exv4w2



 






Execution Version




EXHIBIT 4.2




$300,000,000 AGGREGATE PRINCIPAL AMOUNT




MAXTOR CORPORATION




2.375% CONVERTIBLE SENIOR NOTES




DUE 2012




Resale Registration Rights Agreement




dated August 15, 2005




 









 





     RESALE REGISTRATION RIGHTS AGREEMENT, dated as of August 15, 2005, between Maxtor
Corporation, a Delaware corporation (together with any successor entity, herein referred to as the
“Company”) and the Initial Purchasers referred to in Schedule A to the Purchase Agreement (as
defined below) (the “Initial Purchasers”).



     Pursuant to the Purchase Agreement, dated as of August 9, 2005, among the Company and the
Initial Purchasers (the “Purchase Agreement”), the Initial Purchasers have agreed to purchase from
the Company $300,000,000 ($345,000,000 if the Initial Purchasers exercise their option in full) in
aggregate principal amount of 2.375% Convertible Senior Notes due 2012 (the “Notes”). The Notes
will be convertible into fully paid, nonassessable shares of common stock, par value $0.01 per
share, of the Company (the “Common Stock”). The Notes will be convertible on the terms, and
subject to the conditions, set forth in the Indenture (as defined herein). To induce the Initial
Purchasers to purchase the Notes, the Company has agreed to provide the registration rights set
forth in this Agreement pursuant to Section 1 of the Purchase Agreement for their benefit and the
benefit of Holders (as herein defined) from time to time of the Notes and Common Stock.



     The parties hereby agree as follows:



     1. Definitions. Capitalized terms used in this Agreement without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following
capitalized terms shall have the following meanings:



     “Affiliate” of any specified person means any other person which, directly or indirectly, is
in control of, is controlled by, or is under common control with, such specified person. For
purposes of this definition, control of a person means the power, direct or indirect, to direct or
cause the direction of the management and policies of such person whether by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the foregoing.



     “Agreement”: This Resale Registration Rights Agreement.



     “Amendment Effectiveness Deadline Date”: As defined in Section 2(e) hereof.



     “Blue Sky Application”: As defined in Section 6(a)(i) hereof.



     “Business Day”: The definition of “Business Day” in the Indenture.



     “Commission”: Securities and Exchange Commission.



     “Common Stock”: As defined in the preamble hereto.



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     “Company”: As defined in the preamble hereto.



     “Conversion Price” means, with respect to each $1,000 principal amount of Notes, as of any
date of determination, the principal amount divided by the Conversion Rate in effect as of such
date of determination or, if no Notes are then outstanding, the Conversion Rate that would be in
effect were Notes then outstanding.



     “Conversion Rate” has the meaning assigned to such term in the Indenture.



     “Effectiveness Period”: As defined in Section 2(a)(iii) hereof.



     “Effectiveness Target Date”: As defined in Section 2(a)(ii) hereof.



     “Exchange Act”: Securities Exchange Act of 1934, as amended.



     “Holder”: A Person who owns, beneficially or otherwise, Transfer Restricted Securities.



     “Indemnified Holder”: As defined in Section 6(a) hereof.



     “Indenture”: The Indenture, dated as of August 15, 2005 between the Company and U.S. Bank
National Association, as trustee (the “Trustee”), pursuant to which the Notes are to be issued, as
such Indenture is amended, modified or supplemented from time to time in accordance with the terms
thereof.



     “Initial Purchasers”: As defined in the preamble hereto.



     “Liquidated Damages”: As defined in Section 3(b) hereof.



     “Liquidated Damages Payment Date”: Each February 15 and August 15.



     “Majority of Holders”: Holders holding over 50% of the aggregate principal amount of Notes
outstanding; provided that, for the purposes of this definition, a holder of shares of Common Stock
which constitute Transfer Restricted Securities issued upon conversion of the Notes shall be deemed
to hold an aggregate principal amount of Notes (in addition to the principal amount of Notes held
by such holder) equal to the quotient of (x) the number of such shares of Common Stock held by such
holder and (y) the Conversion Rate in effect at the time of such conversion.



     “Market Price”: The closing price of the Common Stock on the NYSE or, if the Common Stock is
not listed for trading on the NYSE, on the principal other national or regional securities exchange
on which the Common Stock then is



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listed or, if the Common Stock is not listed for trading on a national or regional securities
exchange, on the National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers Automated Quotation
System, on the principal other market on which the Common Stock is then traded.




     “NASD”: National Association of Securities Dealers, Inc.



     “NYSE”: The New York Stock Exchange, Inc.



     “Notes”: As defined in the preamble hereto.



