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  TABLE OF CONTENTS

 
 

Exhibit 10.24    
  

    ASSET PURCHASE AGREEMENT

AMONG

McDATA CORPORATION,

SANAVIGATOR, INC.,

CONNEX, INC.,

AND

WESTERN DIGITAL CORPORATION

August 31, 2001  

 

  

 

TABLE OF CONTENTS    
  

 

	1.	 	Definitions
	

2.	
 	

Basic Transaction
	 	 	(a)	 	Purchase and Sale of Assets
	 	 	(b)	 	Assumption of Liabilities
	 	 	(c)	 	Purchase Price
	 	 	(d)	 	The Closing
	 	 	(e)	 	Deliveries at the Closing
	 	 	(f)	 	Allocation
	

3A.	
 	

Representations and Warranties of SANavigator
	 	 	(a)	 	Organization of SANavigator
	 	 	(b)	 	Authorization of Transaction
	 	 	(c)	 	Noncontravention
	 	 	(d)	 	Brokers' Fees
	 	 	(e)	 	Title to Assets
	 	 	(f)	 	Subsidiaries
	 	 	(g)	 	Financial Statements
	 	 	(h)	 	Events Subsequent to Most Recent Fiscal Month End
	 	 	(i)	 	Undisclosed Liabilities
	 	 	(j)	 	Legal Compliance
	 	 	(k)	 	Tax Matters
	 	 	(l)	 	Real Property
	 	 	(m)	 	Intellectual Property
	 	 	(n)	 	Tangible Assets
	 	 	(o)	 	Inventory
	 	 	(p)	 	Contracts
	 	 	(q)	 	Notes and Accounts Receivable
	 	 	(r)	 	Powers of Attorney
	 	 	(s)	 	Insurance
	 	 	(t)	 	Litigation
	 	 	(u)	 	Warranty
	 	 	(v)	 	Product Liability
	 	 	(w)	 	Employees
	 	 	(x)	 	Employee Benefits
	 	 	(y)	 	Guaranties
	 	 	(z)	 	Environmental, Health, and Safety Matters
	 	 	(aa)	 	Certain Business Relationships With SANavigator
	 	 	(bb)	 	SANavigator Customers
	

3B.	
 	

Representation and Warranties of Western Digital
	 	 	(a)	 	Organization Western Digital
	 	 	(b)	 	Authorization of Transaction
	 	 	(c)	 	Noncontravention
	 	 	(d)	 	Broker's Fees
	 	 	(e)	 	Intellectual Property
	 	 	(f)	 	Employees
	

3C.	
 	

Representation and Warranties of Connex
	 	 	(a)	 	Organization Connex

 

	 	 	(b)	 	Authorization of Transaction
	 	 	(c)	 	Noncontravention
	 	 	(d)	 	Broker's Fees
	 	 	(e)	 	Intellectual Property
	 	 	(f)	 	Employees
	

4.	
 	

Representations and Warranties of the Buyer
	 	 	(a)	 	Organization of the Buyer
	 	 	(b)	 	Authorization of Transaction
	 	 	(c)	 	Noncontravention
	 	 	(d)	 	Brokers' Fees
	

5.	
 	

Pre-Closing Covenants
	 	 	(a)	 	General
	 	 	(b)	 	Notices and Consents
	 	 	(c)	 	Operation of Business
	 	 	(d)	 	Preservation of Business
	 	 	(e)	 	Full Access
	 	 	(f)	 	Notice of Developments
	 	 	(g)	 	Exclusivity
	 	 	(i)	 	Employees
	 	 	(j)	 	Source Code
	 	 	(k)	 	Patent Filings
	 	 	(l)	 	Integration
	

6.	
 	

Conditions to Obligation to Close
	 	 	(a)	 	Conditions to Obligation of the Buyer
	 	 	(b)	 	Conditions to Obligation of SANavigator, Connex and Western Digital
	

7.	
 	

Remedies for Breaches of this Agreement
	 	 	(a)	 	Survival of Representations and Warranties
	 	 	(b)	 	Indemnification Provisions for Benefit of the Buyer
	 	 	(c)	 	Indemnification Provisions for Benefit of SANavigator
	 	 	(d)	 	Matters Involving Third Parties
	 	 	(e)	 	Other Indemnification Provisions
	

8.	
 	

Termination
	 	 	(a)	 	Termination of Agreement
	 	 	(b)	 	Effect of Termination
	

9.	
 	

Miscellaneous
	 	 	(a)	 	Covenant Not to Compete
	 	 	(b)	 	Press Releases and Public Announcements
	 	 	(c)	 	No Third-Party Beneficiaries
	 	 	(d)	 	Entire Agreement
	 	 	(e)	 	Succession and Assignment
	 	 	(f)	 	Counterparts
	 	 	(g)	 	Headings
	 	 	(h)	 	Notices
	 	 	(i)	 	Transition
	 	 	(j)	 	Confidential
	 	 	(k)	 	Governing Law
	 	 	(l)	 	Amendments and Waivers
	 	 	(m)	 	Severability

 

	 	 	(n)	 	Expenses
	 	 	(o)	 	Construction
	 	 	(p)	 	Incorporation of Exhibits and Schedules
	 	 	(q)	 	Specific Performance
	 	 	(r)	 	Submission to Jurisdiction

Exhibit A-1—Form of
Bill of Sale, Assignment and Assumption Agreement 

Exhibit A-2—Form of
Trademark Assignment 

Exhibit A-3—Form of
Patent Assignment 

Exhibit A-4—Form of
Domain Name Assignment 

Exhibit B—Form of
Escrow Agreement 

Exhibit C—Historical
Financial Statements 

Exhibit D-1—Form of
Transition Services Agreement 

Exhibit D-2—Form of
Sublease 

Exhibit E—Form of
Opinion of Counsel to SANavigator 

Exhibit F—Form of
Opinion of Counsel to the Buyer 

Exhibit G—Specifications
of SANavigator 

Disclosure
Schedule—Exceptions to Representations and Warranties 

Asset
Schedule—List of Assets 

  

 
 

ASSET PURCHASE AGREEMENT    
  

    Agreement entered into on August 31, 2001, by and between McDATA Corporation, a Delaware corporation (the
"Buyer"), SANavigator, Inc., a Delaware corporation ("SANavigator"), Connex, Inc., a
Delaware corporation ("Connex"), and Western Digital Corporation, a Delaware corporation ("Western
Digital"). The Buyer, SANavigator, Connex and Western Digital are referred to collectively herein as the "Parties." 

 
 

Recitals    
  

    A.  The
Buyer desires to purchase from SANavigator, and SANavigator desires to sell to the Buyer, all of the assets relating to SANavigator's SANavigatorTM
software business, in exchange for the assumption of certain specified liabilities relating to such software business of SANavigator and other consideration set forth below. 

    B.  The
Board of Directors of each of the Buyer and SANavigator believes it is in the best interests of its respective corporation and stockholders that the
transactions contemplated hereby be consummated and, in furtherance thereof, has approved this Agreement and the transactions contemplated hereby. 

    C.  SANavigator
and the Buyer desire to make certain representations, warranties, covenants and other agreements in connection with the transactions contemplated
hereby. 

 
 

Agreement    
  

    In consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained,
the Parties agree as follows. 

 
 

       1.  Definitions.   

    "Acquired Assets" means all right, title, and interest in and to all of the assets of SANavigator, including  all of its (a)
 leaseholds and subleaseholds therein, improvements, fixtures, and fittings thereon, and easements, rights-of-way, and other
appurtenants thereto (such as appurtenant rights in and to public streets), (b) tangible personal property (such as machinery, lab test equipment, switches, other equipment, inventories of raw
materials and supplies, manufactured and purchased parts, goods in process and finished goods, furniture, automobiles, trucks, tractors, trailers, tools, jigs, and dies), (c) Intellectual
Property (which includes the SANavigator Software and all materials and rights related thereto), goodwill associated therewith, licenses and sublicenses granted and obtained with respect thereto, and
rights thereunder, remedies against infringements thereof and rights to protection of interests therein (including any right to sue for past, present and future infringement) under the laws of all
jurisdictions, (d) leases, subleases, and rights thereunder, (e) agreements, contracts indentures, mortgages, instruments, Security Interests, guaranties, other similar arrangements, and
rights thereunder, (f) accounts, notes, and other receivables, (g) securities, (h) claims, deposits, prepayments, refunds, causes of action, choses in action, rights of recovery,
rights of set off, and rights of recoupment (including any such item relating to the payment of Taxes), (i) franchises, approvals, permits, licenses, orders, registrations, certificates,
variances, and similar rights obtained from governments and governmental agencies, (j) books, records, ledgers, files, documents, correspondence, lists, plats, architectural plans, drawings,
and specifications, creative materials, advertising and promotional materials, studies, reports, and other printed or written materials, (k) websites, and (l) the Technology License
Agreement, dated September 23, 1998, between Adaptec, Inc. and Ridge Shareholders, Inc.; provided, however, that the Acquired
Assets shall not include (i) the corporate charter, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer
and other identification numbers, seals, minute books, stock transfer books, blank stock certificates, insurance policies, and other documents relating to the organization, 

  
maintenance, and existence of SANavigator as a corporation, (ii) information technology (IT) equipment shared by SANavigator and Connex/Western Digital set forth on  Schedule 1(a),
(iii) any of the rights of SANavigator under this Agreement (or under any side agreement between SANavigator on the one
hand and the Buyer on the other hand entered into on or after the date of this Agreement), (iv) all Western Digital and Connex trademarks, tradenames and service marks that are not listed in
Section 3(m) of the Disclosure Schedule, (v) the lease, dated April 7, 1999, among Kilroy Realty, L.P., Kilroy Realty Corporation, and WDC Storage Systems, Inc., as
amended, (vi) intercompany receivables from Affiliates not related to the licenses of the SANavigator Software and (vii) the assets listed on Schedule 1(b). Without limiting the
generality of the foregoing, the Acquired Assets shall include the assets listed on the Asset Schedule. 

    "Adverse Consequence" means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses, and fees, including
court costs and reasonable attorney's fees and expenses. 

    "Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange
Act. 

    "Affiliated Group" means any affiliated group within the meaning of Code §1504(a) or any similar group defined under a
similar provision of state, local, or foreign law. 

    "Asset Schedule" means the list of Acquired Assets attached hereto. 

    "Assumed Liabilities" means all Liabilities (i) arising under the agreements listed on Section 3(p) of the Disclosure
Schedule; (ii) related to the Intellectual Property listed on Section 3(m)(v) of the Disclosure Schedule; (iii) related to the Acquired Assets arising after the Closing;
and (iv) listed on Schedule 1(c) hereof; provided, however, that Assumed Liabilities shall not include (x) any Liabilities
associated with clause (i) above (a) as a result of or relating to a breach or default by any of the Sellers or (b) as a result of SANavigator not paying such Liabilities when due
under the terms under any agreement set forth in Section 3(p) of the Disclosure Schedule and (y) the Liabilities listed on Schedule 1(b). 

    "Basis" means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction that forms or could reasonably be expected to form the basis for any specified consequence. 

    "Buyer" has the meaning set forth in the preface above. 

    "Closing" has the meaning set forth in Section 2(d) below. 

    "Closing Date" has the meaning set forth in Section 2(d) below. 

    "COBRA" means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B and of any similar
state law. 

    "Code" means the Internal Revenue Code of 1986, as amended. 

    "Confidential Information" means any information concerning the businesses and affairs of SANavigator that is not already available to
the public. 

    "Connex" has the meaning set forth in the preface above. 

    "Controlled Group" has the meaning set forth in Code Section 1563. 

    "Deferred Intercompany Transaction" has the meaning set forth in Reg. §1.1502-13. 

      "Disclosure Schedule" has the meaning set forth in Section 3A below. 

    "Employee Benefit Plan" means any "employee benefit plan" (as such term is defined in ERISA §3(3)) and any other employee
benefit plan, program or arrangement of any kind. 

    "Employee Pension Benefit Plan" has the meaning set forth in ERISA §3(2). 

    "Employee Welfare Benefit Plan" has the meaning set forth in ERISA §3(1). 

    "Environmental, Health, and Safety Requirements" shall mean all federal, state, local and foreign statutes, regulations, ordinances and
other provisions having the force or effect of law, all judicial and administrative orders and determinations, all contractual obligations and all common law concerning public health and safety,
worker health and safety, and pollution or protection of the environment, including without limitation all those relating to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances or wastes, chemical
substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as now or
hereafter in effect. 

    "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 

    "ERISA Affiliate" means each entity which is treated as a single employer with SANavigator for purposes of Code §414. 

    "Escrow Agent" has the meaning set forth in the Escrow Agreement. 

    "Escrow Agreement" means the escrow agreement among the Buyer, SANavigator, Connex, Western Digital and U.S. Bank National Association
in the form attached hereto as Exhibit B. 

    "Excess Loss Account" has the meaning set forth in Reg. §1.1502-19. 

    "Extremely Hazardous Substance" has the meaning set forth in §302 of the Emergency Planning and Community
Right-to-Know Act of 1986, as amended. 

    "Fiduciary" has the meaning set forth in ERISA §3(21). 

    "Financial Statement" has the meaning set forth in Section 3A(g) below. 

    "Indemnified Party" has the meaning set forth in Section 7(d) below. 

    "Indemnifying Party" has the meaning set forth in Section 7(d) below. "Party"  has the meaning set forth in the preface above.

