
     be paid to the person entitled to the shares at the date of the sale.

                                 CALL ON SHARES

                                       12



32.  (a)     The Directors may from time to time make calls upon the Members in
             respect of any monies unpaid on their shares (whether on account
             of the nominal value of the shares or by way of premium or
             otherwise) and not by the conditions of allotment thereof made
             payable at fixed terms, provided that no call shall be payable at
             less than one month from the date fixed for the payment of the
             last preceding call, and each Member shall (subject to receiving
             at least fourteen days notice specifying the time or times of
             payment) pay to the Company at the time or times so specified the
             amount called on the shares. A call may be revoked or postponed as
             the Directors may determine. A call may be made payable by
             instalments.

     (b)     A call shall be deemed to have been made at the time when the
             resolution of the Directors authorising such call was passed.

     (c)     The joint holders of a share shall be jointly and severally liable
             to pay all calls in respect thereof.

33.  If a sum called in respect of a share is not paid before or on a day
     appointed for payment thereof, the persons from whom the sum is due shall
     pay interest on the sum from the day appointed for payment thereof to the
     time of actual payment at such rate not exceeding ten per cent per annum as
     the Directors may determine, but the Directors shall be at liberty to waive
     payment of such interest either wholly or in part.

34.  Any sum which by the terms of issue of a share becomes payable on allotment
     or at any fixed date, whether on account of the nominal value of the share
     or by way of premium or otherwise, shall for the purposes of these Articles
     be deemed to be a call duly made, notified and payable on the date on which
     by the terms of issue the same becomes payable, and in the case of
     non-payment all the relevant provisions of these Articles as to payment of
     interest forfeiture or otherwise shall apply as if such sum had become
     payable by virtue of a call duly made and notified.

35.  The Directors may, on the issue of shares, differentiate between the
     holders as to the amount of calls or interest to be paid and the times of
     payment.

36.  (a)     The Directors may, if they think fit, receive from any
             Member willing to advance the same, all or any part of the monies
             uncalled and unpaid upon any shares held by him, and upon all or
             any of the monies so advanced may (until the same would but for
             such advances, become payable) pay interest at such rate not
             exceeding (unless the Company in general meeting shall otherwise
             direct) seven per cent per annum, as may be agreed upon between the
             Directors and the Member paying such sum in advance.

     (b)     No such sum paid in advance of calls shall entitle the Member
             paying such sum to any portion of a dividend declared in respect of
             any period prior to the date upon which such sum would, but for
             such payment, become presently payable.

                              FORFEITURE OF SHARES

                                       13



37.  (a)     If a Member fails to pay any call or instalment of a call or to
             make any payment required by the terms of issue on the day
             appointed for payment thereof, the Directors may, at any time
             thereafter during such time as any part of the call, instalment or
             payment remains unpaid, give notice requiring payment of so much
             of the call, instalment or payment as is unpaid, together with any
             interest which may have accrued and all expenses that have been
             incurred by the Company by reason of such non-payment. Such notice
             shall name a day (not earlier than the expiration of fourteen days
             from the date of giving of the notice) on or before which the
             payment required by the notice is to be made, and shall state
             that, in the event of non-payment at or before the time appointed
             the shares in respect of which such notice was given will be
             liable to be forfeited.

     (b)     If the requirements of any such notice as aforesaid are not
             complied with, any share in respect of which the notice has been
             given may at any time thereafter, before the payment required by
             the notice has been made, be forfeited by a resolution of the
             Directors to that effect. Such forfeiture shall include all
             dividends declared in respect of the forfeited share and not
             actually paid before the forfeiture.

     (c)     A forfeited share may be sold or otherwise disposed of on such
             terms and in such manner as the Directors think fit and at any time
             before a sale or disposition the forfeiture may be cancelled on
             such terms as the Directors think fit.

38.  A person whose shares have been forfeited shall cease to be a Member in
     respect of the forfeited shares, but shall, notwithstanding, remain liable
     to pay to the Company all monies which, at the date of forfeiture were
     payable by him to the Company in respect of the shares together with
     interest thereon, but his liability shall cease if and when the Company
     shall have received payment in full of all monies whenever payable in
     respect of the shares.

39.  A certificate in writing under the hand of one Director or the Secretary of
     the Company that a share in the Company has been duly forfeited on a date
     stated in the declaration shall be conclusive evidence of the fact therein
     stated as against all persons claiming to be entitled to the share. The
     Company may receive the consideration given for the share on any sale or
     disposition thereof and may execute a transfer of the share in favour of
     the person to whom the share is sold or disposed of and he shall thereupon
     be registered as the holder of the share and shall not be bound to see to
     the application of the purchase money, if any, nor shall his title to the
     share be affected by any irregularity or invalidity in the proceedings in
     reference to the forfeiture, sale or disposal of the share.

40.  The provisions of these Articles as to forfeiture shall apply in the case
     of non-payment of any sum which, by the terms of issue of a share, becomes
     payable at a fixed time, whether on account of the nominal value of the
     share or by way of premium as if the same had been payable by virtue of a
     call duly made and notified.

                     REGISTRATION OF EMPOWERING INSTRUMENTS

                                       14



41.  The Company shall be entitled to charge a fee not exceeding one dollar
     (US$l.00) on the registration of every probate, letters of administration,
     certificate of death or marriage, power of attorney, notice in lieu of
     distringas, or other instrument.

                             TRANSMISSION OF SHARES

42.  In case of the death of a Member, the survivor or survivors where the
     deceased was a joint holder, and the legal personal representatives of the
     deceased where he was a sole holder, shall be the only persons recognised
     by the Company as having any title to his interest in the shares, but
     nothing herein contained shall release the estate of any such deceased
     holder from any liability in respect of any shares which had been held by
     him solely or jointly with other persons.

43.  (a)     Any person becoming entitled to a share in consequence of the death
             or bankruptcy or liquidation or dissolution of a Member (or in any
             other way than by transfer) may, upon such evidence being produced
             as may from time to time be required by the Directors and subject
             as hereinafter provided, elect either to be registered himself as
             holder of the share or to make such transfer of the share to such
             other person nominated by him as the deceased or bankrupt person
             could have made and to have such person registered as the
             transferee thereof, but the Directors shall, in either case, have
             the same right to decline or suspend registration as they would
             have had in the case of a transfer of the share by that Member
             before his death or bankruptcy as the case may be.

     (b)     If the person so becoming entitled shall elect to be registered
             himself as holder he shall deliver or send to the Company a notice
             in writing signed by him stating that he so elects.

44.  A person becoming entitled to a share by reason of the death or bankruptcy
     or liquidation or dissolution of the holder (or in any other case than by
     transfer) shall be entitled to the same dividends and other advantages to
     which he would be entitled if he were the registered holder of the share,
     except that he shall not, before being registered as a Member in respect of
     the share, be entitled in respect of it to exercise any right conferred by
     membership in relation to meetings of the Company PROVIDED HOWEVER that the
     Directors may at any time give notice requiring any such person to elect
     either to be registered himself or to transfer the share and if the notice
     is not complied with within ninety days the Directors may thereafter
     withhold payment of all dividends, bonuses or other monies payable in
     respect of the share until the requirements of the notice have been
     complied with.

                     AMENDMENT OF MEMORANDUM OF ASSOCIATION,
                  CHANGE OF LOCATION OF REGISTERED OFFICE, AND
                              ALTERATION OF CAPITAL

45.  (a)     Subject to and in so far as permitted by the provisions of
             the Statute, the Company may from time to time by ordinary
             resolution alter or amend its Memorandum of Association otherwise
             than with respect to its name and objects and may, without

                                       15



             restricting the generality of the foregoing:

             (i)   increase the share capital by such sum to be divided into
                   shares of such amount or without nominal or par value as the
                   resolution shall prescribe and with such rights, priorities
                   and privileges annexed thereto, as the Company in general
                   meeting may determine;

             (ii)  consolidate and divide all or any of its share capital into
                   shares of larger amount than its existing shares;

             (iii) by subdivision of its existing shares or any of them divide
                   the whole or any part of its share capital into shares of
                   smaller amount than is fixed by the Memorandum of Association
                   or into shares without nominal or par value; or

             (iv)  cancel any shares which at the date of the passing of the
                   resolution have not been taken or agreed to be taken by any
                   person.

     (b)     All new shares created hereunder shall be subject to the same
             provisions with reference to the payment of calls, liens, transfer,
             transmission, forfeiture and otherwise as the shares in the
             original share capital.

     (c)     Subject to the provisions of the Statute, the Company may by
             Special Resolution change its name or alter its objects.

     (d)     Without prejudice to Article 23 hereof and subject to the
             provisions of the Statute, the Company may by Special Resolution
             reduce its share capital and any capital redemption reserve fund.

     (e)     Subject to the provisions of the Statute, the Company may by
             resolution of the Directors change the location of its registered
             office.

                CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE

46.  For the purpose of determining Members entitled to notice of or to vote at
     any meeting of Members or any adjournment thereof, or Members entitled to
     receive payment of any dividend, or in order to make a determination of
     Members for any other proper purpose, the Directors of the Company may
     provide that the register of Members shall be closed for transfers for a
     stated period but not to exceed in any case forty days. If the register of
     Members shall be so closed for the purpose of determining Members entitled
     to notice of or to vote at a meeting of Members such register shall be so
     closed for at least ten days immediately preceding such meeting and the
     record date for such determination shall be the date of the closure of the
     register of Members.

47.  In lieu of or apart from closing the register of Members, the Directors may
     fix in advance a date as the record date for any such determination of
     Members entitled to notice of or to vote at a meeting of the Members and
     for the purpose of determining the Members entitled

                                       16



     to receive payment of any dividend the Directors may, at or within 90 days
     prior to the date of declaration of such dividend fix a subsequent date as
     the record date for such determination.

48.  If the register of Members is not so closed and no record date is fixed for
     the determination of Members entitled to notice of or to vote at a meeting
     of Members or Members entitled to receive payment of a dividend, the date
     on which notice of the meeting is mailed or the date on which the
     resolution of the Directors declaring such dividend is adopted, as the case
     may be, shall be the record date for such determination of Members. When a
     determination of Members entitled to vote at any meeting of Members has
     been made as provided in this section, such determination shall apply to
     any adjournment thereof.

                                 GENERAL MEETING

49.  (a)     Subject to paragraph (c) hereof, the Company shall within one year
             of its incorporation and in each year of its existence thereafter
             hold a general meeting as its annual general meeting and shall
             specify the meeting as such in the notices calling it. The annual
             general meeting shall be held at such time and place as the
             Directors shall appoint and if no other time and place is
             prescribed by them, it shall be held at the registered office on
             the second Wednesday in December of each year at ten o'clock in the
             morning.

     (b)     At these meetings the report of the Directors (if any) shall be
             presented.

     (c)     If the Company is exempted as defined in the Statute it may but
             shall not be obliged to hold an annual general meeting.

50.  (a)     The Directors may whenever they think fit, and they shall
             on the requisition of Members of the Company holding at the date of
             the deposit of the requisition not less than one-tenth of such of
             the paid-up capital of the Company as at the date of the deposit
             carries the right of voting at general meetings of the Company,
             proceed to convene a general meeting of the Company.

     (b)     The requisition must state the objects of the meeting and must be
             signed by the requisitionists and deposited at the registered
             office of the Company and may consist of several documents in like
             form each signed by one or more requisitionists.

     (c)     If the Directors do not within twenty-one days from the date of the
             deposit of the requisition duly proceed to convene a general
             meeting, the requisitionists, or any of them representing more than
             one-half of the total voting rights of all of them, may themselves
             convene a general meeting, but any meeting so convened shall not be
             held after the expiration of three months after the expiration of
             the said twenty-one days.

     (d)     A general meeting convened as aforesaid by requisitionists shall be
             convened in the same manner as nearly as possible as that in which
             general meetings are to be

                                       17



             convened by Directors.

                           NOTICE OF GENERAL MEETINGS

51.  At least five days' notice shall be given of an annual general meeting or
     any other general meeting. Every notice shall be exclusive of the day on
     which it is given or deemed to be given and of the day for which it is
     given and shall specify the place, the day and the hour of the meeting and
     the general nature of the business and shall be given in manner hereinafter
     mentioned or in such other manner if any as may be prescribed by the
     Company PROVIDED that a general meeting of the Company shall, whether or
     not the notice specified in this regulation has been given and whether or
     not the provisions of Article 50 have been complied with, be deemed to have
     been duly convened if it is so agreed:

     (a)     in the case of a general meeting called as an annual general
             meeting by all the Members entitled to attend and vote thereat or
             their proxies; and

     (b)     in the case of any other general meeting by a majority in number of
             the Members having a right to attend and vote at the meeting, being
             a majority together holding not less than seventy-five per cent in
             nominal value or in the case of shares without nominal or par value
             seventy-five per cent of the shares in issue, or their proxies.

52.  The accidental omission to give notice of a general meeting to, or the
     non-receipt of notice of a meeting by any person entitled to receive notice
     shall not invalidate the proceedings of that meeting.

                         PROCEEDINGS AT GENERAL MEETINGS

53.  No business shall be transacted at any general meeting unless a quorum of
     Members is present at the time when the meeting proceeds to business; two
     Members present in person or by proxy shall be a quorum provided always
     that if the Company has one Member of record the quorum shall be that one
     Member present in person or by proxy.

54.  A resolution (including a Special Resolution) in writing (in one or more
     counterparts) signed by all Members for the time being entitled to receive
     notice of and to attend and vote at general meetings (or being corporations
     by their duly authorised representatives) shall be as valid and effective
     as if the same had been passed at a general meeting of the Company duly
     convened and held.

55.  If within half an hour from the time appointed for the meeting a quorum is
     not present, the meeting, if convened upon the requisition of Members,
     shall be dissolved and in any other case it shall stand adjourned to the
     same day in the next week at the same time and place or to such other time
     or such other place as the Directors may determine and if at the adjourned
     meeting a quorum is not present within half an hour from the time appointed
     for the meeting the Members present shall be a quorum.

                                       18



56.  The Chairman, if any, of the Board of Directors shall preside as Chairman
     at every general meeting of the Company, or if there is no such Chairman,
     or if he shall not be present within fifteen minutes after the time
     appointed for the holding of the meeting, or is unwilling to act, the
     Directors present shall elect one of their number to be Chairman of the
     meeting.

57.  If at any general meeting no Director is willing to act as Chairman or if
     no Director is present within fifteen minutes after the time appointed for
     holding the meeting, the Members present shall choose one of their number
     to be Chairman of the meeting.

58.  The Chairman may, with the consent of any general meeting duly constituted
     hereunder, and shall if so directed by the meeting, adjourn the meeting
     from time to time and from place to place, but no business shall be
     transacted at any adjourned meeting other than the business left unfinished
     at the meeting from which the adjournment took place. When a general
     meeting is adjourned for thirty days or more, notice of the adjourned
     meeting shall be given as in the case of an original meeting; save as
     aforesaid it shall not be necessary to give any notice of an adjournment or
     of the business to be transacted at an adjourned general meeting.

59.  At any general meeting a resolution put to the vote of the meeting shall be
     decided on a poll.

60.  Unless a poll be so demanded a declaration by the Chairman that a
     resolution has on a show of hands been carried, or carried unanimously, or
     by a particular majority, or lost, and an entry to that effect in the
     Company's Minute Book containing the Minutes of the proceedings of the
     meeting shall be conclusive evidence of that fact without proof of the
     number or proportion of the votes recorded in favour of or against such
     resolution.

61.  The demand for a poll may be withdrawn.

62.  Except as provided in Article 64, if a poll is duly demanded it shall be
     taken in such manner as the Chairman directs and the result of the poll
     shall be deemed to be the resolution of the general meeting at which the
     poll was demanded.

63.  In the case of an equality of votes, whether on a show of hands or on a
     poll, the Chairman of the general meeting at which the show of hands takes
     place or at which the poll is demanded, shall be entitled to a second or
     casting vote.

64.  A poll demanded on the election of a Chairman or on a question of
     adjournment shall be taken forthwith. A poll demanded on any other question
     shall be taken at such time as the Chairman of the general meeting directs
     and any business other than that upon which a poll has been demanded or is
     contingent thereon may be proceeded with pending the taking of the poll.

                                VOTES OF MEMBERS

65.  Subject to any rights or restrictions for the time being attached to any
     class or classes of

                                       19



     shares, every Member of record present in person or by proxy shall have one
     vote for each share registered in his name in the register of Members.

66.  In the case of joint holders of record the vote of the senior who tenders a
     vote, whether in person or by proxy, shall be accepted to the exclusion of
     the votes of the other joint holders, and for this purpose seniority shall
     be determined by the order in which the names stand in the register of
     Members.

67.  A Member of unsound mind, or in respect of whom an order has been made by
     any court, having jurisdiction in lunacy, may vote, whether on a show of
     hands or on a poll, by his committee, receiver, curator bonis, or other
     person in the nature of a committee, receiver or curator bonis appointed by
     that court, and any such committee, receiver, curator bonis or other
     persons may vote by proxy.

68.  No Member shall be entitled to vote at any general meeting unless he is
     registered as a shareholder of the Company on the record date for such
     meeting nor unless all calls or other sums presently payable by him in
     respect of shares in the Company have been paid.

69.  No objection shall be raised to the qualification of any voter except at
     the general meeting or adjourned general meeting at which the vote objected
     to is given or tendered and every vote not disallowed at such general
     meeting shall be valid for all purposes. Any such objection made in due
     time shall be referred to the Chairman of the general meeting whose
     decision shall be final and conclusive.

70.  On a poll votes may be given either personally or by proxy.

                                     PROXIES

71.  The instrument appointing a proxy shall be in writing and shall be executed
     under the hand of the appointor or of his attorney duly authorised in
     writing, or, if the appointor is a corporation under the hand of an officer
     or attorney duly authorised in that behalf. A proxy need not be a Member of
     the Company.

72.  The instrument appointing a proxy shall be deposited at the registered
     office of the Company or at such other place as is specified for that
     purpose in the notice convening the meeting no later than the time for
     holding the meeting, or adjourned meeting provided that the Chairman of the
     Meeting may at his discretion direct that an instrument of proxy shall be
     deemed to have been duly deposited upon receipt of telex, cable or telecopy
     confirmation from the appointor that the instrument of proxy duly signed is
     in the course of transmission to the Company.

73.  The instrument appointing a proxy may be in any usual or common form and
     may be expressed to be for a particular meeting or any adjournment thereof
     or generally until revoked. An instrument appointing a proxy shall be
     deemed to include the power to demand or join or concur in demanding a
     poll.

                                       20



74.  A vote given in accordance with the terms of an instrument of proxy shall
     be valid notwithstanding the previous death or insanity of the principal or
     revocation of the proxy or of the authority under which the proxy was
     executed, or the transfer of the share in respect of which the proxy is
     given provided that no intimation in writing of such death, insanity,
     revocation or transfer as aforesaid shall have been received by the Company
     at the registered office before the commencement of the general meeting, or
     adjourned meeting at which it is sought to use the proxy.

75.  Any corporation which is a Member of record of the Company may in
     accordance with its Articles or in the absence of such provision by
     resolution of its Directors or other governing body authorise such person
     as it thinks fit to act as its representative at any meeting of the Company
     or of any class of Members of the Company, and the person so authorised
     shall be entitled to exercise the same powers on behalf of the corporation
     which he represents as the corporation could exercise if it were an
     individual Member of record of the Company.

76.  Shares of its own capital belonging to the Company or held by it in a
     fiduciary capacity shall not be voted, directly or indirectly, at any
     meeting and shall not be counted in determining the total number of
     outstanding shares at any given time.

                                   DIRECTORS

77.  There shall be a Board of Directors consisting of not less than one or more
     than ten persons (exclusive of alternate Directors) PROVIDED HOWEVER that
     the Company may from time to time by ordinary resolution increase or reduce
     the limits in the number of Directors. The first Directors of the Company
     shall be determined in writing by, or appointed by a resolution of, the
     subscribers of the Memorandum of Association or a majority of them.

78.  The remuneration to be paid to the Directors shall be such remuneration as
     the Directors shall determine. Such remuneration shall be deemed to accrue
     from day to day. The Directors shall also be entitled to be paid their
     travelling, hotel and other expenses properly incurred by them in going to,
     attending and returning from meetings of the Directors, or any committee of
     the Directors, or general meetings of the Company, or otherwise in
     connection with the business of the Company, or to receive a fixed
     allowance in respect thereof as may be determined by the Directors from
     time to time, or a combination partly of one such method and partly the
     other.

79.  The Directors may by resolution award special remuneration to any Director
     of the Company undertaking any special work or services for, or undertaking
     any special mission on behalf of, the Company other than his ordinary
     routine work as a Director. Any fees paid to a Director who is also counsel
     or solicitor to the Company, or otherwise serves it in a professional
     capacity shall be in addition to his remuneration as a Director.

80.  A Director or alternate Director may hold any other office or place of
     profit under the Company (other than the office of Auditor) in conjunction
     with his office of Director for such period and on such terms as to
     remuneration and otherwise as the Directors may determine.

                                       21



81.  A Director or alternate Director may act by himself or his firm in a
     professional capacity for the Company and he or his firm shall be entitled
     to remuneration for professional services as if he were not a Director or
     alternate Director.

82.  A shareholding qualification for Directors may be fixed by the Company in
     general meeting, but unless and until so fixed no qualification shall be
     required.

83.  A Director or alternate Director of the Company may be or become a director
     or other officer of or otherwise interested in any company promoted by the
     Company or in which the Company may be interested as shareholder or
     otherwise and no such Director or alternate Director shall be accountable
     to the Company for any remuneration or other benefits received by him as a
     director or officer of, or from his interest in, such other company.

84.  No person shall be disqualified from the office of Director or alternate
     Director or prevented by such office from contracting with the Company,
     either as vendor, purchaser or otherwise, nor shall any such contract or
     any contract or transaction entered into by or on behalf of the Company in
     which any Director or alternate Director shall be in any way interested be
     or be liable to be avoided, nor shall any Director or alternate Director so
     contracting or being so interested be liable to account to the Company for
     any profit realised by any such contract or transaction by reason of such
     Director holding office or of the fiduciary relation thereby established. A
     Director (or his alternate Director in his absence) shall be at liberty to
     vote in respect of any contract or transaction in which he is so interested
     as aforesaid PROVIDED HOWEVER that the nature of the interest of any
     Director or alternate Director in any such contract or transaction shall be
     disclosed by him or the alternate Director appointed by him at or prior to
     its consideration and any vote thereon.

85.  A general notice that a Director or alternate Director is a shareholder of
     any specified firm or company and is to be regarded as interested in any
     transaction with such firm or company shall be sufficient disclosure under
     Article 84 and after such general notice it shall not be necessary to give
     special notice relating to any particular transaction.

                               ALTERNATE DIRECTORS

86.  Subject to the exception contained in Article 94, a Director who expects to
     be unable to attend Directors' Meetings because of absence, illness or
     otherwise may appoint any person to be an alternate Director to act in his
     stead and such appointee whilst he holds office as an alternate Director
     shall, in the event of absence therefrom of his appointor, be entitled to
     attend meetings of the Directors and to vote thereat and to do, in the
     place and stead of his appointor, any other act or thing which his
     appointor is permitted or required to do by virtue of his being a Director
     as if the alternate Director were the appointor, other than appointment of
     an alternate to himself, and he shall ipso facto vacate office if and when
     his appointor ceases to be a Director or removes the appointee from office.
     Any appointment or removal under this Article shall be effected by notice
     in writing under the hand of the Director making the same.

                                       22



                         POWERS AND DUTIES OF DIRECTORS

87.  The business of the Company shall be managed by the Directors (or a sole
     Director if only one is appointed) who may pay all expenses incurred in
     promoting, registering and setting up the Company, and may exercise all
     such powers of the Company as are not, from time to time by the Statute, or
     by these Articles, or such regulations, being not inconsistent with the
     aforesaid, as may be prescribed by the Company in general meeting required
     to be exercised by the Company in general meeting PROVIDED HOWEVER that no
     regulations made by the Company in general meeting shall invalidate any
     prior act of the Directors which would have been valid if that regulation
     had not been made.

88.  The Directors may from time to time and at any time by powers of attorney
     appoint any company, firm, person or body of persons, whether nominated
     directly or indirectly by the Directors, to be the attorney or attorneys of
     the Company for such purpose and with such powers, authorities and
     discretions (not exceeding those vested in or exercisable by the Directors
     under these Articles) and for such period and subject to such conditions as
     they may think fit, and any such powers of attorney may contain such
     provisions for the protection and convenience of persons dealing with any
     such attorneys as the Directors may think fit and may also authorise any
     such attorney to delegate all or any of the powers, authorities and
     discretions vested in him.

89.  All cheques, promissory notes, drafts, bills of exchange and other
     negotiable instruments and all receipts for monies paid to the Company
     shall be signed, drawn, accepted, endorsed or otherwise executed as the
     case may be in such manner as the Directors shall from time to time by
     resolution determine.

90.  The Directors shall cause minutes to be made in books provided for the
     purpose:

     (a)  of all appointments of officers made by the Directors;

     (b)  of the names of the Directors (including those represented thereat by
          an alternate or by proxy) present at each meeting of the Directors and
          of any committee of the Directors;

     (c)  of all resolutions and proceedings at all meetings of the Company and
          of the Directors and of committees of Directors.

91.  The Directors on behalf of the Company may pay a gratuity or pension or
     allowance on retirement to any Director who has held any other salaried
     office or place of profit with the Company or to his widow or dependants
     and may make contributions to any fund and pay premiums for the purchase or
     provision of any such gratuity, pension or allowance.

92.  The Directors may exercise all the powers of the Company to borrow money
     and to mortgage or charge its undertaking, property and uncalled capital or
     any part thereof and to issue debentures, debenture stock and other
     securities whether outright or as security for any debt, liability or
     obligation of the Company or of any third party.

                                       23



                                   MANAGEMENT

93.  (a)     The Directors may from time to time provide for the management of
             the affairs of the Company in such manner as they shall think fit
             and the provisions contained in the three next following paragraphs
             shall be without prejudice to the general powers conferred by this
             paragraph.

     (b)     The Directors from time to time and at any time may establish any
             committees, local boards or agencies for managing any of the
             affairs of the Company and may appoint any persons to be members of
             such committees or local boards or any managers or agents and may
             fix their remuneration.

     (c)     The Directors from time to time and at any time may delegate to any
             such committee, local board, manager or agent any of the powers,
             authorities and discretions for the time being vested in the
             Directors and may authorise the members for the time being of any
             such local board, or any of them to fill up any vacancies therein
             and to act notwithstanding vacancies and any such appointment or
             delegation may be made on such terms and subject to such conditions
             as the Directors may think fit and the Directors may at any time
             remove any person so appointed and may annul or vary any such
             delegation, but no person dealing in good faith and without notice
             of any such annulment or variation shall be affected thereby.

     (d)     Any such delegates as aforesaid may be authorised by the Directors
             to subdelegate all or any of the powers, authorities, and
             discretions for the time being vested in them.

                               MANAGING DIRECTORS

94.  The Directors may, from time to time, appoint one or more of their body
     (but not an alternate Director) to the office of Managing Director for such
     term and at such remuneration (whether by way of salary, or commission, or
     participation in profits, or partly in one way and partly in another) as
     they may think fit but his appointment shall be subject to determination
     ipso facto if he ceases from any cause to be a Director and no alternate
     Director appointed by him can act in his stead as a Director or Managing
     Director.

95.  The Directors may entrust to and confer upon a Managing Director any of the
     powers exercisable by them upon such terms and conditions and with such
     restrictions as they may think fit and either collaterally with or to the
     exclusion of their own powers and may from time to time revoke, withdraw,
     alter or vary all or any of such powers.

                            PROCEEDINGS OF DIRECTORS

96.  Except as otherwise provided by these Articles, the Directors shall meet
     together for the despatch of business, convening, adjourning and otherwise
     regulating their meetings as they

                                       24



     think fit. Questions arising at any meeting shall be decided by a majority
     of votes of the Directors and alternate Directors present at a meeting at
     which there is a quorum, the vote of an alternate Director not being
     counted if his appointor be present at such meeting. In case of an equality
     of votes, the Chairman shall have a second or casting vote.

97.  A Director or alternate Director may, and the Secretary on the requisition
     of a Director or alternate Director shall, at any time summon a meeting of
     the Directors by at least two days' notice in writing to every Director and
     alternate Director which notice shall set forth the general nature of the
     business to be considered unless notice is waived by all the Directors (or
     their alternates) either at, before or after the meeting is held and
     PROVIDED FURTHER if notice is given in person, by cable, telex or telecopy
     the same shall be deemed to have been given on the day it is delivered to
     the Directors or transmitting organisation as the case may be. The
     provisions of Article 52 shall apply mutatis mutandis with respect to
     notices of meetings of Directors.

98.  The quorum necessary for the transaction of the business of the Directors
     may be fixed by the Directors and unless so fixed shall be two, a Director
     and his appointed alternate Director being considered only one person for
     this purpose, PROVIDED ALWAYS that if there shall at any time be only a
     sole Director the quorum shall be one. For the purposes of this Article an
     alternate Director or proxy appointed by a Director shall be counted in a
     quorum at a meeting at which the Director appointing him is not present.

99.  The continuing Directors may act notwithstanding any vacancy in their body,
     but if and so long as their number is reduced below the number fixed by or
     pursuant to these Articles as the necessary quorum of Directors the
     continuing Directors or Director may act for the purpose of increasing the
     number of Directors to that number, or of summoning a general meeting of
     the Company, but for no other purpose.

100. The Directors may elect a Chairman of their Board and determine the period
     for which he is to hold office; but if no such Chairman is elected, or if
     at any meeting the Chairman is not present within five minutes after the
     time appointed for holding the same, the Directors present may choose one
     of their number to be Chairman of the meeting.

101. The Directors may delegate any of their powers to committees consisting of
     such member or members of the Board of Directors (including Alternate
     Directors in the absence of their appointors) as they think fit; any
     committee so formed shall in the exercise of the powers so delegated
     conform to any regulations that may be imposed on it by the Directors.

102. A committee may meet and adjourn as it thinks proper. Questions arising at
     any meeting shall be determined by a majority of votes of the members
     present, and in the case of an equality of votes the Chairman shall have a
     second or casting vote.

103. All acts done by any meeting of the Directors or of a committee of
     Directors (including any person acting as an alternate Director) shall,
     notwithstanding that it be afterwards discovered that there was some defect
     in the appointment of any Director or alternate Director, or that they or
     any of them were disqualified, be as valid as if every such person

                                       25



     had been duly appointed and qualified to be a Director or alternate
     Director as the case may be.

104. Members of the Board of Directors or of any committee thereof may
     participate in a meeting of the Board or of such committee by means of
     conference telephone or similar communications equipment by means of which
     all persons participating in the meeting can hear each other and
     participation in a meeting pursuant to this provision shall constitute
     presence in person at such meeting. A resolution in writing (in one or more
     counterparts), signed by all the Directors for the time being or all the
     members of a committee of Directors (an alternate Director being entitled
     to sign such resolution on behalf of his appointor) shall be as valid and
     effectual as if it had been passed at a meeting of the Directors or
     committee as the case may be duly convened and held.

105. (a)     A Director may be represented at any meetings of the Board of
             Directors by a proxy appointed by him in which event the presence
             or vote of the proxy shall for all purposes be deemed to be that of
             the Director.

     (b)     The provisions of Articles 71-74 shall mutatis mutandis apply to
             the appointment of proxies by Directors.

                         VACATION OF OFFICE OF DIRECTOR

106. The office of a Director shall be vacated:

     (a)     if he gives notice in writing to the Company that he resigns the
             office of Director;

     (b)     if he absents himself (without being represented by proxy or an
             alternate Director appointed by him) from three consecutive
             meetings of the Board of Directors without special leave of absence
             from the Directors, and they pass a resolution that he has by
             reason of such absence vacated office;

     (c)     if he dies, becomes bankrupt or makes any arrangement or
             composition with his creditors generally;

     (d)     if he is found a lunatic or becomes of unsound mind.

                      APPOINTMENT AND REMOVAL OF DIRECTORS

107. The Company may by ordinary resolution appoint any person to be a Director
     and may in like manner remove any Director and may in like manner appoint
     another person in his stead.

108. The Directors shall have power at any time and from time to time to appoint
     any person to be a Director, either to fill a casual vacancy or as an
     addition to the existing Directors but so that the total amount of
     Directors (exclusive of alternate Directors) shall not at any time exceed
     the number fixed in accordance with these Articles.

                                       26



                              PRESUMPTION OF ASSENT

109. A Director of the Company who is present at a meeting of the Board of
     Directors at which action on any Company matter is taken shall be presumed
     to have assented to the action taken unless his dissent shall be entered in
     the Minutes of the meeting or unless he shall file his written dissent from
     such action with the person acting as the Secretary of the meeting before
     the adjournment thereof or shall forward such dissent by registered mail to
     such person immediately after the adjournment of the meeting. Such right to
     dissent shall not apply to a Director who voted in favour of such action.

                                      SEAL

110. (a)     The Company may, if the Directors so determine, have a
             Seal which shall, subject to paragraph (c) hereof, only be used by
             the authority of the Directors or of a committee of the Directors
             authorised by the Directors in that behalf and every instrument to
             which the Seal has been affixed shall be signed by one person who
             shall be either a Director or the Secretary or Secretary-Treasurer
             or some person appointed by the Directors for the purpose.

     (b)     The Company may have for use in any place or places outside the
             Cayman Islands a duplicate Seal or Seals each of which shall be a
             facsimile of the Common Seal of the Company and, if the Directors
             so determine, with the addition on its face of the name of every
             place where it is to be used.

     (c)     A Director, Secretary or other officer or representative or
             attorney may without further authority of the Directors affix the
             Seal of the Company over his signature alone to any document of the
             Company required to be authenticated by him under Seal or to be
             filed with the Registrar of Companies in the Cayman Islands or
             elsewhere wheresoever.

                                    OFFICERS

111. The Company may have a President, a Secretary or Secretary-Treasurer
     appointed by the Directors who may also from time to time appoint such
     other officers as they consider necessary, all for such terms, at such
     remuneration and to perform such duties, and subject to such provisions as
     to disqualification and removal as the Directors from time to time
     prescribe.

                      DIVIDENDS, DISTRIBUTIONS AND RESERVE

112. Subject to the Statute, the Directors may from time to time declare
     dividends (including interim dividends) and distributions on shares of the
     Company outstanding and authorise payment of the same out of the funds of
     the Company lawfully available therefor.

113. The Directors may, before declaring any dividends or distributions, set
     aside such sums as

                                       27




     they think proper as a reserve or reserves which shall at the discretion of
     the Directors, be applicable for any purpose of the Company and pending
     such application may, at the like discretion, be employed in the business
     of the Company.

114. No dividend or distribution shall be payable except out of the profits of
     the Company, realised or unrealised, or out of the share premium account or
     as otherwise permitted by the Statute.

115. Subject to the rights of persons, if any, entitled to shares with special
     rights as to dividends or distributions, if dividends or distributions are
     to be declared on a class of shares they shall be declared and paid
     according to the amounts paid or credited as paid on the shares of such
     class outstanding on the record date for such dividend or distribution as
     determined in accordance with these Articles but no amount paid or credited
     as paid on a share in advance of calls shall be treated for the purpose of
     this Article as paid on the share.

116. The Directors may deduct from any dividend or distribution payable to any
     Member all sums of money (if any) presently payable by him to the Company
     on account of calls or otherwise.

117. The Directors may declare that any dividend or distribution be paid wholly
     or partly by the distribution of specific assets and in particular of paid
     up shares, debentures, or debenture stock of any other company or in any
     one or more of such ways and where any difficulty arises in regard to such
     distribution, the Directors may settle the same as they think expedient and
     in particular may issue fractional certificates and fix the value for
     distribution of such specific assets or any part thereof and may determine
     that cash payments shall be made to any Members upon the footing of the
     value so fixed in order to adjust the rights of all Members and may vest
     any such specific assets in trustees as may seem expedient to the
     Directors.

118. Any dividend, distribution, interest or other monies payable in cash in
     respect of shares may be paid by cheque or warrant sent through the post
     directed to the registered address of the holder or, in the case of joint
     holders, to the holder who is first named on the register of Members or to
     such person and to such address as such holder or joint holders may in
     writing direct. Every such cheque or warrant shall be made payable to the
     order of the person to whom it is sent. Any one of two or more joint
     holders may give effectual receipts for any dividends, bonuses, or other
     monies payable in respect of the share held by them as joint holders.

119. No dividend or distribution shall bear interest against the Company.

                                 CAPITALISATION

120. The Company may upon the recommendation of the Directors by ordinary
     resolution authorise the Directors to capitalise any sum standing to the
     credit of any of the Company's reserve accounts (including share premium
     account and capital redemption reserve fund) or any sum standing to the
     credit of profit and loss account or otherwise available for

                                       28



     distribution and to appropriate such sum to Members in the proportions in
     which such sum would have been divisible amongst them had the same been a
     distribution of profits by way of dividend and to apply such sum on their
     behalf in paying up in full unissued shares for allotment and distribution
     credited as fully paid up to and amongst them in the proportion aforesaid.
     In such event the Directors shall do all acts and things required to give
     effect to such capitalisation, with full power to the Directors to make
     such provisions as they think fit for the case of shares becoming
     distributable in fractions (including provisions whereby the benefit of
     fractional entitlements accrue to the Company rather than to the Members
     concerned). The Directors may authorise any person to enter on behalf of
     all of the Members interested into an agreement with the Company providing
     for such capitalisation and matters incidental thereto and any agreement
     made under such authority shall be effective and binding on all concerned.

                                BOOKS OF ACCOUNT

121. The Directors shall cause proper books of account to be kept with respect
     to:

     (a)     all sums of money received and expended by the Company and the
             matters in respect of which the receipt or expenditure takes place;

     (b)     all sales and purchases of goods by the Company;

     (c)     the assets and liabilities of the Company.

     Proper books shall not be deemed to be kept if there are not kept such
     books of account as are necessary to give a true and fair view of the state
     of the Company's affairs and to explain its transactions.

122. The Directors shall from time to time determine whether and to what extent
     and at what times and places and under what conditions or regulations the
     accounts and books of the Company or any of them shall be open to the
     inspection of Members not being Directors and no Member (not being a
     Director) shall have any right of inspecting any account or book or
     document of the Company except as conferred by Statute or authorised by the
     Directors or by the Company in general meeting.

123. The Directors may from time to time cause to be prepared and to be laid
     before the Company in general meeting profit and loss accounts, balance
     sheets, group accounts (if any) and such other reports and accounts as may
     be required by law.

                                      AUDIT

124. The Company may at any annual general meeting appoint an Auditor or
     Auditors of the Company who shall hold office until the next annual general
     meeting and may fix his or their remuneration.

125. The Directors may before the first annual general meeting appoint an
     Auditor or Auditors of

                                       29



     the Company who shall hold office until the first annual general meeting
     unless previously removed by an ordinary resolution of the Members in
     general meeting in which case the Members at that meeting may appoint
     Auditors. The Directors may fill any casual vacancy in the office of
     Auditor but while any such vacancy continues the surviving or continuing
     Auditor or Auditors, if any, may act. The remuneration of any Auditor
     appointed by the Directors under this Article may be fixed by the
     Directors.

126. Every Auditor of the Company shall have a right of access at all times to
     the books and accounts and vouchers of the Company and shall be entitled to
     require from the Directors and Officers of the Company such information and
     explanation as may be necessary for the performance of the duties of the
     auditors.

127. Auditors shall at the next annual general meeting following their
     appointment and at any other time during their term of office, upon request
     of the Directors or any general meeting of the Members, make a report on
     the accounts of the Company in general meeting during their tenure of
     office.

                                     NOTICES

128. Notices shall be in writing and may be given by the Company to any Member
     either personally or by sending it by post, cable, telex or telecopy to him
     or to his address as shown in the register of Members, such notice, if
     mailed, to be forwarded airmail if the address be outside the Cayman
     Islands.

129. (a)     Where a notice is sent by post, service of the notice shall be
             deemed to be effected by properly addressing, pre-paying and
             posting a letter containing the notice, and to have been effected
             at the expiration of sixty hours after the letter containing the
             same is posted as aforesaid.

     (b)     Where a notice is sent by cable, telex, or telecopy, service of the
             notice shall be deemed to be effected by properly addressing, and
             sending such notice through a transmitting organisation and to have
             been effected on the day the same is sent as aforesaid.

130. A notice may be given by the Company to the joint holders of record of a
     share by giving the notice to the joint holder first named on the register
     of Members in respect of the share.

131. A notice may be given by the Company to the person or persons which the
     Company has been advised are entitled to a share or shares in consequence
     of the death or bankruptcy of a Member by sending it through the post as
     aforesaid in a pre-paid letter addressed to them by name, or by the title
     of representatives of the deceased, or trustee of the bankrupt, or by any
     like description at the address supplied for that purpose by the persons
     claiming to be so entitled, or at the option of the Company by giving the
     notice in any manner in which the same might have been given if the death
     or bankruptcy had not occurred.

132. Notice of every general meeting shall be given in any manner hereinbefore
     authorised to:

                                       30



     (a)     every person shown as a Member in the register of Members as of the
             record date for such meeting except that in the case of joint
             holders the notice shall be sufficient if given to the joint holder
             first named in the register of Members.

     (b)     every person upon whom the ownership of a share devolves by reason
             of his being a legal personal representative or a trustee in
             bankruptcy of a Member of record where the Member of record but for
             his death or bankruptcy would be entitled to receive notice of the
             meeting; and

     No other person shall be entitled to receive notices of general meetings.

                                   WINDING UP

133. Subject to the provisions of Articles 6 and 12, if the Company shall be
     wound up the liquidator may, with the sanction of a Special Resolution of
     the Company and any other sanction required by the Statute, divide amongst
     the Members in specie or kind the whole or any part of the assets of the
     Company (whether they shall consist of property of the same kind or not)
     and may for such purpose set such value as he deems fair upon any property
     to be divided as aforesaid and may determine how such division shall be
     carried out as between the Members or different classes of Members. The
     liquidator may with the like sanction, vest the whole or any part of such
     assets in trustees upon such trusts for the benefit of the contributories
     as the liquidator, with the like sanction, shall think fit, but so that no
     Member shall be compelled to accept any shares or other securities whereon
     there is any liability.

134. Subject to the provisions of Articles 6 and 12, if the Company shall be
     wound up, and the assets available for distribution amongst the Members as
     such shall be insufficient to repay the whole of the paid-up capital, such
     assets shall be distributed so that, as nearly as may be, the losses shall
     be borne by the Members in proportion to the capital paid up, or which
     ought to have been paid up, at the commencement of the winding up on the
     shares held by them respectively. And if in a winding up the assets
     available for distribution amongst the Members shall be more than
     sufficient to repay the whole of the capital paid up at the commencement of
     the winding up, the excess shall be distributed amongst the Members in
     proportion to the capital paid up at the commencement of the winding up on
     the shares held by them respectively. This Article is to be without
     prejudice to the rights of the holders of shares issued upon special terms
     and conditions.

                                    INDEMNITY

135. The Directors and officers for the time being of the Company and any
     trustee for the time being acting in relation to any of the affairs of the
     Company and their heirs, executors, administrators and personal
     representatives respectively shall be indemnified out of the assets of the
     Company from and against all actions, proceedings, costs, charges, losses,
     damages and expenses which they or any of them shall or may incur or
     sustain by reason of any act done or omitted in or about the execution of
     their duty in their respective offices or

                                       31



     trusts, except such (if any) as they shall incur or sustain by or through
     their own wilful neglect or default respectively and no such Director,
     officer or trustee shall be answerable for the acts, receipts, neglects or
     defaults of any other Director, officer or trustee or for joining in any
     receipt for the sake of conformity or for the solvency or honesty of any
     banker or other persons with whom any monies or effects belonging to the
     Company may be lodged or deposited for safe custody or for any
     insufficiency of any security upon which any monies of the Company may be
     invested or for any other loss or damage due to any such cause as aforesaid
     or which may happen in or about the execution of his office or trust unless
     the same shall happen through the wilful neglect or default of such
     Director, Officer or trustee.

                                 FINANCIAL YEAR

136. Unless the Directors otherwise prescribe, the financial year of the Company
     shall end on 31st December in each year and, following the year of
     incorporation, shall begin on 1st January in each year.

                             AMENDMENTS OF ARTICLES

137. Subject to the Statute, the Company may at any time and from time to time
     by Special Resolution alter or amend these Articles in whole or in part.

                         TRANSFER BY WAY OF CONTINUATION

138. If the Company is exempted as defined in the Statute, it shall, subject to
     the provisions of the Statute and with the approval of a Special
     Resolution, have the power to register by way of continuation as a body
     corporate under the laws of any jurisdiction outside the Cayman Islands and
     to be deregistered in the Cayman Islands.

                                       32

EX-4.2

                                                                    Exhibit 4.2

                                                                 EXECUTION COPY

_______________________________________________________________________________
_______________________________________________________________________________


                         Seagate Technology HDD Holdings
                                     Issuer

                           Seagate Technology Holdings
                                    Guarantor

                            8% Senior Notes Due 2009

                              ____________________

                                    INDENTURE

                            Dated as of May 13, 2002

                              ____________________

                                 U.S. Bank, N.A.,

                                   as Trustee


_______________________________________________________________________________
_______________________________________________________________________________



                                    CROSS-REFERENCE TABLE

  TIA                                                 Indenture
Section                                               Section
- -------                                               -------

310(a)(1)          ..............................     7.10
    (a)(2)         ..............................     7.10
    (a)(3)         ..............................     N.A.
    (a)(4)         ..............................     N.A.
    (b)            ..............................     7.08; 7.10
    (c)            ..............................     N.A.
311(a)             ..............................     7.11
    (b)            ..............................     7.11
    (c)            ..............................     N.A.
312(a)             ..............................     2.05
    (b)            ..............................     11.03
    (c)            ..............................     11.03
313(a)             ..............................     7.06
    (b)(1)         ..............................     N.A.
    (b)(2)         ..............................     7.06
    (c)            ..............................     11.02
    (d)            ..............................     7.06
314(a)             ..............................     4.02; 4.10; 11.02
    (b)            ..............................     N.A.
    (c)(1)         ..............................     11.04
    (c)(2)         ..............................     11.04
    (c)(3)         ..............................     N.A.
    (d)            ..............................     N.A.
    (e)            ..............................     11.05
    (f)            ..............................     4.10
315(a)             ..............................     7.01
    (b)            ..............................     7.05; 10.02
    (c)            ..............................     7.01
    (d)            ..............................     7.01
    (e)            ..............................     6.11
316(a)(last sentence) ...........................     11.06
    (a)(1)(A)      ..............................     6.05
    (a)(1)(B)      ..............................     6.04
    (a)(2)         ..............................     N.A.
    (b)            ..............................     6.07
317(a)(1)          ..............................     6.08
    (a)(2)         ..............................     6.09
    (b)            ..............................     2.04
318(a)             ..............................     11.01

                                  N.A. means Not Applicable.

_________________________
Note:  This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.



                                TABLE OF CONTENTS



                                                                                                          Page
                                                                                                          ----
                                                                                                              
ARTICLE 1  Definitions and Incorporation by Reference.............................................................1
           ------------------------------------------

     SECTION 1.01. Definitions....................................................................................1
                   -----------

     SECTION 1.02. Other Definitions.............................................................................44
                   -----------------

     SECTION 1.03. Incorporation by Reference of Trust Indenture Act.............................................44
                   -------------------------------------------------

     SECTION 1.04. Rules of Construction.........................................................................45
                   ---------------------

ARTICLE 2  The Securities........................................................................................46
           --------------

     SECTION 2.01. Form and Dating...............................................................................46
                   ---------------

     SECTION 2.02. Execution and Authentication..................................................................47
                   ----------------------------

     SECTION 2.03. Registrar and Paying Agent....................................................................47
                   --------------------------

     SECTION 2.04. Paying Agent To Hold Money in Trust...........................................................49
                   -----------------------------------

     SECTION 2.05. Securityholder Lists..........................................................................49
                   --------------------

     SECTION 2.06. Transfer and Exchange.........................................................................50
                   ---------------------

     SECTION 2.06. Replacement Securities........................................................................50
                   ----------------------

     SECTION 2.07. Outstanding Securities........................................................................51
                   ----------------------

     SECTION 2.08. Temporary Securities..........................................................................51
                   --------------------

     SECTION 2.09. Cancellation..................................................................................52
                   ------------

     SECTION 2.10. Defaulted Interest............................................................................52
                   ------------------

     SECTION 2.12. CUSIP Numbers.................................................................................53
                   -------------

     SECTION 2.11. Issuance of Additional Securities.............................................................53
                   ---------------------------------

ARTICLE 3  Redemption............................................................................................54
           ----------

     SECTION 3.01. Notices to Trustee............................................................................54
                   ------------------

     SECTION 3.02. Selection of Securities To Be Redeemed........................................................55
                   --------------------------------------

     SECTION 3.03. Notice of Redemption..........................................................................55
                   --------------------




                                                                                                              
     SECTION 3.04. Effect of Notice of Redemption................................................................56
                   ------------------------------

     SECTION 3.05. Deposit of Redemption Price...................................................................57
                   ---------------------------

     SECTION 3.06. Securities Redeemed in Part...................................................................57
                   ---------------------------

ARTICLE 4  Covenants.............................................................................................57
           ---------

     SECTION 4.01. Payment of Securities.........................................................................57
                   ---------------------

     SECTION 4.02. SEC Reports...................................................................................58
                   -----------

     SECTION 4.03. Limitation on Indebtedness....................................................................59
                   --------------------------

     SECTION 4.04. Limitation on Restricted Payments.............................................................63
                   ---------------------------------

     SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries......................72
                   ------------------------------------------------------------------------

     SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock............................................74
                   --------------------------------------------------

     SECTION 4.07. Limitation on Affiliate Transactions..........................................................79

     SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries................83
                   ------------------------------------------------------------------------------

     SECTION 4.08. Change of Control.............................................................................83
                   -----------------

     SECTION 4.10. Limitation on Liens...........................................................................86
                   -------------------

     SECTION 4.11. Limitation on Sale/Leaseback Transactions.....................................................86
                   -----------------------------------------

     SECTION 4.09. Amendment of Deferred Compensation Plans......................................................86
                   ----------------------------------------

     SECTION 4.10. Additional Amounts............................................................................87
                   ------------------

     SECTION 4.11. Compliance Certificate........................................................................90
                   ----------------------

     SECTION 4.12. Further Instruments and Acts..................................................................90
                   ----------------------------

ARTICLE 5  Successor Company.....................................................................................90
           -----------------

     SECTION 5.01. When the Company May Merge or Transfer Assets.................................................90
                   ---------------------------------------------

     SECTION 5.02. When Parent May Merge or Transfer Assets......................................................92
                   ----------------------------------------

ARTICLE 6  Defaults and Remedies.................................................................................93
           ---------------------

     SECTION 6.01. Events of Default.............................................................................93
                   -----------------

     SECTION 6.02. Acceleration..................................................................................96
                   ------------





                                                                                                             
     SECTION 6.03. Other Remedies................................................................................96
                   --------------

     SECTION 6.04. Waiver of Past Defaults.......................................................................97
                   -----------------------

     SECTION 6.05. Control by Majority...........................................................................97
                   -------------------

     SECTION 6.06. Limitation on Suits...........................................................................97
                   -------------------

     SECTION 6.07. Rights of Holders to Receive Payment..........................................................98
                   ------------------------------------

     SECTION 6.08. Collection Suit by Trustee....................................................................98
                   --------------------------

     SECTION 6.09. Trustee May File Proofs of Claim..............................................................99
                   --------------------------------

     SECTION 6.10. Priorities....................................................................................99
                   ----------

     SECTION 6.11. Undertaking for Costs........................................................................100
                   ---------------------

     SECTION 6.12. Waiver of Stay or Extension Laws.............................................................100
                   --------------------------------

ARTICLE 7  Trustee..............................................................................................100
           -------

     SECTION 7.01. Duties of Trustee............................................................................100
                   -----------------

     SECTION 7.02. Rights of Trustee............................................................................102
                   -----------------

     SECTION 7.03. Individual Rights of Trustee.................................................................103
                   ----------------------------

     SECTION 7.04. Trustee's Disclaimer.........................................................................103
                   --------------------

     SECTION 7.05. Notice of Defaults...........................................................................104
                   ------------------

     SECTION 7.06. Reports by Trustee to Holders................................................................104
                   -----------------------------

     SECTION 7.07. Compensation and Indemnity...................................................................105
                   --------------------------

     SECTION 7.08. Replacement of Trustee.......................................................................106
                   ----------------------

     SECTION 7.09. Successor Trustee by Merger..................................................................107
                   ---------------------------

     SECTION 7.10. Eligibility; Disqualification................................................................107
                   -----------------------------

     SECTION 7.11. Preferential Collection of Claims Against Company............................................108
                   -------------------------------------------------

ARTICLE 8  Discharge of Indenture; Defeasance...................................................................108
           ----------------------------------

     SECTION 8.01. Discharge of Liability on Securities; Defeasance.............................................108
                   ------------------------------------------------

     SECTION 8.02. Conditions to Defeasance.....................................................................109
                   ------------------------

     SECTION 8.03. Application of Trust Money...................................................................111
                   --------------------------





                                                                                                             
     SECTION 8.04. Repayment to Company.........................................................................111
                   --------------------

     SECTION 8.05. Indemnity for Government Obligations.........................................................112
                   ------------------------------------

     SECTION 8.06. Reinstatement................................................................................112
                   -------------

ARTICLE 9  Amendments...........................................................................................112
           ----------

     SECTION 9.01. Without Consent of Holders...................................................................112
                   --------------------------

     SECTION 9.02. With Consent of Holders......................................................................113
                   -----------------------

     SECTION 9.03. Compliance with Trust Indenture Act..........................................................115
                   -----------------------------------

     SECTION 9.04. Revocation and Effect of Consents and Waivers................................................115
                   ---------------------------------------------

     SECTION 9.05. Notation on or Exchange of Securities........................................................116
                   -------------------------------------

     SECTION 9.06. Trustee To Sign Amendments...................................................................116
                   --------------------------

     SECTION 9.07. Payment for Consent..........................................................................116
                   -------------------

ARTICLE 10  Guarantee...........................................................................................116
            ---------

     SECTION 10.01. Guarantee...................................................................................117
                    ---------

     SECTION 10.02. Successors and Assigns......................................................................119
                    ----------------------

     SECTION 10.03. No Waiver...................................................................................119
                    ---------

     SECTION 10.04. Modification................................................................................120
                    ------------

     SECTION 10.05. Release of Guarantor and Termination of Parent Guaranty.....................................120
                    -------------------------------------------------------

ARTICLE 11  Miscellaneous.......................................................................................120
            -------------

     SECTION 11.01. Trust Indenture Act Controls................................................................120
                    ----------------------------

     SECTION 11.02. Notices.....................................................................................121
                    -------

     SECTION 11.03. Communication by Holders with Other Holders.................................................122
                    -------------------------------------------

     SECTION 11.04. Certificate and Opinion as to Conditions Precedent..........................................122
                    --------------------------------------------------

     SECTION 11.05. Statements Required in Certificate or Opinion...............................................123
                    ---------------------------------------------

     SECTION 11.06. When Securities Disregarded.................................................................123
                    ---------------------------

     SECTION 11.07. Rules by Trustee, Paying Agent and Registrar................................................124
                    --------------------------------------------

     SECTION 11.08. Legal Holidays..............................................................................124
                    --------------





                                                                                                             
     SECTION 11.09. GOVERNING LAW...............................................................................124
                    -------------

     SECTION 11.10. No Recourse Against Others..................................................................124
                    --------------------------

     SECTION 11.11. Successors..................................................................................124
                    ----------

     SECTION 11.12. Multiple Originals..........................................................................124
                    ------------------

     SECTION 11.13. Consent to Jurisdiction; Appointment of Agent for Service of Process........................124
                    --------------------------------------------------------------------

     SECTION 11.14. Table of Contents; Headings.................................................................126
                    ---------------------------





Rule 144A/Regulation S Appendix

Exhibit 1 - Form of Initial Security

Exhibit A - Form of Exchange Security or Private Exchange
            Security



                                    INDENTURE dated as of May 13, 2002, among
                           SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited
                           liability company organized under the laws of the
                           Cayman Islands (the "Company"), SEAGATE TECHNOLOGY
                           HOLDINGS, an exempted limited liability company
                           organized under the laws of the Cayman Islands
                           ("Parent"), and U.S. BANK, N.A., a national banking
                           association, as trustee (the "Trustee").

                  Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
Initial Securities, Exchange Securities and Private Exchange Securities
(collectively, the "Securities"):

                 Definitions and Incorporation by Reference
                 ------------------------------------------

                  Definitions.
                  -----------

                  "Additional Assets" means (1) any property, plant or equipment
used in a Related Business, (2) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted Subsidiary or (3) Capital Stock constituting a
minority interest in any Person that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clause (2)
- --------  -------
or (3) above is primarily engaged in a Related Business.

                  "Additional Interest" means "Additional Interest" as defined
in the Registration Rights Agreement.

                  "Additional Securities" means, subject to the Company's
compliance with Section 4.03, 8% Senior Notes Due 2009 issued from time to time
after the Issue Date under the terms of this Indenture (other than pursuant to
Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange
Securities or Private Exchange Securities issued



pursuant to an exchange offer for other Securities outstanding under this
Indenture).

                  "Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.

                  "Applicable Premium" means, with respect to a Security at any
redemption date, the greater of (1) 1.0% of the principal amount of such
Security and (2) the excess of (A) the present value of (x) the redemption price
of such Security at May 15, 2006, as set forth in such Security (but excluding
accrued interest) plus (y) all required interest payments due on such Security
through May 15, 2006, computed using a discount rate equal to the Treasury Rate
plus 50 basis points over (B) the then-outstanding principal amount of such
Security.

                  "Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of

                  (1)   any shares of Capital Stock of a Restricted Subsidiary
         (other than directors' qualifying shares or shares required by
         applicable law to be held by a Person other than the Company or a
         Restricted Subsidiary),

                                      2



                  (2)   all or substantially all the assets of any division or
         line of business of the Company or any Restricted Subsidiary, or

                  (3)   any other assets of the Company or any Restricted
         Subsidiary outside of the ordinary course of business of the Company or
         such Restricted Subsidiary,

other than, in the case of (1), (2) and (3) above, (A) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (B) sales or other dispositions of
obsolete, uneconomical, negligible, worn-out or surplus assets, in each case in
the ordinary course of business, (C) issuances of (i) options, warrants or other
rights to purchase common stock of a Restricted Subsidiary or (ii) shares of
common stock of such Restricted Subsidiary upon exercise of such options,
warrants or other rights to officers, directors and employees of such Restricted
Subsidiary pursuant to the terms of agreements (including employment agreements)
or employee or director benefit plans (or amendments thereto) approved by the
Board of Directors of the Company in good faith; provided, however, that shares
                                                 --------  -------
of common stock of such Restricted Subsidiary issued pursuant to the exercise of
such options, warrants or other rights to purchase such common stock which are
subject to this clause (C) shall not exceed 20% of the outstanding shares of
common stock of such Restricted Subsidiary, on a fully diluted basis, (D) for
purposes of Section 4.06 only, (i) a disposition that constitutes a Restricted
Payment permitted by Section 4.04 or a Permitted Investment, (ii) a disposition
of all or substantially all the assets of the Company in accordance with Section
5.01 and (z) a disposition of Capital Stock, Indebtedness or other securities of
an Unrestricted Subsidiary, (E) a disposition of Temporary Cash Investments, (F)
sales of assets received by the Company or any Restricted Subsidiary upon
foreclosure of a Lien, (G) the lease or sublease of office and factory space in
the ordinary course of business and (H) a disposition of assets with a fair
market value of less than $1 million.

                  "Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of

                                      3



determination, the present value (discounted at the interest rate borne by the
Securities, compounded annually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended); provided, however, that if such Sale/Leaseback Transaction results in
           --------  -------
a Capital Lease Obligation, the amount of Indebtedness represented thereby will
be determined in accordance with the definition of "Capital Lease Obligation."

                  "Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (1) the sum of
the products of the number of years from the date of determination to the dates
of each successive scheduled principal payment of or redemption or similar
payment with respect to such Indebtedness multiplied by the amount of such
payment by (2) the sum of all such payments.

                  "Board of Directors" with respect to a Person means the Board
of Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board.

                  "Business Day" means each day which is not a Legal Holiday.

                  "Capital Lease Obligation" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty. For purposes of Section 4.10, a Capital
Lease Obligation will be deemed to be secured by a Lien on the property being
leased.

                  "Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options,

                                      4



participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.

                  "Change of Control" means the occurrence of any of the
following events:

                  (1)   prior to the earlier to occur of (A) the first public
         offering of common stock of Parent or (B) the first public offering of
         common stock of the Company, the Permitted Holders cease to be the
         "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
         Exchange Act), directly or indirectly, of a majority in the aggregate
         of the total voting power of the Voting Stock of Parent or the Company,
         whether as a result of issuance of securities of Parent or the Company,
         any merger, consolidation, liquidation or dissolution of Parent or the
         Company, or any direct or indirect transfer of securities by Parent or
         the Company or otherwise (for purposes of this clause (1) and clause
         (2) below, the Permitted Holders shall be deemed to beneficially own
         any Voting Stock of a Person (the "specified Person") held by any other
         Person (the "parent entity") so long as the Permitted Holders
         beneficially own (as so defined), directly or indirectly, in the
         aggregate a majority of the voting power of the Voting Stock of the
         parent entity);

                  (2)   any "person" (as such term is used in Sections 13(d) and
         14(d) of the Exchange Act), other than one or more Permitted Holders,
         is or becomes the beneficial owner (as defined in clause (1) above,
         except that for purposes of this clause (2) such person shall be deemed
         to have "beneficial ownership" of all shares that any such person has
         the right to acquire, whether such right is exercisable immediately or
         only after the passage of time), directly or indirectly, of more than
         35% of the total voting power of the Voting Stock of the Company;
         provided, however, that the Permitted Holders beneficially own (as
         --------  -------
         defined in clause (1) above), directly or indirectly, in the aggregate
         a lesser percentage of the total voting power of the Voting Stock of
         the Company than

                                      5



         such other person and do not have the right or ability by voting power,
         contract or otherwise to elect or designate for election a majority of
         the Board of Directors of the Company (for the purposes of this clause
         (2), such other person shall be deemed to beneficially own any Voting
         Stock of a specified Person held by a parent entity, if such other
         person is the beneficial owner (as defined in this clause (2)),
         directly or indirectly, of more than 35% of the voting power of the
         Voting Stock of such parent entity and the Permitted Holders
         beneficially own (as defined in clause (1) above), directly or
         indirectly, in the aggregate a lesser percentage of the voting power of
         the Voting Stock of such parent entity and do not have the right or
         ability by voting power, contract or otherwise to elect or designate
         for election a majority of the board of directors of such parent
         entity);

                  (3)   individuals who on the Issue Date constituted the Board
         of Directors of the Company or the Parent Board (together with any new
         directors whose election by such Board of Directors of the Company or
         the Parent Board or whose nomination for election by the shareholders
         of the Company or Parent, as the case may be, was approved by a vote of
         a majority of the directors of the Company or of Parent, as the case
         may be, then still in office who were either directors on the Issue
         Date or whose election or nomination for election was previously so
         approved) cease for any reason to constitute a majority of the Board of
         Directors of the Company or the Parent Board then in office;

                  (4)   the adoption of a plan relating to the liquidation or
         dissolution of the Company; or

                  (5)   the merger or consolidation of Parent or the Company
         with or into another Person or the merger of another Person with or
         into Parent or the Company, or the sale of all or substantially all the
         assets of Parent or the Company (determined on a consolidated basis) to
         another Person (other than, in all such cases, a Person that is
         controlled by the Permitted

                                      6



         Holders), other than a transaction following which, in the case of a
         merger or consolidation transaction, holders of securities that
         represented 100% of the Voting Stock of Parent or the Company
         immediately prior to such transaction (or other securities into which
         such securities are converted as part of such merger or consolidation
         transaction) own directly or indirectly at least a majority of the
         voting power of the Voting Stock of the surviving Person in such merger
         or consolidation transaction immediately after such transaction and in
         substantially the same proportion as before the transaction.

Following the first day that Parent is permitted to be released from the Parent
Guaranty in connection with an initial public offering of the Company, as
described in Section 10.05(a), all references to Parent and Parent Board in
clauses (1) to (5) above shall be deemed to be deleted.

                  "Code" means the Internal Revenue Code of 1986, as amended.

                  "Commodity Agreements" means, with respect to any Person, any
agreement for protection against fluctuations in commodity prices or any similar
agreements or arrangements to which such Person is a party or of which it is a
beneficiary.

                  "Company" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.

                  "Consolidated Coverage Ratio" as of any date of determination
means the ratio of (x) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which financial statements are
internally available to the Company ending prior to the date of such
determination to (y) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that:
          --------  -------

                                      7



                  (1)   if the Company or any Restricted Subsidiary has Incurred
         any Indebtedness since the beginning of such period that remains
         outstanding or if the transaction giving rise to the need to calculate
         the Consolidated Coverage Ratio is an Incurrence of Indebtedness,
         EBITDA and Consolidated Interest Expense for such period shall be
         calculated after giving effect on a pro forma basis to such
         Indebtedness as if such Indebtedness had been Incurred on the first day
         of such period;

                  (2)   if the Company or any Restricted Subsidiary has repaid,
         repurchased, defeased or otherwise discharged any Indebtedness since
         the beginning of such period or if any Indebtedness is to be repaid,
         repurchased, defeased or otherwise discharged (in each case other than
         Indebtedness Incurred under any revolving credit facility unless such
         Indebtedness has been permanently repaid and has not been replaced) on
         the date of the transaction giving rise to the need to calculate the
         Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense
         for such period shall be calculated on a pro forma basis as if such
         discharge had occurred on the first day of such period and as if the
         Company or such Restricted Subsidiary has not earned the interest
         income actually earned during such period in respect of cash or
         Temporary Cash Investments used to repay, repurchase, defease or
         otherwise discharge such Indebtedness;

                  (3)   if since the beginning of such period the Company or any
         Restricted Subsidiary shall have made any Asset Disposition, EBITDA for
         such period shall be reduced by an amount equal to EBITDA (if positive)
         directly attributable to the assets which are the subject of such Asset
         Disposition for such period, or increased by an amount equal to EBITDA
         (if negative), directly attributable thereto for such period and
         Consolidated Interest Expense for such period shall be reduced by an
         amount equal to the Consolidated Interest Expense directly attributable
         to any Indebtedness of the Company or any Restricted Subsidiary repaid,
         repurchased, defeased or otherwise discharged with respect to the
         Company and its

                                      8



         continuing Restricted Subsidiaries in connection with such Asset
         Disposition for such period (or, if the Capital Stock of any
         Restricted Subsidiary is sold, the Consolidated Interest Expense for
         such period directly attributable to the Indebtedness of such
         Restricted Subsidiary to the extent the Company and its continuing
         Restricted Subsidiaries are no longer liable for such Indebtedness
         after such sale);

                  (4)   if since the beginning of such period the Company or any
         Restricted Subsidiary (by merger or otherwise) shall have made an
         Investment in any Restricted Subsidiary (or any person which becomes a
         Restricted Subsidiary) or an acquisition of assets, including any
         acquisition of assets occurring in connection with a transaction
         requiring a calculation to be made hereunder, which constitutes all or
         substantially all of an operating unit of a business, EBITDA and
         Consolidated Interest Expense for such period shall be calculated after
         giving pro forma effect thereto (including the Incurrence of any
         Indebtedness) as if such Investment or acquisition occurred on the
         first day of such period; and

                  (5)   if since the beginning of such period any Person (that
         subsequently became a Restricted Subsidiary or was merged with or into
         the Company or any Restricted Subsidiary since the beginning of such
         period) shall have made any Asset Disposition, any Investment or
         acquisition of assets that would have required an adjustment pursuant
         to clause (3) or (4) above if made by the Company or a Restricted
         Subsidiary during such period, EBITDA and Consolidated Interest Expense
         for such period shall be calculated after giving pro forma effect
         thereto as if such Asset Disposition, Investment or acquisition
         occurred on the first day of such period.

                  For purposes of this definition, whenever pro forma effect is
to be given to an acquisition of assets or other Investment, the amount of
income or earnings relating thereto, the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred in connection therewith and any
operating expense reductions and other

                                      9



adjustments as described below, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company
and (i) shall, except as described below in clause (iii), comply with the
requirements of Rule 11-02 of Regulation S-X of the SEC, (ii) may include
adjustments for operating expense reductions that would be permitted by such
Rule and (iii) in connection with acquisitions, purchases or mergers, may
reflect adjustments not permitted by such Rule for the elimination of operating
expenses attributable to any terminated lease or contract, the related reduction
in personnel or facility expenses as a result of such termination and the
elimination of personnel expenses as a result of severance and of facilities
expense as a result of the termination, closure or relocation of facilities, in
each case if such termination, severance, closure or relocation has occurred at
the time of such acquisition, purchase or merger or occurs within three months
thereof.

                  "Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries,
without duplication,

                  (1)   interest expense attributable to Capital Lease
         Obligations and the interest expense attributable to leases
         constituting part of a Sale/Leaseback Transaction,

                  (2)   amortization of debt discount and debt issuance cost
         (other than any costs associated with the Incurrence of Indebtedness
         with respect to the Securities and the Credit Agreement),

                  (3)   capitalized interest,

                  (4)   non-cash interest expense,

                  (5)   commissions, discounts and other fees and charges owed
         with respect to letters of credit and bankers' acceptance financing,

                                      10



                  (6)  net payments pursuant to Hedging Obligations,

                  (7)  Preferred Stock dividends in respect of all Preferred
         Stock held by Persons other than the Company or a Restricted Subsidiary
         (other than dividends payable solely in Capital Stock (other than
         Disqualified Stock) of the issuer of such Preferred Stock); provided,
                                                                     --------
         however, that such dividends will be multiplied by a fraction the
         -------
         numerator of which is one and the denominator of which is one minus the
         effective combined tax rate of the issuer of such Preferred Stock
         (expressed as a decimal) for such period (as estimated by the Chief
         Financial Officer of the Company in good faith),

                  (8)  interest incurred in connection with Investments in
         discontinued operations,

                  (9)  interest accruing on any Indebtedness of any other
         Person to the extent such Indebtedness is Guaranteed by (or secured by
         the assets of) the Company or any Restricted Subsidiary, and

                  (10) the cash contributions to any employee stock ownership
         plan or similar trust to the extent such contributions are used by such
         plan or trust to pay interest or fees to any Person (other than the
         Company) in connection with Indebtedness Incurred by such plan or
         trust.

                  "Consolidated Net Income" means, for any period, the net
income of the Company and its consolidated Subsidiaries; provided, however, that
                                                         --------  -------
there shall not be included in such Consolidated Net Income:

                  (1)  any net income of any Person (other than the Company) if
         such Person is not a Restricted Subsidiary, except that

                       (A)  subject to the exclusion contained in clause (4)
                  below, the Company's equity in the net income of any such
                  Person for such period shall be included in such Consolidated
                  Net Income up to the aggregate amount of cash actually
                  distributed

                                      11



                  by such Person during such period to the Company or a
                  Restricted Subsidiary as a dividend or other distribution
                  (subject, in the case of a dividend or other distribution paid
                  to a Restricted Subsidiary, to the limitations contained in
                  clause (3) below), and

                           (B)   the Company's equity in a net loss of any such
                  Person to the extent accounted for pursuant to the equity
                  method of accounting for such period shall be included in
                  determining such Consolidated Net Income;

                  (2)   any net income (or loss) of any Person acquired by the
         Company or a Subsidiary in a pooling of interests transaction for any
         period prior to the date of such acquisition;

                  (3)   any net income of any Restricted Subsidiary if such
         Restricted Subsidiary is subject to restrictions, directly or
         indirectly, on the payment of dividends or the making of distributions
         by such Restricted Subsidiary, directly or indirectly, to the Company,
         except that

                           (A)   subject to the exclusion contained in clause
                  (4) below, the Company's equity in the net income of any such
                  Restricted Subsidiary for such period shall be included in
                  such Consolidated Net Income up to the aggregate amount of
                  cash that could have been distributed by such Restricted
                  Subsidiary during such period to the Company or another
                  Restricted Subsidiary as a dividend or other distribution
                  (subject, in the case of a dividend or other distribution paid
                  to another Restricted Subsidiary, to the limitation contained
                  in this clause), and

                           (B)   the Company's equity in a net loss of any such
                  Restricted Subsidiary for such period shall be included in
                  determining such Consolidated Net Income;

                                      12



                  (4)   any gain (or loss) realized upon the sale or other
         disposition of any assets of the Company, its consolidated Subsidiaries
         or any other Person (including pursuant to any sale-and-leaseback
         arrangement) which is not sold or otherwise disposed of in the ordinary
         course of business and any gain (or loss) realized upon the sale or
         other disposition of any Capital Stock of any Person;

                  (5)   extraordinary gains or losses; and

                  (6)   the cumulative effect of a change in accounting
         principles.

Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under Section 4.04(a)(3)(D).

                  "Credit Agreement" means the Credit Agreement to be entered
into by and among Parent, the Company, Seagate Technology (US) Holdings, Inc.,
the lenders referred to therein, JPMorgan Chase Bank, as Administrative Agent,
Morgan Stanley Senior Funding, Inc., as Syndication Agent, and Citicorp USA,
Inc., Credit Suisse First Boston and Merrill Lynch Capital Corporation, as
Documentation Agents, together with the related documents thereto (including the
term loans and revolving loans thereunder, any guarantees and security
documents), as amended, extended, renewed, restated, supplemented or otherwise
modified (in whole or in part, and without limitation as to amount, terms,
conditions, covenants and other provisions) from time to time, and any other
agreement or agreements (and related document or documents) governing
Indebtedness incurred to Refinance, in whole or in part, the borrowings and
commitments then outstanding or permitted to be outstanding under such Credit
Agreement or a successor Credit Agreement, whether by the same or any other
lender or group of lenders.

                                      13



                  "Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.

                  "Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.

                  "Deferred Compensation Plans" means (1) the deferred
compensation plan dated as of November 22, 2000, of the Company (as amended,
waived, supplemented or otherwise modified from time to time in compliance with
the provisions set forth in Section 4.12), (2) any other plan established in
lieu of, or to renew or replace, in whole or in part, any plan referred to in
clause (1) above or this clause (2) and any other similar plan the purpose or
effect of which is to provide the participants therein the benefits that they
are entitled to on the Issue Date under the plans described in clause (1) above
or this clause (2), and (3) any Guarantee by the Company or any of its
Subsidiaries, that is in effect on the Issue Date and is described in the
Offering Memorandum, of any obligation under any Deferred Compensation Plan
referred to in clauses (1) and (2) above.

                  "Designated Preferred Stock" means Preferred Stock of the
Company (other than Disqualified Stock and Excluded Contributions) that is
issued for cash (other than to a Subsidiary of the Company or an employee stock
ownership plan or trust established by the Company or any of its Subsidiaries)
and is so designated as Designated Preferred Stock, pursuant to an Officers'
Certificate executed by an Officer of the Company on the issuance date thereof,
the cash proceeds of which are excluded from the calculation set forth in
Section 4.04(a)(3).

                  "Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable at the option of the holder) or
upon the happening of any event

                                      14



                  (1)   matures or is mandatorily redeemable pursuant to a
         sinking fund obligation or otherwise,

                  (2)   is convertible or exchangeable at the option of the
         holder for Indebtedness or Disqualified Stock, or

                  (3)   is mandatorily redeemable or must be purchased upon the
         occurrence of certain events or otherwise, in whole or in part,

in each case on or prior to 91 days after the Stated Maturity of the Securities;
provided, however, that if such Capital Stock is issued to any employee of the
- --------  -------
Company or any of its Subsidiaries or to any plan for the benefit of employees
of the Company or any of its Subsidiaries or by any such plan to such employees,
such Capital Stock shall not constitute Disqualified Stock solely because it may
be required to be repurchased by the Company in order to satisfy obligations as
a result of such employees' death or disability; and provided further, however,
                                                     -------- -------- --------
that any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
purchase or redeem such Capital Stock upon the occurrence of an "asset sale" or
"change of control" occurring prior to 91 days after the Stated Maturity of the
Securities shall not constitute Disqualified Stock if:

                  (1)   the "asset sale" or "change of control" provisions
         applicable to such Capital Stock are not more favorable to the holders
         of such Capital Stock than the terms applicable to the Securities as
         described in Sections 4.06 and 4.09 and

                  (2)   any such requirement only becomes operative after
         compliance with such terms applicable to the Securities, including the
         purchase of any Securities tendered pursuant thereto.

                  The amount of any Disqualified Stock that does not have a
fixed redemption, repayment or repurchase price will be calculated in accordance
with the terms of such Disqualified Stock as if such Disqualified Stock were

                                      15



redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this Indenture; provided,
                                                                   --------
however, that if such Disqualified Stock could not be required to be redeemed,
- -------
repaid or repurchased at the time of such determination, the redemption,
repayment or repurchase price will be the book value of such Disqualified Stock
as reflected in the most recent financial statements of such Person.

                  "EBITDA" for any period means the sum of Consolidated Net
Income, plus the following to the extent deducted in calculating such
Consolidated Net Income:

                  (1)   all income tax expense of the Company and its
         consolidated Restricted Subsidiaries,

                  (2)   Consolidated Interest Expense,

                  (3)   depreciation and amortization expense of the Company and
         its consolidated Restricted Subsidiaries (excluding amortization
         expense attributable to a prepaid operating activity item that was paid
         in cash in a prior period),

                  (4)   all other non-cash charges and other non-operating
         losses and expenses of the Company and its consolidated Restricted
         Subsidiaries (excluding any such non-cash charge or other non-operating
         loss or expense to the extent that it represents an accrual of or
         reserve for cash expenditures in any future period),

                  (5)   all expenses and charges as a result of the Refinancing
         Transactions,

                  (6)   any annual management, consulting, monitoring and
         advisory fees paid by the Company and its Restricted Subsidiaries to
         any of the Sponsors, in an amount not to exceed $5 million in the
         aggregate in any calendar year, and

                  (7)   any non-recurring charge relating to a restructuring
         plan of the Company and its Restricted Subsidiaries,

                                      16



in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated
Net Income to compute EBITDA only to the extent (and in the same proportion)
that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended or distributed to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.

                  "Equity Offering" means any public or private sale of common
stock or Preferred Stock of the Company or Parent other than (1) public
offerings with respect to the Company's or Parent's common stock registered on
Form S-8, (2) any public or private sale that constitutes Disqualified Stock,
Designated Preferred Stock or an Excluded Contribution and (3) other issuances
upon exercise of options by employees of Parent, the Company or any of the
Restricted Subsidiaries.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Excluded Contributions" means the Net Cash Proceeds received
by the Company after the Issue Date from (1) contributions (other than from a
Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries) to its common equity
capital and (2) the sale (other than to a Subsidiary of the Company or to any
Company or Subsidiary management equity plan or stock option plan or any other
management or employee benefit plan or agreement or an employee stock ownership
plan or trust established by the Company or any of its Subsidiaries) of Capital
Stock (other than Disqualified Stock and Designated Preferred Stock) of the
Company, in each case designated as Excluded Contributions pursuant to an
Officers' Certificate executed

                                      17



by an Officer of the Company on the issuance date thereof, the cash proceeds of
which are excluded from the calculation set forth in Section 4.04(a)(3).

                  "Fiscal 2002" means the fiscal year commencing June 30, 2001
and ending on June 28, 2002.

                  "GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in

                  (1)   the opinions and pronouncements of the Accounting
         Principles Board of the American Institute of Certified Public
         Accountants,

                  (2)   statements and pronouncements of the Financial
         Accounting Standards Board,

                  (3)   such other statements by such other entity as approved
         by a significant segment of the accounting profession, and

                  (4)   the rules and regulations of the SEC governing the
         inclusion of financial statements (including pro forma financial
         statements) in periodic reports required to be filed pursuant to
         Section 13 of the Exchange Act, including opinions and pronouncements
         in staff accounting bulletins and similar written statements from the
         accounting staff of the SEC.

                  All ratios and computations based on GAAP contained in this
Indenture shall be computed in conformity with GAAP.

                  "Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any Person
and any obligation, direct or indirect, contingent or otherwise, of such Person

                  (1)   to purchase or pay (or advance or supply funds for the
         purchase or payment of) such Indebtedness of such Person (whether
         arising by virtue

                                      18



         of partnership arrangements, or by agreements to keep-well, to
         purchase assets, goods, securities or services, to take-or-pay or to
         maintain financial statement conditions or otherwise) or

                  (2)   entered into for the purpose of assuring in any other
         manner the obligee of such Indebtedness of the payment thereof or to
         protect such obligee against loss in respect thereof (in whole or in
         part);

provided, however, that the term "Guarantee" shall not include endorsements for
- --------  -------
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.

                  "Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement, Currency Agreement,
Commodity Agreement or similar agreement.

                  "Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.

                  "Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
                   --------  -------
a Person existing at the time such Person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Person at the time it becomes a Restricted Subsidiary. The
term "Incurrence" when used as a noun shall have a correlative meaning. Solely
for purposes of determining compliance with Section 4.03,

                  (1)   amortization of debt discount or the accretion of
         principal with respect to a non-interest bearing or other discount
         security,

                  (2)   the payment of regularly scheduled interest in the form
         of additional Indebtedness of the same instrument or the payment of
         regularly scheduled dividends on Capital Stock in the form of
         additional

                                      19



         Capital Stock of the same clause and with the same terms, and

                  (3)   the obligation to pay a premium in respect of
         Indebtedness arising in connection with the issuance of a notice of
         redemption or the making of a mandatory offer to purchase such
         Indebtedness

shall not be deemed to be the Incurrence of Indebtedness.

                  "Indebtedness" means, with respect to any Person on any date
of determination (without duplication):

                  (1)   the principal in respect of (A) indebtedness of such
         Person for money borrowed and (B) indebtedness evidenced by notes,
         debentures, bonds or other similar instruments for the payment of which
         such Person is responsible or liable, including, in each case, any
         premium on such indebtedness to the extent such premium has become due
         and payable;

                  (2)   all Capital Lease Obligations of such Person and all
         Attributable Debt in respect of Sale/Leaseback Transactions entered
         into by such Person;

                  (3)   all obligations of such Person issued or assumed as the
         deferred purchase price of property, all conditional sale obligations
         of such Person and all obligations of such Person under any title
         retention agreement (but excluding trade accounts payable arising in
         the ordinary course of business);

                  (4)   all obligations of such Person for the reimbursement of
         any obligor on any letter of credit, banker's acceptance or similar
         credit transaction (other than obligations with respect to letters of
         credit securing obligations (other than obligations described in
         clauses (1) through (3) above) entered into in the ordinary course of
         business of such Person to the extent such letters of credit are not
         drawn upon or, if and to the extent drawn upon, such drawing is
         reimbursed no later than the 30th Business Day following payment on the
         letter of credit);

                                      20



                  (5)   the amount of all obligations of such Person with
         respect to the redemption, repayment or other repurchase of any
         Disqualified Stock or, with respect to any Subsidiary of such Person,
         any Preferred Stock (but excluding, in each case, any accrued
         dividends);

                  (6)   all obligations of the type referred to in clauses (1)
         through (5) of other Persons and all dividends of other Persons for the
         payment of which, in either case, such Person is responsible or liable,
         directly or indirectly, as obligor, guarantor or otherwise, including
         by means of any Guarantee;

                  (7)   all obligations of the type referred to in clauses (1)
         through (6) of other Persons secured by any Lien on any property or
         asset of such Person (whether or not such obligation is assumed by such
         Person), the amount of such obligation being deemed to be the lesser of
         the value of such property or assets and the amount of the obligation
         so secured; and

                  (8)   to the extent not otherwise included in this definition,
Hedging Obligations of such Person.

                  Notwithstanding the foregoing, in connection with the purchase
by the Company or any Restricted Subsidiary of any business, the term
"Indebtedness" shall exclude post-closing payment adjustments to which the
seller may become entitled to the extent such payment is determined by a final
closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that, at the time of closing, the
                            --------  -------
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 60 days
thereafter.

                  The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date; provided, however, that in the case of Indebtedness sold at a discount,
      --------  -------
the amount of such Indebtedness at any time will be the accreted value thereof

                                      21



at such time. Notwithstanding the foregoing, in no event shall Indebtedness
include any liabilities incurred under the Deferred Compensation Plans.

                  "Indemnification Agreement" means that certain Indemnification
Agreement dated as of March 29, 2000, among Seagate Technology, Inc., VERITAS
Software Corporation and Suez Acquisition Company (Cayman) Limited.

                  "Indenture" means this Indenture as amended or supplemented
from time to time.

                  "Independent Qualified Party" means an investment banking
firm, accounting firm or appraisal firm of national standing; provided, however,
                                                              --------  -------
that such firm is not an Affiliate of the Company.

                  "Initial Purchasers" means Morgan Stanley & Co. Incorporated,
J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc.

                  "Interest Rate Agreement" means in respect of a Person any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.

                  "Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of the
lender) or other extensions of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by such Person. Except as otherwise provided
for herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value.

                                      22



                  For purposes of the definition of "Unrestricted Subsidiary",
the definition of "Restricted Payment" and Section 4.04,

                  (1)   "Investment" shall include the portion (proportionate to
         the Company's equity interest in such Subsidiary) of the fair market
         value of the net assets of any Subsidiary of the Company at the time
         that such Subsidiary is designated an Unrestricted Subsidiary;
         provided, however, that upon a redesignation of such Subsidiary as a
         --------  -------
         Restricted Subsidiary, the Company shall be deemed to continue to have
         a permanent "Investment" in an Unrestricted Subsidiary equal to an
         amount (if positive) equal to (A) the Company's "Investment" in such
         Subsidiary at the time of such redesignation less (B) the portion
         (proportionate to the Company's equity interest in such Subsidiary) of
         the fair market value of the net assets of such Subsidiary at the time
         of such redesignation, and

                  (2)   any property transferred to or from an Unrestricted
         Subsidiary shall be valued at its fair market value at the time of such
         transfer, in each case as determined in good faith by the Board of
         Directors of the Company.

                  "Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's and BBB-(or the equivalent) by S&P or
an equivalent rating by any other Rating Agency.

                  "Issue Date" means May 13, 2002.

                  "Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).

                  "Moody's" means Moody's Investors Service, Inc. and its
successors.
                  "Net Available Cash" from an Asset Disposition means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal

                                      23



pursuant to a note or installment receivable or otherwise and proceeds from the
sale or other disposition of any securities received as consideration, but only
as and when received, but excluding any other consideration received in the form
of assumption by the acquiring Person of Indebtedness or other obligations
relating to such properties or assets or received in any other noncash form), in
each case net of

                  (1)   all legal, accounting, investment banking and brokerage
         fees and expenses and all title and recording tax expenses, commissions
         and other fees and expenses incurred, and all Federal, state,
         provincial, foreign and local taxes required to be accrued as a
         liability under GAAP, as a consequence of such Asset Disposition,

                  (2)   all payments made on any Indebtedness which is secured
         by any assets subject to such Asset Disposition, in accordance with
         the terms of any Lien upon or other security agreement of any kind
         with respect to such assets, or which must by its terms, or in order
         to obtain a necessary consent to such Asset Disposition, or by
         applicable law, be repaid out of the proceeds from such Asset
         Disposition,

                  (3)   all distributions and other payments required to be made
         to minority interest holders in Restricted Subsidiaries as a result of
         such Asset Disposition and

                  (4)   the deduction of appropriate amounts provided by the
         seller as a reserve, in accordance with GAAP, against any liabilities
         associated with the property or other assets disposed in such Asset
         Disposition and retained by the Company or any Restricted Subsidiary
         after such Asset Disposition.

                  "Net Cash Proceeds," with respect to any issuance or sale of
Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale
net of attorneys' fees, accountants' fees, underwriters', initial purchasers' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in

                                      24



connection with such issuance or sale and net of taxes paid or payable as a
result thereof.

                  "New SAC" means New SAC, an exempted limited liability company
organized under the laws of the Cayman Islands.

                  "Obligations" means with respect to any Indebtedness all
obligations for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.

                  "Offering Memorandum" means the Offering Memorandum dated as
of May 3, 2002, relating to the issuance of the Securities.

                  "Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company.

                  "Officers' Certificate" means a certificate signed by two
Officers.

                  "Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.

                  "Parent" means the party named as such in this Indenture until
a successor replaces it and, thereafter, means the successor.

                  "Parent Board" means the Board of Directors of Parent or any
committee thereof duly authorized to act on behalf of such Board.

                  "Parent Guaranty" means the Guarantee by Parent of the
Company's obligations with respect to the Securities.

                  "Permitted Holders" means (1) the Sponsors, (2) members of
management of the Company, Parent, New SAC or

                                      25



Seagate Technology International who own Capital Stock of Parent on the Issue
Date and (3) each of their Affiliates.

                  "Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in

                  (1)   the Company, a Restricted Subsidiary or a Person that
         will, upon the making of such Investment, become a Restricted
         Subsidiary; provided, however, that the primary business of such
                     --------  -------
         Restricted Subsidiary is a Related Business,

                  (2)   another Person if as a result of such Investment such
         other Person is merged or consolidated with or into, or transfers or
         conveys all or substantially all its assets to, the Company or a
         Restricted Subsidiary; provided, however, that such Person's primary
                                --------  -------
         business is a Related Business,

                  (3)   cash and Temporary Cash Investments,

                  (4)   receivables owing to the Company or any Restricted
         Subsidiary if created or acquired in the ordinary course of business
         and payable or dischargeable in accordance with customary trade terms;
         provided, however, that such trade terms may include such concessionary
         --------  -------
         trade terms as the Company or any such Restricted Subsidiary deems
         reasonable under the circumstances,

                  (5)   payroll, travel, moving and similar advances to cover
         matters that are expected at the time of such advances ultimately to be
         treated as expenses for accounting purposes and that are made in the
         ordinary course of business,

                  (6)   loans or advances to employees and directors made in the
         ordinary course of business and not exceeding $15 million at any time
         outstanding,

                  (7)   stock, obligations or securities received in settlement
         of debts created in the ordinary course of business and owing to the
         Company or any Restricted Subsidiary or in satisfaction of judgments,

                                      26



                  (8)   any Person to the extent such Investment represents the
         non-cash portion of the consideration received for an Asset Disposition
         as permitted pursuant to Section 4.06,

                  (9)   any Person to the extent such Investment exists on the
         Issue Date and any Investment that replaces or refunds such an
         Investment; provided, however, that the replacing or refunding
                     --------  -------
         Investment is in an amount that does not exceed the amount of the
         replaced or refunded Investment (valued at the time made and without
         giving effect to subsequent changes in value) and is made in the same
         Person as the replaced or refunded Investment,

                  (10)  any Person; provided, however, that the payment for
                                    --------  -------
         such Investments consists solely of Capital Stock of the Company or its
         Subsidiaries (other than Disqualified Stock),

                  (11)  any Person to the extent such Investment consists of
         the licensing of intellectual property pursuant to joint venture,
         strategic alliances or joint marketing arrangements with such Person,
         in each case made in the ordinary course of business,

                  (12)  a vendor or supplier to the extent such Investment
         consists of loans or advances to such vendor or supplier in connection
         with any guarantees to the Company or any Restricted Subsidiary of
         supply by, or to fund the supply capacity of, such vendor or supplier,
         in any case not to exceed $50 million at any one time outstanding,

                  (13)  any Person where such Investment was acquired by the
         Company or any of its Restricted Subsidiaries (a) in exchange for any
         other Investment or accounts receivable held by the Company or any such
         Restricted Subsidiary in connection with or as a result of a
         bankruptcy, workout, reorganization or recapitalization of the issuer
         of such other Investment or accounts receivable or (b) as a result of a
         foreclosure by the Company or any of its

                                      27



         Restricted Subsidiaries with respect to any secured Investment or
         other transfer of title with respect to any secured Investment in
         default,

                  (14)   Hedging Agreements permitted under Section 4.03(b)(8),

                  (15)   any Person; provided, however, that such Investment is
                                     --------  -------
         acquired by the Company or any of its Restricted Subsidiaries (a) in
         exchange for any other Investment or accounts receivable held by the
         Company or any such Restricted Subsidiary in connection with or as a
         result of a bankruptcy, workout, reorganization or recapitalization of
         the issuer of such other Investment or accounts receivable or (b) as a
         result of a foreclosure by the Company or any of its Restricted
         Subsidiaries on a Lien,

                  (16)   any Person consisting of Guarantees issued in
         accordance with Section 4.03, and

                  (17)   any other Persons (in addition to the Investments
         permitted by clauses (1) through (16) of this definition) in aggregate
         amount not to exceed $200 million at any time outstanding; provided,
                                                                    --------
         however, that not more than $100 million in aggregate amount of such
         -------
         Investments may be made in any calendar year.

                  "Permitted Liens" means, with respect to any Person,

                  (1)   pledges or deposits by such Person under worker's
         compensation laws, unemployment insurance laws or similar legislation,
         or good faith deposits in connection with bids, tenders, contracts
         (other than for the payment of Indebtedness) or leases to which such
         Person is a party, or deposits to secure public or statutory
         obligations of such Person or deposits of cash or United States
         government bonds to secure surety or appeal bonds to which such Person
         is a party, or deposits as security for contested taxes or import
         duties or for the payment of rent, in each case Incurred in the
         ordinary course of business;

                                      28



                  (2)   Liens imposed by law, such as carriers', warehousemen's
         and mechanics' Liens and other similar Liens, in each case for sums not
         yet overdue by more than 30 days or being contested in good faith by
         appropriate proceedings or other Liens arising out of judgments or
         awards against such Person with respect to which such Person shall then
         be proceeding with an appeal or other proceedings for review and Liens
         arising solely by virtue of any statutory or common law provision
         relating to banker's Liens, rights of set-off or similar rights and
         remedies as to deposit accounts or other funds maintained with a
         creditor depository institution; provided, however, that (A) such
                                          --------  -------
         deposit account is not a dedicated cash collateral account and is not
         subject to restrictions against access by the Company in excess of
         those set forth by regulations promulgated by the Federal Reserve Board
         and (B) such deposit account is not intended by the Company or any
         Restricted Subsidiary to provide collateral to the depository
         institution;

                  (3)   Liens for taxes, assessments or other governmental
         charges not yet due or payable or subject to penalties for non-payment
         or which are being contested in good faith by appropriate proceedings;

                  (4)   Liens to secure the performance of bids, trade
         contracts, leases, statutory obligations, surety and appeal bonds,
         performance bonds and other obligations of a like nature, in each case
         in the ordinary course of business;

                  (5)   minor survey exceptions, minor encumbrances, easements
         or reservations of, or rights of others for, licenses, rights-of-way,
         sewers, electric lines, telegraph and telephone lines and other similar
         purposes, or zoning or other restrictions as to the use of real
         property or Liens incidental to the conduct of the business of such
         Person or to the ownership of its properties which were not Incurred in
         connection with Indebtedness and which do not in the aggregate
         materially adversely affect the value of

                                      29



         said properties or materially impair their use in the operation of the
         business of such Person;

                  (6)   Liens securing Indebtedness Incurred to finance the
         construction, purchase or lease of, or repairs, improvements or
         additions to, property (real or personal, tangible or intangible),
         plant or equipment (whether through the direct purchase of assets or
         the Capital Stock of any person owning such assets) of such Person;
         provided, however, that the Lien may not extend to any other property
         --------  -------
         owned by such Person or any of its Restricted Subsidiaries at the time
         the Lien is Incurred (other than assets and property affixed or
         appurtenant thereto), and the Indebtedness (other than any interest
         thereon) secured by the Lien may not be Incurred more than 180 days
         after the later of the acquisition, completion of construction, repair,
         improvement, addition or commencement of full operation of the property
         subject to the Lien;

                  (7)   Liens to secure Indebtedness permitted under Section
         4.03(b)(1);

                  (8)   Liens existing on the Issue Date;

                  (9)   Liens on property or shares of Capital Stock of another
         Person at the time such other Person becomes a Subsidiary of such
         Person; provided, however, that the Liens may not extend to any other
                 --------  -------
         property owned by such Person or any of its Restricted Subsidiaries
         (other than assets and property affixed or appurtenant thereto);

                  (10)  Liens securing Hedging Obligations so long as such
         Hedging Obligations relate to Indebtedness that is, and is permitted to
         be under this Indenture, secured by a Lien on the same property
         securing such Hedging Obligations;

                  (11)  Liens on property at the time the Company or a
         Restricted Subsidiary acquires such property, including any
         acquisition by means of a merger or consolidation with or into the
         Company or any

                                      30



         Restricted Subsidiary; provided, however, that such Liens are not
                                --------  -------
         created or Incurred in connection with, or in contemplation of, such
         acquisition; provided further, however, that the Liens may not extend
                      -------- -------  -------
         to any other property owned by the Company or any Restricted
         Subsidiary;

                  (12)  Liens on specific items of inventory or other goods of
         any Person securing such Person's obligations in respect of bankers'
         acceptances issued or created for the account of such Person solely to
         facilitate the purchase, shipment or storage of such inventory or other
         goods;

                  (13)  Liens consisting of leases and subleases of real
         property by the Company or any of its Restricted Subsidiaries which do
         not materially interfere with the ordinary conduct of the business of
         the Company or any of its Restricted Subsidiaries;

                  (14)  Liens arising from Uniform Commercial Code financing
         statement filings by lessors regarding operating leases entered into by
         such lessors and the Company and its Restricted Subsidiaries in the
         ordinary course of business;

                  (15)  Liens in favor of the Company or any of its Restricted
         Subsidiaries;

                  (16)  Liens over goods in favor of customs and revenue
         authorities arising as a matter of law to secure payment of customs
         duties in connection with the importation of such goods;

                  (17)  licenses of intellectual property of the Company and
         its Restricted Subsidiaries granted in the ordinary course of business;

                  (18)  to the extent not included in clauses (1) through (17)
         above, any other Lien that is permitted under the Credit Agreement in
         effect as of the Issue Date; and

                                      31



                  (19)  Liens to secure any Refinancing (or successive
         Refinancings) as a whole, or in part, of any Indebtedness secured by
         any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10),
         (11) or (14); provided, however, that:
                       --------  -------

                           (A)   such new Lien shall be limited to all or part
                  of the same property and assets that secured or, under the
                  written agreements pursuant to which the original Lien arose,
                  could secure the original Lien (plus improvements and
                  accessions to, such property or proceeds or distributions
                  thereof); and

                           (B)   the Indebtedness secured by such Lien at such
                  time is not increased to any amount greater than the sum of
                  (x) the outstanding principal amount or, if greater, committed
                  amount of the Indebtedness described under clauses (6), (7),
                  (8), (9), (10), (13) or (16) at the time the original Lien
                  became a Permitted Lien and (y) an amount necessary to pay any
                  fees and expenses, including premiums, related to such
                  refinancing, refunding, extension, renewal or replacement.

                  Notwithstanding the foregoing, "Permitted Liens" will not
include any Lien described in clauses (6), (9) or (10) above to the extent such
Lien applies to any Additional Assets acquired directly or indirectly from Net
Available Cash pursuant to Section 4.06. For purposes of this definition, the
term "Indebtedness" shall be deemed to include interest on such Indebtedness.

                  "Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.

                  "Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary

                                      32



liquidation or dissolution of such Person, over shares of Capital Stock of any
other class of such Person.

                  "principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security which is due or overdue or is
to become due at the relevant time.

                  "Publicly Traded Equity Securities" means equity securities
of companies (other than any Affiliate of the Company) which are listed on the
New York Stock Exchange, the Nasdaq National Market or another recognized
national securities exchange.

                  "Purchase Money Indebtedness" means Indebtedness

                  (1)   consisting of the deferred purchase price of an asset,
         conditional sale obligations, obligations under any title retention
         agreement and other purchase money obligations, in each case where the
         maturity of such Indebtedness does not exceed the anticipated useful
         life of the asset being financed, and

                  (2)   incurred to finance the acquisition by the Company or a
         Restricted Subsidiary of such asset, including additions and
         improvements;

provided, however, that such Indebtedness is incurred within 180 days after the
- --------  -------
acquisition by the Company or such Restricted Subsidiary of such asset.

                  "Rating Agency" means S&P and Moody's or, if S&P or Moody's
or both shall not make a rating on the Securities publicly available, a
nationally recognized statistical rating agency or agencies, as the case may
be, selected by the Company (as certified by a resolution of the Board of
Directors of the Company) which shall be substituted for S&P or Moody's or
both, as the case may be.

                  "Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such

                                      33



indebtedness. "Refinanced" and "Refinancing" shall have correlative meanings.

                  "Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of the Company or any Restricted Subsidiary existing on the
Issue Date or Incurred in compliance with this Indenture, including
Indebtedness that Refinances Refinancing Indebtedness; provided, however, that:
                                                       --------  -------

                  (1)   such Refinancing Indebtedness has a Stated Maturity no
         earlier than the Stated Maturity of the Indebtedness being Refinanced;

                  (2)   such Refinancing Indebtedness has an Average Life at the
         time such Refinancing Indebtedness is Incurred that is equal to or
         greater than the Average Life of the Indebtedness being Refinanced; and

                  (3)   such Refinancing Indebtedness has an aggregate principal
         amount (or if Incurred with original issue discount, an aggregate issue
         price) that is equal to or less than the aggregate principal amount (or
         if Incurred with original issue discount, the aggregate accreted value)
         then outstanding or committed (plus fees and expenses, including any
         premium and defeasance costs) under the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include (A)
- -------- -------  -------
Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of the
Company or (B) Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.

                  "Refinancing Transactions" means, collectively, the
transactions described under the caption "The Refinancing" in the Offering
Memorandum.

                  "Registration Default" shall have the meaning assigned to
such term in the Registration Rights Agreement.

                                      34



                  "Registration Rights Agreement" means the Registration Rights
Agreement dated May 13, 2002, among the Company and the Initial Purchasers.

                  "Related Business" means any business related, ancillary or
complementary to the businesses of the Company and its Restricted Subsidiaries
on the Issue Date or which constitutes a reasonable extension or expansion of
such businesses.

                  "Restricted Payment" with respect to any Person means

                  (1)   the declaration or payment of any dividends or any other
         distributions of any sort in respect of its Capital Stock (including
         any payment in connection with any merger or consolidation involving
         such Person) or similar payment to the direct or indirect holders of
         its Capital Stock (other than dividends or distributions payable solely
         in its Capital Stock (other than Disqualified Stock) and dividends or
         distributions payable solely to the Company or a Restricted Subsidiary,
         and other than pro rata dividends or other distributions made by a
         Subsidiary that is not a Wholly Owned Subsidiary to minority
         stockholders (or owners of an equivalent interest in the case of a
         Subsidiary that is an entity other than a corporation)),

                  (2)   the purchase, redemption or other acquisition or
         retirement for value of any Capital Stock of the Company held by any
         Person or of any Capital Stock of a Restricted Subsidiary held by any
         Affiliate of the Company (other than a Restricted Subsidiary),
         including in connection with any merger or consolidation and including
         the exercise of any option to exchange any Capital Stock (other than
         into Capital Stock of the Company that is not Disqualified Stock),

                  (3)   the purchase, repurchase, redemption, defeasance or
         other acquisition or retirement for value, prior to scheduled
         maturity, scheduled repayment or scheduled sinking fund payment of
         any Subordinated Obligations of such Person (other than

                                      35



         the purchase, repurchase or other acquisition of Subordinated
         Obligations purchased in anticipation of satisfying a sinking fund
         obligation, principal installment or final maturity, in each case due
         within one year of the date of such purchase, repurchase or other
         acquisition),

                  (4)   any distribution or other payment (whether in cash,
         securities or other property or any combination thereof) under or in
         respect of any Deferred Compensation Plan, or

                  (5)   the making of any Investment (other than a Permitted
         Investment) in any Person.

                  "Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.

                  "S&P" means Standard & Poor's Rating Group, Inc. and its
successors.

                  "Sale/Leaseback Transaction" means an arrangement relating to
property owned the Company or a Restricted Subsidiary on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or a Restricted Subsidiary leases it from such Person, other than
leases between the Company and a Wholly Owned Subsidiary.

                  "SEC" means the U.S. Securities and Exchange Commission.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Securities" means the Securities issued under this Indenture.

                  "Senior Indebtedness" means with respect to any Person:

                                      36



                  (1)   Indebtedness of such Person, whether outstanding on the
         Issue Date or thereafter Incurred, and

                  (2)   accrued and unpaid interest (including interest accruing
         on or after the filing of any petition in bankruptcy or for
         reorganization relating to such Person whether or not post-filing
         interest is allowed in such proceeding) in respect of (A) indebtedness
         of such Person for money borrowed and (B) indebtedness evidenced by
         notes, debentures, bonds or other similar instruments for the payment
         of which such Person is responsible or liable,

unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are subordinate in right of payment to the
Securities; provided, however, that Senior Indebtedness shall not include
            --------  -------

                  (1)   any obligation of such Person to any Subsidiary,

                  (2)   any liability for Federal, state, local or other taxes
         owed or owing by such Person,

                  (3)   any accounts payable or other liability to trade
         creditors arising in the ordinary course of business (including
         guarantees thereof or instruments evidencing such liabilities),

                  (4)   any Indebtedness of such Person (and any accrued and
         unpaid interest in respect thereof) which is subordinate or junior in
         any respect to any other Indebtedness or other obligation of such
         Person, or

                  (5)   that portion of any Indebtedness which at the time of
         Incurrence is Incurred in violation of this Indenture.

                  "Shareholders' Agreement" means each of (1) that certain
Shareholders' Agreement dated as of November 22, 2000, among each of the
Sponsors and New SAC and (2) that

                                      37



certain Management Shareholders Agreement dated as of November 22, 2000, among
each of the members of the management group that held ordinary shares of New
SAC on November 22, 2000, and New SAC, each as in effect on the Issue Date.

                  "Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.

                  "Sponsors" means Silver Lake Capital Partners, L.P., Integral
Capital Partners, TPG Partners III, L.P., August Capital, JPMorgan Capital
Partners and GS Capital Partners III, L.P. and each of their respective
Affiliates that is a party to a Shareholders' Agreement.

                  "Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).

                  "Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect.

                  "Subsidiary" means, with respect to any Person, any
corporation, association, partnership or other business entity of which more
than 50% of the total voting power of shares of Voting Stock is at the time
owned or controlled, directly or indirectly, by (1) such Person, (2) such Person
and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of
such Person.

                  "Temporary Cash Investments" means any of the following:

                                      38



                  (1)   any investment in direct obligations of the United
         States of America or any agency thereof or obligations guaranteed by
         the United States of America or any agency thereof;

                  (2)   investments in (a) time deposit accounts, bankers'
         acceptances, certificates of deposit and money market deposits maturing
         within one year of the date of acquisition thereof issued by a bank or
         trust company which is organized under the laws of the United States of
         America, any State thereof or any foreign country recognized by the
         United States of America or (b) obligations of United States federal
         agencies sponsored by the federal government (including, without
         limitation, Federal Home Loan Bank, Federal Farm Credit Bank, Federal
         Home Loan Mortgage Corporation and Federal National Mortgage
         Association) but that are not direct obligations of the United States
         of America or any agency thereof and are not obligations guaranteed by
         the United States of America or any agency thereof; in each case which
         bank, trust company or federally sponsored agency has capital, surplus
         and undivided profits aggregating in excess of $250 million (or the
         foreign currency equivalent thereof) and has outstanding debt which is
         rated "A" (or such similar equivalent rating) or higher by at least one
         nationally recognized statistical rating organization (as defined in
         Rule 436 under the Securities Act) or any money-market fund sponsored
         by a registered broker dealer or mutual fund distributor;

                  (3)   fully collateralized repurchase obligations with a term
         of not more than 45 days for securities of the types described in
         clause (1) above or clauses (5), (6) or (7) below entered into with a
         financial institution meeting the qualifications described in clause
         (2) above;

                  (4)   investments in commercial paper, maturing not more than
         one year after the date of acquisition, issued by a corporation (other
         than an Affiliate of the Company) organized and in existence under the
         laws of the United States of America or any foreign country

                                      39



         recognized by the United States of America with a rating at the time
         as of which any investment therein is made of "P-1" (or higher)
         according to Moody's or "A-1" (or higher) according to S&P;

                  (5)   investments in securities with maturities of one year or
         less from the date of acquisition issued or fully guaranteed by any
         state, commonwealth or territory of the United States of America, or
         by any political subdivision or taxing authority thereof, and rated
         at least "A" by S&P or "A" by Moody's;

                  (6)   investments in securities with maturities of three years
         or less from the date of acquisition issued or fully guaranteed by any
         state, commonwealth or territory of the United States of America, or by
         any political subdivision or taxing authority thereof, and rated at
         least "AA" by S&P or "Aa" by Moody's;

                  (7)   securities issued by any foreign government or any
         political subdivision of any foreign government or any public
         instrumentality thereof having maturities of not more than six months
         from the date of acquisition thereof and, at the time of acquisition,
         having one of the two highest credit ratings obtainable from Moody's or
         S&P;

                  (8)   investments in corporate bonds or notes maturing not
         more than three years from the date of acquisition thereof and
         having, at the date of such acquisition, a rating of at least "AA" by
         S&P or "Aa" by Moody's;

                  (9)   auction rate preferred stock maturing not more than 90
         days from the date of acquisition thereof and having a rating of at
         least "A" by S&P or "A" by Moody's; and

                  (10)  money market funds that (i) comply with the criteria
         set forth in SEC Rule 2A-7 under the Investment Company Act of 1940
         and (ii) have portfolio assets of at least $1 billion.

                                      40



                  "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)
                                                                  ------
(S) 77aaa-77bbbb) as in effect on the date of this Indenture.

                  "Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by, and published in, the most recent Federal Reserve Statistical
Release H.15(519) which has become publicly available at least two Business
Days prior to the date fixed for redemption of the Securities following a
Change of Control (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the
period from the redemption date to May 15, 2006; provided, however, that if the
                                                 --------  -------
period from the redemption date to May 15, 2006 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average
yields of United States Treasury securities for which such yields are given,
except that if the period from the redemption date to May 15, 2006 is less than
one year, the weekly average yield on actually traded United States Treasury
adjusted to a constant maturity of one year shall be used.

                  "Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.

                  "Trust Officer" means the Chairman of the Board, the
President or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.

                  "Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.

                  "Unrestricted Subsidiary" means:

                  (1)   any Subsidiary of the Company that at the time of
         determination shall be designated an

                                      41



         Unrestricted Subsidiary by the Board of Directors of the Company in the
         manner provided below, and

                  (2)   any Subsidiary of an Unrestricted Subsidiary.

                  The Board of Directors of the Company may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds
any Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided,
                                                                --------
however, that (A) the Subsidiary to be so designated has total assets of $1,000
- -------
or less, (B) the Subsidiary to be so designated became a Subsidiary of the
Company upon the consolidation of or merger with or into Parent or the merger
of Parent into the Company if such designation is made at the time of such
consolidation or merger and the shareholders of Parent and the Company receive
no consideration in connection with any such consolidation or merger other than
Capital Stock of the successor company (but excluding any Disqualified Stock)
or (C) if such Subsidiary has assets greater than $1,000, such designation
would be permitted under Section 4.04.

                  The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
                                                       --------  -------
immediately after giving effect to such designation (A) the Company could Incur
$1.00 of additional Indebtedness under Section 4.03(a) and (B) no Default shall
have occurred and be continuing. Any such designation by the Board of Directors
of the Company shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution of the Board of Directors of the Company
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.

                  "U.S. Dollar Equivalent" means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign
currency

                                      42



involved in such computation into U.S. dollars at the spot rate for the
purchase of U.S. dollars with the applicable foreign currency as published in
The Wall Street Journal in the "Exchange Rates" column under the heading
"Currency Trading" on the date two Business Days prior to such determination.

                  "U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.

                  "Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.

                  "Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned
by the Company or one or more Wholly Owned Subsidiaries.

                                      43



             Other Definitions.
             ------------------

                                                                     Defined in
                     Term                                              Section
                     ----                                              -------
"Additional Amounts"............................................     4.13
"Affiliate Transaction".........................................     4.07
"Appendix"......................................................     2.01
"Authorized Agent"..............................................     11.13(b)
"Bankruptcy Law"................................................     6.01
"Change of Control Offer".......................................     4.09(b)
"covenant defeasance option"....................................     8.01(b)
"cross acceleration provisions".................................     6.01
"Custodian".....................................................     6.01
"Event of Default" .............................................     6.01
"Excess Interim Tax Distributions"..............................     4.04(b)(15)
"Guaranteed Obligation".........................................     10.01
"Initial Lien"..................................................     4.10
"legal defeasance option".......................................     8.01(b)
"Legal Holiday".................................................     11.08
"Notice of Default".............................................     6.01
"Obligations"...................................................     10.01
"Offer".........................................................     4.06(b)
"Offer Amount"..................................................     4.06(c)(2)
"Offer Period"..................................................     4.06(c)(2)
"Paying Agent"..................................................      2.03
"Purchase Date" ................................................     4.07(c)(1)
"Registrar".....................................................     2.03
"Relevant Taxing Jurisdiction"..................................     4.13
"Subpart F income"..............................................     4.04(b)(15)
"Successor Company".............................................     5.01(a)
"Tax Distributions".............................................     4.04(b)(15)
"Taxes".........................................................     4.13

                  Incorporation by Reference of Trust Indenture Act.
                  --------------------------------------------------
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:

                  "Commission" means the SEC;

                                      44



                  "indenture securities" means the Securities and the Parent
Guaranty;

                  "indenture security holder" means a Securityholder;

                  "indenture to be qualified" means this Indenture;

                  "indenture trustee" or "institutional trustee" means the
Trustee; and

                  "obligor" on the indenture securities means the Company,
Parent and any other obligor on the indenture securities.

                  All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.

                  Rules of Construction. Unless the context otherwise requires:
                  ----------------------

                  (1)   a term has the meaning assigned to it;

                  (2)   an accounting term not otherwise defined has the meaning
         assigned to it in accordance with GAAP;

                  (3)   "or" is not exclusive;

                  (4)   "including" means including without limitation;

                  (5)   words in the singular include the plural and words in
         the plural include the singular;

                  (6)   unsecured Indebtedness shall not be deemed to be
         subordinate or junior to Secured Indebtedness merely by virtue of its
         nature as unsecured Indebtedness;

                  (7)   the principal amount of any noninterest bearing or other
         discount security at any date shall be the principal amount thereof
         that would be shown on a balance sheet of the issuer dated such date
         prepared in accordance with GAAP;

                                      45



                  (8)   interest payable on the Securities shall include any
         Additional Interest required to be paid on the Securities under the
         Registration Rights Agreement;

                  (9)   the principal amount of any Preferred Stock shall be (i)
         the maximum liquidation value of such Preferred Stock or (ii) the
         maximum mandatory redemption or mandatory repurchase price with respect
         to such Preferred Stock, whichever is greater;

                  (10)  all references to the date the Securities were
         originally issued shall refer to the Issue Date; and

                  (11)  all references to "$" or "dollars" are to U.S. dollars.

                                 The Securities
                                 --------------

                  Form and Dating.  Provisions relating to the Initial
                  ----------------
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix")
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Appendix which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in the Appendix, Exhibit 1 to the Appendix and Exhibit A
are part of the terms of this Indenture.

                                      46



                  Execution and Authentication.  One Officer shall sign the
                  -----------------------------
Securities for the Company by manual or facsimile signature.

                  If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.

                  A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.

                  The Trustee shall authenticate and deliver Securities as set
forth in the Appendix.

                  The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.

                  Registrar and Paying Agent.  The Company shall maintain an
                  ---------------------------
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.

                  The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of

                                      47



any such agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or any Wholly Owned Subsidiary
incorporated or organized within either the United States of America or the
Cayman Islands may act as Paying Agent, Registrar, co-registrar or transfer
agent.

                  The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.

                  The Company may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; provided,
                                                                     --------
however, that no such removal shall become effective until (a) acceptance of an
- -------
appointment by a successor Registrar or Paying Agent, as the case may be, as
evidenced by an appropriate agreement entered into by the Company and such
successor Registrar or Paying Agent, as the case may be, and delivered to the
Trustee or (b) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent, as the case may be, until the appointment in
accordance with clause (a) above. The Registrar or Paying Agent may resign at
any time upon written notice to the Company and the Trustee.

                                      48



                  Paying Agent To Hold Money in Trust.  Prior to each due date
                  ------------------------------------
of the principal and interest on any Security, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal of or interest on the Securities and shall notify
the Trustee of any default by the Company in making any such payment. If the
Company or a Wholly Owned Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it in trust for the benefit of
the Persons entitled thereto. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section 2.04, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.

                  Securityholder Lists.  The Trustee shall preserve in as
                  ---------------------
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.

                                      49



                  SECTION 2.06.   Transfer and Exchange.  The Securities shall
                                  ----------------------
be issued in registered form and shall be transferable only upon the surrender
of the Securities being transferred for registration of transfer and in
compliance with the Appendix. When a Security is presented to the Registrar or
a co-registrar with a request to register a transfer, the Registrar shall
register the transfer as requested if the requirements therefor are met. When
Securities are presented to the Registrar or a co-registrar with a request to
exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the
requirements therefor are met.

                  Replacement Securities.  If a mutilated Security is
                  -----------------------
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the Holder
satisfies any other reasonable requirements of the Trustee. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security. In
the event that any mutilated, lost, destroyed or wrongfully taken Security has
become or is about to become due and payable, the Company in its discretion may
pay such Security, together with all accrued and unpaid interest thereon,
instead of issuing a new Security in replacement thereof.

                  Every replacement Security is an additional obligation of the
Company.

                  The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.

                                      50



                  Outstanding Securities.  Securities outstanding at any time
                  -----------------------
are all Securities authenticated by the Trustee except for those canceled by
it, those delivered to it for cancellation and those described in this Section
2.08 as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.

                  If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.

                  If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date such Securities (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.

                  Temporary Securities.  Until definitive Securities are ready
                  ---------------------
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities upon surrender of such
temporary Securities at the office or agency of the Company, without charge to
the Holder.

                                      51



                  Cancellation.  The Company at any time may deliver Securities
                  -------------
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation. The Trustee shall not
authenticate Securities in place of canceled Securities other than pursuant to
the terms of this Indenture.

                  Defaulted Interest.  If the Company defaults in a payment of
                  -------------------
interest on the Securities, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.

                                      52



                  SECTION 2.12.   CUSIP Numbers.  The Company in issuing the
                                  --------------
Securities may use numbers assigned by the Committee on Uniform Securities
Identification Procedures ("CUSIP") and corresponding International Securities
Identification Numbers ("ISIN") (if then generally in use) and, if so, the
Trustee shall use CUSIP numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
         --------  -------
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the CUSIP or ISIN numbers.

                  Issuance of Additional Securities.  The Company shall be
                  ----------------------------------
entitled, subject to its compliance with Section 4.03, without the consent of
the Holders, to issue Additional Securities from time to time after the Issue
Date under this Indenture, in an unlimited aggregate principal amount, which
shall have identical terms as the Initial Securities issued on the Issue Date,
other than with respect to the date of issuance and issue price. The Initial
Securities issued on the Issue Date, any Additional Securities and all Exchange
Securities or Private Exchange Securities issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture, including,
without limitation, waivers, amendments, redemptions and offers to purchase.

                  With respect to any Additional Securities, the Company shall
set forth in a resolution of the Board of Directors of the Company and an
Officers' Certificate, a copy of each which shall be delivered to the Trustee,
the following information:

                  (1)   the aggregate principal amount of such Additional
         Securities to be authenticated and delivered pursuant to this
         Indenture;

                  (2)   the issue price, the issue date and the CUSIP or ISIN
         number of such Additional Securities; provided, however, that no
                                               --------  -------
         Additional Securities may be issued at

                                      53



         a price that would cause such Additional Securities to have "original
         issue discount" within the meaning of Section 1273 of the Code; and

                  (3)   whether such Additional Securities shall be Transfer
         Restricted Securities and issued in the form of Initial Securities as
         set forth in the Appendix to this Indenture or shall be issued in the
         form of Exchange Securities as set forth in Exhibit A.

                                   Redemption
                                   ----------

                  Notices to Trustee.  If the Company elects to redeem
                  -------------------
Securities pursuant to paragraph 5 or 6 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities
to be redeemed and the paragraph of the Securities pursuant to which the
redemption will occur.

                  The Company shall give each notice to the Trustee provided for
in this Section at least 45 but no more than 60 days before the redemption date
unless the Trustee consents to a shorter period. Such notice shall be
accompanied by an Officers' Certificate and an Opinion of Counsel from the
Company to the effect that such redemption will comply with the conditions
herein. Any such notice to the Trustee may be canceled by the Company by written
notice to the Trustee given no later than three Business Days prior to the date
on which the Trustee intends to mail notice of such redemption to any Holder and
shall thereby be void and of no effect.

                                      54



                  Selection of Securities To Be Redeemed.  If fewer than all the
                  ---------------------------------------
Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by a method that the Trustee in its sole
discretion shall deem to be fair and appropriate. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in principal amounts of $1,000 or an integral multiple
of $1,000, unless a Security has a principal amount of $1,000 or less, in which
case the Trustee may select the whole principal amount but not part of the
principal amount. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.

                  Notice of Redemption.  At least 30 days but not more than 60
                  ---------------------
days before a date for redemption of Securities, the Company shall mail a notice
of redemption by first-class mail to each Holder of Securities to be redeemed at
such Holder's registered address.

                  The notice shall identify the Securities to be redeemed and
shall state:

                  (1)   the redemption date;

                  (2)   the redemption price;

                  (3)   the name and address of the Paying Agent;

                  (4)   that Securities called for redemption must be
         surrendered to the Paying Agent to collect the redemption price;

                  (5)   if fewer than all the outstanding Securities are to be
         redeemed, the identification and principal amounts of the particular
         Securities to be redeemed;

                  (6)   that, unless the Company defaults in making such
         redemption payment, interest on Securities (or

                                      55



         portion thereof) called for redemption ceases to accrue on and after
         the redemption date;

                  (7)   the paragraph of the Securities pursuant to which the
         Securities called for redemption are being redeemed; and

                  (8)   that no representation is made as to the correctness or
         accuracy of the CUSIP or ISIN number, if any, listed in such notice or
         printed on the Securities.

                  At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.03.

                  Effect of Notice of Redemption.  Once notice of redemption is
                  -------------------------------
mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date). Failure to give notice or any defect
in the notice to any Holder shall not affect the validity of the notice to any
other Holder.

                                      56



                  Deposit of Redemption Price.  Prior to the redemption date,
                  ----------------------------
the Company shall deposit with the Paying Agent (or, if the Company or a Wholly
Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to
the Trustee for cancellation. On and after the redemption date, interest shall
cease to accrue on Securities or portions of Securities called for redemption
so long as the Issuer has deposited with the Paying Agent (or, if the Company
or a Wholly Owned Subsidiary is the Paying Agent, has segregated and holds in
trust) funds sufficient to pay in full the principal of, plus all accrued and
unpaid interest on, the Securities to be redeemed, unless the Paying Agent is
prohibited from taking such payment pursuant to the terms of this Indenture.

                  Securities Redeemed in Part.  Upon surrender of a Security
                  ----------------------------
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.

                                    Covenants
                                    ---------

                  Payment of Securities.  The Company shall promptly pay the
                  ----------------------
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.

                  The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

                                      57



                  SEC Reports.  Notwithstanding that the Company may not be
                  ------------
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC (unless not permitted by SEC practice)
and provide the Trustee and Securityholders within 15 days after it files them
(or would have filed them if permitted by SEC practice) with the SEC with such
annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such information, documents and other
reports to be so filed and provided at the times specified for the filing of
such information, documents and reports under such Sections; provided, however,
                                                             --------  -------
that in lieu of any annual report required of U.S. corporations, if the Company
is a "foreign private issuer" for purposes of the Exchange Act, the Company may
file and provide such annual report required of foreign private issuers subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
provided further, however, that (a) so long as Parent is the Guarantor of the
- -------- -------  -------
Securities, the reports, information and other documents required to be filed
and provided as described in this Section 4.02 may, at the Company's option, be
filed and provided by, and be those of, Parent rather than the Company, and (b)
in that event and if Parent conducts any business or holds any significant
assets other than the capital stock of the Company at the time of filing any
such report, information or other document, such reports, information and other
documents must include summarized financial information (consistent with that
provided in the Offering Memorandum) with respect to the Company and its
Subsidiaries. In addition, the Company shall furnish to the Holders of the
Securities and to prospective investors, upon the requests of such Holders or
prospective investors, any information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act so long any Securities are not freely
transferable under the Securities Act. The Company also shall comply with the
other provisions of TIA (S) 314(a).

                                      58



                  Limitation on Indebtedness.
                  ---------------------------

                  (a)   The Company shall not, and shall not permit any
Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company shall be entitled to Incur Indebtedness if,
- --------  -------
on the date of such Incurrence and after giving effect thereto, the Consolidated
Coverage Ratio exceeds 3.0 to 1.0.

                  (b)   Notwithstanding the foregoing paragraph (a), the Company
and the Restricted Subsidiaries shall be entitled to Incur any or all of the
following Indebtedness:

                  (1)   Indebtedness of the Company or any Restricted Subsidiary
         Incurred pursuant to the Credit Agreement; provided, however, that,
                                                    --------  -------
         immediately after giving effect to any such Incurrence, the aggregate
         principal amount of all Indebtedness Incurred under this clause (1) and
         then outstanding does not exceed $600 million;

                  (2)   Indebtedness owed to and held by the Company or a
         Restricted Subsidiary; provided, however, that (A) any subsequent
                                --------  -------
         issuance or transfer of any Capital Stock which results in any such
         Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
         subsequent transfer of such Indebtedness (other than to the Company or
         a Restricted Subsidiary) shall be deemed, in each case, to constitute
         the Incurrence of such Indebtedness by the obligor thereon and (B) if
         the Company is the obligor on such Indebtedness, such Indebtedness is
         expressly subordinated to the prior payment in full in cash of all
         obligations with respect to the Securities;

                  (3)   the Securities and the Exchange Securities (other than
         any Additional Securities);

                  (4)   any Indebtedness to the extent outstanding on the Issue
         Date after application of the proceeds from the sale of the Securities
         (other than Indebtedness described in clauses (1), (2) or (3) of this
         Section 4.03(b);

                  (5)   Indebtedness of a Restricted Subsidiary Incurred and
         outstanding on or prior to the date on

                                      59



         which such Restricted Subsidiary was acquired by the Company (other
         than Indebtedness Incurred in contemplation of, in connection with, as
         consideration in, or to provide all or any portion of the funds or
         credit support utilized to consummate, the transaction or series of
         related transactions pursuant to which such Restricted Subsidiary
         became a Subsidiary of or was otherwise acquired by the Company);
         provided, however, that on the date of such acquisition and after
         --------  -------
         giving pro forma effect thereto, either (A) the Company would have
         been able to Incur at least $1.00 of additional Indebtedness pursuant
         to Section 4.03(a) after giving effect to the Incurrence of such
         Indebtedness pursuant to this clause (5) or (B) the Consolidated
         Coverage Ratio after giving effect to such acquisition would be (i)
         greater than the Consolidated Coverage Ratio immediately prior to such
         acquisition and (ii) at least 2.5:1.0;

                  (6)   Refinancing Indebtedness in respect of Indebtedness
         Incurred pursuant to Section 4.03(a) or pursuant to clause (4) or (5)
         of this Section 4.03(b) or this clause (6);

                  (7)   Purchase Money Indebtedness and Refinancing Indebtedness
         in respect of Indebtedness Incurred pursuant to this clause (7) in an
         aggregate principal amount not to exceed $150 million at any time
         outstanding;

                  (8)   Hedging Obligations entered into in good faith to hedge
         risks with respect to the Company's and the Restricted Subsidiaries'
         interest rate, currency and commodity price exposure;

                  (9)   obligations in respect of workman's compensation,
         performance, bid and surety bonds, completion guarantees and payment
         obligations in connection with self-insurance or similar requirements
         provided by the Company or any Restricted Subsidiary in the ordinary
         course of business;

                  (10)  Indebtedness arising from the honoring by a bank or
         other financial institution of a check, draft or

                                      60



         similar instrument drawn against insufficient funds in the ordinary
         course of business; provided, however, that such Indebtedness is
                             --------  -------
         extinguished within five Business Days of its Incurrence;

                  (11)  Indebtedness arising from agreements of the Company or
         a Restricted Subsidiary providing for customary indemnification,
         adjustment of purchase price or similar obligations, in each case
         Incurred in connection with the acquisition or disposition of any
         business, assets or a Subsidiary by the Company or any Restricted
         Subsidiary in compliance with the terms of this Indenture, other than
         Indebtedness consisting of Guarantees of Indebtedness Incurred by any
         Person acquiring all or any portion of such business, assets or
         Subsidiary for the purpose of financing such acquisition;

                  (12)  obligations arising from or representing deferred
         compensation to employees of the Company or its Subsidiaries (A) that
         constitute or are deemed to be Indebtedness under GAAP and that are
         Incurred in the ordinary course of business or (B) pursuant to the
         Deferred Compensation Plans; and

                  (13)  Indebtedness of the Company or any Restricted Subsidiary
         in an aggregate principal amount which, when taken together with all
         other Indebtedness of the Company and the Restricted Subsidiaries
         outstanding on the date of such Incurrence (other than Indebtedness
         permitted by clauses (1) through (12) of this Section 4.03(b) or
         Section 4.03(a)) does not exceed $100 million.

                  (c)   Notwithstanding the foregoing, the Company and the
Restricted Subsidiaries shall not Incur any Indebtedness pursuant to Section
4.03(b) if the proceeds thereof are used, directly or indirectly, to Refinance
any Subordinated Obligations unless such Indebtedness shall be subordinated to
the Securities to at least the same extent as such Subordinated Obligations.

                  (d)   For purposes of determining compliance with this Section
4.03, (1) any Indebtedness outstanding under the

                                      61



Credit Agreement on the Issue Date will be treated as Incurred on the Issue Date
under Section 4.03(b)(1), (2) in the event that an item of Indebtedness meets
the criteria of more than one of the types of Indebtedness described herein, the
Company, in its sole discretion, shall classify such item of Indebtedness at the
time of Incurrence and only be required to include the amount and type of such
Indebtedness in one of the above clauses, (3) the Company shall be entitled to
divide and classify an item of Indebtedness in more than one of the types of
Indebtedness described herein, and (4) at any time that the Consolidated
Coverage Ratio exceeds 3.0 to 1.0, the Company may reclassify Indebtedness
originally Incurred pursuant to one or more clauses of Section 4.03(b) as
Indebtedness Incurred pursuant to Section 4.03(a) but only to the extent such
Indebtedness could have been Incurred pursuant to Section 4.03(a).

                  (e)   Notwithstanding any other provision of this Section
4.03, the maximum amount of Indebtedness that the Company or any Restricted
Subsidiary may Incur pursuant to this Section 4.03 shall not be deemed to be
exceeded solely as a result of fluctuations in the exchange rates of currencies
after the date on which such Indebtedness was Incurred. For purposes of
determining compliance with any U.S. dollar denominated restriction on the
Incurrence of Indebtedness where the Indebtedness Incurred is denominated in a
different currency, the amount of such Indebtedness will be the U.S. Dollar
Equivalent determined on the date of the Incurrence of such Indebtedness;
provided, however, that if any such Indebtedness denominated in a different
- --------  -------
currency is subject to a Currency Agreement with respect to the U.S. dollar
covering all principal, premium, if any, and interest payable on such
Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be
as provided in such Currency Agreement. The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness being Refinanced
will be the U.S. Dollar Equivalent of the Indebtedness being Refinanced, except
to the extent that (1) such U.S. Dollar Equivalent was determined based on a
Currency Agreement, in which case the Refinancing Indebtedness will be
determined in accordance with the preceding sentence and (2) the principal
amount of the Refinancing Indebtedness exceeds the principal amount of the
Indebtedness being Refinanced, in which case the U.S.

                                      62



Dollar Equivalent of such excess will be determined on the date such Refinancing
Indebtedness is Incurred.

         (f)   Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.03.

                       Limitation on Restricted Payments.
                       ---------------------------------

         (a)   The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:

                  (1)   a Default shall have occurred and be continuing (or
         would result therefrom);

                  (2)   the Company is not entitled to Incur an additional
         $1.00 of Indebtedness under Section 4.03(a); or

                  (3)   the aggregate amount of such Restricted Payment and all
         other Restricted Payments since the Issue Date would exceed the sum of
         (without duplication):

                           (A)   50% of the Consolidated Net Income accrued
                  during the period (treated as one accounting period) from the
                  beginning of Fiscal 2002 to the end of the most recent fiscal
                  quarter ended for which financial statements are internally
                  available to the Company prior to the date of such Restricted
                  Payment (or, in case such Consolidated Net Income shall be a
                  deficit, minus 100% of such deficit); plus
                                                        ----

                           (B)   100% of the aggregate Net Cash Proceeds
                  received by the Company from the issuance or sale of its
                  Capital Stock (other than Disqualified Stock, Excluded
                  Contributions and Designated Preferred Stock) subsequent to
                  the beginning of Fiscal 2002 (other than an issuance or sale
                  to a

                                      63



                  Subsidiary of the Company and other than an issuance or sale
                  to an employee stock ownership plan or to a trust established
                  by the Company or any of its Subsidiaries for the benefit of
                  their employees) and 100% of any cash contribution (other than
                  Excluded Contributions) received by the Company from its
                  shareholders subsequent to the beginning of Fiscal 2002; plus
                                                                           ----

                           (C)   the amount by which Indebtedness of the Company
                  is reduced on the Company's balance sheet upon the conversion
                  or exchange subsequent to the beginning of Fiscal 2002 of any
                  Indebtedness of the Company convertible or exchangeable for
                  Capital Stock (other than Disqualified Stock) of the Company
                  (less the amount of any cash, or the fair value of any other
                  property, distributed by the Company upon such conversion or
                  exchange); provided, however, that the foregoing amount shall
                             --------  -------
                  not exceed the Net Cash Proceeds received by the Company or
                  any Restricted Subsidiary from the sale of such Indebtedness
                  (excluding Net Cash Proceeds from sales to a Subsidiary of the
                  Company or to an employee stock ownership plan or a trust
                  established by the Company or any of its Subsidiaries for the
                  benefit of their employees); plus
                                               ----

                           (D)   an amount equal to the sum of (x) the net
                  reduction in the Investments (other than Permitted
                  Investments) made by the Company or any Restricted Subsidiary
                  in any Person resulting from repurchases, repayments or
                  redemptions of such Investments by such Person, proceeds
                  realized on the sale of such Investment and proceeds
                  representing the return of capital (excluding dividends and
                  distributions), in each case received by the Company or any
                  Restricted Subsidiary and (y) to the extent such Person is an
                  Unrestricted Subsidiary, the portion (proportionate to the
                  Company's equity interest in such Subsidiary) of the fair
                  market value of the net assets of such Unrestricted Subsidiary
                  at the time such Unrestricted Subsidiary is designated a
                  Restricted

                                      64



                  Subsidiary; provided, however, that the foregoing sum shall
                              --------  -------
                  not exceed, in the case of any Person or Unrestricted
                  Subsidiary, the amount of Investments (excluding Permitted
                  Investments) previously made (and treated as a Restricted
                  Payment) by the Company or any Restricted Subsidiary in such
                  Person or Unrestricted Subsidiary.