     “Notice and Questionnaire”: A written notice executed by the respective Holder and delivered
to the Company containing substantially the information called for by the Selling Securityholder
Notice and Questionnaire attached as Appendix A to the Offering Memorandum of the Company dated
August 9, 2005 relating to the Notes.



     “Notice Holder”: On any date, any Holder that has delivered a Notice and Questionnaire to the
Company on or prior to such date.



     “Person”: An individual, partnership, corporation, company, unincorporated organization,
trust, joint venture or a government or agency or political subdivision thereof.



     “Purchase Agreement”: As defined in the preamble hereto.



     “Prospectus”: The prospectus included in a Shelf Registration Statement, as amended or
supplemented by any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such prospectus.



     “Record Holder”: With respect to any Liquidated Damages Payment Date, each Person who is a
Holder of Notes which are Transfer Restricted Securities on the 15th day preceding the
relevant Liquidated Damages Payment Date.



     “Registration Default”: As defined in Section 3(a) hereof.



     “Securities Act”: Securities Act of 1933, as amended.



     “Shelf Filing Deadline”: As defined in Section 2(a)(i) hereof.



     “Shelf Registration Statement”: As defined in Section 2(a)(i) hereof.



     “Subsequent Shelf Registration Statement”: As defined in Section 2(c) hereof.



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     “Suspension Notice”: As defined in Section 4(c) hereof.



     “Suspension Period”: As defined in Section 4(b)(i) hereof.



     “TIA”: Trust Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder, in each case, as in effect on the date the Indenture is qualified under the
TIA.



     “Transfer Restricted Securities”: Each Note and each share of Common Stock issued upon
conversion of Notes until the earlier of:




     (i) the date on which such Note or such share of Common Stock issued upon conversion
has been effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement;




     (ii) the date on which such Note or such share of Common Stock issued upon conversion
is transferred in compliance with Rule 144 under the Securities Act or may be sold or
transferred by a person who is not an affiliate of the Company pursuant to Rule 144(k)
under the Securities Act (or any other similar provision then in force); or




     (iii) the date on which such Note or such share of Common Stock issued upon
conversion ceases to be outstanding (whether as a result of redemption, repurchase and
cancellation, conversion or otherwise).



     “Underwritten Registration”: A registration in which Notes of the Company are sold to an
underwriter for reoffering to the public.



     Unless the context otherwise requires, the singular includes the plural, and words in the
plural include the singular.




	 	2.	 	Shelf Registration.






	 	(a)	 	The Company shall:






          (i) not later than 90 days after the date hereof (the “Shelf Filing
Deadline”), cause to be filed a registration statement pursuant to Rule 415
under the Securities Act (the “Shelf Registration Statement”), which Shelf
Registration Statement shall provide for resales of all Transfer Restricted
Securities held by Holders that have provided the information required pursuant
to the terms of Section 2(e) hereof;




          (ii) use its best efforts to cause the Shelf Registration Statement to be
declared effective by the Commission not later



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than 180 days after the date hereof (the “Effectiveness Target Date”); and




          (iii) use its best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 4(b) hereof to the extent necessary to ensure that (A) it is
available for resales by the Holders of Transfer Restricted Securities entitled,
to the benefit of this Agreement and (B) conforms with the requirements of this
Agreement and the Securities Act and the rules and regulations of the Commission
promulgated thereunder as announced from time to time, for a period (the
“Effectiveness Period”) until the earliest of:




               (1) two years after the last date of original issuance of
any of the Notes; or




               (2) the date when the Holders of Transfer Restricted
Securities are able to sell all such Transfer Restricted
Securities immediately pursuant to Rule 144(k) under the
Securities Act; or




               (3) the date when all of the Transfer Restricted
Securities are disposed of pursuant to the Shelf Registration
Statement or Rule 144 under the Securities Act or any similar
provision then in effect.



     (b) None of the Company’s security holders (other than the Holders of Transfer
Restricted Securities) shall have the right to include any of the Company’s securities in
the Shelf Registration Statement.



     (c) If the Shelf Registration Statement or any Subsequent Shelf Registration
Statement ceases to be effective for any reason at any time during the Effectiveness
Period (other than because all Transfer Restricted Securities registered thereunder shall
have been resold pursuant thereto or shall have otherwise ceased to be Transfer Restricted
Securities), the Company shall use its best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof, and in any event shall within thirty (30) days
of such cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement covering all of the securities
that as of the date of such filing are Transfer Restricted Securities (a “Subsequent Shelf
Registration Statement”). If a Subsequent Shelf Registration Statement is filed, the
Company shall use its best efforts to



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cause the Subsequent Shelf Registration Statement to become effective as promptly as
is practicable after such filing and to keep such Registration Statement (or subsequent
Shelf Registration Statement) continuously effective until the end of the Effectiveness
Period.



