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ASSET PURCHASE AGREEMENT
among
EXODUS COMMUNICATIONS, INC.,
AMERICAN INFORMATION SYSTEMS, INC.,
ARCA SYSTEMS, INC.,
COHESIVE TECHNOLOGY SOLUTIONS, INC.,
GLOBALCENTER HOLDING CO.,
GLOBALCENTER INC. and
SERVICE METRICS, INC.,
as Sellers,
CABLE AND WIRELESS PLC,
as Parent
and
DIGITAL ISLAND INC.,
as the Buyer
Dated as of November 29, 2001
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ARTICLE I
DEFINITIONS
Section 1.1. Specific Definitions.........................................1
Section 1.2. Other Terms.................................................14
Section 1.3. Other Definitional Provisions...............................14
ARTICLE II
THE PURCHASE AND SALE OF ASSETS
Section 2.1. Purchased Assets............................................15
Section 2.2. Consideration for the Purchased Assets......................20
Section 2.3. Contract Assumption and Assignment..........................23
Section 2.4. Contract Obligations........................................26
Section 2.5. No Expansion of Third Party Rights..........................27
Section 2.6. Closing.....................................................27
Section 2.7. Deliveries at Closing.......................................28
Section 2.8. Subsequent Transfer.........................................29
Section 2.9. Performance.................................................29
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EXODUS
Section 3.1. Title to Purchased Assets...................................30
Section 3.2. Power and Authority.........................................30
Section 3.3. Organization, Authority and Qualification...................30
Section 3.4. Capitalization of SPEs......................................31
Section 3.5. Subsidiaries................................................31
Section 3.6. SEC and Other Reports; Financial Statements.................31
Section 3.7. Absence of Certain Changes or Events........................32
Section 3.8. Real Estate; Title to Properties............................32
Section 3.9. Litigation..................................................34
Section 3.10. Compliance with Law.........................................34
Section 3.11. Contracts...................................................34
Section 3.12. Consents and Approvals......................................35
Section 3.13. Environmental and Health and Safety Matters.................35
Section 3.14. Tax Matters.................................................36
Section 3.15. Intellectual Property.......................................36
Section 3.16. Labor Matters...............................................38
Section 3.17. Employee Benefits...........................................40
Section 3.18. Insurance...................................................42
Section 3.19. Brokers and Finders.........................................42
Section 3.20. Information Technology......................................42
Section 3.21. Sufficiency of Purchased Assets.............................42
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Section 4.1. Power and Authority.........................................43
Section 4.2. Organization, Authority and Qualification...................43
Section 4.3. Brokers and Finders.........................................43
Section 4.4. Consents and Approvals......................................43
Section 4.5. Litigation..................................................43
Section 4.6. Availability of Funds.......................................44
ARTICLE V
TAX MATTERS
Section 5.1. Transfer Taxes..............................................44
Section 5.2. Allocation of Purchase Price................................44
Section 5.3. Tax Information.............................................45
ARTICLE VI
CERTAIN COVENANTS AND AGREEMENTS OF THE SELLERS AND THE BUYER
Section 6.1. Submission for Bankruptcy Court Approval....................45
Section 6.2. Consultation; Notification; No Conflict.....................50
Section 6.3. Bidding Procedures..........................................50
Section 6.4. Expense Reimbursement and Break-Up Fee......................53
Section 6.5. Other Assets and Agreements.................................53
Section 6.6. Additional Matters and Further Assurances...................54
Section 6.7. Access and Information......................................54
Section 6.8. Registrations, Filings and Consents.........................55
Section 6.9. Conduct of Business.........................................56
Section 6.10. Retention of Books and Records..............................58
Section 6.11. Delivery of Corporate Minutes and Bank Signature Cards......58
Section 6.12. Further Assurances..........................................59
Section 6.13. Non-Solicitation of Employees; Confidentiality of Information;
Use of Intellectual Property................................59
Section 6.14. Closing.....................................................60
Section 6.15. Employment..................................................60
Section 6.16. Benefit Plans...............................................60