                  (b)   The provisions of Section 4.04(a) shall not prohibit:

                  (1)   any Restricted Payment made out of the Net Cash Proceeds
         of the substantially concurrent sale of, or made by exchange for,
         Capital Stock of the Company (other than Disqualified Stock, other than
         Capital Stock issued or sold to a Subsidiary of the Company or an
         employee stock ownership plan or to a trust established by the Company
         or any of its Subsidiaries for the benefit of their employees and other
         than any such Net Cash Proceeds that have previously been applied under
         Sections 4.04(b)(1), (4), (12) or (14)) or a substantially concurrent
         cash capital contribution received by the Company from its
         shareholders; provided, however, that (A) such Restricted Payment shall
                       --------  -------
         be excluded in the calculation of the amount of Restricted Payments and
         (B) the Net Cash Proceeds from such sale or such cash capital
         contribution (to the extent so used for such Restricted Payment) shall
         be excluded from the calculation of amounts under Section
         4.04(a)(3)(B);

                  (2)   any purchase, repurchase, redemption, defeasance or
         other acquisition or retirement for value of Subordinated Obligations
         made by exchange for, or out of the proceeds of the substantially
         concurrent sale of, Indebtedness which is permitted to be Incurred
         pursuant to Section 4.03; provided, however, that such purchase,
                                   --------  -------
         repurchase, redemption, defeasance or other acquisition or retirement
         for value shall be excluded in the calculation of the amount of
         Restricted Payments;

                  (3)   dividends paid within 60 days after the date of
         declaration thereof if at such date of declaration such dividend would
         have complied with this Section 4.04;

                                      65



         provided, however, that such dividend shall be included in the
         --------  -------
         calculation of the amount of Restricted Payments;

                  (4)   so long as no Default has occurred and is continuing,
         the repurchase or other acquisition of shares of Capital Stock of New
         SAC, Parent or the Company or any of its Subsidiaries from employees,
         former employees, directors or former directors of New SAC, Parent or
         the Company or any of its Subsidiaries (or permitted transferees of
         such employees, former employees, directors or former directors),
         pursuant to the terms of the agreements (including employment
         agreements) or plans (or amendments thereto) approved by the Board of
         Directors of the Company under which such individuals purchase or sell
         or are granted the option to purchase or sell, shares of such Capital
         Stock; provided, however, that the aggregate amount of such
                --------  -------
         repurchases and other acquisitions shall not exceed $25 million in any
         calendar year (with unused amounts in any calendar year being
         permitted to be carried over for the two succeeding calendar years);
         provided further, however, that such amount in any calendar year may
         -------- -------  -------
         be increased by an amount not to exceed (A) the Net Cash Proceeds
         received by the Company or any of its Restricted Subsidiaries in such
         calendar year from the sale of Capital Stock of the Company or any of
         its Restricted Subsidiaries (other than Disqualified Stock or
         Preferred Stock and other than any such Net Cash Proceeds that have
         previously been applied under Sections 4.04(b)(1), (4), (12) or (14))
         to members of management or directors of the Company or any of its
         Restricted Subsidiaries that occurs after the Issue Date (provided
                                                                   --------
         that the amount of such cash proceeds utilized for any such
         repurchase, retirement, other acquisition or dividend will not
         increase the amount available for Restricted Payments under Section
         4.04(a)(3)) plus (B) the cash proceeds of key man life insurance
         policies received by the Company and its Restricted Subsidiaries in
         such calendar year after the Issue Date; provided further, however,
                                                  -------- -------  -------
         that such repurchases and other acquisitions shall be excluded in the
         calculation of the amount of Restricted Payments;

                                      66



                  (5)   dividends to Parent to be used by Parent solely to pay
         its franchise taxes and other fees required to maintain its corporate
         existence and to pay for general corporate and overhead expenses
         (including salaries and other compensation of the employees) incurred
         by Parent in the ordinary course of its business; provided, however,
                                                           --------  -------
         that such dividends shall not exceed $3 million in any calendar year;
         provided further, however, that such dividends shall be excluded in
         -------- -------  -------
         the calculation of the amount of Restricted Payments;

                  (6)   the payment of dividends on the Company's common stock
         following the first bona fide underwritten public offering of common
         stock of the Company or Parent, as the case may be, after the Issue
         Date, of up to 6% per annum of the Net Cash Proceeds received by the
         Company or Parent, as the case may be, from such public offering;
         provided, however, that (A) the aggregate amount of all such dividends
         --------  -------
         shall not exceed the aggregate amount of Net Cash Proceeds received by
         or, in the case of a public offering by Parent, contributed by Parent
         to the Company in connection with such public offering and (B) such
         dividends shall be included in the calculation of the amount of
         Restricted Payments;

                  (7)   the payment of, or the making of distributions to Parent
         solely to allow Parent to pay, annual management, consulting,
         monitoring and advisory fees to any of the Sponsors; provided, however,
                                                              --------  -------
         that any such payment is permitted by Section 4.07; provided further,
                                                             -------- -------
         however, that any such payment is excluded in the calculation of the
         -------
         amount of Restricted Payments;

                  (8)   the making of distributions to Parent and the making of
         distributions or other payments to participants under the Deferred
         Compensation Plans, in each case on or about the Issue Date in the
         amounts and on the terms described in the Offering Memorandum;
         provided, however, that such distributions and payments shall be
         --------  -------
         excluded in the calculation of the amount of Restricted Payments;

                  (9)   any prepayment, repayment, purchase, repurchase,
         redemption, retirement, defeasance or other

                                      67



         acquisition for value of Subordinated Obligations from Net Available
         Cash to the extent that any surplus Net Available Cash exists after
         the consummation of an offer to purchase Securities under Section
         4.06(a)(3)(C); provided, however, that such prepayment, repayment,
                        --------  -------
         purchase, repurchase, redemption, retirement, defeasance or other
         acquisition for value shall be excluded in the calculation of the
         amount of Restricted Payments;

                  (10)  any repurchase of Capital Stock of the Company deemed
         to occur upon the exercise of stock options to acquire Capital Stock of
         the Company if such Capital Stock represents a portion of the exercise
         price of such options; provided, however, that such repurchase shall be
                                --------  -------
         excluded in the calculation of the amount of Restricted Payments;

                  (11)  the declaration and payment of dividends or
         distributions to holders of any class or series of Disqualified Stock
         of the Company or its Restricted Subsidiaries issued or Incurred after
         the Issue Date in accordance with Section 4.03; provided, however,
                                                         --------  -------
         that such dividends or distributions shall be excluded in the
         calculation of the amount or Restricted Payments;

                  (12)  the declaration and payment of dividends to holders of
         any class or series of Designated Preferred Stock issued after the
         Issue Date; provided, however, that (A) for the most recently ended
                     --------  -------
         four full fiscal quarters for which financial statements are internally
         available to the Company immediately preceding the declaration of any
         such dividend after giving effect to such dividend on a pro forma
         basis, the Consolidated Coverage Ratio would have been at least
         3.0:1.0, and (B) the aggregate amount of dividends declared and paid
         pursuant to this Section 4.04(b)(12) on a particular class or series of
         Designated Preferred Stock does not exceed the Net Cash Proceeds
         received by the Company from the sale of such class or series of
         Designated Preferred Stock issued after the Issue Date that have not,
         at the date of such payment, been applied under Sections 4.04(b)(1),
         (4) or (12); provided further, however, that such dividends shall be
                      -------- -------  -------
         excluded in the calculation of the amount of Restricted Payments;

                                      68



                  (13) payments, or the making of distributions to Parent
         solely to allow payments, which are contemplated by the Indemnification
         Agreement; provided, however, that such payments shall be excluded in
                    --------  -------
         the calculation of the amount of Restricted Payments;

                  (14) investments that are made with Excluded Contributions
         (other than Excluded Contributions that have previously been applied
         under Sections 4.04(b)(1), (4) or (14)); provided, however, that such
                                                  --------  -------
         Investments shall be excluded in the calculation of the amount of
         Restricted Payments;

                  (15) if the Company or any of its Subsidiaries is a controlled
         foreign corporation for United States federal income tax purposes for
         all or a portion of the Company's or any such Subsidiary's taxable
         year, the declaration and payment of dividends or distributions on the
         Company's Capital Stock within 30 days after the end of the calendar
         year during which such taxable year ends, in a maximum amount equal to
         the product of (x) the aggregate amount of "Subpart F income" (within
         the meaning of Section 952 of the Code, which for the purposes of this
         Section 4.04(b)(15) shall include income includable under Section
         951(a)(1)(B) of the Code) of the Company for the portion of such
         taxable year for which the Company was a controlled foreign corporation
         plus the amount of Subpart F income of any of the Company's
         Subsidiaries for the portion of such taxable year for which such
         Subsidiary was a controlled foreign corporation, multiplied by (y) 40%
         (such dividends, "Tax Distributions"); provided that (A) the Company
                                                --------
         shall have delivered to the Trustee at least 30 calendar days prior to
         the declaration of such Tax Distribution or any interim Tax
         Distribution pursuant to clause (C) of this Section 4.04(b)(15), a
         notice, certified by the Chief Financial Officer of the Company,
         setting forth in detail reasonably satisfactory to the Trustee the
         basis for the determination of the amount of such Tax Distribution, (B)
         Tax Distributions in respect of any Subpart F income of an Unrestricted
         Subsidiary shall only be permitted if they are made with the proceeds
         of dividends or distributions from an

                                      69



         Unrestricted Subsidiary that are received by the Company or a
         Restricted Subsidiary; provided that the amount of such dividends and
                                --------
         distributions will not increase the amount available for Restricted
         Payments under Section 4.04(a)(3), (C)(i) interim Tax Distributions
         may be made during each calendar year on or shortly after April 10,
         June 10, September 10 and December 31 of such year based on good-faith
         estimates of the Subpart F income, if any, of the Company and its
         Subsidiaries for the taxable year to which such interim Tax
         Distribution relates and (ii) if any such interim Tax Distributions
         are made by the Company during a calendar year, then within 30
         calendar days after the end of such calendar year the Company shall
         deliver to the Trustee a determination of the maximum amount of Tax
         Distributions that may be made for such calendar year, and if the
         aggregate interim Tax Distributions made for such calendar year exceed
         such maximum, then such excess amount ("Excess Interim Tax
         Distributions") shall be applied to reduce amounts payable under any
         subsection of this Section 4.04(b) for the next calendar year and to
         the extent not so applied, shall be carried forward for application
         against such amounts in a future calendar year, and (D)(i) any Tax
         Distributions (excluding any Excess Interim Tax Distributions) paid
         pursuant to this Section 4.04(b)(15) shall be excluded in the
         calculation of the amount of Restricted Payments and (ii) any Excess
         Interim Tax Distributions shall be included in the amount of
         Restricted Payments;

                  (16)  immediately prior to or concurrently with the initial
         public offering of the Company that would permit Parent to be released
         from the Parent Guaranty pursuant to Section 10.05(a), the making of
         distributions by the Company to Parent and the making of distributions
         or other payments to participants under the Deferred Compensation
         Plans; provided, however, that (A) on the date of such distributions
                --------  -------
         and payments and after giving effect to such distributions and payments
         and to such initial public offering and the Net Cash Proceeds therefrom
         (i) the ratio of (x) the average amount of cash and cash equivalents
         held by the Company and the Restricted Subsidiaries at the close of
         business during the five Business Day period ending three Business Days

                                      70



         prior to the date of payment of such distributions and payments to (y)
         the aggregate amount of all Indebtedness of the Company and the
         Restricted Subsidiaries outstanding as of such date of payment is no
         less than 1.1 to 1.0, and (ii) no Event of Default has occurred and is
         continuing, and (B) no later than two Business Days prior to the date
         of payment of such distributions and payments, the Company shall have
         delivered to the Trustee an Officers' Certificate dated as of such date
         that (i) sets forth, in reasonable detail, the calculation of the
         amount of such distribution and payment and (ii) certifies compliance
         with the ratio set forth in clause (A) of the first proviso to this
         Section 4.04(b)(16); provided further, however, that (x) the aggregate
                              -------- -------  -------
         amount of all such distributions and payments under this Section
         4.04(b)(16) shall not exceed $580,000,000 minus the aggregate amount of
         all distributions and payments made pursuant to Section 4.04(b)(8) and
         (y) the amount of any distribution and payment pursuant to this Section
         4.04(b)(16) shall be included in the calculation of the amount of
         Restricted Payments;

                  (17)  Restricted Payments consisting of distributions or other
         payments (whether in cash, securities or other property or any
         combination thereof) under any Deferred Compensation Plan; provided,
                                                                    --------
         however, that such distributions or payments under this Section
         -------
         4.04(b)(17) shall be included in the calculation of the amount of
         Restricted Payments;

                  (18)  Restricted Payments in an aggregate amount not to exceed
         $60 million consisting of dividends or distributions made or paid to
         Parent prior to or in connection with an underwritten initial public
         offering of the Company's common stock; provided that (A) the entire
                                                 --------
         amount of such dividends or distributions are immediately contributed
         or otherwise provided, directly or indirectly, to XIOtech Corporation,
         (B) the entire amount of such dividends or distributions are
         immediately used by XIOtech Corporation to repay in full all amounts
         then owed by XIOtech Corporation to the Company or its Restricted
         Subsidiaries and (C) all dividends, distributions or payments made or
         paid

                                      71



         pursuant to this Section 4.04(b)(18) shall be excluded in the
         calculation of the amount of Restricted Payments; and

                  (19)  other Restricted Payments in an aggregate amount not to
         exceed $75 million; provided, however, that such Restricted Payments
                             --------  -------
         shall be excluded in the calculation of the amount of Restricted
         Payments.

         (c)   Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.04.

               Limitation on Restrictions on Distributions from Restricted
               -----------------------------------------------------------
Subsidiaries.
- ------------

                  (a)   The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (1) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (2) make any loans or advances to the Company
or (3) transfer any of its property or assets to the Company, except:

         (i)   with respect to clauses (1), (2) and (3),

                  (A)   any encumbrance or restriction pursuant to the Credit
         Agreement, as in effect at the Issue Date, and any other agreement in
         effect at or entered into on the Issue Date;

                  (B)   any encumbrance or restriction with respect to a
         Restricted Subsidiary contained in the terms of any Indebtedness of
         such Restricted Subsidiary, which Indebtedness was permitted to be
         Incurred pursuant to Section 4.03 or any agreement pursuant to which
         such Indebtedness was Incurred if (x) either (i) the encumbrance or
         restriction applies only in the event of

                                      72



         and during the continuance of a payment default or a default with
         respect to a financial covenant contained in such Indebtedness or
         agreement or (ii) the Company determines at the time any such
         Indebtedness is Incurred (and at the time of any modification of the
         terms of any such encumbrance or restriction) that any such
         encumbrance or restriction will not materially affect the Company's
         ability to make principal, premium (if any) or interest payments on
         the Securities and (y) the encumbrance or restriction is not
         materially more disadvantageous to the Holders of the Securities than
         is customary in comparable financings or agreements (as determined by
         the Board of Directors of the Company in good faith);

                  (C)   any encumbrance or restriction with respect to a
         Restricted Subsidiary pursuant to an agreement relating to any
         Indebtedness Incurred by such Restricted Subsidiary on or prior to the
         date on which such Restricted Subsidiary was acquired by the Company
         (other than Indebtedness Incurred in contemplation of, in connection
         with, as consideration in, or to provide all or any portion of the
         funds or credit support utilized to consummate, the transaction or
         series of related transactions pursuant to which such Restricted
         Subsidiary became a Restricted Subsidiary or was acquired by the
         Company) and outstanding on such date;

                  (D)   any encumbrance or restriction pursuant to an agreement
         effecting a Refinancing of Indebtedness Incurred pursuant to an
         agreement referred to in Section 4.05(a)(i)(A), (B) or (C) or this
         clause (D) or contained in any amendment to an agreement referred to in
         Section 4.05(a)(i)(A), (B) or (C) or this clause (D); provided,
                                                               --------
         however, that the encumbrances and restrictions with respect to such
         -------
         Restricted Subsidiary contained in any such refinancing agreement or
         amendment are no less favorable to the Securityholders than
         encumbrances and restrictions with respect to such Restricted
         Subsidiary contained in such predecessor agreements;

                  (E)   any encumbrance or restriction pursuant to applicable
         law, rule, regulation or order;

                                      73



                  (F)   any encumbrance or restriction on cash or other deposits
         or net worth imposed by customers under contracts entered into in the
         ordinary course of business; and

                  (G)   customary provisions in joint venture agreements and
         other similar agreements entered into in the ordinary course of
         business; and

         (ii)   with respect to clause (3) only,

                  (A)   any such encumbrance or restriction consisting of
         customary nonassignment provisions in leases governing leasehold
         interests to the extent such provisions restrict the transfer of the
         lease or the property leased thereunder;

                  (B)   restrictions contained in security agreements or
         mortgages securing Indebtedness of a Restricted Subsidiary to the
         extent such restrictions restrict the transfer of the property subject
         to such security agreements or mortgages; and

                  (C)   any restriction with respect to a Restricted Subsidiary
         imposed pursuant to an agreement entered into for the sale or
         disposition of all or substantially all the Capital Stock or assets of
         such Restricted Subsidiary pending the closing of such sale or
         disposition.

                  (b)   Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.05.

                  Limitation on Sales of Assets and Subsidiary Stock.
                  --------------------------------------------------

                  (a)   The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, consummate any Asset
Disposition unless (1) the Company or such Restricted Subsidiary receives
consideration at the time

                                      74



of such Asset Disposition at least equal to the fair market value (including as
to the value of all non-cash consideration), as determined in good faith by the
Board of Directors of the Company, of the shares and assets subject to such
Asset Disposition, (2) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash or cash equivalents
and (3) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Restricted Subsidiary, as the
case may be) (A) first, to the extent the Company elects (or is required by the
                 -----
terms of any Indebtedness), to prepay, repay, redeem or purchase Senior
Indebtedness of the Company or Indebtedness (other than any Disqualified Stock)
of a Wholly Owned Subsidiary (in each case other than Indebtedness owed to the
Company or an Affiliate of the Company) within one year from the later of the
date of such Asset Disposition or the receipt of such Net Available Cash, (B)
second, to the extent of the balance of such Net Available Cash after
- ------
application in accordance with clause (A), to the extent the Company elects, to
acquire Additional Assets within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash and (C) third, to
                                                                    -----
the extent of the balance of such Net Available Cash after application in
accordance with clauses (A) and (B), to make an Offer to the holders of the
Securities (and to holders of other Senior Indebtedness of the Company
designated by the Company) to purchase Securities (and such other Senior
Indebtedness of the Company) pursuant to and subject to the conditions contained
in this Indenture; provided, however, that in connection with any prepayment,
                   --------  -------
repayment or purchase of Indebtedness pursuant to clause (A) or (C) above, the
Company or such Restricted Subsidiary shall permanently retire such Indebtedness
and shall cause the related loan commitment (if any) to be permanently reduced
in an amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06, the Company and
the Restricted Subsidiaries shall not be required to apply any Net Available
Cash in accordance with this Section 4.06(a) except to the extent that the
aggregate Net Available Cash from all Asset Dispositions which are not applied
in accordance with this Section 4.06(a) exceeds $25 million. Pending application
of Net Available Cash pursuant to this Section 4.06(a), such Net Available Cash
shall be invested in Temporary Cash

                                      75



Investments or applied to temporarily reduce revolving credit indebtedness.

                  For the purposes of this Section 4.06(a), the following are
deemed to be cash or cash equivalents: (1) the assumption of Indebtedness of the
Company or any Restricted Subsidiary and the release of the Company or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Asset Disposition; (2) securities received by the Company or any Restricted
Subsidiary in an Asset Disposition from the transferee with respect to which the
Company or such Restricted Subsidiary shall use its reasonable best efforts to
convert into cash within 90 days after the later to occur of (A) the
consummation of such Asset Disposition or (B) the expiration of any lock-up or
similar restriction on the right of the Company or such Restricted Subsidiary to
dispose of such securities; provided, however, that all the cash received upon
                            --------  -------
such conversion shall be Net Available Cash for the purposes of, and applied in
accordance with, this Section 4.06(a); and (3) any assets related to a Related
Business received in exchange for assets of comparable fair market value in the
good faith determination of the Board of Directors of the Company.

                  (b)   In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Indebtedness of the Company) pursuant
to Section 4.06(a)(3)(C), the Company shall purchase Securities tendered
pursuant to an offer by the Company for the Securities (and such other Senior
Indebtedness) (the "Offer") at a purchase price of 100% of their principal
amount (or, in the event such other Senior Indebtedness of the Company was
issued with significant original issue discount, 100% of the accreted value
thereof), without premium, plus accrued but unpaid interest (or, in respect of
such other Senior Indebtedness of the Company, such lesser price, if any, as may
be provided for by the terms of such Senior Indebtedness) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
Section 4.06(c). If the aggregate purchase price of Securities (and any other
Senior Indebtedness) tendered pursuant to the Offer exceeds the Net Available
Cash allotted to their purchase, the Company shall select the Securities and
other Senior Indebtedness to be purchased on a pro rata basis but in round

                                      76



denominations, which in the case of the Securities will be denominations of
$1,000 principal amount or multiples thereof. The Company shall not be required
to make an Offer to purchase Securities (and other Senior Indebtedness) pursuant
to this Section 4.06 if the Net Available Cash available therefor is less than
$25 million (which lesser amount shall be carried forward for purposes of
determining whether such an Offer is required with respect to the Net Available
Cash from any subsequent Asset Disposition). Upon completion of such Offer, Net
Available Cash will be deemed to be reduced by the aggregate amount of such
Offer.

                  (c)   (1)  Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Securities purchased by the Company either
in whole or in part (subject to prorating as described in Section 4.06(b) in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date (the "Purchase Date") not less than 30 days nor more than 60 days after the
date of such notice and shall contain such information concerning the business
of the Company which the Company in good faith believes will enable such Holders
to make an informed decision (which at a minimum will include (A) the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of Parent or the Company, as applicable, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of Parent or the Company, as applicable, filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Dispositions otherwise
described in the offering materials (or corresponding successor reports), (B) a
description of material developments in the Company's business subsequent to the
date of the latest of such Reports and (C) if material, appropriate pro forma
financial information) and all instructions and materials necessary to tender
Securities pursuant to the Offer, together with the information contained in
Section 4.06(c)(3).

                  (2)   Not later than the date upon which written notice of an
Offer is delivered to the Trustee as provided

                                      77



below, the Company shall deliver to the Trustee an Officers' Certificate as to
(A) the amount of the Offer (the "Offer Amount"), including information as to
any other Senior Indebtedness included in the Offer, (B) the allocation of the
Net Available Cash from the Asset Dispositions pursuant to which such Offer is
being made and (C) the compliance of such allocation with the provisions of
Section 4.06(a) and (b). On such date, the Company shall also irrevocably
deposit with the Trustee or with a Paying Agent (or, if the Company or any
Wholly Owned Subsidiary is acting as its own Paying Agent, segregate and hold in
trust) an amount equal to the Offer Amount to be invested in Temporary Cash
Investments, maturing on the last day prior to the Purchase Date or on the
Purchase Date if funds are immediately available by open of business, an amount
equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section 4.06. If the Offer includes other Senior
Indebtedness, the deposit described in the preceding sentence may be made with
any other paying agent pursuant to arrangements satisfactory to the Trustee.
Upon the expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Trustee (or the Paying Agent, if not the
Trustee) shall, on the Purchase Date, mail or deliver payment (or cause the
delivery of payment) to each tendering Holder in the amount of the purchase
price. In the event that the aggregate purchase price of the Securities
delivered by the Company to the Trustee (and other Senior Indebtedness tendered)
is less than the Offer Amount applicable to the Securities (and other Senior
Indebtedness tendered), the Trustee shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.

                  (3)   Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a facsimile transmission or letter setting

                                      78



forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. Holders whose
Securities are purchased only in part shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.

                  (4)   At the time the Company delivers Securities to the
Trustee which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section 4.06. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.

                  (d)   The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.06 by virtue of its
compliance with such securities laws or regulations.

                  (e)   Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.06.

                  Limitation on Affiliate Transactions.

                  (a)   The Company shall not, and shall not permit any
Restricted Subsidiary to, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with, or for the
benefit of,

                                      79



any Affiliate of the Company (an "Affiliate Transaction") unless:

                  (1)   the terms of the Affiliate Transaction are no less
         favorable to the Company or such Restricted Subsidiary than those that
         could be obtained at the time of such transaction in arm's-length
         dealings with a Person who is not such an Affiliate;

                  (2)   if such Affiliate Transaction involves an amount in
         excess of $25 million, the terms of the Affiliate Transaction are set
         forth in writing and a majority of the non-employee directors of the
         Company disinterested with respect to such Affiliate Transaction have
         determined in good faith that the criteria set forth in clause (1) are
         satisfied and have approved the relevant Affiliate Transaction as
         evidenced by a resolution of the Board of Directors of the Company;
         and
                  (3)   if such Affiliate Transaction involves an amount in
         excess of $50 million, the Board of Directors of the Company shall also
         have received a written opinion from an Independent Qualified Party to
         the effect that such Affiliate Transaction is fair, from a financial
         standpoint, to the Company and its Restricted Subsidiaries or not less
         favorable to the Company and its Restricted Subsidiaries than could
         reasonably be expected to be obtained at the time in an arm's-length
         transaction with a Person who was not an Affiliate.

                  (b)   The provisions of Section 4.07(a) shall not prohibit:

                  (1)   any Investment (other than a Permitted Investment) or
         other Restricted Payment, in each case permitted to be made pursuant to
         Section 4.04;

                  (2)   any issuance of securities, or other payments, awards or
         grants in cash, securities or otherwise pursuant to, or the funding of,
         employment arrangements, stock options and stock ownership plans
         approved by the Board of Directors of the Company;

                  (3)   loans or advances to employees in the ordinary course of
         business of the Company or its Restricted

                                      80



         Subsidiaries, but in any event not to exceed $15 million in the
         aggregate outstanding at any one time;

                  (4)   the payment of reasonable and customary fees and
         compensation to, or the provision of employee benefit arrangements and
         indemnity for the benefit of, directors, officers, employees and
         consultants of the Company and its Restricted Subsidiaries in the
         ordinary course of business;

                  (5)   any transaction with a Restricted Subsidiary or joint
         venture or similar entity which would constitute an Affiliate
         Transaction solely because the Company or a Restricted Subsidiary owns
         an equity interest in or otherwise controls such Restricted Subsidiary,
         joint venture or similar entity;

                  (6)   the payment by the Company or any of its Restricted
         Subsidiaries of (A) annual management, consulting, monitoring and
         advisory fees and any related and reasonable out-of-pocket expenses to
         any of the Sponsors in an aggregate amount, for all the Sponsors, not
         to exceed $5 million in any calendar year and (B) fees to any of the
         Sponsors paid for any financial advisory, financing, underwriting or
         placement services including, without limitation, in connection with
         any acquisition transaction or divestiture entered into by the Company
         or any Restricted Subsidiary; provided, however, that the aggregate
                                       --------  -------
         amount of fees paid to all of the Sponsors under this clause (B) in
         respect of any transaction shall not exceed the lesser of (i) 25% of
         the total amount of such transaction and (ii) the greater of 2% of the
         total amount of such transaction and $2 million;

                  (7)   the issuance or sale of any Capital Stock (other than
         Disqualified Stock) of the Company;

                  (8)   transactions with customers, clients, suppliers or
         purchasers or sellers of goods or services in each case in the ordinary
         course of business and otherwise in compliance with the terms of this
         Indenture which are fair to the Company or its Restricted Subsidiaries,
         in the good faith determination of the Board of Directors

                                      81



         of the Company or the senior management thereof, or are on terms at
         least as favorable as might reasonably have been obtained at such time
         from an unaffiliated party;

                  (9)   any agreement as in effect as of the Issue Date on the
         terms described in the Offering Memorandum or any amendment thereto (so
         long as any such amendment is not disadvantageous to the Holders of the
         Securities in any material respect) or any transaction contemplated
         thereby;

                  (10)  any licensing agreement or similar agreement entered
         into in the ordinary course of business relating to the use of
         technology or intellectual property between any of the Company and its
         Subsidiaries, on the one hand, and any company or other Person, on the
         other hand, which is an Affiliate of the Company or its Subsidiaries
         by virtue of the fact that a Sponsor has made an investment in or owns
         any Capital Stock of such company or other Person which are fair to
         the Company or its Restricted Subsidiaries, in the reasonable
         determination of the Board of Directors of the Company or the senior
         management thereof, or are on terms at least as favorable as might
         reasonably have been obtained at such time from an unaffiliated party;

                  (11)  the grant of stock options or similar rights to
         employees and directors of the Company or any of its Restricted
         Subsidiaries pursuant to plans approved by the Board of Directors of
         the Company in good faith; and

                  (12)  the existence of, or the performance by the Company or
         any of its Restricted Subsidiaries of its obligations under the terms
         of, any stockholders agreement (including any registration rights
         agreement or purchase agreement related thereto) to which it is a party
         as of the Issue Date, and any similar agreements which it may enter
         into thereafter; provided, however, that the existence of, or the
                          --------  -------
         performance by the Company or any of its Restricted Subsidiaries of its
         obligations under, any future amendment to such existing agreement or
         under any similar agreement entered into after the Issue Date shall
         only be permitted by this clause (12) to the extent that the terms of
         any such amendment or

                                      82



         new agreement are not disadvantageous to the Holders in any material
         respect.

         (c)   Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.07.

                  SECTION 4.08.   Limitation on the Sale or Issuance of Capital
                                  ---------------------------------------------
Stock of Restricted Subsidiaries.  The Company (1) shall not, and shall not
- ---------------------------------
permit any Restricted Subsidiary to, sell, lease, transfer or otherwise dispose
of any Capital Stock of any Restricted Subsidiary to any Person (other than to
the Company or a Wholly Owned Subsidiary) and (2) shall not permit any
Restricted Subsidiary to issue any of its Capital Stock (other than, if
necessary, shares of its Capital Stock constituting directors' or other legally
required qualifying shares) to any Person (other than to the Company or a Wholly
Owned Subsidiary) unless (A) immediately after giving effect to such issuance,
sale or other disposition, neither the Company nor any of its Subsidiaries own
any Capital Stock of such Restricted Subsidiary or (B) made in compliance with
Section 4.06 and, immediately after giving effect to such issuance, sale or
other disposition, such Restricted Subsidiary either (x) continues to be a
Restricted Subsidiary or (y) would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect thereto is
treated as a new Investment by the Company and such Investment would be
permitted to be made under Section 4.04 if made on the date of such issuance,
sale or other disposition. The proceeds of any sale of such Capital Stock
permitted hereby will be treated as Net Available Cash from an Asset Disposition
and must be applied in accordance with the terms of Section 4.06.

                  Change of Control.
                  ------------------

                  (a)   Upon the occurrence of a Change of Control, each Holder
shall have the right to require that the Company repurchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal amount
thereof on the date of purchase plus accrued and unpaid interest, if any, to

                                      83



the date of purchase (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.09(b).

                  (b)   Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder with a copy to the Trustee (the
"Change of Control Offer") stating:

                  (1)   that a Change of Control has occurred and that such
         Holder has the right to require the Company to purchase such Holder's
         Securities at a purchase price in cash equal to 101% of the principal
         amount thereof on the date of purchase, plus accrued and unpaid
         interest, if any, to the date of purchase (subject to the right of
         Holders of record on the relevant record date to receive interest on
         the relevant interest payment date);

                  (2)   the circumstances and relevant facts regarding such
         Change of Control;

                  (3)   the purchase date (which shall be no earlier than 30
         days nor later than 60 days from the date such notice is mailed); and

                  (4)   the instructions determined by the Company, consistent
         with this Section 4.09, that a Holder must follow in order to have its
         Securities purchased.

                  (c)   Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.

                                      84



                  (d)   On the purchase date, all Securities purchased by the
Company under this Section 4.09 shall be delivered by the Company to the Trustee
for cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.

                  (e)   Notwithstanding the foregoing provisions of this Section
4.09, the Company shall not be required to make a Change of Control Offer
following a Change of Control if (1) a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section applicable to a Change of Control Offer
made by the Company and purchases all Securities validly tendered and not
withdrawn under such Change of Control Offer or (2) the Company has exercised
its option to redeem all the Securities pursuant to Article 3.

                  (f)   The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.09. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.09, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.09 by virtue of its
compliance with such securities laws or regulations.

                                      85



                  SECTION 4.10.   Limitation on Liens.  The Company shall not,
                                  --------------------
and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur
or permit to exist any Lien (the "Initial Lien") of any nature whatsoever on any
of its properties (including Capital Stock of a Restricted Subsidiary), whether
owned at the Issue Date or thereafter acquired, securing any Indebtedness, other
than Permitted Liens, without effectively providing that the Securities shall be
secured equally and ratably with (or prior to) the obligations so secured for so
long as such obligations are so secured. Any Lien created for the benefit of the
Holders of the Securities pursuant to the preceding sentence shall provide by
its terms that such Lien shall be automatically and unconditionally released and
discharged upon the release and discharge of the Initial Lien.

                  SECTION 4.11.   Limitation on Sale/Leaseback Transactions.
                                  ------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to, enter
into any Sale/Leaseback Transaction with respect to any property unless (1) the
Company or such Restricted Subsidiary would be entitled to (A) Incur
Indebtedness in an amount equal to the Attributable Debt with respect to such
Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien on
such property securing such Attributable Debt without equally and ratably
securing the Securities pursuant to Section 4.10, (2) the net proceeds received
by the Company or any Restricted Subsidiary in connection with such
Sale/Leaseback Transaction are at least equal to the fair value (as determined
by the Board of Directors of the Company) of such property and (3) the Company
applies the proceeds of such transaction in compliance with Section 4.06.

                  Amendment of Deferred Compensation Plans.
                  -----------------------------------------

                  (a)   The Company shall not, and shall not permit any
Restricted Subsidiary to,

                  (1)   amend, modify or waive any of its rights under any
         Deferred Compensation Plan, except to the extent that such amendments,
         modifications or waivers, individually and in the aggregate, (i) would
         not reasonably be expected to be materially adverse to the Holders and
         (ii) would not require the Company or any of its Subsidiaries to make
         any distributions or other

                                      86



         payments (whether in cash, securities or other property or any
         combination thereof) that would be in violation of the covenants set
         forth in this Indenture, or

                  (2)   adopt any Deferred Compensation Plan if the terms
         (including subordination terms) of such Deferred Compensation Plan that
         are material to the Holders are in any way less favorable to the
         Holders than the terms of the Deferred Compensation Plans in effect on
         the Issue Date.

Notwithstanding clause (1) above, the Company shall not, and shall not permit
any Restricted Subsidiary to, amend, modify or waive any of the subordination
terms of any Deferred Compensation Plan in effect on the Issue Date.

                  (b) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of this Section 4.12.

                  Additional Amounts.  All payments made by the Company and
                  -------------------
Parent under or with respect to the Securities and the Parent Guaranty shall be
made free and clear of and without withholding or deduction for or on account of
any present or future tax, duty, levy, impost, assessment or other governmental
charge (including penalties, interest and other liabilities related thereto)
(hereinafter "Taxes") imposed or levied by or on behalf of the government of the
              -----
Cayman Islands or any political subdivision or any authority or agency therein
or thereof having power to tax, or within any other jurisdiction in which we are
organized or are otherwise resident for tax purposes or any jurisdiction from or
through which payment is made (each a "Relevant Taxing Jurisdiction"), unless
                                       ----------------------------
the applicable obligor is required to withhold or deduct Taxes by law or by the
interpretation or administration thereof.

                  If the Company or Parent is so required to withhold or deduct
any amount for or on account of Taxes imposed by a Relevant Taxing Jurisdiction
from any payment made under or with respect to the Securities or the Parent
Guaranty, the

                                      87



Company or Parent, as the case may be, shall pay such additional amounts
("Additional Amounts") as may be necessary so that the net amount received by
  ------------------
the Holders (including Additional Amounts) after such withholding or deduction
will not be less than the amount the Holders would have received if such Taxes
had not been withheld or deducted; provided, however, that the foregoing
                                   --------  -------
obligation to pay Additional Amounts does not apply to (1) any Taxes that would
not have been so imposed but for the existence of any present or former
connection between the relevant Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of, or possessor of power over the relevant
Holder, if the relevant Holder is an estate, nominee, trust or corporation) and
the Relevant Taxing Jurisdiction (other than the mere receipt of such payment or
the ownership or holding outside of the Cayman Islands of such Security, but
including, without limitation, such relevant Holder (or such fiduciary, settlor,
beneficiary, member or shareholder or possessor) being or having been a citizen
or resident thereof or being or having been present or engaged in a trade or
business therein or having or having had a permanent establishment therein); (2)
any estate, inheritance, gift, sales, excise, transfer, personal property tax or
similar tax, assessment or governmental charge; (3) any Tax that is imposed or
withheld by reason of the failure by the Holder or the beneficial owner of the
Security to comply with a request of the Company or Parent addressed to the
Holder (x) to provide information, documents or other evidence concerning the
nationality, residence or identity of the Holder or such beneficial owner or (y)
to make and deliver any declaration or other similar claim (other than a claim
for refund of a tax, assessment or other governmental charge withheld by the
Company or Parent) or satisfy any information or reporting requirements, which,
in the case of (x) or (y), is required or imposed by a statute, treaty,
regulation or administrative practice of the Relevant Taxing Jurisdiction as a
precondition to exemption from all or part of such Tax; or (4) any Tax that is
payable otherwise than by withholding from payment of principal of, premium, if
any, or interest on such Security; nor shall the Company or Parent be required
to pay Additional Amounts (a) if the payment could have been made without such
deduction or withholding if the beneficiary of the payment had presented the
Security for payment within 30 days after the date on which such payment or such
Security became due

                                      88



and payable or the date on which payment thereof is duly provided for,
whichever is later (except to the extent that the Holder would have been
entitled to Additional Amounts had the Security been presented on the last day
of such 30 day period), (b) if, at the election of the relevant Holder, the
payment of principal of (or premium, if any, on) or interest on such Security
could have been made through another paying agent without such deduction or
withholding, or (c) with respect to any payment of principal of (or premium, if
any, on) or interest on or with respect to such Security to any Holder who is a
fiduciary or partnership (for United States Federal tax purposes) or any person
other than the sole beneficial owner of such payment, to the extent that a
beneficiary or settlor with respect to such fiduciary, a partner of such a
partnership or the beneficial owner of such payment would not have been
entitled to the Additional Amounts had such beneficiary, settlor, partner or
beneficial owner been the actual Holder of such Security.

                  The Company shall provide the Trustee with official receipts
or other documentation evidencing the payment of the Taxes with respect to which
Additional Amounts are paid.

                  Whenever in this Indenture or any Security there is mentioned,
in any context: (1) the payment of principal; (2) purchase prices in connection
with a purchase of Securities; (3) interest; or (4) any other amount payable on
or with respect to any of the Securities, such reference shall be deemed to
include payment of Additional Amounts provided for in this Section 4.13 to the
extent that, in such context, Additional Amounts are, were or would be payable
in respect thereof.

                  The Company shall pay any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise in any jurisdiction from the execution, delivery, enforcement
or registration of the Securities, this Indenture or any other document or
instrument in relation thereof, or the receipt of any payments with respect to
the Securities, excluding such taxes, charges or similar levies imposed by any
jurisdiction outside of the Cayman Islands or the United States (or any
political subdivision or taxing authority of either jurisdiction), the
jurisdiction of incorporation of any

                                      89



successor of the Company or any jurisdiction in which a paying agent is located
or the Company is organized or engaged in business for tax purposes, and the
Company will agree to indemnify the Holders for any such taxes paid by such
Holders.

                  The obligations described under this Section 4.13 shall
survive any termination, defeasance or discharge of this Indenture and shall
apply mutatis mutandis to any jurisdiction in which any successor Person to the
Company or Parent is organized or any political subdivision or taxing authority
or agency thereof or therein.

                  Compliance Certificate.  The Company shall deliver to the
                  -----------------------
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA (S) 314(a)(4).

                  Further Instruments and Acts.  Upon request of the Trustee,
                  -----------------------------
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

                                Successor Company
                                -----------------

                  When the Company May Merge or Transfer Assets.
                  ----------------------------------------------

                  (a)   The Company shall not consolidate with or merge with or
into, or convey, transfer or lease, in one transaction or a series of
transactions, directly or indirectly, all or substantially all its assets to,
any Person, unless:

                  (1)   the resulting, surviving or transferee Person (the
         "Successor Company") shall be a Person organized

                                      90



         and existing under either the laws of the Cayman Islands or the laws
         of the United States of America, any State thereof or the District of
         Columbia and the Successor Company (if not the Company) shall
         expressly assume, by an indenture supplemental hereto, executed and
         delivered to the Trustee, in form satisfactory to the Trustee, all the
         obligations of the Company under the Securities and this Indenture;

                  (2)   immediately after giving pro forma effect to such
         transaction (and treating any Indebtedness which becomes an obligation
         of the Successor Company or any Subsidiary as a result of such
         transaction as having been Incurred by such Successor Company or such
         Subsidiary at the time of such transaction), no Default shall have
         occurred and be continuing;

                  (3)   immediately after giving pro forma effect to such
         transaction, either (i) the Successor Company would be able to Incur an
         additional $1.00 of Indebtedness pursuant to Section 4.03(a) or (ii)
         the Consolidated Coverage Ratio would be (A) greater than the
         Consolidated Coverage Ratio immediately prior to such transaction and
         (B) at least 2.5 to 1.0; and

                  (4)   the Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger or transfer and such supplemental indenture (if
         any) comply with this Indenture;

provided, however, that clause (3) will not be applicable to (A) a Restricted
- --------  -------
Subsidiary consolidating with, merging into or transferring all or part of its
properties and assets to the Company or (B) the Company merging with an
Affiliate of the Company solely for the purpose and with the sole effect of
reincorporating the Company in another jurisdiction.

                  For the purposes of this Section 5.01, the sale, lease,
conveyance, assignment, transfer or other disposition of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties

                                      91



and assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.

                  The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, and the predecessor Company, except
in the case of a lease, shall be released from the obligation to pay the
principal of and interest on the Securities.

                  (b) Following the first day that (1) the Securities have an
Investment Grade Rating from both of the Rating Agencies and (2) no Default has
occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries shall cease to be subject to the provisions of Section 5.01(a)(3).

                  SECTION 5.02.   When Parent May Merge or Transfer Assets.
                                  -----------------------------------------
Parent shall not merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless:

                  (a)   the resulting, surviving or transferee Person (if not
         Parent) shall be a Person organized and existing under the laws of the
         Cayman Islands or under the laws of the United States of America, or
         any State thereof or the District of Columbia, and such Person shall
         expressly assume all the obligations of Parent, if any, under the
         Parent Guaranty;

                  (b)   immediately after giving effect to such transaction or
         transactions on a pro forma basis (and treating any Indebtedness which
         becomes an obligation of the resulting, surviving or transferee Person
         as a result of such transaction as having been issued by such Person at
         the time of such transaction), no Default shall have occurred and be
         continuing; and

                  (c)   the Company delivers to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger or transfer and such assumption of obligations
         under the Parent Guaranty, if any, complies with this Indenture.

                                      92



                              Defaults and Remedies
                              ---------------------

                  Events of Default.  An "Event of Default" occurs if:
                  ------------------

                  (1)   the Company defaults in any payment of interest or any
         Additional Amounts on any Security when the same becomes due and
         payable and such default continues for a period of 30 days;

                  (2)   the Company defaults in the payment of the principal of
         any Security when the same becomes due and payable at its Stated
         Maturity, upon optional redemption, upon required purchase, upon
         declaration of acceleration or otherwise;

                  (3)   the Company or Parent fails to comply with Section 5.01
         or Section 5.02, respectively;

                  (4)   the Company fails to comply for 45 days after notice
         with any of its obligations under Section 4.09 (other than a failure
         to purchase Securities) or under Sections 4.02, 4.03, 4.04, 4.05, 4.06
         (other than a failure to purchase Securities), 4.07, 4.08, 4.10, 4.11
         or 4.12;

                  (5)   the Company fails to comply with any of its agreements
         in the Securities or this Indenture (other than those referred to in
         clause (1), (2), (3) or (4) above) and such failure continues for 60
         days after the notice specified below;

                  (6)   Indebtedness of the Company or any Significant
         Subsidiary is not paid within any applicable grace period after final
         maturity or is accelerated by the holders thereof because of a default
         and the total amount of such Indebtedness unpaid or accelerated
         exceeds $50 million or its foreign currency equivalent at the time
         (the "cross acceleration provisions") and such failure continues for
         30 days after the notice specified below;

                                      93



                  (7)   the Company or any Significant Subsidiary pursuant to or
         within the meaning of any Bankruptcy Law:

                           (A)   commences a voluntary case;

                           (B)   consents to the entry of an order for relief
                  against it in an involuntary case;

                           (C) consents to the appointment of a Custodian of it
                  or for any substantial part of its property; or

                           (D) makes a general assignment for the benefit of its
                  creditors;

         or takes any comparable action under any foreign laws relating to
         insolvency;

                  (8)   a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:

                           (A)   is for relief against the Company or any
                  Significant Subsidiary in an involuntary case;

                           (B)   appoints a Custodian of the Company or any
                  Significant Subsidiary or for any substantial part of its
                  property; or

                           (C)   orders the winding up or liquidation of the
                  Company or any Significant Subsidiary;

         or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;

                  (9)   any judgment or decree for the payment of money (other
         than judgments which are covered by enforceable insurance policies
         issued by creditworthy, solvent and reputable insurance carriers) in
         excess of $50 million or its foreign currency equivalent at the time is
         entered against the Company or any Significant Subsidiary, remains
         outstanding for a period of 60 consecutive days following the entry of
         such judgment

                                      94



         or decree and is not discharged, waived or the execution thereof stayed
         within 10 days after the notice specified below; or

                  (10)   the Parent Guaranty ceases to be in full force and
         effect (other than in accordance with the terms of this Indenture) or
         Parent denies or disaffirms its obligations under the Parent Guaranty
         and such Default continues for 10 days after the notice specified
         below;

                  The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.

                  The term "Bankruptcy Law" means Title 11, United States Code,
                                                            ------------------
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.

                  A Default under clauses (4), (5), (6), (9) or (10) is not an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Company of the default and the
Company does not cure such Default within the time specified after receipt of
such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".

                  The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any event which with the giving of notice or the lapse of time would become
an Event of Default under clause (4), (5), (6) or (10), its status and what
action the Company is taking or proposes to take with respect thereto; provided,
                                                                       --------
however, that in the case of any event which would become an Event of Default
- -------
under clause (9), such delivery shall be made within 10 days after the
occurrence thereof.

                                      95



                  Acceleration.  If an Event of Default (other than an Event of
                  -------------
Default specified in Section 6.01(7) or (8) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in principal amount of the outstanding Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Sections 6.01(7) or (8) with respect to the Company occurs,
the principal of and interest on all the Securities shall ipso facto become and
                                                          ---- -----
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.

                  Other Remedies.  If an Event of Default occurs and is
                  ---------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.

                  The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

                                      96



                  Waiver of Past Defaults.  The Holders of a majority in
                  ------------------------
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Security (ii) a Default arising from the failure
to redeem or purchase any Security when required pursuant to this Indenture or
(iii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.

                  Control by Majority.  The Holders of a majority in principal
                  --------------------
amount of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
           --------  -------
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.

                  Limitation on Suits.  Except to enforce the right to receive
                  --------------------
payment of principal, premium (if any) or interest when due, no Securityholder
may pursue any remedy with respect to this Indenture or the Securities unless:

                  (1)   the Holder gives to the Trustee written notice stating
         that an Event of Default is continuing;

                  (2)   the Holders of at least 25% in principal amount of the
         outstanding Securities make a written request to the Trustee to pursue
         the remedy;

                  (3)   such Holder or Holders offer to the Trustee reasonable
         security or indemnity against any loss, liability or expense;

                                      97



                  (4)   the Trustee does not comply with the request within 60
         days after receipt of the request and the offer of security or
         indemnity; and

                  (5)   the Holders of a majority in principal amount of the
         outstanding Securities do not give the Trustee a direction inconsistent
         with the request during such 60-day period.

                  A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.

                  Rights of Holders to Receive Payment.  Notwithstanding any
                  -------------------------------------
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring suit for the
enforcement of any payment with respect to the Securities, shall not be impaired
or affected without the consent of such Holder.

                  Collection Suit by Trustee.  If an Event of Default specified
                  ---------------------------
in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and owing (together with interest on any overdue
installments of interest at the rate of 8% per annum to the extent lawful) and
the amounts provided for in Section 7.07.

                                      98



                  Trustee May File Proofs of Claim.  The Trustee may file such
                  ---------------------------------
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Securityholders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.

                  Priorities.  If the Trustee collects any money or property
                  -----------
pursuant to this Article 6, it shall pay out the money or property in the
following order:

                  FIRST:   to the Trustee for amounts due under Section 7.07;

                  SECOND:  to Securityholders for amounts due and unpaid on the
         Securities for principal and interest, ratably, without preference or
         priority of any kind, according to the amounts due and payable on the
         Securities for principal and interest, respectively; and

                  THIRD:   to the Company.

                  The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Company shall mail to each Securityholder and the
Trustee a notice that states the record date, the payment date and amount to be
paid.

                                      99



                  Undertaking for Costs.  In any suit for the enforcement of any
                  ----------------------
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10%
in principal amount of the Securities.

                  Waiver of Stay or Extension Laws.  The Company (to the extent
                  ---------------------------------
it may lawfully do so) shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.

                                     Trustee
                                     -------

                  Duties of Trustee.
                  ------------------

                  (a)   If an Event of Default has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.

                                      100



                  (b)   Except during the continuance of an Event of Default:

                  (1)   the Trustee undertakes to perform such duties and only
         such duties as are specifically set forth in this Indenture and no
         implied covenants or obligations shall be read into this Indenture
         against the Trustee; and

                  (2)   in the absence of bad faith or gross negligence on its
         part, the Trustee may conclusively rely, as to the truth of the
         statements and the correctness of the opinions expressed therein, upon
         certificates or opinions furnished to the Trustee and conforming to the
         requirements of this Indenture. However, the Trustee shall examine the
         certificates and opinions to determine whether or not they conform to
         the requirements of this Indenture (but need not confirm or investigate
         the accuracy of mathematical calculations or other facts stated
         therein).

                  (c)   The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:

                  (1)   this paragraph does not limit the effect of paragraph
         (b) of this Section 7.01;

                  (2)   the Trustee shall not be liable for any error of
         judgment made in good faith by a Trust Officer unless it is proved that
         the Trustee was negligent in ascertaining the pertinent facts; and

                  (3)   the Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Section 6.05.

                  (d)   Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section
7.01.

                  (e)   The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company.

                                      101



                  (f)   Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.

                  (g)   No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.

                  (h)   Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section 7.01 and to the provisions of
the TIA.

                  Rights of Trustee.
                  ------------------

                  (a)   The Trustee may conclusively rely on any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the
document.

                  (b)   Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.

                  (c)   The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.

                  (d)   The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
                  --------  -------
constitute wilful misconduct or negligence.

                  (e)   The Trustee may consult with counsel of its selection,
and the advice or opinion of counsel with respect to legal matters relating to
this Indenture and the

                                      102



Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.

                  Individual Rights of Trustee.  The Trustee in its individual
                  -----------------------------
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.

                  Trustee's Disclaimer.
                  ---------------------

                  (a)   The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or in any document issued in connection with the sale
of the Securities or in the Securities other than the Trustee's certificate of
authentication.

                  (b)   The Trustee shall not be under any obligation to
ascertain whether or not a Change of Control or Registration Default has
occurred or to give notice with respect thereto and may conclusively assume, in
the absence of either actual knowledge of a Trust Officer of such occurrence or
receipt of a written notice to the contrary from the Company, that no Change of
Control or Registration Default has occurred.

                                      103



                  Notice of Defaults.  If a Default occurs and is continuing and
                  -------------------
if it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of such Security, if
any), the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.

                  Reports by Trustee to Holders.  As promptly as practicable
                  ------------------------------
after each May 15 beginning with the second May 15 following the date of this
Indenture, and in any event prior to July 15 in each year, the Trustee shall
mail to each Securityholder a brief report dated as of May 15 that complies with
TIA [sec] 313(a). The Trustee also shall comply with TIA [sec] 313(b).

                  A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.

                                      104



                  Compensation and Indemnity.  The Company shall pay to the
                  ---------------------------
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel. The Company need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own wilful misconduct, negligence
or bad faith.

                  To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of and interest on particular Securities.

                  The Company's payment obligations pursuant to this Section
7.07 shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(7) or (8)
with respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.

                                      105



                  Replacement of Trustee.  The Trustee may resign at any time by
                  -----------------------
so notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. The Company shall remove the Trustee if:

                  (1)   the Trustee fails to comply with Section 7.10;

                  (2)   the Trustee is adjudged bankrupt or insolvent;

                  (3)   a receiver or other public officer takes charge of the
         Trustee or its property; or

                  (4)   the Trustee otherwise becomes incapable of acting.

                  If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.

                  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.

                  If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

                  If the Trustee fails to comply with Section 7.10, unless the
Trustee's duty to resign is stayed as provided in TIA [sec] 310(b), any
Securityholder who has been a bona fide

                                      106



holder of a Security for at least six months may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

                  Notwithstanding the replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.

                  Successor Trustee by Merger.  If the Trustee consolidates
                  ----------------------------
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

                  In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.

                  Eligibility; Disqualification.  The Trustee shall at all times
                  ------------------------------
satisfy the requirements of TIA [sec] 310(a). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA [sec]
310(b); provided, however, that there shall be excluded from the operation of
        --------  -------
TIA [sec] 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA [sec]
310(b)(1) are met.

                                      107



                  Preferential Collection of Claims Against Company.  The
                  --------------------------------------------------
Trustee shall comply with TIA [sec] 311(a), excluding any creditor relationship
listed in TIA [sec] 311(b). A Trustee who has resigned or been removed shall be
subject to TIA [sec] 311(a) to the extent indicated.

                       Discharge of Indenture; Defeasance
                       ----------------------------------

                  Discharge of Liability on Securities; Defeasance.
                  -------------------------------------------------

                  (a)   When (1) all outstanding Securities (other than
Securities replaced or paid pursuant to Section 2.07) have been canceled or
delivered to the Trustee for cancelation or (2) all outstanding Securities have
become due and payable, whether at maturity or on a redemption date as a result
of the mailing of a notice of redemption pursuant to Article 3 hereof and the
Company irrevocably deposits with the Trustee funds or U.S. Government
Obligations, or a combination thereof, in an amount sufficient, in the opinion
of a nationally recognized firm of independent public accountants delivered to
the Trustee (which delivery will only be required if U.S. Government Obligations
have been so delivered), to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced or paid pursuant to Section 2.07), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 8.01(c), cease to be of further
effect and all obligations of Parent and the Company hereunder shall cease. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.

                  (b)   Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (1) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (2) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and
the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but,
in the case of Sections 6.01(7) and

                                      108



(8), with respect only to Significant Subsidiaries) and the limitations
contained in Sections 5.01(a)(3) and Parent may terminate the limitations
contained in Section 5.02 ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.

                  If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections 6.01(4),
6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections 6.01(7) and
(8), with respect only to Significant Subsidiaries) or because of the failure of
the Company to comply with Section 5.01(a)(3) or because of the failure by
Parent to comply with Section 5.02. If the Company exercises its legal
defeasance option or its covenant defeasance option, Parent shall be released
from all its obligations with respect to the Parent Guaranty.

                  Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.

                  (c)   Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
                  Conditions to Defeasance.  The Company may exercise its legal
                  -------------------------
defeasance option or its covenant defeasance option only if:

                  (1)   the Company irrevocably deposits in trust with the
         Trustee money or U.S. Government Obligations, or a combination thereof,
         for the payment of principal of and interest on the Securities to
         maturity or redemption, as the case may be;

                  (2)   the Company delivers to the Trustee a certificate from a
         nationally recognized firm of

                                      109



         independent accountants expressing their opinion that the payments of
         principal and interest when due and without reinvestment on the
         deposited U.S. Government Obligations plus any deposited money without
         investment will provide cash at such times and in such amounts as will
         be sufficient to pay principal and interest when due on all the
         Securities to maturity or redemption, as the case may be;

                  (3)   123 days pass after the deposit is made and during the
         123-day period no Default specified in Sections 6.01(7) or (8) with
         respect to the Company occurs which is continuing at the end of the
         period;

                  (4)   the deposit does not constitute a default under any
         other agreement binding on the Company;

                  (5)   the Company delivers to the Trustee an Opinion of
         Counsel to the effect that the trust resulting from the deposit does
         not constitute, or is qualified as, a regulated investment company
         under the Investment Company Act of 1940;

                  (6)   in the case of the legal defeasance option, the Company
         shall have delivered to the Trustee an Opinion of Counsel stating that
         (A) the Company has received from, or there has been published by, the
         Internal Revenue Service a ruling or (B) since the date of this
         Indenture there has been a change in the applicable Federal income tax
         law, in either case to the effect that, and based thereon such Opinion
         of Counsel shall confirm that, the Securityholders will not recognize
         income, gain or loss for Federal income tax purposes as a result of
         such legal defeasance and will be subject to Federal income tax on the
         same amounts, in the same manner and at the same times as would have
         been the case if such defeasance had not occurred;
                  (7)   in the case of the covenant defeasance option, the
         Company shall have delivered to the Trustee an Opinion of Counsel to
         the effect that the Securityholders will not recognize income, gain or
         loss for Federal income tax purposes as a result of such covenant
         defeasance and will be subject to Federal income tax on the same
         amounts, in the same manner and

                                      110



         at the same times as would have been the case if such covenant
         defeasance had not occurred;

                  (8)   the Company delivers to the Trustee an Opinion of
         Counsel in the jurisdiction of organization of the Company (if other
         than the United States) to the effect that Holders will not recognize
         income, gain or loss for income tax purposes of such jurisdiction as a
         result of such deposit and defeasance and will be subject to income tax
         of such jurisdiction on the same amounts, in the same manner and at the
         same times as would have been the case if such deposit and defeasance
         had not occurred; and

                  (9)   the Company delivers to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent to the defeasance and discharge of the Securities as
         contemplated by this Article 8 have been complied with.

                  Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.

                  Application of Trust Money.  The Trustee shall hold in trust
                  ---------------------------
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.

                  Repayment to Company.  The Trustee and the Paying Agent shall
                  ---------------------
promptly turn over to the Company upon request any excess money or securities
held by them at any time.

                  Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.

                                      111



                  Indemnity for Government Obligations.  The Company shall pay
                  -------------------------------------
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.

                  Reinstatement.  If the Trustee or Paying Agent is unable to
                  --------------
apply any money or U.S. Government Obligations in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
                     --------  -------
payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.

                                   Amendments
                                   ----------

                  Without Consent of Holders.  The Company, Parent and the
                  --------------------------
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:

                  (1)   to cure any ambiguity, omission, defect or
         inconsistency;

                  (2)   to provide for the assumption by a Successor Company of
         the obligations of the Company or Parent under this Indenture;

                  (3)   to provide for uncertificated Securities in addition to
         or in place of certificated Securities; provided, however, that the
                                                 --------  -------
         uncertificated Securities are issued in registered form for purposes
         of Section 163(f) of the Code or in a manner such that the

                                      112



         uncertificated Securities are described in Section 163(f)(2)(B) of the
         Code;
                  (4)   to add Guarantees with respect to the Securities or to
         secure the Securities;

                  (5)   to add to the covenants of the Company or Parent for the
         benefit of the Holders or to surrender any right or power herein
         conferred upon the Company or Parent;

                  (6)   to comply with any requirement of the SEC in connection
         with qualifying, or maintaining the qualification of, this Indenture
         under the TIA;

                  (7)   to make any change that does not adversely affect the
         rights of any Securityholder; or

                  (8)   to make any amendment to the Appendix; provided, that
                                                               --------
         (a) compliance with the Appendix as so amended would not violate the
         Securities Act or any other applicable law and (b) such amendment does
         not materially affect the rights of Holders to transfer Securities.

                  After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section 9.01.

                  With Consent of Holders.  The Company, Parent and the Trustee
                  ------------------------
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in
connection with a tender offer or exchange for the Securities). However, without
the consent of each Securityholder affected thereby, an amendment may not:

                  (1)   reduce the amount of Securities whose Holders must
         consent to an amendment;

                                      113



                  (2)   reduce the rate of or extend the time for payment of
         interest on any Security;

                  (3)   reduce the principal amount of or extend the Stated
         Maturity of any Security;

                  (4)   reduce the amount payable upon the redemption of any
         Security or change the time at which or the preconditions upon which
         any Security may be redeemed in accordance with Article 3;

                  (5)   make any Security payable in money other than that
         stated in the Security;

                  (6)   impair the right of any Holder to receive payment of
         principal of and interest on such Holder's Securities on or after the
         due dates therefor or to institute suit for the enforcement of any
         payment on or with respect to such Holder's Securities;

                  (7)   make any changes in the amendment provisions which
         require each Holder's consent or in the waiver provisions;

                  (8)   make any changes in the ranking or priority of any
         Security that would adversely affect the Securityholders;

                  (9)   make any change in the Parent Guaranty that would
         adversely affect the Securityholders; or

                  (10)  make any change in Section 4.13 that adversely affects
         the rights of any Securityholder or amend the terms of the Securities
         or this Indenture in a way that would result in the loss of an
         exemption from any of the Taxes described therein.

                  It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.

                  After an amendment under this Section 9.02 becomes effective,
the Company shall mail to Securityholders a notice

                                      114



briefly describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section 9.02.

                  Compliance with Trust Indenture Act.  Every amendment to this
                  ------------------------------------
Indenture or the Securities shall comply with the TIA as then in effect.

                  Revocation and Effect of Consents and Waivers.  A consent to
                  ----------------------------------------------
an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation
of the consent or waiver is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.

                  The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.

                                      115



                  Notation on or Exchange of Securities.  If an amendment
                  --------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.

                  Trustee To Sign Amendments.  The Trustee shall sign any
                  ---------------------------
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.

                  Payment for Consent.  Neither the Company nor any Affiliate of
                  --------------------
the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.

                                      116



                                   Guarantee
                                   ---------

                  Guarantee.  Parent hereby unconditionally and irrevocably
                  ----------
guarantees to each Holder and to the Trustee and its successors and assigns (a)
the full and punctual payment of principal of and interest on the Securities
when due, whether at maturity, by acceleration, by redemption or otherwise, and
all other monetary obligations of the Company under this Indenture and the
Securities and (b) the full and punctual performance within applicable grace
periods of all other obligations of the Company under this Indenture and the
Securities (all the foregoing being hereinafter collectively called the
"Guaranteed Obligations"). Parent further agrees that the Guaranteed Obligations
may be extended or renewed, in whole or in part, without notice or further
assent from Parent and that Parent will remain bound under this Article 10
notwithstanding any extension or renewal of any Guaranteed Obligation.

                  Parent waives presentation to, demand of payment from and
protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Parent waives notice of any default under the
Securities or the Guaranteed Obligations. The obligations of Parent hereunder
shall not be affected by (a) the failure of any Holder or the Trustee to assert
any claim or demand or to enforce any right or remedy against the Company or any
other Person under this Indenture, the Securities or any other agreement or
otherwise, (b) any extension or renewal of any thereof, (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Securities or any other agreement, (d) the release of any
security held by any Holder or the Trustee for the Guaranteed Obligations or any
of them, (e) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations, or (f) except
as set forth in Section 10.05, any change in the ownership of Parent.

                  Parent further agrees that the Parent Guaranty herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.

                                      117



                  Except as expressly set forth in Sections 8.01(b) and 10.05,
the obligations of Parent hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of Parent pursuant to this Article 10 shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the obligations, or by any other act or thing or omission or delay to do any
other act or thing which may or might in any manner or to any extent vary the
risk of Parent or would otherwise operate as a discharge of Parent as a matter
of law or equity.

                  Parent agrees that the Parent Guaranty herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.

                  In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against
Parent by virtue hereof, upon the failure of the Company to pay the principal of
or interest on any Guaranteed Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Guaranteed Obligation, Parent hereby promises to and
shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to
be paid, in cash, to the Holders or the Trustee an amount equal to the sum of
(1) the unpaid amount of such Guaranteed Obligations, (2) accrued and unpaid
interest on such Guaranteed Obligations (but only to the extent not prohibited
by law) and (3) all other monetary Obligations of the Company to the Holders and
the Trustee.

                                      118



                  Parent agrees that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations may be accelerated as provided in Article 6 for the purposes of the
Parent Guaranty herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6, such Obligations (whether or not due
and payable) shall forthwith become due and payable by Parent for the purposes
of this Section 10.01.

                  Parent also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section 10.01.

                  Successors and Assigns.  This Article 10 shall be binding upon
                  -----------------------
Parent and its successors and assigns and shall enure to the benefit of the
successors and assigns of the Trustee and the Holders and, in the event of any
transfer or assignment of rights by any Holder or the Trustee, the rights and
privileges conferred upon that party in this Indenture and in the Securities
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.

                  No Waiver.  Neither a failure nor a delay on the part of
                  ----------
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 10 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 10
at law, in equity, by statute or otherwise.

                                      119



                  Modification.  No modification, amendment or waiver of any
                  -------------
provision of this Article 10, nor the consent to any departure by Parent
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on any Guarantor in any case shall entitle Parent to any other or
further notice or demand in the same, similar or other circumstances.

                  SECTION 10.05.   Release of Guarantor and Termination of
                                   ---------------------------------------
Parent Guaranty.  (a)   In connection with either an initial public offering of
- ----------------
the Company that involves an underwritten public offering of common stock of the
Company or a merger or consolidation between Parent and New SAC in a transaction
permitted by Section 5.02, Parent shall, at Parent's option, be released from
all obligations under this Article 10 without any further action required on the
part of the Trustee or any Holder. At the request of the Company, the Trustee
shall execute and deliver an appropriate instrument evidencing such release.

                  (b)   If Parent and the Company merge or consolidate in a
transaction permitted by Sections 5.01 and 5.02, then the Parent Guaranty shall
automatically be terminated upon the consummation of such merger or
consolidation and shall no longer have any effect from such time without any
further action required on the part of the Trustee or any Holder. At the request
of the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such termination.

                                  Miscellaneous
                                  -------------

                  Trust Indenture Act Controls.  If any provision of this
                  -----------------------------
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA (S)(S) 310 to 318,
inclusive, the required provision shall control.

                                       120



                  Notices.  Any notice or communication shall be in writing and
                  --------
delivered in person or mailed by first-class mail addressed as follows:

                  if to the Company or Parent:

                  c/o Seagate Technology (US) Holdings, Inc.
                  920 Disc Drive
                  Scotts Valley, CA 95067

                  Attention of:

                  William L. Hudson
                  Senior Vice President,
                  General Counsel and Secretary
                  Tel:  831-439-5370
                  Fax:  831-438-6675

                  Glen A. Peterson
                  Vice President of Finance
                  and Treasurer
                  Tel:  831-439-2870
                  Fax:  831-438-8931

                  with a copy to:

                  Simpson Thacher & Bartlett
                  3330 Hillview Avenue
                  Palo Alto, CA 94304

                  Attention of:

                  William H. Hinman
                  Tel:  650-251-5000
                  Fax:  650-251-5002

                  if to the Trustee:

                  U.S. Bank, N.A.
                  One California Street
                  Suite 2550
                  San Francisco, CA 94111

                                      121



                  Attention of:

                  Robert C. Hyman
                  Tel:  415-273-4584
                  Fax:  415-273-4591

                  The Company, Parent or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

                  Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.

                  Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

                  Communication by Holders with Other Holders.  Securityholders
                  --------------------------------------------
may communicate pursuant to TIA (S) 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company,
Parent, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 312(c).

                  Certificate and Opinion as to Conditions Precedent.  Upon any
                  ---------------------------------------------------
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:

                  (1)   an Officers' Certificate in form and substance
         reasonably satisfactory to the Trustee stating that, in the opinion of
         the signers, all conditions precedent, if any, provided for in this
         Indenture relating to the proposed action have been complied with; and

                  (2)   an Opinion of Counsel in form and substance reasonably
         satisfactory to the Trustee stating that, in

                                      122



         the opinion of such counsel, all such conditions precedent have been
         complied with.

                  Statements Required in Certificate or Opinion. Each
                  ----------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:

                  (1)   a statement that the individual making such certificate
         or opinion has read such covenant or condition;

                  (2)   a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (3)   a statement that, in the opinion of such individual, he
         has made such examination or investigation as is necessary to enable
         him to express an informed opinion as to whether or not such covenant
         or condition has been complied with; and

                  (4)   a statement as to whether or not, in the opinion of such
         individual, such covenant or condition has been complied with.

                  When Securities Disregarded.  In determining whether the
                  ----------------------------
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.

                                      123



                  Rules by Trustee, Paying Agent and Registrar.  The Trustee may
                  ---------------------------------------------
make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.

                  Legal Holidays.  A "Legal Holiday" is a Saturday, a Sunday or
                  ---------------
a day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.

                  GOVERNING LAW.  THIS INDENTURE AND THE SECURITIES SHALL BE
                  --------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

                  No Recourse Against Others.  A director, officer, employee,
                  ---------------------------
incorporator or stockholder, as such, of the Company or Parent shall not have
any liability for any obligations of the Company or Parent under the Securities,
the Parent Guaranty or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.

                  Successors.  All agreements of the Company in this Indenture
                  -----------
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.

                  Multiple Originals.  The parties may sign any number of copies
                  -------------------
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.

                                      124



                  Consent to Jurisdiction; Appointment of Agent for
                  -------------------------------------------------
Service of Process.
- -------------------

                  (a)   The Company and Parent agree that any suit, action or
proceeding against the Company or Parent arising out of or relating to this
Indenture or the Securities may be instituted in any state or U.S. Federal court
located in the Borough of Manhattan, The City of New York, New York, and any
appellate court from any thereof, and each of them irrevocably submits to the
nonexclusive jurisdiction of such courts in any suit, action or proceeding that
may be brought in connection with this Indenture or the Securities. The Company
and Parent each irrevocably waives, to the fullest extent permitted by law, any
objection to any suit, action or proceeding that may be brought in connection
with this Indenture or the Securities, including such actions, suits or
proceedings relating to securities laws of the United States of America or any
state thereof, in such courts whether on the grounds of venue, residence or
domicile or on the ground that any such suit, action or proceeding has been
brought in an inconvenient forum. The Company and Parent agree that final
judgment in any such suit, action or proceeding brought in such court shall be
conclusive and binding upon the Company and Parent, as the case may be, and may
be enforced in any court to the jurisdiction of which the Company or Parent, as
the case may be, is subject by a suit upon such judgment; provided, however,
                                                          --------  -------
that service of process is affected upon the Company or Parent, as the case may
be, in the manner provided by Section 11.13(b).

                  (b)   The Company and Parent each have appointed CT
Corporation System Inc., with offices on the date hereof at 818 West Seventh
Street, Suite 200, Los Angeles, CA 90017, as its authorized agent (the
"Authorized Agent"), upon whom process may be served in any suit, action or
proceeding arising out of or relating to this Indenture or the Securities or the
transactions contemplated herein which may be instituted in the Borough of
Manhattan, The City of New York, New York, and expressly accepts the
non-exclusive jurisdiction of any such court in respect of any such suit, action
or proceeding. The Company and Parent each hereby represent and warrant that the
Authorized Agent has accepted such appointment and has agreed to act as said
agent for service of process, and the Company and Parent agree to take any and
all actions, including the filing of any and all documents, that may be
necessary to continue such respective appointment in full force and effect
through June 1, 2009.

                                      125



Service of process upon the Authorized Agent shall be deemed, in every respect,
effective service of process upon the Company and Parent. Notwithstanding the
foregoing, any action involving the Company or Parent arising out of or relating
to this Indenture or the Securities may be instituted in any court of competent
jurisdiction in any other jurisdiction.

                  Table of Contents; Headings.  The table of contents,
                  ----------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.

                                      126



                  IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.

                                     SEAGATE TECHNOLOGY HDD HOLDINGS,

                                       by    /s/ William L. Hudson
                                             -------------------------------
                                             Name:  William L. Hudson
                                             Title: Secretary

                                     SEAGATE TECHNOLOGY HOLDINGS,

                                       by    /s/ William L. Hudson
                                             -------------------------------
                                             Name:  William L. Hudson
                                             Title: Secretary

                                     U.S. BANK, N.A.,
                                     as trustee,

                                       by    /s/ Leticia Sabiniano
                                             -------------------------------
                                             Name: Leticia Sabiniano
                                             Title: Assistant Vice President


                                      127



                                                 RULE 144A/REGULATION S APPENDIX

                   PROVISIONS RELATING TO INITIAL SECURITIES,
                   ------------------------------------------
                           PRIVATE EXCHANGE SECURITIES
                           ---------------------------
                             AND EXCHANGE SECURITIES
                             -----------------------

         1.  Definitions.
             ------------

         1.1   Definitions
               -----------

         For the purposes of this Appendix the following terms shall have the
meanings indicated below:

                  "Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository, Euroclear and
Clearstream for such a Temporary Regulation S Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.

                  "Clearstream" means Clearstream Banking, societe anonyme, or
any successor securities clearing agency.

                  "Definitive Security" means a certificated Initial Security or
Exchange Security or Private Exchange Security bearing, if required, the
restricted securities legend set forth in Section 2.3(e).

                  "Depository" means The Depository Trust Company, its nominees
and their respective successors.

                  "Distribution Compliance Period", with respect to any
Securities, means the period of 40 consecutive days beginning on and including
the later of (i) the day on which such Securities are first offered to Persons
other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the date on which such Securities are
initially issued.

                  "Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System, or any successor securities clearing agency.



                  "Exchange Securities" means (1) the 8% Senior Notes Due 2009
issued pursuant to the Indenture in connection with a Registered Exchange Offer
pursuant to a Registration Rights Agreement and (2) Additional Securities, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.

                  "Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, Morgan Stanley & Co. Incorporated, J.P.
Morgan Securities Inc., Credit Suisse First Boston Corporation, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc. and (2) with
respect to each issuance of Additional Securities, the Persons purchasing such
Additional Securities under the related Purchase Agreement.

                  "Initial Securities" means (1) $400 aggregate principal amount
of 8% Senior Notes Due 2009 issued on the Issue Date and (2) Additional
Securities, if any, issued in a transaction exempt from the registration
requirements of the Securities Act.

                  "Private Exchange" means the offer by the Company, pursuant to
the Registration Rights Agreement, to the Initial Purchasers to issue and
deliver to each Initial Purchaser, in exchange for the Initial Securities held
by the Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.

                  "Private Exchange Securities" means any 8% Senior Notes Due
2009 issued in connection with a Private Exchange.

                  "Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated May 3, 2002,
among the Company and the Initial Purchasers, and (2) with respect to each
issuance of Additional Securities, the purchase agreement or underwriting
agreement among the Company and the Persons purchasing such Additional
Securities.

                  "QIB" means a "qualified institutional buyer" as defined in
Rule 144A.

                  "Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial

                                      2



Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.

                  "Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated May 13, 2002, among the Company and the Initial Purchasers, and (2) with
respect to each issuance of Additional Securities issued in a transaction exempt
from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Company and the Persons purchasing such
Additional Securities under the related Purchase Agreement.

                  "Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto and shall initially be the Trustee.

                  "Shelf Registration Statement" means the registration
statement issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to the a Registration Rights
Agreement.

                  "Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(e) hereto.

         1.2      Other Definitions
                  -----------------

                                                                   Defined in
                                                                   ----------
                  Term                                                Section:
                  ----                                                -------

"Agent Members"......................................................... 2.1(b)
"Global Security"........................................................2.1(a)
"Permanent Regulation S Global Security".................................2.1(a)
"Regulation S"...........................................................2.1(a)
"Restricted Global Security".............................................2.1(a)

                                      3



"Rule 144A"..............................................................2.1(a)
"Temporary Regulation S Global Security..................................2.1(a)

         2.   The Securities.
              ---------------

         2.1  (a)   Form and Dating.  The Initial Securities will be offered and
                    ----------------
sold by the Company pursuant to a Purchase Agreement. The Initial Securities
will be resold initially only to (i) QIBs in reliance on Rule 144A under the
Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as
defined in Regulation S) in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs and purchasers in reliance on Regulation S, in each case, subject
to the restrictions on transfer set forth herein. Initial Securities initially
resold pursuant to Rule 144A shall be issued initially in the form of one or
more permanent global Securities in definitive, fully registered form
(collectively, the "Rule 144A Global Security") and Initial Securities
initially resold pursuant to Regulation S shall be issued initially in the form
of one or more temporary global securities in definitive, fully registered form
(collectively, the "Temporary Regulation S Global Security"), in each case
without interest coupons and with the global securities legend and restricted
securities Legend set forth in Exhibit 1 hereto, which shall be deposited on
behalf of the purchasers of the Initial Securities represented thereby with the
Securities Custodian, and registered in the name of the Depository or a nominee
of the Depository, duly executed by the Company and authenticated by the
Trustee as provided in the Indenture. Except as set forth in this Section
2.1(a), beneficial ownership interests in the Temporary Regulation S Global
Security will not be exchangeable for interests in the permanent global
security (the "Permanent Regulation S Global Security"), or any other Security
without a legend containing restrictions on transfer of such Security prior to
the expiration of the Distribution Compliance Period and then beneficial
interests in the Temporary Regulation S Global Security may be exchanged for
interests in a Rule 144A Global Security or the Permanent Regulation S Global
Security only upon certification in a form reasonably satisfactory to the
Trustee that beneficial ownership interests in such Temporary Regulation S
Global Security are owned either by non-U.S. persons or U.S. persons who
purchased such interests in a transaction that did not require registration
under the Securities Act.

              Beneficial interests in Temporary Regulation S Global Securities
may be exchanged for interests in Rule 144A Global

                                      4



Securities or Permanent Regulation S Global Securities only if (1) such exchange
occurs in connection with a transfer of Securities in compliance with Rule 144A
and (2) the transferor of the Regulation S Global Security first delivers to the
Trustee a written certificate (in a form satisfactory to the Trustee) to the
effect that the Regulation S Global Security being transferred to a Person (a)
who the transferor reasonably believes to be a QIB (b) purchasing for its own
account or the account of a QIB in a transaction meeting the requirements of
Rule 144A and (c) in accordance with all applicable securities laws of the
States of the United States and other jurisdictions.

              The Rule 144A Global Security, the Temporary Regulation S Global
Security and the Permanent Regulation S Global Security are collectively
referred to herein as "Global Securities". The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided.

              (b)   Book-Entry Provisions.  This Section 2.1(b) shall apply
                    ----------------------
only to a Global Security deposited with or on behalf of the Depository.

              The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.

                                      5



              Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the custodian of
the Depository or under such Global Security, and the Company, the Trustee and
any agent of the Company or the Trustee shall be entitled to treat the
Depository as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.

              (c)   Certificated Securities.  Except as provided in this
                    ------------------------
Section 2.1 or Section 2.3 or 2.4 of this Appendix, owners of beneficial
interests in Restricted Global Securities shall not be entitled to receive
physical delivery of certificated Securities.

         2.2  Authentication.  The Trustee shall authenticate and deliver: (1)
              ---------------
on the Issue Date, an aggregate principal amount of $400 million 8% Senior Notes
Due 2009, (2) any Additional Securities for an original issue in an aggregate
principal amount specified in the written order of the Company pursuant to
Section 2.02 of the Indenture and (3) Exchange Securities or Private Exchange
Securities for issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to a Registration Rights Agreement, for a like principal
amount of Initial Securities, in each case upon a written order of the Company
signed by one Officer. Such order shall specify the amount of the Securities to
be authenticated and the date on which the original issue of Securities is to be
authenticated and, in the case of any issuance of Additional Securities pursuant
to Section 2.13 of the Indenture, shall certify that such issuance is in
compliance with Section 4.03 of the Indenture.

         2.3  Transfer and Exchange.
              -----------------------

              (a)   Transfer and Exchange of Definitive Securities.  When
                    -----------------------------------------------
Definitive Securities are presented to the Registrar or a co-registrar with a
request:

              (x)   to register the transfer of such Definitive Securities; or

                                      6



              (y)   to exchange such Definitive Securities for an equal
                    principal amount of Definitive Securities of other
                    authorized denominations,

the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
- --------  -------
exchange:

              (i)   shall be duly endorsed or accompanied by a written
                    instrument of transfer in form reasonably satisfactory to
                    the Company and the Registrar or co-registrar, duly
                    executed by the Holder thereof or its attorney duly
                    authorized in writing; and

              (ii)  if such Definitive Securities are required to bear a
                    restricted securities legend, they are being transferred or
                    exchanged pursuant to an effective registration statement
                    under the Securities Act, pursuant to Section 2.3(b) of this
                    Appendix or pursuant to clause (A), (B) or (C) below, and
                    are accompanied by the following additional information and
                    documents, as applicable:

                    (A)    if such Definitive Securities are being delivered to
                           the Registrar by a Holder for registration in the
                           name of such Holder, without transfer, a
                           certification from such Holder to that effect; or

                    (B)    if such Definitive Securities are being transferred
                           to the Company, a certification to that effect; or

                    (C)    if such Definitive Securities are being transferred
                           (x) pursuant to an exemption from registration in
                           accordance with Rule 144A, Regulation S or Rule 144
                           under the Securities Act; or (y) in reliance upon
                           another exemption from the requirements of the
                           Securities Act: (i) a certification to that effect
                           (in the form set forth on the reverse of the
                           Security) and (ii) if the Company so requests, an
                           opinion of counsel or other evidence reasonably
                           satisfactory to it as to the compliance with the
                           restrictions set forth

                                      7



                           in the legend set forth in Section 2.3(e)(i) of this
                           Appendix.

              (b)   Restrictions on Transfer of a Definitive Security for a
                    -------------------------------------------------------
Beneficial Interest in a Global Security.  A Definitive Security may not be
- -----------------------------------------
exchanged for a beneficial interest in a Rule 144A Global Security or a
Permanent Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:

              (i)   certification, in the form set forth on the reverse of the
                    Security, that such Definitive Security is either (A) being
                    transferred to a QIB in accordance with Rule 144A or (B) is
                    being transferred after expiration of the Distribution
                    Compliance Period by a Person who initially purchased such
                    Security in reliance on Regulation S to a buyer who elects
                    to hold its interest in such Security in the form of a
                    beneficial interest in the Permanent Regulation S Global
                    Security; and

              (ii)  written instructions directing the Trustee to make, or to
                    direct the Securities Custodian to make, an adjustment on
                    its books and records with respect to such Rule 144A Global
                    Security (in the case of a transfer pursuant to clause
                    (b)(i)(A)) or Permanent Regulation S Security (in the case
                    of a transfer pursuant to clause (b)(i)(B)) to reflect an
                    increase in the aggregate principal amount of the Securities
                    represented by the Rule 144A Global Security or Permanent
                    Regulation S Global Security, as applicable, such
                    instructions to contain information regarding the
                    Depository account to be credited with such increase,

then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, to be
increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A

                                      8



Global Security or Permanent Regulation S Global Security, as applicable, equal
to the principal amount of the Definitive Security so canceled. If no Rule 144A
Global Securities or Permanent Regulation S Global Securities, as applicable,
are then outstanding, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an Officers'
Certificate, a new Rule 144A Global Security or Permanent Regulation S Global
Security, as applicable, in the appropriate principal amount.

              (c)   Transfer and Exchange of Global Securities.
                    -------------------------------------------

              (i)   The transfer and exchange of Global Securities or
                    beneficial interests therein shall be effected through the
                    Depository, in accordance with this Indenture (including
                    applicable restrictions on transfer set forth herein, if
                    any) and the procedures of the Depository therefor. A
                    transferor of a beneficial interest in a Global Security
                    shall deliver to the Registrar a written order given in
                    accordance with the Depository's procedures containing
                    information regarding the participant account of the
                    Depository to be credited with a beneficial interest in the
                    Global Security. The Registrar shall, in accordance with
                    such instructions, instruct the Depository to credit to the
                    account of the Person specified in such instructions a
                    beneficial interest in the Global Security and to debit the
                    account of the Person making the transfer the beneficial
                    interest in the Global Security being transferred.

              (ii)  If the proposed transfer is a transfer
                    of a beneficial interest in one Global Security to a
                    beneficial interest in another Global Security, the
                    Registrar shall reflect on its books and records the date
                    and an increase in the principal amount of the Global
                    Security to which such interest is being transferred in an
                    amount equal to the principal amount of the interest to be
                    so transferred, and the Registrar shall reflect on its
                    books and records the date and a corresponding decrease in
                    the principal amount of the Global Security from which such
                    interest is being transferred.

              (iii) Notwithstanding any other provisions of this Appendix
                    (other than the provisions set forth in

                                      9



                    Section 2.4 of this Appendix), a Global Security may not be
                    transferred as a whole except by the Depository to a
                    nominee of the Depository or by a nominee of the Depository
                    to the Depository or another nominee of the Depository or
                    by the Depository or any such nominee to a successor
                    Depository or a nominee of such successor Depository.

              (iv)  In the event that a Global Security is exchanged for
                    Definitive Securities pursuant to Section 2.4 of this
                    Appendix, prior to the consummation of a Registered
                    Exchange Offer or the effectiveness of a Shelf Registration
                    Statement with respect to such Securities, such Securities
                    may be exchanged only in accordance with such procedures as
                    are substantially consistent with the provisions of this
                    Section 2.3 (including the certification requirements set
                    forth on the reverse of the Initial Securities intended to
                    ensure that such transfers comply with Rule 144A or
                    Regulation S, as the case may be) and such other procedures
                    as may from time to time be adopted by the Company.

              (d)   Restrictions on Transfer of Temporary Regulation S Global
                    ---------------------------------------------------------
Securities.  During the Distribution Compliance Period, beneficial ownership
- -----------
interests in Temporary Regulation S Global Securities may only be sold, pledged
or transferred through Euroclear or Clearstream in accordance with the
Applicable Procedures and only (i) to the Company, (ii) so long as such
Security is eligible for resale pursuant to Rule 144A, to a Person whom the
selling holder reasonably believes is a QIB that purchases for its own account
or for the account of a QIB to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, (iii) in an offshore
transaction in accordance with Regulation S, (iv) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if applicable)
under the Securities Act or (v) pursuant to an effective registration statement
under the Securities Act, in each case in accordance with any applicable
securities laws of any State of the United States.

              (e)   Legend.
                    -------

              (i)   Except as permitted by the following paragraphs (ii), (iii)
         and (iv), each Security certificate evidencing the

                                      10



         Restricted Global Securities (and all Securities issued in exchange
         therefor or in substitution thereof) shall bear a legend in
         substantially the following form:

              THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
              UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
              "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS IN THE UNITED
              STATES. THIS SECURITY MAY NOT BE REOFFERED, RESOLD, ASSIGNED,
              TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT
              PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT MEETING THE
              APPLICABLE REQUIREMENTS OF THE SECURITIES ACT OR UNLESS SUCH
              TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

              THE HOLDER OF THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN
              WILL BE ABLE TO EXERCISE THE EXCHANGE RIGHT ONLY IF THE HOLDER
              CERTIFIES THAT IT (A) IS A "QUALIFIED INSTITUTIONAL BUYER" AS
              DEFINED IN RULE 144A UNDER THE SECURITIES ACT, (B) IS AN
              INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
              SUBPARAGRAPHS (a)(1),(2),(3) OR (7) OF RULE 501 UNDER THE
              SECURITIES ACT OR (C) IS NOT A U.S. PERSON (AS DEFINED IN
              REGULATION S UNDER THE SECURITIES ACT) AND IS NOT EXERCISING
              SUCH EXCHANGE RIGHT ON BEHALF OF A U.S. PERSON.

              BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
              THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS
              SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE
              (THE "RESALE RESTRICTION TERMINATION DATE"), WHICH IS, IN THE
              CASE OF NOTES SOLD IN RELIANCE UPON RULE 144A: TWO YEARS, OR, IN
              THE CASE OF NOTES SOLD IN RELIANCE UPON REGULATION S: 40 DAYS,
              AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
              DATE ON WHICH SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY AFFILIATE
              THEREOF WAS THE OWNER OF THIS SECURITY OR ANY BENEFICIAL
              INTEREST HEREIN (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A)
              TO SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY SUBSIDIARY THEREOF,
              (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO
              RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
              INSTITUTIONAL BUYER" THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
              THE ACCOUNT OF A "QUALIFIED INSTITUTIONAL BUYER" TO WHICH NOTICE
              IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
              144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" THAT IS
              ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
              OF SUCH AN

                                      11



              INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND
              NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
              DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) IN AN
              OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S
              UNDER THE SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE
              EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
              ACT, INCLUDING UNDER RULE 144, IF AVAILABLE, OR (F) PURSUANT TO
              A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
              THE SECURITIES ACT, SUBJECT TO SEAGATE TECHNOLOGY HDD HOLDINGS'
              RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
              CLAUSE (C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
              COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
              IT, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF
              TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
              SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
              TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
              HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

              (ii)  Upon any sale or transfer of a Transfer Restricted
         Security (including any Transfer Restricted Security represented by a
         Global Security) pursuant to Rule 144 under the Securities Act, the
         Registrar shall permit the transferee thereof to exchange such Transfer
         Restricted Security for a certificated Security that does not bear the
         legend set forth above and rescind any restriction on the transfer of
         such Transfer Restricted Security, if the transferor thereof certifies
         in writing to the Registrar that such sale or transfer was made in
         reliance on Rule 144 (such certification to be in the form set forth on
         the reverse of the Security).

              (iii) After a transfer of any Initial Securities or Private
         Exchange Securities pursuant to and during the period of the
         effectiveness of a Shelf Registration Statement with respect to such
         Initial Securities or Private Exchange Securities, as the case may be,
         all requirements pertaining to legends on such Initial Security or such
         Private Exchange Security will cease to apply, the requirements
         requiring any such Initial Security or such Private Exchange Security
         issued to certain Holders be issued in global form will cease to apply,
         and a certificated Initial Security or Private Exchange Security or an
         Initial Security or Private Exchange Security in global form, in each
         case without restrictive transfer legends, will be available to

                                      12



         the transferee of the Holder of such Initial Securities or Private
         Exchange Securities upon exchange of such transferring Holder's
         certificated Initial Security or Private Exchange Security or
         directions to transfer such Holder's interest in the Global Security,
         as applicable.

              (iv)  Upon the consummation of a Registered Exchange Offer
         with respect to the Initial Securities, all requirements pertaining to
         such Initial Securities that Initial Securities issued to certain
         Holders be issued in global form will still apply with respect to
         Holders of such Initial Securities that do not exchange their Initial
         Securities, and Exchange Securities in certificated or global form
         will be available to Holders that exchange such Initial Securities in
         such Registered Exchange Offer.

              (v)   Upon the consummation of a Private Exchange with respect
         to the Initial Securities, all requirements pertaining to such Initial
         Securities that Initial Securities issued to certain Holders be issued
         in global form will still apply with respect to Holders of such Initial
         Securities that do not exchange their Initial Securities, and Private
         Exchange Securities in global form with the global securities legend
         and the Restricted Securities Legend set forth in Exhibit 1 hereto will
         be available to Holders that exchange such Initial Securities in such
         Private Exchange.

              (f)   Cancellation or Adjustment of Global Security.  At such
                    ----------------------------------------------
time as all beneficial interests in a Global Security have either been exchanged
for certificated Securities, redeemed, purchased or canceled, such Global
Security shall be returned to the Depository for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, purchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by the
Trustee or the Securities Custodian, to reflect such reduction.

                                      13



              (g)   Obligations with Respect to Transfers and Exchanges of
                     ------------------------------------------------------
Securities.
- -----------

              (i)   To permit registrations of transfers and exchanges, the
         Company shall execute and the Trustee shall authenticate certificated
         Securities and Global Securities at the Registrar's or co-registrar's
         request.

              (ii)  No service charge shall be made for any registration of
         transfer or exchange, but the Company may require payment of a sum
         sufficient to cover any transfer tax, assessments, or similar
         governmental charge payable in connection therewith (other than any
         such transfer taxes, assessments or similar governmental charge payable
         upon exchange or transfer pursuant to Sections 3.06, 4.09 and 9.05 of
         the Indenture).

              (iii) The Registrar or co-registrar shall not be required to
         register the transfer of or exchange of any Security for a period
         beginning 15 Business Days before the mailing of a notice of an offer
         to repurchase or redeem Securities or 15 Business Days before an
         interest payment date.

              (iv)  Prior to the due presentation for registration of
         transfer of any Security, the Company, the Trustee, the Paying Agent,
         the Registrar or any co-registrar may deem and treat the person in
         whose name a Security is registered as the absolute owner of such
         Security for the purpose of receiving payment of principal of and
         (subject to paragraph 2 of the Securities) interest on such Security
         and for all other purposes whatsoever, whether or not such Security is
         overdue, and none of the Company, the Trustee, the Paying Agent, the
         Registrar or any co-registrar shall be affected by notice to the
         contrary.

              (v)   Any Holder of a Global Security shall, by acceptance of
         such Global Security, agree that transfers of any beneficial interest
         in such Global Security may be effected only through a book-entry
         system maintained by (a) the Holder of such Global Security (or its
         agent) or (b) any Holder of a beneficial interest in such Global
         Security, and that ownership of a beneficial interest in such Global
         Security shall be required to be reflected in a book entry.

              (vi)  All Securities issued upon any transfer or exchange
         pursuant to the terms of this Indenture shall evidence the same debt
         and shall be entitled to the same benefits under this

                                      14



         Indenture as the Securities surrendered upon such transfer or exchange.

                  (h)  No Obligation of the Trustee.
                       -----------------------------

                  (i)  The Trustee shall have no responsibility or obligation to
         any beneficial owner of a Global Security, a member of, or a
         participant in the Depository or other Person with respect to the
         accuracy of the records of the Depository or its nominee or of any
         participant or member thereof, with respect to any ownership interest
         in the Securities or with respect to the delivery to any participant,
         member, beneficial owner or other Person (other than the Depository) of
         any notice (including any notice of redemption) or the payment of any
         amount, under or with respect to such Securities. All notices and
         communications to be given to the Holders and all payments to be made
         to Holders under the Securities shall be given or made only to or upon
         the order of the registered Holders (which shall be the Depository or
         its nominee in the case of a Global Security). The rights of beneficial
         owners in any Global Security shall be exercised only through the
         Depository subject to the applicable rules and procedures of the
         Depository. The Trustee may rely and shall be fully protected in
         relying upon information furnished by the Depository with respect to
         its members, participants and any beneficial owners.

                  (ii) The Trustee shall have no obligation or duty to monitor,
         determine or inquire as to compliance with any restrictions on transfer
         imposed under this Indenture or under applicable law with respect to
         any transfer of any interest in any Security (including any transfers
         between or among Depository participants, members or beneficial owners
         in any Global Security) other than to require delivery of such
         certificates and other documentation or evidence as are expressly
         required by, and to do so if and when expressly required by, the terms
         of this Indenture, and to examine the same to determine substantial
         compliance as to form with the express requirements hereof.

         2.4  Certificated Securities.
              ------------------------

                  (a)   A Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 of this
Appendix shall be transferred to the beneficial owners thereof in the form of
certificated Securities in an aggregate principal amount equal to the principal
amount of such Global

                                      15



Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 of this Appendix and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.

                  (b)   Any Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in
the Borough of Manhattan, The City of New York, to be so transferred, in whole
or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of certificated Initial
Securities of authorized denominations.  Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security or Private Exchange Security delivered in
exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.3(e) of this Appendix, bear the restricted securities
legend set forth in Exhibit 1 hereto.

                  (c)  Subject to the provisions of Section 2.4(b) of this
Appendix, the registered Holder of a Global Security shall be entitled to grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.

                  (d)  In the event of the occurrence of either of the events
specified in Section 2.4(a) of this Appendix, the Company shall promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.

                                      16



                                                                       EXHIBIT 1
                                                                              to
                                                 RULE 144A/REGULATION S APPENDIX

                        FORM OF FACE OF INITIAL SECURITY

                           [Global Securities Legend]

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

                  [FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE
COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES
BY A DEALER (AS DEFINED IN THE U.S. SECURITIES ACT) MAY VIOLATE THE REGISTRATION
REQUIREMENTS OF THE U.S. SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE
THAN IN ACCORDANCE WITH THE RULE 144A THEREUNDER.]

                         [Restricted Securities Legend]

                  THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR OF ANY OTHER JURISDICTION.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
RESOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT MEETING THE APPLICABLE
REQUIREMENTS OF THE SECURITIES ACT OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.



                  THE HOLDER OF THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN
WILL BE ABLE TO EXERCISE THE EXCHANGE RIGHT ONLY IF THE HOLDER CERTIFIES THAT IT
(A) IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT, (B) IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPHS (a)(1),(2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT OR
(C) IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT)
AND IS NOT EXERCISING SUCH EXCHANGE RIGHT ON BEHALF OF A U.S. PERSON.

                  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY
BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE"), WHICH IS, IN THE CASE OF NOTES SOLD IN RELIANCE UPON RULE
144A, TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY AFFILIATE THEREOF WAS THE
OWNER OF THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A "QUALIFIED
INSTITUTIONAL BUYER" TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING
UNDER RULE 144, IF AVAILABLE, OR (F) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, SUBJECT TO SEAGATE
TECHNOLOGY HDD HOLDINGS' RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.



                 [Temporary Regulation S Global Security Legend]

                  EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR
INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY
REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT
CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF
THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON
CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS
OPERATOR OF THE EUROCLEAR SYSTEM OR CLEARSTREAM BANKING, SOCIETE ANONYME AND
ONLY (A) TO SEAGATE TECHNOLOGY HDD HOLDINGS OR ANY SUBSIDIARY THEREOF, (B) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A "QUALIFIED INSTITUTIONAL BUYER" TO WHICH
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR,"
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING UNDER RULE 144, IF
AVAILABLE, OR (F) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, SUBJECT TO SEAGATE TECHNOLOGY HDD HOLDINGS'
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE EXPIRATION OF THE 40-DAY
DISTRIBUTION COMPLIANCE PERIOD.

                                     3



                  BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF
(1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN
COMPLIANCE WITH RULE 144A, AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL
SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
SECURITY BEING TRANSFERRED TO A PERSON (A) WHO THE TRANSFEROR REASONABLY
BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(B) PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.

                  BENEFICIAL INTEREST IN A RULE 144A GLOBAL SECURITY MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE
REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR
904 OF REGULATION S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS
PRIOR TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE
INTEREST TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK
S.A./N.A. OR CLEARSTREAM BANKING SOCIETE ANONYME.

  [Each Definitive Security shall bear the following additional legend.]

                  IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR, TRUSTEE AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRUSTEE OR TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

                                       4



No. ______                                                                $ ____

                            8% Senior Notes Due 2009

                                                              CUSIP NO. ________
                                                              ISIN NO. _________

                  SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited liability
company organized under the laws of the Cayman Islands, promises to pay to ., or
registered assigns, the principal sum of ____Dollars on May 15, 2009.

                  Interest Payment Dates:  May 15 and November 15.

                  Record Dates:  May 1 and November 1.

                  Additional provisions of this Security are set forth on the
other side of this Security.

                  IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.

Dated:

                                                 SEAGATE TECHNOLOGY HDD HOLDINGS

                                                   by___________________________
                                                       Name:
                                                       Title:




TRUSTEE'S CERTIFICATE OF
     AUTHENTICATION

U.S. BANK, N.A.
  as Trustee, certifies
       that this is one of
       the Securities referred
       to in the Indenture.

 by
    _________________________________
        Authorized Signatory

                                     5



                    FORM OF REVERSE SIDE OF INITIAL SECURITY

                             8% Senior Note Due 2009

1.   Interest
     --------

                  SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited liability
company organized under the laws of the Cayman Islands (such company, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; provided, however, that if a
                                            --------  -------
Registration Default occurs, additional interest will accrue on this Security at
a rate of 1.0% per annum from and including the date on which any such
Registration Default shall occur to but excluding the earlier of (a) the date on
which all Registration Defaults have been cured and (b) the first date on which
the Securities shall become saleable pursuant to Rule 144(k) under the
Securities Act, or any successor rule thereof. The Company will pay interest
semiannually on May 15 and November 15 of each year, commencing on November 15,
2002. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from May 13, 2002.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue installments of interest at the
rate of 8% per annum to the extent lawful.

                                      6



2.   Method of Payment
     -----------------

                  The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the May 1 or November 1 immediately preceding the
interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium, if
any, and interest) will be made by wire transfer of immediately available funds
to the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Security (including principal,
premium, if any, and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
                     --------  -------
may also be made, in the case of a Holder of at least $1,000,000 aggregate
principal amount of Securities, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).

3.   Paying Agent and Registrar
     --------------------------

                  Initially, U.S. Bank, N.A., a national banking association
(the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.

                                    7



4.   Indenture
     ---------

                  The Company issued the Securities under an Indenture dated as
of May 13, 2002 ("Indenture"), among the Company, Seagate Technology Holdings,
an exempted limited liability company organized under the laws of the Cayman
Islands ("Parent"), and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. (s)(s) 77aaa-77bbbb) as in effect on the
                                ------
date of the Indenture (the "Act"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.

                  The Securities are senior unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. The Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur additional indebtedness; pay dividends
or distributions on, or redeem or repurchase, capital stock; make investments;
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; consolidate,
merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; engage in sale/leaseback transactions; and amend any deferred
compensation plan of the Company. These covenants are subject to important
exceptions and qualifications, and certain of them will terminate from the first
date that the Securities have an Investment Grade Rating from both of the Rating
Agencies.

5.   Optional Redemption
     -------------------

                  Except as set forth below, or under paragraph 6 of this
Security, the Company shall not be entitled to redeem the Securities at its
option prior to May 15, 2006.

                                        8



                  On and after May 15, 2006, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on May 15 of the years
set forth below:
                                        Redemption
     Period                               Price
     ------                             --------

     2006                               104.00%
     2007                               102.00%
     2008 and thereafter                100.00%

                  At any time prior to May 15, 2005, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued with the Net Cash Proceeds from
one or more Equity Offerings (1) by the Company or (2) by Parent to the extent
the Net Cash Proceeds thereof are contributed to the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from the Company,
at a redemption price equal to 108.00% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that after giving effect to
                                 --------  -------
any such redemption:

                  (1)   at least 65% of such aggregate principal amount of
         Securities (which includes Additional Securities, if any) remains
         outstanding immediately after the occurrence of each such redemption
         (other than Securities held, directly or indirectly, by the Company or
         its Affiliates); and

                  (2)   each such redemption occurs within 90 days after the
         date of the related Equity Offering.

                                        9



                  At any time prior to May 15, 2006, the Securities may be
redeemed, as a whole but not in part, at the option of the Company upon the
occurrence of a, or if applicable each, Change of Control, upon not less than 30
or more than 60 days' prior notice (but in no event may any such redemption
occur more than 90 days after the occurrence of such Change of Control) mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to the sum of (1) the principal amount thereof and (2) the Applicable
Premium as of, and accrued and unpaid interest, if any, to, the redemption date
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).

6.   Redemption for Changes in Withholding Taxes.
     --------------------------------------------

                  (a)   The Company shall be entitled to redeem the Securities,
at its option, at any time as a whole but not in part, upon not less than 30 nor
more than 60 days' notice, at 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in the event the Company has become or would
become obligated to pay, on the next date on which any amount would be payable
with respect to the Securities, any Additional Amounts as a result of:

                  (1)   a change in or an amendment to the laws (including any
         regulations or rulings promulgated thereunder) of (x) the Cayman
         Islands, (y) any jurisdiction, other than the United States, from or
         through which a payment on the Securities is made or (z) any other
         jurisdiction, other than the United States, in which the Company or
         Parent is organized (or any political subdivision or taxing authority
         thereof or therein), in any such case which change or amendment is
         announced or becomes effective on or after May 3, 2002; or

                  (2)   any change in or amendment to any official position
         regarding the application or interpretation of such laws, regulations
         or rulings, or any exception of or amendment to any treaty or treaties
         affecting taxation to

                                       10



         which such jurisdiction (or such political subdivision or taxing
         authority) is a party, which change or amendment is announced or
         becomes effective on or after May 3, 2002,

and the Company cannot avoid such obligation by taking reasonable measures
available to it.

                  (b)   Before the Company publishes or mails notice of
redemption of the Securities pursuant to paragraph 6(a), it will deliver to the
Trustee an Officers' Certificate to the effect that it cannot avoid its
obligation to pay Additional Amounts by taking reasonable measures available to
it. The Company will also deliver an Opinion of Counsel from independent legal
counsel of recognized standing stating that the Company would be obligated to
pay Additional Amounts as a result of a change in tax laws, regulations or
rulings or the application or interpretation of such laws, regulations, rulings
or treaties, as applicable.

7.   Notice of Redemption
     --------------------

                  Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 principal amount may be redeemed in part but
only in whole multiples of $1,000. Securities in denominations of $1,000
principal amount or less may be redeemed in whole but not in part. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.

                                       11



8.   Put Provisions
     --------------

                  Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.

                  Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase Securities with the Net Available
Cash from Asset Dispositions.

9.   Guarantee
     ---------

                  The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
senior unsecured basis by Parent. Such Guarantee may be released or terminated
in certain circumstances which are set forth in the Indenture.

10.  Denominations; Transfer; Exchange
     ---------------------------------

                  The Securities are in registered form without coupons in
denominations of $1,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer or
exchange of any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

                                       12



11.  Persons Deemed Owners
     ---------------------

                  The registered Holder of this Security may be treated as the
owner of it for all purposes.

12.  Unclaimed Money
     ---------------

                  If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company for payment as general creditors, and the Trustee and the Paying
Agent shall have no further liability with respect to such monies.

13.  Discharge and Defeasance
     ------------------------

                  Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations, or a combination thereof, for the payment of principal and interest
on the Securities to redemption or maturity, as the case may be.

                                      13



14.  Amendment; Waiver
     -----------------

                  Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, Parent and
the Trustee shall be entitled to amend the Indenture or the Securities to cure
any ambiguity, omission, defect or inconsistency, or to provide for the
assumption by a Successor Company of the obligations of the Company or Parent
under Article 5 of the Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company or Parent, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to amend certain provisions of the
Indenture relating to form, authentication and transfer of Securities, provided
that (a) compliance with the Indenture as so amended would not violate the
Securities Act of 1933, as amended, or any other applicable law and (b) such
amendment does not materially affect the rights of Holders to transfer
Securities.

15.  Defaults and Remedies
     ---------------------

                  Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
or 6 of the Securities, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company to comply for 60 days after notice with other agreements in the
Indenture or the Securities; (iv) certain accelerations

                                      14



(including failure to pay within any grace period after final maturity) of
other Indebtedness of the Company or any Significant Subsidiary if the amount
accelerated (or so unpaid) exceeds $50 million and the failure continues for 30
days after notice; (v) certain events of bankruptcy or insolvency with respect
to the Company or any Significant Subsidiary; (vi) certain judgments or decrees
for the payment of money in excess of $50 million; and (vii) certain defaults
with respect to the Parent Guaranty. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.

                  Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.

16.  Trustee Dealings with the Company
     ---------------------------------

                  Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.

17.  No Recourse Against Others
     --------------------------

                  A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any

                                      15



liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.

18.  Authentication
     --------------

                  This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

19.  Abbreviations
     -------------

                  Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).

20.  CUSIP Numbers
     -------------

                  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.

                                      16



21.  Holders' Compliance with Registration Rights Agreement.
     ------------------------------------------------------

                  Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.

22.  Governing Law.
     --------------

                  THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:

                  Seagate Technology HDD Holdings
                  c/o Seagate Technology (US) Holdings, Inc.
                  920 Disc Drive
                  Scotts Valley, California 95067
                  1-800-SEAGATE
                  Attn:  Walter Chang

                                      17



_______________________________________________________________________________

                                                     ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

         (Print or type assignee's name, address and zip code)

         (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                                agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.

_______________________________________________________________________________

Date: _____________________ Your Signature: ___________________________________

_______________________________________________________________________________

Sign exactly as your name appears on the other side of this Security.

[In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

         (1)      [ ]     to the Company; or

         (2)      [ ]     pursuant to an effective registration statement under
                          the Securities Act of 1933; or

                                      18



         (3)      [ ]     inside the United States to a "qualified institutional
                          buyer" (as defined in Rule 144A under the Securities
                          Act of 1933) that purchases for its own account or for
                          the account of a qualified institutional buyer to whom
                          notice is given that such transfer is being made in
                          reliance on Rule 144A, in each case pursuant to and in
                          compliance with Rule 144A under the Securities Act of
                          1933; or

         (4)      [ ]     outside the United States in an offshore transaction
                          within the meaning of Regulation S under the
                          Securities Act in compliance with Rule 904 under the
                          Securities Act of 1933 and such Security shall be
                          held immediately after the transfer through Euroclear
                          or Clearstream until the expiration of the Restricted
                          Period; or

         (5)      [ ]     to an institutional "accredited investor" (as defined
                          in Rule 501(a)(1), (2), (3) or (7) under the
                          Securities Act) that has furnished the Trustee with a
                          representation letter in a form reasonably acceptable
                          to the Trustee; or

         (6)      [ ]     pursuant to the exemption from registration provided
                          by Rule 144 under the Securities Act of 1933.

         Unless one of the boxes is checked, the Trustee will refuse to register
         any of the Securities evidenced by this certificate in the name of any
         person other than the registered holder thereof; provided, however,
                                                          --------  -------
         that if box (4), (5) or (6) is checked, the Trustee shall be entitled
         to require, prior to registering any such transfer of the Securities,
         such legal opinions, certifications and other information as the
         Company has reasonably requested to confirm that such transfer is being
         made pursuant to an exemption from, or in a transaction not subject to,
         the registration requirements of the Securities Act of 1933, such as
         the exemption provided by Rule 144 under such Act.

                                      19



                                         ___________________________
                                                 Your Signature

Signature Guarantee:

____________________________                   ________________________________
Signature must be guaranteed                   Signature of Signature Guarantor

         Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

__________________________________________________________________________

         TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

                  The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

Dated: ______________________                   _______________________________
                                                NOTICE:  To be executed by
                                                         an executive officer]


             SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

                  The following increases or decreases in this Global Security
have been made:



Date of       Amount of decrease in  Amount of increase in  Principal amount of    Signature of authoriz
Exchange      Principal amount of    Principal amount of    this Global Security   officer of Trustee or
              this Global Security   this Global Security   following such decrea  Securities Custodian
                                                            or increase
                                                                       


                                       20



                      OPTION OF HOLDER TO ELECT PURCHASE

                  If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 (Asset Disposition) or 4.09 (Change of Control)
of the Indenture, check the box:

         Asset Disposition        [ ]           Change of Control        [ ]

                  If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the Indenture,
state the amount ($1,000 or an integral multiple thereof) in principal amount:
$__________

Date: _______________         Your Signature:      ____________________________
                                                   (Sign exactly as your name
                                                   appears on the other side of
                                                   this Security.)

Signature Guarantee: _________________________________________________
                             (Signature must be guaranteed)

         Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                       21



                                                                       EXHIBIT A

                    FORM OF FACE OF EXCHANGE SECURITY
                     OR PRIVATE EXCHANGE SECURITY* **

- ----------

*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".

**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.



No. ______                                                                $ ____

                           8% Senior Notes Due 2009

                                                                CUSIP NO. ______
                                                                ISIN NO.  ______

                  SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited liability
company organized under the laws of the Cayman Islands, promises to pay to
_____, or registered assigns, the principal sum of ___________Dollars on May 15,
2009.

                  Interest Payment Dates:  May 15 and November 15.

                  Record Dates:  May 1 and November 1.

                  Additional provisions of this Security are set forth on the
other side of this Security.

                  IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.

Dated:

                                                 SEAGATE TECHNOLOGY HDD HOLDINGS

                                                   by___________________________
                                                        Name:
                                                        Title:



TRUSTEE'S CERTIFICATE OF
     AUTHENTICATION

U.S. BANK, N.A.
  as Trustee, certifies
           that this is one of
           the Securities referred
           to in the Indenture.

 by_____________________________
        Authorized Signatory

                                       2



                  [FORM OF REVERSE SIDE OF EXCHANGE SECURITY
                        OR PRIVATE EXCHANGE SECURITY]

                            8% Senior Note Due 2009

1.   Interest
     --------

                  SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited liability
company organized under the laws of the Cayman Islands (such company, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above[; provided, however, that if a
                                             --------  -------
Registration Default occurs, additional interest will accrue on this Security at
a rate of 1.0% per annum from and including the date on which any such
Registration Default shall occur to but excluding the earlier of (a) the date on
which all Registration Defaults have been cured and (b) the first date on which
the Securities shall become saleable pursuant to Rule 144(k) under the
Securities Act, or any successor rule thereof.]/1/ The Company will pay interest
semiannually on May 15 and November 15 of each year, commencing on November 15,
2002. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from May 13, 2002.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue installments of interest at the
rate of 8% per annum to the extent lawful.

- --------------------
         /1./ Insert if at the date of issuance of the Exchange Security or
         Private Exchange Security (as the case may be) any Registration Default
         has occurred with respect to the related Initial Securities during the
         interest period in which such date of issuance occurs.

                                      3



2.   Method of Payment
     -----------------

                  The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the May 1 or November 1 immediately preceding the
interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium, if
any, and interest) will be made by wire transfer of immediately available funds
to the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Security (including principal,
premium, if any, and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
                     --------  -------
may also be made, in the case of a Holder of at least $1,000,000 aggregate
principal amount of Securities, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).

3.   Paying Agent and Registrar
     --------------------------

                  Initially, U.S. Bank, N.A., a national banking association
(the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.

                                      4



4.   Indenture
     ---------

                  The Company issued the Securities under an Indenture dated as
of May 13, 2002 ("Indenture"), among the Company, Seagate Technology Holdings,
an exempted limited liability company organized under the laws of the Cayman
Islands ("Parent"), and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the
                                ------
date of the Indenture (the "Act"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.

                  The Securities are senior unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. The Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur additional indebtedness; pay dividends
or distributions on, or redeem or repurchase, capital stock; make investments;
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; consolidate,
merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; engage in sale/leaseback transactions; and amend any deferred
compensation plan of the Company. These covenants are subject to important
exceptions and qualifications, and certain of them will terminate from the first
date that the Securities have an Investment Grade Rating from both of the Rating
Agencies.

5.   Optional Redemption
     -------------------

                  Except as set forth below, or under paragraph 6 of this
Security, the Company shall not be entitled to redeem the Securities at its
option prior to May 15, 2006.

                                      5



                  On and after May 15, 2006, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on May 15 of the years
set forth below:

                                        Redemption
     Period                               Price
     ------                             ---------

     2006                               104.00%
     2007                               102.00%
     2008 and thereafter                100.00%

                  At any time prior to May 15, 2005, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued with the Net Cash Proceeds from
one or more Equity Offerings (1) by the Company or (2) by Parent to the extent
the Net Cash Proceeds thereof are contributed to the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from the Company,
at a redemption price equal to 108.00% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that after giving effect to
                                 --------  -------
any such redemption:

                  (1)   at least 65% of such aggregate principal amount of
         Securities (which includes Additional Securities, if any) remains
         outstanding immediately after the occurrence of each such redemption
         (other than Securities held, directly or indirectly, by the Company or
         its Affiliates); and

                  (2)   each such redemption occurs within 90 days after the
         date of the related Equity Offering.

                                      6



                  At any time prior to May 15, 2006, the Securities may be
redeemed, as a whole but not in part, at the option of the Company upon the
occurrence of a, or if applicable each, Change of Control, upon not less than 30
or more than 60 days' prior notice (but in no event may any such redemption
occur more than 90 days after the occurrence of such Change of Control) mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to the sum of (1) the principal amount thereof and (2) the Applicable
Premium as of, and accrued and unpaid interest, if any, to, the redemption date
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).

6.   Redemption for Changes in Withholding Taxes.
     --------------------------------------------

                  (a)   The Company shall be entitled to redeem the Securities,
at its option, at any time as a whole but not in part, upon not less than 30 nor
more than 60 days' notice, at 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in the event the Company has become or would
become obligated to pay, on the next date on which any amount would be payable
with respect to the Securities, any Additional Amounts as a result of:

                  (1)   a change in or an amendment to the laws (including any
         regulations or rulings promulgated thereunder) of (x) the Cayman
         Islands, (y) any jurisdiction, other than the United States, from or
         through which a payment on the Securities is made or (z) any other
         jurisdiction, other than the United States, in which the Company or
         Parent is organized (or any political subdivision or taxing authority
         thereof or therein), in any such case which change or amendment is
         announced or becomes effective on or after May 3, 2002; or

                  (2)   any change in or amendment to any official position
         regarding the application or interpretation of such laws, regulations
         or rulings, or any exception of or amendment to any treaty or treaties
         affecting taxation to which such jurisdiction (or such political
         subdivision or

                                      7



         taxing authority) is a party, which change or amendment is announced or
         becomes effective on or after May 3, 2002,

and the Company cannot avoid such obligation by taking reasonable measures
available to it.

                  (b) Before the Company publishes or mails notice of redemption
of the Securities pursuant to paragraph 6(a), it will deliver to the Trustee an
Officers' Certificate to the effect that it cannot avoid its obligation to pay
Additional Amounts by taking reasonable measures available to it. The Company
will also deliver an Opinion of Counsel from independent legal counsel of
recognized standing stating that the Company would be obligated to pay
Additional Amounts as a result of a change in tax laws, regulations or rulings
or the application or interpretation of such laws, regulations, rulings or
treaties, as applicable.

7.   Notice of Redemption
     --------------------

                  Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 principal amount may be redeemed in part but
only in whole multiples of $1,000. Securities in denominations of $1,000
principal amount or less may be redeemed in whole but not in part. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.

                                      8



8.   Put Provisions
     --------------

                  Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
                  Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase Securities with the Net Available
Cash from Asset Dispositions.

9.   Guarantee
     ---------

                  The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
senior unsecured basis by Parent. Such Guarantee may be released or terminated
in certain circumstances which are set forth in the Indenture.

10.  Denominations; Transfer; Exchange
     ---------------------------------

                  The Securities are in registered form without coupons in
denominations of $1,000 principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer or
exchange of any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

                                        9



11.  Persons Deemed Owners
     ---------------------

                  The registered Holder of this Security may be treated as the
owner of it for all purposes.

12.  Unclaimed Money
     ---------------

                  If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company for payment as general creditors, and the Trustee and the Paying
Agent shall have no further liability with respect to such monies.

13.  Discharge and Defeasance
     ------------------------

                  Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations, or a combination thereof, for the payment of principal and interest
on the Securities to redemption or maturity, as the case may be.

                                      10



14.  Amendment; Waiver
     -----------------

                  Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, Parent and
the Trustee shall be entitled to amend the Indenture or the Securities to cure
any ambiguity, omission, defect or inconsistency, or to provide for the
assumption by a Successor Company of the obligations of the Company or Parent
under Article 5 of the Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company or Parent, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to amend certain provisions of the
Indenture relating to form, authentication and transfer of Securities, provided
that (a) compliance with the Indenture as so amended would not violate the
Securities Act of 1933, as amended, or any other applicable law and (b) such
amendment does not materially affect the rights of Holders to transfer
Securities.

                                      11



15.  Defaults and Remedies
     ---------------------

                  Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
or 6 of the Securities, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company to comply for 60 days after notice with other agreements in the
Indenture or the Securities; (iv) certain accelerations (including failure to
pay within any grace period after final maturity) of other Indebtedness of the
Company or any Significant Subsidiary if the amount accelerated (or so unpaid)
exceeds $50 million and the failure continues for 30 days after notice; (v)
certain events of bankruptcy or insolvency with respect to the Company or any
Significant Subsidiary; (vi) certain judgments or decrees for the payment of
money in excess of $50 million; and (vii) certain defaults with respect to the
Parent Guaranty. If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the Securities may declare
all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.

                  Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.

                                      12



16.  Trustee Dealings with the Company
     ---------------------------------

                  Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.

17.  No Recourse Against Others
     --------------------------

                  A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.

18.  Authentication
     --------------

                  This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

19.  Abbreviations
     -------------

                  Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).

                                      13



20.  CUSIP Numbers
     -------------

                  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.

[21. Holders' Compliance with Registration Rights Agreement.
     ------------------------------------------------------

                  Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]/2/

22.  Governing Law.
     --------------

                  THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:

                  Seagate Technology HDD Holdings
                  c/o Seagate Technology (US) Holdings, Inc.
                  920 Disc Drive
                  Scotts Valley, California 95067
                  1-800-SEAGATE
                  Attn:  Walter Chang

- --------------------
         /2./  Delete if this Security is not being issued in exchange for an
         Initial Security.

                                      14



- -------------------------------------------------------------------------------

                                                     ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

         (Print or type assignee's name, address and zip code)

         (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                                                agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.

_______________________________________________________________________________

Date: _____________________ Your Signature: ___________________________________

_______________________________________________________________________________

_______________________________________________________________________________

Sign exactly as your name appears on the other side of this Security.

                                      15



                      OPTION OF HOLDER TO ELECT PURCHASE

                  If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 (Asset Disposition) or 4.09 (Change of Control)
of the Indenture, check the box:

                  Asset Disposition       [ ]       Change of Control       [ ]

                  If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.09 of the Indenture,
state the amount ($1,000 or an integral multiple thereof) in principal amount:
$.

Date: _______________         Your Signature:      ____________________________
                                                   (Sign exactly as your name
                                                   appears on the other side of
                                                   this Security.)

Signature Guarantee: __________________________________________________________
                                    (Signature must be guaranteed)

         Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

EX-4.3

                                                                     EXHIBIT 4.3


                                                                  CONFORMED COPY

                                  $400,000,000

                         Seagate Technology HDD Holdings

                            8% Senior Notes due 2009

                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------


                                                                    May 13, 2002

Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner & Smith
  Incorporated
Salomon Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY  10036

Dear Sirs:

     Seagate Technology HDD Holdings, an exempted limited liability company
organized under the laws of the Cayman Islands (the "Company"), proposes to
issue and sell to Morgan Stanley & Co. Incorporated, J.P. Morgan Securities
Inc., Credit Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Salomon Smith Barney Inc. (collectively, the "Initial
Purchasers"), upon the terms set forth in a purchase agreement of even date
herewith (the "Purchase Agreement"), $400,000,000 aggregate principal amount of
its 8% Senior Notes due 2009 (the "Initial Securities") to be guaranteed (the
"Guarantee") by Seagate Technology Holdings, an exempted limited liability
organized under the laws of the Cayman Islands (the "Guarantor"). The Initial
Securities will be issued pursuant to an Indenture, dated as of May 13, 2002
(the "Indenture"), among the Guarantor, the Company and U.S. Bank, N.A., as
trustee (the "Trustee"). As an inducement to the Initial Purchasers to enter
into the Purchase Agreement, the Company agrees with the Initial Purchasers, for
the benefit of the Initial Purchasers and the holders of the Securities (as
defined below) (collectively the "Holders"), as follows:

     1. Registered Exchange Offer. Unless not permitted by applicable law (after
the Company has complied with the ultimate paragraph of this Section 1), the
Company shall prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to a proposed offer (the "Registered
Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in
Section 6 hereof), who are not prohibited by any law or policy of the Commission
from participating in the Registered Exchange Offer, to issue and deliver to
such Holders, in exchange for the Initial Securities, a like aggregate principal
amount of debt securities of the Company issued under the Indenture, identical
in all material respects to the Initial Securities and registered under the
Securities Act (the "Exchange Securities"). The Company shall use its reasonable
best efforts to (i) cause such Exchange Offer Registration Statement to become
effective under the Securities Act within 210 days after the date (the "Closing
Date") on which the Initial Purchasers purchase the Initial Securities pursuant
to the Purchase Agreement (such 210th day being an "Effectiveness Deadline") and
(ii) keep the Exchange Offer Registration Statement effective for not less than
20 business days (or longer, if required by applicable law) after the date
notice of the Registered Exchange Offer is mailed to the Holders (such period
being called the "Exchange Offer Registration Period").

     If the Company commences the Registered Exchange Offer, the Company (i)
will be entitled to consummate the Registered Exchange Offer 20 business days
after such commencement (provided that the Company has accepted all the Initial
                         --------
Securities theretofore validly tendered in accordance with the terms of



the Registered Exchange Offer) and (ii) will be required to consummate the
Registered Exchange Offer no later than 40 days after the date on which the
Exchange Offer Registration Statement is declared effective (such 40th day being
the "Consummation Deadline").

     Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall, as soon as practicable, commence the
Registered Exchange Offer, it being the objective of such Registered Exchange
Offer to enable each Holder of Transfer Restricted Securities electing to
exchange the Initial Securities for Exchange Securities (assuming that such
Holder is not an affiliate of the Company within the meaning of the Securities
Act, acquires the Exchange Securities in the ordinary course of such Holder's
business and has no arrangement or understanding with any person to participate
in the distribution of the Exchange Securities and is not prohibited by any law
or policy of the Commission from participating in the Registered Exchange Offer)
to trade such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act and without material
restrictions under the securities laws of the several states of the United
States.

     The Company acknowledges that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder which is a broker-dealer
electing to exchange Initial Securities, acquired for its own account as a
result of market making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing the information set forth in (a) Annex A hereto on the cover, (b)
Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section and (c) Annex C hereto in the "Plan of Distribution"
section of such prospectus in connection with a sale of any such Exchange
Securities received by such Exchanging Dealer pursuant to the Registered
Exchange Offer and (ii) an Initial Purchaser that elects to sell Securities (as
defined below) acquired in exchange for Initial Securities constituting any
portion of an unsold allotment, is required to deliver a prospectus containing
the information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in connection with such sale.

     The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein, in order to permit such prospectus to be lawfully
delivered by all persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such persons must comply with such
requirements in order to resell the Exchange Securities; provided, however, that
                                                         --------  -------
(i) in the case where such prospectus and any amendment or supplement thereto
must be delivered by an Exchanging Dealer or an Initial Purchaser, such period
shall be the lesser of 180 days and the date on which all Exchanging Dealers and
the Initial Purchasers have sold all Exchange Securities held by them (unless
such period is extended pursuant to Section 3(j) below) and (ii) the Company
shall make such prospectus and any amendment or supplement thereto available to
any broker-dealer for use in connection with any resale of any Exchange
Securities for a period of not less than 180-days after the consummation of the
Registered Exchange Offer. Notwithstanding the foregoing, the Company shall not
be obligated to keep the Exchange Offer Registration Statement continuously
effective to the extent set forth above if the Company determines, in its
reasonable judgment, upon advice of counsel, that the continued effectiveness
and usability of the Exchange Offer Registration Statement would (i) require the
disclosure of material information which the Guarantor, the Company or any of
its subsidiaries has a bona fide business reason for preserving as confidential
or (ii) interfere with any existing or prospective financing, acquisition,
corporate reorganization or other material business situation, transaction or
negotiation involving the Guarantor, the Company or any of its subsidiaries;
provided, however, that the failure to keep the Exchange Offer Registration
- --------  -------
Statement effective and usable for such reason shall last no longer than 20 days
(whereafter Additional Interest (as defined in Section 6(a)) shall accrue and be
payable until the Exchange Offer Registration Statement becomes effective and
usable) and shall in no event occur during the first 30 days after the Exchange
Offer Registration Statement becomes effective. In the event that the Company
does not keep the Exchange Offer Registration Statement continuously effective
as provided in the immediately preceding sentence, the number of days during
which the Exchange Offer Registration Statement is not continuously effective,
which shall include the date the Company gives notice that the Exchange Offer
Registration Statement is no longer effective, shall be added on to, and
therefore extend, the period during which the Company is obligated to use its
reasonable best efforts to keep the Exchange Offer Registration Statement
effective and to amend and supplement the prospectus contained therein.


                                       2



     If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds Initial Securities acquired by it as part of its initial
distribution, the Company, simultaneously with the delivery of the Exchange
Securities pursuant to the Registered Exchange Offer, shall issue and deliver to
such Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "Private Exchange") for the Initial Securities held by such
Initial Purchaser, a like principal amount of debt securities of the Company
issued under the Indenture and identical in all material respects to the Initial
Securities (the "Private Exchange Securities"). The Initial Securities, the
Exchange Securities and the Private Exchange Securities are herein collectively
called the "Securities".

     In connection with the Registered Exchange Offer, the Company shall:

          (a) mail to each Holder a copy of the prospectus forming part of the
     Exchange Offer Registration Statement, together with an appropriate letter
     of transmittal and related documents;

          (b) keep the Registered Exchange Offer open for not less than 20
     business days (or longer, if required by applicable law) after the date
     notice thereof is mailed to the Holders;

          (c) utilize the services of a depositary for the Registered Exchange
     Offer with an address in the Borough of Manhattan, The City of New York,
     which may be the Trustee or an affiliate of the Trustee;

          (d) permit Holders to withdraw tendered Securities at any time prior
     to the close of business, New York time, on the last business day on which
     the Registered Exchange Offer shall remain open; and

          (e) otherwise comply with all applicable laws.

     As soon as practicable after the close of the Registered Exchange Offer or
the Private Exchange, as the case may be, the Company shall:

          (x) accept for exchange all the Securities validly tendered and not
     withdrawn pursuant to the Registered Exchange Offer and the Private
     Exchange;

          (y) deliver to the Trustee for cancellation all the Initial Securities
     so accepted for exchange; and

          (z) cause the Trustee to authenticate and deliver promptly to each
     Holder of the Initial Securities, Exchange Securities or Private Exchange
     Securities, as the case may be, equal in principal amount to the Initial
     Securities of such Holder so accepted for exchange.

     The Indenture will provide that the Exchange Securities will not be subject
to the transfer restrictions set forth in the Indenture and that all the
Securities will vote and consent together on all matters as one class and that
none of the Securities will have the right to vote or consent as a class
separate from one another on any matter.

     Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Initial Securities surrendered in exchange therefor or, if no interest has been
paid on the Initial Securities, from the date of original issue of the Initial
Securities.

     Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will
have no arrangement or understanding with any person to participate in the
distribution of the Securities or

                                       3



the Exchange Securities within the meaning of the Securities Act, (iii) such
Holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of
the Company or, if it is an affiliate, such Holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable, (iv) if such Holder is not a broker-dealer, that it is not
engaged in, and does not intend to engage in, the distribution of the Exchange
Securities and (v) if such Holder is a broker-dealer, that it will receive
Exchange Securities for its own account in exchange for Initial Securities that
were acquired as a result of market-making activities or other trading
activities and that it will be required to acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities.

     Notwithstanding any other provisions hereof, the Company will ensure that
(i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

     2. Shelf Registration. If, (i) applicable interpretations of the staff of
the Commission do not permit the Company to effect a Registered Exchange Offer,
as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not
consummated by the 250th day after the Closing Date, (iii) any Initial Purchaser
so requests with respect to the Initial Securities (or the Private Exchange
Securities) not eligible to be exchanged for Exchange Securities in the
Registered Exchange Offer and held by it following consummation of the
Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer)
is prohibited by law or Commission policy from participating in the Registered
Exchange Offer or, in the case of any Holder (other than an Exchanging Dealer)
that participates in the Registered Exchange Offer, such Holder does not receive
freely tradeable Exchange Securities on the date of the exchange and any such
Holder so requests, the Company shall take the following actions (the date on
which any of the conditions described in the foregoing clauses (i) through (iv)
occur, including in the case of clauses (iii) or (iv) the receipt of the
required notice, being a "Trigger Date"):

          (a) The Company shall promptly file with the Commission a registration
     statement (the "Shelf Registration Statement" and, together with the
     Exchange Offer Registration Statement, a "Registration Statement") on an
     appropriate form under the Securities Act relating to the offer and sale of
     the Transfer Restricted Securities by the Holders thereof from time to time
     in accordance with the methods of distribution set forth in the Shelf
     Registration Statement and Rule 415 under the Securities Act (hereinafter,
     the "Shelf Registration"); provided, however, that no Holder (other than an
                                --------  -------
     Initial Purchaser) shall be entitled to have the Securities held by it
     covered by such Shelf Registration Statement unless such Holder agrees in
     writing to be bound by all the provisions of this Agreement applicable to
     such Holder.

          (b) The Company shall, in the case of clause (i) of this Section 2,
     use its reasonable best efforts to cause the Shelf Registration Statement
     to be declared effective under the Securities Act not later than 210 days
     after the Closing Date (such 210th day being an "Effectiveness Deadline")
     and, in the case of clauses (ii), (iii) or (iv) of this Section 2, use its
     reasonable best efforts to cause the Shelf Registration Statement to be
     declared effective under the Securities Act no later than 60 days after the
     Trigger Date (such 60th day being an "Effectiveness Deadline").