     (d) The Company shall supplement or amend the Shelf Registration Statement if
required by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement, if required by the Securities
Act or as reasonably requested by the Initial Purchasers or by the Trustee on behalf of
the Holders of the Transfer Restricted Securities covered by such Shelf Registration
Statement.



     (e) Each Holder agrees that if such Holder wishes to sell Transfer Restricted
Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do
so only in accordance with this Section 2(e) and Section 4(b). Each Holder wishing to
sell Transfer Restricted Securities pursuant to a Shelf Registration Statement and related
Prospectus must deliver a Notice and Questionnaire to the Company. In order to be named
as a selling securityholder in the Prospectus at the time of effectiveness of the Shelf
Registration Statement, the Notice and Questionnaire must be delivered at least ten (10)
Business Days prior to the effectiveness of the Shelf Registration Statement. From and
after the date the Shelf Registration Statement is declared effective, the Company shall,
as promptly as practicable after the date a Notice and Questionnaire is delivered:




     (i) (a) if required by applicable law, upon the later of (x) ninety (90)
days after such date or (y) ten (10) Business Days after the expiration of any
Suspension Period in effect when the Notice and Questionnaire is delivered, file
with the SEC a post-effective amendment to the Shelf Registration Statement or
(b) prepare and, if required by applicable law, upon the later of (x) fifteen
(15) Business Days after such date or (y) ten (10) Business Days after the
expiration of any Suspension Period in effect when the Notice and Questionnaire
is delivered (the “Prospectus Supplement Deadline Date”), file a supplement to
the related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that the Holder
delivering such Notice and Questionnaire is named as a selling securityholder in
the Shelf Registration Statement and the related Prospectus in such a manner as
to permit such Holder to deliver such Prospectus to purchasers of the Transfer
Restricted Securities in accordance with applicable law and, if the Company
shall file a post-effective



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amendment to the Shelf Registration Statement, use its best efforts to
cause such post-effective amendment to be declared effective under the
Securities Act as promptly as is practicable, but in any event by the date (the
“Amendment Effectiveness Deadline Date”) that is forty-five (45) days after the
date such post-effective amendment is required by this clause to be filed;




     (ii) provide such Holder upon its request copies of any documents filed
pursuant to Section 2(e)(i); and




     (iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(e)(i);


provided that if such Notice and Questionnaire is delivered during a Suspension Period, the Company
shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set
forth in clauses (i), (ii) and (iii) above upon expiration of the Suspension Period in accordance
with Section 4(b). Notwithstanding anything contained herein to the contrary, (i) the Company
shall be under no obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Registration Statement or related Prospectus and (ii) the Amendment
Effectiveness Deadline Date shall be extended by up to ten (10) Business Days after the expiration
of a Suspension Period (and the Company shall incur no obligation to pay Liquidated Damages during
such extension) if such Suspension Period shall be in effect on the Amendment Effectiveness
Deadline Date.





	 	3.	 	Liquidated Damages.






     (a) Each event referred to in the following clauses (i) through (vi), is a
“Registration Default”:




          (i) the Shelf Registration Statement is not filed with the Commission prior
to or on the Shelf Filing Deadline;




          (ii) the Shelf Registration Statement has not been declared effective by
the Commission prior to or on the Effectiveness Target Date;




          (iii) the Company has failed to perform its obligations set forth in
Section 2(e) within the time period required therein;




          (iv) (a) any post-effective amendment to a Shelf Registration filed
pursuant to Section 2(e)(i)(a) has not become effective under the Securities Act
on or prior to the Amendment Effectiveness Deadline Date or (b) any supplement
pursuant to the



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related Prospectus or supplement or amendment to any document incorporated
therein by reference or filing of any other required document pursuant to
Section 2(e)(i)(b) is filed after the Prospectus Supplement Deadline Date;




          (v) except as provided in Section 4(b)(i) hereof, the Shelf Registration
Statement is filed and declared effective but, during the Effectiveness Period,
shall thereafter cease to be effective or fail to be usable for its intended
purpose without being succeeded within five Business Days by a post-effective
amendment to the Shelf Registration Statement, a supplement to the Prospectus or
a report filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act that cures such failure and, in the case of a post-effective
amendment, is itself immediately declared effective; or




          (vi) (a) prior to or on the 45th or 60th day, as the case may be, of any
Suspension Period, such suspension has not been terminated or (b) a Suspension
Period when aggregated with other Suspension Periods during the prior 360-day
period exceeds 90 days,



