\n ARTICLE VI CONDITIONS TO THE MERGER……………………………………………………………… 42
\n ————————————
\n 6.1 Conditions to Obligations of Each Party to Effect the Merger…………………………………. 42
\n — ————————————————————
\n 6.2 Additional Conditions to Obligations of the Company Parties………………………………….. 43
\n — ———————————————————–
\n 6.3 Additional Conditions to Obligations of Exodus Parties………………………………………. 44
\n — —————————————————— <\/p>\n ARTICLE VII TERMINATION, AMENDMENT AND WAIVER…………………………………………………….. 46
\n ———————————————-
\n 7.1 Termination…………………………………………………………………………….. 46
\n — ———–
\n 7.2 Effect of Termination……………………………………………………………………. 47
\n — ———————
\n 7.3 Expenses and Termination Fees…………………………………………………………….. 47
\n — —————————–
\n 7.4 Amendment………………………………………………………………………………. 48
\n — ———
\n 7.5 Extension; Waiver……………………………………………………………………….. 48
\n — —————– <\/p>\n
ARTICLE VIII TAX MATTERS……………………………………………………………………….. 48
\n ————————-
\n 8.1 Liability for Taxes……………………………………………………………………… 48
\n — ——————-
\n 8.2 Tax Refunds…………………………………………………………………………….. 49
\n — ———–
\n 8.3 Amended Returns…………………………………………………………………………. 50
\n — —————
\n 8.4 Tax Returns…………………………………………………………………………….. 51
\n — ———–
\n 8.5 Tax Contest Provisions…………………………………………………………………… 52
\n — ———————-
\n 8.6 Termination of Tax Allocation Agreements…………………………………………………… 53
\n — —————————————-
\n 8.7 Assistance and Cooperation……………………………………………………………….. 53
\n — ————————–
\n 8.8 Preservation of Reorganization Status……………………………………………………… 53
\n — ————————————- <\/p>\n
ARTICLE IX GENERAL PROVISIONS…………………………………………………………………… 53
\n ——————————
\n 9.1 Non-Survival at Effective Time……………………………………………………………. 53
\n — ——————————
\n 9.2 Notices………………………………………………………………………………… 54
\n — ——-
\n 9.3 Interpretation………………………………………………………………………….. 55
\n — ————–
\n 9.4 Counterparts……………………………………………………………………………. 55
\n — ————
\n 9.5 Entire Agreement; Nonassignability; Parties in Interest……………………………………… 55
\n — ——————————————————-
\n 9.6 Severability……………………………………………………………………………. 56
\n — ————
\n 9.7 Remedies Cumulative……………………………………………………………………… 56
\n — ——————-
\n 9.8 Governing Law; Submission to Jurisdiction………………………………………………….. 56
\n — —————————————–
\n 9.9 Rules of Construction……………………………………………………………………. 56
\n — ———————
\n9.10 Remedies for Breach……………………………………………………………………… 56
\n—- ——————- <\/p>\n
ARTICLE X INDEMNIFICATION; REMEDIES. …………………………………………………………….. 57
\n————————————
\n10.1 Global Crossing NA’s Obligation to Indemnify……………………………………………….. 57
\n—- ——————————————–
\n10.2 Entitlement to Indemnification; Indemnification Amount; Double Recovery……………………….. 57
\n—- ———————————————————————–
\n10.3 Sole Remedy…………………………………………………………………………….. 58
\n—- ———–
\n10.4 Claims…………………………………………………………………………………. 58
\n—- ——
\n10.5 Survival……………………………………………………………………………….. 58
\n—- ——–
\n10.6 Satisfaction of Indemnity Obligations……………………………………………………… 58
\n—- ————————————-
\n10.7 Adjustment to Purchase Price……………………………………………………………… 59
\n—- —————————-
\n<\/c><\/s><\/table>\n
iii<\/p>\n
EXHIBITS<\/p>\n
Exhibit A – Certificate of Merger
\nExhibit B – Form of Indemnification Agreement
\nExhibit C – Form of Noncompetition Agreement
\nExhibit D – Amendment No. 2 to Rights Plan<\/p>\n
iv<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and
\n ———
\nentered into as of September 28, 2000, among Exodus Communications, Inc., a
\nDelaware corporation (“Exodus”), Exodus Acquisition Corp., a Delaware
\n ——
\ncorporation and a direct, wholly-owned subsidiary of Exodus (“Exodus Merger
\n ————-
\nSub”), Global Crossing North America, Inc., a New York corporation (“Global
\n— ——
\nCrossing NA”), Global Crossing GlobalCenter Holdings, Inc., a Delaware
\n———–
\ncorporation and an indirect wholly-owned subsidiary of Global Crossing NA
\n(“GCG”), GlobalCenter Holding Co., a Delaware corporation and an indirect
\n —
\nwholly-owned subsidiary of Global Crossing NA and a wholly-owned subsidiary of
\nGCG (the “Company”), and GlobalCenter, Inc., a Delaware corporation and a direct
\n ——-
\nwholly-owned subsidiary of the Company and an indirect wholly-owned subsidiary
\nof Global Crossing NA (“GlobalCenter”). For purposes of this Agreement the term
\n ————
\n“Exodus Parties” shall mean Exodus and Exodus Merger Sub, and the term “Company
\n ————– ——-
\nParties” shall mean Global Crossing NA, GCG, the Company and GlobalCenter.
\n——-<\/p>\n
RECITALS<\/p>\n
A. The Boards of Directors of the Exodus Parties and the Company Parties
\nbelieve it is in the best interests of their respective companies and the
\nstockholders of their respective companies that the Company and Exodus Merger
\nSub combine into a single company through the statutory merger of Exodus Merger
\nSub with and into the Company (the “Merger”).
\n ——<\/p>\n
B. Pursuant to the Merger, among other things, each outstanding share of
\ncommon stock, $.01 par value, of the Company (“Company Common Stock”) shall be
\n ——————–
\nconverted into shares of common stock, $.001 par value, of Exodus (“Exodus
\n ——
\nCommon Stock”), in the manner set forth herein.
\n————<\/p>\n
C. The Exodus Parties and the Company Parties desire to make certain
\nrepresentations, warranties, covenants and other agreements in connection with
\nthe Merger.<\/p>\n
D. The parties intend, by executing this Agreement, to adopt a plan of
\nreorganization within the meaning of Section 368 of the Internal Revenue Code of
\n1986, as amended (the “Code”), and to cause the Merger to qualify as a
\n —-
\nreorganization under Section 368(a) of the Code.<\/p>\n
E. Concurrently with the execution of this Agreement, Exodus, GCG and the
\nCompany are entering into a Stockholder Rights Agreement (the “Stockholder
\n ———–
\nAgreement”), and a Registration Rights Agreement (the “Registration Rights
\n——— ——————-
\nAgreement”).
\n———
\n NOW, THEREFORE, in consideration of the covenants and representations set
\nforth herein, and for other good and valuable consideration, the parties agree
\nas follows:<\/p>\n
1<\/p>\n
ARTICLE I<\/p>\n
THE MERGER<\/p>\n
1.1 The Merger.
\n ———-<\/p>\n
At the Effective Time (as defined in Section 1.2) and subject to and upon
\nthe terms and conditions of this Agreement, the Certificate of Merger attached
\nhereto as Exhibit A (the “Certificate of Merger”) and the applicable provisions
\n ——— ———————
\nof the Delaware General Corporation Law (“Delaware Law”), Exodus Merger Sub
\n ————
\nshall be merged with and into the Company, the separate corporate existence of
\nExodus Merger Sub shall cease and the Company shall continue as the surviving
\ncorporation. The Company as the surviving corporation after the Merger is
\nhereinafter sometimes referred to as the “Surviving Corporation.”
\n ———————
\n 1.2 Closing; Effective Time.
\n ———————–<\/p>\n
The closing of the transactions contemplated hereby (the “Closing”) shall
\n ——-
\ntake place as soon as practicable following the satisfaction or waiver of each
\nof the conditions set forth in Article VI hereof, or at such other time as the
\nparties hereto agree (the “Closing Date”). The Closing shall take place at the
\n ————
\noffices of Fenwick & West LLP, Palo Alto, California, or at such other location
\nas the parties hereto agree. In connection with the Closing, the parties hereto
\nshall cause the Merger to be consummated by filing the Certificate of Merger,
\ntogether with the required officers’ certificates, with the Secretary of State
\nof the State of Delaware in accordance with the relevant provisions of Delaware
\nLaw (the time of effectiveness of the Merger under the Delaware Law being the
\n“Effective Time”).
\n ————–<\/p>\n
1.3 Effect of the Merger.
\n ——————–<\/p>\n
At the Effective Time, the effect of the Merger shall be as provided in
\nthis Agreement, the Certificate of Merger and the applicable provisions of
\nDelaware Law. Without limiting the generality of the foregoing, and subject
\nthereto, at the Effective Time, all the property, rights, privileges, powers and
\nfranchises of the Company shall vest in the Surviving Corporation, and all
\ndebts, liabilities and duties of the Company shall become the debts, liabilities
\nand duties of the Surviving Corporation.<\/p>\n
1.4 Certificate of Incorporation; Bylaws.
\n ————————————<\/p>\n
(a) Certificate of Incorporation. At the Effective Time, the
\n —————————-
\nCertificate of Incorporation of the Company, as in effect immediately prior to
\nthe Effective Time, shall be the Certificate of Incorporation of the Surviving
\nCorporation until thereafter amended as provided by Delaware Law and such
\nCertificate of Incorporation.<\/p>\n
(b) Bylaws. The Bylaws of Exodus Merger Sub, as in effect
\n ——
\nimmediately prior to the Effective Time, shall be the Bylaws of the Surviving
\nCorporation until thereafter amended.<\/p>\n
2<\/p>\n
1.5 Directors and Officers.
\n ———————-<\/p>\n
At the Effective Time, the directors of Exodus Merger Sub, as in effect
\nimmediately prior to the Effective Time, shall be the directors of the Surviving
\nCorporation, until their respective successors are duly elected or appointed and
\nqualified. The officers of Exodus Merger Sub, as in effect immediately prior to
\nthe Effective Time, shall be the officers of the Surviving Corporation, until
\ntheir respective successors are duly elected or appointed and qualified.<\/p>\n
1.6 Effect on Capital Stock.
\n ———————–<\/p>\n
(a) Company Stock. At the Effective Time, each share of Company
\n ————-
\nCommon Stock issued and outstanding immediately prior to the Effective Time
\nshall be converted into and exchanged for the right to receive a number of
\nshares of Exodus Common Stock equal to the Exchange Ratio. The Exchange Ratio
\nwill equal the quotient obtained by dividing (i) the Total Exodus Shares (as
\ndefined below) by (ii) the Total Number of GlobalCenter Securities (as defined
\nbelow). Such Exchange Ratio shall be rounded to four decimal places. The “Total
\n —–
\nNumber of GlobalCenter Securities” shall equal the sum of (q) the number of
\n———————————
\nshares of Company Common Stock outstanding immediately prior to the Effective
\nTime, plus (r) the total number of shares of Company Common Stock issuable or
\ndeemed to be issuable under Company Options (as defined below) and the Global
\nCrossing Assumed Options (as defined below). As used herein, all references to
\nExodus Common Stock shall include the associated stock purchase rights issued
\npursuant to the Rights Agreement dated as of January 27, 1999 (the “Rights
\n ——
\nAgreement”), between Exodus and BankBoston, N.A. The “Total Exodus Shares” shall
\n——— ——————-
\nmean that number of shares of Exodus Common Stock equal to the quotient obtained
\nby dividing (A) the sum of (i) $6.525 Billion, plus (ii) the aggregate proceeds
\nfrom the exercise of all of the Company Options and Global Crossing Assumed
\nOptions, minus (iii) the Global Crossing Cancelled Options Money Value (as
\ndefined below), by (B) the Final Closing Price (as defined below), rounded to
\nthe nearest whole share. The “Global Crossing Cancelled Options Money Value”
\n ———————————————
\nshall mean (x) the product of (1) the average closing price per share as quoted
\non the Nasdaq National Market of Global Crossing Ltd. (as defined below) common
\nstock for the ten (10) trading days prior to and including the trading day
\nending two days prior to the Closing Date, and (2) the total number of shares of
\nGlobal Crossing Ltd. stock issuable pursuant to the Global Crossing Cancelled
\nOptions (as defined below), minus (y) the aggregate proceeds from the exercise
\nof all of the Global Crossing Cancelled Options. The “Final Closing Price” shall
\n ——————-
\nmean the average closing price per share as quoted on the Nasdaq National Market
\nof Exodus Common Stock for the ten (10) trading days prior to and including the
\ntrading day ending two days prior to the Closing Date; provided that if the
\nFinal Closing Price is less than $56.41, the Final Closing Price shall equal
\n$56.41 and if the Final Closing Price is greater than $65.55, the Final Closing
\nPrice shall equal $65.55.<\/p>\n
(b) Company Options and Global Crossing Options. At the Effective
\n ——————————————-
\nTime, each Company Option (as defined hereinafter) and Global Crossing Assumed
\nOption (as hereinafter defined) shall be assumed by Exodus in accordance with
\nSection 5.9(a) and thereafter shall constitute the right to receive options to
\npurchase such number of shares of Exodus Common Stock as set forth in Section
\n5.9(a). At the Effective Time, each Global Crossing Cancelled Option (as defined
\nhereinafter) will be canceled and Exodus will issue options to purchase shares
\nof Exodus Common Stock (the “New Exodus Options”) in accordance with
\n —————— <\/p>\n
3<\/p>\n
Section 5.9(b). “Company Options” means all options outstanding immediately
\n —————
\nprior to the Effective Time under the GlobalCenter Management Stock Plan (the
\n“GlobalCenter Stock Option Plan”). “Global Crossing Assumed Options” means the
\n —————————— ——————————-
\noptions to purchase 2,934,493 shares of Global Crossing Ltd. (which are deemed
\nto be equivalent to 5,540,323 shares of Company Common Stock) granted pursuant
\nto the Global Crossing Ltd. 1998 Stock Option Plan (the “Global Crossing Stock
\n ———————
\nOption Plan” and, together with the GlobalCenter Stock Option Plan, the “Company
\n———– ——-
\nStock Option Plans”). “Global Crossing Cancelled Options” means all unvested
\n—————— ———————————
\noptions held immediately prior to the Effective Time by Company employees (other
\nthan Leo Hindery) granted pursuant to the Global Crossing Stock Option Plan,
\nexcluding the unvested options included in the definition of Global Crossing
\nAssumed Options above.<\/p>\n
(c) Cancellation of Company Common Stock Owned by the Company. At the
\n ———————————————————
\nEffective Time, all shares of Company Common Stock that are owned by the Company
\nas treasury stock, if any, shall be canceled and extinguished without any
\nconversion thereof.<\/p>\n
(d) Adjustments to Exchange Ratio. The Exchange Ratio shall be
\n —————————–
\nadjusted to reflect fully the effect of any stock split, reverse stock split,
\nstock dividend (including any dividend or distribution of securities convertible
\nor exchangeable into Exodus Common Stock or capital stock of the Company),
\nreorganization, recapitalization or other like change with respect to Exodus
\nCommon Stock or Company Common Stock occurring after the date hereof and prior
\nto the Effective Time, other than the stock splits or stock dividends in which
\nthe Company will convert each currently outstanding share of its common stock
\ninto 233,500 shares of its common stock and GlobalCenter will convert each
\ncurrently outstanding share of its common stock in to 233,500 shares of its
\ncommon stock (the “Stock Splits”).
\n ————<\/p>\n
(e) Fractional Shares. No fraction of a share of Exodus Common Stock
\n —————–
\nwill be issued, but in lieu thereof, each holder of shares of Company Common
\nStock who would otherwise be entitled to a fraction of a share of Exodus Common
\nStock (after aggregating all fractional shares of Exodus Common Stock to be
\nreceived by such holder) shall receive from Exodus an amount of cash (rounded to
\nthe nearest whole cent) equal to the product of (i) such fraction, and (ii) the
\nclosing price of one share of Exodus Common Stock on the Nasdaq National Market
\non the last trading day before the Effective Time, as reported in the Wall
\n —-
\nStreet Journal.
\n————–<\/p>\n
(f) Exodus Merger Sub. Each share of capital stock of Exodus Merger
\n —————–
\nSub issued and outstanding immediately prior to the Effective Time shall be
\nconverted into and exchanged for one share of the common stock of the Surviving
\nCorporation.<\/p>\n
1.7 Exchange of Certificates.
\n ————————<\/p>\n
At the Closing, GCG shall surrender to Exodus Merger Sub all outstanding
\ncertificates theretofore representing the Company Common Stock together with the
\nstock powers duly endorsed in blank and shall thereupon receive in exchange
\ntherefor certificates for Exodus Common Stock as provided in Section 1.6.<\/p>\n
4<\/p>\n
1.8 No Further Ownership Rights in Company Capital Stock.
\n —————————————————-<\/p>\n
All shares of Exodus Common Stock issued upon the surrender for
\nexchange of shares of Company Common Stock in accordance with the terms hereof
\n(including any cash paid in lieu of fractional shares) shall be deemed to have
\nbeen issued in full satisfaction of all rights pertaining to such shares of
\nCompany Common Stock, and following the Effective Time there shall be no further
\nregistration of transfers on the records of the Surviving Corporation of shares
\nof Company Common Stock which were outstanding immediately prior to the
\nEffective Time. If, after the Effective Time, certificates are presented to the
\nSurviving Corporation for any reason, they shall be canceled and exchanged as
\nprovided in this Article I.<\/p>\n
1.9 Tax Consequences.
\n —————-<\/p>\n
It is intended by the parties hereto that the Merger shall constitute a
\nreorganization within the meaning of Section 368(a) of the Code.<\/p>\n
1.10 Exemption from Registration.
\n —————————<\/p>\n
The shares of Exodus Common Stock to be issued in connection with the
\nMerger will be issued in a transaction exempt from registration under the
\nSecurities Act of 1933, as amended (the “Securities Act”), by reason of Section
\n ————–
\n4(2) thereof.<\/p>\n
1.11 Taking of Necessary Action; Further Action.
\n ——————————————<\/p>\n
If, at any time after the Effective Time, any further action is
\nnecessary or desirable to carry out the purposes of this Agreement and to vest
\nthe Surviving Corporation with full right, title and possession to all assets,
\nproperty, rights, privileges, powers and franchises of the Company, the officers
\nand directors of the Company and the Surviving Corporation are fully authorized
\nin the name of their respective corporations or otherwise to take, and will
\ntake, all such lawful and necessary action, so long as such action is not
\ninconsistent with this Agreement.<\/p>\n
ARTICLE II<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES<\/p>\n
In this Agreement, any reference to any event, change, condition or
\neffect being “material” with respect to any entity or group of entities means
\n ——–
\nany material event, change or condition materially affecting the financial
\ncondition, properties, assets, business or prospects of the consolidated group
\nof which such entity or group of entities is a part. In this Agreement, any
\nreference to a “Material Adverse Effect” with respect to any entity or group of
\n ———————–
\nentities means any event, change, violation, inaccuracy, circumstance or effect
\nthat is materially adverse to the financial condition, properties, assets,
\nbusiness or prospects of such entity and its direct and indirect subsidiaries,
\ntaken as a whole; provided that “Material Adverse Effect” shall not include any
\n ———————–
\nevent, change or effect to the extent resulting from (i) changes in general
\neconomic conditions or conditions in the industry in which Exodus and the
\nCompany operate which generally affect industry participants, (ii) changes after
\nthe date of this Agreement in generally accepted accounting principles (“GAAP”),
\n —-
\n(iii) the announcement of this Agreement and the <\/p>\n
5<\/p>\n
transactions contemplated hereby or (iv) changes in the trading prices of any
\nsuch entity (or any such entity’s parent’s) capital stock. In this Agreement,
\nany reference to a party’s “knowledge” means actual knowledge of such party’s
\n ———
\n(and in the case of the Company, the executive officers of GlobalCenter)
\nexecutive officers and directors, but in such connection, such persons shall be
\ndeemed to be on notice of such matters as a reasonably prudent person serving in
\nsuch capacity as an executive officer or director would be aware.<\/p>\n
A. Representations and Warranties of the Company<\/p>\n
Global Crossing NA and the Company jointly and severally represent and
\nwarrant to Exodus as follows:<\/p>\n
2.1 Organization, Standing and Power.
\n ——————————–<\/p>\n
The Company is a corporation duly organized, validly existing and in good
\nstanding under the laws of Delaware, and each of its direct and indirect
\nsubsidiaries is duly organized, validly existing and in good standing under the
\nlaws of its jurisdiction of organization. The Company and each of its
\nsubsidiaries has the corporate power to own its respective properties and to
\ncarry on its respective business as now being conducted and is duly qualified to
\ndo business and is in good standing in each jurisdiction in which the failure to
\nbe so qualified and in good standing would have a Material Adverse Effect on the
\nCompany. The Company and each of its subsidiaries has made available true and
\ncorrect copies of the Certificate of Incorporation and Bylaws or other charter
\ndocuments, as applicable, of the Company and its subsidiaries, each as amended
\nto date and true and complete copies of minute books of the Company and
\nGlobalCenter for the three year period ending on the date hereof. Neither the
\nCompany nor any of its subsidiaries is in violation of any of the provisions of
\nits Certificate of Incorporation or Bylaws or equivalent organizational
\ndocuments. Except as set forth on Item 2.1 to the disclosure letter delivered by
\n ——–
\nthe Company to Exodus concurrently with the execution and delivery of this
\nAgreement and referring to the representations and warranties in this Agreement
\n(the “Company Disclosure Letter”), the Company does not directly or indirectly
\n ————————-
\nown any equity or similar interest in, or any interest convertible or
\nexchangeable or exercisable for, any equity or similar interest in, any
\ncorporation, partnership, joint venture or other business association or entity.<\/p>\n
2.2 Capital Structure.
\n —————–<\/p>\n
(a) As of the Closing Date, after giving effect to the Stock Splits,
\nthe authorized capital stock of the Company will consist of 300,000,000 shares
\nof Company Common Stock, of which 233,500,000 shares will be issued and
\noutstanding.<\/p>\n
(b) All outstanding shares of Company Common Stock are owned
\nbeneficially and of record by GCG. There are no other outstanding shares of
\ncapital stock or voting securities and no outstanding commitments to issue any
\nshares of Company capital stock or voting securities, other than pursuant to the
\nexercise of the Company Options and the Global Crossing Assumed Options.<\/p>\n
(c) All outstanding shares of Company Common Stock are duly
\nauthorized, validly issued, fully paid and non-assessable and are free of any
\nliens or encumbrances, and are not subject to preemptive rights or rights of
\nfirst refusal created by statute, the Certificate of <\/p>\n
6<\/p>\n
Incorporation or Bylaws of the Company or any agreement to which the Company is
\na party or by which it is bound. All outstanding shares of capital stock of each
\nof the subsidiaries of the Company are duly authorized, validly issued, fully
\npaid and non-assessable and are free of any liens or encumbrances, and are not
\nsubject to preemptive rights or rights of first refusal created by statute, the
\nCertificate of Incorporation or Bylaws or other organizational documents of such
\nsubsidiary or any agreement to which such subsidiary is a party or by which it
\nis bound. The Company owns, directly or indirectly, 100% of the outstanding
\nstock of each of the subsidiaries listed in Item 2.1 of the Company Disclosure
\n ——–
\nSchedule. On the date hereof, (1) the Company Options consist of options to
\npurchase 25,616,795 shares of Company Common Stock granted pursuant to the
\nGlobalCenter Stock Option Plan, (2) the Global Crossing Assumed Options consist
\nof options to purchase 2,934,493 shares of Global Crossing Ltd., a company
\norganized under the laws of Bermuda (“Global Crossing Ltd.”) (which are deemed
\n ——————-
\nto be equivalent to 5,540,323 shares of Company Common Stock) granted pursuant
\nto the Global Crossing Stock Option Plan, and (3) the Global Crossing Canceled
\nOptions consist of options to purchase 1,898,877 shares of Global Crossing Ltd.
