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Agreement and Plan of Merger

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Title:

Agreement and Plan of Merger

Entities:

Citibank, NA; Quantum Corp.; Keybank NA; Wilson Sonsini Goodrich & Rosati

Date:

2006

Size:

275KB total

Price:

$85

ID:

#1738084

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AGREEMENT AND PLAN OF MERGER

BY AND AMONG

QUANTUM CORPORATION

AGATE ACQUISITION CORP.

AND

ADVANCED DIGITAL INFORMATION CORPORATION

Dated as of May 2, 2006

TABLE OF CONTENTS


			Page
ARTICLE I THE MERGER			1

	1.1	The Merger	1
	1.2	Effective Time; Closing	1
	1.3	Effect of the Merger	2
	1.4	Articles of Incorporation and Bylaws	2
	1.5	Directors and Officers	2

ARTICLE II CONVERSION OF SECURITIES			2

	2.1	Effect on Capital Stock	2
	2.2	Elections	3
	2.3	Proration of Stock Election Consideration	4
	2.4	Repurchase Rights	5
	2.5	Non-Employee Options	5
	2.6	Cancellation of Subsidiary and Parent Owned Stock	5
	2.7	Capital Stock of Merger Sub	5
	2.8	Employee Stock Options; Employee Stock Purchase Plans	5
	2.9	Adjustments to Merger Consideration	6
	2.10	Dissenting Shares	6
	2.11	Surrender of Certificates	6
	2.12	No Further Ownership Rights in Company Common Stock	8
	2.13	Lost, Stolen or Destroyed Certificates	8
	2.14	Further Action	8

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY			9

	3.1	Organization; Standing and Power; Charter Documents; Subsidiaries	9
	3.2	Capital Structure	9
	3.3	Authority; No Conflict; Necessary Consents	11
	3.4	SEC Filings; Financial Statements; Internal Controls	12
	3.5	Absence of Certain Changes or Events	14
	3.6	Taxes	16
	3.7	Title to Properties	17
	3.8	Intellectual Property	19
	3.9	Restrictions on Business Activities	22
	3.10	Governmental Authorizations	22
	3.11	Litigation	22
	3.12	Compliance with Laws	22
	3.13	Environmental Matters	22
	3.14	Brokers and Finders Fees	23
	3.15	Transactions with Affiliates	23
	3.16	Employee Benefit Plans and Compensation	24
	3.17	Contracts	27
	3.18	Insurance	28
	3.19	Accounts Receivable	28
	3.20	Product Warranties	28
	3.21	Inventory	29
	3.22	Customers	29
	3.23	Suppliers	29
	3.24	Export Control Laws	29
	3.25	Foreign Corrupt Practices Act	29


			Page
	3.26	Information Supplied	30
	3.27	Fairness Opinion	30
	3.28	Government Contracts	30
	3.29	Takeover Statutes and Rights Plans	31

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB			31

	4.1	Organization	31
	4.2	Capital Structure	32
	4.3	Authority; No Conflict; Necessary Consents	32
	4.4	Financing; Capital Resources	33
	4.5	SEC Filings	33
	4.6	Financial Statements	34
	4.7	Absence of Changes	34
	4.8	Information Supplied	34
	4.9	Company Stock	35

ARTICLE V CONDUCT BY THE COMPANY PRIOR TO THE EFFECTIVE TIME			35

	5.1	Conduct of Business by the Company	35
	5.2	Procedures for Requesting Parent Consent	38

ARTICLE VI ADDITIONAL AGREEMENTS			38

	6.1	Proxy Statement and Registration Statement	38
	6.2	Meeting of Company Stockholders; Board Recommendation	39
	6.3	Acquisition Proposals	39
	6.4	Confidentiality; Access to Information; No Modification of Representations, Warranties or Covenants	42
	6.5	Public Disclosure	43
	6.6	Regulatory Filings; Reasonable Best Efforts	43
	6.7	Notification of Certain Matters	45
	6.8	Third-Party Consents	45
	6.9	Equity Awards and Employee Matters	46
	6.10	Form S-8	48
	6.11	Employee Information	48
	6.12	Indemnification	48
	6.13	Section 16 Matters	49
	6.14	Affiliates	49
	6.15	FIRPTA Compliance	49
	6.16	Insurance Approval	49
	6.17	NYSE Listing	49
	6.18	Financing	49
	6.19	Retention Plan	50

ARTICLE VII CONDITIONS TO THE MERGER			50

	7.1	Conditions to the Obligations of Each Party to Effect the Merger	50
	7.2	Additional Conditions to the Obligations of Parent	51
	7.3	Additional Conditions to the Obligations of the Company	52

ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER			52

	8.1	Termination	52
	8.2	Notice of Termination; Effect of Termination	54
	8.3	Fees and Expenses	54
	8.4	Amendment	55
	8.5	Extension; Waiver	55


			Page

ARTICLE IX GENERAL PROVISIONS			55

	9.1	Non-Survival of Representations and Warranties	55
	9.2	Notices	56
	9.3	Interpretation; Knowledge	56
	9.4	Counterparts	57
	9.5	Entire Agreement; Third-Party Beneficiaries	57
	9.6	Severability	58
	9.7	Other Remedies	58
	9.8	Governing Law	58
	9.9	Rules of Construction	58
	9.10	Assignment	58
	9.11	Waiver of Jury Trial	58



		Exhibit A		Form of Voting Agreement

		Exhibit B		Form of Affiliate Letter

		Exhibit C		Third Party Consents

		Exhibit D		Form of Opinion of Perkins Coie LLP

		Schedule 1		Directors and Officers of the Company entering into Voting Agreements