     For purposes of this Agreement, each Registration Default set forth above shall begin and be
cured on the dates set forth in the table below:



	 	 	 	 	 
	Type of	 	 	 	 
	Registration Default	 	Beginning	 	Cure
	by Clause	 	Date	 	Date
	 
	(i)

	 	Shelf Filing Deadline
	 	the date the Shelf
Registration
Statement is filed
	 
	 	 	 	 
	(ii)

	 	Effectiveness Target Date
	 	the date the Shelf
Registration
Statement is
declared effective
by the Commission
	 
	 	 	 	 
	(iii)

	 	the date by which the
Company is required to
perform its obligations
under Section 2(e)
	 	the date the Company performs its obligations set
forth in Section 2(e)






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	Type of	 	 	 	 
	Registration Default	 	Beginning	 	Cure
	by Clause	 	Date	 	Date
	 
	(iv)

	 	the Amendment
Effectiveness Deadline
Date or, with respect to
any Liquidated Damages to
be incurred pursuant to
Section 3(a)(iv)(b), the
Prospectus Supplement
Deadline Date
	 	the date the
applicable
post-effective
amendment to a Shelf
Registration
Statement becomes
effective under the
Securities Act or,
with respect to any
Liquidated Damages
to be incurred
pursuant to Section
3(a)(iv)(b), the
date of filing of
such supplement to
the related
Prospectus or other
document provided
for in Section
2(e)(i)(b)
	 
	 	 	 	 
	(v)

	 	the date five Business
Days following the date
that the Shelf
Registration Statement
ceases to be effective or
fails to be usable
	 	the date any
post-effective
amendment is
declared effective
by the Commission or
any supplement to
the Prospectus or
report is filed that
makes the Shelf
Registration
Statement usable
	 
	 	 	 	 
	(vi)

	 	the date on which a
Suspension Period, or the
aggregate duration of
Suspension Periods in any
period, exceeds the
permitted number of days
	 	termination of the
applicable
Suspension Period







     (b) If a Registration Default occurs, other than a Registration Default relating to a
failure to file or have an effective Shelf Registration Statement with respect to shares
of Common Stock already issued upon conversion of the Notes that are Transfer Restricted
Securities, the Company hereby agrees to pay interest (“Liquidated Damages”) with respect
to the Notes that are Transfer Restricted Securities from and including the day following
beginning of the Registration Default to but excluding the earlier of (1) the day on which
the Registration Default has been cured and (2) the date the Shelf Registration Statement
is no longer



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required to be kept effective, accruing at a rate (x) with respect to the first
90-day period during which a Registration Default shall have occurred and be continuing,
equal to 0.25% per annum of the aggregate principal amount of the Notes that are Transfer
Restricted Securities, or, with respect to any Notes tendered for conversion prior to a
Liquidated Damages Payment Date during which there is a Registration Default, an
adjustment to the Conversion Rate in an amount equal to (i) 0.25% per annum of the
aggregate principal of such Notes that are Transfer Restricted Securities calculated from
the Liquidated Damages Payment Date immediately prior to such conversion to but excluding
the date of such conversion (ii) divided by the Market Price on the date of such
conversion and (y) with respect to the period commencing on the 91st day following the day
the Registration Default shall have occurred and be continuing, equal to 0.50% per annum
of the aggregate principal amount of the Notes that are Transfer Restricted Securities,
or, with respect to any Notes tendered for conversion prior to a Liquidated Damages
Payment Date during which there is a Registration Default, an adjustment to the Conversion
Rate in an amount equal to (i) 0.50% per annum of the aggregate principal of such Notes
that are Transfer Restricted Securities calculated from the Liquidated Damages Payment
Date immediately prior to such conversion to but excluding the date of such conversion
(ii) divided by the Market Price on the date of such conversion; provided that in no event
shall Liquidated Damages accrue at a rate per year exceeding 0.50% of the aggregate
principal amount of the Notes that are Transfer Restricted Securities.




     (c) All accrued Liquidated Damages shall be paid in arrears to Record Holders by the
Company on each Liquidated Damages Payment Date. Upon the cure of all Registration
Defaults relating to any particular Note, the accrual of Liquidated Damages with respect
to such Note will cease.




     (d) All obligations of the Company set forth in this Section 3 that are outstanding
with respect to any Note that is a Transfer Restricted Security at the time such Note
ceases to be a Transfer Restricted Security shall survive until such time as all such
obligations with respect to such Note that is a Transfer Restricted Security shall have
been satisfied in full.