\ngranted or committed to be granted pursuant to the Global Crossing Stock Option
\nPlan. Except for (i) the rights created pursuant to this Agreement; (ii) the
\nCompany Options, the Global Crossing Assumed Options and the Global Crossing
\nCanceled Options; and (iii) up to 250,000 additional Global Crossing Cancelled
\nOptions to be granted after the date hereof and before Closing; there are no
\nother options, warrants, calls, rights, commitments or agreements of any
\ncharacter to which the Company or any of its subsidiaries is a party or by which
\nthey are bound obligating the Company or any of its subsidiaries to issue,
\ndeliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,
\nrepurchased or redeemed, any shares of capital stock of the Company or any of
\nits subsidiaries or obligating the Company or any of its subsidiaries to grant,
\nextend,e Exodus Group will continue
\nto support existing customers of the AGC Group that are utilizing Exodus
\nServices.<\/p>\n
(d) If upon the termination of this Agreement for any reason, the
\nExodus Group shall not have fulfilled its Required Percentage obligation under
\nSection 2(a) hereof, the Exodus Group will promptly purchase such amount of
\nNetwork Services, or otherwise meet its Required Percentage obligation, so that
\nit brings itself into compliance with such obligation.<\/p>\n
30. Joint Venture Agreement. The parties acknowledge the provisions
\n ————————
\nof Sections 6.9 and 6.13 of the Joint Venture Agreement, and nothing contained
\nherein is intended in any way to reduce either party’s obligations under such
\nprovisions.<\/p>\n
12<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this Network Services,
\nMarketing and Cooperation Agreement as of the date first above written.<\/p>\n
EXODUS COMMUNICATIONS, INC.<\/p>\n
By: \/s\/ Ellen M. Hancock
\n ——————–
\n Ellen M. Hancock
\n Chief Executive Officer and Chairman<\/p>\n
ASIA GLOBAL CROSSING LTD.<\/p>\n
By: \/s\/ Charles F. Carroll
\n ———————-
\n Charles F. Carroll
\n Senior Vice President and General
\n Counsel<\/p>\n
13<\/p>\n
ANNEX A
\n SERVICES
\n ——–
\n Part 1
\n ——
\n Exodus Services
\n —————<\/p>\n
Internet infrastructure services incorporating:<\/p>\n
. Internet Web-Hosting;
\n . IP network services, using primarily the Exodus network;
\n . hardware and software procurement and installation;
\n . content distribution, integration and management services;
\n . systems applications; and
\n . professional services.<\/p>\n
Part 2
\n ——
\n AGC Services
\n ————<\/p>\n
AGC is a provider of global Internet Protocol, or “IP”, and data and voice
\nservices for both wholesale and retail customers. It is building a state-of-
\nthe-art fiber optic network of global scope and scale to serve as the backbone
\nfor its services. AGC provides services in several principal segments. The
\nsegment that comprises the “AGC Services” is the telecommunications services
\nsegment which offers a variety of integrated telecommunications products and
\nservices through its global fiber optic network, including domestic and
\ninternational voice services, data products and structured bandwidth services,
\nand other communications products and other services offered by the AGC Group.
\nAGC Services include Network Services.<\/p>\n
ANNEX B<\/p>\n
PRICING FOR NETWORK SERVICES<\/p>\n
The AGC Group will provide Network Services to each member of the Exodus Group
\npurchasing any such Network Services at a price equal to the lower of:<\/p>\n
(1) the lowest price of any sale (excluding co-build arrangements and other
\narrangements whereby an entity participates in a network system during
\nconstruction through a purchase [***] of the proposed initial capacity of such
\nsystem and\/or by sharing in [***] of the construction costs, known as “anchor
\ntenant” arrangements) of such service (on a similar product basis) to a non-
\nAffiliated entity activating such asset or service (“MFN”), less five percent
\n(5%); or<\/p>\n
(2) the lowest price of any sale of such service (on a similar product basis) to
\nan Affiliated party in which a AGC Group member has direct or indirect ownership
\n[***] of the stock, shares or other voting interest of the non-Affiliated party
\nactivating such asset or service; or<\/p>\n
(3) if there is no instance of a non-Affiliated entity activating a particular
\nasset or service and there is an instance for one or more Affiliates activating
\nsuch asset or service for its own use, the lowest price of any sale of such
\nasset or service (on a similar product basis) to any such Affiliated party; or<\/p>\n
[***]
\n________________________<\/p>\n
[***] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.<\/p>\n
ANNEX C<\/p>\n
PRICING FOR EXODUS SERVICES
\n —————————
\n [To be completed by the Parties Pursuant to Section 4(b) hereof.].<\/p>\n
ANNEX D<\/p>\n
CHANGE OF CONTROL
\n —————–<\/p>\n
“Change of Control” shall mean any of the following: (i) a merger, consolidation
\nor other business combination or transaction to which AGC or Exodus is a party
\nif the shares of AGC’s or Exodus’ (as the case may be) common stock outstanding
\nimmediately prior to the effective date of such merger, consolidation or other
\nbusiness combination or transaction (or the shares of common stock into which
\nthey are converted or exchanged pursuant to such merger, consolidation or other
\nbusiness combination or transaction) do not represent 50% or more of the voting
\npower of the surviving corporation (or its parent) following such merger,
\nconsolidation or other business combination or transaction; (ii) an acquisition
\nby any entity of 50% or more of the voting power of AGC or Exodus, other than by
\na parent company which has substantially the same shareholders as AGC or Exodus
\n(as the case may be) had prior to such event; or (iii) a sale of all or
\nsubstantially all the consolidated assets of AGC or Exodus to any entity, other
\nthan to a parent company which has substantially the same shareholders as AGC or
\nExodus (as the case may be) had prior to such event.<\/p>\n
ANNEX E<\/p>\n
REQUIRED PERCENTAGE CALCULATION<\/p>\n
The Required Percentage shall be calculated as follows: the first period (the<\/p>\n
“First Period”) of calculation shall be from the date of this Agreement until
\n————-
\n[***], thereafter, the Required Percentage shall be calculated on an annual
\ncalendar year basis.<\/p>\n
If, in any calendar year following the First Period, the Exodus Group fails to
\nmeet its Required Percentage but, has at least met one half of its Required
\n —
\nPercentage obligation for that year, the Exodus Group will be entitled to, and
\nshall be obligated to, make up such shortfall in the following calendar year as
\nfollows:<\/p>\n
(a) all purchases of Network Services in such following calendar year shall be
\napplied first to meet the Required Percentage for such year; and<\/p>\n
(b) any such shortfall plus the “Applicable Premium” shall be paid in such
\nfollowing calendar year (the “Applicable Premium” shall mean an amount equal to
\n ——————
\nthe product of (A) the Required Percentage for the previous year multiplied by
\nthe total Network Services purchased by the Exodus Group in such year from all
\nproviders and (B) [***]).<\/p>\n
If in the First Period or any succeeding calendar year the Exodus Group exceeds
\nthe Required Percentage, the amount of such excess may not be carried forward as
\na credit for the following calendar year.<\/p>\n
______________________<\/p>\n
[***] Certain information on this page has been omitted and filed separately
\nwith the Securities and Exchange Commission. Confidential treatment has been
\nrequested with respect to the omitted portions.
\npost partnership,
\neach individual executing this Lease on behalf of said corporation or
\npartnership, as the case may be, represents and warrants that he is duly
\nauthorized to execute and deliver this Lease on behalf of said entity in
\naccordance with its corporate bylaws, statement of partnership or certificate of
\nlimited partnership, as the case may be, and that this Lease is binding upon
\nsaid entity in accordance with its terms. Landlord, at its option, may require a
\ncopy of such written authorization to enter into this Lease.<\/p>\n
K. Exhibits. All exhibits, amendments, riders and addenda
\nattached hereto are hereby incorporated herein and made a part hereof.<\/p>\n
L. Lease Summary. The Lease Summary attached to this Lease is
\nintended to provide general information only. In the event of any inconsistency
\nbetween the Lease Summary and the specific provisions of this Lease, the
\nspecific provisions of this Lease shall prevail.<\/p>\n
M. Memorandum of Lease. This Lease shall not be recorded
\nwithout the prior consent of both Landlord and Tenant; provided, however, that
\nupon the written request of Tenant, Landlord and Tenant shall execute and
\nacknowledge, in recordable form, a memorandum of this Lease in form reasonably
\nacceptable to both Landlord and Tenant, and shall cause such memorandum to be
\nrecorded in the Official Records of the County of San Mateo, State of
\nCalifornia. Upon expiration of the term of this Lease or earlier termination of
\nthis Lease, Tenant shall execute, acknowledge and deliver to Landlord an
\nappropriate instrument prepared by Landlord which Landlord may then record in
\nthe Official Records of San Mateo County to expunge this Lease and any
\nmemorandum thereof from the public record with respect to the Premises. In
\naddition, Tenant hereby irrevocably constitutes and appoints Landlord as its
\ntrue and lawful attorney in fact, in its name and in its behalf, to make,
\nexecute, acknowledge, deliver, and file any and all such instruments that Tenant
\nso fails or refuses to execute. Tenant expressly understands and acknowledges
\nthat the foregoing special power of attorney is coupled with an interest, is
\nirrevocable, and shall survive the dissolution or insolvency of Tenant, or the
\ntransfer by Tenant of the whole or any portion of its interest in this Lease
\n(provided that any such transfer shall be subject to the restrictions set forth
\nin this Lease).<\/p>\n
49<\/p>\n
56<\/p>\n
THIS LEASE is effective as of the date the last signatory
\nnecessary to execute the Lease shall have executed this Lease.<\/p>\n
TENANT:<\/p>\n
Dated: ,1998 AT HOME CORPORATION,
\n ——— a Delaware corporation<\/p>\n
By: \/s\/ KENNETH A. GOLDMAN
\n —————————————
\n Its:
\n —————————————<\/p>\n
By:
\n —————————————
\n Its:
\n —————————————<\/p>\n
LANDLORD:<\/p>\n
Dated: MARTIN\/CAMPUS ASSOCIATES, L.P.,
\n ————- a Delaware limited partnership<\/p>\n
By: Martin\/Redwood Partners,
\n L.P., a California limited
\n partnership, its General Partner<\/p>\n
By: TMG Redwood LLC,
\n A California limited liability
\n Company
\n Its: General Partner<\/p>\n
By: The Martin Group of
\n Companies, Inc., a
\n California corporation,
\n Its General Partner<\/p>\n
By: \/s\/
\n ———————-
\n Its: Vice President
\n ———————-<\/p>\n
50<\/p>\n
57<\/p>\n
EXHIBIT A
\n ———<\/p>\n
PREMISES
\n ——–<\/p>\n
58<\/p>\n
EXHIBIT B
\n ———<\/p>\n
WORK LETTER AGREEMENT
\n ———————<\/p>\n
THIS WORK LETTER (“Agreement”) is made and entered into by and
\nbetween Landlord and Tenant as of the date of the Lease. This Agreement shall be
\ndeemed a part of the Lease to which it is attached. Capitalized terms which are
\nused herein and defi<\/p>\n
incurred in the Ordinary Course since the Balance Sheet Date, and (iii) those
\nincurred in connection with the execution and performance of this Agreement.<\/p>\n
2.7 Litigation.
\n ———-<\/p>\n
There is no private or governmental action, suit, proceeding, claim,
\narbitration or investigation (each an “Action”) pending or, to the knowledge of
\n ——
\nthe Company or any of its subsidiaries, threatened before any agency, court or
\ntribunal, foreign or domestic, against the Company or any of its subsidiaries or
\nany of their respective properties or any of their respective officers or
\ndirectors (in their capacities as such) that would reasonably be expected to
\nhave a Material Adverse Effect on the Company. As of the date hereof, there is
\nno Order against the Company or any of its subsidiaries, or, to the knowledge of
\nthe Company or any of its subsidiaries, any of their respective directors or
\nofficers (in their capacities as such), that would reasonably be expected to
\nhave a Material Adverse Effect on the Company.<\/p>\n
2.8 Real Estate; Title to Property.
\n ——————————<\/p>\n
The Company and its subsidiaries have good and valid title to all of
\ntheir respective properties, interests in properties and assets, real and
\npersonal, reflected in the Balance Sheet or acquired after the Balance Sheet
\nDate (except properties, interests in properties and assets sold or otherwise
\ndisposed of since the Balance Sheet Date in the Ordinary Course), or with
\nrespect to leased properties and assets, valid leasehold interests in, free and
\nclear of all Liens, except (i) Permitted Liens, (ii) such imperfections of
\ntitle, liens and easements as would not have a Material Adverse Effect on the
\nCompany, and (iii) liens securing debt which is reflected on the Balance Sheet.
\nItem 2.8 of the Company Disclosure Schedule sets forth all real property owned,
\n——–
\nleased or otherwise used by the Company or GlobalCenter or any of their
\nsubsidiaries regardless of the party currently named as lessee or sublessee on
\nthe applicable agreement for such space, and such schedule shall include the
\naddresses of such locations, the name and address of the landlords, if
\napplicable, and any sublessors, if applicable.<\/p>\n
2.9 Intellectual Property.
\n ———————<\/p>\n
(a) For purposes of this Agreement, “Intellectual Property”
\nmeans:<\/p>\n
(i) all issued patents, reissued or reexamined patents,
\nrevivals of patents, utility models, certificates of invention, registrations of
\npatents and extensions thereof, regardless of country or formal name
\n(collectively, “Issued Patents”);
\n ————–<\/p>\n
(ii) all published or unpublished nonprovisional and
\nprovisional patent applications, reexamination proceedings, invention
\ndisclosures and records of invention (collectively “Patent Applications” and,
\n ——————-
\nwith the Issued Patents, the “Patents”);
\n ——–<\/p>\n
(iii) all semiconductor topography and mask work rights,
\nincluding all rights of authorship, use, publication, reproduction,
\ndistribution, performance transformation, moral rights and rights of ownership
\nof copyrightable works, semiconductor topography works and mask works, and all
\nrights to register and obtain renewals and extensions of registrations, together
\nwith all other interests accruing by reason of international copyright,
\nsemiconductor topography and mask work conventions (collectively, “Copyrights”);
\n ———- <\/p>\n
11<\/p>\n
(iv) trademarks, registered trademarks, applications for
\nregistration of trademarks, service marks, registered service marks,
\napplications for registration of service marks, trade names, registered trade
\nnames and applications for registrations of trade names (collectively,
\n“Trademarks”);
\n ———-<\/p>\n
(v) all technology, ideas, inventions, designs,
\nproprietary information, manufacturing and operating specifications, know-how,
\nformulae, trade secrets, technical data and proprietary processes;<\/p>\n
(v) all databases and all collected data and all rights
\ntherein throughout the world;<\/p>\n
(vii) all computer software, including all source code,
\nobject code firmware, development tools, files, records and data and all media
\non which any of the foregoing is recorded; and<\/p>\n
(viii) all URLs, Web addresses and domain names.<\/p>\n
(b) The Company and its subsidiaries own, or are licensed or
\notherwise possess legally enforceable rights to use, all Intellectual Property,
\nincluding without limitation, patents, trademarks, trade names, service marks,
\ndomain names, trade dress, copyrights, copyrightable works, mask works,
\nhardware, discoveries, databases, systems, networks, documentation, drawings,
\nresearch and development, schematics, technology, know-how, trade secrets,
\ninventions, ideas, algorithms, processes, computer software programs or
\napplications (in source code and\/or object code form), and proprietary
\ninformation or material that are used in and material to the business of the
\nCompany or any of its subsidiaries as currently conducted.<\/p>\n
(c) With respect to each item of Intellectual Property
\nincorporated into any product of Company or its subsidiaries or used in
\nconnection with any service offered or provided by Company or its subsidiaries
\nor otherwise used in the business of Company or its subsidiaries (except “off
\nthe shelf” or other software widely available through regular commercial
\ndistribution channels at a cost not exceeding $50,000 per copy or seat on
\nstandard, non-negotiated terms and conditions) (“Company Intellectual
\n ——————–
\nProperty”), Item 2.9(b) of the Company Disclosure Letter lists as of the date of
\n——– ———–
\nthis Agreement:<\/p>\n
(i) all Patents, all registered Trademarks, and all
\nregistered Copyrights owned by the Company and its subsidiaries, including the
\njurisdictions in which each such intellectual property has been issued or
\nregistered or in which any application for such issuance and registration of a
\nPatent, Trademark or Copyright has been filed.<\/p>\n
(ii) the following agreements relating to the products or
\nservice offerings or capabilities of Company and its subsidiaries, including
\nproducts or service offerings or capabilities currently under development
\n(collectively the “Company Services”) or other Company Intellectual Property:
\n —————-
\nall (A) agreements granting any right to distribute or sublicense any of the
\nCompany Services on any exclusive basis, (B) any exclusive licenses of
\nintellectual property from Company or any of its subsidiaries, (C) joint
\ndevelopment agreements not terminable within thirty (30) days by either party,
\nand (D) any agreement by which Company or any of its subsidiaries grants any
\nownership right to any Company Intellectual Property owned <\/p>\n
12<\/p>\n
by Company or any of its subsidiaries other than nonexclusive software licenses
\nentered into with customers in the Ordinary Course.<\/p>\n
(d) As of the date of this Agreement the Company and its
\nsubsidiaries do not have any licenses, sublicenses and other agreements to which
\nCompany or any of its subsidiaries is a party and pursuant to which Company or
\nany of its subsidiaries is authorized to use any Company Intellectual Property
\nowned by any third party (except software or other Intellectual Property widely
\navailable through regular commercial distribution channels or software or other
\nIntellectual Property that the Company or its subsidiaries could replace if its
\nrights were terminated without incurring any additional costs material to the
\nCompany.) (“Third Party Intellectual Property”).
\n ———————————<\/p>\n
(e) To the knowledge of the Company, as of the date of this
\nAgreement, there is no unauthorized use, disclosure, infringement or
\nmisappropriation of any Company Intellectual Property, including any Third Party
\nIntellectual Property, by the Company or its subsidiaries or by any other third
\nparty.<\/p>\n
(f) Neither Company nor any of its subsidiaries is in breach of
\nany license, sublicense or other agreement relating to the Company Intellectual
\nProperty.<\/p>\n
(g) To the knowledge of the Company, neither Company nor any of
\nits subsidiaries has infringed, misappropriated or made unlawful use of, is not
\ncurrently infringing, misappropriating or making unlawful use of, and has not
\nreceived any written notice or written communication alleging or relating to any
\nactual, alleged, possible or potential infringement, misappropriation or
\nunlawful use of, any Patents, Copyrights or trade secrets owned or used by any
\nthird party. Without limiting the foregoing, to the knowledge of the Company the
\noffering and sale of the Company Services by Company and its subsidiaries does
\nnot, the business of Company and its subsidiaries as conducted as of the date
\nhereof does not, and Company’s and its subsidiaries’ use of patents, copyrights
\nor trade secrets as of the date hereof does not, infringe or violate any
\nPatents, Copyrights or trade secrets of any other person. There is no proceeding
\npending or, to the knowledge of the Company, threatened against the Company or
\nany of its subsidiaries, nor has any written claim or demand been made against
\nthe Company or any of its subsidiaries, which challenges the legality, validity,
\nenforceability or ownership of any item of Company Intellectual Property or
\nThird Party Intellectual Property. As of the date hereof, neither Company nor
\nany of its subsidiaries has brought a proceeding alleging infringement of
\nCompany Intellectual Property or breach of any license or agreement involving
\nPatents, Copyrights or trade secrets against any third party.<\/p>\n
(h) All current, and, except as would not have a Material
\nAdverse Effect on the Company Intellectual Property, former employees engaged in
\ndevelopment of Company Services and products of Company or its subsidiaries
\n(“Company Products”) have executed and delivered to Company or one of its
\n —————-
\nsubsidiaries an agreement (containing no exceptions or exclusions from the scope
\nof its coverage other than as set forth in the standard form) regarding the
\nprotection of proprietary information and the assignment to Company or
\nGlobalCenter of any Intellectual Property arising from services performed for
\nCompany or its subsidiaries by such persons, the form of which has been supplied
\nto Exodus. All current employees have executed<\/p>\n
13<\/p>\n
and delivered to the Company or one of its subsidiaries a non-disclosure
\nagreement, the form of which has been supplied to Exodus.<\/p>\n
(i) Company has taken all commercially reasonable and customary
\nmeasures and precautions necessary to protect and maintain the confidentiality
\nof all Company Intellectual Property (except such Company Intellectual Property
\nwhose value would be unimpaired by public disclosure) and otherwise to maintain
\nand protect the full value of all Company Intellectual Property owned by it as
\nof the date of this Agreement.<\/p>\n
(j) Neither Company nor any subsidiary is subject to any
\nproceeding or outstanding decree, order, judgment, or stipulation which is
\nreasonably likely to affect the validity, use or enforceability of any Company
\nIntellectual Property or restrict in any manner the use, transfer, or licensing
\nthereof by Company or any subsidiary.<\/p>\n
(k) Except as set out in Item 2.9(k) to the Company Disclosure
\n ———–
\nLetter or as set forth in GlobalCenter’s standard master service agreement,
\nCompany and its subsidiaries have not granted any reseller, distributor, sales
\nrepresentative, original equipment manufacturer, value added reseller or other
\nthird party any exclusive right to reproduce, manufacture, sell, license,
\nfurnish or distribute any Company Services in any market segment or geographic
\nlocation.<\/p>\n
2.10 Environmental Matters.
\n ———————<\/p>\n
As of the date hereof:<\/p>\n
(a) (i) The Company and its subsidiaries comply and have
\ncomplied with all applicable Environmental Laws, and possess and comply with and
\nhave possessed and complied with all Environmental Permits, the failure to
\ncomply with which would have a Material Adverse Effect on the Company; (ii)
\nthere are and have been no Materials of Environmental Concern, or other
\nconditions, at any property owned, operated, or otherwise used by the Company or
\nany of its subsidiaries now or in the past, or at any other location, in
\ncircumstances that would reasonably be expected to result in a Material Adverse
\nEffect on the Company.<\/p>\n
(b) For purposes of this Agreement, the terms below shall be
\ndefined as follows:<\/p>\n
(i) “Environmental Laws” shall mean any and all laws,
\n ——————
\nrules, orders, regulations, statutes, ordinances, codes, decrees, or other
\nlegally enforceable requirement of any foreign government, the United States, or
\nany state, local, municipal or other governmental authority, regulating,
\nrelating to or imposing liability or standards of conduct concerning protection
\nof the environment or of human health, or employee health and safety.<\/p>\n
(ii) “Environmental Permits” shall mean any and all
\n ———————
\npermits, licenses, registrations, notifications, exemptions and any other
\nauthorization required under any applicable Environmental Law.<\/p>\n
14<\/p>\n
(iii) “Materials of Environmental Concern” shall mean any
\n ———————————-
\ngasoline or petroleum (including crude oil or any fraction thereof) or petroleum
