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TableofContents
SEAGATETECHNOLOGYPLC
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued)
Seagate-CaymanortheapplicablesubsidiaryofSeagate-Caymanor(ii)Indemnitee'sconscious,intentionalorwillfulfailuretoacthonestly,lawfullyandingood
faithwithaviewtothebestinterestsofSeagate-CaymanortheapplicablesubsidiaryofSeagate-Cayman.Inaddition,theRevisedIndemnificationAgreement
providesthatSeagate-CaymanwilladvanceexpensesincurredbyanIndemniteeinconnectionwithenforcementoftheRevisedIndemnificationAgreementorwith
theinvestigation,settlementorappealofanyactionorproceedingagainsthimorherastowhichheorshecouldbeindemnified.
OnJuly3,2010,pursuanttoacorporatereorganization,thecommonshareholdersofSeagate-CaymanbecameordinaryshareholdersofSeagate
Technologyplc(the"Company")andSeagate-CaymanbecameawhollyownedsubsidiaryoftheCompany,asdescribedmorefullyintheCurrentReporton
Form8-KfiledbytheCompanyonJuly6,2010(the"Redomestication").OnJuly27,2010,inconnectionwiththeRedomestication,theCompany,assole
shareholderofSeagate-Cayman,approvedaformofdeedofindemnity(the"DeedofIndemnity"),whichprovidesfortheindemnificationbySeagate-Caymanof
anydirector,officer,employeeoragentoftheCompany,Seagate-CaymanoranysubsidiaryoftheCompany(each,a"DeedIndemnitee"),inadditiontoanyofa
DeedIndemnitee'sindemnificationrightsundertheCompany'sArticlesofAssociation,applicablelaworotherwise,withasimilarscopetotheRevised
IndemnificationAgreement.Seagate-CaymanenteredintotheDeedofIndemnitywithcertainDeedIndemniteeseffectiveasofJuly3,2010andcontinuestoenter
intotheDeedofIndemnitywithadditionalDeedIndemniteesfromtimetotime.
ThenatureoftheseindemnificationobligationspreventstheCompanyfrommakingareasonableestimateofthemaximumpotentialamountitcouldbe
requiredtopayonbehalfofitsofficersanddirectors.Historically,theCompanyhasnotmadeanysignificantindemnificationpaymentsundersuchagreementsand
noamounthasbeenaccruedintheaccompanyingconsolidatedfinancialstatementswithrespecttotheseindemnificationobligations.
IntellectualPropertyIndemnificationObligations
TheCompanyhasenteredintoagreementswithcustomersandsuppliersthatincludelimitedintellectualpropertyindemnificationobligationsthatare
customaryintheindustry.TheseguaranteesgenerallyrequiretheCompanytocompensatetheotherpartyforcertaindamagesandcostsincurredasaresultofthird
partyintellectualpropertyclaimsarisingfromthesetransactions.ThenatureoftheintellectualpropertyindemnificationobligationspreventstheCompanyfrom
makingareasonableestimateofthemaximumpotentialamountitcouldberequiredtopaytoitscustomersandsuppliers.Historically,theCompanyhasnotmade
anysignificantindemnificationpaymentsundersuchagreementsandnoamounthasbeenaccruedintheaccompanyingconsolidatedfinancialstatementswith
respecttotheseindemnificationobligations.
ProductWarranty
TheCompanyestimatesprobableproductwarrantycostsatthetimerevenueisrecognized.TheCompanygenerallywarrantsitsproductsforaperiodof1to
5years.TheCompanyusesestimatedrepairorreplacementcostsandusesstatisticalmodelingtoestimateproductreturnratesinordertodetermine
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