    "Intellectual Property" means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice),
all improvements thereto, and all patents, patent applications, and invention disclosures, together with all reissuances, divisionals, continuations, continuations-in-part,
revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works,
all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith,
(e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and
techniques, methodologies, technical data, designs, drawings, specifications, models, customer and supplier lists, pricing and cost information, and business and marketing plans and 

  
proposals), (f) all computer software and firmware (including but not limited to the SANavigator Software) and scripts whether source code or object code (including descriptions, flow charts
and other work product used to design, organize or develop such computer software and any related documentation, including without limitation, user manuals and training manuals), (g) all
databases and compilations, including all data and collections of data whether in print, electronic or other form, (h) all other intellectual property rights in the tangible and intangible
assets relating to the SANavigator Software business, (i) domain names, and (j) all copies and tangible embodiments thereof (in whatever form or medium). 

    "Knowledge" means with respect to each representing party the actual knowledge of the individuals listed on
Schedule 1(d) of the Disclosure Schedule after reasonable investigation; provided, however, that such investigation shall not, in any case, be deemed to include any patent searches. 

    "Liability" means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes. 

    "Most Recent Balance Sheet" means the balance sheet contained within the Most Recent Financial Statements. 

    "Most Recent Financial Statements" has the meaning set forth in Section 3A(g) below. 

    "Most Recent Fiscal Month End" has the meaning set forth in Section 3A(g) below. 

    "Multiemployer Plan" has the meaning set forth in ERISA §3(37). 

    "Ordinary Course of Business" means the ordinary course of business consistent with past custom and practice (including with respect to
quantity and frequency). 

    "Party" has the meaning set forth in the preface above. 

    "PBGC" means the Pension Benefit Guaranty Corporation. 

    "Person" means an individual, a limited liability company, a partnership, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof). 

    "Prohibited Transaction" has the meaning set forth in ERISA §406 and Code §4975. 

    "Purchase Price" has the meaning set forth in Section 2(c) below. 

    "SANavigator" has the meaning set forth in the preface above. 

    "Reportable Event" has the meaning set forth in ERISA §4043. 

    "SANavigator Software" has the meaning set forth in Exhibit G. 

    "Securities Act" means the Securities Act of 1933, as amended. 

    "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended. 

    "Security Interest" means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other
than (a) mechanic's, materialmen's, and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase money liens and liens securing rental
payments under capital or equipment lease arrangements, and (d) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money. 

      "Subsidiary" means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common
stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors. 

    "Survey" has the meaning set forth in Section 5(i) below. 

    "Tax" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not. 

    "Third Party Claim" has the meaning set forth in Section 7(d) below. 

    "Western Digital" has the meaning set forth in the preface above. 

 
 

       2.  Basic Transaction.   

 
 

      (a)  Purchase and Sale of Assets.   On and subject to the terms and conditions of this Agreement, the Buyer agrees to purchase from SANavigator, and
SANavigator agrees to sell, transfer, convey
and deliver to the Buyer or to a wholly-owned subsidiary of the Buyer, as the Buyer shall direct, all of the Acquired Assets at the Closing for the consideration specified below in this
Section 2. 

 
 

       (b)  Assumption of Liabilities.   On and subject to the terms and conditions of this Agreement, the Buyer agrees to assume, or the Buyer shall cause a
wholly-owned subsidiary of the Buyer to
assume, and become responsible for all of the Assumed Liabilities at the Closing. The Buyer will not assume or have any responsibility, however, with respect to any other obligation or Liability of
SANavigator not included within the definition of Assumed Liabilities. 

 
 

       (c)  Purchase Price.   The Buyer agrees to pay to SANavigator at the Closing $29,750,000 (the "Purchase Price") by delivery of cash in
the amount of $26,775,000 payable by wire transfer or delivery of other immediately available funds and by delivery of $2,975,000 to the Escrow Agent. 

 
 

      (d)  The Closing.   The closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices
of Faegre & Benson LLP in Denver, Colorado, commencing at 9:00 a.m. local time on the second business day following the satisfaction or waiver of all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Closing itself) or such other date as the Parties may
mutually determine (the "Closing Date"). 

 
 

      (e)  Deliveries at the Closing.   At the Closing, (i) SANavigator will deliver to the Buyer the various certificates, instruments, and documents
referred to in
Section 6(a) below; (ii) the Buyer will deliver to SANavigator the various certificates, instruments, and documents referred to in Section 6(b) below;
(iii) SANavigator will execute, acknowledge (if appropriate), and deliver to the Buyer (A) assignments and assumptions (including real property and Intellectual Property transfer
documents) in the forms attached hereto as Exhibits A-1 through A-4 and (B) such other instruments of sale, transfer, conveyance, and assignment as the Buyer and its
counsel may reasonably request; (iv) the Buyer will execute, acknowledge (if appropriate), and deliver to SANavigator (A) assignments and assumptions in the forms attached hereto as
Exhibit A-1 through A-4 and (B) such other instruments of assumption as SANavigator and its counsel reasonably may request; and (v) the Buyer will deliver
to SANavigator the consideration specified in Section 2(c) above. The SANavigator Software shall be delivered electronically in California in object code form and the source code and
documentation related to the SANavigator Software shall also be delivered in electronic form in California; provided, however that such delivery shall be made in a protected manner and not by 

  
electronic mail. To the extent the Acquired Assets are transferred by electronic means, no such Acquired Assets shall be transferred to the Buyer in any physical embodiment, and to the extent the
Acquired Assets include computers or other media upon which such Acquired Assets are located, such computers or other media shall be purged of all such Acquired Assets following such electronic
transfer and prior to the sale and transfer of such computers or other media to the Buyer. 

 
 

       (f)  Allocation.   The Parties shall, prior to Closing, agree upon the allocation of the Purchase Price (and all other capitalizable costs) among the
Acquired Assets and
non-competition agreements to be entered into with certain of SANavigator's employees for tax purposes. The allocation shall be conclusive and binding upon the parties for tax purposes and
tax returns, including IRS Form 8594 shall be prepared in a manner consistent with such allocation unless otherwise required by the IRS or any other applicable taxing authority. 

 
 

       3A.  Representations and Warranties of SANavigator.   SANavigator represents and warrants to the Buyer, except as set forth in the disclosure schedule
accompanying this Agreement and initialed by the Parties (the
"Disclosure Schedule") that: 

 
 

       (a)  Organization of SANavigator.   SANavigator is a corporation duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. 

 
 

       (b)  Authorization of Transaction.   SANavigator has full corporate power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement has been
authorized by all necessary corporate action of SANavigator, has been duly executed and delivered by SANavigator and constitutes the valid and legally binding obligation of SANavigator, enforceable in
accordance with its terms and conditions except as such enforceability may be limited by laws or general application relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies. 

 
 

       (c)  Noncontravention.   Except as set forth in Section 3(c) of the Disclosure Schedule, neither the execution and the delivery of this
Agreement, nor the consummation of
the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above), will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which SANavigator is subject or any provision of the charter or bylaws of SANavigator
or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any material agreement, contract, lease, license, instrument, or other arrangement to which SANavigator is a party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any Security Interest upon any of its assets). SANavigator does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in Section 2
above). 

 
 

       (d)  Brokers' Fees.   SANavigator has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this
Agreement for which the Buyer could become liable or obligated. 

 
 

      (e)  Title to Assets.   The Acquired Assets constitute all of the assets used in SANavigator's business as presently conducted or as presently
proposed to be conducted. SANavigator
has good and marketable title to, or a valid leasehold interest in, the properties and assets used by them, located on their premises, or shown on the Most Recent Balance Sheet or acquired after the
date thereof, free and clear of all Security Interests or adverse interests. Without limiting the generality of the foregoing, SANavigator has good
and marketable title to all of the Acquired Assets, free and clear of any Security Interest or restriction on transfer. 

  

 
 

       (f)  Subsidiaries.   SANavigator has no Subsidiaries. 

 
 

       (g)  Financial Statements.   Attached hereto as Exhibit C are the unaudited balance sheet and statement of operations (the "Most Recent Financial
Statements") as of and for the seven months ended July 27, 2001 and the month ended July 27, 2001 (the "Most Recent Fiscal Month
End") for SANavigator. The Most Recent Financial Statements (including the notes thereto) have been prepared on the basis set forth in notes thereto which have been applied on
a consistent basis throughout the periods covered thereby, present fairly the financial condition of SANavigator as of such dates and the results of operations of SANavigator for such periods, are
correct and complete in all material respects, and are consistent with the books and records of SANavigator (which books and records are correct and complete). 

 
 

      (h)  Events Subsequent to Most Recent Fiscal Month End.   Since the Most Recent Fiscal Month End, there has not been any material adverse change in the
business, financial condition, operations, or results of
operations of SANavigator. Except as specifically listed in Section 3(h) of the Disclosure Schedule, without limiting the generality of the foregoing, between July 28, 2001 and
the date of this Agreement: 

    (i)  SANavigator
has not sold, leased, transferred, or assigned any of its assets, tangible or intangible, except for sales and licenses to end-user
customers; 

    (ii) SANavigator
has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses), except with respect
to the purchase of supplies and raw materials with a cost of not in excess of $5,000 in the aggregate; 

    (iii) no
party (including SANavigator) has accelerated, terminated, modified, or cancelled any agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses); 

    (iv) SANavigator
has not imposed any Security Interest upon any of its assets, tangible or intangible; 

    (v) SANavigator
has not made any capital expenditure (or series of related capital expenditures) in excess of $10,000 individually or $20,000 in the aggregate; 

    (vi) SANavigator
has not made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital
investments, loans, and acquisitions); 

    (vii) SANavigator
has not issued any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized
lease obligation except intercompany indebtedness to Affiliates; 

    (viii) SANavigator
has not delayed or postponed the payment of accounts payable and other Liabilities; 

    (ix) SANavigator
has not knowingly cancelled, compromised, waived, or released any material right or claim; 

    (x) SANavigator
has not granted any license or sublicense of any rights under or with respect to any Intellectual Property except for standard end-user
licenses granted to customers; 

    (xi) there
has been no change made or authorized in the charter or bylaws of SANavigator; 

    (xii) SANavigator
has not experienced any material damage, destruction, or loss (whether or not covered by insurance) to its property; 

  
    (xiii) SANavigator has not made any loan to, or entered into any other transaction with, any of its directors, officers, and employees; 

    (xiv) SANavigator
has not adopted, amended, modified, or terminated any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the
benefit of any of its directors, officers, and employees (or taken any such action with respect to any other Employee Benefit Plan); 

    (xv) there
has not been any other occurrence, event, incident, action, failure to act, or transaction outside the Ordinary Course of Business involving SANavigator
which could reasonably be expected to have a material adverse effect on SANavigator's business, financial condition, operations or results of operations; and 

    (xvi) SANavigator
has not committed to any of the foregoing. 

 
 

      (i)  Undisclosed Liabilities.   SANavigator has no Liabilities (and to SANavigator's Knowledge there is no Basis for any Liability), except for
(i) Liabilities set forth on the face of
the Most Recent Balance Sheet, and (ii) Liabilities which have arisen after the Most Recent Fiscal Month End (none of which results from, arises out of, relates to, or was caused by any breach
of contract, breach of warranty, tort, infringement, or violation of law), and (iii) Liabilities arising under agreements listed on Section 3(p) of the Disclosure Schedule. 

 
 

      (j)  Legal Compliance.   SANavigator and its predecessors have complied in all material respects with all applicable laws (including rules, regulations,
codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof), and to its knowledge no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice relating to the Acquired Assets has been filed or commenced against any of them alleging any failure so to comply. 

 
 

      (k)  Tax Matters.   There are no Taxes of SANavigator for which Buyer will become liable as a result of the transactions contemplated by this Agreement.

 
 

       (l)  Real Property.   

    (i)  SANavigator
owns no real property. 

    (ii) Section 3(l)(ii) of
the Disclosure Schedule lists and describes briefly all real property leased or subleased to SANavigator. SANavigator has
delivered to the Buyer correct and complete copies of the leases and subleases listed in Section 3(l)(ii) of the Disclosure Schedule (as amended to date). With respect to each lease and
sublease listed in Section 3(l)(ii) of the Disclosure Schedule: 

    (A) the
lease or sublease is legal, valid, binding, enforceable in accordance with its terms and conditions, except as such enforceability may be limited by laws of
general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and in full force and effect; 

    (B) subject
to the terms of any required consent, the lease or sublease will continue to be legal, valid, binding, enforceable, and in full force and effect on
identical terms immediately following the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above); 

    (C) SANavigator
is not, and to its Knowledge, no other party to the lease or sublease is in material breach or default, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default or permit termination, modification, or acceleration thereunder; 

  
    (D) SANavigator has not, and to its Knowledge, no other party to the lease or sublease has repudiated any provision thereof; 

    (E) there
are no disputes, oral agreements, or forbearance programs in effect as to the lease or sublease; 

    (F) SANavigator
has not assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in the leasehold or subleasehold; 

    (G) to
SANavigator's Knowledge all facilities leased or subleased thereunder have received all approvals of governmental authorities (including licenses and permits)
required in connection with the operation thereof and have been operated and maintained in accordance with applicable laws, rules, and regulations except where failure to obtain such approvals or
operate and maintain in accordance with such laws, rules and regulations would not have a material adverse effect on SANavigator or the Acquired Assets; and 

    (H) to
SANavigator's Knowledge all facilities leased or subleased thereunder are supplied with utilities and other services necessary for the operation of said
facilities. 