\nproducts, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
\npollutants, contaminants, radioactivity, and any other substances defined as
\nhazardous or toxic under any Environmental Law.<\/p>\n
2.11 Taxes.
\n —–<\/p>\n
(a) Except to the extent indicated in Item 2.11, and except as
\n ———
\nwould not have a Material Adverse Effect on the Company:<\/p>\n
(i) all Tax Returns that are required to be filed by or with
\nrespect to the Company and its subsidiaries through the Closing Date have been
\nor will be duly and timely filed and are or will be accurate, complete and
\ncorrect in all material respects;<\/p>\n
(ii) all Taxes of the Company and its subsidiaries which are
\ndue and payable have been paid in full, other than Taxes for which a reserve has
\nbeen established on the Financial Statements in accordance with GAAP;<\/p>\n
(iii) there is no deficiency that has in writing been
\nthreatened, proposed or assessed or any dispute or claim concerning any
\nliability with respect to Taxes of the Company or its subsidiaries that has been
\nclaimed or raised by any Tax Authority in writing;<\/p>\n
(iv) neither the Company nor any of its subsidiaries is now
\nsubject to a claim for the assessment of Taxes nor is the Company or any of its
\nsubsidiaries under examination by any Tax Authority;<\/p>\n
(v) no extensions, waivers of statutes of limitation, or
\nconsents to extend the period for assessment or collection have been given by or
\nrequested with respect to any Taxes or Tax Returns of the Company or its
\nsubsidiaries;<\/p>\n
(vi) there are no liens with respect to Taxes, other than liens
\nfor Taxes not yet due and payable;<\/p>\n
(vii) each of the Company and its subsidiaries has withheld and
\npaid all Taxes required to have been withheld and paid in connection with
\namounts paid or owing to any employee, independent contractor, creditor,
\nstockholder, or other third party and the Company and its subsidiaries have each
\ncomplied with all reporting requirements with respect to such Taxes;<\/p>\n
(viii) neither the Company nor any of its subsidiaries has (x)
\nany liability for the Taxes of any person (other than the Company and its
\nsubsidiaries or the members of the federal consolidated group of which Global
\nCrossing NA is the common parent (the “Global Crossing NA Group”)) under
\n ————————
\nTreasury Regulation Section 1.1502-6 (or any similar provision of state, local
\nor foreign law) or (y) any liability for Taxes of any person (other than the
\nCompany or its subsidiaries) as a transferee or successor, or by contract
\n(including under any Tax sharing or Tax allocation agreement); and<\/p>\n
15<\/p>\n
(ix) the Company has not filed any elections under
\nSection 341(f) of the Code.<\/p>\n
(b) For purposes of this Agreement, the following terms have the
\nfollowing meanings: “Tax” (and, with correlative meaning, “Taxes” and “Taxable”)
\n — —– ——-
\nmeans any net income, alternative or add-on minimum tax, gross income, gross
\nreceipts, sales, use, ad valorem, transfer, franchise, profits, license,
\nwithholding, payroll, employment, excise, severance, stamp, occupation, premium,
\nproperty, environmental or windfall profit tax, custom, duty or other tax,
\ngovernmental fee or other like assessment or charge of any kind whatsoever,
\ntogether with any interest or any penalty, addition to tax or additional amount
\nimposed by any governmental entity (a “Tax Authority”) responsible for the
\n ————-
\nimposition of any such tax (domestic or foreign). “Tax Return” shall mean any
\n ———-
\nreturn, statement, report or form (including, without limitation, estimated tax
\nreturns and reports, withholding tax returns and reports that are required to be
\nfiled with any Tax Authority).<\/p>\n
2.12 Employee Benefit Plans.
\n ———————-<\/p>\n
(a) Item 2.12 contains a true and complete list of each
\n ———
\n“employee benefit plan” (within the meaning of Section 3(3) of the Employee
\n ———————
\nRetirement Income Security Act of 1974, as amended (“ERISA”) and each stock
\n —–
\npurchase, stock option, severance, change-in-control, fringe benefit, bonus,
\ndeferred compensation and all other employee benefit plans, agreements,
\nprograms, or policies (i) under which any current or former employee, director
\nor consultant of the Company or any of its subsidiaries (the “Company
\n ——-
\nEmployees”) has any current or future right to benefits or (ii) under which the
\n———
\nCompany or any of its subsidiaries has any current or future liability (“Company
\n ——-
\nPlans”) in excess of $200,000.
\n—–<\/p>\n
(b) As of the Effective Time, with respect to each Company Plan
\nthat applies to Company Employees, the Company will have made available to
\nExodus a current, accurate and complete copy (or, to the extent no such copy
\nexists, an accurate description) thereof and, to the extent applicable: (i) any
\nrelated trust agreement or other funding instrument; (ii) the most recent
\ndetermination letter; (iii) any summary plan description; and (iv) for the two
\nmost recent years (A) the Form 5500 and attached schedules and (B) audited
\nfinancial statements.<\/p>\n
(c) Except as is not material to the Company and its
\nsubsidiaries, taken as a whole, (i) each Company Plan has been established and
\nadministered in accordance with its terms, and in compliance with the applicable
\nprovisions of ERISA, the Code and other U.S. or foreign applicable laws, rules
\nand regulations; (ii) each Company Plan which is intended to be qualified within
\nthe meaning of Code Section 401(a) has received a favorable determination letter
\nas to its qualification, and nothing has occurred, whether by action or failure
\nto act, that is reasonably likely to cause the loss of such qualification; and
\n(iii) no event has occurred and no condition exists that would subject the
\nCompany, either directly or by reason of its affiliation with any member of its
\n“Controlled Group” (within the meaning of Section 414(b), (c), (m) or (o) of the
\n —————-
\nCode), to any tax, fine, lien, penalty or other liability imposed by ERISA
\n(including Title IV thereof), the Code or other U.S. or foreign applicable laws,
\nrules and regulations.<\/p>\n
(d) Except as disclosed on Item 2.12, no Company Plan exists
\n ———
\nthat, as a result solely of the execution of this Agreement or the transaction
\ncontemplated by this Agreement, <\/p>\n
16<\/p>\n
would result in the payment to any Company Employee of any money or other
\nproperty or would result in the increase, acceleration or provision of any other
\nrights or benefits to any Company Employee. Each individual who has a
\ncontractual agreement providing for a cash payment to such individual for an
\nexcise tax under Code Section 4999 (each, a “Contract Holder”) is disclosed on
\n —————
\nItem 2.12 and each such individual will sign prior to Closing an Indemnification
\n———
\nAgreement substantially in the form of Exhibit B attached hereto.
\n ——— <\/p>\n
(e) In the event a Company Plan that is a group medical, dental,
\nvision or other health or welfare plan that is fully or partially self-funded is
\nterminated, any stop-loss coverage relating to such plan will cover all claims
\nof an individual covered by such Company Plan that are incurred on or prior to
\nthe date such Company Plan is terminated.<\/p>\n
(f) Other than as set forth on Item 2.18, no Company Employee is
\n ———
\ncurrently, or will be prior to the Merger, entitled to forgiveness of any debt
\nowed to the Company.<\/p>\n
2.13 Labor Matters.
\n ————-<\/p>\n
(a) As of the date hereof, neither the Company nor any of its
\nsubsidiaries is a party to any collective bargaining agreement or other labor
\nunion contract, and neither the Company nor any of its subsidiaries knows of any
\nactivities or proceedings of any labor union in connection with an attempt to
\norganize any such employees. As of the date hereof, there is no labor strike,
\nslowdown, work stoppage, lockout or other material labor controversy in effect
\nor, to the Company’s knowledge, threatened against the Company or any of its
\nsubsidiaries. As of the date hereof, neither the Company nor any of its
\nsubsidiaries is a party to, or otherwise bound by, any consent decree with, or
\ncitation by, any Government agency relating to employees or employment
\npractices.<\/p>\n
(b) Except as is not material to the Company and its
\nsubsidiaries, taken as a whole, the Company and its subsidiaries are in
\ncompliance with all applicable laws, agreements and contracts relating to
\nemployment, employment practices, immigration, wages, hours and terms and
\nconditions of employment, including, but not limited to, employee compensation
\nmatters, and has correctly classified employees as exempt employees and non-
\nexempt employees under the Fair Labor Standards Act. A list of all employees,
\nofficers and consultants of the Company and their current title and\/or job
\ndescription and compensation is set forth on Item 2.13(a). Item 2.13(b) lists
\n ———— ———–
\neach employment contract and consulting agreement with the Company or any
\nsubsidiary of the Company that is currently in effect. Other than the Chief
\nExecutive Officer of the Company, whose employment contract has been assumed by
\nGlobal Crossing Ltd. or a subsidiary not being acquired hereunder, neither the
\nCompany nor any of its subsidiaries has any employment contracts or consulting
\nagreements (which do not include option agreements) currently in effect that are
\nnot terminable at will without penalty or payment of compensation (other than
\nagreements with the sole purpose of providing for the confidentiality of
\nproprietary information or assignment of inventions). All employees of the
\nCompany and its subsidiaries are legally permitted to be employed in the United
\nStates of America in their current job capacities and by the Company and its
\nsubsidiaries.<\/p>\n
17<\/p>\n
2.14 Compliance With Laws.
\n ——————–<\/p>\n
Except for noncompliance that would not result in a Material Adverse
\nEffect on the Company, Company has complied in all material respects, with all
\napplicable laws, ordinances, regulations and rules, and all orders, writs,
\ninjunctions, awards, judgments and decrees, applicable to Company or its
\nsubsidiaries or to the assets, properties and business thereof, including,
\nwithout limitation: (a) all applicable federal and state securities laws and
\nregulations except as disclosed in Item 2.14 to the Company Disclosure Letter,
\n ———
\n(b) all applicable federal, state and local laws, ordinances and regulations,
\nand all orders, writs, injunctions, awards, judgments and decrees, pertaining to
\n(i) the sale, licensing, leasing, ownership or management of owned, leased or
\nlicensed real or personal property, products or technical data, (ii) employment
\nor employment practices, terms and conditions of employment, or wages and hours
\nand (iii) safety, health, fire prevention, environmental protection (including
\ntoxic waste disposal and related matters), building standards, zoning or other
\nsimilar matters, (c) the Export Administration Act and regulations promulgated
\nthereunder and other laws, regulations, rules, orders, writs, injunctions,
\njudgments or decrees applicable to the export or re-export of controlled
\ncommodities or technical data, (d) the Immigration Reform and Control Act and
\n(e) all governmental and nongovernmental regulations related to the operation
\nand use of the Internet. Except as disclosed in Item 2.14, Company has received
\n ———
\nall permits and approvals from, and has made all filings with, third parties,
\nincluding government agencies and authorities, that are necessary to the conduct
\nof its business as presently conducted except where the failure to receive such
\npermit or approval or make such filing would not have a Material Adverse Effect
\non Company.<\/p>\n
2.15 Brokers’ and Finders’ Fees.
\n ————————–<\/p>\n
Neither the Company nor any of its subsidiaries has incurred, nor will
\nit incur, directly or indirectly, any liability for brokerage or finders’ fees
\nor agents’ commissions or investment bankers’ fees or any similar charges in
\nconnection with this Agreement or any transaction contemplated hereby, except
\nwith respect to any advisor whose fees and expenses will be paid by Global
\nCrossing NA.<\/p>\n
2.16 Board and Stockholder Approval.
\n ——————————<\/p>\n
The Board of Directors of the Company has (i) approved this Agreement
\nand the Merger, (ii) determined that the Merger is in the best interests of the
\nstockholders of the Company and is on terms that are fair to such stockholder
\nand (iii) recommended that the sole stockholder of the Company approve this
\nAgreement and the Merger. GCG, as sole stockholder of the Company, has approved
\nthis Agreement and the Merger by unanimous written consent and such consent has
\nnot been withdrawn.<\/p>\n
2.17 Information Supplied.
\n ——————–<\/p>\n
None of the information supplied or to be supplied in writing by the
\nCompany or any of its subsidiaries specifically for inclusion or incorporation
\nby reference in the proxy statement filed pursuant to SEC Regulation 14A in
\nconnection with the Merger (the “Exodus Proxy Statement”) will, when submitted
\n ———————-
\nin the Exodus Proxy Statement to the SEC, when the Exodus <\/p>\n
18<\/p>\n
Proxy Statement is first mailed or at the time of the Exodus Stockholder
\nMeeting, contain any untrue statement of a material fact or omit to state any
\nmaterial fact required to be stated therein or necessary in order to make the
\nstatements therein, in light of the circumstances under which they are made, not
\nmisleading.<\/p>\n
2.18 Agreements and Commitments.
\n ————————–<\/p>\n
As of the date hereof, except as disclosed in Item 2.18 to the Company
\n ———
\nDisclosure Letter, neither Company nor any subsidiary is a party or subject to
\nany agreement or contract of the following nature that is material to the
\nCompany:<\/p>\n
(a) Any franchise agreement;<\/p>\n
(b) Any joint venture contract or arrangement or any other
\nagreement that involves a sharing of profits with other persons or the payment
\nof royalties to any other person, excluding non-exclusive software licenses;<\/p>\n
(c) Any instrument evidencing indebtedness for borrowed
\nmoney by way of direct loan, sale of debt securities, purchase money obligation,
\nconditional sale, guarantee or otherwise, except for trade indebtedness or any
\nadvance to any employee of Company or any of its subsidiaries incurred or made
\nin the Ordinary Course, and except as disclosed in the GlobalCenter Financial
\nStatements;<\/p>\n
(d) Any contract containing covenants purporting to limit
\nCompany’s or any subsidiary’s freedom to compete in any line of business, market
\nor industry and\/or in any geographic area;<\/p>\n
(e) Any material agreement entered into outside the
\nOrdinary Course by Company or its subsidiaries to encumber, transfer or sell
\nrights in or with respect to any material item of Company Intellectual Property,
\nexcluding non-exclusive software licenses;<\/p>\n
(f) Any agreement entered into after the Balance Sheet Date
\nfor the sale or lease of real or tangible personal property outside the Ordinary
\nCourse by the Company involving more than $500,000 per year; and<\/p>\n
(g) Any material agreement under which Company or its
\nsubsidiaries provide Internet data center and internet connectivity services
\nthat materially deviates from the GlobalCenter standard master service agreement
\n(except for any agreements entered into in the Ordinary Course);<\/p>\n
(h) Any contract for the employment of any officer,
\nemployee or consultant of Company or any of its subsidiaries or any other type
\nof contract or commitment with any officer, employee or consultant of Company or
\nany of its subsidiaries, other than agreements with respect to Company Options,
\nGlobal Crossing Assumed Options or Global Crossing Cancelled Options, that is
\nnot immediately terminable by Company or any of its subsidiaries without cost or
\nother liability; or<\/p>\n
19<\/p>\n
(i) any intercompany agreements to which the Company and
\nany of Global Crossing Ltd. or its subsidiaries (other than the Company and its
\nsubsidiaries) are parties and which relate to research and development
\nactivities.<\/p>\n
Except as noted therein, to the Company’s knowledge, all agreements,
\nobligations and commitments disclosed in Item 2.18 to the Company Disclosure
\n ———
\nLetter are valid and in full force and effect, except where the failure to be
\nsuch would not have a Material Adverse Effect on the Company. Except as noted in
\nItem 2.18 of the Company Disclosure Letter, as of the date hereof, neither the
\n———
\nCompany nor to the Company’s knowledge any other party is in breach of or
\ndefault under any material term of any such agreement, obligation or commitment
\nnor has such other party threatened such a breach or default. To the Company’s
\nknowledge, the Company is not a party to any contract or arrangement that would
\nhave a Material Adverse Effect on the Company.<\/p>\n
2.19 Warranties, Guarantees and Indemnities.
\n ————————————–<\/p>\n
Except as disclosed in Item 2.19 to the Company Disclosure Letter, or
\n ———
\nwhich individually or in the aggregate would not be reasonably expected to have
\na Material Adverse Effect on the Company, the Company has not provided to its
\ncustomers or any third parties (i) any warranties or guarantees regarding the
\nCompany Services; (ii) any rights to obtain refunds with respect to Company
\nServices or (iii) any indemnities with respect to intellectual property
\ninfringement or Year 2000 compliance, except as provided in the current and
\npredecessor versions of the Company’s standard master service agreement, the
\ncurrent version of which is attached to Item 2.19.
\n ———<\/p>\n
2.20 Title to and Condition and Sufficiency of GlobalCenter Group
\n ————————————————————
\n Assets.
\n —— <\/p>\n
Except as set forth in Item 2.20 to the Company Disclosure Letter,
\n ———
\nthe Company or its subsidiaries (the “Group”) own or at the Closing will own all
\n —–
\nassets owned by Global Crossing Ltd. or any of its subsidiaries and used in the
\nGroup’s business as currently conducted. Immediately after the Closing, all
\nleases and subleases of real property or personal property from Global Crossing
\nLtd. to any member of the Group shall remain in effect in accordance with their
\nrespective terms in effect on the date of this Agreement.<\/p>\n
2.21 Customer Relationships.
\n ———————-<\/p>\n
Except as disclosed in Item 2.21 to the Company Disclosure Letter, no
\n ———
\ncustomer accounting for more than five percent (5%) of the Company’s revenues
\nduring the quarter ended June 30, 2000 has canceled or otherwise terminated its
\nrelationship with Company prior to the date of this Agreement or threatened in
\nwriting to do so.<\/p>\n
2.22 Disruptions.
\n ———–<\/p>\n
Except to the extent disclosed on Item 2.22 to the Company
\n ———
\nDisclosure Letter, there has not occurred any recurring, material disruptions to
\nnetwork operations, or any material delays in planned facility or network build
\nout or construction activities, or any repeated, material performance failures
\nby the Company, in any such case that have resulted in material, recurring
\ncustomer complaints or recurring, material breaches of customer installation
\ncommitments, in each case with respect to the Company.<\/p>\n
20<\/p>\n
B. Representations and Warranties of GCG.<\/p>\n
2.23 Authority.
\n ———<\/p>\n
GCG has all requisite corporate power and authority to enter into this
\nAgreement, the Stockholder Agreement (the “Stockholder Agreement”) and the
\n ———————
\nRegistration Rights Agreement (the “Registration Rights Agreement” and, together
\n —————————–
\nwith the Stockholder Agreement, the “Ancillary Agreements”), and to consummate
\n ——————–
\nthe transactions contemplated hereby and thereby. The execution and delivery of
\nthis Agreement and the Ancillary Agreements and the consummation of the
\ntransactions contemplated hereby and thereby have been duly authorized by all
\nnecessary corporate action on the part of GCG, except for the filing of the
\nCertificate of Merger, together with the required officers’ certificates, with
\nthe Secretary of State of the State of Delaware pursuant to Section 1.2. Each of
\nthis Agreement and the Ancillary Agreements has been duly executed and delivered
\nby GCG and constitutes the valid and binding obligation of GCG enforceable
\nagainst GCG in accordance with its terms. The execution and delivery of this
\nAgreement and the Ancillary Agreements by GCG does not, and the consummation of
\nthe transactions contemplated hereby and thereby will not, conflict with, or
\nresult in any violation of, or default under (with or without notice or lapse of
\ntime, or both), or give rise to a right of termination, cancellation or
\nacceleration of any obligation under (i) any provision of the Certificate of
\nIncorporation or Bylaws of GCG, as amended, or (ii) any mortgage, indenture,
\nlease, contract or other agreement or instrument, permit, franchise or license
\nto which GCG is a party, or (iii) any Order binding on GCG or any of its
\nproperties or assets, which conflict, violation, default, termination,
\ncancellation, acceleration would have a Material Adverse Effect on GCG or would
\nmaterially adversely effect the ability of GCG to perform its obligations under
\nthis Agreement.<\/p>\n
2.24 Accredited Investor; Investment Intent.
\n ————————————–<\/p>\n
GCG is an “accredited investor” as such term in defined in Regulation
\n ——————-
\nD promulgated under the Securities Act. GCG is aware that none of the shares of
\nExodus Common Stock to be received by GCG in the Merger are registered under the
\nSecurities Act or under any state securities laws. GCG is not an “underwriter,”
\n ———–
\nas such term is defined under the Securities Act, with respect to such shares of
\nExodus Common Stock and GCG is acquiring the shares of Exodus Common Stock
\npursuant to the Merger Agreement solely for its own account for investment
\npurposes, with no present intention to distribute any such shares of Exodus
\nCommon Stock to any person, and will not sell or otherwise dispose of shares of
\nExodus Common Stock except in compliance with the registration requirements, or
\nin transactions exempt from the registration requirements, of the Securities Act
\nand the rules and regulations promulgated thereunder, or any other applicable
\nsecurities laws.<\/p>\n
C. Representations and Warranties of Global Crossing NA.<\/p>\n
2.25 Global Crossing NA Authority.
\n —————————-<\/p>\n
Global Crossing NA has all requisite corporate power and authority to
\nenter into this Agreement and to consummate the transactions contemplated
\nhereby. The execution and delivery of this Agreement and the consummation of the
\ntransactions contemplated hereby have <\/p>\n
21<\/p>\n
been duly authorized by all necessary corporate action on the part of Global
\nCrossing NA, except for the filing of the Certificate of Merger, together with
\nthe required officers’ certificates, with the Secretary of State of the State of
\nDelaware pursuant to Section 1.2. This Agreement has been duly executed and
\ndelivered by Global Crossing NA and constitutes the valid and binding obligation
\nof Global Crossing NA enforceable against Global Crossing NA in accordance with
\nits terms. The execution and delivery of this Agreement by Global Crossing NA
\ndoes not, and the consummation of the transactions contemplated hereby will not,
\nconflict with, or result in any violation of, or default under (with or without
\nnotice or lapse of time, or both), or give rise to a right of termination,
\ncancellation or acceleration of any obligation under (i) any provision of the
\nCertificate of Incorporation or Bylaws or other charter documents of Global
\nCrossing NA or Global Crossing Ltd. respectively, as amended, or (ii) any
\nmortgage, indenture, lease, contract or other agreement or instrument, permit,
\nfranchise or license to which Global Crossing NA or Global Crossing Ltd. is a
\nparty, or (iii) any Order binding on Global Crossing NA or Global Crossing Ltd.
\nor any of their properties or assets, which conflict, violation, default,
\ntermination, cancellation, acceleration would have a Material Adverse Effect on
\nGlobal Crossing NA or Global Crossing Ltd. or would materially adversely effect
\nthe ability of Global Crossing NA to perform its obligations under this
\nAgreement.<\/p>\n
ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES OF EXODUS<\/p>\n
Exodus represents and warrants to the Company as follows:<\/p>\n
3.1 Organization, Standing and Power.
\n ——————————–<\/p>\n
Exodus is a corporation duly organized, validly existing and in good
\nstanding under the laws of Delaware, and each of its subsidiaries is in good
\nstanding under the laws of its jurisdiction of organization. Exodus and each of
\nits subsidiaries has the corporate power to own its properties and to carry on
\nits respective business as now being conducted and is duly qualified to do
\nbusiness and is in good standing in each jurisdiction in which the failure to be
\nso qualified and in good standing would have a Material Adverse Effect on
\nExodus. Exodus is not in violation of any of the provisions of its Certificate
\nof Incorporation or Bylaws. Exodus Merger Sub is a corporation duly organized,
\nvalidly existing and in good standing under the laws of Delaware. Exodus Merger
\nSub has the corporate power to own its properties and to carry on its business
\nas now being conducted and is duly qualified to do business and is in good
\nstanding in each jurisdiction in which the failure to be so qualified and in
\ngood standing would have a Material Adverse Effect on Exodus Merger Sub. Exodus
\nMerger Sub is not in violation of any of the provisions of its Certificate of
\nIncorporation or Bylaws or equivalent organizational documents.<\/p>\n
3.2 Capital Structure.
\n —————–<\/p>\n
The authorized capital stock of Exodus consists of
\n1,500,000,000 shares of Exodus Common Stock, $0.001 par value per share, and
\n5,000,000 shares of Preferred Stock, $0.001 par value per share (“Exodus
\n ——
\nPreferred Stock”), of which there were issued and outstanding as of the close of
\n—————
\nbusiness on September 22, 2000, 421,654,138 shares of Exodus <\/p>\n
22<\/p>\n
Common Stock, and no shares of Exodus Preferred Stock. The shares of Exodus
\nCommon Stock to be issued in the Merger in exchange for Company Common Stock or
\nupon the exercise of the assumed Company Options and the Global Crossing Assumed
\nOptions and the New Exodus Options will be duly authorized, validly issued,
\nfully paid, and non-assessable. Except for issued and outstanding warrants to
\npurchase an aggregate total of 346,664 shares of Exodus Common Stock (the
\n“Exodus Warrants”), there are no other outstanding shares of capital stock or
\n —————
\nvoting securities and no outstanding commitments to issue any shares of capital
\nstock or voting securities, other than pursuant to the exercise of options
\noutstanding as of such date under Exodus’s existing employee stock option plans.
