Master Separation And Distribution Agreement

Exhibit 2.1


FIRST AMENDED AND RESTATED


MASTER SEPARATION AND DISTRIBUTION AGREEMENT


BETWEEN


ADAPTEC, INC.


AND


ROXIO, INC.


EFFECTIVE AS OF


FEBRUARY 28, 2001


TABLE OF CONTENTS
PAGE
---- ARTICLE I SEPARATION..........................................................................2
Section 1.1 Separation Date.............................................................2
Section 1.2 Closing of Transactions.....................................................2
Section 1.3 Exchange of Secretary's Certificates........................................2


ARTICLE II DOCUMENTS AND ITEMS TO BE DELIVERED ON OR BEFORE THE SEPARATION DATE...............2
Section 2.1 Documents to Be Delivered By Adaptec........................................2
Section 2.2 Contribution to Capital.....................................................3
Section 2.3 Documents to Be Delivered by Roxio..........................................3


ARTICLE III THE DISTRIBUTION AND ACTIONS PENDING THE DISTRIBUTION.............................4
Section 3.1 Transactions Prior to the Distribution......................................4
Section 3.2 The Distribution............................................................5
Section 3.3 Conditions to Distribution..................................................5
Section 3.4 Sole Discretion of Adaptec..................................................6
Section 3.5 Fractional Shares...........................................................7


ARTICLE IV COVENANTS AND OTHER MATTERS........................................................7
Section 4.1 Other Agreements............................................................7
Section 4.2 Further Instruments.........................................................7
Section 4.3 Agreement For Exchange of Information.......................................8
Section 4.4 Auditors and Audits; Annual and Quarterly Statements and Accounting.........9
Section 4.5 Consistency with Past Practices............................................11
Section 4.6 Payment of Expenses........................................................11
Section 4.7 Dispute Resolution.........................................................11
Section 4.8 Governmental Approvals.....................................................12
Section 4.9 Representations and Warranties.............................................12
Section 4.10 Cooperation in Obtaining New Agreements....................................13
Section 4.11 Property Damage to Roxio Assets Prior to the Separation Date...............13
Section 4.12 Asset Transfers in Connection with Separation..............................13


ARTICLE V MISCELLANEOUS......................................................................14
Section 5.1 Limitation of Liability....................................................14
Section 5.2 Entire Agreement...........................................................14
Section 5.3 Governing Law..............................................................14
Section 5.4 Termination................................................................14
Section 5.5 Notices....................................................................14
Section 5.6 Counterparts...............................................................15
Section 5.7 Binding Effect; Assignment.................................................15
Section 5.8 Severability...............................................................16


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TABLE OF CONTENTS
(CONTINUED)


PAGE
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Section 5.9 Waiver of Breach..........................................................16
Section 5.10 Amendment and Execution...................................................16
Section 5.11 Authority.................................................................16
Section 5.12 Descriptive Headings......................................................16
Section 5.13 Gender and Number.........................................................16
Section 5.14 Additional Assurances.....................................................17
Section 5.15 Force Majeure.............................................................17
Section 5.16 Conflicting Agreements....................................................17
Section 5.17 Prior Agreement...........................................................17


ARTICLE VI DEFINITIONS......................................................................17
Section 6.1 Adaptec Business..........................................................17
Section 6.2 Adaptec Group.............................................................17
Section 6.3 Adaptec's Auditors........................................................17
Section 6.4 AMS.......................................................................17
Section 6.5 Ancillary Agreements......................................................17
Section 6.6 Assignment Agreement......................................................17
Section 6.7 Business Day..............................................................17
Section 6.8 Code......................................................................18
Section 6.9 Commission................................................................18
Section 6.10 Disputes..................................................................18
Section 6.11 Distribution..............................................................18
Section 6.12 Distribution Agent........................................................18
Section 6.13 Distribution Date.........................................................18
Section 6.14 Exchange Act..............................................................18
Section 6.15 Form 10 Registration Statement............................................18
Section 6.16 GAAP......................................................................18
Section 6.17 Governmental Approvals....................................................18
Section 6.18 Governmental Authority....................................................18
Section 6.19 Gray Cary.................................................................18
Section 6.20 Information...............................................................18
Section 6.21 Nasdaq....................................................................18
Section 6.22 Person....................................................................19
Section 6.23 Prime Rate................................................................19
Section 6.24 Prior Agreement...........................................................19
Section 6.25 Record Date...............................................................19
Section 6.26 Roxio Assets..............................................................19
Section 6.27 Roxio's Auditors..........................................................19
Section 6.28 Roxio Business............................................................19
Section 6.29 Roxio Group...............................................................19
Section 6.30 Separation................................................................19