Section 6.17. Transition Services; License................................62
Section 6.18. Conduct After Closing.......................................64
Section 6.19. Use of Licensed Marks.......................................64
Section 6.20. Non-US Transactions.........................................65
Section 6.21. Consents to Severance of Leases.............................67
Section 6.22. Additional Payments in respect of Austin 2..................68
Section 6.23. Letters of Credit; Security Deposits........................68
Section 6.24. Shutdown of Certain Non-Acquired Sites......................69
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1. Conditions Precedent to Obligations of the Sellers
and the Buyer...............................................70
Section 7.2. Conditions Precedent to Obligations of the Sellers..........71
Section 7.3. Conditions Precedent to the Obligations of Parent
and the Buyer...............................................71
ARTICLE VIII
TERMINATION
Section 8.1. Termination.................................................72
Section 8.2. Notice of Termination.......................................74
Section 8.3. Abandonment.................................................74
ARTICLE IX
INDEMNIFICATION
Section 9.1. Survival of Representations.................................74
Section 9.2. Agreement to Indemnify......................................75
Section 9.3. Conditions of Indemnification for Third-Party Claims........75
Section 9.4. Limitation of Indemnification...............................76
Section 9.5. Security for Indemnification................................77
Section 9.6. Purchase Price Adjustment...................................77
ARTICLE X
MISCELLANEOUS
Section 10.1. Amendment and Waiver........................................77
Section 10.2. Expenses....................................................78
Section 10.3. Public Disclosure...........................................78
Section 10.4. Specific Performance........................................78
Section 10.5. Assignment..................................................78
Section 10.6. Entire Agreement............................................78
Section 10.7. Fulfillment of Obligations..................................78
Section 10.8. Parties in Interest; No Third Party Beneficiaries...........79
Section 10.9. Schedules...................................................79
Section 10.10. Counterparts................................................79
Section 10.11. Headings....................................................79
Section 10.12. Notices.....................................................79
Section 10.13. No Strict Construction......................................80
Section 10.14. Governing Law...............................................80
Section 10.15. Severability................................................81
EXHIBITS
Exhibit A - Transition Services Agreement S/B
Exhibit B - Transition Services Agreement B/S
Exhibit C - License Agreement
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of November
29, 2001, among Exodus Communications, Inc., a Delaware corporation
("Exodus"), American Information Systems, Inc., an Illinois corporation, Arca
Systems, Inc., a Delaware corporation, Cohesive Technology Solutions, Inc., a
Delaware corporation, GlobalCenter Holding, Co., a Delaware corporation,
GlobalCenter, Inc., a Delaware corporation, and Service Metrics, Inc., a
Delaware corporation (each a "Seller" and, together with Exodus, the
"Sellers"); Digital Island Inc. (the "Buyer"); and Cable and Wireless plc, a
public limited company organized under the laws of England and Wales
("Parent").
W I T N E S S E T H:
WHEREAS, Exodus is engaged, directly and through the other
Sellers and its and their respective Subsidiaries, in the Business; and
WHEREAS, on September 26, 2001, voluntary petitions were filed by
Exodus and the other Sellers for relief pursuant to Section 301 of Title 11
of the United States Code, 11 U.S.C. ss.ss.101 et seq. (as amended, the
"Bankruptcy Code"), in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court") (the "Bankruptcy Cases"); and
WHEREAS, Exodus owns, directly or indirectly, all of the issued
and outstanding shares of capital stock of each other Seller; and
WHEREAS, the Sellers desire to sell and transfer to the Buyer or
its Designees, and the Buyer desires to purchase and assume from the Sellers,
the Purchased Assets and the Buyer is willing to assume, and the Sellers
desire to assign to the Buyer, the Assumed Liabilities; and
WHEREAS, upon the terms and subject to the conditions set forth
herein, and as authorized under Sections 105, 363, 365 and 1146 of the
Bankruptcy Code, the Buyer or its Designees will purchase from the Sellers
the Purchased Assets and the Buyer will assume from the Sellers the Assumed
Liabilities;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Specific Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or referenced below:
"Accounts Receivable Value" shall be determined in accordance
with Schedule 2.2(b)(i).
"Accrued Vacation Benefit" shall have the meaning set forth in
Section 6.16(c).