 
 

       (m)  Intellectual Property.   

    (i)  SANavigator
owns or has the valid right to use pursuant to license, sublicense, or agreement all Intellectual Property necessary for the operation of the business
of SANavigator as presently conducted; provided, however, that no representation is made with respect to patents except as set forth in Section 3A(m)(iii). Neither Connex nor Western Digital
have any right, title, or interest in or to any such Intellectual Property. Subject to the terms of any required consents, each item of Intellectual Property owned or used by SANavigator immediately
prior to the Closing hereunder will be owned or available for use by the Buyer on identical terms and conditions immediately subsequent to the Closing hereunder. 

    (ii) SANavigator
has taken commercially reasonable action to maintain and protect each item of Intellectual Property that it owns or uses. None of SANavigator's
licenses, contracts, agreements, or arrangements vest or create in any other Person any rights (including, without limitation, rights to make, use, market, import, copy, distribute, transmit, perform,
modify, create derivative works, or otherwise exploit or any residual rights) in or to such Intellectual Property, (including, without limitation, the SANavigator Software), other than: 

    (A) with
respect to end-users of the SANavigator Software, the non-exclusive right to use, solely for the end-users' internal
business purposes, and make back-up copies of the SANavigator Software, in object code form (such as permitted in SANavigator's standard end-user use licenses); 

    (B) with
respect to distributors or resellers, the non-exclusive right to: (1) distribute and market the SANavigator Software, in object code form,
and (2) use the SANavigator Software, in object code form, solely for marketing and demonstration purposes and for the training of end-users; 

    (C) with
respect to original equipment manufactures ("OEMs"), the non-exclusive right to: (1) distribute and market the SANavigator Software, in
object code form, only as an embedded part of or bundled with approved OEM products, (2) pursuant to an approved written agreement, grant a nonexclusive sublicense to end-users to
use (solely for the end-users' internal business purposes) the SANavigator Software in object code form, only as an embedded part of or as bundled with the approved OEM products
(3) copy the SANavigator Software, in object code form, solely in connection with the granting of a nonexclusive sublicense as permitted in Section 3A(m)(ii)(C)(2), (4) use the
SANavigator 

  
Software, in object code form, solely for marketing and demonstration purposes and for the training of end-users, (5) make back-up copies of the SANavigator Software;
and 

    (D) with
respect to system integrators, the non-exclusive right to: (1) pursuant to an approved written agreement, grant a nonexclusive sublicense to
end-users to use, solely for the end-users' internal business
purposes, the SANavigator Software, in object code form, (2) use the SANavigator Software, in object code form, to provide support to licensed (pursuant to Section 3A(m)(ii)(D)(1))
end-users, and for marketing and demonstration purposes and for the training of end-users, (3) to enable programs written by the system integrator to be used with and
interface to the SANavigator Software; provided such programs do not incorporate any Intellectual Property embodied in the SANavigator Software, (4) copy the SANavigator Software, in object
code form, solely in connection with the granting of a nonexclusive sublicense as permitted in Section 3A(m)(ii)(D)(1), (5) make back-up copies of the SANavigator Software; 

    (iii) SANavigator
has not interfered with (pursuant to 15 U.S.C. §1066 or 35 U.S.C. §135), infringed upon (either directly or indirectly such as
through contributory infringement or inducement to infringe) any patents, trademarks or copyrights owned by any third parties. SANavigator has not misappropriated any other Intellectual Property
rights of third parties. SANavigator, including its directors and officers (and employees with responsibility for Intellectual Property matters), has not received in writing, and to SANavigator's
Knowledge, it has not received in writing or otherwise, any charge, complaint, claim, demand, or notice alleging any such interference, infringement or misappropriation (including any claim that
SANavigator must license or refrain from using any Intellectual Property rights of any third party). 

    (iv) To
the Knowledge of SANavigator, no third party has interfered with (pursuant to 15 U.S.C. §1066 or 35 U.S.C. §135), infringed upon (either
directly or indirectly such as through contributory infringement or inducement to infringe), or misappropriated any Intellectual Property rights of SANavigator. 

    (v) Section 3(m)(v) of
the Disclosure Schedule identifies each patent, copyright or trademark registration which has been issued to SANavigator with
respect to any of its Intellectual Property, identifies each pending patent, copyright and trademark application for registration which SANavigator has made with respect to any of its Intellectual
Property, identifies each invention disclosure docketed by legal counsel for SANavigator, identifies each domain name used by SANavigator or related to the Acquired Assets, and identifies each license
or agreement which SANavigator has granted to or entered into with any third party with respect to any of its Intellectual Property (other than end-user licenses granted to SANavigator's
customers pursuant to its standard end-user license agreement). SANavigator has delivered to the Buyer correct and complete copies of all such patent, copyright and trademark
registrations, applications, licenses and agreements (as amended to date) and correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of
each such item. Section 3(m)(v) of the Disclosure Schedule also identifies each trade name or unregistered trademark used by SANavigator in connection with any of its businesses. With
respect to each item of Intellectual Property required to be identified in Section 3(m)(v) of the Disclosure Schedule and except as set forth in Section 3(m) of the Disclosure
Schedule: 

    (A) SANavigator
possesses all right, title, and interest in and to the item, free and clear of any Security Interest, license, encumbrance or other restriction
(including, without limitation, any interest of any former or present employees of, or contractors or consultants to, SANavigator); 

    (B) the
item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge; 

  
    (C) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, opposition, interference, or demand is pending or, to the Knowledge of SANavigator,
is threatened which challenges the legality, validity, enforceability, use, or ownership of the item; 

    (D) Except
for the provisions of the Contracts listed on Schedule 3(p) of the Disclosure Schedule and indemnities contained in SANavigator's standard end user
licenses, SANavigator has not agreed to indemnify any Person for or against infringement or misappropriation with respect to the item; and 

    (E) to
the extent such item of Intellectual Property is a license, sublicense, or agreement, SANavigator is not, and to the Knowledge of SANavigator, no other party is
in breach or default thereof and no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, modification, or acceleration thereunder
(including as a result of the transactions contemplated by this Agreement). 

    (vi) Except
as set forth in Section 3(m)(vi) of the Disclosure Schedule, SANavigator does not license any software from any third-party that is necessary
or otherwise incorporated into or used in past, current, or pending releases of SANavigator Software. Section 3(m)(vi) of the Disclosure Schedule identifies each item of Intellectual
Property that any third party owns and that SANavigator possesses pursuant to license, sublicense, or agreement. SANavigator has delivered to the Buyer correct and complete copies of all such
licenses, sublicenses, and agreements (as amended to date). With respect to each item of Intellectual Property required to be identified in Section 3(m)(vi) of the Disclosure Schedule
and except as set forth in Section 3(m)(vi) of the Disclosure Schedule; 

    (A) the
license, sublicense, or agreement covering the item is legal, valid, binding, enforceable in accordance with its terms and conditions, except as such
enforceability may be limited by laws relating to bankruptcy, insolvency and relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and is in
full force and effect; 

    (B) subject
to the terms of any required consent, the license, sublicense, or agreement will continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms immediately following the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above); 

    (C) SANavigator
is not, and to its Knowledge no other party to the license, sublicense, or agreement is in material breach or default, and to SANavigator's Knowledge,
no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, modification, or acceleration thereunder; 

    (D) SANavigator
has not, and to its Knowledge, no other party to the license, sublicense, or agreement has repudiated any provision thereof; 

    (E) with
respect to each sublicense, to the actual knowledge of the individuals listed on Schedule 1 (without a duty to investigate), the representations and
warranties set forth in subsections (A) through (D) above are true and correct with respect to the underlying license; 

    (F) to
the actual knowledge of the individuals listed on Schedule 1 (without a duty to investigate), the underlying item of Intellectual Property is not subject
to any outstanding injunction, judgment, order, decree, ruling, or charge; 

    (G) to
the actual knowledge of the individuals listed on Schedule 1 (without a duty to investigate), no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or is threatened which challenges the legality, validity, or enforceability of the underlying item of Intellectual Property; and 

  

    (H) Except
as explicitly identified in Section 3(m)(vi) of the Disclosure Schedule, SANavigator has not granted any sublicense or similar right with
respect to the license, sublicense, or agreement, excluding the right to use and make back-up copies as permitted by SANavigator's standard end-user licenses. 

    (vii) SANavigator
has secured valid written assignments (of all applicable Intellectual Property rights) from all former or present employees of, or contractors or
consultants to SANavigator who contributed to the creation or development of the SANavigator Software. 

    (viii) No
trade secret of SANavigator has been published or disclosed by SANavigator or, to the Knowledge of SANavigator, by any other Person to any Person except as
permitted by a written agreement requiring such Person receiving such trade secrets to keep such trade secrets confidential. To the Knowledge of SANavigator, no Person receiving such trade secrets
pursuant to a written agreement is in breach or default thereof and no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, modification,
or acceleration thereunder. 

    (ix) No
licenses or rights have been granted to any Person to distribute the source code of, to use source code to modify or create derivative works of, or to otherwise
exploit the source code of any product currently marketed by, commercially available from or under development by SANavigator. 

 
 

       (n)  Tangible Assets.   SANavigator owns or leases all office equipment, and other tangible assets necessary for the conduct of its businesses as
presently conducted. Each such
tangible asset is in good operating condition and repair (subject to normal wear and tear), and is suitable for the purposes for which it presently is used. 

 
 

       (o)  Inventory.   SANavigator has no inventory. 

 
 

       (p)  Contracts.   Section 3(p) of the Disclosure Schedule lists the following contracts and other agreements to which SANavigator is a party:

    (i)  any
agreement (or group of related agreements) for the lease of personal property to or from any Person; 

    (ii) any
agreement (or group of related agreements) for the purchase or sale of raw materials, commodities, supplies, products, or other personal property or
Intellectual Property, or for the furnishing or receipt of services in excess of $10,000; 

    (iii) any
agreement concerning a partnership or joint venture; 

    (iv) any
agreement (or group of related agreements) under which it has imposed a Security Interest on any of its assets, tangible or intangible; 

    (v) any
agreement concerning confidentiality or noncompetition; 

    (vi) any
agreement between SANavigator and Connex or Western Digital and their Affiliates (other than SANavigator); 

    (vii) any
profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, or other plan or arrangement for the benefit of its
current or former directors, officers, and employees; 

    (viii) any
agreement for the employment of any individual on a full-time, part-time, consulting, or other basis or providing severance benefits; 

    (ix) any
agreement under which it has advanced or loaned any amount to any of its directors, officers, and employees; or 

  
    (x) any agreement under which the consequences of a default or termination could have a material adverse effect on the business, financial condition, operations, or
results of operations of SANavigator. 

SANavigator
has delivered to the Buyer a correct and complete copy of each written agreement listed in Section 3(p) of the Disclosure Schedule (as amended to date) and a written summary setting
forth
the terms and conditions of each oral agreement referred to in Section 3(p) of the Disclosure Schedule. With respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable in accordance with its terms and conditions except as such enforceability may be limited by laws or general application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other equitable remedies, and in full force and effect; (B) subject to the terms of any required consents, the agreement will
continue to be legal, valid, binding, enforceable in accordance with its terms and conditions except as such enforceability may be limited by laws or general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and in full force and effect on identical terms immediately
following the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above); (C) SANavigator is not, and to its
Knowledge, no other party is in material breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) SANavigator has not, and to its Knowledge, no other party has repudiated any provision of the agreement. 

 
 

       (q)  Notes and Accounts Receivable.   All notes and accounts receivable of SANavigator are reflected properly on its books and records, are valid
receivables subject to no setoffs or counterclaims,
and are current and collectible, subject only to the reserve for bad debts set forth on the face of the Most Recent Balance Sheet as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of SANavigator. 

 
 

       (r)  Powers of Attorney.   There are no outstanding powers of attorney executed on behalf of SANavigator. 

 
 

       (s)  Insurance.   Section 3(s) of the Disclosure Schedule sets forth a list of each insurance policy (including policies providing property,
casualty, liability, and
workers' compensation coverage and bond and surety arrangements) to which SANavigator is been a party, a named insured, or otherwise the beneficiary of coverage. 

 
 

       (t)  Litigation.   Section 3(t) of the Disclosure Schedule sets forth each instance in which SANavigator (i) is subject to any outstanding
injunction, judgment,
order, decree, ruling, or charge or (ii) is a party or to its Knowledge is threatened to be made a party to any action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator. None of the actions, suits, proceedings, hearings, and investigations set
forth in Section 3(t) of the Disclosure Schedule could reasonably be expected to result in any adverse change in the business, financial condition, operations, or results of operations of
SANavigator. 

 
 

       (u)  Warranty.   Each product manufactured, sold, leased, or delivered by SANavigator has been in conformity with all applicable contractual commitments
and all express and
implied warranties, and SANavigator has no Liability for replacement or repair thereof or other damages in connection therewith, subject only to the reserve for product warranty claims set forth on
the face of the Most Recent Balance Sheet as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of SANavigator. No product manufactured, sold,
leased, or delivered by SANavigator is subject to any guaranty, warranty, or other indemnity beyond the applicable standard terms and conditions of sale or lease. Section 3(u) of the Disclosure
Schedule includes copies of the 

  
standard terms and conditions of sale or lease for SANavigator (containing applicable guaranty, warranty, and indemnity provisions). 