          (c) The Company shall use its reasonable best efforts to keep the
     Shelf Registration Statement continuously effective in order to permit the
     prospectus included therein to be lawfully delivered by the Holders of the
     relevant Securities, for a period of two years (or for such longer

                                       4



     period if extended pursuant to Section 3(j) below) from the date of its
     effectiveness or such shorter period that will terminate when all the
     Securities covered by the Shelf Registration Statement (i) have been sold
     pursuant thereto or (ii) are no longer restricted securities (as defined in
     Rule 144 under the Securities Act, or any successor rule thereof);
     provided, however, the Company shall not be obligated to keep the Shelf
     --------  -------
     Registration Statement continuously effective to the extent set forth below
     if (i) the Company determines, in its reasonable judgment, upon advice of
     counsel, that the continued effectiveness and usability of the Shelf
     Registration statement would (x) require the disclosure of material
     information which the Guarantor, the Company or any of its subsidiaries has
     a bona fide business reason for preserving as confidential or (y) interfere
     with any financing, acquisition, corporate reorganization or other material
     transaction involving the Guarantor, the Company or any of its
     subsidiaries; provided that the failure to keep the Shelf Registration
                   --------
     Statement effective and usable for offers and sales of Securities for the
     reasons set forth in clauses (x) and (y) above shall last no longer than 60
     days in aggregate in any 12-month period (whereafter Additional Interest
     (as defined in Section 6(a)) shall accrue and be payable until the Shelf
     Registration Statement becomes effective and usable) and (ii) the Company
     promptly thereafter complies with the requirements of Section 3(j) hereof,
     if applicable; provided, further, that the number of days of any actual
                    --------  -------
     Suspension Period (as hereinafter defined) shall be added on to, and
     therefore extend, the two-year period specified above. Any such period
     during which the Company is excused from keeping the Shelf Registration
     Statement effective and usable for offers and sales of securities is
     referred to herein as a "Suspension Period." A Suspension Period shall
     commence on and include the date that the Company gives notice that the
     Shelf Registration Statement is no longer effective or the prospectus
     included therein is no longer usable for offers and sales of Securities and
     shall end on the earlier to occur of (1) the date on which each seller of
     Securities covered by the Shelf Registration Statement either receives the
     copies of the supplemented or amended prospectus contemplated by Section
     3(j) hereof or is advised in writing by the Company that the use of the
     prospectus may be resumed and (2) the expiration of 60 days in aggregate in
     any 12-month period during which one or more Suspension Periods has been in
     effect. The Company shall be deemed not to have used its reasonable best
     efforts to keep the Shelf Registration Statement effective during the
     requisite period if it voluntarily takes any action that would result in
     Holders of Securities covered thereby not being able to offer and sell such
     Securities during that period, unless such action is (A) required by
     applicable law or (B) permitted by this clause (c).

          (d) Notwithstanding any other provisions of this Agreement to the
     contrary, the Company shall cause the Shelf Registration Statement and the
     related prospectus and any amendment or supplement thereto, as of the
     effective date of the Shelf Registration Statement, amendment or
     supplement, (i) to comply in all material respects with the applicable
     requirements of the Securities Act and the rules and regulations of the
     Commission and (ii) not to 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.

     3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Registered
Exchange Offer contemplated by Section 1 hereof, the following provisions shall
apply:

          (a) The Company shall (i) furnish to each Initial Purchaser, prior to
     the filing thereof with the Commission, a copy of the Registration
     Statement and each amendment thereof and each supplement, if any, to the
     prospectus included therein and, in the event that an Initial Purchaser
     (with respect to any portion of an unsold allotment from the original
     offering) is participating in the Registered Exchange Offer or the Shelf
     Registration Statement, the Company shall use its reasonable best efforts
     to reflect in each such document, when so filed with the Commission, such
     comments as such Initial Purchaser reasonably may propose; (ii) include the
     information set forth

                                       5



     in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
     Procedures" section and the "Purpose of the Exchange Offer" section and in
     Annex C hereto in the "Plan of Distribution" section of the prospectus
     forming a part of the Exchange Offer Registration Statement and include the
     information set forth in Annex D hereto in the Letter of Transmittal
     delivered pursuant to the Registered Exchange Offer; (iii) if requested by
     an Initial Purchaser, include the information required by Items 507 or 508
     of Regulation S-K under the Securities Act, as applicable, in the
     prospectus forming a part of the Exchange Offer Registration Statement;
     (iv) include within the prospectus contained in the Exchange Offer
     Registration Statement a section entitled "Plan of Distribution,"
     reasonably acceptable to the Initial Purchasers, which shall contain a
     summary statement of the positions taken or policies made by the staff of
     the Commission with respect to the potential "underwriter" status of any
     broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under
     the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
     Exchange Securities received by such broker-dealer in the Registered
     Exchange Offer (a "Participating Broker-Dealer"), whether such positions or
     policies have been publicly disseminated by the staff of the Commission or
     such positions or policies, in the reasonable judgment of the Initial
     Purchasers based upon advice of counsel (which may be in-house counsel),
     represent the prevailing views of the staff of the Commission; and (v) in
     the case of a Shelf Registration Statement, include the names of the
     Holders who propose to sell Securities pursuant to the Shelf Registration
     Statement as selling securityholders.

          (b) The Company shall give written notice to the Initial Purchasers,
     the Holders of the Securities and any Participating Broker-Dealer from whom
     the Company has received prior written notice that it will be a
     Participating Broker-Dealer in the Registered Exchange Offer (which notice
     pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction
     to suspend the use of the prospectus until the requisite changes have been
     made):

               (i) when the Registration Statement or any amendment thereto has
          been filed with the Commission and when the Registration Statement or
          any post-effective amendment thereto has become effective;

               (ii) of any request by the Commission for amendments or
          supplements to the Registration Statement or the prospectus included
          therein or for additional information;

               (iii) of the issuance by the Commission of any stop order
          suspending the effectiveness of the Registration Statement or the
          initiation of any proceedings for that purpose;

               (iv) of the receipt by the Company or its legal counsel of any
          notification with respect to the suspension of the qualification of
          the Securities for sale in any jurisdiction or the initiation or
          threatening of any proceeding for such purpose; and

               (v) of the happening of any event that requires the Company to
          make changes in the Registration Statement or the prospectus in order
          that the Registration Statement or the prospectus do not contain an
          untrue statement of a material fact nor omit to state a material fact
          required to be stated therein or necessary to make the statements
          therein (in the case of the prospectus, in light of the circumstances
          under which they were made) not misleading.

          (c) The Company shall make every reasonable effort to obtain the
     withdrawal at the earliest possible time, of any order suspending the
     effectiveness of the Registration Statement.

          (d) The Company shall furnish to each Holder of Securities included
     within the coverage of the Shelf Registration, without charge, at least one
     copy of the Shelf Registration Statement and

                                       6



     any post-effective amendment thereto, including financial statements and
     schedules, and, if the Holder so requests in writing, all exhibits thereto
     (including those, if any, incorporated by reference).

          (e) The Company shall deliver to each Exchanging Dealer and each
     Initial Purchaser, and to any other Holder who so requests, without charge,
     at least one copy of the Exchange Offer Registration Statement and any
     post-effective amendment thereto, including financial statements and
     schedules, and, if any Initial Purchaser or any such Holder requests, all
     exhibits thereto (including those incorporated by reference).

          (f) The Company shall, during the Shelf Registration Period, deliver
     to each Holder of Securities included within the coverage of the Shelf
     Registration, without charge, as many copies of the prospectus (including
     each preliminary prospectus) included in the Shelf Registration Statement
     and any amendment or supplement thereto as such person may reasonably
     request. The Company consents, subject to the provisions of this Agreement,
     to the use of the prospectus or any amendment or supplement thereto by each
     of the selling Holders of the Securities in connection with the offering
     and sale of the Securities covered by the prospectus, or any amendment or
     supplement thereto, included in the Shelf Registration Statement.

          (g) The Company shall deliver to each Initial Purchaser, any
     Exchanging Dealer, any Participating Broker-Dealer and such other persons
     required to deliver a prospectus following the Registered Exchange Offer,
     without charge, as many copies of the final prospectus included in the
     Exchange Offer Registration Statement and any amendment or supplement
     thereto as such persons may reasonably request. The Company consents,
     subject to the provisions of this Agreement, to the use of the prospectus
     or any amendment or supplement thereto by any Initial Purchaser, if
     necessary, any Participating Broker-Dealer and such other persons required
     to deliver a prospectus following the Registered Exchange Offer in
     connection with the offering and sale of the Exchange Securities covered by
     the prospectus, or any amendment or supplement thereto, included in such
     Exchange Offer Registration Statement.

          (h) Prior to any public offering of the Securities pursuant to any
     Registration Statement the Company shall use its reasonable best efforts to
     register or qualify or cooperate with the Holders of the Securities
     included therein and their respective counsel in connection with the
     registration or qualification of the Securities for offer and sale under
     the securities or "blue sky" laws of such states of the United States as
     any Holder of the Securities reasonably requests in writing and do any and
     all other acts or things necessary or advisable to enable the offer and
     sale in such jurisdictions of the Securities covered by such Registration
     Statement; provided, however, that the Company shall not be required to (i)
                --------  -------
     qualify generally to do business in any jurisdiction where it is not then
     so qualified or (ii) take any action which would subject it to general
     service of process or to taxation in any jurisdiction where it is not then
     so subject.

          (i) The Company shall cooperate with the Holders of the Securities to
     facilitate the timely preparation and delivery of certificates representing
     the Securities to be sold pursuant to any Registration Statement free of
     any restrictive legends and in such denominations and registered in such
     names as the Holders may request a reasonable period of time prior to sales
     of the Securities pursuant to such Registration Statement.

          (j) Upon the occurrence of any event contemplated by paragraphs (ii)
     through (v) of Section 3(b) above during the period for which the Company
     is required to maintain an effective Registration Statement, the Company
     shall promptly prepare and file a post-effective amendment to the
     Registration Statement or a supplement to the related prospectus and any
     other required document so that, as thereafter delivered to Holders of the
     Securities or purchasers of Securities, the prospectus will not contain an
     untrue statement of a material fact or omit to state any material

                                       7



     fact required to be stated therein or necessary to make the statements
     therein, in light of the circumstances under which they were made, not
     misleading. If the Company notifies the Initial Purchasers, the Holders of
     the Securities and any known Participating Broker-Dealer in accordance with
     paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the
     prospectus until the requisite changes to the prospectus have been made,
     then the Initial Purchasers, the Holders of the Securities and any such
     Participating Broker-Dealers shall suspend use of such prospectus, and the
     period of effectiveness of the Shelf Registration Statement provided for in
     Section 2(b) above and the Exchange Offer Registration Statement provided
     for in Section 1 above shall each be extended by the number of days from
     and including the date of the giving of such notice to and including the
     date when the Initial Purchasers, the Holders of the Securities and any
     known Participating Broker-Dealer shall have received such amended or
     supplemented prospectus pursuant to this Section 3(j).

          (k) Not later than the effective date of the applicable Registration
     Statement, the Company will provide a CUSIP number for the Initial
     Securities, the Exchange Securities or the Private Exchange Securities, as
     the case may be, and provide the applicable trustee with printed
     certificates for the Initial Securities, the Exchange Securities or the
     Private Exchange Securities, as the case may be, in a form eligible for
     deposit with The Depository Trust Company.

          (l) The Company will comply with all rules and regulations of the
     Commission to the extent and so long as they are applicable to the
     Registered Exchange Offer or the Shelf Registration and will make generally
     available to its security holders (or otherwise provide in accordance with
     Section 11(a) of the Securities Act) an earnings statement satisfying the
     provisions of Section 11(a) of the Securities Act, no later than 45 days
     after the end of a 12-month period (or 90 days, if such period is a fiscal
     year) beginning with the first month of the Company's first fiscal quarter
     commencing after the effective date of the Registration Statement, which
     statement shall cover such 12-month period.

          (m) The Company shall cause the Indenture to be qualified under the
     Trust Indenture Act of 1939, as amended, in a timely manner and containing
     such changes, if any, as shall be necessary for such qualification. In the
     event that such qualification would require the appointment of a new
     trustee under the Indenture, the Company shall appoint a new trustee
     thereunder pursuant to the applicable provisions of the Indenture.

          (n) The Company may require each Holder of Securities to be sold
     pursuant to the Shelf Registration Statement to furnish to the Company such
     information regarding the Holder and the distribution of the Securities as
     the Company may from time to time reasonably require for inclusion in the
     Shelf Registration Statement, and the Company may exclude from such
     registration the Securities of any Holder that unreasonably fails to
     furnish such information within a reasonable time after receiving such
     request.

          (o) The Company shall enter into such customary agreements (including,
     if requested by the Holders of at least 10% of the aggregate principal
     amount of the outstanding Securities covered thereby, an underwriting
     agreement in customary form) and take all such other action, if any, as the
     Holders of at least 10% of the aggregate principal amount of the
     outstanding Securities shall reasonably request in order to facilitate the
     disposition of the Securities pursuant to any Shelf Registration.

          (p) In the case of any Shelf Registration, the Company shall (i) make
     reasonably available for inspection by the Holders of the Securities, any
     underwriter participating in any disposition pursuant to the Shelf
     Registration Statement and any attorney, accountant or other agent retained
     by the Holders of the Securities or any such underwriter all relevant
     financial and other records, pertinent corporate documents and properties
     of the Company and (ii) cause the

                                       8



     Company's officers, directors, employees, accountants and auditors to
     supply all relevant information reasonably requested by the Holders of the
     Securities or any such underwriter, attorney, accountant or agent in
     connection with the Shelf Registration Statement (the information supplied
     pursuant to clauses (i) and (ii) being the "Records"), in each case, as
     shall be reasonably necessary to enable such persons, to conduct a
     reasonable investigation within the meaning of Section 11 of the Securities
     Act; provided, however, that any such person shall first agree in writing
          --------  -------
     with the Company that any information that is reasonably and in good faith
     designated by the Company as confidential at the time of delivery of such
     information shall be kept confidential by such person, unless (A)
     disclosure of such information is required by court or administrative order
     or is necessary to respond to inquiries of regulatory authorities, (B)
     disclosure of such information is required by law (including any disclosure
     requirements pursuant to federal securities laws in connection with the
     filing of the Registration Statement or the use of any prospectus) or (C)
     such information becomes generally available to the public other than as a
     result of a disclosure or failure to safeguard such information by such
     person; provided further that the foregoing inspection and information
             -------- -------
     gathering shall be coordinated on behalf of the Initial Purchasers by
     Morgan Stanley & Co. Incorporated and on behalf of the other parties, by
     one counsel designated by and on behalf of such other parties as described
     in Section 4 hereof. Each Holder of Securities and the Initial Purchasers
     further agree and shall cause any person reviewing documents on their
     behalf pursuant to this paragraph (p) to agree, that it will, upon learning
     that disclosure of such Records is sought pursuant to clause (A) or (B)
     above, give notice to the Company and allow the Company, at its expense, to
     undertake appropriate action to prevent disclosure of the Records deemed
     confidential.

          (q) In the case of any Shelf Registration, the Company, if requested
     by Holders of at least 10% of the aggregate principal amount of the
     outstanding Securities covered thereby, shall cause (i) its counsel to
     deliver an opinion and updates thereof relating to the Securities in
     customary form addressed to such Holders and the managing underwriters, if
     any, thereof and dated, in the case of the initial opinion, the effective
     date of such Shelf Registration Statement (it being agreed that the matters
     to be covered by such opinion shall include, without limitation, the due
     incorporation and good standing of the Guarantor (if the Guarantee is in
     effect as of such date) and the Company; the qualification of the Guarantor
     (if the Guarantee is in effect as of such date) and the Company to transact
     business as foreign corporations; the due authorization, execution and
     delivery of the relevant agreement of the type referred to in Section 3(o)
     hereof; the due authorization, execution, authentication and issuance, and
     the validity and enforceability, of the applicable Securities; the absence
     of material legal or governmental proceedings involving the Guarantor (if
     the Guarantee is in effect as of such date) and the Company; the absence of
     governmental approvals required to be obtained in connection with the Shelf
     Registration Statement, the offering and sale of the applicable Securities,
     or any agreement of the type referred to in Section 3(o) hereof; the
     compliance as to form of such Shelf Registration Statement and any
     documents incorporated by reference therein and of the Indenture with the
     requirements of the Securities Act and the Trust Indenture Act,
     respectively; and, as of the date of the opinion and as of the effective
     date of the Shelf Registration Statement or most recent post-effective
     amendment thereto, as the case may be, the absence from such Shelf
     Registration Statement and the prospectus included therein, as then amended
     or supplemented, and from any documents incorporated by reference therein
     of an untrue statement of a material fact or the omission to state therein
     a material fact required to be stated therein or necessary to make the
     statements therein not misleading (in the case of any such documents, in
     the light of the circumstances existing at the time that such documents
     were filed with the Commission under the Exchange Act); (ii) its officers
     to execute and deliver all customary documents and certificates and updates
     thereof requested by any underwriters of the applicable Securities and
     (iii) its independent public accountants to provide to the selling Holders
     of the applicable Securities and any underwriter therefor a comfort letter
     in customary form and covering matters of the type customarily covered in
     comfort letters in connection with primary underwritten offerings, subject
     to receipt of

                                       9



     appropriate documentation as contemplated, and only if permitted, by
     Statement of Auditing Standards No. 72.

          (r) In the case of the Registered Exchange Offer, if requested by any
     Initial Purchaser or any known Participating Broker-Dealer, the Company
     shall cause (i) its counsel to deliver to such Initial Purchaser or such
     Participating Broker-Dealer a signed opinion substantially in the form set
     forth in Exhibits A and B of the Purchase Agreement with such changes as
     are customary in connection with the preparation of a Registration
     Statement and (ii) its independent public accountants to deliver to such
     Initial Purchaser or such Participating Broker-Dealer a comfort letter, in
     customary form, meeting the requirements as to the substance thereof as set
     forth in Section 5(e) of the Purchase Agreement, with appropriate date
     changes.

          (s) If a Registered Exchange Offer or a Private Exchange is to be
     consummated, upon delivery of the Initial Securities by Holders to the
     Company (or to such other Person as directed by the Company) in exchange
     for the Exchange Securities or the Private Exchange Securities, as the case
     may be, the Company shall mark, or caused to be marked, on the Initial
     Securities so exchanged that such Initial Securities are being canceled in
     exchange for the Exchange Securities or the Private Exchange Securities, as
     the case may be; in no event shall the Initial Securities be marked as paid
     or otherwise satisfied.

          (t) The Company will use its reasonable best efforts to (a) if the
     Initial Securities have been rated prior to the initial sale of such
     Initial Securities, confirm such ratings will apply to the Securities
     covered by a Registration Statement, or (b) if the Initial Securities were
     not previously rated, cause the Securities covered by a Registration
     Statement to be rated with the appropriate rating agencies, if so requested
     by Holders of a majority in aggregate principal amount of Securities
     covered by such Registration Statement, or by the managing underwriters, if
     any.

          (u) In the event that any broker-dealer registered under the Exchange
     Act shall underwrite any Securities or participate as a member of an
     underwriting syndicate or selling group or "assist in the distribution"
     (within the meaning of the Conduct Rules (the "Rules") of the National
     Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a
     Holder of such Securities or as an underwriter, a placement or sales agent
     or a broker or dealer in respect thereof, or otherwise, the Company will
     assist such broker-dealer in complying with the requirements of such Rules,
     including, without limitation, by (i) if such Rules, including Rule 2720,
     shall so require, engaging a "qualified independent underwriter" (as
     defined in Rule 2720) to participate in the preparation of the Registration
     Statement relating to such Securities, to exercise usual standards of due
     diligence in respect thereto and, if any portion of the offering
     contemplated by such Registration Statement is an underwritten offering or
     is made through a placement or sales agent, to recommend the yield of such
     Securities, (ii) indemnifying any such qualified independent underwriter to
     the extent of the indemnification of underwriters provided in Section 5
     hereof and (iii) providing such information to such broker-dealer as may be
     required in order for such broker-dealer to comply with the requirements of
     the Rules.

          (v) The Company shall use its reasonable best efforts to take all
     other steps necessary to effect the registration of the Securities covered
     by a Registration Statement contemplated hereby.

     4. Registration Expenses.

          (a) All expenses incident to the Company's performance of and
     compliance with this Agreement will be borne by the Company, regardless of
     whether a Registration Statement is ever filed or becomes effective,
     including without limitation;

               (i) all registration and filing fees and expenses;


                                       10



               (ii) all fees and expenses of compliance with federal securities
          and state "blue sky" or securities laws;

               (iii) all expenses of printing (including printing certificates
          for the Securities to be issued in the Registered Exchange Offer and
          the Private Exchange and printing of Prospectuses), messenger and
          delivery services and telephone;

               (iv) all fees and disbursements of counsel for the Company;

               (v) all application and filing fees in connection with listing
          the Exchange Securities on a national securities exchange or automated
          quotation system pursuant to the requirements hereof; and

               (vi) all fees and disbursements of independent certified public
          accountants of the Company (including the expenses of any special
          audit and comfort letters required by or incident to such
          performance).

The Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Company.

          (b) In connection with any Registration Statement required by this
     Agreement, the Company will reimburse the Initial Purchasers and the
     Holders of Transfer Restricted Securities who are tendering Initial
     Securities in the Registered Exchange Offer and/or selling or reselling
     Securities pursuant to the "Plan of Distribution" contained in the Exchange
     Offer Registration Statement or the Shelf Registration Statement, as
     applicable, for the reasonable fees and disbursements (but, in the case of
     an Exchange Offer Registration Statement, not to exceed $10,000) of not
     more than one counsel, who shall be Cravath, Swaine & Moore unless another
     firm shall be chosen by the Holders of a majority in principal amount of
     the Transfer Restricted Securities for whose benefit such Registration
     Statement is being prepared.

     5. Indemnification.

          (a) The Company agrees to indemnify and hold harmless each Holder of
     the Securities, any Participating Broker-Dealer and each person, if any,
     who controls such Holder or such Participating Broker-Dealer within the
     meaning of the Securities Act or the Exchange Act (each Holder, any
     Participating Broker-Dealer and such controlling persons are referred to
     collectively as the "Indemnified Parties") from and against any losses,
     claims, damages or liabilities, joint or several, or any actions in respect
     thereof (including, but not limited to, any losses, claims, damages,
     liabilities or actions relating to purchases and sales of the Securities)
     to which each Indemnified Party may become subject under the Securities
     Act, the Exchange Act or otherwise, insofar as such losses, claims,
     damages, liabilities or actions arise out of or are based upon any untrue
     statement or alleged untrue statement of a material fact contained in a
     Registration Statement or prospectus or in any amendment or supplement
     thereto or in any preliminary prospectus relating to a Shelf Registration,
     or arise out of, or are based upon, the omission or alleged omission to
     state therein a material fact required to be stated therein or necessary to
     make the statements therein not misleading, and shall reimburse, as
     incurred, the Indemnified Parties for any legal or other expenses
     reasonably incurred by them in connection with investigating or defending
     any such loss, claim, damage, liability or action in respect thereof;
     provided, however, that (i) the Company shall not be liable in any such
     --------  -------
     case to the extent that such loss, claim, damage or liability arises out of
     or is based upon any untrue statement or alleged untrue statement or
     omission or alleged omission (A) made in a Registration Statement or
     prospectus or in any

                                       11



     amendment or supplement thereto or in any preliminary prospectus relating
     to a Shelf Registration in reliance upon and in conformity with written
     information pertaining to such Holder and furnished to the Company by or on
     behalf of such Holder specifically for inclusion therein or (B) resulting
     from the use of the prospectus during the period when the use of the
     prospectus was suspended or otherwise unavailable for sales thereunder in
     accordance with the terms of this Agreement; provided, however, that
                                                  --------  -------
     Holders received at least 10 days prior written notice of such suspension
     or other unavailability; and (ii) with respect to any untrue statement or
     omission or alleged untrue statement or omission made in any preliminary
     prospectus relating to a Shelf Registration Statement, the indemnity
     agreement contained in this subsection (a) shall not inure to the benefit
     of any Holder or Participating Broker-Dealer from whom the person asserting
     any such losses, claims, damages or liabilities purchased the Securities
     concerned, to the extent that a prospectus relating to such Securities was
     required to be delivered by such Holder or Participating Broker-Dealer
     under the Securities Act in connection with such purchase and any such
     loss, claim, damage or liability of such Holder or Participating
     Broker-Dealer results from the fact that there was not sent or given to
     such person, at or prior to the written confirmation of the sale of such
     Securities to such person, a copy of the final prospectus if the Company
     had previously furnished copies thereof to such Holder or Participating
     Broker-Dealer; provided further, however, that this indemnity agreement
                    -------- -------  -------
     will be in addition to any liability which the Company may otherwise have
     to such Indemnified Party. The Company shall also indemnify underwriters,
     their officers and directors and each person who controls such underwriters
     within the meaning of the Securities Act or the Exchange Act to the same
     extent as provided above with respect to the indemnification of the Holders
     of the Securities if requested by such Holders.

          (b) Each Holder of the Securities, severally and not jointly, will
     indemnify and hold harmless the Company and each person, if any, who
     controls the Company within the meaning of the Securities Act or the
     Exchange Act from and against any losses, claims, damages or liabilities or
     any actions in respect thereof, to which the Company or any such
     controlling person may become subject under the Securities Act, the
     Exchange Act or otherwise, insofar as such losses, claims, damages,
     liabilities or actions arise out of or are based upon any untrue statement
     or alleged untrue statement of a material fact contained in a Registration
     Statement or prospectus or in any amendment or supplement thereto or in any
     preliminary prospectus relating to a Shelf Registration, or arise out of or
     are based upon the omission or alleged omission to state therein a material
     fact necessary to make the statements therein not misleading, but in each
     case only to the extent that the untrue statement or omission or alleged
     untrue statement or omission was made in reliance upon and in conformity
     with written information pertaining to such Holder and furnished to the
     Company by or on behalf of such Holder specifically for inclusion therein;
     and, subject to the limitation set forth immediately preceding this clause,
     shall reimburse, as incurred, the Company for any legal or other expenses
     reasonably incurred by the Company or any such controlling person in
     connection with investigating or defending any loss, claim, damage,
     liability or action in respect thereof. This indemnity agreement will be in
     addition to any liability which such Holder may otherwise have to the
     Company or any of its controlling persons.

          (c) Promptly after receipt by an indemnified party under this Section
     5 of notice of the commencement of any action or proceeding (including a
     governmental investigation), such indemnified party will, if a claim in
     respect thereof is to be made against the indemnifying party under this
     Section 5, notify the indemnifying party of the commencement thereof; but
     the omission so to notify the indemnifying party will not, in any event,
     relieve the indemnifying party from any obligations to any indemnified
     party other than the indemnification obligation provided in paragraph (a)
     or (b) above. In case any such action is brought against any indemnified
     party, and it notifies the indemnifying party of the commencement thereof,
     the indemnifying party will be entitled to participate therein and, to the
     extent that it may wish, jointly with any other indemnifying party
     similarly notified, to assume the defense thereof, with counsel reasonably
     satisfactory to such indemnified

                                       12



     party (who shall not, except with the consent of the indemnified party, be
     counsel to the indemnifying party), and after notice from the indemnifying
     party to such indemnified party of its election so to assume the defense
     thereof the indemnifying party will not be liable to such indemnified party
     under this Section 5 for any legal or other expenses, other than reasonable
     costs of investigation, subsequently incurred by such indemnified party in
     connection with the defense thereof. No indemnifying party shall, without
     the prior written consent of the indemnified party, effect any settlement
     of any pending or threatened action in respect of which any indemnified
     party is or could have been a party and indemnity could have been sought
     hereunder by such indemnified party unless such settlement (i) includes an
     unconditional release of such indemnified party from all liability on any
     claims that are the subject matter of such action and (ii) does not include
     a statement as to or an admission of fault, culpability or a failure to act
     by or on behalf of any indemnified party.

          (d) If the indemnification provided for in this Section 5 is
     unavailable or insufficient to hold harmless an indemnified party under
     subsections (a) or (b) above, then each indemnifying party shall contribute
     to the amount paid or payable by such indemnified party as a result of the
     losses, claims, damages or liabilities (or actions in respect thereof)
     referred to in subsection (a) or (b) above in such proportion as is
     appropriate to reflect the relative fault of the indemnifying party or
     parties on the one hand and the indemnified party on the other in
     connection with the statements or omissions that resulted in such losses,
     claims, damages or liabilities (or actions in respect thereof) as well as
     any other relevant equitable considerations. The relative fault of the
     parties shall be determined by reference to, among other things, whether
     the untrue or alleged untrue statement of a material fact or the omission
     or alleged omission to state a material fact relates to information
     supplied by the Company on the one hand or such Holder or such other
     indemnified party, as the case may be, on the other, and the parties'
     relative intent, knowledge, access to information and opportunity to
     correct or prevent such statement or omission. The amount paid by an
     indemnified party as a result of the losses, claims, damages or liabilities
     referred to in the first sentence of this subsection (d) shall be deemed to
     include any legal or other expenses reasonably incurred by such indemnified
     party in connection with investigating or defending any action or claim
     which is the subject of this subsection (d). Notwithstanding any other
     provision of this Section 5(d), the Holders of the Securities shall not be
     required to contribute any amount in excess of the amount by which the net
     proceeds received by such Holders from the sale of the Securities pursuant
     to a Registration Statement exceeds the amount of damages which such
     Holders have otherwise been required to pay by reason of such untrue or
     alleged untrue statement or omission or alleged omission. No person guilty
     of fraudulent misrepresentation (within the meaning of Section 11(f) of the
     Securities Act) shall be entitled to contribution from any person who was
     not guilty of such fraudulent misrepresentation. For purposes of this
     paragraph (d), each person, if any, who controls such indemnified party
     within the meaning of the Securities Act or the Exchange Act shall have the
     same rights to contribution as such indemnified party and each person, if
     any, who controls the Company within the meaning of the Securities Act or
     the Exchange Act shall have the same rights to contribution as the Company.

          (e) The agreements contained in this Section 5 shall survive the sale
     of the Securities pursuant to a Registration Statement and shall remain in
     full force and effect, regardless of any termination or cancellation of
     this Agreement or any investigation made by or on behalf of any indemnified
     party.

     6. Additional Interest Under Certain Circumstances.

          (a) Additional interest (the "Additional Interest") with respect to
     the Securities shall be assessed as follows if any of the following events
     occur (each such event in clauses (i) through (iv) below being herein
     called a "Registration Default"):

                                       13


               (i) any Registration Statement required by this Agreement is not
          declared effective by the Commission on or prior to the applicable
          Effectiveness Deadline;

               (ii) the Registered Exchange Offer has not been consummated on or
          prior to the Consummation Deadline; or

               (iii) if obligated to file a Shelf Registration Statement due to
          the existence of any of the circumstances described in clauses (ii),
          (iii) or (iv) of Section 2, the Company fails to file the Shelf
          Registration Statement with the Commission on or prior to the 45th day
          after the applicable Trigger Date; and

               (iv) any Registration Statement required by this Agreement has
          been declared effective by the Commission but (A) such Registration
          Statement thereafter ceases to be effective or (B) such Registration
          Statement or the related prospectus ceases to be usable in connection
          with resales of Transfer Restricted Securities during the periods
          specified herein because either (1) any event occurs as a result of
          which the related prospectus forming part of such Registration
          Statement would include any untrue statement of a material fact or
          omit to state any material fact necessary to make the statements
          therein in the light of the circumstances under which they were made
          not misleading, or (2) it shall be necessary to amend such
          Registration Statement or supplement the related prospectus, to comply
          with the Securities Act or the Exchange Act or the respective rules
          thereunder.

Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission.

     Additional Interest shall accrue on the Securities over and above the
interest set forth in the title of the Securities from and including the date on
which any such Registration Default shall occur to but excluding the earlier of
(i) the date on which all such Registration Defaults have been cured and (ii)
the first date on which the Securities shall become saleable pursuant to Rule
144(k) under the Securities Act, or any successor rule thereof, at a rate of
1.00% per annum (the "Additional Interest Rate").

          (b) A Registration Default referred to in Section 6(a)(iv) hereof
     shall be deemed not to have occurred and be continuing in relation to a
     Shelf Registration Statement or the related prospectus if (i) such
     Registration Default has occurred solely as a result of (x) the filing of a
     post-effective amendment to such Shelf Registration Statement to
     incorporate annual audited financial information with respect to the
     Company where such post-effective amendment is not yet effective and needs
     to be declared effective to permit Holders to use the related prospectus or
     (y) other material events, with respect to the Company that would need to
     be described in such Shelf Registration Statement or the related prospectus
     and (ii) in the case of clause (y), the Company is proceeding promptly and
     in good faith to amend or supplement such Shelf Registration Statement and
     related prospectus to describe such events; provided, however, that in any
                                                 --------  -------
     case if such Registration Default occurs for a continuous period in excess
     of 30 days, Additional Interest shall be payable in accordance with the
     above paragraph from the day such Registration Default occurs until such
     Registration Default is cured.

          (c) Any amounts of Additional Interest due pursuant to Section 6(a)
     will be payable in cash on the regular interest payment dates with respect
     to the Securities. The amount of Additional Interest will be determined by
     multiplying the applicable Additional Interest Rate by the principal amount
     of the Securities and further multiplied by a fraction, the numerator of
     which is the number of days such Additional Interest Rate was applicable
     during such period (determined on the basis of a 360-day year comprised of
     twelve 30-day months), and the denominator of which is 360.

                                       14



          (d) "Transfer Restricted Securities" means each Security until (i) the
     date on which such Security has been exchanged by a person other than a
     broker-dealer for a freely transferable Exchange Security in the Registered
     Exchange Offer, (ii) following the exchange by a broker-dealer in the
     Registered Exchange Offer of an Initial Security for an Exchange Note, the
     date on which such Exchange Note is sold to a purchaser who receives from
     such broker-dealer on or prior to the date of such sale a copy of the
     prospectus contained in the Exchange Offer Registration Statement, (iii)
     the date on which such Security has been effectively registered under the
     Securities Act and disposed of in accordance with the Shelf Registration
     Statement or (iv) the date on which such Security is distributed to the
     public pursuant to Rule 144 under the Securities Act or is saleable
     pursuant to Rule 144(k) under the Securities Act.

     7. Rules 144 and 144A. The Company shall use its reasonable best efforts to
file the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the request of any Holder of Securities,
make publicly available other information so long as necessary to permit sales
of their Securities pursuant to Rules 144 and 144A. The Company covenants that
it will take such further action as any Holder of Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). The Company will provide a copy of this
Agreement to prospective purchasers of Initial Securities identified to the
Company by the Initial Purchasers upon request. Upon the request of any Holder
of Initial Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements. Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the Company
to register any of its Securities pursuant to the Exchange Act.

     8. Underwritten Registrations. If any of the Transfer Restricted Securities
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering ("Managing Underwriters") will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Securities to be included in such offering and shall be reasonably acceptable to
the Company.

     No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

     9. Miscellaneous.

          (a) Remedies. The Company acknowledges and agrees that any failure by
     the Company to comply with its obligations under Section 1 and 2 hereof may
     result in material irreparable injury to the Initial Purchasers or the
     Holders for which there is no adequate remedy at law, that it will not be
     possible to measure damages for such injuries precisely and that, in the
     event of any such failure, the Initial Purchasers or any Holder may obtain
     such relief as may be required to specifically enforce the Company's
     obligations under Sections 1 and 2 hereof. The Company further agrees to
     waive the defense in any action for specific performance that a remedy at
     law would be adequate.

          (b) No Inconsistent Agreements. The Company will not on or after the
     date of this Agreement enter into any agreement with respect to its
     securities that is inconsistent with the rights granted to the Holders in
     this Agreement or otherwise conflicts with the provisions hereof. The
     rights granted to the Holders hereunder do not in any way conflict with and
     are not inconsistent with the rights granted to the holders of the
     Company's securities under any agreement in effect on the date hereof.

                                       15



          (c) Amendments and Waivers. The provisions of this Agreement may not
     be amended, modified or supplemented, and waivers or consents to departures
     from the provisions hereof may not be given, except by the Company and the
     written consent of the Holders of a majority in principal amount of the
     Securities affected by such amendment, modification, supplement, waiver or
     consents. Without the consent of the Holder of each Security, however, no
     modification may change the provisions relating to the payment of
     Additional Interest.

          (d) Notices. All notices and other communications provided for or
     permitted hereunder shall be made in writing by hand delivery, first-class
     mail, facsimile transmission, or air courier which guarantees overnight
     delivery:

               (1) if to a Holder of the Securities, at the most current address
          given by such Holder to the Company.

               (2) if to the Initial Purchasers;

               Morgan Stanley & Co. Incorporated
               1585 Broadway
               New York, NY  10036
               Fax No.:  (212) 507-0462
               Attention:  Kathryn Walsh

               with a copy to:

               Morgan Stanley & Co. Incorporated
               2725 Sand Hill Road
               Menlo Park, CA 94125
               Fax No.:  (650) 234-5605
               Attention:  William Salisbury

               and with a copy to:

               Cravath, Swaine & Moore
               825 Eighth Avenue
               New York, NY 10019
               Fax No.:  (212) 474-3700
               Attention:  Kris F. Heinzelman

               (3) if to the Company, at its address as follows:

               Seagate Technology HDD Holdings
               c/o Maples & Calder
               P.O. Box 309 GT
               Ugland House
               South Church Street
               George Town, Grand Cayman
               Cayman Islands

               with a copy to:

               Simpson Thacher & Bartlett
               3330 Hillview Avenue
               Palo Alto, CA 94304
               Fax No.:  (650) 251-5002
               Attention:  William H. Hinman, Jr.

                                       16



     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.

          (e) Third Party Beneficiaries. The Holders shall be third party
     beneficiaries to the agreements made hereunder between the Company, on the
     one hand, and the Initial Purchasers, on the other hand, and shall have the
     right to enforce such agreements directly to the extent they may deem such
     enforcement necessary or advisable to protect their rights or the rights of
     Holders hereunder.

          (f) Successors and Assigns. This Agreement shall be binding upon the
     Company and its successors and assigns.

          (g) Counterparts. This Agreement may be executed in any number of
     counterparts and by the parties hereto in separate counterparts, each of
     which when so executed shall be deemed to be an original and all of which
     taken together shall constitute one and the same agreement.

          (h) Headings. The headings in this Agreement are for convenience of
     reference only and shall not limit or otherwise affect the meaning hereof.

          (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
     IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          (j) Severability. If any one or more of the provisions contained
     herein, or the application thereof in any circumstance, is held invalid,
     illegal or unenforceable, the validity, legality and enforceability of any
     such provision in every other respect and of the remaining provisions
     contained herein shall not be affected or impaired thereby.

          (k) Securities Held by the Company. Whenever the consent or approval
     of Holders of a specified percentage of principal amount of Securities is
     required hereunder, Securities held by the Company or its affiliates (other
     than subsequent Holders of Securities if such subsequent Holders are deemed
     to be affiliates solely by reason of their holdings of such Securities)
     shall not be counted in determining whether such consent or approval was
     given by the Holders of such required percentage.

          (l) Agent for Service; Submission to Jurisdiction; Waiver of
     Immunities. By the execution and delivery of this Agreement, the Company
     (i) acknowledges that it has, by separate written instrument, designated
     and appointed CT Corporation System, as its authorized agent upon which
     process may be served in any suit or proceeding arising out of or relating
     to this Agreement, and acknowledges that CT Corporation System has accepted
     such designation, (ii) submits to the nonexclusive jurisdiction of any
     federal or state court in the State of New York in any such suit or
     proceeding or any suit or proceeding brought under federal or state
     securities laws, and (iii) agrees that service of process upon CT
     Corporation System written notice of said service to the Company shall be
     deemed in every respect effective service of process upon it in any such
     suit or proceeding. The Company further agrees to take any and all action,
     including the execution and filing of any and all such documents and
     instruments, as may be necessary to


                                       17



     continue such designation and appointment of CT Corporation System in full
     force and effect so long as any of the Securities shall be outstanding. To
     the extent that the Company may acquire any immunity from jurisdiction of
     any court or from any legal process (whether through service of notice,
     attachment prior to judgment, attachment in aid of execution, execution or
     otherwise) with respect to itself or its property, it hereby irrevocably
     waives such immunity in respect of this Agreement, to the fullest extent
     permitted by law.


                                       18



     If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the several Initial Purchasers, the Company and the Guarantor in accordance with
its terms.

                                      Very truly yours,


                                      SEAGATE TECHNOLOGY HDD HOLDINGS

                                      by    /s/ William L. Hudson
                                          --------------------------------------
                                          Name: William L. Hudson
                                          Title: Secretary


                                      SEAGATE TECHNOLOGY HOLDINGS

                                      by    /s/ William L. Hudson
                                          --------------------------------------
                                          Name: William L. Hudson
                                          Title: Secretary


The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.


MORGAN STANLEY & CO. INCORPORATED

by    /s/ David Schwarzbach
      -----------------------------------
      Name: David Schwarzbach
      Title: Vice President


J.P. MORGAN SECURITIES INC.

by    /s/ Benjamin Ben-Attar
      -----------------------------------
      Name: Benjamin Ben-Attar
      Title: Vice President


                                       19


CREDIT SUISSE FIRST BOSTON CORPORATION


by    /s/ Robert A. Curley, Jr.
      -----------------------------------
      Name: Robert A. Curley, Jr.
      Title: Managing Director


MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

by    /s/ Jack Weingart
      -----------------------------------
      Name: Jack Weingart
      Title: Managing Director


SALOMON SMITH BARNEY INC.

by    /s/ Randy L. Moe
      -----------------------------------
      Name: Randy L. Moe
      Title: Vice President


                                       20



                                                                         ANNEX A

     Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Securities received in exchange for Initial Securities
where such Initial Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."



                                                                         ANNEX B

     Each broker-dealer that receives Exchange Securities for its own account in
exchange for Initial Securities, where such Initial Securities were acquired by
such broker-dealer as a result of market- making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."



                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

     Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Initial Securities where such Initial Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until               , 200 ,
all dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus./1/

     The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities. Any broker-dealer that resells Exchange Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

     For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.











- --------
/1/    In addition, the legend required by Item 502(e) of Regulation S-K will
     appear on the inside front cover page of the Exchange Offer prospectus
     below the Table of Contents.



                                                                         ANNEX D

[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

         Name:
                  --------------------------------------------
         Address:
                  --------------------------------------------





If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Initial Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

EX-5.1

Exhibit 5.1

May 15, 2002

SEAGATE TECHNOLOGY HDD HOLDINGS

SEAGATE TECHNOLOGY HOLDINGS

P.O. Box 309GT

Ugland House, South Church Street

George Town, Grand Cayman

Cayman Islands

Ladies and Gentlemen:

We have acted as counsel to Seagate Technology HDD Holdings, an exempted limited liability company incorporated under the laws of the Cayman Islands (the “Company”), and to Seagate Technology Holdings, an exempted limited liability company incorporated under the laws of the Cayman Islands (the “Guarantor”), in connection with the registration statement on Form S-4 (the “Registration Statement”) filed by the Company and the Guarantor with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, relating to the issuance by the Company of $400,000,000 aggregate principal amount of 8% Senior Notes due 2009 (the “Securities”) and the issuance by the Guarantor of a guarantee (the “Guarantee”) with respect to the Securities. The Securities and the Guarantee will be issued under an indenture, dated May 13, 2002 (the “Indenture”), among the Company, the Guarantor and U.S. Bank, N.A., as trustee (the “Trustee”).

We have examined the Registration Statement and the Indenture, which has been filed with the Commission as an exhibit to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, instruments and other documents and have made such other and further investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Company and the Guarantor.

In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. We also have assumed that the Indenture is the valid and legally binding obligation of the Trustee.

We have assumed further that (1) the Company and the Guarantor are validly existing under the laws of the Cayman Islands and have duly authorized, executed and delivered the Indenture, and duly authorized the Securities and the Guarantee, in accordance with their respective memorandum and articles of association and the laws of the Cayman Islands, (2) execution, delivery and performance of the Indenture by the Company and the Guarantor, of the Securities by the Company and of the Guarantee by the Guarantor do not and will not violate the laws of the Cayman Islands or any other applicable laws (excepting the laws of the State of New York and the federal laws of the United States) and (3) execution, delivery and performance of the Indenture by the Company and the Guarantor, of the Securities by the Company and of the Guarantee by the Guarantor do not and will not constitute a breach or violation of any agreement or instrument that is binding upon the Company or the Guarantor.

Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that:

1.    Assuming the due execution, authentication, issuance and delivery of the Securities in accordance with the provisions of the Indenture, the Securities will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.

2.    Assuming (a) the due execution, authentication, issuance and delivery of the Securities in accordance with the provisions of the Indenture and (b) the due issuance of the Guarantee, the Guarantee

will constitute a valid and legally binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms.

Our opinions set forth above are subject to the effects of (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law), (iii) an implied covenant of good faith and fair dealing and (iv) the effects of the possible judicial application of foreign laws or foreign governmental or judicial action affecting creditors’ rights.

We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York and the federal law of the United States.

We hereby consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement and to the use of our name under the caption “Legal Matters” in the Prospectus included in the Registration Statement.

Very truly yours,

/s/    SIMPSON THACHER & BARTLETT

SIMPSON THACHER & BARTLETT

EX-10.1

                                                                    Exhibit 10.1

                                                                  EXECUTION COPY

================================================================================

                                CREDIT AGREEMENT

                                   dated as of

                                  May 13, 2002

                                      among

                          SEAGATE TECHNOLOGY HOLDINGS,

                        SEAGATE TECHNOLOGY HDD HOLDINGS,
                               as Cayman Borrower,

                     SEAGATE TECHNOLOGY (US) HOLDINGS, INC.,
                                as U.S. Borrower,

                            The Lenders Party Hereto

                                       and

                              JPMORGAN CHASE BANK,
                             as Administrative Agent

                           ---------------------------

                          J.P. MORGAN SECURITIES INC.,
                    as Joint Bookrunner and Co-Lead Arranger

                      MORGAN STANLEY SENIOR FUNDING, INC.,
                     as Syndication Agent, Joint Bookrunner
                              and Co-Lead Arranger

                               CITICORP USA, INC.,
                             as Documentation Agent

                       MERRILL LYNCH CAPITAL CORPORATION,
                             as Documentation Agent

                           CREDIT SUISSE FIRST BOSTON
                             as Documentation Agent

================================================================================




                                TABLE OF CONTENTS



                                                                                Page
                                                                                ----
                                                                            
                                    ARTICLE I

                                   Definitions
                                   -----------

SECTION 1.01.   Defined Terms......................................................1
                -------------
SECTION 1.02.   Classification of Loans and Borrowings............................48
                --------------------------------------
SECTION 1.03.   Terms Generally...................................................48
                ---------------
SECTION 1.04.   Accounting Terms; GAAP............................................48
                ----------------------
SECTION 1.05.   Exchange Rates....................................................49
                --------------

                                   ARTICLE II

                                   The Credits
                                   -----------

SECTION 2.01.   Commitments.......................................................49
                -----------
SECTION 2.02.   Loans and Borrowings..............................................50
                --------------------
SECTION 2.03.   Requests for Borrowings...........................................51
                -----------------------
SECTION 2.04.   Swingline Loans...................................................52
                ---------------
SECTION 2.05.   Letters of Credit.................................................54
                -----------------
SECTION 2.06.   Funding of Borrowings.............................................62
                ---------------------
SECTION 2.07.   Interest Elections................................................63
                ------------------
SECTION 2.08.   Termination and Reduction of Commitments..........................65
                ----------------------------------------
SECTION 2.09.   Repayment of Loans; Evidence of Debt..............................65
                ------------------------------------
SECTION 2.10.   Amortization of Term Loans........................................67
                --------------------------
SECTION 2.11.   Prepayment of Loans...............................................68
                -------------------
SECTION 2.12.   Fees..............................................................70
                ----
SECTION 2.13.   Interest..........................................................72
                --------
SECTION 2.14.   Alternate Rate of Interest........................................73
                --------------------------
SECTION 2.15.   Increased Costs...................................................74
                ---------------
SECTION 2.16.   Break Funding Payments............................................75
                ----------------------
SECTION 2.17.   Taxes.............................................................76
                -----
SECTION 2.18.   Payments Generally; Pro Rata Treatment; Sharing of Set-offs.......78
                -----------------------------------------------------------
SECTION 2.19.   Mitigation Obligations; Replacement of Lenders....................80
                ----------------------------------------------
SECTION 2.20.   Change in Law.....................................................82
                -------------






                                                                                Page
                                                                                ----
                                                                           
                                   ARTICLE III

                         Representations and Warranties
                         ------------------------------

SECTION 3.01.   Organization; Powers..............................................82
                --------------------
SECTION 3.02.   Authorization; Enforceability.....................................82
                -----------------------------
SECTION 3.03.   Governmental Approvals; No Conflicts..............................83
                ------------------------------------
SECTION 3.04.   Financial Condition; No Material Adverse Change...................83
                -----------------------------------------------
SECTION 3.05.   Properties........................................................85
                ----------
SECTION 3.06.   Litigation and Environmental Matters..............................85
                ------------------------------------
SECTION 3.07.   Compliance with Laws and Agreements...............................86
                -----------------------------------
SECTION 3.08.   Investment and Holding Company Status.............................86
                -------------------------------------
SECTION 3.09.   Taxes.............................................................86
                -----
SECTION 3.10.   ERISA.............................................................87
                -----
SECTION 3.11.   Disclosure........................................................87
                ----------
SECTION 3.12.   Subsidiaries......................................................88
                ------------
SECTION 3.13.   Insurance.........................................................88
                ---------
SECTION 3.14.   Labor Matters.....................................................88
                -------------
SECTION 3.15.   Solvency..........................................................88
                --------
SECTION 3.16.   Senior Indebtedness...............................................89
                -------------------

                                   ARTICLE IV

                                   Conditions
                                   ----------

SECTION 4.01.   Effective Date....................................................89
                --------------
SECTION 4.02.   Each Credit Event.................................................93
                -----------------

                                    ARTICLE V

                              Affirmative Covenants
                              ---------------------

SECTION 5.01.   Financial Statements and Other Information........................94
                ------------------------------------------
SECTION 5.02.   Notices of Material Events........................................97
                --------------------------
SECTION 5.03.   Information Regarding Collateral..................................98
                --------------------------------
SECTION 5.04.   Existence; Conduct of Business....................................99
                ------------------------------
SECTION 5.05.   Payment of Obligations............................................99
                ----------------------
SECTION 5.06.   Maintenance of Properties.........................................99
                -------------------------
SECTION 5.07.   Insurance........................................................100
                ---------
SECTION 5.08.   Casualty and Condemnation........................................100
                -------------------------
SECTION 5.09.   Books and Records; Inspection and Audit Rights...................100
                ----------------------------------------------
SECTION 5.10.   Compliance with Laws.............................................100
                --------------------






                                                                                Page
                                                                                ----
                                                                           
SECTION 5.11.   Use of Proceeds and Letters of Credit............................101
                -------------------------------------
SECTION 5.12.   Additional Subsidiaries..........................................101
                -----------------------
SECTION 5.13.   Further Assurances...............................................102
                ------------------

                                   ARTICLE VI

                               Negative Covenants
                               ------------------

SECTION 6.01.   Indebtedness; Certain Equity Securities..........................103
                ---------------------------------------
SECTION 6.02.   Liens............................................................107
                -----
SECTION 6.03.   Fundamental Changes..............................................109
                -------------------
SECTION 6.04.   Investments, Loans, Advances, Guarantees and Acquisitions........110
                ---------------------------------------------------------
SECTION 6.05.   Asset Sales......................................................114
                -----------
SECTION 6.06.   Sale and Leaseback Transactions..................................118
                -------------------------------
SECTION 6.07.   Swap Agreements..................................................118
                ---------------
SECTION 6.08.   Restricted Payments; Certain Payments of Indebtedness............119
                -----------------------------------------------------
SECTION 6.09.   Transactions with Affiliates.....................................124
                ----------------------------
SECTION 6.10.   Restrictive Agreements...........................................125
                ----------------------
SECTION 6.11.   Amendment of Material Documents..................................126
                -------------------------------
SECTION 6.12.   Interest Expense Coverage Ratio..................................127
                -------------------------------
SECTION 6.13.   Fixed Charge Coverage Ratio......................................127
                ---------------------------
SECTION 6.14.   Net Leverage Ratio...............................................127
                ------------------

                                   ARTICLE VII

                                Events of Default
                                -----------------

SECTION 7.01.   Events of Default................................................128
                -----------------
SECTION 7.02.   Exclusion of Immaterial Subsidiaries.............................132
                ------------------------------------

                                  ARTICLE VIII

                            The Administrative Agent
                            ------------------------

SECTION 8.01.   The Administrative Agent.........................................132
                ------------------------






                                                                                Page
                                                                                ----
                                                                           
                                   ARTICLE IX

                                  Miscellaneous
                                  -------------

SECTION 9.01.   Notices..........................................................135
                -------
SECTION 9.02.   Waivers; Amendments..............................................136
                -------------------
SECTION 9.03.   Expenses; Indemnity; Damage Waiver...............................138
                ----------------------------------
SECTION 9.04.   Successors and Assigns...........................................141
                ----------------------
SECTION 9.05.   Survival.........................................................146
                --------
SECTION 9.06.   Counterparts; Integration; Effectiveness.........................147
                ----------------------------------------
SECTION 9.07.   Severability.....................................................147
                ------------
SECTION 9.08.   Right of Setoff..................................................148
                ---------------
SECTION 9.09.   GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.......148
                ----------------------------------------------------------
SECTION 9.10.   WAIVER OF JURY TRIAL.............................................149
                --------------------
SECTION 9.11.   Headings.........................................................149
                --------
SECTION 9.12.   Confidentiality..................................................149
                ---------------
SECTION 9.13.   Interest Rate Limitation.........................................150
                ------------------------
SECTION 9.14.   Judgment Currency................................................151
                -----------------
SECTION 9.15.   Joint and Several Liability......................................152
                ----------------------------

                                    ARTICLE X

                         Collection Allocation Mechanism
                         -------------------------------

SECTION 10.01.   Implementation of CAM...........................................152
                 ---------------------
SECTION 10.02.   Letters of Credit...............................................153
                ------------------


SCHEDULES:

Schedule 1.01(a)   --   Mortgaged Properties
Schedule 1.01(b)   --   Foreign Subsidiaries of the U.S. Borrower
Schedule 1.01(c)   --   Moribund Subsidiaries
Schedule 1.02      --   Jurisdictions of Core Loan Parties
Schedule 2.01      --   Commitments
Schedule 2.05(a)   --   Existing Letters of Credit
Schedule 2.05(b)   --   Outside Letters of Credit
Schedule 3.05(c)   --   Real Property
Schedule 3.06      --   Disclosed Matters
Schedule 3.12      --   Subsidiaries
Schedule 3.13      --   Insurance
Schedule 5.01      --   Financial Information of Cayman Borrower
Schedule 6.01      --   Existing Indebtedness
Schedule 6.02      --   Existing Liens



                                                                            Page
                                                                            ----

Schedule 6.04      --   Existing Investments
Schedule 6.10      --   Existing Restrictions



EXHIBITS:

Exhibit A      --   Form of Assignment and Acceptance
Exhibit B-1
(A)-(B)        --   Forms of Opinion of Borrowers' United
                    States Counsel
Exhibit B-2    --   Form of Opinion of Borrowers' Cayman
                    Islands Counsel
Exhibit B-3    --   Form of Opinion of Borrowers' Singapore
                    Counsel
Exhibit B-4    --   Form of Opinion of Borrowers' Northern
                    Ireland Counsel
Exhibit B-5    --   Form of Opinion of Borrower's Netherlands
                    Counsel
Exhibit B-6    --   Form of Opinion of United States Local
                    Counsel
Exhibit B-7    --   Form of Opinion of Administrative Agent's
                    Thai Counsel
Exhibit B-8    --   Form of Opinion of Borrower's Japan
                    Counsel
Exhibit B-9    --   Form of Opinion of Borrower's Mexico
                    Counsel
Exhibit B-10   --   Form of Opinion of Administrative Agent's
                    U.K. Counsel
Exhibit B-11   --   Form of Opinion of Borrower's Thai Counsel
Exhibit C-1    --   Form of U.S. Security Agreement
Exhibit C-2    --   Form of Cayman Security Agreement
Exhibit C-3    --   Form of Singapore Security Agreement
Exhibit C-4    --   Form of Northern Ireland Security
                    Agreement
Exhibit C-5    --   Form of Netherlands Security Agreement
Exhibit D-1    --   Form of U.S. Pledge Agreement
Exhibit D-2    --   Form of Cayman Pledge Agreement
Exhibit D-3    --   Form of Singapore Pledge Agreement
Exhibit E      --   Form of Indemnity, Subrogation and
                    Contribution Agreement
Exhibit F      --   Form of U.S. Guarantee Agreement
Exhibit G      --   Form of U.K. Security Agreement



                                                                               1

                    CREDIT AGREEMENT dated as of May 13, 2002, among SEAGATE
               TECHNOLOGY HOLDINGS, an exempted limited liability company
               organized under the laws of the Cayman Islands ("Intermediate
               Holdings"), SEAGATE TECHNOLOGY HDD HOLDINGS, an exempted limited
               liability company organized under the laws of the Cayman Islands
               (the "Cayman Borrower"), SEAGATE TECHNOLOGY (US) HOLDINGS, INC.,
               a Delaware corporation (the "U.S. Borrower"), the LENDERS party
               hereto and JPMORGAN CHASE BANK, as Administrative Agent.

                      The parties hereto agree as follows:

                                    ARTICLE I

                                   Definitions
                                   -----------

          SECTION 1.01. Defined Terms. As used in this Agreement, the following
                        -------------
terms have the meanings specified below:

          "ABR", when used in reference to any Loan or Borrowing, refers to
           ---
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.

          "Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
           ------------------
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.

          "Administrative Agent" means JPMorgan Chase Bank, in its capacity as
           --------------------
administrative agent for the Lenders hereunder.

          "Administrative Questionnaire" means an Administrative Questionnaire
           ----------------------------
in a form supplied by the Administrative Agent.

          "Affiliate" means, with respect to a specified Person, another Person
           ---------
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
Notwithstanding the foregoing, no individual shall be deemed to be an Affiliate
of a Person solely by reason of his or her being an officer or director of such
Person.



                                                                               2

          "Alternate Base Rate" means, for any day, a rate per annum equal to
           -------------------
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.

          "Alternative Currency" means any currency that is freely available,
           --------------------
freely transferable and freely convertible into dollars and in which dealings in
deposits are carried on in the New York, London or Tokyo interbank markets,
provided that such currency is reasonably acceptable to the Administrative Agent
- --------
and the applicable Issuing Bank.

          "Alternative Currency LC Exposure" means, at any time, the sum of (a)
           --------------------------------
the Dollar Equivalent of the aggregate undrawn and unexpired amount of all
outstanding Alternative Currency Letters of Credit at such time plus (b) the
Dollar Equivalent of the aggregate principal amount of all LC Disbursements in
respect of Alternative Currency Letters of Credit that have not yet been
reimbursed at such time.

          "Alternative Currency Letter of Credit" means a Letter of Credit
           -------------------------------------
denominated in an Alternative Currency.

          "Applicable Margin" means, for any day with respect to (a) any ABR
           -----------------
Loan or Eurodollar Loan that is a Term Loan, (b) any ABR Loan or Eurodollar Loan
that is a Revolving Loan or (c) the commitment fees payable hereunder, as the
case may be, the applicable margin per annum set forth below under the caption
"Revolving Loan ABR Spread", "Revolving Loan Eurodollar Spread", "Term Loan ABR
Spread," "Term Loan Eurodollar Spread" or "Commitment Fee Rate", as the case may
be, based upon the Leverage Ratio as of the most recent determination date,
provided that until the delivery to the Administrative Agent, pursuant to
- --------
Section 5.01(b), of the Cayman Borrower's consolidated financial information for
the Cayman Borrower's first fiscal quarter ending after the Effective Date, the
"Applicable Margin" for purposes of clauses (a) and (b) above shall be



                                                                               3

the applicable margin per annum set forth below in Category 2:



====================================================================================
                                   Revolving
                      Revolving       Loan                   Term Loan
                         Loan      Eurodollar   Term Loan    Eurodollar   Commitment
  Leverage Ratio:     ABR Spread     Spread     ABR Spread     Spread      Fee Rate
- ------------------------------------------------------------------------------------
                                                              
     Category 1
     ----------
Equal to or greater
 than 1.00 to 1.00       1.25%        2.25%        1.25%        2.25%        0.50%
- ------------------------------------------------------------------------------------

    Category 2
    ----------
Less than 1.00 to
1.00 but equal to
 or greater than
   0.50 to 1.00          1.00%        2.00%        1.00%        2.00%        0.50%

- ------------------------------------------------------------------------------------

    Category 3
    ----------
Less than 0.50 to
1.00 but equal to
 or greater than
   0.25 to 1.00          0.75%        1.75%        1.00%        2.00%        0.50%

- ------------------------------------------------------------------------------------

      Category 4
      ----------
  Less than 0.25 to
         1.00            0.50%        1.50%        1.00%        2.00%        0.50%

====================================================================================


          For purposes of the foregoing, (a) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Cayman Borrower's fiscal
year based upon the Cayman Borrower's consolidated financial information
delivered pursuant to Section 5.01(a) or (b) and (b) each change in the
Applicable Margin resulting from a change in the Leverage Ratio shall be
effective during the period commencing on and including the first Business Day
after the date of delivery to the Administrative Agent of such consolidated
financial information indicating such change and ending on the date immediately
preceding the effective date of the next such change, provided that the Leverage
                                                      --------
Ratio shall be deemed to be in Category 1 (i) at any time that an Event of
Default has occurred and is continuing or (ii) at the option of the
Administrative Agent or at the request of the Required Lenders if Intermediate
Holdings (or, if Intermediate Holdings is no longer a Loan Party, the Cayman
Borrower) fails to deliver the consolidated financial information required to be
delivered by it pursuant to Section 5.01(a) or (b), during the period from the
expiration of the time for delivery thereof until such consolidated financial
information is delivered.

          "Applicable Percentage" means, with respect to any Revolving Lender,
           ---------------------
the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or



                                                                               4

expired, the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.

          "Assignment and Acceptance" means an assignment and acceptance entered
           -------------------------
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.

          "Board" means the Board of Governors of the Federal Reserve System of
           -----
the United States of America.

          "Borrowing" means (a) Loans of the same Class and Type, made,
           ---------
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.

          "Borrowing Request" means a request by the Cayman Borrower or the U.S.
           -----------------
Borrower for a Borrowing in accordance with Section 2.03.

          "Borrowers" means the Cayman Borrower and the U.S. Borrower.
           ---------

          "Business Day" means any day that is not a Saturday, Sunday or other
           ------------
day on which commercial banks in New York City are authorized or required by law
to remain closed, provided that, when used in connection with a Eurodollar Loan,
                  --------
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

          "Calculation Date" means (a) the last Business Day of each calendar
           ----------------
month and (b) if on the last Business Day of any calendar week the total
Revolving Exposures exceed 75% of the total Revolving Commitments (giving effect
to any reductions in the Revolving Commitments scheduled to occur on such day),
such Business Day.

          "CAM" shall mean the mechanism for the allocation and exchange of
           ---
interests in the Loans, participations in Letters of Credit and collections
thereunder established under Article X.

          "CAM Exchange" shall mean the exchange of the Lenders' interests
           ---
provided for in Section 10.01.

          "CAM Exchange Date" shall mean the first date after the Effective Date
           -----------------
on which there shall occur (a) any



                                                                               5

event described in paragraph (h) or (i) of Section 7.01 with respect to either
Borrower or (b) an acceleration of the maturity of Loans pursuant to Section
7.01.

          "CAM Percentage" shall mean, as to each Lender, a fraction, expressed
           --------------
as a decimal, of which (a) the numerator shall be the sum of (i) the aggregate
Obligations owed to such Lender, (ii) the LC Exposure, if any, of such Lender,
and (iii) the Swingline Exposure, if any, of such Lender, in each case
immediately prior to the CAM Exchange Date, and (b) the denominator shall be the
sum of (i) the aggregate Obligations owed to all the Lenders and (ii) the
aggregate LC Exposure of all the Lenders, in each case immediately prior to the
CAM Exchange Date; provided that, for purposes of clause (a) above, the
                   --------
Obligations owed to the Swingline Lender will be deemed not to include any
Swingline Loans except to the extent provided in clause (a)(iii) above.

          "Capital Expenditures" means, for any period, without duplication, (a)
           --------------------
the additions to property, plant and equipment and other capital expenditures of
the Cayman Borrower and its consolidated subsidiaries that are (or would be) set
forth in a consolidated statement of cash flows of the Cayman Borrower for such
period prepared in accordance with GAAP and (b) Capital Lease Obligations
incurred by the Cayman Borrower and its consolidated subsidiaries during such
period, provided that the term "Capital Expenditures" (i) shall be net of
        --------
landlord construction allowances, (ii) shall not include expenditures to the
extent they are made with the proceeds of the issuance of Equity Interests of
Intermediate Holdings, the Cayman Borrower, the U.S. Borrower or any Subsidiary
after the Effective Date, (iii) shall not include expenditures of proceeds of
insurance settlements, condemnation awards and other settlements in respect of
lost, destroyed, damaged or condemned assets, equipment or other property to the
extent such expenditures are made to replace or repair such lost, destroyed,
damaged or condemned assets, equipment or other property or otherwise to acquire
properties useful in the business of either Borrower or any of the Subsidiaries
within 365 days of receipt of such proceeds, and (iv) shall not include the
purchase price of equipment to the extent the consideration therefor consists of
used or surplus equipment being traded in at such time or the proceeds of a
concurrent sale of such used or surplus equipment, in each case in the ordinary
course of business. For the purpose of calculating Capital Expenditures any
amounts expended in respect of an acquisition or other investment that is made
pursuant to Section 6.04 (q) shall be deemed not to constitute Capital
Expenditures to the extent such amounts reduce the available amount under
Section 6.04(q).



                                                                               6

          "Capital Lease Obligations" of any Person means the obligations of
           -------------------------
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

          "Cash Amount" means, as of any date, the average amount of cash and
           -----------
the carrying value of Permitted Investments that would be reflected as cash or
short term investments on a consolidated balance sheet of the Cayman Borrower in
accordance with GAAP, held by the Cayman Borrower and its consolidated
subsidiaries at the close of business during the five Business Day period
preceding such date.

          "Cash From Operations" means, as of any date, the amount of cash and
           --------------------
the carrying value of Permitted Investments that would be reflected as cash or
short term investments on a consolidated balance sheet of the Cayman Borrower in
accordance with GAAP, held by the Cayman Borrower and its consolidated
subsidiaries at the close of business on the preceding Business Day less (a) the
Net Proceeds received by the Cayman Borrower and its consolidated subsidiaries
during the period from the Effective Date to and including such date in respect
of asset sales (to the extent such Net Proceeds are not previously reinvested in
real property, equipment or other assets to be used in the business of the
Cayman Borrower or the Subsidiaries) and (b) the aggregate amount by which
Indebtedness of the Cayman Borrower and its consolidated subsidiaries increased
during the period from the Effective Date to and including such date.

          "Cayman Borrower" means Seagate Technology HDD Holdings, an exempted
           ---------------
limited liability company existing and organized under the laws of the Cayman
Islands.

          "Cayman Pledge Agreements" means the Share Mortgages, dated as of the
           ------------------------
Effective Date, substantially in the form of Exhibit D-2, between each Loan
Party that owns Equity Interests of any Person organized under the laws of the
Cayman Islands that would constitute Collateral if such Loan Party executed a
Cayman Pledge Agreement and the Collateral Agent for the benefit of the Secured
Parties.

          "Cayman Security Agreements" means the Deeds of Charge, dated as of
           --------------------------
the Effective Date, substantially in the



                                                                               7

form of Exhibit C-2, between each Loan Party that is incorporated or organized
under the laws of the Cayman Islands or that owns Collateral located in the
Cayman Islands and the Collateral Agent for the benefit of the Secured Parties.

          "Cayman Term Loan" means a Loan made pursuant to clause (a) of Section
           ----------------
2.01.

          "CERCLA" means the Comprehensive Environmental Response, Compensation,
           ------
and Liability Act, 42 U.S.C.(S). 9601 et seq.

          "Change in Control" means:
           -----------------

     (a) the acquisition of direct ownership, beneficially or of record, by any
Person other than the Cayman Borrower of any Equity Interest in the U.S.
Borrower;

     (b) prior to an IPO of the Cayman Borrower, the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person other than
Intermediate Holdings (or, following the distribution of all the Equity
Interests in the Cayman Borrower by Intermediate Holdings to Holdings (i) in
connection with an IPO of the Cayman Borrower or (ii) following the sale,
transfer, liquidation or other disposition of SAN Holdings and its subsidiaries
by Intermediate Holdings, Holdings) of any Equity Interest in the Cayman
Borrower (other than the acquisition of Equity Interests in the Cayman Borrower
by Permitted Optionholders pursuant to the exercise of Permitted Options);

     (c) prior to an IPO of the Cayman Borrower or Intermediate Holdings, the
failure by the Permitted Holders collectively to own (and retain the right to
vote) directly or indirectly, beneficially and of record, Equity Interests in
the Cayman Borrower representing more than 50% of the aggregate ordinary voting
power and aggregate equity value represented by the issued and outstanding
Equity Interests in Intermediate Holdings;

     (d) after an IPO of the Cayman Borrower or Intermediate Holdings, the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof), of Equity Interests in the Cayman Borrower representing
greater than 30% of the aggregate ordinary voting power and aggregate equity
value represented by the issued and outstanding



                                                                               8

Equity Interests in the Cayman Borrower unless the Permitted Holders
collectively own, directly or indirectly, Equity Interests representing more
than 45% of the aggregate ordinary voting power and aggregate equity value
represented by the issued and outstanding Equity Interests in the Cayman
Borrower;

     (e) occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Cayman Borrower or Intermediate Holdings by Persons
who were neither (i) nominated by at least a majority of the board of directors
of the Cayman Borrower or Intermediate Holdings, as applicable, nor (ii)
appointed by a vote of a majority of directors so nominated; or

     (f) the occurrence of a "Change in Control" as defined in the Senior Note
Documents.

          "Change in Law" means (a) the adoption of any law, rule or regulation
           -------------
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

          "Class", when used in reference to any Loan or Borrowing, refers to
           -----
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term Loans or Swingline Loans and, when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Commitment, or Term Loan
Commitment.

          "Code" means the Internal Revenue Code of 1986, as amended from time
           ----
to time.

          "Collateral" means any and all "Collateral", as defined in any
           ----------
applicable Security Document.

          "Collateral Agent" means the "Collateral Agent", as defined in any
           ----------------
applicable Security Document.



                                                                               9

          "Collateral and Guarantee Requirement" means the requirement that:
           ------------------------------------

          (a) on the Effective Date (except as provided in Section 4.01(f)), the
     Administrative Agent shall have received from each Loan Party a counterpart
     of each of (i) the applicable Guarantee Agreement, (ii) in the case of any
     Loan Party that executes the U.S. Guarantee Agreement, the Indemnity,
     Subrogation and Contribution Agreement, (iii) in the case of any Loan Party
     that is a U.S. Loan Party or that owns any Equity Interests in any Person
     that is organized under the laws of the United States that would constitute
     Collateral if such Loan Party executed the U.S. Pledge Agreement, the U.S.
     Pledge Agreement, (iv) in the case of any Loan Party that is a U.S. Loan
     Party or that owns any Collateral located in the United States, the U.S.
     Security Agreement, (v) in the case of any Loan Party that owns any Equity
     Interests in a Person that is incorporated or organized under the laws of
     the Cayman Islands and that would constitute Collateral if such Loan Party
     executed a Cayman Pledge Agreement, a Cayman Pledge Agreement, (vi) in the
     case of any Loan Party that is incorporated or organized under the laws of
     the Cayman Islands or owns any Collateral located in the Cayman Islands, a
     Cayman Security Agreement, (vii) in the case of any Loan Party that is
     organized under the laws of Singapore or that owns any Collateral located
     in Singapore, the Singapore Security Agreement, (viii) in the case of any
     Loan Party that owns Equity Interests in a Person that is organized under
     the laws of Singapore and that would constitute Collateral if such Loan
     Party executed a Singapore Pledge Agreement, a Singapore Pledge Agreement,
     (ix) in the case of Seagate Technology International, Seagate Technology
     Media (Ireland) and Seagate Technology (Ireland), a Northern Ireland
     Security Agreement, (x) in the case of STI, the Netherlands Security
     Agreement, and (xi) in the case of Seagate Technology (Thailand) Limited,
     the Thai Mortgages, in each case duly executed and delivered on behalf of
     such Loan Party;

          (b) in the case of any Subsidiary created or acquired by either
     Borrower or any Subsidiary after the Effective Date that is not a Foreign
     Subsidiary, such Subsidiary shall execute and deliver to the Administrative
     Agent a supplement to each of the U.S. Guarantee Agreement, the Indemnity,
     Subrogation and Contribution Agreement and each applicable Security
     Document, in the form specified therein;



                                                                              10

          (c) in the case of any Foreign Subsidiary created or acquired by
     either Borrower or any Subsidiary after the Effective Date that (i) is
     organized under the laws of Singapore, (ii) on the date on which such
     Foreign Subsidiary is created or acquired, would, on a pro forma basis
     after giving effect to such creation or acquisition and any related
     transfers of assets to such Foreign Subsidiary, (A) hold at least 10% of
     the Consolidated Total Assets reflected in the Cayman Borrower's
     consolidated financial information (as adjusted to give effect to such
     creation or acquisition) as of the last day of the most recently ended
     fiscal quarter for which a balance sheet has been delivered to the
     Administrative Agent pursuant to Section 5.01(a) or (b) or (B) account for
     at least 10% of Consolidated EBITDA for the four fiscal quarter period
     ended on such day as reflected in the certificate for such period (as
     adjusted to give effect to such creation or acquisition) delivered to the
     Administrative Agent pursuant to Section 5.01(c) or (iii) at the end of any
     fiscal quarter after the date on which such Foreign Subsidiary is created
     or acquired (A) holds at least 10% of Consolidated Total Assets as
     reflected in the Cayman Borrower's consolidated financial information (as
     adjusted to give effect to such creation or acquisition) for such date
     delivered to the Administrative Agent pursuant to Section 5.01(a) or (b) or
     (B) accounts for at least 10% of Consolidated EBITDA for the four fiscal
     quarter period ended on such date as reflected in the certificate for such
     period (as adjusted to give effect to such creation or acquisition)
     delivered to the Administrative Agent pursuant to Section 5.01(c), such
     Foreign Subsidiary (if not organized under the laws of Malaysia or any
     other jurisdiction in which applicable law would prevent such entity from
     lawfully complying with the provisions of this clause (c)) shall execute
     and deliver to the Administrative Agent (x) a supplement to or a
     counterpart of the applicable Guarantee Agreement, (y) if such Foreign
     Subsidiary executes the U.S. Guarantee Agreement, a supplement to the
     Indemnity, Subrogation and Contribution Agreement and (z) a counterpart of
     one or more security or pledge agreements or similar documents or
     instruments, which (as applicable) may include a Singapore Security
     Agreement, a Singapore Pledge Agreement or a Northern Ireland Security
     Agreement on terms substantially similar to those contained in the U.S.
     Pledge Agreement (collectively, a "Foreign Security Agreement"), that (1)
     create perfected Liens on substantially all tangible and intangible assets



                                                                              11

     (including Equity Interests in other Subsidiaries of such Foreign
     Subsidiary), other than assets that the Administrative Agent has made a
     determination to exclude, prior to any other Lien on any of such assets
     (other than Liens expressly permitted to be prior to the Liens created by
     such a Foreign Security Agreement pursuant to Section 6.02), (2) provide
     rights and benefits to the Collateral Agent and the other Secured Parties
     with respect to such assets substantially identical to the rights and
     benefits provided by the U.S. Security Agreement and the U.S. Pledge
     Agreement (except as prohibited by applicable law) and (3) are otherwise in
     form and substance reasonably satisfactory to the Administrative Agent, in
     each case duly executed and delivered on behalf of such Loan Party;

          (d) in the case of a Foreign Subsidiary created or acquired by either
     Borrower or any Subsidiary after the Effective Date to which the preceding
     clause (c) does not apply and that the Cayman Borrower designates as a
     Subsidiary Loan Party, such Foreign Subsidiary shall execute and deliver to
     the Administrative Agent a supplement to or counterpart of the applicable
     Guarantee Agreement, and, if such Foreign Subsidiary executes the U.S.
     Guarantee Agreement, a supplement to the Indemnity, Subrogation and
     Contribution Agreement (except as prohibited by applicable law);

          (e) all outstanding Equity Interests of each Borrower and each
     Subsidiary (except that, if such Subsidiary is (i) a Foreign Subsidiary
     identified on Schedule 1.01(b) and (ii) a direct or indirect subsidiary of
     the U.S. Borrower, shares of common stock of such Subsidiary to be pledged
     pursuant to the applicable Pledge Agreement may be limited to 65% of the
     outstanding common stock of such Subsidiary) owned directly by or directly
     on behalf of any Loan Party that is required hereunder to become party to
     any Pledge Agreement or Foreign Security Agreement shall have been pledged
     pursuant to the applicable Pledge Agreement (other than any Equity
     Interests in Seagate Technology (Ireland Holdings)) and, unless the
     Administrative Agent shall otherwise agree (which agreement shall not be
     unreasonably withheld), the Administrative Agent shall have received
     certificates or other instruments representing all such Equity Interests,
     together with stock powers or other instruments of transfer with respect
     thereto endorsed in blank;



                                                                              12

          (f) all Indebtedness of Intermediate Holdings (for so long as it is a
     Loan Party), each Borrower and each Subsidiary that is owing to any Loan
     Party that is required hereunder to become party to a Pledge Agreement or a
     Foreign Security Agreement shall be evidenced by a promissory note and
     shall have been pledged pursuant to the applicable Pledge Agreement and,
     unless the Administrative Agent shall otherwise agree (which agreement
     shall not be unreasonably withheld), the Administrative Agent shall have
     received all such promissory notes, together with instruments of transfer
     with respect thereto endorsed in blank;

          (g) all documents and instruments, including Uniform Commercial Code
     financing statements, required by law or reasonably requested by the
     Administrative Agent to be filed, registered or recorded to (i) create the
     Liens intended to be created by the Security Documents and (ii) perfect
     such Liens to the extent required by, and with the priority required by,
     the applicable Security Document, shall have been filed, registered or
     recorded or delivered to the Administrative Agent for filing, registration
     or recording;

          (h) the Administrative Agent shall have received (i) counterparts of a
     Mortgage with respect to each Mortgaged Property duly executed and
     delivered by the record owner of such Mortgaged Property, (ii) a policy or
     policies of title insurance issued by a nationally recognized title
     insurance company insuring the Lien of each such Mortgage in respect of a
     Mortgaged Property located in the United States or, if reasonably requested
     by the Administrative Agent and available on commercially reasonable terms,
     outside the United States as a valid first Lien on the Mortgaged Property
     described therein, free of any other Liens except as expressly permitted by
     Section 6.02, together with such endorsements, coinsurance and reinsurance
     as the Administrative Agent or the Required Lenders may reasonably request,
     and (iii) such survey affidavits, legal opinions and other documents as the
     Administrative Agent or the Required Lenders may reasonably request with
     respect to any such Mortgage or Mortgaged Property; and

          (i) each Loan Party shall have obtained all material consents and
     approvals required to be obtained by it in connection with the execution
     and delivery of all Security Documents to which it is a party, the



                                                                              13

     performance of its obligations thereunder and the granting by it of the
     Liens thereunder.

          "Commitment" means a Revolving Commitment, Term Loan Commitment, or
           ----------
any combination thereof (as the context requires).

          "Consolidated Cash Interest Expense" means, for any period, the excess
           ----------------------------------
of (a) the sum of (i) the interest expense (including imputed interest expense
in respect of Capital Lease Obligations) of the Borrowers and the Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP,
plus (ii) any interest accrued during such period in respect of Indebtedness of
either Borrower or any Subsidiary that is required to be capitalized rather than
included in consolidated interest expense for such period in accordance with
GAAP, plus (iii) any cash payments made during such period in respect of
obligations referred to in clause (b)(ii) below that were amortized or accrued
in a previous period, minus (b) the sum of (i) to the extent included in such
consolidated interest expense for such period, non-cash amounts attributable to
amortization of financing costs paid in a previous period, plus (ii) to the
extent included in such consolidated interest expense for such period, non-cash
amounts attributable to amortization of debt discounts or accrued interest or
dividends payable in kind for such period.

          "Consolidated EBITDA" means, for any period, Consolidated Net Income
           -------------------
for such period plus (a) without duplication and to the extent deducted in
                ----
determining such Consolidated Net Income, the sum of (i) consolidated interest
expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period,
(iv) all extraordinary charges during such period, (v) noncash expenses during
such period resulting from (A) the grant of stock or stock options to management
and employees of either Borrower or any of the Subsidiaries or (B) the treatment
of such options under variable plan accounting, (vi) the aggregate amount of
deferred financing expenses for such period, (vii) all other noncash charges,
noncash expenses or noncash losses of either Borrower or any of the Subsidiaries
for such period (excluding any such charge, expense or loss incurred in the
ordinary course of business that constitutes an accrual of or a reserve for cash
charges for any future period), provided, however, that cash payments made in
                                --------  -------
such period or in any future period (other than payments made under the terms of
the Deferred Compensation Plans to, or for the benefit of, participants in such
Deferred Compensation Plans) in respect of such noncash charges,



                                                                              14

expenses or losses (excluding any such charge, expense or loss incurred in the
ordinary course of business that constitutes an accrual of or a reserve for cash
charges for any future period) shall be subtracted from Consolidated Net Income
in calculating Consolidated EBITDA in the period when such payments are made,
(viii) any non-recurring fees, expenses or charges realized by either Borrower
or any of the Subsidiaries for such period related to any offering of Equity
Interests or incurrence of Indebtedness permitted to be issued or incurred under
Section 6.01 (whether or not successful) and fees, expenses and charges related
to the Transactions and (ix) any charges for the portion of such period ended on
or before June 27, 2003, that are associated with the restructuring of the
manufacturing operations of the U.S. Borrower, STI and the Subsidiaries,
provided that such charges shall not be in excess of $126,200,000 for the period
- --------
of three fiscal years ending June 27, 2003, and minus (b) without duplication
                                                -----
and to the extent included in determining such Consolidated Net Income, (i) any
extraordinary gains for such period, (ii) interest income for such period and
(iii) all noncash items increasing Consolidated Net Income for such period
(excluding any items that represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any prior period that are described in
the parenthetical to clause (a)(vii) above), all determined on a consolidated
basis in accordance with GAAP. For purposes of calculating Consolidated EBITDA
for any period, any payment made or received by either Borrower or any of the
Subsidiaries pursuant to the Indemnification Agreement (any such payment, an
"Indemnification Payment") shall be treated in the manner in which the loss,
cost, expense or payment that gave rise to such Indemnification Payment (the
"Underlying Payment") would have been treated if such Underlying Payment had
 ------------------
been made or received, as applicable, directly by or to the Borrowers or any of
the Subsidiaries. For purposes of calculating the Leverage Ratio or the Net
Leverage Ratio or the Fixed Charge Coverage Ratio as of any date, if either
Borrower or any consolidated Subsidiary has made any material Permitted
Acquisition or material sale, transfer, lease or other disposition of assets
outside of the ordinary course of business permitted by Section 6.05 during the
period of four consecutive fiscal quarters ending on the date on which the most
recent fiscal quarter ended, Consolidated EBITDA for the relevant period for
testing compliance shall be calculated after giving pro forma effect thereto, as
if such Permitted Acquisition or sale, transfer, lease or other disposition of
assets outside of the ordinary course of business (and any related incurrence,
repayment or assumption of Indebtedness with any new Indebtedness being deemed
to be amortized over the applicable testing period in



                                                                              15

accordance with its terms) had occurred on the first day of the relevant period
for testing compliance. Any pro forma calculations pursuant to the immediately
preceding sentence shall be determined in good faith by a Financial Officer of
the Cayman Borrower and may include adjustments (a) for all purposes under this
Agreement, for operating expense reductions that would be permitted pursuant to
Article XI of Regulation S-X under the Securities Act of 1933 or (b) for all
purposes under this Agreement other than for purposes of determining whether any
acquisition complies with clause (d) of the definition of the term Permitted
Acquisition, to eliminate the actual, historical operating expenses attributable
to any lease or other contract, any personnel or any facility as a direct result
of the termination of such lease or other contract, the termination of such
personnel or the closing of such facility, in each case only if such termination
or closing has been effected within three months after a Permitted Acquisition
in connection with such Permitted Acquisition, provided that the Cayman
                                               --------
Borrower's calculation of such adjustments is set forth in a certificate signed
by a Financial Officer of the Cayman Borrower.

          "Consolidated Fixed Charges" means, for any period, the sum of (a)
           --------------------------
Consolidated Cash Interest Expense for such period and (b) Capital Expenditures
for such period. For purposes of calculating compliance with Section 6.13 as of
any date, if either Borrower or any consolidated Subsidiary has made any
material Permitted Acquisition or material sale, transfer, lease or other
disposition of assets outside of the ordinary course of business permitted by
Section 6.05 during the period of four consecutive fiscal quarters ending on the
date on which the most recent fiscal quarter ended, Consolidated Fixed Charges
for the relevant period for testing compliance shall be calculated after giving
pro forma effect thereto, as if such Permitted Acquisition or sale, transfer,
lease or other disposition of assets outside of the ordinary course of business
(and any related incurrence, repayment or assumption of Indebtedness with any
new Indebtedness being deemed to be amortized over the applicable testing period
in accordance with its terms) had occurred on the first day of the relevant
period for testing compliance.

          "Consolidated Net Cash Interest Expense" means, for any period, the
           --------------------------------------
excess of (a) Consolidated Cash Interest Expense for such period minus (b) cash
interest income of the Borrowers and the Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.



                                                                              16

          "Consolidated Net Income" means, for any period, the net income or
           -----------------------
loss of the Borrowers and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, provided that there shall be
                                            --------
excluded from such net income or loss (a) the income of any Person (that is not
a consolidated Subsidiary) in which any other Person (other than either Borrower
or any consolidated Subsidiary or any director holding qualifying shares in
compliance with applicable law) owns an Equity Interest, except to the extent of
the amount of dividends or other distributions actually paid to either Borrower
or any of the consolidated Subsidiaries by such Person during such period, (b)
the income or loss of any Person accrued prior to the date on which it becomes a
Subsidiary or is merged into or consolidated with either Borrower or any
consolidated Subsidiary or the date on which such Person's assets are acquired
by either Borrower or any consolidated Subsidiary and (c) minority interest
expense attributable to the Cayman Borrower as a result of a Permitted Cayman
Borrower Equity Sale.

          "Consolidated Total Assets" means, as of any date, the total assets of
           -------------------------
the Borrowers and the Subsidiaries on such date determined on a consolidated
basis in accordance with GAAP.

          "Control" means the possession, directly or indirectly, of the power
           -------
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
The terms "Controlling" and "Controlled" have meanings correlative thereto.
           -----------       ----------

          "Convertible Securities" has the meaning assigned to such term in the
           ----------------------
definition of the term Distributable Liquidity Event Proceeds.

          "Core Loan Party" means Intermediate Holdings, each Borrower and any
           ---------------
Subsidiary Loan Party that executes a Guarantee Agreement and is organized under
the laws of (i) the United States of America or any State thereof or the
District of Columbia, (ii) the Cayman Islands, (iii) any jurisdiction listed on
Schedule 1.02 hereto or (iv) any other jurisdiction requested by the Cayman
Borrower in which the Administrative Agent is satisfied that, taking into
account all legal and practical considerations, the Collateral Agent for the
benefit of the Lenders will be able substantially to realize the benefits
intended to be created by such Subsidiary's Guarantee of the Obligations and any
Collateral pledged in connection therewith, provided that any Subsidiary Loan
                                            --------
Party organized under the laws of any



                                                                              17

jurisdiction other than the United States, the Cayman Islands, Singapore, Japan,
Mexico, Thailand or another jurisdiction in respect of which the Cayman Borrower
has previously complied with the requirement of this proviso shall not be
considered a Core Loan Party unless and until the Cayman Borrower has delivered
to the Administrative Agent an opinion of counsel for such jurisdiction, in form
and substance reasonably satisfactory to the Administrative Agent; provided,
                                                                   --------
further, that upon the release of the Guarantee by Intermediate Holdings of the
- -------
Obligations in accordance with the terms of the U.S. Guarantee Agreement,
Intermediate Holdings shall cease to be a Core Loan Party for all purposes
hereunder. For the avoidance of doubt, any Person organized in any of the
jurisdictions described in clauses (i) through (iv) of the previous sentence
that is not a Loan Party is not a Core Loan Party.

          "Debt Tender Materials" means the Offer to Purchase and Consent
           ---------------------
Solicitation Statement dated April 15, 2002, and the related Consent and Letter
of Transmittal dated April 15, 2002.

          "Debt Tender Offer" means the debt tender offer and consent
           -----------------
solicitation by STI in respect of the Existing Subordinated Debt pursuant to
which (a) STI will purchase not less than a majority of the aggregate principal
amount of the Existing Subordinated Debt outstanding on the Effective Date and
(b) STI will obtain consents sufficient to amend and, immediately thereafter,
shall amend the indenture governing the Existing Subordinated Debt pursuant to
documentation reasonably satisfactory to the Administrative Agent to eliminate
all significant negative covenants in such indenture, all in accordance with the
Debt Tender Materials.

          "Default" means any event or condition that constitutes an Event of
           -------
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

          "Deferred Compensation Plans" means (i) the deferred compensation plan
           ---------------------------
dated as of November 22, 2000, of the Cayman Borrower (as amended, waived,
supplemented or otherwise modified from time to time), (ii) any other plan
established in lieu of, or to renew or replace, in whole or in part, any plan
referred to in clause (i) above or this clause (ii) and (iii) any Guarantee by
Intermediate Holdings or any of its subsidiaries of any obligation under any
Deferred Compensation Plan referred to in clause (i) or (ii) above.



                                                                              18

          "Denmark Holdings" means Seagate Technology (Denmark) ApS, an
           ----------------
anpartsselskab organized under the laws of Denmark.

          "Disclosed Matters" means the actions, suits and proceedings and the
           -----------------
environmental matters disclosed in Schedule 3.06.

          "Distributable Liquidity Event Proceeds" means
           --------------------------------------

          (a) with respect to a Permitted Cayman Borrower Equity Sale that is an
issuance and sale by the Cayman Borrower of Equity Interests in the Cayman
Borrower pursuant to an IPO of the Cayman Borrower, the Net Proceeds received by
the Cayman Borrower from such Permitted Cayman Borrower Equity Sale;

          (b) with respect to a Permitted Cayman Borrower Equity Sale that is an
issuance and sale of Equity Interests in the Cayman Borrower subsequent to an
IPO of the Cayman Borrower pursuant to an offering by the Cayman Borrower, the
Net Proceeds received by the Cayman Borrower from such Permitted Cayman Borrower
Equity Sale.

          (c) with respect to (i) a Permitted Intermediate Holdings Equity Sale
that is an issuance and sale by Intermediate Holdings of Equity Interests in
Intermediate Holdings pursuant to an IPO of Intermediate Holdings or (ii) a
Permitted Cayman Borrower Equity Sale that is a sale of Equity Interests in the
Cayman Borrower held by Intermediate Holdings, the Net Proceeds received by
Intermediate Holdings from such Permitted Intermediate Holdings Equity Sale or
Permitted Cayman Borrower Equity Sale (or cash received from the sale of Net
Public Equity Proceeds received from such Permitted Cayman Borrower Equity Sale)
and contributed to the Cayman Borrower; and

          (d) with respect to a Permitted Intermediate Holdings Equity Sale that
is an issuance and sale of Equity Interests in Intermediate Holdings subsequent
to an IPO of Intermediate Holdings pursuant to an offering by Intermediate
Holdings, the Net Proceeds received by Intermediate Holdings from such Permitted
Intermediate Holdings Equity Sale and contributed to the Cayman Borrower.

          "Documentation Agents" means Citicorp USA, Inc. and Merrill Lynch
           --------------------
Capital Corporation.

          "dollars" or "$" refers to lawful money of the United States of
           -------      -
America.



                                                                              19

          "Dollar Equivalent" means, on any date of determination, (a) for the
           -----------------
purposes of determining compliance with Article VI or the existence of an Event
of Default under Article VII, with respect to any amount denominated in a
currency other than dollars, the equivalent in dollars of such amount,
determined in good faith by the Cayman Borrower in a manner consistent with the
way such amount is or would be reflected on the audited consolidated financial
statements delivered pursuant to Section 5.01(a) for the fiscal year in which
such determination is made, and (b) for the purposes of Article II or Article X,
with respect to any amount denominated in an Alternative Currency, the
equivalent in dollars of such amount, determined by the Administrative Agent
pursuant to Section 1.05(a) using the applicable Exchange Rate with respect to
such Alternative Currency.

          "Effective Date" means the date on which the conditions specified in
           --------------
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

          "Environmental Laws" means all laws, rules, regulations, codes,
           ------------------
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating to the environment, preservation or reclamation of natural
resources or the presence, management, Release or threatened Release of any
Hazardous Material.

          "Environmental Liability" means any liabilities, obligations, damages,
           -----------------------
claims, actions, suits, judgements or orders, contingent or otherwise (including
any costs of environmental remediation, administrative oversight costs, fines,
penalties or indemnities), of Intermediate Holdings (for so long as it is a Loan
Party) , the Borrowers or any Subsidiary resulting from or relating to (a) the
non-compliance with any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the Release or threatened Release of
any Hazardous Materials or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

          "Equity Interests" means shares of capital stock, partnership
           ----------------
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.



                                                                              20

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
           -----
amended from time to time.

          "ERISA Affiliate" means any trade or business (whether or not
           ---------------
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

          "ERISA Event" means (a) any "reportable event", as defined in Section
           -----------
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by either Borrower or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by either Borrower or any ERISA Affiliate from the PBGC or
a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan under Section 4042
of ERISA; (f) the incurrence by either Borrower or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by either Borrower or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from either
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

          "Eurodollar", when used in reference to any Loan or Borrowing, refers
           ----------
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.

          "Event of Default" has the meaning assigned to such term in Article
           ----------------
VII.

          "Exchange Rate" means, on any day, with respect to any Alternative
           -------------
Currency, the rate at which such Alternative Currency may be exchanged into
dollars, as set forth at approximately 11:00 a.m., New York City time, on such
day on the applicable Reuters World Spot Page. In the event that any such rate
does not appear on any Reuters World Spot



                                                                              21

Page, the Exchange Rate shall be determined by reference to such other publicly
available service for displaying exchange rates reasonably selected by the
Administrative Agent in consultation with the Cayman Borrower for such purpose
or, at the discretion of the Administrative Agent in consultation with the
Cayman Borrower, such Exchange Rate shall instead be the arithmetic average of
the spot rates of exchange of the Administrative Agent in the market where its
foreign currency exchange operations in respect of such Alternative Currency are
then being conducted, at or about 10:00 a.m., local time, on such day for the
purchase of the applicable Alternative Currency for delivery two Business Days
later, provided that, if at the time of any such determination, for any reason,
       --------
no such spot rate is being quoted, the Administrative Agent may use any other
reasonable method it deems appropriate to determine such rate, and such
determination shall be presumed correct absent manifest error.

          "Excluded Taxes" means, with respect to the Administrative Agent, any
           --------------
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrowers hereunder, (a) doing business,
income or franchise taxes (i) imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located or (ii) as
a result of a present or former connection between such recipient and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Lender's, Issuing Bank's or any other
recipient's having executed, delivered or performed its obligations or received
a payment under, or enforced, any Loan Document), (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Cayman Borrower
under Section 2.19(b)), any withholding tax (other than a withholding tax levied
upon any amounts payable to such Foreign Lender in respect of any interest in
any Loan acquired by such Foreign Lender pursuant to the CAM Exchange) that (i)
is in effect and would apply to amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from a



                                                                              22

Borrower with respect to any withholding tax pursuant to Section 2.17(a), or
(ii) is attributable to such Foreign Lender's failure to comply with Section
2.17(e).

          "Existing Credit Agreement" means the credit agreement dated as of
           -------------------------
November 22, 2000 (as amended, restated, modified or otherwise supplemented from
time to time), among Holdings, STI, the U.S. Borrower, the Lenders party
thereto, JPMorgan Chase Bank, as administrative agent and the other parties
thereto.

          "Existing Letter of Credit" means each letter of credit previously
           -------------------------
issued for the account of, or guaranteed by, either Borrower or a Subsidiary
that (a) is outstanding on the Effective Date and (b) is listed on Schedule
2.05(a).

          "Existing Subordinated Debt" means the 12 1/2% Senior Subordinated
           --------------------------
Notes due 2007 issued by STI.

          "Existing Subordinated Debt Documents" means the indenture under which
           ------------------------------------
the Existing Subordinated Debt is issued and all other instruments, agreements
and other documents evidencing or governing the Existing Subordinated Debt or
providing for any Guarantee or other right in respect thereof.

          "Federal Funds Effective Rate" means, for any day, the weighted
           ----------------------------
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

          "Financial Officer" means the chief financial officer, principal
           -----------------
accounting officer, treasurer or controller of Intermediate Holdings or the
applicable Borrower.

          "Fixed Charge Coverage Ratio" has the meaning assigned to such term in
           ---------------------------
Section 6.13.

          "Foreign Lender" means any Lender that is organized under the laws of
           --------------
a jurisdiction other than (a) the United States of America, any State thereof or
the District of Columbia or (b) the jurisdiction in which the



                                                                              23

applicable Borrower is located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.

          "Foreign Security Agreement" has the meaning assigned to such term in
           --------------------------
paragraph (c) of the definition of the term "Collateral and Guarantee
Requirement".

          "Foreign Subsidiary" means any Subsidiary that is organized under the
           ------------------
laws of a jurisdiction other than (a) the United States of America or any State
thereof or the District of Columbia or (b) the Cayman Islands.

          "Foreign Subsidiary Guarantee Agreement" means an agreement between
           --------------------------------------
any Foreign Subsidiary and the Collateral Agent that (x) provides a Guarantee of
the Obligations by such Foreign Subsidiary in favor of, and other rights and
benefits to, the Collateral Agent and the other Secured Parties substantially
identical to the Guarantee of the Obligations and the other rights and benefits
provided by the U.S. Guarantee Agreement (except as prohibited by applicable
law) and (y) is otherwise in form and substance reasonably satisfactory to the
Administrative Agent.

          "Funded Indebtedness" means as of any date, (a) the aggregate
           -------------------
principal amount of Indebtedness of the Borrowers and the Subsidiaries
outstanding as of such date, in the amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP,
and (b) without duplication, the aggregate amount of any Guarantee by either
Borrower or any Subsidiary of any such Indebtedness of any other Person.

          "GAAP" means generally accepted accounting principles in the United
           ----
States of America.

          "Governmental Authority" means the government of the United States of
           ----------------------
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

          "Guarantee" of or by any Person (the "guarantor") means any
           ---------                            ---------
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
                   ---------------
indirectly, and including any obligation of the



                                                                              24

guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation, provided that the term
                                                   --------
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.

          "Guarantee Agreements" means (a) with respect to each U.S. Loan Party,
           --------------------
each Loan Party organized under the laws of the Cayman Islands and each other
Loan Party reasonably designated by the Administrative Agent, the U.S. Guarantee
Agreement and (b) with respect to each other Loan Party, a Foreign Subsidiary
Guarantee Agreement.

          "Hazardous Materials" means all explosive, radioactive, hazardous or
           -------------------
toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes, and all substances or wastes
of any nature regulated pursuant to any Environmental Law, including any
material listed as a hazardous substance under Section 101(14) of CERCLA.

          "Holdings" means New SAC, an exempted limited liability company
           --------
incorporated and existing under the laws of the Cayman Islands.

          "Holdings Distribution" means the distributions on or about the
           ---------------------
Effective Date by the U.S. Borrower and the Subsidiaries to the Cayman Borrower,
by the Cayman Borrower to Intermediate Holdings and to, or for the account of,
participants in a Deferred Compensation Plan in an aggregate amount not to
exceed the amount by which (i) the Cash Amount exceeds (ii) Material Funded
Indebtedness, in each case on the Effective Date after giving effect to the
Transactions.

          "Hutchinson Settlement" means the settlement of a patent interference
           ---------------------
action with Hutchinson Technology relating to certain patent applications held
by Seagate Technology LLC with respect to flexure-based microactuators and
certain patents and patent applications held by Seagate



                                                                              25

Technology LLC with respect to flexures (the "Transferred Patents"), which
                                              -------------------
settlement will involve the transfer of the Transferred Patents to Hutchinson
Technology in exchange for (i) a royalty free license from Hutchinson Technology
of their patents with respect to this technology and (ii) royalties from
licenses by Hutchinson Technology of the Transferred Patents, together with a
cross-license between Seagate Technology LLC and Hutchinson Technology with
respect to interconnect circuitry patents.

          "Hutchinson Technology" means Hutchinson Technology Incorporated.
           ---------------------

          "Indebtedness" of any Person means, without duplication, (a) all
           ------------
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Notwithstanding anything to the contrary in this paragraph, the term
"Indebtedness" shall not include (a) obligations under Swap Agreements, (b)
agreements providing for indemnification, purchase price adjustments or similar
obligations incurred or assumed in connection with the acquisition or
disposition of assets or stock or (c) liabilities incurred under the Deferred
Compensation Plans.



                                                                              26

          "Indemnification Agreement" means the indemnification agreement dated
           -------------------------
as of March 29, 2000, among Holdings, Seagate Technology, Inc. and VERITAS
Software Corporation, inter alia as amended on August 29, 2000, and October 18,
2000.

          "Indemnified Taxes" means Taxes other than Excluded Taxes.
           -----------------

          "Indemnity, Subrogation and Contribution Agreement" means the
           -------------------------------------------------
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E, among the Borrowers, the Subsidiary Loan Parties and the Collateral
Agent.

          "Index Debt" has the meaning assigned to such term in the definition
           ----------
of "Investment Grade Ratings".

          "Information Memorandum" means the Confidential Information Memorandum
           ----------------------
dated April 18, 2002.

          "Insignificant Core Loan Party" means, on any date of determination, a
           ----------------------
Core Loan Party that (i) has less than $2,500 in assets on such date, (ii) has
not conducted any business or operations during the period of four fiscal
quarters ended immediately prior to such date and (iii) does not hold any
patents, trademarks or copyrights.

          "Interest Election Request" means a request by the applicable Borrower
           -------------------------
to convert or continue a Revolving Borrowing or Term Borrowing in accordance
with Section 2.07.

          "Interest Payment Date" means (a) with respect to any ABR Loan (other
           ---------------------
than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.

          "Interest Period" means, with respect to any Eurodollar Borrowing, the
           ---------------
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or 9 or 12 months if consented to by all the applicable Lenders) thereafter, as
the applicable Borrower may elect, provided that (a) if any Interest Period
                                   --------
would



                                                                              27

end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day and (b) any Interest Period that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.

          "Intermediate Holdings" means Seagate Technology Holdings, an exempted
           ---------------------
limited liability company incorporated and existing under the laws of the Cayman
Islands.

          "Investment Grade Period" means any period (a) commencing on the first
           -----------------------
day on which (x) the Index Debt (as defined below under "Investment Grade
Ratings") has Investment Grade Ratings and (y) no Default or Event of Default
has occurred and is continuing and (b) ending on the date on which the Index
Debt no longer has Investment Grade Ratings.

          "Investment Grade Ratings" means that the Cayman Borrower's senior
           ------------------------
unsecured long-term debt (the "Index Debt") is rated both (a) BBB- (or, for
purposes of Section 6.05, BBB) or better by S&P and (b) Baa3 (or, for purposes
of Section 6.05, Baa2) or better by Moody's.

          "Investors" means SLP, TPG, August Capital, JPMorgan Partners, LLC,
           ---------
Goldman Sachs Capital Partners III, L.L.C. and Integral Capital Partners.

          "IPO" means, with respect to any Person, a bona fide underwritten
           ---
initial public offering of voting common stock of such Person for cash in which
at least 10% of the aggregate voting common stock of such Person (calculated on
a fully diluted basis after giving effect to all options to acquire voting
common stock of such Person, then outstanding, regardless of whether such
options are then currently exercisable), is issued to Persons other than the
Investors, Holdings and their respective Affiliates (including all directors,
officers and employees of Holdings, either Borrower and any Subsidiary).

          "Issuing Bank" means, as the context may require, (a) JPMorgan Chase
           ------------
Bank, with respect to Letters of Credit



                                                                              28

issued by it, (b) any other Revolving Lender that becomes an Issuing Bank
pursuant to Section 2.05(l), with respect to Letters of Credit issued by it, and
(c) any Revolving Lender that has issued an Existing Letter of Credit, with
respect to such Existing Letter of Credit and, in each case, its successors in
such capacity as provided in Section 2.05(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.

          "LC Disbursement" means a payment made by the Issuing Bank pursuant to
           ---------------
a Letter of Credit.

          "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
           -----------
and unexpired amount of all outstanding Letters of Credit denominated in dollars
at such time plus (b) the aggregate amount of all LC Disbursements that were
made in dollars and that have not yet been reimbursed by or on behalf of the
Cayman Borrower at such time plus (c) the Alternative Currency LC Exposure at
such time. The LC Exposure of any Revolving Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

          "Lender Affiliate" means, (a) with respect to any Lender, (i) an
           ----------------
Affiliate of such Lender or (ii) an entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by such Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund that invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

          "Lenders" means the Persons listed on Schedule 2.01 and any other
           -------
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.

          "Letter of Credit" means any letter of credit (including each Existing
           ----------------
Letter of Credit) issued pursuant to this Agreement.



                                                                              29

          "Leverage Ratio" means, on any date, the ratio of Funded Indebtedness
           --------------
on such date to Consolidated EBITDA for the period of four consecutive fiscal
quarters of the Cayman Borrower ended on such date (or, if such date is not the
last day of a fiscal quarter, ended on the last day of the fiscal quarter of the
Cayman Borrower most recently ended prior to such date).

          "LIBO Rate" means, with respect to any Eurodollar Borrowing for any
           ---------
Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service
(or on any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
                                                 ---------
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

          "Lien" means, with respect to any asset, (a) any mortgage, deed of
           ----
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

          "Loan Documents" means this Agreement, the Guarantee Agreements, the
           --------------
Indemnity, Subrogation and Contribution Agreement, the Security Documents and
the Promissory Notes.

          "Loan Parties" means Intermediate Holdings, the Borrowers and the
           ------------
Subsidiary Loan Parties provided, that upon the release of the Guarantee by
                        --------
Intermediate Holdings of the Obligations in accordance with the terms of the
U.S.



                                                                              30

Guarantee Agreement, Intermediate Holdings shall cease to be a Loan Party for
all purposes hereunder.

          "Loans" means the loans made by the Lenders to either Borrower
           -----
pursuant to this Agreement.

          "Long-Term Indebtedness" means any Indebtedness that, in accordance
           ----------------------
with GAAP, constitutes (or, when incurred, constituted) a long-term liability.

          "Material Adverse Effect" means a material adverse effect on (a) the
           -----------------------
business, assets, operations, properties or financial condition of Intermediate
Holdings (for so long as it is a Loan Party), the Borrowers and the
Subsidiaries, taken as a whole, (b) the ability of the Loan Parties to perform
their obligations under the Loan Documents or (c) any material rights of or
benefits available to the Lenders under the Loan Documents.

          "Material Funded Indebtedness" means, as of any date, the sum of (a)
           ----------------------------
the aggregate principal amount of Existing Subordinated Debt outstanding as of
such date, (b) the aggregate principal amount of Senior Notes outstanding as of
such date and (c) the aggregate principal amount of Loans outstanding as of such
date.

          "Material Indebtedness" means Indebtedness (other than the Loans and
           ---------------------
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of Intermediate Holdings (for so long as it is a Loan Party),
either Borrower or any Subsidiary in an aggregate principal amount exceeding
$20,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of any Swap Agreement at any
time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Swap Agreement
were terminated at such time.

          "Moody's" means Moody's Investors Service, Inc. and its successors.
           -------

          "Moribund Subsidiary" means a Subsidiary listed on Schedule 1.01(c),
           -------------------
provided that (a) such Subsidiary has begun a dissolution, liquidation, winding
- --------
up or similar process before or within 180 days after the Effective Date, and
such Subsidiary is actively and in good faith pursuing the completion of such
dissolution, liquidation, winding up or similar process, (b) such Subsidiary has
no business or operations and conducts no activities other than those activities
reasonably necessary to the dissolution of such



                                                                              31

Subsidiary, (c) such Subsidiary does not incur any Indebtedness or other
liabilities (other than reasonable fees of attorneys and accountants and other
de minimis fees in connection with such dissolution, liquidation, winding up or
similar process) after the Effective Date and (d) the Moribund Subsidiaries as a
group shall not have more than $5,000,000 in assets. Notwithstanding anything to
the contrary in the preceding sentence, Seagate Technology Media Mexico S.A. de
C.V. ("STMM") shall be a Moribund Subsidiary provided that (a) STMM conducts no
                                             --------
business, operations or activities other than those necessary to complete the
liquidation thereof, (b) STMM does not own any assets other than those assets
owned by it on the Effective Date and (c) STMM and the Borrowers use their best
efforts to complete the liquidation of STMM as soon as reasonably practicable,
and, in any event, such liquidation is completed on or prior to November 22,
2003.

          "Mortgage" means a mortgage, deed of trust, assignment of leases and
           --------
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be reasonably
satisfactory in form and substance to the Collateral Agent.

          "Mortgaged Property" means, initially, each parcel of real property
           ------------------
and the improvements thereto owned by a Loan Party and identified on Schedule
1.01, and includes each other parcel of real property and improvements thereto
with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.

          "Multiemployer Plan" means a multiemployer plan as defined in Section
           ------------------
4001(a)(3) of ERISA.

          "Netherlands Holdings" means Seagate Technology (Netherlands) BV.
           --------------------

          "Netherlands Security Agreement" means the Deed of Pledge of Moveable
           ------------------------------
Property and Intellectual Property Rights, dated as of the Effective Date,
substantially in the form of Exhibit C-5, between STI and the Collateral Agent
for the benefit of the Secured Parties.

          "Net Leverage Ratio" means, on any date, the ratio of (a) the excess
           ------------------
of (i) Funded Indebtedness as of such date over (ii) the sum of (A) the amount
of cash held by either Borrower or any Subsidiary and (B) the carrying value of
Permitted Investments that would be reflected as cash or short-term investments
on a consolidated balance sheet of the Cayman Borrower on such date to (b)
Consolidated EBITDA



                                                                              32

for the period of four consecutive fiscal quarters of the Cayman Borrower ended
on such date (or, if such date is not the last day of a fiscal quarter, ended on
the last day of the fiscal quarter of the Cayman Borrower most recently ended
prior to such date).

          "Net Proceeds" means, with respect to any event, (a) the cash proceeds
           ------------
received in respect of such event, including any cash received in respect of any
non-cash proceeds, but only as and when received, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses (including underwriting discounts and
commissions and collection expenses) paid or payable by Intermediate Holdings
(for so long as it is a Loan Party), the Borrowers and the Subsidiaries to third
parties in connection with such event, (ii) in the case of a sale, transfer or
other disposition of an asset (including pursuant to a sale and leaseback
transaction), the amount of all payments required to be made by Intermediate
Holdings (for so long as it is a Loan Party), the Borrowers and the Subsidiaries
as a result of such event to repay Indebtedness (other than Loans) secured by
such asset or otherwise subject to mandatory prepayment as a result of such
event, and (iii) the amount of all taxes paid (or reasonably estimated to be
payable) by Intermediate Holdings (for so long as it is a Loan Party), the
Borrowers and the Subsidiaries plus the amount of all distributions that the
Cayman Borrower would be permitted to effect pursuant to Section 6.08(a)(vi) and
the amount of any reserves established by Intermediate Holdings (for so long as
it is a Loan Party), the Borrowers and the Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, in each case during the year
that such event occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good faith by the
chief financial officer of Intermediate Holdings or, after Intermediate Holdings
ceases to be a Loan Party, the Cayman Borrower).

          "Net Public Equity Proceeds" means, with respect to any event, the
           --------------------------
Publicly Traded Equity Securities received in respect of such event, excluding a
portion of such Publicly Traded Equity Securities having a fair market value (as
determined reasonably and in good faith by the chief financial officer of
Intermediate Holdings or the Cayman Borrower) equal to the sum of (i) all
reasonable fees and out-of-pocket expenses (including underwriting discounts and
commissions and collection expenses) paid or payable by Intermediate Holdings
(for so long as



                                                                              33

it is a Loan Party), the Borrowers and the Subsidiaries to third parties in
connection with such event, (ii) the amount of all payments required to be made
by Intermediate Holdings (for so long as it is a Loan Party), the Borrowers and
the Subsidiaries as a result of such event to repay Indebtedness (other than
Loans) secured by such asset or otherwise subject to mandatory prepayment as a
result of such event, and (iii) the amount of all taxes paid (or reasonably
estimated to be payable) by Intermediate Holdings (for so long as it is a Loan
Party), the Borrowers and the Subsidiaries plus the amount of all distributions
that the Cayman Borrower would be permitted to effect pursuant to Section
6.08(a)(vi) and the amount of any reserves established by Intermediate Holdings
(for so long as it is a Loan Party), the Borrowers and the Subsidiaries to fund
contingent liabilities reasonably estimated to be payable, in each case during
the year that such event occurred or the next succeeding year and that are
directly attributable to such event (as determined reasonably and in good faith
by the chief financial officer of Intermediate Holdings or the Cayman Borrower).

          "Non-Investment Grade Period" means any period of time other than an
           ---------------------------
Investment Grade Period.

          "Northern Ireland Security Agreement" means each of the Debentures,
           -----------------------------------
substantially in the form of Exhibit C-4, dated as of the Effective Date between
(a) each of Seagate Technology International, Seagate Technology Media (Ireland)
and Seagate Technology (Ireland) and (b) the Collateral Agent for the benefit of
the Secured Parties.

          "Obligations" has the meaning assigned to such term in the U.S.
           -----------
Security Agreement.

          "Other Taxes" means any and all current or future recording, stamp,
           -----------
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.

          "Outside Letter of Credit" means each letter of credit previously
           ------------------------
issued for the account of, or guaranteed by, a Borrower or a Subsidiary that (a)
is outstanding on the Effective Date and (b) is listed on Schedule 2.05(b).

          "Overdraft Facility" means any same-day overdraft facility extended by
           ------------------
a bank or other lending institution to a Loan Party.

          "Participant" has the meaning assigned to such term in Section
           -----------
9.04(e).



                                                                              34

          "PBGC" means the Pension Benefit Guaranty Corporation referred to and
           ----
defined in ERISA and any successor entity performing similar functions.

          "Perfection Certificate" means a certificate in the form of Annex 1 to
           ----------------------
the U.S. Security Agreement or any other form approved by the Cayman Borrower
and the Administrative Agent.

          "Permitted Acquisition" means any acquisition (whether by purchase,
           ---------------------
merger, consolidation or otherwise) by either Borrower or any consolidated
Subsidiary of all or substantially all the assets of, or at least 90% of the
Equity Interests in, a Person or division or line of business of a Person not
preceded by an unsolicited tender offer for such Person if, at the time of and
immediately after giving effect thereto, (a) no Default has occurred and is
continuing or would result therefrom, (b) the principal business of such Person
is reasonably related to a business in which the Borrowers and the Subsidiaries
were engaged on the Effective Date, (c) each Subsidiary formed for the purpose
of or resulting from such acquisition shall be a Core Loan Party and all of the
Equity Interests of such Core Loan Party are owned directly by a Borrower or a
consolidated Core Loan Party and all actions required to be taken with respect
to such acquired or newly formed Core Loan Party under Sections 5.12 and 5.13
shall have been taken, (d) the Borrowers and the Subsidiaries are in compliance,
on a pro forma basis after giving effect to such acquisition (giving effect to
any reductions in operating expenses permitted to be included for this purpose
in the calculation set forth in the definition of the term Consolidated EBITDA),
with the covenants contained in Sections 6.12, 6.13 and 6.14 recomputed as at
the last day of the most recently ended fiscal quarter of the Cayman Borrower
for which financial information is available, as if such acquisition (and any
related incurrence or repayment of Indebtedness, with any new Indebtedness being
deemed to be amortized over the applicable testing period in accordance with its
terms) had occurred on the first day of each relevant period for testing such
compliance and (e) the Cayman Borrower has delivered to the Administrative Agent
an officers' certificate to the effect set forth in clauses (a), (b), (c) and
(d) above, together with all relevant financial information for the Person or
assets to be acquired and reasonably detailed calculations demonstrating
satisfaction of the requirement set forth in clause (d) above.

          "Permitted Cayman Borrower Equity Sales" means (a) the issuance and
           --------------------------------------
sale by the Cayman Borrower of Equity



                                                                              35

Interests in the Cayman Borrower pursuant to an IPO of the Cayman Borrower and,
subsequent to an IPO of the Cayman Borrower, pursuant to any other offering, (b)
the sale by Intermediate Holdings of Equity Interests in the Cayman Borrower
held by Intermediate Holdings pursuant to an IPO of the Cayman Borrower or (c)
subsequent to an IPO of the Cayman Borrower, the sale for cash or Publicly
Traded Equity Securities by Intermediate Holdings of Equity Interests in the
Cayman Borrower held by Intermediate Holdings to any Person (other than
Holdings, any subsidiary of Holdings or other Affiliate of Holdings or any
employee stock ownership plan or other trust established by Holdings or any
subsidiary of Holdings), provided, in each case, that a Permitted Intermediate
                         --------
Holdings Equity Sale has not occurred.

          "Permitted Encumbrances" means:
           ----------------------

          (a) Liens imposed by law for taxes or other governmental charges that
     are not yet due or are being contested in compliance with Section 5.05;

          (b) landlords', carriers', warehousemen's, mechanics', materialmen's,
     repairmen's and other like Liens imposed by law, arising in the ordinary
     course of business and securing obligations that are not overdue by more
     than 30 days or are being contested in compliance with Section 5.05;

          (c) pledges and deposits made in the ordinary course of business in
     compliance with workers' compensation, unemployment insurance and other
     social security laws or regulations;

          (d) Liens (other than Liens on Collateral other than cash) to secure
     the performance of bids, trade contracts, leases, statutory obligations,
     surety and appeal bonds, performance bonds and other obligations of a like
     nature, in each case in the ordinary course of business;

          (e) judgment liens in respect of judgments that do not constitute an
     Event of Default under clause (k) of Section 7.01;

          (f) easements, zoning restrictions, licenses, reservations, covenants,
     utility easements, building restrictions, rights-of-way and similar
     encumbrances on real property imposed by law or arising in the ordinary
     course of business and minor defects or irregularities in title that do not
     secure any monetary obligations



                                                                              36

     and do not materially detract from the value of the affected property or
     interfere with the ordinary conduct of business of Intermediate Holdings,
     either Borrower or any Subsidiary;

          (g) any interest or title of a lessor under any lease permitted by
     this Agreement;

          (h) Liens in favor of customs and revenue authorities arising as a
     matter of law to secure payment of customs duties in connection with the
     importation of goods;

          (i) leases or subleases granted to other Persons and not interfering
     in any material respect with the business of Intermediate Holdings, either
     Borrower and the Subsidiaries, taken as a whole; and

          (j) licenses of intellectual property granted in the ordinary course
     of business;

provided that the term "Permitted Encumbrances" shall not include any Lien
- --------
securing Indebtedness.

          "Permitted High-Yield Indebtedness" means (a) the Existing
           ---------------------------------
Subordinated Debt not repurchased or redeemed pursuant to the Debt Tender Offer
and (b) the Senior Notes.

          "Permitted Holders" means the Investors and any officer or member of
           -----------------
the Board of Directors of Holdings, Intermediate Holdings, a Borrower or any
Subsidiary who owns Equity Interests of Holdings on the Effective Date.

          "Permitted Intermediate Holdings Equity Sales" means the issuance and
           --------------------------------------------
sale by Intermediate Holdings of Equity Interests in Intermediate Holdings (a)
pursuant to an IPO of Intermediate Holdings and (b) subsequent to an IPO of
Intermediate Holdings, pursuant to any other offering, provided, that a
                                                       --------
Permitted Cayman Borrower Equity Sale has not occurred.

          "Permitted Investments" means:
           ---------------------

          (a) direct obligations of the United States of America or any agency
     thereof or obligations guaranteed by the United States of America or any
     agency thereof;

          (b) investments in commercial paper maturing not more than one year
     after the date of acquisition issued by a corporation (other than an
     Affiliate of the Cayman Borrower) organized and in existence under the laws
     of



                                                                              37

     the United States of America or any foreign country recognized by the
     United States of America and having, at such date of acquisition, a rating
     of "P-1" (or better) from Moody's or "A-1" (or better) from S & P;

          (c) investments in (i) certificates of deposit, bankers' acceptances,
     time deposits and money market deposit accounts maturing not more than one
     year after the date of acquisition thereof issued or guaranteed by or
     placed with any commercial bank or trust company organized under the laws
     of the United States of America or any State thereof or any foreign country
     recognized by the United States of America or (ii) obligations of United
     States Federal agencies sponsored by the Federal government (including,
     without limitation, the Federal Home Loan Bank, Federal Farm Credit Bank,
     Federal Home Loan Mortgage Corporation and Federal National Mortgage
     Association) that are not direct obligations of the United States of
     America or any State thereof and are not obligations guaranteed by the
     United States of America or any State thereof, in each case which bank,
     trust company or Federally sponsored agency has a combined capital and
     surplus and undivided profits in excess of $250,000,000 (or the foreign
     currency equivalent thereof) and has outstanding debt which is rated "A"
     (or such similar equivalent rating) or higher by at least one nationally
     recognized statistical rating organization (as defined in Rule 436 under
     the Securities Act);

          (d) fully collateralized repurchase obligations with a term of not
     more than 45 days for securities described in clause (a) above or clause
     (e), (f) or (g) below and entered into with a financial institution
     satisfying the criteria described in clause (c) above;

          (e) investments in securities issued or fully guaranteed by any state,
     commonwealth or territory of the United States of America or any political
     subdivision or taxing authority thereof having maturities of not more than
     three years from the date of acquisition thereof and, having a rating of at
     least "AA" from S&P or "Aa" from Moody's;

          (f) investments in securities with maturities of one year or less from
     the date of acquisition issued or fully guaranteed by any state,
     commonwealth or territory of the United States of America, or by any
     political subdivision or taxing authority thereof, and having a rating of
     at least "A" from S&P or from Moody's;



                                                                              38

          (g) investments in securities issued by any foreign government or any
     political subdivision of any foreign government or any public
     instrumentality thereof having maturities of not more than six months from
     the date of acquisition thereof and, at the time of acquisition, having one
     of the two highest credit ratings obtainable from S&P or from Moody's;

          (h) investments in corporate bonds or notes having maturities of not
     more than three years from the date of acquisition thereof and having a
     rating of at least "AA" from S&P or "Aa" from Moody's;

          (i) auction rate preferred stock having maturities of not more than 90
     days from the date of acquisition thereof, provided that the long-term
                                                --------
     senior unsecured debt of the issuer of such preferred stock shall have a
     rating of at least "A" from S&P or from Moody's;

          (j) investments in funds that invest solely in one or more types of
     securities described in clauses (a) through (i) above; and

          (k) money market funds that (i) comply with the criteria set forth in
     Securities and Exchange Commission Rule 2a-7 under the Investment Company
     Act of 1940 and (ii) have portfolio assets of at least $1,000,000,000.

          "Permitted Liquidity Event Distribution" means the distribution of
           --------------------------------------
Distributable Liquidity Event Proceeds, provided that
                                        --------

          (i) in the case of a distribution of Distributable Liquidity Event
     Proceeds resulting from an event described in clauses (a) or (c) of the
     definition of the term Distributable Liquidity Event Proceeds, a portion of
     the Net Proceeds of such event equal to the portion designated for use
     pursuant to Section 6.05(c)(iii)(B)(4) or Section 6.05(c)(iv)(B)(4) shall
     have been used to prepay Term Loans pursuant to Section 2.11(c);

          (ii) in the case of a distribution of Distributable Liquidity Event
     Proceeds resulting from an event described in clause (b) of the definition
     of the term Distributable Liquidity Event Proceeds, a portion of the Net
     Proceeds of such event equal to the portion designated for use pursuant to
     Section 6.05(c)(iv)(B)(1) and Section 6.05(c)(iv)(B)(4)



                                                                              39

     shall have been used to prepay Term Loans pursuant to Section 2.11(c);

          (iii) in the case of a distribution of Distributable Liquidity Event
     Proceeds resulting from an event described in clause (d) of the definition
     of the term Distributable Liquidity Event Proceeds, a portion of the Net
     Proceeds of such event equal to the sum of (x) the amount designated for
     use pursuant to Section 6.05(c)(iii)(B)(1) and Section 6.05(c)(iii)(B)(4)
     and (y) the amount of Net Proceeds resulting from such event not
     contributed to the Cayman Borrower by Intermediate Holdings shall have been
     used to prepay Term Loans pursuant to Section 2.11(c); and

          (iv) if the participants in a Deferred Compensation Plan ("Entitled
                                                                     --------
     Participants") are entitled thereunder to receive a portion of the
     ------------
     Distributable Liquidity Event Proceeds available for a Permitted Liquidity
     Event Distribution (or would be so entitled, but for the failure of such
     participants' interest in such Deferred Compensation Plan to have vested at
     the time of such Permitted Liquidity Event Distribution), (a) no
     distribution of such Distributable Liquidity Event Proceeds shall be made
     to the Investors to the extent that the amount of such Distributable
     Liquidity Event Proceeds exceeds the amount thereof to which the Investors
     are entitled after deducting amounts to which participants in the
     applicable Deferred Compensation Plan are (or, upon vesting, would be)
     entitled under the applicable Deferred Compensation Plan and (b) no
     distribution of such Distributable Liquidity Event Proceeds shall be made
     to the Entitled Participants to the extent that the amount of such
     Distributable Liquidity Event Proceeds exceeds the amount thereof to which
     the Entitled Participants are (or, upon vesting, would be) entitled under
     the applicable Deferred Compensation Plan.

          "Permitted Obligation" means an obligation of either Borrower or any
           --------------------
Subsidiary (for purposes of this definition, a "Primary Obligor") not
                                                ---------------
constituting Indebtedness, provided (i) such obligation is entered into in the
                           --------
ordinary course of such Primary Obligor's business, (ii) any Guarantee of such
obligation by any Loan Party is given in the ordinary course of such guarantor
Loan Party's business and (iii) any Guarantee of such obligation is reasonably
consistent with the practices of the Loan Parties and reasonably necessary to
permit the Primary Obligor to incur such obligation.



                                                                              40

          "Permitted Optionholder" means a holder of Permitted Options or any
           ----------------------
equity securities issued upon the exercise of Permitted Options.

          "Permitted Options" has the meaning assigned to such term in Section
           -----------------
6.05(e).

          "Person" means any natural person, corporation, limited liability
           ------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

          "Plan" means any employee pension benefit plan (other than a
           ----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which either Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.

          "Pledge Agreements" means the Cayman Pledge Agreements, the Singapore
           -----------------
Pledge Agreement and the U.S. Pledge Agreement.

          "Prime Rate" means the rate of interest per annum publicly announced
           ----------
from time to time by JPMorgan Chase Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

          "Promissory Notes" means any promissory notes delivered pursuant to
           ----------------
Section 2.09(e).

          "Publicly Traded Equity Security" means (a) an equity security that is
           -------------------------------
listed on The New York Stock Exchange, The NASDAQ National Market or another
recognized national securities exchange registered with the United States
Securities and Exchange Commission (b) an equity security that is convertible at
the option of the holder thereof into an equity security referred to in clause
(a) above.

          "Register" has the meaning set forth in Section 9.04(c).
           --------

          "Related Parties" means, with respect to any specified Person, such
           ---------------
Person's Affiliates and the respective directors, officers, employees, agents,
trustees and advisors of such Person and such Person's Affiliates.



                                                                              41

          "Release" means any release, spill, emission, leaking, dumping,
           -------
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.

          "Required Lenders" means, at any time, Lenders having Revolving
           ----------------
Exposures, Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.

          "Reset Date" has the meaning assigned to such term in Section 1.05(a).
           ----------

          "Restricted Indebtedness" means Indebtedness of Intermediate Holdings
           -----------------------
(for so long as it is a Loan Party), either Borrower or any Subsidiary, the
payment, prepayment, redemption, repurchase or defeasance of which is restricted
under Section 6.08.

          "Restricted Payment" means (i) any dividend or other distribution
           ------------------
(whether in cash, securities or other property) with respect to any Equity
Interests in either Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Equity Interests in either Borrower or any Subsidiary or any
option, warrant or other right to acquire any such Equity Interests in either
Borrower or any Subsidiary and (ii) any distribution or other payment (whether
in cash, securities or other property or any combination thereof) under or in
respect of any Deferred Compensation Plan.

          "Revolving Availability Period" means the period from and including
           -----------------------------
the Effective Date to but excluding the earlier of the Revolving Maturity Date
and the date of termination of the Revolving Commitments.

          "Revolving Commitment" means, with respect to each Lender, the
           --------------------
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Revolving



                                                                              42

Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Commitment, as
applicable. The initial aggregate amount of the Lenders' Revolving Commitments
is $150,000,000.

          "Revolving Exposure" means, with respect to any Lender at any time,
           ------------------
the sum of (a) the outstanding principal amount of such Lender's Revolving Loans
and (b) such Lender's LC Exposure and Swingline Exposure at such time.

          "Revolving Lender" means a Lender with a Revolving Commitment or, if
           ----------------
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.

          "Revolving Loan" means a Loan made pursuant to clause (c) of Section
           --------------
2.01.

          "Revolving Maturity Date" means May 13, 2007, or, if such day is not a
           -----------------------
Business Day, the Business Day immediately preceding such day.

          "S&P" means Standard & Poor's Rating Service and its successors.
           ---

          "SAN Holdings" means Seagate Technology SAN Holdings, an exempted
           ------------
limited liability company organized and existing under the laws of the Cayman
Islands.

          "Secondary Distribution" means distributions by the U.S. Borrower and
           ----------------------
STI to the Cayman Borrower, by the Cayman Borrower to Intermediate Holdings, its
other shareholders (ratably in accordance with their equity ownership) and to,
or for the account of, participants in Deferred Compensation Plans in an
aggregate amount not to exceed Cash From Operations, provided that (a) such
                                                     --------
distributions are made concurrently with the consummation of an IPO by
Intermediate Holdings or the Cayman Borrower, (b) on the date of such
distributions and after giving pro forma effect thereto and to such IPO and the
application of the proceeds thereof (including the application of any
Distributable Liquidity Event Proceeds received in connection therewith) (i) the
ratio of (x) the Cash Amount to (y) Indebtedness of the Cayman Borrower and its
consolidated subsidiaries (other than Indebtedness in respect of letters of
credit securing obligations entered into in the ordinary course of business to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the 30th Business Day
following payment on such letters of credit) is no less than 1.1 to 1.0 and (ii)
no Default or



                                                                              43

Event of Default has occurred and is continuing and (c) prior to such
distributions, the Cayman Borrower shall have delivered to the Administrative
Agent a certificate dated as of such date and signed by a Financial Officer of
the Cayman Borrower that (i) sets forth, in reasonable detail, the calculation
of the amount of such distributions, (ii) certifies compliance with the ratio
set forth in clause (b)(i) above and (iii) certifies that the cash used to pay
the Secondary Distribution was generated in the ordinary course of business.

          "Secured Parties" has the meaning assigned to such term in the U.S.
           ---------------
Security Agreement.

          "Security Agreements" means the Cayman Security Agreements, the
           -------------------
Netherlands Security Agreement, the Northern Ireland Security Agreement, the
Singapore Security Agreements, the U.K. Security Agreement, and the U.S.
Security Agreement.

          "Security Documents" means the Security Agreements, the Pledge
           ------------------
Agreements, the Mortgages, any other Foreign Security Agreements and each other
security agreement or other instrument or document executed and delivered
pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

          "Senior Notes" means the 8% Senior Notes due 2009 to be issued by the
           ------------
Cayman Borrower on or prior to the Effective Date in the aggregate principal
amount not to exceed $400,000,000 and the Indebtedness represented thereby
(including the Parent Guaranty, the Exchange Notes (each as defined in the
Senior Note Documents), the guarantees of the Exchange Notes and any replacement
notes).

          "Senior Note Documents" means the indenture under which the Senior
           ---------------------
Notes are issued and all other instruments, agreements and other documents
evidencing or governing the Senior Notes or providing for any Guarantee in
respect thereof by Intermediate Holdings.

          "Singapore Pledge Agreement" means the Singapore Shares Charge, dated
           --------------------------
as of the Effective Date, substantially in the form of Exhibit D-3, between STI
and the Collateral Agent for the benefit of the Secured Parties.

          "Singapore Security Agreements" means, collectively, (a) the Singapore
           -----------------------------
Debentures, dated as of the Effective Date and substantially in form of Exhibit
C-3--A, (i) between STI and the Collateral Agent for the benefit of the Secured
Parties and (ii) between Seagate Singapore



                                                                              44

Distribution Pte. Ltd. and the Collateral Agent for the benefit of the Secured
Parties and (b) the Singapore Assignments of Trade Receivables, dated as of the
Effective Date and substantially in the form of Exhibit C-3--B, (i) between STI
and the Collateral Agent for the benefit of the Secured Parties and (ii) between
Seagate Singapore Distribution Pte. Ltd. and the Collateral Agent for the
benefit of the Secured Parties.

          "SLP" means Silver Lake Partners, L.P. and its Affiliates, provided
           ---                                                       --------
that no such Affiliate shall be deemed to be a member of SLP to the extent it
ceases to be Controlled by, or under common Control with, Silver Lake Partners,
L.P.

          "Statutory Reserve Rate" means a fraction (expressed as a decimal),
           ----------------------
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.

          "STI" means Seagate Technology International, an exempted limited
           ---
liability company organized under the laws of the Cayman Islands.

          "Strategic Investments" means investments in Equity Interests in
           ---------------------
Persons that are primarily engaged in businesses of the type conducted by the
Borrowers and the Subsidiaries on the date hereof or businesses reasonably
related, ancillary or complementary thereto.

          "subsidiary" means, with respect to any Person (the "parent") at any
           ----------                                          ------
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation,



                                                                              45

limited liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.

          "Subsidiary" means any subsidiary of the Cayman Borrower other than
           ----------
the U.S. Borrower.