"Acquired Sites" shall mean the 27 Internet data centers
identified on Schedule 2.1(a)(i).
"Actions or Proceedings" shall have the meaning set forth in
Section 3.9(a).
"Actual Cure Amounts" shall have the meaning set forth in Section
2.4(a).
"Affiliate," as applied to any Person, shall mean any other
Person directly or indirectly controlling, controlled by or under common
control with such Person.
"Aggregate Vacation Benefit" shall have the meaning set forth in
Section 6.16(c).
"Agreed Operating Lease Cure Amount" shall have the meaning set
forth in Section 2.1(a)(iii).
"Agreement" shall mean this Agreement and all Schedules and
Exhibits hereto.
"Alternative Non-US Transaction" shall have the meaning set forth
in Section 6.20(g)(i).
"Alternative Transaction" shall have the meaning set forth in
Section 6.4(a).
"Antitrust Division" shall mean the Antitrust Division of the
United States Department of Justice.
"Assigned Contracts" shall have the meaning set forth in Section
2.3(d).
"Assumed Leases" shall have the meaning set forth in Section 3.8(b).
"Assumed Liabilities" shall have the meaning set forth in Section
2.1(c).
"Auction" shall have the meaning set forth in Section 6.3(c)(i).
"Auction Transaction" shall have the meaning set forth in Section
6.4(a).
"Bankruptcy Auction Interested Parties" shall have the meaning
set forth in Section 2.3(f).
"Bankruptcy Cases" shall have the meaning set forth in the recitals.
"Bankruptcy Code" shall have the meaning set forth in the recitals.
"Bankruptcy Court" shall have the meaning set forth in the recitals.
"Bankruptcy Rules" shall mean the Federal Rules of Bankruptcy
Procedure.
"Benefit Plans" shall have the meaning set forth in Section 3.17(a).
"Bid" shall have the meaning set forth in Section 6.3(a).
"Bid Deadline" shall have the meaning set forth in Section 6.3(a).
"Bidding Procedures" shall have the meaning set forth in Section
6.3.
"Bidding Procedures Motion" shall have the meaning set forth in
Section 6.1(a)(1).
"Bidding Procedures Order" shall have the meaning set forth in
Section 6.1(a)(i).
"Break-Up Fee" shall have the meaning set forth in Section 6.4(a).
"Business" means the business of providing Internet
infrastructure outsourcing services, including web-hosting and managed and
professional services, as conducted by the Sellers and their respective
Subsidiaries on the date hereof and encompassing the business operations,
including all customer relationships, associated with the Acquired Sites and
the Non-Acquired Sites and the SPEs, as well as (to the extent not otherwise
associated with the Acquired Sites and the SPEs), any other business
operations (including managed and professional services businesses) related
to maintaining such customer relationships and business operations described
above, but excluding any business operations, customer relationships, assets
or liabilities of the Sellers or any of their respective Subsidiaries outside
the United States.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banks in London, England, New York, New York or San
Francisco, California are authorized or obligated by law or executive order
to close.
"Business Employees" shall have the meaning set forth in
Section 6.15.
"Buyer" shall have the meanings set forth in the preamble.
"Cash Consideration" shall have the meaning set forth in Section
2.2(a).
"Claimants" shall have the meaning set forth in Section
6.1(a)(ii).
"Claims" shall have the meaning set forth in Section 9.2(a).
"Closing" shall have the meaning set forth in Section 2.6.
"Closing Accounts Statement" shall have the meaning set forth in
Section 2.2(b)(ii).
"Closing Date" shall have the meaning set forth in Section 2.6.
"Closing Disputed Matters" shall have the meaning set forth in
Section 2.2(c).
"Closing Receivables Statement" shall have the meaning set forth
in Section 2.2(b)(i).
"COBRA" shall have the meaning set forth in Section 2.1(d)(vii).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall have the meaning set forth in Section 6.3(a).
"Commonly Controlled Entity" shall have the meaning set forth in
Section 3.17(a).
"Confidentiality Agreement" shall have the meaning set forth in
Section 6.7(e).