 
 

      (v)  Product Liability.   SANavigator has no Liability arising out of any injury to individuals or property as a result of the ownership, possession, or
use of any product manufactured,
sold, leased, or delivered by SANavigator. 

 
 

       (w)  Employees.   To SANavigator's Knowledge, no executive, key employee, or group of employees has any plans to terminate employment with SANavigator
or to refuse employment
with the Buyer, if offered. SANavigator is not a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. SANavigator has not committed any unfair labor practice. SANavigator has no Knowledge of any organizational effort presently being made or threatened by or on behalf of
any labor union with respect to employees of SANavigator. Section 3(w) of the Disclosure Schedule lists all current employees and contractors of SANavigator by title, salary (or fee), and all
other compensation arrangements. Except as noted in Section 3(w) of the Disclosure Schedule, to the Knowledge of SANavigator each such employee is a United States citizen or has a valid work
visa that does not expire for at least three years. 

 
 

      (x)  Employee Benefits.   To the Knowledge of SANavigator, Section 3(x) of the Disclosure Schedule lists each Employee Benefit Plan that
SANavigator maintains, to which
SANavigator contributes or has any obligation to contribute, or with respect to which SANavigator has any material Liability or potential Liability. SANavigator has delivered to the Buyer a correct
and complete list of the plan documents and summary plan descriptions. SANavigator does not maintain, contribute to or have an obligation to contribute to, any Employee Welfare Benefit Plan providing
medical, health, or life insurance or other welfare-type benefits for retired or terminated employees, their spouses, or their dependents (other than in accordance with COBRA). 

 
 

      (y)  Guaranties.   SANavigator is not a guarantor or, to its Knowledge, otherwise is liable for any Liability or obligation (including indebtedness) of
any other Person. 

 
 

       (z)  Environmental, Health, and Safety Matters.   

    (i)  Each
of SANavigator and its predecessors has complied and is in compliance in all material respects with all Environmental, Health, and Safety Requirements. 

    (ii) Without
limiting the generality of the foregoing, each of SANavigator and its Affiliates has obtained and complied with, and is in compliance in all material
respects with, all permits, licenses and other authorizations that are required pursuant to Environmental, Health, and Safety Requirements for the occupation of its facilities and the operation of its
business; a list of all such permits, licenses and other authorizations is set forth on the attached "Environmental and Safety Permits Schedule." 

    (iii) Neither
SANavigator nor its predecessors has received any written or oral notice, report or other information regarding any actual or alleged violation of
Environmental, Health, and Safety Requirements, or any liabilities or potential liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial or
corrective obligations, relating to SANavigator's facilities arising under Environmental, Health, and Safety Requirements. 

 
 

       (aa)  Certain Business Relationships With SANavigator.   Section 3(aa) of the Disclosure Schedule sets forth a complete list of the services
provided to SANavigator by either Connex, Western Digital or their
Affiliates. None of Connex, Western Digital or their Affiliates own any asset, tangible or intangible, which are necessary for the operation of the business of SANavigator as presently conducted. 

 

 
 

       (bb)  SANavigator Customers.   Section 3(bb) of the Disclosure Schedule lists all of SANavigator's customers that have licensed the SANavigator
Software. 

 
 

      3B.  Representation and Warranties of Western Digital.   Western Digital represents and warrants to the Buyer that: 

 
 

       (a)  Organization of Western Digital.   Western Digital is a corporation duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. 

 
 

      (b)  Authorization of Transaction.   Western Digital has full corporate power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement has been
authorized by all necessary corporate action of Western Digital, has been duly executed and delivered by Western Digital and constitutes the valid and legally binding obligation of Western Digital,
enforceable in accordance with its terms and conditions except as such enforceability may be limited by laws of general application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other equitable remedies. 

 
 

      (c)  Noncontravention.   Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and
assumptions referred to in Section 2 above), will (i) violate any material constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Western Digital is subject which would have a material adverse effect on Western Digital or any provision of the charter or bylaws
of Western Digital or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any material agreement, contract, lease, license, instrument, or other arrangement to which Western Digital is a party or by which it is bound or to which any of
its assets is subject (or result in the imposition of any Security Interest upon any of its assets). Western Digital does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and
assumptions referred to in Section 2 above). 

 
 

      (d)  Broker's Fees.   Western Digital has no Liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by
this Agreement for which Buyer could become liable or obligated. 

 
 

       (e)  Intellectual Property.   

    (i)  With
respect to the Intellectual Property included in the Acquired Assets, Western Digital, its directors and officers (and employees with responsibility for
Intellectual Property matters), has not received in writing, and to Western Digital's Knowledge, it has not received in writing or otherwise, any charge, complaint, claim, demand, or notice alleging
any interference, infringement, misappropriation, or violation of any Intellectual Property rights of any third party (including any claim that SANavigator must license or refrain from using any
Intellectual Property rights of any third party). 

    (ii) To
the Knowledge of Western Digital, no third party has interfered with (pursuant to 15 U.S.C. §1066 or 35 U.S.C. §135) or infringed upon
(either directly or indirectly such as through contributory infringement or inducement to infringe) any patents, trademarks or copyrights included in the Acquired Assets, or misappropriated any other
Intellectual Property rights included in the Acquired Assets. 

    (iii) To
the Knowledge of Western Digital, no action, suit, proceeding, hearing, investigation, charge, complaint, claim, opposition, interference, or demand is pending
or threatened which 

  
challenges the legality, validity, enforceability, use, or ownership of an item identified, in Section 3(m)(v) or Section 3(m)(vi) of the Disclosure Schedule 

    (iv) To
the Knowledge of Western Digital: no trade secret of SANavigator has been published or disclosed by SANavigator or by any other Person to any Person except as
permitted by a written agreement requiring such Person receiving such trade secrets to keep such trade secrets confidential; and no Person receiving such trade secrets pursuant to a written agreement
is in breach or default thereof and no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, modification, or acceleration thereunder. 

 
 

       (f)  Employees.   To the Knowledge of Western Digital, no executive, key employee or group of employees has any plans to terminate employment with
SANavigator or to refuse
employment with the Buyer, if offered. 

 
 

      3C.  Representation and Warranties of Connex.   Connex represents and warrants to the Buyer that: 

 
 

       (a)  Organization of Connex.   Connex is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its
incorporation. 

 
 

      (b)  Authorization of Transaction.   Connex has full corporate power and authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been
authorized by all necessary corporate action of Connex, has been duly executed and delivered by Connex and constitutes the valid and legally binding obligation of Connex, enforceable in accordance
with its terms and conditions except as such enforceability may be limited by laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. 

 
 

      (c)  Noncontravention.   Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and
assumptions referred to in Section 2 above), will (i) violate any material constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Connex is subject which would have a material adverse effect on Connex or any provision of the charter or bylaws of Connex or
(ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any material agreement, contract, lease, license, instrument, or other arrangement to which Connex is a party or by which it is bound or to which any of its assets is subject (or result
in the imposition of any Security Interest upon any of its assets). Connex does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in Section 2
above). 

 
 

       (d)  Broker's Fees.   Connex has no Liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this
Agreement for which Buyer could become liable or obligated. 

 
 

       (e)  Intellectual Property.   

    (i)  With
respect to the Intellectual Property included in the Acquired Assets, Connex, its directors and officers (and employees with responsibility for Intellectual
Property matters), has not received in writing, and to Connex's Knowledge, it has not received in writing or otherwise, any charge, complaint, claim, demand, or notice alleging any interference,
infringement, misappropriation, or violation of any Intellectual Property rights of any third party (including any claim that SANavigator must license or refrain from using any Intellectual Property
rights of any third party). 

  

    (ii) To
the Knowledge of Connex, no third party has interfered with (pursuant to 15 U.S.C. §1066 or 35 U.S.C. §135) or infringed upon (either
directly or indirectly such as through contributory infringement or inducement to infringe) any patents, trademarks or copyrights included in the Acquired Assets, or misappropriated any other
Intellectual Property rights included in the Acquired Assets. 

    (iii) To
the Knowledge of Connex, no action, suit, proceeding, hearing, investigation, charge, complaint, claim, opposition, interference, or demand is pending or
threatened which challenges the legality, validity, enforceability, use, or ownership of an item identified, in Section 3(m)(v) or Section 3(m)(vi) of the Disclosure
Schedule 

    (iv) To
the Knowledge of Connex: no trade secret of SANavigator has been published or disclosed by SANavigator or by any other Person to any Person except as permitted
by a written agreement requiring such Person receiving such trade secrets to keep such trade secrets confidential; and no Person receiving such trade secrets pursuant to a written agreement is in
breach or default thereof and no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, modification, or acceleration thereunder. 

 
 

      (f)  Employees.   To the knowledge of Connex, no executive, key employee, or group of employees has any plans to terminate employment with SANavigator or
to refuse employment
with the Buyer, if offered. 

 
 

       4.  Representations and Warranties of the Buyer.   The Buyer represents and warrants to SANavigator except as set forth in the Disclosure Schedule:

 
 

      (a)  Organization of the Buyer.   The Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of
its incorporation. 

 
 

       (b)  Authorization of Transaction.   The Buyer has full corporate power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement has been
authorized by all necessary corporate action of Buyer, has been duly executed and delivered by Buyer and constitutes the valid and legally binding obligation of the Buyer, enforceable in accordance
with its terms and conditions, except as such enforceability may be limited by laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. 

 
 

       (c)  Noncontravention.   Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and
assumptions referred to in Section 2 above), will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which the Buyer is subject or any provision of its charter or bylaws or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any material agreement, contract, lease, license, instrument, or
other arrangement to which the Buyer is a party or by which it is bound or to which any of its assets is subject. Except for notice to EMC Corporation, the former parent corporation of the Buyer, the
Buyer does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments and assumptions referred to in Section 2 above). 

 
 

       (d)  Brokers' Fees.   The Buyer has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this
Agreement for which SANavigator or Western Digital could become liable or obligated. 

 

 
 

      5.  Pre-Closing Covenants.   The Parties agree as follows with respect to the period between the execution of this Agreement and the Closing. 

 
 

       (a)  General.   Each of the Parties shall use its best efforts to take all action and to do all things reasonably necessary, proper, or advisable in
order to consummate and
make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 6 below). 

 
 

       (b)  Notices and Consents.   SANavigator, Connex, and Western Digital shall give (and will cause each of its Subsidiaries to give) any notices to third
parties, and SANavigator, Connex and
Western Digital will each use commercially reasonable efforts to obtain (and will cause each of its Subsidiaries to use commercially reasonable efforts to obtain) any third party consents, in
connection with the matters referred to in Section 3A(c) above. The Sellers shall not enter into any consent agreement that (i) alters the terms of the related agreement or
(ii) will cause SANavigator to have any obligations other than those set forth
in the related agreement, without the written consent of the Buyer, which consent shall not be unreasonably withheld. Each of the Parties will give any notices to, make any filings with, and use
commercially reasonable efforts to obtain any authorizations, consents, and approvals of governments and governmental agencies in connection with the matters referred to in Section 3A(c) and
Section 4(c) above. 

 
 

      (c)  Operation of Business.   SANavigator shall not engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of
Business except as necessary to
consummate the transactions contemplated hereby. Without limiting the generality of the foregoing, SANavigator will not (i) declare, set aside, or pay any dividend or make any distribution with
respect to its capital stock or redeem, purchase, or otherwise acquire any of its capital stock, (ii) pay any amount to any third party with respect to any Liability or obligation (including
any costs and expenses SANavigator has incurred or may incur in connection with this Agreement and the transactions contemplated hereby) which would not constitute an Assumed Liability if in existence
as of the Closing, (iii) otherwise engage in any practice, take any action, or enter into any transaction of the sort described in Section 3A(h) above, or (iv) otherwise
enter into any transaction (or maintain its business in any manner) that could be reasonably expected to materially adversely affect its business, financial condition, operations or results of
operations. 

 
 

       (d)  Preservation of Business.   SANavigator shall use commercially reasonable efforts to keep its business and properties substantially intact,
including its present operations, physical
facilities, working conditions, and relationships with lessors, licensors, suppliers, customers, and employees. 

 
 

       (e)  Full Access.   SANavigator shall permit representatives of the Buyer to have full access at all reasonable times, and in a manner so as not to
interfere with the normal
business operations of SANavigator, to all premises, properties, personnel, books, records (including Tax records), contracts, and documents of or pertaining to SANavigator. SANavigator will cooperate
with the Buyer in arranging meetings with SANavigator's employees. 

 
 

      (f)  Notice of Developments.   Each Party shall give prompt written notice to the other Party of any material adverse development constituting a breach
of any of its own representations and
warranties in Section 3 and Section 4 above. No disclosure by any Party pursuant to this Section 5(f), however shall be deemed to amend or supplement the Disclosure Schedule. 

 
 

       (g)  Exclusivity.   SANavigator shall not (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to
the acquisition of any
capital stock or other voting securities, or any substantial portion of the assets, of SANavigator (including any acquisition structured as a merger, consolidation, or share exchange) or
(ii) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. SANavigator, Connex, 

  
and Western Digital will notify the Buyer immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing. 