     (e) The Liquidated Damages set forth above shall be the exclusive monetary remedy
available to the Holders of Notes that are Transfer Restricted Securities for each
Registration Default.



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	 	4.	 	Registration Procedures.






     (a) In connection with the Shelf Registration Statement, the Company shall comply
with all the provisions of Section 4(b) hereof and shall use its best efforts to effect
such registration to permit the sale of the Transfer Restricted Securities, and pursuant
thereto, shall as expeditiously as possible prepare and file with the Commission a Shelf
Registration Statement relating to the registration on any appropriate form under the
Securities Act.




     (b) In connection with the Shelf Registration Statement and any Prospectus required
by this Agreement to permit the sale or resale of Transfer Restricted Securities, the
Company shall:




          (i) Subject to any notice by the Company in accordance with this Section
4(b) of the existence of any fact or event of the kind described in Section
4(b)(iii)(D), use its best efforts to keep the Shelf Registration Statement
continuously effective during the Effectiveness Period; upon the occurrence of
any event that would cause the Shelf Registration Statement or the Prospectus
contained therein (A) to contain a material misstatement or omission or (B) not
to be effective and usable for resale of Transfer Restricted Securities during
the Effectiveness Period, the Company shall file promptly an appropriate
amendment to the Shelf Registration Statement, a supplement to the Prospectus or
a report filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act, in the case of clause (A), correcting any such misstatement
or omission, and, in the case of either clause (A) or (B), use its best efforts
to cause such amendment to be declared effective and the Shelf Registration
Statement and the related Prospectus to become usable for their intended
purposes as soon as practicable thereafter. Notwithstanding the foregoing, the
Company may suspend the effectiveness of the Shelf Registration Statement by
written notice to the Holders for a period not to exceed an aggregate of 45 days
in any 90-day period (each such period, a “Suspension Period”) if:




          (x) an event occurs and is continuing as a result of which the Shelf
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any document incorporated by reference therein would, in the Company’s judgment,
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



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          (y) the Company determines in good faith that the disclosure of such event
at such time could be seriously detrimental to the Company and its subsidiaries;



provided that, in the event the disclosure relates to a previously undisclosed proposed or
pending material business transaction, the disclosure of which the Company determines in
good faith would be reasonably likely to impede the Company’s ability to consummate such
transaction, the Company may extend a Suspension Period from 45 days to 60 days; provided,
however, that Suspension Periods shall not exceed an aggregate of 90 days in any 360-day
period. The Company shall not be required to specify in the written notice to the Holders
the nature of the event giving rise to the Suspension Period.




          (ii) Prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective during the
Effectiveness Period; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the disposition of all
Transfer Restricted Securities covered by the Shelf Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in the Shelf Registration
Statement or supplement to the Prospectus.




          (iii) Advise the selling Holders promptly and, if requested by such selling
Holders, to confirm such advice in writing, except as provided in clause (D)
below:




               (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Shelf Registration Statement or any post-effective amendment thereto,
when the same has become effective,




               (B) of any request by the Commission for amendments to the Shelf
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto,



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               (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
under the Securities Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, or




               (D) of the existence of any fact or the happening of any event,
during the Effectiveness Period, that makes any statement of a
material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Shelf Registration Statement or
the Prospectus in order to make the statements therein not
misleading.



If at any time the Commission shall issue any stop order suspending the effectiveness of
the Shelf Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or Blue Sky
laws, the Company shall use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time and will provide to each Holder who is named in the
Shelf Registration Statement prompt notice of the withdrawal of any such order.




          (iv) Make available at reasonable times for inspection by one or more
representatives of the selling Holders, designated in writing by a Majority of
Holders whose Transfer Restricted Securities are included in the Shelf
Registration Statement, and any attorney or accountant retained by such selling
Holders, all financial and other records, pertinent corporate documents and
properties of the Company as shall be reasonably necessary to enable them to
conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act, and cause the Company’s officers, directors, managers and
employees to supply all information reasonably requested by any such
representative or representatives of the selling Holders, attorney or accountant
in connection therewith; provided, however, that the Company shall have no
obligation to deliver information to any selling Holder or representative
pursuant to this Section 4(b)(iv) unless such selling Holder or representative
shall have executed and delivered a



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confidentiality agreement in a form acceptable to the Company relating to
such information.




          (v) If requested by any selling Holders, promptly incorporate in the Shelf
Registration Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders may reasonably
request to have included therein, including, without limitation, information
relating to the plan of distribution of the Transfer Restricted Securities.