		Schedule 2		List of Indemnification Agreements

		Schedule 2.5(a)		Certain Persons

		Schedule 5.2		Individuals from whom to request Parent consent

		Schedule 6.12(b)		Insurance

		Schedule 9.3(b)		List of Directors and Officers for Knowledge definition

iii

INDEX OF DEFINED TERMS


401(k) Plan		61
Acquisition		71
Acquisition Proposal		54
Action of Divesture		58
Agreement		1
Antitrust Law		56
Articles of Merger		2
Assumed Option Shares		5
Bid		39
Business Day		2
Cash Election Consideration		3
Certificates		8
Change of Recommendation		53
Closing		2
Closing Date		2
COBRA		31
Code		9
Company		1
Company Balance Sheet		17
Company Charter Documents		12
Company Common Stock		3
Company Disclosure Letter		11
Company Employee Plan		30
Company Environmental Permits		30
Company Financials		17
Company Government Contract		39
Company Government Subcontract		40
Company Intellectual Property		24
Company Material Contract		35
Company Options		13
Company Preferred Stock		12
Company Products		24
Company Purchase Plan		13
Company Purchase Plans		7
Company Registered Intellectual Property		24
Company Rights		40
Company SEC Reports		16
Company Source Code		27
Company Stock Option Plans		13
Company Unvested Common Stock		6
Confidentiality Agreement		55
Continuing Employees		61
Contract		11
Customer Information		28
DGCL		42
Dissenting Shares		7
DOJ		15
DOL		31
Effect		73
Effective Time		2


Election Deadline		4
Election Form		4
Employee		31
Employee Agreement		31
End Date		68
ERISA		31
ERISA Affiliate		31
Exchange Act		15
Exchange Agent		8
Exchange Fund		8
Exchange Ratio		3
Export Approvals		38
Fairness Opinion		39
FCPA		38
Financing		43
Financing Agreements		64
Financing Commitments		43
FTC		15
GAAP		17
Governmental Authorizations		28
Governmental Entity		15
Hazardous Material		29
Hazardous Materials Activities		30
HIPAA		31
HSR Act		15
include, includes and including		73
Indemnified Parties		62
Intellectual Property		24
Intellectual Property Rights		25
International Employee Plan		31
Inventory		37
IRS		31
Knowledge		73
Lease Documents		23
Leased Real Property		22
Legal Requirements		14
Liens		12
Material Adverse Effect		73
Maximum Parent Shares Issuable		5
Maximum Stock Election Number		5
Merger		1
Merger Consideration		3
Merger Sub		1
Merger Sub Bylaws		41
Merger Sub Charter		41
Merger Sub Common Stock		7
Nasdaq		16
Necessary Consents		16
Non-Employee Option		6
Non-Unanimous Board Recommendation		70
Open Source		27
Option Ratio		60


Owned Real Property		22
Parent		1
Parent Bylaws		41
Parent Charter		41
Parent Common Stock		41
Parent Disclosure Letter		41
Parent Rights		42
Parent SEC Reports		43
Parent Shares Available		5
Parent Stock Option Plans		41
Parent Stock Options		41
Pension Plan		31
Person		74
Prorated Stock Election		5
Proxy Statement		39
Real Property		23
Registration Statement		39
Retention Plan		65
Returns		21
Rights Agreement		13
Rocksoft Retention Pool		60
RoHS		29
Sarbanes-Oxley Act		16
SEC		15
Section 6.3(d) Notice		53
Securities Act		15
Shrink-Wrapped Code		25
Significant Customer		37
Significant Supplier		37
Source Code		25
Stock Electing Company Share		3
Stock Election		3
Stock Election Consideration		3
Stock Proration Factor		5
Stockholders Meeting		50
Subsidiary		11
Subsidiary Charter Documents		12
Superior Offer		55
Surviving Corporation		2
Tax		20
Tax Incentive		22
Taxes		20
Termination Fee		70
Trade Secrets		25
Triggering Event		69
Voting Agreements		1
Voting Debt		13
WARN		31
Washington Law		1

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this Agreement) is made and entered into as of May 2, 2006, by and among Quantum Corporation, a Delaware corporation (Parent), Agate Acquisition Corp., a Washington corporation and direct wholly owned subsidiary of Parent (Merger Sub), and Advanced Digital Information Corporation, a Washington corporation (the Company).

RECITALS

A. The respective Boards of Directors of Parent, Merger Sub and the Company have deemed it advisable and in the best interests of their respective corporations and stockholders that Parent and the Company consummate the business combination and other transactions provided for herein.

B. The respective Boards of Directors of Merger Sub and the Company have approved, in accordance with the Washington Business Corporation Act (Washington Law), this Agreement and the transactions contemplated hereby, including the Merger.

C. Concurrently with the execution of this Agreement, and as a condition and inducement to Parents willingness to enter into this Agreement, each director of the Company and each officer of the Company listed on Schedule 1 is entering into a Voting Agreement and irrevocable proxy in substantially the form attached hereto as Exhibit A (collectively, the Voting Agreements).

D. The Board of Directors of the Company has resolved to recommend to its stockholders approval and adoption of this Agreement and approval of the Merger.

E. Parent, as the sole stockholder of Merger Sub, has approved and adopted this Agreement and approved the Merger.

F. Parent, Merger Sub and the Company desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

THE MERGER

1.1 The Merger. At the Effective Time and subject to and upon the terms and conditi