 
 

      (i)  Employees.   The employees of SANavigator so determined by the Buyer in its sole discretion shall be offered at-will employment by Buyer, to be
effective as of
the Closing Date. Such offers of employment will provide for compensation and other benefits from the Buyer as may be determined by the Buyer in its sole discretion; provided, however, that such
compensation and other benefits will be substantially as favorable as such employees' current compensation and benefit packages from SANavigator and the salary and options granted to such employees
shall be no less than those set forth in the side letter of even date herewith. To the extent permitted by law and existing agreements with third party benefit providers, Buyer shall grant all
Continuing Employees credit for all services provided to SANavigator prior to the Closing Date (to the same extent as service with Buyer is taken into account with similarly situated employees of
Buyer) for (i) eligibility and vesting purposes under Buyer's benefit plans and (ii) purposes of vacation accrual after the Closing Date. Buyer shall provide SANavigator with a copy of
each offer letter to an employee of SANavigator at least two business days prior to any such offer being made to an employee. The Buyer agrees not terminate more than three
(3) Continuing Employees for a period sixty (60) days from the Closing Date. The foregoing sentence shall not be deemed to limit the Buyer's right to terminate any Continuing Employees
for cause. The Buyer shall promptly notify SANavigator if it becomes aware of facts that lead the Buyer to believe that the conditions contained in Section 6(a)(vi) of the Agreement will
not be satisfied. 

 
 

       (j)  Source Code.   No later than five days prior to Closing, SANavigator shall deliver three copies (each in electronic form) of the source code
to the SANavigator
Software and the related documentation to Gibson, Dunn & Crutcher LLP to be held in escrow until the earlier of (i) the Closing, at which time they shall be delivered to the Buyer in
California, and (ii) termination of this Agreement pursuant to Article 8 of this Agreement, at which time they shall be returned to SANavigator. 

 
 

       (k)  Patent Filings.   SANavigator shall use commercially reasonable efforts to: (i) prosecute all pending patent applications; and (ii) file
utility patent
applications for the invention disclosures identified in Schedule 3(m)(v) of the Disclosure Schedule prior to the dates specified therein. In no event will SANavigator submit any paper
to, or take any action before, the United States Patent or Trademark Office without first receiving Buyer's written approval, which approval will not be unreasonably withheld. 

 
 

      (l)  Integration.   Buyer acknowledges that the software integration plan referred to in the Letter of Intent dated July 11, 2001, as amended, has
been satisfactorily
completed. In the event that the asset purchase contemplated by this Agreement is not completed for any reason, Buyer shall pay SANavigator an amount of $50,000
in consideration of the development and implementation of such integration plan. This covenant shall survive the termination of this Agreement. 

 
 

      6.  Conditions to Obligation to Close.   

 
 

       (a)  Conditions to Obligation of the Buyer.   The obligation of the Buyer to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following
conditions: 

    (i)  the
representations and warranties set forth in Section 3 above shall be true and correct in all material respects (except for representations and
warranties that have a materiality standard, which shall be true and correct in all respects) at and as of the Closing Date (except to the extent that such representations and warranties speak as of
an earlier date); 

    (ii) SANavigator,
Connex, and Western Digital shall have performed and complied with all of their covenants hereunder in all material respects through the Closing; 

  
    (iii) SANavigator shall have procured all of the third party consents specified in Section 3(c) of the Disclosure Schedule that are marked "Consent
Required" and at least 50% of the third party consents specified in Section 3(c) of the Disclosure Schedule that are marked "50-50;" 

    (iv) no
action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, or (C) affect adversely the right of the Buyer to own the Acquired Assets or to
operate the former businesses of SANavigator being acquired hereunder; 

    (v) the
Buyer, SANavigator, Connex and Western Digital shall have entered into the Escrow Agreement with the Escrow Agent; 

    (vi) at
least four of SANavigator's five key executive officers (including SANavigator's Chief Operating Officer, head of Software Engineering and head of Engineering
Services) shall have accepted employment with Buyer effective as of the Closing Date; 

    (vii) the
relevant parties shall have entered into side agreements in form and substance as set forth in Exhibits D-1 and D-2 attached hereto
and the side letters of even date herewith and the same shall be in full force and effect; 

    (viii) 50%
of SANavigator's employees to whom the Buyer has offered employment shall have accepted such employment offers effective as of the Closing Date; 

    (ix) the
Buyer shall have received from counsel to SANavigator, Connex, and Western Digital an opinion in form and substance as set forth in Exhibit E attached
hereto, addressed to the Buyer, and dated as of the Closing Date; 

    (x) all
actions to be taken by SANavigator in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and
other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Buyer; 

    (xi) SANavigator
shall have executed and delivered appropriate documents changing its corporate name to a name that does not contain "SANavigator;" and 

    (xii) SANavigator
shall have delivered to the Buyer a certificate to the effect that each of the conditions specified above in Section 6(a)(i)-(xi) is
satisfied by SANavigator in all respects. 

The
Buyer may waive any condition specified in this Section 6(a) if it executes a writing so stating at or prior to the Closing. 

 
 

       (b)  Conditions to Obligation of SANavigator, Connex and Western Digital.   The obligation of SANavigator, Connex and Western Digital to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions: 

    (i)  the
representations and warranties set forth in Section 4 above shall be true and correct in all material respects (except for representations and
warranties that have a materiality standard, which
shall be true and correct in all respects) at and as of the Closing Date (except to the extent that such representations and warranties speak as of an earlier date); 

    (ii) the
Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Closing; 

  
    (iii) no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement or (B) cause any of
the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect); 

    (iv) the
relevant parties shall have entered into side agreements in form and substance as set forth in Exhibits D-1 and D-2 attached hereto and
the side letters of even date herewith and the same shall be in full force and effect; 

    (v) SANavigator
shall have received from counsel to the Buyer an opinion in form and substance as set forth in Exhibit F attached hereto, addressed to
SANavigator, and dated as of the Closing Date; 

    (vi) all
actions to be taken by the Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to SANavigator; and 

    (vii) Buyer
shall have delivered to SANavigator and Western Digital a certificate to the effect that each of the conditions specified above in this
Section 6(b)(i)-(vi) is satisfied by Buyer in all respects. 

SANavigator,
Connex and Western Digital may waive any condition specified in this Section 6(b) if they execute a writing so stating at or prior to the Closing. 

 
 

       7.  Remedies for Breaches of this Agreement.   

 
 

      (a)  Survival of Representations and Warranties.   All of the representations and warranties of the Buyer, SANavigator, Connex and Western Digital
contained in this Agreement shall survive the Closing (even if
the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of Closing) and continue in full force and effect for a period of 12 months thereafter;
provided, however, that the representations and warranties contained in Sections 3A(m), 3B(e) and 3C(e) of this Agreement shall survive the Closing (even if the Buyer knew or had
reason to know of any misrepresentation or breach of warranty at the time of Closing) and continue in full force and effect for a period of 18 months thereafter. 

 
 

       (b)  Indemnification Provisions for Benefit of the Buyer.   

    (i)  In
the event SANavigator breaches any of its representations, warranties, and covenants contained in this Agreement, provided that the Buyer makes a written claim
for indemnification against any of SANavigator pursuant to Section 9(h) below within the applicable survival period pursuant to Section 7(a), then, subject to
clause (v) below, SANavigator, Connex and Western Digital, jointly and severally, agree to indemnify the Buyer from and against any Adverse Consequences the Buyer may suffer through and
after the date of the claim for indemnification (including any Adverse Consequences the Buyer may suffer after the end of any applicable survival period) resulting from, arising out of, relating to,
or caused by the breach (or the alleged breach). 

    (ii) In
the event Connex or Western Digital breaches any of its representations, warranties, and covenants contained in this Agreement, provided that the Buyer makes a
written claim for indemnification against Connex or Western Digital pursuant to Section 9(h) below within the applicable survival period pursuant to Section 7(a), then, subject to
clause (v) below, Connex and Western Digital, jointly and severally, agree to indemnify the Buyer from and against any Adverse Consequences the Buyer may suffer through and after the
date of the claim for indemnification 

  
(including any Adverse Consequences the Buyer may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, or caused by the breach (or the alleged breach). 

    (iii) SANavigator,
Connex and Western Digital, jointly and severally, agree to indemnify the Buyer from and against any Adverse Consequences the Buyer may suffer
resulting from, arising out of, relating to, in the nature of, or caused by any Liability of SANavigator which is not an Assumed Liability. 

    (iv) SANavigator,
Connex and Western Digital, jointly and severally, agree to indemnify Buyer for certain special indemnity matters agreed to by the parties in that
certain side letter of even date herewith. 

    (v) In
the event the Buyer is entitled to receive indemnification pursuant to Section 7(b)(i), (ii) or (iv), the sole and exclusive remedy of Buyer
(except as set forth in the next sentence and in subsection (e) below) shall be to recover the funds deposited with the Escrow Agent pursuant to the Escrow Agreement. At such time the
funds deposited with the Escrow Agent are no longer available (whether because they have been forwarded to the Parties or because the Escrow Agreement has been terminated), then solely with respect to
(A) breaches of the representations and warranties contained in Sections 3A(m), 3B(e), and 3C(e) and the covenants contained in Section 5(k), Buyer may seek to recover any amounts
owed hereunder up to an additional $1,487,500 by any lawful means, and (B) with respect to the special indemnity matters in Section 7(b)(iv) Buyer may seek to recover any amounts
owed for such indemnity pursuant to the side letter. The Buyer shall not be entitled to seek indemnification under Section 7(b)(i) or (ii) unless and until the Buyer has incurred
at least $200,000 in the aggregate of Adverse Consequences (the "Basket Amount"), in which case the Buyer shall be entitled to seek indemnification
solely for Adverse Consequences in excess of the Basket Amount. 

 
 

       (c)  Indemnification Provisions for Benefit of SANavigator, Connex and Western Digital.   

    (i)  In
the event the Buyer breaches any of its representations, warranties, and covenants contained in this Agreement, and provided that SANavigator, Connex or Western
Digital makes a written claim for indemnification against the Buyer pursuant to Section 9(h) below within the survival period in Section 7(a), then the Buyer agrees to indemnify
SANavigator, Connex and Western Digital from and against any Adverse Consequences SANavigator, Connex or Western Digital may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences SANavigator may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, or caused by the breach (or the alleged
breach). 

    (ii) The
Buyer agrees to indemnify each of SANavigator, Connex and Western Digital from and against any Adverse Consequences SANavigator may suffer resulting from,
arising out of, relating to, or caused by any Assumed Liability. 

 
 

      (d)  Matters Involving Third Parties.   

    (i)  If
any third party shall notify any Party (the "Indemnified Party") with respect to any matter (a
"Third Party Claim") which may give rise to a claim for indemnification against any other Party (the "Indemnifying
Party") under this Section 7, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided,
however, that no delay on the part of the Indemnified
Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced. 

  

    (ii) Any
Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice satisfactory to the Indemnified
Party so long as (A) the Indemnifying Party notifies the Indemnified Party in writing within 15 days after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, or
caused by the Third Party Claim, (B) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (C) the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice adverse to the continuing business interests of the Indemnified Party, and (E) the Indemnifying Party conducts the defense of the Third Party Claim
actively and diligently. 

    (iii) So
long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 7(d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, (B) the Indemnified Party will not consent to
the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably), and
(C) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld unreasonably). 

    (iv) In
the event any of the conditions in Section 7(d)(ii) above is or becomes unsatisfied, however, (A) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in connection therewith), (B) the Indemnifying Parties will reimburse the Indemnified Party promptly and periodically for the
costs of defending against the Third Party Claim (including attorneys' fees and expenses), and (C) the Indemnifying Parties will remain responsible for any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this Section 7. 

 
 

       (e)  Other Indemnification Provisions.   The foregoing indemnification provisions are the sole and exclusive remedy any Party may have with respect to
the transactions contemplated by this Agreement;
provided, however, that the foregoing clause shall not be deemed a waiver by any party of any remedy such party may have arising out of common law fraud with respect to this Agreement. 

 
 

       8.  Termination.   

 
 

       (a)  Termination of Agreement.   Certain of the Parties may terminate this Agreement as provided below: 

    (i)  the
Buyer and SANavigator may terminate this Agreement by mutual written consent at any time prior to the Closing; 

    (ii) the
Buyer may terminate this Agreement by giving written notice to SANavigator at any time prior to the Closing (A) in the event SANavigator has breached
any representation, warranty, or covenant contained in this Agreement in any material respect, the Buyer has notified SANavigator of the breach, and the breach has continued without cure for a period
of 10 days after the notice of breach, (B) if the Closing shall not have occurred on or before September 21, 2001, by reason of the failure of any condition precedent under
Section 6 hereof (unless the failure 

  
results primarily from the Buyer itself breaching any representation, warranty, or covenant contained in this Agreement), or (C) if the condition contained in Section 6(a)(vi) has
not been satisfied at or before 5:00 p.m. Pacific Time on September 4, 2001; and 

    (iii) SANavigator
may terminate this Agreement by giving written notice to the Buyer at any time prior to the Closing (A) in the event the Buyer has breached any
material representation, warranty, or covenant contained in this Agreement in any material respect, SANavigator has notified the Buyer of the breach, and the breach has continued without cure for a
period of 10 days after the notice of breach or (B) if the Closing shall not have occurred on or before September 21, 2001, by reason of the failure of any condition precedent
under Section 6 hereof (unless the failure results primarily from SANavigator, Connex or Western Digital breaching any representation, warranty, or covenant contained in this Agreement). 