          (vi) Furnish to each selling Holder upon their request, without charge, at
least one copy of the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto (and any documents incorporated by
reference therein or exhibits thereto (or exhibits incorporated in such exhibits
by reference) as such Person may request).




          (vii) Deliver to each selling Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; subject to any notice
by the Company in accordance with this Section 4(b) of the existence of any fact
or event of the kind described in Section 4(b)(iii)(D), the Company hereby
consents to the use of the Prospectus and any amendment or supplement thereto by
each of the selling Holders in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto.




          (viii) Before any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions in the United States as the
selling Holders may reasonably request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration Statement;
provided, however, that the Company shall not be required (A) to register or
qualify as a foreign corporation or a dealer of securities where it is not now
so qualified or (B) to subject itself to general or unlimited service of process
or to taxation in any such jurisdiction if it is not now so subject.



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          (ix) Cooperate with the selling Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends (unless required
by applicable securities laws); and enable such Transfer Restricted Securities
to be in such denominations and registered in such names as the Holders may
request at least two Business Days before any sale of Transfer Restricted
Securities.




          (x) Use its best efforts to cause the Transfer Restricted Securities
covered by the Shelf Registration Statement to be registered with or approved by
such other U.S. governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities.




          (xi) Subject to Section 4(b)(i) hereof, if any fact or event contemplated
by Section 4(b)(iii)(D) hereof shall exist or have occurred, use its best
efforts to prepare a supplement or post-effective amendment to the Shelf
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not misleading.




          (xii) Provide a CUSIP number for the Notes that are not Transfer Restricted
Securities not later than the effective date of the Shelf Registration Statement
and provide the Trustee under the Indenture with certificates for the Notes and
shares of Common Stock that are not Transfer Restricted Securities that are in a
form eligible for deposit with The Depository Trust Company.




          (xiii) Cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter that is required to be retained in accordance with the rules and
regulations of the NASD.




          (xiv) Otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission and all reporting requirements under the rules
and regulations of the Exchange Act.



15









 






          (xv) Cause the Indenture to be qualified under the TIA not later than the
effective date of the Shelf Registration Statement required by this Agreement,
and, in connection therewith, cooperate with the Trustee and the holders of
Notes to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its best efforts to cause the Trustee thereunder to execute all
documents that may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such Indenture to
be so qualified in a timely manner.




          (xvi) Cause all Common Stock covered by the Shelf Registration Statement to
be listed or quoted, as the case may be, on each securities exchange or
automated quotation system on which Common Stock is then listed or quoted.




          (xvii) Provide to each Holder upon written request each document filed with
the Commission pursuant to the requirements of Section 13 and Section 15 of the
Exchange Act after the effective date of the Shelf Registration Statement,
unless such document is available through the Commission’s EDGAR system.




     (c) Each Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice (a “Suspension Notice”) from the Company of the existence of any
fact of the kind described in Section 4(b)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the Shelf
Registration Statement until:




               (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 4(b)(xi) hereof; or




               (ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.


If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense)
all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of receipt of such
Suspension Notice.






16









 









     (d) Each Holder agrees, by acquisition of the Transfer Restricted Securities, that no
Holder shall be entitled to sell any of such
Transfer Restricted Securities pursuant to a Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with a Notice
and Questionnaire as required pursuant to Section 2(e) hereof (including the information
required to be included in such Notice and Questionnaire) and the information set forth in
the next sentence. Each Notice Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously furnished
to the Company by such Notice Holder not misleading and any other information regarding
such Notice Holder and the distribution of such Transfer Restricted Securities as the
Company may from time to time reasonably request in writing. Any sale of any Transfer
Restricted Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such disposition, that
such Prospectus does not as of the time of such sale contain any untrue statement of a
material fact relating to or provided by such Holder or its plan of distribution and that
such Prospectus does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which they were
made, not misleading.




	 	5.	 	Registration Expenses.





     All expenses incident to the Company’s performance of or compliance with this Agreement shall
be borne by the Company regardless of whether a Shelf Registration Statement becomes effective,
including, without limitation:




               (i) all registration and filing fees and expenses (including filings made
with the NASD);




               (ii) all fees and expenses of compliance with federal securities and state
Blue Sky or securities laws;




               (iii) all expenses of printing (including printing of Prospectuses and
certificates for the Common Stock to be issued upon conversion of the Notes) and
the Company’s expenses for messenger and delivery services and telephone;




               (iv) all fees and disbursements of counsel to the Company;




               (v) all application and filing fees in connection with listing (or
authorizing for quotation) the Common Stock on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and



17









 






               (vi) all fees and disbursements of independent certified public accountants
of the Company.