          "Subsidiary Loan Party" means (a) any Subsidiary (other than (i) any
           ---------------------
Moribund Subsidiary and (ii) any Insignificant Core Loan Party) that (A) is not
a Foreign Subsidiary or (B) is a Foreign Subsidiary that is organized under the
laws of Thailand, Singapore, Mexico or Japan or meets the requirements set forth
in any of clause (i), clause (ii) or clause (iii) of paragraph (c) of the
definition of the term Collateral and Guarantee Requirement and (b) any other
Foreign Subsidiary that the Cayman Borrower designates as a Subsidiary Loan
Party in a written notice to the Administrative Agent.

          "Swap Agreement" means any agreement with respect to any swap,
           --------------
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions, provided that
                                                                  --------
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of either Borrower or the Subsidiaries shall be a Swap Agreement.

          "Swingline Exposure" means, at any time, the aggregate principal
           ------------------
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.

          "Swingline Lender" means JPMorgan Chase Bank, in its capacity as
           ----------------
lender of Swingline Loans hereunder.

          "Swingline Loan" means a Loan made pursuant to Section 2.04.
           --------------



                                                                              46

          "Taxes" means any and all current or future taxes, levies,
           -----
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.

          "Term Loans" means the Cayman Term Loans and the U.S. Term Loans.
           ----------

          "Term Loan Commitment" means, with respect to each Lender, the
           --------------------
commitment, if any, of such Lender to make Term Loans hereunder on the Effective
Date, expressed as an amount representing the maximum principal amount of the
Term Loans to be made by such Lender hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Term Loan Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Term Loan Commitment, as applicable. The
initial aggregate amount of the Lenders' Term Loan Commitments is $350,000,000.

          "Term Lender" means a Lender with a Term Loan Commitment or an
           -----------
outstanding Term Loan.

          "Term Loan Maturity Date" means May 13, 2007, or if such date is not a
           -----------------------
Business Day, the Business Day immediately preceding such day.

          "Thai Mortgages" means the Mortgages relating to the properties
           --------------
located at Korat-90 Moo 9, Tambol Soong Nern, Amphur Soong Nern, KM225 Mitraphap
Hwy, Nakorn Ratchasima, Thailand and M0023 Teparuk Road, Teparuk Sub-Assembly,
Tambol, Amphor Muang, Thailand.

          "TPG" means TPG Partners III, L.P. and its Affiliates, provided that
           ---                                                   --------
no such Affiliate shall be deemed to be a member of TPG to the extent it ceases
to be Controlled by, or under common Control with, TPG Partners III, L.P.

          "Transaction Costs" means the fees and expenses (including
           -----------------
underwriting discounts and commissions but excluding tender premiums, consent
fees and accrued interest in connection with the Debt Tender Offer) incurred or
borne by Intermediate Holdings, the Borrower and the Subsidiaries in connection
with the Transactions.

          "Transactions" means (a) the issuance of the Senior Notes, (b) the
           ------------
consummation of the Debt Tender Offer, (c) the repayment of all obligations
under the Existing



                                                                              47

Credit Agreement (and the termination of the commitments and security interests
created thereunder) and (d) the payment of the Holdings Distribution.

          "Type", when used in reference to any Loan or Borrowing, refers to
           ----
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.

          "U.S. Borrower" means Seagate Technology (US) Holdings, Inc., a
           --------------
Delaware corporation.

          "U.S. Guarantee Agreement" means the U.S. Guarantee Agreement, dated
           -------------------------
as of the Effective Date, substantially in the form of Exhibit F, among
Intermediate Holdings, the U.S. Loan Parties, the Subsidiary Loan Parties that
are organized under the laws of the Cayman Islands, the other applicable
Subsidiary Loan Parties and the Collateral Agent for the benefit of the Secured
Parties.

          "U.K. Security Agreement" means the Charge over Bank Account, dated as
           -----------------------
of the Effective Date, substantially in the form of Exhibit G between Seagate
Technology International and the Collateral Agent, for the benefit of the
Secured Parties.

          "U.S. Loan Parties" means any Loan Parties that are organized under
           -----------------
the laws of the United States of America or any State thereof or the District of
Columbia.

          "U.S. Pledge Agreement" means the Pledge Agreement, dated as of the
           ---------------------
Effective Date, substantially in the form of Exhibit D-1, among the U.S. Loan
Parties and each other Loan Party that owns Equity Interests in a Person that is
organized under the laws of the United States of America and that would
constitute Collateral if such Loan Party executed the U.S. Pledge Agreement and
the Collateral Agent for the benefit of the Secured Parties.

          "U.S. Security Agreement" means the U.S. Security Agreement, dated as
           -----------------------
of the Effective Date, substantially in the form of Exhibit C-1, among the U.S.
Loan Parties and the Collateral Agent for the benefit of the Secured Parties.

          "U.S. Term Loan" means a Loan made pursuant to clause (b) of Section
           --------------
2.01.

          "Withdrawal Liability" means liability to a Multiemployer Plan as a
           --------------------
result of a complete or partial



                                                                              48

withdrawal from such Multiemployer  Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

          SECTION 1.02. Classification of Loans and Borrowings. For purposes of
                        ---------------------------------------
this Agreement, Loans may be classified and referred to by Class (e.g., a
                                                                  ----
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
                              ----
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
 ----
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
                      ----                                       ----
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
                                              ----
Borrowing").

          SECTION 1.03. Terms Generally. The definitions of terms herein shall
                        ----------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
                        -----------------------
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time, provided
                                                                   --------
that, if the Cayman Borrower notifies the Administrative Agent that the Cayman
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Cayman Borrower



                                                                              49

that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith. For the purposes of
determining compliance under Sections 6.01, 6.02, 6.04, 6.05, 6.06, 6.08, 6.09
and 6.15 with respect to any amount in a currency other than Dollars, such
amount shall be deemed to equal the Dollar Equivalent thereof (determined in
good faith by the Cayman Borrower) at the time such amount was incurred or
expended, as the case may be.

          SECTION 1.05. Exchange Rates. (a) Not later than 1:00 p.m., New York
                        ---------------
City time, on each Calculation Date, the Administrative Agent shall (i)
determine the Exchange Rate as of such Calculation Date to be used for
calculating the Dollar Equivalent amounts of each Alternative Currency in which
an outstanding Alternative Currency Letter of Credit or unreimbursed LC
Disbursement is denominated and (ii) give notice thereof to the Cayman Borrower.
The Exchange Rates so determined shall become effective on the first Business
Day immediately following the relevant Calculation Date (a "Reset Date"), shall
                                                            ----------
remain effective until the next succeeding Reset Date and shall for all purposes
of this Agreement (other than converting into dollars under Sections 2.05(d),
(e), (h), (j) and (k) and 2.12(b) the obligations of the Cayman Borrower and the
Revolving Lenders in respect of LC Disbursements that have not been reimbursed
when due) be the Exchange Rates employed in converting any amounts between the
applicable currencies.

          (b) Not later than 5:00 p.m., New York City time, on each Reset Date,
the Administrative Agent shall (i) determine the Alternative Currency LC
Exposure on such date (after giving effect to any Alternative Currency Letters
of Credit issued, renewed or terminated or requested to be issued, renewed or
terminated on such date) and (ii) notify the Cayman Borrower and each Issuing
Bank of the results of such determination.

                                   ARTICLE II

                                   The Credits
                                   -----------

          SECTION 2.01. Commitments. Subject to the terms and conditions set
                        ------------
forth herein, each Lender agrees (a) to make a Term Loan to the Cayman Borrower
on the Effective



                                                                              50

Date in a principal amount not exceeding 71.43% of its Term Loan Commitment, (b)
to make a Term Loan to the U.S. Borrower on the Effective Date in a principal
amount not exceeding 28.57% of its Term Loan Commitment and (c) to make
Revolving Loans to the Cayman Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount that will not result in
such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment,
provided that no Revolving Loans will be made on the Effective Date. Within the
- --------
foregoing limits and subject to the terms and conditions set forth herein, the
Cayman Borrower may borrow, prepay and reborrow Revolving Loans. Amounts repaid
or prepaid in respect of Term Loans may not be reborrowed.

          SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
                        ---------------------
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder, provided that the Commitments of the Lenders are
                           --------
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.

          (b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
applicable Borrower may request in accordance herewith, provided that all
                                                        --------
Borrowings made on the Effective Date shall be ABR Borrowings. Each Swingline
Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan, provided that (i) any exercise of such option shall not affect
                --------
the obligation of the Borrowers to repay such Loan in accordance with the terms
of this Agreement and (ii) the Borrowers shall not be required to make any
greater payment under Section 2.15 or Section 2.17 to the applicable Lender than
such Lender would have been entitled to receive if such Lender had not exercised
such option.

          (c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $20,000,000. At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $500,000 and not less than $10,000,000, provided that
                                                                   --------
an ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Revolving



                                                                              51

Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e). Each Swingline Loan shall be in
an amount that is an integral multiple of $100,000 and not less than $500,000.
Borrowings of more than one Type and Class may be outstanding at the same time,
provided that there shall not at any time be more than (x) a total of six
- --------
Eurodollar Borrowings outstanding comprised of Revolving Loans and (y) a total
of six Eurodollar Borrowings outstanding comprised of Term Loans.

          (d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date or Term Loan Maturity Date, as applicable.

          SECTION 2.03. Requests for Borrowings. To request a Revolving
                        ------------------------
Borrowing or Term Borrowing, the applicable Borrower shall notify the
Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 1:00 p.m., New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 2:00 p.m., New York City time, one Business Day
before the date of the proposed Borrowing, provided that any such notice of an
                                           --------
ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(e) may be given not later than 1:00 p.m., New York
City time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the applicable Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:

          (i) in the case of a Borrowing requested by the Cayman Borrower,
     whether the requested Borrowing is to be a Revolving Borrowing or Term
     Borrowing;

          (ii) the aggregate amount of such Borrowing;

          (iii) the date of such Borrowing, which shall be a Business Day;

          (iv) subject to the proviso to the first sentence of Section 2.02(b),
     whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;



                                                                              52

          (v) in the case of a Eurodollar Borrowing, the initial Interest Period
     to be applicable thereto, which shall be a period contemplated by the
     definition of the term "Interest Period"; and

          (vi) the location and number of the applicable Borrower's account to
     which funds are to be disbursed, which shall comply with the requirements
     of Section 2.06.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the applicable
Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.

          SECTION 2.04. Swingline Loans. (a) Subject to the terms and conditions
                        ----------------
set forth herein, the Swingline Lender agrees to make Swingline Loans to the
Cayman Borrower from time to time during the Revolving Availability Period, in
an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$20,000,000 or (ii) the sum of the total Revolving Exposures exceeding the total
Revolving Commitments, provided that (A) the Swingline Lender shall not be
                       --------
required to make a Swingline Loan to refinance an outstanding Swingline Loan and
(B) no Swingline Loans will be made on the Effective Date. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Cayman
Borrower may borrow, prepay and reborrow Swingline Loans.

          (b) To request a Swingline Loan, the Cayman Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 2:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Cayman Borrower. The Swingline Lender shall make each
Swingline Loan available to the Cayman Borrower by means of a credit to the
general deposit account of the Cayman Borrower with the Swingline Lender (or, in
the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as



                                                                              53

provided in Section 2.05(e), by remittance to the Issuing Bank) by 4:00 p.m.,
New York City time, on the requested date of such Swingline Loan.

          (c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:30 p.m., New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Applicable Percentage of such Swingline Loan or Swingline Loans.
Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt
of notice as provided above, to pay to the Administrative Agent, for the account
of the Swingline Lender, such Lender's Applicable Percentage of such Swingline
Loan or Swingline Loans. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
       ------- --------
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Revolving Lenders. The Administrative Agent
shall notify the Cayman Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph, and thereafter payments in respect of such
Swingline Loan shall be made to the Administrative Agent and not to the
Swingline Lender. Any amounts received by the Swingline Lender from the Cayman
Borrower (or other party on behalf of the Cayman Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Revolving Lenders that shall have
made their payments pursuant to this paragraph and to the Swingline Lender, as
their interests may appear. The purchase of participations in a Swingline Loan
pursuant to



                                                                              54

this paragraph shall not relieve the Cayman Borrower of any default in the
payment thereof.

          SECTION 2.05. Letters of Credit. (a) General. Upon the satisfaction
                        ------------------     --------
(or waiver in accordance with Section 9.02) of the conditions specified in
Section 4.01 on the Effective Date, each Existing Letter of Credit will
automatically, without any action on the part of any Person, be deemed to be a
Letter of Credit issued hereunder for the account of the Cayman Borrower for all
purposes of this Agreement and the other Loan Documents. In addition, subject to
the terms and conditions set forth herein, the Cayman Borrower may request the
issuance of Letters of Credit for its own account, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Revolving Availability Period and prior to the date
that is five Business Days prior to the Revolving Maturity Date. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Cayman Borrower to, or entered into by the Cayman
Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
              ----------------------------------------------------------
Conditions. To request the issuance of a Letter of Credit (or the amendment,
- ----------
renewal or extension of an outstanding Letter of Credit), the Cayman Borrower
shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the currency in which such Letter of Credit is
to be denominated (which shall be dollars or, subject to Section 2.20, an
Alternative Currency), the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Issuing Bank, the Cayman Borrower also
shall submit a letter of credit application on the Issuing Bank's standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or



                                                                              55

extension of each Letter of Credit the Cayman Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed
$100,000,000 and (ii) the total Revolving Exposures shall not exceed the total
Revolving Commitments.

          (c) Expiration Date. Each Letter of Credit shall expire at or prior to
              ---------------
the close of business on the earlier of (i) (x) the date one year after the date
of the issuance of such Letter of Credit (or, (A) in the case of any renewal or
extension thereof, one year after such renewal or extension, or (B) in the case
of an Existing Letter of Credit having a later expiration date, such expiration
date) or (y) such other date mutually agreed upon by an Issuing Bank and the
Cayman Borrower (but in no event shall such date be later than as provided in
clause (ii) of this paragraph (c)) and (ii) the date that is five Business Days
prior to the Revolving Maturity Date.

          (d) Participations. By the issuance of a Letter of Credit (or an
              ---------------
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit
(including each Existing Letter Credit) equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Revolving
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent in dollars, for the account of the Issuing Bank, such Lender's Applicable
Percentage of (i) each LC Disbursement made by the Issuing Bank in dollars and
(ii) the Dollar Equivalent, using the Exchange Rates on the date such payment is
required, of each LC Disbursement made by the Issuing Bank in an Alternative
Currency and, in each case, not reimbursed by the Cayman Borrower on the date
due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Cayman Borrower for any reason (or, if
such reimbursement payment was refunded in an Alternative Currency, the Dollar
Equivalent thereof using the Exchange Rates on the date of such refund). Each
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and



                                                                              56

that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.

          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
              -------------
in respect of a Letter of Credit, the Cayman Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement, in dollars or (subject to the two immediately succeeding
sentences) the applicable Alternative Currency, not later than 2:00 p.m., New
York City time, on the Business Day immediately following the date on which the
Cayman Borrower receives notice of such LC Disbursement, provided that, in the
                                                         --------
case of any LC Disbursement made in dollars, the Cayman Borrower may, subject to
the conditions to borrowing set forth herein, request in accordance with Section
2.03 or 2.04 that such payment be financed with an ABR Revolving Borrowing or
Swingline Loan in an equivalent amount and, to the extent so financed, the
Cayman Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Cayman Borrower's reimbursement of, or obligation to reimburse, any amounts in
any Alternative Currency would subject the Administrative Agent, the Issuing
Bank or any Lender to any stamp duty, ad valorem charge or similar tax that
would not be payable if such reimbursement were made or required to be made in
dollars, the Cayman Borrower shall reimburse each LC Disbursement made in such
Alternative Currency in dollars, in an amount equal to the Dollar Equivalent,
calculated using the applicable Exchange Rate on the date such LC Disbursement
is made, of such LC Disbursement. If the Cayman Borrower fails to make such
payment when due, then (i) if such payment relates to an Alternative Currency
Letter of Credit, automatically and with no further action required, the Cayman
Borrower's obligation to reimburse the applicable LC Disbursement shall be
permanently converted into an obligation to reimburse the Dollar Equivalent,
calculated using the Exchange Rates on the date when such payment was due, of
such LC Disbursement and (ii) the Administrative Agent shall promptly notify the
Issuing Bank and each other Revolving Lender of the applicable LC Disbursement,
the Dollar Equivalent thereof (if such LC Disbursement relates to an Alternative
Currency Letter of Credit), the payment then due from the Cayman Borrower in
respect thereof and, in the case of a Revolving Lender, such Lender's Applicable
Percentage thereof. Promptly following receipt of such notice, each Revolving
Lender shall pay to the Administrative Agent in dollars its Applicable
Percentage of the payment then due from the Cayman Borrower (determined as
provided in clause (i) above, if such payment relates to an Alternative Currency
Letter of Credit), in the same manner as provided in Section 2.06 with



                                                                              57

respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
                                                                    -------
mutandis, to the payment obligations of the Revolving Lenders), and the
- --------
Administrative Agent shall promptly pay to the applicable Issuing Bank in
dollars the amounts so received by it from the Revolving Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Cayman
Borrower pursuant to this paragraph, the Administrative Agent shall distribute
such payment to such Issuing Bank or, to the extent that Revolving Lenders have
made payments pursuant to this paragraph to reimburse such Issuing Bank, then to
such Lenders and the Issuing Bank as their interests may appear. Any payment
made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing
Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
relieve the Cayman Borrower of its obligation to reimburse such LC Disbursement.

          (f) Obligations Absolute. The Cayman Borrower's obligation to
              ---------------------
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit, any application for the issuance of a Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Cayman Borrower's obligations hereunder.
None of the Administrative Agent, the Lenders, the Issuing Bank or any of their
Related Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising



                                                                              58

from causes beyond the control of the Issuing Bank, provided that the foregoing
                                                    --------
provisions of this paragraph (f) shall not be construed to excuse the Issuing
Bank from liability to the Cayman Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrowers to the extent permitted by applicable law) suffered by
the Cayman Borrower that are caused by (i) the Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof or (ii) the Issuing
Bank's failure to issue a Letter of Credit in accordance with the terms of this
Agreement when requested by the Cayman Borrower pursuant to Section 2.05(b). The
parties hereto expressly agree that, in the absence of gross negligence or
wilful misconduct on the part of the Issuing Bank (as finally determined by a
court of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised care in each such determination and each issuance of (or failure to
issue) a Letter of Credit. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation or refuse to accept and make payment upon such documents
if such documents are not in strict compliance with the terms of such Letter of
Credit.

          (g) Disbursement Procedures. The Issuing Bank shall, promptly
              ------------------------
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Cayman Borrower by telephone (confirmed
by telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder, provided that any failure to give or
                                         --------
delay in giving such notice shall not relieve the Cayman Borrower of its
obligation to reimburse the Issuing Bank and the Revolving Lenders with respect
to any such LC Disbursement.

          (h) Interim Interest. If the Issuing Bank shall make any LC
              -----------------
Disbursement, then, unless the Cayman Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Cayman Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans, provided that, if the Cayman Borrower fails to reimburse
                 --------



                                                                              59

such LC Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.13(c) shall apply, provided further that, in the case of an LC
                             -------- -------
Disbursement made under an Alternative Currency Letter of Credit, the amount of
interest due with respect thereto shall (i) in the case of any LC Disbursement
that is reimbursed on or before the Business Day immediately succeeding such LC
Disbursement, (A) be payable in the applicable Alternative Currency and (B) bear
interest at a rate equal to the rate reasonably determined by the applicable
Issuing Bank to be the cost to such Issuing Bank of funding such LC Disbursement
plus the Applicable Margin applicable to Eurodollar Loans at such time and (ii)
in the case of any LC Disbursement that is reimbursed after the Business Day
immediately succeeding such LC Disbursement (A) be payable in dollars, (B)
accrue on the Dollar Equivalent, calculated using the Exchange Rates on the date
such LC Disbursement was made, of such LC Disbursement and (C) bear interest at
the rate per annum then applicable to ABR Revolving Loans, subject to Section
2.13(c). Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Bank, except that interest accrued on and after the date of payment
by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such
payment.

          (i) Replacement of the Issuing Bank. Any Issuing Bank may be replaced
              --------------------------------
at any time by written agreement among the Cayman Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Cayman Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective
date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.



                                                                              60

          (j) Cash Collateralization. If any Event of Default shall occur and be
              -----------------------
continuing, on the Business Day that the Cayman Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Cayman Borrower shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in dollars and in cash equal to
the LC Exposure as of such date plus any accrued and unpaid interest thereon,
provided that (i) the portions of such amount attributable to undrawn
- --------
Alternative Currency Letters of Credit or LC Disbursements in an Alternative
Currency that the Cayman Borrower is not late in reimbursing shall be deposited
in the applicable Alternative Currencies in the actual amounts of such undrawn
Letters of Credit and LC Disbursements and (ii) upon the occurrence of any Event
of Default with respect to the Cayman Borrower described in clause (h) or (i) of
Section 7.01 the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and payable
in dollars, without demand or other notice of any kind. For the purposes of this
paragraph, the Alternative Currency LC Exposure shall be calculated using the
Exchange Rates on the date notice demanding cash collateralization is delivered
to the Cayman Borrower. The Cayman Borrower also shall deposit cash collateral
pursuant to this paragraph as and to the extent required by Section 2.11(b).
Each such deposit pursuant to this paragraph or pursuant to Section 2.11(b)
shall be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Cayman Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Cayman
Borrower's risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Cayman Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Lenders with LC Exposure representing greater than 50% of
the total LC Exposure), be applied to satisfy other obligations of the Cayman
Borrower



                                                                              61

under this Agreement. If the Cayman Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Cayman Borrower within three Business Days after all Events of Default have been
cured or waived. If the Cayman Borrower is required to provide an amount of cash
collateral hereunder pursuant to Section 2.11(b), such amount (to the extent not
applied as aforesaid) shall be returned to the Cayman Borrower as and to the
extent that, after giving effect to such return, the Cayman Borrower would
remain in compliance with Section 2.11(b) and no Event of Default shall have
occurred and be continuing.

          (k) Conversion. In the event that the Loans become immediately due and
              -----------
payable on any date pursuant to Section 7.01, all amounts (i) that the Cayman
Borrower is at the time or thereafter becomes required to reimburse or otherwise
pay to the Administrative Agent in respect of LC Disbursements made under any
Alternative Currency Letter of Credit (other than amounts in respect of which
the Cayman Borrower has deposited cash collateral pursuant to Section 2.05(j),
if such cash collateral was deposited in the applicable Alternative Currency to
the extent so deposited or applied), (ii) that the Revolving Lenders are at the
time or thereafter become required to pay to the Administrative Agent and the
Administrative Agent is at the time or thereafter becomes required to distribute
to the Issuing Bank pursuant to paragraph (e) of this Section in respect of
unreimbursed LC Disbursements made under any Alternative Currency Letter of
Credit and (iii) of each Revolving Lender's participation in any Alternative
Currency Letter of Credit under which an LC Disbursement has been made shall,
automatically and with no further action required, be converted into the Dollar
Equivalent, calculated using the Exchange Rates on such date (or in the case of
any LC Disbursement made after such date, on the date such LC Disbursement is
made), of such amounts. On and after such conversion, all amounts accruing and
owed to the Administrative Agent, the Issuing Bank or any Lender in respect of
the Obligations described in this paragraph shall accrue and be payable in
dollars at the rates otherwise applicable hereunder.

          (l) The Cayman Borrower may, at any time and from time to time with
the consent of the Administrative Agent (which consent shall not be unreasonably
withheld) and such Revolving Lender, designate one or more additional Revolving
Lenders to act as an issuing bank under the terms of this Agreement, provided
                                                                     --------
that the total number of Revolving Lenders so designated at any time plus the
total number of



                                                                              62

Issuing Banks pursuant to clause (c) of the definition of the term "Issuing
Bank" at such time shall not exceed 6. Any Revolving Lender designated as an
Issuing Bank pursuant to this paragraph (l) shall be deemed to be an "Issuing
Bank" for the purposes of this Agreement (in addition to being a Revolving
Lender) with respect to Letters of Credit issued by such Revolving Lender.

          (m) Each Issuing Bank will report in writing to the Administrative
Agent (i) on the first Business Day of each week, the aggregate face amount of
Letters of Credit issued by it and outstanding as of the last Business Day of
the preceding week, (ii) on or prior to each Business Day on which an Issuing
Bank expects to issue, amend, renew or extend any Letter of Credit, the date of
such issuance or amendment, and the aggregate face amount of Letters of Credit
to be issued, amended, renewed or extended by it and outstanding after giving
effect to such issuance, amendment, renewal or extension (and such Issuing Bank
shall advise the Administrative Agent on such Business Day whether such
issuance, amendment, renewal or extension occurred and whether the amount
thereof changed), (iii) on each Business Day on which an Issuing Bank makes any
LC Disbursement, the date of such LC Disbursement and the amount of such LC
Disbursement and (iv) on any Business Day on which the Cayman Borrower fails to
reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on
such day, the date of such failure and amount of such LC Disbursement.

          SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each
                        ---------------------
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders, provided that Swingline Loans shall be made as provided
                       --------
in Section 2.04. The Administrative Agent will make such Loans available to the
applicable Borrower by promptly crediting the amounts so received, in like
funds, to an account of such Borrower maintained with the Administrative Agent
in New York City and designated by such Borrower in the applicable Borrowing
Request, provided that ABR Revolving Loans and Swingline Loans made to finance
         --------
the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.

          (b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such



                                                                              63

Lender has made such share available on such date in accordance with paragraph
(a) of this Section and may, in reliance upon such assumption, make available to
the applicable Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the applicable Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to such Borrower to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of such Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.

          (c) Nothing in this Section 2.06 shall be deemed to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that the Borrowers may have against any Lender as a result of any default
by any such Lender hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to fulfill its Commitments
hereunder).

          SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing and
                        ------------------
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
applicable Borrower may elect to convert such Borrowing to a different Type or
to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The applicable
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Borrowings, which may not be converted or
continued.

          (b) To make an election pursuant to this Section, the applicable
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if



                                                                              64

such Borrower were requesting a Revolving Borrowing of the Type resulting from
such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request in a form approved by the Administrative Agent and
signed by the applicable Borrower.

          (c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:

          (i) the Borrowing to which such Interest Election Request applies and,
     if different options are being elected with respect to different portions
     thereof, the portions thereof to be allocated to each resulting Borrowing
     (in which case the information to be specified pursuant to clauses (iii)
     and (iv) below shall be specified for each resulting Borrowing);

          (ii) the effective date of the election made pursuant to such Interest
     Election Request, which shall be a Business Day;

          (iii) whether the resulting Borrowing is to be an ABR Borrowing or a
     Eurodollar Borrowing; and

          (iv) if the resulting Borrowing is a Eurodollar Borrowing, the
     Interest Period to be applicable thereto after giving effect to such
     election, which shall be a period contemplated by the definition of the
     term "Interest Period".

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration.

          (d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.

          (e) If the applicable Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event



                                                                              65

of Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the applicable Borrower, then, so
long as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

          SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
                        ----------------------------------------
previously terminated, (i) the Term Loan Commitments shall terminate at 5:00
p.m., New York City time, on the Effective Date and (ii) the Revolving
Commitments shall terminate on the Revolving Maturity Date.

          (b) The Cayman Borrower and the U.S. Borrower, as applicable, may,
without premium or penalty, at any time terminate, or from time to time reduce,
the Commitments of any Class, provided that (i) each reduction of the
                              --------
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Cayman Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving Commitments.

          (c) The applicable Borrower shall notify the Administrative Agent of
any election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by
either of the Borrowers pursuant to this Section shall be irrevocable, provided
                                                                       --------
that a notice of termination of the Revolving Commitments delivered by the
Cayman Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Cayman Borrower (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any termination or
reduction of the Commitments of any Class shall be permanent. Each reduction of
the Commitments of any Class shall be made ratably among the Lenders in
accordance with their respective Commitments of such Class.

          SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrowers
                        ------------------------------------
hereby unconditionally promise to pay (i) to the Administrative Agent for the
account of each



                                                                              66

Lender the then unpaid principal amount of each Revolving Loan of such Lender on
the Revolving Maturity Date, (ii) to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Term Loan of such Lender as
provided in Section 2.10 and (iii) to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving Maturity
Date and the first date after such Swingline Loan is made that is the 15th or
last day of a calendar month and is at least five Business Days after such
Swingline Loan is made, provided that on each date that a Revolving Borrowing is
                        --------
made, the Cayman Borrower shall repay all Swingline Loans that were outstanding
on the date such Borrowing was requested.

          (b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of each Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

          (c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof,
which accounts the Administrative Agent will make available to either Borrower
upon its reasonable request.

          (d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
                                    ----- -----
amounts of the obligations recorded therein, provided that the failure of any
                                             --------
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement.

          (e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the applicable Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Cayman Borrower and the
Administrative Agent. Thereafter, the Loans evidenced by such promissory



                                                                              67

note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory notes in such
form payable to the order of the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).

          SECTION 2.10. Amortization of Term Loans. (a) Subject to adjustment
                        --------------------------
pursuant to paragraph (d) of this Section, the Cayman Borrower shall repay
Cayman Term Loans on each date set forth below in the aggregate principal amount
set forth opposite such date:

         Date                  Amount
         ----               ------------
   December 31, 2002        $  1,250,025
     June 30, 2003          $  1,250,025
   December 31, 2003        $  1,250,025
     June 30, 2004          $  1,250,025
   December 31, 2004        $  1,250,025
     June 30, 2005          $  1,250,025
   December 31, 2005        $  1,250,025
     June 30, 2006          $  1,250,025
   December 31, 2006        $120,002,400
Term Loan Maturity Date     $120,002,400

          (b) Subject to adjustment pursuant to paragraph (d) of this Section,
the U.S. Borrower shall repay U.S. Term Loans on each date set forth below in
the aggregate principal amount set forth opposite such date:


         Date                Amount
         ----             ------------
   December 31, 2002      $   499,975
     June 30, 2003        $   499,975
   December 31, 2003      $   499,975
     June 30, 2004        $   499,975
   December 31, 2004      $   499,975
     June 30, 2005        $   499,975
   December 31, 2005      $   499,975
     June 30, 2006        $   499,975
   December 31, 2006      $47,997,600



                                                                              68

        Date                Amount
        ----                ------
Term Loan Maturity Date   $47,997,600

          (c) To the extent not previously paid, all Term Loans shall be due and
payable on the Term Loan Maturity Date.

          (d) Any mandatory prepayment of a Term Borrowing shall be applied to
reduce the scheduled repayments of the Term Borrowings to be made pursuant to
this Section ratably. Any optional prepayment of a Term Borrowing pursuant to
Section 2.11(a) shall be applied to reduce the scheduled repayments of the Term
Borrowings to be made pursuant to this Section in order of maturity or ratably
at the Cayman Borrower's discretion. If the initial aggregate amount of the
Lenders' Term Commitments exceeds the aggregate principal amount of Term Loans
that are made on the Effective Date, then the scheduled repayments of Term
Borrowings to be made pursuant to this Section shall be reduced ratably by an
aggregate amount equal to such excess.

          (e) Prior to any repayment of any portion of any Term Borrowings made
by either Borrower hereunder, the Borrowers shall select the Borrowing or
Borrowings to be repaid and shall notify the Administrative Agent by telephone
(confirmed by telecopy) of such selection not later than 11:00 a.m., New York
City time, three Business Days before the scheduled date of such repayment. Each
repayment of a portion of any Borrowing made by either Borrower shall be applied
ratably to the Loans of such Borrower included in the repaid Borrowing.
Repayments of Term Borrowings shall be accompanied by accrued interest on the
amount repaid.

          SECTION 2.11. Prepayment of Loans. (a) Each Borrower shall have the
                        -------------------
right at any time and from time to time to prepay any Borrowing in whole or in
part, without premium or penalty (but subject to Section 2.16), subject to the
requirements of this Section.

          (b) In the event and on each occasion that the sum of the Revolving
Exposures exceeds the total Revolving Commitments, the Cayman Borrower shall
prepay Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings
are outstanding, deposit cash collateral in an account with the Administrative
Agent pursuant to Section 2.05(j)) in an aggregate amount equal to such excess.

          (c) In the event and on each occasion that:



                                                                              69

          (i) the Cayman Borrower or Intermediate Holdings designates a portion
     of Distributable Liquidity Event Proceeds resulting from an event described
     in clauses (a) or (c) of the definition of the term Distributable Liquidity
     Event Proceeds for use as described in Section 6.05(c)(iii)(B)(4) or
     Section 6.05(c)(iv)(B)(4), the Cayman Borrower or Intermediate Holdings
     shall, concurrently with the delivery of the certificate described in
     Section 6.05(c)(iii) or Section 6.05(c)(iv), cause Term Loans in an
     aggregate amount equal to the amount of such Distributable Liquidity Event
     Proceeds being so designated to be prepaid using a portion of the Net
     Proceeds (or cash received from the sale of Net Public Equity Proceeds
     received by Intermediate Holdings from such Permitted Cayman Borrower
     Equity Sale) of such event;

          (ii) the Cayman Borrower designates a portion of Distributable
     Liquidity Event Proceeds in respect of an event described in clause (b) of
     the definition of the term Distributable Liquidity Event Proceeds for use
     pursuant to Section 6.05(c)(iv)(B)(1) or 6.05(c)(iv)(B)(4), the Borrowers
     shall, concurrently with the delivery of the certificate described in
     Section 6.05(c)(iv), prepay Term Loans in an aggregate amount equal to the
     amount of such Distributable Liquidity Event Proceeds being so designated
     using a portion of the Net Proceeds of such event; and

          (iii) Intermediate Holdings receives Net Proceeds in respect of an
     event described in clause (d) of the definition of the term Distributable
     Liquidity Event Proceeds and (x) such Net Proceeds are not contributed to
     the Cayman Borrower within 30 days or (y) the Distributable Liquidity Event
     Proceeds therefrom are designated for use pursuant to Section
     6.05(c)(iii)(B)(1) or 6.05(c)(iii)(B)(4), Intermediate Holdings shall,
     concurrently with the delivery of the certificate described in Section
     6.05(c)(iii), cause Term Loans in an aggregate amount equal to the sum of
     (x) the amount of Net Proceeds not contributed to the Cayman Borrower by
     Intermediate Holdings and (y) the amount of Distributable Liquidity Event
     Proceeds designated for use pursuant to Sections 6.05(c)(iii)(B)(1) and
     6.05(c)(iii)(B)(4) to be prepaid using a portion of the Net Proceeds of
     such event.

          (d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrowers shall select the Borrowing or Borrowings to be prepaid
and shall specify such



                                                                              70

selection in the notice of such prepayment pursuant to paragraph (e) of this
Section. An amount equal to 71.43% of the portion of any optional or mandatory
prepayment of Term Borrowings shall be made by the Cayman Borrower in respect of
the Cayman Term Loans and an amount equal to 28.57% of the portion of any
optional or mandatory prepayment of Term Borrowings shall be made by the U.S.
Borrower in respect of the U.S. Term Loans.

          (e) The Cayman Borrower shall notify the Administrative Agent (and, in
the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 1:00 p.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 2:00 p.m., New York City time,
one Business Day prior to the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 2:00 p.m., New York City time, on
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date, the principal amount of each Borrowing or portion thereof
to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment, provided that, if a notice of
                                              --------
optional prepayment of any Loans is given in connection with a conditional
notice of termination of the Revolving Commitments as contemplated by Section
2.08, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.08. Promptly following
receipt of any such notice (other than a notice relating solely to Swingline
Loans), the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a portion of any Borrowing made by
either Borrower shall be applied ratably to the Loans of such Borrower included
in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest
to the extent required by Section 2.13.

          SECTION 2.12. Fees. (a) The Cayman Borrower agrees to pay to the
                        ----
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at the Applicable Margin on the average daily unused amount
of the Revolving Commitment of such Revolving Lender during the period from and
including the Effective Date to but excluding the date on which such Commitment
terminates. Accrued commitment fees shall be payable in arrears on the



                                                                              71

last day of March, June, September and December of each year and on the date on
which the Revolving Commitments terminate, commencing on the first such date to
occur after the date hereof. All commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees, a Revolving Commitment of a Lender shall be deemed to be used
to the extent of the outstanding Revolving Loans and LC Exposure of such Lender
(and the Swingline Exposure of such Lender shall be disregarded for such
purpose).

          (b) The Cayman Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin as interest on Eurodollar Revolving Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at per annum rate, separately agreed upon between the Cayman Borrower and the
Issuing Bank, on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank's standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of March, June, September and December of
each year shall be payable on the third Business Day following such last day,
commencing on the first such date to occur after the Effective Date, provided
                                                                     --------
that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). For the
purposes of calculating the average daily amount of the LC Exposure for any
period



                                                                              72

under this Section 2.12(b), the average daily amount of the Alternative Currency
LC Exposure for such period shall be calculated by multiplying (x) the average
daily balance of each Alternative Currency Letter of Credit (expressed in the
currency in which such Alternative Currency Letter of Credit is denominated) by
(y) the Exchange Rate for each such Alternative Currency in effect on the last
Business Day of such period or by such other reasonable method that the
Administrative Agent deems appropriate.

          (c) The Cayman Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Cayman Borrower and the Administrative Agent.

          (d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds in dollars, to the Administrative Agent (or to the
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.

          SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
                        --------
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Margin.

          (b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin.

          (c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrowers hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, to the
fullest extent permitted by applicable law, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus the rate otherwise applicable
to such Loan as provided in the preceding paragraphs of this Section or (ii) in
the case of any other amount, 2% plus the rate applicable to ABR Revolving Loans
as provided in paragraph (a) of this Section.

          (d) Accrued interest on each Loan shall be payable in arrears (i) on
each Interest Payment Date for such Loan, (ii) in the case of Revolving Loans,
upon termination of the Revolving Commitments and (iii) in the case of Term
Loans, on the Term Loan Maturity Date, provided
                                       --------



                                                                              73

that (i) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Revolving Loan prior to the end of the
Revolving Availability Period), accrued interest on the principal amount repaid
or prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

          (e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent in accordance
with the terms hereof, and such determination shall be prima facie evidence
thereof.

          SECTION 2.14. Alternate Rate of Interest. If prior to the commencement
                        --------------------------
of any Interest Period for a Eurodollar Borrowing:

          (a) the Administrative Agent determines (which determination shall be
     prima facie evidence thereof) that adequate and reasonable means do not
     exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

          (b) the Administrative Agent is advised by the Required Lenders that
     the Adjusted LIBO Rate for such Interest Period will not adequately and
     fairly reflect the cost to such Lenders of making or maintaining their
     Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Cayman Borrower
and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Cayman Borrower and the Lenders
that the circumstances giving rise to such notice no longer exist (it being
understood that the Administrative Agent will use commercially reasonable
efforts to give such notice as soon as practicable after such circumstances no
longer exist), (i) any Interest Election Request that



                                                                              74

requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing
Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.

          SECTION 2.15. Increased Costs. (a) If any Change in Law (except with
                        ---------------
respect to Taxes which shall be governed by Section 2.17) shall:

          (i) impose, modify or deem applicable any reserve, special deposit or
     similar requirement against assets of, deposits with or for the account of,
     or credit extended by, any Lender (except any such reserve requirement
     reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

          (ii) impose on any Lender or the Issuing Bank or the London interbank
     market any other condition affecting this Agreement or Eurodollar Loans
     made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
applicable Borrower will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.

          (b) If any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on a Lender's or the Issuing
Bank's capital or on the capital of such Lender's or the Issuing Bank's holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time the applicable Borrower



                                                                              75

will pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company for any such reduction suffered.

          (c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section, and setting forth in reasonable detail the basis on which such
amount or amounts were calculated and stating that such calculation has been
made in a manner consistent with the treatment given by such Lender or Issuing
Bank to similar businesses in similar circumstances, shall be delivered to the
Cayman Borrower and shall be prima facie evidence thereof. The applicable
Borrower shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 15 days after receipt
thereof.

          (d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation, provided
                                                                       --------
that the Borrowers shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Cayman Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor, and provided further that, if the
                                              -------- -------
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.

          SECTION 2.16. Break Funding Payments. In the event of (a) the payment
                        ----------------------
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11(e) and is revoked in accordance therewith) or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the



                                                                              76

Cayman Borrower pursuant to Section 2.19, then, in any such event, the
applicable Borrower shall compensate each Lender for the loss (other than lost
profits), cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount reasonably determined by such Lender to be the excess, if any,
of (i) the amount of interest that would have accrued on the principal amount of
such Loan had such event not occurred, at the Adjusted LIBO Rate that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest that would
accrue on such principal amount for such period at the interest rate that such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section, and setting forth
in reasonable detail the basis on which such amount or amounts were calculated,
shall be delivered to the Cayman Borrower and shall be prima facie evidence
thereof. The applicable Borrower shall pay such Lender the amount shown as due
on any such certificate within 15 days after receipt thereof.

          SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
                        -----
obligation of either Borrower hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes, provided that if either Borrower shall be required to deduct any
             --------
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the applicable Borrower shall make such deductions and (iii) the
applicable Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

          (b) In addition, the applicable Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.

          (c) The applicable Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank,



                                                                              77

within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender
or the Issuing Bank, as the case may be, on or with respect to any payment by or
on account of any obligation of such Borrower hereunder or under any other Loan
Document (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Cayman Borrower by a Lender or the
Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error.

          (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by either Borrower to a Governmental Authority, the applicable
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

          (e) Any Foreign Lender (or Participant) that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which a Borrower is located, or under any treaty to which such jurisdiction
is a party, with respect to payments under this Agreement shall deliver to the
Borrowers (with a copy to the Administrative Agent) (or in the case of a
Participant, to the Foreign Lender from which the related participation was
purchased), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by such Borrower as will permit such payments to be made without
withholding or at a reduced rate, provided that, with respect to such
                                  --------
documentation provided to the Cayman Borrower, such Foreign Lender (or
Participant) has received written notice from the Cayman Borrower advising it of
the availability of such exemption or reduction and supplying all applicable
documentation. In addition, each Foreign Lender (or Participant) shall deliver
substitute forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Foreign Lender (or Participant), provided that,
                                                              --------
with respect to such documentation provided to the Cayman Borrower, such Foreign
Lender (or Participant) has



                                                                              78

received written notice from the Cayman Borrower advising it of such
obsolescence and supplying such substitute forms.

          (f) If the Administrative Agent or a Lender or the Issuing Bank
determines, in its sole discretion, that it has received a refund of any Taxes
as to which it has been indemnified by either Borrower or with respect to which
either Borrower has paid additional amounts pursuant to this Section 2.17, which
the Administrative Agent or such Lender or the Issuing Bank is able to identify
as such, it shall pay such refund to such Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by such Borrower under this
Section 2.17 with respect to the Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses of the Administrative Agent or such Lender or
the Issuing Bank and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, however,
that each Borrower agrees to pay, upon the request of the Administrative Agent
or such Lender or the Issuing Bank, the amount paid to such Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender or the Issuing Bank in the
event the Administrative Agent or such Lender or the Issuing Bank is required to
repay such refund to such Governmental Authority. Nothing contained in this
Section 2.17(f) shall require the Administrative Agent or any Lender or the
Issuing Bank to make available its tax returns (or any other information
relating to its Taxes that it deems confidential) to either Borrower or any
other Person.

          SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
                        --------------------------------------------------
Set-offs. (a) Each Borrower shall make each payment required to be made by it
- --------
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 2:00 p.m., New York City time), on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant



                                                                              79

to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. Except as provided in Section 2.05(e), all payments
under each Loan Document shall be made in dollars.

          (b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

          (c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans, Term Loans
and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans, provided that (i) if any such participations
                                   --------
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the



                                                                              80

Borrowers pursuant to and in accordance with the express terms of this Agreement
or any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans or participations in LC
Disbursements to any assignee or participant, other than to a Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Borrowers consent to the foregoing and agree, to the extent
they may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.

          (d) Unless the Administrative Agent shall have received notice from
the Cayman Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the applicable Borrower will not make such payment, the
Administrative Agent may assume that such Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the applicable Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.

          (e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.

          SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If
                        ----------------------------------------------
any Lender requests compensation under Section 2.15, or if either Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to



                                                                              81

Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.15 or 2.17, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

          (b) If any Lender requests compensation under Section 2.15, or if
either Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Cayman Borrower may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that (i) the Cayman
                                              --------
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank and
Swingline Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or either Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a material reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the applicable Borrower to
require such assignment and delegation cease to apply. Nothing in this Section
2.19 shall be deemed to prejudice any rights that either Borrower may have
against any Lender as a result of any default by any such Lender in its
obligations to fund Loans hereunder.



                                                                              82

          SECTION 2.20. Change in Law. Notwithstanding any other provision of
                        -------------
this Agreement, if, after the date hereof, (i) any Change in Law shall make it
unlawful for any Issuing Bank to issue Letters of Credit denominated in an
Alternative Currency, or (ii) there shall have occurred any change in national
or international financial, political or economic conditions (including the
imposition of or any change in exchange controls) or currency exchange rates
that would make it impracticable for any Issuing Bank to issue Letters of Credit
denominated in such Alternative Currency for the account of the Cayman Borrower,
then by prompt written notice thereof to the Cayman Borrower and to the
Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), such Issuing Bank may declare that Letters of
Credit will not thereafter be issued by it in the affected Alternative Currency
or Alternative Currencies, whereupon the affected Alternative Currency or
Alternative Currencies shall be deemed (for the duration of such declaration)
not to constitute an Alternative Currency for purposes of the issuance of
Letters of Credit by such Issuing Bank.

                                   ARTICLE III

                         Representations and Warranties
                         ------------------------------

          Each of Intermediate Holdings and the Borrowers represents and
warrants to the Lenders with respect to itself and its subsidiaries that:

          SECTION 3.01. Organization; Powers. Each of Intermediate Holdings, the
                        --------------------
Borrowers and the Subsidiaries is duly incorporated or organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization or incorporation, has all requisite power and authority to carry on
its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.

          SECTION 3.02. Authorization; Enforceability. The Transactions to be
                        -----------------------------
entered into by each Loan Party are within such Loan Party's powers and have
been duly authorized by all necessary action. This Agreement has been duly
executed and delivered by each of Intermediate Holdings and the Borrowers and
constitutes, and each other Loan Document to which any Loan Party (other than a
Subsidiary Loan Party that is a Subsidiary Loan Party solely pursuant



                                                                              83

to clause (b) of the definition of the term "Subsidiary Loan Party") is to be a
party, when executed and delivered by such Loan Party, will constitute, a legal,
valid and binding obligation of Intermediate Holdings, such Borrower or such
Loan Party (as the case may be), enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights generally
and to general principles of equity and an implied covenant of good faith and
fair dealing, regardless of whether considered in a proceeding in equity or at
law.

          SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
                        ------------------------------------
(a) do not require any consent or approval of, registration or filing with, or
any other action by or before, any Governmental Authority, except such as have
been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents and, except where
the failure to obtain such consent or approval or to make such registration or
filing, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect, (b) will not violate any applicable law or
regulation in any material respect or the memorandum and articles of
association, charter, by-laws or other organizational documents of Intermediate
Holdings, either Borrower or any of the Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, material agreement or other material instrument binding upon
Intermediate Holdings, either Borrower or any of the Subsidiaries or any of
their assets, or give rise to a right thereunder to require any payment to be
made by Intermediate Holdings, either Borrower or any of the Subsidiaries,
except for violations or payments that, individually and in the aggregate, could
not reasonably be expected to have a Material Adverse Effect, and (d) will not
result in the creation or imposition of any Lien on any asset of Intermediate
Holdings, either Borrower or any of the Subsidiaries, except Liens created under
the Loan Documents.

          SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
                        -----------------------------------------------
Intermediate Holdings has heretofore furnished to the Lenders (i)(x) the
consolidated and combined statements of operations, stockholders' equity and
cash flows of Intermediate Holdings and its predecessor as of and for the fiscal
years ended July 2, 1999 and June 30, 2000, for the period from July 1, 2000 to
November 22, 2000, and for the period from November 23, 2000, to June 29, 2001,
and (y) the consolidated and combined balance sheets of Intermediate Holdings as
of June 30, 2000, and June 30,



                                                                              84

2001, in each case reported on by Ernst & Young LLP, independent auditors and
(ii) selected unaudited consolidated financial information of the Cayman
Borrower and its predecessor, which includes the line-items specified on
Schedule 5.01, as of and for the fiscal years ended July 2, 1999, June 30, 2000,
and combined for the 12 months ended June 29, 2001, in each case with procedures
performed by Ernst & Young LLP, independent auditors, in accordance with
Statement on Auditing Standards No. 72 and accompanied by a customary letter to
such effect. Such financial statements of Intermediate Holdings present fairly,
in all material respects, the consolidated financial position and results of
operations and cash flows of Intermediate Holdings as of such dates and for such
periods in accordance with GAAP.

          (b) Intermediate Holdings has heretofore furnished to the Lenders
(i)(x) the unaudited consolidated statements of income, stockholders' equity and
cash flows of Intermediate Holdings as of and for the nine months ended March
30, 2001, and March 29, 2002, and (y) the consolidated balance sheets of
Intermediate Holdings as of March 30, 2001, and March 29, 2002, and (ii)
selected unaudited consolidated financial information of the Cayman Borrower,
which includes the line-items specified on Schedule 5.01, as of and for the nine
months ended March 30, 2001, and March 29, 2002.

          (c) Intermediate Holdings has heretofore furnished to the Lenders its
pro forma capitalization table as of March 29, 2002, prepared giving effect to
the Transactions as if the Transactions had occurred on such date. Such pro
forma capitalization table (i) has been prepared in good faith based on
assumptions made known to the Lenders (which assumptions are believed by
Intermediate Holdings and the Borrowers to be reasonable at the time of
preparation) and upon information not known to be incorrect or unreasonable in
any material respect and (ii) accurately reflect in all material respects all
adjustments necessary to give effect to the Transactions.

          (d) Except as disclosed in the financial statements referred to in
paragraphs (a), (b) and (c) above or the notes thereto or in the Information
Memorandum and except for the Disclosed Matters, after giving effect to the
Transactions, none of Intermediate Holdings, the Borrowers or the Subsidiaries
has, as of the Effective Date, any material contingent liabilities, unusual
long-term commitments or unrealized losses.



                                                                              85

          (e) Since June 30, 2001, there has been no material adverse change in
the business, financial condition or results of operations of Intermediate
Holdings, the Borrowers and the Subsidiaries, taken as a whole.

          SECTION 3.05. Properties. (a) Intermediate Holdings, each Borrower and
                        ----------
each of the Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes and subject to Permitted Encumbrances.

          (b) Intermediate Holdings, each Borrower and each of the Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use thereof by
Intermediate Holdings, the Borrowers and the Subsidiaries does not infringe upon
the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

          (c) Schedule 3.05(c) sets forth the address of each real property that
is owned or leased by either Borrower or any of the Subsidiaries as of the
Effective Date after giving effect to the Transactions.

          (d) As of the Effective Date, none of Intermediate Holdings, either
Borrower or any of the Subsidiaries has received notice of, or has knowledge of,
any material pending or contemplated condemnation proceeding affecting any
Mortgaged Property or any sale or disposition thereof in lieu of condemnation.
Neither any Mortgaged Property nor any interest therein is subject to any right
of first refusal, option or other contractual right to purchase such Mortgaged
Property or interest therein.

          SECTION 3.06. Litigation and Environmental Matters. (a) Except for the
                        ------------------------------------
Disclosed Matters, there are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of
Intermediate Holdings or the Borrowers, threatened against or affecting
Intermediate Holdings, either Borrower or any of the Subsidiaries (i) that could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii)(x) that involve any of the Loan Documents or the
Transactions, (y) that are not frivolous and (z) if adversely determined, would



                                                                              86

reasonably be expected to be adverse to the interests of the Lenders.

          (b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, none of Intermediate Holdings,
either Borrower or any of the Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.

          (c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.

          SECTION 3.07. Compliance with Laws and Agreements. Each of
                        -----------------------------------
Intermediate Holdings, the Borrowers and the Subsidiaries is in compliance with
all laws, regulations and orders of any Governmental Authority applicable to it
or its property and all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.

          SECTION 3.08. Investment and Holding Company Status. None of
                        -------------------------------------
Intermediate Holdings, either Borrower or any of the Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.

          SECTION 3.09. Taxes. Intermediate Holdings, each Borrower and each of
                        -----
the Subsidiaries has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) any Taxes that are being contested
in good faith by appropriate proceedings and for which Intermediate Holdings,
such Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.



                                                                              87

          SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
                        -----
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, would reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under all underfunded Plans (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed the fair market value of the assets of all such underfunded Plans by an
amount that, if it were required to be fully paid, would reasonably be expected
to result in a Material Adverse Effect. Neither of the Borrowers nor any of the
ERISA Affiliates has engaged in a transaction with respect to any employee
benefit plan that would reasonably be expected to result in a Material Adverse
Effect.

          SECTION 3.11. Disclosure. Intermediate Holdings and the Borrowers have
                        ----------
disclosed to the Lenders all agreements, instruments and corporate or other
restrictions to which Intermediate Holdings, either Borrower or any of the
Subsidiaries is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. The Information Memorandum and the other reports,
financial statements, certificates or other information furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or any other Loan Document or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished), taken as a whole, do not contain any material misstatement of fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
provided that, (a) with respect to projected financial information, Intermediate
- --------
Holdings and the Borrowers represent only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time and (b)
with respect to information regarding the hard disc drive market and other
industry data, Intermediate Holdings and the Borrowers represent only that such
information was prepared by third-party industry research firms, and although
Intermediate Holdings and the Borrowers believe such information is reliable,
Intermediate Holdings and the Borrowers cannot guarantee the accuracy and
completeness of the information and have not independently verified such
information.



                                                                              88

          SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name of, and
                        ------------
the ownership interest of Intermediate Holdings, each Borrower and each
Subsidiary in, each Subsidiary and identifies each Subsidiary that is a
Subsidiary Loan Party, in each case as of the Effective Date.

          SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of all
                        ---------
insurance maintained by or on behalf of Intermediate Holdings, the Borrowers and
the Subsidiaries as of the Effective Date. As of the Effective Date, all
premiums in respect of such insurance that are required to have been paid have
been paid. Intermediate Holdings and the Borrowers believe that the insurance
maintained by or on behalf of Intermediate Holdings, the Borrowers and the
Subsidiaries is adequate in all material respects.

          SECTION 3.14. Labor Matters. As of the Effective Date, there are no
                        -------------
material strikes, lockouts or slowdowns against Intermediate Holdings, either
Borrower or any Subsidiary pending or, to the knowledge of Intermediate Holdings
or the Borrowers, threatened. Except as could not be reasonably expected to
result in a Material Adverse Effect, (a) the hours worked by and payments made
to employees of Intermediate Holdings, the Borrowers and the Subsidiaries have
not been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters, (b) all payments
due from Intermediate Holdings, either Borrower or any Subsidiary, or for which
any claim may be made against Intermediate Holdings, either Borrower or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of
Intermediate Holdings, such Borrower or such Subsidiary and (c) the consummation
of the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which Intermediate Holdings, either Borrower or any Subsidiary is bound.

          SECTION 3.15. Solvency. Immediately after the consummation of the
                        --------
Transactions to occur on the Effective Date and immediately following the making
of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets
(including all rights under the Indemnity, Subrogation and Contribution
Agreement and any similar agreement) of each Core Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair



                                                                              89

saleable value of the property of each Core Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Core Loan Party will be
able to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (d) each Core Loan
Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Effective Date.

          SECTION 3.16. Senior Indebtedness. The Obligations constitute "Senior
                        -------------------
Indebtedness" under and as defined in the Existing Subordinated Debt Documents
and the Senior Note Documents.

                                   ARTICLE IV

                                   Conditions
                                   ----------

          SECTION 4.01. Effective Date. The obligations of the Lenders to make
                        --------------
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):

          (a) The Administrative Agent (or its counsel) shall have received from
     each party hereto either (i) a counterpart of this Agreement signed on
     behalf of such party or (ii) written evidence satisfactory to the
     Administrative Agent (which may include telecopy transmission of a signed
     signature page of this Agreement) that such party has signed a counterpart
     of this Agreement.

          (b) The Administrative Agent shall have received a favorable written
     opinion (addressed to the Administrative Agent and the Lenders and dated
     the Effective Date) of each of (i)(A) Simpson Thacher & Bartlett, United
     States counsel for the Borrowers, substantially in the form of Exhibit
     B-1(A) and (B) William L. Hudson, General Counsel of Intermediate Holdings,
     substantially in the form of Exhibit B-1(B), (ii) Walkers, Cayman Islands
     counsel for the Borrowers, substantially in the form of Exhibit B-2, (iii)
     Lee & Lee, Singapore counsel for the Borrowers, substantially in the form
     of Exhibit B-3, (iv) L'Estrange & Brett Solicitors, Northern Ireland
     counsel for the Borrowers,



                                                                              90

     substantially in the form of Exhibit B-4, (v) Clifford Chance, Netherlands
     counsel for the Borrowers, substantially in the form of Exhibit B-5, (vi)
     United States local counsel in each jurisdiction where a Mortgaged Property
     is located, substantially in the form of Exhibit B-6, (vii) Siam Premier,
     Thailand counsel for the Administrative Agent, substantially in the form of
     Exhibit B-7, (viii) Clifford Chance, Japanese counsel for the Borrowers,
     substantially in the form of Exhibit B-8, (ix) Ritch, Heather & Mueller,
     Mexican counsel for the Borrowers, substantially in the form of Exhibit
     B-9, (x) Herbert Smith, English counsel for the Administrative Agent,
     substantially in the form of Exhibit B-10 and (xi) Clifford Chance Wirot
     Limited, Thai counsel for the Borrowers, substantially in the form of
     Exhibit B-11, and, in the case of each such opinion required by this
     paragraph, covering such other matters relating to the Loan Parties, the
     Loan Documents or the Transactions as the Required Lenders shall reasonably
     request. Each of Intermediate Holdings and the Borrowers hereby requests
     such counsel to deliver such opinions.

          (c) The Administrative Agent shall have received such documents and
     certificates as the Administrative Agent or its counsel may reasonably
     request relating to the organization or incorporation, existence and good
     standing of each Loan Party, the authorization of the Transactions and any
     other legal matters relating to the Loan Parties, the Loan Documents or the
     Transactions, all in form and substance reasonably satisfactory to the
     Administrative Agent and its counsel.

          (d) The Administrative Agent shall have received a certificate, dated
     the Effective Date and signed by the President, a Vice President or a
     Financial Officer of the Cayman Borrower, confirming compliance with the
     conditions set forth in paragraphs (a) and (b) of Section 4.02.

          (e) The Administrative Agent shall have received all fees and other
     amounts due and payable on or prior to the Effective Date, including, to
     the extent invoiced, reimbursement or payment of all reasonable
     out-of-pocket expenses (including reasonable fees, charges and
     disbursements of counsel) required to be reimbursed or paid by any Loan
     Party hereunder or under any other Loan Document.



                                                                              91

          (f) The requirements set forth in paragraphs (a), (e), (f), (g), (h)
     and (i) of the Collateral and Guarantee Requirement shall have been
     satisfied and the Administrative Agent shall have received (i) a completed
     Perfection Certificate dated the Effective Date and signed by an executive
     officer or Financial Officer of the Cayman Borrower, together with all
     attachments contemplated thereby, including the results of a search of the
     Uniform Commercial Code (or equivalent) filings made with respect to the
     Loan Parties in the jurisdictions contemplated by the Perfection
     Certificate and copies of the financing statements (or similar documents)
     disclosed by such search and evidence reasonably satisfactory to the
     Administrative Agent that the Liens indicated by such financing statements
     (or similar documents) are permitted by Section 6.02 or have been or
     simultaneously are being released, provided that to the extent that it is
                                        --------
     not practicable (x) for any Foreign Subsidiary to satisfy clause (i) of
     paragraph (a) of the Collateral and Guarantee Requirement,(y) to perfect
     any security interest as provided in the Collateral and Guarantee
     Requirement or (z) to deliver an opinion of counsel relating to clauses (x)
     or (y) above, in each case prior to the Effective Date, such requirements
     may be satisfied after the Effective Date in accordance with Section
     5.13(a).

          (g) The Administrative Agent shall have received evidence that the
     insurance required by Section 5.07 and the Security Documents is in effect.

          (h) STI shall have purchased not less than a majority in aggregate
     principal amount of the Existing Subordinated Debt outstanding on the
     Effective Date pursuant to the Debt Tender Offer and all the significant
     negative covenants in the Existing Subordinated Debt Documents shall have
     been eliminated. The terms and conditions of the Debt Tender Offer, the
     Debt Tender Materials and all other material documentation related thereto
     shall be reasonably satisfactory to the Administrative Agent.

          (i) The Cayman Borrowers shall have issued the Senior Notes for cash.
     The terms and conditions of the Senior Notes and the provisions of the
     Senior Note Documents and all other material documentation related thereto
     shall be reasonably satisfactory to the Administrative Agent. The
     Administrative Agent shall have received copies of the Senior Note
     Documents, certified by a Financial Officer of the Cayman Borrower



                                                                              92

     as complete and correct. After giving effect to the issuance of the Senior
     Notes and the consummation of the Debt Tender Offer, the aggregate
     principal amount of Permitted High-Yield Indebtedness outstanding shall not
     be less than $400,000,000.

          (j) All amounts outstanding under the Existing Credit Agreement shall
     have been repaid in full and the Administrative Agent shall have received
     reasonably satisfactory documentation evidencing the termination of the
     Existing Credit Agreement and each agreement related thereto, the release
     of all liens granted thereunder and the discharge of all obligations
     thereunder.

          (k) The Administrative Agent shall have received a pro forma
     capitalization table of Intermediate Holdings dated as of March 29, 2002,
     reflecting all pro forma adjustments as if the Transactions and the other
     transactions contemplated hereby had been consummated on such date. The
     Administrative Agent shall be reasonably satisfied that such balance sheet
     and the transactions in connection with the Transactions and the financing
     arrangements contemplated hereby are not materially inconsistent with the
     information or projections and the financial model delivered to the
     Administrative Agent prior to the date hereof.

          (l) After giving effect to the Transactions, (i) neither Borrower nor
     any of the Subsidiaries shall have outstanding any preferred stock (other
     than any shares set forth on Schedule 3.12) or any Indebtedness, other than
     (A) Indebtedness incurred under the Loan Documents, (B) the Permitted
     High-Yield Indebtedness and (C) the Indebtedness set forth in Schedule
     6.01, (ii) the U.S. Borrower shall have outstanding no common stock other
     than common stock owned by the Cayman Borrower, (iii) the Cayman Borrower
     shall have outstanding no ordinary shares other than ordinary shares owned
     by Intermediate Holdings and (iv) Intermediate Holdings shall have
     outstanding (A) no ordinary shares other than ordinary shares owned by
     Holdings and ordinary shares issued upon exercise of Permitted Options to
     Permitted Optionholders and (B) no Indebtedness or preferred stock other
     than (x) its Guarantee of the Obligations, (y) its Guarantees of the
     Permitted High-Yield Indebtedness and (z) 400,000,000 shares of Series A
     Preferred Stock owned by Holdings.

          (m) As of the Effective Date, after giving effect to the Transactions
     (including the Holdings



                                                                              93

     Distribution), the ratio of (i) the Cash Amount to (ii) Material Funded
     Indebtedness shall not be less than 1.0 to 1.0 and the Administrative Agent
     shall have received a certificate from a Financial Officer of Intermediate
     Holdings or the Cayman Borrower that (x) sets forth, in reasonable detail,
     the calculation of the amount of the Holdings Distribution, (y) certifies
     compliance by the Borrowers with the ratio set forth above and (z)
     certifies that the cash used to pay the Holdings Distribution was generated
     in the ordinary course of the Borrowers' business.

          (n) The Administrative Agent shall be reasonably satisfied that (i) no
     legal or other restrictions exist that would prevent the transfer to the
     Borrowers by the Subsidiaries of the funds required to service the
     Indebtedness to be incurred under the Loan Documents, the Existing
     Subordinated Debt Documents and the Senior Note Documents and (ii) the
     Transaction Costs shall not exceed $25,000,000.

The Administrative Agent shall notify the Cayman Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 5:00 p.m., New York City time, on July 31, 2002, (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).

          SECTION 4.02. Each Credit Event. The obligation of each Lender to make
                        -----------------
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:

          (a) The representations and warranties of each Loan Party set forth in
     the Loan Documents shall be true and correct in all material respects on
     and as of the date of such Borrowing or the date of issuance, amendment,
     renewal or extension of such Letter of Credit, as applicable, except to the
     extent (i) such representations and warranties expressly relate to an
     earlier date (in which case such representations and warranties shall be
     true and correct in all material respects as of such earlier date) or (ii)
     such representations and warranties are made by, or relate



                                                                              94

     to, Intermediate Holdings and Intermediate Holdings is no longer a Loan
     Party.

          (b) At the time of and immediately after giving effect to such
     Borrowing or the issuance, amendment, renewal or extension of such Letter
     of Credit, as applicable, no Default shall have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by
Intermediate Holdings (for so long as it is a Loan Party) and each Borrower on
the date thereof as to the matters specified in paragraphs (a) and (b) of this
Section. For purposes of the foregoing, the term "Borrowing" shall not include
the continuation or conversion of Loans in which the aggregate amount of such
Loans is not being increased.

                                    ARTICLE V

                              Affirmative Covenants
                              ---------------------

          Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of Intermediate Holdings
(for so long as it is a Loan Party) and each Borrower covenants and agrees with
the Lenders that:

          SECTION 5.01. Financial Statements and Other Information. For so long
                        -------------------------------------------
as it is a Loan Party, Intermediate Holdings will and, after Intermediate
Holdings ceases to be a Loan Party, the Cayman Borrower will furnish to the
Administrative Agent:

          (a) within 90 days after the end of each fiscal year of Intermediate
     Holdings or the Cayman Borrower, as applicable, (i) its audited
     consolidated balance sheet and related statements of operations,
     stockholders' equity and cash flows as of the end of and for such year,
     setting forth in each case in comparative form the figures for the previous
     fiscal year, all reported on by Ernst & Young or other independent public
     accountants of recognized national standing (without a "going concern" or
     like qualification or exception and without any qualification or exception
     as to the scope of such



                                                                              95

     audit or any other material qualification or exception) to the effect that
     such consolidated financial statements present fairly in all material
     respects the consolidated financial condition and results of operations of
     Intermediate Holdings (for so long as it is a Loan Party), the Borrowers
     and the consolidated Subsidiaries on a consolidated basis in accordance
     with GAAP consistently applied and (ii) selected unaudited consolidated
     financial information of the Cayman Borrower, which will include the
     line-items set forth on Schedule 5.01, with procedures performed by Ernst &
     Young LLP or other independent auditors of recognized national standing in
     accordance with Statement on Auditing Standards No. 72 and accompanied by a
     customary letter to such effect from such auditors; provided that, if
                                                         --------
     Intermediate Holdings ceases to be a Loan Party, the Cayman Borrower will
     furnish the information required by clause (i) (but not clause (ii)) with
     respect to itself and its consolidated subsidiaries;

          (b) within 45 days after the end of each of the first three fiscal
     quarters of each fiscal year of Intermediate Holdings or the Cayman
     Borrower, as applicable, (i) its unaudited consolidated balance sheet and
     related statements of operations, stockholders' equity and cash flows as of
     the end of and for such fiscal quarter and the then-elapsed portion of the
     fiscal year, setting forth in each case in comparative form the figures for
     the corresponding period or periods of (or, in the case of the balance
     sheet, as of the end of) the previous fiscal year, all certified by one of
     its Financial Officers as presenting fairly in all material respects the
     consolidated financial condition and results of operations of Intermediate
     Holdings (for as long as it is a Loan Party), the Borrowers and the
     consolidated Subsidiaries on a consolidated basis in accordance with GAAP
     consistently applied, subject to normal year-end audit adjustments and the
     absence of footnotes and (ii) selected unaudited consolidated financial
     information of the Cayman Borrower, which will include the line-items set
     forth on Schedule 5.01; provided that, if Intermediate Holdings ceases to
                             --------
     be a Loan Party, the Cayman Borrower will furnish the information required
     by clause (i) (but not clause (ii)) with respect to itself and its
     consolidated subsidiaries;

          (c) concurrently with any delivery of financial statements under
     paragraph (a) or (b) above, a certificate of a Financial Officer of the
     Person



                                                                              96

     delivering such financial statements (i) certifying as to whether a Default
     has occurred and, if a Default has occurred, specifying the details thereof
     and any action taken or proposed to be taken with respect thereto, (ii)
     setting forth reasonably detailed calculations demonstrating compliance
     with Sections 6.12, 6.13 and 6.14, (iii) stating whether any change in GAAP
     or in the application thereof has occurred since the date of Intermediate
     Holdings's audited financial statements referred to in Section 3.04 and, if
     any such change has occurred, specifying the effect of such change on the
     financial statements accompanying such certificate and (iv) identifying any
     Permitted Acquisitions that have been consummated since the end of the
     previous fiscal quarter, including the date on which each such Permitted
     Acquisition was consummated and the consideration therefor;

          (d) concurrently with any delivery of financial statements under
     paragraph (a) above, a certificate of the accounting firm that reported on
     such financial statements stating whether they obtained knowledge during
     the course of their examination of such financial statements of any Default
     (which certificate may be limited to the extent required by accounting
     rules or guidelines);

          (e) concurrently with any delivery of financial statements under
     paragraph (a) above with respect to any fiscal year, a detailed
     consolidated operating and capital expenditure budget for the Borrowers and
     the Subsidiaries for the following fiscal year (including a projected
     consolidated balance sheet and related statements of projected operations
     and cash flows as of the end of and for such fiscal year and setting forth
     any material assumptions used for purposes of preparing such budget) and,
     promptly when available, any significant revisions of such budget;

          (f) promptly after the same become publicly available, copies of all
     periodic and other reports, proxy statements and other materials filed by
     Intermediate Holdings (for so long as it is a Loan Party), either Borrower
     or any Subsidiary with the Securities and Exchange Commission, or any
     Governmental Authority succeeding to any or all of the functions of said
     Commission, or with any national securities exchange, or, in the event that
     Intermediate Holdings (for so long as it is a Loan



                                                                              97

     Party) or the Cayman Borrower becomes a publicly traded company,
     distributed by Intermediate Holdings (for so long as it is a Loan Party) or
     the Cayman Borrower to its shareholders generally, as the case may be; and

          (g) promptly following any request therefor, such other information
     regarding the operations, business affairs and financial condition of
     Intermediate Holdings (for so long as it is a Loan Party), either Borrower
     or any Subsidiary, or compliance with the terms of any Loan Document, as
     the Administrative Agent or any Lender may reasonably request.

          SECTION 5.02. Notices of Material Events. Intermediate Holdings and
                        ---------------------------
each Borrower will furnish, promptly upon Intermediate Holdings's or such
Borrower's obtaining knowledge thereof, to the Administrative Agent written
notice of the following:

          (a) the occurrence of any Default;

          (b) the filing or commencement of any action, suit or proceeding by or
     before any arbitrator or Governmental Authority against or affecting
     Intermediate Holdings, either Borrower or any Affiliate thereof that, if
     adversely determined, could reasonably be expected to result in a Material
     Adverse Effect;

          (c) the occurrence of any ERISA Event that, alone or together with any
     other ERISA Events that have occurred, could reasonably be expected to
     result in liability of Intermediate Holdings, the Borrowers and the
     Subsidiaries in an aggregate amount exceeding $10,000,000;

          (d) the occurrence of any change to the rating of any Indebtedness of
     the Cayman Borrower by S&P or Moody's; and

          (e) any other development that results in, or could reasonably be
     expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of Intermediate Holdings or the
applicable Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto. At such time as Intermediate Holdings ceases to be a Loan Party, this
Section 5.02 shall no longer apply to Intermediate Holdings (and this covenant
shall no longer require notices of any events with respect to Intermediate
Holdings).



                                                                              98

          SECTION 5.03. Information Regarding Collateral. (a) Intermediate
                        ---------------------------------
Holdings (or, at such time as Intermediate Holdings is no longer a Loan Party,
the Cayman Borrower) will furnish to the Administrative Agent prompt written
notice of any change (i) in the corporate name of any Loan Party that executes
any Security Document, (ii) in the jurisdiction of incorporation or organization
of any Loan Party, any office in which such Loan Party maintains books or
records relating to Collateral owned by it or, to the extent that such
Collateral has an aggregate fair market value in excess of $10,000,000, any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in the Organization Identification
Number or the Federal Taxpayer Identification Number of any Loan Party that
executes any Security Document. Intermediate Holdings (for so long as it is a
Loan Party) and the Cayman Borrower agree not to effect or permit any change
referred to in the preceding sentence unless all filings, if any, have been
made, or will have been made within the applicable statutory period, under the
Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected security interest in all the Collateral for the benefit of
the Secured Parties. Intermediate Holdings (for so long as it is a Loan Party)
and the Cayman Borrower also agree promptly to notify the Administrative Agent
if any material portion of the Collateral is damaged or destroyed.

          (b) Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to paragraph (a) of Section
5.01, the Person delivering such financial statements shall deliver to the
Administrative Agent a certificate of a Financial Officer of such Person (i)
setting forth all changes in the information set forth in Section 2 of the
Perfection Certificate or confirming that there has been no change in such
information, in either case since the date of the Perfection Certificate
delivered on the Effective Date or the date of the most recent certificate
delivered pursuant to this Section, and (ii) certifying that all Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations, including all
refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record or have been delivered to the
Administrative Agent for filing in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above
to the extent



                                                                              99

necessary to protect and perfect the security interests under the Security
Documents for a period of not less than 18 months after the date of such
certificate (except as noted therein with respect to any continuation statements
to be filed within such period).

          SECTION 5.04. Existence; Conduct of Business. Each of Intermediate
                        -------------------------------
Holdings (for so long as it is a Loan Party) and each Borrower will, and will
cause each of its subsidiaries that is a Subsidiary to, do or cause to be done
all things necessary to preserve, renew and keep in full force and effect (a)
its legal existence and (b) the rights, contracts, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names used in
the conduct of the business of the Borrowers and the Subsidiaries taken as a
whole, except, in the case of clause (b) of this Section 5.04, to the extent
that the failure to take any such action could not reasonably be expected to
have a Material Adverse Effect, and provided that the foregoing shall not
                                    --------
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03 or any sale of assets permitted under Section 6.05. In addition,
each Borrower will, and will cause the Subsidiaries to, manage the cash held by
the Borrowers and the Subsidiaries in the ordinary course of business.

          SECTION 5.05. Payment of Obligations. Each of Intermediate Holdings
                        -----------------------
(for so long as it is a Loan Party) and each Borrower will, and will cause each
of its subsidiaries that is a Subsidiary to, pay its Material Indebtedness and
other material obligations not constituting Indebtedness, including Tax
liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) Intermediate Holdings, the applicable Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest could
not reasonably be expected to result in a Material Adverse Effect.

          SECTION 5.06. Maintenance of Properties. Each of Intermediate Holdings
                        --------------------------
(for so long as it is a Loan Party) and each Borrower will, and will cause each
of its subsidiaries that is a Subsidiary to, keep and maintain all property
material to the conduct of the business of, the Borrowers and the Subsidiaries,
taken as a whole, in good



                                                                             100

working order and condition, ordinary wear and tear excepted.

          SECTION 5.07. Insurance. Each of Intermediate Holdings (for so long as
                        ----------
it is a Loan Party) and each Borrower will, and will cause each of its
subsidiaries that is a Subsidiary to, maintain, with financially sound and
reputable insurance companies (a) insurance in such amounts (with no greater
risk retention) and against such risks as are customarily maintained by
companies of established repute engaged in the same or similar businesses
operating in the same or similar locations and (b) all insurance required to be
maintained pursuant to the Security Documents. The Cayman Borrower will furnish
to the Administrative Agent, upon request, information in reasonable detail as
to the insurance so maintained.

          SECTION 5.08. Casualty and Condemnation. The Cayman Borrower will
                        --------------------------
furnish to the Administrative Agent and the Lenders prompt written notice of any
casualty or other insured damage to any material portion of any Collateral or
the commencement of any action or proceeding for the taking of any material
portion of the Collateral or any part thereof or interest therein under power of
eminent domain or by condemnation or similar proceeding.

          SECTION 5.09. Books and Records; Inspection and Audit Rights. Each of
                        -----------------------------------------------
Intermediate Holdings (for so long as it is a Loan Party) and each Borrower
will, and will cause each of its subsidiaries that is a Subsidiary to, keep
proper books of record and account in which full, true and correct entries are
made of all material dealings and transactions in relation to its business and
activities. Each of Intermediate Holdings (for so long as it is a Loan Party)
and each Borrower will, and will cause each of its subsidiaries that is a
Subsidiary to, permit any representatives designated by the Administrative Agent
or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and at such reasonable intervals as
may be reasonably requested, provided that any such visit or inspection by a
                             --------
Lender other than the Administrative Agent shall be coordinated by (and any
request for such a visit or inspection shall be presented through) the
Administrative Agent.

          SECTION 5.10. Compliance with Laws. Each of Intermediate Holdings (for
                        ---------------------
so long as it is a Loan Party) and each Borrower will, and will cause each of
its



                                                                             101

subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

          SECTION 5.11. Use of Proceeds and Letters of Credit. The proceeds of
                        --------------------------------------
the Term Loans, together with other existing cash of Intermediate Holdings, the
Borrowers and the Subsidiaries and the proceeds of the Senior Notes, will be
used on the Effective Date, only for (a) the payment of all obligations of the
U.S. Borrower and STI under the Existing Credit Agreement, (b) the consummation
of the Debt Tender Offer, including the payment of all related tender premiums,
consent fees and accrued interest in connection therewith, and (c) the payment
of all Transaction Costs. The proceeds of the Revolving Loans made after the
Effective Date and Swingline Loans will be used only for working capital and
other general corporate purposes. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X.
Letters of Credit will be issued only to support obligations of the Borrowers or
any Subsidiary incurred in the ordinary course of business.

          SECTION 5.12. Additional Subsidiaries. If any additional Subsidiary is
                        ------------------------
formed or acquired (or any Moribund Subsidiary that would otherwise be a Loan
Party ceases to be a Moribund Subsidiary or any Insignificant Core Loan Party
that would otherwise be a Core Loan Party ceases to meet the qualifications of
an Insignificant Core Loan Party) after the Effective Date, unless such
Subsidiary would be an Insignificant Core Loan Party after giving effect to the
actions required by this Section 5.12, the Cayman Borrower will, (a) within ten
Business Days after such Subsidiary is formed or acquired, notify the
Administrative Agent and the Lenders thereof (and, if such Subsidiary is or will
become a Subsidiary Loan Party, identifying the subclause of the definition of
the term Subsidiary Loan Party pursuant to which it became or will become a
Subsidiary Loan Party) and (b) within 30 Business Days after such Subsidiary is
formed or acquired (or, if such Subsidiary is a Foreign Subsidiary (i) to which
clause(c)(i) of the definition of the term Collateral and Guarantee Requirement
applies, within 90 Business Days after such Foreign Subsidiary is formed or
acquired, (ii) to which clause (c)(ii) of the definition of the term Collateral
and Guarantee Requirement applies, within 60 Business Days after such Foreign
Subsidiary is formed or acquired or (iii) to which clause (c)(iii) of the
definition of the term Collateral and Guarantee Requirement



                                                                             102

applies, within 60 Business Days after the financial statements pursuant to
which such Foreign Subsidiary has become subject to clause (c)(iii) of the
definition of the term Collateral and Guarantee Requirement have been delivered
to the Administrative Agent), cause the Collateral and Guarantee Requirement to
be satisfied with respect to such Subsidiary (if it is a Subsidiary Loan Party)
and with respect to any Equity Interest in or Indebtedness of such Subsidiary
owned by or on behalf of any Loan Party (except that, (A) if such Subsidiary is
(x) a Foreign Subsidiary and (y) a direct or indirect subsidiary of the U.S.
Borrower, shares of common stock of such Subsidiary to be pledged pursuant to
the applicable Pledge Agreement may be limited to 65% of the outstanding common
stock of such Subsidiary and (B) if the Administrative Agent determines, after
consultation with the Cayman Borrower, that (1) providing such security
arrangements or taking security interests in the assets of such additional
Subsidiary would violate the law of such Subsidiary's jurisdiction or (2) the
economic detriment to the Cayman Borrower and its subsidiaries of providing
security arrangements or taking security interests in the assets of such
additional Subsidiary would be excessive in view of the related benefits to be
received by the Lenders, then the Cayman Borrower shall not be required to cause
the Collateral and Guarantee Requirement to be satisfied with respect to such
additional Subsidiary or such Equity Interests or Indebtedness).

          SECTION 5.13. Further Assurances. (a) In the event that any
                        -------------------
requirement set forth in Section 4.01(f) or 4.01(b) has not been satisfied in
full on or prior to the Effective Date, each Borrower will, and will cause each
Subsidiary to, cause such requirement to be satisfied as promptly as practicable
after the Effective Date and, in any event, to cause substantially all the
requirements set forth in Section 4.01(f) or 4.01(b) to be satisfied not later
than 90 days following the Effective Date.

          (b) Each of Intermediate Holdings (for so long as it is a Loan Party)
and each Borrower will, and will cause each of its subsidiaries that is a
Subsidiary Loan Party to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
mortgages, deeds of trust, charges and other documents), that may be required
under any applicable law, or that the Administrative Agent or the Required
Lenders may reasonably request, to cause the Collateral and Guarantee
Requirement to be and remain satisfied, all at the expense of the Loan Parties.
Intermediate Holdings (for so long as it is a Loan Party)



                                                                             103

and the Borrowers also agree to provide to the Administrative Agent, from time
to time upon request, evidence reasonably satisfactory to the Administrative
Agent as to the perfection and priority of the Liens created or intended to be
created by the Security Documents.

          (c) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by either Borrower or
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under any Security Document that become subject to the
Lien of such Security Document upon acquisition thereof), the Cayman Borrower
will notify the Administrative Agent, and, if requested by the Administrative
Agent or the Required Lenders, the Cayman Borrower will cause such assets to be
subjected to a Lien securing the Obligations and will take, and cause the
Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section (except, in
the case of the Foreign Subsidiaries, as provided by applicable law), all at the
expense of the Loan Parties; provided, however, that if the Administrative Agent
                             --------  -------
determines, after consultation with the Cayman Borrower, that (1) taking such
security interests in such assets would violate the law of the jurisdiction in
which the assets are located or the law of the jurisdiction where the Person
owning such assets is organized or (2) the economic detriment to the Cayman
Borrower and its subsidiaries of granting and perfecting a Lien in such assets
would be excessive in view of the related benefits to be received by the
Lenders, then the Cayman Borrower shall not be required to cause such assets to
be subjected to a Lien.

                                   ARTICLE VI

                               Negative Covenants
                               ------------------

          Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, each of Intermediate Holdings (for so long as it is
a Loan Party) and each Borrower covenants and agrees with the Lenders that:

          SECTION 6.01. Indebtedness; Certain Equity Securities. (a) During any
                        ----------------------------------------
Non-Investment Grade Period, neither Borrower will, and the Borrowers will not
permit any



                                                                             104

Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
except:

          (i) Indebtedness created under the Loan Documents;

          (ii) Permitted High-Yield Indebtedness and extensions, renewals,
     refinancings and replacements of such Permitted High Yield Indebtedness
     that do not increase the outstanding principal amount thereof or result in
     an earlier maturity date or decreased weighted average life thereof and
     that do not contain covenants that are more restrictive from the Cayman
     Borrower's perspective than the covenants contained in the Senior Notes;

          (iii) Indebtedness existing on the date hereof and set forth in
     Schedule 6.01 and extensions, renewals, refinancings and replacements of
     any such Indebtedness that do not increase the outstanding principal amount
     thereof or result in an earlier maturity date or decreased weighted average
     life thereof;

          (iv) Indebtedness of either Borrower to Intermediate Holdings (for so
     long as it is a Loan Party), any Subsidiary or the other Borrower and of
     any Subsidiary to Intermediate Holdings (for so long as it is a Loan
     Party), either Borrower or any other Subsidiary, provided that (A)
                                                      --------
     Indebtedness of any Subsidiary that is not a Core Loan Party to either
     Borrower or any Core Loan Party shall be subject to Section 6.04 and (B)
     any Indebtedness owed by either Borrower or any Subsidiary to Intermediate
     Holdings that is outstanding on the date that Intermediate Holdings ceases
     to be a Loan Party shall cease to be Indebtedness permitted under this
     clause (iv);

          (v) Guarantees by either Borrower of Indebtedness or Permitted
     Obligations of any Subsidiary or of the other Borrower, and by any
     Subsidiary of Indebtedness or Permitted Obligations of either Borrower or
     any other Subsidiary, provided that such Indebtedness or Permitted
                           --------
     Obligations is otherwise permitted hereunder, and provided further that
                                                       -------- -------
     Guarantees by either Borrower or any Core Loan Party of Indebtedness or
     Permitted Obligations of any Subsidiary that is not a Core Loan Party shall
     be subject to Section 6.04;

          (vi) Indebtedness of either Borrower or any Subsidiary incurred to
     finance the acquisition, construction or improvement of any fixed or
     capital assets, including Capital Lease Obligations and any



                                                                             105

     Indebtedness assumed in connection with the acquisition of any such assets
     or secured by a Lien on any such assets prior to the acquisition thereof
     (provided that such Indebtedness is incurred prior to or within 180 days
      --------
     after such acquisition or the completion of such construction or
     improvement), and extensions, renewals, refinancings and replacements of
     any such Indebtedness that do not increase the outstanding principal amount
     thereof, provided that the aggregate principal amount of Indebtedness
              --------
     permitted by this clause (vi) shall not exceed $150,000,000 at any time
     outstanding;

          (vii) Indebtedness of either Borrower or any Subsidiary in respect of
     workers' compensation claims, self-insurance obligations, performance
     bonds, surety, appeal or similar bonds and completion guarantees provided
     by the Borrowers and the Subsidiaries in the ordinary course of their
     business, provided that upon the incurrence of Indebtedness with respect to
               --------
     reimbursement type obligations regarding workers' compensation claims, such
     obligations are reimbursed within 30 days following such drawing or
     incurrence;

          (viii) Indebtedness of either Borrower or any Subsidiary that was
     Indebtedness of any other Person existing at the time such other Person was
     merged with or became a Subsidiary, and extensions, renewals, refinancings
     and replacements of any such Indebtedness that do not increase the
     outstanding principal amount thereof or result in an earlier maturity date
     or decreased weighted average life thereof, provided, that (A) such
                                                 --------
     Indebtedness was not incurred in connection with, or in contemplation of,
     such other Person's merging with or becoming a Subsidiary, and (B) the
     aggregate principal amount of Indebtedness permitted under this clause
     (viii) shall not exceed $100,000,000 at any time outstanding;

          (ix) Indebtedness of either Borrower or any Subsidiary in respect of
     letters of credit (including the Outside Letters of Credit) not issued
     under this Agreement and issued in the ordinary course of the applicable
     Borrower's or Subsidiary's business, provided that the aggregate face
                                          --------
     amount of undrawn and unexpired letters of credit issued and outstanding
     pursuant to this clause (ix) plus the aggregate amounts drawn but not
     reimbursed under letters of credit issued pursuant to this clause (ix)
     shall not exceed $100,000,000 at any time;



                                                                             106

          (x) Indebtedness of either Borrower or any Subsidiary representing
     deferred compensation to employees of the Borrowers or the Subsidiaries
     incurred in the ordinary course of the applicable Borrower's or
     Subsidiary's business, consistent with the historical practices of such
     Borrower or such Subsidiary;

          (xi) drawings under Overdraft Facilities, provided that any drawing
                                                    --------
     that is not repaid in full on the same day that such drawing is made shall
     not be permitted by this clause (xi); and

          (xii) other Indebtedness in an aggregate principal amount not
     exceeding $225,000,000 at any time outstanding, provided that the aggregate
                                                     --------
     principal amount of Indebtedness of the Subsidiaries that are not Core Loan
     Parties permitted by this clause (xii) shall not exceed $50,000,000 at any
     time outstanding;

          (xiii) During a Non-Investment Grade Period, Indebtedness incurred
     during any prior Investment Grade Period and outstanding at the end of the
     immediately preceding Investment Grade Period, provided that such
                                                    --------
     Indebtedness could not be classified as Indebtedness permitted under any
     other clause of this Section 6.01(a).

          (b) Intermediate Holdings will not create, incur, assume or permit to
exist any Indebtedness except (i) Indebtedness created under the Loan Documents,
(ii) its Guarantees of the Permitted High-Yield Indebtedness and (iii)
Indebtedness to the Cayman Borrower in respect of loans made by the Cayman
Borrower pursuant to Section 6.04(v).

          (c) Neither Intermediate Holdings nor the Borrowers will, nor will the
Borrowers permit any of the Subsidiaries to, issue any preferred shares or other
preferred Equity Interests, except that (i) Intermediate Holdings or the Cayman
Borrower, as applicable, may issue to Holdings its preferred shares or other
preferred Equity Interests that do not require mandatory cash dividends or
redemptions and do not provide for any right on the part of the holder to
require redemption, repurchase or repayment thereof, in each case prior to the
date that is 91 days after May 13, 2007, and (ii) Intermediate Holdings, either
Borrower or any Subsidiary may issue directors' qualifying shares or shares
required by applicable law to be held by a Person other than Holdings,
Intermediate Holdings, either Borrower or any Subsidiary.



                                                                             107

          SECTION 6.02. Liens. (a) Neither Borrower will, and the Borrowers will
                        ------
not permit any of the Subsidiaries to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect thereof, except:

          (i) Liens created under the Loan Documents;

          (ii) Permitted Encumbrances;

          (iii) any Lien on any property or asset of either Borrower or any
     Subsidiary existing on the date hereof and set forth in Schedule 6.02,
     provided that (A) such Lien shall not apply to any other property or asset
     --------
     of either Borrower or any Subsidiary and (B) such Lien shall secure only
     those obligations that it secures on the date hereof and extensions,
     renewals and replacements thereof that do not increase the outstanding
     principal amount thereof;

          (iv) any Lien existing on any property or asset prior to the
     acquisition thereof by either Borrower or any Subsidiary or existing on any
     property or asset of any Person that becomes a Subsidiary after the date
     hereof prior to the time such Person becomes a Subsidiary, provided that
                                                                --------
     (A) such Lien is not created in contemplation of or in connection with such
     acquisition or such Person becoming a Subsidiary, as the case may be, (B)
     such Lien shall not apply to any other property or assets of either
     Borrower or any Subsidiary and (C) such Lien shall secure only those
     obligations that it secures on the date of such acquisition or the date
     such Person becomes a Subsidiary, as the case may be, and extensions,
     renewals and replacements thereof that do not increase the outstanding
     principal amount thereof;

          (v) Liens on fixed or capital assets acquired, constructed or improved
     by either Borrower or any Subsidiary, provided that (A) such Liens secure
                                           --------
     Indebtedness permitted by clause (vi) of Section 6.01(a), (B) such security
     interests and the Indebtedness secured thereby are incurred prior to or
     within 180 days after such acquisition or the completion of such
     construction or improvement, (C) the Indebtedness secured thereby does not
     exceed 100% of the cost of acquiring, constructing or improving such fixed
     or capital assets and (D) such security interests shall not apply to any
     other property or assets of either Borrower or any Subsidiary;



                                                                             108

          (vi) Liens arising solely by virtue of any statutory or common law
     provision relating to banker's liens, rights of setoff or similar rights;

          (vii) Liens in favor of a landlord on leasehold improvements in leased
     premises;

          (viii) Liens arising by operation of law, including Liens imposed
     pursuant to Environmental Laws or ERISA, that secure obligations in an
     aggregate amount not to exceed $5,000,000 at any time outstanding;

          (ix) "Permitted Encumbrances" under and as such term is defined in the
     respective Mortgages in respect of the applicable Mortgaged Properties;

          (x) Liens arising from Permitted Investments described in clause (d)
     of the definition of the term Permitted Investments;

          (xi) During a Non-Investment Grade Period, other Liens securing
     obligations not exceeding $50,000,000 at any one time outstanding;

          (xii) During a Non-Investment Grade Period, Liens incurred during any
     prior Investment Grade Period pursuant to clause (xiii) of this Section
     6.02(a) and outstanding at the end of the immediately preceding Investment
     Grade Period, provided that such Liens could not be classified as Liens
                   --------
     created, incurred, assumed or permitted pursuant to clauses (i) through
     (xi) of this Section 6.02(a); and

          (xiii) During any Investment Grade Period, other Liens in respect of
     assets and property the fair market value of which, on the date of
     creation, incurrence or assumption, is less than or equal to 10% of
     Consolidated Total Assets as of the end of the most recent period for which
     financial statements have been provided pursuant to Section 5.01 provided,
                                                                      --------
     that the fair market value of all assets and property that are the subject
     of Liens at such time does not exceed 15% of Consolidated Total Assets as
     of the end of the most recent period for which financial statements have
     been provided pursuant to Section 5.01.

          (b) For so long as it is a Loan Party, Intermediate Holdings will not
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in



                                                                             109

respect thereof, except Liens created under the Security Documents and Permitted
Encumbrances.

          SECTION 6.03. Fundamental Changes. (a) Neither Intermediate Holdings
                        --------------------
(for so long as it is a Loan Party) nor the Borrowers will, nor will the
Borrowers permit any of the Subsidiaries to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with
Intermediate Holdings (for so long as it is a Loan Party), either Borrower or
any Subsidiary, or liquidate or dissolve, nor will Intermediate Holdings or the
Borrowers sell, transfer, lease or otherwise dispose of all or substantially all
the assets of the Borrowers and the Subsidiaries, taken as a whole (whether
directly or through the sale, transfer, lease or other disposition of the assets
of one or more Subsidiaries), except that (i) Intermediate Holdings may, in
connection with an IPO of the Cayman Borrower or following the sale, transfer,
liquidation or other disposition of SAN Holdings and its subsidiaries, liquidate
or dissolve or merge into or consolidate with the Cayman Borrower or Holdings,
and (ii) if at the time thereof and immediately after giving effect thereto no
Default shall have occurred and be continuing (A) any Person may merge with
Intermediate Holdings or either Borrower in a transaction in which the surviving
entity is a Person organized or existing under the laws of the United States of
America, any State thereof, the District of Columbia or the Cayman Islands and,
if such surviving entity is not Intermediate Holdings or the applicable
Borrower, as the case may be, such Person expressly assumes, in writing, all the
obligations of Intermediate Holdings or such Borrower, as the case may be, under
the Loan Documents, (B) any Person may merge with any Subsidiary in a
transaction in which the surviving entity is a Subsidiary and (if any party to
such merger is a Core Loan Party) is a Core Loan Party and (C) any Subsidiary
(other than a Core Loan Party that is not an Insignificant Core Loan Party on
the date of such liquidation or dissolution) may liquidate or dissolve if the
Cayman Borrower determines in good faith that such liquidation or dissolution is
in the best interests of the Borrowers and is not materially disadvantageous to
the Lenders, provided that any such merger described in clauses (A) or (B)
             --------
hereof involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Sections
6.04 and 6.08.

          (b) The Borrowers will not, and the Borrowers will not permit any of
the Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrowers and the Subsidiaries on the



                                                                             110

date of execution of this Agreement and businesses reasonably related, ancillary
or complementary thereto.

          (c) For so long as it is a Loan Party, Intermediate Holdings will not
engage in any business or activity other than (i) the ownership of capital stock
of SAN Holdings and the Cayman Borrower, (ii) the sale, transfer or other
disposition of capital stock of SAN Holdings and the Cayman Borrower (in the
case of the Cayman Borrower, to the extent permitted under this Agreement),
(iii) the ownership of assets received in connection with any such sale,
transfer or other disposition, (iv) any merger, liquidation, dissolution,
consolidation or transactions permitted by Section 6.03(a), (v) the making of
investments permitted by Section 6.04(b), (c), (d) or (e), (vi) the making of
distributions (of any nature whatsoever) to its shareholders and (vii)
activities incidental thereto. For so long as it is a Loan Party, Intermediate
Holdings will not own or acquire any assets other than assets acquired pursuant
to a transaction permitted by the preceding sentence, cash and Permitted
Investments or incur any liabilities (other than liabilities under the Loan
Documents, Indebtedness to the Cayman Borrower in respect of loans made by the
Cayman Borrower pursuant to Section 6.04(v), subordinated Guarantees of the
Existing Subordinated Debt, Guarantees of the Senior Notes and Guarantees of
obligations of the Borrowers and the Subsidiaries under leases of real property,
liabilities imposed by law, including tax liabilities and other liabilities
incidental to its existence and permitted business activities).

          SECTION 6.04. Investments, Loans, Advances, Guarantees and
                        --------------------------------------------
Acquisitions. Each of Intermediate Holdings (for so long as it is a Loan Party)
- ------------
and the Borrowers will not, and the Borrowers will not permit any of the
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
Equity Interests in or evidences of indebtedness or other securities (including
any option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:

          (a) Permitted Investments;



                                                                             111

          (b) investments existing on the date hereof and set forth on Schedule
     6.04;

          (c) investments by Intermediate Holdings, the Borrowers and the
     Subsidiaries in Equity Interests in their respective subsidiaries, provided
                                                                        --------
     that (i) any such Equity Interests held by Intermediate Holdings, either
     Borrower or a Subsidiary Loan Party shall, to the extent required by the
     Collateral and Guarantee Requirement, be pledged pursuant to the applicable
     Pledge Agreement or Foreign Security Agreement and (ii) the aggregate
     amount of investments made after the Effective Date by Core Loan Parties
     in, and loans and advances outstanding at any time by Core Loan Parties to,
     and Guarantees outstanding at any time by Core Loan Parties of Indebtedness
     of, Subsidiaries that are not Core Loan Parties shall not exceed
     $150,000,000 at any time outstanding;

          (d) loans or advances made by Intermediate Holdings to either Borrower
     or to any Subsidiary, made by either Borrower to the other Borrower or to
     any Subsidiary and made by any Subsidiary to either Borrower or any other
     Subsidiary, provided that (i) any such loans and advances made by
                 --------
     Intermediate Holdings, either Borrower or a Subsidiary Loan Party shall be
     evidenced by a promissory note and, to the extent required by the
     Collateral and Guarantee Requirement, shall (subject to applicable law) be
     pledged pursuant to the applicable Pledge Agreement or Foreign Security
     Agreement and (ii) the amount of such loans and advances made by Core Loan
     Parties to Subsidiaries that are not Core Loan Parties shall be subject to
     the limitation set forth in clause (c)(ii) above;

          (e) Guarantees constituting Indebtedness permitted by Section 6.01 and
     Guarantees of Permitted Obligations permitted by Section 6.01, provided
                                                                    --------
     that the aggregate principal amount of Indebtedness of Subsidiaries that
     are not Core Loan Parties that is Guaranteed by any Core Loan Party shall
     be subject to the limitation set forth in clause (c)(ii) above;

          (f) investments received in connection with the bankruptcy or
     reorganization of, or settlement of delinquent accounts and disputes with,
     customers and suppliers, in each case in the ordinary course of business;

          (g) Permitted Acquisitions;



                                                                             112

          (h) any investments in or loans to any other Person received as
     noncash consideration for sales, transfers, leases and other dispositions
     permitted by Section 6.05, including Publicly Traded Equity Securities
     received by Intermediate Holdings as consideration for any sale permitted
     by Section 6.05(c);

          (i) Guarantees by the Borrowers and the Subsidiaries of leases other
     than Capital Lease Obligations entered into by any Subsidiary as lessee;

          (j) extensions of credit in the nature of accounts receivable or notes
     receivable in the ordinary course of business;

          (k) investments in payroll, travel and similar advances to cover
     matters that are expected at the time of such advances ultimately to be
     treated as expenses for accounting purposes and that are made in the
     ordinary course of business;

          (l) loans or advances to employees, directors and officers not
     exceeding $15,000,000 in the aggregate at any one time outstanding, in each
     case, made in the ordinary course of business consistent with prudent
     business practice;

          (m) investments in or acquisitions of stock, obligations or securities
     received in settlement of debts created in the ordinary course of business
     and owing to either Borrower or any Subsidiary or in satisfaction of
     judgments;

          (n) investments in the form of Swap Agreements permitted under Section
     6.07;

          (o) investments, loans, advances, guarantees and acquisitions
     resulting from a foreclosure by Intermediate Holdings, either Borrower or
     any Subsidiary with respect to any secured investment or other transfer of
     title with respect to any secured investment in default;

          (p) investments, loans, advances, guarantees and acquisitions the
     consideration for which consists solely of shares of common stock of
     Intermediate Holdings;

          (q) Strategic Investments in an amount not to exceed the sum of (i)
     any Net Proceeds received by



                                                                             113

     either Borrower or any Subsidiary from sales after the date hereof of (A)
     future Strategic Investments made pursuant to this paragraph (q) or (B)
     assets received as the consideration for any sale referred to in clause (A)
     above, in each case not otherwise used for a purpose that would result in a
     reduction in Net Proceeds and (ii)(x) during any Non-Investment Grade
     Period, $100,000,000 or (y) during any Investment Grade Period,
     $250,000,000, provided that if the amount of Strategic Investments made in
                   --------
     accordance with this Section 6.04(q) and outstanding at the time an
     Investment Grade Period ends exceeds the amount of Strategic Investments
     that would be permitted under this Section 6.04(q) at the time the
     succeeding Non-Investment Grade Period commences, then the amount of such
     excess (less the amount by which Strategic Investments are reduced during
     such succeeding Non-Investment Grade Period) shall be deemed to be
     permitted under this Section 6.04(q);

          (r) prepayments or advances to vendors or suppliers of semiconductors
     in connection with any guarantee of supply by, or to fund the expansion of
     supply capacity by, such vendor or supplier, in an aggregate amount not to
     exceed $50,000,000 at any one time outstanding;

          (s) loans, capital contributions and other payments to the Cayman
     Borrower to permit the Cayman Borrower to make Permitted Liquidity Event
     Distributions permitted by Section 6.08(a)(v) and (viii) to, or for the
     account of, participants in its Deferred Compensation Plans;

          (t) capital contributions to Denmark Holdings or from Denmark Holdings
     to Netherlands Holdings in an aggregate amount not to exceed $35,000,000,
     provided that (i) each such capital contribution is made in cash and (ii)
     --------
     on the same day that any such capital contribution is made, either (A)
     Denmark Holdings shall contribute in cash the full amount of such capital
     contribution to a Core Loan Party organized under the laws of Japan as
     common equity or (B) Denmark Holdings shall contribute in cash the full
     amount of such capital contribution to Netherlands Holdings as common
     equity and Netherlands Holdings shall contribute in cash the full amount of
     such capital contribution to a Core Loan Party organized under the laws of
     Japan as common equity;



                                                                             114

          (u) investments made using Distributable Liquidity Event Proceeds that
     have been designated for such use pursuant to Section 6.05(c)(iii) or
     Section 6.05(c)(iv);

          (v) loans or advances made by the Cayman Borrower to Intermediate
     Holdings using Distributable Liquidity Event Proceeds that have been
     designated for such use pursuant to Section 6.05(c)(iv)(A), provided that
                                                                 --------
     (A) the amount of any loans or advances made pursuant to this Section
     6.04(v) shall reduce, on a dollar-for-dollar basis, the amount of
     Distributable Liquidity Event Proceeds that may be distributed pursuant to
     Section 6.08(a)(v) and (B) the making of such loan or advance shall be
     subject to clause (B) of the proviso in Section 6.08(a)(v);

          (w) other investments in an aggregate amount not to exceed
     $25,000,000; and

          (x) investments by Intermediate Holdings in SAN Holdings or its
     subsidiaries using dividends or distributions from the Cayman Borrower
     permitted by Section 6.08(a)(ix).

          SECTION 6.05. Asset Sales. During a Non-Investment Grade Period,
                        -----------
Intermediate Holdings (for so long as it is a Loan Party) and the Borrowers will
not, and the Borrowers will not permit the Subsidiaries to, sell, transfer,
lease or otherwise dispose of any asset, including any Equity Interest owned by
it, and Intermediate Holdings (for so long as it is a Loan Party) and the
Borrowers will not, and the Borrowers will not permit the Subsidiaries to, issue
any additional Equity Interests in such Person, except:

          (a) sales of inventory, used or surplus equipment and Permitted
     Investments in the ordinary course of business and periodic clearance of
     aged inventory;

          (b) sales, transfers, dispositions and issuances of Equity Interests
     to either Borrower or a Subsidiary, provided that any such sales,
                                         --------
     transfers, dispositions or issuances of Equity Interests involving a
     Subsidiary that is not a Core Loan Party shall be made in compliance with
     Section 6.09;

          (c) Permitted Intermediate Holdings Equity Sales and Permitted Cayman
     Borrower Equity Sales and any sale for cash or Publicly Traded Equity
     Securities of Publicly Traded Equity Securities received as the



                                                                             115

     consideration for any sale permitted by this paragraph (c), provided that
                                                                 --------

               (i) at the time of and immediately after giving effect to any
          such Permitted Intermediate Holdings Equity Sale or Permitted Cayman
          Borrower Equity Sale, no Default has occurred and is continuing or
          would result therefrom;

               (ii) the Borrowers and the Subsidiaries are in compliance, on a
          pro forma basis after giving effect to such Permitted Intermediate
          Holdings Equity Sale or Permitted Cayman Borrower Equity Sale, with
          the covenants contained in Sections 6.12, 6.13 and 6.14 recomputed as
          at the last day of the most recent fiscal quarter of Intermediate
          Holdings for which financial statements are available, as if such
          Permitted Intermediate Holdings Equity Sale or Permitted Cayman
          Borrower Equity Sale had occurred on the first day of each relevant
          period for testing such compliance;

               (iii) in the case of a Permitted Cayman Borrower Equity Sale of
          the type described in clause (c) of the definition of the term
          Distributable Liquidity Event Proceeds or a Permitted Intermediate
          Holdings Equity Sale, Intermediate Holdings shall have delivered to
          the Administrative Agent, not more than 30 days after the consummation
          of such sale, a certificate signed by a Financial Officer of
          Intermediate Holdings that (A) certifies the amount of the Net
          Proceeds, sets forth in reasonable detail the calculation thereof and
          certifies the portion thereof, if any, that will be contributed to the
          Cayman Borrower and (B) designates the portion of the Distributable
          Liquidity Event Proceeds therefrom that may be used (1) to pay a
          dividend or make a distribution pursuant to Section 6.08(a)(v) or make
          a loan pursuant to Section 6.04(v), (2) to make investments pursuant
          to Section 6.04(u), (3) to repurchase Senior Notes pursuant to Section
          6.08(c)(v) or (4) to repurchase Senior Notes pursuant to Section
          6.08(c)(vi); and

               (iv) in the case of a Permitted Cayman Borrower Equity Sale
          referred to in the definition of Distributable Liquidity Event
          Proceeds, the Cayman Borrower shall have delivered to the



                                                                             116

          Administrative Agent, not more than 30 days after the consummation of
          such sale, a certificate signed by a Financial Officer of the Cayman
          Borrower that (A) certifies the amount of the Distributable Liquidity
          Event Proceeds therefrom and sets forth in reasonable detail the
          calculation thereof and (B) designates the portion of the
          Distributable Liquidity Event Proceeds from such sale that may be used
          (1) to pay a dividend or make a distribution pursuant to Section
          6.08(a)(v) or make a loan pursuant to Section 6.04(v), (2) to make
          investments pursuant to Section 6.04(u), (3) to repurchase Senior
          Notes pursuant to Section 6.08(c)(v) or (4) to repurchase Senior Notes
          pursuant to Section 6.08(c)(vi);

          (d) sales by Intermediate Holdings of (i) Equity Interests in SAN
     Holdings or any subsidiary of SAN Holdings, (ii) any cash or other assets
     of SAN Holdings or any subsidiary of SAN Holdings or (iii) assets received
     as the consideration for any sale permitted by this paragraph (d)
     (including a sale pursuant to this clause (iii));

          (e) issuances to officers, directors and employees of Intermediate
     Holdings or the Cayman Borrower of options, warrants or other rights to
     purchase the capital stock of Intermediate Holdings or the Cayman Borrower,
     respectively (the "Permitted Options") and sales of shares of capital stock
                        -----------------
     of Intermediate Holdings or the Cayman Borrower, respectively, to such
     officers, directors and employees upon the exercise of Permitted Options,
     provided that at no time shall the shares subject to (and issued upon the
     --------
     exercise of) Permitted Options represent greater than 20% of the
     outstanding capital stock of each of Intermediate Holdings and the Cayman
     Borrower, respectively, at such time) calculated on a fully diluted basis
     after giving effect to all options to acquire common stock of Intermediate
     Holdings and the Cayman Borrower then outstanding, regardless of whether or
     not such options are then currently exercisable);

          (f) sales of assets (other than Equity Interests in a Subsidiary)
     pursuant to a transaction permitted by Section 6.03(a);

          (g) sales of assets pursuant to a sale and leaseback transaction
     permitted by Section 6.06;



                                                                             117

          (h) sales by either Borrower or any Subsidiary of all the Equity
     Interests in, or of all or substantially all the assets of, Seagate
     Technology Reynosa, S. de R. L. de C.V.;

          (i) sales of assets received by Intermediate Holdings, either Borrower
     or any Subsidiary upon the exercise of a power of sale or foreclosure by
     Intermediate Holdings, either Borrower or any Subsidiary with respect to
     any secured investment or other transfer of title with respect to any
     secured investment in default;

          (j) licensing and cross-licensing arrangements entered into in the
     ordinary course of either Borrower's or any Subsidiary's business involving
     any technology or other intellectual property of such Borrower or such
     Subsidiary;

          (k) sales, transfers and other dispositions of assets (other than
     Equity Interests in either Borrower or a Subsidiary) that are not permitted
     by any other clause of this Section, provided that the aggregate fair
                                          --------
     market value of all assets sold, transferred or otherwise disposed of in
     reliance upon this clause (k) shall not during any fiscal year of the
     Cayman Borrower exceed (i) during any period when the Index Debt is rated
     below BBB- by S&P or Baa3 by Moody's, the amount that is equal to 5.0% of
     Consolidated Total Assets or (ii) during any period in which the Index Debt
     is rated (x) BBB- or better by S&P and (y) Baa3 or better by Moody's, the
     amount that is equal to 10% of Consolidated Total Assets, in each case as
     of the end of the immediately preceding fiscal year of the Cayman Borrower;

          (l) licensing of assets that constitute technology or other
     intellectual property to joint ventures in connection with investments
     permitted by Section 6.04;

          (m) transfers of patents and patent applications for flexure-based
     microactuator technology and flexure technology to Hutchinson Technology
     pursuant to the Hutchinson Settlement;

          (n) Permitted Liquidity Event Distributions permitted by Section
     6.08(a)(v);

          (o) sales, transfers and other dispositions of 100% of the outstanding
     Equity Interests in any Subsidiary if the sale of all or substantially all
     of



                                                                             118

     the assets of such Subsidiary would be permitted pursuant to clause (k) of
     this Section; and

          (p) the sale by STI of the assets constituting the printed circuit
     board business of STI.

provided that all sales, transfers, leases and other dispositions permitted
- --------
hereby (other than those permitted by clauses (b),(d), (e) and (n) above) shall
be made for fair market value and (except in the case of (x) a transfer made
pursuant to clause (b), (c), (d), (e), (f), (i), (j), (l), (m), (n) or (o)
above, (y) transfers of assets having an aggregate fair market value not to
exceed $40,000,000 during the term of this Agreement made pursuant to clause (k)
above or (z) a transfer made pursuant to clause (h) above, which shall be made
for consideration of at least 65% cash or cash equivalents) for consideration of
at least 75% cash or cash equivalents, except to the extent expressly provided
otherwise elsewhere in this Agreement.

          SECTION 6.06. Sale and Leaseback Transactions. Intermediate Holdings
                        -------------------------------
(for so long as it is a Loan Party) and the Borrowers will not, and the
Borrowers will not permit the Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred, except for (i) the sale and leaseback of the design centers
located at (A) 389 Disc Drive, Longmont, Colorado and (B) 1280 Disc Drive,
Shakopee, Minnesota and (ii) any such sale of any fixed or capital assets that
is made for cash consideration in an amount not less than the cost of such fixed
or capital asset and is consummated within 180 days after such Borrower or such
Subsidiary acquires or completes the construction of such fixed or capital
asset, provided that the Borrowers and the Subsidiaries may enter into such
       --------
transactions with respect to assets having a fair market value (determined in
good faith by the Borrower with respect to any such asset at the time the
transaction with respect to such asset is entered into) not to exceed
$100,000,000 in the aggregate during the term of this Agreement.

          SECTION 6.07. Swap Agreements. Intermediate Holdings (for so long as
                        ---------------
it is a Loan Party) and the Borrowers will not, and the Borrowers will not
permit the Subsidiaries to, enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which either Borrower or
any Subsidiary has actual



                                                                             119

exposure (other than those in respect of Equity Interests of either Borrower or
any of the Subsidiaries), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of either Borrower or
any Subsidiary provided that Intermediate Holdings, the Borrowers and the
               --------
Subsidiaries may enter into Swap Agreements in respect of Equity Interests in
the Cayman Borrower and Intermediate Holdings providing for payments to current
or former directors, officers or employees of Intermediate Holdings, the
Borrowers and the Subsidiaries or their heirs or estates (and may make such
payments), in the same circumstances and amounts that Intermediate Holdings, the
Borrowers and the Subsidiaries are then permitted to make Restricted Payments
pursuant to Section 6.08(a)(iii), and any payments made pursuant to this proviso
during any fiscal year shall be deemed to reduce the amount of Restricted
Payments available during such fiscal year under Section 6.08(a)(iii).

          SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.
                        -----------------------------------------------------
(a) During any Non-Investment Grade Period, other than as specified in the first
sentence of Section 5.11, neither Borrower will, nor will the Borrowers permit
the Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except that:

          (i) the Borrowers and the Subsidiaries may declare and pay dividends
     ratably with respect to their capital stock payable solely in additional
     shares of their capital stock;

          (ii) Subsidiaries and the U.S. Borrower may declare and pay dividends
     ratably with respect to their capital stock;

          (iii) the Borrowers and the Subsidiaries may make Restricted Payments,
     not exceeding $25,000,000 during any fiscal year, pursuant to and in
     accordance with stock option plans or other benefit plans for directors,
     management or employees of Holdings, Intermediate Holdings, the Borrowers
     and the Subsidiaries, including the redemption or purchase of capital stock
     of Holdings, Intermediate Holdings, the Borrowers or a Subsidiary held by
     former directors, management or employees of Holdings, Intermediate
     Holdings, either Borrower or any Subsidiary following termination of their
     employment;



                                                                             120

          (iv) the U.S. Borrower and STI may pay dividends to the Cayman
     Borrower and the Cayman Borrower may pay dividends to Intermediate Holdings
     and its other shareholders (ratably in accordance with their equity
     ownership), in each case at such times and in such amounts, not exceeding
     $5,000,000 during any fiscal year, as shall be necessary to permit Holdings
     to discharge its liabilities;

          (v) the Cayman Borrower may make Permitted Liquidity Event
     Distributions to Intermediate Holdings and its other shareholders (ratably
     in accordance with their equity ownership) and to, or for the account of,
     participants in its Deferred Compensation Plans using Distributable
     Liquidity Event Proceeds designated for such use pursuant to Section
     6.05(c)(iv), provided, in each case, that (A) the amount of such
                  --------
     Distributable Liquidity Event Proceeds available for distribution pursuant
     to this clause (v) shall be calculated after giving effect to the amount of
     Distributable Liquidity Event Proceeds applied pursuant to Section 6.04(v)
     and (B) no Default has occurred and is continuing or would occur as a
     result of such Permitted Liquidity Event Distributions;

          (vi) (A) If and for so long as the Cayman Borrower or any of its
     subsidiaries is a controlled foreign corporation for United States Federal
     income tax purposes for all or a portion of the Cayman Borrower's or any
     such subsidiary's taxable year, within 30 days after the end of each
     calendar year during which such taxable year ends, the Cayman Borrower may
     declare and pay a dividend on its capital stock to Intermediate Holdings,
     in a maximum amount equal to the product of (x) the aggregate amount of
     "Subpart F income" (within the meaning of Section 952 of the Code, which
     for purposes of this clause (vi) shall include income includable under
     Section 951(a)(1)(B) of the Code) of the Cayman Borrower for the portion of
     such taxable year for which the Cayman Borrower was a controlled foreign
     corporation plus the amount of Subpart F income of any of the Cayman
     Borrower's subsidiaries for the portion of such taxable year for which such
     subsidiary was a controlled foreign corporation (other than "Subpart F
     income" resulting from the distribution of any amount under Section
     6.08(a)(ii)) multiplied by (y) 40% (such dividends, "Tax Distributions").

          (B) As a condition to making any Tax Distribution under paragraph (A)
above or any interim Tax Distribution



                                                                             121

under paragraph (D) below, the Cayman Borrower will deliver to the
Administrative Agent at least 30 calendar days prior to the declaration and
payment of such Tax Distribution, a notice, certified by the Chief Financial
Officer of the Cayman Borrower, setting forth in detail reasonably satisfactory
to the Administrative Agent the basis for the determination of the amount of
such Tax Distribution.

          (C) If the Cayman Borrower makes any Tax Distribution pursuant to this
clause (vi) in respect of any taxable income realized on any sale of assets or
Equity Interests permitted under Section 6.05(c) or 6.05(h), the consideration
for which consists of Publicly Traded Equity Securities, such Tax Distribution
shall be made in the form of Publicly Traded Equity Securities to the extent
that the Cayman Borrower is legally permitted to do so.

          (D) Interim Tax Distributions may be made during each calendar year on
or shortly after April 10, June 10, September 10 and December 31 of such year
based on good-faith estimates of the Subpart F income, if any, of the Cayman
Borrower and its subsidiaries for the taxable year to which any such interim Tax
Distribution relates. If any such interim Tax Distributions are made by the
Cayman Borrower during a calendar year, then within 30 calendar days after the
end of such calendar year the Cayman Borrower shall deliver to the
Administrative Agent a determination of the maximum amount of Tax Distributions
that may be made for such calendar year under paragraph (A) above, and if the
aggregate interim Tax Distributions made for such calendar year exceed such
maximum, then such excess amount ("Excess Interim Tax Distributions") shall be
applied to reduce all amounts payable pursuant to this Section 6.08(a)(vi) for
the next calendar year and to the extent not so applied, shall be carried
forward for application against such amounts in a future calendar year.

          (vii) the Holdings Distribution and the Secondary Distribution,
     provided that the sum of the amount of the Holdings Distribution and the
     --------
     amount of the Secondary Distribution shall not exceed $580,000,000;

          (viii) the Cayman Borrower may make distributions to, or for the
     account of, participants in its Deferred Compensation Plans, not exceeding
     the sum of (A) $65,000,000 and (B) the excess of (1) the amount
     distributable by the Cayman Borrower pursuant to clause (vii) of this
     Section 6.08(a) as a Secondary Distribution over (2) the amount actually
     distributed by the Cayman Borrower as a Secondary Distribution pursuant to
     such clause (vii) concurrently with an IPO



                                                                             122

     of the Cayman Borrower or Intermediate Holdings, provided that
                                                      --------
     distributions pursuant to subclause (A) of this clause (viii) shall not
     exceed $35,000,000 in respect of any single event and provided, further,
                                                           --------  -------
     that the amount of any distribution made by the Cayman Borrower
     attributable to subclause (B) of this clause (viii) shall reduce, on a
     dollar-for-dollar basis, the amount that the Cayman Borrower may distribute
     pursuant to clause (vii) of this Section 6.08(a); and

          (ix) Restricted Payments in an aggregate amount not to exceed
     $60,000,000 consisting of dividends or distributions made by the Cayman
     Borrower to Intermediate Holdings prior to or in connection with an IPO of
     the Cayman Borrower, provided that (i) the entire amount of such dividends
                          --------
     or distributions are immediately contributed or otherwise provided,
     directly or indirectly, to XIOtech Corporation and (ii) the entire amount
     of such dividends or distributions are immediately used by XIOtech
     Corporation to repay in full all amounts then owed by XIOtech Corporation
     to the Cayman Borrower or its Subsidiaries;

          (b) During any Investment Grade Period, neither Borrower will, nor
will either Borrower permit any Subsidiaries to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment unless such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Borrowers and the Subsidiaries after the beginning of the
fiscal quarter of the Cayman Borrower in which the Effective Date occurs
(excluding Restricted Payments permitted by clauses (i), (ii), (v), (vi) and
(vii) referred to in Section 6.08(a)), is less than 50% of Consolidated Net
Income for the period (treated as one accounting period) commencing at the
beginning of the fiscal quarter of the Cayman Borrower in which the Effective
Date occurs and ending at the end of the most recent fiscal period for which
financial statements have been delivered pursuant to Section 5.01; provided,
                                                                   --------
however, that (i) if the amount of such Restricted Payment, together with the
- -------
aggregate amount of all other Restricted Payments made by the Borrowers and the
Subsidiaries during the period referred to above (excluding Restricted Payments
permitted by clauses (i), (ii), (v), (vi) and (vii) referred to in Section
6.08(a)), exceed 50% of Consolidated Net Income for the period (treated as one
accounting period) commencing at the beginning of the fiscal quarter in which
such Investment Grade Period began and ending at the end of the most recent
fiscal period for which financial statements have been delivered pursuant to
Section 5.01, then (A) on the date of such Restricted Payment and after giving
pro



                                                                             123

forma effect thereto, the ratio of (x) the Cash Amount to (y) Indebtedness of
the Cayman Borrower and its consolidated subsidiaries (other than Indebtedness
in respect of letters of credit securing obligations entered into in the
ordinary course of business to the extent such letters of credit are not drawn
upon or, if and to the extent drawn upon, such drawing is reimbursed no later
than the 30th Business Day following payment on such letters of credit) shall
not be less than 1.1 to 1.0 and (B) prior to such Restricted Payment being made
(1) the Administrative Agent shall have received a written statement of Moody's
and S&P to the effect that after giving pro forma effect to such Restricted
Payment, the Cayman Borrower would maintain its Investment Grade Ratings, and
(2) the Cayman Borrower shall have delivered to the Administrative Agent a
certificate dated as of such date and signed by a Financial Officer of the
Cayman Borrower that (x) sets forth, in reasonable detail, the calculation of
the amount of such Restricted Payments, and (y) certifies compliance with the
ratio set forth in clause (A) above, and (ii) the foregoing shall not prohibit
the Borrowers or the Subsidiaries, as applicable, from making the Restricted
Payments set forth in clauses (i) through (viii) of Section 6.08(a).

          (c) Neither Borrower will, nor will the Borrowers permit the
Subsidiaries to, make or agree to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property) of
or in respect of principal of or interest on any Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness, except:

          (i) payment of Indebtedness created under the Loan Documents;

          (ii) payment of regularly scheduled interest and principal payments as
     and when due in respect of any Indebtedness, other than payments in respect
     of the Existing Subordinated Debt prohibited by the subordination
     provisions thereof;

          (iii) refinancings of Indebtedness to the extent permitted by Section
     6.01;

          (iv) payment of secured Indebtedness that becomes due as a result of
     the voluntary sale or transfer of the property or assets securing such
     Indebtedness; and



                                                                             124

          (v) redemption of up to 35% of the aggregate principal amount of the
     Senior Notes outstanding on the Effective Date with Distributable Liquidity
     Event Proceeds and on the terms set forth in the indenture under which the
     Senior Notes are issued, provided, that the amount of such Distributable
                              --------
     Liquidity Event Proceeds applied pursuant to this clause (v) shall be
     limited to the amount designated for such use pursuant to Section
     6.05(c)(iii) or Section 6.05(c)(iv); and

          (vi) redemption of additional Senior Notes with Distributable
     Liquidity Event Proceeds, provided that the amount of Distributable
                               --------
     Liquidity Event Proceeds applied pursuant to this clause (vi) shall be
     limited to the amount designated for such use pursuant to Section
     6.05(c)(iii) or Section 6.05(c)(iv).

          (d) If, as a result of the receipt of any cash proceeds by either
Borrower or any Subsidiary in connection with any sale, transfer, lease or other
disposition of any asset, including any Equity Interest, the Cayman Borrower
would be required by the terms of the indenture governing the Senior Notes to
make an offer to purchase any Senior Notes, then the Borrowers shall, or shall
cause one or more of the Subsidiaries to (i) prepay Loans in accordance with
Section 2.11 or (ii) acquire assets, Equity Interests or other securities in a
manner that is permitted by Section 6.04, in each case in a manner that will
eliminate any requirement to make an offer to purchase such Senior Notes. Any
such prepayment or acquisition shall be made prior to the first day on which the
Cayman Borrower would be required to commence such an offer to purchase the
Senior Notes under the indenture governing such Senior Notes.

          (e) Notwithstanding anything to the contrary set forth in this
Agreement, the Borrowers will not, and will not permit any Subsidiary to,
furnish any funds to or make any investment in any Person for purposes of
enabling such Person to make any distribution or other payment (including in
respect of Indebtedness) pursuant to Section 6.08(c) that could not be made
directly by either Borrower or any Subsidiary in accordance with the provisions
of this Section.

          SECTION 6.09. Transactions with Affiliates. (a) Neither Intermediate
                        ----------------------------
Holdings (for so long as it is a Loan Party) nor the Borrowers will, nor will
the Borrowers permit the Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its



                                                                             125

Affiliates, except (i) transactions that are at prices and on terms and
conditions not less favorable to Intermediate Holdings (for so long as it is a
Loan Party), the applicable Borrower or such Subsidiary than could be obtained
on an arm's-length basis from unrelated third parties, (ii) transactions between
or among Intermediate Holdings (for so long as it is a Loan Party), the
Borrowers and the Core Loan Parties not involving any other Affiliate, (iii)
payments of management, consulting and advisory fees to the Investors pursuant
to any financial advisory, financing, underwriting or placement agreement or in
respect of other investment banking activities, including in connection with
acquisitions and divestitures, in an aggregate amount not to exceed $2,000,000
in any fiscal year, (iv) any issuance of securities, or other payments, awards
or grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved by the
board of directors of Intermediate Holdings (for so long as it is a Loan Party),
either Borrower or any Subsidiary, (v) the grant of stock options or similar
rights to officers, employees, consultants and directors of Intermediate
Holdings (for so long as it is a Loan Party) pursuant to plans approved by the
board of directors of Intermediate Holdings (for so long as it is a Loan Party),
either Borrower or any Subsidiary and the payment of amounts or the issuance of
securities pursuant thereto, (vi) loans or advances to employees permitted by
Section 6.04(l) and (vii) any Restricted Payment permitted by Section 6.08.

          (b) The provisions of Section 6.09(a) notwithstanding, neither
Intermediate Holdings (for so long as it is a Loan Party) nor the Borrowers
will, nor will the Borrowers permit the Subsidiaries to, adopt or change any
policy regarding transfer pricing or other practices regarding cross-border
intercompany payments with Intermediate Holdings (for so long as it is a Loan
Party), either Borrower or any other Subsidiary in a manner that is
systematically disadvantageous to the Lenders.

          SECTION 6.10. Restrictive Agreements. Neither Intermediate Holdings
                        ----------------------
(for so long as it is a Loan Party) nor the Borrowers will, nor will the
Borrowers permit the Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of Intermediate Holdings (for so
long as it is a Loan Party), either Borrower or any Subsidiary to create, incur
or permit to exist any Lien upon any of its property or assets or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares



                                                                             126

of its capital stock or to make or repay loans or advances to either Borrower or
any other Subsidiary or to Guarantee Indebtedness of either Borrower or any
other Subsidiary, provided that (i) the foregoing shall not apply to
                  --------
restrictions and conditions imposed by law, by any Loan Document, by any Senior
Note Document or Existing Subordinated Debt Document (after giving effect to the
Debt Tender), (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.10 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) the foregoing shall not apply to customary
restrictions on or customary conditions to the payment of dividends or other
distributions on, or the creation of Liens over, Equity Interests owned by
either Borrower or any Subsidiary in any joint venture or like enterprise that
is not a Subsidiary contained in the constitutive documents of such joint
venture or enterprise, (v) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (vi) clause
(a) of the foregoing shall not apply to customary provisions in leases or
Licenses (as such term is defined in the U.S. Security Agreement) restricting
the assignment, subletting or transfer thereof.

          SECTION 6.11. Amendment of Material Documents. Neither Intermediate
                        -------------------------------
Holdings (for so long as it is a Loan Party) nor the Borrowers will, nor will
the Borrowers permit the Subsidiaries to, (i) amend, modify or waive any of its
rights under (A) any Existing Subordinated Debt Document, (B) any Deferred
Compensation Plan, (C) its certificate of incorporation, by-laws or other
organizational documents or (D) any Senior Note Document, except to the extent
that such amendments, modifications or waivers, individually and in the
aggregate, (1) would not reasonably be expected to have a Material Adverse
Effect or be materially adverse to the Lenders and (2) in the case of an
amendment, modification or waiver of a Deferred Compensation Plan, would not
require Intermediate Holdings or any of its subsidiaries to make any
distributions or other payments (whether in cash, securities or other property
or any combination thereof) that would be in violation of the covenants set
forth in this Agreement, or (ii) adopt any Deferred Compensation Plan if the
terms



                                                                             127

(including subordination terms) of such Deferred Compensation Plan that are
material to the Lenders are in any way less favorable to the Lenders than the
terms of the Deferred Compensation Plans in effect on the date hereof and
previously provided to the Administrative Agent.

          SECTION 6.12. Interest Expense Coverage Ratio. The Borrowers will not
                        -------------------------------
permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Net Cash
Interest Expense, in each case for any period of four consecutive fiscal
quarters ending on the last day of any quarter ending on or after March 30,
2002, to be less than 2.50 to 1.00.

          SECTION 6.13. Fixed Charge Coverage Ratio. The Borrowers will not
                        ---------------------------
permit the ratio of (a) the sum of (i) Consolidated EBITDA for any period of
four consecutive fiscal quarters ending on the last day of any fiscal quarter
during any period set forth below plus (ii) the sum of (A) the amount of cash
held by either Borrower or any Subsidiary and (B) the carrying value of
Permitted Investments that would be reflected as cash or short-term investments
on a consolidated balance sheet of the Cayman Borrower on such date, minus (iii)
the aggregate principal amount of Revolving Loans and Swingline Loans
outstanding on such date to (b) Consolidated Fixed Charges for such period of
four consecutive fiscal quarters (the "Fixed Charge Coverage Ratio") to be less
                                       --------------------- -----
than the ratio set forth below opposite such period set forth below:

            Period                     Ratio
            ------                     -----
March 30, 2002, to June 29, 2002   1.20 to 1.00
June 30, 2002, to June 29, 2003    1.25 to 1.00
June 30, 2003, and thereafter      1.50 to 1.00.

          SECTION 6.14. Net Leverage Ratio. The Borrowers will not permit the
                        ------------------
Net Leverage Ratio as of the end of any fiscal quarter during any period set
forth below to exceed the ratio set forth opposite such period:

            Period                     Ratio
            ------                     -----
March 30, 2002 to June 29, 2002    1.75 to 1.00
June 30, 2002 and thereafter       1.50 to 1.00.