 
 

       (b)  Effect of Termination.   If any Party terminates this Agreement pursuant to Section 8(a) above, all rights and obligations of the Parties
hereunder shall terminate
without any Liability of any Party to any other Party (except for any Liability of any Party then in breach). 

 
 

      9.  Miscellaneous.   

 
 

       (a)  Covenant Not to Compete.   For a period of two years from and after the Closing Date, neither SANavigator, Connex, Western Digital nor any of
their Subsidiaries will engage
directly or indirectly in any business that SANavigator conducts as of the Closing Date, which for purposes of this Agreement shall mean the storage area network management software business, in any
geographic area in which SANavigator or the Buyer conducts that business as of the Closing Date; provided, however, that no owner of less than 1% of the
outstanding stock of any publicly traded corporation shall be deemed to engage solely by reason thereof in any of its businesses; provided, further,
that this provision shall not be construed to prohibit SANavigator, Connex or Western Digital from being acquired by an entity that engages in the storage area network management software business.
For purposes of this paragraph the definition of storage area network shall mean a dedicated network of heterogeneous storage devices that connect to a server network through a standard interface
connection. In any such acquisition by an entity that engages in the business of SANavigator as of the Closing Date, neither the acquiror nor the acquired company (SANavigator, Connex, or Western
Digital, as the case may be) would be bound by the provisions hereof. If the final judgment of a court of competent jurisdiction declares that any term or provision of this
Section 9(a) is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration,
or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the
judgment may be appealed. 

 
 

      (b)  Press Releases and Public Announcements.   No Party shall issue any press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of
the other Party; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing
or trading agreement concerning its publicly-traded securities (in which case the disclosing Party will use its best efforts to advise and cooperate with the other Party prior to making the
disclosure). 

 
 

      (c)  No Third-Party Beneficiaries.   This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns. 

 
 

       (d)  Entire Agreement.   This Agreement and the Confidentiality Agreement dated June 6, 2001 (including the documents referred to herein)
constitutes the entire agreement
between the Parties and 

  
supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, to the extent they related in any way to the subject matter hereof. 

 
 

       (e)  Succession and Assignment.   This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may
assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party; provided,
however, that the Buyer may (i) assign any or all of its rights and interests hereunder to a wholly-owned subsidiary and (ii) designate a wholly-owned subsidiary
to perform its obligations hereunder (in any or all of which cases the Buyer nonetheless shall remain responsible for the performance of all of its obligations hereunder) and SANavigator may assign
its rights and obligations hereunder to Connex or Western Digital. 

 
 

       (f)  Counterparts.   This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together
will constitute one and the
same instrument. 

 
 

      (g)  Headings.   The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this
Agreement. 

 
 

       (h)  Notices.   All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or
other communication
hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below: 

	If to Western Digital:	 	Copy to:
	Western Digital Corporation

20511 Lake Forest Drive

Lake Forest, CA 92630

Attn: Michael A. Cornelius, Esq.	 	Gibson Dunn & Crutcher LLP

1530 Page Mill Road

Palo Alto, CA 94025

Attn: Larry Calof, Esq.
	
If to Connex:	
 	

Copy to:
	Western Digital Corporation

20511 Lake Forest Drive

Lake Forest, CA 92630

Attn: Michael A. Cornelius, Esq.	 	Gibson Dunn & Crutcher LLP

1530 Page Mill Road

Palo Alto, CA 94025

Attn: Larry Calof, Esq.
	
If to SANavigator:	
 	

Copy to:
	SANavigator, Inc.

20511 Lake Forest Drive

Lake Forest, CA 92630

Attn: Michael A. Cornelius, Esq.	 	Gibson Dunn & Crutcher LLP

1530 Page Mill Road

Palo Alto, CA 94025

Attn: Larry Calof, Esq.
	
If to the Buyer:	
 	

Copy to:
	McDATA Corporation

380 Interlocken Crescent

Broomfield, CO 80021

Attn: Thomas McGimpsey, Esq.	 	Faegre & Benson LLP

2500 Republic Plaza

370 17th Street

Denver, CO 80202

Attn: Douglas Wright, Esq.

Any
Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered
by giving the other Party notice in the manner herein set forth. 

 

 
 

       (i)  Transition.   None of SANavigator, Connex or Western Digital will take any action that is designed or intended to have the effect of discouraging
any lessor, licensor,
customer, supplier, or other business associate of
SANavigator from maintaining the same business relationships with the Buyer and its Subsidiaries after the Closing as it maintained with SANavigator prior to the Closing. 

 
 

      (j)  Confidential.   After the Closing, each of SANavigator, Connex and Western Digital will treat and hold as such all of the Confidential Information,
refrain from using any of
the Confidential Information except in connection with this Agreement, and deliver promptly to the Buyer or destroy, at the request and option of the Buyer, all tangible embodiments (and all copies)
of the Confidential Information which are in its possession. In the event that any of SANavigator, Connex or Western Digital is requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information, that Party will notify the Buyer promptly of the
request or requirement so that the Buyer may seek an appropriate protective order or waive compliance with the provisions of this Section 9(j). If, in the absence of a protective order or the
receipt of a waiver hereunder, any of SANavigator, Connex or Western Digital is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or else stand liable for
contempt, that Party may disclose the Confidential Information to the tribunal; provided, however, that the disclosing Party shall use its reasonable
best efforts to obtain, at the reasonable request of the Buyer, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be
disclosed as the Buyer shall designate. 

 
 

      (k)  Governing Law.   This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict
of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 

 
 

       (l)  Amendments and Waivers.   No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and SANavigator. No waiver by any
Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. The knowledge of a default, misrepresentation, or breach of
warranty or covenant hereunder shall not be deemed a waiver of or non-reliance on such warranty or covenant by the other Party. 

 
 

       (m)  Severability.   Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability
of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. 

 
 

       (n)  Expenses.   Each of the Buyer, SANavigator, Connex and Western Digital will bear its own costs and expenses (including legal fees and expenses)
incurred in connection with
this Agreement and the transactions contemplated hereby. SANavigator also agrees that it has not paid any amount to any third party, and will not pay any amount to any third party until after the
Closing, with respect to any of the costs and expenses of SANavigator, Connex and Western Digital (including any of their legal fees and expenses) in connection with this Agreement or any of the
transactions contemplated hereby. 

 
 

       (o)  Construction.   The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of
intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all 

  
rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. 

 
 

       (p)  Incorporation of Exhibits and Schedules.   The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a
part hereof. 

 
 

      (q)  Specific Performance.   Each of the Parties acknowledges and agrees that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state
thereof having jurisdiction over the Parties and the matter, in addition to any other remedy to which it may be entitled, at law or in equity. 

 
 

       (r)  Submission to Jurisdiction.   Each of the Parties submits to the jurisdiction of any state or federal court sitting in Denver, Colorado, in any
action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. Each of the Parties waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto. Any Party may make service on
the other Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 9(h) above.
Nothing in this Section 9(r), however, shall affect the right of any Party to bring any action or proceeding arising out of or relating to this Agreement in any other court or to serve legal
process in any other manner permitted by law or in equity. Each Party agrees that a final judgment in
any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or in equity. 

***** 

[Remainder
of this page intentionally left blank. Signature pages follow.] 

  
    IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first above written. 

	

 	
 	
MCDATA CORPORATION
	

 	
 	
By:	

/s/ JOHN F. MCDONNEL   
	 	 	 	

	 	 	Title:	CEO
	 	 	 	

	

 	
 	
SANAVIGATOR, INC.
	

 	
 	
By:	

/s/ MICHAEL CORNELIUS   
	 	 	 	

	 	 	Title:	Secretary
	 	 	 	

	

 	
 	
CONNEX, INC.
	

 	
 	
By:	

/s/ MICHAEL CORNELIUS   
	 	 	 	

	 	 	Title:	Secretary
	 	 	 	

	

 	
 	
WESTERN DIGITAL CORPORATION
	

 	
 	
By:	

/s/ MICHAEL CORNELIUS   
	 	 	 	

	 	 	Title:	VP of Law and Admin.<Page>

                                                                     EXHIBIT 4.1

================================================================================

                              OWENS-ILLINOIS, INC.,

                                     ISSUER

                                       AND

                           OWENS-ILLINOIS GROUP, INC.
                         OWENS-BROCKWAY PACKAGING, INC.,

                          THE GUARANTEEING SUBSIDIARIES

                                       AND

                              THE BANK OF NEW YORK,

                                     TRUSTEE

                              --------------------

                             SUPPLEMENTAL INDENTURE

                            DATED AS OF JUNE 26, 2001

                              --------------------

                          Supplemental to the Indenture
                            dated as of May 20, 1998
               with respect to the following series of Securities:
                           7.15% Senior Notes due 2005
                           7.35% Senior Notes due 2008
                        7.50% Senior Debentures due 2010
                        7.80% Senior Debentures due 2018

================================================================================

<Page>

      Supplemental Indenture (this "SUPPLEMENTAL INDENTURE"), dated as of June
26, 2001 among Owens-Illinois, Inc. (or its permitted successor), a Delaware
corporation (the "COMPANY"), Owens-Illinois Group, Inc. ("GROUP") and
Owens-Brockway Packaging, Inc. ("PACKAGING") (each of Group and Packaging, a
"GUARANTEEING SUBSIDIARY"), subsidiaries of the Company, and The Bank of New
York, as trustee under the indenture referred to below (the "TRUSTEE").

                               W I T N E S S E T H

      WHEREAS, the Company has executed and delivered to the Trustee an
indenture dated as of May 20, 1998, as amended or supplemented prior to the date
hereof (the "INDENTURE"), pursuant to which the Company has issued $350 million
principal amount of 7.15% Senior Notes due 2005, $250 million principal amount
of 7.35% Senior Notes due 2008, $250 million principal amount of 7.50% Senior
Debentures due 2010 and $250 million principal amount of 7.80% Senior Debentures
due 2018, each of which are a separate series of Securities under the Indenture;

      WHEREAS, the Holders of not less than a majority of the principal amount
of the outstanding [list series of securities that have consented]
(collectively, the "NOTES") have consented to the amendments to the Indenture
set forth herein;

      WHEREAS, (a) each Guaranteeing Subsidiary desires to unconditionally
guarantee all of the Company's obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "NOTE GUARANTEE") and (b) the
Guaranteeing Subsidiaries desire to pledge and grant security interests in
certain collateral to (i) secure on a second priority basis the Company's
obligations under the Indenture and the Notes on the terms and conditions set
forth herein and (ii) secure on a second priority basis the obligations of each
Guaranteeing Subsidiary under the Note Guarantee; and

      WHEREAS, the amendments effected by this Supplemental Indenture will not
become operative unless and until the conditions set forth in Section 7 are
satisfied.

      NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, each Guaranteeing Subsidiary and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:

      SECTION 1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

      SECTION 2. DEFINITIONS. The following definitions are hereby added to
Section 1.01 of the Indenture, which, in the event of a conflict with the
definition of terms in the Indenture, shall control:

      "COLLATERAL AGENT" means Bankers Trust Company or any successor acting in
the capacity of collateral agent under the Pledge Agreement.

      "CREDIT AGREEMENT" means the Secured Credit Agreement dated as of April
23, 2001 among certain subsidiaries of the Company, the lenders named therein,
the agents for the lenders, the managers for the lenders and Bankers Trust
Company, as administrative agent, as such agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time, and includes any
credit agreement or bank facility that extends the maturity of or refinances or
replaces all or any portion of the obligations or commitments under such
agreement or any successor agreement.

      "EQUITY INTERESTS" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, with respect to partnerships, partnership interests and any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, such
partnership (collectively, "Capital Stock"), and all warrants, options or other
rights to acquire such Capital Stock.

      "GUARANTIED OBLIGATIONS" has the meaning given such term in the Credit
Agreement or the Subsidiary Guaranty, as applicable.

      "INTERCREDITOR AGREEMENT" means the Intercreditor Agreement executed and
delivered by the Collateral Agent and the other parties thereto dated as of
April 23, 2001, in the form of Exhibit A hereto, as such Intercreditor Agreement
may hereafter be amended, supplemented or otherwise modified from time to time.

                                      -1-
<Page>

      "NEW SENIOR DEBT" means Indebtedness of any Subsidiary of the Company
issued after the date hereof so long as such Indebtedness is issued in
compliance with the terms and provisions of the Credit Agreement and constitutes
"New Senior Debt" under the Credit Agreement.

      "PERMITTED JUNIOR SECURITIES" means Equity Interests or debt securities of
the Company or any Guaranteeing Subsidiary, in each case that are subordinated
to the Senior Guarantees to substantially the same extent as, or to a greater
extent than, the Note Guarantee is subordinated to the Senior Guarantees.

      "PLEDGE AGREEMENT" means the Pledge Agreement executed and delivered by
Group and Packaging to the Collateral Agent dated as of April 23, 2001, in the
form of Exhibit B hereto, as such Pledge Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.

      "PLEDGED COLLATERAL" means the Pledged Collateral as defined in the Pledge
Agreement.

      "SENIOR GUARANTEE" means (i) the guarantee by Group of the Guarantied
Obligations pursuant to the Credit Agreement, (ii) the guarantee by Packaging of
the Guarantied Obligations pursuant to the Subsidiary Guaranty to which it is a
party and (iii) if applicable, the guarantee by any Guaranteeing Subsidiary of
obligations of the issuer or issuers of any New Senior Debt.

      "SUBSIDIARY GUARANTY" means the Guaranty executed and delivered by
Packaging pursuant to the Credit Agreement.