     The Company shall bear its internal expenses (including, without limitation, all salaries and
expenses of their officers and employees performing legal, accounting or other duties), the
expenses of any annual audit and the fees and expenses of any Person, including special experts,
retained by the Company.




	 	6.	 	Indemnification And Contribution.






     (a) The Company agrees to indemnify and hold harmless each Holder (including each
Initial Purchaser), its directors, officers, and employees and each person, if any, who
controls any such Holder within the meaning of the Securities Act or the Exchange Act
(each, an “Indemnified Holder”), against any loss, claim, damage, liability or expense,
joint or several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to resales of the Transfer Restricted
Securities), to which such Indemnified Holder may become subject, insofar as any such
loss, claim, damage, liability or action arises out of, or is based upon:




     (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Shelf Registration Statement as originally filed or in any
amendment thereof, in any Prospectus, or in any amendment or supplement thereto
or (B) any blue sky application or other document or any amendment or supplement
thereto prepared or executed by the Company (or based upon written information
furnished by or on behalf of the Company expressly for use in such blue sky
application or other document or amendment on supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Transfer Restricted Securities under the securities law of any state or other
jurisdiction (such application or document being hereinafter called a “Blue Sky
Application”); or




     (ii) the omission or alleged omission to state therein any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,


and agrees to reimburse each Indemnified Holder promptly upon demand for any legal or other
expenses reasonably incurred by such Indemnified Holder in connection with investigating,
defending, settling, compromising or paying any




18









 







such loss, claim, damage, liability, expense or action; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage, liability or
expense arises out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder (or its related Indemnified Holder)
specifically for use therein. The foregoing indemnity agreement is in addition to any liability
which the Company may otherwise have.





     (b) Each Holder, severally and not jointly, agrees to indemnify and hold harmless the
Company, its directors, officers and employees and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act to the same extent as
the foregoing indemnity from the Company to each such Holder, but only with reference to
written information relating to such Holder furnished to the Company by or on behalf of
such Holder specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement set forth in this Section shall be in addition to any
liabilities which any such Holder may otherwise have. In no event shall any Holder, its
directors, officers or employees or any person who controls such Holder be liable or
responsible for any amount in excess of the amount by which the total amount received by
such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Shelf
Registration Statement exceeds the amount of any damages that such Holder, its directors,
officers or employees or any person who controls such Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.




     (c) Promptly after receipt by an indemnified party under this Section 6 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under this Section 6, notify
the indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent it has been
materially prejudiced by such failure and, provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 6. If any such claim or action shall
be brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its election to
assume the defense of such



19









 





claim or action, the indemnifying party shall not be liable to the indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Holders shall have the right to employ a single
counsel to represent jointly the Holders and their directors, officers, employees and
controlling persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Holders against the Company under this Section 6 if
the Holders seeking indemnification shall have been advised by legal counsel that there
may be one or more legal defenses available to such Holders and their respective
directors, officers, employees and controlling persons that are different from or
additional to those available to the Company, and in that event, the fees and expenses of
such separate counsel shall be paid by the Company.




     (d) The indemnifying party under this Section shall not be liable for any settlement
of any proceeding effected without its written consent, which shall not be withheld
unreasonably, but if settled with such consent or if there is a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 6(c) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment
in any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement, compromise or consent
(x) includes an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit or proceeding and (y) 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.




     (e) If the indemnification provided for in this Section 6 shall for any reason be
unavailable or insufficient to hold harmless an indemnified party under Section 6(a) or
6(b) in respect of any loss, claim, damage or liability (or action in respect thereof)
referred to therein, each



20









 





indemnifying party shall, in lieu of indemnifying such indemnified party, contribute
to the amount paid or payable by such indemnified party as a result of such loss, claim,
damage or liability (or action in respect thereof):




          (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company from the offering and sale of the Transfer Restricted
Securities on the one hand and a Holder with respect to the sale by such Holder
of the Transfer Restricted Securities on the other, or




          (ii) if the allocation provided by Section (6)(d)(i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in Section 6(d)(i) but also the relative fault of
the Company on the one hand and the Holders on the other in connection with the
statements or omissions or alleged statements or alleged omissions that resulted
in such loss, claim, damage or liability (or action in respect thereof), as well
as any other relevant equitable considerations.


The relative benefits received by the Company on the one hand and a Holder on the other with
respect to such offering and such sale shall be deemed to be in the same proportion as the total
net proceeds from the offering of the Notes purchased under the Purchase Agreement (before
deducting expenses) received by the Company, on the one hand, bear to the total proceeds received
by such Holder with respect to its sale of Transfer Restricted Securities on the other. The
relative fault of the parties shall be determined by reference to 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 the Holders on the other, the
intent of the parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and each Holder agree that it would not
be just and equitable if the amount of contribution pursuant to this Section 6(e) were determined
by pro rata allocation or by any other method of allocation that does not take into account the
equitable considerations referred to in the first sentence of this paragraph (e).