                                                                             128

                                   ARTICLE VII

                                Events of Default
                                -----------------

          SECTION 7.01. Events of Default. If any of the following events
                        -----------------
("Events of Default") shall occur:
  -----------------

          (a) either Borrower shall fail to pay any principal of any Loan or any
     reimbursement obligation in respect of any LC Disbursement when and as the
     same shall become due and payable, whether at the due date thereof or at a
     date fixed for prepayment thereof or otherwise;

          (b) either Borrower shall fail to pay any interest on any Loan or any
     fee or any other amount (other than an amount referred to in clause (a) of
     this Article) payable under this Agreement or any other Loan Document, when
     and as the same shall become due and payable, and such failure shall
     continue unremedied for a period of five days;

          (c) any representation or warranty made or deemed made by or on behalf
     of Intermediate Holdings, either Borrower or any Subsidiary in or in
     connection with any Loan Document or any amendment or modification thereof
     or waiver thereunder, or in any report, certificate, financial statement or
     other document furnished pursuant to or in connection with any Loan
     Document or any amendment or modification thereof or waiver thereunder,
     shall prove to have been incorrect in any material respect when made or
     deemed made;

          (d) Intermediate Holdings or either Borrower shall fail to observe or
     perform any covenant, condition or agreement contained in Sections 5.02(a),
     5.04 (with respect to the existence of Intermediate Holdings or either
     Borrower), 5.11 or 5.13(a) or in Article VI;

          (e) any Loan Party shall fail to observe or perform any covenant,
     condition or agreement contained in any Loan Document (other than those
     specified in clause (a), (b) or (d) of this Article), and such failure
     shall continue unremedied for a period of 30 days after notice thereof from
     the Administrative Agent to the Cayman Borrower (which notice will be given
     at the request of any Lender);

          (f) Intermediate Holdings (for so long as it is a Loan Party) either
     Borrower or any Subsidiary shall fail to make any payment (whether of
     principal or



                                                                             129

     interest and regardless of amount) in respect of any Material Indebtedness,
     when and as the same shall become due and payable after giving effect to
     the applicable grace period with respect thereto;

          (g) any event or condition occurs that results in any Material
     Indebtedness becoming due prior to its scheduled maturity or that enables
     or permits the holder or holders of any Material Indebtedness or any
     trustee or agent on its or their behalf to cause any Material Indebtedness
     to become due, or to require the prepayment, repurchase, redemption or
     defeasance thereof, prior to its scheduled maturity, provided that this
                                                          --------
     clause (g) shall not apply to secured Indebtedness that becomes due as a
     result of the voluntary sale or transfer of the property or assets securing
     such Indebtedness;

          (h) an involuntary proceeding shall be commenced or an involuntary
     petition shall be filed seeking (i) liquidation, reorganization or other
     relief in respect of Intermediate Holdings (for so long as it is a Loan
     Party) either Borrower or, subject to Section 7.02, any Subsidiary or its
     debts, or of a substantial part of its assets, under any Federal, state or
     foreign bankruptcy, insolvency, receivership or similar law now or
     hereafter in effect or (ii) the appointment of a receiver, trustee,
     custodian, sequestrator, conservator, liquidator or similar official for
     Intermediate Holdings (for so long as it is a Loan Party) either Borrower
     or, subject to Section 7.02, any Subsidiary or for a substantial part of
     its assets, and, in any such case, such proceeding or petition shall
     continue undismissed for 60 days or an order or decree approving or
     ordering any of the foregoing shall be entered;

          (i) Intermediate Holdings (for so long as it is a Loan Party) either
     Borrower or, subject to Section 7.02, any Subsidiary shall (i) voluntarily
     commence any proceeding or file any petition seeking dissolution,
     winding-up, liquidation, reorganization or other relief under any Federal,
     state or foreign bankruptcy, insolvency, receivership or similar law now or
     hereafter in effect, (ii) consent to the institution of, or fail to contest
     in a timely and appropriate manner, any proceeding or petition described in
     clause (h) of this Article, (iii) apply for or consent to the appointment
     of a receiver, trustee, custodian, sequestrator, conservator, liquidator or
     similar official for Intermediate Holdings (for so long as it is a



                                                                             130

     Loan Party) either Borrower or, subject to Section 7.02, any Subsidiary or
     for a substantial part of its assets, (iv) file an answer admitting the
     material allegations of a petition filed against it in any such proceeding,
     (v) make a general assignment for the benefit of creditors or (vi) take any
     action for the purpose of effecting any of the foregoing;

          (j) Intermediate Holdings (for so long as it is a Loan Party) either
     Borrower or, subject to Section 7.02, any Subsidiary shall become unable,
     admit in writing its inability or fail generally to pay its debts as they
     become due;

          (k) one or more judgments for the payment of money in an aggregate
     amount in excess of $10,000,000 (net of amounts covered by insurance as to
     which the insurer has admitted liability in writing) shall be rendered
     against Intermediate Holdings (for so long as it is a Loan Party), either
     Borrower, any Subsidiary or any combination thereof and the same shall
     remain undischarged for a period of 30 consecutive days during which
     execution shall not be effectively stayed, or any action shall be legally
     taken by a judgment creditor to attach or levy upon any assets of
     Intermediate Holdings (for so long as it is a Loan Party), either Borrower
     or any Subsidiary to enforce any such judgment;

          (l) an ERISA Event shall have occurred that, when taken together with
     all other ERISA Events that have occurred, could reasonably be expected to
     result in a Material Adverse Effect;

          (m) any Lien purported to be created under any Security Document shall
     cease to be, or shall be asserted by any Loan Party not to be, a valid and
     perfected Lien on Collateral having, in the aggregate, a value in excess of
     $5,000,000, with the priority required by the applicable Security Document,
     except (i) as a result of the sale or other disposition of the applicable
     Collateral in a transaction permitted under the Loan Documents, (ii) any
     action taken by the Collateral Agent to release any such Lien in compliance
     with the provisions of this Agreement or any other Loan Document or (iii)
     as a result of the Collateral Agent's failure to maintain possession of any
     stock or share certificates, promissory notes or other instruments
     delivered to it under the Pledge Agreement or to file properly (A) Uniform
     Commercial Code financing statements or comparable filings delivered to it
     for filing under the Security Documents or (B) Uniform



                                                                             131

     Commercial Code continuation statements or comparable filings necessary to
     maintain perfection;

          (n) a Change in Control shall occur;

          (o) either Borrower, Intermediate Holdings (for so long as it is a
     Loan Party) or any Subsidiary shall challenge the subordination provisions
     of the Existing Subordinated Debt or any Deferred Compensation Plan or
     assert that such provisions are invalid or unenforceable or that the
     Obligations of either Borrower, or the Obligations of Intermediate Holdings
     (for so long as it is a Loan Party) or any Subsidiary under the applicable
     Guarantee Agreement, are not senior indebtedness under the subordination
     provisions of the Existing Subordinated Debt or any Deferred Compensation
     Plan, or any court, tribunal or government authority of competent
     jurisdiction shall judge the subordination provisions of the Existing
     Subordinated Debt or any Deferred Compensation Plan to be invalid or
     unenforceable or such Obligations to be not senior indebtedness under such
     subordination provisions; or

          (p) any Guarantee under any Guarantee Agreement for any reason shall
     cease to be in full force and effect (other than in accordance with its
     terms), or any Loan Party shall deny in writing that it has any further
     liability under its Guarantee Agreement (other than as a result of the
     discharge of such Loan Party in accordance with the terms of the Loan
     Documents);

then, and in every such event (other than an event with respect to either
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower; and in case of any event with respect to either Borrower
described in clause (h) or (i) of this Article, the Commitments shall



                                                                             132

automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Borrower.

          SECTION 7.02. Exclusion of Immaterial Subsidiaries. Solely for the
                        ------------------------------------
purposes of determining whether a Default has occurred under (a) clause (h), (i)
or (j) of Section 7.01, any reference in any such clause to any Subsidiary shall
be deemed not to include any Subsidiary affected by any event or circumstance
referred to in any such clause that did not, as of the last day of the fiscal
quarter of Intermediate Holdings (or, if Intermediate Holdings is no longer a
Loan Party, the Cayman Borrower) most recently ended, have assets with a value
in excess of 5.0% of the Consolidated Total Assets as of such date, provided
                                                                    --------
that if it is necessary to exclude more than one Subsidiary from clause (h), (i)
or (j) of Section 7.01 pursuant to this clause (a) in order to avoid a Default
thereunder, all excluded Subsidiaries shall be considered to be a single
consolidated Subsidiary for purposes of determining whether the condition
specified above is satisfied and (b) under clause (i) of Section 7.01, any
reference in such clause to any "Subsidiary" shall be deemed not to include any
Moribund Subsidiary that is being dissolved, liquidated or wound up in
accordance with the definition of the term "Moribund Subsidiary".

                                  ARTICLE VIII

                            The Administrative Agent
                            ------------------------

          SECTION 8.01. The Administrative Agent. Each of the Lenders and the
                        ------------------------
Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent
and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the
terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto. For purposes of this Article VIII and for the
purposes of Section 9.02 and 9.03 of Article IX, all references to the
Administrative Agent are deemed to include the Collateral Agent.

          The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and



                                                                             133

such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings, Intermediate Holdings,
either Borrower or any Subsidiary or other Affiliate thereof as if it were not
the Administrative Agent hereunder.

          The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to Intermediate Holdings, either Borrower or any of the
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by Intermediate Holdings, the Cayman Borrower or a Lender,
and the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.



                                                                             134

          The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrowers), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

          The Administrative Agent may perform any of and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

          Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Cayman
Borrower. Upon any such resignation, the Required Lenders shall have the right,
subject to the approval of the Cayman Borrower (which approval shall not be
unreasonably withheld), to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent that
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrowers to a successor



                                                                             135

Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Cayman Borrower and such successor. After
the Administrative Agent's resignation hereunder, the provisions of this Article
and Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.

          Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.

                                   ARTICLE IX

                                  Miscellaneous
                                  -------------

          SECTION 9.01. Notices. Except in the case of notices and other
                        -------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

          (a) if to Intermediate Holdings or either Borrower, to it at 920 Disc
     Drive, Scotts Valley, California 95067, Attention of Glen A. Peterson
     (Telecopy No. (831) 438-8931) with copies to (i) Silver Lake Partners,
     L.P., 2725 Sand Hill Road, Suite 150, Menlo Park, California 94025,
     Attention of Kenneth Y. Hao (Telecopy No. (650) 234-2502), and (ii) TPG
     Partners III, L.P., 301 Commerce Street, Suite 3300, Fort Worth, Texas
     76102, Attention of James J. O'Brien (Telecopy No. (817) 871-4013);

          (b) if to the Administrative Agent, to JPMorgan Chase Bank, Loan and
     Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New
     York 10081,



                                                                             136

     Attention of Janet Belden (Telecopy No. (212) 552-5658), with a copy to
     JPMorgan Chase Bank, 101 California Street, Suite 2725, San Francisco,
     California 94111, Attention of William Rindfuss (Telecopy No. (415)
     371-4881);

          (c) if to JPMorgan Chase Bank, as Issuing Bank, to it at JPMorgan
     Chase Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
     Floor, New York, New York 10081, Attention of Janet Belden (Telecopy No.
     (212) 552-5658);

          (d) if to the Swingline Lender, to it at JPMorgan Chase Bank, Loan and
     Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New
     York 10081, Attention of Janet Belden (Telecopy No. (212) 552-5658); and

          (e) if to any other Lender, to it at its address (or telecopy number)
     set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

          SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
                        -------------------
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether



                                                                             137

the Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

          (b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Intermediate Holdings (for so long as it is a Loan Party), the
Borrowers and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent or the Collateral Agent, as applicable, and the Loan Party
or Loan Parties that are parties thereto, in each case with the consent of the
Required Lenders, provided that no such agreement shall (i) increase the
                  --------
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of, or any scheduled payment with respect to, any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender directly affected
thereby, (iii) postpone the final maturity of any Loan, or the required date of
reimbursement of any LC Disbursement, or any required date for the payment of
any interest or fees payable hereunder, or reduce the amount of, waive or excuse
any such required payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section or the percentage set forth in the
definition of the term "Required Lenders" or any other provision of any Loan
Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release
Intermediate Holdings or any Core Loan Party from its Guarantee under the
applicable Guarantee Agreement (except as expressly provided in the applicable
Guarantee Agreement), or limit its liability in respect of such Guarantee,
without the written consent of each Lender, (vii) except as otherwise provided
in the Security Documents, release all or substantially all of the Collateral
from the Liens of the Security Documents, without the written consent of each
Lender, (viii) postpone the date of any scheduled payment of the principal
amount of any Term Loan under Section 2.10 without the written consent of each
Lender holding outstanding Term Loans, (ix) change any provisions of any Loan
Document in a manner that by its



                                                                             138

terms adversely affects the rights in respect of payments due to Lenders holding
Loans of any Class differently than those holding Loans of any other Class,
without the written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each affected Class, (x) change
Section 9.15 in any way or release either Borrower from its obligations
thereunder, without the written consent of each Lender, or (xi) change the
definition of the term Interest Period to permit the Borrowers to select
interest periods of 9 or 12 months for Eurodollar Borrowings without the written
consent of each Lender affected thereby, and provided, further that (A) no such
                                             -----------------
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any Issuing Bank or the Swingline Lender without the prior
written consent of the Administrative Agent, such Issuing Bank or the Swingline
Lender, as the case may be, and (B) any waiver, amendment or modification of
this Agreement that by its terms affects the rights or duties under this
Agreement of the Revolving Lenders (but not the Term Lenders) or the Term
Lenders (but not the Revolving Lenders) may be effected by an agreement or
agreements in writing entered into by Intermediate Holdings (for so long as it
is a Loan Party), the Borrowers and the requisite percentage in interest of the
affected Class of Lenders that would be required to consent thereto under this
Section if such Class of Lenders were the only Class of Lenders hereunder at the
time. Notwithstanding the foregoing, any provision of this Agreement may be
amended by an agreement in writing entered into by Intermediate Holdings (for so
long as it is a Loan Party), the Borrowers, the Required Lenders and the
Administrative Agent (and, if their rights or obligations are affected thereby,
the Issuing Bank and the Swingline Lender) if (i) by the terms of such agreement
the Commitment of each Lender not consenting to the amendment provided for
therein shall terminate upon the effectiveness of such amendment and (ii) at the
time such amendment becomes effective, each Lender not consenting thereto
receives payment in full of the principal of and interest accrued on each Loan
made by it and all other amounts owing to it or accrued for its account under
this Agreement.

          SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers
                        ----------------------------------
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of one counsel for the Administrative Agent in each applicable
jurisdiction, in connection with the syndication of the credit facilities
provided for herein, the preparation and administration of the Loan Documents or
any amendments, modifications or waivers of the provisions



                                                                             139

thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Documentation
Agents, the Issuing Bank or any Lender, including the reasonable fees, charges
and disbursements of one counsel each, in each applicable jurisdiction, for the
Administrative Agent, each Documentation Agent, each Issuing Bank or each
Lender, in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such reasonable out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

          (b) The Borrowers shall indemnify the Administrative Agent, the
Documentation Agents, the Issuing Bank and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an "Indemnitee")
                                                                   ----------
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of the commitment letter (and related
fee letters) with respect to the credit facilities contemplated hereby, any Loan
Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence, Release or threatened Release of
Hazardous Materials on or from any Mortgaged Property or any other property
currently or formerly owned or operated by Intermediate Holdings, either
Borrower or any of the Subsidiaries, or any Environmental Liability related in
any way to Intermediate Holdings, either Borrower or any of the Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party



                                                                             140

thereto, provided that such indemnity shall not, as to any Indemnitee, be
         --------
available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence or wilful misconduct of such
Indemnitee. It is acknowledged and agreed by the parties hereto that, solely in
their capacities as Documentation Agents, and not in their capacities as
Lenders, the Documentation Agents shall have no duties hereunder.

          (c) To the extent that either Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, a Documentation Agent,
the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, such
Documentation Agent, the Issuing Bank or the Swingline Lender, as the case may
be, such Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
- --------
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, a Documentation Agent, the Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at the time.

          (d) To the extent permitted by applicable law, neither Intermediate
Holdings nor either Borrower shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof. In addition, no Indemnitee
shall be liable for any damages arising from the use by others of information or
other materials obtained through electronic, telecommunications or other
information transmission systems.

          (e) All amounts due under this Section shall be payable promptly after
written demand therefor.

          (f) No director, officer, employee, stockholder or member, as such, of
any Loan Party shall have any liability for the Obligations or for any claim
based on, in respect of or by reason of the Obligations or their creation,
provided that the foregoing shall not be construed
- --------



                                                                             141

to relieve any Loan Party of its Obligations under any Loan Document.

          SECTION 9.04. Successors and Assigns. (a) The provisions of this
                        ----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that
neither Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by either Borrower without such consent shall
be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

          (b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitments and the Loans at the time owing to it), provided that (i) except
                                                        --------
in the case of (x) an assignment of Term Loans or Term Commitments to a Lender
or a Lender Affiliate and (y) an assignment of Revolving Loans or Revolving
Commitments to a Revolving Lender, each of the Cayman Borrower and the
Administrative Agent (and, in the case of (A) an assignment of all or a portion
of a Revolving Commitment or any Lender's obligations in respect of its
Swingline Exposure, the Swingline Lender and (B) an assignment of all or a
portion of a Revolving Commitment or any Lender's obligations in respect of its
LC Exposure, each Issuing Bank) must give their prior written consent to such
assignment (which consent (A) shall not be unreasonably withheld or delayed and
(B) in the case of any consent required by an Issuing Bank, shall be deemed to
have been given in the event that such Issuing Bank fails to respond in writing
to a request for consent within two Business Days of receipt thereof), (ii)
except in the case of an assignment to a Lender or a Lender Affiliate or an
assignment of the entire remaining amount of the assigning Lender's Commitments
or Loans of any Class, the amount of the Commitments or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall be (A) an



                                                                             142

amount not less than $1,000,000, in the case of an assignment of Term Loans or
Term Commitments, or (B) an amount not less than $5,000,000, in the case of an
assignment of Revolving Loans or Revolving Commitments, in each case unless each
of the Cayman Borrower and the Administrative Agent (and, in the case of an
assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its Swingline Exposure, the Swingline Lender)
otherwise consent, which consent shall not be unreasonably withheld, (iii) each
partial assignment of an assigning Lender's rights and obligations in respect of
one Class of Commitments or Loans shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
such Class of Commitments or Loans (which, in the case of any assignment of Term
Loans, will include a proportionate part of the assigning Lender's rights and
obligations in respect of Cayman Term Loans and U.S. Term Loans of which such
Term Loans are a part), (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500, and (v) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire, and provided further that any consent of the Cayman Borrower
                   ----------------
otherwise required under this paragraph shall not be required if an Event of
Default under clause (a), (b), (h) or (i) of Article VII has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement (provided that any
                                                             --------
liability of each Borrower to such assignee under Section 2.15, 2.16 or 2.17
shall be limited to the amount, if any, that would have been payable thereunder
by such Borrower in the absence of such assignment and provided further that an
                                                       -------- -------
assignee that is a Foreign Lender shall not be entitled to the benefits of
Section 2.17 unless such assignee agrees to comply with the requirements of
Section 2.17(e)), and the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this



                                                                             143

paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.

          (c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing by each Borrower
to, each Lender pursuant to the terms hereof from time to time (the "Register").
                                                                     --------
The entries in the Register shall be conclusive, and Intermediate Holdings, the
Borrowers, the Administrative Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the
Borrowers, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

          (d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

          (e) Any Lender may, without the consent of either Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations (which, in the case of any participations in Term Loans, will
include a proportionate part of the assigning Lender's rights and obligations in
respect of the Cayman Term Loans and the U.S. Term Loans included in the
Borrowing of which such Term Loans are a part) to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
             -----------
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it), provided that (i) such Lender's obligations under
                            --------
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for



                                                                             144

the performance of such obligations and (iii) Intermediate Holdings, the
Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce the Loan Documents and
to approve any amendment, modification or waiver of any provision of the Loan
Documents, provided that such agreement or instrument may provide that such
           --------
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.

          (f) A Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the applicable
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the applicable Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the applicable
Borrower, to comply with Section 2.17(e) as though it were a Lender.

          (g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest, provided that no such pledge or assignment of
                                   --------
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto. In
the case of any Lender that is a fund that invests in bank loans, such Lender
may, without the consent of the Borrowers or the Administrative Agent, assign or
pledge all or any portion of any instrument evidencing its rights as a Lender
under this Agreement to



                                                                             145

any trustee for, or any other representative of holders of obligations owed or
securities issued by, such fund, as security for such obligations or securities,
provided that any foreclosure or similar action by such trustee or
representative shall be subject to the provisions of this Section 9.02
concerning assignments.

          (h) In the event that S&P or Moody's shall, after the date that any
Revolving Lender becomes a Lender, downgrade the long-term certificate deposit
ratings or long-term senior unsecured debt ratings of such Lender (or the parent
company thereof), and the resulting ratings shall be BBB+ or lower by S&P or
Baa1 or lower by Moody's, then the Swingline Lender shall have the right, but
not the obligation, at its own expense, upon notice to such Lender, the
Administrative Agent and the Cayman Borrower, to replace (or to request the
Cayman Borrower, at the sole expense of the Swingline Lender, to use its
reasonable efforts to replace) such Lender with respect to such Lender's
Revolving Commitment with an assignee (in accordance with and subject to the
restrictions contained in paragraph (b) above, including the right of the
Borrowers and the Administrative Agent to consent to the identity of such
assignee (which consent shall not be unreasonably withheld)), and such Lender
hereby agrees to transfer and assign without recourse (in accordance with and
subject to the restrictions contained in paragraph (b) above) all its interests,
rights and obligations in respect of its Revolving Commitment to such assignee;
provided, however, that (i) no such assignment shall conflict with any law, rule
- --------  -------
and regulation or order of any Governmental Authority and (ii) such assignee
shall pay to such Lender in immediately available funds on the date of such
assignment the principal of and interest and fees accrued to the date of payment
on the Loans and LC Disbursements of such Lender hereunder.

          (i) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
           ---------------
"SPV"), identified as such in writing from time to time by the Granting Lender
 ---
to the Administrative Agent and the Cayman Borrower, the option to provide to
either Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to such Borrower pursuant to this Agreement,
provided that (i) nothing herein shall constitute a commitment by any SPV to
- --------
make any Loan or, except as provided in the immediately succeeding sentence,
affect in any way the Commitment of the Granting Lender and (ii) if an SPV
elects not to exercise such option or otherwise fails to provide all or any part
of such Loan, the Granting Lender shall be obligated to make such Loan pursuant
to the terms



                                                                             146

hereof. The making of a Loan by an SPV hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. In the event that an SPV provides all or any part of any Loan,
Intermediate Holdings, the Borrowers and the Administrative Agent shall continue
to deal solely and directly with the Granting Lender with respect to such Loan,
including with respect to the giving of notices and the delivery of financial
statements, certificates and other documents (including pursuant to Section 5)
and information. Each party hereto hereby agrees that no SPV shall be (i) liable
for any indemnity or similar payment obligation under this Agreement (all
liability for which shall remain with the Granting Lender), (ii) have any voting
rights under Section 9.02 or Article VII or with respect to any other matter
under this Agreement to which the Lenders are entitled to give their consent
(all of which voting rights shall remain with the Granting Lender) or (iii)
entitled to receive any greater amount pursuant to Section 2.15, 2.16, 2.17 or
9.03 than the Granting Lender would have been entitled to receive in respect of
the amount of any Loan provided by the SPV if the Granting Lender had in fact
made such Loan. In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that, prior to
the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPV, it will
not institute against, or join any other person in instituting against, such SPV
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary in this Section 9.04, any SPV
may (i) with notice to, but without the prior written consent of, the Cayman
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by the Cayman Borrower and
the Administrative Agent) providing liquidity and/or credit support to or for
the account of such SPV to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPV. As this Section
9.04(i) applies to any particular SPV, this Section may not be amended without
the written consent of such SPV.

          SECTION 9.05. Survival. All covenants, agreements, representations and
                        ---------
warranties made by the Loan Parties in the Loan Documents and in the
certificates or



                                                                             147

other instruments delivered in connection with or pursuant to this Agreement or
any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.

          SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement
                        -----------------------------------------
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

          SECTION 9.07. Severability. Any provision of this Agreement held to be
                        -------------
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality



                                                                             148

and enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

          SECTION 9.08. Right of Setoff. If an Event of Default shall have
                        ----------------
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of either
Borrower against any of and all the obligations of the applicable Borrower then
existing under this Agreement (to the extent such obligations of either Borrower
are then due and payable (by acceleration or otherwise)) held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender may
have.

          SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
                        --------------------------------------------------
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
- --------
BY THE LAW OF THE STATE OF NEW YORK.

          (b) Each of Intermediate Holdings, the Borrowers, the Administrative
Agent, each Issuing Bank and each Lender hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement or any other Loan Document shall affect any right
that the Administrative Agent, the Issuing Bank or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or any other Loan
Document against



                                                                             149

Intermediate Holdings, the Borrowers or their properties in the courts of any
jurisdiction.

          (c) Each of Intermediate Holdings and the Borrowers hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law. Intermediate
Holdings, the Cayman Borrower and each of the Subsidiary Loan Parties that is
not organized or incorporated in the United States hereby appoints the U.S.
Borrower as agent for service of process in the United States and the U.S.
Borrower hereby accepts such appointment.

          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
                        ---------------------
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

          SECTION 9.11. Headings. Article and Section headings and the Table of
                        ---------
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

          SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
                        ----------------
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information



                                                                             150

(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section (or an agreement to be bound by the provisions of this
Section 9.12), to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, or (ii) any actual or prospective direct or indirect contractual
counterparties in swap or other derivative agreements or such contractual
counterparties' professional advisors, (g) with the consent of either Borrower,
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than Intermediate Holdings or the Borrowers or (i) to any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender. In the case of any disclosure of Information pursuant to clause (c)
or clause (e) of the preceding sentence, the Administrative Agent will inform
the Borrowers of such disclosure. For the purposes of this Section, the term
"Information" means all information received from Intermediate Holdings or
 -----------
either Borrower relating to Intermediate Holdings or the Borrowers or their
business, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by Intermediate Holdings or a Borrower. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

          SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
                        -------------------------
herein to the contrary, if at any



                                                                             151

time the interest rate applicable to any Loan, together with all fees, charges
and other amounts that are treated as interest on such Loan under applicable law
(collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum
                   -------                                               -------
Rate") that may be contracted for, charged, taken, received or reserved by the
- ----
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.

          SECTION 9.14. Judgment Currency. (a) The Borrowers' obligations
                        ------------------
hereunder and each Borrower's and the other Loan Parties' obligations under the
other Loan Documents to make payments in Dollars (the "Obligation Currency")
                                                       -------------------
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by the Administrative Agent, the Collateral Agent or a Lender
of the full amount of the Obligation Currency expressed to be payable to the
Administrative Agent, the Collateral Agent or such Lender under this Agreement
or the other Loan Documents. If, for the purpose of obtaining or enforcing
judgment against the Borrower or any other Loan Party in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the "Judgment Currency") an amount due in the Obligation Currency, the
        -----------------
conversion shall be made, at the rate of exchange (as quoted by the
Administrative Agent or, if the Administrative Agent does not quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Administrative Agent) determined, in each case, as of the date immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
                                ---------------------------------

          (b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Borrowers covenant and agree to pay, or cause to be paid, such



                                                                             152

additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency that could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.

          (c) For purposes of determining the rate of exchange for this Section,
such amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.

          SECTION 9.15. Joint and Several Liability. Notwithstanding any
                        ----------------------------
provision contained herein or in any other Loan Document to the contrary, each
of the Cayman Borrower and the U.S. Borrower agrees and acknowledges that the
Cayman Borrower and the U.S. Borrower shall be jointly and severally liable for
all of the Obligations arising hereunder and under the other Loan Documents,
including principal of, interest on, and any fees, expenses, indemnities and
premium payable in respect of, each of the Cayman Term Loans and the U.S. Term
Loans.

                                    ARTICLE X

                         Collection Allocation Mechanism
                         -------------------------------

          SECTION 10.01. Implementation of CAM. (a) On the CAM Exchange Date,
                         ----------------------
(i) the Commitments shall automatically and without further act be terminated as
provided in Section 7.01, (ii) each Revolving Lender shall immediately be deemed
to have acquired (and shall promptly make payment therefor to the Administrative
Agent in accordance with Section 2.04(c)) participations in the Swingline Loans
in an amount equal to such Revolving Lender's Applicable Percentage of each
Swingline Loan outstanding on such date and (iii) the Lenders shall
automatically and without further act (and without regard to the provisions of
Section 9.04) be deemed to have exchanged interests in the Loans (other than the
Swingline Loans) and, in the case of the Revolving Lenders, participations in
Swingline Loans and Letters of Credit such that in lieu of the interest of each
Lender in each Loan and Letter of Credit in which it shall participate as of
such date (including such Lender's interest in the Obligations of each Loan
Party in respect of each such Loan and Letter of Credit), such Lender shall hold
an interest in every one of the Loans (other than the Swingline Loans) and a



                                                                             153

participation in every one of the Swingline Loans and Letters of Credit
(including the Obligations of each Loan Party in respect of each such Loan and
each LC Reserve Account established pursuant to Section 10.02 below), whether or
not such Lender shall previously have participated therein, equal to such
Lender's CAM Percentage thereof. Each Lender and each Loan Party hereby consents
and agrees to the CAM Exchange, and each Lender agrees that the CAM Exchange
shall be binding upon its successors and assigns and any person that acquires a
participation in its interests in any Loan. Each Loan Party agrees from time to
time to execute and deliver to the Administrative Agent all such Notes and other
instruments and documents as the Administrative Agent shall reasonably request
to evidence and confirm the respective interests of the Lenders after giving
effect to the CAM Exchange, and each Lender agrees to surrender any Notes
originally received by it in connection with its Loans hereunder to the
Administrative Agent against delivery of new Notes evidencing its interests in
the Loans; provided, however, that the failure of any Loan Party to execute or
           --------  -------
deliver or of any Lender to accept any such Note, instrument or document shall
not affect the validity or effectiveness of the CAM Exchange.

          (b) As a result of the CAM Exchange, upon and after the CAM Exchange
Date, each payment received by the Administrative Agent or the Collateral Agent
pursuant to any Loan Document in respect of the Obligations, and each
distribution made by the Collateral Agent pursuant to any Security Document in
respect of the Obligations, shall be distributed to the Lenders pro rata in
accordance with their respective CAM Percentages. Any direct payment received by
a Lender upon or after the CAM Exchange Date, including by way of setoff, in
respect of an Obligation shall be paid over to the Administrative Agent for
distribution to the Lenders in accordance herewith.

          SECTION 10.02. Letters of Credit. (a) In the event that on the CAM
                         ------------------
Exchange Date any Letter of Credit shall be outstanding and undrawn in whole or
in part, or any LC Disbursement shall not have been reimbursed either by the
Cayman Borrower or, in the case of any LC Disbursement made in dollars, with the
proceeds of a Revolving Borrowing, each Revolving Lender shall promptly pay over
to the Administrative Agent, in immediately available funds, an amount in
dollars equal to such Revolving Lender's Applicable Percentage of such undrawn
face amount (or, in the case of any Alternative Currency Letter of Credit, the
Dollar Equivalent of such face amount) or (to the extent it has not already done
so) such unreimbursed drawing, as the case may be, together with interest
thereon from the CAM



                                                                             154

Exchange Date to the date on which such amount shall be paid to the
Administrative Agent at the rate that would be applicable at the time to an ABR
Revolving Loan in a principal amount equal to such amount. The Administrative
Agent shall establish a separate account or accounts for each Lender (each, an
"LC Reserve Account") for the amounts received with respect to each such Letter
of Credit pursuant to the preceding sentence. The Administrative Agent shall
deposit in each Lender's LC Reserve Account such Lender's CAM Percentage of the
amounts received from the Revolving Lenders as provided above, provided that in
                                               --------
the case of amounts received in respect of Alternative Currency Letters of
Credit, the Administrative Agent may, in its sole discretion, convert any or all
of such amounts into the applicable Alternative Currency immediately prior to
any withdrawal from the LC Reserve Account pursuant to paragraph (b) below. The
Administrative Agent shall have sole dominion and control over each LC Reserve
Account, and the amounts deposited in each LC Reserve Account shall be held in
such LC Reserve Account until withdrawn as provided in paragraph (b) or (c)
below. The Administrative Agent shall maintain records enabling it to determine
the amounts paid over to it and deposited in the LC Reserve Accounts in respect
of each Letter of Credit and the amounts on deposit in respect of each Letter of
Credit attributable to each Lender's CAM Percentage. The amounts held in each
Lender's LC Reserve Account shall be held as a reserve against the LC Exposures,
shall be the property of such Lender, shall not constitute Loans to or give rise
to any claim of or against any Loan Party and shall not give rise to any
obligation on the part of either Borrower to pay interest to such Lender, it
being agreed that the reimbursement obligations in respect of Letters of Credit
shall arise only at such times as drawings are made thereunder, as provided in
Section 2.05.

          (b) In the event that after the CAM Exchange Date any drawing shall be
made in respect of a Letter of Credit, the Administrative Agent shall, at the
request of the Issuing Bank, withdraw from the LC Reserve Account of each Lender
any amounts, up to the amount of such Lender's CAM Percentage of such drawing,
deposited in respect of such Letter of Credit and remaining on deposit and
deliver such amounts to the Issuing Bank in satisfaction of the reimbursement
obligations of the Revolving Lenders under Section 2.05(d) (but not of the
Cayman Borrower under Section 2.05(e)). In the event that any Revolving Lender
shall default on its obligation to pay over any amount to the Administrative
Agent in respect of any Letter of Credit as provided in this Section 10.02, the
Issuing Bank shall, in the event of a drawing thereunder, have a claim against



                                                                             155

such Revolving Lender to the same extent as if such Lender had defaulted on its
obligations under Section 2.05(d), but shall have no claim against any other
Lender in respect of such defaulted amount, notwithstanding the exchange of
interests in the Cayman Borrower's reimbursement obligations pursuant to Section
10.01. Each other Lender shall have a claim against such defaulting Revolving
Lender for any damages sustained by it as a result of such default, including,
in the event that such Letter of Credit shall expire undrawn, its CAM Percentage
of the defaulted amount.

          (c) In the event that after the CAM Exchange Date any Letter of Credit
shall expire undrawn, the Administrative Agent shall withdraw from the LC
Reserve Account of each Lender the amount remaining on deposit therein in
respect of such Letter of Credit and distribute such amount to such Lender.

          (d) With the prior written approval of the Administrative Agent (not
to be unreasonably withheld), any Lender may withdraw the amount held in its LC
Reserve Account in respect of the undrawn amount of any Letter of Credit. Any
Lender making such a withdrawal shall be unconditionally obligated, in the event
there shall subsequently be a drawing under such Letter of Credit, to pay over
to the Administrative Agent, for the account of the applicable Issuing Bank, on
demand, its CAM Percentage of such drawing.

          (e) Pending the withdrawal by any Lender of any amounts from its LC
Reserve Account as contemplated by the above paragraphs, the Administrative
Agent will, at the direction of such Lender and subject to such rules as the
Administrative Agent may prescribe for the avoidance of inconvenience, invest
such amounts in Permitted Investments. Each Lender that has not withdrawn its
amounts in its LC Reserve Account as provided in paragraph (d) above shall have
the right, at intervals reasonably specified by the Administrative Agent, to
withdraw the earnings on investments so made by the Administrative Agent with
amounts in its LC Reserve Account and to retain such earnings for its own
account.



                                                                             156

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

                                        SEAGATE TECHNOLOGY HOLDINGS,

                                            by /s/ William L. Hudson
                                               ---------------------------------
                                               Name:  William L. Hudson
                                               Title: Secretary





                                                                Credit Agreement



                                                                             157

                                        SEAGATE TECHNOLOGY HDD HOLDINGS,

                                            by /s/ William L. Hudson
                                               ---------------------------------
                                               Name:  William L. Hudson
                                               Title: Secretary





                                                                Credit Agreement



                                        SEAGATE TECHNOLOGY (US) HOLDINGS, INC.,


                                            by /s/ William L. Hudson
                                              ----------------------------------
                                              Name:  William L. Hudson
                                              Title: Secretary





                                                                Credit Agreement



                                              JPMORGAN CHASE BANK, individually
                                              and as Administrative Agent,


                                               by /s/ Marian Schulman
                                                 -------------------------------
                                                 Name:  Marian Schulman
                                                 Title: Vice President





                                                                Credit Agreement



                                              MORGAN STANLEY SENIOR FUNDING,
                                              INC., individually and as
                                              Syndication Agent,


                                               by /s/ Michael Hart
                                                 -------------------------------
                                                 Name: Michael Hart
                                                 Title: Vice President





                                                                Credit Agreement




                                              MERRILL LYNCH CAPITAL CORPORATION,
                                              individually and as a
                                              Documentation Agent,


                                               by /s/ Carol J. E. Feeley
                                                 -------------------------------
                                                 Name: Carol J. E. Feeley
                                                 Title: Vice President






                                                                Credit Agreement



                                           CITICORP USA, INC., individually and
                                           as a Documentation Agent,


                                            by /s/ Arman Spieget
                                              ----------------------------------
                                              Name: Arman Spieget
                                              Title: Vice President






                                                                Credit Agreement



                                              CREDIT SUISSE FIRST BOSTON,
                                              individually and as a
                                              Documentation Agent,


                                               by /s/ Robert Hetu
                                                 -------------------------------
                                                 Name: Robert Hetu
                                                 Title: Director

                                                 /s/ Mark Heron
                                                 -------------------------------
                                                 Name: Mark Heron
                                                 Title: Associate












                                                                Credit Agreement



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                             AS OF MAY ___, 2002


                                  Name of Institution:

                                  The Bank of Nova Scotia
                                  ----------------------------------------------

                                     by /s/ Liz Hanson
                                       -----------------------------------------
                                       Name: Liz Hanson
                                       Title: Director



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                             AS OF MAY ___, 2002

                              Name of Institution:

                                CREDIT LYONNAIS NEW YORK BRANCH
                                --------------------------------------------

                                  by /s/ A. Averbukh
                                    ----------------------------------------
                                    Name: A. Averbukh
                                    Title: Vice President




                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                             AS OF MAY ___, 2002

                              Name of Institution:

                                KEY CORPORATE CAPITAL, INC.
                                individually and as Senior Managing Agent
                                --------------------------------------------

                                  by /s/ Julien Michaels
                                    ----------------------------------------
                                    Name: JULIEN MICHAELS
                                    Title: VICE PRESIDENT





                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                             AS OF MAY ___, 2002

                              Name of Institution: BNP Paribas, individually
                                                   and as Senior Managing Agent


                                BNP Paribas
                                --------------------------------------------

                                  by /s/ Pjalling Terpstra
                                    ----------------------------------------
                                    Name: Pjalling Terpstra
                                    Title: Director


                                  by /s/ Janice Ho
                                    ----------------------------------------
                                    Name: Janice Ho
                                    Title: Director





                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                             AS OF MAY ___, 2002

                              Name of Institution:

                                Lloyds TSB Bank PLC
                                --------------------------------------------

                                  by /s/ Matthew Packham
                                    ----------------------------------------
                                    Name: Matthew Packham
                                    Title: Assistant Director


                                  by /s/ Nicholas J. Bruce
                                    ----------------------------------------
                                    Name: Nicholas J. Bruce
                                    Title: Vice President
                                           Credit Services
                                           B-499




                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY 10, 2002

                              Name of Institution:

                                General Electric Capital Corporation
                                --------------------------------------------

                                  by /s/ Gregory Hong
                                    ----------------------------------------
                                    Name: GREGORY HONG
                                    Title: DULY AUTHORIZED SIGNATORY





                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                Metropolitan Life Insurance Company
                                --------------------------------------------

                                  by /s/ James P. Lingtor
                                    ----------------------------------------
                                    Name: James P. Lingtor
                                    Title: Director




                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:
                                 MONY Life Insurance Company

                             By: MONY Capital Management, Inc.,
                                 as Investment Adviser
                                --------------------------------------------


                                  by /s/ Suzanne E. Walton
                                    ----------------------------------------
                                    Name: Suzanne E. Walton
                                    Title: Senior Managing Director




                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:
                                 MONY Life Insurance Company of America

                             By: MONY Capital Management, Inc.
                                --------------------------------------------


                                  by /s/ Suzanne E. Walton
                                    ----------------------------------------
                                    Name: Suzanne E. Walton
                                    Title: Authorized Agent




                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                KZH Cypress Tau - 1 LLC
                                --------------------------------------------


                                  by /s/ Susan Lee
                                    ----------------------------------------
                                    Name: SUSAN LEE
                                    Title: AUTHORIZED AGENT



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:


                                KZH ING - 2 LLC
                                --------------------------------------------


                                  by /s/ Susan Lee
                                    ----------------------------------------
                                    Name: SUSAN LEE
                                    Title: Authorized Agent



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                KZH Pondview LLC
                                --------------------------------------------


                                  by /s/ Susan Lee
                                    ----------------------------------------
                                    Name: SUSAN LEE
                                    Title: Authorized Agent



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                KZH Riverside LLC
                                --------------------------------------------


                                  by /s/ Susan Lee
                                    ----------------------------------------
                                    Name: Susan Lee
                                    Title: Authorized Agent



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                KZH Waterside LLC
                                --------------------------------------------


                                  by /s/ Susan Lee
                                    ----------------------------------------
                                    Name: SUSAN LEE
                                    Title: Authorized Agent



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              TRAVELERS CORPORATE
                              LOAN FUND INC.

                              By Travelers Asset Management
                              International Company, LLC


                             By: /s/ William M. Gardner
                                --------------------------------------------
                                Name: WILLIAM M. GARDNER
                                Title: ASSISTANT INVESTMENT OFFICER



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                KZH Sterling LLC
                                --------------------------------------------


                                  by /s/ Susan Lee
                                    ----------------------------------------
                                    Name: SUSAN LEE
                                    Title: Authorized Agent



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                Oppenheimer Senior Floating Rate
                                --------------------------------------------


                                  by /s/ David Foxhoven
                                    ----------------------------------------
                                    Name: David Foxhoven
                                    Title: Assistant Vice President



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                STANWICH LOAN FUNDING LLC
                                --------------------------------------------


                                  by /s/ Kelly W. Warnement
                                    ----------------------------------------
                                    Name: KELLY W. WARNEMENT
                                    Title: VICE PRESIDENT



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY 13, 2002

                              Name of Institution:

                                SCUDDER FLOATING RATE FUND
                                --------------------------------------------


                                  by /s/ Kenneth Weber
                                    ----------------------------------------
                                    Name: KENNETH WEBER
                                    Title: SENIOR VICE PRESIDENT



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                The Sumitomo Trust & Banking Co., Ltd.
                                New York Branch
                                --------------------------------------------


                                  by /s/ Elizabeth A. Quirk
                                    ----------------------------------------
                                    Name: ELIZABETH A. QUIRK
                                    Title: VICE PRESIDENT



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                Stein Roe Floating Rate Limited Liability
                                Company
                                --------------------------------------------


                                  by /s/ Kathleen A. Zarn
                                    ----------------------------------------
                                    Name: Kathleen A. Zarn
                                    Title: Vice President
                                           Stein Roe & Farnham Incorporated,
                                           as Advisor to the Stein Roe
                                           Floating Rate Limited Liability
                                           Company



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                SRF TRADING, INC.
                                --------------------------------------------


                                  by /s/ Diana L. Mushill
                                    ----------------------------------------
                                    Name: DIANA L. MUSHILL
                                    Title: ASST. VICE PRESIDENT



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                SRF 2000 LLC
                                --------------------------------------------


                                  by /s/ Diana L. Mushill
                                    ----------------------------------------
                                    Name: DIANA L. MUSHILL
                                    Title: ASST. VICE PRESIDENT



                                                                  SIGNATURE PAGE
                                                                   TO THE CREDIT
                                                                 AGREEMENT DATED
                                                              AS OF MAY __, 2002

                              Name of Institution:

                                CypressTree Investment Management Company, Inc.
                                As: Attorney-in-Fact and on behalf of First
                                    Allmerica Financial Life Insurance Company
                                    as Portfolio Manager


                                 By: /s/ Jeffrey Megar
                                    ----------------------------------------
                                    Name: JEFFREY MEGAR
                                    Title: PRINCIPAL



                                                                Credit Agreement



                                                                             189

                                                                   SCHEDULE 1.02

                       Jurisdictions of Core Loan Parties
                       ----------------------------------

United States
Cayman Islands
Japan
Mexico
Singapore
Thailand



                                                                             190

                                                                SCHEDULE 2.05(a)

                           Existing Letters of Credit
                           --------------------------

Date of Issuance   Issuer   Applicant   Beneficiary   Amount and Currency
- ----------------   ------   ---------   -----------   -------------------
Expiration Date
- ---------------



                                                                             191

                                                                   SCHEDULE 5.01

          Line Items to be Included in Selected Unaudited Consolidated
          ------------------------------------------------------------
                  Financial Information of the Cayman Borrower
                  --------------------------------------------

Statement of Operations Data:
Revenue
Cost of revenue
Product development
Marketing and administrative
Amortization of good will and other intangibles
In-process research and development
Restructuring
Unusual items

Income (loss) from operations
Other income (expense):
         Interest income
         Interest expense
Other non-operating income (expense)
Income (loss) before income taxes
Benefit (provision) for income taxes
Net income (loss)

Balance Sheet Data (at end of period):
Cash and cash equivalents
Short-term investments
Total assets
Total debt (including current portion of long-term debt)
Total shareholder's equity

Other Financial Data:
EBITDA
Depreciation and amortization
Capital expenditures, net
Working capital
Cash interest expense
Ratio of earnings to fixed charges
EBITDA/interest expense
Total debt/EBITDA
Net debt/EBITDA
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities

EX-10.2(A)

                                                                 EXHIBIT 10.2(A)

                          FORM OF EMPLOYMENT AGREEMENT

          EMPLOYMENT AGREEMENT (the "Agreement") dated as of February 2, 2001 by
and between Seagate Technology (US) Holdings, Inc., a Delaware corporation (the
"Company"), and ____________ (the "Executive").

          Seagate Technology, Inc. ("Seagate") and Suez Acquisition Company
(Cayman) Limited ("SAC") entered into a Stock Purchase Agreement dated as of
March 29, 2000 (as amended, the "Stock Purchase Agreement"), pursuant to which,
as of the Closing which occurred on the Closing Date (each as defined in the
Stock Purchase Agreement), SAC, subject to certain exclusions, acquired all of
the shares of various subsidiaries of Seagate and, indirectly, substantially all
of the operating assets of Seagate;

          Prior to the consummation of the transactions pursuant to the Stock
Purchase Agreement, SAC assigned all of its rights and obligations under the
Stock Purchase Agreement to New SAC, a limited company incorporated in the
Cayman Islands ("New SAC")

          The Company desires to employ Executive and to enter into an agreement
embodying the terms of such employment;

          Executive desires to accept such employment and enter into such an
agreement;

          In consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as follows:

          1.  Term of Employment. Subject to the provisions of Section 7 of this
              ------------------
Agreement, Executive shall be employed by the Company for a period commencing on
the Closing Date (the "Commencement Date") and ending on the third anniversary
of the Commencement Date (the "Employment Term") on the terms and subject to the
conditions set forth in this Agreement; provided, however, that commencing with
                                        --------  -------
the date following the third anniversary of the Commencement Date, and on each
anniversary thereafter (each an "Extension Date"), the Employment Term shall be
automatically extended for an additional one-year period, unless the Company or
Executive provides the other party hereto 30 days prior written notice before
the next Extension Date that the Employment Term shall not be so extended.

          2.  Position.
              --------

              a. During the Employment Term, Executive shall serve in the
positions set forth on Exhibit A. In such position, Executive shall have duties
and authority at a level consistent with the duties and authority set forth on
Exhibit A and such other duties and responsibilities as shall be determined from
time to time by the Board of Directors of the Company (the "Board"). If
requested, Executive shall also serve as a member of the Board without
additional compensation.

              b. During the Employment Term, Executive will devote Executive's
full business time and best efforts to the performance of Executive's duties
hereunder and will not engage in any other business, profession or occupation
for compensation or otherwise which would conflict or interfere with the
rendition of such services either directly or indirectly,



without the prior written consent of the Board; provided that Executive may
                                                --------
continue to serve as a member of the boards of directors and trustees listed on
Exhibit B hereto ; provided in each case, and in the aggregate, that such
                   --------
activities do not conflict or interfere with the performance of Executive's
duties hereunder or conflict with Section 8.

          3.  Base Salary. During the Employment Term, the Company shall pay
              -----------
Executive a base salary at the annual rate of $_____________, payable in regular
installments in accordance with the Company's usual payment practices. Beginning
with the fiscal year commencing July 1, 2001, Executive's annual base salary
shall be reviewed within 30 days of the start of that fiscal year and will be
reviewed each year thereafter during the Employment Term, and, if appropriate,
it shall be increased from time to time in the sole discretion of the Board. The
base salary specified in this Section 3, together with any increases in such
base salary that the Board may make thereto from time to time, is herein after
referred to as the "Base Salary."

          4.  Annual Bonus. With respect to the fiscal year ending June 30, 2001
              ------------
and with respect to each full fiscal year thereafter during the Employment Term,
Executive shall be eligible to earn an annual bonus award (an "Annual Bonus") of
up to ___% of Executive's Base Salary (the "Target") based upon the achievement
of annual performance targets established by the Board within the first three
months of each fiscal year during the Employment Term; provided that the annual
                                                       --------
performance targets for the fiscal year in which the Closing occurs shall be
established by the Board within 90 days following the Closing. Executive shall,
by prior irrevocable election, have the right to defer the payment of each such
bonus for one or more years, and during the deferral period, Executive shall
have the right to designate, from among a number of investment alternatives, the
investments which shall serve as the measure of the investment return on his or
her deferred compensation. If all or any portion of the Annual Bonus otherwise
payable to Executive for any fiscal year of the Company would not in fact be
deductible for federal income tax purposes by reason of the limitation of
section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
then the portion of such Annual Bonus which is not so deductible shall be
deferred and paid to Executive in one lump sum upon the first date on which such
payment may be made without exceeding any applicable limitation on deductibility
under Code section 162(m). During the period in which payment of the Annual
Bonus is deferred, whether in whole or in part, the deferred portion of such
Annual Bonus shall be held in a grantor trust established by the Company for
Executive's benefit, and Executive shall have the right to designate the
investments, from a number of diversified investment alternatives designated by
the Company, which shall serve as the measure of the investment return on such
deferred portion.



          5.  Employee Benefits/Equity Awards.
              -------------------------------

              a. During the Employment Term, Executive shall be provided health,
life and disability insurance and retirement and fringe benefits that are
comparable, in the aggregate, to those benefits made available to the senior
executives of Seagate immediately prior to the Closing.

              b. Promptly following the date hereof, Executive shall be granted
an option to purchase shares of the Company or an affiliate, the number of
shares and the terms and conditions of the option to be determined by the Board
of Directors of New SAC. Notwithstanding the foregoing, the option agreement
representing the right to purchase such shares shall provide that if the
Executive's employment is terminated by the Company without Cause (as defined
below) or if the Executive resigns for Good Reason (as defined below), the
option shall immediately vest and become exercisable for all the shares at the
time subject to the option.

          6.  Business Expenses. During the Employment Term, reasonable business
              -----------------
expenses incurred by Executive in the performance of Executive's duties
hereunder shall be reimbursed by the Company in accordance with Company
policies.

          7.  Termination. The Employment Term and Executive's employment
              -----------
hereunder may be terminated by either party at any time and for any reason;
provided that Executive will be required to give the Company at least 30 days
- --------
advance written notice of any resignation of Executive's employment without Good
Reason. Notwithstanding any other provision of this Agreement, the provisions of
this Section 7 shall exclusively govern Executive's rights upon termination of
employment with the Company and its affiliates; provided that nothing in this
Agreement shall affect or otherwise modify Executive's rights, benefits or
entitlements under (i) the Deferred Compensation Plan into which Executive has
rolled the value of his unvested Seagate options and/or unvested Seagate share
pursuant to his Rollover Agreement with SAC dated November 13, 2000 (the
"Rollover Agreement"), (ii) his Restricted Share Agreement with SAC dated
November 22, 2000, (iii) the Management Retention Agreement between Executive
and Seagate dated as of ________________ (as amended by the Management
Participation Agreement dated as of March 29, 2000 between Executive and SAC and
the Rollover Agreement) (the "Management Retention Agreement") and (iv) any
stock option agreements or restricted share agreements and the awards subject to
such agreements which may be awarded to Executive from time to time following
the Closing (collectively, the "Collateral Documents").

              a.   By the Company For Cause or By Executive Resignation Without
                   -------------------------------------------------------------
Good Reason.
- -----------

              (i)  The Employment Term and Executive's employment hereunder may
 be terminated by the Company for Cause (as defined below) and shall terminate
automatically upon Executive's resignation without Good Reason (as defined in
Section 7(C)); provided that Executive will be required to give the Company at
               --------
least 30 days advance written notice of a resignation without Good Reason.

              (ii) For purposes of this Agreement, "Cause" shall mean (A)
Executive's continued failure to substantially perform the material duties of
his office (other than as a result of total or partial incapacity due to
physical or mental illness), (B) embezzlement or theft by Executive of the
Company's property, (C) the commission of any act or acts on Executive's part
resulting in the conviction of such Executive of a felony under the laws of the
United States or



any state, (D) Executive's willful malfeasance or willful misconduct in
connection with Executive's duties to Company or any other act or omission which
is materially injurious to the financial condition or business reputation of the
Company or any of its subsidiaries or affiliates, or (E) a material breach by
Executive of the material terms of this Agreement, the Management Stockholders
Agreement dated as of November 22, 2000, or any non-compete, non-solicitation or
confidentiality provisions to which Executive is subject. However, no
termination shall be deemed for Cause under clause (A), (D) or (E) unless
Executive is first given written notice by the Company of the specific acts or
omissions which the Company deems constitute grounds for a termination for Cause
and is provided with at least 30 days after such notice to cure the specified
deficiency.

          (iii) If Executive's employment is terminated by the Company for
Cause, or if Executive resigns without Good Reason, Executive shall be entitled
to receive:

                (A)  the Base Salary through the date of termination;

                (B)  any Annual Bonus earned but unpaid as of the date of
       termination for any previously completed fiscal year;

                (C)  reimbursement for any unreimbursed business expenses
       properly incurred by Executive in accordance with Company policy prior
       to the date of Executive's termination; and

                (D)  such employee benefits, if any, as to which Executive may
       be entitled under the employee benefit plans of the Company (the
       amounts described in clauses (A) through (D) hereof being referred to as
       the "Accrued Rights").

          Following such termination of Executive's employment by the Company
for Cause or resignation by Executive without Good Reason, except as set forth
in this Section 7(a)(iii) or in the Collateral Documents, Executive shall have
no further rights to any compensation or any other benefits under this
Agreement.

                 b.  Disability or Death.
                     -------------------

          (i) The Employment Term and Executive's employment hereunder shall
terminate upon Executive's death and may be terminated by the Company upon
fifteen (15) days prior written notice to Executive if Executive becomes
physically or mentally incapacitated and is therefore unable for a period of six
consecutive months or for an aggregate of nine months in any twenty-four
consecutive month period to perform Executive's duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to the existence of
the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the
Agreement.



            (ii)  Subject to reduction by the present value of any other cash
severance or cash termination benefits payable to Executive under any other
plans, programs or arrangements of the Company or its affiliates, including, but
not limited to, the Management Retention Agreement, upon termination of
Executive's employment hereunder for either death or Disability, Executive or
Executive's estate (as the case may be) shall be entitled to receive:

                 (A)  the Accrued Rights; and

                 (B)  a pro rata portion of any Annual Bonus, if any, that
     Executive would have been entitled to receive pursuant to Section 4 hereof
     in such year based upon (i) the percentage of the fiscal year that shall
     have elapsed through the date of Executive's termination of employment and
     (ii) to the extent payment of the Annual Bonus is based upon subjective
     individual performance criteria, based upon the actual performance of
     Executive during the portion of such fiscal year that Executive was
     employed by the Company prior to such death or Disability, payable when
     such Annual Bonus would have otherwise been payable had Executive's
     employment not terminated.

            Following Executive's termination of employment due to death or
Disability, except as set forth in this Section 7(b)(ii) or in the Collateral
Documents, Executive shall have no further rights to any compensation or any
other benefits under this Agreement.

                 c.   By the Company Without Cause or Resignation by Executive
                      ---------------------------------------------------------
for Good Reason.
- ---------------

            (i)   The Employment Term and Executive's employment hereunder may
be terminated by the Company without Cause or by Executive's resignation for
Good Reason.

            (ii)  For purposes of this Agreement, "Good Reason" shall mean
Executive's resignation of Executive's employment with the Company as a result
of the following actions, which actions remain uncured for at least 30 days
following written notice from Executive to the Company describing the occurrence
of such events and asserting that such events constitute grounds for a Good
Reason resignation, provided notice of such resignation is given to the Company
within 60 days after the expiration of the cure period: (A) without Executive's
express written consent, any material reduction in the level of Executive's
authority or duties from those set forth on Exhibit A of this Agreement
(including, for these purposes, any authority or duties assigned to Executive
with the consent of Executive and the Board within 90 days following the Closing
Date); provided, however, that, for the avoidance of doubt, the sale by New SAC
       --------  -------
of Seagate Removable Storage Solutions Holdings, Seagate Software (Cayman)
Holdings, XIOTECH Corporation or any of their subsidiaries shall not be
considered a material reduction in the level of Executive's authority or duties;
(B) without Executive's express written consent, a reduction of 10% or more in
the level of the base salary, target annual bonus or employee benefits to be
provided to Executive under this Agreement, other than a reduction implemented
with the consent of Executive or a reduction that is equivalent to reduction in
base salaries, bonus opportunities and/or employee benefits, as applicable,
imposed on all other senior executives of the Company at a similar level within
the Company (provided that the use of private aircraft shall not be deemed an
employee benefit for these purposes); or (C) the relocation of Executive to a
principal place of employment more than 50 miles from Executive's current
principal place of employment, without Executive's express written consent.

            (iii) Subject to reduction by the present value of any other cash
severance or cash termination benefits payable to Executive under any other
plans, programs or arrangements



of the Company or its affiliates, including, but not limited to, the Management
Retention Agreement, if Executive's employment is terminated by the Company
without Cause (other than by reason of death or Disability) or if Executive
resigns for Good Reason, Executive shall be entitled to receive:

            (A)  the Accrued Rights;

            (B)  subject to Executive's continued compliance with the provisions
     of Sections 8 and 9, continued payment of the Base Salary and monthly
     payments of the Executive's Target Annual Bonus divided by twelve for (x)
     __ months if such termination occurs on or prior to the second anniversary
     of the Commencement Date, or (y) __ months if such termination occurs
     following the ______ anniversary of the Commencement Date (as applicable,
     the "Severance Period"); and

            (C)  subject to Executive's continued compliance with the provisions
     of Sections 8 and 9, continued coverage under the Company's health, dental
     and life insurance programs for the Severance Period on the same basis as
     such coverage is generally provided to active senior executives of the
     Company, such continued coverage shall be without duplication of benefit
     coverage provided under any other plan, program or arrangement of the
     Company or its affiliates (including, without limitation, the Management
     Retention Agreement) and, for the avoidance of doubt, Executive shall be
     entitled to the continued coverage that is most favorable to Executive.

          Following Executive's termination of employment by the Company without
Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this Section
7(c)(iii) or in the Collateral Documents, Executive shall have no further rights
to any compensation or any other benefits under this Agreement.

            d.   Expiration of Employment Term.
                 -----------------------------

        (i) Election Not to Extend the Employment Term. In the event either
            ------------------------------------------
party elects not to extend the Employment Term pursuant to Section 1, unless
Executive's employment is earlier terminated pursuant to paragraphs (a), (b) or
(c) of this Section 7, Executive's termination of employment hereunder (whether
or not Executive continues as an employee of the Company thereafter) shall be
deemed to occur on the close of business on the day immediately preceding the
next scheduled Extension Date and, unless Executive continues as an employee of
the Company, Executive shall be entitled to receive the Accrued Rights.

          Following such termination of Executive's employment hereunder as a
result of either party's election not to extend the Employment Term, except as
set forth in this Section 7(d)(i) or in the Collateral Documents, Executive
shall have no further rights to any compensation or any other benefits under
this Agreement.



            (ii) Continued Employment Beyond the Expiration of the Employment
                 ------------------------------------------------------------
Term. Unless the parties otherwise agree in writing, continuation of Executive's
- ----
employment with the Company beyond the expiration of the Employment Term shall
be deemed an employment at-will and shall not be deemed to extend any of the
provisions of this Agreement and Executive's employment may thereafter be
terminated at will by either Executive or the Company; provided that the
                                                       --------
provisions of Sections 8, 9 and 10 of this Agreement shall survive any
termination of this Agreement or Executive's termination of employment
hereunder.

                 e.   Notice of Termination. Any purported termination of
                      ---------------------
employment by the Company or by Executive (other than due to Executive's death)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 11(h) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.

                 f.   Board/Committee Resignation. Upon termination of
                      ---------------------------
Executive's employment for any reason, Executive agrees to resign, as of the
date of such termination and to the extent applicable, from the Board (and any
committees thereof) and the Board of Directors (and any committees thereof) of
any of the Company's affiliates.

            8.   Non-Competition.
                 ---------------

                 a.   Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its affiliates and
accordingly agrees as follows:

            (1)  Except as otherwise expressly provided in Section 8(c), during
the Employment Term and, for a period of __ year(s) following the date Executive
ceases to be employed by the Company; provided, however, if Executive is
                                      --------  -------
terminated without Cause or resigns for Good Reason on or prior to the second
anniversary of the Commencement Date, for a period of __ years following the
date Executive ceases to be employed by the Company (the "Restricted Period"),
Executive will not, whether on Executive's own behalf or on behalf of or in
conjunction with any person, company, business entity or other organization
whatsoever, directly or indirectly solicit or assist in soliciting in
competition with the Company, the business of any client or prospective client:

                 (i)   with whom Executive had personal contact or dealings on
                       behalf of the Company during the one year period
                       preceding Executive's termination of employment;

                 (ii)  with whom employees reporting to Executive have had
                       personal contact or dealings on behalf of the Company
                       during the one year immediately preceding the Executive's
                       termination of employment; or

                 (iii) for whom Executive had direct or indirect responsibility
                       during the one year immediately preceding Executive's
                       termination of employment.

          (2)    Except as otherwise expressly provided in Section 8(c), during
the Restricted Period, Executive will not directly or indirectly:



                 (i)       engage in any business that competes with
                           the business of New SAC or its subsidiaries
                           (including, without limitation, businesses
                           which New SAC or its subsidiaries have
                           specific plans to conduct in the future and
                           as to which Executive is aware of such
                           planning) in any geographical area which is
                           within 100 miles of any geographical area in
                           which New SAC or its subsidiaries conduct
                           such business (a "Competitive Business");

                 (ii)      enter the employ of, or render any services to, any
                           person or entity (or any division of any person or
                           entity) who or which engages in a Competitive
                           Business;

                 (iii)     acquire a financial interest in, or otherwise become
                           actively involved with, any Competitive Business,
                           directly or indirectly, as an individual, partner,
                           shareholder, officer, director, principal, agent,
                           trustee or consultant; or

                 (iv)      interfere with, or attempt to interfere with,
                           business relationships (whether formed before, on or
                           after the date of this Agreement) between New SAC or
                           any of its subsidiaries and customers, clients,
                           suppliers, partners, members or investors of New SAC
                           or its subsidiaries.

          (3)    Notwithstanding anything to the contrary in this Agreement,
Executive may, directly or indirectly own, solely as an investment, securities
of any person engaged in the business of New SAC or its subsidiaries which are
publicly traded on a national or regional stock exchange or on the
over-the-counter market if Executive (i) is not a controlling person of, or a
member of a group which controls, such person and (ii) does not, directly or
indirectly, own 5% or more of any class of securities of such person.

          (4)    During the Restricted Period, Executive will not, whether on
Executive's own behalf or on behalf of or in conjunction with any person,
company, business entity or other organization whatsoever, directly or
indirectly:

                 (i)       solicit or encourage any employee of New SAC or its
                           subsidiaries to leave the employment of New SAC or
                           its subsidiaries; or

                 (ii)      hire any such employee who was employed by New SAC or
                           its subsidiaries as of the date of Executive's
                           termination of employment with the Company or who
                           left the employment of New SAC or its subsidiaries
                           coincident with, or within one year prior to or
                           after, the termination of Executive's employment
                           with the Company.

          (5)    During the Restricted Period, Executive will not, directly or
indirectly, solicit or encourage to cease to work with New SAC or its
subsidiaries any consultant then under contract with New SAC or its
subsidiaries.

                 b. It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in this Section 8
to be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against



Executive, the provisions of this Agreement shall not be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.

              c.     Notwithstanding the foregoing, the restrictions on
soliciting clients or prospective clients set forth in Section 8(a)(1) and on
engaging in Competitive Businesses set forth in Section 8(a)(2) shall not apply
to Executive following the expiration of the Employment Term if the Employment
Term is terminated due to the Company's election not to extend the Employment
Term pursuant to Section 1, unless the Company elects in writing, in its sole
                            ------
discretion, to pay Executive, following Executive's termination of employment
with the Company, the amounts set forth in Section 7(c)(iii) that would have
been payable to Executive in the event Executive's termination had been
terminated by the Company immediately prior to the expiration of the Employment
Term without Cause, in which case the provisions of Sections 8(a)(1) and 8(a)(2)
shall continue to apply.

       9.     Confidentiality; Inventions. Executive agrees to sign, and abide
              ---------------------------
by the terms of, the Company's standard At-Will Employment, Confidential
Information and Invention Assignment Agreement (the "Standard Agreement"), a
copy of which is attached hereto as Exhibit C and the terms of which are hereby
incorporated herein by reference and made a part of this Agreement; provided
                                                                    --------
that (i) the Company acknowledges that the provisions of the Standard Agreement
regarding "at will" employment shall not affect Executive's rights under this
Agreement and (ii) Executive acknowledges and agrees that to the extent any
original works of authorship which are made by Executive (solely or jointly with
others) within the scope of and during the period of Executive's employment with
the Company are deemed not to be "works made for hire," Executive hereby assigns
the copyright and all other intellectual property rights in such works to the
Company; provided further that the foregoing assignment shall not apply to
         ----------------
inventions, the assignment of which is prohibited by California Labor Code
Section 2870.

       10.    Specific Performance. Executive acknowledges and agrees that the
              --------------------
Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 8 or Section 9 would be inadequate and the Company would
suffer irreparable damages ads a result of any such breach or threatened breach.
In recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available
entitled and, in the case of any material breach of such provisions, to cease
making any payments or providing any benefit otherwise required by this
Agreement.

       11.    Miscellaneous.
              -------------

              a.     Governing Law. This Agreement shall be governed by and
                     -------------
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

              b.     Entire Agreement/Amendments.
                     ---------------------------

           (i) Except as otherwise provided in Section 11(b)(ii) below, this
Agreement contains the entire understanding of the parties with respect to the
employment of Executive by



the Company, and this Agreement supercedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company
and/or its affiliates regarding the terms and conditions of Executive's
employment with the Company and/or its affiliates. There are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein other than those expressly set forth
herein. This Agreement may not be altered, modified, or amended except by
written instrument signed by the parties hereto.

        (ii) Nothing in this Agreement shall affect or in any manner
otherwise modify Executive's rights, benefits and entitlements under the
Collateral Documents; provided that this Agreement does supercede the provisions
                      --------
of the Management Agreement dated as of March 29, 2000 among SAC and Executive
which described the material terms of an employment agreement to be entered into
between SAC and Executive (the "Management Agreement") and the provisions of the
Management Agreement referred to, or otherwise incorporated into, any of the
Collateral Documents.

              c.   No Waiver. The failure of a party to insist upon strict
                   ---------
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.

              d.   Severability. In the event that any one or more of the
                   ------------
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.

              e.   Assignment. This Agreement shall not be assignable by
                   ----------
Executive. This Agreement may be assigned by the Company to a person or entity
which is an affiliate or a successor in interest to substantially all of the
business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such affiliate or successor person or entity. The failure of any such affiliate
or successor person or entity to accept the assignment of the Company's
obligations under this Agreement (other than an assignment which occurs by
operation of law) shall constitute additional grounds for a resignation for Good
Reason by Executive under Section 7(c) of this Agreement.

              f.   Set Off  The Company's obligation to pay Executive the
                   -------
amounts provided and to make the arrangements provided hereunder shall be
subject to set-off, counterclaim or recoupment of amounts owed by Executive to
the Company or its affiliates

              g.   Successors; Binding Agreement. This Agreement shall inure to
                   -----------------------------
the benefit of and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributes, devises and legatees.

              h.   Notice. For the purpose of this Agreement, notices and all
                   ------
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.




                  If to the Company:

                  Seagate Technology (US) Holdings, Inc.
                  920 Disc Drive
                  Scotts Valley, CA  95066
                  Attention:  General Counsel

                  If to Executive:

                  To the most recent address of Executive set forth in the
                  personnel records of the Company.

                       i.     Executive Representation. Executive hereby
                              ------------------------
represents to the Company that the execution and delivery of this Agreement by
Executive and the Company and the performance by Executive of Executive's duties
hereunder shall not constitute a breach of, or otherwise contravene, the terms
of any employment agreement or other agreement or policy to which Executive is a
party or otherwise bound.

                       j.     Cooperation.  Executive shall provide his
                              -----------
reasonable cooperation in connection with any action or proceeding (or any
appeal from any action or proceeding) which relates to events occurring during
Executive's employment hereunder. This provision shall survive any termination
of this Agreement.

                       k.     Withholding Taxes.  The Company may withhold from
                              -----------------
any amounts payable under this Agreement such Federal, state and local taxes as
may be required to be withheld pursuant to any applicable law or regulation.

                       l.     Counterparts.  This Agreement may be signed in
                              ------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.



          IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

                                    SEAGATE TECHNOLOGY (US) HOLDINGS, INC.

                                    _________________________________
                                    By:
                                    Title:

                                    EXECUTIVE

                                    _________________________________



                                    EXHIBIT A
                             (DUTIES AND AUTHORITY)



                                    EXHIBIT B
                       (CURRENT BOARD/TRUSTEE MEMBERSHIPS)



                                    EXHIBIT C
 (STANDARD AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT
                                   AGREEMENT)

EX-10.2(B)

                                                                 Exhibit 10.2(b)

                              EMPLOYMENT AGREEMENT

                                Stephen J. Luczo


          EMPLOYMENT AGREEMENT (the "Agreement") dated as of February 2, 2001 by
and between Seagate Technology (US) Holdings, Inc., a Delaware corporation (the
"Company"), and Stephen J. Luczo (the "Executive").

          Seagate Technology, Inc. ("Seagate") and Suez Acquisition Company
(Cayman) Limited ("SAC") entered into a Stock Purchase Agreement dated as of
March 29, 2000 (as amended, the "Stock Purchase Agreement"), pursuant to which,
as of the Closing which occurred on the Closing Date (each as defined in the
Stock Purchase Agreement), SAC, subject to certain exclusions, acquired all of
the shares of various subsidiaries of Seagate and, indirectly, substantially all
of the operating assets of Seagate;

          Prior to the consummation of the transactions pursuant to the Stock
Purchase Agreement, SAC assigned all of its rights and obligations under the
Stock Purchase Agreement to New SAC, a limited company incorporated in the
Cayman Islands ("New SAC")

          The Company desires to employ Executive and to enter into an agreement
embodying the terms of such employment;

          Executive desires to accept such employment and enter into such an
agreement;

          In consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as follows:

          1.   Term of Employment. Subject to the provisions of Section 7 of
               ------------------
this Agreement, Executive shall be employed by the Company for a period
commencing on the Closing Date (the "Commencement Date") and ending on the third
anniversary of the Commencement Date (the "Employment Term") on the terms and
subject to the conditions set forth in this Agreement; provided, however, that
                                                       --------  -------
commencing with the date following the third anniversary of the Commencement
Date, and on each anniversary thereafter (each an "Extension Date"), the
Employment Term shall be automatically extended for an additional one-year
period, unless the Company or Executive provides the other party hereto 30 days
prior written notice before the next Extension Date that the Employment Term
shall not be so extended.

          2.   Position.
               --------

               a.   During the Employment Term, Executive shall serve in the
positions set forth on Exhibit A. In such position, Executive shall have duties
and authority at a level consistent with the duties and authority set forth on
Exhibit A and such other duties and responsibilities as shall be determined from
time to time by the Board of Directors of the Company (the "Board"). If
requested, Executive shall also serve as a member of the Board without
additional compensation.

               b.   During the Employment Term, Executive will devote
Executive's full business time and best efforts to the performance of
Executive's duties hereunder and will



not engage in any other business, profession or occupation for compensation or
otherwise which would conflict or interfere with the rendition of such services
either directly or indirectly, without the prior written consent of the Board;
provided that Executive may continue to serve as a member of the boards of
- --------
directors and trustees listed on Exhibit B hereto; provided in each case, and
                                                   --------
in the aggregate, that such activities do not conflict or interfere with the
performance of Executive's duties hereunder or conflict with Section 8.

          3.   Base Salary. During the Employment Term, the Company shall pay
               -----------
Executive a base salary at the annual rate of $1,000,000, payable in regular
installments in accordance with the Company's usual payment practices. Beginning
with the fiscal year commencing July 1, 2001, Executive's annual base salary
shall be reviewed within 30 days of the start of that fiscal year and will be
reviewed each year thereafter during the Employment Term, and, if appropriate,
it shall be increased from time to time in the sole discretion of the Board. The
base salary specified in this Section 3, together with any increases in such
base salary that the Board may make thereto from time to time, is herein after
referred to as the "Base Salary."

          4.   Annual Bonus. With respect to the fiscal year ending June 30,
               ------------
2001 and with respect to each full fiscal year thereafter during the Employment
Term, Executive shall be eligible to earn an annual bonus award (an "Annual
Bonus") of up to 125% of Executive's Base Salary (the "Target") based upon the
achievement of annual performance targets established by the Board within the
first three months of each fiscal year during the Employment Term; provided that
                                                                   --------
the annual performance targets for the fiscal year in which the Closing occurs
shall be established by the Board within 90 days following the Closing.
Executive shall, by prior irrevocable election, have the right to defer the
payment of each such bonus for one or more years, and during the deferral
period, Executive shall have the right to designate, from among a number of
investment alternatives, the investments which shall serve as the measure of the
investment return on his or her deferred compensation. If all or any portion of
the Annual Bonus otherwise payable to Executive for any fiscal year of the
Company would not in fact be deductible for federal income tax purposes by
reason of the limitation of section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"), then the portion of such Annual Bonus which is not so
deductible shall be deferred and paid to Executive in one lump sum upon the
first date on which such payment may be made without exceeding any applicable
limitation on deductibility under Code section 162(m). During the period in
which payment of the Annual Bonus is deferred, whether in whole or in part, the
deferred portion of such Annual Bonus shall be held in a grantor trust
established by the Company for Executive's benefit, and Executive shall have the
right to designate the investments, from a number of diversified investment
alternatives designated by the Company, which shall serve as the measure of the
investment return on such deferred portion.

                                       2



          5.   Employee Benefits/Equity Awards.
               -------------------------------

               a.   During the Employment Term, Executive shall be provided
health, life and disability insurance and retirement and fringe benefits that
are comparable, in the aggregate, to those benefits made available to the senior
executives of Seagate immediately prior to the Closing.

               b.   Promptly following the date hereof, Executive shall be
granted an option to purchase shares of the Company or an affiliate, the number
of shares and the terms and conditions of the option to be determined by the
Board of Directors of New SAC. Notwithstanding the foregoing, the option
agreement representing the right to purchase such shares shall provide that if
the Executive's employment is terminated by the Company without Cause (as
defined below) or if the Executive resigns for Good Reason (as defined below),
the option shall immediately vest and become exercisable for all the shares at
the time subject to the option.

          6.   Business Expenses. During the Employment Term, reasonable
               -----------------
business expenses incurred by Executive in the performance of Executive's duties
hereunder shall be reimbursed by the Company in accordance with Company
policies.

          7.   Termination. The Employment Term and Executive's employment
               -----------
hereunder may be terminated by either party at any time and for any reason;
provided that Executive will be required to give the Company at least 30 days
- --------
advance written notice of any resignation of Executive's employment without Good
Reason. Notwithstanding any other provision of this Agreement, the provisions of
this Section 7 shall exclusively govern Executive's rights upon termination of
employment with the Company and its affiliates; provided that nothing in this
                                                --------
Agreement shall affect or otherwise modify Executive's rights, benefits or
entitlements under (i) the Deferred Compensation Plan into which Executive has
rolled the value of his unvested Seagate options and/or unvested Seagate share
pursuant to his Rollover Agreement with SAC dated November 13, 2000 (the
"Rollover Agreement"), (ii) his Restricted Share Agreement with SAC dated
November 22, 2000, (iii) the Management Retention Agreement between Executive
and Seagate dated as of November 12, 1998 (as amended by the Management
Participation Agreement dated as of March 29, 2000 between Executive and SAC and
the Rollover Agreement) (the "Management Retention Agreement") and (iv) any
stock option agreements or restricted share agreements and the awards subject to
such agreements which may be awarded to Executive from time to time following
the Closing (collectively, the "Collateral Documents").

               a.   By the Company For Cause or By Executive Resignation Without
                    ------------------------------------------------------------
Good Reason.
- -----------

          (i)  The Employment Term and Executive's employment hereunder may be
terminated by the Company for Cause (as defined below) and shall terminate
automatically upon Executive's resignation without Good Reason (as defined in
Section 7(C)); provided that Executive will be required to give the Company at
               --------
least 30 days advance written notice of a resignation without Good Reason.

          (ii) For purposes of this Agreement, "Cause" shall mean (A)
Executive's continued failure to substantially perform the material duties of
his office (other than as a result

                                       3



of total or partial incapacity due to physical or mental illness), (B)
embezzlement or theft by Executive of the Company's property, (C) the commission
of any act or acts on Executive's part resulting in the conviction of such
Executive of a felony under the laws of the United States or any state, (D)
Executive's willful malfeasance or willful misconduct in connection with
Executive's duties to Company or any other act or omission which is materially
injurious to the financial condition or business reputation of the Company or
any of its subsidiaries or affiliates, or (E) a material breach by Executive of
the material terms of this Agreement, the Management Stockholders Agreement
dated as of November 22, 2000, or any non-compete, non-solicitation or
confidentiality provisions to which Executive is subject. However, no
termination shall be deemed for Cause under clause (A), (D) or (E) unless
Executive is first given written notice by the Company of the specific acts or
omissions which the Company deems constitute grounds for a termination for Cause
and is provided with at least 30 days after such notice to cure the specified
deficiency.

          (iii) If Executive's employment is terminated by the Company for
Cause, or if Executive resigns without Good Reason, Executive shall be entitled
to receive:

               (A)  the Base Salary through the date of termination;

               (B)  any Annual Bonus earned but unpaid as of the date of
     termination for any previously completed fiscal year;

               (C)  reimbursement for any unreimbursed business expenses
     properly incurred by Executive in accordance with Company policy prior to
     the date of Executive's termination; and

               (D)  such employee benefits, if any, as to which Executive may be
     entitled under the employee benefit plans of the Company (the amounts
     described in clauses (A) through (D) hereof being referred to as the
     "Accrued Rights").

        Following such termination of Executive's employment by the Company for
Cause or resignation by Executive without Good Reason, except as set forth in
this Section 7(a)(iii) or in the Collateral Documents, Executive shall have no
further rights to any compensation or any other benefits under this Agreement.

               b.   Disability or Death.
                    -------------------

          (i)  The Employment Term and Executive's employment hereunder shall
terminate upon Executive's death and may be terminated by the Company upon
fifteen (15) days prior written notice to Executive if Executive becomes
physically or mentally incapacitated and is therefore unable for a period of six
consecutive months or for an aggregate of nine months in any twenty-four
consecutive month period to perform Executive's duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to the existence of
the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the
Agreement.

                                       4



          (ii) Subject to reduction by the present value of any other cash
severance or cash termination benefits payable to Executive under any other
plans, programs or arrangements of the Company or its affiliates, including, but
not limited to, the Management Retention Agreement, upon termination of
Executive's employment hereunder for either death or Disability, Executive or
Executive's estate (as the case may be) shall be entitled to receive:

              (A)   the Accrued Rights; and

              (B)   a pro rata portion of any Annual Bonus, if any, that
     Executive would have been entitled to receive pursuant to Section 4 hereof
     in such year based upon (i) the percentage of the fiscal year that shall
     have elapsed through the date of Executive's termination of employment and
     (ii) to the extent payment of the Annual Bonus is based upon subjective
     individual performance criteria, based upon the actual performance of
     Executive during the portion of such fiscal year that Executive was
     employed by the Company prior to such death or Disability, payable when
     such Annual Bonus would have otherwise been payable had Executive's
     employment not terminated.

        Following Executive's termination of employment due to death or
Disability, except as set forth in this Section 7(b)(ii) or in the Collateral
Documents, Executive shall have no further rights to any compensation or any
other benefits under this Agreement.

               c.   By the Company Without Cause or Resignation by Executive for
                    ------------------------------------------------------------
Good Reason.
- -----------

          (i)  The Employment Term and Executive's employment hereunder may be
terminated by the Company without Cause or by Executive's resignation for Good
Reason.

          (ii) For purposes of this Agreement, "Good Reason" shall mean
Executive's resignation of Executive's employment with the Company as a result
of the following actions, which actions remain uncured for at least 30 days
following written notice from Executive to the Company describing the occurrence
of such events and asserting that such events constitute grounds for a Good
Reason resignation, provided notice of such resignation is given to the Company
within 60 days after the expiration of the cure period: (A) without Executive's
express written consent, any material reduction in the level of Executive's
authority or duties from those set forth on Exhibit A of this Agreement
(including, for these purposes, any authority or duties assigned to Executive
with the consent of Executive and the Board within 90 days following the Closing
Date); provided, however, that, for the avoidance of doubt, the sale by New SAC
       --------  -------
of Seagate Removable Storage Solutions Holdings, Seagate Software (Cayman)
Holdings, XIOTECH Corporation or any of their subsidiaries shall not be
considered a material reduction in the level of Executive's authority or duties;
(B) without Executive's express written consent, a reduction of 10% or more in
the level of the base salary, target annual bonus or employee benefits to be
provided to Executive under this Agreement, other than a reduction implemented
with the consent of Executive or a reduction that is equivalent to reduction in
base salaries, bonus opportunities and/or employee benefits, as applicable,
imposed on all other senior executives of the Company at a similar level within
the Company (provided that the use of private aircraft shall not be deemed an
employee benefit for these purposes); or (C) the relocation of Executive to a
principal place of employment more than 50 miles from Executive's current
principal place of employment, without Executive's express written consent.

                                        5



          (iii) Subject to reduction by the present value of any other cash
severance or cash termination benefits payable to Executive under any other
plans, programs or arrangements of the Company or its affiliates, including, but
not limited to, the Management Retention Agreement, if Executive's employment is
terminated by the Company without Cause (other than by reason of death or
Disability) or if Executive resigns for Good Reason, Executive shall be entitled
to receive:

               (A)  the Accrued Rights;

               (B)  subject to Executive's continued compliance with the
     provisions of Sections 8 and 9, continued payment of the Base Salary and
     monthly payments of the Executive's Target Annual Bonus divided by twelve
     for (x) 36 months if such termination occurs on or prior to the second
     anniversary of the Commencement Date, or (y) 24 months if such termination
     occurs following the second anniversary of the Commencement Date (as
     applicable, the "Severance Period"); and

               (C)  subject to Executive's continued compliance with the
     provisions of Sections 8 and 9, continued coverage under the Company's
     health, dental and life insurance programs for the Severance Period on the
     same basis as such coverage is generally provided to active senior
     executives of the Company, such continued coverage shall be without
     duplication of benefit coverage provided under any other plan, program or
     arrangement of the Company or its affiliates (including, without
     limitation, the Management Retention Agreement) and, for the avoidance of
     doubt, Executive shall be entitled to the continued coverage that is most
     favorable to Executive.

        Following Executive's termination of employment by the Company without
Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this Section
7(c)(iii) or in the Collateral Documents, Executive shall have no further rights
to any compensation or any other benefits under this Agreement.

                d.  Expiration of Employment Term.
                    -----------------------------

          (i)   Election Not to Extend the Employment Term. In the event either
                ------------------------------------------
party elects not to extend the Employment Term pursuant to Section 1, unless
Executive's employment is earlier terminated pursuant to paragraphs (a), (b) or
(c) of this Section 7, Executive's termination of employment hereunder (whether
or not Executive continues as an employee of the Company thereafter) shall be
deemed to occur on the close of business on the day immediately preceding the
next scheduled Extension Date and, unless Executive continues as an employee of
the Company, Executive shall be entitled to receive the Accrued Rights.

        Following such termination of Executive's employment hereunder
as a result of either party's election not to extend the Employment Term, except
as set forth in this Section 7(d)(i) or in the Collateral Documents, Executive
shall have no further rights to any compensation or any other benefits under
this Agreement.

          (ii)  Continued Employment Beyond the Expiration of the Employment
                ------------------------------------------------------------
Term. Unless the parties otherwise agree in writing, continuation of Executive's
- ----
employment with the

                                       6



Company beyond the expiration of the Employment Term shall be deemed an
employment at-will and shall not be deemed to extend any of the provisions of
this Agreement and Executive's employment may thereafter be terminated at will
by either Executive or the Company; provided that the provisions of Sections 8,
9 and 10 of this Agreement shall survive any termination of this Agreement or
Executive's termination of employment hereunder.

               e.   Notice of Termination. Any purported termination of
                    ---------------------
employment by the Company or by Executive (other than due to Executive's death)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 11(h) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.

               f.   Board/Committee Resignation. Upon termination of Executive's
                    ----------------------------
employment for any reason, Executive agrees to resign, as of the date of such
termination and to the extent applicable, from the Board (and any committees
thereof) and the Board of Directors (and any committees thereof) of any of the
Company's affiliates.

          8.   Non-Competition.
               ---------------

               a.   Executive acknowledges and recognizes the highly competitive
nature of the businesses of the Company and its affiliates and accordingly
agrees as follows:

          (1)  Except as otherwise expressly provided in Section 8(c), during
the Employment Term and, for a period of 2 years following the date Executive
ceases to be employed by the Company; provided, however, if Executive is
                                      --------  -------
terminated without Cause or resigns for Good Reason on or prior to the second
anniversary of the Commencement Date, for a period of 3 years following the date
Executive ceases to be employed by the Company (the "Restricted Period"),
Executive will not, whether on Executive's own behalf or on behalf of or in
conjunction with any person, company, business entity or other organization
whatsoever, directly or indirectly solicit or assist in soliciting in
competition with the Company, the business of any client or prospective client:

               (i)     with whom Executive had personal contact or dealings on
                       behalf of the Company during the one year period
                       preceding Executive's termination of employment;

               (ii)    with whom employees reporting to Executive have had
                       personal contact or dealings on behalf of the Company
                       during the one year immediately preceding the Executive's
                       termination of employment; or

               (iii)   for whom Executive had direct or indirect responsibility
                       during the one year immediately preceding Executive's
                       termination of employment.

          (2)  Except as otherwise expressly provided in Section 8(c), during
the Restricted Period, Executive will not directly or indirectly:

                                       7



                (i)   engage in any business that competes with the business of
                      New SAC or its subsidiaries (including, without
                      limitation, businesses which New SAC or its subsidiaries
                      have specific plans to conduct in the future and as to
                      which Executive is aware of such planning) in any
                      geographical area which is within 100 miles of any
                      geographical area in which New SAC or its subsidiaries
                      conduct such business (a "Competitive Business");

                (ii)  enter the employ of, or render any services to, any person
                      or entity (or any division of any person or entity) who or
                      which engages in a Competitive Business;

                (iii) acquire a financial interest in, or otherwise become
                      actively involved with, any Competitive Business, directly
                      or indirectly, as an individual, partner, shareholder,
                      officer, director, principal, agent, trustee or
                      consultant; or

                (iv)  interfere with, or attempt to interfere with, business
                      relationships (whether formed before, on or after the date
                      of this Agreement) between New SAC or any of its
                      subsidiaries and customers, clients, suppliers, partners,
                      members or investors of New SAC or its subsidiaries.

          (3)   Notwithstanding anything to the contrary in this Agreement,
Executive may, directly or indirectly own, solely as an investment, securities
of any person engaged in the business of New SAC or its subsidiaries which are
publicly traded on a national or regional stock exchange or on the
over-the-counter market if Executive (i) is not a controlling person of, or a
member of a group which controls, such person and (ii) does not, directly or
indirectly, own 5% or more of any class of securities of such person.

          (4)   During the Restricted Period, Executive will not, whether on
Executive's own behalf or on behalf of or in conjunction with any person,
company, business entity or other organization whatsoever, directly or
indirectly:

                (i)   solicit or encourage any employee of New SAC or its
                      subsidiaries to leave the employment of New SAC or its
                      subsidiaries; or

                (ii)  hire any such employee who was employed by New SAC or its
                      subsidiaries as of the date of Executive's termination of
                      employment with the Company or who left the employment of
                      New SAC or its subsidiaries coincident with, or within one
                      year prior to or after, the termination of Executive's
                      employment with the Company.

          (5)   During the Restricted Period, Executive will not, directly or
indirectly, solicit or encourage to cease to work with New SAC or its
subsidiaries any consultant then under contract with New SAC or its
subsidiaries.

                                       8



               b. It is expressly understood and agreed that although Executive
and the Company consider the restrictions contained in this Section 8 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against Executive, the provisions
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

               c. Notwithstanding the foregoing, the restrictions on soliciting
clients or prospective clients set forth in Section 8(a)(1) and on engaging in
Competitive Businesses set forth in Section 8(a)(2) shall not apply to Executive
following the expiration of the Employment Term if the Employment Term is
terminated due to the Company's election not to extend the Employment Term
pursuant to Section 1, unless the Company elects in writing, in its sole
                       ------
discretion, to pay Executive, following Executive's termination of employment
with the Company, the amounts set forth in Section 7(c)(iii) that would have
been payable to Executive in the event Executive's termination had been
terminated by the Company immediately prior to the expiration of the Employment
Term without Cause, in which case the provisions of Sections 8(a)(1) and 8(a)(2)
shall continue to apply.

          9.   Confidentiality; Inventions. Executive agrees to sign, and abide
               ---------------------------
by the terms of, the Company's standard At-Will Employment, Confidential
Information and Invention Assignment Agreement (the "Standard Agreement"), a
copy of which is attached hereto as Exhibit C and the terms of which are hereby
incorporated herein by reference and made a part of this Agreement; provided
                                                                    --------
that (i) the Company acknowledges that the provisions of the Standard Agreement
regarding "at will" employment shall not affect Executive's rights under this
Agreement and (ii) Executive acknowledges and agrees that to the extent any
original works of authorship which are made by Executive (solely or jointly with
others) within the scope of and during the period of Executive's employment with
the Company are deemed not to be "works made for hire," Executive hereby assigns
the copyright and all other intellectual property rights in such works to the
Company; provided further that the foregoing assignment shall not apply to
         ----------------
inventions, the assignment of which is prohibited by California Labor Code
Section 2870.

          10.  Specific Performance. Executive acknowledges and agrees that the
               --------------------
Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 8 or Section 9 would be inadequate and the Company would
suffer irreparable damages ads a result of any such breach or threatened breach.
In recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available
entitled and, in the case of any material breach of such provisions, to cease
making any payments or providing any benefit otherwise required by this
Agreement.

          11.  Miscellaneous.
               -------------

                                       9



                     a.  Governing Law. This Agreement shall be governed by and
                         -------------
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

                     b.  Entire Agreement/Amendments.
                         ---------------------------

               (i)   Except as otherwise provided in Section 11(b)(ii) below,
this Agreement contains the entire understanding of the parties with respect to
the employment of Executive by the Company, and this Agreement supercedes all
prior agreements and understandings (including verbal agreements) between
Executive and the Company and/or its affiliates regarding the terms and
conditions of Executive's employment with the Company and/or its affiliates.
There are no restrictions, agreements, promises, warranties, covenants or
undertakings between the parties with respect to the subject matter herein other
than those expressly set forth herein. This Agreement may not be altered,
modified, or amended except by written instrument signed by the parties hereto.

               (ii)  Nothing in this Agreement shall affect or in any manner
otherwise modify Executive's rights, benefits and entitlements under the
Collateral Documents; provided that this Agreement does supercede the provisions
                      --------
of the Management Agreement dated as of March 29, 2000 among SAC and Executive
which described the material terms of an employment agreement to be entered into
between SAC and Executive (the "Management Agreement") and the provisions of the
Management Agreement referred to, or otherwise incorporated into, any of the
Collateral Documents.

                     c.  No Waiver. The failure of a party to insist upon strict
                         ---------
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.

                     d.  Severability. In the event that any one or more of the
                         ------------
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.

                     e.  Assignment. This Agreement shall not be assignable by
                         ----------
Executive. This Agreement may be assigned by the Company to a person or entity
which is an affiliate or a successor in interest to substantially all of the
business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such affiliate or successor person or entity. The failure of any such affiliate
or successor person or entity to accept the assignment of the Company's
obligations under this Agreement (other than an assignment which occurs by
operation of law) shall constitute additional grounds for a resignation for Good
Reason by Executive under Section 7(c) of this Agreement.

                     f.  Set Off The Company's obligation to pay Executive the
                         -------
amounts provided and to make the arrangements provided hereunder shall be
subject to set-off, counterclaim or recoupment of amounts owed by Executive to
the Company or its affiliates

                                       10



                     g. Successors; Binding Agreement. This Agreement shall
                        -----------------------------
inure to the benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributes, devises and legatees.

                     h. Notice. For the purpose of this Agreement, notices and
                        ------
all other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered by hand or overnight
courier or three days after it has been mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth below Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

             If to the Company:

             Seagate Technology (US) Holdings, Inc.
             920 Disc Drive
             Scotts Valley, CA 95066
             Attention:  General Counsel

             If to Executive:

             To the most recent address of Executive set forth in the
             personnel records of the Company.

                     i. Executive Representation. Executive hereby represents to
                        ------------------------
the Company that the execution and delivery of this Agreement by Executive and
the Company and the performance by Executive of Executive's duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
employment agreement or other agreement or policy to which Executive is a party
or otherwise bound.

                     j. Cooperation. Executive shall provide his reasonable
                        -----------
cooperation in connection with any action or proceeding (or any appeal from any
action or proceeding) which relates to events occurring during Executive's
employment hereunder. This provision shall survive any termination of this
Agreement.

                     k. Withholding Taxes. The Company may withhold from any
                        -----------------
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.

                     l. Counterparts. This Agreement may be signed in'
                        ------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

                                       11



          IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

                                    SEAGATE TECHNOLOGY (US) HOLDINGS, INC.


                                     /s/ WILLIAM L. HUDSON
                                    _____________________________________
                                    By: William L. Hudson
                                    Title: Secretary, General Counsel and
                                            Senior Vice President

                                    EXECUTIVE

                                     /s/ STEPHEN J. LUCZO
                                    ______________________________________

                                       12



                                    EXHIBIT A
                             (Duties and Authority)

Chief Executive Officer of New SAC, Seagate Technology Holdings and Seagate
Removable Storage Solutions Holdings and Chief Executive Officer, President and
Chief Operating Officer of Seagate Software (Cayman) Holdings with primary
responsibility for the management and oversight of the aforementioned entities
as well as the oversight of the investment activity of Seagate Technology
Investment Holdings LLC.



                                    EXHIBIT B
                       (Current Board/Trustee Memberships)

Seagate Technology

Seagate Software

Veritas Software

e2open

Stanford Graduate School of Business Advisory Board

Shark Foundation Board

Board of Trustees for the Boys and Girls Club of America



                                    EXHIBIT C
 (Standard At-Will Employment, Confidential Information and Invention Assignment
                                   Agreement)

EX-10.2(C)

                                                                 Exhibit 10.2(c)
                              EMPLOYMENT AGREEMENT

                               WILLIAM D. WATKINS

          EMPLOYMENT AGREEMENT (the "Agreement") dated as of February 2, 2001 by
and between Seagate Technology (US) Holdings, Inc., a Delaware corporation (the
"Company") , and William D. Watkins (the "Executive").

          Seagate Technology, Inc. ("Seagate") and Suez Acquisition Company
(Cayman) Limited ("SAC") entered into a Stock Purchase Agreement dated as of
March 29, 2000 (as amended, the "Stock Purchase Agreement"), pursuant to which,
as of the Closing which occurred on the Closing Date (each as defined in the
Stock Purchase Agreement), SAC, subject to certain exclusions, acquired all of
the shares of various subsidiaries of Seagate and, indirectly, substantially all
of the operating assets of Seagate;

          Prior to the consummation of the transactions pursuant to the Stock
Purchase Agreement, SAC assigned all of its rights and obligations under the
Stock Purchase Agreement to New SAC, a limited company incorporated in the
Cayman Islands ("New SAC")

          The Company desires to employ Executive and to enter into an agreement
embodying the terms of such employment;

          Executive desires to accept such employment and enter into such an
agreement;

          In consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as follows:

          1. Term of Employment. Subject to the provisions of Section 7 of this
             ------------------
Agreement, Executive shall be employed by the Company for a period commencing on
the Closing Date (the "Commencement Date") and ending on the third anniversary
of the Commencement Date (the "Employment Term") on the terms and subject to the
conditions set forth in this Agreement; provided, however, that commencing with
                                        --------  -------
the date following the third anniversary of the Commencement Date, and on each
anniversary thereafter (each an "Extension Date"), the Employment Term shall be
automatically extended for an additional one-year period, unless the Company or
Executive provides the other party hereto 30 days prior written notice before
the next Extension Date that the Employment Term shall not be so extended.

          2. Position.
             --------

             a. During the Employment Term, Executive shall serve in the
positions set forth on Exhibit A. In such position, Executive shall have duties
and authority at a level consistent with the duties and authority set forth on
Exhibit A and such other duties and responsibilities as shall be determined from
time to time by the Board of Directors of the Company (the "Board") and the
Chief Executive Officer of the Company. If requested, Executive shall also serve
as a member of the Board without additional compensation.



             b. During the Employment Term, Executive will devote Executive's
full business time and best efforts to the performance of Executive's duties
hereunder and will not engage in any other business, profession or occupation
for compensation or otherwise which would conflict or interfere with the
rendition of such services either directly or indirectly, without the prior
written consent of the Board; provided that Executive may continue to serve as a
                              --------
member of the boards of directors and trustees listed on Exhibit B hereto ;
provided in each case, and in the aggregate, that such activities do not
- --------
conflict or interfere with the performance of Executive's duties hereunder or
conflict with Section 8.

          3. Base Salary. During the Employment Term, the Company shall pay
             -----------
Executive a base salary at the annual rate of $850,000, payable in regular
installments in accordance with the Company's usual payment practices. Beginning
with the fiscal year commencing July 1, 2001, Executive's annual base salary
shall be reviewed within 30 days of the start of that fiscal year and will be
reviewed each year thereafter during the Employment Term, and, if appropriate,
it shall be increased from time to time in the sole discretion of the Board. The
base salary specified in this Section 3, together with any increases in such
base salary that the Board may make thereto from time to time, is herein after
referred to as the "Base Salary."

          4. Annual Bonus. With respect to the fiscal year ending June 30, 2001
             ------------
and with respect to each full fiscal year thereafter during the Employment Term,
Executive shall be eligible to earn an annual bonus award (an "Annual Bonus") of
up to 125% of Executive's Base Salary (the "Target") based upon the achievement
of annual performance targets established by the Board within the first three
months of each fiscal year during the Employment Term; provided that the annual
                                                       --------
performance targets for the fiscal year in which the Closing occurs shall be
established by the Board within 90 days following the Closing. Executive shall,
by prior irrevocable election, have the right to defer the payment of each such
bonus for one or more years, and during the deferral period, Executive shall
have the right to designate, from among a number of investment alternatives, the
investments which shall serve as the measure of the investment return on his or
her deferred compensation. If all or any portion of the Annual Bonus otherwise
payable to Executive for any fiscal year of the Company would not in fact be
deductible for federal income tax purposes by reason of the limitation of
section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
then the portion of such Annual Bonus which is not so deductible shall be
deferred and paid to Executive in one lump sum upon the first date on which such
payment may be made without exceeding any applicable limitation on deductibility
under Code section 162(m). During the period in which payment of the Annual
Bonus is deferred, whether in whole or in part, the deferred portion of such
Annual Bonus shall be held in a grantor trust established by the Company for
Executive's benefit, and Executive shall have the right to designate the
investments, from a number of diversified investment alternatives designated by
the Company, which shall serve as the measure of the investment return on such
deferred portion.

                                                                               2



         5.  Employee Benefits/Equity Awards.
             -------------------------------

             a. During the Employment Term, Executive shall be provided health,
life and disability insurance and retirement and fringe benefits that are
comparable, in the aggregate, to those benefits made available to the senior
executives of Seagate immediately prior to the Closing.

             b. Promptly following the date hereof, Executive shall be granted
an option to purchase shares of the Company or an affiliate, the number of
shares and the terms and conditions of the option to be determined by the Board
of Directors of New SAC. Notwithstanding the foregoing, the option agreement
representing the right to purchase such shares shall provide that if the
Executive's employment is terminated by the Company without Cause (as defined
below) or if the Executive resigns for Good Reason (as defined below), the
option shall immediately vest and become exercisable for all the shares at the
time subject to the option.

         6.  Business Expenses.  During the Employment Term, reasonable business
             -----------------
expenses incurred by Executive in the performance of Executive's duties
hereunder shall be reimbursed by the Company in accordance with Company
policies.

         7.  Termination. The Employment Term and Executive's employment
             -----------
hereunder may be terminated by either party at any time and for any reason;
provided that Executive will be required to give the Company at least 30 days
- --------
advance written notice of any resignation of Executive's employment without Good
Reason. Notwithstanding any other provision of this Agreement, the provisions of
this Section 7 shall exclusively govern Executive's rights upon termination of
employment with the Company and its affiliates; provided that nothing in this
                                                --------
Agreement shall affect or otherwise modify Executive's rights, benefits or
entitlements under (i) the Deferred Compensation Plan into which Executive has
rolled the value of his unvested Seagate options and/or unvested Seagate share
pursuant to his Rollover Agreement with SAC dated November 13, 2000 (the
"Rollover Agreement"), (ii) his Restricted Share Agreement with SAC dated
November 22, 2000, (iii) the Management Retention Agreement between Executive
and Seagate dated as of November 12, 1998 (as amended by the Management
Participation Agreement dated as of March 29, 2000 between Executive and SAC and
the Rollover Agreement) (the "Management Retention Agreement") and (iv) any
stock option agreements or restricted share agreements and the awards subject to
such agreements which may be awarded to Executive from time to time following
the Closing (collectively, the "Collateral Documents").

             a. By the Company For Cause or By Executive Resignation Without
                -------------------------------------------------------------
Good Reason.
- -----------

        (i)  The Employment Term and Executive's employment hereunder may be
terminated by the Company for Cause (as defined below) and shall terminate
automatically upon Executive's resignation without Good Reason (as defined in
Section 7(c)); provided that Executive will be required to give the Company at
               --------
least 30 days advance written notice of a resignation without Good Reason.

        (ii) For purposes of this Agreement, "Cause" shall mean (A) Executive's
continued failure to substantially perform the material duties of his office
(other than as a result

                                                                               3



of total or partial incapacity due to physical or mental illness), (B)
embezzlement or theft by Executive of the Company's property, (C) the commission
of any act or acts on Executive's part resulting in the conviction of such
Executive of a felony under the laws of the United States or any state, (D)
Executive's willful malfeasance or willful misconduct in connection with
Executive's duties to Company or any other act or omission which is materially
injurious to the financial condition or business reputation of the Company or
any of its subsidiaries or affiliates, or (E) a material breach by Executive of
the material terms of this Agreement, the Management Stockholders Agreement
dated as of November 22, 2000, or any non-compete, non-solicitation or
confidentiality provisions to which Executive is subject. However, no
termination shall be deemed for Cause under clause (A), (D) or (E) unless
Executive is first given written notice by the Company of the specific acts or
omissions which the Company deems constitute grounds for a termination for Cause
and is provided with at least 30 days after such notice to cure the specified
deficiency.

       (iii) If Executive's employment is terminated by the Company for Cause,
or if Executive resigns without Good Reason, Executive shall be entitled to
receive:

             (A)   the Base Salary through the date of termination;

             (B)   any Annual Bonus earned but unpaid as of the date of
   termination for any previously completed fiscal year;

             (C)   reimbursement for any unreimbursed business expenses properly
   incurred by Executive in accordance with Company policy prior to the date of
   Executive's termination; and

             (D)   such employee benefits, if any, as to which Executive may be
   entitled under the employee benefit plans of the Company (the amounts
   described in clauses (A) through (D) hereof being referred to as the "Accrued
   Rights").

      Following such termination of Executive's employment by the Company for
Cause or resignation by Executive without Good Reason, except as set forth in
this Section 7(a)(iii) or in the Collateral Documents, Executive shall have no
further rights to any compensation or any other benefits under this Agreement.

             b.    Disability or Death.
                   -------------------

       (i)   The Employment Term and Executive's employment hereunder shall
terminate upon Executive's death and may be terminated by the Company upon
fifteen (15) days prior written notice to Executive if Executive becomes
physically or mentally incapacitated and is therefore unable for a period of six
consecutive months or for an aggregate of nine months in any twenty-four
consecutive month period to perform Executive's duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to the existence of
the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the
Agreement.

                                                                               4



       (ii)  Subject to reduction by the present value of any other cash
severance or cash termination benefits payable to Executive under any other
plans, programs or arrangements of the Company or its affiliates, including, but
not limited to, the Management Retention Agreement, upon termination of
Executive's employment hereunder for either death or Disability, Executive or
Executive's estate (as the case may be) shall be entitled to receive:

             (A)    the Accrued Rights; and

             (B)    a pro rata portion of any Annual Bonus, if any, that
   Executive would have been entitled to receive pursuant to Section 4 hereof in
   such year based upon (i) the percentage of the fiscal year that shall have
   elapsed through the date of Executive's termination of employment and (ii) to
   the extent payment of the Annual Bonus is based upon subjective individual
   performance criteria, based upon the actual performance of Executive during
   the portion of such fiscal year that Executive was employed by the Company
   prior to such death or Disability, payable when such Annual Bonus would have
   otherwise been payable had Executive's employment not terminated.

       Following Executive's termination of employment due to death or
Disability, except as set forth in this Section 7(b)(ii) or in the Collateral
Documents, Executive shall have no further rights to any compensation or any
other benefits under this Agreement.

             c.     By the Company Without Cause or Resignation by Executive for
                    ------------------------------------------------------------
Good Reason.
- -----------

       (i)   The Employment Term and Executive's employment hereunder may be
terminated by the Company without Cause or by Executive's resignation for Good
Reason.

       (ii)  For purposes of this Agreement, "Good Reason" shall mean
Executive's resignation of Executive's employment with the Company as a result
of the following actions, which actions remain uncured for at least 30 days
following written notice from Executive to the Company describing the occurrence
of such events and asserting that such events constitute grounds for a Good
Reason resignation, provided notice of such resignation is given to the Company
within 60 days after the expiration of the cure period: (A) without Executive's
express written consent, any material reduction in the level of Executive's
authority or duties from those set forth on Exhibit A of this Agreement
(including, for these purposes, any authority or duties assigned to Executive
with the consent of Executive and the Board within 90 days following the Closing
Date); provided, however, that, for the avoidance of doubt, the sale by New SAC
       --------  -------
of Seagate Removable Storage Solutions Holdings, Seagate Software (Cayman)
Holdings, XIOTECH Corporation or any of their subsidiaries shall not be
considered a material reduction in the level of Executive's authority or duties;
(B) without Executive's express written consent, a reduction of 10% or more in
the level of the base salary, target annual bonus or employee benefits to be
provided to Executive under this Agreement, other than a reduction implemented
with the consent of Executive or a reduction that is equivalent to reduction in
base salaries, bonus opportunities and/or employee benefits, as applicable,
imposed on all other senior executives of the Company at a similar level within
the Company (provided that the use of private aircraft shall not be deemed an
employee benefit for these purposes); or (C) the relocation of Executive to a
principal place of employment more than 50 miles from Executive's current
principal place of employment, without Executive's express written consent.

                                                                               5



          (iii) Subject to reduction by the present value of any other cash
severance or cash termination benefits payable to Executive under any other
plans, programs or arrangements of the Company or its affiliates, including, but
not limited to, the Management Retention Agreement, if Executive's employment is
terminated by the Company without Cause (other than by reason of death or
Disability) or if Executive resigns for Good Reason, Executive shall be entitled
to receive:

          (A)   the Accrued Rights;

          (B)   subject to Executive's continued compliance with the provisions
     of Sections 8 and 9, continued payment of the Base Salary and monthly
     payments of the Executive's Target Annual Bonus divided by twelve for
     either (x) the lesser of (1) 24 months or (2) until the fourth anniversary
     of the Commencement Date, if such termination occurs on or prior to the
     third anniversary of the Commencement Date, or (y) 12 months if such
     termination occurs following the third anniversary of the Commencement Date
     (as applicable, the "Severance Period"); and

          (C)   subject to Executive's continued compliance with the provisions
     of Sections 8 and 9, continued coverage under the Company's health, dental
     and life insurance programs for the Severance Period on the same basis as
     such coverage is generally provided to active senior executives of the
     Company, such continued coverage shall be without duplication of benefit
     coverage provided under any other plan, program or arrangement of the
     Company or its affiliates (including, without limitation, the Management
     Retention Agreement) and, for the avoidance of doubt, Executive shall be
     entitled to the continued coverage that is most favorable to Executive.

        Following Executive's termination of employment by the Company without
Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this Section
7(c)(iii) or in the Collateral Documents, Executive shall have no further rights
to any compensation or any other benefits under this Agreement.

               d.    Expiration of Employment Term.
                     -----------------------------

           (i) Election Not to Extend the Employment Term. In the event either
               ------------------------------------------
party elects not to extend the Employment Term pursuant to Section 1, unless
Executive's employment is earlier terminated pursuant to paragraphs (a), (b) or
(c) of this Section 7, Executive's termination of employment hereunder (whether
or not Executive continues as an employee of the Company thereafter) shall be
deemed to occur on the close of business on the day immediately preceding the
next scheduled Extension Date and, unless Executive continues as an employee of
the Company, Executive shall be entitled to receive the Accrued Rights.

        Following such termination of Executive's employment hereunder as a
result of either party's election not to extend the Employment Term, except as
set forth in this Section 7(d)(i) or in the Collateral Documents, Executive
shall have no further rights to any compensation or any other benefits under
this Agreement.

                                                                               6



         (ii) Continued Employment Beyond the Expiration of the Employment Term.
              -----------------------------------------------------------------
Unless the parties otherwise agree in writing, continuation of Executive's
employment with the Company beyond the expiration of the Employment Term shall
be deemed an employment at-will and shall not be deemed to extend any of the
provisions of this Agreement and Executive's employment may thereafter be
terminated at will by either Executive or the Company; provided that the
provisions of Sections 8, 9 and 10 of this Agreement shall survive any
termination of this Agreement or Executive's termination of employment
hereunder.

              e.  Notice of Termination. Any purported termination of employment
                  ---------------------
by the Company or by Executive (other than due to Executive's death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 11(h) hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.

              f.  Board/Committee Resignation. Upon termination of Executive's
                  ---------------------------
employment for any reason, Executive agrees to resign, as of the date of such
termination and to the extent applicable, from the Board (and any committees
thereof) and the Board of Directors (and any committees thereof) of any of the
Company's affiliates.

         8.   Non-Competition.
              ---------------

              a. Executive acknowledges and recognizes the highly competitive
nature of the businesses of the Company and its affiliates and accordingly
agrees as follows:

         (1)  Except as otherwise expressly provided in Section 8(c), during the
Employment Term and, for a period equal to (x) the lesser of (A) 2 years
following the date Executive ceases to be employed by the Company or (B) until
the fourth anniversary of the Commencement Date, if Executive's termination of
employment occurs on or prior to the third anniversary of the Commencement Date
or (y) 1 year following the date Executive ceases to be employed by the Company,
if Executive's termination of employment occurs following the third anniversary
of the Commencement Date (the "Restricted Period"), Executive will not, whether
on Executive's own behalf or on behalf of or in conjunction with any person,
company, business entity or other organization whatsoever, directly or
indirectly solicit or assist in soliciting in competition with the Company, the
business of any client or prospective client:

              (i)    with whom Executive had personal contact or dealings on
                     behalf of the Company during the one year period preceding
                     Executive's termination of employment;

              (ii)   with whom employees reporting to Executive have had
                     personal contact or dealings on behalf of the Company
                     during the one year immediately preceding the Executive's
                     termination of employment; or

              (iii)  for whom Executive had direct or indirect responsibility
                     during the one year immediately preceding Executive's
                     termination of employment.

                                                                               7



        (2)    Except as otherwise expressly provided in Section 8(c), during
the Restricted Period, Executive will not directly or indirectly:

               (i)   engage in any business that competes with the business of
                     New SAC or its subsidiaries (including, without limitation,
                     businesses which New SAC or its subsidiaries have specific
                     plans to conduct in the future and as to which Executive is
                     aware of such planning) in any geographical area which is
                     within 100 miles of any geographical area in which New SAC
                     or its subsidiaries conduct such business (a "Competitive
                     Business");

               (ii)  enter the employ of, or render any services to, any person
                     or entity (or any division of any person or entity) who or
                     which engages in a Competitive Business;

               (iii) acquire a financial interest in, or otherwise become
                     actively involved with, any Competitive Business, directly
                     or indirectly, as an individual, partner, shareholder,
                     officer, director, principal, agent, trustee or consultant;
                     or

               (iv)  interfere with, or attempt to interfere with, business
                     relationships (whether formed before, on or after the date
                     of this Agreement) between New SAC or any of its
                     subsidiaries and customers, clients, suppliers, partners,
                     members or investors of New SAC or its subsidiaries.

          (3)  Notwithstanding anything to the contrary in this Agreement,
Executive may, directly or indirectly own, solely as an investment, securities
of any person engaged in the business of New SAC or its subsidiaries which are
publicly traded on a national or regional stock exchange or on the
over-the-counter market if Executive (i) is not a controlling person of, or a
member of a group which controls, such person and (ii) does not, directly or
indirectly, own 5% or more of any class of securities of such person.

          (4)  During the Restricted Period, Executive will not, whether on
Executive's own behalf or on behalf of or in conjunction with any person,
company, business entity or other organization whatsoever, directly or
indirectly:

               (i)   solicit or encourage any employee of New SAC or its
                     subsidiaries to leave the employment of New SAC or its
                     subsidiaries; or

               (ii)  hire any such employee who was employed by New SAC or its
                     subsidiaries as of the date of Executive's termination of
                     employment with the Company or who left the employment of
                     New SAC or its subsidiaries coincident with, or within one
                     year prior to or after, the termination of Executive's
                     employment with the Company.

                                                                               8



     (5)   During the Restricted Period, Executive will not, directly or
indirectly, solicit or encourage to cease to work with New SAC or its
subsidiaries any consultant then under contract with New SAC or its
subsidiaries.

            b.  It is expressly understood and agreed that although Executive
and the Company consider the restrictions contained in this Section 8 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against Executive, the provisions
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

            c.  Notwithstanding the foregoing, the restrictions on soliciting
clients or prospective clients set forth in Section 8(a)(1) and on engaging in
Competitive Businesses set forth in Section 8(a)(2) shall not apply to Executive
following the expiration of the Employment Term if the Employment Term is
terminated due to the Company's election not to extend the Employment Term
pursuant to Section 1, unless the Company elects in writing, in its sole
                       ------
discretion, to pay Executive, following Executive's termination of employment
with the Company, the amounts set forth in Section 7(c)(iii) that would have
been payable to Executive in the event Executive's termination had been
terminated by the Company immediately prior to the expiration of the Employment
Term without Cause, in which case the provisions of Sections 8(a)(1) and 8(a)(2)
shall continue to apply.

      9.    Confidentiality; Inventions. Executive agrees to sign, and abide by
            ---------------------------
the terms of, the Company's standard At-Will Employment, Confidential
Information and Invention Assignment Agreement (the "Standard Agreement"), a
copy of which is attached hereto as Exhibit C and the terms of which are hereby
incorporated herein by reference and made a part of this Agreement; provided
                                                                    --------
that (i) the Company acknowledges that the provisions of the Standard Agreement
regarding "at will" employment shall not affect Executive's rights under this
Agreement and (ii) Executive acknowledges and agrees that to the extent any
original works of authorship which are made by Executive (solely or jointly with
others) within the scope of and during the period of Executive's employment with
the Company are deemed not to be "works made for hire," Executive hereby assigns
the copyright and all other intellectual property rights in such works to the
Company; provided further that the foregoing assignment shall not apply to
         ----------------
inventions, the assignment of which is prohibited by California Labor Code
Section 2870.

      10.   Specific Performance. Executive acknowledges and agrees that the
            --------------------
Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 8 or Section 9 would be inadequate and the Company would
suffer irreparable damages ads a result of any such breach or threatened breach.
In recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available
entitled and, in the case of any material

                                                                               9



breach of such provisions, to cease making any payments or providing any benefit
otherwise required by this Agreement.

          11.   Miscellaneous.
                -------------

                a.   Governing Law. This Agreement shall be governed by and
                     -------------
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

                b.   Entire Agreement/Amendments.
                     ---------------------------

            (i) Except as otherwise provided in Section 11(b)(ii) below, this
Agreement contains the entire understanding of the parties with respect to the
employment of Executive by the Company, and this Agreement supercedes all prior
agreements and understandings (including verbal agreements) between Executive
and the Company and/or its affiliates regarding the terms and conditions of
Executive's employment with the Company and/or its affiliates. There are no
restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter herein other than those
expressly set forth herein. This Agreement may not be altered, modified, or
amended except by written instrument signed by the parties hereto.

            (ii) Nothing in this Agreement shall affect or in any manner
otherwise modify Executive's rights, benefits and entitlements under the
Collateral Documents; provided that this Agreement does supercede the provisions
                      --------
of the Management Agreement dated as of March 29, 2000 among SAC and Executive
which described the material terms of an employment agreement to be entered into
between SAC and Executive (the "Management Agreement") and the provisions of the
Management Agreement referred to, or otherwise incorporated into, any of the
Collateral Documents.

                c.   No Waiver. The failure of a party to insist upon strict
                     ---------
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.

                d.   Severability. In the event that any one or more of the
                     ------------
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.

                e.   Assignment. This Agreement shall not be assignable by
                     ----------
Executive. This Agreement may be assigned by the Company to a person or entity
which is an affiliate or a successor in interest to substantially all of the
business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such affiliate or successor person or entity. The failure of any such affiliate
or successor person or entity to accept the assignment of the Company's
obligations under this Agreement (other than an assignment which occurs by
operation of law) shall constitute additional grounds for a resignation for Good
Reason by Executive under Section 7(c) of this Agreement.

                                                                              10



               f.   Set Off The Company's obligation to pay Executive the
                    -------
amounts provided and to make the arrangements provided hereunder shall be
subject to set-off, counterclaim or recoupment of amounts owed by Executive to
the Company or its affiliates

               g.   Successors; Binding Agreement. This Agreement shall inure to
                    -----------------------------
the benefit of and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributes, devises and legatees.

               h.   Notice. For the purpose of this Agreement, notices and all
                    ------
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

          If to the Company:

          Seagate Technology (US) Holdings, Inc
          920 Disc Drive
          Scotts Valley, CA  95066
          Attention:  General Counsel

          If to Executive:

          To the most recent address of Executive set forth in the personnel
          records of the Company.

               i.   Executive Representation. Executive hereby represents to the
                    ------------------------
Company that the execution and delivery of this Agreement by Executive and the
Company and the performance by Executive of Executive's duties hereunder shall
not constitute a breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound.

               j.   Cooperation. Executive shall provide his reasonable
                    -----------
cooperation in connection with any action or proceeding (or any appeal from any
action or proceeding) which relates to events occurring during Executive's
employment hereunder. This provision shall survive any termination of this
Agreement.

               k.   Withholding Taxes. The Company may withhold from any amounts
                    -----------------
payable under this Agreement such Federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.

               l.   Counterparts. This Agreement may be signed in counterparts,
                    ------------
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

                                       11



          IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

                                    SEAGATE TECHNOLOGY (US) HOLDINGS, INC.

                                    /s/ Stephen Luzco
                                    -------------------------------------
                                    By:  Stephen Luzco
                                    Title:  Chief Executive Officer

                                    EXECUTIVE

                                    /s/ William D. Watkins
                                    -------------------------------------

                                       12



                                    EXHIBIT A
                             (Duties and Authority)

President and Chief Operating Officer of New SAC and Seagate Technology Holdings
with primary responsibility for the management and oversight of the operation of
Seagate Technology Holdings, in particular, Seagate Technology HDD Holdings.

                                       13



                                    EXHIBIT B
                       (Current Board/Trustee Memberships)

Iolon, a Seagate Technology Investment Holdings LLC investment

Cache Vision, a Seagate Technology Investment Holdings LLC investment

Candescent Inc.

                                       14



                                    EXHIBIT C
 (Standard At-Will Employment, Confidential Information and Invention Assignment
                                   Agreement)

                                       15

EX-10.3(A)

                                                                 EXHIBIT 10.3(a)

                            SEAGATE TECHNOLOGY, INC.

                         MANAGEMENT RETENTION AGREEMENT

     This Management Retention Agreement (the "AGREEMENT") is made and entered
into by and between _________________________ (the "EMPLOYEE") and Seagate
Technology, Inc. (the "COMPANY"), effective as of __________________ (the
"EFFECTIVE DATE").

                                    RECITALS
                                    --------

     A.   It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the "BOARD") recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.

     B.   The Board believes that it is in the best interests of the Company and
its stock-holders to provide the Employee with an incentive to continue his
employment and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

     C.   The Board believes that it is imperative to provide the Employee with
certain severance benefits upon Employee's termination of employment following a
Change of Control which provides the Employee with enhanced financial security
and provides incentive and encouragement to the Employee to remain with the
Company notwithstanding the possibility of a Change of Control.

     D.   Certain capitalized terms used in the Agreement are defined in Section
6 below.

     The parties hereto agree as follows:

     1.   Term of Agreement. This Agreement shall terminate upon the date that
          -----------------
all obligations of the parties hereto with respect to this Agreement have been
satisfied.

     2.   At-Will Employment. The Company and the Employee acknowledge that the
          ------------------
Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason,
including (without limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
practices or pursuant to other agreements with the Company.

                                       -1-



     3.   Severance Benefits.
          ------------------

          (a)  Involuntary Termination Other than for Cause; Voluntary
               -------------------------------------------------------
Termination for Good Reason; Disability; Death. If the Employee's employment is
- ----------------------------------------------
(i) involuntarily terminated by the Company other than for Cause (as defined
herein), (ii) voluntarily terminated by Employee for Good Reason (as defined
herein), (iii) terminated due to Employee's Disability (as defined herein) or
death, in any case within twenty-four (24) months following a Change of Control
(as defined herein), then, subject to the Employee's obligations pursuant to
Section 9 below, the Employee shall receive the following severance benefits
from the Company:

                    (1)  Lump-Sum Severance Payment.  A cash payment in an
                         --------------------------
amount equal to ___ hundred percent (    ) of the Employee's Annual Compensation
(as defined herein);

                    (2)  Option Accelerated Vesting. One hundred percent (100 %)
                         --------------------------
of the unvested portion of any stock option covering Company shares or shares of
any subsidiary of the Company held by the Employee shall automatically become
vested in full upon the employment termination date.

                    (3)  Restricted Stock Accelerated Vesting.  Employee's
                         ------------------------------------
unvested shares granted under the Company's Executive Stock Plan (or any similar
successor plan) shall vest (i.e., be released from the Company's repurchase
option) as to that percentage of the unvested shares determined by dividing (i)
the number of months that have elapsed from the restricted stock grant date to
the date of employment termination, by (ii) the number of months between the
grant date and the date when all shares would otherwise have vested based on
Employee's continued employment with the Company.

                    (4)  Continued Employee Benefits. One hundred percent (100%)
                         ---------------------------
Company-paid health, dental and life insurance coverage at the same level of
coverage as was provided to such employee immediately prior to the Change of
Control (the "COMPANY-PAID COVERAGE"). If such coverage included the Employee's
dependents immediately prior to the Change of Control, such dependents shall
also be covered at Company expense. Company-Paid Coverage shall continue until
the earlier of (i) two (2) years from the date of termination or (ii) the date
that the Employee and his dependents become covered under another employer's
group health, dental or life insurance plans that provide Employee and his
dependents comparable benefits and levels of coverage. For purposes of Title X
of the Consolidated Budget Reconciliation Act of 1985 ("COBRA"), the date of the
"qualifying event" for Employee and his dependents shall be the date upon which
the Company-Paid Coverage terminates.

                    (5)  Bonus Proration. A lump sum dollar amount equal to a
                         ---------------
pro rata portion (based on the number of days elapsed during the fiscal year in
which the termination occurs) of Employee's targeted bonus under the Company's
executive bonus plan for the fiscal year in which the termination occurs.

                                      -2-



                    (6)  Company Automobile.  The purchase by Employee of the
                         ------------------
Company-owned automobile in Employee's possession at the wholesale Kelly Blue
Book value.

          (b)  Timing of Severance Payments. Any severance payment to which
               ----------------------------
Employee is entitled under Sections 3(a)(1 and 5) shall be paid by the Company
to the Employee (or to the Employee's successors in interest, pursuant to
Section 7(b)) in cash and in full, not later than thirty (30) calendar days
following the employment termination date.

          (c)  Voluntary Resignation other than for Good Reason; Termination for
               -----------------------------------------------------------------
Cause. If the Employee's employment terminates by reason of the Employee's
- -----
voluntary resignation other than for Good Reason, or if the Employee is
terminated involuntarily by the Company for Cause, then the Employee shall not
be entitled to receive severance or other benefits except for those (if any) as
may then be established under the Company's then existing severance and benefits
plans and practices or pursuant to other agreements with the Company.

          (d)  Termination Apart from Change of Control. In the event the
               ----------------------------------------
Employee's employment is terminated for any reason, either prior to the
occurrence of a Change of Control or after the twenty-four (24) month period
following a Change of Control, then the Employee shall be entitled to receive
severance and any other benefits as may then be established under the Company's
existing severance and benefits plans and practices or pursuant to other written
agreements with the Company.

          (e)  Non-assumption by Successor Entity. Notwithstanding Sections 3(a)
               ----------------------------------
(2) and (3) above, if on the effective date of a Change of Control a successor
to the Company (whether direct or indirect and whether by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets fails to assume any stock option (granted
pursuant to the Company's option plans) or restricted stock (granted pursuant to
the Company's Executive Stock Plan), then (i) one hundred percent (100%) of the
unvested portion of any stock option covering Company shares or the shares of
any subsidiary of the Company held by the Employee shall automatically become
vested in full as of the Change of Control, and (ii) Employee's unvested shares
granted under the Company's Executive Stock Plan shall pro rata vest as outlined
in Section 3(a)(3) above as of the Change of Control.

     4.   Attorney Fees, Costs and Expenses.  The Company shall promptly
          ---------------------------------
reimburse Employee, on a monthly basis, for the reasonable attorney fees, costs
and expenses incurred by the Employee in connection with any action brought by
Employee to enforce his rights hereunder.

     5.   Golden Parachute Excise Tax Gross-Up. In the event that the benefits
          ------------------------------------
provided for in this Agreement or otherwise payable to the Employee constitute
"parachute payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "CODE") and will be subject to the excise tax
imposed by Section 4999 (as it may be amended or replaced) of the Code (the
"EXCISE TAX"), then the Employee shall receive (i) a payment from the Company
sufficient to pay such Excise Tax, and (ii) an additional payment from the
Company sufficient to pay the Excise Tax and federal and state income taxes
arising from the payments made by the Company to Employee pursuant to this
sentence. Unless the Company and the Employee otherwise agree in writing, the
determination of Employee's Excise Tax liability and the amount required to be
paid under this Section 5 shall be made in writing by the accounting firm
serving as the Company's

                                      -3-



independent public accountants immediately prior to the Change of Control (the
"ACCOUNTANTS"). For purposes of making the calculations required by this Section
5, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of the Code. The Company and the Employee shall
furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 5.

     6.   Definition of Terms. The following terms referred to in this Agreement
          -------------------
shall have the following meanings:

          (a)  Annual Compensation. "Annual Compensation" means an amount equal
               -------------------
to the sum of Employee's (i) annual Company salary at the highest rate in effect
in the twelve months immediately preceding the Change of Control, and (ii)
Employee's highest annual bonus (includes cumulation of quarterly bonus amounts
and deferral amounts) awarded within the three fiscal years immediately prior to
the Change of Control.

          (b)  Cause. "Cause" means (i) any act of personal dishonesty taken by
               -----
the Employee in connection with his responsibilities as an employee and intended
to result in substantial personal enrichment of the Employee, (ii) Employee's
conviction of a felony, or (iii) a willful act by the Employee which constitutes
gross misconduct and which is injurious to the Company.

          (c)  Change of Control.  "Change of Control" means the occurrence of
               -----------------
any of the following events:

               (i)    Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act) ("BENEFICIAL
OWNER"), directly or indirectly, of securities of the Company representing forty
percent (40%) or more of the total voting power represented by the Company's
then outstanding voting securities; or

               (ii)   A change in the composition of the Board occurring within
a two-year period, as a result of which fewer than a majority of the directors
are Incumbent Directors. "Incumbent Directors" shall mean directors who either
(A) are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative vote of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company); or

               (iii) There occurs a reorganization, merger, consolidation or
other corporate transaction involving the Company (a "TRANSACTION"), in each
case with respect to which

                                      -4-



the stockholders of the Company immediately prior to such Transaction do not,
immediately after the Transaction, own more than 50% of the combined voting
power of the Company or other corporation resulting from such Transaction; or


               (iv) All or substantially all of the assets of the Company are
sold, liquidated or distributed.

          (d)  Disability. "Disability" means that Employee has been determined
               ----------
disabled for purposes of the Seagate Long Term Disability Plan, and has been so
disabled for a period of at least six months.

          (e)  Good Reason. "Good Reason" means an Employee's resignation of his
               -----------
or her employment with the Company within thirty (30) days of and as a result of
any of the following: (i) without the Employee's express written consent, any
material reduction of the Employee's duties, authority or responsibilities,
relative to the Employee's duties, authority or responsibilities as in effect
immediately prior to such reduction, or an assignment to Employee of such
reduced duties, authority or responsibilities; (ii) without the Employee's
express written consent, any material reduction of the facilities and
perquisites available to the Employee immediately prior to such reduction
provided, however, use of private aircraft shall not be deemed a perquisite for
purposes of the clause; (iii) a reduction by the Company in the base salary of
the Employee as in effect immediately prior to such reduction, other than a
reduction implemented with the consent of the Employee or a reduction that is
equivalent to salary reductions imposed on all executives of the Company; (iv)
any material reduction by the Company in the kind or level of employee benefits,
including bonuses, to which the Employee was entitled immediately prior to such
reduction; (v) the relocation of the Employee to a facility or a location more
than fifty (50) miles from the Employee's then present location, without the
Employee's express written consent; or (vi) failure by the Company's Successors
as outlined in Section 7 below to assume any and all of the rights, duties and
obligations under this Agreement.

     7.   Successors.
          ----------

          (a)  Company's Successors. Any successor to the Company (whether
               --------------------
direct or indirect and whether by purchase, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this Section
7(a) or which becomes bound by the terms of this Agreement by operation of law.

          (b)  Employee's Successors. The terms of this Agreement and all rights
               ---------------------
of the Employee hereunder shall inure to the benefit of, and be enforceable by,
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

                                      -5-



     8.   Notice.
          ------

          (a)  General. Notices and all other communications contemplated by
               -------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.

          (b)  Notice of Termination. Any termination by the Company for Cause
               ---------------------
or by the Employee as a result of a voluntary resignation (whether or not for
Good Reason) shall be communicated by a notice of termination to the other party
hereto given in accordance with Section 8(a) of this Agreement. Such notice
shall indicate the specific termination provision in this Agreement relied upon,
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated, and shall
specify the employment termination date (which shall be not more than 30 days
after the giving of such notice). The failure by the Employee to include in the
notice any fact or circumstance which contributes to a showing of Good Reason
shall not waive any right of the Employee hereunder or preclude the Employee
from asserting such fact or circumstance in enforcing his rights hereunder.

     9.   Employee Covenants. As consideration for the severance and other
          ------------------
benefits the Employee is to receive herein, the Employee agrees that he will not
as an employee, agent, consultant, advisor, officer or director of any
corporation, partnership, person or other entity, directly or indirectly at any
time during his employment with the Company and continuing until twenty-four
(24) months after his termination of employment with the Company:

          (a)  Participate or engage in the development, production, sale,
marketing or servicing of any business enterprise that is in competition with
any of the Company's (or any of its subsidiaries') product lines or business
activities, or

          (b)  Solicit, employ or interfere in any other manner with the
employment relationships existing between the Company (or any of its
subsidiaries) and its current or prospective employees.

     10.  Miscellaneous Provisions.
          ------------------------

          (a)  No Duty to Mitigate. The Employee shall not be required to
               -------------------
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Employee may receive from any
other source.

          (b)  Waiver. No provision of this Agreement shall be modified, waived
               ------
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the Company
(other than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by

                                      -6-



the other party shall be considered a waiver of any other condition or provision
or of the same condition or provision at another time.

          (c)  Whole Agreement. No agreements, representations or understandings
               ---------------
(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof. This Agreement represents the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior arrangements and understandings regarding same.

          (d)  Choice of Law.  The validity, interpretation, construction and
               -------------
performance of this Agreement shall be governed by the laws of the State of
Delaware.

          (e)  Severability. The invalidity or unenforceability of any provision
               ------------
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.

          (f)  Withholding. All payments made pursuant to this Agreement will be
               -----------
subject to withholding of applicable income and employment taxes to the extent
required by law.

          (g)  Loans. Employee shall repay any outstanding Company loans
               -----
(principal and accrued interest) on Employee's termination date unless the
respective loan terms and conditions preclude repayment.

          (h)  Counterparts.  This Agreement may be executed in counterparts,
               ------------
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

          IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year set forth below.

COMPANY:                                SEAGATE TECHNOLOGY, INC.

                                        ________________________


EMPLOYEE:                               ________________________

                                      -7-

EX-10.3(B)

                                                                 EXHIBIT 10.3(b)

                            SEAGATE TECHNOLOGY, INC.

                         MANAGEMENT RETENTION AGREEMENT

     This Management Retention Agreement (the "AGREEMENT") is made and entered
into by and between Stephen J. Luczo (the "EMPLOYEE") and Seagate Technology,
Inc. (the "COMPANY"), effective as of November 12, 1998 (the "EFFECTIVE DATE").

                                 R E C I T A L S
                                 ---------------

          A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the "BOARD") recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.

          B. The Board believes that it is in the best interests of the Company
and its stock-holders to provide the Employee with an incentive to continue his
employment and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

          C. The Board believes that it is imperative to provide the Employee
with certain severance benefits upon Employee's termination of employment
following a Change of Control which provides the Employee with enhanced
financial security and provides incentive and encouragement to the Employee to
remain with the Company notwithstanding the possibility of a Change of Control.

          D. Certain capitalized terms used in the Agreement are defined in
Section 6 below.

          The parties hereto agree as follows:

          1. Term of Agreement. This Agreement shall terminate upon the date
             -----------------
that all obligations of the parties hereto with respect to this Agreement have
been satisfied.

          2. At-Will Employment. The Company and the Employee acknowledge that
             ------------------
the Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason,
including (without limitation) any termination prior to a Change of Control, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
practices or pursuant to other agreements with the Company.



          3.       Severance Benefits.
                   ------------------

                   (a) Involuntary Termination Other than for Cause; Voluntary
                       -------------------------------------------------------
Termination for Good Reason; Disability; Death. If the Employee's employment is
- ----------------------------------------------
(i) involuntarily terminated by the Company other than for Cause (as defined
herein), (ii) voluntarily terminated by Employee for Good Reason (as defined
herein), (iii) terminated due to Employee's Disability (as defined herein) or
death, in any case within twenty-four (24) months following a Change of Control
(as defined herein), then, subject to the Employee's obligations pursuant to
Section 9 below, the Employee shall receive the following severance benefits
from the Company:

                              (1)  Lump-Sum Severance Payment.  A cash payment
                                   --------------------------
in an amount equal to three hundred percent (300%) of the Employee's Annual
Compensation (as defined herein);

                              (2)  Option Accelerated Vesting. One hundred
                                   --------------------------
percent (100 %) of the unvested portion of any stock option covering Company
shares or shares of any subsidiary of the Company held by the Employee shall
automatically become vested in full upon the employment termination date.