\nAs of September 22, 2000, 84,006,007 shares are subject to outstanding,
\nunexercised Exodus Options and 29,812,479 shares are available for issuance
\nunder the Exodus Stock Option Plans. Except for (i) the rights created pursuant
\nto this Agreement, (ii) outstanding Exodus Options, there are no other options,
\nwarrants, calls, rights, commitments or agreements of any character to which
\nExodus is a party or by which it is bound obligating Exodus to issue, deliver,
\nsell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased
\nor redeemed, any shares of capital stock of Exodus or obligating Exodus to
\ngrant, extend, accelerate the vesting of, change the price of, or otherwise
\namend or enter into any such option, warrant, call, right, commitment or
\nagreement; and (iii) outstanding Exodus Warrants.<\/p>\n
3.3 Authority.
\n ———<\/p>\n
(a) Exodus has all requisite corporate power and authority to
\nenter into this Agreement and the Stockholder Agreement and to consummate the
\ntransactions contemplated hereby and thereby. The execution and delivery of this
\nAgreement and the Stockholder Agreement and the consummation of the transactions
\ncontemplated hereby and thereby have been duly authorized by all necessary
\ncorporate action on the part of Exodus, other than the approval of the issuance
\nof shares of Exodus Common Stock in the Merger by Exodus stockholders at the
\nExodus Stockholders Meeting. This Agreement has been duly executed and delivered
\nby Exodus and constitutes the valid and binding obligation of Exodus enforceable
\nagainst Exodus in accordance with its terms. Except as set forth on Item 3.3 to
\n ——–
\nthe disclosure letter delivered by Exodus to the Company concurrently with the
\nexecution and delivery of this Agreement and referring to the representations
\nand warranties in this Agreement (the “Exodus Disclosure Letter”), the execution
\n ————————
\nand delivery of this Agreement does not, and the consummation of the
\ntransactions contemplated hereby will not, conflict with, or result in any
\nviolation of, or default under (with or without notice or lapse of time, or
\nboth), or give rise to a right of termination, cancellation or acceleration of
\nany obligation or loss of a benefit under (A) any provision of the Certificate
\nof Incorporation or Bylaws of Exodus, as amended, (B) any mortgage, indenture,
\nlease, contract or other agreement or instrument, permit, concession, franchise
\nor license to which Exodus or any of its subsidiaries is a party, or (C) any
\nOrder binding on Exodus or its subsidiaries or their respective properties or
\nassets, which conflict, violation, default termination, cancellation or
\nacceleration would have a Material Adverse Effect on Exodus. No consent,
\napproval, order or authorization of, or registration, declaration or filing
\nwith, any Governmental Entity, is required by or with respect to the Exodus
\nParties in connection with the execution and delivery of this Agreement by the
\nExodus Parties or the consummation by the Exodus Parties of the transactions
\ncontemplated hereby, except for (i) the filing of the Certificate of Merger,
\ntogether with the required officers’ certificates, as provided in Section 1.2,
\n(ii) the filing of a Form 8-K with the SEC and National Association of
\nSecurities Dealers <\/p>\n
23<\/p>\n
(“NASD”) within fifteen (15) days after the Closing Date, (iii) any filings as
\n —-
\nmay be required under applicable state securities laws and the securities laws
\nof any foreign country, (iv) such filings as may be required under HSR, (v) the
\nfiling with the Nasdaq National Market of a Notification Form for Listing of
\nAdditional Shares with respect to the shares of Exodus Common Stock issuable
\nupon conversion of the Company Common Stock in the Merger and upon exercise of
\nthe Company Options and Global Crossing Assumed Options assumed by Exodus and,
\nif necessary, upon exercise of the New Exodus Options, and a Form 10-C, (vi) the
\nfiling of a registration statement on Form S-8 with the SEC, or other applicable
\nform covering the shares of Exodus Common Stock issuable pursuant to outstanding
\nCompany Options and Global Crossing Assumed Options assumed by Exodus and, if
\nnecessary, pursuant to the New Exodus Options, (vii) the filing with, and the
\nclearance by the SEC of, the Exodus Proxy Statement relating to the proposal
\nthat the Exodus stockholders approve the issuance of shares of Exodus Common
\nStock in the Merger and (viii) such other consents, authorizations, filings,
\napprovals and registrations which, if not obtained or made, would not have a
\nMaterial Adverse Effect on Exodus and would not prevent, materially alter or
\ndelay any of the transactions contemplated by this Agreement.<\/p>\n
(b) Exodus Merger Sub has all requisite corporate power and authority
\nto enter into this Agreement and to consummate the transactions contemplated
\nhereby. The execution and delivery of this Agreement and the consummation of the
\ntransactions contemplated hereby have been duly authorized by all necessary
\ncorporate action on the part of Exodus Merger Sub. This Agreement has been duly
\nexecuted and delivered by Exodus Merger Sub and constitutes the valid and
\nbinding obligation of Exodus Merger Sub enforceable against Exodus Merger Sub in
\naccordance with its terms.<\/p>\n
3.4 SEC Documents; Financial Statements.
\n ———————————–<\/p>\n
(a) Exodus has filed all required reports, registration statements
\n(with the prospectus in the form filed pursuant to Rule 424(b) of the Securities
\nAct), definitive proxy statements, schedules, forms, statements and other
\ndocuments required to be filed with the SEC by Exodus since December 31, 1997
\n(collectively, including all exhibits thereto, the “Exodus SEC Documents”). In
\n ——————–
\naddition, Exodus has made available to the Company all Exodus SEC Documents
\nfiled prior to the date hereof, and will promptly make available to the Company
\nall exhibits to any additional Exodus SEC Documents filed prior to the Effective
\nTime. As of their respective filing dates (and, if amended or superceded by a
\nfiling prior to the date of this Agreement, then on the date of such filing),
\nExodus SEC Documents complied as to form in all material respects with the
\nrequirements of the Securities Exchange Act of 1934, as amended (the “Exchange
\n ——–
\nAct”), and the Securities Act and the rules and regulations promulgated
\nthereunder. As of their respective filing dates (and, if amended or superceded
\nby a filing prior to the date of this Agreement, then on the date of such
\nfiling), none of Exodus SEC Documents contained any untrue statement of a
\nmaterial fact or omitted to state a material fact required to be stated therein
\nor necessary to make the statements made therein, in light of the circumstances
\nin which they were made, not misleading.<\/p>\n
(b) Certain of the Exodus SEC Documents include audited financial
\nstatements for Exodus as at and for the twelve-month periods ended December 31,
\n1999, 1998 and 1997 and unaudited financial statements for Exodus at and for the
\nthree month period ended June 30, 2000 (collectively, the “Exodus Financial
\n —————-
\nStatements”). The Exodus Financial
\n———-<\/p>\n
24<\/p>\n
Statements (including the related notes) have been prepared in accordance with
\nGAAP applied on a consistent basis throughout the periods indicated and with
\neach other. The Exodus Financial Statements fairly present, in all material
\nrespects, the financial position and results of operations and cashflows of
\nExodus as of the dates, and for the periods, indicated therein, all in
\nconformity with GAAP consistently applied during the periods involved except as
\notherwise noted therein, and subject, in the case of the unaudited interim
\nfinancial statements, to the absence of notes and normal year-end adjustments.<\/p>\n
3.5 Board and Stockholder Approvals.
\n ——————————-<\/p>\n
The Boards of Directors of Exodus and Exodus Merger Sub and Exodus, as the
\nsole stockholder of Exodus Merger Sub, have approved this Agreement and the
\nMerger and each of the other transactions and agreements contemplated hereby and
\nhave resolved to recommend that the stockholders of Exodus approve the issuance
\nof shares of Exodus Common Stock in the Merger.<\/p>\n
3.6 Absence of Certain Changes.
\n ————————–<\/p>\n
Except as set forth on Item 3.6 to Exodus Disclosure Letter, from June 30,
\n ——–
\n2000 to the date of this Agreement in the case of clause (a) below and to the
\ndate of this Agreement and to the Closing Date in the case of all clauses except
\nclause (a) below, Exodus and each of its subsidiaries have conducted their
\nrespective businesses in the Ordinary Course consistent with past practice and
\nthere has not occurred:<\/p>\n
(a) any change, event or condition (whether or not covered by
\ninsurance) that has resulted in, or would reasonably be expected to result in, a
\nMaterial Adverse Effect with respect to Exodus;<\/p>\n
(b) any change in accounting methods or practices (including any
\nchange in depreciation or amortization policies or rates) by Exodus or any of
\nits subsidiaries or any revaluation by Exodus or any of its subsidiaries of any
\nof its material assets;<\/p>\n
(c) any declaration, setting side, or payment of a dividend or other
\ndistribution with respect to the shares of Exodus, or any direct or indirect
\nredemption, purchase or other acquisition by Exodus of any of its shares of
\ncapital stock;<\/p>\n
(d) any amendment or change to the Certificate of Incorporation or
\nBylaws of Exodus; or<\/p>\n
(e) any mortgage or pledge of any of the properties or assets or
\nExodus or any of its subsidiaries or the incurrence of any security interest,
\nencumbrance or lien of any kind (collectively, a “Lien”), except Liens that have
\n —-
\nnot resulted in, or that would not reasonably be expected to result in, a
\nMaterial Adverse Effect on Exodus.<\/p>\n
3.7 Absence of Undisclosed Liabilities.
\n ———————————-<\/p>\n
Neither Exodus nor any of its subsidiaries has any material obligations or
\nliabilities of any nature (matured or unmatured, fixed or contingent) which are,
\nindividually or in the<\/p>\n
25<\/p>\n
aggregate, of a nature required to be set forth or provided for on its balance
\nsheet in accordance with GAAP other than (i) those set forth or adequately
\nprovided for in the balance sheet included in Exodus SEC Documents as of June
\n30, 2000, (ii) those incurred in the Ordinary Course since the date of such
\nbalance sheet, and (iii) those incurred in connection with the execution and
\nperformance of this Agreement.<\/p>\n
3.8 Litigation.
\n ———-<\/p>\n
There is no Action pending or, to the knowledge of Exodus, threatened
\nbefore any agency, court or tribunal, foreign or domestic, against Exodus or any
\nof its subsidiaries or any of their respective properties or any of their
\nrespective officers or directors (in their capacities as such) that would
\nreasonably be expected to have a Material Adverse Effect on Exodus. As of the
\ndate hereof, there is no Order against Exodus or any of its subsidiaries, or, to
\nthe knowledge of Exodus, any of their respective directors or officers (in their
\ncapacities as such), that would reasonably be expected to have a Material
\nAdverse Effect on Exodus.<\/p>\n
3.9 Compliance With Laws.
\n ——————–<\/p>\n
Exodus and each of its subsidiaries has complied with, is not in violation
\nof, and has not received any notices of violation with respect to, any federal,
\nstate, local or foreign statute, law or regulation with respect to the conduct
\nof its business, or the ownership or operation of its business, except for such
\nviolations or failures to comply as would not be reasonably expected to have a
\nMaterial Adverse Effect on Exodus.<\/p>\n
3.10 Brokers’ and Finders’ Fees.
\n ————————–<\/p>\n
Exodus has not incurred, nor will it incur, directly or indirectly, any
\nliability for brokerage or finders’ fees or agents’ commissions or investment
\nbankers’ fees or any similar charges in connection with this Agreement or any
\ntransaction contemplated hereby, except with respect to Thomas Weisel Partners,
\nGoldman, Sachs & Co. Inc. and Donaldson, Lufkin & Jenrette whose fees will be
\npaid by Exodus.<\/p>\n
3.11 Taxes.
\n —–<\/p>\n
Except to the extent indicated in Item 3.11, and except as would not
\n ———
\nhave a Material Adverse Effect on Exodus:<\/p>\n
(a) all Tax Returns that are required to be filed by or with
\nrespect to Exodus and its subsidiaries through the Closing Date have been or
\nwill be duly and timely filed and are or will be accurate, complete and correct
\nin all material respects;<\/p>\n
(b) all Taxes of Exodus and its subsidiaries which are due and
\npayable have been paid in full, other than Taxes for which a reserve has been
\nestablished on the Exodus Financial Statements in accordance with GAAP;<\/p>\n
(c) there is no deficiency that has in writing been threatened,
\nproposed or assessed or any dispute or claim concerning any liability with
\nrespect to Taxes of Exodus or its subsidiaries that has been claimed or raised
\nby any Tax Authority in writing;<\/p>\n
26<\/p>\n
(d) neither Exodus nor any of its subsidiaries is now subject to
\na claim for the assessment of Taxes nor is Exodus or any of its subsidiaries
\nunder examination by any Tax Authority;<\/p>\n
(e) no extensions, waivers of statutes of limitation or consents
\nto extend the period for assessment or collection have been given by or
\nrequested with respect to any Taxes or Tax Returns of Exodus or its
\nsubsidiaries;<\/p>\n
(f) there are no liens with respect to Taxes, other than liens
\nfor Taxes not yet due and payable;<\/p>\n
(g) each of Exodus and its subsidiaries has withheld and paid
\nall Taxes required to have been withheld and paid in connection with amounts
\npaid or owing to any employee, independent contractor, creditor, stockholder, or
\nother third party, and Exodus and its subsidiaries have each complied with all
\nreporting requirements with respect to such Taxes;<\/p>\n
(h) neither Exodus nor any of its subsidiaries has (x) any
\nliability for the Taxes of any person (other than Exodus and its subsidiaries or
\nthe members of the federal consolidated group of which Exodus is the common
\nparent) under Treasury Regulation Section 1.1502-6 (or any similar provision of
\nstate, local or foreign law) or (y) any liability for Taxes of any person (other
\nthan Exodus or its subsidiaries) as a transferee or successor, or by contract
\n(including, without limitation, under any Tax sharing or Tax allocation
\nagreement); and<\/p>\n
(i) Exodus has not filed any elections under Section 341(f) of
\nthe Code.<\/p>\n
3.12 Board Approval; Section 203 of the DGCL.
\n —————————————<\/p>\n
(a) In accordance with Section 203 of the DGCL (“Section 203”), the
\n ———–
\nBoard of Directors of Exodus has, prior to the execution hereof, approved (i)
\nthe execution and delivery by Exodus of this Agreement and the consummation of
\nthe Merger and the other transactions contemplated by this Agreement and (ii)
\nany transaction that results in any “affiliate” (as defined in Section 203) or
\n ———
\n“associate” (as defined in Section 203) of Global Crossing NA becoming an
\n ———
\n“interested stockholder” (as defined in Section 203) by virtue of Global
\n ———————-
\nCrossing NA or its affiliate or associate owning any shares of Exodus acquired
\npursuant to this Agreement or acquired after the Closing in compliance with the
\nStockholders Agreement. Accordingly, the ownership by Global Crossing NA, its
\naffiliates and its associates of shares of Exodus acquired pursuant to this
\nAgreement or after the Closing in compliance with the Stockholders Agreement
\nwill not result in the provisions of Section 203 applicable to a “business
\n ——–
\ncombination” (as defined in Section 203) between such persons (or their
\n———–
\naffiliates or associates) and the Company. No state takeover statute or similar
\nstatute or regulation of the State of Delaware or of any other state or
\njurisdiction applies to this Agreement, the Merger, or any of the other
\ntransactions contemplated hereby or thereby and no provision of the certificate
\nof incorporation, by-laws or other governing instruments of Exodus would,
\ndirectly or indirectly, restrict or impair the ability of GCG to vote, or
\notherwise to exercise the rights of a stockholder with respect to, securities of
\nExodus that may be acquired or controlled by GCG or permit any stockholder to
\nacquire<\/p>\n
27<\/p>\n
securities of Exodus or the Surviving Corporation on a basis not available to
\nGCG in the event that GCG was to acquire securities of Exodus.<\/p>\n
(b) The Board of Directors of Exodus will have, prior to the
\nClosing, adopted Amendment No. 2 to the Exodus Rights Agreement in substantially
\nthe form set forth as Exhibit D hereto so that the provisions of the Rights
\n ———
\nAgreement will not be triggered by the acquisition by Global Crossing NA or its
\naffiliates or associates of shares of Exodus pursuant to this Agreement or after
\nthe Closing in compliance with the Stockholders Agreement.<\/p>\n
3.13 Opinion of Financial Advisor.
\n —————————-<\/p>\n
Exodus has received the opinion of Goldman, Sachs & Co. Inc. and Donaldson,
\nLufkin & Jenrette, dated the date of this Agreement, to the effect that, as of
\nthe date thereof, the Exchange Ratio is fair, from a financial point of view, to
\nExodus.<\/p>\n
3.14 Required Exodus Vote.
\n ——————–<\/p>\n
The affirmative approval by vote of a majority of the shares of Exodus
\nCommon Stock voting at a meeting at which a quorum is present, is the only vote
\nof the holders of any class or series of Exodus securities necessary to approve
\nthe Merger and the other transactions contemplated hereby.<\/p>\n
3.15 Exodus Proxy Statement.
\n ———————-<\/p>\n
The Exodus Proxy Statement will not, on the date it is filed with the SEC
\nor first mailed to the Exodus stockholders, or at the time of the Exodus
\nStockholders Meeting, contain any untrue statement of a material fact or omit to
\nstate any material fact required to be stated therein or necessary in order to
\nmake the statements therein, in light of the circumstances under which they were
\nmade, not misleading. The Exodus Proxy Statement will comply as to form in all
\nmaterial respects with the requirements of the Exchange Act and the Securities
\nAct and the rules and regulations promulgated thereunder. Notwithstanding the
\nforegoing provisions of this Section 3.15, no representation or warranty is made
\nby Exodus with respect to statements made or incorporated by reference in the
\nExodus Proxy Statement based on information supplied by the Company Parties in
\nwriting specifically for inclusion or incorporation by reference therein.<\/p>\n
3.16 No Business Activities.
\n ———————-<\/p>\n
Exodus Merger Sub has not conducted any activities other than in connection
\nwith the organization of Exodus Merger Sub, the negotiation and execution of
\nthis Agreement and the consummation of the transactions contemplated hereby.
\nExodus Merger Sub has no subsidiaries.<\/p>\n
28<\/p>\n
ARTICLE IV<\/p>\n
CONDUCT PRIOR TO THE EFFECTIVE TIME<\/p>\n
4.1 Conduct of Business of the Company and Exodus.
\n ———————————————<\/p>\n
During the period from the date of this Agreement and continuing until the
\nearlier of the termination of this Agreement or the Effective Time, the Company
\nand Exodus agree (except to the extent expressly contemplated by this Agreement
\nor as consented to in writing by the other party, such consent not to
\nunreasonably be withheld or delayed), to carry on their respective businesses
\nand the businesses of their respective subsidiaries in the Ordinary Course
\nconsistent with past practice, as modified by the business strategies described
\nin the GlobalCenter Proxy Statement (in the case of the Company) or the Exodus
\nSEC Documents (in the case of Exodus) without regard to the size of a particular
\ntransaction, and to use all reasonable efforts consistent with past practice and
\npolicies to preserve intact their respective present business organizations,
\nkeep available the services of their respective present officers and key
\nemployees and preserve their respective relationships with customers, suppliers,
\ndistributors, licensors, licensees, and others having business dealings with
\nthem, in order to preserve their respective goodwill and ongoing business;