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TABLE OF CONTENTS
(CONTINUED)


PAGE
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Section 6.31 Separation Date...........................................................19
Section 6.32 Subsidiary................................................................19
Section 6.33 Transferred Subsidiary....................................................20
Section 6.34 Transitional Service Schedules............................................20
Section 6.35 WSGR......................................................................20


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EXHIBITS


Exhibit A Certificate of Secretary of Adaptec


Exhibit B Certificate of Secretary of Roxio


Exhibit C General Assignment and Assumption Agreement


Exhibit D-1 Master Technology Ownership and License Agreement


Exhibit D-2 Master Patent Ownership and License Agreement


Exhibit E Employee Matters Agreement


Exhibit F Tax Sharing Agreement


Exhibit G Real Estate Agreement


Exhibit H Master Confidential Disclosure Agreement


Exhibit I Indemnification and Insurance Matters Agreement


Exhibit J Manufacturing Services Agreement


Exhibit K Master Transitional Services Agreement


Exhibit L International Transfer of Assets Agreement


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SCHEDULES


Schedule 2.1(b) Subsidiaries of Adaptec to be Transferred to Roxio


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FIRST AMENDED AND RESTATED
MASTER SEPARATION AND DISTRIBUTION AGREEMENT


This First Amended and Restated Master Separation and Distribution Agreement (this "AGREEMENT") is entered into as of February 28, 2001, between Adaptec, Inc., a Delaware corporation ("ADAPTEC"), and Roxio, Inc., a Delaware corporation ("ROXIO"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in ARTICLE VI hereof. Adaptec and Roxio are sometimes referred to herein individually as a "party" or collectively as the "parties."


RECITALS


WHEREAS, the Boards of Directors of each of Adaptec and Roxio have determined that it is appropriate and desirable for Adaptec to contribute and transfer to Roxio, and for Roxio to receive and assume, directly or indirectly, substantially all of the assets and liabilities currently associated with the Roxio Business and the stock, investments or similar interests currently held by Adaptec in subsidiaries and other entities that conduct such business (the "SEPARATION");


WHEREAS, Adaptec has caused Roxio to be incorporated in order to effect the Separation and Adaptec currently owns all of the issued and outstanding capital stock of Roxio;


WHEREAS, the Board of Directors of Adaptec has determined that it is appropriate and desirable on the terms and conditions contemplated hereby to distribute to the holders of its common stock, $0.01 par value, by means of a pro rata distribution following the Separation, all of the shares of Roxio common stock owned by Adaptec (the "DISTRIBUTION");


WHEREAS, Adaptec and Roxio intend that the Separation and the Distribution will qualify as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as amended (the "CODE"), and that this Agreement is intended to be, and is hereby adopted as, a plan of reorganization under Section 368 of the Code; and


WHEREAS, Adaptec and Roxio previously entered into a Master Separation and Distribution Agreement dated September 21, 2000 (the "PRIOR AGREEMENT"), which, among other things, contemplated that prior to the Distribution Roxio would effect a registered initial public offering of its Common Stock ( the "IPO");


WHEREAS, the Board of Directors of each of Adaptec and Roxio no longer desire Roxio to effect the IPO;


WHEREAS, Adaptec and Roxio desire to terminate in all respects the Prior Agreement and enter into this Agreement; and


WHEREAS, the parties intend in this Agreement, including the Exhibits and Schedules hereto, to set forth the principal arrangements between them regarding the separation of the Roxio Business.


NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth below, the parties hereto, intending to be legally bound, agree as follows:


ARTICLE I


SEPARATION


SECTION 1.1 SEPARATION DATE. Unless otherwise provided in this Agreement, or in any agreement to be executed in connection with this Agreement, the effective time and date of each transfer of property, assumption of liability, license, undertaking, or agreement in connection with the Separation shall be 12:01 a.m., Pacific Time, April 1, 2001 or such other date as may be fixed by the Board of Directors of Adaptec (the "SEPARATION DATE").