                              (3)  Restricted Stock Accelerated Vesting.
                                   ------------------------------------
Employee's unvested shares granted under the Company's Executive Stock Plan (or
any similar successor plan) shall vest (i.e., be released from the Company's
repurchase option) as to that percentage of the unvested shares determined by
dividing (i) the number of months that have elapsed from the restricted stock
grant date to the date of employment termination, by (ii) the number of months
between the grant date and the date when all shares would otherwise have vested
based on Employee's continued employment with the Company.

                              (4)  Continued Employee Benefits. One hundred
                                   ---------------------------
percent (100%) Company-paid health, dental and life insurance coverage at the
same level of coverage as was provided to such employee immediately prior to the
Change of Control (the "Company-Paid Coverage"). If such coverage included the
Employee's dependents immediately prior to the Change of Control, such
dependents shall also be covered at Company expense. Company-Paid Coverage shall
continue until the earlier of (i) ______ years from the date of termination or
(ii) the date that the Employee and his dependents become covered under another
employer's group health, dental or life insurance plans that provide Employee
and his dependents comparable benefits and levels of coverage. For purposes of
Title X of the Consolidated Budget Reconciliation Act of 1985 ("COBRA"), the
date of the "qualifying event" for Employee and his dependents shall be the date
upon which the Company-Paid Coverage terminates.

                              (5)  Bonus Proration. A lump sum dollar amount
                                   ---------------
equal to a pro rata portion (based on the number of days elapsed during the
fiscal year in which the termination occurs) of Employee's targeted bonus under
the Company's executive bonus plan for the fiscal year in which the termination
occurs.



                              (6)  Company Automobile. The purchase by Employee
                                   ------------------
of the Company-owned automobile in Employee's possession at the wholesale Kelly
Blue Book value.

                   (b)  Timing of Severance Payments. Any severance payment to
                        ----------------------------
which Employee is entitled under Sections 3(a)(1 and 5) shall be paid by the
Company to the Employee (or to the Employee's successors in interest, pursuant
to Section 7(b)) in cash and in full, not later than thirty (30) calendar days
following the employment termination date.

                   (c)  Voluntary Resignation other than for Good Reason;
                        ------------------------------------------------
Termination for Cause. If the Employee's employment terminates by reason of the
- ---------------------
Employee's voluntary resignation other than for Good Reason, or if the Employee
is terminated involuntarily by the Company for Cause, then the Employee shall
not be entitled to receive severance or other benefits except for those (if any)
as may then be established under the Company's then existing severance and
benefits plans and practices or pursuant to other agreements with the Company.

                   (d)  Termination Apart from Change of Control. In the event
                        ----------------------------------------
the Employee's employment is terminated for any reason, either prior to the
occurrence of a Change of Control or after the twenty-four (24) month period
following a Change of Control, then the Employee shall be entitled to receive
severance and any other benefits as may then be established under the Company's
existing severance and benefits plans and practices or pursuant to other written
agreements with the Company.

                   (e)  Non-assumption by Successor Entity. Notwithstanding
                        ----------------------------------
Sections 3(a)(2) and (3) above, if on the effective date of a Change of Control
a successor to the Company (whether direct or indirect and whether by purchase,
merger, consolidation, liquidation or otherwise) to all or substantially all of
the Company's business and/or assets fails to assume any stock option (granted
pursuant to the Company's option plans) or restricted stock (granted pursuant to
the Company's Executive Stock Plan), then (i) one hundred percent (100%) of the
unvested portion of any stock option covering Company shares or the shares of
any subsidiary of the Company held by the Employee shall automatically become
vested in full as of the Change of Control, and (ii) Employee's unvested shares
granted under the Company's Executive Stock Plan shall pro rata vest as outlined
in Section 3(a)(3) above as of the Change of Control.

          4.       Attorney Fees, Costs and Expenses.  The Company shall
                   ---------------------------------
promptly reimburse Employee, on a monthly basis, for the reasonable attorney
fees, costs and expenses incurred by the Employee in connection with any action
brought by Employee to enforce his rights hereunder.

          5.       Golden Parachute Excise Tax Gross-Up. In the event that the
                   ------------------------------------
benefits provided for in this Agreement or otherwise payable to the Employee
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "CODE") and will be subject to
the excise tax imposed by Section 4999 (as it may be amended or replaced) of the
Code (the "EXCISE TAX"), then the Employee shall receive (i) a payment from the
Company sufficient to pay such Excise Tax, and (ii) an additional payment from
the Company sufficient to pay the Excise Tax and federal and state income taxes
arising from the payments made by the Company to Employee pursuant to this
sentence. Unless the Company and the Employee otherwise agree in writing, the
determination of Employee's Excise Tax liability and the amount required to be
paid under this Section 5 shall be made in writing by the accounting firm
serving as the Company's



independent public accountants immediately prior to the Change of Control (the
"ACCOUNTANTS"). For purposes of making the calculations required by this Section
5, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of the Code. The Company and the Employee shall
furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 5.

          6.       Definition of Terms.  The following terms referred to in this
                   -------------------
Agreement shall have the following meanings:

                   (a)  Annual Compensation. "Annual Compensation" means an
                        -------------------
amount equal to the sum of Employee's (i) annual Company salary at the highest
rate in effect in the twelve months immediately preceding the Change of Control,
and (ii) Employee's highest annual bonus (includes cumulation of quarterly bonus
amounts and deferral amounts) awarded within the three fiscal years immediately
prior to the Change of Control.

                   (b)  Cause. "Cause" means (i) any act of personal dishonesty
                        -----
taken by the Employee in connection with his responsibilities as an employee and
intended to result in substantial personal enrichment of the Employee, (ii)
Employee's conviction of a felony, or (iii) a willful act by the Employee which
constitutes gross misconduct and which is injurious to the Company.

                   (c)  Change of Control.  "Change of Control" means the
                        -----------------
occurrence of any of the following events:

                            (i)    Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act)
("BENEFICIAL OWNER"), directly or indirectly, of securities of the Company
representing forty percent (40%) or more of the total voting power represented
by the Company's then outstanding voting securities; or

                            (ii)   A change in the composition of the Board
occurring within a two-year period, as a result of which fewer than a majority
of the directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either (A) are directors of the Company as of the date hereof, or
(B) are elected, or nominated for election, to the Board with the affirmative
vote of at least a majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or

                            (iii)  There occurs a reorganization, merger,
consolidation or other corporate transaction involving the Company (a
"TRANSACTION"), in each case with respect to which



the stockholders of the Company immediately prior to such Transaction do not,
immediately after the Transaction, own more than 50% of the combined voting
power of the Company or other corporation resulting from such Transaction; or

                            (iv)   All or substantially all of the assets of the
Company are sold, liquidated or distributed.

                   (d)  Disability. "Disability" means that Employee has been
                        ----------
determined disabled for purposes of the Seagate Long Term Disability Plan, and
has been so disabled for a period of at least six months.

                   (e)  Good Reason. "Good Reason" means an Employee's
                        -----------
resignation of his or her employment with the Company within thirty (30) days of
and as a result of any of the following: (i) without the Employee's express
written consent, any material reduction of the Employee's duties, authority or
responsibilities, relative to the Employee's duties, authority or
responsibilities as in effect immediately prior to such reduction, or an
assignment to Employee of such reduced duties, authority or responsibilities;
(ii) without the Employee's express written consent, any material reduction of
the facilities and perquisites available to the Employee immediately prior to
such reduction provided, however, use of private aircraft shall not be deemed a
perquisite for purposes of the clause; (iii) a reduction by the Company in the
base salary of the Employee as in effect immediately prior to such reduction,
other than a reduction implemented with the consent of the Employee or a
reduction that is equivalent to salary reductions imposed on all executives of
the Company; (iv) any material reduction by the Company in the kind or level of
employee benefits, including bonuses, to which the Employee was entitled
immediately prior to such reduction; (v) the relocation of the Employee to a
facility or a location more than fifty (50) miles from the Employee's then
present location, without the Employee's express written consent; or (vi)
failure by the Company's Successors as outlined in Section 7 below to assume any
and all of the rights, duties and obligations under this Agreement.

          7.       Successors.
                   ----------

                   (a)  Company's Successors. Any successor to the Company
                        --------------------
(whether direct or indirect and whether by purchase, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in the same manner and
to the same extent as the Company would be required to perform such obligations
in the absence of a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this Section
7(a) or which becomes bound by the terms of this Agreement by operation of law.

                   (b)  Employee's Successors. The terms of this Agreement and
                        ---------------------
all rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.



          8.       Notice.
                   ------

                   (a)     General. Notices and all other communications
                           -------
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.

                   (b)     Notice of Termination. Any termination by the Company
                           ---------------------
for Cause or by the Employee as a result of a voluntary resignation (whether or
not for Good Reason) shall be communicated by a notice of termination to the
other party hereto given in accordance with Section 8(a) of this Agreement. Such
notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated, and
shall specify the employment termination date (which shall be not more than 30
days after the giving of such notice). The failure by the Employee to include in
the notice any fact or circumstance which contributes to a showing of Good
Reason shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his rights
hereunder.

          9.       Employee Covenants. As consideration for the severance and
                   ------------------
other benefits the Employee is to receive herein, the Employee agrees that he
will not as an employee, agent, consultant, advisor, officer or director of any
corporation, partnership, person or other entity, directly or indirectly at any
time during his employment with the Company and continuing until twenty-four
(24) months after his termination of employment with the Company:

                   (a)     Participate or engage in the development, production,
sale, marketing or servicing of any business enterprise that is in competition
with any of the Company's (or any of its subsidiaries') product lines or
business activities, or

                   (b)     Solicit, employ or interfere in any other manner with
the employment relationships existing between the Company (or any of its
subsidiaries) and its current or prospective employees.

          10.      Miscellaneous Provisions.
                   ------------------------

                   (a)     No Duty to Mitigate. The Employee shall not be
                           -------------------
required to mitigate the amount of any payment contemplated by this Agreement,
nor shall any such payment be reduced by any earnings that the Employee may
receive from any other source.

                   (b)     Waiver. No provision of this Agreement shall be
                           ------
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized officer of
the Company (other than the Employee). No waiver by either party of any breach
of, or of compliance with, any condition or provision of this Agreement by



the other party shall be considered a waiver of any other condition or provision
or of the same condition or provision at another time.

                   (c)     Whole Agreement. No agreements, representations or
                           ---------------
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement
represents the entire understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior arrangements and understandings
regarding same.

                   (d)     Choice of Law.  The validity, interpretation,
                           -------------
construction and performance of this Agreement shall be governed by the laws of
the State of Delaware.

                   (e)     Severability. The invalidity or unenforceability of
                           ------------
any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

                   (f)     Withholding. All payments made pursuant to this
                           -----------
Agreement will be subject to withholding of applicable income and employment
taxes to the extent required by law.

                   (g)     Loans. Employee shall repay any outstanding Company
                           -----
loans (principal and accrued interest) on Employee's termination date unless the
respective loan terms and conditions preclude repayment.

                   (h)     Counterparts.  This Agreement may be executed in
                           ------------
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.

                   IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year set forth below.

COMPANY:                                    SEAGATE TECHNOLOGY, INC.

                                            /s/ Thomas Mulvaney
                                            ------------------------


EMPLOYEE:                                   /s/ Stephen J. Luczo
                                            ------------------------

EX-10.4

                                                                    Exhibit 10.4

                       MANAGEMENT PARTICIPATION AGREEMENT

                  THIS MANAGEMENT PARTICIPATION AGREEMENT (this "Agreement") is
made and entered into as of March 29, 2000 among Seagate Technology, Inc.,
Delaware corporation ("Seller"), Suez Acquisition Company (Cayman) Limited, a
limited company organized under the laws of the Cayman Islands, ("Purchaser")
and each of the management employees of Seller listed on the signature pages
hereof (each a "Senior Manager" and collectively, the "Senior Managers").

                  WHEREAS, Seller and Purchaser are entering into the Stock
Purchase Agreement dated as of March 29, 2000 (the "Stock Purchase Agreement")
pursuant to which, as of the Closing which occurs on the Closing Date (each as
defined in the Stock Purchase Agreement), Purchaser will acquire all of the
shares of various subsidiaries of Seller and indirectly substantially all of the
assets of Seller:

                  WHEREAS, Seller and each of the Senior Managers have entered
in Management Retention Agreements pursuant to which each Senior Manager is
afforded certain rights following the occurrence of a change of control of
Seller (each a "Retention Agreement" and collectively, the "Retention
Agreements") and Purchaser intends to assume, as of the Closing Date, Seller's
obligations under the Retention Agreements, as modified hereby;

                  WHEREAS, the Senior Managers currently hold unvested options
to acquire shares of Seller common stock ("Seller Options") and/or unvested
restricted shares of Seller common stock ("Seller Restricted Shares") and have
agreed that, as of the Closing Date, a portion of such Seller Options shall be
assumed by Purchaser and converted into options to acquire shares of Purchaser
(the "Rollover Options) and a portion of such Seller Restricted Shares shall be
exchanged for substitute restricted shares of Purchaser issued by the Purchaser
on the Closing Date ("Purchaser Restricted Shares"), in each case, on the terms
and conditions hereinafter set forth; and

                  WHEREAS, Purchaser and the Senior Managers intend to enter
into certain other compensation arrangements which are more fully set forth in
the Management Term Sheet attached hereto as Exhibit A (the "Management Term
Sheet").

                  NOW THEREFORE, in consideration of the foregoing premises, and
the covenants and promises and representations set forth herein, and for other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged and accepted, the parties hereto agree as follows:

1.                Section Effectiveness. This Agreement shall constitute a
                          -------------
binding obligation of the parties hereto as of the date hereof; provided that
                                                                --------
the operative provisions of this Agreement shall only take effect upon the
occurrence of the Closing Date. In the event the Stock Purchase Agreement is
terminated for any reason without the Closing Date having occurred, this



Agreement shall be terminated without further obligation or liability of any
party hereunder.

2.         Section Management Retention Agreements: As of the Closing Date,
                   -------------------------------
Purchaser shall assume the Retention Agreements and all of Seller's obligations
and liabilities thereunder and such Retention Agreements shall thereafter
continue in full force and effect in accordance with their terms, with the
following understandings and modifications:

           (a) The Closing shall be deemed to constitute a "Change of Control"
for purposes of the Retention Agreements and the protection afforded to the
Senior Managers under the Retention Agreements which become applicable from and
after the occurrence of a Change of Control shall apply; provided that from and
                                                         --------
after the Closing, all references in the Retention Agreements to the Company
shall be deemed to constitute references to Purchaser; and from and after the
Closing, no future corporate transactions or events (other than the Closing)
shall be deemed to constitute a Change of Control for purposes of the Retention
Agreements; provided, further, that (i) to the extent, but only to the extent,
            --------  -------
that any such Retention Agreements currently include a provision providing for
gross-up protection for excise taxes incurred under Section 280G of the Internal
Revenue Code of 1986 (a "Gross-Up Provision"), such Gross-Up Provision shall
continue to apply with respect to any future change of control transactions
involving Purchaser and (ii) to the extent that any such Retention Agreements
currently include a provision limiting the dollar amount of the parachute
payments (within the meaning of Section 280G of the Internal Revenue Code of
1986) payable thereunder to the greatest after-tax benefit that can be provided
the individual, such limit shall continue to apply with respect to any future
change of control transactions involving Purchaser;

           (b) The consummation of the transactions contemplated by the Stock
Purchase Agreement, the occurrence of the Closing, and the termination of each
Senior Manager's employment with Seller and commencement of employment with
Purchaser shall not constitute a termination of any Senior Manager's employment
for purposes of the Retention Agreements;

           (i) The term "Good Reason" within the Retention Agreements shall be
restated to mean" an Employee's resignation of his or her employment with the
Company as a result of any of the following actions, which actions remain
uncured for at least thirty (30) days following written notice from Employee to
the Company describing the occurrence of such events and asserting that such
events constitute Good Reason; provided notice of such resignation is given to
the Company within sixty (60) days after the expiration of such cure period:
without Employee's express written consent, any material reduction in Employee's
authority or responsibilities from those set forth in Employee's employment
agreement with the Company (an "Employment Agreement") (or if such Employee is
not a party to an Employment Agreement, from the authority and responsibilities
initially assigned to such Employee by the Company after the Closing (as defined
in the Stock Purchase Agreement dated as of March 29, 2000 by and between
Seagate Technology, Inc. and Suez Acquisition Company (Cayman) Limited), without
Employee's express written consent, any reduction of 10% or more in the level of
the base salary, target annual bonus or employee benefits to be provided to
Employee under the Employment Agreement (or if such Employee is not a party to
an Employment Agreement, a



reduction of 10% or more in the level of the base salary, target annual
bonus or employee benefits provided to such Employee immediately prior to the
Closing), other than a reduction implemented with the consent of Employee or a
reduction that is equivalent to reduction in base salaries, annual bonus
opportunities and/or employee benefits, as applicable, imposed on all other
senior executives of the Company at a similar level within the Company (provided
that the use of private aircraft shall not be deemed an employee benefit for
theses purposes); or the relocation of Employee to a principal place of
employment more than 50 miles from Employee's current principal place of
employment, without Employee's express written consent"; and

          (c)  The provisions of Sections 3(a)(2) and 3(a)(3) of each of the
Retention Agreements (relating to the accelerated vesting of stock options and
restricted shares) shall only apply with respect to the Rollover Options and
Purchaser Restricted Shares (i.e., options and restricted shares expressly
granted by Purchaser in substitution of (or as a result of Purchaser's
assumption of) unvested options to acquire Seller common stock and unvested
restricted shares which were not otherwise cancelled for consideration in
connection with the Agreement and Plan of Merger by and among Veritas Software
Corporation and Seagate Technology, Inc. dated as of March 29, 2000);

3.        Section  Rollover Equity.
                   ---------------

          (i)  Each Senior Manager agrees to work, in good faith, with Purchaser
and the institutional investors investing in Purchaser at the Closing (the
"Institutional Investors") to provide that Seller Options and/or Seller
Restricted Shares with an aggregate Rollover Value (as defined below) of between
$150,000,000 and $250,000,000 (targeted at $200,000,000) will be converted into
Rollover Options and Purchaser Restricted Shares as follows; provided, that in
any event Seller Options and/or Seller Restricted Shares with an aggregate
Rollover Value of at least $150,000,000 will be so converted: Any such Seller
Options will be assumed by Purchaser and converted into options to acquire
shares of Purchaser and any such Seller Restricted Shares shall be exchanged as
of the Closing Date for the issuance by Purchaser of Purchaser Restricted
Shares, in each case, on the same terms and conditions as were applicable to the
Seller Options and Seller Restricted Shares, as applicable, immediately prior to
the Closing (including any unsatisfied vesting conditions and without any
accelerated vesting as a result of the Closing or any related transactions). For
purposes of this Agreement, "Rollover Value" shall mean with respect to Seller
Options, the excess of (x) the fair market value per share of Seller common
stock (using the average of the Seller's closing selling prices for the five
consecutive trading days ending two trading days immediately preceding the
Closing (the "FMV"), times the number of shares of Seller common stock subject
to the Seller Option, over (y) the aggregate exercise price of the Seller Option
and with respect to Seller Restricted Shares, the FMV times the number of Seller
Restricted Shares.

          (b)  The Purchaser Restricted Shares issued in exchange for Seller
Restricted Shares held by any Senior Manager will have an aggregate fair market
value (determined by reference to the price per share paid by the Institutional
Investors at Closing), as of immediately after Closing, equal to the aggregate
FMV of such cancelled Seller Restricted Shares



immediately prior to the Closing. Similarly, the conversion of the Seller
Options into Rollover Options will be effected in a manner so as to preserve, as
of the date of assumption and conversion, the "spread" (i.e., the excess of the
FMV per share of Seller common stock immediately prior to the Closing over the
exercise price of the Seller Option).

          (c)  The Senior Managers will work with the Institutional Investors in
good faith to effect the transactions contemplated by this Section 3 in a manner
designed to minimize the application of any excise taxes imposed by Section 280G
of the Internal Revenue Code of 1986.

          (i)  All existing options to acquire common stock of Seller and its
subsidiaries, other than the Seller Options which are assumed by Purchaser and
converted into Rollover Options as contemplated hereby and options to acquire
Seagate Information Management Group Holdings, Inc. common stock which shall
remain outstanding after the Closing; and all existing restricted shares; other
than the Seller Restricted Shares issued in exchange for the issuance of
Purchaser Restricted Shares as contemplated hereby, will be cancelled in
consideration for the payment by Veritas Software Corporation of the merger
consideration pursuant to the terms of the Merger Agreement between Seller and
Veritas Software Corporation.

(ii)           Section Management Term Sheet. In addition to the foregoing,
                       ---------------------
Purchaser and the Senior Managers acknowledge that they have agreed in good
faith to enter into definitive documentation prior to the Closing providing for
the adoption by Purchaser of a new option plan and the grant of options to the
Senior Managers and others, the creation of a management stockholders agreement
governing each Senior Manager's rights and obligations with respect to shares of
Purchaser and other compensation matters, each as set forth more fully in the
Management Term Sheet attached hereto as Exhibit A.

4.        Section  Miscellaneous.
                   -------------

          (a)  This Agreement and the documents and instruments attached hereto
as Exhibits, constitute the entire agreement among the parties with respect to
the subject matter hereof and supercede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof.

          (b)  This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.

          (c)  This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, it being understood
that all parties need not sign the same counterpart.



SUEZ ACQUISITION COMPANY (CAYMAN) LIMITED


By: /s/ David Roux
    --------------
Name:   David Roux
Title:  Managing Member


SEAGATE TECHNOLOGY, INC.


By: /s/ William L. Hudson
    ----------------------
Name:   William L. Hudson
Title:  Sr. VP, General Counsel
            and Secretary



                                 Senior Managers
                                 ---------------


/s/ Stephen J. Luczo        /s/ William D. Watkins        /s/ Mark A. Brewer
- -------------------------  ----------------------------  ----------------------
 Stephen J. Luczo           William D. Watkins           Mark A. Brewer

/s/ Bernard A. Carballo    /s/ Karl T. Chicca            /s/ Donald G. Colton
- -------------------------  ----------------------------  ----------------------
 Bernard A. Carballo        Karl T. Chicca               Donald G. Colton

/s/ James M. Chirico, Jr.  /s/ J. Ken Davidson           /s/ Brian S. Dexheimer
- -------------------------  ----------------------------  ----------------------
 James M. Chirico, Jr.      J. Ken Davidson              Brian S. Dexheimer

/s/ Jaroslaw S. Glembocki   /s/ William L. Hudson        /s/ Thomas F. Mulvane
- -------------------------  ----------------------------  ----------------------
 Jaroslaw S. Glembocki      William L. Hudson            Thomas F. Mulvaney

/s/ Charles C. Pope        /s/ Townsend H. Porter, Jr.   /s/ Charles M. Sander
- -------------------------  ----------------------------  ----------------------
 Charles C. Pope           Townsend H. Porter, Jr.       Charles M. Sander

/s/ Michael C. Stears      /s/ Donald L. Waite           /s/ John P. Weyandt
- -------------------------  ----------------------------  ----------------------
 Michael C. Stears          Donald L. Waite              John P. Weyandt

/s/ David A. Wickersham    /s/ Mark H. Kryder            /s/ Kevin D. Eassa
- -------------------------  ----------------------------  ----------------------
 David A. Wickersham        Mark H. Kryder               Kevin D. Eassa

/s/ Timothy D. Harris      /s/ Patrick J. O'Malley       /s/ Nigel C. Macleod
- -------------------------  ----------------------------  ----------------------
 Timothy D. Harris          Patrick J. O'Malley          Nigel C. Macleod




/s/ Ralph R. McLaughlin     /s/ Joel A. Stead       /s/ Pom Piemsomboom
- ------------------------   -------------------      --------------------
 Ralph R. McLaughlin        Joel A. Stead           Pom Piemsomboom

/s/ Larry W. Poe                                    /s/ Larry T. McMannon
- -----------------                                   ----------------------
 Larry W. Poe                                       Larry T. McMannon

EX-10.5

                                                                    Exhibit 10.5

                               ROLLOVER AGREEMENT

     ROLLOVER AGREEMENT dated as of November 13, 2000 (the "Agreement") between
New SAC, a limited company incorporated in the Cayman Islands (the "Company"),
Seagate Technology HDD Holdings, and the individual listed on Schedule I hereto
(the "Senior Manager").

     WHEREAS, Seagate Technology, Inc. ("Seagate"), Seagate Software Holdings,
Inc. and Suez Acquisition Company (Cayman) Limited ("SAC") have entered into the
Stock Purchase Agreement dated as of March 29, 2000 (as amended, the "Stock
Purchase Agreement");

     WHEREAS, prior to the consummation of the transactions pursuant to the
Stock Purchase Agreement, SAC has assigned or will assign all of its rights and
obligations under the Stock Purchase Agreement to the Company; and

     WHEREAS, pursuant to the Stock Purchase Agreement, as of the Closing which
occurs on the Closing Date (each as defined in the Stock Purchase Agreement),
the Company will, subject to certain exclusions, acquire all of the shares of
various subsidiaries of Seagate and, indirectly, substantially all of the
operating assets of Seagate; and

     WHEREAS, the Senior Manager and other members of Seagate management
(together with the Senior Manager, the "Seagate Management") currently hold
unvested options to acquire shares of Seagate common stock ("Seagate Options")
and/or unvested restricted shares of Seagate common stock ("Seagate Restricted
Shares") and have agreed that, as of the Closing Date, Seagate Options and
Seagate Restricted Shares with a Rollover Value (as defined below) of between
$150,000,000 and $250,000,000 (the "Commitment Amount") shall be converted into
(i) deferred compensation and (ii) restricted preferred shares, par value $.0001
per share, of the Company (the "Restricted Preferred Shares"), in an aggregate
amount equal to the Commitment Amount; and

     WHEREAS, in respect of the Restricted Preferred Shares received by the
Senior Manager, the Senior Manager shall receive restricted ordinary shares, par
value $.0001, of the Company (the "Restricted Ordinary Shares"); and

     WHEREAS, the Senior Manager also agrees to subscribe for vested restricted
preferred shares, par value $.0001 per share, of the Company (the "Restricted
Vested Preferred Shares") and vested restricted ordinary shares , par value
$.0001 per share, of the Company (the "Restricted Vested Ordinary Shares") as
set forth herein;

     NOW THEREFORE, in consideration of the foregoing, and the covenants and
promises and representations set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged and
accepted, the parties hereto agree as follows:

          1.   The Senior Manager agrees to the conversion, at the time of
Closing, of unvested Seagate Options held by such Senior Manager and/or unvested
Seagate Restricted Shares held by such Senior Manager with an aggregate Rollover
Value (as defined below) equal to at least the Applicable Percentage (as defined
below) of the total Rollover Value represented



by all unvested Seagate Options and Seagate Restricted Shares held by such
Senior Manager as of the Closing, into (i) pursuant to the terms of the New SAC
Restricted Share Plan (substantially in the form attached hereto as Exhibit A)
(the "Restricted Share Plan"), the Restricted Share Agreement (substantially in
the form attached hereto as Exhibit B) (the "Restricted Share Agreement") and
the Management Shareholders Agreement (substantially in the form attached hereto
as Exhibit C (the "Management Shareholders Agreement," which reference shall
include the applicable provisions of the Shareholders Agreement (substantially
in the form attached hereto as Exhibit D (the "Investor Shareholders
Agreement")), Restricted Preferred Shares having an aggregate liquidation
preference equal to fifty percent of the Subscribed Value (as defined below) and
(ii) a deferred compensation account pursuant to a deferred compensation plan
(substantially in the form attached hereto as Exhibit E), which shall be subject
to all the terms (including the subordination terms) of such plan, equal to the
excess of the Converted Value over the aggregate liquidation preference of the
Restricted Preferred Shares (the "Deferred Value"). The Senior Manager further
agrees that any such conversion of his or her unvested Seagate Options and
Seagate Restricted Shares hereunder shall (if necessary) be adjusted upward so
that the resulting Converted Value shall be a whole multiple of Ten Thousand
Dollars ($10,000). For purposes of this Agreement, "Converted Value" shall equal
the Rollover Value of the unvested Seagate Options and/or unvested Seagate
Restricted Shares actually converted. For purposes of this Agreement,
"Applicable Percentage" shall mean, with respect to a Senior Manager who is a
Senior Vice President or higher, 50%, and with respect to any other Senior
Manager, 25%.

          2.   In addition, with respect to the Restricted Preferred Shares
received pursuant to the preceding paragraph, the Senior Manager shall receive,
pursuant to the terms of the Restricted Share Plan, the Restricted Share
Agreement and the Management Shareholders Agreement, a number of Restricted
Ordinary Shares sufficient to provide the Senior Manager, as of the Closing,
with a percentage ownership of the total outstanding Ordinary Shares of the
Company as of the Closing equal to the Converted Value divided by the sum of (i)
the aggregate Converted Value of Seagate Management and (ii) the balance of the
total equity investment in the Company as of the Closing Date (including all
amounts contributed by the Seagate Management for Restricted Vested Preferred
Shares (as defined below)). For purposes of this Agreement, "Rollover Value"
shall mean (i) with respect to Seagate Options, the excess of (x) the fair
market value per share of Seagate common stock (using the average of Seagate's
closing selling prices for the five consecutive trading days ending two trading
days immediately preceding the Closing (the "FMV") times the number of Seagate
                                                   -----
shares subject to the Seagate Option, over (y) the aggregate exercise price of
                                      ----
the Seagate Option and (ii) with respect to Seagate Restricted Shares, the FMV
times the number of Seagate Restricted Shares.
- -----

          3.   The Senior Manager agrees to convert additional Seagate Options
and/or Seagate Restricted Shares such that the total Converted Value shall equal
the maximum percentage, as set forth on Schedule I hereto, of the total Rollover
Value represented by all unvested Seagate Options and Seagate Restricted Shares
held by such Senior Manager as of the Closing (such total value, the "Committed
Value"). In the event that the total Committed Value of the Seagate Management
exceeds $213,750,000 (or such lesser amount, but not below $180,500,000, as
determined by Silver Lake Partners, L.P.) such total Committed Value shall be
allocated pro rata among the Seagate Management, based, first, on the Applicable
Percentage of

                                       2



each member of Seagate management (including the Senior Manager) and then on the
respective Committed Values of the Seagate Management in excess of the
Applicable Percentage.

          4.   In consideration for the establishment of the deferred
compensation account and the Restricted Preferred Shares, the Senior Manager
agrees to the cancellation and/or the forfeiture of a number of Seagate Options
and/or Seagate Restricted Shares equal to the Converted Value and the Senior
Manager unconditionally releases Seagate Technology, Inc., VERITAS Software
Corporation, Victory Merger Sub, Inc., and their respective successors, assigns,
affiliates, officers, directors, employees and agents from any and all claims,
liabilities and obligations with respect to such Seagate Options and/or Seagate
Restricted Shares. The Seagate Options and/or Seagate Restricted Shares shall be
cancelled and/or forfeited in a manner determined in the sole discretion of the
Executive Vice President and Chief Administrator Officer of Seagate so as to
minimize any potential excise tax liability of the Senior Manager under Section
280G of the Internal Revenue Code of 1986, as amended.

          5.   The Senior Manager agrees to subscribe for a number of Restricted
Vested Preferred Shares having an aggregate liquidation preference equal to
5.264% of the Converted Value (the "Subscribed Value"), for which the Senior
Manager will make a cash payment at Closing in the per share amount equal to the
same as is paid by the Investors (as defined in the Management Shareholders
Agreement) for the Preferred Shares of the Company purchased by the Investors.
The Senior Manager will receive at Closing, in respect of each Restricted Vested
Preferred Share paid for by the Senior Manager, one Restricted Vested Ordinary
Share subject to the terms of the Management Shareholders Agreement. In addition
to the cash payment required to pay for the Restricted Vested Preferred Shares
set forth above, the Senior Manager agrees to pay cash at Closing for the
Restricted Vested Ordinary Shares equal to $.0001 times the total number of such
Restricted Vested Ordinary Shares.

          6.   With respect to Senior Managers who are party to the Management
Participation Agreement dated as of March 29, 2000 (the "Management
Participation Agreement") among Seagate Technology, Inc. ("Seller"), SAC and
certain management employees of Seller listed on the signature page thereof. The
parties hereto hereby agree and acknowledge that:

          (a)  All references to "Purchaser" and the "Company" in the operative
provisions of the Management Participation Agreement shall be deemed to
constitute references to Seagate Technology HDD Holdings;

          (b)  The references in Section 2(c) of the Management Participation
Agreement to Rollover Options and Purchaser Restricted Shares shall be deemed to
constitute references to Restricted Preferred Shares and Restricted Ordinary
Shares; and

          (c)  The transactions contemplated by this Agreement shall be in
satisfaction of the parties' obligation under Section 3 of the Management
Participation Agreement regarding Rollover Equity.

          7.   In the case of Senior Managers who are Vice Presidents, the
Company reserves the right to advance the cash subscription price payable
pursuant to this Agreement on

                                       3



behalf of such Vice Presidents in the event the wire transfer of such funds by
such Vice Presidents is not completed on a timely basis. Any funds so advances
by the Company will be required to be repaid within 30 days of the advance, with
interest at the prime rate on the Closing Date.

          8.   The Senior Manager warrants and represents that he or she is an
"accredited investor," as such term is defined under Regulation D of the
Securities Act of 1933, as amended.

          9.   This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.

          10.  This Agreement may be executed in counterparts, all of which
shall be considered one and the same agreement, it being understood that all
parties need not sign the same counterpart.

                                       4



                                   Schedule I

Name of Senior Manager:  _____________________________
Address of Senior Manager:  ____________________________
                            _____________________________

     Maximum percentage of total Rollover Value with respect to the Senior
     Manager which the Senior Manager agrees to convert: ___________%


               By executing this Schedule, the undersigned Senior Manager
accepts and agrees to be bound by and subject to the terms and conditions of,
and makes the representations, warranties and agreements set forth in (i) this
Agreement, (ii) the Management Shareholders Agreement, (iii) the Restricted
Share Agreement between the Company and the undersigned Senior Manager. By
signing and returning this Schedule, the undersigned Senior Manager also accepts
and agrees to be bound by and subject to the terms and conditions set out in the
relevant sections of the Investor Shareholders Agreement. The parties to each
such agreement shall treat the execution and delivery hereof by the undersigned
Senior Manager as the execution and delivery of such agreement by the
undersigned Senior Manager, and, upon receipt and acceptance of this Schedule by
such parties, the signature of the undersigned Senior Manager set forth below
shall constitute a counterpart to the signature page of each such agreement.

                                                NEW SAC

_____________________________
Senior Manager

                                                By: ___________________________
                                                    Name:
                                                    Title:

                                                SEAGATE TECHNOLOGY HDD HOLDINGS


                                                By: ___________________________
                                                    Name:
                                                    Title:
Dated:  November 13, 2000

                                       5

EX-10.6

                                                                   EXHIBIT 10.6

                         SEAGATE TECHNOLOGY HDD HOLDINGS

                           DEFERRED COMPENSATION PLAN

                                     PURPOSE

     The purpose of this Seagate Technology HDD Holdings Deferred Compensation
Plan (the "Plan") is to create a deferred compensation account for those
employees or consultants who, in connection with the transaction contemplated by
the Stock Purchase Agreement by and among Suez Acquisition Company (Cayman)
Limited, Seagate Technology, Inc. ("Seagate") and Seagate Software Holdings,
Inc. (the "Transaction"), have elected, pursuant to the Rollover Agreements, to
rollover equity-based awards in Seagate into deferred compensation accounts and
restricted shares of SAC (as defined below).

                                    SECTION I

                                   DEFINITIONS
                                   -----------

          Whenever used in the Plan, the following terms shall have the
following meanings:

          1.1  "Account" - means the account created by the Company pursuant to
                -------
     Section II of this Plan.

          1.2  "Act" - means The Securities Exchange Act of 1934, as amended, or
                ---
     any successor thereto.

          1.3  "Affiliate" - means, with respect to the Company, any entity
                ---------
     directly or indirectly controlling, controlled by, or under common control
     with, the Company or any other entity designated by the Board in which the
     Company or an Affiliate has an interest.

          1.4  "Administrator" - means the Committee or such entity or person to
                -------------
     whom the Committee may delegate responsibility for administration of the
     Plan.

          1.5  "Beneficial Owner" - means a "beneficial owner", as such term is
                ----------------
     defined in Rule 13d-3 under the Act (or any successor rule thereto).

          1.6  "Beneficiary" - means one or more persons or entities (including
                -----------
     a trust or estate) designated by a Participant, at any time or from time to
     time, to receive any payment under the Plan at or after such Participant's
     death.

          1.7  "Board" - means the Board of Directors of the Company.
                -----

          1.8  "Cause" - means (i) the Participant's continued failure
                -----
     substantially to perform the material duties of his office (other than as a
     result of total or partial incapacity due to physical or mental illness),
     (ii) the embezzlement or theft by the Participant of the Company's
     property, (iii) the commission of any act or acts on the Participant's part
     resulting in the conviction of such Participant of a felony under the laws



     of the United States or any state, (iv) the Participant's willful
     malfeasance or willful misconduct in connection with the Participant's
     duties to the Company or any other act or omission which is materially
     injurious to the financial condition or business reputation of the Company
     or any of its subsidiaries or affiliates, or (v) a material breach by the
     Participant of the material terms of his employment agreement, any
     stockholders' agreement or any non-compete, non-solicitation or
     confidentiality provisions to which the Participant is subject. However, no
     termination shall be deemed for Cause under clause (i), (iv) or (v) unless
     the Participant is first given written notice by the Company of the
     specific acts or omissions which the Company deems constitute grounds for a
     termination for Cause and is provided with at least 30 days after such
     notice to cure the specified deficiency.

          1.9  "Change of Control" - means (i) (A) the sale or disposition, in
                -----------------
     one or a series of related transactions, of all or substantially all of the
     assets of SAC to any Person or "group" (as such term is defined in Sections
     13(d)(3) and 14(d)(2) of the Act) other than the Investors or their
     Affiliates or (B) any person or group, other than the Investors or their
     Affiliates, is or becomes the Beneficial Owner, directly or indirectly, of
     more than 50% of the total voting power of the voting stock of SAC,
     including by way of merger, consolidation or otherwise, and (ii) the
     representatives of the Investors or their Affiliates (individually or in
     the aggregate) cease to comprise a majority of the Board of Directors of
     SAC.

          1.10 "Closing Date" - means the "Closing Date" as defined in the Stock
                ------------
     Purchase Agreement, dated March 29, 2000, by and among Suez Acquisition
     Company (Cayman) Limited, Seagate and Seagate Software Holdings, Inc., as
     amended.

          1.11 "Code" - means the Internal Revenue Code of 1986, as amended from
                ----
     time to time.

          1.12 "Committee" - means the Compensation Committee of the Board, or
                ---------
     such other committee designated by the Board.

          1.13 "Company" - means Seagate Technology HDD Holdings.
                -------

          1.14 "Company Change of Control" - means (i) (A) the sale or
                -------------------------
     disposition, in one or a series of related transactions, of all or
     substantially all of the assets of the Company to any Person or "group" (as
     such term is defined in Sections 13(d)(3) and 14(d)(2) of the Act) other
     than the Investors or their Affiliates or (B) any person or group, other
     than the Investors or their Affiliates, is or becomes the Beneficial Owner,
     directly or indirectly, of more than 50% of the total voting power of the
     voting stock of Company including by way of merger, consolidation or
     otherwise, and (ii) the representatives of the Investors or their
     Affiliates (individually or in the aggregate) cease to comprise a majority
     of the Board.

          1.15 "Deferral Amount" - means the Participant's Deferred Value (as
                ---------------
     defined in the Rollover Agreement).

                                                                               2



          1.16 "Deferral Percentage" - means the percentage represented by a
                -------------------
     fraction, where the numerator equals the Deferral Amount and the
     denominator equals the sum of (i) the total equity investment in the
     Company by the Investors as of the Closing Date and (ii) the aggregate
     Deferral Amount of all Participants as of the Closing Date.

          1.17 "Effective Date" - means the Closing Date.
                --------------

          1.18 "Fair Market Value" - means (i) if there is a public market for
                -----------------
     the shares on such date, the average of the high and low closing bid prices
     of the shares on such stock exchange on which the shares are principally
     trading on the date in question, or, if there were no sales on such date,
     on the closest preceding date on which there were sales of shares or (ii)
     if there is no public market for the shares on such date, the fair market
     value of the shares as determined in good faith by the Board.

          1.19 "Good Reason" - shall mean a Participant's resignation of his or
                -----------
     her employment with the Company as a result of the following actions, which
     actions remain uncured for at least 30 days following written notice from
     the Participant to the Company describing the occurrence of such events and
     asserting that such events constitute grounds for a Good Reason
     resignation, provided notice of such resignation is given to the Company
     within sixty (60) days after the expiration of such cure period: (i)
     without the Participant's express written consent, any material reduction
     in the Participant's authority or responsibilities from those set forth in
     an employment agreement between the Company and the Participant (an
     "Employment Agreement") (or if such Participant is not a party to an
     Employment Agreement, from the authority and responsibilities initially
     assigned to such Participant by the Company after the Closing Date), (ii)
     without the Participant's express written consent, a reduction of 10% or
     more in the level of the base salary, target annual bonus or employee
     benefits to be provided to the Participant under an Employment Agreement
     (or if such Participant is not a party to an Employment Agreement, a
     reduction of 10% or more in the level of base salary, target annual bonus
     or employee benefits provided to such Participant immediately prior to the
     Closing Date), other than a reduction implemented with the consent of the
     Participant or a reduction that is equivalent to reduction in base
     salaries, bonus opportunities and/or employee benefits, as applicable,
     imposed on all other senior executives of the Company at a similar level
     within the Company (provided that the use of private aircraft shall not be
     deemed an employee benefit for theses purposes); or (iii) the relocation of
     the Participant to a principal place of employment more than 50 miles from
     the Participant's current principal place of employment, without the
     Participant's express written consent.

          1.20 "Investors" - means Silver Lake Partners, L.P., SAC Investments,
                ---------
     L.P. and the other investors that invested in SAC as of the Closing Date
     (or an affiliate or affiliates thereof) (other than pursuant to the
     conversion of equity-based awards in Seagate).

          1.21 "Participant" - means each employee or consultant who has entered
                -----------
     into a Rollover Agreement.

                                                                               3



          1.22 "Person" - means a "person", as such term is used for purposes of
                ------
     Section 13(d) or 14(d) of the Act.

          1.23 "Plan" - means this Seagate Technology HDD Holdings Deferred
                ----
     Compensation Plan, as set forth herein and as it may be amended and/or
     restated from time to time.

          1.24 "Preferred Shares" - means preferred shares, par value $.0001 per
                ----------------
     share of SAC.

          1.25 "Rollover Agreement" - means an agreement, in the form attached
                ------------------
     hereto as Exhibit A, between an employee of the Company or one of its
     Affiliates and SAC whereby the employee has elected to rollover
     equity-based compensation in Seagate into (i) deferred compensation and
     (ii) restricted Preferred Shares.

          1.26 "SAC" - means New SAC, a limited company incorporated in the
                ---
     Cayman Islands.

                                   SECTION II

                         DEFERRED COMPENSATION ACCOUNTS
                         ------------------------------

2.1  The Company shall maintain a separate book entry account (an "Account")
     initially equal to the Deferral Amount of each Participant. The balance of
     each Participant's Account shall be reduced by any distributions made to
     such Participant or his or her Beneficiary pursuant to this Plan.

2.2  Nothing contained herein shall be deemed to create a trust of any kind or
     any fiduciary relationship; provided, however, that the Company or any of
                                 --------  -------
     its subsidiaries reserves the right to establish one or more trusts to
     provide alternate sources of benefit payments under this Plan. To the
     extent that any person acquires a right to receive payments from the
     Company under the Plan, such right shall be (a) subordinated as set forth
     in Section 4.6 and (b) in any event, no greater than the right of any
     unsecured general creditor of the Company or its subsidiaries.

                                   SECTION III

                                     VESTING
                                     -------

3.1  Subject to the Participant's employment with, or continued service to, the
     Company or any affiliate, the Account of each Participant shall vest with
     respect to one-third of the initial balance of such Participant's Account
     on the first anniversary of the Closing Date, with respect to one-third of
     the initial balance of such Participant's Account ratably each month over
     the 18 months following the first anniversary of the Closing Date and with
     respect to the remaining one-third of the initial balance of such
     Participant's Account on the date which is 30 months following the Closing
     Date; provided, however, that the
           --------  -------

                                                                               4



     Company, in its sole discretion, may accelerate the vesting of all or a
     portion of a Participant's Account at any time.

3.2  A Participant's Account shall become 100% vested upon such Participant's
     termination of employment or service for any reason (including, without
     limitation, the Participant's death or disability); provided, however, that
                                                         --------  -------
     if the Participant's employment or service is terminated by the Company for
     Cause or the Participant resigns without Good Reason the unvested portion
     of the Account immediately prior to such termination shall be forfeited
     without consideration.

                                   SECTION IV

                        PAYMENT OF DEFERRED COMPENSATION
                        --------------------------------

4.1  Amounts contained in a Participant's Account shall, subject to Section 4.5
     and 4.6, be paid to the Participant as and when distributions are made to
     the Investors in respect of their Preferred Shares (excluding, any tax
     distributions) (a "Distribution Event"). The amount of the payment shall
     equal the product of the initial balance of such Account times the
     Distribution Percentage (as defined below). For purposes of this Section
     4.1, the "Distribution Percentage" with respect to a Distribution Event
     shall equal (i) the fair market value of the distribution made by SAC to
     the Investors with respect to their Preferred Shares in connection with
     such Distribution Event, divided by (ii) the initial investment by the
     Investors in the Preferred Shares as of the Closing Date.

4.2  Subject to Section 4.5 and 4.6, any amount payable to a Participant
     pursuant to Section 4.1 shall be paid within 5 days following the date on
     which such amount becomes payable. Such amounts shall be paid, in the
     Company's discretion, in cash or the same securities or other property
     (such securities or other property shall be referred to as "Distributed
     Property") distributed to the Investors in connection with a Distribution
     Event, such Distributed Property having a fair market value as of the
     Distribution Event (as determined by the Administrator) equal to the cash
     otherwise payable, provided that the amount of Distributed Property which
     may be paid to the Participants in satisfaction of the Company's obligation
     under Section 4.1 shall be limited to the extent necessary to assure that
     the aggregate fair market value of such Distributed Property (measured as
     of the Distribution Event) does not exceed the fair market value of the
     Distributed Property distributed with respect to the Preferred Shares in
     such Distribution Event.

4.3  Notwithstanding Section 4.1 and 4.2, the payment of amounts contained in a
     Participant's Account that are otherwise payable upon a Distribution Event
     but are not vested at the time of such Distribution Event (an "Unvested
     Payable Amount") shall continue to be deferred until such Unvested Payable
     Amount vests. Upon the vesting thereof, the vested portion of an Unvested
     Payable Amount shall, subject to Section 4.6, be paid, in the Company's
     discretion but consistent with Section 4.2, in cash or Distributed Property
     which relates to the Unvested Payable Amount, with any such securities or
     other property distributed in payment of the vested portion of the Unvested
     Payable Amount to be valued based on the fair market value (as determined
     by the Administrator) of such

                                                                               5



     securities or other property as of the vesting date. In the case of
     Unvested Payable Amount, the election described in Section 5.6 may be
     delivered by the Company to SAC no later than 20 days prior to the date on
     which such Unvested Payable Amount is expected to vest (and the
     Participants shall be notified at such time) and SAC shall be, subject to
     Sections 4.5 and 4.6, obligated to loan or to contribute to the capital of
     the Company, no later than the date on which such Unvested Payable Amount
     vests, the portion of the Unvested Payable Amount described in the
     election. In such a case, the Net Worth Limitation described in Section 5.6
     shall be applied on the date the Unvested Payable Amount vests.

4.4  Each Participant shall have the right to designate a Beneficiary. Any
     designated Beneficiary shall receive payments in the same manner as the
     Participant as if he or she had lived. In case of a failure of designation
     or the death of a designated Beneficiary without a designated successor,
     the balance of the amounts contained in the Participant's Account shall be
     paid, in accordance with Section 4.1, 4.2 and 4.3, to the Participant's
     estate. No designation of Beneficiary or change in Beneficiary shall be
     valid unless it is in writing signed by the Participant and filed with the
     Secretary of the Company (or his or her designated agent).

4.5  Notwithstanding anything contained herein to the contrary, no provision of
     this Plan will entitle any Participant or Beneficiary to any distribution
     or other payment from the Company or SAC (or entitle the Company to any
     loan or capital contribution from SAC), or to any claim against the Company
     or SAC for any such distribution or other payment (or loan or capital
     contribution), except for distributions payable and claims arising upon the
     occurrence of a Distribution Event, as and to the extent expressly provided
     in Sections 4.1, 4.2 and 4.3 (and, in the case of a claim by the Company
     for a loan or capital contribution from SAC, Section 5.6), subject to the
     subordination provisions set forth in Section 4.6.

4.6  (a) Each Participant, by entering into a Rollover Agreement, the Company
     and SAC agrees that the obligations of the Company and SAC under this Plan
     to make any distribution or other payment to the Participants and the
     Beneficiaries (and the obligations of SAC to make any loan or capital
     contribution to the Company) are expressly subordinated in right of
     payment, to the extent and in the manner provided herein, to the prior
     payment in full in cash of all (i) Obligations (as defined in the Credit
     Agreement to be dated as of November 22, 2000 (as renewed, refinanced,
     extended, modified, amended, restated, supplemented or waived from time to
     time, the "Credit Agreement"), among SAC, Seagate Technology International,
     Seagate Technology (US) Holdings, Inc., the Lenders party thereto and The
     Chase Manhattan Bank, as Administrative Agent), whether as primary obligor
     or as a guarantor, and (ii) Guaranteed Obligations (as defined in the
     Indenture to be dated as of November 22, 2000 (as renewed, refinanced,
     extended, modified, amended, restated, supplemented or waived from time to
     time, the "Indenture") among SAC, Seagate Technology International, the
     various subsidiaries of SAC from time to time party thereto and The Bank of
     New York, as Trustee), including interest and other monetary obligations
     incurred during the pendency of any insolvency, bankruptcy, receivership or
     similar proceeding (the

                                                                               6



     "Subordinated Note Obligations"), whether as primary obligor or as a
     guarantor, in each case as increased, renewed, refinanced, extended,
     modified, amended, restated, compromised, supplemented, terminated, waived
     or released from time to time (all such obligations in clauses (i) and
     (ii), as so increased, renewed, refinanced, extended, modified, amended,
     restated, compromised, supplemented, terminated, waived or released,
     collectively, the "Prior Obligations").

     (b) Until the payment in full in cash of all Prior Obligations, the
     termination of the Commitments (as defined in the Credit Agreement) and the
     reduction of the LC Exposure (as defined in the Credit Agreement) to zero
     (the "Time of Termination"), no Participant or Beneficiary shall be
     entitled to receive, and neither the Company nor SAC shall be required or
     permitted to make, any distribution or other payment under this Plan, and
     any such distribution or other payment to which a Participant or
     Beneficiary would be entitled but for the provisions of this sentence shall
     be made to holders of Prior Obligations (in each case, whether or not the
     Company is at the time a guarantor of Prior Obligations), subject to the
     subordination provisions of the Prior Obligations (or, if made to a
     Participant or Beneficiary, held by such Participant or Beneficiary in
     trust for the holders of the Prior Obligations and paid over to the holders
     of the Prior Obligations, subject to the subordination provisions of the
     Prior Obligations) as their interests may appear; provided, however, that
                                                       --------  -------
     the Company or SAC may make any distribution required by Section 4.1, 4.2
     or 4.3 of the Plan and no Participant or Beneficiary receiving any such
     distribution would be under any obligation to hold that distribution in
     trust for the holders of the Prior Obligations, if at the time when such
     distribution will be made no Default or Event of Default under the Credit
     Agreement or under the Indenture or other documentation governing the
     Subordinated Note Obligations has occurred and is continuing or would
     result from such distribution.

     (c) If, at any time, all or part of any payment previously made by SAC or
     any other Person with respect to Prior Obligations is rescinded for any
     reason whatsoever (including the insolvency, bankruptcy or reorganization
     of SAC or such other Person), the subordination provisions set forth in
     this Section 4.6 shall continue to be effective or be reinstated, as the
     case may be, all as though such payment had not been made.

     (d) The subordination provisions of this Section 4.6 are for the benefit of
     and enforceable by holders of the Prior Obligations (or any agent or
     trustee for such holders), and may not be modified, rescinded or cancelled
     in whole or in part prior to the Time of Termination.

                                    SECTION V

                          ADMINISTRATION; MISCELLANEOUS

5.1  The Company shall administer the Plan at its expense. All decisions made by
     the Company with respect to issues hereunder shall be final and binding on
     all parties.

                                                                               7



5.2  Except to the extent required by law, the right of any Participant or any
     Beneficiary to any benefit or to any payment hereunder shall not be subject
     in any manner to attachment or other legal process for the debts of such
     Participant or Beneficiary.

5.3  This Plan does not constitute an employment contract between the Company
     and a Participant. Nothing in this Plan shall be construed to give a
     Participant the right to be retained in the service of the Company, nor
     interfere with the right of the Company to terminate a Participant at any
     time and nothing in this Plan shall require uniformity of treatment with
     respect to Participants and/or their Beneficiaries.

5.4  Notwithstanding any other provision of the Plan, in the event of a Company
     Change of Control, (i) the successor entity (which, in the case of a sale
     or disposition of assets, shall mean the acquiror of such assets) shall
     assume the Company's obligations under the Plan, (ii) the Account of each
     Participant shall be recalculated to equal the lesser of (A) the Deferral
     Amount less distributions made to such Participant or his or her
     Beneficiary pursuant to the Plan and (B) the fair market value of SAC
     immediately prior to the Company Change of Control (excluding the aggregate
     Deferral Amount of all Participants), as determined by the Administrator in
     its sole discretion, multiplied by the Deferral Percentage, (iii) the
     Account of each Participant shall, subject to Section 4.6, be paid if and
     when such Account vests in accordance with the provisions of Section 3 and
     (iv) the payment of each Account shall be made in cash.

5.5  Notwithstanding any other provision of this Plan, in the event of a sale of
     substantially all the assets of SAC or a liquidation of SAC, (i) the
     Account of each Participant shall become 100% vested and (ii) following the
     distributions to the Investors and a payment to the Participants pursuant
     to such distributions as provided in the Plan, subject to Section 4.5 and
     4.6, the Plan shall terminate and all remaining balances in each
     Participant's Account shall be forfeited without consideration.

5.6  Subject to Sections 4.3, 4.5 and 4.6, at such time as an amount first
     becomes payable to the Participants pursuant to Section 4.1 or 4.3, in the
     event the Company determines that it has insufficient available assets with
     which to pay to Participants all or any portion of such amount, and the
     Company elects, in its discretion, not to borrow such assets or to cause
     such assets to be distributed to the Company by its Affiliates, the Company
     shall demand that SAC loan to the Company or make a contribution to the
     capital of the Company (at the election of SAC) all or any portion of such
     amount. In such event, the Company shall deliver a written demand to SAC on
     or before the date an amount first becomes payable to Participants pursuant
     to Section 4.1 or 4.3, and the Company shall notify such Participants at
     such time. SAC shall, subject to Sections 4.5 and 4.6, be obligated to loan
     or to contribute to the capital of the Company (i) within 5 days following
     the date on which any such amount becomes payable under 4.1 or (ii) on the
     date any such amount becomes payable under Section 4.3, the amount that is
     described in such demand, provided, however, that SAC may satisfy its
     obligation in cash and/or with Distributed Property (except that the amount
     of Distributed Property transferred may not exceed the amount of such
     Distributed Property that may be paid to the Participants in accordance
     with Section 4.2), provided further, however, that the amount of SAC's

                                                                               8



     obligation shall not exceed the Net Worth of the Company determined as of
     the date such amount becomes payable to the Participants pursuant to
     Section 4.1 (the "Net Worth Limitation"). Notwithstanding any other
     provision of this Plan, this Section 5.6 shall not be applicable to (and
     neither SAC nor any of its Affiliates (including, in the case of a Company
     Change of Control that is a sale or disposition of assets, the Company)
     shall have any liability in respect of) any payments or obligations of the
     Company or otherwise under the Plan following a Company Change of Control
     in which neither SAC nor any of the Borrowers or Subsidiaries are the
     successor or acquiring entity. For this purpose, the term "Net Worth" shall
     be equal to the difference between the Fair Market Value of the Company's
     assets (determined without regard to the obligation of SAC described in
     this Section 5.6), and the amount of the Company's liabilities (determined
     by taking into account the obligation to the Participants determined under
     Section 4.1). In the event amounts first become payable pursuant to Section
     4.1 on more than one occasion, the Net Worth Limitation shall be applied
     with respect to each such occasion.

5.7  This Plan shall be governed by, and construed in accordance with the laws
     of the State of New York, without regard to the conflicts of laws
     provisions thereof.

5.8  The Company may withhold from distributions made from the Plan any taxes
     required to be withheld under federal, state, or local law.

5.9  Benefits payable under this Plan may not be anticipated, assigned (either
     at law or equity), alienated, pledged, encumbered, or subjected to
     attachment, garnishment, levy, execution, or other legal process, and any
     attempt to effect such distribution shall be void.

5.10 The Plan may be amended, suspended or terminated in whole or in part from
     time to time by the Board, subject to Section 4.6(d) and except that no
     amendment, suspension, or termination shall diminish the rights, or
     adversely affect the benefits, provided to the Participants hereunder.

5.11 Until such time as the Company is subject to the periodic reporting
     requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
     the Company shall deliver a balance sheet and an income statement at least
     annually to each individual with an Account under the Plan, unless such
     individual is a key employee of the Company or its Affiliates whose duties
     in connection with the Company (or any Affiliate) assure such individual
     access to equivalent information.

5.12 The Plan is an unfunded plan intended to provide deferred compensation to a
     select group of management and highly compensated employees of the Company
     and its subsidiaries.

                                                                               9

EX-10.7(A)

                                                                 EXHIBIT 10.7(a)

                       NEW SAC 2000 RESTRICTED SHARE PLAN

     1.   PURPOSE OF THE PLAN

          The purpose of the Plan is to aid New SAC (the "Company") and its
affiliates in securing and retaining key employees, directors and consultants of
outstanding ability and to motivate such employees, directors and consultants to
exert their best efforts on behalf of the Company and its affiliates by
providing incentive through the grant of restricted share awards ("Awards"). The
Company expects that it will benefit from the added interest which such key
employees and directors will have in the welfare of the Company as a result of
their proprietary interest in the Company's success.

     2.   SHARES SUBJECT TO THE PLAN

          The total number of ordinary shares, par value $.0001, of the Company
(the "Ordinary Shares") that may be issued under the Plan is $1,843,000 and the
total number of preferred shares, par value $.0001, of the Company (the
"Preferred Shares") that may be issued under the Plan is 48,500 (the Ordinary
Shares and the Preferred Shares, together, the "Shares"). If any Shares awarded
under the Plan are forfeited by a Participant pursuant to the Plan, such Shares
may thereafter be reissued under the Plan.

     3.   ADMINISTRATION

          The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"); provided, however, that any
                                                     --------  -------
action permitted to be taken by the Committee may be taken by the Board of
Directors of the Company (the "Board"), in its discretion. The Committee is
authorized to interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, and to make any other determinations that it
deems necessary or desirable for the administration of the Plan. The Committee
may correct any defect or omission or reconcile any inconsistency in the Plan in
the manner and to the extent the Committee deems necessary or desirable. Awards
may, in the discretion of the Committee, be made under the Plan in assumption
of, or in substitution for, outstanding awards previously granted by the Company
or its affiliates or a company acquired by the Company or with which the Company
combines. The number of Shares underlying such substitute awards shall be
counted against the aggregate number of Shares available for Awards under the
Plan. Any decision of the Committee in the interpretation and administration of
the Plan, as described herein, shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned (including,
but not limited to, participants and their beneficiaries or successors). The
Committee shall have the full power and authority to establish the terms and
conditions of any Award consistent with the provisions of the Plan and to waive
any such terms and conditions at any time.

     4.   ELIGIBILITY

          Key management and other employees, directors and consultants of the
Company and its affiliates, who are from time to time responsible for the
management, growth or protection of the business of the Company and its
affiliates, are eligible to be granted Awards




under the Plan. The participants under the Plan shall be selected from time to
time by the Committee, in its discretion, from among those eligible, and the
Committee shall determine, in its discretion, consistent with the terms of the
Plan, the terms and conditions of the Awards granted to each participant.

     5.   LIMITATION

          No Award may be granted under the Plan after the tenth anniversary of
the Effective Date, but Awards theretofore granted may extend beyond that date.

     6.   RESTRICTED SHARE AWARDS

          Awards granted under this Plan shall be subject to the following terms
and conditions:

          (a)  The prospective recipient of an Award shall not, with respect to
               such Award, be deemed to have become a participant or to have any
               rights with respect to such Award until and unless such recipient
               (i) shall have executed an Agreement or other instrument
               evidencing the Award and its terms and conditions and delivered a
               fully executed copy thereof to the Company, (ii) shall become a
               signatory to the Management Shareholders Agreement dated as of
               November 22, 2000 among the Company and certain individuals
               identified therein and (iii) otherwise complied with the then
               applicable terms and conditions under the Plan.

          (b)  The name of each participant will be entered into the Register of
               Members and each participant shall be issued a certificate in
               respect of restricted shares awarded under the Plan. Such
               certificate shall be registered in the name of the participant,
               and shall bear an appropriate legend referring to the terms,
               conditions and restrictions applicable to such Award
               substantially in the following form:

                    "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                    (I) A MANAGEMENT SHAREHOLDERS AGREEMENT AMONG NEW SAC (THE
                    "COMPANY") AND THE MANAGEMENT SHAREHOLDERS LISTED THEREIN,
                    DATED AS OF NOVEMBER 22, 2000, AS AMENDED AND SUPPLEMENTED
                    FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, AND
                    (II) A RESTRICTED SHARE AGREEMENT WITH THE COMPANY RELATING
                    TO SUCH SHARES, A COPY OF EACH OF WHICH IS ON FILE WITH THE
                    SECRETARY OF THE COMPANY. THE MANAGEMENT SHAREHOLDERS
                    AGREEMENT

                                                                               2



                    CONTAINS, AMONG OTHER THINGS, CERTAIN PROVISIONS RELATING TO
                    THE VOTING AND TRANSFER OF THE SHARES SUBJECT TO THE
                    AGREEMENT, AND THE RESTRICTED SHARE AGREEMENT CONTAINS,
                    AMONG OTHER THINGS, CERTAIN PROVISIONS RELATING TO THE
                    VESTING OF SUCH SHARES. NO TRANSFER, SALE, ASSIGNMENT,
                    PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES
                    REPRESENTED BY THIS CERTIFICATE, DIRECTLY OR INDIRECTLY, MAY
                    BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH
                    MANAGEMENT SHAREHOLDERS AGREEMENT AND RESTRICTED SHARE
                    AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF
                    THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE
                    PROVISIONS OF SUCH MANAGEMENT SHAREHOLDERS AGREEMENT AND
                    RESTRICTED SHARE AGREEMENT."

                    "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                    REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAss. Y NOT
                    BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE
                    BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM
                    REGISTRATION IS AVAILABLE."

          (c)  All certificates for restricted shares delivered under this Plan
               shall be subject to such share transfer orders and other
               restrictions as the Committee may deem advisable under the rules,
               regulations and other requirements of the Securities and Exchange
               Commission, any stock exchange upon which the Company's Shares
               are then listed and any applicable federal or state securities
               law, and the Committee may cause a legend or legends to be put on
               any such certificates to make appropriate reference to such
               restrictions.

          (d)  The Committee may adopt rules which provide that the share
               certificates evidencing such shares may be held in custody by a
               bank or other institution, or that the Company may itself hold
               such shares in custody until the restrictions thereon shall have
               lapsed, and may require as a condition of any Award that the
               participant shall have delivered a stock power endorsed in blank
               relating to the share covered by such Award.

          (e)  Until such time as the Company is subject to the periodic
               reporting requirements of Section 13 or 15(d) of the Securities
               Exchange Act of 1934, the Company shall deliver a balance sheet
               and an income statement at least annually to each individual
               holding Shares issued under the Plan, unless such individual is a
               key employee of the Company or its Affiliates

                                                                               3



               whose duties in connection with the Company (or any Affiliate)
               assure such individual access to equivalent information.

     7.   RESTRICTIONS AND FORFEITURES

          The Shares awarded pursuant to the Plan shall be subject to the
following restrictions and conditions:

          (a)  During a period set by the Committee of no more than ten years
               commencing with the date of an Award (the "Restriction Period"),
               the participant will not be permitted to sell, transfer, pledge,
               assign or otherwise dispose of restricted shares awarded pursuant
               to such Award. If a participant's employment by the Company
               should terminate for any reason during the Restriction Period,
               unless otherwise provided by the Committee, the participant shall
               forfeit the restricted shares and it shall be returned to the
               Company in full and cancelled. However, such forfeiture
               provisions shall in all events lapse as to the Shares issued to
               each participant at the rate not less than twenty percent (20%)
               of those Shares per year of service over the five (5)-year period
               measured from the issue date of the Shares and shall immediately
               lapse as all the Shares issued to the participant upon the
               termination of his or her service by reason of death or permanent
               disability. Within these limits the Committee may provide for the
               lapse of such restrictions in installments where deemed
               appropriate.

          (b)  Except as provided in Section 7(a), the participant shall have
               with respect to the restricted shares all of the rights of a
               shareholder of the Company, including the right to vote the
               shares and receive dividends and other distributions; provided,
                                                                     --------
               however, that distributions (other than tax distributions) with
               -------
               respect Shares subject to the Restriction Period, shall be held
               by the Company and distributed upon vesting.

          (c)  The Committee may impose any conditions on an Award it deems
               advisable to ensure the participant's payment to the Company of
               any federal, state or local taxes required to be withheld with
               respect to such Award.

          (d)  If the Company provides for the repurchase of the Shares, the
               purchase price for such Shares shall be deemed reasonable if (1)
               it is not less than the fair market value of the securities to be
               repurchased on the date of termination of employment and the
               right to repurchase is exercised for cash or cancellation of
               purchase money indebtedness for the Shares within 90 days of
               termination of employment, and the right terminates when the
               Company's securities become publicly traded or (2) it is at the
               original purchase price, provided that the right to repurchase at
               the original purchase price lapses at the rate of at least 20% of
               the Shares per year over

                                                                               4



               5 years from the date the Award is granted and the right to
               repurchase must be exercised for cash or cancellation of purchase
               money indebtedness for the Shares within 90 days of termination
               of employment; provided, that the securities held by an officer,
               director, or consultant of the Company may be subject to
               additional or greater restrictions than those provided in (1) and
               (2) above.

     8.   ADJUSTMENTS UPON CERTAIN EVENTS

          Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:

          (a)  Generally. In the event of any change in the outstanding Shares
               ---------
after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination,
combination or transaction or exchange of Shares or other corporate exchange or
similar or other transaction effecting the value of the Shares including,
without limitation, the repayment of Company indebtedness by an affiliate or
shareholder, or any distribution to shareholders of Shares or the receipt of
proceeds from the sale or other disposition of a subsidiary of the Company other
than regular cash dividends or any transaction similar to the foregoing, the
Committee in its sole discretion and without liability to any person may make
such substitution or adjustment, if any, as it deems to be equitable, as to the
number or kind of Shares or other securities issued or reserved for issuance
pursuant to the Plan.

          (b)  Change in Control. Except as otherwise provided in an Award
               -----------------
Agreement, in the event of a Change in Control, the Committee in its sole
discretion and without liability to any person may take such actions, if any, as
it deems necessary or desirable with respect to any Award (including, without
limitation, the lapse of the restrictions on an Award); provided, however, that
                                                        --------  -------
if the Award is not assumed, substituted or otherwise continued following the
Change in Control, the restrictions on the Award shall lapse immediately prior
to the Change in Control. Change in Control shall mean: (i) (A) the sale or
disposition, in one or a series of related transactions, of all, or
substantially all, of the assets of the Company to any "person" or "group" (as
such terms are defined in Sections 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) other than Silver Lake Partners, L.P., Texas
Pacific Group, August Capital Partners, Chase Capital Partners and GS Capital
Partners III, L.P. or their affiliates (the "Investors") or (B) any person or
group, other than the Investors, is or becomes the beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly
or indirectly, of more than 50% of the total voting power of the voting shares
of the Company, including by way of merger, consolidation or otherwise and (ii)
the representative of the Investors (individually or in the aggregate) cease to
comprise a majority of the Board.

     9.   AMENDMENT OR TERMINATION

          The Board or the Committee may amend, alter or discontinue the Plan,
but no amendment, alteration or discontinuation shall be made which, without the
consent of a participant, would diminish any of the rights under any Award
theretofore granted to such

                                                                               5



participant under the Plan; provided, however, that the Board or the Committee
                            --------  -------
may amend the Plan in such manner as it deems necessary to permit the granting
of Awards meeting the requirements of the Code or other applicable laws.

     10.  NO RIGHT TO EMPLOYMENT

                  The granting of an Award under the Plan shall impose no
obligation on the Company or any subsidiary to continue the employment of a
participant and shall not lessen or affect the Company's or such subsidiary's
right to terminate the employment of such participant.

     11.  SUCCESSORS AND ASSIGNS

          The Plan shall be binding on all successors and assigns of the Company
and a participant, including without limitation, the estate of such participant
and the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the participant's creditors.

     12.  CHOICE OF LAW

          The Plan shall be governed by, and construed in accordance with, the
laws of the State of New York, without regard to the conflict of laws provisions
thereof.

     13.  EFFECTIVENESS OF THE PLAN

          The Plan shall be effective as of the date the Plan is adopted by the
Board of Directors and approved by the shareholders of the Company (the
"Effective Date").

                                                                               6

EX-10.7(B)

                                                                 EXHIBIT 10.7(b)

                       NEW SAC RESTRICTED SHARE AGREEMENT
                                (ROLLOVER GROUP)

     THIS AGREEMENT (the "Agreement"), is made effective as of the ____ day of
______________, 2000, (hereinafter called the "Date of Grant"), between New SAC,
a limited company incorporated in the Cayman Islands (the "Company") and the
individual listed on Schedule I hereto (the "Participant"):

     The Company, pursuant to the New SAC 2000 Restricted Share Plan (the
"Plan") hereby grants to the Participant, the number of ordinary shares, par
value $.0001, of the Company (the "Ordinary Shares") and the number of preferred
shares, par value $.0001, of the Company (the "Preferred Shares", together with
the Ordinary Shares, the "Shares") listed on Schedule I hereto. The Shares are
granted pursuant to the Plan, and are governed by the terms and conditions of
the Plan. All defined terms used herein, unless specifically defined in this
Agreement, have the meanings assigned to them in the Plan. The Participant
agrees to be bound by all terms and conditions of this Agreement and the Plan,
as amended from time to time.

     To be effective, this Restricted Share Agreement must be signed by the
Participant and returned to the General Counsel, within 10 weeks of the date
hereof and the Participant must become a signatory to the Management
Shareholders Agreement dated as of November 22, 2000 among the Company and
certain individuals identified therein.

          1.  Restrictions on Transfer of Shares. (a) Except as otherwise
              ----------------------------------
determined by the Committee, the Shares cannot be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of (collectively, a "Transfer")
during the Restriction Period. For purposes of this Agreement, the Restriction
Period shall mean, from the Date of Grant until the thirtieth month following
the Date of Grant; provided, however, that the Restriction Period shall lapse
with respect to one-third of the Ordinary Shares and one-third of the Preferred
Shares on the first anniversary of the Date of Grant, with respect to one-third
of the Ordinary Shares and one-third of the Preferred Shares ratably each month
over the 18 months following the first anniversary of the Date of Grant and with
respect to remaining one-third of the Ordinary Shares and one-third of the
Preferred Shares on the date which is thirty months following the Date of Grant.

          (b) Regardless of whether the restrictions imposed by this Paragraph 1
hereof have lapsed and subject to any transfer restrictions in the Management
Stockholders Agreement, the Participant shall only Transfer the Preferred Shares
with a proportionate number of the Ordinary Shares and the Participant shall
only Transfer the Ordinary Shares with a proportionate number of the Preferred
Shares, provided, however, that the foregoing restriction shall not be
applicable to any Transfer by the Participant of the Preferred Shares or the
Ordinary Shares as separate securities pursuant to the Tag-Along Rights or
Take-Along Rights of the Management Stockholders Agreement.

          2.  Forfeiture of Shares. (a) If the Participant's employment with the
              --------------------
Company shall terminate, prior to the expiration of the Restriction Period, for
any reason, any Shares with respect to which the Restriction Period has not yet
lapsed (the "Restricted Shares") shall, upon such termination of employment, be
forfeited by Participant to the Company, without the payment of any
consideration or further consideration by the Company, and neither



Participant nor any successors, heirs, assigns, or personal representatives of
Participant shall thereafter have any further rights or interest in the
Restricted Shares or under this Agreement, and Participant's name shall
thereupon be deleted from the list of the Company's shareholders with respect to
the Restricted Shares; provided, however, that if the employment of Participant
                       --------  -------
with the Company shall be terminated for any reason (including death or
disability) other than (A) by the Participant without Good Reason or (B) by the
Company for Cause or if the Participant's employment with the Company (or its
Affiliates) terminates by reason of the Company's sale or other disposition of
the entity employing Participant so that such entity is no longer an Affiliate
of the Company, then the Restriction Period shall lapse with respect to the
Restricted Shares and the Restricted Shares shall thereby be free of such
restrictions.

          (b) For purposes of this Agreement "Cause" shall mean (i) the
Participant's continued failure substantially to perform the material duties of
his office (other than as a result of total or partial incapacity due to
physical or mental illness), (ii) the embezzlement or theft by the Participant
of the Company's property, (iii) the commission of any act or acts on the
Participant' s part resulting in the conviction of such Participant of a felony
under the laws of the United States or any state, (iv) the Participant's willful
malfeasance or willful misconduct in connection with the Participant's duties to
the Company or any other act or omission which is materially injurious to the
financial condition or business reputation of the Company or any of its
subsidiaries or affiliates, or (v) a material breach by the Participant of the
material terms of his employment agreement, the Management Shareholders
Agreement or any non-compete, non-solicitation or confidentiality provisions to
which the Participant is subject. However, no termination shall be deemed for
Cause under clause (i), (iv) or (v) unless the Participant is first given
written notice by the Company of the specific acts or omissions which the
Company deems constitute grounds for a termination for Cause and is provided
with at least 30 days after such notice to cure the specified deficiency.

          (c) For purposes of this Agreement, "Good Reason" shall mean a
Participant's resignation of his or her employment with the Company as a result
of the following actions, which actions remain uncured for at least 30 days
following written notice from the Participant to the Company describing the
occurrence of such events and asserting that such events constitute grounds for
a Good Reason resignation, provided notice of such resignation is given to the
Company within sixty (60) days after the expiration of such cure period: (i)
without the Participant's express written consent, any material reduction in the
Participant's authority or responsibilities from those set forth in an
employment agreement between the Company and the Participant (the "Employment
Agreement") (or if such Participant is not a party to an Employment Agreement,
from the authority and responsibilities initially assigned to such Participant
by the Company after the Closing), (ii) without the Participant's express
written consent, a reduction of 10% or more in the level of the base salary,
target annual bonus or employee benefits to be provided to the Participant under
the Employment Agreement (or if such Participant is not a party to an Employment
Agreement, a reduction of 10% or more in the level of base salary, target annual
bonus or employee benefits provided to such Participant immediately prior to the
Closing), other than a reduction implemented with the consent of the Participant
or a reduction that is equivalent to reduction in base salaries, bonus
opportunities and/or employee benefits, as applicable, imposed on all other
senior executives of the Company

                                                                               2



at a similar level within the Company (provided that the use of private aircraft
shall not be deemed an employee benefit for these purposes); or (iii) the
relocation of the Participant to a principal place of employment more than 50
miles from the Participant's current principal place of employment, without the
Participant's express written consent.

          3. Voting; Distributions. Regardless of whether the restrictions
             ---------------------
imposed by Paragraph 1 hereof have lapsed, the Participant shall have the right
to vote the Shares granted hereunder to the extent the Participant is a
shareholder of record on any applicable record date with respect to such Shares.
To the extent that the restrictions imposed by Paragraph 1 have not lapsed with
respect to Shares, distributions (other than tax distributions), whether in
cash, securities or other property, with respect to such Shares shall be held by
the Company and distributed when the restrictions lapse.

          4. No Right to Employment. The execution and delivery of this
             ----------------------
Agreement and the granting of Shares hereunder shall not constitute or be
evidence of any agreement or understanding, express or implied, on the part of
the Company or its affiliates to employ the Participant for any specific period
or in any particular capacity and shall not prevent the Company or its
affiliates from terminating the Participant's employment at any time with or
without cause.

          5. Change in Control. [In the event of a Change in Control, the
             -----------------
Restriction Period shall lapse with respect to the greater of (i) the number of
Ordinary Shares and Preferred Shares for which the Restriction Period would have
lapsed within the twelve months following the Change in Control or (ii) fifty
percent of the Ordinary Shares and the Preferred Shares subject to the
Restriction Period.]1 If the successor entity in the Change in Control does not
assume the Restricted Shares, substitute shares of its capital stock with
restrictions substantially equivalent to those in effect for the Restricted
Shares immediately prior to the Change in Control or otherwise continue the
Restricted Shares in effect following the Change in Control, then the
Restriction Period shall lapse with respect to such Restricted Shares
immediately prior to the Change in Control.

          6. Application of Laws. The granting of Shares hereunder shall be
             -------------------
subject to all applicable laws, rules and regulations and to such approvals of
any governmental agencies as may be required, in particular the laws of the
Cayman Islands.

          7. Taxes. Any taxes required by federal, state or local laws to be
             -----
withheld by the Company shall be paid to the Company by the Participant by the
time such taxes are required to be paid or deposited by the Company.

          8. Notices. Any notices required to be given hereunder to the
             -------
Company shall be addressed to New SAC, Attention: General Counsel, and any
notice required to be given hereunder to the Participant shall be sent to the
Participant's address as shown on the records of the Company.

_____________________________
1.  Tier I Senior Managers Only.
                                                                               3



          9. Choice of Law. This Agreement shall be governed by, and construed
             -------------
in accordance with, the laws of the State of New York, without regard to the
conflict of laws provisions thereof.

                                                                               4



                                   SCHEDULE I

Name of Senior Manager:  _____________________________

             Number of Ordinary Shares: ____________

             Number of Preferred Shares: ________


             IN WITNESS WHEREOF, the parties hereto have executed this
Agreement.

                                     NEW SAC

                                     By _____________________
                                       Name:
                                       Title:

Agreed and acknowledged as
of the date first above written:


____________________________

EX-10.8(A)

                                                                 EXHIBIT 10.8(a)

                       NEW SAC 2001 RESTRICTED SHARE PLAN

     1.   PURPOSE OF THE PLAN

          The purpose of the Plan is to aid New SAC (the "Company") and its
affiliates in securing and retaining key employees, directors and consultants of
outstanding ability and to motivate such employees, directors and consultants to
exert their best efforts on behalf of the Company and its affiliates by
providing incentive through the grant of restricted share awards ("Awards"). The
Company expects that it will benefit from the added interest which such key
employees and directors will have in the welfare of the Company as a result of
their proprietary interest in the Company's success.

     2.   SHARES SUBJECT TO THE PLAN

          The total number of ordinary shares, par value $.0001, of the Company
(the "Shares") that may be issued under the Plan is 500,000. If any Shares
awarded under the Plan are forfeited by a Participant pursuant to the Plan, such
Shares may thereafter be reissued under the Plan.

     3.   ADMINISTRATION

          The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"); provided, however, that any
                                                     --------  -------
action permitted to be taken by the Committee may be taken by the Board of
Directors of the Company (the "Board"), in its discretion. The Committee is
authorized to interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, and to make any other determinations that it
deems necessary or desirable for the administration of the Plan. The Committee
may correct any defect or omission or reconcile any inconsistency in the Plan in
the manner and to the extent the Committee deems necessary or desirable. Awards
may, in the discretion of the Committee, be made under the Plan in assumption
of, or in substitution for, outstanding awards previously granted by the Company
or its affiliates or a company acquired by the Company or with which the Company
combines. The number of Shares underlying such substitute awards shall be
counted against the aggregate number of Shares available for Awards under the
Plan. Any decision of the Committee in the interpretation and administration of
the Plan, as described herein, shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned (including,
but not limited to, participants and their beneficiaries or successors). The
Committee shall have the full power and authority to establish the terms and
conditions of any Award consistent with the provisions of the Plan and to waive
any such terms and conditions at any time.

     4.   ELIGIBILITY

          Key management and other employees, directors and consultants of the
Company and its affiliates, who are from time to time responsible for the
management, growth or protection of the business of the Company and its
affiliates, are eligible to be granted Awards under the Plan. The participants
under the Plan shall be selected from time to time by the Committee, in its
discretion, from among those eligible, and the Committee shall determine, in



its discretion, consistent with the terms of the Plan, the terms and conditions
of the Awards granted to each participant.

     5.   LIMITATION

          No Award may be granted under the Plan after the tenth anniversary of
the Effective Date, but Awards theretofore granted may extend beyond that date.

     6.   RESTRICTED SHARE AWARDS

          Awards granted under this Plan shall be subject to the following terms
and conditions:

          (a)  The prospective recipient of an Award shall not, with respect to
               such Award, be deemed to have become a participant or to have any
               rights with respect to such Award until and unless such recipient
               (i) shall have executed an Agreement or other instrument
               evidencing the Award and its terms and conditions and delivered a
               fully executed copy thereof to the Company, (ii) shall become a
               signatory to the Management Shareholders Agreement dated as of
               November 22, 2000 among the Company and certain individuals
               identified therein and (iii) otherwise complied with the then
               applicable terms and conditions under the Plan.

          (b)  The name of each participant will be entered into the Register of
               Members and each participant shall be issued a certificate in
               respect of restricted shares awarded under the Plan. Such
               certificate shall be registered in the name of the participant,
               and shall bear an appropriate legend referring to the terms,
               conditions and restrictions applicable to such Award
               substantially in the following form:

                    "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                    (I) A MANAGEMENT SHAREHOLDERS AGREEMENT AMONG NEW SAC (THE
                    "COMPANY") AND THE MANAGEMENT SHAREHOLDERS LISTED THEREIN,
                    DATED AS OF NOVEMBER 22, 2000, AS AMENDED AND SUPPLEMENTED
                    FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, AND
                    (II) A RESTRICTED SHARE AGREEMENT WITH THE COMPANY RELATING
                    TO SUCH SHARES, A COPY OF EACH OF WHICH IS ON FILE WITH THE
                    SECRETARY OF THE COMPANY. THE MANAGEMENT SHAREHOLDERS
                    AGREEMENT CONTAINS, AMONG OTHER THINGS, CERTAIN PROVISIONS
                    RELATING TO THE VOTING AND TRANSFER

                                                                               2



                    OF THE SHARES SUBJECT TO THE AGREEMENT, AND THE RESTRICTED
                    SHARE AGREEMENT CONTAINS, AMONG OTHER THINGS, CERTAIN
                    PROVISIONS RELATING TO THE VESTING OF SUCH SHARES. NO
                    TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
                    DISPOSITION OF THE SECURITIES REPRESENTED BY THIS
                    CERTIFICATE, DIRECTLY OR INDIRECTLY, MAY BE MADE EXCEPT IN
                    ACCORDANCE WITH THE PROVISIONS OF SUCH MANAGEMENT
                    SHAREHOLDERS AGREEMENT AND RESTRICTED SHARE AGREEMENT. THE
                    HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS
                    CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF
                    SUCH MANAGEMENT SHAREHOLDERS AGREEMENT AND RESTRICTED SHARE
                    AGREEMENT."

                    "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                    REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAss. Y NOT
                    BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE
                    BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM
                    REGISTRATION IS AVAILABLE."

          (c)  All certificates for restricted shares delivered under this Plan
               shall be subject to such share transfer orders and other
               restrictions as the Committee may deem advisable under the rules,
               regulations and other requirements of the Securities and Exchange
               Commission, any stock exchange upon which the Company's Shares
               are then listed and any applicable federal or state securities
               law, and the Committee may cause a legend or legends to be put on
               any such certificates to make appropriate reference to such
               restrictions.

          (d)  The Committee may adopt rules which provide that the share
               certificates evidencing such shares may be held in custody by a
               bank or other institution, or that the Company may itself hold
               such shares in custody until the restrictions thereon shall have
               lapsed, and may require as a condition of any Award that the
               participant shall have delivered a stock power endorsed in blank
               relating to the share covered by such Award.

          (e)  Until such time as the Company is subject to the periodic
               reporting requirements of Section 13 or 15(d) of the Securities
               Exchange Act of 1934, the Company shall deliver a balance sheet
               and an income statement at least annually to each individual
               holding Shares issued under the Plan, unless such individual is a
               key employee of the Company or its Affiliates whose duties in
               connection with the Company (or any Affiliate) assure such
               individual access to equivalent information.

                                                                               3



     7.   RESTRICTIONS AND FORFEITURES

          The Shares awarded pursuant to the Plan shall be subject to the
following restrictions and conditions:

          (a)  During a period set by the Committee of no more than ten years
               commencing with the date of an Award (the "Restriction Period"),
               the participant will not be permitted to sell, transfer, pledge,
               assign or otherwise dispose of restricted shares awarded pursuant
               to such Award. If a participant's employment by the Company
               should terminate for any reason during the Restriction Period,
               unless otherwise provided by the Committee, the participant shall
               forfeit the restricted shares and it shall be returned to the
               Company in full and cancelled. However, such forfeiture
               provisions shall in all events lapse as to the Shares issued to
               each participant at the rate not less than twenty percent (20%)
               of those Shares per year of service over the five (5)-year period
               measured from the issue date of the Shares and shall immediately
               lapse as all the Shares issued to the participant upon the
               termination of his or her service by reason of death or permanent
               disability. Within these limits the Committee may provide for the
               lapse of such restrictions in installments where deemed
               appropriate.

          (b)  Except as provided in Section 7(a), the participant shall have
               with respect to the restricted shares all of the rights of a
               shareholder of the Company, including the right to vote the
               shares and receive dividends and other distributions; provided,
               however, that distributions (other than tax distributions) with
               respect Shares subject to the Restriction Period, shall be held
               by the Company and distributed upon vesting.

          (c)  The Committee may impose any conditions on an Award it deems
               advisable to ensure the participant's payment to the Company of
               any federal, state or local taxes required to be withheld with
               respect to such Award.

          (f)  If the Company provides for the repurchase of the Shares, the
               purchase price for such Shares shall be deemed reasonable if (1)
               it is not less than the fair market value of the securities to be
               repurchased on the date of termination of employment and the
               right to repurchase is exercised for cash or cancellation of
               purchase money indebtedness for the Shares within 90 days of
               termination of employment, and the right terminates when the
               Company's securities become publicly traded or (2) it is at the
               original purchase price, provided that the right to repurchase at
               the original purchase price lapses at the rate of at least 20% of
               the Shares per year over 5 years from the date the Award is
               granted and the right to repurchase must be exercised for cash or
               cancellation of purchase money indebtedness for the Shares within
               90 days of termination of employment;

                                                                               4


               provided, that the securities held by an officer, director, or
               consultant of the Company may be subject to additional or greater
               restrictions than those provided in (1) and (2) above.

     8.   ADJUSTMENTS UPON CERTAIN EVENTS

          Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:

          (a)   Generally. In the event of any change in the outstanding Shares
                ---------
after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination,
combination or transaction or exchange of Shares or other corporate exchange or
similar or other transaction effecting the value of the Shares including,
without limitation, the repayment of Company indebtedness by an affiliate or
shareholder, or any distribution to shareholders of Shares or the receipt of
proceeds from the sale or other disposition of a subsidiary of the Company other
than regular cash dividends or any transaction similar to the foregoing, the
Committee in its sole discretion and without liability to any person may make
such substitution or adjustment, if any, as it deems to be equitable, as to the
number or kind of Shares or other securities issued or reserved for issuance
pursuant to the Plan.

          (b)   Change in Control. Except as otherwise provided in an Award
                -----------------
Agreement, in the event of a Change in Control, the Committee in its sole
discretion and without liability to any person may take such actions, if any, as
it deems necessary or desirable with respect to any Award (including, without
limitation, the lapse of the restrictions on an Award); provided, however, that
                                                        --------  -------
if the Award is not assumed, substituted or otherwise continued following the
Change in Control, the restrictions on the Award shall lapse immediately prior
to the Change in Control. Change in Control shall mean: (i) (A) the sale or
disposition, in one or a series of related transactions, of all, or
substantially all, of the assets of the Company to any "person" or "group" (as
such terms are defined in Sections 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) other than Silver Lake Partners, L.P., Texas
Pacific Group, August Capital Partners, Chase Capital Partners and GS Capital
Partners III, L.P. or their affiliates (the "Investors") or (B) any person or
group, other than the Investors, is or becomes the beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly
or indirectly, of more than 50% of the total voting power of the voting shares
of the Company, including by way of merger, consolidation or otherwise and (ii)
the representative of the Investors (individually or in the aggregate) cease to
comprise a majority of the Board.

     9.   AMENDMENT OR TERMINATION

          The Board or the Committee may amend, alter or discontinue the Plan,
but no amendment, alteration or discontinuation shall be made which, without the
consent of a participant, would diminish any of the rights under any Award
theretofore granted to such participant under the Plan; provided, however, that
                                                        --------  -------
the Board or the Committee may amend the Plan in such manner as it deems
necessary to permit the granting of Awards meeting the requirements of the Code
or other applicable laws.

                                                                               5



     10.   NO RIGHT TO EMPLOYMENT

           The granting of an Award under the Plan shall impose no obligation on
the Company or any subsidiary to continue the employment of a participant and
shall not lessen or affect the Company's or such subsidiary's right to terminate
the employment of such participant.

     11.   SUCCESSORS AND ASSIGNS

           The Plan shall be binding on all successors and assigns of the
Company and a participant, including without limitation, the estate of such
participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the participant's
creditors.

     12.   CHOICE OF LAW

           The Plan shall be governed by, and construed in accordance with, the
laws of the State of New York, without regard to the conflict of laws provisions
thereof.

     13.   EFFECTIVENESS OF THE PLAN

           The Plan shall be effective as of the date the Plan is adopted by the
Board of Directors and approved by the shareholders of the Company (the
"Effective Date").

                                                                               6

EX-10.8(B)

                                                                 Exhibit 10.8(b)

                       NEW SAC 2001 RESTRICTED SHARE PLAN

                           RESTRICTED SHARE AGREEMENT

     THIS AGREEMENT (the "Agreement"), is made effective as of the _____ day of
________, 2001, between New SAC, a limited company incorporated in the Cayman
Islands (the "Company") and ___________________ (the "Participant"):

     The Company, pursuant to the New SAC 2001 Restricted Share Plan (the
"Plan") hereby grants to the Participant, _________ ordinary shares, par value
$.0001, of the Company (the "Shares"). The Shares are granted pursuant to the
Plan, and are governed by the terms and conditions of the Plan. All defined
terms used herein, unless specifically defined in this Agreement, have the
meanings assigned to them in the Plan. The Participant agrees to be bound by all
terms and conditions of this Agreement and the Plan, as amended from time to
time.

     To be effective, this Restricted Share Agreement must be signed by the
Participant and returned to the General Counsel on or before June 29, 2001 and
the Participant must become (or already be) a signatory to the Management
Shareholders Agreement dated as of November 22, 2000 among the Company and
certain individuals identified therein ("Management Shareholders Agreement"). If
the Participant is not already a signatory to the Management Shareholders
Agreement, then Participant shall sign the form of Joinder Agreement attached
hereto as Appendix A.

          1. Restrictions on Transfer of Shares. Except as otherwise determined
             ----------------------------------
by the Committee, the Shares cannot be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of in any manner (collectively, a "Transfer")
during the Restriction Period. For purposes of this Agreement, the "Restriction
Period" shall mean the period beginning on November 22, 2000 (the "Vesting
Commencement Date") and ending on the fourth anniversary of the Vesting
Commencement Date; provided, however, that, subject to the Participant's
continued employment, the Restriction Period shall lapse with respect to twenty
- - five percent (25%) of the Shares on the first anniversary of the Vesting
Commencement Date and with respect to 1/48th of the Shares at the end of each
month thereafter (measured by using the same day of such subsequent month as the
Vesting Commencement Date, or if there is no same day in a given subsequent
month, the last day of such subsequent month).

          2. Forfeiture of Shares. (a) If the Participant's employment with the
             --------------------
Company (including its Affiliates) shall terminate prior to the expiration of
the Restriction Period, for any reason or no reason, any Shares with respect to
which the Restriction Period has not yet lapsed, rounded to the nearest whole
Share (the "Restricted Shares") shall, upon such termination of employment, be
automatically forfeited by Participant to the Company, without the payment of
any consideration or further consideration by the Company, and neither
Participant nor any successors, heirs, assigns, or personal representatives of
Participant shall thereafter have any further rights or interest in the
Restricted Shares or under this Agreement, and Participant's name shall
thereupon be deleted from the list of the Company's shareholders with respect to
the Restricted Shares; provided, however, that if the employment of Participant
                       --------  -------
with the Company (or its Affiliates) shall be terminated (A) by the Participant
with Good Reason or (B) by the Company without Cause, then the Restriction
Period shall lapse with respect to all of the Restricted Shares and the
Restricted Shares shall thereby be entirely free of such forfeiture
restrictions. In addition, in the event of Participant's termination of
employment with the Company (including its Affiliates) on account of the
Participant's death, the Participant shall be



deemed to have completed an additional year of service for purposes of
calculating the number of Shares which are to be treated as Restricted Shares.
The preceding sentence shall have no effect if the Participant's death occurs at
a time when none of the Shares which are subject to this Agreement are
Restricted Shares or if the Participant's death occurs at a time when the
Participant is no longer employed by the Company (including its Affiliates).

          Notwithstanding the foregoing, in the event of the sale or other
disposition of the entity employing Participant so that such entity is no longer
an Affiliate of the Company ("Company Sale"), then (1) the Shares which are
Restricted Shares at that time (following the application of Paragraph 5) shall
not be forfeited, (2) the Restriction Period shall immediately lapse upon the
occurrence of the Company Sale with respect to the greater of (A) the number of
Shares as to which the Restriction Period would have lapsed, pursuant to Section
1 above, during the twelve month period following the Company Sale assuming that
the Participant had continued to perform services during that period, and (B)
50% of the Shares which are Restricted Shares immediately prior to the
occurrence of the Company Sale, (3) the provisions of this Agreement shall
continue to apply as if the Participant's new employer were the Company or an
Affiliate of the Company and the Restriction Period shall continue to lapse as
to the Shares in installments as set forth in Section 1 over the period of
Participant's continued employment with the new employer (as adjusted to take
into account the Shares as to which the Restriction Period has lapsed pursuant
to (2) immediately above, and (4) if the employment of Participant with the
Participant's new employer (or its Affiliates) shall be terminated (A) by the
Participant for Good Reason, (B) by the new employer (including its Affiliates)
without Cause, (C) if the Participant's new employer is controlled by another
entity ("Parent") directly, or indirectly through one or more intermediaries
("Subsidiary"), by reason of the Parent's sale or other disposition of
Participant's new employer so that Participant's new employer is no longer a
Subsidiary of Parent, or (D) if Participant's new employer is not a Subsidiary,
then by any "person" or "group" (as such terms are defined in Sections 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
other than any person, group or Affiliate of such person or group which acquired
ownership of at least 10% of the total voting power of the voting securities of
Participant's new employer in connection with the Company Sale, becoming the
beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of more than 50% of the total voting power of the voting
securities of Participant's new employer, including by way or merger,
consolidation or otherwise, then the Restriction Period shall lapse with respect
to all of the Restricted Shares and the Restricted Shares shall thereby be
entirely free of such forfeiture restrictions.

          (b) For purposes of this Agreement, "Cause" shall mean (i) the
Participant's continued failure substantially to perform the material duties of
his office (other than as a result of total or partial incapacity due to
physical or mental illness), (ii) the embezzlement or theft by the Participant
of the Company's property, (iii) the commission of any act or acts on the
Participant's part resulting in the conviction of such Participant of a felony
under the laws of the United States or any state, (iv) the Participant's willful
malfeasance or willful misconduct in connection with the Participant's duties to
the Company or any other act or omission which is materially injurious to the
financial condition or business reputation of the Company or any of its
subsidiaries or affiliates, or (v) a material breach by the Participant of the
material terms of his employment agreement, the Management Shareholders
Agreement, or any non-compete, non-solicitation or confidentiality provisions to
which the Participant is subject. However, no termination shall be deemed for
Cause under clause (i), (iv) or (v) unless the Participant is first



given written notice by the Company of the specific acts or omissions which the
Company deems constitute grounds for a termination for Cause and is provided
with at least 30 days after such notice to cure the specified deficiency.

          (c) For purposes of this Agreement, "Good Reason" shall mean a
Participant's resignation of his or her employment with the Company as a result
of the following actions, which actions remain uncured for at least 30 days
following written notice from the Participant to the Company describing the
occurrence of such events and asserting that such events constitute grounds for
a Good Reason resignation, provided notice of such resignation is given to the
Company within sixty (60) days after the expiration of such cure period: (i)
without the Participant's express written consent, any material reduction in the
Participant's authority or responsibilities from those set forth in an
employment agreement between the Company and the Participant (the "Employment
Agreement") (or if such Participant is not a party to an Employment Agreement,
from the authority and responsibilities initially assigned to such Participant
by the Company after the Vesting Commencement Date), (ii) without the
Participant's express written consent, a reduction of 10% or more in the level
of the base salary, target annual bonus or employee benefits to be provided to
the Participant under the Employment Agreement (or if such Participant is not a
party to an Employment Agreement, a reduction of 10% or more in the level of
base salary, target annual bonus or employee benefits provided to such
Participant immediately prior to the Vesting Commencement Date), other than a
reduction implemented with the consent of the Participant or a reduction that is
equivalent to reduction in base salaries, bonus opportunities and/or employee
benefits, as applicable, imposed on all other senior executives of the Company
at a similar level within the Company (provided that the use of private aircraft
shall not be deemed an employee benefit for these purposes); or (iii) the
relocation of the Participant to a principal place of employment more than 50
miles from the Participant's current principal place of employment, without the
Participant's express written consent.

          (d) For purposes of this Agreement, "Affiliate" shall mean a person
that directly, or indirectly through one or more intermediates, controls or is
controlled by, or is under common control with, the Company.

          3. Voting; Distributions. Regardless of whether the restrictions
             ---------------------
imposed by Paragraph 1 hereof have lapsed, the Participant shall have the right
to vote the Shares granted hereunder to the extent the Participant is a
shareholder of record on any applicable record date with respect to such Shares.
To the extent that the restrictions imposed by Paragraph 1 have not lapsed with
respect to Shares, distributions (other than tax distributions), whether in
cash, securities or other property, with respect to such Shares shall be held by
the Company and distributed ratably when the restrictions lapse.

          4. No Right to Employment. The execution and delivery of this
             ----------------------
Agreement and the granting of Shares hereunder shall not constitute or be
evidence of any agreement or understanding, express or implied, on the part of
the Company or its affiliates to employ the Participant for any specific period
or in any particular capacity and shall not prevent the Company or its
affiliates from terminating the Participant's employment at any time with or
without cause.



          5. Change in Control. In the event of a Change in Control, the
             -----------------
Restriction Period shall lapse with respect to the greater of (i) the number of
Shares for which the Restriction Period would have lapsed within the twelve
months following the Change in Control or (ii) fifty percent of the Shares
subject to the Restriction Period. If the successor entity in the Change in
Control does not assume the Restricted Shares, substitute shares of its capital
stock with restrictions substantially equivalent to those in effect for the
Restricted Shares immediately prior to the Change in Control or otherwise
continue the Restricted Shares in effect following the Change in Control, then
the Restriction Period shall lapse with respect to such Restricted Shares
immediately prior to the Change in Control.

          6. Application of Laws. The granting of Shares hereunder shall be
             -------------------
subject to all applicable laws, rules and regulations and to such approvals of
any governmental agencies as may be required, in particular the laws of the
Cayman Islands.

          7. Taxes. Any taxes required by federal, state or local laws to be
             -----
withheld by the Company shall be paid to the Company by the Participant by the
time such taxes are required to be paid or deposited by the Company.

          8. Notices. Any notices required to be given hereunder to the Company
             -------
shall be addressed to New SAC at the address of its executive headquarters,
Attention: General Counsel, and any notice required to be given hereunder to the
Participant shall be sent to the Participant's address as shown on the records
of the Company.

          9. Choice of Law. This Agreement shall be governed by, and construed
             -------------
in accordance with, the laws of the State of New York, without regard to the
conflict of laws provisions thereof.

          10. References to Law. References to any specific provisions of law in
              -----------------
this Agreement, whether of a statute, regulation, administrative pronouncement
or otherwise, shall also include any amendment, replacement, or other succeeding
provision.


          IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

                                                        NEW SAC


                                                        By _____________________
                                                          Name:
                                                          Title:
Agreed and acknowledged as
of the date first above written:


- -------------------------






                               APPENDIX A

                          FORM OF JOINDER AGREEMENT

     Pursuant to the Management Shareholders Agreement dated as of November 22,
2000 (the "Management Shareholders Agreement") among New SAC and the Management
Shareholders party thereto, the undersigned hereby agrees that, having acquired
Shares, the undersigned has, by the terms of the Management Shareholders
Agreement, become bound by the terms and other provisions of the Management
Shareholders Agreement with all attendant rights, duties and obligations thereof
and, pursuant to Section 2.4 and/or Section 7.2 of the Management Shareholders
Agreement and by this Joinder Agreement, hereby joins and enters into the
Management Shareholders Agreement. This is a Joinder Agreement referred to in
the Management Shareholders Agreement. Capitalized terms used but not defined in
this Joinder Agreement shall have the meaning assigned to them in the Management
Shareholders Agreement.

Listed below is information regarding the Shares of the undersigned:

Number of Ordinary Shares:   _______________________________

Number of Preferred Shares:  _______________________________

          IN WITNESS WHEREOF, the undersigned has executed this Joinder
Agreement as of the date set forth below.

[NAME]

Signature: _______________________________

Title: ___________________________________

Date: [__________________], 2001

- --------------------------------------------------------------------------------

Acknowledged by:

NEW SAC

By: ____________________________________

Name:  __________________________________

Title: ___________________________________

EX-10.8(C)

                                                                EXHIBIT 10.8(c)

                       NEW SAC 2001 RESTRICTED SHARE PLAN

                           RESTRICTED SHARE AGREEMENT
                                (OTHER EMPLOYEES)

     THIS AGREEMENT (the "Agreement"), is made effective as of the __the day of
________, 2001, (hereinafter called the "Date of Grant"), between New SAC, a
limited company incorporated in the Cayman Islands (the "Company") and
___________________ (the "Participant"):

     The Company, pursuant to the New SAC 2001 Restricted Share Plan (the
"Plan") hereby grants to the Participant, _________ ordinary shares, par value
$.0001, of the Company (the "Shares"). The Shares are granted pursuant to the
Plan, and are governed by the terms and conditions of the Plan. All defined
terms used herein, unless specifically defined in this Agreement, have the
meanings assigned to them in the Plan. The Participant agrees to be bound by all
terms and conditions of this Agreement and the Plan, as amended from time to
time.

     To be effective, this Restricted Share Agreement must be signed by the
Participant and returned to the General Counsel, within 10 weeks of the date
hereof and the Participant must become a signatory to the Management
Shareholders Agreement dated as of November 22, 2000 among the Company and
certain individuals identified therein.

          1.   Restrictions on Transfer of Shares. Except as otherwise
               ----------------------------------
determined by the Committee, the Shares cannot be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of (collectively, a "Transfer")
during the Restriction Period. For purposes of this Agreement, the Restriction
Period shall mean, from the Date of Grant until four years following the Date of
Grant; provided, however, that, subject to the Participant's continued
employment, the Restriction Period shall lapse with respect to twenty - five
percent (25%) of the Shares on the first anniversary of the Date of Grant and
with respect to 1/48/th/ of the Shares at the end of each month thereafter.

          2.   Forfeiture of Shares. Except as provided in Section 5 of this
               --------------------
Agreement, if the Participant's employment with the Company shall terminate,
prior to the expiration of the Restriction Period, for any reason, any Shares
with respect to which the Restriction Period has not yet lapsed (the "Restricted
Shares") shall, upon such termination of employment, be forfeited by Participant
to the Company, without the payment of any consideration or further
consideration by the Company, and neither Participant nor any successors, heirs,
assigns, or personal representatives of Participant shall thereafter have any
further rights or interest in the Restricted Shares or under this Agreement, and
Participant's name shall thereupon be deleted from the list of the Company's
shareholders with respect to the Restricted Shares.

          3.   Voting; Distributions. Regardless of whether the restrictions
               ---------------------
imposed by Paragraph 1 hereof have lapsed, the Participant shall have the right
to vote the Shares granted hereunder to the extent the Participant is a
shareholder of record on any applicable record date with respect to such Shares.
To the extent that the restrictions imposed by Paragraph 1 have not lapsed with
respect to Shares, distributions (other than tax distributions), whether in
cash, securities or other property, with respect to such Shares shall be held by
the Company and distributed when the restrictions lapse.

                                       1



          4.   No Right to Employment. The execution and delivery of this
               ----------------------
Agreement and the granting of Shares hereunder shall not constitute or be
evidence of any agreement or understanding, express or implied, on the part of
the Company or its affiliates to employ the Participant for any specific period
or in any particular capacity and shall not prevent the Company or its
affiliates from terminating the Participant's employment at any time with or
without cause.

          5.   Change in Control. (a) In the event that a Participant is
               -----------------
terminated without Cause within two (2) years following a Change in Control, the
Restriction Period shall lapse with respect to the Restricted Shares and the
Restricted Shares shall thereby be free of such restrictions. If the successor
entity in the Change in Control does not assume the Restricted Shares,
substitute shares of its capital stock with restrictions substantially
equivalent to those in effect for the Restricted Shares immediately prior to the
Change in Control or otherwise continue the Restricted Shares in effect
following the Change in Control, then the Restriction Period shall lapse with
respect to such Restricted Shares immediately prior to the Change in Control.

          (b)  For purposes of this Agreement "Cause" shall mean (i) the
Participant's continued failure substantially to perform the material duties of
his office (other than as a result of total or partial incapacity due to
physical or mental illness), (ii) the embezzlement or theft by the Participant
of the Company's property, (iii) the commission of any act or acts on the
Participant' s part resulting in the conviction of such Participant of a felony
under the laws of the United States or any state, (iv) the Participant's willful
malfeasance or willful misconduct in connection with the Participant's duties to
the Company or any other act or omission which is materially injurious to the
financial condition or business reputation of the Company or any of its
subsidiaries or affiliates, or (v) a material breach by the Participant of the
material terms of his employment agreement, the Management Shareholders
Agreement or any non-compete, non-solicitation or confidentiality provisions to
which the Participant is subject. However, no termination shall be deemed for
Cause under clause (i), (iv) or (v) unless the Participant is first given
written notice by the Company of the specific acts or omissions which the
Company deems constitute grounds for a termination for Cause and is provided
with at least 30 days after such notice to cure the specified deficiency.

          6.   Application of Laws.  The granting of Shares hereunder shall be
               -------------------
subject to all applicable laws, rules and regulations and to such approvals of
any governmental agencies as may be required, in particular the laws of the
Cayman Islands.

          7.   Taxes.  Any taxes required by federal, state or local laws to be
               -----
withheld by the Company shall be paid to the Company by the Participant by the
time such taxes are required to be paid or deposited by the Company.

          8.   Notices.  Any notices required to be given hereunder to the
               -------
Company shall be addressed to New SAC, Attention: General Counsel, and any
notice required to be given hereunder to the Participant shall be sent to the
Participant's address as shown on the records of the Company.

          9.   Choice of Law.  This Agreement shall be governed by, and
               -------------
construed in accordance with, the laws of the State of New York, without regard
to the conflict of laws provisions thereof.

                                       2




          IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

                                      NEW SAC

                                      By _____________________
                                         Name:
                                         Title:

Agreed and acknowledged as
of the date first above written:




________________________

                                       3

EX-10.9

                                                                    Exhibit 10.9
                           SEAGATE TECHNOLOGY HOLDINGS
                             2001 SHARE OPTION PLAN
           (as amended and restated effective as of January 31, 2002)

1.   Purpose of the Plan

          The purpose of the Plan is to aid the Company and its Affiliates in
recruiting and retaining key employees, directors or consultants of outstanding
ability and to motivate such employees, directors or consultants to exert their
best efforts on behalf of the Company and its Affiliates by providing incentives
through the granting of Awards. The Company expects that it will benefit from
the added interest which such key employees, directors or consultants will have
in the welfare of the Company as a result of their proprietary interest in the
Company's success.

2.   Definitions

     The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:

          (a)  10% Shareholder: the owner of stock (as determined under Code
               ---------------
               Section 424(d)) possessing more than ten percent (10%) of the
               total combined voting power of all classes of stock of the
               Company (or any parent of Subsidiary).

          (b)  Act: The Securities Exchange Act of 1934, as amended, or any
               ---
               successor thereto.

          (c)  Affiliate: With respect to the Company, any entity directly or
               ---------
               indirectly controlling, controlled by, or under common control
               with, the Company or any other entity designated by the Board in
               which the Company or an Affiliate has an interest.

          (d)  Award Agreement: A written agreement signed by an authorized
               ---------------
               officer of the Company evidencing the grant of an Option.

          (e)  Beneficial Owner: A "beneficial owner", as such term is defined
               ----------------
               in Rule 13d-3 under the Act (or any successor rule thereto).

          (f)  Board: The Board of Directors of the Company.
               -----

          (g)  Change in Control: (i) the sale or disposition, in one or a
               -----------------
               series of related transactions, of all, or substantially all, of
               the assets of the Company to any Person or "group" (as such terms
               are defined in Sections 13(d)(3) or 14(d)(2) of the Act) other
               than the Investors or their Affiliates or (ii) any person or
               group, other than the Investors or their Affiliates, is or
               becomes the Beneficial Owner, directly or indirectly, of more
               than 50% of the total voting power of the voting securities of
               the Company, including by way of merger, consolidation, tender or
               exchange offer or otherwise and the representatives of the
               Investors or their Affiliates (individually or in the aggregate)
               cease to comprise a majority of the Board.

                                              1




          (h)  Closing Date: November 22, 2001, the date on which Seagate
               ------------
               Technology, Inc., Seagate Software Holdings, Inc. and Suez
               Acquisition Company Limited completed the stock purchase
               agreement and Seagate Technology, Inc. and VERITAS Software
               Corporation completed the agreement and plan of merger and
               reorganization.

          (i)  Code: The Internal Revenue Code of 1986, as amended, or any
               ----
               successor thereto.

          (j)  Committee: The Board, or any committee of the Board designated by
               ---------
               the Board to administer this Plan.

          (k)  Company: Seagate Technology Holdings, a limited company
               -------
               incorporated in the Cayman Islands.

          (l)  Effective Date: The date the Board approves the Plan.
               --------------

          (m)  Employment: The term "employment" as used herein shall be deemed
               ----------
               to refer to (i) a Participant's employment if the Participant is
               an employee of the Company or any of its Affiliates and (ii) to a
               Participant's service as a nonemployee director or consultant if
               the Participant is a nonemployee director or consultant to the
               Company or its Affiliates.

          (n)  Fair Market Value: On a given date, (i) if there should be a
               -----------------
               public market for the Shares on such date, the arithmetic mean of
               the high and low selling prices of the Shares as reported on such
               date on the Composite Tape of the principal national securities
               exchange on which such Shares are listed or admitted to trading,
               or, if no Composite Tape exists for such national securities
               exchange on such date, then on the principal national securities
               exchange on which such Shares are listed or admitted to trading,
               or, if the Shares are not listed or admitted on a national
               securities exchange, the arithmetic mean of the per Share closing
               bid price and per Share closing asked price on such date as
               quoted on the National Association of Securities Dealers
               Automated Quotation System (or such market in which such prices
               are regularly quoted), or if no sale of Shares shall have been
               reported on such Composite Tape or such national securities
               exchange on such date or quoted on the National Association of
               Securities Dealer Automated Quotation System on such date, then
               the immediately preceding date on which sales of the Shares have
               been so reported or quoted shall be used, and (ii) if there
               should not be a public market for the Shares on such date, the
               Fair Market Value shall be the fair market value per share
               established by the Board in good faith.

                                               2



          (o)  Investors: Silver Lake Partners, L.P., SAC Investments, L.P. and
               ---------
               the other investors that invested in New SAC as of the Closing
               Date (other than pursuant to the conversion of equity-based
               awards in Seagate Technology, Inc. or the purchase of New SAC
               securities pursuant to Rollover Agreements with New SAC dated
               November 13, 2000).

          (p)  ISO: An Option that is also an incentive stock option granted
               ---
               pursuant to Section 6(d) of the Plan.

          (q)  New SAC: New SAC, a limited company incorporated in the Cayman
               -------
               Islands.

          (r)  Option: A share option granted pursuant to Section 6 of the Plan.
               ------

          (s)  Option Price: The purchase price per Share of an Option, as
               ------------
               determined pursuant to Section 6(a) of the Plan.

          (t)  Participant: An employee, director or consultant of the Company
               -----------
               or its Affiliates who is selected by the Committee to participate
               in the Plan.

          (u)  Person: A "person", as such term is used for purposes of Section
               ------
               13(d) or 14(d) of the Act.

          (v)  Plan: The Seagate Technology Holdings 2001 Share Option Plan.
               ----

          (w)  Shares: Shares of common shares of the Company.
               ------

          (x)  Subsidiary: A subsidiary corporation, as defined in Section
               ----------
               424(f) of the Code (or any successor section thereto).

3.   Shares Subject to the Plan

          The total number of Shares which may be issued under the Plan is
100,000,000. The Shares may consist, in whole or in part, of unissued Shares or
treasury Shares. The issuance of Shares or the payment of cash upon the exercise
of an Option shall reduce the total number of Shares available under the Plan,
as applicable. Shares which are subject to Options which terminate or lapse
without consideration may be granted again under the Plan. In addition, unvested
Shares repurchased by the Company, pursuant to the repurchase right under
Section 6(b) of the Plan, upon the Participant's termination of Employment shall
be added back to the number of Shares available for issuance under the Plan.

4.   Administration

          The Plan shall be administered by the Committee, which may delegate
its duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two

                                       3



individuals who, during any period when the Company and this Plan are subject to
the provisions of Section 162(m) of the Code and Section 16 of the Act, are
intended to qualify as "nonemployee directors" within the meaning of Rule 16b-3
under the Act (or any successor rule thereto) and "outside directors" within the
meaning of Section 162(m) of the Code (or any successor section thereto).
Options may, in the discretion of the Committee, be granted under the Plan in
substitution for outstanding options previously granted by the Company or its
affiliates or a company acquired by the Company or with which the Company
combines. The number of Shares underlying such substitute options shall be
counted against the aggregate number of Shares available for Options under the
Plan. The Committee is authorized to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors). The Committee shall have the full power
and authority to establish the terms and conditions of any Option consistent
with the provisions of the Plan and to waive any such terms and conditions at
any time (including, without limitation, accelerating or waiving any vesting
conditions). The Committee shall require payment of any amount it may determine
to be necessary to withhold for federal, state, local or other taxes as a result
of the exercise of an Option. If the Committee specifically provides in a
Participant's Award Agreement, the Participant may elect to pay a portion or all
of such withholding taxes, but in no event greater than the Company's minimum
statutory rate (based on both the federal and state rates) by (a) delivery in
Shares or (b) having Shares withheld by the Company from any Shares that would
have otherwise been received by the Participant.

5.   Limitations

          No Option may be granted under the Plan after the tenth anniversary of
the Effective Date, but Options theretofore granted may extend beyond that date.

6.   Terms and Conditions of Options

          Options granted under the Plan shall be, as determined by the
Committee, non-qualified or incentive stock options for federal income tax
purposes, as evidenced by the related Award Agreements, and shall be subject to
the foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:

          (a)  Option Price. The Option Price per Share shall be determined by
               ------------
               the Committee at the time of grant and shall be set forth in an
               Award Agreement; provided, however, that the exercise price per
                                --------  -------
               share shall not be less than eighty-five percent (85%) of the
               Fair Market Value per Share on the date of grant; provided,
                                                                 --------
               further, that if the Participant is a 10%
               -------

                                       4



               Shareholder, then the Option Price per share shall not be less
               than one hundred ten percent (110%) of the Fair Market Value per
               Share on the date of grant.

          (b)  Exercisability. Options granted under the Plan shall be
               --------------
               exercisable at such time and upon such terms and conditions as
               may be determined by the Committee. The Committee shall have the
               discretion to grant Options which are immediately exercisable for
               unvested Shares, and any unvested Shares purchased under those
               Options shall be subject to repurchase by the Company should the
               Participant cease employment prior to vesting in those Shares. In
               the discretion of the Committee, the repurchase price shall equal
               either (i) the Option Price paid per Share or (ii) the lower of
               the Fair Market Value per Share or the Option Price paid per
               Share. The terms upon which such repurchase right shall be
               exercisable (including the period and procedure for exercise and
               the appropriate vesting schedule for the purchased Shares) shall
               be established by the Committee and set forth in the document
               evidencing such repurchase right. In no event, however, shall the
               Committee impose a vesting schedule that is more restrictive than
               twenty percent (20%) per year, with the initial vesting to occur
               not later than one (1) year after the date of grant; provided,
               further, that such limitation shall not be applicable to any
               Participants who are officers of the Company or an Affiliate,
               nonemployee directors or consultants. Notwithstanding the
               foregoing, in no event shall an Option be exercisable more than
               ten years after the date it is granted.

          (c)  Exercise of Options. Except as otherwise provided in the Plan or
               -------------------
               in an Award Agreement, an Option may be exercised for all, or
               from time to time any part, of the Shares for which it is then
               exercisable. For purposes of Section 6 of the Plan, the exercise
               date of an Option shall be the later of the date a notice of
               exercise is received by the Company and, if applicable, the date
               payment is received by the Company pursuant to clauses (i), (ii)
               or (iii) in the following sentence. The purchase price for the
               Shares as to which an Option is exercised shall be paid to the
               Company in full at the time of exercise at the election of the
               Participant (i) in cash or its equivalent (e.g., by check) or
               (ii) if there should be a public market for the Shares at such
               time, (A) in Shares having a Fair Market Value equal to the
               aggregate Option Price for the Shares being purchased and
               satisfying such other requirements as may be imposed by the
               Committee; provided, that such Shares have been held by the
                          --------
               Participant for no less than six months (or such other period as
               established from time to time by the Committee or generally
               accepted accounting principles), (B) partly in cash and partly in
               such Shares or (C) subject to such rules as may be established by
               the Committee, through the delivery of irrevocable instruments to
               a broker to sell all or a portion of such Shares and deliver
               promptly to the Company an amount equal to the aggregate Option
               Price for the Shares being

                                             5



               purchased. No Participant shall have any rights to dividends or
               other rights of a shareholder with respect to Shares subject to
               an Option until the Participant has given written notice of
               exercise of the Option, paid in full for such Shares and, if
               applicable, has satisfied any other conditions imposed by the
               Committee pursuant to the Plan.

          (d)  ISOs. The Committee may grant Options under the Plan that are
               ----
               intended to be ISOs. Such ISOs shall comply with the requirements
               of Section 422 of the Code (or any successor section thereto). No
               ISO may be granted to any Participant who at the time of such
               grant, owns more than ten percent of the total combined voting
               power of all classes of stock of the Company or of any Subsidiary
               within the meaning of Section 422(b)(6) of the Code (or any
               successor section thereto), unless (i) the Option Price for such
               ISO is at least 110% of the Fair Market Value of a Share on the
               date the ISO is granted and (ii) the date on which such ISO
               terminates is a date not later than the day preceding the fifth
               anniversary of the date on which the ISO is granted. Any
               Participant who disposes of Shares acquired upon the exercise of
               an ISO either (i) within two years after the date of grant of
               such ISO or (ii) within one year after the transfer of such
               Shares to the Participant, shall notify the Company of such
               disposition and of the amount realized upon such disposition.

          (e)  Attestation. Wherever in this Plan or any Award Agreement a
               -----------
               Participant is permitted to pay the exercise price of an Option
               or taxes relating to the exercise of an Option by delivering
               Shares, the Participant may, subject to procedures satisfactory
               to the Committee, satisfy such delivery requirement by presenting
               proof of beneficial ownership of such Shares, in which case the
               Company shall treat the Option as exercised without further
               payment and shall withhold such number of Shares from the Shares
               acquired by the exercise of the Option.

7.   Adjustments Upon Certain Events

          Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Options granted under the Plan:

          (a)  Generally. In the event of any change in the outstanding Shares
               ---------
               after the Effective Date by reason of any Share dividend or
               split, reorganization, recapitalization, merger, consolidation,
               spin-off, combination, or other transaction or exchange of Shares
               or other exchange or similar or other transaction affecting the
               value of the Shares including, without limitation, the repayment
               of Company indebtedness by an Affiliate or shareholder, or any
               distribution to shareholders of Shares or the shares of any
               Subsidiary of the Company in a spin-off or spinout transaction,
               the distribution of proceeds from the sale or other disposition
               of a Subsidiary of the

                                            6



               Company to the Company's shareholders or any transaction similar
               to the foregoing other than regular cash dividends, the Committee
               shall, without liability to any person, make such substitution or
               adjustment it deems to be equitable, as to (i) the number or kind
               of Shares or other securities or other property issued or
               reserved for issuance pursuant to the Plan or pursuant to
               outstanding Options, (ii) the Option Price and/or (iii) any other
               affected terms of such Options; provided the aggregate Option
               Price shall not be increased. In the event of the liquidation or
               dissolution of the Company, all Options which have not been
               previously exercised shall terminate.

          (b)  Change in Control. Except as otherwise provided in an Award
               -----------------
               Agreement, in the event of a Change in Control, the Committee in
               its sole discretion and without liability to any person may take
               such actions, if any, as it deems necessary or desirable with
               respect to any Option (including, without limitation, (i) the
               acceleration of the vesting of an Option, (ii) the payment of a
               cash amount in exchange for the cancellation of an Option equal
               to the product of (x) the excess, if any, of the Fair Market
               Value per Share at such time over the Option Price times (y) the
                                                                  -----
               number of Shares then subject to such Option (a "Cash-Out")
               and/or (iii) the requiring of the assumption of the outstanding
               Options by the successor entity or the issuance of substitute
               Options or other equity based awards that will substantially
               preserve the value, rights and benefits of any outstanding
               Options in effect prior to the consummation of the Change in
               Control as determined by the Committee; provided, however, that
                                                       --------  -------
               if the Option is not assumed, substituted, Cashed-Out or
               otherwise continued following the Change in Control, the Option
               shall become immediately vested and exercisable immediately prior
               to the Change in Control and shall terminate if not exercised
               upon or prior to the Change in Control.

8.   No Right to Employment or Awards

          The granting of an Option under the Plan shall impose no obligation on
the Company or any Affiliate to continue the employment of a Participant and
shall not lessen or affect the Company's or its Affiliate's right to terminate
the employment of such Participant. No Participant or other Person shall have
any claim to be granted any Option, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Options. The terms and
conditions of Options and the Committee's determinations and interpretations
with respect thereto need not be the same with respect to each Participant
(whether or not such Participants are similarly situated).

9.   Successors and Assigns

          The Plan shall be binding on all successors and assigns of the Company
and a Participant, including without limitation, the estate of such Participant
and the executor,

                                    7



administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.

10.  Nontransferability of Options

          Unless otherwise determined by the Committee, an Option shall not be
transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. An Option exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant. Notwithstanding the foregoing, the Participant
may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who in the event of the death of the
Participant shall thereafter be entitled to exercise the Option.

11.  Loans

          The Committee may, in its sole discretion, permit a Participant to pay
the Option Price for any Shares purchased under the Plan by delivering a
full-recourse promissory note payable in one or more installments and secured by
the purchased Shares. The promissory note shall bear interest at the market rate
on the date of exercise. In no event, however, may the maximum credit available
to the Participant exceed the sum of (i) the aggregate Option Price payable for
the purchased Shares (less the par value of those Shares) plus (ii) any Federal,
state and local income and employment tax liability or other tax liability
incurred by the Participant in connection with the Share purchase.

12.  Amendments or Termination

          The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which, (a) without the approval of
the shareholders of the Company, would (except as is provided in Section 7 of
the Plan), increase the total number of Shares reserved for the purposes of the
Plan or change the maximum number of Shares for which Options may be granted to
any Participant or (b) without the consent of a Participant, would diminish any
of the rights of the Participant under any Option theretofore granted to such
Participant under the Plan; provided, however, that the Committee may amend the
                            --------  -------
Plan in such manner as it deems necessary to permit the granting of Options
meeting the requirements of the Code or other applicable laws.

13.  Choice of Law

          The Plan shall be governed by and construed in accordance with the
laws of the State of New York without regard to conflicts of laws.

14.  Effectiveness of the Plan

          The Plan shall be effective as of the Effective Date.

                                      8

EX-10.10

                                                                   EXHIBIT 10.10

                                                                  EXECUTION COPY

                             SHAREHOLDERS AGREEMENT
                             ----------------------

     THIS SHAREHOLDERS AGREEMENT, dated as of November 22, 2000 (this
"Agreement"), is entered into among New SAC (the "Company"), Silver Lake
 ---------                                        -------
Technology Investors Cayman, L.P., Silver Lake Investors Cayman, L.P., Silver
Lake Partners Cayman, L.P., (collectively, "Silver Lake"), SAC Investments, L.P.
                                            -----------
("TPG"), August Capital III, L.P. ("August"), Chase Equity Associates, L.P.
  ---                               ------
("Chase"), GS Capital Partners III, L.P., GS Capital Partners III Offshore,
  -----
L.P., Goldman, Sachs & Co. Verwaltungs GmbH, Stone Street Fund 2000 L.P., Bridge
Street Special Opportunities Fund 2000, L.P. (collectively, "GS"), Staenberg
                                                             --
Venture Partners II, L.P., Staenberg Seagate Partners, LLC (collectively,
"Staenberg"), Integral Capital Partners V, L.P., Integral Capital Partners V
 ---------
Side Fund, L.P. (collectively, "Integral") and the individuals listed on the
                                --------
signature pages hereto. Each of the entities listed above and the individuals
listed on the signature pages hereto are sometimes referred to individually as a
"Shareholder" and together as the "Shareholders."
 -----------                       ------------

                                    RECITALS:

     A. Suez Acquisition Company (Cayman) Limited ("SAC"), Seagate Technology,
                                                    ---
Inc. ("Seagate") and Seagate Software Holdings, Inc. ("SSHI"), entered into a
       -------                                         ----
Stock Purchase Agreement dated as of March 29, 2000 as amended by the
Consolidated Amendment to Stock Purchase Agreement, Agreement and Plan of Merger
and Reorganization, and Indemnification Agreement, and Consent, dated as of
August 29, 2000, among SAC, Seagate, SSHI, VERITAS Software Corporation
("VERITAS") and Victory Merger Sub, Inc. ("Merger Sub") and Consolidated
  -------                                  ----------
Amendment No. 2 to Stock Purchase Agreement, Agreement and Plan of Merger and
Reorganization, and Indemnification Agreement, and Consent, dated as of October
18, 2000, among SAC, Seagate, SSHI, VERITAS and Merger Sub (as so amended and as
it may be further amended, supplemented or otherwise modified from time to time,
the "Stock Purchase Agreement");
     ------------------------

     B. Pursuant to an Assignment and Assumption Agreement dated as of November
22, 2000, between SAC and the Company, SAC assigned all of its rights and
obligations under the Stock Purchase Agreement to the Company;

     C. Pursuant to the Stock Purchase Agreement, the Company will purchase all
of Seagate's operating assets and assume substantially all of its liabilities by
acquiring the shares of one or more companies;

     D. Immediately following the transactions contemplated by the Stock
Purchase Agreement, Silver Lake (including for these purposes Integral), TPG,
August, Chase, GS and Staenberg will hold approximately 34.727%, 22.909%,
11.818%, 6.818%, 2.273% and 0.909% of the aggregate outstanding Ordinary Shares
(as defined below) and Non-Voting Ordinary Shares (as defined below) of the
Company, respectively, and 41.497%, 27.375%,



14.122%, 8.147%, 2.716% and 1.086% of the outstanding Preferred Shares (as
defined below) of the Company, respectively;

        E. The remainder of the outstanding Shares (as defined below)
immediately following the transactions contemplated by the Stock Purchase
Agreement will be held by certain management employees of the Company
(collectively, the "Management Shareholders"); and
                    -----------------------

        F. The Shareholders wish to provide for certain matters relating to
their respective holdings of Shares and the governance of the Company.

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:

ARTICLE I. INTRODUCTORY MATTERS

        1.1. Defined Terms. In addition to the terms defined elsewhere herein,
             -------------
the following terms have the following meanings when used herein with initial
capital letters:

        "AAA" has the meaning given that term in Section 7.10 of this
         ---
     Agreement.

        "Additional Director" means, subject to Section 5.1(a)(ii), a Director
         -------------------
     who is (i) designated by, but is not a partner, controlling person or
     employee of, Silver Lake, (ii) approved by TPG and (iii) reasonably
     acceptable to a majority of the Board (other than the Additional Director).

        "Affiliate" has the meaning given that term in Rule 405 promulgated
         ---------
     under the Securities Act; provided that officers, directors or employees of
     the Company will not be deemed to be Affiliates of a shareholder of the
     Company for purposes hereof solely by reason of being officers, directors
     or employees of the Company.

        "Aggregate Pro Rata Portion" means, with respect to either the
         --------------------------
     Ordinary Shares (including for all purposes of this defined term Non-Voting
     Ordinary Shares) or Preferred Shares (as the case may be): (i) with respect
     to any Non-Selling Holder who has delivered a Section 2.3 Notice, the
     number equal to the product of (A) the number of Offered Shares of the
     class of Shares as to which a determination is being made, multiplied by
     (B) a fraction, the numerator of which shall be the total number of Shares2
     of such class owned by such Non-Selling Holder and the denominator of which
     shall be the total number of Shares of such class held by all Non-Selling
     Holders who have delivered such a notice; and (ii) with respect to any
     Non-Selling Holder who has delivered a Subsequent Section 2.3 Notice, the
     number equal to the product of (A) the number of Remaining Offered Shares
     of the class of Shares to which the determination is being made, multiplied
     by (B) a fraction, the numerator of which shall be the total number of
     Shares of such class owned by such Non-Selling Holder and the denominator
     of which shall be the total number of Shares of such class held by all
     Non-Selling Holders who have delivered such a notice; provided that in
                                                           --------
     calculating the Aggregate Pro

                                                                               2



     Rata Portion with respect to any Non-Selling Holder who is a Management
     Shareholder, Shares held by such Management Shareholder shall not include
     any Shares other than those received by such Management Shareholder on the
     Closing Date (the "Initial Shares") and any additional Shares received by
                        --------------
     such Management Shareholder with respect to such Initial Shares.

                  "Agreement" means this Agreement, as the same may be amended,
                   ---------
     supplemented or otherwise modified from time to time in accordance with
     the terms hereof.

                  "Assumption Agreement" means a writing substantially in the
                   --------------------
     form of Exhibit A hereto whereby a Permitted Transferee or other Transferee
     pursuant to Section 2.5 becomes a party to, and agrees to be bound to the
     same extent as its Transferor by, the terms of this Agreement.

                  "Board" means the Board of Directors of the Company.
                   -----

                  "Business Day" means a day other than a Saturday, Sunday,
                   ------------
     federal or New York or California state holiday or other day on which
     commercial banks in New York City or San Francisco are authorized or
     required by law to close.

                  "Capital Account" has the meaning given that term in Section
                   ---------------
     6.3(a) of this Agreement.

                  "Carrying Value" means, with respect to any asset of the
                   --------------
     Company, such asset's adjusted basis for U.S. federal income tax purposes,
     except that the Carrying Values of all assets of the Company shall be
     adjusted to equal their respective fair market values, in accordance with
     the rules set forth in Regulations section 1.704-1(b)(2)(iv)(f), except as
     otherwise provided herein, as of: (i) the date of the acquisition of any
     additional Shares by any new or existing Shareholder or Management
     Shareholder in exchange for more than a de minimis capital contribution;
     (ii) the date of distribution of more than a de minimis amount of money or
     other property of the Company to a Shareholder or Management Shareholder as
     consideration for an interest in the Company, and (iii) the date any Shares
     are relinquished to the Company. The Carrying Value of any asset of the
     Company distributed to any Shareholder or Management Shareholder shall be
     adjusted immediately prior to such distribution to equal its fair market
     value and depreciation shall be calculated by reference to Carrying Value,
     instead of tax basis, once Carrying Value differs from tax basis. The
     Carrying Value of any asset contributed (or deemed contributed under
     Regulations section 1.701-1(b)(1)(iv)) by a Shareholder or Management
     Shareholder to the Company will be the fair market value of such asset at
     the date of its contribution thereto. Upon an adjustment to Carrying Value
     of any asset pursuant to this definition of Carrying Value, the amount of
     the adjustment shall be included as gain or loss in computing book income
     or loss for purposes of maintaining Capital Accounts hereunder.

                  "Chase Regulatory Side Letter" means the side letter relating
                   ----------------------------
     to banking regulatory matters dated the date hereof between Chase and the
     Company.

                                                                               3



                  "Chief Executive Officer" has the meaning given that term in
                   -----------------------
     Section 5.1(a) of this Agreement.

                  "Closing" has the meaning given to that term in the Stock
                   -------
     Purchase Agreement.

                  "Closing Date" means November 22, 2000.
                   ------------

                  "Code" means the Internal Revenue Code of 1986, as amended.
                   ----

                  "Commitment Notice" has the meaning given that term in Section
                   -----------------
     2.3(a) of this Agreement.

                  "Default Notice" has the meaning given that term in Section
                   --------------
     2.3(a) of this Agreement.

                  "Defaulting Non-Selling Holder" has the meaning given that
                   -----------------------------
     term in Section 2.3(a) of this Agreement.