\nprovided, however, that nothing in this Section 4.1 shall restrict Exodus from
\n——– ——-
\nengaging in transactions complying with Sections 4.9 or 5.7.<\/p>\n
4.2 Restriction on Conduct of Business of the Company.
\n ————————————————-<\/p>\n
During the period from the date of this Agreement and continuing until the
\nearlier of the termination of this Agreement or the Effective Time, except as
\nset forth in Item 4.2 of the Company Disclosure Letter or as expressly provided
\n ——–
\nfor in this Agreement, neither the Company nor any of its subsidiaries shall do,
\ncause or permit any of the following, without the prior written consent of
\nExodus, which consent will not be unreasonably withheld or delayed:<\/p>\n
(a) Charter Documents. Cause or permit any amendments to its
\n —————–
\nCertificate of Incorporation or Bylaws of the Company or any of its
\nsubsidiaries, except as necessary to increase the authorized capitalization of
\nthe Company and GlobalCenter and to effect the Stock Splits;<\/p>\n
(b) Dividends; Changes in Capital Stock. Except as necessary to
\n ———————————–
\neffect the Stock Splits, declare, set aside or pay any dividends on or make any
\nother distributions (whether in cash, stock or property) in respect of any of
\nits capital stock, or split, combine or reclassify any of its capital stock or
\nissue or authorize the issuance of any other securities in respect of, in lieu
\nof or in substitution for shares of its capital stock, or repurchase or
\notherwise acquire, directly or indirectly, any shares of its capital stock
\nexcept from former employees, directors and consultants to the extent permitted
\nor required in accordance with agreements providing for the repurchase of shares
\nin connection with any termination of service to it;<\/p>\n
(c) Stock Option Plans, Etc. Waive any stock repurchase rights,
\n ———————–
\naccelerate, amend or change the period of exercisability or vesting of options
\nor other rights granted under its stock plans (other than pursuant to existing
\nstock option grants) or authorize cash payments in exchange for any options or
\nother rights granted under any of such plans;<\/p>\n
29<\/p>\n
(d) Issuance of Securities. Issue, deliver, pledge or sell or
\n ———————-
\nauthorize or propose the issuance, delivery, pledge or sale of, or purchase or
\npropose the purchase of, directly or through action of Global Crossing Ltd. or
\nany direct or indirect subsidiary thereof, any shares of its capital stock or
\nsecurities convertible into, or subscriptions, rights, warrants or options to
\nacquire, or other agreements or commitments of any character obligating it to
\nissue any such shares or other convertible securities, other than (i) the
\nissuance of shares of Company Common Stock pursuant to the exercise of stock
\noptions, warrants or other rights therefor disclosed in Item 2.2 or Item 5.9 to
\n ——– ——–
\nthe Company Disclosure Letter as outstanding as of the date of this Agreement or
\nissued after the date hereof in compliance with the terms hereof including
\nSection 4.2(c) hereof and (ii) the issuance of up to an aggregate of 250,000
\nadditional Global Crossing Cancelled Options to future employees of the Company;<\/p>\n
(e) Exclusive Rights. (A) Enter into or amend any agreements
\n —————-
\npursuant to which any other party is granted (i) exclusive marketing or other
\nmaterial exclusive rights of any type or scope with respect to any of its
\nmaterial products or technology or with respect to any market segment or
\ngeographic area; (ii) enter into any agreement of the type described in Section
\n2.9(c)(ii); or (B) enter into any noncompetition, nonsolicitation or similar
\nagreement materially restricting the rights of the Company or its subsidiaries;<\/p>\n
(f) Dispositions. Sell, lease, license, contractually encumber or
\n ————
\notherwise dispose of any of its properties or assets which are material,
\nindividually or in the aggregate, to the Company’s and its subsidiaries’
\nbusiness, taken as a whole except for (i) sales of products and services in the
\nOrdinary Course; or (ii) sales of obsolete or unused equipment or other assets;<\/p>\n
(g) Indebtedness. Incur any indebtedness for borrowed money in
\n ————
\nexcess of $500,000 or guarantee any such indebtedness or issue or sell any debt
\nsecurities in excess of $500,000 or guarantee any debt securities of others or
\noptions, warrants, calls or other rights to acquire any debt securities of other
\nparties; provided, that no such indebtedness or debt securities shall remain
\n ——–
\noutstanding after the Closing;<\/p>\n
(h) Insurance. Materially reduce the aggregate amount of insurance
\n ———
\ncoverage provided by existing insurance policies;<\/p>\n
(i) Employee Benefit Plans. Other than as permitted in Section
\n ———————-
\n4.2(d) above, (x) increase or accelerate the compensation or fringe benefits of
\nany current or former director or employee of the Company (except for increases
\nin salary or wages in the Ordinary Course consistent with past practice), (y)
\ngrant any severance or termination pay to any current or former director or
\nemployee of the Company except in accordance with existing severance policies or
\nother agreements or (z) except in accordance with agreements in effect on the
\ndate hereof, and except as expressly contemplated by this Agreement establish,
\nadopt, enter into, amend, terminate or accelerate any Company Option, Global
\nCrossing Assumed Option, Global Crossing Cancelled Option, Company Plan or any
\nplan, agreement, program, policy, trust, or other arrangement that would be a
\nCompany Plan if it were in existence as of the date of this Agreement;<\/p>\n
(j) Acquisitions. Acquire or agree to acquire by merging or
\n ————
\nconsolidating with, or by purchasing a substantial portion of the assets of, or
\nby any other manner, any material <\/p>\n
30<\/p>\n
business or any corporation, partnership, association or other business
\norganization or division thereof;<\/p>\n
(k) Joint Ventures. Enter into, materially amend or terminate any
\n ————–
\nmaterial joint venture agreements;<\/p>\n
(l) Tax Agreements. Enter into any tax sharing or tax allocation
\n ————–
\nagreements or engage in any tax restructuring transactions or other transactions
\ndesigned primarily for tax purposes;<\/p>\n
(m) Joint Development Agreements. Enter into any material joint
\n —————————-
\ndevelopment agreements that are not terminable on thirty (30) days notice by
\neither party or that give third parties joint or exclusive ownership of Company
\nIntellectual Property<\/p>\n
(n) Material Contracts. Modify, amend or terminate any contract to
\n ——————
\nwhich the Company or any subsidiary thereof is a party or waive, release or
\nassign any material rights or claims thereunder, in each case, in a manner that
\nwould reasonably be expected to have a Material Adverse Effect on the Company,
\nor enter into any material contract having terms that are not in the Ordinary
\nCourse and consistent with past practice;<\/p>\n
(o) Accounting Practices. Materially revalue any of the assets of
\n ——————–
\nthe Company or its subsidiaries or, except as required by GAAP, make any change
\nin accounting methods, principles or practices; and<\/p>\n
(p) Other. Agree in writing or otherwise to take any of the actions
\n —–
\ndescribed in Sections 4.2(a) through (o) above.<\/p>\n
4.3 Restriction on Conduct of Business of Exodus.
\n ——————————————–<\/p>\n
During the period from the date of this Agreement and continuing until the
\nearlier of the termination of this Agreement or the Effective Time, except as
\nset forth in Item 4.3 of the Exodus Disclosure Letter, or as expressly provided
\nfor in this Agreement, Exodus and its subsidiaries shall not do, or cause or
\npermit any of the following, without the prior written consent of the Company,
\nwhich consent shall not be unreasonably withheld or delayed:<\/p>\n
(a) Charter Documents. Cause or permit any amendments to its
\n —————–
\nCertificate of Incorporation or Bylaws;<\/p>\n
(b) Dividends; Changes in Capital Stock. Declare or pay any
\n ———————————–
\ndividends on or make any other distributions (whether in cash, stock or
\nproperty) in respect of any of its capital stock, or split, combine or
\nreclassify any of its capital stock or issue (except a stock split, combination
\nor reclassification for which the Exchange Ratio would be adjusted as provided
\nin Section 1.6(d)) or authorize the issuance of any other securities in respect
\nof, in lieu of or in substitution for shares of its capital stock, or repurchase
\nor otherwise acquire, directly or indirectly, any shares of its capital stock
\nexcept from former employees, directors and consultants to the extent required
\nin accordance with agreements providing for the repurchase of shares in
\nconnection with any termination of service to it;<\/p>\n
31<\/p>\n
(c) Exodus Rights Agreement. Effect or attempt or propose to effect
\n ———————–
\nany amendment to the Exodus Rights Agreement in a manner adverse to Global
\nCrossing NA, GCG or the Company (except for an exclusion of such parties from
\nthe definition of the term “Person” so long as they collectively beneficially
\nown no more than the Designated Global Crossing Percentage (as defined in
\nAmendment No. 2 to the Exodus Rights Agreement) of Exodus’s outstanding common
\nstock ); and<\/p>\n
(d) Other. Agree in writing or otherwise to take any of the actions
\n —–
\ndescribed in Sections 4.3(a) through (c) above.<\/p>\n
4.4 Capital Expenditures; Working Capital. During the period from the
\n ————————————-
\ndate hereof through the Closing Date, Global Crossing NA will make on behalf of
\nthe Company, or will cause the Company to make, all capital expenditures
\nrequired by the Company to continue Company operations as presently conducted on
\nthe date hereof and as planned to be conducted through the Closing Date,
\nincluding without limitation those capital expenditures set forth in the Capital
\nPlan. Any material deviations from the Capital Plan or any material changes in
\nthe Capital Plan, or any material failure to make expenditures required by the
\npreceding sentence, must be approved by Exodus. Prior to the Closing Date,
\nGlobal Crossing NA shall (i) fund, or cause to be funded, to the extent not
\nfunded by the Company’s cash receipts, the operations of the Company and its
\nsubsidiaries (including capital expenditures pursuant to the Capital Plan) from
\nthe date of this Agreement to the Closing Date in the Ordinary Course and (ii)
\ncause the Company to, and the Company shall, pay its payables, collect its
\nreceivables, and otherwise manage its working capital accounts, in the Ordinary
\nCourse and consistent with past practice. In the event that non-cash working
\ncapital of the Company is negative immediately prior to the Effective Time,
\nGlobal Crossing NA shall contribute to Company sufficient cash to eliminate such
\nnegative working capital account balance as of the Closing. After Closing the
\nparties will determine the amount of any positive working capital balance of the
\nCompany as of the Effective Time (“Positive WC Amount”). On the first
\n ——————
\nanniversary of the Closing, Exodus shall pay to Global Crossing NA any Positive
\nWC Amount. In addition, if at Closing the Company has not spent the full amount
\nof its Capital Plan during the period covered thereby, Global Crossing NA shall
\nalso pay Exodus at Closing the difference between the amount of capital
\nexpenditures during such period and the Capital Plan amount for the indicated
\nperiod. Conversely, if at Closing the Company has spent more than the full
\namount of its Capital Plan during the period covered thereby, Exodus shall pay
\nto Global Crossing NA at Closing the excess of such capital expenditures for the
\nindicated period over the Capital Plan amount. If during any calendar month
\nprior to Closing the Company fails to spend the full amount specified in its
\nCapital Plan for such month, then Global Crossing NA or the Company shall notify
\nExodus in writing of such shortfall, the amount thereof, and the reasons
\ntherefore. In the event that the Closing does not occur by December 31, 2000,
\nthe Company shall deliver to Exodus by that date the Company’s capital
\nexpenditure plan for the three month period ended March 31, 2001, and references
\nabove to the “Capital Plan” shall apply to this additional capital plan as well.<\/p>\n
4.5 Leases.
\n ——<\/p>\n
The Company shall confer with Exodus before the Company or any of its
\nsubsidiaries enters into any lease in which the landlord does not provide
\nrepresentations and warranties<\/p>\n
32<\/p>\n
relating to environmental matters or in which the landlord does not indemnify
\nthe Company and its subsidiaries against environmental liabilities.<\/p>\n
4.6 Disclosures.
\n ———–<\/p>\n
Prior to Closing, the Company will provide Exodus with (i) a list of any
\nmaterial agreements with respect to software, hardware, network and technology
\ninfrastructure, bandwidth and connectivity used in the Company or its
\nsubsidiaries’ business as currently conducted which, if terminated, could have a
\nMaterial Adverse Effect on the Company and (ii) a list of any royalties, fees or
\nother payments payable by the Company or its subsidiaries to any Person by
\nreason of the ownership, use, sale or disposition of any Company Intellectual
\nProperty.<\/p>\n
4.7 Extinguishments of Debt; No Cash.
\n ——————————–<\/p>\n
Global Crossing NA shall cause all intercompany and third party
\nindebtedness of the Company and its subsidiaries for borrowed money (excluding
\ntrade payables, lease obligations and similar obligations) or guarantees by the
\nCompany or any of its subsidiaries of any third party indebtedness to be settled
\nor otherwise terminated on or prior to the Closing Date and shall cause the
\nassets of the Company and its subsidiaries to be released from any such
\nindebtedness. The Company shall not be required to have any cash at Closing
\nexcept as provided in Section 4.4.<\/p>\n
4.8 Assumption of Lease Guarantees.
\n ——————————<\/p>\n
Exodus shall assume, as of the Closing Date, all guarantees by Global
\nCrossing NA or one of its affiliates of the Company’s and its subsidiaries’
\nperformance relating to leases to which the Company or any of its subsidiaries
\nare a party.<\/p>\n
4.9. Exodus Acquisitions.
\n ——————-<\/p>\n
Without the prior written consent of the Company, prior to the Effective
\nTime, Exodus shall not acquire by merging or consolidating with, or by
\npurchasing a substantial portion of the assets or stock of, or by any other
\nmeans, any business or any corporation, limited liability company, partnership,
\nassociation or other business organization or division thereof (excluding only
\nfor purposes of clause (a) below purchases or other transactions of less than
\n$750 million in value), or agree to any such transaction (each, an “Exodus
\n ——
\nAcquisition”), unless (a) any filing in respect of such Exodus Acquisition under
\n———–
\nHSR is made after the earlier of (x) the expiration or termination of all
\nwaiting periods under HSR applicable to the Merger and (y) the 40th day after
\nthe date of this Agreement (the “HSR Exclusivity Period”), provided that if
\n ———————-
\nExodus does not file its notification and report form under HSR with respect to
\nthe transactions contemplated by the Agreement within ten (10) days after the
\ndate of this Agreement, then the HSR Exclusivity Period will be extended on a
\nday for day basis for each day after such first ten days until the day Exodus
\nfiles such notification request form (provided, that the HSR Exclusivity Period
\nwill not be so extended to the extent that the failure to file on any day is due
\nto Global Crossing Ltd. not being prepared to file), (b) to the extent the
\napproval of an Exodus Acquisition requires the approval of Exodus’ stockholders,
\nthe stockholder vote for such transaction is not held any earlier than (but it
\nmay be held on the same day and at the same stockholder meeting as) the<\/p>\n
33<\/p>\n
stockholder meeting to approve the Merger; and (c) such Exodus Acquisition is
\nnot conditioned on (nor does it require) (x) the cancellation, termination,
\nabandonment or modification of the Merger or any of the other transactions
\ncontemplated by the Ancillary Agreements or the Commercial Agreements (as
\ndefined in Section 6.1(d)), (y) the Exodus Board recommending against the
\napproval of issuance of shares in the Merger, or (z) the Exodus stockholders
\nvoting against approval of the Merger. Notwithstanding the first sentence
\nhereof, if requested by Exodus, the Company will in good faith discuss
\npermitting Exodus to make an HSR filing in respect of any other business
\ncombination prior to the date Exodus would otherwise be permitted to make such
\nfiling pursuant to this Section 4.9.<\/p>\n
ARTICLE V<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
5.1 Proxy Statement.
\n —————<\/p>\n
As promptly as practicable after the execution of this Agreement, Exodus
\nshall prepare, with the cooperation of the Company, the Exodus Proxy Statement.
\nExodus shall use its best efforts to file the Exodus Proxy Statement with the
\nSEC as soon as practicable after the date on which the Company provides audited
\nfinancial statements of the Company for inclusion in the Exodus Proxy Statement
\nand shall use its best efforts to clear all SEC comments and mail the Exodus
\nProxy Statement to all stockholders of Exodus entitled to receive such notice
\nunder Delaware Law as promptly as possible thereafter. Whenever any event occurs
\nwith respect to the Company or Exodus that is required to be set forth in an
\namendment or supplement to the Exodus Proxy Statement, the applicable party
\nshall promptly inform the other party of such occurrence and cooperate in
\nmailing to stockholders of Exodus such amendment or supplement. The Exodus Proxy
\nStatement shall include the recommendation of the Board of Directors of Exodus
\nthat the Exodus stockholders vote in favor of the issuance of shares of Exodus
\nCommon Stock in the Merger and the conclusion of the Board of Directors that the
\nterms and conditions of the Merger are fair to the stockholders of Exodus (the
\n“Recommendation”), along with a copy of the written opinion referred to in
\n ————–
\nSection 3.13; provided, however, that nothing in this Agreement shall prevent
\n ——– ——-
\nthe Board of Directors of Exodus from withholding, withdrawing, amending or
\nmodifying the Recommendation if (i) Exodus receives an unsolicited, bona fide
\nThird Party Acquisition Proposal (as defined in Section 5.7(b)) that is
\nconditioned on (or requires) the cancellation, termination, abandonment or
\nmodification of the Merger or any of the other transactions contemplated by the
\nAncillary Agreements or the Commercial Agreements (an “Exodus Acquisition
\n ——————
\nOffer”) and such Exodus Acquisition Offer is not withdrawn, (ii) Exodus shall
\n—–
\nhave provided written notice to the Company advising the Company that Exodus has
\nreceived an Exodus Acquisition Offer, specifying all of the material terms and
\nconditions of such an Exodus Acquisition Offer and identifying the person or
\nentity making such Exodus Acquisition Offer, (iii) the Board of Directors of
\nExodus concludes in good faith, after consultation with its outside legal
\ncounsel and a financial advisor of national standing, that, in light of such
\nExodus Acquisition Offer, the withholding, withdrawal, amendment or modification
\nof the Recommendation is required in order for the Board of Directors of Exodus
\nto comply with its fiduciary obligations to Exodus’ stockholders under
\napplicable law. Except as provided in the immediately preceding sentence the
\nBoard of Directors of Exodus will not withhold, withdraw, amend or modify the
\nRecommendation (a “Withdrawal of Recommendation”). Anything to the
\n —————————-<\/p>\n
34<\/p>\n
contrary contained herein notwithstanding, Exodus shall not include in the
\nExodus Proxy Statement any information with respect to the Company or its
\naffiliates or associates, the form and content of which information shall not
\nhave been approved by the Company prior to such inclusion (such approval not to
\nbe unreasonably withheld or delayed).<\/p>\n
5.2 Meeting of Stockholders.
\n ———————–<\/p>\n
Exodus shall promptly after the date hereof take all action necessary in
\naccordance with Delaware Law, Nasdaq rules and its Certificate of Incorporation
\nand Bylaws to convene a meeting of the stockholders of Exodus for the purpose of
\napproving the issuance of shares of Exodus Common Stock in the Merger (referred
\nto as the “Exodus Stockholders Meeting”) as soon as practicable after the date
\n —————————
\nthat the Exodus Proxy Statement shall be cleared by the SEC for mailing to the
\nstockholders of Exodus. Exodus shall consult with the Company regarding the date
\nof or any postponements or adjournments of the Exodus Stockholders Meeting and,
\nexcept as provided in the next sentence, shall not postpone or adjourn Exodus
\nStockholders Meeting without the consent of the Company. Notwithstanding the
\nforegoing two sentences, Exodus may adjourn or postpone the Exodus Stockholders
\nMeeting (i) to the extent necessary to ensure that any amendment or supplement
\nto the Exodus Proxy Statement required under the Securities Act due to
\ndevelopments following the initial mailing thereof is provided to Exodus
\nstockholders in advance of a vote on the Merger (in which case the Exodus
\nStockholders Meeting shall be held on the next legally permissible business day,
\nbut in no event more than ten (10) business days after the originally scheduled
\ndate) or (ii) if, as of the originally scheduled date and time for the Exodus
\nStockholders Meeting (as set forth in the Exodus Proxy Statement), there are
\ninsufficient shares of Exodus Common Stock represented (either in person or by
\nproxy) to constitute the quorum necessary to conduct the business of the Exodus
\nStockholders Meeting (in which case the Exodus Stockholders Meeting shall be
\nadjourned until such quorum is available, but in no event more than ten (10)
\nbusiness days after the originally scheduled date). Exodus’s obligation to call,
\ngive notice of, convene and hold the Exodus Stockholders Meeting in accordance
\nwith this Section 5.2 shall not be limited to or otherwise affected by the
\ncommencement, disclosure, announcement or submission to Exodus of any Third
\nParty Acquisition Proposal (as defined in Section 5.7(b)), or by any withdrawal,
\namendment or modification of the recommendation of the Board of Directors of
\nExodus with respect to the Merger. Exodus shall use its best efforts to solicit
\nfrom stockholders of Exodus proxies in favor of the issuance of share of Exodus
\nCommon Stock in the Merger and shall, subject to the Exodus board’s fiduciary
\nduty, take all other action necessary or advisable to secure the vote or consent
\nof stockholders required to effect the Merger.<\/p>\n
5.3 Access to Information.
\n ———————<\/p>\n
(a) The Company shall afford Exodus and its accountants, counsel and
\nother representatives reasonable access during normal business hours during the
\nperiod prior to the Effective Time to (i) all of the Company’s and its
\nsubsidiaries properties, books, contracts, commitments and records material to
\nthe business of the Company and its subsidiaries, and (ii) all other information
\nmaterial to the business, properties, personnel of the Company and its
\nsubsidiaries as Exodus may reasonably request. The Company agrees to provide to
\nExodus and its accountants, counsel and other representatives copies of material
\ninternal financial statements promptly upon request.<\/p>\n
35<\/p>\n
(b) Exodus shall afford the Company and its accountants, counsel and
\nother representatives access that is reasonable under the circumstances during
\nnormal business hours during the period prior to the Effective Time to (i) all
\nof the Exodus’s and its subsidiaries’ properties, books, contracts, commitments
\nand records material to the business of Exodus and its subsidiaries, and (ii)
\nall other information material to the business, properties, personnel of Exodus
\nas the Company may reasonably request. Exodus agrees to provide to the Company
\nand its accountants, counsel and other representatives copies of material
\ninternal financial statements promptly upon request.<\/p>\n
(c) No information or knowledge obtained in any investigation
\npursuant to this Section 5.3 shall affect or be deemed to modify any
\nrepresentation or warranty contained herein or the conditions to the obligations
\nof the parties to consummate the Merger.<\/p>\n
5.4 Confidentiality.
\n —————<\/p>\n
The parties acknowledge that Exodus and the Company have previously
\nexecuted reciprocal non-disclosure agreements dated June 30, 2000 (the
\n“Confidentiality Agreements”), which Confidentiality Agreements shall continue
\n ————————–
\nin full force and effect in accordance with their respective terms, except that
\nthe terms of the “standstill” agreements contained in each such Confidentiality
\nAgreement shall terminate at Closing.<\/p>\n
5.5 Public Disclosure.
\n —————–<\/p>\n
The Company Parties, on the one hand, and Exodus Parties, on the other
\nhand, will consult with each other before holding any press conferences or
\nanalyst calls and before issuing any press releases or making any public
\nstatements relating to this Agreement or the Merger or any other transaction in
\nwhich the other party is engaged. The parties will provide each other the
\nopportunity to review and comment upon any proposed press release or public
\nstatements with respect to the transactions contemplated by this Agreement,
\nincluding the Merger, and shall not issue any such press release or public
\nstatements prior to such consultation, except as may be required by applicable
\nlaw, court process or by obligations pursuant to any listing agreement with any
\nnational securities exchange or automated quotation system. The parties agree
\nthat the initial press release or releases to be issued with respect to the
\ntransactions contemplated by this Agreement shall be mutually agreed upon prior
\nto the issuance thereof.<\/p>\n
5.6 Consents; Cooperation.
\n ———————<\/p>\n
(a) Each of Exodus and the Company shall as soon as practicable after
\nthe date of this Agreement, apply for or otherwise seek, and use its best
\nefforts, subject to Section 5.6(b), to obtain, all consents and approvals
\nrequired to be obtained by it as a condition to the Closing of the Merger under
\nHSR and other Antitrust Laws (as defined below). The Company, in conjunction
\nwith and as reasonably requested by Exodus, shall use commercially reasonable
\nefforts to obtain all necessary consents, waivers and approvals under any of its
\nmaterial contracts set forth on Item 2.3 to the Company Disclosure Letter in
\n ——–
\nconnection with the Merger for the assignment thereof or otherwise. The parties
\nhereto will consult and cooperate with one another, and consider in good faith
\nthe views of one another, in connection with any analyses, appearances,
\npresentations, memoranda, briefs, arguments, opinions and proposals made or<\/p>\n
36<\/p>\n
submitted by or on behalf of any party hereto in connection with proceedings
\nunder or relating to HSR or any other Antitrust Laws.<\/p>\n
(b) Each of Exodus and the Company shall use best efforts to resolve
\nsuch objections, if any, as may be asserted by any Governmental Entity with
\nrespect to the transactions contemplated by this Agreement under the HSR, the
\nSherman Act, as amended, the Clayton Act, as amended, the Federal Trade
\nCommission Act, as amended, the competition laws of the European Union, and any
\nother Federal, state or foreign statutes, rules, regulations, orders or decrees
\nthat are designed to prohibit, restrict or regulate actions having the purpose
\nor effect of monopolization or restraint of trade (collectively, “Antitrust
\n ———
\nLaws”). In connection therewith, if any administrative or judicial action or
\n—-
\nproceeding is instituted (or threatened to be instituted) challenging any
\ntransaction contemplated by this Agreement as violative of any Antitrust Law,
\neach of Exodus and the Company shall cooperate and use best efforts vigorously
\nto contest and resist any such action or proceeding and to have vacated, lifted,
\nreversed, or overturned any Order that is in effect and that prohibits,
\nprevents, or restricts consummation of the Merger or any such other
\ntransactions, unless by mutual agreement Exodus and the Company decide that
\nlitigation is not in their respective best interests. Each of Exodus and the
\nCompany shall use best efforts to take such action as may be required to cause
\nthe expiration of the notice periods under the HSR or other Antitrust Laws with
\nrespect to such transactions as promptly as possible after the execution of this
\nAgreement.<\/p>\n
(c) Notwithstanding anything to the contrary in Section 5.6(a) or
\n(b), (i) Exodus shall not be required to (A) take any other action or agree to
\nany limitation that could reasonably be expected to have a Material Adverse
\nEffect on Exodus or the Surviving Corporation after the Effective Time or to (B)
\ndivest any of its or its subsidiaries’ businesses, product lines or assets, and
\n(ii) the Company may not agree to divest any of its businesses, product lines or
\nassets, or to take or agree to take any other action or agree to any limitation