      SECTION 3. AGREEMENT TO PROVIDE SECURITY. The Company and the Guaranteeing
Subsidiaries hereby agree to provide security for the Notes on the following
terms and conditions:

            SECTION 3.1 PLEDGE AGREEMENT.The due and punctual payment of the
principal of and interest, if any, on the Notes when and as the same shall be
due and payable, whether on an interest payment date, at maturity, by
acceleration, repurchase, redemption or otherwise, and interest on the overdue
principal of and interest (to the extent permitted by law), if any, on the Notes
and performance of all other obligations of the Company to the Holders of Notes
or the Trustee under the Indenture and the Notes, and the performance of each
Guaranteeing Subsidiary under the Note Guarantee, in each case according to the
terms hereunder or thereunder, shall be secured as provided in the Pledge
Agreement. The Company shall deliver to the Trustee copies of all documents
delivered to the Collateral Agent pursuant to the Pledge Agreement, and shall do
or cause to be done all such acts and things as may be necessary or proper, or
as may be required by the provisions of the Pledge Agreement, to assure and
confirm to the Trustee and the Collateral Agent the security interest in the
Pledged Collateral contemplated hereby, by the Pledge Agreement or any part
thereof, as from time to time constituted, so as to render the same available
for the security and benefit of the Indenture, the Note Guarantee and of the
Notes secured hereby, according to the intent and purposes herein and therein
expressed. The Company shall take, or shall cause its Subsidiaries to take, as
necessary or upon request of the Trustee, any and all actions reasonably
required to cause the Pledge Agreement to create and maintain, as security for
the obligations of the Company and the Guaranteeing Subsidiaries under this
Supplemental Indenture and the Indenture, a valid and enforceable second
priority Lien in and on all the Pledged Collateral, in favor of the Collateral
Agent for the benefit of the Holders of Notes, as and to the extent set forth in
the Pledge Agreement.

            SECTION 3.2 RECORDING AND OPINIONS.

                  (a) The Company shall furnish to the Trustee promptly
following the execution and delivery of this Supplemental Indenture an Opinion
of Counsel either (i) stating that in the opinion of such counsel all action has
been taken with respect to the recording, registering and filing of the
Indenture, financing statements or other instruments necessary to make effective
the Lien intended to be created by the Pledge Agreement, and reciting with
respect to the security interests in the Pledged Collateral, the details of such
action, or (ii) stating that, in the opinion of such counsel, no such action is
necessary to make such Lien effective.

                  (b) The Company shall furnish to the Trustee within 30 days
after May 1 of each year, beginning with May 1, 2002, an Opinion of Counsel,
dated as of such date, either (i) (A) stating that, in the opinion of such
counsel, action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and refiling of all supplemental
indentures, financing statements, continuation statements or other instruments
of further assurance as is necessary to maintain the Lien of the Pledge
Agreement and reciting with respect to the security interests in the Pledged
Collateral the details of such action or referring to prior Opinions of Counsel
in which such details are given, and (B) stating that, based on relevant laws as
in effect on the date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are

                                      -2-
<Page>

necessary as of such date and during the succeeding 12 months fully to preserve
and protect, to the extent such protection and preservation are possible by
filing, the rights of the Holders of Notes and the Collateral Agent and the
Trustee hereunder and under the Pledge Agreement with respect to the security
interests in the Pledged Collateral, or (ii) stating that, in the opinion of
such counsel, no such action is necessary to maintain such Lien and assignment.

                  (c) The Company shall otherwise comply with the provisions of
TIAss.314(b).

            SECTION 3.3 RELEASE OF COLLATERAL. Pledged Collateral may be
released from the Lien and security interest created by the Pledge Agreement at
any time or from time to time in accordance with the provisions of the Pledge
Agreement and the Intercreditor Agreement. The release of any Pledged Collateral
from the terms of the Indenture and the Pledge Agreement shall not be deemed to
impair the security under the Indenture in contravention of the provisions
hereof if and to the extent the Pledged Collateral is released pursuant to the
terms of the Pledge Agreement and the Intercreditor Agreement. The Trustee
acknowledges and the Holders, by their consent to the amendments effected by
this Supplemental Indenture are deemed to acknowledge, that a release of the
Pledged Collateral in accordance with the terms of the Pledge Agreement and the
Intercreditor Agreement will not be deemed for any purpose to be an impairment
of the security under the Indenture. To the extent applicable, the Company shall
comply with TIA ss. 313(b), relating to reports, and TIA ss. 314(d), relating to
the release of property or securities from the Lien and security interest of the
Pledge Agreement and relating to the substitution therefor of any property or
securities to be subjected to the Lien and security interest of the Pledge
Agreement. Any certificate or opinion required by TIA ss. 314(d) may be made by
an Officer of the Company except in cases where TIA ss. 314(d) requires that
such certificate or opinion be made by an independent Person.

            SECTION 3.4 AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE
UNDER THE PLEDGE AGREEMENT. Subject to the provisions of the Intercreditor
Agreement and the Pledge Agreement, the Trustee shall have power to institute
and maintain such suits and proceedings to prevent any impairment of the Pledged
Collateral by any acts that may be unlawful or in violation of the Pledge
Agreement, the Intercreditor Agreement or the Indenture, and such suits and
proceedings to preserve or protect its interests and the interests of the
Holders of Notes in the Pledged Collateral (including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders of Notes or of the Trustee).

            SECTION 3.5 AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER
THE PLEDGE AGREEMENT. The Trustee is authorized to receive any funds for the
benefit of the Holders of Notes distributed under the Pledge Agreement, and to
make further distributions of such funds to the Holders of Notes according to
the provisions of this Supplemental Indenture, the Indenture and the
Intercreditor Agreement.

      SECTION 4. AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby
agrees as follows:

            SECTION 4.1 GUARANTEE.

                  (a) Such Guaranteeing Subsidiary jointly and severally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Supplemental Indenture, the Indenture, the Notes or
the obligations of the Company thereunder, that:

                        (i) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the Notes
(to the extent permitted by law), if any (including amounts that would become
due but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Law, and interest that, but for the filing of a proceeding under the
Bankruptcy Law with respect to the Company, would have accrued on the Notes,
whether or not any such interest is allowed as an enforceable claim against the
Company in such proceeding), and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and

                        (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when

                                      -3-
<Page>

due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guaranteeing Subsidiaries shall be jointly and severally obligated
to pay the same immediately.

                  (b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or the
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance that might otherwise constitute a legal or equitable
discharge or defense of a Guaranteeing Subsidiary.

                  (c) The following is hereby waived: diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever.

                  (d) This Note Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture.

                  (e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guaranteeing Subsidiaries, or any
custodian, trustee, liquidator or other similar official acting in relation to
either the Company or the Guaranteeing Subsidiaries, any amount paid by either
to the Trustee or such Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.

                  (f) Such Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.

                  (g) As between the Guaranteeing Subsidiaries, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 of the
Indenture for the purposes of this Note Guarantee, 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 of the Indenture, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guaranteeing Subsidiaries for the purpose of this Note Guarantee.

                  (h) Such Guaranteeing Subsidiary shall have the right to seek
contribution from any non-paying Guaranteeing Subsidiary so long as the exercise
of such right does not impair the rights of the Holders under the Note
Guarantee.

                  (i) Each Guaranteeing Subsidiary hereby confirms that it is
the intention of such party that the Note Guarantee of such Guaranteeing
Subsidiary not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act or any similar federal or
state law to the extent applicable to any Note Guarantee. To effectuate the
foregoing intention, the Trustee and the Guaranteeing Subsidiaries hereby
irrevocably agree that the obligations of such Guaranteeing Subsidiary will,
after giving effect to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy Law or fraudulent
conveyance laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Guaranteeing Subsidiary in respect of the obligations of such other Guaranteeing
Subsidiary under this Supplemental Indenture, this Note Guarantee shall be
limited to the maximum amount permissible such that the obligations of such
Guaranteeing Subsidiary under this Note Guarantee will not constitute a
fraudulent transfer or conveyance.

            SECTION 4.2 EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary
agrees that the Note Guarantee shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.

            SECTION 4.3 GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.

                  (a) Subject to Section 4.4(a) below, a Guaranteeing Subsidiary
may not consolidate with or merge with or into (whether or not such Guaranteeing
Subsidiary is the surviving Person) another Person unless the Person formed by
or surviving any such consolidation or merger (if other than a Guaranteeing
Subsidiary or the Company) unconditionally assumes all the obligations of such
Guaranteeing Subsidiary, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes, the Indenture
and the Note Guarantee on the terms set forth herein or therein.

                                      -4-
<Page>

                  (b) Subject to Section 4.4(a) below, in case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Note Guarantee and the
due and punctual performance of all of the covenants and conditions of the
Indenture to be performed by the Guaranteeing Subsidiary, such successor Person
shall succeed to and be substituted for the Guaranteeing Subsidiary with the
same effect as if it had been named herein as a Guaranteeing Subsidiary. Such
successor corporation thereupon may cause to be signed any or all of the Note
Guarantees which theretofore shall not have been signed by the Guaranteeing
Subsidiary and delivered to the Trustee. All the Note Guarantees so issued shall
in all respects have the same legal rank and benefit under the Indenture as the
Note Guarantees theretofore and thereafter issued in accordance with the terms
of the Indenture as though all of such Note Guarantees had been issued at the
date of the execution hereof.

                  (c) Notwithstanding clauses (a) and (b) above, nothing
contained in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guaranteeing Subsidiary with or into the Company or
another Guaranteeing Subsidiary, or shall prevent any sale or conveyance of the
property of a Guaranteeing Subsidiary as an entirety or substantially as an
entirety to the Company or another Guaranteeing Subsidiary.

            SECTION 4.4 RELEASES.

                  (a) In the event of a sale or other disposition of all or
substantially all of the assets of any Guaranteeing Subsidiary, by way of
merger, consolidation or otherwise, or a sale or other disposition of all of the
capital stock of any Guaranteeing Subsidiary, in each case to a Person that is
not (either before or after giving effect to such transaction) a Subsidiary of
the Company, then such Guaranteeing Subsidiary (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the capital
stock of such Guaranteeing Subsidiary) or the corporation acquiring the property
(in the event of a sale or other disposition of all or substantially all of the
assets of such Guaranteeing Subsidiary) will be released and relieved of any
obligations under its Note Guarantee. Upon delivery by the Company to the
Trustee of an Officers' Certificate to the effect that such sale or other
disposition has occurred, the Trustee shall execute any documents reasonably
required in order to evidence the release of any Guaranteeing Subsidiary from
its obligations under its Note Guarantee.

                  (b) The Company, in its sole discretion, may release and
relieve a Guaranteeing Subsidiary of any obligations under its Note Guarantee in
the event such Guaranteeing Subsidiary is no longer a guarantor of any
Guarantied Obligations. Upon delivery by the Company to the Trustee of an
Officers' Certificate to the effect that such Guaranteeing Subsidiary is no
longer a guarantor of any Guarantied Obligations, the Trustee shall execute any
documents reasonably required in order to evidence the release of any
Guaranteeing Subsidiary from its obligations under its Note Guarantee.

                  (c) Any Guaranteeing Subsidiary not released from its
obligations under its Note Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations of any
Guaranteeing Subsidiary under the Indenture.

            SECTION 4.5 SUBORDINATION OF NOTE GUARANTEE. Each Guaranteeing
Subsidiary covenants and agrees that the obligations of such Guaranteeing
Subsidiary under its Note Guarantee shall be junior and subordinate in right of
payment to the prior payment in full in cash of all obligations under the Senior
Guarantee of such Guaranteeing Subsidiary.

            SECTION 4.6 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. Upon any
distribution to creditors of a Guaranteeing Subsidiary in a liquidation or
dissolution of such Guaranteeing Subsidiary or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Guaranteeing
Subsidiary or its property, in an assignment for the benefit of creditors or any
marshaling of the Guaranteeing Subsidiary's assets and liabilities:

                        (i) holders of the Senior Guarantees shall be entitled
to receive payment in full in cash of all obligations due in respect of such
Senior Guarantees (including interest after the commencement of any such
proceeding at the rate specified in the Indebtedness to which such Senior
Guarantee relates whether or not any such interest is allowed as an enforceable
claim against the Guaranteeing Subsidiary in such proceeding) before holders of
the Note Guarantee shall be entitled to receive any payment with respect to the
Note Guarantee (except that Holders may receive (A) Permitted Junior Securities
and (B) payments and other distributions made from any defeasance trust created
pursuant to Section 8.03 or 8.04 of the Indenture); and

                                      -5-
<Page>

                        (ii) until all obligations with respect to the Senior
Guarantees (as provided in clause (i) above) are paid in full in cash, any
distribution to which holders of the Note Guarantee would be entitled but for
this Section 4 shall be made to holders entitled to the benefit of the Senior
Guarantees (except that holders of the Note Guarantee may receive (A) Permitted
Junior Securities and (B) payments and other distributions made from any
defeasance trust created pursuant to Section 8.03 or 8.04 of the Indenture), as
their interests may appear.

            SECTION 4.7 DEFAULT ON SENIOR GUARANTEES.