                  "Deferred Compensation" means, with respect to any particular
                   ---------------------
     Designated Subsidiary, the aggregate amount of all deferred compensation
     accounts established on the Closing Date and administered by the Company
     and/or any of its Subsidiaries with respect to employees of such Designated
     Subsidiary.

                  "Designated Subsidiaries" shall mean Seagate Technology
                   -----------------------
     Holdings, Seagate Technology HDD Holdings, Seagate Technology SAN Holdings,
     Seagate Removable Storage Solutions Holdings, Seagate Software (Cayman)
     Holdings, and the shares of Iolon, Inc. (the "Iolon Designated Subsidiary")
                                                   ---------------------------
     currently held by Seagate Technology Investment Holdings LLC.

                  "Determination Date" has the meaning given that term in
                   ------------------
     Section 5.2(b) of this Agreement.

                  "Director" means any member of the Board.
                   --------

                  "Exchange Act" means the Securities Exchange Act of 1934, as
                   ------------
     amended, and the rules and regulations promulgated thereunder, as the same
     may be amended from time to time.

                  "Fees" has the meaning given that term in Section 5.4 of this
                   ----
     Agreement.

                  "First Offer Notice" has the meaning given that term in
                   ------------------
     Section 2.3(a) of this Agreement.

                  "Funding Date" has the meaning given that term in Section
                   ------------
     2.3(a) of this Agreement.

                                                                               4



                  "Holder" has the meaning given that term in Section 3.6(a) of
                   ------
     this Agreement.

                  "Indemnified Parties" has the meaning given that term in
                   -------------------
     Section 3.6(a) of this Agreement.

                  "Indenture" means the indenture, dated as of November 22,
                   ---------
     2000, among Seagate Technology International, the Note Guarantors (as
     defined in the Indenture) and the Bank of New York, as Trustee.

                  "Initial Share Holding Period" has the meaning given to that
                   ----------------------------
     term in Section 2.1(a) of this Agreement.

                  "Iolon Designated Subsidiary" has the meaning given that term
                   ---------------------------
     in the definition of "Designated Subsidiary."

                  "Initiating Holder" has the meaning given that term in Section
                   -----------------
     3.1(a) of this Agreement.

                  "Legend" has the meaning given that term in Section 2.1(c) of
                   ------
     this Agreement.

                  "Majority Shareholders" has the meaning given that term in
                   ---------------------
     Section 2.6 of this Agreement.

                  "Management Director" means a Director who is (i) an executive
                   -------------------
     officer of the Company and (ii) reasonably acceptable to a majority of the
     Board (other than the Management Directors).

                  "Management Shareholders" has the meaning given that term in
                   -----------------------
     the recitals to this Agreement.

                  "Management Shareholders Agreement" means the Management
                   ---------------------------------
     Shareholders Agreement, dated as of the date hereof, among the Company and
     the Management Shareholders party thereto.

                  "Non-Defaulting Non-Selling Holder" has the meaning given that
                   ---------------------------------
     term in Section 2.3(a) of this Agreement.

                  "Non-Selling Holder" has the meaning given that term in
                   ------------------
     Section 2.3(a) of this Agreement.

                  "Non-Voting Ordinary Shares" means the non-voting ordinary
                   --------------------------
     shares, par value $0.0001, of the Company.

                  "Offered Shares" means, as applicable, Ordinary Offered Shares
                   --------------
     or Preferred Offered Shares.

                                                                               5



                  "Ordinary Offered Shares" has the meaning given that term in
                   -----------------------
     Section 2.3(a) of this Agreement.

                  "Ordinary Shares" means the ordinary shares, par value $0.0001
                   ---------------
     per share, of the Company.

                  "Partnership Income" means, with respect to each calendar year
                   ------------------
     of the Company, and for so long as the Company is a pass-through entity for
     U.S. federal income tax purposes, the taxable income the Company would have
     had if it were a corporation incorporated in the United States, excluding
     any Subpart F Income, reduced by the amount of taxable loss allocated to
     the Shareholders and the Management Shareholders for all prior calendar
     years (except to the extent that such taxable losses have been previously
     taken into account with respect to a prior calendar year).

                  "Permitted Transferee" means, in the case of any Shareholder,
                   --------------------
     (A) any controlled Affiliate (other than an individual) of such
     Shareholder, any Affiliate (other than an individual) which is under common
     control with such Shareholder or any Affiliate (other than an individual)
     which controls such Shareholder (which, in the case of Chase, shall include
     any investment fund managed by a controlled Affiliate of The Chase
     Manhattan Corporation), (B) any general or limited partner, director,
     officer or employee of such Shareholder or controlled Affiliate of such
     Shareholder, (C) the heirs, executors, administrators, testamentary
     trustees, legatees or beneficiaries of any of the individuals referred to
     in clause (B), (D) for estate planning purposes, any trust, the
     beneficiaries of which include only (1) such Shareholder, (2) Permitted
     Transferees referred to in clauses (A), (B) and (C) and (3) spouses and
     lineal descendants of Permitted Transferees referred to in clause (B), (E)
     in the case of Chase, Dan Case and Todd Bakar, (F) any Transferee permitted
     by the Chase Regulatory Side Letter, and (G) a corporation, partnership,
     limited liability company or similar entity, a majority of the equity of
     which is owned and controlled by such Shareholder and/or Permitted
     Transferees referred to in clauses (A), (B), (C) and (D).

                  "Person" means any individual, corporation, limited liability
                   ------
     company, partnership, trust, joint stock company, business trust,
     unincorporated association, joint venture, governmental authority or other
     legal entity of any nature whatsoever.

                  "Postponed Funding Date" has the meaning given that term in
                   ----------------------
     Section 2.3(a) of this Agreement.

                  "Preemptive Notice" has the meaning given that term in Section
                   -----------------
     4.2 of this Agreement.

                  "Preemptive Right Pro Rata Share" has the meaning given that
                   -------------------------------
     term in Section 4.1 of this Agreement.

                                                                               6



                  "Preferred Offered Shares" has the meaning given that term in
                   ------------------------
     Section 2.3 (a) of this Agreement.

                  "Preferred Shares" means the preferred shares, par value
                   ----------------
     $0.0001 per share, of the Company.

                  "Private Placement Memorandum" means the confidential private
                   ----------------------------
     placement memorandum prepared by the Company to provide information in
     connection with the offering by the Company of Shares to the Management
     Shareholders.

                  "Proposed Sale" has the meaning given that term in Section
                   -------------
     2.4(a) of this Agreement.

                  "Proposed Transferee" has the meaning given that term in
                   -------------------
     Section 2.4(a) of this Agreement.

                  "Public Offering" means the sale of common equity or
                   ---------------
     equivalent securities to the public pursuant to an effective registration
     statement (other than a registration statement on Form S-4 or S-8 or any
     similar or successor form) filed under the Securities Act.

                  "Registrable Securities" means (i) any Ordinary Shares held by
                   ----------------------
     a Shareholder or any Permitted Transferees (including, without limitation,
     any such shares issued or issuable upon conversion of Non-Voting Ordinary
     Shares), (ii) any shares issued as (or issuable upon the conversion or
     exercise of any warrant, right, option or other convertible security which
     is issued as) a dividend, share split or other distribution,
     recapitalization or reclassification with respect to, or in exchange for,
     or in replacement of, such Ordinary Shares, and (iii) any shares or any
     security convertible into, or exchangeable or exercisable for, shares which
     may be issued or distributed in respect thereof by way of a share dividend,
     share split or other distribution, recapitalization or reclassification.
     For purposes of this Agreement, with respect to any Shareholder, any
     Registrable Securities held by such Shareholder will cease to be
     Registrable Securities when (A) a registration statement covering such
     Registrable Securities has been declared effective and such Registrable
     Securities have been disposed of pursuant to such effective registration
     statement, (B) such Registrable Securities shall have been offered and sold
     pursuant to Rule 144 (or any similar provision then in effect) under the
     Securities Act, (C) all Registrable Securities held by such Shareholder are
     eligible for transfer to the public pursuant to Rule 144 (or any similar
     provision then in effect) under the Securities Act, without restriction as
     to manner of sale or amount sold, (D) such Registrable Securities are sold
     by a Person in a transaction in which rights under the provisions of this
     Agreement are not assigned in accordance with this Agreement or (E) such
     Registrable Securities cease to be outstanding.

                  "Registration Expenses" means any and all expenses incident to
                   ---------------------
     the performance by the Company of its obligations under Sections 3.1 and
     3.2, including without limitation (i) all SEC, stock exchange, or National
     Association of Securities Dealers, Inc. (the "NASD") registration and
                                                   ----
     filing fees (including, if applicable, the fees and expenses

                                                                               7



         of any "qualified independent underwriter," as such term is defined in
         Rule 2720 of the NASD, and of its counsel), (ii) all fees and expenses
         of complying with securities or blue sky laws (including fees and
         disbursements of counsel for the underwriters in connection with blue
         sky qualifications of the Registrable Securities), (iii) all printing,
         messenger and delivery expenses, (iv) all fees and expenses incurred in
         connection with the listing of the Registrable Securities on any
         securities exchange and all rating agency fees, (v) the fees and
         disbursements of counsel for the Company and of its independent public
         accountants, including the expenses of any special audits and/or "cold
         comfort" letters required by or incident to such performance and
         compliance, (vi) any fees and disbursements of underwriters customarily
         paid by the issuers or sellers of securities, including liability
         insurance if the Company so desires or if the underwriters so require,
         and the reasonable fees and expenses of any special experts retained in
         connection with the requested registration, but excluding underwriting
         discounts and commissions and transfer taxes, if any, (vii) the
         reasonable out-of-pocket expenses of not more than one law firm
         incurred by all the Shareholders and their Permitted Transferees in
         connection with any registration of Registrable Securities, and (viii)
         the costs and expenses of the Company relating to analyst and investor
         presentations or any "road show" undertaken in connection with any
         registration and/or marketing of the Registrable Securities; provided
                                                                      --------
         that nothing in this clause (viii) shall obligate the Company to engage
         or participate in any such presentations or road show.

                  "Registration Rights Holders" means, collectively the
                   ---------------------------
         Shareholders and their Permitted Transferees.

                  "Regulations" means the regulations promulgated under the
                   -----------
         Code.

                  "Remaining Offered Shares" has the meaning given that term in
                   -----------------------
         Section 2.3(a) of this Agreement.

                  "Required Funds" has the meaning given that term in Section
                   -------------
         2.3(a) of this Agreement.

                  "SEC" means the Securities and Exchange Commission.
                   ---

                  "Section 2.3 Ordinary Shares" has the meaning given that term
                   ---------------------------
         in Section 2.3(a) of this Agreement.

                  "Section 2.3 Notice" has the meaning given that term in
                   ------------------
         Section 2.3(a) of this Agreement.

                  "Section 2.3 Preferred Shares" has the meaning given that term
                   ----------------------------
         in Section 2.3(a) of this Agreement.

                  "Securities Act" means the Securities Act of 1933, as amended,
                   --------------
         and the rules and regulations promulgated thereunder, as the same may
         be amended from time to time.

                                       8



                  "Selling Holder" has the meaning given that term in Section
                   --------------
         2.3(a) of this Agreement.

                  "Share Equivalents" has the meaning given that term in Section
                   -----------------
         4.1 of this Agreement.

                  "Shares" means, with respect to any shareholder of the
                   ------
         Company, the Ordinary Shares, the Non-Voting Ordinary Shares and the
         Preferred Shares, whether now owned or hereafter acquired (including
         upon exercise of options, warrants, rights, including preemptive
         rights, or otherwise), held by such shareholder other than shares
         acquired in a Public Offering or in the public market after the initial
         Public Offering of the Company.

                  "Shortfall" has the meaning given that term in Section 2.3(a)
                   ---------
         of this Agreement.

                  "Silver Lake Designee" has the meaning given that term in
                   --------------------
         Section 5.1(a) of this Agreement.

                  "Stock Purchase Agreement" has the meaning given that term in
                   ------------------------
         the recitals to this Agreement.

                  "Subsequent Section 2.3 Notice" has the meaning given that
                   -----------------------------
         term in Section 2.3(a) of this Agreement.

                  "Subpart F Income" means, with respect to each calendar year
                   ----------------
         of the Company, (i) if the Company is a controlled foreign corporation
         for U.S. federal income tax purposes, the aggregate amount of the
         Company's "subpart F income" (within the meaning of section 952 of the
         Code which for purposes of this definition shall include income
         includable under section 951(a)(1)(B) of the Code) for such calendar
         year (and, to the extent such subpart F income would be attributed to
         the Shareholders and the Management Shareholders, the subpart F income
         of the Company's subsidiaries for such calendar year), and (ii) if the
         Company is a pass-through entity for U.S. federal income tax purposes,
         the amount of any "subpart F income" (within the meaning of section 952
         of the code which for purposes of this definition shall include income
         includable under section 951(a)(1)(B) of the Code) of its subsidiaries
         that the Company would be required to include in its taxable income for
         such calendar year if it were a corporation incorporated in the United
         States.

                  "Tag-Along Notice" has the meaning given that term in Section
                   ----------------
         2.4(a) of this Agreement.

                  "Tagging Shareholder" has the meaning given that term in
                   -------------------
         Section 2.4(a) of this Agreement.

                  "Take-Along Buyer" has the meaning given that term in Section
                   ----------------
         2.6 of this Agreement.

                                       9



                  "Take-Along Notice" has the meaning given that term in Section
                   -----------------
         2.6 of this Agreement.

                  "Take-Along Shareholders" has the meaning given that term in
                   -----------------------
         Section 2.6 of this Agreement.

                  "Target" has the meaning given that term in Section 5.2(b)(ii)
                   ------
         of this Agreement.

                  "10% Demand Party" has the meaning given that term in Section
                   ----------------
         3.2(a) of this Agreement.

                  "TPG Designee" has the meaning given that term in Section
                   ------------
         5.1(a) of this Agreement.

                  "Transfer" means, with respect to any Share (or direct or
                   --------
         indirect economic or other interest therein), a transfer, sale,
         assignment, pledge, hypothecation or other disposition, whether
         directly or indirectly (pursuant to the creation of a derivative
         security or otherwise), the grant of an option or other right or the
         imposition of a restriction on disposition or voting or by operation of
         law. When used as a verb, "Transfer" shall have the correlative
         meaning. In addition, "Transferred" and "Transferee" shall have the
         correlative meanings.

                  "20% Demand Party" has the meaning given that term in Section
                   ----------------
         3.2(a) of this Agreement.

                  "Vested Deferred Compensation" means, with respect to any
                   ----------------------------
         particular Designated Subsidiary on a particular date, the vested
         amount of Deferred Compensation on such date.

                  1.2.  Construction. The language used in this Agreement will
                        ------------
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
Unless the context otherwise requires: (a) "or" is disjunctive but not
                                            --
exclusive, (b) words in the singular include the plural, and in the plural
include the singular, and (c) the words "hereof", "herein" and "hereunder" and
                                         ------    ------       ---------
words of similar import when used in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section and
Exhibit references are to this Agreement unless otherwise specified.

ARTICLE II.     TRANSFERS; CERTAIN DISTRIBUTIONS

                  2.1.  Limitations on Transfer. (a) Unless Silver Lake and TPG
                        -----------------------
both consent, no Shareholder may Transfer any Shares prior to the earlier of (i)
the third anniversary of the Closing Date and (ii) the date 180 days following
the consummation of the initial Public Offering by the Company (the "Initial
                                                                     -------
Share Holding Period") (other than to the Company or in accordance with Section
- --------------------
2.2 hereof). After the Initial Share Holding Period, Shareholders may Transfer
Shares only in accordance with, and subject to the applicable provisions of,
both Article

                                       10



II and Article III hereof. Notwithstanding anything in this Agreement to
the contrary, without the prior written consent of Silver Lake and TPG, no
Shareholder may Transfer all or a portion of its Shares or take any other action
if such action would create a material risk of the Company becoming a "publicly
traded partnership," within the meaning of Section 7704 of the Code and the
regulations promulgated thereunder.

                  (a)   In the event of any purported Transfer by a Shareholder
of any Shares in violation of the provisions of this Agreement, such purported
Transfer will be void and of no effect, and the Company will not give effect to
such Transfer.

                  (b)   Each certificate representing Shares held by a
Shareholder will bear a legend on the face thereof substantially to the
following effect (with such additions thereto or changes therein as the Company
may be advised by counsel are required by law or necessary to give full effect
to this Agreement, the "Legend"):
                        ------

                  "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
                  SHAREHOLDERS AGREEMENT AMONG NEW SAC AND THE OTHER
                  SHAREHOLDERS PARTY THERETO, DATED AS OF NOVEMBER 22, 2000, AS
                  AMENDED AND SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH
                  THE TERMS THEREOF, A COPY OF WHICH IS ON FILE WITH THE
                  SECRETARY OF NEW SAC. THE SHAREHOLDERS AGREEMENT CONTAINS,
                  AMONG OTHER THINGS, CERTAIN PROVISIONS RELATING TO THE VOTING
                  AND TRANSFER OF THE SHARES SUBJECT TO THE AGREEMENT. NO
                  TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
                  DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE,
                  DIRECTLY OR INDIRECTLY, MAY BE MADE EXCEPT IN ACCORDANCE WITH
                  THE PROVISIONS OF SUCH SHAREHOLDERS AGREEMENT. THE HOLDER OF
                  THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO
                  BE BOUND BY ALL OF THE PROVISIONS OF SUCH SHAREHOLDERS
                  AGREEMENT."

                  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
                  TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN
                  REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS
                  AVAILABLE."

The Legend will be removed by the Company, with respect to any certificate
representing Shares, by the delivery of substitute certificates without such
Legend in the event of a Transfer permitted by this Agreement and in which the
Transferee is not required to enter into an Assumption Agreement pursuant to
Section 2.5; provided, however, that the second paragraph of the Legend will
             --------  -------
only be removed if at such time it is no longer required for purposes of
applicable securities laws.

                2.2.    Transfer to Permitted Transferees. (a) Any Shareholder
                        ---------------------------------
may Transfer any or all of the Shares held by it to any Permitted Transferee of
such Shareholder who duly executes

                                       11



and delivers an Assumption Agreement, provided that such Transfer shall not
                                      --------
be effective unless and until the Company shall have been furnished with
information reasonably satisfactory to it demonstrating that such Transfer is
exempt from or not subject to the provisions of Section 5 of the Securities Act
and any other applicable securities laws.

                  (b)   Each Permitted Transferee of any Shareholder to which
Shares are transferred shall, and such Shareholder shall cause such Permitted
Transferee to, transfer back to such Shareholder (or to another Permitted
Transferee of such Shareholder) any Shares it owns prior to such Permitted
Transferee ceasing to be a Permitted Transferee of such Shareholder; provided,
                                                                     --------
however, that this Section 2.2(b) shall not apply to any Transfer described in
- -------
clause (E) or (F) of the definition of Permitted Transferee.

                  (c)   This Section 2.2 shall not apply to the grant by Chase
of a participation interest to one or more other investment funds managed by a
controlled Affiliate of The Chase Manhattan Corporation without change in record
ownership.

                2.3.    Right of First Offer. (a) If at any time following the
                        --------------------
Initial Share Holding Period any Shareholder desires to Transfer all or any
portion of the Shares held by such Shareholder (other than to the Company or a
Permitted Transferee, pursuant to the exercise of rights set forth in Section
2.4 and Section 2.6 or Article III or in compliance with Rule 144 (or similar
successor provision) under the Securities Act), such Shareholder (a "Selling
                                                                     -------
Holder") shall deliver to each other Shareholder (each, a "Non-Selling Holder")
- ------                                                     ------------------
a written notice (the "First Offer Notice"), which shall set forth the number of
                       ------------------
Ordinary Shares (including for these purposes Non-Voting Ordinary Shares) (the
"Ordinary Offered Shares") and/or Preferred Shares (the "Preferred Offered
 -----------------------                                 -----------------
Shares") proposed to be Transferred and the terms (including the cash purchase
- ------
price per share) on which the Selling Holder irrevocably offers to Transfer such
Shares to the Non-Selling Holders. Each Non-Selling Holder shall have 30 days
from the date the First Offer Notice is received to determine whether to
purchase any of the Ordinary Offered Shares and/or Preferred Offered Shares for
the purchase price and upon substantially the terms specified in the First Offer
Notice by giving written notice to the Selling Holder (a "Section 2.3 Notice")
                                                          ------------------
and stating therein the number of Ordinary Offered Shares that such Non-Selling
Holder wishes to purchase ("Section 2.3 Ordinary Shares") and/or the number of
                            ---------------------------
Preferred Offered Shares that such Non-Selling Holder wishes to purchase
("Section 2.3 Preferred Shares"). If a Non-Selling Holder shall not have
  ----------------------------
delivered a Section 2.3 Notice in accordance with this Section 2.3(a), then such
Non-Selling Holder will be deemed to have elected not to exercise the right of
first offer specified in the First Offer Notice.

                  In the case of a proposed sale of Ordinary Shares (including
for these purposes Non-Voting Ordinary Shares) or Preferred Shares, if the
aggregate number of Section 2.3 Ordinary Shares or Section 2.3 Preferred Shares
exceeds the number of Offered Shares of such class, then the number of Offered
Shares of such class that each Non-Selling Holder who delivers a Section 2.3
Notice shall have the right to purchase shall be equal to the lesser of (x) the
number of Section 2.3 Shares of such class, if any, specified in such
Non-Selling Holder's Section 2.3 Notice and (y) the number of Offered Shares of
such class equal to such Non-Selling Holder's Aggregate Pro Rata Portion of the
Offered Shares of such class. If one or more of the Non-Selling Holders who have
delivered a Section 2.3 Notice does not purchase all of its or their Aggregate
Pro Rata Portion of the Offered Shares of such class, then the remaining
Non-Selling

                                       12



Holders who have delivered a Section 2.3 Notice with respect to such Offered
Shares, and who, based on a subsequent notice (a "Subsequent Section 2.3
                                                  ----------------------
Notice") to the Selling Holder, still desire to purchase the remaining Offered
- ------
Shares (the "Remaining Offered Shares"), shall have the right to purchase their
             -----------------------
respective Aggregate Pro Rata Portions of such Remaining Offered Shares of such
class until all the Offered Shares of such class are allocated for purchase
among the Non-Selling Holders who have delivered a Section 2.3 Notice. If the
aggregate number of Section 2.3 Shares of all Non-Selling Holders of that class
of Shares is less than the total number of Offered Shares of such class, then
the Selling Holder shall not be obligated, but shall be permitted, to sell to
Non-Selling Holders and shall instead have the right (subject to complying with
Section 2.4) to proceed with the Transfer of all the Offered Shares of such
class in accordance with Section 2.3(b).

                  If the Non-Selling Holders, collectively, shall have agreed to
purchase all the Offered Shares of such class (or the Selling Holder shall have
elected to proceed with the Transfer to the Non-Selling Holders of the number of
Offered Shares of such class as to which it has received offers to purchase from
the Non-Selling Holders), each Non-Selling Holder shall consummate its purchase
by delivering, against receipt of certificates or other instruments representing
the Shares being purchased, appropriately endorsed by the Selling Holder, the
aggregate purchase price to be paid by it (the "Required Funds") via wire
                                                --------------
transfer of immediately available funds to an account specified by the Selling
Holder not less than two Business Days before the closing date (the "Funding
                                                                     -------
Date"). The Funding Date will be the later of (i) 30 days after the date of
- ----
receipt of the Section 2.3 Notice by the Selling Holder and (ii) five Business
Days after receipt of all governmental consents and approvals, and the
expiration of all waiting periods applicable to the Transfer. The Selling Holder
shall give participating Non-Selling Holders at least five Business Days written
notice of the Funding Date and shall give participating Non-Selling Holders at
least ten Business Days notice of the amount of Required Funds for such
Non-Selling Holder, which notice may be delivered at any time after receipt of
the applicable Section 2.3 Notice.

                  If any Non-Selling Holder who has offered to purchase Offered
Shares (the "Defaulting Non-Selling Holder") fails to transfer, as required by
             -----------------------------
this Section 2.3, the Required Funds by the Funding Date, then the Funding Date
shall be postponed and the Selling Holder shall give written notice to the
effect set forth in the next sentence to all Non-Selling Holders (if any) who
transferred the Required Funds (the "Non-Defaulting Non-Selling Holders"). Such
                                     ----------------------------------
notice (the "Default Notice") shall state the aggregate amount of Required Funds
             --------------
which Defaulting Non-Selling Holders have failed to provide (such aggregate
amount, the "Shortfall"), the aggregate number of Offered Shares related to such
             ---------
Shortfall and the date (pursuant to the next sentence) by which the
Non-Defaulting Non-Selling Holders may, at the sole option of each of them,
offer to purchase the Offered Shares related to the Shortfall. Each
Non-Defaulting Non-Selling Holder shall have the right to commit to purchase up
to the entire number of Offered Shares within five Business Days of the receipt
of the Default Notice. Such commitment shall be effected by the delivery to the
Selling Holder of a written notice (a "Commitment Notice") to that effect. If,
                                       -----------------
after giving effect to all such Commitment Notices and the aggregate amount of
Required Funds already received, more than 100% of the Offered Shares would be
subject to purchase, then the number of shares offered to be purchased in such
Commitment Notices by each Non-Defaulting Non-Selling Holder shall be reduced
pro rata by the same method applied in the second paragraph of this Section
- --------
2.3(a) so that 100% of the Offered Shares (or such lower

                                       13



percentage thereof as the Selling Holder has agreed to sell) are subject to
purchase, and the Selling Holder shall sell such shares as provided below. The
Selling Holder shall then give written notice to each Non-Defaulting Non-Selling
Holder of the number of Offered Shares, if any, related to the Shortfall that it
shall purchase from such Non-Defaulting Non-Selling Holder after giving effect
to the foregoing, and such Non-Defaulting Non-Selling Holders shall have ten
Business Days (the tenth such Business Day, the "Postponed Funding Date")
                                                 ----------------------
following receipt of such notice to provide the additional Required Funds in the
same manner as set forth above. On the Postponed Funding Date, the Selling
Holder shall sell the Offered Shares as to which Commitment Notices have been
delivered to the Non-Defaulting Non-Selling Holders in the same manner as set
forth above.

                  The right of first offer granted to the Non-Selling Holders
hereunder shall terminate if unexercised within 30 days after receipt of the
First Offer Notice. The election of a Non-Selling Holder to purchase Offered
Shares by delivering a Section 2.3 Notice or a Subsequent Section 2.3 Notice
shall constitute a binding obligation to purchase the portion of Offered Shares
allocated to such Non-Selling Holder. Nothing herein shall limit the rights of
any party hereto to seek damages against any Defaulting Non-Selling Holder
incurred in connection with any failure to purchase such Offered Shares as
provided herein. Furthermore, any Defaulting Non-Selling Holder shall not be
entitled to elect to participate in the next bona fide Transfer proposed by any
Selling Holder following any such default.

                  (b)   If the Selling Holder shall be permitted to proceed with
the proposed Transfer of the Offered Shares (other than to Non-Selling Holders),
the Selling Holder shall have 90 days to consummate such proposed Transfer,
subject to the following sentence and at a price not less than 105% of the
purchase price per share set forth in the First Offer Notice and on other terms
not materially less favorable to the Selling Holder than those terms set forth
in the First Offer Notice, before the provisions of this Section 2.3 shall again
be in effect with respect to such shares. Any such proposed Transfer shall be
made only to a Person with the written consent of a majority of the members of
the Board, excluding those Directors who are Affiliates of the Shareholder
engaging in such proposed Transfer, which consent shall not be unreasonably
withheld.

                  2.4.  Tag-Along Rights. (a) In the case of a proposed sale of
                        ----------------
Shares (including any sale prior to the expiration of the Initial Share Holding
Period), so long as this Agreement remains in effect, with respect to any
proposed Transfer (other than (i) pursuant to Section 2.2, (ii) to one or more
Non-Selling Holders pursuant to Section 2.3, (iii) pursuant to the exercise of
rights set forth in Section 2.6 and (iv) following the initial Public Offering
by the Company pursuant to the exercise of rights set forth in Article III or in
a bona fide sale to the public pursuant to Rule 144 under the Securities Act) (a
"Proposed Sale"), by any Selling Holder, each Shareholder (including, to the
 -------------
extent permitted under Section 2.3 of the Management Shareholders Agreement,
Management Shareholders) who exercises its rights under this Section 2.4(a) (a
"Tagging Shareholder") shall have the right to require the proposed Transferee
 -------------------
(a "Proposed Transferee") to purchase from such Tagging Shareholder up to the
    -------------------
number of Shares of the same class proposed to be Transferred equal to the
product (rounded up to the nearest whole Share) of (i) the quotient determined
by dividing (A) the aggregate number of Shares of such class owned by such
Tagging Shareholder by (B) the aggregate number of Shares of such class owned by
the Selling Holder and all Tagging Shareholders and others with tag-along rights

                                       14



and (ii) the total number of Shares of such class proposed to be directly or
indirectly Transferred to the Proposed Transferee in the Proposed Sale, at the
same price per Share and upon the same terms and conditions (including, without
limitation, time of payment and form of consideration) as to be paid and given
to the Selling Holder; provided that in order to be entitled to exercise its
                       --------
right to sell Shares to the Proposed Transferee pursuant to this Section 2.4,
each Tagging Shareholder must agree to make to the Proposed Transferee the same
representations, warranties, covenants, indemnities and agreements as the
Selling Holder agrees to make in connection with the Proposed Sale and agree to
the same conditions to the Proposed Sale as the Selling Holder agrees (except
that, in the case of representations, warranties, conditions, covenants,
indemnities and agreements pertaining specifically to the Selling Holder, each
Tagging Shareholder shall make comparable representations, warranties,
covenants, indemnities and agreements and shall agree to comparable conditions,
in each case to the extent applicable and pertaining specifically to itself and
only to itself); provided that all representations, warranties, covenants,
                 --------
indemnities and agreements (other than those referred to in the immediately
preceding exception) shall be made by the Selling Holder and each Tagging
Shareholder severally and not jointly and that any liability to the Selling
Holder and the Tagging Shareholders thereunder shall be borne by each of them on
a pro rata basis determined according to the number of Shares sold by each of
them. Each Tagging Shareholder will be responsible for its proportionate share
of the costs of the Proposed Sale to the extent not paid or reimbursed by the
Proposed Transferee or the Company.

                  (a)   The Selling Holder will give notice to each Tagging
Shareholder of each Proposed Sale not later than ten days after the execution of
the definitive agreement relating to the Proposed Sale, setting forth the number
of Shares proposed to be so Transferred, the name and address of the Proposed
Transferee, the proposed amount and form of consideration (and if such
consideration consists in part or in whole of property other than cash, the
Selling Holder will provide such information, to the extent reasonably available
to the Selling Holder, relating to such non-cash consideration as the Tagging
Shareholders together may reasonably request in order to evaluate such non-cash
consideration) and other terms and conditions of payment offered by the Proposed
Transferee. The Selling Holder will deliver or cause to be delivered to each
Tagging Shareholder copies of all transaction documents relating to the Proposed
Sale as the same become available. The tag-along rights provided by this Section
2.4 must be exercised by the Tagging Shareholders within ten Business Days
following receipt of the notice required by the preceding sentence by delivery
of a written notice to the Selling Holder indicating its desire to exercise its
rights and specifying the number of Shares it desires to sell.

                  (b)   If any Tagging Shareholder exercises its rights under
Section 2.4(a), the closing of the purchase of the Shares with respect to which
such rights have been exercised will take place concurrently with the closing of
the sale of the Selling Holder's Shares to the Proposed Transferee.

                  (c)   Each Shareholder agrees that the Management Shareholders
shall, in accordance with the Management Shareholders Agreement, have the right
to participate as Tagging Shareholders in connection with any Transfer by such
Shareholder subject to this Section 2.4; provided that Shares owned by any
Management Shareholder who so participates shall not be deemed to be owned by
such Management Shareholder for purposes hereof unless such Shares are not
subject to a Restricted Share Agreement (as defined in the Management
Shareholders Agreement) or such Management Shareholder's interest with respect
to such

                                       15



Shares has fully vested as of the date of the closing of the applicable
Proposed Sale, in accordance with the applicable Restricted Share Agreement.

          2.5. Rights and Obligations of Transferees. Any Transferee of Shares
               -------------------------------------
(other than Transferees who acquire Shares pursuant to the exercise of rights
set forth in Section 2.6 or Article III or, following the initial Public
Offering by the Company, in a bona fide sale to the public pursuant to Rule 144
under the Securities Act) will be required, at the time of and as a condition to
such Transfer, to become a party to this Agreement by executing and delivering
an Assumption Agreement and, upon executing and delivering an Assumption
Agreement, will be treated as a Shareholder for all purposes hereof; provided,
                                                                     --------
however, that no such Transferee will acquire any rights (but will be subject to
- -------
the obligations) under Article V unless (i) it acquires all of the Shares held
by either Silver Lake and its Permitted Transferees, TPG and its Permitted
Transferees or August and its Permitted Transferees, as the case may be, and
(ii) Silver Lake shall have consented, in its sole discretion, to the giving of
such rights to such Proposed Transferee.

          2.6. Take-Along Rights. In the case of a proposed sale of Shares
               -----------------
(other than pursuant to Section 2.2), if, at any time after the Initial Share
Holding Period, any Shareholder or Shareholders holding, in the aggregate, at
least a majority of the aggregate outstanding Ordinary Shares and Non-Voting
Ordinary Shares (such Shareholder or Shareholders, the "Majority Shareholders")
                                                        ---------------------
receive an offer from a third party (a "Take-Along Buyer") to purchase or
                                        ----------------
otherwise acquire at least a majority of the aggregate outstanding Ordinary
Shares and Non-Voting Ordinary Shares, the Company shall, at the request of such
Majority Shareholders and subject to approval by the Board (in accordance with
Article V), deliver written notice (a "Take-Along Notice") to each other
                                       -----------------
Shareholder (the "Take-Along Shareholders"), stating that such Majority
                  -----------------------
Shareholders wish to exercise their rights under this Section 2.6 with respect
to such Transfer, setting forth the name and address of the Take-Along Buyer,
the proposed amount and form of consideration and transaction (and if such
consideration consists in part or in whole of property other than cash, the
Majority Shareholders will provide such information, to the extent reasonably
available to the Majority Shareholders, relating to such non-cash consideration
as the Take-Along Shareholders together may reasonably request in order to
evaluate such non-cash consideration) and other terms and conditions offered by
the Take-Along Buyer, including the number of Ordinary Shares and any Preferred
Shares proposed to be Transferred. Upon delivery of a Take-Along Notice, each
Take-Along Shareholder shall be required to Transfer that percentage of its
Preferred Shares and that percentage of its Ordinary Shares (including for these
purposes Non-Voting Ordinary Shares) equal to the percentage of the Preferred
Shares and/or Ordinary Shares (including for these purposes Non-Voting Ordinary
Shares) (as the case may be) held by the Majority Shareholders being transferred
at the same price per Preferred Share and/or Ordinary Share (including for these
purposes Non-Voting Ordinary Shares) (as the case may be) and upon the terms,
conditions, and provisions, if any, of the offer so accepted by the Majority
Shareholders, including making the same representations, warranties, covenants,
indemnities and agreements that the Majority Shareholders agree to make (except
that, in the case of representations, warranties, conditions, covenants,
indemnities and agreements pertaining specifically to the Majority Shareholders,
each Shareholder shall make the comparable representations, warranties,
covenants, indemnities and agreements and shall agree to comparable conditions,
in each case to the extent applicable and pertaining specifically to itself and
only to itself); provided that all representations, warranties, covenants,
                 --------
indemnities and

                                       16



agreements (other than those referred to in the immediately preceding
exception) shall be made by each Majority Shareholder and each Take-Along
Shareholder severally and not jointly and that any liability of the Majority
Shareholders and the Take-Along Shareholders thereunder shall be borne by each
of them on a pro rata basis determined according to the number of Ordinary
Shares (including for these purposes Non-Voting Ordinary Shares) sold by each of
them. In the event that any such Transfer is structured as a merger,
consolidation or similar business combination, each Take-Along Shareholder
agrees to vote in favor of the transaction and take all action to waive any
dissenters, appraisal or other similar rights.

          2.7. Distributions Upon Initial Public Offering of Designated
               --------------------------------------------------------
Subsidiaries. If, prior to the termination of this Agreement, an initial Public
- ------------
Offering of a Designated Subsidiary is consummated, then, subject to applicable
law or legal order and any contractual restriction or prohibition, at any time
after 190 days following the date of the consummation of such initial Public
Offering of a Designated Subsidiary other than the Iolon Designated Subsidiary
and, in the case of the Iolon Designated Subsidiary, at any time following the
date of the consummation of such initial Public Offering, and in each case upon
the unanimous written request of either the Silver Lake Designees, the TPG
Designees, or both, the Company shall distribute to the Shareholders, in respect
of the outstanding shares of the Company in accordance with the articles of
association of the Company, shares of such Designated Subsidiary held by the
Company (excluding shares which the Board may determine to withhold from
distribution for possible allocation to employees of such Designated Subsidiary
in connection with employee benefit plans); provided that the aggregate number
                                            --------
of such shares required to be so distributed by the Company to the Shareholders
pursuant to this Section 2.7 shall not exceed (unless otherwise determined by
Silver Lake and TPG) (i) the total number of shares of such Designated
Subsidiary held by the Company multiplied by (ii) the quotient obtained by
dividing (a) the aggregate amount of Vested Deferred Compensation of the Company
and each of its subsidiaries by (b) the aggregate amount of Deferred
Compensation of the Company and each of its Subsidiaries. In connection with
such distribution (other than a distribution of the Iolon Designated
Subsidiary), each Shareholder shall enter into a shareholders agreement with the
Company and each other Shareholder having substantially identical terms and
conditions as this Agreement (subject to necessary conforming changes and
appropriate modifications to Section 6.1 hereof), provided that all references
                                                  --------
in this Agreement to the Company shall be changed in such additional
shareholders agreement to references to such Designated Subsidiary and
references therein to Designated Subsidiaries, Preferred Shares and Non-Voting
Ordinary Shares shall be omitted, and provided, further, that if on the date of
                                      --------  -------
such distribution at least 50% of the number of issued and outstanding shares of
such Designated Subsidiary have been publicly distributed or sold, or are being
actively traded on a national securities exchange or interdealer quotation
system, then only the provisions contained in Article III of this Agreement
shall be included in such additional shareholders agreement, and such provisions
shall survive until such time as all Registrable Securities under such
additional shareholders agreement held by the Shareholders cease to be
Registrable Securities. For purposes of clarification, no shareholders agreement
shall be entered into in connection with the distribution of the Iolon
Designated Subsidiary. From and after such time (if any) as Registration Rights
Holders referred to in clause (x) of Section 3.2(a) have the right to demand the
registration of Registrable Securities pursuant to Section 3.2(a) pursuant to
Section 3.2(a)(ii), such Registration Rights Holders shall also have the right
to require the Company to effect the registration of the ordinary shares of

                                       17



Seagate Technology Holdings, and upon exercise of such right, the provisions of
this Section 2.7 shall apply to such shares.

          2.8. Call Rights. The Shareholders shall have the rights given to them
               -----------
in Article III of the Management Shareholders Agreement.

ARTICLE III.   REGISTRATION RIGHTS

          3.1. Piggyback Rights. (a) If the Company at any time following the
               ----------------
initial Public Offering by the Company proposes to register Ordinary Shares
under the Securities Act (other than a registration on Form S-4 or S-8, or any
successor or other forms promulgated for similar purposes), whether or not for
sale for its own account (including pursuant to Section 3.3), it will, at each
such time, give prompt written notice to the Registration Rights Holders of its
intention to do so and of the Registration Rights Holders' rights under this
Section 3.1. Upon the written request of any Registration Rights Holder made
within 14 days after the receipt of any such notice (which request shall specify
the number of Registrable Securities intended to be disposed of by such
Registration Rights Holder), the Company will use its reasonable efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Registration Rights Holders have so requested to be registered;
provided that (i) if, at any time after giving written notice of its intention
- --------
to register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company or any other
holder of securities that initiated such registration (an "Initiating Holder")
                                                           -----------------
shall determine for any reason not to proceed with the proposed registration of
the securities to be sold by it, the Company or such Initiating Holder may, at
its election, give written notice of such determination to the Registration
Rights Holders and, thereupon, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses incurred in connection
therewith), and (ii) if such registration involves an underwritten offering, the
Registration Rights Holders of Registrable Securities requesting to be included
in the registration must sell their Registrable Securities to the underwriters
selected by the Company or the Initiating Holders, as the case may be, on the
same terms and conditions as apply to the Company or the Initiating Holders, as
the case may be, with, in the case of a combined primary and secondary offering,
such differences, including any with respect to indemnification and liability
insurance, as may be customary or appropriate in combined primary and secondary
offerings. If a registration requested pursuant to this Section 3.1(a) involves
an underwritten public offering, any Registration Rights Holder requesting to be
included in such registration may elect, in writing prior to the effective date
of the registration statement filed in connection with such registration, not to
register all or any portion of such securities in connection with such
registration. Nothing in this Section 3.1(a) shall operate to limit the right of
a Registration Rights Holder to (i) request the registration of Registrable
Securities that consist of Ordinary Shares issuable upon conversion, exercise or
exchange of convertible, exercisable or exchangeable securities, as applicable,
held by such Registration Rights Holder (including Non-Voting Ordinary Shares)
notwithstanding the fact that at the time of request such Registration Rights
Holder holds only such securities and not the underlying Ordinary Shares or (ii)
request the registration at one time of Registrable Securities that consist of
both Ordinary Shares and securities convertible into or exercisable or
exchangeable for Ordinary Shares.

                                       18



          (a) The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this Section
3.1.

          (b) If a registration pursuant to this Section 3.1 involves an
underwritten offering and the managing underwriter advises the Company in
writing that, in its opinion, the number of Registrable Securities and other
securities requested to be included in such registration exceeds the number
which can be sold in such offering, so as to be reasonably likely to have an
adverse effect on the price, timing or distribution of the securities offered in
such offering, then the Company will include in such registration (i) first,
100% of the securities, if any, the Company proposes to sell for its own
account, provided that the registration of Ordinary Shares contemplated by this
         --------
Section 3.1 was initiated by the Company with respect to shares intended to be
registered for sale for its own account and (ii) second, such number of
Registrable Securities requested to be included in such registration which, in
the opinion of such managing underwriter, can be sold without having the adverse
effect referred to above, which number of Registrable Securities shall be
allocated pro rata among all such requesting holders of Registrable Securities,
based on the relative number of Registrable Securities then held by each such
requesting holder of Registrable Securities. In the event that (i) the Company
did not initiate the registration of securities intended to be registered for
sale for its own account and (ii) the number of Registrable Securities and
Ordinary Shares of other holders entitled to registration rights with respect to
such Ordinary Shares, in each case requested to be included in such
registration, is less than the number which, in the opinion of the managing
underwriter, can be sold, the Company may include in such registration the
securities it proposes to sell up to the number of securities that, in the
opinion of the underwriter, can be sold.

          3.2. Demand Registration. (a) At any time after the earlier of (i) the
               -------------------
180th day following the initial Public Offering by the Company and (ii) the
fourth anniversary of the Closing Date (so long as such fourth anniversary is
not within 180 days of the initial Public Offering by the Company), upon the
written request of (x) any Registration Rights Holder or Registration Rights
Holders holding, in the aggregate, the equivalent of at least 20% of the
aggregate outstanding Ordinary Shares and Non-Voting Ordinary Shares held by
Shareholders (the Registration Rights Holder or Registration Rights Holders
making such request, a "20% Demand Party") or (y) any single Registration Rights
                        ----------------
Holder holding the equivalent of at least 10% of the aggregate outstanding
Ordinary Shares and Non-Voting Ordinary Shares held by Shareholders (such
Registration Rights Holder making such request, a "10% Demand Party") requesting
                                                   ----------------
that the Company effect the registration under the Securities Act of all or part
of such Demand Party's Registrable Securities and specifying the amount and
intended method of disposition thereof, the Company will promptly give written
notice of such requested registration to the other holders of Registrable
Securities and other holders of securities entitled to notice of such
registration and thereupon will, as expeditiously as possible, file a
registration statement to effect the registration under the Securities Act of:

               (i)  such Registrable Securities which the Company has been so
       requested to register by the Registration Rights Holders; and

               (ii) the Registrable Securities of other holders which the
       Company has been requested to register by written request given to the
       Company within 15 days after

                                       19



         the giving of such written notice by the Company (which request shall
         specify the amount and intended method of disposition of such
         securities);

all to the extent necessary to permit the disposition (in accordance with the
intended method thereof as aforesaid) of the Registrable Securities and such
other securities so to be registered; provided that the Company shall not be
                                      --------
required to effect the registration of Registrable Securities (i) at the request
of a 20% Demand Party under this Section 3.2(a) on more than three occasions,
and (ii) at the request of a 10% Demand Party under this Section 3.2(a) on more
than one occasion with respect to each such 10% Demand Party; provided, that the
                                                              --------
Company shall not be obligated to file a registration statement relating to any
registration request under this Section 3.2(a):

                  (x) within a period of 180 days (or such lesser period as the
         managing underwriters in an underwritten offering may permit) after the
         effective date of any other registration statement relating to any
         registration request under this Section 3.2(a) or relating to any
         registration effected under Section 3.1;

                  (y) if with respect thereto the managing underwriter, the SEC,
         the Securities Act, or the form on which the registration statement is
         to be filed, would require the conduct of an audit other than the
         regular audit conducted by the Company at the end of its fiscal year,
         in which case the filing may be delayed until the completion of such
         audit (and the Company shall, upon request of the 20% Demand Party or
         10% Demand Party, as the case may be, use its reasonable best efforts
         to cause such audit to be completed expeditiously and without
         unreasonable delay); or

                  (z) if the Company is in possession of material non-public
         information and the Board determines in good faith that disclosure of
         such information would not be in the best interests of the Company and
         its shareholders, in which case the filing of the registration
         statement may be delayed until the earlier of the second Business Day
         after such conditions shall have ceased to exist and the 90th day after
         receipt by the Company of the written request from the 20% Demand Party
         or 10% Demand Party, as the case may be, to register Registrable
         Securities under this Section 3.2(a).

Nothing in this Section 3.2(a) shall operate to limit the right of a
Registration Rights Holder to (i) request the registration of Registrable
Securities that consist of Ordinary Shares issuable upon conversion, exercise or
exchange of convertible, exercisable or exchangeable securities, as applicable,
held by such Registration Rights Holder (including Non-Voting Ordinary Shares)
notwithstanding the fact that at the time of request such Registration Rights
Holder holds only such securities and not the underlying Ordinary Shares or (ii)
request the registration at one time of Registrable Securities that consist of
both Ordinary Shares and securities convertible into or exercisable or
exchangeable for Ordinary Shares (including Non-Voting Ordinary Shares).

                  (b) The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 3.2.

                  (c) A registration requested pursuant to this Article III will
not be deemed to have been effected unless it has become effective; provided
                                                                    --------
that, if, within 180 days after it has

                                       20



become effective, the offering of Registrable Securities pursuant to such
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court, then such
registration will be deemed not to have been effected.

                  (d)  If a requested registration pursuant to this Section 3.2
involves an underwritten offering and regardless of whether the Company is
registering any securities therein, the Board shall have the right to select the
investment banker or bankers and managers to administer the offering, including
the lead managing underwriter.

                  (e)  If a requested registration pursuant to this Section 3.2
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number of Registrable Securities
requested to be included in such registration exceeds the number which can be
sold in such offering, so as to be reasonably likely to have an adverse effect
on the price, timing or distribution of the securities offered in such offering,
then the Company will include in such registration such number of Registrable
Securities requested to be included in such registration which, in the opinion
of such managing underwriter, can be sold without having the adverse effect
referred to above, which number shall be allocated pro rata among all such
requesting holders of Registrable Securities based on the relative number of
Registrable Securities then held by each such requesting holder of Registrable
Securities. In the event that the number of Registrable Securities and Ordinary
Shares of other holders, in each case entitled to registration rights with
respect to such Ordinary Shares requested to be included in such registration is
less than the number which, in the opinion of the managing underwriter, can be
sold, the Company may include in such registration securities it proposes to
sell for its own account up to the number of securities that, in the opinion of
the underwriter, can be sold.

                  3.3. Form S-3 Registration. If the Company receives from one
                       ---------------------
or more Registration Rights Holders a written request or requests that the
Company effect a registration on Form S-3 (or any successor to Form S-3) and any
related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Registration Rights Holder or Registration
Rights Holders, the Company will:

                  (a)  promptly give notice of the proposed registration, and
any related qualification or compliance, to the other Registration Rights
Holders who hold Registrable Securities; and

                  (b)  as expeditiously as possible, effect such registration
and all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registration Rights Holder's or Registration Rights Holders' Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Registration Rights Holder or
Registration Rights Holders joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
                         --------  -------
obligated to effect any such registration, qualification or compliance pursuant
to this Section 3.3:

                       (i) if Form S-3 (or any successor form) is not available
         for such offering by the Registration Rights Holders; or

                                       21



               (ii)  if the Registration Rights Holders, together with the
         holders of any other securities of the Company entitled to inclusion in
         such registration, propose to sell Registrable Securities and such
         other securities (if any) at an aggregate price to the public of less
         than $500,000; or

               (iii) if the Company shall furnish to the Registration Rights
         Holders a certificate signed by the chairman of the Board stating that
         in the good faith judgment of the Board, it would not be in the best
         interests of the Company for such Form S-3 Registration to be effected
         at such time, in which event the Company shall have the right to defer
         the filing of the Form S-3 registration statement for a period of not
         more than ninety (90) days after receipt of the request of the
         Registration Rights Holder or Registration Rights Holders under this
         Section 3.3; provided, that such right to delay a request shall be
                      --------
         exercised by the Company not more than once in any twelve (12) month
         period; or

               (iv)  if the Company has, within the twelve (12) month period
         preceding the date of such request, already effected two (2)
         registrations on Form S-3 for the Registration Rights Holders pursuant
         to this Section 3.3; or

               (v)   in any particular jurisdiction in which the Company would
               be required to qualify to do business or to execute a general
               consent to service of process in effecting such registration,
               qualification or compliance unless the Company is already subject
               to service in such jurisdiction and except as may be required by
               the Securities Act.

          (c)  Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as expeditiously as possible after receipt of the
request or requests of the Registration Rights Holders. Registrations effected
pursuant to this Section 3.3 shall not be counted as demands for registration or
registrations effected pursuant to Section 3.2.

          The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 3.3.

          3.4. Registration Procedures. If and whenever the Company is required
               -----------------------
to file a registration statement with respect to, or to use its reasonable best
efforts to effect or cause the registration of, any Registrable Securities under
the Securities Act as provided in this Agreement the Company will as
expeditiously as possible:

          (a)  prepare and, in any event within 120 days after the end of the
period within which a request for registration may be given to the Company
pursuant to Section 3.2, file with the SEC a registration statement on an
appropriate form with respect to such Registrable Securities and use its
reasonable efforts to cause such registration statement to become effective;
provided, however, that the Company may discontinue any registration of
- --------  -------
securities as to which it is the Initiating Party at any time prior to the
effective date of the registration statement relating thereto (and, in such
event, the Company shall pay the Registration Expenses incurred in connection
therewith); provided, further, that not less than five (5) Business Days before
            --------  -------
filing a

                                       22



registration statement or prospectus, or any amendments or supplements
thereto, the Company will furnish to counsel for the sellers of Registrable
Securities covered by such registration statement copies of all documents
proposed to be filed, which documents will be subject to the review and input of
such counsel;

          (b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for a period not
in excess of 270 days and to comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all securities covered
by such registration statement during such period in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement; provided that not less than five (5) Business Days
                             --------
before filing a registration statement or prospectus, or any amendments or
supplements thereto, the Company will furnish to counsel for the sellers of
Registrable Securities covered by such registration statement copies of all
documents proposed to be filed, which documents will be subject to the review
and input of such counsel;

          (c) furnish to each seller of such Registrable Securities such number
of copies of such registration statement and of each amendment and supplement
thereto (in each case including all exhibits filed therewith, including any
documents incorporated by reference), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and summary prospectus), in conformity with the requirements of the Securities
Act, and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities by such seller;

          (d) use its reasonable efforts to register or qualify such Registrable
Securities covered by such registration in such jurisdictions as each seller
shall reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this subsection (d), it would not be
obligated to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;

          (e) use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities;

          (f) notify each seller of any such Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act within the appropriate period
mentioned in Section 3.3(b), of the Company's becoming aware that the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and at the request of any such seller,
prepare and furnish to such

                                       23



seller a reasonable number of copies of an amended or supplemental prospectus as
may be necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing;

          (g)  otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable (but not more than 18 months) after
the effective date of the registration statement, an earnings statement which
shall satisfy the provisions of Section 11(a) of the Securities Act;

          (h)  (i) if such Registrable Securities are Ordinary Shares (including
Ordinary Shares issuable upon conversion, exchange or exercise of another
security), use its reasonable best efforts to list such Registrable Securities
on any securities exchange on which the Ordinary Shares are then listed if such
Registrable Securities are not already so listed and if such listing is then
permitted under the rules of such exchange; (ii) if such Registrable Securities
are convertible, exchangeable or exercisable into Ordinary Shares, upon the
reasonable request of sellers of a majority of such Registrable Securities, use
its reasonable best efforts to list such securities and, if requested, the
Ordinary Shares underlying such securities, notwithstanding that at the time of
request such sellers hold only such securities, on any securities exchange so
requested, if such Registrable Securities are not already so listed and if such
listing is then permitted under the rules of such exchange; and (iii) use its
reasonable efforts to provide a transfer agent and registrar for such
Registrable Securities covered by such registration statement not later than the
effective date of such registration statement;

          (i)  enter into such customary agreements (including an underwriting
agreement in customary form), which may include indemnification provisions in
favor of underwriters and other Persons in addition to, or in substitution for
the indemnification provisions hereof, and take such other actions as sellers of
a majority of shares of such Registrable Securities or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities;

          (j)  obtain a "cold comfort" letter or letters from the Company's
independent public accounts in customary form and covering matters of the type
customarily covered by "cold comfort" letters as the seller or sellers of a
majority of shares of such Registrable Securities shall reasonably request;

          (k)  make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;

                                       24



          (l)  notify counsel for the holders of Registrable Securities included
in such registration statement and the managing underwriter or agent,
immediately, and confirm the notice in writing (i) when the registration
statement, or any post-effective amendment to the registration statement, shall
have become effective, or any supplement to the prospectus or any amendment to
the prospectus shall have been filed, (ii) of the receipt of any comments from
the SEC, (iii) of any request of the SEC to amend the registration statement or
amend or supplement the prospectus or for additional information, and (iv) of
the issuance by the SEC of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
registration statement for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes;

          (m)  use its reasonable best efforts to prevent the issuance of any
stop order suspending the effectiveness of the registration statement or of any
order preventing or suspending the use of any preliminary prospectus and, if any
such order is issued, to obtain the withdrawal of any such order at the earliest
possible moment;

          (n)  if requested by the managing underwriter or agent or any holder
of Registrable Securities covered by the registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such holder reasonably
requests to be included therein, including, with respect to the number of
Registrable Securities being sold by such holder to such underwriter or agent,
the purchase price being paid therefor by such underwriter or agent and with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
being notified of the matters incorporated in such prospectus supplement or
post-effective amendment;

          (o)  cooperate with the holders of Registrable Securities covered by
the registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement, and enable such securities to be in such denominations and registered
in such names as the managing underwriter or agent, if any, or the Registration
Rights Holders that sellers may request;

          (p)  obtain for delivery to the holders of Registrable Securities
being registered and to the underwriter or agent an opinion or opinions from
counsel for the Company in customary form and in form, substance and scope
reasonably satisfactory to such holders, underwriters or agents and their
counsel; and

          (q)  cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD.

          3.5. Other Registration-Related Matters. (a) The Company may require
               -----------------------------------
any Person that is selling Ordinary Shares in a Public Offering pursuant to
Sections 3.1, 3.2 or 3.3 to furnish to the Company in writing such information
regarding such Person and pertinent to the

                                       25



disclosure requirements relating to the registration and the distribution of the
Registrable Securities which are included in such Public Offering as the Company
may from time to time reasonably request in writing.

          (a)  Each Registration Rights Holder agrees, severally and not
jointly, that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3.4(f), it will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until its receipt of the copies of the
amended or supplemented prospectus contemplated by Section 3.4(f) and, if so
directed by the Company, each Registration Rights Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in their possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company gives
any such notice, the period for which the Company will be required to keep the
registration statement effective will be extended by the number of days during
the period from and including the date of the giving of such notice pursuant to
Section 3.4(f) to and including the date when each seller of Registrable
Securities covered by such registration statement has received the copies of the
supplemented or amended prospectus contemplated by Section 3.4(f).

          (b)  Each holder of Registrable Securities will, in connection with an
underwritten Public Offering of the Company's securities, upon the request of
the Company or of the underwriters managing any underwritten offering of the
Company's securities, agree in writing not to effect any sale, disposition or
distribution of Registrable Securities (other than those included in the Public
Offering) without the prior written consent of the managing underwriter for such
period of time commencing 7 days before and ending 180 days (or such earlier
date as the managing underwriter shall agree) after the effective date of such
registration. No Shareholder shall be released from such lock-up period unless
all of the Shareholders are so released.

          3.6. Indemnification. (a) In the event of any registration of any
               ---------------
securities of the Company under the Securities Act pursuant to Section 3.1, 3.2
or 3.3, the Company hereby indemnifies and agrees to hold harmless, to the
extent permitted by law, the sellers of any Registrable Securities covered by
such registration statement (each a "Holder"), each Affiliate of such Holder and
                                     ------
their respective directors and officers, members or general and limited partners
(and the directors, officers, employees, affiliates and controlling Persons of
any of the foregoing), each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person, if any, who
controls such Holder or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any and all
                                   -------------------
losses, claims, damages or liabilities, joint or several, and expenses to which
such Indemnified Party may become subject under the Securities Act, common law
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof, whether or not such Indemnified Party is a
party thereto) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Securities Act,
any preliminary, final or summary prospectus contained therein, or any amendment
or supplement thereto, or (ii) any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in light of the circumstances when they

                                       26



were made, and the Company will reimburse such Indemnified Party for any legal
or other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided that
                                                                 --------
the Company will not be liable to any Indemnified Party in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement, in any such preliminary, final or summary prospectus, or
any amendment or supplement thereto in reliance upon and in conformity with
written information with respect to such Indemnified Party furnished to the
Company by such Indemnified Party expressly for use in the preparation thereof.
Such indemnity will remain in full force and effect regardless of any
investigation made by or on behalf of such Holder or any Indemnified Party and
will survive the Transfer of such securities by such Holder.

          (a)  The Company may require, as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 3.1, 3.2 or 3.3 that the Company shall have received an undertaking
reasonably satisfactory to it from the Holder of such Registrable Securities or
any prospective underwriter to indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 3.6(a)) the Company, all other
Holders or any prospective underwriter, as the case may be, and any of their
respective Affiliates, directors, officers and controlling Persons, with respect
to any untrue statement in or omission from such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement, if such untrue statement or omission was made in reliance upon and
in conformity with written information with respect to such Holder or
underwriter furnished to the Company by such Holder or underwriter expressly for
use in the preparation of such registration statement, preliminary, final or
summary prospectus or amendment or supplement, or a document incorporated by
reference into any of the foregoing. Such indemnity will remain in full force
and effect regardless of any investigation made by or on behalf of the Company
or any of the Holders, or any of their respective affiliates, directors,
officers or controlling Persons and will survive the Transfer of such securities
by such Holder. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the net proceeds actually received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.

          (b)  Promptly after receipt by an Indemnified Party hereunder of
written notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this Section 3.6, such
Indemnified Party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided that the failure of the Indemnified Party to give notice
             --------
as provided herein will not relieve the indemnifying party of its obligations
under Section 3.6(a) or 3.6(b), except to the extent that the indemnifying party
is actually prejudiced by such failure to give notice. In case any such action
is brought against an Indemnified Party, unless in such Indemnified Party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such Indemnified Party, and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such

                                       27



Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. If, in such Indemnified Party's reasonable judgment, having
common counsel would result in a conflict of interest between the interests of
such indemnified and indemnifying parties, then such Indemnified Party may
employ separate counsel reasonably acceptable to the indemnifying party to
represent or defend such Indemnified Party in such action, it being understood,
however, that the indemnifying party will not be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time for all
such Indemnified Parties (and not more than one separate firm of local counsel
at any time for all such Indemnified Parties) in such action. No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation.

          (c)  If the indemnification provided for hereunder from the
indemnifying party is unavailable to an Indemnified Party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to herein, then
the indemnifying party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
Indemnified Parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
Indemnified Parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
Indemnified Parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party under this Section 3.6(d) as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding. In no event shall the liability
of any selling Holder of Registrable Securities hereunder be greater in amount
than the dollar amount of the net proceeds actually received by such Holder upon
the sale of the Registrable Securities giving rise to such contribution
obligation.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

          (d)  Indemnification similar to that specified in this Section 3.6
(with appropriate modifications) shall be given by the Company and each seller
of Registrable Securities with respect to any required registration or other
qualification of securities under any law or with any governmental entity other
than as required by the Securities Act.

                                       28



          (e)  The obligations of the parties under this Section 3.6 will be in
addition to any liability which any party may otherwise have to any other party.

ARTICLE IV.  PREEMPTIVE RIGHTS

          4.1. Preemptive Right. Each Shareholder shall have the right to
               ----------------
purchase for cash its Preemptive Right Pro Rata Share of newly issued shares of
the Company or any warrants, options and rights or securities convertible into,
exchangeable or exercisable for shares of the Company ("Share Equivalents")
                                                        -----------------
which the Company may from time to time propose to sell to any Person for cash
(excluding, issuances of shares or Share Equivalents upon exercise of
outstanding options granted to any employee benefit plan or arrangement). The
"Preemptive Right Pro Rata Share" shall be, at any given time, that proportion
 -------------------------------
which the number of Ordinary Shares (including for these purposes Non-Voting
Ordinary Shares) held by the Shareholder at such time bears to the total number
of Ordinary Shares (including for these purposes Non-Voting Ordinary Shares)
issued and outstanding at such time, in each case, as calculated on a fully
diluted basis.

          4.2. Preemptive Notices. In the event the Company proposes to
               ------------------
undertake an issuance of shares and/or Share Equivalents referred to in Section
4.1, it shall give each Shareholder written notice (the "Preemptive Notice") of
                                                         -----------------
its intention to do so, specifying the price, the identity of the purchaser and
the principal terms upon which the Company proposes to issue the same. Each
Shareholder shall have ten (10) Business Days from the delivery date of any
Preemptive Notice to agree to purchase a number of shares and/or Share
Equivalents up to its Preemptive Right Pro Rata Share (in each case calculated
prior to the issuance) for the price and upon the terms specified in the
Preemptive Notice by giving written notice to the Company and stating therein
the number of shares and/or Share Equivalents to be purchased.

          4.3. Failure to Exercise Preemptive Right. In the event any
               ------------------------------------
Shareholder fails to purchase all of its Preemptive Right Pro Rata Share
pursuant to this Article IV, the Company shall have 90 days after the date of
the Preemptive Notice to consummate the sale of the shares and/or Share
Equivalents with respect to which any Shareholder's preemptive right was not
exercised, at or above the price and upon terms not more favorable to the
purchasers of such shares and/or Share Equivalents than the terms specified in
the initial Preemptive Notice given in connection with such sale.

ARTICLE V.   CORPORATE GOVERNANCE MATTERS

          5.1. Board of Directors.
               ------------------

          (a)  Directors of the Company shall be elected annually. Effective as
of the Closing, the Board shall be comprised of nine members, consisting of
three designees of Silver Lake (each a "Silver Lake Designee"), two designees of
                                        --------------------
TPG (each a "TPG Designee"), one Management Director, one Additional Director,
             ------------
the chief executive officer of the Company from time to time serving (the "Chief
                                                                           -----
Executive Officer") and one director elected pursuant to the provisions of the
- -----------------
memorandum and articles of association of the Company. Members of the Board who
are not required to be designated by a Shareholder pursuant to the rights
provided in

                                       29



this Agreement shall be nominated and elected in accordance with the articles of
association of the Company.

          (b)  A member of the Board designated by a Shareholder pursuant to the
rights provided in this Agreement may only be removed by such Shareholder.
Except as provided in Section 5.1(e) below, any other member of the Board may be
removed only for cause by vote of a majority of the Board. If, prior to his or
her election to the Board, any Silver Lake Designee shall be unable or unwilling
to serve as a director of the Company, Silver Lake shall be entitled to nominate
a replacement who shall then be a Silver Lake Designee for purposes of this
Section 5.1. If, following an election to the Board pursuant to this Section
5.1, any Silver Lake Designee shall resign or be removed or be unable to serve
for any reason prior to the expiration of his or her term as a Director, Silver
Lake shall notify the Board in writing of a replacement Silver Lake Designee and
each of the Company and all of the Shareholders hereby agree to take such
actions provided for under the terms of the Shares held by them as will result
in the appointment of such Silver Lake Designee to the Board. If Silver Lake
requests that any Silver Lake Designee be removed as a Director (with or without
cause) by written notice thereof to the Company, then each of the Company and
all of the Shareholders shall take all actions provided for under the terms of
the Shares held by them necessary to effect such removal upon such request.

          If, prior to his or her election to the Board, any TPG Designee shall
be unable or unwilling to serve as a director of the Company, TPG shall be
entitled to nominate a replacement who shall then be a TPG Designee for purposes
of this Section 5.1. If, following an election to the Board pursuant to this
Section 5.1, any TPG Designee shall resign or be removed or be unable to serve
for any reason prior to the expiration of his or her term as a Director, TPG
shall notify the Board in writing of a replacement TPG Designee and each of the
Company and all of the Shareholders hereby agree to take such actions provided
for under the terms of the Shares held by them as will result in the appointment
of such TPG Designee to the Board. If TPG requests that any TPG Designee be
removed as a Director (with or without cause) by written notice thereof to the
Company, then each of the Company and all of the Shareholders shall take all
actions provided for under the terms of the Shares held by them necessary to
effect such removal upon such request.

          If, prior to his or her election to the Board, the Additional Director
shall be unable or unwilling to serve as a director of the Company, Silver Lake
shall be entitled to nominate a replacement who shall then be the Additional
Director for purposes of this Section 5.1; provided, that such replacement
                                           --------
Additional Director satisfies all of the criteria set forth in the definition of
"Additional Director" herein. If, following an election to the Board pursuant to
this Section 5.1, the Additional Director shall resign or be removed or be
unable to serve for any reason prior to the expiration of his or her term as a
Director, Silver Lake shall notify the Board in writing of a replacement and,
provided that such replacement Additional Director satisfies all the criteria
- --------
set forth in the definition of "Additional Director" herein, each of the Company
and all of the Shareholders hereby agree to take such actions provided for under
the terms of the Shares held by them as will result in the appointment of such
replacement Additional Director to the Board. So long as TPG consents, if Silver
Lake requests that the Additional Director be removed as a Director (with or
without cause) by written notice thereof to the Company, then each of the
Company and all of the Shareholders shall take all actions provided for under
the terms of the Shares held by them necessary to effect such removal upon such
request.

                                       30



          Any director (including the Additional Director) who is no longer
designated by Silver Lake or TPG shall be designated instead by the other
members of the Board and shall be considered a "Board Designee" for all purposes
hereunder. If any Board Designee shall resign or be removed or be unable to
serve for any reason prior to the expiration of his or her term as a Director,
then each of the Company and each Shareholder hereby agrees to take such actions
provided for under the terms of the Shares held by them as will result in the
appointment to the Board of an individual designated by the Board. If the Board
requests that any Board Designee be removed as a Director (with or without
cause) by written notice thereof to the Company, then each of the Company and
each Shareholder shall take all actions provided for under the terms of the
Shares held by them necessary to effect such removal upon such request.

          (c)  The Company will pay all reasonable out-of-pocket expenses
incurred by the Directors in connection with their participation in meetings of
the Board (and committees thereof) and the Boards of Directors (and committees
thereof) of the subsidiaries of the Company. Directors will receive no other
compensation or fees; provided that the Board may provide for a reasonable fee
                      --------
to be paid to the Additional Director or any future independent director.

          (d)  The board of directors of each subsidiary of the Company shall at
any given time either be (i) comprised in the same manner as the Board is then
comprised or (ii) comprised in a manner reasonably acceptable to both TPG and
Silver Lake.

          (e)  Notwithstanding anything in this Agreement to the contrary, no
director (other than any Silver Lake Designee, any TPG Designee, the Management
Director, the Chief Executive Officer of the Company (in his capacity as a
director), the Additional Director, or any director who becomes a director after
December 1, 2000) may be removed other than for cause and then only with the
approval of seven of nine directors.

          5.2. Actions by the Board of Directors.
               ---------------------------------

          (a)  The Shareholders and the Company shall take all actions provided
for under the terms of the Shares held by them necessary to amend the memorandum
and articles of association of the Company to provide that, for so long as this
Agreement is in effect, a quorum for any meeting of the Board shall require the
presence of (x) directors constituting at least a majority of the entire Board,
and (y) at least one of the Silver Lake Designees and (z) at least one of the
TPG Designees. Unless agreed to by unanimous consent of the Board in writing, no
action by the Board will be valid unless approved by a majority of the directors
at a meeting properly convened at which a quorum is present. The Company and the
Shareholders shall take such further action to provide that the articles of
incorporation and/or bylaws of the Company will provide that they may not be
amended by action of the Board unless such amendment is approved in the manner
set forth in the immediately preceding sentence. The Company and the
Shareholders shall take (or shall cause the Directors appointed by them to take)
such action provided for under the terms of the Shares held by them as is
necessary to cause (i) the Board to establish executive, audit, compensation and
governance committees of the Board, the duties of which shall be determined by
the Board, (ii) at least one Silver Lake Designee and one TPG Designee to serve
on each such committee of the Board of Directors and (iii) the Chief Executive
Officer of the Company to serve as the Chairman of the Executive Committee. The
Shareholders

                                       31



and the Company shall take such action provided for under the terms of the
Shares held by them to cause the memorandum and articles of association of the
Company to provide that no action by a committee of the Board of a type referred
to in Section 5.2(b) below shall be valid unless approved in the same manner as
required by action of the entire Board, as provided in this paragraph (a).

          (b)  Subject to applicable law, the Company shall not take any of the
actions set forth in items (i) through (iv) and (vi) through (ix) below without
the prior consent of at least seven of the nine Directors and the Company shall
not take the action set forth in item (v) below without the prior consent of at
least eight of the nine directors.

               (i)    voluntarily commence any proceeding or file any petition
     seeking relief under Title 11 of the United States Code as now constituted
     or hereafter amended, or any other federal, state or foreign bankruptcy,
     insolvency or similar law;

               (ii)   merge or consolidate with any other Person other than a
     subsidiary of the Company (the "Target") if (x) the book value of the
                                     ------
     assets of the Target (in the case of an acquisition of a Target) as of the
     end of its most recently ended fiscal quarter preceding the earlier of the
     date the Company enters into definitive agreements in respect of such
     transaction or publicly announces such transaction (the "Determination
                                                              -------------
     Date") would exceed $100 million or (y) the fair market value of the
     ----
     consideration paid or payable for the Target would exceed $100 million;

               (iii)  sell, transfer or otherwise dispose of (including by
     merger, dividend or other distribution or other transaction involving one
     or more shareholders of the Company, formation of a joint venture or
     otherwise) any assets in one or a series of related transactions if (x) the
     book value of such assets exceeds $100 million as of the end of the
     Company's most recent fiscal quarter preceding the Determination Date or
     (y) the fair market value of the consideration received or receivable for
     such assets (including, with respect to any asset sale, the value of any
     debt assumed or to be assumed in such transaction) exceeds $100 million;

               (iv)   enter into any contract with or otherwise engage in or
     become obligated to engage in any transaction or series of related
     transactions with any of Silver Lake, TPG, August or any of their
     respective Affiliates involving more than $1 million per calendar year;
     provided, however, that all such contracts and transactions (whether or not
     exceeding the $1 million limitation) shall be on an arms' length basis;

               (v)    increase or decrease the number of Directors that comprise
     the entire Board;

               (vi)   authorize, issue or sell (including by merger or
     otherwise) any shares, options, warrants or rights to acquire shares of the
     Company (other than issuances of shares pursuant to management options
     issued with the approval of the Board);

               (vii)  pay, declare or set aside any sums or other property for
     the payment of any dividends on, or make any other distributions in respect
     of (including by merger or otherwise), any shares of the Company, or any
     warrants, options, rights or

                                       32



     securities convertible into, exchangeable or exercisable for, shares of the
     Company (excluding purchases from employees pursuant to employee benefit
     plans or arrangements);

               (viii) redeem, purchase or otherwise acquire (including by merger
     or otherwise), any shares of the Company or any warrants, options and
     rights or securities convertible into, exchangeable or exercisable for,
     shares of the Company, or redeem or purchase otherwise acquire or make any
     payments with respect to any share appreciation rights or phantom share
     plans (excluding purchases from employees pursuant to employee benefit
     plans or arrangements); or

               (ix)   amend, modify or repeal any of the provisions of the
     memorandum and articles of association of the Company.

               In addition, no Shareholder may exercise its rights pursuant to
     Section 2.6 without the prior consent of at least seven of the nine
     Directors. Finally, the prior consent of at least five of the nine
     Directors (other than the Chief Executive Officer and the Management
     Director, who shall be required to abstain) shall be required to hire or
     terminate the employment contract of the Chief Executive Officer.
     Notwithstanding the foregoing, nothing in this Section 5.2 shall limit the
     rights of any Shareholder under Article III.

          (c)  Unless otherwise agreed by the parties hereto, the Board shall
follow the following procedures:

               (i)    Special meetings of the Board may be held at any time upon
     the call of at least two Directors by oral, telephonic, telegraphic,
     facsimile or e-mail notice duly given or sent at least one day, or by
     written notice sent by express mail at least three days, before the meeting
     to each director. Reasonable efforts shall be made to ensure that each
     director actually receives timely notice of any meeting. The annual meeting
     of the Board shall be held without notice immediately following the annual
     meeting of shareholders of the Company.

               (ii)   A reasonably detailed agenda shall be supplied to each
     director reasonably in advance of each meeting of the Board, together with
     other appropriate documentation with respect to agenda items calling for
     board action, to inform adequately directors regarding matters to come
     before the board. Any director wishing to place a matter on the agenda for
     any meeting of the applicable board of directors may do so by communicating
     with the chairman of the Board sufficiently in advance of the meeting of
     the Board so as to permit timely dissemination to all directors of
     information with respect to the agenda items.

          (d)  The Shareholders shall upon request take all action provided for
under the terms of the Shares held by them to cause the memorandum and articles
of association or comparable governing documents of each subsidiary of the
Company to be amended to require the prior approval of the Board of any actions
of the subsidiary that, if made by the Company,

                                       33



would require the approval of the Company's Board under the articles of
association of the Company or under this Agreement.

          5.3. Voting of Shares; Action by the Company. At any annual or special
               ---------------------------------------
meeting of shareholders of the Company or in any written consent executed in
lieu of such a meeting of shareholders, the Shareholders shall take all other
action provided for under the terms of the Shares held by them, including by way
of voting their Shares, to give effect to the agreements contained in this
Agreement. In order to effectuate the provisions of this Article V, each
Shareholder hereby agrees that when any action or vote is required to be taken
by such Shareholder pursuant to this Agreement, such Shareholder shall use his
or its best efforts to call, or cause the appropriate officers and directors of
the Company to call, a special or annual meeting of shareholders of the Company,
as the case may be, or execute or cause to be executed a consent in writing in
lieu of any such meetings pursuant to applicable provisions of The Companies Law
(2000 Revision) of the Cayman Islands. In addition, the Company shall take all
actions to give effect to the agreements contained in this Agreement.

          5.4. Fee Sharing. (a) Any transaction, closing or similar fee received
               -----------
by any Shareholder (or any Affiliate of any Shareholder) from the Company in
connection with the transactions contemplated hereby shall be allocated as
follows: first, 25% of such fees to Silver Lake or an Affiliate designated by
Silver Lake; second, the remainder of such fees pro rata to Silver Lake, TPG,
                                                --- ----
August Capital Management III, L.L.C. ("August Management"), Chase and GS (or an
Affiliate designated by each such Shareholder or August Management, as the case
may be) in proportion to the total aggregate number of Ordinary Shares and
Non-Voting Ordinary Shares owned by each such Shareholder (including, in the
case of Silver Lake, all Shares owned by Integral) or, in the case of fees
payable to August Management, owned by August, in each case relative to such
other Shareholders.

          (b)  Any monitoring or similar fee received by any Shareholder from
the Company shall be allocated as follows: first, 25% of such fees to Silver
Lake or an Affiliate designated by Silver Lake; second, the remainder of such
fees pro rata to Silver Lake, TPG and August Management (or an Affiliate
     --- ----
designated by each such Shareholder or August Management, as the case may be) in
proportion to the total aggregate number of Ordinary Shares and Non-Voting
Ordinary Shares owned by each such Shareholder (including, in the case of Silver
Lake, all Shares owned by Integral) or, in the case of fees payable to August
Management, owned by August, in each case relative to such other Shareholders.;
provided, however, that August Management shall be entitled to receive fees
- --------  -------
pursuant to this provision only for so long as David Marquardt serves as a
director of the Company; provided, however, that nothing in this Agreement shall
                         --------  -------
give David Marquardt the right to be elected as a director or, if so elected,
prohibit him from declining to serve as a director.

          5.5. Conversion of Ordinary Shares. So long as August is the record
               -----------------------------
owner of any Ordinary Shares, the Company agrees not to take any action to amend
the memorandum and articles of association of the Company to provide for the
conversion of Ordinary Shares into Non-Voting Ordinary Shares without the
consent of August; provided, however, that this Section 5.5 shall not prevent
                   --------  -------
Chase or any Permitted Transferee of Chase from converting Ordinary Shares
received solely upon the conversion of Non-Voting Ordinary Shares acquired
directly from the Company back into Non-Voting Ordinary Shares if it is
determined by Chase or such

                                       34



Permitted Transferee of Chase to be necessary to avoid a Regulatory Problem (as
defined in the Chase Regulatory Side Letter).

ARTICLE VI.  TAX MATTERS

          6.1. Tax Matters. (a) For such time as the Company constitutes a
               -----------
partnership for U.S. federal income tax purposes and Silver Lake and its
Affiliates in the aggregate own at least 25% of the number of Ordinary Shares
owned by them immediately following the transactions contemplated by the Stock
Purchase Agreement (as adjusted for share splits, reverse share splits,
combinations, recapitalizations and similar transactions), the "tax matters
partner" for purposes of section 6231(a)(7) of the Code (the "Tax Matters
                                                              -----------
Shareholder") shall be Silver Lake or its designated Affiliate (provided,
- -----------
however, that such Affiliate must be a Shareholder). For such time as the
Company constitutes a partnership for U.S. federal income tax purposes, and
Silver Lake and its affiliates in the aggregate own less than 25% of the number
of Ordinary Shares owned by them immediately following the transactions
contemplated by the Stock Purchase Agreement (as adjusted for share splits,
reverse share splits, combinations, recapitalizations and similar transactions),
the Tax Matters Shareholder shall be appointed by the Board. The Tax Matters
Shareholder shall have all of the rights, duties, powers and obligations
provided for in sections 6221 through 6231 of the Code with respect to the
Company.

          (b)  For such time as the Company constitutes a partnership for U.S.
federal income tax purposes, the Tax Matters Shareholder shall timely cause to
be prepared all tax returns of the Company for each year or period, and in such
jurisdictions, that such returns are required to be filed; provided, however,
                                                           --------  -------
that the Tax Matters Shareholder shall only file a material tax return if such
return has been approved by Silver Lake, TPG and August. Any Shareholder may
request in writing to review any and all such tax returns, and the Tax Matters
Shareholder's consent to such request shall not be unreasonably withheld.

          (c)  The Tax Matters Shareholder shall be reimbursed by the Company or
its subsidiaries, as appropriate, for all reasonable costs and expenses
associated with the performance of its obligations as Tax Matters Shareholder.

          6.2. Partnership Elections. For such time as the Company constitutes a
               ---------------------
partnership for U.S. federal income tax purposes, the Tax Matters Shareholder
shall have the right to make, or cause the Company to make, all Company tax
elections which the Tax Matters Shareholder deems appropriate in its reasonable
discretion; provided, however, that the Tax Matters Shareholder shall not make
            --------  -------
any material tax election without the consent of Silver Lake, TPG and August,
and provided, further, that the Tax Matters Shareholder shall make the election
    --------  -------
to adjust the basis of the Company's property pursuant to section 754 of the
Code for the year in which the Closing Date occurs.

          6.3. Capital Accounts; Book Allocations. (a) Solely for purposes of
               ----------------------------------
complying with section 704 of the Code and the Regulations promulgated
thereunder, there shall be established for each Shareholder and Management
Shareholder on the books of the Company as of the date hereof, or such later
date on which such Shareholder or Management Shareholder is admitted to the
Company, a capital account (each being a "Capital Account"). The Capital
                                          ---------------

                                       35



Account of each Shareholder and Management Shareholder shall (in accordance with
the requirements of Regulations section 1.704-1(b)(2)(iv)) be credited with (i)
the amount paid by such Shareholder or Management Shareholder with respect to
the Shares purchased by such Shareholder or Management Shareholder, as the case
may be, and (ii) the amount of the Liquidation Preference (as defined in Article
17 of the articles of association of the Company) of any Unvested Restricted
Shares (as defined in the Private Placement Memorandum) for which an election
under section 83(b) of the Code has been made, increased by any allocation of
income or gain and by any additional capital contributions by such Shareholder
or Management Shareholder, and shall be reduced by any allocation of loss or
deduction and by any distribution to such Shareholder or Management Shareholder.
Capital Accounts shall be appropriately adjusted to reflect transfers of part
(but not all) of the Shares held by any Shareholder or Management Shareholder.
Interest shall not be payable on Capital Account balances.

          (b)  Except as otherwise provided herein, as long as the Company is a
partnership for U.S. federal income tax purposes, all items of Company income,
gain, loss or deduction shall be allocated among the Shareholders and the
Management Shareholders in a manner such that the Capital Account of each
Shareholder and Management Shareholder (including with respect to Unvested
Restricted Shares (as defined in the Private Placement Memorandum) for which an
election under section 83(b) of the Code has been made), immediately after
making such allocation is, as nearly as possible, equal (proportionately) to the
distributions that would be made to such Shareholder or such Management
Shareholder, as the case may be, if the Company was dissolved, its affairs wound
up and its assets sold for cash equal to their Carrying Value, all Company
liabilities were satisfied, and the net assets of the Company were distributed
pursuant to Articles 9 and 17 of the articles of association of the Company to
the Shareholders and the Management Shareholders immediately after making such
allocation.

          (c)  The provisions of this Section 6.3 relating to the maintenance of
Capital Accounts and allocations of Company income, gain, loss or deduction are
intended to comply with Regulations section 1.704-1(b) (including, without
limitation, the "qualified income offset" provisions contained therein) and
shall be interpreted and applied in a manner consistent with such Regulations.
Additionally, the foregoing allocation provisions shall be interpreted and
applied in a manner consistent with the "minimum gain chargeback" requirements
of Regulations section 1.704-2(f) and 1.704-2(i)(4) and in a manner consistent
with the partner nonrecourse deduction provisions of Regulations section
1.704-2(i).

          (d)  Notwithstanding anything to the contrary herein, in no event
shall the provisions of this Section 6.3 affect the amount or timing of
distributions to which the Shareholders or Management Shareholders would
otherwise be entitled pursuant to Articles 8, 9, 10, 14, 15 and 17 of the
articles of association of the Company, provided, however, that Tax
Distributions may vary or be made pursuant to Section 6.5 hereof.

          6.4. Tax Allocations. For income tax purposes only, all items of
               ---------------
income, gain, loss, and deduction of the Company shall be allocated among the
Shareholders and the Management Shareholders in the same proportions as they
share the corresponding items pursuant to Section 6.3 hereof; provided, however,
                                                              -----------------
that in the case of any asset of the Company, the Carrying Value of which
differs from its adjusted tax basis for U.S. federal income tax

                                       36



purposes, income, gain, loss and deduction with respect to such asset shall be
allocated solely for income tax purposes in accordance with sections 704(b) and
(c) of the Code (in any manner determined by the Board) so as to take account of
the difference between Carrying Value and adjusted basis of such asset.

          6.5. Distributions Permitted Under the Indenture. Unless such
               -------------------------------------------
distribution is not otherwise permitted by law or unless otherwise agreed to by
Silver Lake, TPG and August, the Shareholders agree to use reasonable best
efforts to cause the Company to make any and all distributions permitted by the
Indenture including, without limitation "Tax Distributions" as such term is
defined in the Indenture ("Distribution Provisions"). The Shareholders agree to
use reasonable best efforts to prevent the Company from modifying the
Distribution Provisions without the consent of Silver Lake, TPG and August. Any
distributions made pursuant to this Section 6.5 other than Tax Distributions,
will be paid out in accordance with Articles 8, 9, 10, 14 15 and 17 of the
articles of association of the Company. Prior to making any other distributions
described in this Section 6.5, any Tax Distributions will be made to the holders
of Ordinary Shares and Non-Voting Ordinary Shares (including holders of Unvested
Restricted Shares (as defined in the Private Placement Memorandum) for which an
election under section 83(b) of the Code has been made) on a pro-rata basis
(based on the relative number of aggregate outstanding Ordinary Shares and
Non-Voting Ordinary Shares owned by them).

          6.6. Partnership Income and Subpart F Income. (a) Except as otherwise
               ---------------------------------------
agreed by Silver Lake, TPG and August, the Shareholders shall use reasonable
best efforts, and shall cause the Company to use reasonable best efforts, to
minimize Partnership Income, except to the extent that the Company makes current
distributions pursuant to the Distribution Provisions (to the extent permitted
by the Indenture) with respect to such Partnership Income.

          (b)  Except as otherwise agreed by Silver Lake and TPG, the
Shareholders shall use reasonable best efforts, and shall cause the Company to
use reasonable best efforts, to avoid creating Subpart F Income in excess of $50
million per calendar year. The Shareholders agree to use reasonable best efforts
to cause the Company to provide to Silver Lake and TPG the information necessary
to allow the direct and indirect beneficial owners of each of Silver Lake and
TPG to make the filings that would be required if the Company were to be treated
as a "controlled foreign corporation" within the meaning of section 957 of the
Code for U.S. federal income tax purposes.

          6.7. Corporate Structure, etc. The Shareholders agree to use their
               ------------------------
reasonable efforts to avoid changing the corporate structure of the Company or
the entity classification for U.S. federal income tax purposes of the Company or
its subsidiaries, to the extent that any such change would cause material
adverse federal income tax consequences to any Shareholder unless such change is
approved by Silver Lake, TPG and August.

          6.8. Unrelated Business Taxable Income and U.S. Trade or Business
               ------------------------------------------------------------
Income. The Shareholders agree to use their best efforts, and to cause the
- ------
Company, or any entity which the Company owns directly which is treated as a
pass-through entity for U.S. federal income tax purposes or indirectly through
an entity which is treated as a pass-through entity for U.S. federal income tax
purposes, to use its best efforts, (i) to not incur any items of gross income
that would be taken into account for purposes of calculating unrelated business
taxable income as defined in

                                       37



section 512 and 514 of the Code ("UBTI") and (ii) to not engage in activities,
directly or indirectly, that would cause a direct or indirect non-U.S. investor
in the Company to be treated as engaged in a U.S. trade or business as defined
in sections 864 or 897 of the Code due to its direct or indirect investment in
the Company. In addition, the Tax Matters Shareholder agrees to use best efforts
to (i) unless otherwise advised by its tax advisors, file tax returns and
information returns on behalf of the Company with the Internal Revenue Service
(the "IRS") on the basis that the Company is not engaged in a trade or business
for purposes of sections 875, 882, 884 and 1446 of the Code, and (ii) promptly
notify all other Shareholders if, based on the advice of its tax advisors, the
Tax Matters Shareholder determines that the Company is engaged in a trade or
business for purposes of sections 875, 882, 884 and 1446 of the Code.

          6.9. Passive Foreign Investment Company. The Tax Matters Shareholder
               ----------------------------------
agrees to use reasonable efforts (a) to determine whether any corporation, as
determined under the entity classification Regulations promulgated under section
7701 of the Code, of which the Company would be deemed to be an owner pursuant
to section 1298 of the Code, is a passive foreign investment company (a "PFIC")
within the meaning of section 1297 of the Code, and (b) with respect to any such
company which is determined to be a PFIC, to provide the Shareholders with
information sufficient to enable the Shareholders to make and maintain an
election to treat such company as a qualifying electing fund within the meaning
of section 1295 of the Code.

ARTICLE VII. MISCELLANEOUS

          7.1. Competition. Any Shareholder and any Affiliate of such
               -----------
Shareholder may engage in or possess an interest in other investments, business
ventures or entities of any nature or description, independently or with others,
similar or dissimilar to, or that compete with, the investments or business of
the Company, and may provide advice and other assistance to any such investment,
business venture or entity, and the Company and the Shareholders shall have no
rights by virtue of this Agreement in and to such investments, business ventures
or entities or the income or profits derived therefrom, and the pursuit of any
such investment or venture, even if competitive with the business of the
Company, shall not be deemed wrongful or improper. Upon the written request of
the Company (which request shall not be made more than once in any 90-day
period), each Shareholder shall, subject to applicable law and the terms of any
applicable confidentiality agreement or similar agreement or arrangement, use
its reasonable efforts to disclose, as soon as reasonably practicable and on a
confidential basis, to the Board any such interest, investment or business
venture that involves the disc drive or similar information storage business
that is owned by such Shareholder. No Shareholder nor any Affiliate thereof
shall be obligated to present any particular investment or business opportunity
to the Company even if such opportunity is of a character that, if presented to
the Company, could be taken by the Company, and any Shareholder or any Affiliate
thereof shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
opportunity.

          7.2. Additional Securities Subject to Agreement. Each Shareholder
               ------------------------------------------
agrees that any other equity securities of the Company which it hereafter
acquires by means of a share split, share dividend, distribution, exercise of
options or warrants or otherwise (other than shares acquired in a Public
Offering or in the public market after the initial Public Offering of the

                                       38



Company) will be subject to the provisions of this Agreement to the same extent
as if held on the date hereof.

          7.3. Information Rights. The Company shall deliver to each of the
               ------------------
Shareholders (i) audited financial statements of the Company within 90 days
after the end of each fiscal year and (ii) unaudited quarterly financial
statements within 45 days after the end of each fiscal quarter. Each of the
Shareholders shall have access to such other information concerning the
Company's business or financial condition as may be reasonably requested by such
Shareholder.

          7.4. Termination. Other than as specified below, the provisions of
               -----------
this Agreement will terminate and be of no further force and effect upon the
date on which at least 50% of the number of issued and outstanding shares of the
Company have been publicly distributed or sold, or are being actively traded on
a national securities exchange or interdealer quotation system. Notwithstanding
the foregoing, Article III of this Agreement shall survive the termination of
this Agreement until such time as all Registrable Securities held by the
Shareholders cease to be Registrable Securities.

          7.5. Notices. All notices, consents, requests, claims, demands and
               -------
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by cable, by telecopy, by telegram, by telex or
registered or certified mail (postage prepaid, return receipt requested) as
follows (or at such other address for a party as shall be specified in a notice
given in accordance with this Section 7.5):

               (i)  if to Silver Lake:

                    Silver Lake Partners, L.P.
                    2725 Sand Hill Road
                    Building C, Suite 150
                    Menlo Park, CA  94025
                    Attention:  David Roux
                    Telecopy:  (650) 233-8125

                    With a copy to:

                    Simpson Thacher & Bartlett
                    425 Lexington Avenue
                    New York, NY  10017
                    Attention: William E. Curbow, Esq.
                    Telecopy:  (212) 455-2502

                                       39



           (ii)    if to TPG:

                   SAC Investments, L.P.
                   c/o Texas Pacific Group.
                   301 Commerce Street
                   Suite 3300
                   Fort Worth, TX 76102
                   Attention: Richard A. Ekleberry
                   Telecopy:  (817) 871-4080

                   with a copy to:

                   Cleary, Gottlieb, Steen & Hamilton
                   One Liberty Plaza
                   New York, NY 10006
                   Attention: Paul J. Shim, Esq.
                   Telecopy:  (212) 225-3999

          (iii)    if to August:

                   August Capital
                   2480 Sand Hill Road
                   Suite 101
                   Menlo Park, CA 94025
                   Attention: Mark Wilson
                   Telecopy: (650) 234-9910

                   with a copy to:

                   Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
                   155 Constitution Drive
                   Menlo Park, CA 94025
                   Attention: Steven R. Franklin, Esq.
                   Telecopy:  (650) 321-2800

           (iv)    if to Chase:

                   Chase Equity Associates, L.P.
                   50 California Street
                   29th Floor
                   San Francisco, CA 94111
                   Attention: Shahan Soghikian
                   Telecopy:  (415) 591-1205

                                       40



                                  with a copy to:

                                  Chase Capital Partners
                                  Official Notices Clerk
                                  1221 Avenue of the Americas
                                  New York, NY 10020
                                  Telecopy: (212) 899-3401

                                  and to:

                                  Latham & Watkins
                                  135 Commonwealth Drive
                                  Menlo Park, CA 94025
                                  Attention: Anthony J. Richmond, Esq.
                                  Telecopy:  (650) 463-2600

                           (v)    if to GS:

                                  GS Capital Partners III, L.P.
                                  85 Broad Street, 10th Floor
                                  New York, NY 10004
                                  Attention: Anne Musella
                                  Telecopy:  (212) 357-5505

                                  with a copy to:

                                  Sullivan & Cromwell
                                  1870 Embarcadero Road
                                  Palo Alto, CA 94303
                                  Attention: Matthew G. Hurd, Esq.
                                  Telecopy:  (650) 461-5700

                          (vi)    if to Staenberg:

                                  Staenberg Venture Partners
                                  2000 First Avenue, Suite 1001
                                  Seattle, WA 98121
                                  Attention:
                                  Telecopy:

                                  with a copy to:

                                  Dorsey & Whitney LLP
                                  U.S. Bank Centre
                                  1420 Fifth Avenue, Suite 3400
                                  Seattle, WA 98101

                                       41



                  (vii)   if to Integral:

                          Integral Capital Partners
                          2750 Sand Hill Rd.
                          Menlo Park, CA  94025
                          Attention: Pamela Hagenah
                          Telecopy:  650-233-0366

                 (viii)   if to the Company:

                          New SAC
                          c/o Silver Lake Partners, L.P.
                          2725 Sand Hill Road
                          Building C, Suite 150
                          Menlo Park, CA  94025
                          Attention:  David Roux
                          Telecopy:  (650) 233-8125

                          with copies to:

                          Simpson Thacher & Bartlett
                          425 Lexington Avenue
                          New York, NY  10017
                          Attention:  William E. Curbow, Esq.
                          Telecopy:  (212) 455-2502

                          -and-

                          Cleary, Gottlieb, Steen & Hamilton
                          One Liberty Plaza
                          New York, NY  10006
                          Attention:  Paul J. Shim, Esq.
                          Telecopy:  (212) 225-3999

          7.6.   Further Assurances. The parties hereto will sign such further
                 ------------------
documents, cause such meetings to be held, resolutions passed, exercise their
votes and do and perform and cause to be done such further acts and things as
may be necessary in order to give full effect to this Agreement and every
provision hereof.

          7.7.   Assignment. This Agreement will inure to the benefit of and be
                 ----------
binding on the parties hereto and their respective successors and permitted
assigns. Except as specifically provided herein, this Agreement may not be
assigned by any party hereto without the express prior written consent of the
other parties, and any attempted assignment, without such consents, will be null
and void.

          7.8.   Amendment; Waiver. This Agreement may be amended, supplemented
                 -----------------
or otherwise modified only by a written instrument executed by the parties
hereto; provided,
        --------

                                       42



however, that this Agreement may be amended, supplemented or otherwise
- -------
modified by a written instrument executed only by the Shareholders so long as
any such amendment, supplement or modification does not impose any material
additional burdens on the Company. No waiver by any party of any of the
provisions hereof will be effective unless explicitly set forth in writing and
executed by the party so waiving. Except as provided in the preceding sentence,
no action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, will be deemed to constitute a
waiver by the party taking such action of compliance with any covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach.

          7.9.  Third Parties. Except as otherwise set forth herein, this
                -------------
Agreement does not create any rights, claims or benefits inuring to any person
that is not a party hereto nor create or establish any third party beneficiary
hereto.

          7.10. Governing Law. This Agreement will be governed by, and construed
                -------------
in accordance with, the laws of the State of New York.

          7.11. Binding Arbitration. Any controversy, dispute or claim arising
                -------------------
out of, in connection with, or in relation to, the construction, performance, or
breach of this Agreement shall be adjudicated by arbitration conducted in
accordance with the existing rules for commercial arbitration of the American
Arbitration Association, or any successor organization in New York or California
(the "AAA"), as determined by the party initiating the arbitration. The demand
      ---
for arbitration shall be delivered in accordance with the notice provisions of
this Agreement. Arbitration hereunder shall be conducted by a single arbitrator
selected jointly by the parties hereto. If within thirty (30) days after a
demand for arbitration is made, the parties hereto are unable to agree on a
single arbitrator, three arbitrators shall be appointed. Each party shall select
one arbitrator and those two arbitrators shall then select within thirty (30)
days a third neutral arbitrator. If the arbitrators selected by the parties
cannot agree on the third arbitrator, they shall discuss the qualifications of
such third arbitrator with the AAA prior to selection of such arbitrator, which
selection shall be in accordance with the existing rules of the AAA. If an
arbitrator cannot continue to serve, a successor to an arbitrator selected by
the parties shall be also selected by the same party, and a successor to a
neutral arbitrator shall be selected as specified above. A full rehearing will
be held only if the neutral arbitrator is unable to continue to serve or if the
remaining arbitrators unanimously agree that such a rehearing is appropriate.
Any discovery in connection with arbitration hereunder shall be limited to
information directly relevant to the controversy or claim in arbitration.
Judgment upon any arbitration award rendered may be entered in any court of
competent jurisdiction. EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.

          7.12. Specific Performance. Without limiting or waiving in any respect
                --------------------
any rights or remedies of the parties hereto under this Agreement now or
hereinafter existing at law or in equity or by statute, each of the parties
hereto will be entitled to seek specific performance of the obligations to be
performed by the other in accordance with the provisions of this Agreement,
including during such time prior to the final and binding decision in any
arbitration contemplated by Section 7.10.

                                       43



          7.13.  Entire Agreement. This Agreement sets forth the entire
                 ----------------
understanding of the parties hereto with respect to the subject matter hereof.

          7.14.  Titles and Headings. The section headings contained in this
                 -------------------
Agreement are for reference purposes only and will not affect the meaning or
interpretation of this Agreement.

          7.15.  Severability. If any provision of this Agreement is declared by
                 ------------
any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement will not be affected and will remain in full
force and effect.

          7.16.  Regulatory Matters. (a) Each Shareholder agrees to cooperate
                 ------------------
with the Company in all reasonable respects in complying with the terms of the
Chase Regulatory Side Letter, including, without limitation, voting to approve
amending the Company's memorandum and articles of association or this Agreement
in a manner reasonably acceptable to the Shareholders and Chase or any Affiliate
of Chase entitled to make such request pursuant to the Chase Regulatory Side
Letter in order to remedy a Regulatory Problem (as defined in the Chase
Regulatory Side Letter). Anything contained in this Section 7.16(a) to the
contrary notwithstanding, no Shareholder shall be required under this Section to
take any action that would adversely affect such Shareholder's rights under this
Agreement or as a shareholder of the Company.

          (b)    The Company and each Shareholder agree not to amend or waive
the voting or other provisions of the Company's memorandum and articles of
association or this Agreement if such amendment or waiver would cause Chase of
any of its Affiliates to have a Regulatory Problem (as defined in the Chase
Regulatory Side Letter). Chase agrees to notify the Company as to whether or not
it would have a Regulatory Problem promptly (and in any event within 5 Business
Days of receipt of notice of such amendment or waiver in accordance with this
Agreement) after Chase has notice of such amendment or waiver. Failure to
respond within such 5 Business-Day period shall be deemed to be a response that
such amendment or waiver will not result in a Regulatory Problem.

          (c)    The Company understands that Chase is affiliated with parties
entering into commercial lending transactions with the Company including,
without limitation, The Chase Manhattan Bank and Chase Securities Inc. The
parties acknowledge that such lending arrangements are entirely independent of
the equity investment made herein and nothing herein shall limit or otherwise
constrain the exercise by such parties under their lending arrangement of any
remedy or right granted to them in the transaction documents governing such
lending arrangements.

          7.17.  Counterparts. This Agreement may be executed in any number of
                 ------------
counterparts, each of which will be deemed to be an original and all of which
together will be deemed to be one and the same instrument.

                                       44



                  IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.

                                 NEW SAC


                                 By: /s/ WILLIAM L. HUDSON
                                    _________________________________________
                                      Name: William L. Hudson
                                      Title: Senior Vice President,
                                             General Counsel and Secretary



                                 SILVER LAKE TECHNOLOGY INVESTORS
                                 CAYMAN, L.P.
                                 By:  Silver Lake (Offshore) AIV GP Ltd., its
                                 General Partner


                                 By: /s/ KENNETH HAO
                                    _________________________________________
                                      Name: Kenneth Hao
                                      Title:



                                 SILVER LAKE INVESTORS CAYMAN, L.P.
                                 By:  Silver Lake (Offshore) AIV GP Ltd., its
                                 General Partner


                                 By: /s/ KENNETH HAO
                                    _________________________________________
                                      Name: Kenneth Hao
                                      Title:



                                 SILVER LAKE PARTNERS CAYMAN, L.P.
                                 By:  Silver Lake (Offshore) AIV GP Ltd., its
                                 General Partner


                                 By: /s/ KENNETH HAO
                                    _________________________________________
                                      Name: Kenneth Hao
                                      Title:


                                       45



                               SAC INVESTMENTS, L.P.
                               By:  TPG SAC Advisors III Corp., its General
                               Partner


                               By: /s/ JUSTIN T. CHANG
                                  ____________________________________________
                                    Name: Justin T. Chang
                                    Title:



                               AUGUST CAPITAL III, L.P.


                               By: /s/ MARK G. WILSON
                                  ____________________________________________
                                    Name: Mark G. Wilson
                                    Title:



                               CHASE EQUITY ASSOCIATES, L.P.
                               By:  Chase Capital Partners, its General Partner

                               By: /s/ SHAKAN SEGHIKIAN
                                  ____________________________________________
                                    Name: Shakan Seghikian
                                    Title:  A General Partner



                               GS CAPITAL PARTNERS III, L.P.
                               By:  GS Advisors III, L.L.C., its General Partner


                               By: /s/ JOHN E. BOWMAN
                                  ____________________________________________
                                    Name: John E. Bowman
                                    Title: Vice President


                               GS CAPITAL PARTNERS III OFFSHORE, L.P.
                               By:  GS Advisors III, L.L.C., its General Partner


                               By: /s/ JOHN E. BOWMAN
                                  ____________________________________________
                                    Name: John E. Bowman
                                    Title: Vice President


                                       46



                            GOLDMAN, SACHS & CO. VERWALTUNGS
                            GmbH


                            By: /s/ JOSEPH H. GLESEPARIN
                               _______________________________________________
                                 Name: Joseph H. Gleseparin
                                 Title: Managing Director

                            and

                            By: /s/ JOHN BOWMAN
                               _______________________________________________
                                 Name: John Bowman
                                 Title: Registered Agent



                            STONE STREET FUND 2000 L.P.
                            By:  Stone Street 2000, L.L.C., its General Partner

                            By: /s/ JOHN BOWMAN
                               ________________________________________________
                                 Name: John Bowman
                                 Title: Vice President



                            BRIDGE STREET SPECIAL OPPORTUNITIES
                            FUND 2000, L.P.
                            By:  Bridge Street Special Opportunities Fund 2000,
                            L.L.C., its General Partner


                            By: /s/ JOHN BOWMAN
                               ________________________________________________
                                 Name: John Bowman
                                 Title: Vice President


                            STAENBERG VENTURE PARTNERS II, L.P.


                            By: /s/ JON R. STAENBERG
                               ________________________________________________
                                 Name: Jon R. Staenberg
                                 Title: Managing Director


                                       47



                          STAENBERG SEAGATE PARTNERS, LLC

                          By:  /s/ JON R. STAENBERG
                               _________________________________________________
                               Name: Jon R. Staenberg
                               Title: Managing Member, Staenberg Seagate Manager
                                      LLC


                          INTEGRAL CAPITAL PARTNERS V, L.P.
                          By:  Integral Capital Management V, LLC, its General
                          Partner


                          By:  /s/ PAMELA K. HAGENAH
                               _________________________________________________
                               Name:  Pamela K. Hagenah
                               Title: Manager

                          INTEGRAL CAPITAL PARTNERS V SIDE FUND, L.P.
                          By:  ICP Management V, LLC, its General Partner


                          By:  /s/ PAMELA K. HAGENAH
                               _________________________________________________
                               Name:  Pamela K. Hagenah
                               Title: Manager


                          /s/ GEORGIA ANN BRINT
                          ______________________________________________________
                          Georgia Ann Brint


                          /s/ WILLIAM L. HUDSON
                          ______________________________________________________
                          William L. Hudson


                          /s/ GREGORY BRIAN KERFOOT
                          ______________________________________________________
                          Gregory Brian Kerfoot


                                       48



                          /s/ STEPHEN J. LUCZO
                          _____________________________________________________
                          Stephen James Luczo


                          /s/ WILLIAM THOMAS ROWLEY
                          _____________________________________________________
                          William Thomas Rowley


                          /s/ PHILIP E. SORAN
                          _____________________________________________________
                          Philip E. Soran


                          /s/ JOHN THOMPSON
                          _____________________________________________________
                          John Thompson


                          /s/ LAM HUY TRUONG
                          _____________________________________________________
                          Lam Huy Truong


                          /s/ DONALD LEO WAITE
                          _____________________________________________________
                          Donald Leo Waite

                                          49

EX-10.11

                                                                   EXHIBIT 10.11

                                                                  EXECUTION COPY

                             MANAGEMENT SHAREHOLDERS
                             -----------------------
                                    AGREEMENT
                                    ---------

          THIS MANAGEMENT SHAREHOLDERS AGREEMENT, dated as of November 22, 2000
(this "Agreement"), is entered into by and among New SAC, a limited company
       ---------
incorporated in the Cayman Islands (the "Company"), the parties identified on
                                         -------
the signature pages hereto as "Management Shareholders" and each other
individual who from time to time executes a Joinder Agreement as contemplated by
Section 7.2 hereof (collectively, the "Management Shareholders").
                                       -----------------------

                                    RECITALS:

     A.   Suez Acquisition Company (Cayman) Limited ("SAC"), Seagate Technology,
                                                      ---
Inc. ("Seagate") and Seagate Software Holdings, Inc. ("SSHI"), entered into a
       -------                                         ----
Stock Purchase Agreement, dated as of March 29, 2000, as amended by the
Consolidated Amendment to Stock Purchase Agreement, Agreement and Plan of Merger
and Reorganization, and Indemnification Agreement, and Consent, dated as of
August 29, 2000, among SAC, Seagate, SSHI, VERITAS Software Corporation
("VERITAS") and Victory Merger Sub, Inc. ("Merger Sub") and Consolidated
  -------                                  ----------
Amendment No. 2 to Stock Purchase Agreement, Agreement and Plan of Merger and
Reorganization, and Indemnification Agreement, and Consent, dated as of October
18, 2000, among SAC, Seagate, SSHI, VERITAS and Merger Sub (as so amended, and
as it may be further amended, supplemented or otherwise modified from time to
time, the "Stock Purchase Agreement");
           ------------------------

     B.   Pursuant to an Assignment and Assumption Agreement, dated as of
November 22, 2000, between SAC and the Company, SAC assigned all of its rights
and obligations under the Stock Purchase Agreement to the Company;

     C.   Pursuant to the Stock Purchase Agreement, the Company will purchase
all of Seagate's operating assets and assume substantially all of its
liabilities by acquiring the stock of a company into which Seagate has
transferred such assets and liabilities;

     D.   In connection with the Stock Purchase Agreement, certain management
employees of Seagate ("Rollover Management Shareholders") will acquire on the
                       --------------------------------
date hereof (i) ordinary shares, par value $0.0001 per share (the "Ordinary
                                                                   --------
Shares"), of the Company, and (ii) Preferred Shares, par value $0.0001 per share
- ------
(the "Preferred Shares"), of the Company; and
      ----------------

     E.   The Management Shareholders and the Company wish to provide for
certain matters relating to the equity interests of the Management Shareholders
in their respective holdings in and the governance of the Company.

          NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:



                        ARTICLE I. INTRODUCTORY MATTERS

          1.1  Defined Terms. In addition to the terms defined elsewhere herein,
               -------------
the following terms have the following meanings when used with initial capital
letters:

          "Affiliate" has the meaning given to that term in Rule 405 promulgated
           ---------
     under the Securities Act; provided that officers, directors or employees of
     the Company will not be deemed to be Affiliates of a shareholder of the
     Company for purposes hereof solely by reason of being officers, directors
     or employees of the Company.

          "Agreement" means this Agreement, as the same may be amended,
           ---------
     supplemented or otherwise modified from time to time in accordance with the
     terms hereof.

          "Assumption Agreement" means a writing substantially in the form of
           --------------------
     Exhibit A hereto whereby a Permitted Transferee or other transferee
     pursuant to Section 2.4 becomes a party to, and agrees to be bound to the
     same extent as its transferor by the terms of, this Agreement.

          "Board" means the Board of Directors of the Company.
           -----

          "Business Day" means a day other than a Saturday, Sunday, federal, New
           ------------
     York or California State holiday or other day on which commercial banks in
     New York City or San Francisco are authorized or required by law to close.

          "Call Rights" has the meaning given that term in Section 3.1(a).
           -----------

          "Cause" with respect to the termination of employment by the Company
           -----
     of any Management Shareholder, means (i) such Management Shareholder's
     continued failure substantially to perform the material duties of his or
     her office (other than as a result of total or partial incapacity due to
     physical or mental illness), (ii) the embezzlement or theft by such
     Management Shareholder of the Company's property, (iii) the commission of
     an act or acts on such Management Shareholder's part resulting in the
     conviction of such Management Shareholder of a felony under the laws of the
     United States or any state thereof, (iv) such Management Shareholder's
     willful malfeasance or willful misconduct in connection with his or her
     duties to the Company or any other act or omission which is materially
     injurious to the financial condition or business reputation of the Company
     or any of its subsidiaries or affiliates, or (v) a material breach by such
     Management Stockholder of the material terms of his or her employment
     agreement, this Agreement, any other shareholders agreement or any
     non-compete, non-solicitation or confidentiality provisions to which such
     Management Shareholder is subject. However, no termination shall be deemed
     for Cause under clause (i), (iv) or (v) unless such Management Shareholder
     is first given written notice by the Company of the specific acts or
     omissions which the Company deems constitute grounds for a termination for
     Cause and is provided with at least 30 days after such notice to cure the
     specified deficiency.

                                                                               2



          "Change of Control" means (i) the sale or disposition, in one or a
           -----------------
     series of related transactions, of all or substantially all of the assets
     of the Company to any "person" or "group" (as such terms are defined in
     Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the
     Investors (or their Permitted Transferees (as defined in the Investor
     Shareholders Agreement)) or (ii) any person or group, other than the
     Investors (or their Permitted Transferees (as defined in the Investor
     Shareholders Agreement)) or their respective Affiliates, is or becomes the
     "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
     Act), directly or indirectly, of more than 50% of the total voting power of
     the voting stock of the Company, including by way of merger, consolidation
     or otherwise, and the representatives of the Investors (or their Permitted
     Transferees (as defined in the Investor Shareholders Agreement)) or their
     respective Affiliates cease to comprise, in the aggregate, a majority of
     the Board.

          "Closing" has the meaning given that term in the Stock Purchase
           -------
     Agreement.

          "Closing Date" means November 22, 2000.
           ------------

          "Code" means the Internal Revenue Code of 1986, as amended.
           ----

          "Cost" means the price per share paid by the Management Shareholders,
           ----
     in each case, as proportionately adjusted for all subsequent stock splits,
     stock dividends and other recapitalizations and reclassifications.

          "Custody Period" has the meaning given that term in Section 3.2.
           --------------

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
           ------------
     and the rules and regulations of the SEC promulgated thereunder, as the
     same may be amended from time to time.

          "Fair Market Value" with respect to a particular date, means (i) if
           -----------------
     there is a public market for the Shares of a particular class as of such
     date, the average of the high and low closing bid prices of such Shares on
     such stock exchange on which such Shares are principally trading on such
     date, or, if there were no sales on such date, on the closest preceding
     date on which there were sales of such Shares or (ii) if there is no public
     market for such Shares on such date, the fair market value of such Shares
     as determined in good faith by the Board (provided that, in all cases, the
     Fair Market Value of Preferred Shares shall not be greater than the
     Liquidation Preference (as defined in the Amended and Restated Memorandum
     and Articles of Association of the Company) in respect thereof).

          "Good Reason," with respect to the resignation from employment with
           -----------
     the Company by any Management Shareholder means such a resignation as a
     result of, any of the following actions, which actions remain uncured for
     at least 30 days following written notice from the resigning Management
     Shareholder to the Company describing the occurrence of such events and
     asserting that such events constitute grounds for a

                                                                               3



     "Good Reason" resignation, provided notice of such resignation is given to
     the Company within sixty (60) days after the expiration of such cure
     period: (i) without the Management Shareholder's express written consent,
     any material reduction in the Management Shareholder's authority or
     responsibilities from those set forth in an employment agreement between
     the Company and the Management Shareholder (an "Employment Agreement") (or
     if such Management Shareholder is not a party to an Employment Agreement,
     from the authority and responsibilities initially assigned to such
     Management Shareholder by the Company after the Closing Date), (ii) without
     the Management Shareholder's express written consent, a reduction of 10% or
     more in the level of the base salary, target annual bonus or employee
     benefits to be provided to the Management Shareholder under an Employment
     Agreement (or if such Management Shareholder is not a party to an
     Employment Agreement, a reduction of 10% or more in the level of base
     salary, target annual bonus or employee benefits provided to such
     Management Shareholder immediately prior to the Closing Date), other than a
     reduction implemented with the consent of the Management Shareholder or a
     reduction that is equivalent to reduction in base salaries, bonus
     opportunities and/or employee benefits, as applicable, imposed on all other
     senior executives of the Company at a similar level within the Company
     (provided that the use of private aircraft shall not be deemed an employee
     benefit for these purposes); or (iii) the relocation of the Management
     Shareholder to a principal place of employment more than 50 miles from the
     Management Shareholder's current principal place of employment, without the
     Management Shareholder's express written consent.

          "Governmental Authority" means any Federal, state or local court or
           ----------------------
     governmental or regulatory authority or agency, domestic or foreign.

          "Investor Shareholders Agreement" means the shareholders agreement,
           -------------------------------
     dated as of the date hereof, by and among the Company and the Investors, as
     the same may be amended, supplemented or otherwise modified from time to
     time.

          "Investors" shall mean, collectively, the Persons who are parties to
           ---------
     the Investor Shareholders Agreement, other than the Company.

          "Joinder Agreement" has the meaning given that term in Section 7.2.
           -----------------

          "Lapse Date" means (a) with respect to each Tier I Senior Manager, the
           ----------
     fifth anniversary of the Closing Date and (b) with respect to each Senior
     Manager other than a Tier I Senior Manager, the second anniversary of the
     Closing Date.

          "Majority Investors" has the meaning given that term in Section 2.5.
           ------------------

          "Offer" has the meaning assigned to it in Section 2.6(a).
           -----

          "Offeree" has the meaning given that term in Section 2.6(a).
           -------

                                                                               4



          "Offeror" has the meaning given that term in Section 2.6(a).
           -------

          "Ordinary Shares" has the meaning given that term in the Recitals to
           ---------------
     this Agreement.

          "Permitted Transferee" means with respect to any Management
           --------------------
     Shareholder, (i) upon the death of such Management Shareholder, his or her
     executors, administrators, testamentary trustees, legatees or
     beneficiaries, (ii) his or her Family Members, (iii) a trust or
     custodianship the beneficiaries of which include only such Management
     Shareholder and/or his or her Family Members, (iv) a trust in which the
     Management Shareholder and/or his or her Family Members have 100% of the
     beneficial ownership, (v) a foundation in which the Management Shareholder
     and/or his or her Family Members control the management of the assets and
     (vi) any other entity in which the Management Shareholder and/or his or her
     Family Members own more than fifty percent of the voting interest, provided
                                                                        --------
     that any such Permitted Transferee complies with Section 2.2(a) hereof. For
     purposes of this definition, "Family Member" means the Management
                                   -------------
     Shareholder's spouse, lineal descendants, siblings, nephews and nieces,
     parents and grandparents, and stepchildren and stepparents, including any
     such persons by adoptive relationships.

          "Person" means any individual, corporation, limited liability company,
           ------
     partnership, trust, joint stock company, business trust, unincorporated
     association, joint venture, governmental authority or other legal entity of
     any nature whatsoever.

          "Preferred Shares" has the meaning given that term in the Recitals to
           ----------------
     this Agreement.

          "Public Offering" means the sale of common equity securities to the
           ---------------
     public pursuant to an effective registration statement (other than a
     registration statement on Form S-4 or Form S-8 or any similar or successor
     form) filed under the Securities Act.

          "Qualified Public Offering" means the sale of (i) at least 15% of the
           -------------------------
     outstanding Ordinary Shares pursuant to an initial Public Offering by the
     Company or (ii) Ordinary Shares pursuant to a Public Offering by the
     Company which results in gross proceeds to the Company of at least $250
     million.

          "Register" means the register of the Company on which the Company
           --------
     records the legal title to the shares of the Company.

          "Restricted Share Agreement" with respect to any Management
           --------------------------
     Shareholder, means the Restricted Share Agreement with the Company relating
     to certain Shares owned by such Management Shareholder.

          "Rollover Management Shareholders" has the meaning given that term in
           --------------------------------
     the Recitals to this Agreement.

                                                                               5



          "Sale Notice" has the meaning given that term in Section 2.6(a).
           -----------

          "SEC" means the Securities and Exchange Commission.
           ---

          "Section 2.2 Transfer" means a Transfer provided for in Section 2.2.
           -----------

          "Securities Act" means the Securities Act of 1933, as amended, and the
           --------------
rules and regulations of the SEC promulgated thereunder, as they may be amended
from time to time.

          "Senior Managers" means those Management Shareholders who are listed
           ---------------
on Schedule I hereto.

          "Shares" means the Ordinary Shares and the Preferred Shares.
           ------

          "Silver Lake" has the meaning given that term in the Investor
           -----------
Shareholders Agreement.

          "Subsidiary" means, with respect to any Person, any corporation,
           ----------
partnership, association or other business entity of which fifty percent (50%)
or more of the total voting power of shares of capital stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof, or fifty percent (50%) or more of the
equity interest therein, which is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the other Subsidiaries of such
Person or a combination thereof.

          "Third Party" means any Person other than the Company, the Investors,
           -----------
the Management Shareholders and each of their Permitted Transferees (with
respect to the Investors only, as such term in defined in the Investor
Shareholders Agreement) and Affiliates.

          "Tier I Senior Manager" means those Management Shareholders who are
           ---------------------
listed on Schedule II hereto.

          "TPG" means SAC Investments, L.P., a Cayman limited partnership.
           ---

          "Transfer" means, with respect to any Shares (or direct or indirect
           --------
economic or other interest therein), a transfer, sale, assignment, pledge,
hypothecation or other disposition, whether directly or indirectly (pursuant to
the creation of a derivative security or otherwise), the grant of an option or
other right or the imposition of a restriction on disposition or voting or by
operation of law. When used as a verb, "Transfer" shall have the correlative
meaning. In addition, "Transferred" and "Transferee" shall have the correlative
meanings.

          "Transfer Restriction Termination Date" has the meaning given that
           -------------------------------------
term in Section 2.1(a).

                                                                               6



          "Unvested Share Legend" has the meaning given that term in Section
           ---------------------
2.1(c).

          "Vested Share Legend" has the meaning given that term in Section
           -------------------
2.1(c)."

          1.2  Construction. The language used in this Agreement will be deemed
               ------------
to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party. Unless the
context otherwise requires: (a) "or" is disjunctive but not exclusive, (b) words
in the singular include the plural, and in the plural include the singular, and
(c) the words "hereof", "herein" and "hereunder" and words of similar import
               ------    ------       ---------
when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Exhibit references are
to this Agreement unless otherwise specified.

                             ARTICLE II. TRANSFERS

          2.1  Limitations on Transfer. (a) Each Management Shareholder agrees
               -----------------------
that he or she will not Transfer any Shares prior to the earliest of (i) a
Qualified Public Offering of Ordinary Shares, (ii) a Change of Control and (iii)
the Lapse Date with respect to such Management Shareholder (such earliest date,
the "Transfer Restriction Termination Date"), except for Transfers which are
     -------------------------------------
permitted pursuant to Sections 2.2, 2.3 or 2.5 hereof or Article III hereof.
After the Transfer Restriction Termination Date with respect to such Management
Shareholder, such Management Shareholder may Transfer Shares only in accordance
with, and subject to the provisions of, this Agreement.

          (b) In the event of any purported Transfer by a Management Shareholder
of any Shares in violation of the provisions of this Agreement, such purported
Transfer will be void and of no effect, and the Company will not give effect to
such Transfer.

          (c) (i) Each certificate representing Shares held by a Management
Shareholder which are subject to a Restricted Share Agreement will bear a legend
on the face thereof substantially to the following effect (with such additions
thereto or changes therein as the Company may be advised by counsel are required
by law or necessary to give full effect to this Agreement, the "Unvested Share
                                                                --------------
Legend"):
- ------

     "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (I) A MANAGEMENT
     SHAREHOLDERS AGREEMENT AMONG NEW SAC (THE "COMPANY") AND THE MANAGEMENT
     SHAREHOLDERS LISTED THEREIN, DATED AS OF NOVEMBER 22, 2000, AS AMENDED AND
     SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, AND
     (II) A RESTRICTED SHARE AGREEMENT WITH THE COMPANY RELATING TO SUCH SHARES,
     A COPY OF EACH OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. THE
     MANAGEMENT SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER THINGS, CERTAIN
     PROVISIONS RELATING TO THE VOTING AND TRANSFER OF THE SHARES SUBJECT TO THE
     AGREEMENT, AND

                                                                               7



     THE RESTRICTED SHARE AGREEMENT CONTAINS, AMONG OTHER THINGS, CERTAIN
     PROVISIONS RELATING TO THE VESTING OF SUCH SHARES. NO TRANSFER, SALE,
     ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES
     REPRESENTED BY THIS CERTIFICATE, DIRECTLY OR INDIRECTLY, MAY BE MADE EXCEPT
     IN ACCORDANCE WITH THE PROVISIONS OF SUCH MANAGEMENT SHAREHOLDERS AGREEMENT
     AND RESTRICTED SHARE AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY
     ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS
     OF SUCH MANAGEMENT SHAREHOLDERS AGREEMENT AND RESTRICTED SHARE AGREEMENT."

     "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED
     OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM
     REGISTRATION IS AVAILABLE."

          (ii) Each certificate representing Shares held by a Management
     Shareholder which are not subject to a Restricted Share Agreement will bear
     a legend on the face thereof substantially to the following effect (with
     such additions thereto or changes therein as the Company may be advised by
     counsel are required by law or necessary to give full effect to this
     Agreement, the "Vested Share Legend"):
                     -------------------

     "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A MANAGEMENT
     SHAREHOLDERS AGREEMENT AMONG NEW SAC (THE "COMPANY") AND THE MANAGEMENT
     SHAREHOLDERS LISTED THEREIN, DATED AS OF NOVEMBER 22, 2000, AS AMENDED AND
     SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, A COPY
     OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. THE MANAGEMENT
     SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER THINGS, CERTAIN PROVISIONS
     RELATING TO THE VOTING AND TRANSFER OF THE SHARES SUBJECT TO THE AGREEMENT.
     NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
     OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE, DIRECTLY OR INDIRECTLY,
     MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH MANAGEMENT
     SHAREHOLDERS AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF
     THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
     MANAGEMENT SHAREHOLDERS AGREEMENT."

     "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE SECURITIES ACT OF 1933 AND MAY NOT BE

                                                                               8



     TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER
     THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."

          (iii) The Unvested Share Legend or the Vested Share Legend, as
     applicable, will be removed by the Company by the delivery of substitute
     certificates without such Unvested Share Legend or Vested Share Legend, as
     the case may be, in the event of a Transfer permitted by this Agreement and
     in which the Transferee is not required to enter into an Assumption
     Agreement pursuant to Section 2.4; provided, however, that the second
                                        --------  -------
     paragraph of each of the Unvested Share Legend and the Vested Share Legend
     will only be removed at such time as it is no longer required for purposes
     of applicable securities laws.

          (d)  Notwithstanding any other provision of this Agreement to the
contrary (other than Section 2.2), a Management Shareholder shall be permitted
to Transfer any Shares which are subject to a Restricted Share Agreement only to
the extent that such Management Shareholder's interest in such Shares has fully
vested, as of the date of such transfer, in accordance with the terms of the
applicable Restricted Share Agreement. However, Ordinary Shares which are not
otherwise vested at the time of Transfer may be transferred to any Permitted
Transferee, provided that such Permitted Transferee agrees to be bound by all of
            --------
the restrictions and forfeiture provisions to which the transferred Ordinary
Shares are subject at the time of such Transfer.

          (e)  Without the prior written consent of Silver Lake and TPG, no
Management Shareholder may Transfer all or a portion of his or her interests in
the Company or take any other action, if such transfer or action would create a
material risk of the Company becoming a "publicly traded partnership," within
the meaning of Section 7704 of the Code and the regulations promulgated
thereunder.

          2.2  Certain Permitted Transfers. (a) Any Management Shareholder may
               ---------------------------
Transfer any or all of the Shares held by him or her to any Permitted Transferee
of such Management Shareholder who duly executes and delivers an Assumption
Agreement, provided that such Transfer shall not be effective unless and until
           --------
the Company shall have been furnished with information reasonably satisfactory
to it demonstrating that such Transfer is exempt from or not subject to the
provisions of Section 5 of the Securities Act and any other applicable
securities laws.

          (b)  Each Permitted Transferee of any Management Shareholder to which
Shares are transferred shall, and such Management Shareholder shall cause such
Permitted Transferee to, transfer back to such Management Shareholder (or to
another Permitted Transferee of such Management Shareholder) any Shares it owns
prior to such Permitted Transferee ceasing to be a Permitted Transferee of such
Management Shareholder.

          (c)  Subject to the other provisions of this Agreement, each
Management Shareholder may Transfer any or all of the Shares held by him or her:
(i) with the consent of the

                                                                               9



Board, to another Management Shareholder; (ii) to the Company; or (iii) to
Silver Lake, TPG or any of their respective Affiliates.

          2.3  Tag-Along Rights. (a) So long as (i) this Agreement shall remain
               ----------------
in effect and (ii) no Qualified Public Offering of Ordinary Shares shall have
occurred, each Management Shareholder shall, with respect to such Management
Shareholder's Shares, have the right to exercise the rights of a Tagging
Shareholder pursuant to Section 2.4 of the Investor Shareholders Agreement in
connection with any Proposed Sale (as defined in the Investor Shareholders
Agreement) of Shares by any Selling Holder (as defined in the Investor
Shareholders Agreement) thereunder, provided that, in the case of a Proposed
Sale, such Management Shareholder shall be permitted to participate in any such
Proposed Sale only with respect to those Shares which are not subject to a
Restricted Share Agreement or with respect to which such Management
Shareholder's interest has fully vested as of the date of the closing of such
Proposed Sale (including Shares that are vested as a result of such Proposed
Sale), in accordance with the terms of the applicable Restricted Share
Agreement.

          2.4  Rights and Obligations of Transferees. Any Transferee of Shares
               -------------------------------------
(other than Transferees who acquire Shares pursuant to the exercise of rights
set forth in Section 2.5 or Section 4.1 or, following the initial Public
Offering by the Company, in a bona fide sale to the public pursuant to Rule 144
under the Securities Act or pursuant to an effective registration statement
under the Securities Act) will be required, at the time of and as a condition to
such Transfer, to become a party to this Agreement by executing and delivering
an Assumption Agreement and, upon executing and delivering an Assumption
Agreement, will be treated as a Management Shareholder for all purposes hereof;
provided, however, that no such Transferee will acquire any rights (but will be
- --------- -------
subject to the obligations) under Section 2.3 and 4.1 or be subject to the Call
Right under Article III, unless such Transferee is a Permitted Transferee.

          2.5  Take-Along Rights. Each Management Shareholder agrees that if any
               -----------------
Investor or Investors holding, in the aggregate, at least a majority of the
outstanding Ordinary Shares (such Investor or Investors, the "Majority
                                                              --------
Investors") receive an offer from a third party to purchase or otherwise acquire
- ---------
at least a majority of the outstanding Ordinary Shares, such Management
Shareholder shall, at the request of such Majority Investors, be required to
Transfer that percentage of his or her vested Preferred Shares and that
percentage of his or her vested Ordinary Shares equal to the percentage of the
Preferred Shares and/or Ordinary Shares (as the case may be) held by the
Majority Investors being transferred at the same price per Preferred Share
and/or Ordinary Share (as the case may be) and upon the terms, conditions, and
provisions, if any, of the offer so accepted by the Majority Investors,
including making the same representations, warranties, covenants, indemnities
and agreements that the Majority Investors agree to make (except that, in the
case of representations, warranties, conditions, covenants, indemnities and
agreements pertaining specifically to the Majority Investors, each such
Management Shareholder shall make the comparable representations, warranties,
covenants, indemnities and agreements and shall agree to comparable conditions,
in each case to the extent applicable and pertaining specifically to itself and
only to itself); provided that all representations, warranties, covenants,
                 --------
indemnities and agreements (other than those referred to in the immediately
preceding exception) shall be made by each Majority Investor and each such

                                                                              10



Management Shareholder severally and not jointly and that any liability of the
Majority Investor and such Management Shareholders thereunder shall be borne by
each of them on a pro rata basis determined according to the number of Shares
sold by each of them. In the event that any such Transfer is structured as a
merger, consolidation or similar business combination, each such Management
Shareholder agrees to vote in favor of the transaction and take all action to
waive any dissenters, appraisal or other similar rights.

                2.6     Rights of First Refusal. (a) If, following the Transfer
                        -----------------------
Restriction Termination Date and prior to an initial Public Offering, a
Management Shareholder (for this purpose, an "Offeree") receives a bona fide
                                              -------
offer to purchase any or all of his or her Shares that are not subject to a
Restricted Share Agreement or which have vested pursuant to the applicable
Restricted Share Agreement (in each case, the "Offer") from a Third Party (the
                                               -----
"Offeror"), which Offer such Management Shareholder wishes to accept and that
 -------
could be consummated without violating the terms of this Agreement, then (i) the
Offeree shall cause the Offer to be reduced to writing and shall notify the
Company in writing of his or her wish to accept the Offer (the "Sale Notice"),
                                                                -----------
(ii) the Company or its designee(s) shall have the right to purchase all (but
not less than all) of such Shares pursuant to this Section 2.6 and (iii) the
Offeree agrees not to sell such Shares prior to the earlier of (a) the 30-day
period set forth in the second succeeding paragraph of this Section 2.6(a) and
(b) the communication to the Offeree of the decision by the Company to not
purchase any or all of such Shares.

                The Sale Notice shall contain an irrevocable offer to sell such
Shares to the Company or its designee(s) in the manner set forth in this Section
2.6(a) at a purchase price equal to the price contained in and otherwise on
substantially the same terms, conditions and other provisions of the Offer and
shall be accompanied by a true and complete written copy of the Offer (which
shall identify the Offeror).

                At any time within 30 days from the date of the receipt by the
Company of the Sale Notice, the Company shall have the option to purchase, or to
arrange for one or more Persons designated by the Company to purchase, all (but
not less than all) of the Shares covered by the Offer either (i) for the same
consideration and on substantially the same terms, conditions and other
provisions as the Offer or (ii) if the Offer includes any consideration other
than cash, then, at the sole option of the Company, at the equivalent all cash
price, determined in good faith by the Board, and otherwise on the same terms,
conditions and other provisions as the Offer. The Company agrees to notify the
Offeree as promptly as practicable of its decision regarding the right of first
refusal set forth in this Section 2.6(a) but, in no event, shall it notify the
Offeree later than the end of such 30-day period.

                (b)  If the option set forth in Section 2.6(a) is exercised
by the Company, the Company (or its designee(s)) shall arrange with the Offeree
a mutually convenient time (not later than ninety (90) days after the date of
the Sale Notice) to consummate such purchase and sale and, at that time, shall
pay to the Offeree cash consideration for the Shares subject to such purchase
and sale, by delivering a certified bank check or checks or by wiring same day
funds upon the instructions of the Offeree in the amount of the purchase price
for such Shares and shall deliver the relevant non-cash consideration, if any,
to the Offeree against delivery to the

                                       11



Company by the Offeree of (i) if the Shares have been issued in certificated
form, certificates representing the Shares being purchased, appropriately
endorsed by the Offeree or (ii) if the Shares have been issued in book-entry
form, instructions regarding the transfer of registration of the Shares being
sold to the Company on the Register.

                (c)  If, at the end of the 30-day period referred to in Section
2.6(a), the Company (or its designee(s)) has not exercised the right of first
refusal in the manner set forth above, the Offeree may, during the next
succeeding 60 Business Days, sell not less than all of the Shares covered by the
Offer to the Offeror at a price and on terms, conditions and other provisions no
less favorable to the Offeree than those contained in the Offer. Promptly after
such sale, (i) the Offeree shall notify the Company of the consummation thereof
and shall furnish such evidence of the completion and time of completion of such
sale and of the terms thereof as may reasonably be requested by the Company and,
thereafter, (ii) the Company shall deliver (A) if the Shares have been issued in
certificated form, new certificates representing the Shares sold to the Offeror
who has purchased such Shares upon delivery of old certificates issued to the
Offeree and representing such Shares or (B) if the Shares have been issued in
book-entry form, notices to the Offeree and the Offeror who has purchased such
Shares of the registration of Transfer of such Shares. If, at the end of the
60-Business Day period referred to in this Section 2.6(c), the Offeree has not
completed the sale of such Shares as aforesaid, all the restrictions on transfer
contained herein shall again be in effect with respect to such Shares.