\nwithout the consent of Exodus.<\/p>\n
5.7. No Solicitation.
\n —————<\/p>\n
(a) Without the prior written consent of the Company, prior to the
\nExodus Stockholders Meeting (as defined), neither Exodus nor any of its
\naffiliates shall, nor shall Exodus or any of its affiliates authorize or permit
\nany of its or their respective officers, directors, employees, representatives
\nor agents to, directly or indirectly, knowingly solicit or knowingly initiate
\ndiscussions or negotiations with or provide any non-public information to any
\nperson or group concerning any Third Party Acquisition Proposal; provided,
\nhowever, that Exodus may, in response to a Third Party Acquisition Proposal that
\nwas not solicited or initiated by Exodus, (i) furnish information to any such
\nperson only pursuant to a confidentiality agreement substantially in the same
\nform as was executed by GlobalCenter prior to the execution of this Agreement,
\nand\/or (ii) participate in discussions and negotiations regarding such proposal
\nor offer; provided, further, that nothing herein shall prevent the Board of
\nDirectors of Exodus from taking and disclosing to Exodus stockholders a position
\ncontemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act with
\nregard to any tender or exchange offer. Exodus shall promptly (i) notify the
\nCompany in the event Exodus or any of its subsidiaries or other affiliates or
\nany of their respective officers, directors, employees and agents receives any
\nThird Party Acquisition Proposal and (ii) from time to time, provide the Company
\nsuch information and<\/p>\n
37<\/p>\n
documents with respect to such Third Party Acquisition Proposal as shall be
\nnecessary to enable the Company to fully understand the potential impact of such
\nThird Party Acquisition Proposal on the timing and certainty of the Closing (if
\nany such impact would be reasonably likely if Exodus were to agree to or
\nconsummate such Third Party Acquisition Proposal), provided that the Company
\nagrees to keep such information confidential in accordance with the terms of the
\nConfidentiality Agreements. Exodus will request that the party making the Third
\nParty Acquisition Proposal publicly support the Merger and not require the
\ncancellation, termination, abandonment or modification of the Merger or any of
\nthe other transactions contemplated by the Ancillary Agreements or the
\nCommercial Agreements, but neither Exodus nor such third party shall have any
\nliability if the third party refuses to abide by such request or acts contrary
\nto it.<\/p>\n
(b) For the purposes of this Agreement, “Third Party Acquisition
\n ———————–
\nProposal” means any proposal or offer with respect to: (i) a merger,
\n——–
\nreorganization, share exchange, consolidation, business combination,
\nrecapitalization or similar transaction involving Exodus and any person (which
\nincludes a “person” as such term is defined in Section 13(d)(3) of the Exchange
\n ——
\nAct) (a “Third Party”), except if the shares of Exodus Common Stock outstanding
\n ———–
\nimmediately prior to such transaction (and any related transactions) will
\nrepresent a majority of the voting power of the outstanding securities of the
\nresulting or surviving corporation or the parent thereof (in which event such
\ntransaction will be deemed to be an Exodus Acquisition and be subject to Section
\n4.9, except as otherwise therein provided); (ii) the acquisition by a Third
\nParty of any material portion (which shall include thirty percent (30%) or more)
\nof the assets of Exodus and its subsidiaries taken as a whole; (iii) the
\nacquisition by a Third Party of securities of Exodus that would result in any
\nperson (or the stockholders of such person) beneficially owning securities
\nrepresenting thirty percent (30%) of the voting power of Exodus (or the parent
\nentity in such transaction) other than in connection with a transaction
\ndescribed in clause (i) above without reference to the exception therefrom; (iv)
\nthe adoption by Exodus of a plan of liquidation or the declaration or payment of
\nan extraordinary dividend; or (v) the repurchase by Exodus or any of its
\nsubsidiaries of more than twenty percent (20%) of the outstanding shares of
\nExodus Common Stock. As used herein, the term “Third Party Acquisition” means
\n ———————–
\nany event described in clause (i), (ii) or (iii) of the definition of “Third
\nParty Acquisition Proposal”.<\/p>\n
5.8 Exodus Board.
\n ————<\/p>\n
Exodus shall take all actions, as required by the Stockholder Agreement, to
\nappoint at Closing one (1) member to its Board of Directors designated by Global
\nCrossing NA. The person designated by Global Crossing NA will be subject to the
\napproval of the Board of Directors of Exodus and of the governance or other
\nnominating committee thereof, which approval will not be withheld unless, based
\non advice of counsel, such approval would be inconsistent with the fiduciary
\nduties of the members of the Board.<\/p>\n
5.9 Assumption of Options.
\n ———————<\/p>\n
(a) At the Effective Time, each Company Option and Global Crossing
\nAssumed Option will be assumed by Exodus. Item 5.9 hereto sets forth a true and
\n ——–
\ncomplete list as of the date hereof of all holders of the Company Options and
\nGlobal Crossing Assumed Options, including the number of shares of Company
\nCommon Stock subject to each such Company Option or, with respect to the Global
\nCrossing Assumed Options, the number of shares <\/p>\n
38<\/p>\n
of Global Crossing Ltd. stock (and deemed number of shares of Company Common
\nStock) subject to each such option, whether the option holder is an employee of
\nthe Company, an employee of one of the Company Parties other than the Company or
\na consultant to the Company, the exercise or vesting schedule, acceleration
\nprovisions, the exercise price per share and the term of each such Company
\nOption or Global Crossing Assumed Option. On the Closing Date, the Company shall
\ndeliver to Exodus an updated Item 5.9, current as of such date. Each Company
\n ——–
\nOption and Global Crossing Assumed Option so assumed by Exodus under this
\nAgreement shall continue to have, and be subject to, the same terms and
\nconditions set forth in the applicable Company Stock Option Plan and the
\napplicable stock option agreement immediately prior to the Effective Time,
\nexcept that:<\/p>\n
(i) with respect to Company Options, (1) each Company Option
\nwill be exercisable for that number of whole shares of Exodus Common Stock equal
\nto the product of (A) the number of shares of Company Common Stock subject to
\nsuch Company Option multiplied by (B) the Exchange Ratio, and rounded to the
\nnearest whole number of shares of Exodus Common Stock, and (2) the per share
\nexercise price for the shares of Exodus Common Stock issuable upon exercise of
\neach such Company Option will be equal to the quotient determined by dividing
\n(x) the exercise price per share of Company Common Stock at which such Company
\nOption was exercisable, by (y) the Exchange Ratio, rounded to the nearest whole
\ncent.<\/p>\n
(ii) with respect to Global Crossing Assumed Options, in
\naccordance with the applicable option agreement, (1) each Global Crossing
\nAssumed Option will be exercisable for that number of whole shares of Exodus
\nCommon Stock equal to the product of (A) the number of shares of Global Crossing
\nLtd. stock subject to such Global Crossing Assumed Option, multiplied by (B)
\n1.888, and multiplied by (C) the Exchange Ratio, and rounded to the nearest
\nwhole number of shares of Exodus Common Stock, and (2) the per share exercise
\nprice for the shares of Exodus Common Stock issuable upon exercise of each such
\nGlobal Crossing Assumed Option will be equal to the quotient determined by
\ndividing (x) $17, by (y) the Exchange Ratio, rounded to the nearest whole cent.<\/p>\n
Except as disclosed on Item 5.9, consistent with the terms of the Company
\n ——–
\nOptions and Global Crossing Assumed Options and the respective documents
\ngoverning them, the Merger will not terminate any of the Company Options or
\nGlobal Crossing Assumed Options.<\/p>\n
(b) Immediately following the Closing, Exodus shall grant the New
\nExodus Options to purchase Exodus Common Stock to holders of the Global Crossing
\nCancelled Options. Item 5.9 hereto sets forth a true and complete list as of the
\n ——–
\ndate hereof of all holders of the Global Crossing Cancelled Options, including
\nthe number of shares of Global Crossing Ltd. stock subject to each such option,
\nwhether the option holder is an employee of the Company, an employee of one of
\nthe Company Parties other than the Company or a consultant to the Company, the
\nexercise or vesting schedule, acceleration provisions, the exercise price per
\nshare and the term of each such Global Crossing Cancelled Option. On the Closing
\nDate, the Company shall deliver to Exodus an updated Item 5.9, current as of
\n ——–
\nsuch date. Each such New Exodus Option shall have, and be subject to, the same
\nvesting schedule set forth in the Global Crossing Stock Option Plan or the
\napplicable stock option agreement immediately prior to the Effective Time, as
\ndisclosed in Item 5.9. All other terms of and conditions of such New Exodus
\n ——–<\/p>\n
39<\/p>\n
Options shall be as set forth in the Exodus 1998 Equity Incentive Plan or the
\nExodus 1999 Stock Option Plan and the applicable stock option agreement
\nimmediately prior to the Effective Time, except that:<\/p>\n
(i) Each New Exodus Option shall be exercisable for that number
\nof whole shares of Exodus Common Stock equal to the product of (A) the number of
\nshares of Global Crossing Ltd. stock subject to the applicable Global Crossing
\nCancelled Option, multiplied by (B) the quotient determined by dividing (x) the
\naverage closing price per share as quoted on the Nasdaq National Market of
\nGlobal Crossing Ltd. stock for the ten (10) trading days prior to and including
\nthe trading day ending two days prior to the Closing Date, by (y) the average
\nclosing price per share as quoted on the Nasdaq National Market of Exodus Common
\nStock for the ten (10) trading days prior to and including the trading day
\nending two days prior to the Closing Date, and rounded to the nearest whole
\nnumber of shares of Exodus Common Stock.<\/p>\n
(ii) The per share exercise price for shares of Exodus Common
\nStock issuable upon exercise of the New Exodus Options will be equal to the
\nproduct of (A) the per share exercise price of the applicable Global Crossing
\nCancelled Option, multiplied by (B) the quotient determined by dividing (x) the
\naverage closing price per share as quoted on the Nasdaq National Market of
\nExodus Common Stock for the ten (10) trading days prior to and including the
\ntrading day ending two days prior to the Closing Date, by (y) the average
\nclosing price per share as quoted on the Nasdaq National Market of Global
\nCrossing Ltd. stock for the ten (10) trading days prior to and including the
\ntrading day ending two days prior to the Closing Date, rounded to the nearest
\nwhole cent.<\/p>\n
5.10 Form S-8.
\n ——–<\/p>\n
Exodus agrees to file a registration statement on Form S-8 covering the
\nshares of Exodus Common Stock issuable upon exercise of the Company Options and
\nGlobal Crossing Assumed Options assumed by Exodus and (if necessary) the New
\nExodus Options and to cause such Form S-8 to be filed with the SEC on or within
\ntwo (2) business days after the Closing Date.<\/p>\n
5.11 Listing of Additional Shares.
\n —————————-<\/p>\n
Prior to the Effective Time, Exodus shall (i) file with the NASDAQ Market a
\nNotification Form for Listing of Additional Shares with respect to the shares of
\nExodus Common Stock issuable upon conversion of the Company Common Stock in the
\nMerger and upon exercise of the Company Options and the Global Crossing Assumed
\nOptions assumed by Exodus and, if necessary, the new Exodus Options and (ii)
\ncause such shares of Exodus Common Stock to be authorized for listing on the
\nNASDAQ National Market.<\/p>\n
5.12 Employees.
\n ———<\/p>\n
(a) Exodus shall have established as of the Closing Date compensation
\nand employee benefit plans or arrangements (or shall have designated existing
\nplans or arrangements) which provide each Company Employee with salary, wages,
\nfringe and other benefits which are comparable in the aggregate to those
\nprovided to similarly situated Exodus employees. In addition, Exodus shall
\nrecognize for all purposes under its benefit plans (other than benefit accrual)
\nservice rendered by Company Employees prior to the Closing Date and <\/p>\n
40<\/p>\n
recognized by the Company under the Company Plans. Exodus shall also recognize
\nand give credit for deductibles and copayments for the fiscal period in which
\nthe Closing Date occurs and to waive pre-existing conditions under the Exodus
\ngroup health plans to the extent permitted under such group health plans.<\/p>\n
(b) All Company Employees shall as of the Closing Date be fully vested
\nin their account balances under the Global Crossing 401(k) plan (the “Global
\n ——
\nCrossing CODA”) and such persons shall be entitled to elect to either (i)
\n————-
\nreceive an immediate distribution of their account balances in accordance with
\nthe terms of such plan and pursuant to Section 401(k)(l0)(A) (iii) of the Code,
\n(ii) maintain such amounts in the Global Crossing CODA in accordance with its
\nterms, or (iii) directly roll over their respective account balances, to an
\nExodus 401(k) Plan or to an individual retirement account, in any case pursuant
\nto Section 401(k)(l0)(A) of the Code.<\/p>\n
5.13 Best Efforts and Further Assurances.
\n ———————————–<\/p>\n
Subject to the terms and conditions of this Agreement, each of the parties
\nto this Agreement shall use its best efforts to effectuate the transactions
\ncontemplated hereby and to fulfill and cause to be fulfilled the conditions to
\nclosing under this Agreement. Each party hereto, at the reasonable request of
\nanother party hereto, shall execute and deliver such other instruments and do
\nand perform such other acts and things as may be necessary or desirable for
\neffecting completely the consummation of this Agreement and the transactions
\ncontemplated hereby.<\/p>\n
5.14 Indemnification of Directors and Officers.
\n —————————————–<\/p>\n
Commencing at the Effective Time and for six years thereafter, the
\nSurviving Corporation and Exodus jointly and severally shall indemnify and hold
\nharmless all present and former directors or officers of the Company and its
\nsubsidiaries against any costs or expenses (including advancing reasonable
\nattorneys fees and expenses as incurred, subject to any undertaking to reimburse
\nsuch advances required by applicable law), judgments, fines, losses, claims,
\ndamages or liabilities incurred by reason of the fact that he or she is or was a
\ndirector or officer of the Company or any of its subsidiaries in connection with
\nany claim, suit, action, proceeding or investigation, whether civil, criminal,
\nadministrative or investigative, arising out of matters existing or occurring at
\nor prior to the Effective Time (excluding any claims brought by any Company
\nParties other than the Company or its subsidiaries), whether asserted or claimed
\nprior to, at or after the Effective Time, to the fullest extent now provided in
\nthe Company’s certificate of incorporation or by-laws as in effect on the date
\nof this Agreement, but not to exceed the fullest extent now permitted by
\nDelaware law.<\/p>\n
5.15 Facilities Transition.
\n ———————-<\/p>\n
Prior to Closing, and subject to more detailed provisions in the Network
\nAgreement and the Transition Agreement, the parties shall negotiate arrangements
\nwith respect to continuing in place, or transitioning and terminating,
\narrangements in place on the date of this Agreement pursuant to which the
\nCompany or its subsidiaries occupy property owned or leased by any of the other
\nCompany Parties.<\/p>\n
41<\/p>\n
5.16 Assumption of Certain Obligations.
\n ———————————-<\/p>\n
Prior to the Effective Time, Global Crossing NA shall have entered into an
\nIndemnification Agreement in substantially the form of Exhibit B hereto with the
\n ———
\nCompany, Global Center, Exodus and each Contract Holder.<\/p>\n
5.17 Employee Loans; Employee Severance Arrangements.
\n ———————————————–<\/p>\n
After the date of this Agreement, Company will not establish, adopt or
\nenter into any loan forgiveness or severance arrangements with or for the
\nbenefit of Company Employees. Global Crossing NA agrees to promptly indemnify
\nand make whole Exodus and the Company for all expenses and costs related to the
\nforgiveness of loans to Company Employees occurring at or after the Effective
\nTime, provided that such loans are made by the Company prior to Closing. Global
\nCrossing NA agrees to promptly indemnify and make whole Exodus and the Company
\nfor all expenses and costs related to payment of severance benefits to Company
\nEmployees under any severance plan or arrangement of Global Crossing, Ltd. or
\nany of its direct or indirect subsidiaries in effect prior to the Closing as a
\nresult of actions occurring at or after the Effective Time, including all
\nseverance benefits payable under the Change of Control Severance Plan. The
\nforegoing indemnification and reimbursement obligations of Global Crossing NA
\nare not subject to the Threshold limitation set forth in Section 10.1 hereof.<\/p>\n
5.18 Corporate Documents; Subsidiaries.
\n ———————————<\/p>\n
At or prior to the Closing, the Company Parties shall deliver or cause to
\nbe delivered to Exodus: (i) true and complete charter documents of Company and
\neach of the subsidiaries listed in Item 2.1 of the Company Disclosure Letter;
\n(ii) true and complete minute books of Company and each of the Company’s
\nsubsidiaries; (iii) the original stock certificate(s) representing 100% of the
\noutstanding securities of Company and each of the Company’s subsidiaries. In
\naddition, effective as of immediately following the Closing, Company shall have
\ncaused each of the directors of each of the Company’s subsidiaries to resign and
\nshall have appointed as directors of each of the Company’s subsidiaries the
\nindividuals designated by Exodus.<\/p>\n
ARTICLE VI<\/p>\n
CONDITIONS TO THE MERGER<\/p>\n
6.1 Conditions to Obligations of Each Party to Effect the Merger.
\n ————————————————————<\/p>\n
The respective obligations of each party to this Agreement to consummate
\nand effect the Merger and the transactions contemplated hereby shall be subject
\nto the satisfaction at or prior to the Effective Time of each of the following
\nconditions, any of which may be waived, in writing, by agreement of all the
\nparties hereto:<\/p>\n
(a) Stockholder Approval. The issuance of shares of Exodus Common
\n ——————–
\nStock in the Merger shall have been approved by the requisite vote of Exodus
\nstockholders under the Nasdaq rules.<\/p>\n
42<\/p>\n
(b) No Injunctions or Restraints; Illegality. No temporary restraining
\n —————————————-
\norder, preliminary or permanent injunction or other order issued by any court of
\ncompetent jurisdiction or other legal or regulatory restraint or prohibition
\npreventing the consummation of the Merger shall be in effect, nor any statute,
\nrule, regulation or order enacted, entered, enforced or deemed applicable to the
\nMerger, which makes the consummation of the Merger illegal. In the event an
\ninjunction or other order shall have been issued, each party agrees, subject to
\nthe other terms of this Agreement, to use its best efforts to have such
\ninjunction or other order lifted.<\/p>\n
(c) Governmental Approval. Exodus and the Company and their respective
\n ———————
\nsubsidiaries shall have obtained from each Governmental Entity all approvals,
\nwaivers and consents, if any, necessary for the consummation of or in connection
\nwith the Merger and the Commercial Agreements (as defined in Section
\n6.1(d)below) and the several transactions contemplated hereby and thereby under
\nAntitrust Laws.<\/p>\n
(d) Other Agreements. The Stockholder Rights Agreement, the
\n —————-
\nRegistration Rights Agreement, Amendment No. 2 to the Rights Plan, the
\nCommercial Agreements and the Transition Agreement shall not have been rescinded
\nand shall be in full force and effect and any transactions contemplated thereby
\nto be in effect at Closing shall be in effect. The Network Agreement and the
\nJoint Venture Agreement shall be referred to herein collectively as the
\n“Commercial Agreements.” The “Network Agreement” shall collectively mean and
\n ——————— —————–
\nrefer to that certain Network Services, Marketing and Cooperation Agreement
\nbetween Exodus and Global Crossing Ltd. and that certain Network Services,
\nMarketing and Cooperation Agreement between Exodus and Asia Global Crossing Ltd.<\/p>\n
6.2 Additional Conditions to Obligations of the Company Parties.
\n ———————————————————–<\/p>\n
The obligations of the Company Parties to consummate and effect this
\nAgreement and the transactions contemplated hereby shall be subject to the
\nsatisfaction at or prior to the Effective Time of each of the following
\nconditions, any of which may be waived, in writing, by the Company:<\/p>\n
(a) Representations, Warranties and Covenants. (i) The representations
\n —————————————–
\nand warranties of Exodus in this Agreement shall be true and correct on and as
\nof the date of this Agreement (disregarding for this purpose any materiality or
\nMaterial Adverse Effect qualifiers in such representations), and on and as of
\nthe Effective Time as though such representations and warranties were made on
\nand as of each such time, except to the extent that any representations and
\nwarranties expressly relate to an earlier date in which case such
\nrepresentations and warranties shall be as of such earlier date, except to the
\nextent that such failure to be true would not be expected to have a Material
\nAdverse Effect on Exodus or on Exodus’s ability to consummate the Merger and
\n(ii) Exodus Parties shall have performed and complied in all material respects
\nwith all covenants, obligations and conditions of this Agreement required to be
\nperformed and complied with by Exodus Parties as of the Effective Time.<\/p>\n
(b) Certificate of Exodus. The Company shall have been provided with a
\n ———————
\ncertificate executed on behalf of Exodus Parties by an the Chief Executive
\nOfficer of each Exodus Party to the effect set forth in Section 6.2(a).<\/p>\n
43<\/p>\n
(c) Tax Opinion. Global Crossing NA shall have received a written
\n ———–
\nopinion of its counsel, in form and substance reasonably satisfactory to it, and
\ndated on or about the Closing Date to the effect that the Merger will constitute
\na reorganization within the meaning of Section 368(a) of the Code, and such
\nopinion shall not have been withdrawn. In rendering such opinion, counsel shall
\nbe entitled to rely upon, among other things, reasonable assumptions as well as
\nrepresentations of Exodus, the Company and any applicable Global Crossing Ltd.
\nsubsidiary.<\/p>\n
(d) Assumption of Guarantees. Global Crossing NA and its affiliates
\n ————————
\nshall have been released from any guarantees of the Company’s and its
\nsubsidiaries’ performance under the leases to which the Company or any of its
\nsubsidiaries is a party, and Exodus shall have assumed such guarantees as of the
\nClosing Date, or (if such guarantees shall not have been released despite the
\nparties’ respective best efforts) Exodus shall have indemnified Global Crossing
\nNA from any and all liabilities under such guarantees.<\/p>\n
(e) No Material Adverse Effect on Exodus. No Material Adverse Effect
\n ————————————
\nwith respect to Exodus shall have occurred since the date of this Agreement and
\nbe continuing.<\/p>\n
6.3 Additional Conditions to Obligations of Exodus Parties.
\n ——————————————————<\/p>\n
The obligations of Exodus Parties to consummate and effect this Agreement
\nand the transactions contemplated hereby shall be subject to the satisfaction at
\nor prior to the Effective Time of each of the following conditions, any of which
\nmay be waived, in writing, by Exodus Parties:<\/p>\n
(a) Representations, Warranties and Covenants. (i) The representations
\n —————————————–
\nand warranties of the Company in this Agreement shall be true and correct on and
\nas of the date of this Agreement (disregarding for this purpose any materiality
\nor Material Adverse Effect qualifiers in such representations), and on and as of
\nthe Effective Time as though such representations and warranties were made on
\nand as of such time, except to the extent that any representations and
\nwarranties expressly relate to an earlier date in which case such
\nrepresentations and warranties shall be as of such earlier date, except to the
\nextent that such failure to be true would not be expected to have a Material
\nAdverse Effect on Company or on Company’s ability to consummate the Merger, and
\nexcept that, without limiting Section 6.3(g) below, the condition in this clause
\n6.3(a)(i) shall not be deemed unsatisfied as a result of a breach of the
\nrepresentations and warranties in Section 2.7 as of the Effective Time if such
\nrepresentations and warranties were true and correct as of the date hereof, and
\n(ii) the Company Parties shall have performed and complied in all material
\nrespects with all covenants, obligations and conditions of this Agreement
\nrequired to be performed and complied with by the Company Parties as of the
\nEffective Time.<\/p>\n
(b) Certificate of the Company Parties. Exodus shall have been
\n ———————————-
\nprovided with a certificate executed on behalf of the Company Parties by the
\nChief Executive Officer of each Company Party to the effect set forth in Section
\n6.3(a).<\/p>\n
(c) Tax Opinion. Exodus shall have received a written opinion of its
\n ———–
\ncounsel, in form and substance reasonably satisfactory to it, and dated on or
\nabout the Closing Date to the <\/p>\n
44<\/p>\n
effect that the Merger will constitute a reorganization within the meaning of
\nSection 368(a) of the Code, and such opinion shall not have been withdrawn. In
\nrendering such opinion, counsel shall be entitled to rely upon, among other
\nthings, reasonable assumptions as well as representations of Exodus, the Company
\nand any applicable Global Crossing Ltd. subsidiary.<\/p>\n
(d) Individual Noncompetition Agreements. The Chief Executive Officer
\n ————————————
\nof the Company and each of his direct reports shall have entered into a
\nnoncompetition agreement in the form attached hereto as Exhibit C.