"Contract" shall mean any mortgage, bond, note, loan, evidence of
indebtedness, purchase order, letter of credit, indenture, covenant not to
compete, lease, franchise, license, permit, contract, agreement, commitment,
obligation, trust, instrument or other written binding arrangement or
understanding.
"Contract Confidential Information" shall have the meaning set
forth in Section 2.3(f).
"Contract Parties" shall have the meaning set forth in Section
2.3(f).
"Copyrights" shall have the meaning set forth in the definition
of Intellectual Property.
"Deductible" shall have the meaning set forth in Section 9.4(b).
"Definitive Sale Documentation" shall have the meaning set forth
in Section 6.3(a).
"Designee" shall mean any direct or indirect wholly-owned
Subsidiary of Parent, that the Buyer may appoint to (i) purchase specified
Purchased Assets, (ii) assume specified Assumed Liabilities or any Assigned
Contract, (iii) exercise any of the Buyer's rights hereunder, or (iv) employ
specified Transferred Employees on and after the Closing Date, it being
understood and agreed that any such right to designate is conditioned upon
such Designee being able to demonstrate satisfaction of the requirements of
Section 365 of the Bankruptcy Code including the provision of adequate
assurance for future performance; provided, that Parent or the Buyer must
inform Exodus of any such appointment no later than the fifth Business Day
prior to the Closing Date or Subsequent Transfer Date, as applicable.
"Determination Date" shall have the meaning set forth in
Section 2.2(d).
"DIP Financing" shall mean that certain Senior Secured,
Super-Priority Debtor-In-Possession Credit Agreement, dated as of November
14, 2001 among Exodus and certain of its Subsidiaries as debtors and
debtors-in-possession, and General Electric Capital Corporation, as Lead
Arranger.
"EHS Law" shall have the meaning set forth in Section 3.13(a).
"Embedded Non-Acquired Sites Technology" shall mean such
Technology (as defined in the License Agreement) incorporated and embedded
in, and not severable or removable from, the facilities and equipment that
are comprised within the Non-Acquired Sites as of the Closing Date.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agent" shall mean a bank or trust company reasonably
acceptable to Parent and Exodus.
"Escrow Agreement" shall mean an escrow agreement in form and
substance reasonably acceptable to Exodus and Parent.
"Escrowed Amount" shall have the meaning set forth in
Section 2.2(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended. "Excluded Assets" shall have the meaning set forth in Section 2.1(b).
"Excluded Lease Amount" shall have the meaning set forth in
Section 6.21(b).
"Excluded Liabilities" shall have the meaning set forth in
Section 2.1(d).
"Excluded Subsidiaries" shall mean any Subsidiary of Exodus other
than (i) the SPEs and (ii) the Sellers.
"Expense Reimbursement" shall have the meaning set forth in
Section 6.4(b).
"Exodus" shall have the meaning set forth in the preamble.
"Exodus Germany" shall mean Exodus Communications GmbH.
"Exodus Intellectual Property" shall mean (i) the Exodus Owned
Intellectual Property and (ii) the Exodus Licensed Intellectual Property.
"Exodus Japan" shall mean Exodus Communications KK (Shinjuku-Ku).
"Exodus Leased Real Properties" shall have the meaning set forth
in Section 3.8(a).
"Exodus Licensed Intellectual Property" shall mean all
Intellectual Property other than Exodus Owned Intellectual Property that is
used under license or otherwise used by Exodus or any Exodus Subsidiary as of
the Closing Date excluding Intellectual Property owned by an Excluded
Subsidiary or used under license between any Excluded Subsidiary and a third
party.
"Exodus Owned Intellectual Property" shall mean Intellectual
Property owned by Exodus or any Exodus Subsidiary as of the Closing Date
(including the TAKI managed firewall monitoring system) excluding
Intellectual Property owned by any Excluded Subsidiary.
"Exodus SEC Reports" shall have the meaning set forth in Section
3.6(a).
"Exodus Subsidiary" and "Exodus Subsidiaries" shall have the
meanings set forth in Section 3.5(a).
"Exodus UK" shall mean Exodus Internet Limited.
"Final Allocation" shall have the meaning set forth in
Section 5.2.