                2.7  Distributions Upon Initial Public Offering of Designated
                     --------------------------------------------------------
Subsidiaries. Upon any distribution contemplated by Section 2.7 of the Investor
- ------------
Shareholders Agreement where an additional shareholders agreement is entered
into pursuant to Section 2.7, each Management Shareholder shall enter into a
shareholders agreement with the Company having substantially identical terms and
conditions as this Agreement, provided that (i) all references in this Agreement
                              --------
to the Company shall be changed in such additional shareholders agreement to
references to the relevant Designated Subsidiary (as such term is defined in the
Investor Shareholders Agreement) and (ii) all references in this Agreement to
the Investor Shareholders Agreement shall be changed in such additional
shareholders agreement to the applicable additional shareholders agreement
entered into pursuant to the terms of the Investor Shareholders Agreement.

                            ARTICLE III. CALL RIGHTS

                3.1  Call Rights. (a) If the employment with the Company or any
                     -----------
of its Subsidiaries of any Management Shareholder terminates for any reason
(including, without limitation, due to death or disability of such Management
Shareholder) prior to the Lapse Date with respect to such Management
Shareholder, the Company (or its designee(s)) shall have the option to purchase
(the "Call Rights"), and such Management Shareholder shall be required to sell
      -----------
to the Company (or to any such designee(s)), if the Company exercises the Call
Rights, any or all Shares held by such Management Shareholder, at a price per
share equal to the applicable purchase price determined pursuant to Section 3.2
hereof; provided, however, that in the case of a termination of employment
        --------  -------
without Cause, a resignation from employment with Good Reason or the death or
disability of the employee, the Company may exercise its Call Rights only with

                                       12



the approval of one Management Director (as such term is defined in the Investor
Shareholders Agreement).

                (b)  If the Company does not exercise its Call Rights with
respect to such Management Shareholder within 60 days of such Management
Shareholder's termination of employment (other than becasuse of a failure to
obtain the approval of one Management Director as contemplated by the proviso of
Section 3.1(a)), then the Investors and the Tier I Senior Managers shall have
the same Call Rights for a period of 30 days effective immediately upon the
expiration of the 60-day period described in this Section 3.1(b). If more than
one Investor or Tier I Senior Manager exercises its Call Rights with respect to
such Management Shareholder, each such Investor or Tier I Senior Manager shall
have the right to purchase the number of such Shares equal to the product of (i)
the number of Shares subject to such Call Rights and (ii) the quotient of (A)
such Investor's or Tier I Senior Manager's percentage ownership in the Ordinary
Shares and (B) the aggregate percentage ownership in the Ordinary Shares of such
Investor or Tier I Senior Manager and all other Investors and Tier I Senior
Managers exercising such Call Rights; provided, that for purposes of determining
                                      --------
such quotient only Ordinary Shares held by Tier I Senior Managers which are not
subject to a Restricted Share Agreement or with respect to which such Tier I
Senior Managers' interests have fully vested as of the date of the exercise of
such Call Rights, in accordance with the terms of the applicable Restricted
Share Agreements, shall be taken into account.

                (c)  Upon the termination of such Management Shareholder's
employment, the Company shall deliver written notice to such Management
Shareholder within 60 days (if at all) of such termination indicating its
intention to exercise its Call Rights. The Company's decision whether to
exercise its Call Rights in the case of a termination of employment of a
Rollover Management Shareholder without Cause or for Good Reason shall, subject
to the proviso of Section 3.1(a), be determined by the Compensation Committee of
the Board. Any Investor or Tier I Senior Manager exercising its Call Rights
pursuant to Section 3.1(b) hereof shall deliver written notice to such
Management Shareholder of such exercise within 30 days of the expiration of the
60-day period referred to in Section 3.1(b) hereof.

                (d)  Regardless of whether the Company or any of the Investors
or Tier I Senior Managers exercise their respective Call Rights within the
period prescribed by this Section 3.1, if a Management Shareholder continues to
own Shares, then he or she shall continue to be bound by the terms of this
Agreement.

                3.2  Procedures for Exercise of Call Rights. In the event of a
                     --------------------------------------
purchase by the Company, any Investor or any Tier I Senior Manager and the sale
by such Management Shareholder pursuant to Section 3.1 hereof, then the purchase
price shall be:

                (i)  in the case of a termination of or resignation from
         employment for any reason other than as provided in clauses (ii) and
         (iii) below, the Fair Market Value of the Shares to be purchased on the
         date on which notice of exercise of Call Rights is delivered pursuant
         to Section 3.1;

                                       13



                (ii)   in the case of a termination of employment for Cause, the
         lower of (a) the Fair Market Value of the Shares to be purchased on the
         date of termination of employment and (b) the original cost at which
         such Management Shareholder acquired such Shares (provided that the
         original cost of (i) any Ordinary Shares acquired on the date hereof
         shall be deemed to be zero and (ii) any Preferred Shares shall be equal
         to the Liquidation Preference (as defined in the articles of
         association of the Company) in respect thereof); or

                (iii) in the case of a termination of employment of a Rollover
         Management Shareholder (but not Management Shareholders who are not
         Rollover Management Shareholders) without Cause or a resignation from
         employment thereby with Good Reason, the higher of (a) the Fair Market
         Value of the Shares to be purchased on the date on which notice of the
         exercise of the Call Rights is delivered pursuant to Section 3.1 and
         (b) the original cost at which such Management Shareholder acquired
         such Shares (provided that the original cost of (i) any Ordinary Shares
         acquired on the date hereof shall be deemed to be zero and (ii) any
         Preferred Shares shall be equal to the Liquidation Preference (as
         defined in the articles of association of the Company) in respect
         thereof).

                If the Company, any Investor or any Tier I Senior Manager
purchases Shares from a terminated Management Shareholder pursuant to Section
3.1(a) hereof, the purchasing party shall arrange a mutually convenient time
(not later than ninety (90) days after the effective date of the Management
Shareholder's termination of employment) to consummate such purchase and sale
and, at that time, shall pay such Management Shareholder the purchase price
against delivery by such Management Shareholder of (i) if the Shares have been
issued in certificated form, certificates representing such Shares appropriately
endorsed by such Management Shareholder or (ii) if the Shares have been issued
in book-entry form, instructions from the terminated Management Shareholder to
register the Transfer of Shares effected by the exercise of such Call Right on
the Register. The purchase price for such Shares shall be paid by delivering a
certified bank check or checks or by wiring same day funds upon the instruction
of such Management Shareholder. The Company shall deliver to the terminated
Management Shareholder (i) if the Shares to be purchased have been issued in
certificated form, certificates representing the balance of the Shares held by
such Management Shareholder which remain unsold (if any) after the purchase
pursuant to this Section 3.1 and which otherwise have not been forfeited (if
any) or (ii) if such Shares have been issued in book-entry form, notice to the
terminated Management Shareholder of the registration of Transfer of the Shares
sold to the Company or the Investors upon the exercise of the Call Rights of
such party. In the event that the Company or any Investor or Tier I Senior
Manager exercises its Call Rights with repect to any Shares held by any
Management Shareholder that have been vested pursuant to a Restricted Share
Agreement for less than six months (the period from the date of such vesting
until six months after such date, the "Custody Period"), the Company shall hold
                                       --------------
such Shares in custody for the benefit of such Management Shareholder until the
expiration of the Custody Period with respect to such Shares; provided, however,
                                                              --------  -------
that such Management Shareholder shall not have any rights with respect to such
Shares (including, without limitation, any rights to Transfer or vote such
Shares). The purchase and sale of such Shares shall be consummated after the


                                     14



expiration of the Custody Period. Notwithstanding anything to the contrary
contained herein, the Fair Market Value of any Shares to be purchased after the
expiration of any Custody Period shall be determined as of the date of the
consummation of the purchase and sale of Shares. Notwithstanding anything to the
contrary contained herein, in the event of a termination of employment of a
Rollover Management Shareholder without Cause or for Good Reason, the Call
Rights herein provided for will not apply to any Ordinary Shares other than
those issued in respect of the cancellation of equity interests of Seagate
pursuant to the Management Shareholder's Rollover Agreement with the Company
dated November 13, 2000.

                    ARTICLE IV. PIGGYBACK REGISTRATION RIGHTS

                4.1   Piggyback Rights. Each Management Shareholder hereby
                      ----------------
agrees to be bound by all of the terms, conditions and obligations of Article
III (Registration Rights) of the Investor Shareholders Agreement and all other
provisions of the Investor Shareholders Agreement (and any subsequent
shareholder agreements entered into pursuant to Section 2.7 of the Investor
Shareholders Agreement) necessary to give effect to Article III thereof. Subject
to the limitations set forth in this Section 4.1, after both (i) the initial
Public Offering by the Company and (ii) the Investors have sold for value to one
or more Third Parties 15% or more of the number of Ordinary Shares owned in the
aggregate by the Investors on the date hereof (as adjusted for any stock
dividends, combinations, splits and the like with respect to such Ordinary
Shares), each Management Shareholder shall have all of the rights and privileges
of Article III of the Investor Shareholders Agreement (other than Section 3.2),
in each case as if the Management Shareholder were an original party (other than
the Company) thereto.

                4.2   Additional Registration Rights. As soon as practicable
                      ------------------------------
following a Qualified Public Offering, the Company shall use its reasonable best
efforts to register all outstanding options to purchase Shares held by the
Management Shareholders or their Permitted Transferees under one or more
employee option plans of the Company or its Affiliates on a Form S-8
registration statement (or any successor form of registration statement) with
the SEC and shall also, at the time of such registration, use its reasonable
best efforts to register for resale on a Form S-3 reoffer prospectus (or any
successor form of reoffer prospectus) any Shares previously issued to the
Management Shareholders in connection with their rollover equity in the Company
or their employment with the Company and held by such Management Shareholders or
their Permitted Transferees at the time, if and to the extent such reoffer
prospectus is permitted to be filed with the SEC in conjunction with the filing
of the S-8 registration statement. The Company shall use its reasonable best
efforts to keep such reoffer prospectus current and in effect for at least one
year following the expiration of any lock-up or market standoff period imposed
on the Management Shareholders in connection with the Qualified Public Offering.
The foregoing obligations of the Company shall also be binding upon any
successor entity, whether through merger, consolidation or other change in
control or ownership transaction.

                                       15



                   ARTICLE V. REPRESENTATIONS AND WARRANTIES

          5.1   Representations and Warranties of the Management Shareholders.
                -------------------------------------------------------------
Each Management Shareholder, severally and not jointly, represents and warrants
to the Company as follows:

          (a) Authority; Enforceability. Such Management Shareholder has the
              -------------------------
legal capacity and all requisite power and authority to enter into this
Agreement, to perform his or her obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement constitutes a valid and binding
obligation of such Management Shareholder, enforceable against him or her in
accordance with its terms. With respect to any Person who joins and enters into
this Agreement after the date hereof pursuant to the terms of this Agreement,
such Person will be deemed to represent and warrant to the Company, in addition
to the other representations and warranties contained herein, that his or her
joining and entering into this Agreement has been duly authorized and approved
and that this Agreement constitutes a valid and binding obligation of such
Person, enforceable against him or her in accordance with its terms.

          (b) No Conflicts. (i) No filing with, and no permit, authorization,
              ------------
consent or approval of, any Governmental Authority or any other Person is
necessary for the execution of this Agreement by such Management Shareholder and
the consummation by him or her of the transactions contemplated hereby and (ii)
the execution and delivery of this Agreement by such Management Shareholder, the
consummation of the transactions contemplated hereby and the compliance with the
terms hereof by such Management Shareholder will not conflict with, or result in
any violation or default (with or without notice or lapse of time or both) under
any other agreement to which such Management Shareholder is a party, including
any voting agreement, shareholders agreement, voting trust, trust agreement,
pledge agreement, loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise or license,
or violate any judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to such Management Shareholder or to his or her property
or assets. With respect to any Person who joins and enters into this Agreement
after the date hereof pursuant to the terms hereof, such Person will be deemed
to represent and warrant to the Company, in addition to the other
representations and warranties contained herein, that the execution and delivery
of this Agreement by such Person, the consummation of the transactions
contemplated hereby and the compliance with the terms hereof by such Person will
not cause any violation of its certificate of incorporation or by-laws or
analogous organizational documents.

          (c) Ownership, Etc. of Securities. Such Management Shareholder is the
              -----------------------------
beneficial or record owner of the equity interests in Seagate set forth opposite
such Management Shareholder's name on Schedule III hereto. Such Management
Shareholder has good and marketable title to such interests, free and clear of
any encumbrances, agreements, adverse claims, liens or other arrangements with
respect to the ownership thereof.

                                                                              16



          (d) Accredited Investors. Each Tier I Senior Manager represents and
              --------------------
warrants to the Company that he or she is an "accredited investor" as defined
under Regulation D of the Securities Act.

          (e) Access to Information, Etc. Such Management Shareholder represents
              --------------------------
and acknowledges that:

               (i)    he or she has been supplied with, or otherwise has had
          access to, adequate information and the opportunity to ask questions
          of representatives of the Company in order to make his or her own
          independent decision to retain or acquire the Shares in connection
          with this Agreement;

               (ii)   the Shares may be required to be held indefinitely and the
          Management Shareholder must continue to bear the economic risk of the
          retention of the Ordinary Shares unless the offer and sale of such
          Shares is subsequently registered under the Securities Act and all
          applicable state securities laws or an exemption or exception from
          such registration is available and the Management Shareholder
          otherwise complies with the terms of this Agreement;

               (iii)  there is no market for the Shares and it is not
          anticipated that there will be any public market for the Shares;

               (iv)   Rule 144 promulgated under the Securities Act is not
          presently available with respect to the sale of any securities of the
          Company (including the Shares), and the Company has made no agreement
          or covenant to make such rule available;

               (v)    when and if Shares may be Transferred without registration
          under the Securities Act in reliance on Rule 144, such Transfer can be
          made only in limited amounts in accordance with the terms and
          conditions of such Rule;

               (vi)   if the exemption provided under Rule 144 is not available,
          the public offer or sale of Shares without registration will require
          compliance with some other exemption or exception under the Securities
          Act and applicable state securities laws;

               (vii)  if any of the Shares are at any time Transferred in
          accordance with Rule 144, the Management Shareholder will deliver to
          the Company at or prior to the time of such Transfer an executed Form
          144 (if required by Rule 144) and such other documentation as the
          Company may reasonably require in connection with such sale;

               (viii) a restrictive legend in the form heretofore set forth in
          Section 2.1(c) hereof shall be placed on the certificates representing
          Shares, if such Shares have been issued in certificated form;

                                                                              17



               (ix)   a notation shall be made in the appropriate records of the
          Company indicating that the Shares are subject to restrictions on
          transfer and, if the Company should at some time in the future engage
          the services of a securities transfer agent, appropriate stop-transfer
          instructions will be issued to such transfer agent with respect to the
          Shares;

               (x)    the Management Shareholder's financial situation is such
          that he or she can afford to bear the economic risk of holding the
          Shares for an indefinite period of time, has adequate means for
          providing for his or her current needs and personal contingencies, and
          can afford to suffer a complete loss of his or her retention of the
          Shares;

               (xi)   the Management Shareholder's knowledge and experience in
          financial and business matters are such that he or she is capable of
          evaluating the merits and risks of owning the Shares;

               (xii)  the Management Shareholder understands that the Shares are
          securities which involve a high degree of risk (including the risk of
          total loss), there are substantial restrictions on the transferability
          of the Shares, and on the Closing Date and for an indefinite period
          following the Closing Date, there will be no public market for the
          Shares and accordingly it may not be possible for the Management
          Shareholder to liquidate his or her Shares, including in case of
          emergency, if at all;

               (xiii) the Management Shareholder understands and has taken
          cognizance of all the risk factors related to the purchase of the
          Shares, and no representations or warranties have been made to the
          Management Shareholder or his or her representatives concerning the
          Shares, these risks, the Company or any of its Subsidiaries or their
          prospects or other related matters;

               (xiv)  in making his or her election to retain or acquire Shares,
          the Management Shareholder has relied upon independent investigations
          made by him or her and, to the extent believed by the Management
          Shareholder to be appropriate, his or her representatives, including
          his or her own professional, legal, financial, tax and other advisors;
          and

               (xv)   he or she has elected to retain or acquire Shares solely
          for investment purposes for his or her own account and not as a
          nominee or agent for any other person and not with a view to, or for
          resale in connection with, the distribution or other disposition
          thereof; provided that this last representation does not prejudice the
                   --------
          right of any Management Shareholder to Transfer Shares in compliance
          with the terms of this Agreement, the Securities Act and applicable
          state securities laws.

                                                                              18



          5.2   Representations and Warranties of the Company. The Company
                ---------------------------------------------
represents and warrants to each Management Shareholder as follows:

          (a)  Authority. It is duly incorporated, validly existing and in good
               ---------
standing as an exempted company under the laws of the Cayman Islands. It has all
requisite limited liability company power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by it and constitutes its valid
and binding obligations, enforceable against it in accordance with its terms.

          (b)  No Conflicts; Enforceability. (i) No filing with, and no permit,
               ----------------------------
authorization, consent or approval of, any Governmental Authority or any other
person is necessary for the execution of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby, and (ii) the
execution and delivery of this Agreement by the Company, the consummation by it
of the transactions contemplated hereby and its compliance with the terms hereof
will not conflict with, or result in any violation of, or default (with or
without notice or lapse of time or both) under any provision of, its memorandum
and articles of association or any other agreement to which it is a party,
including any voting agreement, shareholders agreement, voting trust, trust
agreement, pledge agreement, loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license, or violate any judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to the Company or to its property and
assets.

                            ARTICLE VI. TAX MATTERS

          6.1  Tax Matters. Each Management Shareholder hereby agrees to be
               -----------
bound by all of the terms, conditions, and obligations of Article VI (Tax
Matters) of the Investor Shareholders Agreement and all other provisions of the
Investor Shareholders Agreement necessary to give effect to Article VI thereof.

          6.2  Section 83(b) Election. Promptly after the date of this
               ----------------------
Agreement, each Management Shareholder shall, with respect to the Shares held by
such Management Shareholder, make a timely election under Section 83(b) of the
Code, in accordance with the applicable regulations promulgated thereunder.

          6.3  Income Tax Information. The Company agrees to prepare and send,
               ----------------------
or cause to be prepared and sent, to the Management Shareholders such
information as may reasonably be required for applicable income tax reporting
purposes.

                           ARTICLE VII. MISCELLANEOUS

          7.1  Additional Shares Subject to Agreement. Each Management
               --------------------------------------
Shareholder agrees that any shares of the Company that he or she shall hereafter
acquire by any means of a stock split, stock dividend, distribution, exercise of
options or otherwise (other than pursuant to a Public Offering) shall be subject
to the provisions of this Agreement to the same extent as if held

                                                                              19



as of the Closing Date and such Management Shareholder shall as promptly as
practicable notify the Company of the terms of such acquisition or receipt,
including the number of shares acquired, their price and the other terms and
provisions of the acquisition, including the Person from whom they were
acquired.

          7.2  Joinder. After the Closing Date, employees of the Company may
               -------
from time to time acquire Shares and may be required in connection with such
acquisition, to enter into this agreement with the Company as a Management
Shareholder. Any such employee shall become a party to this Agreement by
executing and delivering to the company a Joinder Agreement in substantially the
form attached hereto as Exhibit B. Each such executed definitive Joinder
Agreement shall become effective as between such employee and the Company upon
its execution and delivery by such employee to the Company and its agreement and
acknowledgment by the Company, and it shall not require the execution or consent
of any other party hereto.

          7.3  Termination. Other than as specified below, the provisions of
               -----------
this Agreement will terminate and be of no further force and effect upon the
date on which at least 50% of the number of issued and outstanding Ordinary
Shares are listed on, or being actively traded on a national securities exchange
or interdealer quotation system. Notwithstanding the foregoing, Section 4.1 of
this Agreement shall survive the termination of this Agreement until such time
as all Registrable Securities (as defined in the Investor Shareholders
Agreement) held by the Management Shareholders cease to be Registrable
Securities.

          7.4  Notices. (a) if to the Company:
               -------

               New SAC
               c/o Silver Lake Partners, L.P.
               2725 Sand Hill Road
               Building C, Suite 150
               Menlo Park, CA  94025
               Attention:  David Roux
               Telecopy:  (650) 233-8125
          with copies to:

               Simpson Thacher & Bartlett
               425 Lexington Avenue
               New York, NY  10017
               Attention:  William E. Curbow, Esq.
               Telecopy:  (212) 455-2502
          -and-

               Cleary, Gottlieb, Steen & Hamilton
               One Liberty Plaza
               New York, NY  10006
               Attention:  Paul J. Shim, Esq.

                                                                              20



               Telecopy: (212) 225-3999

          (b) if to a Management Shareholder, to him or her at his or her
address or facsimile number set forth in the books and records of the Company.

          7.5   Further Assurances. The parties hereto will sign such further
                ------------------
documents, cause such meetings to be held, resolutions passed, exercise their
votes and do and perform and cause to be done such further acts and things as
may be necessary in order to give full effect to this Agreement and every
provision hereof.

          7.6   Effective Time of Agreement. This Agreement shall become
                ---------------------------
effective, with respect to each Management Shareholder, and enforceable against
such Management Shareholder, upon execution of this Agreement by the Company and
such Management Shareholder, without regard to execution by any other Management
Shareholder.

          7.7   Assignment. The provisions of this Agreement shall be binding
                ----------
upon and shall inure to the benefit of the parties hereto and their Permitted
Transferees and their respective successors and permitted assigns. Except as
specifically provided herein, this Agreement may not be assigned by any party
hereto without the express prior written consent of the Investors, and any
attempted assignment, without such consents, will be null and void.

          7.8   Amendments; Waivers. This Agreement may be amended only by a
                -------------------
written instrument signed by (a) the Company and (b) the Management Shareholders
or their Permitted Transferees who own on a fully diluted basis Ordinary Shares
representing at least a majority of the voting power represented by all Ordinary
Shares owned by Management Shareholders which are outstanding on a fully diluted
basis; provided, however, that this Agreement may be amended, solely with
respect to any Management Shareholder, by a written instrument executed by the
Company and such Management Shareholder. No waiver by any party of any of the
provisions hereof will be effective unless explicitly set forth in writing and
executed by the party so waiving. Except as provided in the preceding sentence,
no action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, will be deemed to constitute a
waiver by the party taking such action of compliance with any covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach.

          7.9   Third Parties. This Agreement does not create any rights, claims
                -------------
or benefits inuring to any person that is not a party hereto nor create or
establish any third party beneficiary hereto, provided that the Investors may
rely on and enforce the representations, warranties, covenants and agreements of
the Management Shareholders contained herein.

          7.10  Governing Law. This Agreement will be governed by, and construed
                -------------
in accordance with, the laws of the State of New York.

                                                                              21



          7.11  Jurisdiction. Any action to enforce, which arises out of or in
                ------------
any way relates to, any of the provisions of this Agreement may be brought and
prosecuted in such court or courts located within the State of New York as
provided by law; and the parties consent to the jurisdiction of such court or
courts located within the State of New York and to service of process by
registered mail, return receipt requested, or by any other manner provided by
the law of such applicable jurisdiction.

          7.12  Injunctive Relief. The Management Shareholders acknowledge and
                -----------------
agree that a violation of any of the terms of this Agreement will cause the
Company and the Investors irreparable injury for which adequate remedy at law is
not available. Accordingly, it is agreed that each of the Company and the
Investors shall be entitled to an injunction, restraining order or other
equitable relief to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States or any state thereof, in addition to any other
remedy to which they may be entitled at law or equity.

          7.13  Entire Agreement. This Agreement contains the entire
                ----------------
understanding of the parties with respect to the subject matter hereof.

          7.14  Titles and Headings. The section headings contained in this
                -------------------
Agreement are for reference purposes only and will not affect the meaning or
interpretation of this Agreement.

          7.15  Severability. If any provision of this Agreement is declared by
                ------------
any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement will not be affected and will remain in full
force and effect.

          7.16  Counterparts. This Agreement may be executed in any number of
                ------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

          7.17  Costs. Each of the parties hereto agree that each of them will
                -----
bear his or her own costs which arise from this Agreement.

          7.18  Other Shareholders' Agreements. None of the Management
                ------------------------------
Shareholders shall enter into any shareholder agreement or other arrangement of
any kind with any Person with respect to any Shares which is inconsistent with
the provisions of this Agreement or which may impair its ability to comply with
this Agreement.

                                                                              22



          IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.

                                             NEW SAC

                                             By:  /s/ William L. Hudson
                                                 ------------------------------
                                                 Name:  William L. Hudson
                                                 Title: Senior Vice President,
                                                        General Counsel
                                                        and Secretary


                                             MANAGEMENT SHAREHOLDER:

                                             -----------------------------------
                                                 Name:



                                                                      SCHEDULE I

                             LIST OF SENIOR MANAGERS



                                                                     SCHEDULE II

                         LIST OF TIER I SENIOR MANAGERS



                                                                    SCHEDULE III

                       HOLDINGS OF MANAGEMENT SHAREHOLDERS

     --------------------------------------------------------------------
              NAME OF MANAGEMENT             NUMBER OF SHARES OF
                 SHAREHOLDER                     COMMON STOCK
     --------------------------------------------------------------------

     --------------------------------------------------------------------

     --------------------------------------------------------------------

     --------------------------------------------------------------------

     --------------------------------------------------------------------

     --------------------------------------------------------------------

     --------------------------------------------------------------------



                                                                       EXHIBIT A

                          FORM OF ASSUMPTION AGREEMENT

                                                             [DATE]

To the parties to the
  Management Shareholders Agreement
  referred to below

Ladies and Gentlemen:

          Reference is made to the Management Shareholders Agreement dated as of
November 22, 2000 (as the same be amended, supplemented or otherwise modified
from time to time, the "Management Shareholders Agreement") among New SAC and
the Management Shareholders party thereto. This is an Assumption Agreement
referred to in the Management Shareholders Agreement. Capitalized terms used but
not defined herein have the meanings given such terms in the Management
Shareholders Agreement.

          The undersigned (the "Transferee") is a proposed transferee of Shares
currently held by [TRANSFEROR NAME] (the "Transferor"), and has received a copy
of the Management Shareholders Agreement as currently in effect. In connection
with the proposed transfer of Shares to the Transferee, the Transferee hereby
assumes, and agrees to be bound to the same extent as the Transferor by, the
Management Shareholders Agreement with respect to such Shares. From and after
the execution and delivery hereof and the consummation of the transfer of such
Shares to the Transferee, the Transferee understands that it shall be deemed to
be a party to the Management Shareholders Agreement as a Transferee of the
Transferor, subject to the limitation on certain rights as provided in Section
2.4 of the Management Shareholders Agreement.

                                             Very truly yours,

                                             [TRANSFEREE NAME]



                                             By______________________
                                               Name:
                                               Title:



                                                                       EXHIBIT B

                            FORM OF JOINDER AGREEMENT

          Pursuant to the Management Shareholders' Agreement dated as of
November 22, 2000 (the "Shareholders' Agreement") among New SAC and the
                        -----------------------
Management Shareholders party thereto, the undersigned hereby agrees that,
having acquired Shares, the undersigned has, by the terms of the Management
Shareholders' Agreement, become bound by the terms and other provisions of the
Management Shareholders' Agreement with all attendant rights, duties and
obligations thereof and, pursuant to Section 2.4 and/or Section 7.2 of the
Management Shareholders' Agreement and by this Joinder Agreement, hereby joins
and enters into the Management Shareholders' Agreement. This is a Joinder
Agreement referred to in the Management Shareholders' Agreement. Capitalized
terms used but not defined in this Joinder shall have the meaning assigned to
them in the Management Shareholders' Agreement.

          Listed below is information regarding the Shares of the undersigned:

Number of Ordinary Shares:  ________
- -------------------------

Number of Preferred Shares: ________
- --------------------------

          IN WITNESS WHEREOF, the undersigned has executed this Joinder as of
the date written below.

[NAME]

Name:
Title:
Date:                    , 2000
Acknowledged by:

NEW SAC

By:  ___________________________
     Name:
     Title:
Date:

EX-10.12

                                                                    Ehibit 10.12

                                   DISC DRIVE
                            RESEARCH AND DEVELOPMENT
                             COST SHARING AGREEMENT

         Effective for the period June 29, 1996 through June 27, 1997, and
subsequent fiscal years, SEAGATE TECHNOLOGY, INC., a U.S. corporation with its
principal business office at 920 Disc Drive, Scotts Valley, California
95067-0360 (hereinafter referred to as STUS), SEAGATE TECHNOLOGY INTERNATIONAL,
a Cayman Islands corporation with its registered office at Ugland House, South
Church Street, Georgetown, Grand Cayman, Cayman Islands, B.W.I. (hereinafter
referred to as STIC), SEAGATE TECHNOLOGY (IRELAND), a Cayman Islands corporation
with its registered office at Ugland House, South Church Street, Georgetown,
Grand Cayman, Cayman Islands, B.W.I.(hereinafter referred to as STIR), SEAGATE
TECHNOLOGY (CLONMEL), a Cayman Islands corporation with its registered office at
Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman Islands,
B.W.I. (hereinafter referred to as STCL), SEAGATE TECHNOLOGY INTERNATIONAL
(WUXI) CO. LTD., a China corporation with its principal business office at Lot
106, Xing Chuanger Lu, Wuxi-Singapore Industrial Park, Wuxi, Jiangsu, P.R.C.
214028 (hereinafter referred to as STWX), SEAGATE MICROELECTRONICS LIMITED, a
Scotland corporation with its principal business office at MacIntosh Road,
Kirkton Campus, Livingston EH54 7BW, Scotland (hereinafter referred to as SME),
and SEAGATE PERIPHERALS, INC., a U.S. corporation with its principal business
office at 3081 Zanker Road, San Jose, California 95134-2128 (hereinafter
referred to as SPI) (the foregoing sometimes referred to herein individually as
a "Participant" and collectively as the "Participants") agree as follows:

         WHEREAS the competition in the disc drive and disc drive components
industry continues to escalate at a rapid pace;

         WHEREAS to remain competitive, the Participants must make substantial
investments each year to improve and develop (1) products, including components,
and (2) manufacturing processes;

         WHEREAS the rapid pace of technological advancement in the disc drive
and disc drive components industry dictates that technological developments
generally have a useful life of three years or less;

         WHEREAS the Participants agree that a joint effort is absolutely
necessary to minimize duplication of effort, reduce overall R&D costs and
expenditures, and develop new applications and businesses;

         WHEREAS STUS, STIC, STIR, STCL, and STWX have entered into a Research
and Development Cost Sharing Agreement and Subgroup Cost Sharing Agreement (the
"1995 Cost Sharing Agreements") effective as of July 1, 1995 whereby each party
pooled its resources for the purpose of conducting research and development in
the field of disc drives and disc drive components, and shared the risks and
costs of such research and development activity on the



                                                                               2

basis of the relative benefits the parties anticipated each would receive from
the exploitation of intangible property received therefrom;

         WHEREAS STUS and SME have entered into a Research and Development
Agreement effective as of July 1, 1990 (the " 1990 Research & Development
Agreement"), whereby SME agreed to perform ongoing research, development and
engineering work relating to integrated circuit semiconductor devices for disc
drive printed circuit boards and that the technology would be co-owned by STUS
and its affiliates pursuant to their cost-sharing agreement;

         WHEREAS on February 2, 1996, STUS completed the acquisition of SPI and
its subsidiaries in a transaction accounted for as a pooling of interests and,
as a result thereof, the Participants desire to include SPI and certain of its
affiliates in the joint R&D effort contemplated herein;

         WHEREAS the Participants have agreed to modify the 1995 Cost Sharing
Agreements and the 1990 Research & Development Agreement according to the terms
and conditions memorialized in that certain memorandum of June 28, 1996
("Memorandum") and intend that this Disc Drive Research and Development Cost
Sharing Agreement (the " Agreement") reflect the terms and conditions described
in the Memorandum;

         WHEREAS STUS, STIC, STIR, STCL, STWX, and SME intend that this
Agreement shall terminate and supersede the 1995 Cost Sharing Agreements and the
1990 Research & Development Agreement; and

         WHEREAS the Participants intend that each Participant will have certain
rights to use and exploit such intangible property in their respective
territories, as such territories are assigned pursuant to this Agreement, but
that legal title to such property will be held in the name of STUS solely for
purposes of protecting each Participant's intellectual property rights;

         NOW, THEREFORE, IT IS HEREBY AGREED: That in view of the foregoing
objectives a cost sharing agreement among the Participants is necessary and, in
accord with certain legal and tax requirements, shall be entered into under the
regulations promulgated under Section 482 of the Internal Revenue Code of the
USA with terms and conditions as follows:

SECTION I - DESCRIPTION OF R&D

1.1      The term "R&D" shall include all research and development activities
         performed by the Participants after the effective date of this
         Agreement concerning disc drives and components and their manufacture,
         including but not limited to (i) basic research, (ii) product-specific
         and component-specific development, (iii) creation of improvements,
         adaptations, or other modifications to existing products and
         components, and (iv) design or improvement of manufacturing processes
         and process technology, but shall exclude all research and development
         activity concerning software designed and manufactured for sale to
         third parties by Seagate Software, Inc. and its affiliates and all
         research and development activities in the area of tape drives and tape
         drive manufacturing.

1.2      R&D shall include all R&D relating to Developed Intangible Property.



                                                                               3

1.3      R&D shall include any acquisition of Developed Intangible Property by
         purchase, license, services agreement, or otherwise. In that case, the
         amount paid to acquire the Developed Intangible Property will be
         treated as R&D Expenditures of the party incurring the expense in the
         accounting period in which the expense is paid.

1.4      R&D may be performed at any Participant location.

1.5      The Participants shall each year identify those costs and expenditures
         relating to R&D as defined in this Section I in accordance with the
         definition of R&D Expenditures set forth in subparagraph 2.2(A) below.
         In making such identification the Participants shall review R&D,
         engineering, quality control and any other relevant departments to
         identify the pool of R&D costs to be shared without regard to the
         potential success or failure of such R&D.

SECTION II - COST SHARING

2.1      The Participants have determined that the relative amounts of their
         Adjusted Income Before Tax, as determined under subparagraph 2.2(F)
         below, is the most reliable basis upon which to measure each
         Participant's anticipated benefits to be derived from the Developed
         Intangible Property.

2.2      DEFINITIONS

         (A)   "R&D Expenditures" shall mean costs associated with R&D
               activities as defined in Section I above including, but not
               limited to, the following costs incurred by a Participant
               pursuant to this Agreement:

               (i)    Direct costs as determined under U.S. generally accepted
                      accounting principles ("GAAP");

               (ii)   Indirect costs incurred by supporting cost centers
                      properly allocable to the R&D activities;

               (iii)  Amounts properly chargeable to a Participant by a Related
                      Party in connection with the R&D activities;

               (iv)   Amounts paid by any Participant for the acquisition, by
                      purchase, license, development, services agreement, or
                      otherwise, of Developed Intangible Property.

         (B)   "Related Party" shall mean any legal entity owned or controlled,
               directly or indirectly, by, or under common control with the
               Participants. For purposes of this Agreement, control shall mean
               the ownership of more than fifty percent (50%) of the voting
               interests in any legal entity.

         (C)   "Participant Specific R&D Expenditures" shall mean R&D
               Expenditures with respect to any development specifically
               identified in writing prior to the period in which such R&D
               Expenditures are incurred and determined to have potential
               benefits solely for one Participant.

         (D)   "Allocable R&D Expenditures" shall mean the total R&D
               Expenditures of all Participants less the sum of any Participant
               Specific R&D Expenditures and each Participant's Minimum Payment.



                                                                               4

         (E)   "Cost Share" of a Participant shall mean the sum of (i) the
               Participant's Participant Specific R&D Expenditures, (ii) the
               Participant's Minimum Payment, and (iii) the portion of the
               Allocable R&D Expenditures allocated to the Participant under
               paragraph 2.3 below.

         (F)   "Adjusted Income Before Tax" shall mean income before taxes
               calculated according to GAAP, but without regard to the following
               items:

               (i)    R&D Expenditures,

               (ii)   Royalties or other consideration received for the transfer
                      to a Related Party of any Developed Intangible Property,

               (iii)  Restructuring costs as defined by GAAP,

               (iv)   Interest income and interest expense, whether or not
                      identified as such for financial accounting purposes,

               (v)    Extraordinary income and expense items as defined by GAAP,
                      and

               (vi)   Amortization of research and development costs as defined
                      by GAAP.

         (G)   "Base Period Income" of a Participant shall mean the sum of such
               Participant's Adjusted Income Before Tax for the three prior
               fiscal years. If any Participant experiences annual losses during
               any or all of the first three years of its operations, such loss
               years will be disregarded for purposes of determining such
               Participant's Base Period Income.

         (H)   "Cost Share Ratio" of a Participant shall mean, with respect only
               to Participants having a positive Base Period Income, such
               Participant's Base Period Income over the sum of the Base Period
               Incomes of all Participants having positive Base Period Incomes.
               Cost Share Ratios shall be redetermined each fiscal year.

         (I)   "Minimum Payment" shall mean the sum of U.S. $1,000,000.00.

         (J)   "Developed Intangible Property" shall mean intangible property as
               described in paragraph 3.1 below.


2.3      ALLOCATION OF R&D EXPENDITURES

         (A)   Except as otherwise provided in this subparagraph (A), each
               Participant shall be required annually to pay the Minimum
               Payment. For the first year in which a company becomes a
               Participant under this Agreement, unless special circumstances
               indicate otherwise, the Minimum Payment shall be prorated
               according to the number of days in the fiscal year that the
               company is a Participant. Likewise, for the year in which a
               Participant ceases to be a Participant under this Agreement prior
               to the end of a fiscal year, unless special circumstances
               indicate otherwise, the Minimum Payment shall be prorated
               according to the number of days in the fiscal year that the
               Participant was a Participant.



                                                                               5

         (B)   In addition to the Minimum Payment specified in subparagraph (A)
               above, each Participant shall be required annually to pay the
               Participant Specific R&D Expenditures reasonably allocated to it.

         (C)   In addition to the amounts specified in subparagraphs (A) and (B)
               above, each Participant shall be required annually to pay the
               amount determined by multiplying such Participant's Cost Share
               Ratio times the Allocable R&D Expenditures. In connection with
               determining the amounts payable under this subparagraph (C), each
               year STUS shall calculate such amounts in the manner described
               below and report them to each Participant:

               (i)    Calculate the total R&D Expenditures of all Participants.

               (ii)   Deduct the Minimum Payment of each Participant from the
                      total R&D Expenditures under clause (i) above.

               (iii)  Deduct the Participant Specific R&D Expenditures of each
                      Participant from the total R&D Expenditures under clause
                      (i) above.

               (iv)   The sum of clauses (i), (ii) and (iii) represents the
                      Allocable R&D Expenditures.

               (v)    Calculate a Cost Share Ratio for the Participants with
                      positive Base Period Incomes.

               (vi)   Multiply each Participant's Cost Share Ratio by the
                      Allocable R&D Expenditures.

2.4      If it is determined that the identification of R&D Expenditures under
         Section I above or of the Participants' respective Cost Shares was
         incorrect due to the presence of mechanical or mathematical errors or
         the development of new data which, when used, changes the results of
         such identifications, STUS shall make adjustments as necessary to
         correct the errors in the next periodic calculation and allocation of
         R&D Expenditures following confirmation of the discrepancy.

2.5      Until the Participants agree to modify the methodology used for
         determining each Participant's Cost Share, such methodology shall
         remain in effect.

SECTION III - PROPERTY RIGHTS OF PARTICIPANTS TO INTANGIBLES

3.1      IN GENERAL

         While the Participants recognize that R&D Expenditures will not always
         result in marketable products, including components, or usable process
         technology, the rights to the following intangible property:

         (A)   Patents, formulas, designs, drawings, patterns, processes,
               inventions, know-how relating to manufacturing and processing or
               similar property; or

         (B)   Trade names, trademarks, copyrights, photographs, sales aids or
               similar property,

         developed or acquired by one or more Participants pursuant to this
         Agreement shall be used as defined in paragraphs 3.2 and 3.3
         below.



                                                                               6

3.2      GEOGRAPHICAL RIGHTS - MANUFACTURE AND USE

         Except to the extent that STUS and STIC have agreed in this Agreement
         to grant part of their rights in the Developed Intangible Property to
         certain Related Parties, STUS and STIC shall have exclusive rights
         within their respective territories in such Developed Intangible
         Property as set forth in subparagraphs (A) and (B) below.

         (A)   STUS has the exclusive "right to manufacture" any product,
               including components, developed under this Agreement and the
               exclusive "right to use" any intangible property described in
               subparagraph 3.1 (A) above in its geographical area of influence,
               i.e., the United States of America.

         (B)   STIC has the exclusive "right to manufacture" any product,
               including components, developed under this Agreement and the
               exclusive "right to use" any intangible property described in
               subparagraph 3.1(A) above in its geographical area of influence,
               i.e., Southeast Asia, the Indian Subcontinent and the China
               Basin, including Australia and New Zealand.

         (C)   STUS and STIC have the nonexclusive "right to manufacture" any
               product, including components, developed under this Agreement and
               the nonexclusive "right to use" any intangible property described
               in paragraph 3.1(A) above in areas other than those described in
               subparagraphs 3.2(A) and 3.2(B).

         (D)   SPI has the nonexclusive "right to manufacture" any product,
               including components, developed under this Agreement and the
               nonexclusive "right to use" any intangible property described in
               subparagraph 3.1(A) above everywhere except those areas described
               in subparagraph 3.2(B).

         (E)   STIR has the nonexclusive "right to manufacture" any product,
               including components, developed under this Agreement and the
               nonexclusive "right to use" any intangible property described in
               subparagraph 3.1(A) above in the United Kingdom.

         (F)   STCL has the nonexclusive "right to manufacture" any product,
               including components, developed under this Agreement and the
               nonexclusive "right to use" any intangible property described in
               subparagraph 3.1 (A) above in Ireland.

         (G)   STWX has the nonexclusive "right to manufacture" any product,
               including components, developed under this Agreement and the
               nonexclusive "right to use" any intangible property described in
               subparagraph 3.1 (A) above in China.

         (H)   SME has the nonexclusive "right to manufacture" any product,
               including components, developed under this Agreement and the
               nonexclusive "right to use" any intangible property described in
               subparagraph 3.1(A) above in the United Kingdom.

3.3      GEOGRAPHICAL RIGHTS - SALES AND MARKETING



                                                                               7

         (A)   The Participants shall have the "right to sell and market" all
               products, including components, manufactured by each Participant
               under paragraph 3.2 above and the "right to use" the intangible
               property described in subparagraph 3.1(B) above worldwide without
               restriction or limitation.

         (B)   The "right to sell and market" includes the right to sell to
               controlled, affiliated or related entities worldwide without
               restriction or limitation.

3.4      MANUFACTURING OR PURCHASE OF COMPONENTS

         Notwithstanding anything to the contrary in this Section III, each
         Participant shall have the perpetual and nonexclusive right to contract
         for the manufacture or purchase of any component parts of disc drives
         or of other computer peripheral equipment in any jurisdiction.

3.5      INTANGIBLE PROPERTY ACQUIRED PRIOR TO THE EFFECTIVE DATE OF THIS
         AGREEMENT

         To the extent that a Participant is permitted to use intangible
         property similar to that described in paragraph 3.1 above that was
         developed prior to the time the Participant acquired rights to such
         intangible property through participation in this or any other
         agreement, the Participant's right to use such property shall be dealt
         with in a separate agreement that may involve a license, a capital
         contribution or any other appropriate transfer device.

3.6      TRANSFERS TO RELATED PARTIES

         (A)   Any Participant may, without the consent of any other
               Participant, transfer all or any portion of its rights and
               interests as described in paragraphs 3.2 and 3.3 above to one or
               more Related Parties by license, contribution to capital, or
               other appropriate transfer device. Specifically, the Participants
               acknowledge that STIC's Cost Share will be calculated with
               reference to the rights for Malaysia and Thailand, and that STIC
               intends to make such rights available to its subsidiaries: Penang
               Seagate Industries (M) Sdn. Bhd., Perai Seagate Storage Products
               Sdn. Bhd., and Seagate Technology (Thailand) Limited (hereinafter
               collectively referred to as the "Subsidiaries"). STIC intends to
               seek compensation for the applicable payments of Cost Share
               relating to the rights made available to the Subsidiaries, and it
               is understood that such compensation may be made through cash
               payment or the issuance of shares to STIC, or through any other
               appropriate means. Accordingly, STIC will treat payments of Cost
               Share relating to such Malaysian and Thailand rights as neither
               an expense nor a reduction in its earnings and profits. The
               Minimum Payments and Base Period Incomes otherwise attributable
               to the Subsidiaries will be included with the Minimum Payment and
               Base Period Income of STIC for purposes of determining STIC's
               Cost Share.

         (B)   Notwithstanding any other provisions of this paragraph 3.6, STUS
               may, from time to time and by agreement with STIC and the
               Subsidiaries, receive cash payments



                                                                               8

               directly or indirectly from the Subsidiaries with respect to the
               portion of the Cost Share payable by STIC relating to rights in
               Malaysia and Thailand.

3.7      RIGHTS TO MODIFY OR ADAPT

         All Participants shall have the right to modify, translate, localize,
         improve, and adapt the Developed Intangible Property pursuant to this
         Agreement.

3.8      LEGAL TITLE TO PROPERTY

         Notwithstanding anything in this Agreement to the contrary, the
         Participants agree that legal title to the Developed Intangible
         Property should rest with one Participant solely in order to most
         effectively protect the Developed Intangible Property by making it
         easier to prosecute claims against infringers, and agree that STUS
         shall remain the sole owner of the legal title to the Developed
         Intangible Property.

3.9      LICENSE OF DEVELOPED INTANGIBLE PROPERTY

         Notwithstanding the allocation of rights in this Section III, subject
         to the consent of all the Participants, STUS shall have the sole right
         to license Developed Intangible Property to any person not a Related
         Party. Any such license shall grant nonexclusive rights only. Such
         amounts received by STUS shall reduce the Allocable R&D Expenditures
         for the fiscal year in which such amounts are accrued.

3.10     DISCLOSURE

         (A)   The Participants are not to disclose any proprietary information
               to third parties, other than to Related Parties, without the
               written consent of STUS and STIC. Pursuant to this Section III,
               the Participants agree that no written consent is required for a
               contribution or assignment of rights to a Related Party, or any
               license to, contract manufacturing relationship with, or similar
               transaction with a Related Party. A Participant's nondisclosure
               obligation under this paragraph 3.10 shall not apply if, and to
               the extent that, such information (i) passes into the public
               domain through no fault of the Participant; (ii) is disclosed to
               the Participant by a third party that is under no obligation of
               nondisclosure to the Participant; or (iii) is required to be
               disclosed under the laws, regulations or orders of the United
               States or any other country.

         (B)   During the term of this Agreement, the Participants agree to and
               shall make available to each other all Developed Intangible
               Property for the purpose of enabling each of the other
               Participants to undertake and continue their respective
               participation in this Agreement and to manufacture and market
               products. Developed Intangible Property may be furnished in
               documentary and/or consultative form at such time and in such
               manner as may be mutually convenient to the Participants hereto.

         (C)   Making available Developed Intangible Property under this
               paragraph 3.10 shall not constitute any release or waiver of
               rights of a Participant in its Developed



                                                                               9

               Intangible Property. To the extent required or appropriate to
               establish ownership of Developed Intangible Property in
               accordance with paragraphs 3.1 through 3.9 above, documents and
               instruments of conveyance respecting such Developed Intangible
               Property shall be executed and exchanged among the Participants.
               The absence of a written document shall not limit the rights of
               the Participants to such Developed Intangible Property.

         (D)   The Participants shall take reasonable precautions to maintain
               the secret and confidential nature of any Developed Intangible
               Property made available to each of them hereunder, including the
               maintenance of agreements executed by their employees to whom
               disclosure thereof may be made containing appropriate
               undertakings to maintain the confidential and proprietary nature
               thereof, as may be necessary or appropriate to protect the rights
               and interest of the Participants in such Developed Intangible
               Property. This subparagraph 3. 10(D) shall survive termination of
               this Agreement, regardless of the reason for such termination.

         (E)   The provisions of this paragraph 3.10 shall not imply or be
               construed as limiting the rights of any Participant in and to
               intangible property which has been developed or acquired by such
               Participant prior to the effective date of this Agreement.

3.11     ADDITIONAL PARTICIPANTS

         (A)   The Participants agree that other parties can be admitted and
               participate in this Agreement under the terms and conditions
               hereof.

         (B)   Any such additional Participant shall only receive rights,
               however described by separate agreement or modification to this
               Agreement, to use Developed Intangible Property that is developed
               after the date on which such additional Participant is admitted.

SECTION IV - PAYMENT

4.1      Each Participant having a positive Base Period Income shall accrue an
         estimated monthly Cost Share amount determined by multiplying such
         Participant's Cost Share Ratio times the R&D Expenditures for the prior
         fiscal year, and dividing by twelve. Each Participant having a negative
         Base Period Income shall accrue a monthly Cost Share amount equal to
         one-twelfth of the Minimum Payment. Such monthly Cost Share amounts
         shall be paid, in U.S. dollars, debt instrument, property, or other
         valuable consideration within 90 days after month end, but subject to
         the terms of paragraphs 4.2 through 4.9 below.

4.2      The amount payable by each Participant under paragraph 4.1 above shall
         be net of such Participant's actual R&D Expenditures, if any, incurred
         during such month. Any R&D Expenditures incurred by the Subsidiaries
         shall be combined with STIC's R&D Expenditures for purposes of the
         netting required under this paragraph 4.2.

4.3      If any Participant is required to make a net payment under paragraph
         4.2 above, and if not prohibited under local law or the business
         practices of such Participant, such net payment



                                                                              10

         can be offset or netted against other amounts owed to such Participant
         by the recipient of such payment.

4.4      If any Participant is a net payor under paragraph 4.2 above, and if it
         is deemed appropriate under the circumstances, payment can be made in
         the form of an adjustment to the transfer price of products or service
         charges between any appropriate Related Party.

4.5      If any Participant is a net payor under paragraph 4.2 above, payment,
         in fact or in kind, must be made during the timeframes required by
         Section 482 or 956 of the Internal Revenue Code of the USA, as
         applicable. The Participants agree to hold STUS harmless with respect
         to imputed interest income under Section 482 in the event of
         noncompliance with this paragraph 4.5.

4.6      If any Participant is a net payor under paragraph 4.2 above, and if it
         is deemed appropriate under the circumstances, payment for R&D
         Expenditures can be in the form of a dividend. For U.S. tax purposes,
         such a designation is consistent with the payment concepts contained in
         closing agreements under Revenue Procedure 65-17 and Section 482 of the
         Internal Revenue Code of the USA.

4.7      If the relevant government authority or authorities subsequently
         determine that any Participant did not pay an appropriate Cost Share in
         a year for the benefits received under this Agreement, the Participants
         agree that:

         (A)   If in that year any dividends were paid by such Participant, all
               or part of such dividend shall be treated as a payment of such
               Participant's revised obligation in recognition of the fact that,
               if the revised obligation under this Agreement had been known in
               that year, such obligation would have been paid prior to such
               dividend, and

         (B)   If after taking into account such dividend, it is finally
               determined that a Participant still has not satisfied its revised
               obligations, such Participant, if able to do so, shall pay the
               difference plus interest.

4.8      During the last quarter of each fiscal year , to the extent such
         information is available, STUS shall calculate each Participant's Cost
         Share amount based on the actual R&D Expenditures incurred during such
         fiscal year . Such amount shall be subtracted from the total estimated
         Cost Share accrued by the Participant under paragraph 4.1 above and any
         difference shall be booked as an adjustment in the current period. Any
         such adjustment shall be subject to the payment terms specified in
         paragraph 4.1 above. During the first quarter of each fiscal year, STUS
         shall calculate each Participant's final Cost Share amount for the
         preceding fiscal year, and any necessary adjustments shall be booked in
         the current period.

4.9      Any amount in dispute shall be resolved by agreement of all the
         Participants, or, if necessary, submitted to arbitration.

SECTION V - MODIFICATION



                                                                              11

5.1      The Participants agree to modify this Agreement as necessary to take
         into account changes in economic conditions, business operations and
         practices of the Participants, and the ongoing development of
         intangibles, or as necessary to conform the Agreement to the tax laws
         applicable to the Participants. The Agreement may not be altered or
         amended except by a written instrument signed by the authorized
         corporate officers of the Participants. Any oral modification or change
         in the terms and conditions contained herein shall have no effect.

SECTION VI - TERMINATION, BREACH, FORCE MAJEURE

6.1      The Participants may, at any time, mutually agree to terminate this
         Agreement, such termination to be effective at such time as they deem
         appropriate.

6.2      This Agreement can be terminated by any Participant by giving 60 days
         notice prior to the commencement of any fiscal year or if a substantive
         change in the law occurs in any jurisdiction in which the Participants
         are engaged in a substantial business activity that makes it
         impractical to continue the business or imposes restrictions or
         requirements that have an adverse effect on the business.

6.3      Failure to perform any of the terms and conditions herein shall be
         deemed a material breach and the aggrieved Participant may terminate
         all or part of the Agreement by giving 60 days notice; provided,
         however, that a Participant can prevent termination if it can cure or
         correct any alleged breach during the 60 day period. The 60 day period
         shall commence on the date the breach is communicated to the offending
         Participant. Termination of this Agreement shall not prejudice any
         claim for damages or relieve any Participant from making payments due
         or owing.

6.4      If any of the Participants hereto shall be prevented or delayed from
         performing any of the obligations herein by reason of strike, threat of
         imminent strike, fire, flood or other act of nature, war (declared or
         undeclared) or insurrection or mob violence, regulation (formal or
         informal) of any government or regulatory body, or the failure of any
         governmental authority to issue any permit, license or like
         authorization within a reasonable time after application therefor, then
         and only in such event, such failure to perform shall not be deemed a
         breach of this Agreement; provided that the Participant so delayed
         shall give notice in writing to the other Participant setting out the
         particulars of the cause thereof and the date upon which the same
         arose, and shall give like notice following the date upon which such
         cause ceased to exist. The Participants also agree to use reasonable
         diligence to remove any cause that interfered with the performance of
         the terms and conditions of this Agreement.

6.5      Any termination as described in paragraphs 6.2, 6.3 or 6.4 above will
         be a termination only with respect to the terminating Participant.

6.6      In the event that this Agreement is terminated with respect to a
         Participant, such Participant will retain all rights and interests in
         the property described in paragraph 3.2 above that had been obtained up
         to the date of such termination. Such Participant will still



                                                                              12

         be bound by the terms of this Agreement and must fulfill the
         obligations listed in paragraph 2.3 above.

6.7      A terminated Participant may assign rights that it will have obtained
         up to the date of the Participant's termination to one or more other
         Participants if the terminated Participant and the Participant or
         Participants to whom such rights are assigned agree that the terminated
         Participant will be paid an arm's length price for the rights so
         transferred. The provisions contained in Section IV of this Agreement
         will apply in the event that any such assignment under this paragraph
         results in an obligation to make an arm's length payment therefore.

SECTION VII - ASSIGNMENT

7.1      Except for assignments or transfers to a Related Party as provided in
         paragraph 3.10, this Agreement may not be assigned or transferred in
         any way by any Participant without the prior written consent of each of
         the other Participants, and such assignment or other transfer shall
         then be effective only upon written agreement of the assignee or
         transferee to assume and be bound by the obligations and provisions of
         this Agreement to the same extent it would have been bound had such
         assignee or transferee been an original party to this Agreement.

7.2      This Agreement shall be binding upon and inure to the benefit of any
         Related Party which is the successor to substantially all of the assets
         and business of any Participant.

SECTION VIII - DOMINANT LAW

8.1      This Agreement shall be governed and construed in accordance with the
         laws of the United States of America and the State of California, USA.

8.2      In the event that any term or part of this Agreement is held invalid or
         unenforceable by a court or administrative agency having proper
         jurisdiction, it shall not affect the validity and enforceability of
         the other terms.

SECTION IX - RISKS

9.1      The Participants shall each bear their respective risks undertaken in
         this Agreement. Each Participant shall bear its Cost Share regardless
         of whether Developed Intangible Property is in fact produced by this
         Agreement or the Participants realize any profit from any Developed
         Intangible Property.

SECTION X - RECORDS

10.1     The Participants shall each maintain written records for thirteen (13)
         years, in sufficient detail to permit ready verification of the
         computation of R&D Expenditures and the allocations of such costs. Such
         records shall be made available for such inspection, audit and
         certification as may be reasonably necessary.

SECTION XI - CURRENCY



                                                                              13

11.1     In determining R&D Expenditures hereunder, any expenses incurred in
         currencies other than the U.S. dollar shall be translated into U.S.
         dollars at the prevailing corporate booking rate used by STUS during
         the period in which the revenue or expense occurred.

SECTION XII - GOVERNMENTAL REGULATION

12.1     GENERAL

         No Participant shall transfer either directly or indirectly any
         technical information furnished to it or arising under this Agreement,
         or any of the direct products of the use of such technical information,
         in contravention of any law or regulation of the country of origin of
         such technical information or product.

12.2     U.S. EXPORT CONTROLS

         Without limiting the generality of paragraph 12.1 above, the
         Participants understand and acknowledge that the Developed Intangible
         Property and all technical data (as defined in 15 C.F.R. part 779 of
         the U.S. Export Administration Regulations) related thereto are subject
         to export control by the United States Government. The Participants
         shall comply strictly with all requirements of United States laws and
         regulations related to such Developed Intangible Property and related
         technical data, including the Export Administration Regulations, 15
         C.F.R. Parts 768-799, and all licenses and authorizations issued under
         such laws and regulations, and shall fully cooperate with STUS in
         securing any export licenses and authorizations required thereby. In
         furtherance of the foregoing obligation, the Participants hereby
         specifically agree that, without the prior written authorization of the
         U.S. Commerce Department, the Participants will not, and will cause
         their representatives, employees, agents, contractors and customers to
         agree not to (i) export, reexport, divert or transfer any Developed
         Intangible Property or related technical data, or any direct product of
         such Developed Intangible Property or technical data, to any
         destination, company or person prohibited by the Export Administration
         Regulations, including the Table of Denial Orders, or (ii) disclose any
         such Developed Intangible Property or related technical data to any
         national of any country when such disclosure is prohibited by the
         Export Administration Regulations. The Participants shall make their
         records available to STUS upon reasonable request in order to permit
         STUS to confirm compliance by all Participants with their obligations
         as set forth in this paragraph 12.2. The obligations of the
         Participants as set forth in this paragraph 12.2 shall survive
         expiration or termination of this Agreement for any reason whatsoever.

SECTION XIII - NOTICES

All written communications and notices with respect to this Agreement shall be
sent to the Participants at the following addresses:

To STUS:                920 Disc Drive
                        Scotts Valley, California  95067-0360
                        U.S.A.
                  Fax:  408-438-8931
                Attn.:  Vice President and Treasurer



                                                                              14

To STIC:                Ugland House
                        South Church Street
                        Georgetown, Grand Cayman
                        Cayman Islands, B.W.I.
                  Fax:  809-949-8080
                Attn.:  Director

To STIR:                Ugland House
                        South Church Street
                        Georgetown, Grand Cayman
                        Cayman Islands, B.W.I.
                  Fax:  809-949-8080
                Attn.:  Director

To STCL:                Ugland House
                        South Church Street
                        Georgetown, Grand Cayman
                        Cayman Islands, B.W.I.
                  Fax:  809-949-8080
                Attn.:  Director

To: STWX:               Lot 106
                        Xing Chuanger Lu
                        Wuxi-Singapore Industrial Park
                        Wuxi, Jiangsu
                        P.R.C. 214028
                  Fax:  011-86-510-521-9880
                Attn.:  General Manager

To SME:                 MacIntosh Road
                        Kirkton Campus
                        Livingston EH54 7BW
                        Scotland
                  Fax:  011-44-1506-478032
                 Attn:  General Manager



                                                                              15

To SPI:                 3081 Zanker Road
                        San Jose, California  95134-2128
                  Fax:  408-438-8931
                Attn.:  Vice President and Treasurer

or such other address as such Participant may from time to time notify the other
Participants in writing.

IN WITNESS WHEREOF, the Participants hereto have signed and executed this
Agreement.

                                SEAGATE TECHNOLOGY, INC.

                                By:      /s/  James A. Taylor
                                       -----------------------------------------
                                       James A. Taylor

                                Its: Vice President Finance

                                SEAGATE TECHNOLOGY INTERNATIONAL

                                By:      /s/  Ronald D. Verdoorn
                                       -----------------------------------------
                                       Ronald D. Verdoorn

                                Its: Vice President

                                SEAGATE TECHNOLOGY (IRELAND)

                                By:      /s/  Donald L. Waite
                                       -----------------------------------------
                                       Donald L. Waite

                                Its:  Vice President



                                                                              16

                                SEAGATE TECHNOLOGY (CLONMEL)

                                By:      /s/  Alan F. Shugart
                                       -----------------------------------------
                                       Alan F. Shugart

                                Its:  President

                                SEAGATE TECHNOLOGY INTERNATIONAL
                                (WUXI) CO. LTD.

                                By:      /s/  Ronald D. Verdoorn
                                       -----------------------------------------
                                       Ronald D. Verdoorn

                                Its:  Director and Chairman

                                SEAGATE MICROELECTRONICS LIMITED

                                By:      /s/  Donald L. Waite
                                       -----------------------------------------
                                       Donald L. Waite

                                Its:  Vice President Finance

                                SEAGATE PERIPHERALS, INC.

                                By:      /s/  Thomas F. Mulvaney
                                       -----------------------------------------
                                       Thomas F. Mulvaney

                                Its:  Executive Vice President



                                                                              17

                         WITHDRAWAL FROM THE DISC DRIVE
                 RESEARCH AND DEVELOPMENT COST SHARING AGREEMENT
         WITH RESPECT TO SEAGATE TECHNOLOGY INTERNATIONAL (WUXI) CO LTD.


This agreement is entered into by and among:

Seagate Technology, Inc., a U.S. corporation with its principal business office
at 920 Disc Drive, Scotts Valley, California 95066 U.S.A.,

Seagate Technology International, a Cayman Islands corporation with its
registered office at Ugland House, South Church Street, Georgetown, Grand
Cayman, Cayman Islands, B.W.I.,

Seagate Technology (Ireland), a Cayman Islands corporation with its registered
office at Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman
Islands, B.W.I.,

Seagate Technology (Clonmel), a Cayman Islands corporation with
its registered office at Ugland House, South Church Street, Georgetown, Grand
Cayman, Cayman Islands, B.W.I.,

Seagate Technology International (Wuxi) Co. Ltd., a China corporation with its
principal business office at Lot 106, Xing Chuanger Lu, Wuxi-Singapore
Industrial Park, Wuxi, Jiangsu, P.R.C. 214028,

Seagate Microelectronics Limited, a Scotland corporation with its principal
business office at MacIntosh Road, Kirkton Campus, Livingston EH54 7BW, Scotland
(hereinafter referred to collectively as the "Participants.")

WHEREAS, Seagate Technology International (Wuxi) Co Ltd. wishes to withdraw from
the Disc Drive Research and Development Cost Sharing Agreement dated June 29,
1996 and

WHEREAS, the other participants agree to this withdrawal,

Now therefore, the Participants hereby agree:

1) Seagate Technology International (Wuxi) Co Ltd. hereby withdraws from the
Disc Drive Research and Development Cost Sharing Agreement,

2) The withdrawal shall be effective as of January 3, 1998, and

3) The Participants agree to waive the termination notice as required in Section
6.2 of the Agreement.



                                                                              18

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized signatories.

                                    SEAGATE TECHNOLOGY, INC.

                                    By:  /s/  Charles C. Pope
                                       -----------------------------------------
                                    Charles C. Pope
                                    Title:  Senior Vice President

                                    SEAGATE TECHNOLOGY INTERNATIONAL

                                    By:  /s/  Donald L. Waite
                                       -----------------------------------------
                                    Donald L. Waite
                                    Title:  Vice President

                                    SEAGATE TECHNOLOGY (IRELAND)

                                    By:  /s/  Donald L. Waite
                                       -----------------------------------------
                                    Donald L. Waite
                                    Title:  Vice President

                                    SEAGATE TECHNOLOGY (CLONMEL)

                                    By:  /s/  William D. Watkins
                                       -----------------------------------------
                                    William D. Watkins
                                    Title:  Vice President

                                    SEAGATE MICROELECTRONICS LIMITED

                                    By:  /s/  Charles C. Pope
                                       -----------------------------------------
                                    Charles C. Pope
                                    Title:  Vice President

                                    SEAGATE TECHNOLOGY INTERNATIONAL
                                    (WUXI) CO. LTD.

                                    By:  /s/  William D. Watkins
                                       -----------------------------------------
                                    William D. Watkins
                                    Title:  Legal Representative



                                                                              19

                 TERMINATION OF PARTICIPATION IN THE DISC DRIVE
                 RESEARCH AND DEVELOPMENT COST SHARING AGREEMENT
                  WITH RESPECT TO SEAGATE TECHNOLOGY (CLONMEL)

This agreement is entered into by and among:

Seagate Technology, Inc., a Delaware corporation with its principal business
office at 920 Disc Drive, Scotts Valley, California 95066 U.S.A.,

Seagate Technology International, a Cayman Islands corporation with its
registered office at Ugland House, South Church Street, Georgetown, Grand
Cayman, Cayman Islands, B.W.I.,

Seagate Technology (Ireland), a Cayman Islands corporation with its registered
office at U gland House, South Church Street, Georgetown, Grand Cayman, Cayman
Islands, B.W.I.,

Seagate Technology International (Wuxi) Co. Ltd., a China
corporation with its principal business office at Lot 106, Xing Chuanger Lu,
Wuxi-Singapore Industrial Park, Wuxi, Jiangsu, P.R.C. 214028,

Seagate Technology (Clonmel), a Cayman Islands corporation with its registered
office at Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman
Islands, B.W.I., and

Seagate Microelectronics Limited, a Scotland corporation with its principal
business office at MacIntosh Road, Kirkton Campus, Livingston EH54 7B W,
Scotland (hereinafter referred to collectively as the "Participants.")

WHEREAS, Seagate Technology (Clonmel) wishes to terminate its participation in
the Disc Drive Research and Development Cost Sharing Agreement dated June 29,
1996 and

WHEREAS, the other Participants agree to this termination,

Now therefore, the Participants hereby agree:

1)   Seagate Technology (Clonmel) terminates its participation in the Disc Drive
     Research and Development Cost Sharing Agreement,

2)   The termination shall be effective as of January 31,1998, and

3)   The Participants agree to waive the termination notice as required in
     Section 6.2 of the Agreement.



                                                                              20

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized signatories.

                               SEAGATE TECHNOLOGY, INC.
                               By:  /s/  Charles C. Pope
                                  ----------------------------------------------
                               Charles C. Pope
                               Title:  Senior Vice President

                               SEAGATE TECHNOLOGY INTERNATIONAL
                               By:  /s/  Donald L. Waite
                                  ----------------------------------------------
                               Donald L. Waite
                               Title:  Vice President

                               SEAGATE TECHNOLOGY (IRELAND)
                               By:  /s/  Donald L. Waite
                                  ----------------------------------------------
                               Donald L. Waite
                               Title:  Vice President

                               SEAGATE TECHNOLOGY (CLONMEL)
                               By:  /s/  William D. Watkins
                                  ----------------------------------------------
                               William D. Watkins
                               Title:  Vice President

                               SEAGATE MICROELECTRONICS LIMITED
                               By:  /s/  Charles C. Pope
                                  ----------------------------------------------
                               Charles C. Pope
                               Title:  Vice President

                               SEAGATE TECHNOLOGY INTERNATIONAL (WUXI) CO. LTD.
                               By:  /s/  William D. Watkins
                                  ----------------------------------------------
                               William D. Watkins
                               Title:  Legal Representative



                                                                              21

                         WITHDRAWAL FROM THE DISC DRIVE
                 RESEARCH AND DEVELOPMENT COST SHARING AGREEMENT
                  WITH RESPECT TO SEAGATE TECHNOLOGY (CLONMEL)

This agreement is entered into by and among:

Seagate Technology, Inc., a U.S. corporation with its principal business office
at 920 Disc Drive, Scotts Valley, California 95066 U.S.A.,

Seagate Technology International, a Cayman Islands corporation with its
registered office at Ugland House, South Church Street, Georgetown, Grand
Cayman, Cayman Islands, B.W.I.,

Seagate Technology (Ireland), a Cayman Islands corporation with its registered
office at Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman
Islands, 8. B.W.I.,

Seagate Technology International (Wuxi) Co. Ltd., a China corporation with its
principal business office at Lot 106, Xing Chuanger Lu, Wuxi-Singapore
Industrial Park, Wuxi, Jiangsu, P.R.C. 214028,

Seagate Technology (Clonmel), a Cayman Islands corporation with its registered
office at Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman
Islands, 8. B.W.I.,

Seagate Microelectronics Limited, a Scotland corporation with its principal
business office at MacIntosh Road, Kirkton Campus, Livingston EH54 78W, Scotland
(hereinafter referred to collectively as the "Participants.")

WHEREAS, Seagate Technology (Clonmel) wishes to withdraw from the Disc Drive
Research and Development Cost Sharing Agreement dated June 29, 1996 and

WHEREAS, the other participants agree to this withdrawal,

Now therefore, the Participants hereby agree:

1)   Seagate Technology (Clonmel) hereby withdraws from the Disc Drive Research
     and Development Cost Sharing Agreement,

2)   The withdrawal shall be effective as of January 31, 1998, and

3)   The Participants agree to waive the termination notice as required in
     Section 6.2 of the Agreement.



                                                                              22

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized signatories.

                                SEAGATE TECHNOLOGY, INC.
                                By:  /s/  Charles C. Pope
                                   ---------------------------------------------
                                Charles C. Pope
                                Title:  Senior Vice President

                                SEAGATE TECHNOLOGY INTERNATIONAL
                                By:  /s/  Donald L. Waite
                                   ---------------------------------------------
                                Donald L. Waite
                                Title:  Vice President

                                SEAGATE TECHNOLOGY (IRELAND)
                                By:  /s/  Donald L. Waite
                                   ---------------------------------------------
                                Donald L. Waite
                                Title:  Vice President

                                SEAGATE TECHNOLOGY (CLONMEL)
                                By:  /s/  William D. Watkins
                                   ---------------------------------------------
                                William D. Watkins
                                Title:  Vice President

                                SEAGATE MICROELECTRONICS LIMITED
                                By:  /s/  Charles C. Pope
                                   ---------------------------------------------
                                Charles C. Pope
                                Title:  Vice President

                                SEAGATE TECHNOLOGY INTERNATIONAL (WUXI) CO. LTD.
                                By:  /s/  William D. Watkins
                                   ---------------------------------------------
                                William D. Watkins
                                Title:  Legal Representative



                                                                              23

                         WITHDRAWAL FROM THE DISC DRIVE
                 RESEARCH AND DEVELOPMENT COST SHARING AGREEMENT
                WITH RESPECT TO SEAGATE MICROELECTRONICS LIMITED

This agreement is entered into by and among:

Seagate Technology, Inc., a U.S. corporation with its principal business office
at 920 Disc Drive, Scotts Valley, California 95066 U.S.A.,

Seagate Technology International, a Cayman Islands corporation with its
registered office at Ugland House, South Church Street, Georgetown, Grand
Cayman, Cayman Islands, B.W.I.,

Seagate Technology (Ireland), a Cayman Islands corporation with its registered
office at Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman
Islands, B.W.I.,

Seagate Microelectronics Limited, a Scotland corporation with
its principal business office at MacIntosh Road, Kirkton Campus, Livingston EH54
7BW, Scotland (hereinafter referred to collectively as the "Participants.")

WHEREAS, Seagate Microelectronics Limited wishes to withdraw from the Disc Drive
Research and Development Cost Sharing Agreement dated June 29, 1996 and

WHEREAS, the other participants agree to this withdrawal,

Now therefore, the Participants hereby agree:

1)   Seagate Microelectronics Limited hereby withdraws from the Disc Drive
     Research and Development Cost Sharing Agreement,

2)   The withdrawal shall be effective as of January 30, 1999, and

3)   The Participants agree to waive the termination notice as required in
     Section 6.2 of the Agreement.



                                                                              24

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized signatories.

                                     SEAGATE TECHNOLOGY, INC.

                                     By:  /s/  Donald L. Waite
                                        ----------------------------------------
                                     Donald L. Waite
                                     Title:  Executive Vice President and Chief
                                     Administrative Officer

                                     SEAGATE TECHNOLOGY INTERNATIONAL

                                     By:  /s/  Charles C. Pope
                                        ----------------------------------------
                                     Charles C. Pope
                                     Title:  Vice President

                                     SEAGATE TECHNOLOGY (IRELAND)

                                     By:  /s/  Thomas F. Mulvaney
                                        ----------------------------------------
                                     Thomas F. Mulvaney
                                     Title:  Vice President

                                     SEAGATE TECHNOLOGY (CLONMEL)

                                     By:  /s/  Charles C. Pope
                                        ----------------------------------------
                                     Charles C. Pope
                                     Title:  Vice President



                                                                              25

                         WITHDRAWAL FROM THE DISC DRIVE
                 RESEARCH AND DEVELOPMENT COST SHARING AGREEMENT
                  WITH RESPECT TO SEAGATE TECHNOLOGY (IRELAND)

This agreement is entered into by and among:

Seagate Technology LLC (an assignee of Seagate Technology, Inc.), a Delaware
limited liability company with its principal business office at 920 Disc Drive,
Scotts Valley, California 95066 U.S.A.,

Seagate Technology International, a Cayman Islands company with its registered
office at U gland House, South Church Street, Georgetown, Grand Cayman, Cayman
Islands, B.W.I.,

Seagate Technology (Ireland), a Cayman Islands company with its registered
office at Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman
Islands, B.W.I.,

WHEREAS, Seagate Technology (Ireland) wishes to withdraw from
the Disc Drive Research and Development Cost Sharing Agreement dated June 29,
1996 and

WHEREAS, the other participants agree to this withdrawal,

Now therefore, the Participants hereby agree:

1)   Seagate Technology (Ireland) hereby withdraws from the Disc Drive Research
     and Development Cost Sharing Agreement,

2)   The withdrawal shall be effective as of November 23, 2000, and

3)   The Participants agree to waive the termination notice as required in
     Section 6.2 of the Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized signatories.

                                  SEAGATE TECHNOLOGY LLC
                                  (an assignee of Seagate Technology, Inc.)
                                       /s/  Donald L. Waite
                                  -------------------------
                                  By:  Donald L. Waite
                                  Title:  Executive Vice President and Chief
                                  Administrative Officer

                                  SEAGATE TECHNOLOGY (IRELAND)



                                                                              26

                                       /s/  Charles C. Pope
                                  ----------------------------------------------
                                  By:  Charles C. Pope
                                  Title:  Director

                                 SEAGATE TECHNOLOGY INTERNATIONAL

                                        /s/  Stephen J. Luczo
                                  ----------------------------------------------
                                  By:  Stephen J. Luczo
                                  Title:  Director

EX-10.13

                                                                   Exhibit 10.13

                                   WORLD-WIDE
                               SERVICES AGREEMENT

Effective for the period July 1, 1993 through June 30, 1994, and subsequent
fiscal years, Seagate Technology, Inc., a U.S. Corporation with principal
offices in Scotts Valley, California, hereinafter referred to as STUS, and
Seagate Technology International, and subsidiaries, a Cayman Island corporation
with principal offices in Georgetown, Grand Cayman B.W.I., hereinafter referred
to as STIC, agree as follows:

WHEREAS:

          A.   An existing Service Agreement between STUS and STIC terminates on
               June 30, 1993;

          B.   STUS and STIC manufacture and sell disc drives and disc drive
               components in a highly competitive and technological industry
               where increases in productivity and the control of costs are
               crucial;

          C.   STUS and STIC have separate and independent management teams
               including marketing, technical and support staffs, but each
               requires similar types of marketing, technical and support
               expertise; and

          D.   STUS and STIC desire to maintain the independent management of
               their respective businesses; however, they also desire to
               maximize efficiency and productivity and to minimize the
               duplication and overlap of various services and the use of third
               party contractors.

THEREFORE, IT IS HEREBY AGREED:

          1.   That although STUS and STIC will continue to develop their
               management teams; each may call upon the expertise and staffs of
               the other upon request.

          2.   That each party will strive to maximize efficiency and avoid
               duplication of effort by developing programs and hiring practices
               to attract and retain talented personnel with a view of
               increasing the expertise necessary to run their respective
               businesses, but maintaining strict control of personnel levels.

          3.   That the relationship of STUS and STIC established by this
               Agreement is that of independent contractors, and nothing
               contained in the Agreement shall be construed to (i) give either
               party the power to direct and control the day-to-day activities
               of the other, (ii) constitute the parties as partners, joint
               venturers, principal and agent, employer and employee, co-owners
               or otherwise as participants in a joint undertaking, or (iii)
               allow one party to create or assume any obligation on behalf of
               the other party for any

                                       1



               purpose whatsoever. All financial and other obligations
               associated with each party's business are the sole responsibility
               of that party. Each party shall be solely responsible for, and
               shall indemnify and hold the other party free and harmless from,
               any and all claims, damages or lawsuits (including attorneys'
               fees) arising out of the provision of services by the other
               party, its employees or its agents.

          4.   The services performed and charges therefore shall be determined
               under Sections I and II below.


SECTION I - DEFINITION OF SERVICES

     Each party may perform a variety of services for the other party in accord
     with the objectives stated above. In general, the nature of such services
     will be (1) services that require a charge under Section 1.482-2T(b)(3) of
                                         ------
     the regulations under the Internal Revenue Code in the U.S. and (2)
     services that require no charge under Sections 1.482-2T(b)(2)(ii),
                           ---------
     1.861-8(e)(4) and 1.482-2T(b)(5) of the regulations under the Internal
     Revenue Code in the U.S.

SECTION II - SERVICES - CHARGE

          2.1  A charge shall be made for any service undertaken for the joint
               benefit of either party or for any service performed by one party
               exclusively for the benefit of the other. Such services may
               include engineering, quality assurance and other technical
               services, purchasing services, marketing and sales services,
               treasury and cash management services.

          2.2  The parties shall determine the methodology to identify the
               charges, i.e., interviewing personnel, reviewing department
               documentation and monitoring specific service requests of one of
               the parties, that are to be made pursuant to paragraph 2.1 above.

          2.3  STIC may share any portion of its charges with any of its
               subsidiaries.

SECTION III - SERVICES - NO CHARGE

          3.1  A charge shall not be made for services that are merely a
               duplication of a service that one of the parties already is
               performing. Duplication shall be determined under Sections
               1.482-2T(b)(2)(ii) and 1.861-8(e)(4) of the regulations under the
               Internal Revenue Code in the U.S. Such services may include a
               variety of financial services, stewardship services, personnel
               services, administrative services, marketing and sales services,
               technical services and other support services.

          3.2  A charge shall not be made for services where the benefit to a
               party is indirect, remote or de minimis as determined under
               Section 1.482-2T(b)(2) of the regulations under the Internal
               Revenue Code in the U.S.

                                        2



          3.3  A charge shall not be made for services for certain interest
               expense, expenses associated with issuance of stock and
               maintenance of shareholder relations, and expenses of compliance
               with regulations or policies imposed upon one of the parties
               rendering the service by its government if not related to the
               service in question under Section 1.482-2T(b)(5) of the
               regulations under the Internal Revenue Code in the U.S.

SECTION IV - AMOUNT OF CHARGE FOR SERVICES

          4.1  An Arms Length charge for services described in Section II above
               performed by STUS shall be made in accord with Section
               1.482-2T(b)(3) of the regulations under the Internal Revenue Code
               in the U.S. as set forth below.

               A.   The Arms Length charge for all services performed by STUS
                    shall be deemed to be equal to the costs incurred.

               B.   The Arms Length charge for services performed by STIC shall
                    be made in accord with the applicable law of the Republic of
                    Singapore.

               C.   The costs set forth in (A) above shall include direct and
                    indirect costs as described in Section 1.482-2T(b)(4) of the
                    regulations under the Internal Revenue Code in the U.S.

               D.   The methods used in determining the costs described in (C)
                    above shall be the method described in Section
                    1.482-2T(b)(6) permits the use of methods that are
                    consistent, reasonable and in keeping with sound accounting
                    practices, including the use of estimates and department
                    overhead rates. However, the method of determining
                    apportionable costs must be on the basis of full costs as
                    opposed to incremental costs, and the ordinary prudent man
                    rule shall be utilized in determining estimates and
                    department overhead rates.

               E.   No charge shall be made for services described in Section
                    III above.

               F.   If an individual, a team of individuals or a department
                    performs single or integrated services as defined both in
                    Sections II and III above, an apportionment shall be made in
                    accord with the methods and principles described in
                    paragraphs 4.1 (C) and (D) above.

               G.   The parties shall periodically review the conclusion that
                    the services performed under this Agreement are not an
                    integral part of the business activity of either the
                    provider or recipient of the services under Section
                    1.482-2T(b)(3) of the regulations under the Internal Revenue
                    Code in the U.S. If the parties determine that any

                                       3



                    services being performed under this Agreement are integral,
                    this Agreement may be modified pursuant to paragraph 7.2
                    below.

SECTION V - SERVICE CHARGES

          5.1  All service charges made in accord with Section IV above shall be
               determined and charged on a timely basis with best efforts to
               finalize such charges no later than on a quarterly basis. Charges
               in question or dispute should be submitted for review to the
               other party on a timely basis.

SECTION VI - PAYMENT

          6.1  IN GENERAL

               Payment in cash, debt instrument, property, or other valuable
               consideration shall be made on a timely basis for service charges
               incurred by either party, but subject to the terms of paragraphs
               6.2 through 6.6 below.

          6.2  Prior to any payment by STUS or STIC, service charges shall be
               netted to determine the final debtor.

          6.3  If not prohibited under local law or the business practices of
               either party, the debtor party (STUS or STIC) may net any amount
               described in paragraph 6.2 above against other amounts owed by
               the creditor party to the debtor party.

          6.4  If STIC is the debtor party described in paragraph 6.2 above,
               STIC must make payment in fact or in kind during the time frame
               described in Section 1.482-2T(a)(1)(iii) of the regulations under
               the Internal Revenue Code of the U.S. to avoid imputed interest
               income to STUS. STIC agrees to hold STUS harmless in the event of
               noncompliance with this provision.

          6.5  If STIC is the debtor party described in paragraph 6.2 above and
               if it is deemed appropriate under the circumstances, payment for
               service charges can be in the form of a dividend. For U.S. tax
               purposes, such a designation is consistent with payment concepts
               contained in closing agreements under Revenue Procedure 65-17 and
               Section 482 of the Internal Revenue Code of the U.S.

          6.6  If pursuant to paragraph 2.3 above, STIC shares any portion of
               its charges with any subsidiary, either STIC or such subsidiary
               may pay the portion of the charges related to such subsidiary to
               STUS.

          6.7  Any amount in dispute shall be resolved by agreement of the
               parties or, if necessary, submitted to arbitration.

                                       4



SECTION VII - MODIFICATION

          7.1  This contract may be modified in writing as a result of any
               change in the tax law or of principles contained in the opinion
               of the Tax Court, when issued, in the tax case between STUS and
               the IRS.

          7.2  This contract may be modified in the event that either STUS or
               STIC provides the other with services that are integral under
               Section 1.4822T(b)(3) of the regulations under the Internal
               Revenue Code in the U.S.

          7.3  Any oral modification of this contract shall have no effect.

SECTION VIII - TERMINATION, BREACH, FORCE MAJEURE

          8.1  This contract can be terminated by any party by giving 60 days
               notice prior to the commencement of any fiscal year or at any
               time if a substantive change in the law occurs in any
               jurisdiction in which the parties are engaged in a substantial
               business activity.

          8.2  Failure to perform any of the terms and conditions herein shall
               be deemed a material breach and the aggrieved party may terminate
               all or part of the contract by giving 60 days notice; provided,
               however, that a party can prevent termination if it can cure or
               correct any alleged breach during the 60 day period. The 60 day
               period shall commence on the date the breach is communicated to
               the offending party. Termination of this Agreement shall not
               prejudice any claim for damages or relieve any party from making
               payments due or owing.

          8.3  If any of the parties hereto shall be prevented or delayed from
               performing any of the obligations herein by reason of strike,
               threat of imminent strike, fire, flood or other act of nature,
               war (declared or undeclared) or insurrection or mob violence,
               regulation (formal or informal) of government or regulatory body,
               or the failure of any governmental authority to issue any permit,
               license or like authorization within a reasonable time after
               application therefor, then and only in such event, such failure
               to perform shall not be deemed a breach of this Agreement;
               provided that the party so delayed shall give notice in writing
               to the other party setting out the particulars of the cause
               thereof and the date upon which the same arose, and shall give
               like notice following the date upon which such cause ceased to
               exist. The parties also agree to use reasonable diligence to
               remove any cause that interferes with the performance of the
               terms and conditions of this contract.

SECTION IX - ASSIGNMENT

          9.1  No right or obligation herein shall be assigned by either party,
               except for assignments to controlled entities, without the prior
               written consent of the other.

                                       5



SECTION X - DOMINANT LAW

          10.1 This Agreement shall be governed and construed in accordance with
               the laws of the State of California, USA and the Internal Revenue
               Code of the United States of America, except for paragraph 4.1(B)
               above, which shall be governed and construed in accordance with
               the laws of the Republic of Singapore.

          10.2 In the event that any term or part of this Agreement is held
               invalid or unenforceable by a court or administrative agency
               having proper jurisdiction, it shall not effect the validity and
               enforceability of the other terms.

WITNESS WHEREOF, the parties have signed and executed this Agreement.

                                        SEAGATE TECHNOLOGY, INC.

                                        /s/ Donald L. Waite
                                        -----------------------------------
                                        June 14, 1993
                                        -----------------------------------
                                        DATE

WITNESSED

/s/ [Illegible]
- --------------------------
                                        SEAGATE TECHNOLOGY INTERNATIONAL

                                        /s/ [Illegible]
                                        -----------------------------------
                                        June 28, 1993
                                        -----------------------------------
                                        DATE

WITNESSED

     /s/ C. Hathaway
- --------------------------

                                       6

EX-10.14

                                                                   Exhibit 10.14

                                PROMISSORY NOTE
                                ---------------

$ 120,000.00                                           Scotts Valley, California
                                                       May 8, 1998

FOR VALUE RECEIVED, David Wickersham ("Employee") promises to pay in lawful
money of the United States of America, to Seagate Technology, Inc., a Delaware
corporation ("Company") at 920 Disc Drive, Scotts Valley, California 95066, or
at such other locations as Company may from time to time designate in writing,
the principal sum of ONE HUNDRED TWENTY THOUSAND and NO/100 DOLLARS
($120,000.00). All outstanding principal shall be due on the Due Date, which Due
Date shall be the earlier to occur of: (i) May 31, 2001, or (ii) the day on
which Employee sells any of the shares of Maxtor, Inc. common stock which secure
this Note as described hereinbelow. The privilege is reserved to prepay any
portion of the Note at any time.

This Note is secured by a pledge of Maxtor, Inc. common stock under the terms of
a Security Agreement of even date herewith and is subject to all the provisions
thereof, including but not limited to Paragraph 6, which describes conditions
under which Employee may be in default of both this Note and the Security
Agreement.

Should Employee terminate employment with Company anytime prior to the Due Date,
this Note shall immediately become due and payable, and Employee promises to pay
the full amount of principal owing at the time of termination. This acceleration
clause shall apply whether the termination is voluntary or involuntary. Nothing
herein constitutes a promise, expressed or implied, as to Employee's
continuation of employment.

Employee waives demand, presentment for payment, notice of nonpayment, protest,
notice of protest, notice of intent to accelerate maturity, notice of
acceleration of maturity and all other notices, filing of suit and diligence in
collecting this Promissory Note.

Employee agrees to pay all costs and expenses paid or incurred by the Company in
connection with the collection or enforcement of this Note, whether or not suit
is filed, including but not limited to the Company's reasonable attorneys' fees
and cost of suit, and costs to enforce any judgment.

This Note shall be construed in accordance with the laws of the State of
California without regard to the conflict of laws principal thereof, and is
intended to be performed in accordance with and to the extent permitted by such
laws.

This Note constitutes the entire agreement between Employee and the Company
pertaining to the subject matter contained herein and supersedes all prior and
contemporaneous agreements, representations and understandings. This Note may
not be altered, amended, modified or otherwise changed in any respect
whatsoever, except by a writing duly authorized by Employee and the Company.



If any portion of this Note is held invalid, neither the remainder of this Note
nor the application of such provision to any other person or circumstance shall
be affected thereby, but rather the same shall be enforced to the greatest
extent permitted by law, except that if such provision relates to the payment of
any monetary sum, then the entire indebtedness hereunder shall become
immediately due and payable at the option of the Company.

/s/  DAVID WICKERSHAM                                August 7, 1998
____________________________                     ________________________
David Wickersham                                  Date

Approved as to form and content:

/s/  CHARLES C. POPE                                 August 7, 1998
_____________________________                     ________________________
Charles C. Pope                                   Date
Senior Vice President and
Chief Financial Officer

EX-10.15

                                                                   Exhibit 10.15

DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND DEED OF TRUST SECURING SAME
MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION BEFORE RECONVEYANCE WILL BE
MADE.

                    PROMISSORY NOTE SECURED BY DEED OF TRUST
                    ----------------------------------------

$500,000.00                                            Scotts Valley, California

For value received, the undersigned, Brian S. Dexheimer and Lorilee C.
Dexheimer, (collectively, "Maker"), currently residing at 18481 Twin Creeks
Road, Monte Sereno, California 95030, jointly severally promise to pay in lawful
money of the United States of America, to Seagate Technology LLC, or order
(hereinafter "Holder"), at 920 Disc Drive, Scotts Valley, California 95066 or at
such other place as Holder may from time to time designate by written notice to
Maker, the principal sum of FIVE HUNDRED THOUSAND and NO/100 DOLLARS
($500,000.00), with interest at the rate of eight percent (8 %) per annum,
accrued interest to be forgiven at the end of every twelve (12) months from the
date of execution hereof, provided Brian S. Dexheimer is still employed by
Seagate Technology LLC, or a subsidiary or affilate thereof, (collectively,
"Seagate") at that time. This Note shall become due and payable on October 10,
2005, except as provided below.

Seagate promises to forgive $83,333.00 of the principal on the second
anniversary of the effective date of this Note; $83,333.00 of the principal on
the third anniversary of the effective date of this Note; and $83,333.00 of the
principal on the fourth anniversary of the effective date of this Note, provided
that Employee is still employed by Seagate on the applicable anniversary dates.

Should Brian S. Dexheimer voluntarily resign his employment with Seagate or be
terminated for cause by Seagate prior to October 10, 2005, all unforgiven
principal plus any accrued interest shall become immediately due and payable, or
if there be any default in the payment of this Note, interest will begin
accruing at the prime rate of interest per annum until the Note is paid in full.
Should Brian S. Dexheimer be terminated during a Seagate-initiated reduction in
force, or become deceased, this Note shall become due and payable sixty (60)
months from the date of execution hereof, and all interest will be forgiven.
Nothing contained herein constitutes any promise, express or implied, as to
Brian S. Dexheimer's continuation of employment. Maker agrees to pay federal and
state taxes, if any, which are required by law to be paid with respect to this
Note.

This Note is secured by a Deed of Trust. If the trustor shall sell, convey or
alienate said property, or any part thereof, of any interest therein, or shall
be divested of their title of any interest herein in any manner or way, whether
voluntary or involuntary, beneficiary shall have the right, at its option,
except as prohibited by law, to declare the whole sum of



principal and accrued interest immediately due and payable, without notice or
demand, irrespective of the maturity date, if any, specified in the Note.

Should any default be made in the performance of any of the agreements contained
in the Deed of Trust securing this Note, then the whole sum of principal and
accrued interest shall become immediately due and payable, without notice, at
the option of the Holder of this Note. Failure to exercise such option shall not
constitute a waiver of the right to exercise it in the event of any subsequent
default.

This Note contains a balloon payment. This Note is subject to Section 2966 of
the Civil Code, which provides that the Holder of this Note give written notice
to the Maker or their successor-in-interest of prescribed information at least
sixty (60) days and not more than one-hundred and fifty (150) days before any
balloon payment is due.

Maker agrees to pay the following costs, expense and attorney's fees paid or
incurred by the Holder of this Note, or adjudged by a court: (1) reasonable
costs of collection, costs and expenses and attorney's fees paid or incurred in
connection with the collection or enforcement of this Note, whether or not suit
is filed; and (2) costs of suit and such sum as the court may adjudge as
attorney's fees in any action to enforce payment of this Note or any part of it.

Executed this 12/th/ day of August,       Executed this 12/th/ day of August,
2000 at Scotts Valley, California.        2000 at Scotts Valley, California.

/s/ BRIAN S. DEXHEIMER                        /s/ LORILEE C. DEXHEIMER
___________________________________           __________________________________
Brian S. Dexheimer, Trustee                   Lorilee C. Dexheimer, Trustee


Approved as to form and content:

/s/ CHARLES C. POPE
___________________________________
Charles C. Pope
Executive Vice President &
Chief Financial Officer

EX-10.16

                                                                   Exhibit 10.16

DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND DEED OF TRUST SECURING SAME
MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION BEFORE RECONVEYANCE WILL BE
MADE.

                    PROMISSORY NOTE SECURED BY DEED OF TRUST
                    ----------------------------------------

$1,200,000.00                                          Scotts Valley, California
                                                               February 16, 2001

For value received, the undersigned, Jeremy Tennenbaum and Isabelle Tennenbaum,
(collectively, "Maker"), currently residing at 520 Railway Avenue, Suite, 388,
Campbell, California 95008, jointly severally promise to pay in lawful money of
the United States of America, to Seagate Technology LLC, or order (hereinafter
"Holder"), at 920 Disc Drive, Scotts Valley, California 95066 or at such other
place as Holder may from time to time designate by written notice to Maker, the
principal sum of ONE MILLION TWO HUNDRED THOUSAND and NO/100 DOLLARS
($1,200,000), with interest at the rate of eight percent (8 %) per annum,
accrued interest to be forgiven at the end of every twelve (12) months from the
date of execution hereof, provided Jeremy Tennenbaum is still employed by
Seagate Technology LLC, or a subsidiary or affilate thereof, (collectively,
"Seagate") at that time. This Note shall become due and payable February 16,
2006, except as provided below.

Seagate promises to forgive $200,000 of the principal on the second anniversary
of the effective date of this Note; $200,000 of the principal on the third
anniversary of the effective date of this Note; and $200,000 of the principal on
the fourth anniversary of the effective date of this Note, provided that
Employee is still employed by Seagate on the applicable anniversary dates.

Should Jeremy Tennenbaum voluntarily resign his employment with Seagate or
otherwise be terminated by Seagate prior to February 16, 2006, all unforgiven
principal plus any accrued interest shall become immediately due and payable, or
if there be any default in the payment of this Note, interest will begin
accruing at eight percent (8%) per annum until the Note is paid in full. Should
Jeremy Tennenbaum be terminated during a Seagate-initiated reduction in force,
or become deceased, this Note shall become due and payable sixty (60) months
from the date of execution hereof, and all interest will be forgiven. Nothing
contained herein constitutes any promise, express or implied, as to Jeremy
Tennenbaum's continuation of employment. Maker agrees to pay federal and state
taxes, if any, which are required by law to be paid with respect to this Note.

This Note is secured by a Deed of Trust. If the trustor shall sell, convey or
alienate said property, or any part thereof, of any interest therein, or shall
be divested of their title of any interest herein in any manner or way, whether
voluntary or involuntary, beneficiary shall have the right, at its option,
except as prohibited by law, to declare the whole sum of



principal and accrued interest immediately due and payable, without notice or
demand, irrespective of the maturity date, if any, specified in the Note.

Should any default be made in the performance of any of the agreements contained
in the Deed of Trust securing this Note, then the whole sum of principal and
accrued interest shall become immediately due and payable, without notice, at
the option of the Holder of this Note. Failure to exercise such option shall not
constitute a waiver of the right to exercise it in the event of any subsequent
default.

This Note contains a balloon payment. This Note is subject to Section 2966 of
the Civil Code, which provides that the Holder of this Note give written notice
to the Maker or their successor-in-interest of prescribed information at least
sixty (60) days and not more than one-hundred and fifty (150) days before any
balloon payment is due.

Maker agrees to pay the following costs, expense and attorney's fees paid or
incurred by the Holder of this Note: (1) reasonable costs of collection, costs
and expenses and attorney's fees paid or incurred in connection with the
collection or enforcement of this Note, whether or not suit is filed; and (2)
costs of suit and such sum as the court may adjudge as attorney's fees in any
action to enforce payment of this Note or any part of it.

Executed this 20 day of February, 2001    Executed this 20 day of February, 2001
at Scotts Valley, California.             at Scotts Valley, California.

/s/ JEREMY TENNENBAUM                     /s/ JEREMY TENNENBAUM*
___________________________________       ______________________________
Jeremy Tennenbaum                         Isabelle Tennenbaum

Approved as to form and content:          *signed for Isabelle Tennenbaum
                                          as Power of Attorney



/s/ CHARLES C. POPE
___________________________________
Charles C. Pope
Executive Vice President &
Chief Financial Officer

EX-12.1

                                                                    Exhibit 12.1


                 Seagate Technology Holdings and Its Predecessor
                Computation of Ratio of Earnings to Fixed Charges
                                  (In millions)



                                                      Predecessor                             Seagate Technology Holdings
                                      ---------------------------------------------------- --------------------------------
                                                 Fiscal Year Ended
                                      ----------------------------------------                                      Nine
                                                                                  July 1,   Nov. 23     Nov. 23    Months
                                                                                  2000 to   2000 to     2000 to    Ended
                                      June 27,   July 3,    July 2,   June 30,    Nov. 22,  June 29,    Mar. 30,   Mar. 29,
                                        1997      1998       1999       2000       2000      2001         2001      2002
                                      --------  --------    -------  ---------   --------- ----------  ---------  ---------
                                                                          (in millions)
                                                                                          
Earnings:
   Income (loss) before income taxes   $  950   $  (722)    $  275     $  641    $  (618)  $  (101)    $  (106)    $  403
Add back fixed charges:
   Interest expense                        32        51         48         52         24        54          33         61
   Amortization of debt discount and
     debt issuance costs                   --        --         --         --         --         5           3          6
   Interest portion of rent expense        14        17         16         12          4         5           3          6
                                      --------  --------    -------  ---------   --------- ----------  ---------  ---------
Adjusted earnings                      $  996   $  (654)    $  339     $  705     $ (590)  $   (37)    $   (67)    $  476
Total fixed charges                    $   46   $    68     $   64     $   64     $   28   $    64     $    39    $    73
Ratio of earnings to fixed charges       21.7x                 5.3x      11.0x                                        6.5x
Deficiency of earnings to fixed
 charges                                        $  (654)                          $ (590)  $   (37)    $   (67)

EX-21.1

                                                                                                                       Exhibit 21.1

                                                                                  JURISDICTION OF
                                                                                  INCORPORATION
SEAGATE TECHNOLOGY HOLDINGS SUBSIDIARIES                                          OR FORMATION
- ----------------------------------------                                          ------------
                                                                               
Seagate Technology Holdings                                                       Cayman Islands
 I.  Seagate Technology SAN Holdings                                              Cayman Islands
    A.  XIOtech Corporation                                                       Minnesota
        1.  XIOtech (Canada) Ltd.                                                 Canada
 II.  Seagate Technology HDD Holdings                                             Cayman Islands
    A.  Quinta Corporation                                                        California
    B.  Seagate Technology (US) Holdings, Inc.                                    Delaware
        1.  Seagate Technology LLC                                                Delaware
            a.  Seagate US LLC                                                    Delaware
        2.  Redwood Acquisition Corporation                                       Delaware
        3.  Seagate Technology Australia Pty. Limited                             Australia
        4.  Seagate Technology SAS                                                France
        5.  Seagate Technology GmbH                                               Germany
        6.  Seagate Technology AB                                                 Sweden
        7.  Seagate Technology Taiwan Ltd.                                        Taiwan
        8.  Seagate Technology (Hong Kong) Limited                                Hong Kong
        9.  AVP SpA (in liquidation)                                              Italy
        10.  Seagate Technology Canada Ltd. (inactive)                            Canada
    C.  Seagate Technology International                                          Cayman Islands
        1.  Seagate Technology (Thailand) Limited                                 Thailand
        2.  Seagate Technology China Holding Company                              Cayman Islands
            a.  Seagate Technology International (Shenzhen) Co., Ltd.             China
        3.  Seagate Technology Asia Holdings                                      Cayman Islands
            a.  P.T. Seagate Technology                                           Indonesia
        4.  Seagate Technology Media (Ireland)                                    Cayman Islands
        5.  Seagate Technology (Denmark) ApS                                      Denmark
            a.  Seagate Technology Media Mexico S.A. de C.V. (in liquidation)     Mexico
            b.  Seagate Technology - Reynosa, S. de R.L. de C.V.                  Mexico
            c.  Seagate Technology (Netherlands) BV                               Netherlands
                 i.  Nippon Seagate Inc.                                          Japan
        6.  Seagate Singapore Distribution Pte. Ltd.                              Singapore
        7.  Seagate Distribution (UK) Limited                                     Scotland
        8.  Seagate Technology (Marlow) Limited                                   England & Wales
        9.  Seagate Technology (Philippines)                                      Cayman Islands
        10. Seagate Technology (Ireland)                                          Cayman Islands
        11. Perai Seagate Storage Products Sdn. Bhd.                              Malaysia
        12. Penang Seagate Industries (M) Sdn. Bhd.                               Malaysia
        13. Seagate Technology International (Wuxi) Co. Ltd.                      China
        14. Seagate Technology Far East Holdings                                  Cayman Islands
        15. Seagate Microelectronics Limited (inactive)                           Scotland
        16. Seagate Investments SrL (shelf company)                               Barbados
        17. Seagate Technology Limited (inactive)                                 Scotland
        18. Seagate Technology (Ireland Holdings) (inactive)                      Cayman Islands
        19. Seagate Technology (Malaysia) Holding Company                         Cayman Islands
            a.  Senai Seagate Industries (M) Sdn. Bhd.                            Malaysia

EX-23.1

Exhibit 23.1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated July 16, 2001, (except for Note 16, as to which the date is May 14, 2002) with respect to the consolidated and combined financial statements of Seagate Technology Holdings and its predecessor, the Seagate Technology Hard Disc Drive Business, an operating business of Seagate Technology, Inc., included in the Registration Statement (Form S-4) and related Prospectus of Seagate Technology HDD Holdings for the registration of $400,000,000 of its Senior Notes due 2009.

/s/    Ernst & Young LLP

San Jose, California

May 14, 2002

EX-25.1

                                                                    Exhibit 25.1
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                           --------------------------

                                    FORM T-1

                         STATEMENT OF ELIGIBILITY UNDER
                      THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

               Check if an Application to Determine Eligibility of
                   a Trustee Pursuant to Section 305(b)(2) [ ]
             -------------------------------------------------------

                                 U.S. BANK, N.A.
               (Exact name of trustee as specified in its charter)

                                                                                 
                                                                                 31-0841368
(State of incorporation if not a U.S. national bank)                  (I.R.S. employer identification no.)

        One California Street, Suite 2550
               San Francisco, CA                                                  94111
     (Address of principal executive offices)                                   (Zip Code)


                                        SEAGATE TECHNOLOGY HDD HOLDINGS
                              (Exact name of obligor as specified in its charter)


                Cayman Islands                                                   98-0355609
(State or other jurisdiction of incorporation or                      (I.R.S. employer identification no.)
                organization)

                 P.O. Box 309GT
        Ugland House, South Church Street
            George Town, Grand Cayman
                 Cayman Islands                                                     N/A
    (Address of principal executive offices)                                    (Zip Code)


                                        SEAGATE TECHNOLOGY HOLDINGS
                              (Exact name of obligor as specified in its charter)

                Cayman Islands                                                   98-0232277
(State or other jurisdiction of incorporation or                      (I.R.S. employer identification no.)
                organization)

                 P.O. Box 309GT
        Ugland House, South Church Street
            George Town, Grand Cayman
                 Cayman Islands                                                     N/A
    (Address of principal executive offices)                                    (Zip Code)



                            8% Senior Notes due 2009
                       (Title of the Indenture Securities)
================================================================================



                                    FORM T-1

Item 1.      GENERAL INFORMATION.  Furnish the following information as to the
             Trustee.

              a)  Name and address of each examining or supervising authority to
                  which it is subject.
                           Comptroller of the Currency
                           Washington, D.C.

              b)  Whether it is authorized to exercise corporate trust powers.
                           Yes

Item 2.     AFFILIATIONS WITH OBLIGOR.  If the obligor is an affiliate of the
            Trustee, describe each such affiliation.
                  None

Items 3-15        Items 3-15 are not applicable because to the best of the
                  Trustee's knowledge, the obligor is not in default under any
                  Indenture for which the Trustee acts as Trustee.

Item 16.     LIST OF EXHIBITS:  List below all exhibits filed as a part of this
             statement of eligibility and qualification.

              1.  A copy of the Articles of Association of the Trustee.*

              2.  A copy of the certificate of authority of the Trustee to
                  commence business.*

              3.  A copy of the certificate of authority of the Trustee to
                  exercise corporate trust powers.*

              4.  A copy of the existing bylaws of the Trustee.*

              5.  A copy of each Indenture referred to in Item 4.  Not
                  applicable.

              6.  The consent of the Trustee required by Section 321(b) of the
                  Trust Indenture Act of 1939, attached as Exhibit 6.

              7.  Report of Condition of the Trustee as of December 31, 2001,
                  published pursuant to law or the requirements of its
                  supervising or examining authority, attached as Exhibit 7.

       * Incorporated by reference to Registration Number 333-67188.

                                       2



                                      NOTE

     The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.

                                    SIGNATURE

     Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, U.S. BANK, N.A., a national banking association organized
and existing under the laws of the United States of America, has duly caused
this statement of eligibility and qualification to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of San Francisco,
State of California on the 14th day of May, 2002.

                                      U.S. BANK, N.A.

                                      By:      /s/ Leticia Sabiniano
                                         ---------------------------------------
                                         Leticia Sabiniano
                                         Assistant Vice President



By:      /s/ Andrew Fung
   ---------------------------------------
   Andrew Fung
   Assistant Vice President

                                       3



                                    Exhibit 6
                                    ---------

                                     CONSENT

     In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, U.S. BANK N.A. hereby consents that reports of examination of the
undersigned by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.


Dated: May 14, 2002


                                      U.S. BANK, N.A.


                                      By:      /s/ Leticia Sabiniano
                                         ---------------------------------------
                                         Leticia Sabiniano
                                         Assistant Vice President



By:      /s/ Andrew Fung
   ---------------------------------------
   Andrew Fung
   Assistant Vice President

                                       4



                                    Exhibit 7
                                    ---------
                                 U.S. Bank, N.A.
                        Statement of Financial Condition
                                As of 12/31/2001

                                    ($000's)

                                                         12/31/2001
                                                        ------------
Assets
   Cash and Due From Depository Institutions            $  9,775,116
   Federal Reserve Stock                                           0
   Securities                                             26,316,516
   Federal Funds                                           1,261,731
   Loans & Lease Financing Receivables                   109,012,892
   Fixed Assets                                            1,414,464
   Intangible Assets                                       8,158,687
   Other Assets                                            6,637,699
                                                        ------------
      Total Assets                                      $162,577,105

Liabilities
   Deposits                                             $104,077,584
   Fed Funds                                               4,365,180
   Treasury Demand Notes                                           0
   Trading Liabilities                                       313,719
   Other Borrowed Money                                   25,030,765
   Acceptances                                               201,492
   Subordinated Notes and Debentures                       5,348,437
   Other Liabilities                                       3,894,231
                                                        ------------
   Total Liabilities                                    $143,231,408

Equity
   Minority Interest in Subsidiaries                        $981,870
   Common and Preferred Stock                                 18,200
   Surplus                                                12,068,893
   Undivided Profits                                       6,276,734
                                                        ------------
      Total Equity Capital                              $ 19,345,697

Total Liabilities and Equity Capital                    $162,577,105

- --------------------------------------------------------------------------------
To the best of the undersigned's determination, as of the date hereof, the above
financial information is true and correct.

U.S. Bank, N.A.

By:      /s/ Leticia Sabiniano
   -------------------------------------
   Assistant Vice President


Date:  May 14, 2002

                                       5

EX-99.1

Exhibit 99.1

LETTER OF TRANSMITTAL

SEAGATE TECHNOLOGY HDD HOLDINGS

Offer to Exchange

All Outstanding Privately Placed 8% Senior Notes due 2009

for an Equal Amount of Registered 8% Senior Notes due 2009

pursuant to the Prospectus, dated [            ], 2002

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON [                    ], 2002, UNLESS EXTENDED (THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON [                    ], 2002.

DELIVERY TO:  U.S. BANK NATIONAL ASSOCIATION, EXCHANGE AGENT

By Mail:	By Overnight Courier or Hand:	By Facsimile:
U.S. Bank National Association Corporate Trust Services P.O. Box 64111 St. Paul, MN 55164-0111	U.S. Bank National Association 180 East Fifth Street – 4th. Floor St. Paul, MN 55101 Attention: Specialized Finance Services Mail Station: EP-MN-T4CT	(651) 244-1142
		Confirm:
		(651) 244-8112

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

The undersigned acknowledges receipt of the Prospectus, dated [                    ], 2002 (the “Prospectus”), of Seagate Technology HDD Holdings, a Cayman Islands limited liability company (the “Company”), and this Letter of Transmittal (this “Letter”), which together constitute the offer (the “Exchange Offer”) to exchange an aggregate principal amount of up to $400,000,000 of the Company’s 8% Senior Notes due 2009 that were originally sold pursuant to a private offering (the “Original Notes”) for an equal principal amount of the Company’s 8% Senior Notes due 2009 that have been registered under the Securities Act of 1933, as amended (the “Exchange Notes”). U.S. Bank National Association is the exchange agent for the Exchange Offer (the “Exchange Agent”).

For each Original Note accepted for exchange, the holder of such Original Note will receive an Exchange Note having a principal amount equal to that of the surrendered Original Note. The Exchange Notes will accrue interest at the rate of 8% per annum, payable semi-annually in arrears on May 15 and November 15 of each year, commencing on November 15, 2002.

The Company reserves the right, in accordance with applicable law, at any time: (i) to delay the acceptance of the Original Notes; (ii) to terminate the Exchange Offer if the Company determines that any of the conditions to the Exchange Offer has not occurred or has not been satisfied; (iii) to extend the Expiration Date of the Exchange Offer and keep all Original Notes tendered other than those Original Notes properly withdrawn; and (iv) to waive any condition or amend the terms of the Exchange Offer. If the Company materially changes the Exchange Offer, or if the Company waives a material condition of the Exchange Offer, the Company will promptly distribute a prospectus supplement to the holders of the Original Notes disclosing the change or waiver. The Company also will extend the Exchange Offer as required by Rule 14e-1 under the Securities Exchange Act of 1934, as amended. If the Company exercises any of the rights listed above, it will promptly give oral or written notice of the action to the Exchange Agent and will issue a release to an appropriate news agency. In the case of an extension, an announcement will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.

This Letter is to be completed by a holder of Original Notes either if Original Notes are to be forwarded herewith or if a tender of Original Notes, if available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in the “The Exchange Offer” section of the Prospectus. Holders of Original Notes whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry transfer of their Original Notes into the Exchange Agent’s account at DTC and all other documents required by this Letter to the Exchange Agent on or prior to the Expiration Date, must tender their Original Notes according to the guaranteed delivery procedures set forth in the “The Exchange Offer— Guaranteed Delivery Procedures” section of the Prospectus. See Instruction 1. Delivery of documents to DTC does not constitute delivery to the Exchange Agent. Holders who tender their Original Notes using the DTC ATOP procedures described on page 3 need not submit this Letter.

The undersigned has completed the appropriate boxes below and signed this Letter to indicate the action that the undersigned desires to take with respect to the Exchange Offer.

List below the Original Notes to which this Letter relates. If the space provided below is inadequate, the certificate numbers and principal amount of Original Notes should be listed on a separate signed schedule affixed hereto.

2

DESCRIPTION OF ORIGINAL NOTES	1	2	3
Name(s) and Address(es) of Registered Holder(s) (Please fill in, if blank)	Certificate Number(s)*	Amount of Original Note(s)	Amount Tendered**
*      Need not be completed if Original Notes are being tendered by book-entry transfer. **    Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the original Notes represented by the Original Notes indicated in column 2. See Instruction 2. Original Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. See Instruction 1.

¨ CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:

Name of Tendering Institution _____________________________________________________

Account Number ____________ Transaction Code Number ______________________________

By crediting Original Notes to the Exchange Agent’s account at DTC in accordance with DTC’s Automated Tender Offer Program (“ATOP”) and by complying with applicable ATOP procedures with respect to the Exchange Offer, including transmitting an Agent’s Message to the Exchange Agent in which the holder of the Original Notes acknowledges and agrees to be bound by the terms of this Letter, the participant in ATOP confirms on behalf of itself and the beneficial owners of such Original Notes all provisions of this Letter applicable to it and such beneficial owner as if it had completed the information required herein and executed and transmitted this Letter to the Exchange Agent.

¨ CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

Name(s) of Registered Holder(s) ____________________________________________________

Window Ticket Number (if any) ____________________________________________________

Date of Execution of Notice of Guaranteed Delivery ____________________________________

Name of Institution that Guaranteed Delivery _________________________________________

IF DELIVERED BY DTC, COMPLETE THE FOLLOWING:

Account Number _________ Transaction Code Number_________________________________

3

¨ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name: ________________________________________________________________________  

Address: _______________________________________________________________________

If the undersigned is not a broker-dealer, the undersigned represents that it acquired the Exchange Notes in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes and it has no arrangement or understanding with any person to participate in a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive the Exchange Notes for its own account in exchange for the Original Notes, it represents that the Original Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act of 1933, as amended (the “Securities Act”), in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

4

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the aggregate principal amount of the Original Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Original Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Original Notes as are being tendered hereby.

The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as agent of the Company) with respect to the tendered Original Notes, with full power of substitution and resubstitution (such power of attorney being deemed an irrevocable power coupled with an interest) to (1) deliver certificates representing such Original Notes, or transfer ownership of such Original Notes on the account books maintained by DTC, together, in each such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company, (2) present and deliver such Original Notes for transfer on the books of the Company and (3) receive all benefits or otherwise exercise all rights and incidents of beneficial ownership of such Original Notes, all in accordance with the terms of the Exchange Offer.

The undersigned hereby represents and warrants that (1) the undersigned has full power and authority to tender, sell, assign and transfer the Original Notes tendered hereby, (2) the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and (3) the Original Notes tendered for exchange are not subject to any adverse claims or proxies when the same are accepted by the Company. The undersigned hereby further represents that any Exchange Notes acquired in exchange for Original Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the undersigned, that neither the holder of such Original Notes nor any such other person is engaged in, or intends to engage in a distribution of such Exchange Notes within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), or has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes, and that neither the holder of such Original Notes nor any such other person is an “affiliate”, as such term is defined in Rule 405 under the Securities Act, of the Company.

The undersigned also acknowledges that this Exchange Offer is being made based on the Company’s understanding of an interpretation by the staff of the U.S. Securities and Exchange Commission (the “SEC”) as set forth in no-action letters issued to third parties, including Exxon Capital Holdings Corporation, SEC No-Action Letter (available May 13, 1988), Morgan Stanley & Co. Incorporated, SEC No-Action Letter (available June 5, 1991) and Shearman & Sterling, SEC No-Action Letter (available July 2, 1993), that the Exchange Notes issued in exchange for the Original Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by each holder thereof (other than a broker-dealer who acquires such Exchange Notes directly from the Company for resale pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act

5

or any such holder that is an “affiliate” of the Company within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such holder’s business and such holder is not engaged in, and does not intend to engage in, a distribution of such Exchange Notes and has no arrangement with any person to participate in the distribution of such Exchange Notes. If a holder of the Original Notes is engaged in or intends to engage in a distribution of the Exchange Notes or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, such holder (1) may not rely on the applicable interpretations of the staff of the SEC, (2) will not be entitled to tender its Original Notes in the Exchange Offer and (3) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction. If the undersigned is a broker-dealer that will receive the Exchange Notes for its own account in exchange for the Original Notes, it represents that the Original Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Original Notes tendered hereby. All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in the “The Exchange Offer—Withdrawal of Tenders” section of the Prospectus.

Unless otherwise indicated herein in the box entitled “Special Issuance Instructions” below, please deliver the Exchange Notes (and, if applicable, substitute certificates representing the Original Notes for any Original Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of the Original Notes, please credit the account indicated above maintained at DTC. Similarly, unless otherwise indicated under the box entitled “Special Delivery Instructions” below, please send the Exchange Notes (and, if applicable, substitute certificates representing the Original Notes for any Original Notes not exchanged) to the undersigned at the address shown above in the box entitled “Description of Original Notes”.

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF ORIGINAL NOTES” ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE ORIGINAL NOTES AS SET FORTH IN SUCH BOX ABOVE.

6

SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 3 and 4)

SPECIAL DELIVERY INSTRUCTION (See Instructions 3 and 4)

To be completed ONLY if the certificates for the Original Notes not exchanged and/or the Exchange Notes are to be issued in the name of and sent to someone other than the person(s) whose signature(s) appear(s) on this Letter below, or if the Original Notes delivered by book-entry transfer that are not accepted for exchange are to be returned by credit to an account maintained at DTC other than the account indicated above. Issue the Exchange Notes and/or the Original Notes to: Name(s): ____________________________ (Please Type or Print) Address: _____________________________ ___________________________________ ___________________________________ (Including Zip Code) ____________________________________________ (Tax Identification or Social Security Number) (See Substitute Form W-9) ¨    Credit unexchanged Original Notes delivered by book-entry transfer to the DTC account set forth below. ____________________________________________ (DTC Account Number, if applicable)

To be completed ONLY if the certificates for the Original Notes not exchanged and/or the Exchange Notes are to be sent to someone other than the person(s) whose signature(s) appear(s) on this Letter below or to such person(s) at an address other than shown in the box entitled “Description of Original Notes” on this Letter above. Deliver the Exchange Notes and/or the Original Notes to: Name(s): __________________________ (Please Type or Print) Address: ___________________________ _________________________________ _________________________________ (Including Zip Code)

IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF OR AN AGENT’S MESSAGE IN LIEU HEREOF (TOGETHER WITH THE CERTIFICATES FOR THE ORIGINAL NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

PLEASE READ THIS LETTER OF TRANSMITTAL

CAREFULLY BEFORE COMPLETING ANY BOX ABOVE

7

PLEASE SIGN HERE

(TO BE COMPLETED BY ALL TENDERING HOLDERS)

(Complete accompanying Substitute Form W-9)

__________________________________________________________________________________________

__________________________________________________________________________________________

(Signature(s) of Owner)

Dated: ____________________, 2002

Name(s): __________________________________________________________________________________

(Please Type or Print)

Capacity (full title): __________________________________________________________________________

Address: ____________________________________________________________________________________

__________________________________________________________________________________________

(Including Zip Code)

Daytime Area Code and Telephone No: ___________________________________________________________

Taxpayer Identification or Social Security No: ______________________________________________________

(See Substitute Form W-9)

(If a holder is tendering any Original Notes, this Letter must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Original Notes or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3.)

SIGNATURE GUARANTEE

(if required by Instruction 3)

FINANCIAL INSTITUTIONS: PLACE MEDALLION

GUARANTEE IN SPACE BELOW

Authorized Signature:

Name: _____________________________________________________________________________________

Name of Firm: ______________________________________________________________________________

Address: ____________________________________________________________________________________

Area Code and Telephone Number: _____________________________________________________________

Dated: ______________________________________________________________________________________

8

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Exchange Offer

1. Delivery of This Letter and the Original Notes; Guaranteed Delivery Procedures.

This Letter is to be completed by the holders of the Original Notes either if the certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in the “The Exchange Offer—Book-Entry Transfer” section of the Prospectus and an Agent’s Message is not delivered. The certificates for all physically tendered Original Notes, or book-entry confirmation, as the case may be, as well as a properly completed and duly executed Letter (or facsimile thereof) and any other documents required by this Letter, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Original Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. The term “Agent’s Message” means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a book-entry confirmation which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that it has received and agrees to be bound by the Letter and that the Company may enforce the Letter against the tendering participant. Holders who tender their Original Notes by using the DTC ATOP procedures need not submit this Letter.

Holders of Original Notes whose certificates for Original Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Original Notes pursuant to the guaranteed delivery procedures set forth in the “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus. Pursuant to such procedures, holders may tender their Original Notes if (i) the tender is made by or through an Eligible Guarantor Institution (as defined below); (ii) a properly completed and signed Notice of Guaranteed Delivery in the form provided with this Letter is delivered to the Exchange Agent on or before the Expiration Date (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Original Notes and the amount of Original Notes tendered, stating that the tender is being made thereby; and (iii) the certificates or a confirmation of book-entry transfer and a properly completed and signed Letter is delivered to the Exchange Agent within three New York Stock Exchange trading days after execution of the Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand, facsimile or mail to the Exchange Agent, and a guarantee by an Eligible Guarantor Institution must be included in the form described in the notice.

Delivery of this Letter, the Original Notes and all other required documents by whatever method you choose is at your sole risk. Delivery is complete when the Exchange Agent actually receives the items to be delivered. Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Exchange Agent. If delivery is by mail,

9

then registered mail, return receipt requested, properly insured, or an overnight delivery service is recommended. In all cases, please allow sufficient time to ensure timely delivery. If the Original Notes are sent by mail, it is suggested that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.

2. Partial Tenders (not applicable to holders of Original Notes who tender by book-entry transfer).

If less than all of the Original Notes evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount of the Original Notes to be tendered in the box above entitled “Description of Original Notes—Principal Amount Tendered.” A reissued certificate representing the balance of nontendered Original Notes will be sent to such tendering holder, unless otherwise provided in the appropriate box on this Letter, as promptly as practicable after the Expiration Date. All of the Original Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated.

3. Signatures on This Letter; Bond Powers and Endorsements; Guarantee of Signatures.

If this Letter is signed by the registered holder of the Original Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates without any change whatsoever.

If any tendered Original Notes are owned of record by two or more joint owners, all such owners must sign this Letter.

If any tendered Original Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter as there are different registrations of certificates.

When this Letter is signed by the registered holder of the Original Notes specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the Exchange Notes are to be issued, or any untendered Original Notes are to be reissued, to a person other than the registered holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificates must be guaranteed by an Eligible Guarantor Institution.

If this Letter is signed by a person other than the registered holder of any certificates specified herein, such certificates must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name of the registered holder appears on the certificates and the signatures on such certificates must be guaranteed by an Eligible Guarantor Institution.

If this Letter or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless

10

waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted.

ENDORSEMENTS ON CERTIFICATES FOR THE ORIGINAL NOTES OR SIGNATURES ON BOND POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM THAT IS A MEMBER OF THE SECURITY TRANSFER AGENT MEDALLION SIGNATURE PROGRAM OR BY ANY OTHER “ELIGIBLE GUARANTOR INSTITUTION” WITHIN THE MEANING OF RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934.

SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, PROVIDED THE ORIGINAL NOTES ARE TENDERED: (I) BY A REGISTERED HOLDER OF THE ORIGINAL NOTES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN THE DTC SYSTEM WHOSE NAME APPEARS ON A SECURITY POSITION LISTING AS THE HOLDER OF SUCH ORIGINAL NOTES) TENDERED WHO HAS NOT COMPLETED THE BOX ENTITLED “SPECIAL ISSUANCE INSTRUCTIONS” OR “SPECIAL DELIVERY INSTRUCTIONS” ON THIS LETTER OR (II) FOR THE ACCOUNT OF AN ELIGIBLE GUARANTOR INSTITUTION.

4. Special Issuance and Delivery Instructions.

Tendering holders of the Original Notes should indicate in the applicable box the name and address to which the Exchange Notes issued pursuant to the Exchange Offer and/or substitute certificates evidencing Original Notes not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. A holder tendering the Original Notes by book-entry transfer may request that the Original Notes not exchanged be credited to such account maintained at DTC as such holder may designate hereon. If no such instructions are given, such Original Notes not exchanged will be returned to the name or address of the person signing this Letter.

5. Tax Identification Number.

Federal income tax law generally requires that a tendering holder whose Original Notes are accepted for exchange must provide the Company (as payor) with such holder’s correct Taxpayer Identification Number (“TIN”) on the Substitute Form W-9 below, which, in the case of a tendering holder who is an individual, is his or her social security number. If the Company is not provided with the current TIN or an adequate basis for an exemption, such tendering holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, delivery of the Exchange Notes to such tendering holder may be subject to backup withholding on all reportable payments made after the exchange. If the withholding results in an overpayment of taxes, a refund may be obtained.

Exempt tendering holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the

11

enclosed Guidelines of Certification of Taxpayer Identification Number on Substitute Form W-9 (the “W-9 Guidelines”) for additional instructions.

To prevent backup withholding, each tendering holder must provide its correct TIN by completing the “Substitute Form W-9” set forth below, certifying that the TIN provided is correct (or that such holder is awaiting a TIN) and that (i) the holder is exempt from backup withholding, (ii) the holder has not been notified by the Internal Revenue Service that such holder is subject to a backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the tendering holder is a nonresident alien or foreign entity not subject to backup withholding, such holder must give the Company a completed Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, or other similar statement, signed under penalties of perjury, certifying as to that individual’s exempt status. You can obtain the appropriate form from the Exchange Agent. If the Original Notes are in more than one name or are not in the name of the actual owner, such holder should consult the W-9 Guidelines for information on which TIN to report. If such holder does not have a TIN, such holder should consult the W-9 Guidelines for instructions on applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and write “applied for” in lieu of its TIN. Note: checking this box and writing “applied for” on the form means that such holder has already applied for a TIN or that such holder intends to apply for one in the near future. If such holder does not provide its TIN to the Company within 60 days, backup withholding will begin and continue until such holder furnishes its TIN to the Company.

6. Transfer Taxes.

The Company will pay the transfer taxes for the exchange of the Original Notes in the Exchange Offer. If, however, the Exchange Notes are delivered to or issued in the name of a person other than the registered holder, or if a transfer tax is imposed for any reason other than for the exchange of the Original Notes in the Exchange Offer, then the tendering holder will pay the transfer taxes. If a tendering holder does not submit satisfactory evidence of payment of taxes or exemption from taxes with the Letter, the taxes will be billed to the tendering holder.

EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT IS NOT NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE ORIGINAL NOTES SPECIFIED IN THIS LETTER.

7. Waiver of Conditions.

The Company reserves the right to waive any or all conditions enumerated in the Prospectus.

8. No Conditional Tenders.

No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders, by execution of this Letter, shall waive any right to receive notice of the acceptance of their Original Notes for exchange.

12

Neither the Company, any affiliates or assigns of the Company, the Exchange Agent nor any other person is under any obligation to give notice of any irregularities in tender nor will they be liable for failing to give such notice.

9. Mutilated, Lost, Stolen or Destroyed Original Notes.

Any holder whose Original Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions.

10. Requests for Assistance or Additional Copies.

Questions relating to the procedures for tendering, as well as requests for additional copies of the Prospectus and this Letter, may be directed to the Exchange Agent, at the address and telephone number indicated above.

13

TO BE COMPLETED BY ALL TENDERING HOLDERS

(See Instruction 5)

TAXPAYER IDENTIFICATION NUMBER Substitute Form W-9
Name: __________________________________________________________________________________                     (First, middle, last) (If joint names, list both and circle the name of the person or entity whose number you enter in Part I below)
Address:   _________________________________________________________________________________                  _________________________________________________________________________________
Part 1 — Please provide your Taxpayer Identification Number (“TIN”) in the space provided below and certify by signing and dating below. ___________________________________________                  (Social Security or Employer Identification Number)	Part 2 — If you are exempt from backup withholding, check here. ¨ — Exempt from backup withholding

Part 3 — Certification — Under penalties of perjury, I certify that:

1.    The information provided above on this Substitute Form W-9 is true, complete and correct; and

2.    I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has informed me that I am no longer subject to backup withholding.

Signature: ____________________________________________ Date: ______________________________

Certification Instructions — You must cross out item 2 of Part 3 if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you are subject to backup withholding, you receive another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item 2 of Part 3.

NOTE:  Failure to complete and return this Substitute Form W-9 may result in backup withholding of any payments made to you. Please review the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional details.

NOTE:  You must complete the following certificate if are awaiting a Taxpayer Identification Number.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of the exchange, all reportable payments made to me thereafter may be subject to withholding until I provide a number.
___________________________________________ Signature	_________________________________________ Date

14

EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY

SEAGATE TECHNOLOGY HDD HOLDINGS

Offer to Exchange

All Outstanding Privately Placed 8% Senior Notes due 2009

for an Equal Amount of Registered 8% Senior Notes due 2009

pursuant to the Prospectus, dated [                    ], 2002

This form, or one substantially equivalent hereto, must be used to accept the Exchange Offer made by Seagate Technology HDD Holdings, a Cayman Islands limited liability company (the “Company”), pursuant to its Prospectus, dated [                    ], 2002 (the “Prospectus”), and the enclosed Letter of Transmittal (the “Letter of Transmittal”) if the certificates for the Original Notes are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to U.S. Bank National Association (the “Exchange Agent”) as set forth below. In addition, in order to utilize the guaranteed delivery procedure to tender the Original Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) must also be received by the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Letter of Transmittal.

Delivery To:

U.S. BANK NATIONAL ASSOCIATION

(Exchange Agent)

By Registered or Certified Mail:	Facsimile Transmission Number: (Eligible Institutions Only)	By Hand or Over Night Delivery
U.S. Bank, N.A. 180 East Fifth Street, 4th Floor St. Paul, MN 55101 Attn: Specialized Finance Services Mail Station: EP-MN-T4CT	(651) 244-8014 Confirm (651) 244-8112	U.S. Bank, N.A. 180 East Fifth Street, 4th Floor St. Paul, MN 55101 Attn: Specialized Finance Services Mail Station: EP-MN-T4CT

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

2

Ladies and Gentlemen:

Upon the terms and subject to the conditions set forth in the Prospectus and the accompanying Letter of Transmittal, the undersigned hereby tenders to the Company the principal amount of the Original Notes set forth below, pursuant to the guaranteed delivery procedures described in the “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus.

Principal Amount of the Original Notes Tendered: ____________________________________

Certificate Nos. (If Available): __________________________________________________

___________________________________________________________________________________________

(Signature(s) of Record Holders(s))

___________________________________________________________________________________________

(Please Type of Print Names(s) of Record Holders(s))

Dated: _________________________, 2002

Address: ____________________________________________________________________

___________________________________________________________________________________________

                                                                                        (Zip Code)    

___________________________________________________________________________________________

(Daytime Area Code and Telephone No.)

¨ Check this box if the Original Notes will be delivered by book-entry transfer to The Depositary Trust Company.

Account Number: ______________________________________________________________

THE ACCOMPANYING GUARANTEE MUST BE COMPLETED.

3

GUARANTEE

(Not to be used for signature guarantee)

The undersigned, a participant in the Security Transfer Agents Medallion Program or an “eligible guarantor institution”, as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (a) represents that the above named person(s) “own(s)” the Original Notes tendered hereby within the meaning of Rule 14e-4(b)(2) under the Exchange Act, (b) represents that the tender of those Original Notes complies with Rule 14e-4, and (c) guarantees to deliver to the Exchange Agent, at its address set froth in the Notice of Guaranteed Delivery, the certificates representing all tendered Original Notes, in proper form for transfer, or a book-entry confirmation (a confirmation of a book-entry transfer of the Original Notes into the Exchange Agent’s account at DTC), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and any other documents required by the Letter of Transmittal within three (3) New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery.

Name of Firm: _______________________________________________________________

___________________________________________________________________________________________

(Authorized Signature)

Address: _____________________________________________________________________

___________________________________________________________________________________________

                                                                   (Zip Code)    

Area Code and Tel. No.: _______________________________________________________

Name: ______________________________________________________________________

(Please Type or Print)

Title: _______________________________________________________________________

Dated: ___________________________, 2002

DO NOT SEND CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY, CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL

4

INSTRUCTIONS

1. Delivery of this Notice of Guaranteed Delivery.

A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth on the cover hereof prior to the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and all other required documents to the Exchange Agent is at the election and risk of the holders but, except as otherwise provide below, the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that the holders use an overnight or hand delivery service, properly insured. If such delivery is by mail, it is recommended that the holders use properly insured, registered mail with return receipt requested. In all cases, sufficient time should be allowed to ensure timely delivery. No Notice of Guaranteed Delivery should be sent to the Company.

2. Signature on this Notice of Guaranteed Delivery; Guarantee of Signatures.

If this Notice of Guaranteed Delivery is signed by the holder(s) referred to herein, then the signature must correspond with the name(s) as written on the face of the Original Notes without alteration, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a person other than the holder(s) listed, this Notice of Guaranteed Delivery must be accompanied by a properly completed bond power signed as the name of the holder(s) appears(s) on the face of the Original Notes without alteration, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, office of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and, unless waived by the Company, evidence satisfactory to the Company of their authority so to act must be submitted with this Notice of Guaranteed Delivery.

3. Requests for Assistance or Additional Copies.

Questions relating to the Exchange Offer or the procedures for consenting and tendering as well as requests for assistance or for additional copies of the Prospectus, the Letter of Transmittal and this Notice of Guaranteed Delivery may be directed to the Exchange Agent at the address set forth on the cover hereof or to your broker, dealer, commercial bank or trust company.