                  (a) A Guaranteeing Subsidiary may not make any payment or
distribution to the Trustee or any holder in respect of obligations with respect
to the Note Guarantee and may not acquire from the Trustee or any Holder any
Notes for cash or property (other than (A) Permitted Junior Securities and (B)
payments and other distributions made from any defeasance trust created pursuant
to Section 8.03 or 8.04 of the Indenture) until all obligations with respect to
the Senior Guarantees have been paid in full in cash if:

                        (i) a default in the payment of any obligations with
respect to any Senior Guarantee occurs and is continuing beyond any applicable
grace period in the agreement, indenture or other document governing such Senior
Guarantee; or

                        (ii) a default, other than a payment default, with
respect to any Senior Guarantee occurs and is continuing that then permits
holders of the Senior Guarantee to accelerate the maturity of the Indebtedness
to which such Senior Guarantee relates and a Trust Officer of the Trustee
receives a notice of the default (a "PAYMENT BLOCKAGE NOTICE") from a Person who
may give it pursuant to Section 4.13 hereof. If a Trust Officer of the Trustee
receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice
shall be effective for purposes of this Section unless and until (A) at least
360 days shall have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (B) all scheduled payments of principal, premium, if
any, and interest on the Notes that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to a Trust Officer of the Trustee shall
be, or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been waived for a period of not less than 180 days.

                  (b) A Guaranteeing Subsidiary may and shall resume payments on
and distributions in respect of the Note Guarantee and may acquire Notes upon
the earlier of:

                        (i) the date upon which the default is cured or waived,
or

                        (ii) in the case of a default referred to in clause (ii)
of subclause (a) hereof, 179 days pass after notice is received if the maturity
of the Indebtedness to which such Senior Guarantee relates has not been
accelerated,

if this Section 4 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.

            SECTION 4.8 WHEN DISTRIBUTION MUST BE PAID OVER. In the event that
the Trustee or any holder receives any payment of any obligations with respect
to the Note Guarantee at a time when a Trust Officer of the Trustee or such
holder, as applicable, has actual knowledge that such payment is prohibited by
this Section 4, such payment shall be held by the Trustee or such holder, in
trust for the benefit of, and shall be paid forthwith over and delivered, upon
written request, to, the holders of the Senior Guarantees as their interests may
appear or their representative under the indenture or other agreement (if any)
pursuant to which the Senior Guarantees may have been issued, as their
respective interests may appear, for application to the payment of all
obligations with respect to the Senior Guarantees remaining unpaid to the extent
necessary to pay such obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
the Senior Guarantees.

      With respect to the holders of the Senior Guarantees, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Section 4 and no implied covenants or obligations
with respect to the holders of the Senior Guarantees shall be read into this
Supplemental Indenture or the Indenture against the Trustee. The Trustee shall
not be deemed to owe any fiduciary duty to the holders of the Senior Guarantees,
and shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of holders of the Note Guarantee or any Guaranteeing
Subsidiary or any other Person money or assets to

                                      -6-
<Page>

which any holders of Senior Guarantees shall be entitled by virtue of this
Section 4, except if such payment is made as a result of the willful misconduct
or gross negligence of the Trustee.

            SECTION 4.9 SUBROGATION. After all obligations with respect to the
Senior Guarantees are paid in full and all Guarantied Obligations are satisfied
or terminated and until the Notes are paid in full, holders of the Note
Guarantee shall be subrogated to the rights of holders of Senior Guarantees to
receive distributions applicable to the Senior Guarantees to the extent that
distributions otherwise payable to the holders of the Note Guarantee have been
applied to the payment of the obligations with respect to the Senior Guarantees.
A distribution made under this Section 4 to holders of Senior Guarantees that
otherwise would have been made to holders of the Note Guarantee is not, as
between a Guaranteeing Subsidiary and Holders, a payment by such Guaranteeing
Subsidiary on the Note Guarantee.

            SECTION 4.10 RELATIVE RIGHTS. This Section 4 defines the relative
rights of holders of the Note Guarantee and holders of Senior Guarantees.
Nothing in this Supplemental Indenture or the Indenture shall:

                        (i) impair, as between the Company or any Guaranteeing
Subsidiary and holders of the Note Guarantee, the obligation of the Company and
the Guaranteeing Subsidiaries, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;

                        (ii) affect the relative rights of holders of the Note
Guarantee and creditors of the Guaranteeing Subsidiaries other than their rights
in relation to holders of Senior Guarantees; or

                        (iii) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default, subject to
the rights of holders of Senior Guarantees to receive distributions and payments
otherwise payable to holders of the Note Guarantee.

            SECTION 4.11 SUBORDINATION MAY NOT BE IMPAIRED BY ANY GUARANTEEING
SUBSIDIARY. No right of any holder of a Senior Guarantee to enforce the
subordination of the obligations evidenced by the Note Guarantee shall be
impaired by any act or failure to act by any Guaranteeing Subsidiary or any
holder of the Note Guarantee or by the failure of any Guaranteeing Subsidiary or
any holder of the Note Guarantee to comply with this Supplemental Indenture or
the Indenture.

            SECTION 4.12 DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of the Senior
Guarantees, the distribution may be made and the notice given to their
representative.

      Upon any payment or distribution of assets of any Guaranteeing Subsidiary
referred to in this Section 4, the Trustee and the holders of the Note Guarantee
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the holders of the Note Guarantee for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Guarantees and other Indebtedness of the Guaranteeing Subsidiaries, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section 4.

            SECTION 4.13 RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding the
provisions of this Supplemental Indenture or any other provision of the
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the Paying Agent may continue to make payments in
accordance with the Indenture and the Note Guarantee, unless a Trust Officer of
the Trustee shall have received at its Corporate Trust Office at least five
business days prior to the date of such payment written notice of facts that
would cause the payment of any obligations with respect to the Note Guarantee to
violate this Section 4. Only a Guaranteeing Subsidiary or a Representative may
give the notice. For purposes of this Section 4.13, "Representative" means,
until the Credit Agreement has been terminated, the administrative agent under
the Credit Agreement, and thereafter, any authorized representative of the
holders of the Senior Guarantees, so long as such representative has provided
proof of its status as an authorized representative to the Trustee prior to
giving any notice pursuant to this Section 4.13. Nothing in this Section 4 shall
impair the claims of, or payments to, the Trustee under or pursuant to Section
7.7 of the Indenture.

      The Trustee in its individual or any other capacity may hold Senior
Guarantees with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.

                                      -7-
<Page>

            SECTION 4.14 NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the Securities and Exchange Commission that such a waiver is against
public policy.

      SECTION 5.  DEFAULTS AND REMEDIES.

            SECTION 5.1 ADDITIONAL EVENT OF DEFAULT. In addition to the Events
of Default set forth in Section 6.01 of the Indenture, the Notes shall include
the following additional Event of Default:

   "(7) Group or Packaging fails to comply in any material respect with any of
   its agreements contained in the Indenture, or the loss of the perfection or
   priority of the Liens securing the Notes or the Note Guarantee pursuant to
   the Pledge Agreement, so long as the Notes are secured in accordance with the
   terms thereof, and in each case the Default continues for the period and
   after the notice specified in the final paragraph of this Section 6.01."

            SECTION 5.2 OTHER PROVISIONS RESTATED. The following provisions
shall be amended and restated with respect to the Notes in order to provide for
rights, directions and remedies as they relate to the Pledge Agreement and the
Intercreditor Agreement:

            "Section 6.03  Other Remedies.

      If an Event of Default with respect to Securities of any series occurs and
      is continuing, the Trustee may pursue any available remedy to collect the
      payment of principal or interest on the Securities of that series or to
      enforce the performance of any provision of the Securities of that series,
      this Indenture, the Pledge Agreement, the Intercreditor Agreement or any
      Note Guarantee.

      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.
      All remedies are cumulative to the extent permitted by law."

            "Section 6.06  Limitation on Suits.

      A Holder of Securities of any series may not pursue a remedy with respect
      to this Indenture, the Securities, the Pledge Agreement or any Note
      Guarantee unless:

             (1)  the Holder  gives to the Trustee  written  notice of a
             continuing Event of Default with respect to that series;

             (2) the Holders of at least 50% in principal amount of the then
             outstanding Securities of that series make a written request to the
             Trustee to pursue the remedy;

             (3)  such Holder or Holders offer to the Trustee  indemnity
             satisfactory to the Trustee against any loss,  liability or
             expense;

             (4) the Trustee does not comply with the request within 60 days
             after receipt of the request and the offer and, if requested, the
             provision of indemnity; and

             (5) during such 60-day period the Holders of a majority in
             principal amount of the then outstanding Securities of that series
             do not give the Trustee a direction inconsistent with the request.

      No Holder of any series of Securities may use this Indenture to prejudice
      the rights of another Holder of Securities of that series or to obtain a
      preference or priority over another Holder of Securities of that series."

            "Section 6.10  Priorities.

      If the Trustee collects any money with respect to Securities of any series
      pursuant to this Article (including without limitation any amounts
      received from the distribution of payments pursuant to

                                      -8-
<Page>

      the Intercreditor Agreement, the Pledge Agreement or any Note Guarantee),
      it shall pay out the money in the following order:

            First: to the Trustee, its agents and attorneys for amounts due
            under Section 7.07 hereof, including payment of all compensation,
            expense and liabilities incurred, and all advances made, by the
            Trustee and the costs and expenses of collection;

            Second: to Securityholders for amounts due and unpaid on the
            Securities of such series for principal and interest, ratably,
            without preference or priority of any kind, according to the amounts
            due and payable on the Securities of such series for principal and
            interest, respectively; and

            Third: to the Company or to such party as a court of competent
            jurisdiction shall direct; PROVIDED, however, that in the case of
            amounts received from the distribution of payments pursuant to the
            Intercreditor Agreement or any other proceeds of Pledged Collateral
            securing any series of Securities, such amounts shall not be
            distributed to the Company but shall rather be held by the Trustee,
            in trust, for subsequent application in accordance with the
            Securities of such series and this Indenture to the payment of
            principal of, premium, if any, and interest on the Securities upon
            the earlier to occur of (i) any scheduled or mandatory payment of
            principal, optional redemption or payment of accrued interest on the
            Securities of such series, in any such case as directed in writing
            by the Company, and (ii) the acceleration of the maturity of the
            Securities of that series pursuant to Section 6.02 (including an
            acceleration by reason of an Event of Default specified in Section
            6.01 (4) or (5)). Until so applied, such payments shall be held in a
            separate account, in trust, by the Trustee or invested by the
            Trustee at the written direction of the Company. At such time as no
            Securities of any series remain outstanding, any excess money held
            by the Trustee shall be paid to the Company.

            The Trustee may fix a record date and payment date for any payment
            to Holders of Securities of any series pursuant to this Section. The
            Trustee shall notify the Company in writing reasonably in advance of
            any such record date and payment date."

      SECTION 6. PLEDGE AND INTERCREDITOR AGREEMENTS. The Trustee hereby
acknowledges and accepts the appointment of the Collateral Agent under the
Pledge Agreement and shall, concurrently with the execution hereof, deliver to
the Collateral Agent an acknowledgement of the Intercreditor Agreement. In
addition, the Trustee shall execute such further documents and instruments as
may be necessary to create in favor of the Collateral Agent a valid and
enforceable second priority Lien on the Pledged Collateral.

      SECTION 7. EFFECTIVENESS. The amendments effected by this Supplemental
Indenture shall take effect on the date that each of the following conditions
shall have been satisfied or waived:

                  (a) each of the parties hereto shall have executed and
delivered this Supplemental Indenture; and

                  (b) the Company has received (i) written consent to these
amendments from the holders of at least a majority in principal amount of each
series of Securities issued under the Indenture and (ii) written consent to
substantially similar amendments to the Indenture dated as of May 15, 1997 (the
"Other Indenture") from the holders of at least a majority in principal amount
of the following series of securities issued under the Other Indenture: $300
million principal amount of 7.85% Senior Notes due 2004 and $300 million
principal amount of 8.10% Senior Notes due 2007.

      SECTION 8. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

      SECTION 9. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

                                      -9-
<Page>

      SECTION 10. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

      SECTION 11. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiaries and the
Company. The Company's obligations with respect to compensation and indemnity of
the Trustee shall extend to the administration of and performance of its powers
and duties under the Pledge Agreement and the Intercreditor Agreement.

      SECTION 12. INDENTURE REMAINS IN FULL FORCE AND EFFECT. Except as
expressly set forth herein, the terms of the Indenture shall continue in full
force and effect in accordance with the provisions thereof. As used herein, the
terms "Indenture," "herein," "hereunder," and words of similar import, shall,
unless the context otherwise requires, refer to the Indenture, as supplemented
hereby.

                                      -10-
<Page>

      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed of the date first above written.

      Dated:  June 26, 2001

                                    Owens-Illinois Group, Inc.

                                    By:  /s/ David G. Van Hooser
                                         ---------------------------------------
                                    Name: David G. Van Hooser
                                    Title: Senior Vice President and Chief
                                            Financial Officer

                                    Owens-Brockway Packaging, Inc.

                                    By:  /s/ David G. Van Hooser
                                         ---------------------------------------
                                    Name: David G. Van Hooser
                                    Title: Senior Vice President and Chief
                                            Financial Officer

                                    Owens-Illinois, Inc.

                                    By:  /s/ David G. Van Hooser
                                         ---------------------------------------
                                    Name: David G. Van Hooser
                                    Title: Senior Vice President and Chief
                                            Financial Officer

                                    The Bank of New York,
                                      as Trustee

                                    By:  /s/ Terence Rawlins
                                         ---------------------------------------
                                         Authorized Signatory

                                      -11-

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