"Final Cash Consideration" shall have the meaning set forth in
Section 2.2(d).
"Final Closing Statements" shall have the meaning set forth in
Section 2.2(d).
"Final Order" shall mean an order or judgment (a) as to which the
time to appear, petition for certiorari or move for review or rehearing has
expired and as to which no appeal, petition for certiorari or other
proceeding for review or rehearing is pending or (b) if an appeal, writ of
certiorari, reargument or rehearing has been filed or sought, the order or
judgment has been affirmed by the highest court to which such order or
judgment was appealed or certiorari has been denied, or reargument or
rehearing shall have been denied or resulted in no modification of such order
or judgment, and the time to take any further appeal or to seek certiorari or
further reargument or rehearing has expired; provided, however, that the
possibility that a motion under Rule 59 or Rule 60 of the Federal Rules of
Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be
filed with respect to such order or judgment shall not prevent such order or
judgment from being considered a Final Order.
"Financing Lease" shall mean a financing arrangement with respect
to any equipment that constitutes a secured transaction such that the subject
equipment can be transferred to a buyer free and clear of Liens and Claims,
including without limitation, any underlying lease obligations, pursuant to
Section 363(f) of the Bankruptcy Code.
"FTC" shall mean the United States Federal Trade Commission.
"GAAP" shall mean United States generally accepted accounting
principles.
"German Buyer" shall mean HKS 43 Agentur fur Media Business GmbH
or another Designee named by Parent or HKS 43 Agentur fur Media Business GmbH
on or before the fifth Business Day prior to the closing of the German
Transaction.
"German Transaction" shall have the meaning set forth in Section
6.20(a).
"GlobalCenter" shall have the meaning set forth in Section 6.17(e).
"Governmental Directive" shall have the meaning set forth in
Section 3.9(b).
"Governmental Entity" shall mean any United States federal, state
or local or any supernational or non-United States court, tribunal,
legislative, executive governmental, quasi-governmental or regulatory
authority, self-regulatory authority, agency, department, commission,
instrumentality or body.
"Hazardous Substance" shall have the meaning set forth in Section
3.13(a).
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Indemnified Party" shall have the meaning set forth in Section
9.3(a).
"Indemnifying Party" shall have the meaning set forth in Section
9.3(a).
"Independent Accountant" shall have the meaning set forth in
Section 2.2(c).
"Initial Deposit" shall have the meaning set forth in Section
6.1(a)(i).
"Intellectual Property" shall mean any intellectual property or
proprietary rights in any jurisdiction, whether owned or held for use under
license, whether registered or unregistered, including, without limitation,
such rights in and to: (i) trademarks and pending trademark applications,
trade dress, service marks, certification marks, logos, trade names, brand
names, corporate names, assumed names and business names (the "Trademarks");
(ii) issued patents and pending patent applications, and any and all
divisions, continuations, continuations-in-part, reissues, continuing patent
applications, reexaminations, and extensions thereof, any counterparts
claiming priority therefrom, utility models, patents of
importation/confirmation, certificates of invention, certificates of
registration and like statutory rights (collectively, "Patents"); inventions,
invention disclosures, discoveries and improvements, whether patentable or
not; (iii) copyrighted works, copyright registrations and applications
therefor (the "Copyrights"); (iv) trade secrets (including, but not limited
to, those trade secrets defined in the Uniform Trade Secrets Act and under
corresponding foreign statutory and common law), confidential business,
technical and know-how information (including facility designs,
methodologies, processes and technologies embodied in certain Exodus
professional and managed services) and rights to limit the use or disclosure
thereof by any person (collectively, "Trade Secrets") ; (v) computer
software, data files, source and object codes, user interfaces, manuals,
databases and other specifications and documentation (collectively,
"Software"); (vi) mask works; (vii) moral rights; (viii) claims, causes of
action or defenses relating to the enforcement of any of the foregoing; (ix)
and the goodwill associated with the foregoing.
"Interest Rate" shall have the meaning set forth in Section
2.2(d)(i).
"IRS" shall mean the United States Internal Revenue Service.