\n ———<\/p>\n
(e) No Material Adverse Effect on Company. No Material Adverse Effect
\n ————————————-
\nwith respect to Company shall have occurred since the date of this Agreement and
\nbe continuing.<\/p>\n
(f) Subleases. Exodus and Global Crossing NA (or one of Global
\n ———
\nCrossing NA’s affiliates) shall have entered into agreements to sublease to the
\nSurviving Corporation, or obtain the necessary rights for the Surviving
\nCorporation with respect to, any real property used by the Company and its
\nsubsidiaries as a data center as of the Closing Date. Each sublease or license
\nshall be in form and substance customary for the location. The term of such
\nsublease or license shall be concurrent with the term of the underlying lease or
\nproperty right. At least until December 31, 2001, the rental or license fee to
\nbe paid by the Surviving Corporation with respect to such sublease or license
\nshall be equal to the rental or license fee paid by the Company or the
\napplicable Company subsidiary would have paid with respect to such real property
\nif there had not been any change of control of the Company; provided, however,
\n ——– ——-
\nthat if a fair market rental or license payment is required with respect to such
\nsublease or license by (i) applicable law of the jurisdiction in which the
\nproperty is located or (ii) the provisions of the lease or other agreement
\ncurrently in effect with respect to such property, then the rental or license
\npayment to be paid by the Surviving Corporation after the Closing shall be equal
\nto a fair market rental or license payment; and provided, further, that Exodus
\n ——– ——-
\nand Global Crossing NA shall use their best efforts to avoid such adjustment in
\nthe rental or license fee. If such adjustment is not avoidable and the rental or
\nlicense fee, as so adjusted, represents a material change from the Company’s
\nfinancial assumptions, then Exodus and Global Crossing NA shall use their best
\nefforts to agree on appropriate equitable financial adjustments. If the parties
\nare unable to agree on fair market rental or license amounts, they shall
\ntogether choose an independent appraiser, whose decision shall be binding. After
\nDecember 31, 2001, any rental or license fee with respect to any sublease or
\nlicense contemplated by this Section 6.3(f) may be raised to fair market value.<\/p>\n
(g) Litigation. There shall not be pending, as of the Closing Date,
\n ———-
\nany Action before any agency, court or tribunal, foreign or domestic, against
\nthe Company or any of its subsidiaries or any of their respective properties or
\nany of their officers or directors (in their capacities as such) that would
\nreasonably be expected to have a Material Adverse Effect on the Company.
\nNotwithstanding the foregoing, if Global Crossing NA affirmatively agrees to
\nindemnify Exodus against claims relating to such Action pursuant to Article X
\nwithout reference to the Threshold limitation therein, this clause (g) shall not
\nbe a condition to the obligations of the Exodus Parties to consummate and effect
\nthis Agreement.<\/p>\n
45<\/p>\n
ARTICLE VII<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
7.1 Termination.
\n ———–<\/p>\n
At any time prior to the Effective Time, whether before or after approval
\nof the matters presented in connection with the Merger by the stockholders of
\nExodus, this Agreement may be terminated:<\/p>\n
(a) by mutual written consent duly authorized by the Board of
\nDirectors of Exodus and the Company;<\/p>\n
(b) by either Exodus or the Company, if the Closing shall not have
\noccurred on or before March 31, 2000 (the “Final Closing Date”); provided that
\n ——————
\nthe right to terminate this Agreement under this Section 7.1(b) shall not be
\navailable to any party whose action or failure to act has been the cause or
\nresulted in the failure of the Merger to occur on or before such date and such
\naction or failure to act constitutes a breach of this Agreement; and, provided,
\nfurther, that the Final Closing Date shall be extended for so long as the
\nparties are in good faith actively pursuing any required approval or waiver of
\nany Governmental Entity under the Antitrust Laws, and for ten (10) days after
\nreceipt of any such approval or waiver, but in no event later than May 31, 2001;<\/p>\n
(c) by Exodus, if (i) the Company shall breach any representation,
\nwarranty, obligation or agreement hereunder which would cause the Company to
\nfail to satisfy any condition of Closing set forth in Section 6.3, and such
\nbreach shall not have been cured within ten (10) business days of receipt by the
\nCompany of written notice of such breach (or within thirty (30) days of such
\nreceipt of written notice if the breach is curable but cannot reasonably be
\ncured within ten business days), provided that the right to terminate this
\nAgreement by Exodus under this Section 7.1(c)(i) shall not be available to
\nExodus in the event Exodus is at that time in material breach of this Agreement
\nor (ii) if at the Exodus Shareholders Meeting the holders of Exodus Common Stock
\nfail to approve the issuance of shares of Exodus Common Stock in the Merger;<\/p>\n
(d) by the Company, if (i) Exodus shall breach any representation,
\nwarranty, obligation or agreement hereunder which would cause Exodus to fail to
\nsatisfy any condition of Closing set forth in Section 6.2, and such breach shall
\nnot have been cured within ten (10) business days following receipt by Exodus of
\nwritten notice of such breach (or within thirty (30) days of such receipt of
\nwritten notice if the breach is curable but cannot reasonably be cured within
\nten business days), provided that the right to terminate this Agreement by the
\nCompany under this Section 7.1(d) shall not be available to the Company in the
\nevent the Company is at that time in material breach of this Agreement, (ii) a
\nWithdrawal of Recommendation shall have occurred or the Board of Directors of
\nExodus shall have resolved to effect a Withdrawal of Recommendation, (iii) if at
\nthe Exodus Stockholders Meeting or any adjournment thereof, the holders of
\nExodus Common Stock fail to approve the issuance of shares of Exodus Common
\nStock in the Merger, or (iv) if Exodus or any of its officers, directors,
\nemployees or agents shall have knowingly breached Section 5.7 or Section 4.9
\nhereof; or<\/p>\n
46<\/p>\n
(e) by either the Company or Exodus, if a Governmental Entity shall
\nhave issued an order, decree or ruling, or taken any other action, in any case
\nhaving the effect of permanently restraining, enjoining or otherwise prohibiting
\nthe Merger or the transactions contemplated by the Commercial Agreements, which
\norder, decree, ruling or other action is final and non appealable.<\/p>\n
7.2 Effect of Termination.
\n ———————<\/p>\n
In the event of termination of this Agreement as provided in Section 7.1,
\nthis Agreement shall forthwith become void and there shall be no liability or
\nobligation on the part of Exodus or the Company Parties or their respective
\nofficers, directors, stockholders or affiliates in respect of any provision of
\nthis Agreement that does not survive such termination, except (subject to
\nSection 7.3(b)) to the extent that such termination results from the willful
\nbreach by a party hereto of any of its representations, warranties or covenants
\nset forth in this Agreement; provided, however, that the provisions of Section
\n5.4 (Confidentiality), Section 7.3 (Expenses and Termination Fees) and this
\nSection 7.2 and of Article IX shall remain in full force and effect and survive
\nany termination of this Agreement.<\/p>\n
7.3 Expenses and Termination Fees.
\n —————————–<\/p>\n
(a) Subject to Section 7.3(b), whether or not the Merger is
\nconsummated, all costs and expenses incurred in connection with this Agreement
\nand the transactions contemplated hereby (including, without limitation, the
\nfees and expenses of its advisers, accountants and legal counsel) shall be paid
\nby the party incurring such expense.<\/p>\n
(b) In the event that the Company shall, at a time when there is no
\nbreach of this Agreement such as would cause the condition set forth in Section
\n6.3(a) hereof to not be satisfied, and prior to approval of the Merger by Exodus
\nstockholders, terminate this Agreement pursuant to Section 7.1(d)(ii) following
\nthe making of an Exodus Acquisition Offer then Exodus shall promptly (but in no
\nevent later then five (5) business days after such termination) pay to the
\nCompany Sixty Five Million Dollars ($65,000,000), and if within one year after
\nsuch termination a Third Party Acquisition shall have occurred or Exodus or any
\nof its subsidiaries shall have entered into an agreement providing for a Third
\nParty Acquisition which is subsequently consummated, then Exodus shall promptly
\n(but in no event later than five (5) business days after the consummation of
\nsuch Third Party Acquisition) pay to Company the additional amount of Two
\nHundred Thirty-Five Million Dollars ($235,000,000). In the event that Company
\nshall, at a time when there is no breach of this Agreement such as would cause
\nthe condition set forth in Section 6.3(a) hereof to not be satisfied, terminate
\nthis Agreement pursuant to Section 7.1(d)(iii) following the making of any
\nExodus Acquisition Offer (which term for purposes of this Section 7.3(b) also
\nincludes any Third Party Acquisition Proposal that has been publicly disclosed
\nprior to the Exodus Stockholders Meeting and with respect to which neither the
\nparty making that Third Party Acquisition Proposal nor Exodus has publicly
\ndisclosed prior to the Exodus Stockholders Meeting that the party making that
\nThird Party Acquisition Proposal has made an unconditional commitment to support
\nthe Merger and the transactions contemplated by the Ancillary Agreements and the
\nCommercial Agreements) and, either (A) no later than one year after such
\ntermination the Third Party Acquisition contemplated by such pending Exodus
\nAcquisition Offer (“Pending Transaction”) shall have occurred or Exodus or any
\n ——————-
\nof its <\/p>\n
47<\/p>\n
subsidiaries shall have entered into an agreement with respect to the Pending
\nTransaction which is subsequently consummated, or (B) no later than six months
\nafter such termination any other Third Party Acquisition shall have occurred or
\nExodus or any of its subsidiaries shall have entered into an agreement with
\nrespect to any other Third Party Acquisition, then Exodus shall promptly (but in
\nno event later than five (5) business days after the earlier of the consummation
\nof the Pending Transaction under clause (A) or the consummation of the Third
\nParty Acquisition under clause (B)) pay to Company the amount of Three Hundred
\nMillion Dollars ($300,000,000). Any payment pursuant to this Section 7.3(b)
\nshall be made in immediately available funds by wire transfer to an account
\nspecified by the Company. Such payment will relieve Exodus from any liability it
\nmight otherwise have in accordance with Section 7.2 with respect to any breach
\nof this Agreement.<\/p>\n
7.4 Amendment.
\n ———<\/p>\n
The boards of directors of the parties hereto may cause this Agreement to
\nbe amended at any time by execution of an instrument in writing signed on behalf
\nof each of the parties hereto.<\/p>\n
7.5 Extension; Waiver.
\n —————–<\/p>\n
At any time prior to the Effective Time any party hereto may, to the extent
\nlegally allowed, (i) extend the time for the performance of any of the
\nobligations or other acts of the other parties hereto, (ii) waive any
\ninaccuracies in the representations and warranties made to such party contained
\nherein or in any document delivered pursuant hereto and (iii) waive compliance
\nwith any of the agreements or conditions for the benefit of such party contained
\nherein. Any agreement on the part of a party hereto to any such extension or
\nwaiver shall be valid only if set forth in an instrument in writing signed on
\nbehalf of such party.<\/p>\n
ARTICLE VIII<\/p>\n
TAX MATTERS<\/p>\n
8.1 Liability for Taxes.
\n ——————-<\/p>\n
(a) Global Crossing NA shall be liable for and indemnify Exodus or the
\nCompany as the case may be, for all Taxes imposed on the Company or its
\nsubsidiaries, or for which the Company or its subsidiaries may otherwise be
\nliable (including liabilities pursuant to Treasury Regulation Section 1.1502-
\n6(a) or any similar provision of any state, local or foreign law), for any
\ntaxable year or period that ends on or before the Closing Date (such periods
\nreferred to as “Pre-Closing Tax Periods” and Taxes for such periods referred to
\n ———————–
\nas “Pre-Closing Taxes”) and, with respect to any portion of a taxable year or
\n —————–
\nperiod beginning before and ending after the Closing Date (such periods referred
\nto as “Straddle Periods” and Taxes for such periods referred to as “Straddle
\n —————- ——–
\nTaxes”), the portion of such Straddle Period ending on and including the Closing
\n—–
\nDate; provided, however, that Global Crossing NA shall have no obligation to
\nmake any payment pursuant to this Section 8.1, until the amounts that would
\notherwise be payable pursuant to this Section 8.1 (apart from this proviso)
\nexceed the reserve for Taxes on the Financial Statements.<\/p>\n
48<\/p>\n
(b) The Company shall be liable for, and Exodus shall indemnify Global
\nCrossing NA and its affiliates for, all Taxes imposed on Global Crossing NA or
\nany of its affiliates with respect to the Company or its subsidiaries for any
\ntaxable year or period that begins after the Closing Date (such periods referred
\nto as “Post-Closing Tax Periods” and such Taxes referred to as “Post-Closing
\n ———————— ————
\nTaxes”) and, with respect to a Straddle Period, the portion of such Straddle
\n—–
\nPeriod beginning after the Closing Date.<\/p>\n
(c) For purposes of this Section 8.1, whenever it is necessary to
\ndetermine the liability for Income Taxes of the Company or its subsidiaries for
\na portion of a Straddle Period, the determination of the Income Taxes for the
\nportion of the Straddle Period ending on, and the portion of the Straddle Period
\nbeginning after, the Closing Date, shall be determined by assuming that the
\nCompany and its subsidiaries had a taxable year or period that ended at the
\nclose of the Closing Date. To the extent permitted by applicable law, the
\nparties agree to elect to treat the Closing Date as the last day of the taxable
\nyear. In the case of a Tax that is not based on net income, the Tax for the
\nportion of the Straddle Period ending on the Closing Date shall be the Tax for
\nthe Straddle Period multiplied by a fraction the numerator of which is the
\nnumber of days in the period on or before the Closing Date and the denominator
\nof which is the total number of days in the Straddle Period.<\/p>\n
(d) Exodus covenants that it will not cause or permit the Company, its
\nsubsidiaries or any affiliate of Exodus (i) to take any action on the Closing
\nDate other than in the Ordinary Course, including but not limited to the
\ndistribution of any dividend or the effectuation of any redemption, that could
\ngive rise to any Tax liability or reduce any Tax attribute of the Global
\nCrossing NA Group or (ii) take any Tax position on any Tax Return, take any
\naction, omit to take any action or enter into any transaction that results in
\nany increased Tax liability or reduction of any Tax attribute of the Global
\nCrossing NA Group in respect of any Pre-Closing Tax Period or any pre-closing
\nportion of a Straddle Period without the prior written consent of Global
\nCrossing NA, unless it is required to do so by law. Exodus agrees that the
\nGlobal Crossing NA Group shall have no Tax liability or reduction of any Tax
\nattribute resulting from any prohibited action described in the preceding
\nsentence and agrees to indemnify and hold harmless the Global Crossing NA Group
\nagainst any such Tax and any loss, liability, claim, damage, expense or Tax for
\nwhich indemnification is provided under this Article VIII (as defined below) in
\nconnection therewith.<\/p>\n
8.2 Tax Refunds.
\n ———–<\/p>\n
(a) Global Crossing NA shall be entitled to any refund of any Pre-
\nClosing Taxes of the Company and its subsidiaries and any Taxes of the Company
\nand its subsidiaries for the pre-Closing portion of a Straddle Period,
\nincluding, in each case, interest paid thereon. Global Crossing NA shall have
\nthe right to determine whether any claim for refund for such Taxes shall be made
\non behalf of Global Crossing NA by the Company and its subsidiaries. If Global
\nCrossing NA elects to make a claim for refund, Exodus, the Company and its
\nsubsidiaries shall cooperate fully in connection therewith. Notwithstanding the
\nforegoing, Global Crossing NA shall not be entitled to make any claim for refund
\nof Taxes which would materially adversely affect the liability for Taxes of
\nExodus, the Company or its subsidiaries for any Post-Closing Tax Period or the
\nportion of a Straddle Period beginning after the Closing Date without the prior
\nwritten consent of Exodus; provided, however, that such consent shall not be
\nunreasonably<\/p>\n
49<\/p>\n
withheld and such consent shall not be necessary to the extent that Global
\nCrossing NA has indemnified Exodus against the effects of any such claim for
\nrefund. Global Crossing NA shall reimburse Exodus and the Company and its
\nsubsidiaries for reasonable out-of-pocket expenses incurred in providing such
\ncooperation.<\/p>\n
(b) If an indemnified party receives a refund or credit of Taxes for
\nwhich it has been indemnified pursuant to this Agreement, such indemnified party
\nagrees to pay to the indemnifying party the amount of such refund or credit
\n(including any interest received thereon).<\/p>\n
(c) Subject to the following sentence and to the extent permitted by
\nlaw, Exodus will elect to forego any carrybacks for the Company and its
\nsubsidiaries incurred in any Post-Closing Tax Period. Except as provided in the
\nfollowing sentence, neither Global Crossing NA nor any of its affiliates shall
\nbe required to pay to Exodus, the Company or its subsidiaries any refund or
\ncredit of Taxes that results from the carryback to any Pre-Closing Tax Period of
\nany net operating loss, capital loss or tax credit attributable to the Company
\nor its subsidiaries in any Post-Closing Tax Period, except that the Company and
\nits subsidiaries that have not filed consolidated, combined, unitary or similar
\nreturns with Global Crossing NA or any of its affiliates (other than the Company
\nor any of its subsidiaries) shall be entitled to carry back losses or tax
\ncredits from any such Post-Closing Tax Period to any Pre-Closing Tax Period and
\nto receive any resulting refund of Taxes including any interest received
\nthereon, but only if such carryback would not impose a material Tax cost or
\notherwise materially adversely affect Global Crossing NA or any of its
\naffiliates, unless Exodus has indemnified Global Crossing NA for such material
\nTax costs or material adverse affect on an after-tax basis. Notwithstanding the
\nforegoing sentence, if and to the extent that Exodus is not permitted by
\napplicable law to forego a carryback, then solely with respect to such carryback
\nto the extent that Global Crossing NA receives a refund of Taxes attributable to
\nsuch carryback from a Post-Closing Tax Period of the Company and its
\nsubsidiaries or for the portion of a Straddle Period after the Closing Date,
\nGlobal Crossing NA shall pay to Exodus, net of any additional costs (other than
\ncosts that are indemnified pursuant to Section 8.2(d) hereof), incurred by or
\nTaxes payable by Global Crossing NA or any of its affiliates by reason of such
\ncarryback, such refund including any interest received thereon.<\/p>\n
(d) If and to the extent that Exodus (i) is not permitted by
\napplicable law to forego a carryback of any net operating loss, capital loss or
\ntax credit attributable to the Company or its subsidiaries, (ii) timely requests
\nin writing that Global Crossing NA obtain a refund with respect to such
\ncarryback, and (iii) indemnifies and holds harmless Global Crossing NA on an
\nafter-tax basis for all costs and expenses incurred in respect of obtaining such
\nrefund, then Global Crossing NA shall take all reasonable measures to obtain a
\nrefund with respect to such carryback; provided, however, that Global Crossing
\nNA shall have sole discretion with respect to the manner in which any amended
\nTax Return shall be prepared and filed.<\/p>\n
8.3 Amended Returns.
\n —————<\/p>\n
Without the prior written consent of Global Crossing NA, neither Exodus,
\nthe Company or its subsidiaries, nor any affiliate of Exodus shall (i) make any
\nelection relating to Taxes or (ii) file any amended Tax Returns or propose or
\nagree to any adjustment of any item with the Internal Revenue Service or any
\nother Taxing Authority that would have the effect of increasing <\/p>\n
50<\/p>\n
the liability for any Taxes or reducing any Tax benefit of Global Crossing NA,
\nthe Company or its subsidiaries for any Pre-Closing Tax Period or Pre-Closing
\nportion of a Straddle Period. Without the prior written consent of Exodus,
\nGlobal Crossing NA shall not file any amended Tax Returns for any Pre-Closing
\nPeriod that could have a material adverse affect on the liability of the Company
\nor its subsidiaries for any Taxes for a Post-Closing Period. Notwithstanding
\nanything to the contrary herein (except as provided in Section 8.2(d)), in no
\nevent shall Exodus, the Company or any of its subsidiaries or any affiliate of
\nExodus have any rights to make any election or file any amended Tax Return, or
\ntake any other action with respect to any consolidated, combined or unitary Tax
\nReturns of any of the Global Crossing NA Group.<\/p>\n
8.4 Tax Returns.
\n ———–<\/p>\n
Global Crossing NA shall prepare, or cause to be prepared, and timely file
\nor cause to be filed when due, including extensions thereof, all Tax Returns
\nthat are required to be filed with respect to the Company and its subsidiaries
\nfor Pre-Closing Tax Periods and shall pay any Taxes due in respect of such Tax
\nReturns, and, except as specified in the following two sentences, Exodus shall
\ntimely file or cause to be filed when due, including extensions thereof, all
\nother Tax Returns with respect to the Company and its subsidiaries and shall
\ntimely pay any Taxes due in respect of such Tax Returns. Global Crossing NA in
\nits sole discretion shall have the right to prepare or cause to be prepared all
\nconsolidated, combined or unitary Tax Returns of any of the Global Crossing NA
\nGroup members for all Tax periods. Global Crossing NA in its sole discretion
\nshall have the right to prepare and file or cause to be prepared and filed all
\nTax Returns that are required to be filed with respect to the Company and its
\nsubsidiaries for any Straddle Period. If Global Crossing NA does not exercise
\nits rights in the preceding sentence, Exodus shall prepare or cause to be
\nprepared any Straddle Period Tax Returns that Global Crossing NA does not
\nprepare. Any such Straddle Period Tax Return (regardless of which party prepares
\nit) shall be prepared in a manner consistent with past practices and without a
\nchange of any election or accounting method and shall be submitted by the
\npreparing party to the other party (together with schedules, statements and
\nsupporting documentation) at least twenty (20) days prior to the due date
\n(including extensions of such Tax Returns). Such other party shall have the
\nright to review all work papers and procedures used to prepare any such Tax
\nReturn. If such other party, within ten (10) business days after delivery of any
\nsuch Tax Return, notifies the preparing party in writing that it objects to any
\nof the items in such Tax Return, the preparing party shall attempt in good faith
\nto resolve the dispute and, if they are unable to do so, the disputed items
\nshall be resolved (within a reasonable time, taking into account the deadline
\nfor filing such Tax Return) by an internationally recognized independent
\naccounting firm chosen by and mutually acceptable to both Exodus and Global
\nCrossing NA. Upon resolution of all such items, the relevant Tax Return shall be
\nadjusted to reflect such resolution and shall be binding upon the parties
\nwithout further adjustment. The costs, fees and expenses of such accounting firm
\nshall be born equally by Exodus and Global Crossing NA. If Exodus fails to agree
\nto the selection of an accounting firm within seven (7) business days, Global
\nCrossing NA has the right to adjust the relevant Straddle Period Tax Return in
\nthe manner it deems appropriate and the Tax Return as so adjusted shall be
\nbinding upon the parties without further adjustment.<\/p>\n
51<\/p>\n
8.5 Tax Contest Provisions.
\n ———————-<\/p>\n
(a) Notice Requirements. Whenever Exodus receives a notice of any
\n ——————-
\npending or threatened Tax audit or assessment for any Pre-Closing Tax Period or
\nStraddle Period, Exodus shall promptly inform Global Crossing NA in writing.