SECTION 1.2 CLOSING OF TRANSACTIONS. Unless otherwise provided herein, the closing of the transactions contemplated in ARTICLE II shall occur by the lodging of each of the executed instruments of transfer, assumptions of liability, undertakings, agreements, instruments or other documents executed or to be executed with both Wilson Sonsini Goodrich & Rosati, Professional Corporation ("WSGR"), 650 Page Mill Road, Palo Alto, California 94304, and Gray Cary Ware & Freidenrich LLP ("GRAY CARY"), 400 Hamilton Avenue, Palo Alto, California 94301, to be held in escrow for delivery as provided in SECTION 1.3 of this Agreement.


SECTION 1.3 EXCHANGE OF SECRETARY'S CERTIFICATES. Upon receipt of a certificate of the Secretary or an Assistant Secretary of Adaptec in the form attached to this Agreement as EXHIBIT A, WSGR shall deliver to Roxio on behalf of Adaptec all of the items required to be delivered by Adaptec hereunder pursuant to SECTION 2.1 of this Agreement and each such item shall be deemed to be delivered to Roxio as of the Separation Date upon delivery of such certificate. Upon receipt of a certificate of the Secretary or an Assistant Secretary of Roxio in the form attached to this Agreement as EXHIBIT B, Gray Cary shall deliver to Adaptec on behalf of Roxio all of the items required to be delivered by Roxio pursuant to SECTION 2.2 hereunder and each such item shall be deemed to be delivered to Adaptec as of the Separation Date upon receipt of such certificate.


ARTICLE II


DOCUMENTS AND ITEMS TO BE DELIVERED ON OR BEFORE THE SEPARATION DATE


SECTION 2.1 DOCUMENTS TO BE DELIVERED BY ADAPTEC. On or before the Separation Date, Adaptec will deliver, or will cause its appropriate Subsidiaries to deliver, to Roxio all of the following items and agreements (collectively, together with all agreements and documents contemplated by such agreements, the "ANCILLARY AGREEMENTS"):


(a) A duly executed General Assignment and Assumption Agreement (the "ASSIGNMENT AGREEMENT") substantially in the form attached hereto as EXHIBIT C;


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(b) Certificates representing the stock in the Subsidiaries (the "TRANSFERRED SUBSIDIARIES") of Adaptec set forth on SCHEDULE 2.1(b) with duly executed stock powers in the form proper for transfer;


(c) A duly executed Master Technology Ownership and License Agreement substantially in the form attached hereto as EXHIBIT D-1, a duly executed Master Patent Ownership and License Agreement substantially in the form attached hereto as EXHIBIT D-2, and;


(d) A duly executed Employee Matters Agreement substantially in the form attached hereto as EXHIBIT E;


(e) A duly executed Tax Sharing Agreement substantially in the form attached hereto as EXHIBIT F;


(f) A duly executed Real Estate Matters Agreement substantially in the form attached hereto as EXHIBIT G;


(g) A duly executed Master Confidential Disclosure Agreement substantially in the form attached hereto as EXHIBIT H;


(h) A duly executed Indemnification and Insurance Matters Agreement substantially in the form attached hereto as EXHIBIT I;


(i) A duly executed Manufacturing Services Agreement substantially in the form attached hereto as EXHIBIT J;


(j) A duly executed Master Transitional Services Agreement substantially in the form attached hereto as EXHIBIT K;


(k) A duly executed International Transfer of Assets Agreement substantially in the form attached hereto as EXHIBIT L;


(l) Resignations of each person who is an officer or director of any member of Roxio or its Subsidiaries immediately prior to the Separation Date, but who will be an employee of only Adaptec from and after the Separation Date; and


(m) Such other agreements, documents or instruments as the parties may agree are necessary or desirable in order to achieve the purposes hereof, including, without limitation, all Transitional Service Schedules to the Master Transitional Services Agreement and those documents referred to in SECTION 4.2.


SECTION 2.2 CONTRIBUTION TO CAPITAL. On or prior to the Separation Date, Adaptec will transfer to Roxio the amount of Ten Million Dollars ($10,000,000) in the form of additional paid-in capital.