"Japanese Buyer" shall mean Cable & Wireless Eastern Hemisphere
B.V. or another Designee named by Parent or Cable & Wireless Eastern
Hemisphere B.V. on or before the fifth Business Day prior to the closing of
the Japanese Transaction.
"Japanese Transaction" shall have the meaning set forth in
Section 6.20(b).
"Judgment" shall mean any judgment, injunction, ruling, order,
writ, decree or award, including final determinations under arbitration
proceedings.
"Knowledge" with respect to any individual, or any other Person,
as the case may be, shall mean the actual, direct and personal knowledge of
such individual, or the executive officers (or persons performing similar
functions) of such other Person, in each case after reasonable inquiry. The
Knowledge of the Sellers shall mean the Knowledge of the persons set forth on
Schedule 1.1(a).
"Law" shall mean any law, rule, regulation, code, plan, judgment
or other restriction of any court, arbitrator or other Governmental Entity.
"Lease Adjustments" shall have the meaning set forth in Section
2.2(g).
"License Agreement" shall have the meaning set forth in Section
6.17(d).
"Licensed Marks" shall mean the Trademarks set forth in Schedule
3.15.
"Licensed Territories" shall mean (i) France, (ii) the
Netherlands, (iii) Canada, (iv) Australia, (v) to the extent the German
Transaction has not been consummated, Germany, (vi) to the extent the
Japanese Transaction has not been consummated, Japan and (vii) to the extent
the UK Transaction has not been consummated, the United Kingdom.
"Liens" means any pledge, option, charge, hypothecation,
easement, security interest, right of way, encroachment, mortgage, deed of
trust, or other encumbrances or restrictions on transfer and shall also have
the meaning ascribed to "lien" in Section 101 of the Bankruptcy Code.
"Material Adverse Effect" means, (a) with respect to Exodus, an
effect which is reasonably likely to prevent or materially delay or
materially impair the ability of Exodus or any other Seller to consummate the
transactions contemplated by this Agreement, (b) with respect to the
Purchased Assets, a material adverse effect on the properties, assets,
liabilities, condition (financial or otherwise), or results of operations of
the Business, the Purchased Assets and/or the Assumed Liabilities, taken as a
whole, and (c) with respect to Parent, an effect which is reasonably likely
to prevent or materially delay or materially impair the ability of Parent and
the Buyer to consummate the transactions contemplated by this Agreement;
provided, that a Material Adverse Effect shall not be deemed to have occurred
with respect to a Person as a result solely of matters disclosed by such
Person on the Sellers' Disclosure Letter or Schedules to this Agreement
delivered on or prior to the date hereof and provided further, in no event
shall any of the following be taken into account (alone or in combination
with any other event identified in this proviso) in determining whether there
has been such a Material Adverse Effect: (i) any change, event, circumstance,
development or effect primarily attributable to the public announcement or
pendency of this Agreement or the transactions contemplated this Agreement;
(ii) any change, event, circumstance, development or effect primarily
attributable to conditions generally affecting the Internet infrastructure
outsourcing services industry, except to the extent that any such change,
event, circumstance, development or effect has an adverse effect on Exodus
and its Subsidiaries that is materially and disproportionately greater than
the adverse effect on comparable entities operating in such industries; (iii)
changes in GAAP for companies operating in the Internet infrastructure
outsourcing service industry; (iv) changes in the price or trading volume of
Exodus's Securities; and (v) general economic, political or market
conditions, or acts of terrorism or war (whether or not formally declared)
except to the extent that any such conditions or acts have an adverse effect
on Exodus and its Subsidiaries that is materially and disproportionately
greater than the adverse effect on comparable entities operating in the
Internet infrastructure outsourcing services industry; provided, that the
filing or pendency of the Bankruptcy Cases and any proceedings thereunder are
not by themselves a Material Adverse Effect (it being understood that the
facts underlying any allegations or claims against the Sellers asserted in
any such proceedings may be the basis for a Material Adverse Effect).
"Motions" shall mean one or more of the Bidding Procedures
Motion, the Primary Sale Motion, the Secondary Sale Motion, the Primary 365
Motion or the Secondary 365 Motion, as the context requires.