     The amount paid or payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 6 shall be deemed to
include, for purposes of this Section 6, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to defend any such
action or claim.



21









 





     Notwithstanding the provisions of this Section 6, no Holder shall be required to contribute
any amount in excess of the amount by which the total price
at which the Transfer Restricted Securities purchased by it were resold exceeds the amount of
any damages which such Holder has otherwise been required to pay by reason of any 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 Holders’ obligations to
contribute as provided in this Section 6(d) are several and not joint.




     (f) The provisions of this Section 6 shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the Company or any
of the officers, directors or controlling persons referred to in Section 6 hereof, and
will survive the sale by a Holder of Transfer Restricted Securities.



     7. Rule 144A and Rule 144. The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the Company (i) is not
subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder,
to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and (ii) is
subject to Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby in a
timely manner in order to permit resales of such Transfer Restricted Securities pursuant to Rule
144.



     8. No Participation in Underwritten Registrations. No Holder may participate in any
Underwritten Registration hereunder.



     9. Miscellaneous.




     (a) Remedies. The Company acknowledges and agrees that any failure by the Company to
comply with its obligations under Section 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
Section 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) Actions Affecting Transfer Restricted Securities. The Company shall not,
directly or indirectly, take any action with respect to the Transfer Restricted Securities
as a class that would adversely affect the
ability of the Holders to include such Transfer Restricted Securities in a
registration undertaken pursuant to this Agreement.



22









 






     (c) No Inconsistent Agreements. The Company has not, as of the date hereof, entered
into, nor shall it, on or after the date hereof, 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. In addition, the Company
shall not grant to any of its securityholders (other than the Holders in such capacity)
the right to include any of its securities in the Shelf Registration Statement provided
for in this Agreement other than the Transfer Restricted Securities.




     (d) Amendments and Waivers. This Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions hereof may not
be given, unless the Company has obtained the written consent of a Majority of Holders;
provided, however, that with respect to any matter that directly or indirectly adversely
affects the rights of any Initial Purchaser hereunder, the Company shall obtain the
written consent of each such Initial Purchaser against which such amendment,
qualification, supplement, waiver or consent is to be effective. Notwithstanding the
foregoing (except the foregoing proviso), a waiver or consent to depart from the
provisions hereof, with respect to a matter, which relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Shelf Registration Statement and
does not directly or indirectly adversely affect the rights of other Holders, may be given
by the Majority Holders, determined on the basis of Notes or Common Stock being sold
rather than registered under such Shelf Registration Statement.




     (e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first class mail (registered or
certified, return receipt requested), telex, facsimile transmission, or air courier
guaranteeing overnight delivery:




     (i) if to a Holder, at the address set forth on the records of the
registrar under the Indenture or the transfer agent of the Common Stock, as the
case may be; and




     (ii) if to the Company, initially at its address set forth in the Purchase
Agreement,



     All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if
transmitted by facsimile; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.



23









 





     Any party hereto may change the address for receipt of communications by giving written notice
to the others.




     (f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including without
limitation and without the need for an express assignment, subsequent Holders. The
Company hereby agrees to extend the benefit of this Agreement to any Holder and any such
Holder may specifically enforce the provisions of this Agreement as if an original party
hereto.




     (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) Transfer Restricted Securities Held by the Company or Their Affiliates. Whenever
the consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the Company or
its Affiliates (other than subsequent Holders if such subsequent Holders are deemed to be
Affiliates solely by reason of their holding of such Transfer Restricted Securities) shall
not be counted in determining whether such consent or approval was given by the Holders of
such required percentage.




     (i) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.




     (j) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.




     (k) 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, it
being intended that all of the rights and privileges of the parties shall be enforceable
to the fullest extent permitted by law.




     (l) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth or referred
to herein with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.



24









 





     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	MAXTOR CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ C.S. Park
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Name: Dr. C.S. Park
	 	 	 	 	 	 	 	 	Title: Chairman and Chief Executive Officer
	 
	 	 	 	 	 	 	 	 	 	 
	CITIGROUP GLOBAL MARKETS INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Acting as Representative of the
several Initial Purchasers named in
Schedule A to the Purchase Agreement.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ James A. Perry	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Name: James Perry	 	 	 	 	 	 
	 	 	Title: Vice President