Seagate 2009 Annual Report Download - page 32

Table of Contents
• make certain investments or other restricted payments;
•
sell assets;
• issue or sell capital stock of subsidiaries;
• enter into transactions with affiliates;
•
engage to any material extent in business other than our current business; and
•
effect a consolidation or merger.
Substantially all of our Assets are Pledged as Collateral to Secure Certain Indebtedness
—Since substantially all of our assets are used to
secure portions of our existing debt obligations, we may be limited in our ability to incur additional indebtedness or to provide additional
credit support, and if we fail to meet our payment or other obligations under certain of our existing debt obligations, the lenders thereunder
could foreclose on, and acquire control of, substantially all of our assets.
Substantially all our assets and the assets of our significant subsidiaries organized in the United States, the Cayman Islands, the
Netherlands, Northern Ireland and Singapore, as well as certain assets located in the United States, the Cayman Islands, the Netherlands,
Northern Ireland and Singapore owned by other significant subsidiaries, and all proceeds therefrom, are pledged as security for borrowings under
our 10% Notes, as well as obligations under our hedging agreements, cash management arrangements and certain metal leasing arrangements.
Since substantially all of our assets are used to secure portions of our existing debt obligations, we have a limited amount of collateral that is
available for future secured debt or credit support. As a result, we may be limited in our ability to incur additional indebtedness or to provide
additional credit support for our existing indebtedness. In addition, our failure to comply with the terms of the indenture governing our 10%
Notes would entitle the lenders thereunder to declare all funds borrowed thereunder to be immediately due and payable. If we were unable to
meet these payment obligations, the lenders could foreclose on, and acquire control of, substantially all our assets that serve as collateral.
Volatile Public Markets—The price of our ordinary shares may be volatile and could decline significantly.
The stock market, in general, and the market for technology stocks in particular, has recently experienced volatility that has often been
unrelated to the operating performance of companies. If these market or industry-based fluctuations continue, the trading price of our ordinary
shares could decline significantly independent of our actual operating performance, and you could lose all or a substantial part of your
investment. The market price of our ordinary shares could fluctuate significantly in response to several factors, including among others:
• general uncertainty in stock market conditions occasioned by global economic conditions, negative financial news and the
continued instability of several large financial institutions;
•
actual or anticipated variations in our results of operations;
• announcements of innovations, new products or significant price reductions by us or our competitors, including those competitors
who offer alternative storage technology solutions;
•
our failure to meet the performance estimates of investment research analysts;
• the timing of announcements by us or our competitors of significant contracts or acquisitions;
• general stock market conditions;
•
the occurrence of major catastrophic events;
•
changes in financial estimates by investment research analysts;
• changes in the credit ratings of our indebtedness by rating agencies; and
• the sale of our ordinary shares held by certain equity investors or members of management.
30