"Non-Acquired Sites" shall mean the U.S. Internet data centers of
the Sellers other than the Acquired Sites.
"Non-Conforming Lease" shall have the meaning set forth in
Section 2.2(g).
"Notice Date" shall have the meaning set forth in Section 2.3(f).
"Orders" shall have the meaning set forth in Section 6.1(a)(ii).
"Parent" shall have the meaning set forth in the preamble.
"Patents" shall have the meaning set forth in the definition of
Intellectual Property.
"Pension Plan" shall have the meaning specified in Section 3.17(a).
"Permitted Activities" shall have the meaning specified in
Section 6.13(a).
"Permitted Liens" shall have the meaning set forth in Section
3.8(a).
"Person" means any individual, corporation, partnership (general
or limited), limited liability company, firm, joint venture, association,
joint-stock company, trust, estate, unincorporated organization or
Governmental Entity or other entity or organization.
"Pre-Closing Lease Adjustment" shall have the meaning set forth
in Section 2.2(g).
"Pre-Paid Accounts Value" shall be determined in accordance with
Schedule 2.2(b)(ii).
"Primary 365 Contract" and "Primary 365 Contracts" shall have the
meaning set forth in Section 2.3(d).
"Primary 365 Contracts Motion" shall have the meaning set forth
in Section 6.1(a)(ii)(A).
"Primary 365 Contracts Order" shall have the meaning set forth in
Section 6.1(a)(ii)(A).
"Primary Assigned Contract" shall have the meaning set forth in
Section 2.3(d).
"Primary Non 365 Contract" and "Primary Non 365 Contracts" shall
have the meaning set forth in Section 2.3(d).
"Primary Purchased Assets" shall mean all the Purchased Assets
other than the Secondary Purchased Assets.
"Primary Sale Hearing" shall have the meaning set forth in
Section 6.1(a)(i).
"Primary Sale Motion" shall have the meaning set forth in Section
6.1(a)(ii)(A).
"Primary Sale Order" shall have the meaning set forth in Section
6.1(a)(ii)(A).
"Primary Scheduled Contracts" shall mean the Contracts listed on
Part I of Schedule 2.3(a), Schedule 2.3(b) and Schedule 2.3(c).
"Primary Scheduled Financing Leases" shall have the meaning set
forth in Section 2.1(a)(ii).
"Primary Scheduled Operating Leases" shall have the meaning set
forth in Section 2.1(a)(iii).
"Primary Selected Operating Leases" shall have the meaning set
forth in Section 2.1(a)(iii).
"Prime Rate" means the "prime rate" as reported on a daily basis
in The Wall Street Journal.
"Proposed Allocation" shall have the meaning set forth in
Section 5.2.
"Pro Rata Portion" shall have the meaning set forth in Section
6.16(c).
"Purchased Assets" shall have the meaning set forth in Section
2.1(a)(i) and shall include collectively, the Primary Purchased Assets and
the Secondary Purchased Assets.
"Qualified Bid" shall have the meaning set forth in Section 6.3(b).
"Qualified Bidder" shall have the meaning set forth in Section
6.3(a).
"Related Document" shall mean the documents expressly required to
be executed in connection with the consummation of the transactions
contemplated by this Agreement, including the License Agreement, the Escrow
Agreement, the Transition Services Agreement S/B and the Transition Services
Agreement B/S.
"Reported Exodus Financial Statements" shall have the meaning set
forth in Section 3.6(a).
"Retained Subsidiary" means any Subsidiary of a Seller, other
than the SPEs.
"Sale" shall have the meaning set forth in Section 6.3.
"Scheduled Contracts" shall mean the Primary Scheduled Contracts
and the Secondary Scheduled Contracts.
"Scheduled Financing Leases" shall have the meaning set forth in
Section 2.1(a)(ii).
"Scheduled Lease Amount" shall have the meaning set forth in
Section 2.2(a).
"Scheduled Operating Leases" shall have the meaning set forth in
Section 2.1(a)(iii).
"SEC" means the United States Securities and Exchange Commission.
"Secondary 365 Contract" and "Secondary 365 Contracts" shall have
the meaning set forth in Section 2.3(d).