\nWhenever Global Crossing NA receives a notice of any pending or threatened Tax
\naudit or assessment of Company or its subsidiaries for any Pre-Closing Tax
\nPeriod, any Straddle Period, or any Post-Closing Tax Period, Global Crossing NA
\nshall promptly inform Exodus in writing.<\/p>\n
(b) Contests Pertaining to Pre-Closing and Straddle Period Taxes.
\n ————————————————————
\nGlobal Crossing NA shall have the right to control, at its own cost, any
\nproceedings relating to any pending or threatened Tax audit or assessment for
\nany Pre-Closing Taxes or Straddle Period Taxes of the Company and its
\nsubsidiaries (including any Taxes for which the Company or its subsidiaries may
\nbe liable including any Tax liability pursuant to Treasury Regulation Section
\n1.1502-6(a) or any similar provision of any state, local, or foreign law) and to
\ndetermine whether and when to settle any such claim, assessment or dispute.
\nNotwithstanding the foregoing, Global Crossing NA shall not be entitled to
\nsettle, either administratively or after the commencement of litigation, any
\nclaim for Taxes which would materially adversely affect the liability for Taxes
\nof Exodus, the Company or its subsidiaries for any period Post-Closing Tax
\nPeriod or the post-closing portion of the Straddle Period without the prior
\nwritten consent of Exodus. Such consent shall not be unreasonably withheld, and
\nshall not be necessary to the extent that Global Crossing NA has indemnified
\nExodus against the effects of any such settlement.<\/p>\n
(c) Contests Pertaining to Post-Closing Taxes. Exodus shall have the
\n —————————————–
\nright to control, at its cost, any proceedings relating to any pending or
\nthreatened Tax audit or assessment relating to any Post-Closing Taxes of the
\nCompany and its subsidiaries and to determine whether and when to settle any
\nsuch claim, assessment or dispute. Notwithstanding the foregoing, Exodus shall
\nnot be entitled to settle, either administratively or after the commencement of
\nlitigation, any claim for Taxes which would materially adversely affect the
\nliability for Taxes of Global Crossing NA without the prior written consent of
\nGlobal Crossing NA, provided that such consent shall not be unreasonably
\nwithheld.<\/p>\n
(d) Contests Pertaining to Both Pre-Closing and Post-Closing Taxes.
\n ————————————————————–
\nWith respect to any threatened Tax audit or assessment that covers both one or
\nmore Pre-Closing Tax Periods (or Straddle Periods) and one or more Post-Closing
\nTax Periods, the parties shall use reasonable efforts to cause such proceedings
\nto be bifurcated between the Pre-Closing Tax Periods and Post-Closing Tax
\nPeriods. To the extent that the parties are able to cause such bifurcation,
\nSections 8.5(b) and (c) hereof shall govern the control of such proceedings. To
\nthe extent that the parties are unable to cause such bifurcation, (i) Global
\nCrossing NA and Exodus shall jointly control such proceedings, (ii) Global
\nCrossing NA shall be entitled to determine whether and when to settle any claim,
\nassessment, or dispute to the extent it relates to any Pre-Closing Taxes or
\nStraddle Period Taxes of the Company and its subsidiaries (including any Taxes
\nfor which the Company or its subsidiaries may be liable including any Tax
\nliability pursuant to Treasury Regulation Section 1.1502-6(a) or any similar
\nprovision of any state, local, or foreign law), and (iii) Exodus shall be
\nentitled to determine whether and when to settle any claim, assessment, or
\ndispute to the extent it relates to any Post-Closing Taxes of the Company and
\nits subsidiaries. Notwithstanding the foregoing, neither Exodus nor Global
\nCrossing NA <\/p>\n
52<\/p>\n
shall be entitled to settle, either administratively or after the commencement
\nof litigation, any claim for Taxes which would materially adversely affect the
\nliability for Taxes of the other party without the prior written consent of the
\nother party, provided that such consent shall not be unreasonably withheld.<\/p>\n
8.6 Termination of Tax Allocation Agreements.
\n —————————————-<\/p>\n
Any and all Tax allocation or sharing agreements or arrangements (other
\nthan this Agreement), whether or not written, that may have been entered into by
\nand between Global Crossing NA and its affiliates, on the one hand, and the
\nCompany and its subsidiaries, on the other hand, shall be terminated as to the
\nCompany and its subsidiaries as of the Closing Date, and no payments which are
\nowed by or to the Company or its subsidiaries pursuant thereto shall be made
\nthereunder.<\/p>\n
8.7 Assistance and Cooperation.
\n ————————–<\/p>\n
Each of Exodus and Global Crossing NA will provide the other with such
\nassistance as may reasonably be requested by each of them in connection with the
\npreparation of any Tax Return, any audit or other examination by any Taxing
\nAuthority, or any judicial or administrative proceedings relating to liability
\nfor Taxes, and each provide the other with any records or information which may
\nbe relevant to such Tax Return, audit or examination, proceedings or
\ndetermination. Such assistance shall include making employees available on a
\nmutually convenient basis to provide additional information and explanation of
\nany material provided hereunder and shall include providing copies of any
\nrelevant Tax Return and supporting work schedules. The party requesting
\nassistance hereunder shall reimburse the other for reasonable expenses incurred
\nin providing such assistance. Without limiting in any way the foregoing
\nprovisions of Article VIII, Exodus hereby agrees that it will retain, until the
\nappropriate statutes of limitation (including any extensions) expire, copies of
\nall Tax Returns, supporting work schedules and other records or information
\nwhich it possesses and which may be relevant to such Tax Returns of the Company
\nor its subsidiaries for all Pre-Closing Tax Periods or any pre-Closing portion
\nof a Straddle Period. Further, Exodus will not destroy or otherwise dispose of
\nsuch records without first providing Global Crossing NA with a reasonable
\nopportunity to review and copy such records.<\/p>\n
8.8 Preservation of Reorganization Status.
\n ————————————-<\/p>\n
Neither the Company Parties nor the Exodus Parties shall take any action
\nprior to or following the Closing that would cause the merger to fail to qualify
\nas a “reorganization” within the meaning of Section 368(a) of the Code.
\n ————– <\/p>\n
ARTICLE IX<\/p>\n
GENERAL PROVISIONS<\/p>\n
9.1 Non-Survival at Effective Time.
\n ——————————<\/p>\n
Each of the representations and warranties set forth in Article II and
\nArticle III and in any certificate delivered pursuant to Section 6.2(b) or
\nSection 6.3(b) shall survive for the time period<\/p>\n
53<\/p>\n
set forth in Section 10.5, after which time they will have no further force and
\neffect. The agreements set forth in this Agreement shall terminate at the
\nEffective Time, except that the agreements set forth in Article I, Section 5.4
\n(Confidentiality), 5.9 (Assumption of Options), 5.10 (Form S-8), 5.12
\n(Employees), 5.13 (Best Efforts and Further Assurances), 7.3 (Expenses and
\nTermination Fees), 7.4 (Amendment), Article VIII, this Article IX and Article X
\nshall survive the Effective Date and the Closing. The agreements set forth in
\nArticle VIII shall survive the Effective Date and Closing for a period beginning
\non the date hereof and ending on the last day of the periods of limitations
\napplicable to any Taxes that are the subject of a claim under Article VIII.<\/p>\n
9.2 Notices.
\n ——-<\/p>\n
All notices and other communications hereunder shall be in writing and
\nshall be deemed given if delivered personally or by commercial delivery service,
\nor mailed by registered or certified mail (return receipt requested) or sent via
\nfacsimile (with confirmation of receipt) to the parties at the following address
\n(or at such other address for a party as shall be specified by like notice):<\/p>\n
(a) if to Exodus or Exodus Merger Sub, to:<\/p>\n
Exodus Communications, Inc.
\n 2831 Mission College Blvd.
\n Attention: General Counsel
\n Facsimile No.: (408) 346-2201<\/p>\n
with a copy to:<\/p>\n
Fenwick & West LLP
\n Two Palo Alto Square
\n Palo Alto, CA 94306
\n Attention: David W. Healy
\n Facsimile No.: (650) 496-1417<\/p>\n
(b) if to the Company, GlobalCenter, GCG, Global Crossing NA, to:<\/p>\n
Global Crossing Ltd.
\n 360 N. Crescent Drive
\n Beverly Hills, CA 90210
\n Attention: General Counsel
\n Facsimile No.: (310) 385-3700<\/p>\n
with copies to:<\/p>\n
GlobalCenter Inc.
\n 141 Caspian Court
\n Sunnyvale, CA
\n Attention: General Counsel
\n Facsimile No.: (408) 541-1637<\/p>\n
54<\/p>\n
Gibson, Dunn & Crutcher LLP
\n One Montgomery Street
\n San Francisco, CA 94104
\n Attention: Todd H. Baker
\n Facsimile No.: (415) 986-5309<\/p>\n
Simpson Thacher & Bartlett
\n 3373 Hillview Avenue
\n Suite 250
\n Palo Alto, CA 94304
\n Attention: Richard Capelouto
\n Facsimile No.: (650) 251-5002<\/p>\n
9.3 Interpretation.
\n ————–<\/p>\n
When a reference is made in this Agreement to Exhibits, such reference
\nshall be to an Exhibit to this Agreement unless otherwise indicated. The words
\n“include,” “includes” and “including” when used herein shall be deemed in each
\n ——- ——– ———
\ncase to be followed by the words “without limitation.” The phrases “the date of
\n —————— ———–
\nthis Agreement,” “the date hereof,” and terms of similar import, unless the
\n————– —————
\ncontext otherwise requires, shall be deemed to refer to the date set forth in
\nthe preamble paragraph of this Agreement. References to the “subsidiaries” of a
\nPerson shall be deemed to refer to all of such Person’s direct and indirect
\nsubsidiaries. The table of contents and headings contained in this Agreement are
\nfor reference purposes only and shall not affect in any way the meaning or
\ninterpretation of this Agreement.<\/p>\n
9.4 Counterparts.
\n ————<\/p>\n
This Agreement may be executed in one or more counterparts, all of which
\nshall be considered one and the same agreement and shall become effective when
\none or more counterparts have been signed by each of the parties and delivered
\nto the other parties, it being understood that all parties need not sign the
\nsame counterpart.<\/p>\n
9.5 Entire Agreement; Nonassignability; Parties in Interest.
\n ——————————————————-<\/p>\n
This Agreement and the documents and instruments and other agreements
\nspecifically referred to herein or delivered pursuant hereto, including the
\nExhibits and the Items, including the Company Disclosure Letter and Exodus
\nDisclosure Letter, (a) constitute the entire agreement among the parties with
\nrespect to the subject matter hereof and supersede all prior agreements and
\nunderstandings, both written and oral, among the parties with respect to the
\nsubject matter hereof, except for the Confidentiality Agreement, which shall
\ncontinue in full force and effect and except as set forth in Section 9.1, shall
\nsurvive any termination of this Agreement or the Closing, in accordance with its
\nterms (b) are not intended to confer upon any other person any rights or
\nremedies hereunder, except as set forth in Sections 5.14; and (c) shall not be
\nassigned by operation of law or otherwise by the Company Parties without the
\nprior written consent of the Exodus Parties or by the Exodus Parties without the
\nprior written consent of the Company Parties. Notwithstanding anything herein to
\nthe contrary, in the event that GCG shall transfer, before Closing, all of the
\nissued and outstanding shares of capital stock of GlobalCenter Holding <\/p>\n
55<\/p>\n
to an affiliated entity, then GCG may, without further notice to or prior
\nwritten consent of any party, assign all of its rights and obligations under
\nthis Agreement to such affiliated entity.<\/p>\n
9.6 Severability.
\n ————<\/p>\n
In the event that any provision of this Agreement, or the application
\nthereof, becomes or is declared by a court of competent jurisdiction to be
\nillegal, void or unenforceable, the remainder of this Agreement will continue in
\nfull force and effect and the application of such provision to other persons or
\ncircumstances will be interpreted so as reasonably to effect the intent of the
\nparties hereto. The parties further agree to replace such void or unenforceable
\nprovision of this Agreement with a valid and enforceable provision that will
\nachieve, to the extent possible, the economic, business and other purposes of
\nsuch void or unenforceable provision.<\/p>\n
9.7 Remedies Cumulative.
\n ——————-<\/p>\n
Except as otherwise provided herein, any and all remedies herein expressly
\nconferred upon a party will be deemed cumulative with and not exclusive of any
\nother remedy conferred hereby, or by law or equity upon such party, and the
\nexercise by a party of any one remedy will not preclude the exercise of any
\nother remedy.<\/p>\n
9.8 Governing Law; Submission to Jurisdiction.
\n —————————————–<\/p>\n
This Agreement shall be governed by and construed in accordance with the
\nlaws of the State of Delaware (without giving effect to choice of law principles
\nthereof) applicable to contracts made and to be performed in the State of
\nDelaware. Each of the parties hereto irrevocably consents to the exclusive
\njurisdiction of the Court of Chancery or other courts of the State of Delaware
\nin connection with any matter based upon or arising out of this Agreement or the
\nmatters contemplated herein, agrees that process may be served upon them in any
\nmanner authorized by the laws of the State of Delaware for such persons, and
\nwaives and covenants not to assert or plead any objection which it might
\notherwise have to such jurisdiction and such process.<\/p>\n
9.9 Rules of Construction.
\n ———————<\/p>\n
Each of the parties hereto acknowledges and agrees that such party has been
\nrepresented by counsel during the negotiation, preparation and execution of this
\nAgreement and, therefore, waives the application of any law, regulation, holding
\nor rule of construction providing that ambiguities in an agreement or other
\ndocument will be construed against the party drafting such agreement or
\ndocument.<\/p>\n
9.10 Remedies for Breach.
\n ——————-<\/p>\n
If any party under this Agreement fails to consummate the transactions
\ncontemplated by this Agreement by its act or failure to act or do any other act
\nrequired of such party under this Agreement, then, if the failure continues for
\nten business days after notice to the party in default by the non-defaulting
\nparty, such non-defaulting party may institute and maintain a proceeding to
\ncompel the defaulting party’s specific performance of this Agreement. The remedy
\nof specific<\/p>\n
56<\/p>\n
performance shall be in addition to any and all of the remedies at law or in
\nequity including, but not limited to, injunctive relief and an action for
\ndamages, to which any party may be entitled.<\/p>\n
ARTICLE X<\/p>\n
INDEMNIFICATION; REMEDIES<\/p>\n
10.1 Global Crossing NA’s Obligation to Indemnify.
\n ——————————————–<\/p>\n
From and after the Closing Date, Global Crossing NA hereby agrees to
\ndefend, indemnify, and hold harmless the Exodus Parties and their affiliates,
\nand their respective employees, agents and representatives (collectively,
\n“Exodus Indemnitees”), from and against any and all actual liabilities,
\n ——————
\njudgments, damages, claims, demands, costs, expenses (including necessary and
\nreasonable legal fees and expenses) and losses (each, a “Claim”) suffered or
\n —–
\nincurred by reason of (i) any representation or warranty made by any Company
\nParty in this Agreement (other than representations and warranties contained in
\nSection 2.11 of this Agreement) having been untrue when made or deemed made or
\nthe breach by any Company Party of any covenant or agreement made by it herein
\nor (ii) any liabilities arising from or relating to assets of the Company
\nParties not used in the business of the Group and not included in the assets of
\nthe Company as of the date hereof; provided, however, that, except as set forth
\n ——– ——-
\nin Section 5.17 hereto, Global Crossing NA shall have no liability under this
\nSection 10.1 unless and until the aggregate of all Claims of Exodus Indemnitees
\nexceeds $33 million (the “Threshold”), whereafter Global Crossing NA shall be
\n ———
\nliable for the amount of all Claims of Exodus Indemnitees up to and including
\nthe Threshold and all Claims of Exodus Indemnitees in excess of the Threshold;
\nand provided further that Global Crossing NA’s aggregate liability pursuant to
\n ——– ——-
\nthis Article X shall not exceed $660 million.<\/p>\n
10.2 Entitlement to Indemnification; Indemnification Amount; Double
\n ————————————————————–
\nRecovery.
\n——–<\/p>\n
(a) The Exodus Indemnitees shall be entitled to indemnity under
\nSection 10.1 for any and all Claims for which written notice specifying the
\nClaim in reasonable detail is given during the period set forth in Section 10.5.
\nThe termination of the representations and warranties contained in this
\nAgreement shall not affect the rights of any Exodus Indemnitee, to prosecute to
\nconclusion any Claim resulting from any breach of a representation or warranty
\nas to which notice is given pursuant to Section 10.4 prior to the termination of
\nsuch representation or warranty.<\/p>\n
(b) The amount of any Claim or Tax (collectively, a “Loss”) for which
\n —-
\nindemnification is provided under Article VIII or this Article X shall be net of
\nany amounts actually recovered by the indemnified party under insurance policies
\nwith respect to such Loss and shall be reduced to take account of any net Tax
\nbenefit by the indemnified party arising from the incurrence or payment of any
\nsuch Loss.<\/p>\n
(c) An Exodus Indemnitee shall not be entitled to a double recovery
\nof damages under any provision of this Agreement, including the provisions set
\nforth in Article VIII and this Article X.<\/p>\n
57<\/p>\n
10.3 Sole Remedy.
\n ———–<\/p>\n
The indemnification provided in this Article X shall be the sole and
\nexclusive remedy of any Exodus Indemnitee in respect of the matters addressed in
\nSection 10.1.<\/p>\n
10.4 Claims.
\n ——<\/p>\n
Each indemnified party shall, promptly after receipt of notice of a Claim
\nor action against such indemnified party in respect of which indemnity may be
\nsought hereunder, notify the applicable indemnifying party in writing of the
\nClaim or action. If any such Claim or action shall be brought against an
\nindemnified party, and it shall have notified the indemnifying party thereof,
\nunless based on the written advice of counsel to such indemnified party a
\nconflict of interest between such indemnified party and indemnifying parties may
\nexist in respect of such Claim, then the indemnifying party shall be entitled to
\nparticipate therein, and, to the extent that it wishes, jointly with any other
\nsimilarly notified indemnifying party, to assume the defense thereof. After
\nnotice from the indemnifying party to the indemnified party of its election to
\nassume the defense of such Claim or action in accordance with the preceding
\nsentence, the indemnifying party shall not be liable to the indemnified party
\nunder this Article X for any legal or other expenses subsequently incurred by
\nthe indemnified party in connection with the defense thereof. Any indemnifying
\nparty against whom indemnity may be sought under this Article X shall not be
\nliable to indemnify an indemnified party if such indemnified party settles such
\nClaim or action without the consent of the indemnifying party, but such consent
\nshall not unreasonably be withheld. The indemnifying party may not agree to any
\nsettlement of any such Claim or action, other than solely for monetary damages
\nfor which the indemnifying party shall be responsible hereunder, as a result of
\nwhich any remedy or relief shall be applied to or against the indemnified party,
\nwithout the prior written consent of the indemnified party, which consent shall
\nnot unreasonably be withheld. This Section 10.4 shall not apply to claims made
\nunder Article VIII. In any action hereunder as to which the indemnifying party
\nhas assumed the defense thereof, the indemnified party shall continue to be
\nentitled to participate in the defense thereof, with counsel of its own choice,
\nbut the indemnifying party shall not be obligated hereunder to reimburse the
\nindemnified party of the costs thereof.<\/p>\n
10.5 Survival.
\n ——–<\/p>\n
The representations and warranties of the Company Parties contained in
\nArticle II (other than those representations set forth in Section 2.11 hereof)
\nand the representations and warranties of the Exodus Parties contained in
\nArticle III shall each survive for a period of one (1) year following the
\nClosing Date, at which time they shall terminate and be of no further force and
\neffect. Any other representations and warranties (including those
\nrepresentations set forth in Section 2.11 hereof) of any party which may be
\ncontained in this Agreement or in any certificate or instrument delivered
\npursuant to this Agreement shall terminate on the Closing Date.<\/p>\n
10.6 Satisfaction of Indemnity Obligations.
\n ————————————-<\/p>\n
Global Crossing NA shall satisfy its indemnification obligations under this
\nArticle X by delivery of immediately available funds to an account designated by
\nExodus. Notwithstanding any restriction on the sale of shares of Exodus Common
\nStock by Global Crossing NA or any of<\/p>\n
58<\/p>\n
its affiliates contained in any agreement between Exodus and Global Crossing NA
\nor any such affiliates, Global Crossing NA or such affiliates may at any time
\nsell a number of shares of Exodus Common Stock that will yield proceeds in an
\namount equal to Global Crossing NA’s indemnification obligations pursuant to
\nthis Article X or Article VIII.<\/p>\n
10.7 Adjustment to Purchase Price.
\n —————————-<\/p>\n
Exodus and Global Crossing NA agree to report any indemnification payment
\nmade under Article VIII and this Article X and any payment made pursuant to
\nSection 4.4 as an adjustment to purchase price, contribution to capital made
\nimmediately prior to the Closing Date, or other non-taxable amount to the extent
\nthat there is substantial authority for such reporting position under applicable
\nlaw.<\/p>\n
[Signature page follows]<\/p>\n
59<\/p>\n
IN WITNESS WHEREOF, the Company Parties and Exodus Parties have caused this
\nAgreement to be executed and delivered by their respective officers thereunto
\nduly authorized, all as of the date first written above.<\/p>\n
EXODUS COMMUNICATIONS, INC.
\n \/s\/ Ellen M. Hancock
\n By: ______________________________________
\n Ellen M. Hancock
\n Chief Executive Officer and Chairman<\/p>\n
Einstein ACQUISITION CORP.
\n \/s\/ Adam W. Wegner
\n By: ______________________________________
\n Adam W. Wegner
\n President<\/p>\n
GLOBALCENTER HOLDINGS, INC.
\n \/s\/ Leo J. Hindery, Jr.
\n By: ______________________________________
\n Leo J. Hindery, Jr.
\n Chief Executive Officer<\/p>\n
GLOBAL CROSSING NORTH AMERICA, INC.
\n \/s\/ Leo J. Hindery, Jr.
\n By: ______________________________________
\n Leo J. Hindery, Jr.
\n Chief Executive Officer<\/p>\n
GLOBAL CROSSING GLOBALCENTER HOLDINGS, INC.
\n \/s\/ Leo J. Hindery, Jr.
\n By: ______________________________________
\n Leo J. Hindery, Jr.
\n Chief Executive Officer<\/p>\n
GLOBALCENTER, INC.
\n \/s\/ Leo J. Hindery, Jr.
\n By: ______________________________________
\n Leo J. Hindery, Jr.
\n Chief Executive Officer<\/p>\n
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