SECTION 2.3 DOCUMENTS TO BE DELIVERED BY ROXIO. As of the Separation Date, Roxio will or will cause its appropriate Subsidiaries to deliver to Adaptec all of the following:


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(a) In each case where Roxio is a party to any agreement or instrument referred to in SECTION 2.1, a duly executed counterpart of such agreement or instrument; and


(b) Resignations of each person who is an officer or director of any member of the Adaptec Group immediately prior to the Separation Date, but who will be an employee or director of only Roxio or its Subsidiaries from and after the Separation Date.


ARTICLE III


THE DISTRIBUTION AND ACTIONS PENDING THE DISTRIBUTION


SECTION 3.1 TRANSACTIONS PRIOR TO THE DISTRIBUTION. Subject to the conditions specified in SECTION 3.4, Adaptec and Roxio shall use their reasonable commercial efforts to consummate the Distribution. Such efforts shall include, but not necessarily be limited to, those specified in this SECTION 3.1


(a) REGISTRATION STATEMENT. Roxio, with the cooperation and assistance of Adaptec, shall register its common stock under Section 12 of the Securities Exchange Act of 1934 (the "EXCHANGE ACT") by filing a Form 10 Registration Statement, and such amendments or supplements thereto, as may be necessary in order to cause the same to become and remain effective as required by law, including, but not limited to, filing such amendments to the Form 10 Registration Statement as may be required by the Securities and Exchange Commission (the "COMMISSION") or federal, state or foreign securities laws. Adaptec and Roxio shall also cooperate in preparing and filing with the Commission any registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement.


(b) INFORMATION STATEMENT. Adaptec and Roxio shall prepare and mail, prior to the Distribution Date, to the holders of common stock of Adaptec, such information concerning Roxio and the Distribution and such other matters as Adaptec and Roxio shall reasonably determine are necessary and as may be required by law. Adaptec and Roxio will prepare, and Roxio will, to the extent required under applicable law, file with the Commission any such documentation which Adaptec and Roxio reasonably determine is necessary or desirable to effectuate the Distribution, and Adaptec and Roxio shall each use its reasonable commercial efforts to obtain all necessary approvals from the Commission with respect thereto as soon as practicable.


(c) OTHER MATTERS. Adaptec and Roxio shall consult with each other and their financial advisors regarding the timing, pricing and other material matters with respect to the Distribution.


(d) BLUE SKY. Adaptec and Roxio shall take all such actions as may be necessary or appropriate under the securities or blue sky laws of the United States (and any comparable laws under any foreign jurisdiction) in connection with the Distribution.


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(e) NASDAQ LISTING. Roxio shall prepare, file and use reasonable commercial efforts to seek to make effective, an application for listing of the common stock of Roxio distributed in the Distribution on the Nasdaq National Market ("NASDAQ"), subject to official notice of distribution.


SECTION 3.2 THE DISTRIBUTION.


(a) DELIVERY OF SHARES FOR DISTRIBUTION. Subject to SECTION 3.3 hereof, on or prior to the date the Distribution is effective (the "DISTRIBUTION DATE"), Adaptec will deliver to the distribution agent (the "DISTRIBUTION AGENT") to be appointed by Adaptec to distribute to the stockholders of Adaptec the shares of common stock of Roxio held by Adaptec pursuant to the Distribution for the benefit of holders of record of common stock of Adaptec on the Record Date, a single stock certificate, endorsed by Adaptec in blank, representing all of the outstanding shares of common stock of Roxio then owned by Adaptec, and shall cause the transfer agent for the shares of common stock of Adaptec to instruct the Distribution Agent to distribute on the Distribution Date the appropriate number of such shares of common stock of Roxio to each such holder or designated transferee or transferees of such holder.


(b) SHARES RECEIVED. Subject to SECTIONS 3.3 and 3.5, each holder of common stock of Adaptec on the Record Date (or such holder's designated transferee or transferees) will be entitled to receive in the Distribution a number of shares of common stock of Roxio equal to the number of shares of common stock of Adaptec held by such holder on the Record Date multiplied by a fraction the numerator of which is the number of shares of common stock of Roxio beneficially owned by Adaptec on the Record Date and the denominator of which is the number of shares of common stock of Adaptec outstanding on the Record Date.


(c) OBLIGATION TO PROVIDE INFORMATION. Roxio and Adaptec, as the case may be, will provide to the Distribution Agent all share certificates and any information required in order to complete the Distribution on the basis specified above.


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