"Secondary 365 Contracts Motion" shall have the meaning set forth
in Section 6.1(a)(ii)(B).
"Secondary 365 Contracts Order" shall have the meaning set forth
in Section 6.1(a)(ii)(B).
"Secondary Assigned Contract" shall have the meaning set forth in
Section 2.3(d).
"Secondary Non 365 Contract" and "Secondary Non 365 Contracts"
shall have the meaning set forth in Section 2.3(d).
"Secondary Purchased Assets" shall mean that equipment subject to
Secondary Scheduled Financing Leases selected in accordance with Section
2.1(a)(ii) and subject to the Secondary Sale Order, and the Contracts
(including Secondary Selected Operating Leases) the assignment of which is
governed by the Secondary 365 Contracts Order and any accounts receivable
generated by such Contracts from the Closing Date to the Subsequent Transfer
Date.
"Secondary Sale Hearing" shall have the meaning set forth in
Section 6.1(a)(i).
"Secondary Sale Motion" shall have the meaning set forth in
Section 6.1(a)(ii)(B).
"Secondary Sale Order" shall have the meaning set forth in
Section 6.1(a)(ii)(B).
"Secondary Scheduled Contracts" means the Contracts listed on
Part II of Schedule 2.3(a).
"Secondary Scheduled Financing Leases" shall have the meaning set
forth in Section 2.1(a)(ii).
"Secondary Scheduled Operating Leases" shall have the meaning set
forth in Section 2.1(a)(iii).
"Secondary Selected Operating Leases" shall have the meaning set
forth in Section 2.1(a)(iii).
"Securities" means shares of capital stock, debt securities,
partnership interests, membership interests in limited liability companies
and similar rights.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Deposit Amount" means the amount (or portion thereof)
of the security deposits included in the Purchased Assets to the extent, and
only to the extent, that the Sellers shall have delivered to the Buyer at or
prior to the Closing an estoppel letter from the owner of the relevant
property, in a form reasonably satisfactory to the Buyer, in which such owner
agrees in substance not to make any claims against such security deposit (or
agrees to limit such claims) except in respect of actions or omissions after
the Closing.
"Securitization Documents" shall mean the Securitized Loan; the
Lease Agreement dated March 30, 2001 by and between Exodus Communications
Real Property I, LLC, as landlord, and Exodus, as tenant; the Lease Agreement
dated October 3, 1996 by and between Talus Corporation, as sublandlord, and
Computer Access Technology Corporation, as subtenant, as assigned to Exodus
Communications Real Property I, LLC by that certain Lease and Sublease
Termination Agreement and Assignment of CATC Sublease, dated as of March 1,
2001, by and between Exodus Communications Real Property I, LLC, as master
landlord, Talus Corporation, as sublandlord, and Exodus, as subtenant, as
assigned to Exodus, as sublandlord, by that certain Assignment of CATC
Sublease, dated as of March 1, 2001; the Lease Agreement dated May 4, 2001 by
and between Exodus Communications Real Property I, LLC, as landlord, and
Exodus, as tenant; the Lease Agreement dated February 29, 2000 by and between
TMG, as landlord, and Siemens Information and Communications, Inc., as
tenant, as assigned to Exodus Communications Real Property I, LLC, as
landlord, by assignment dated April 2, 2001, and as further assigned to
Exodus, as sublandlord, by assignment dated April 2, 2001; and the Lease
Agreement dated March 30, 2001 by and between Exodus Communications Real
Property I, LP, as landlord, and Exodus, as tenant.
"Securitized Loan" shall mean the Loan Agreement, dated as of
March 30, 2001, among Exodus Communications Real Property I, LLC and Exodus
Communications Real Property I, LP and Xxxxxx Brothers Bank FSB, as amended
on May 4, 2001, and June 27, 2001.
"Selected Operating Leases" shall have the meaning set forth in
Section 2.1(a)(iii).
"Sellers" shall have the meaning set forth in the preamble.
"Sellers' Disclosure Letter" shall have the meaning set forth in
Article III.
"Software" shall have the meaning set forth in the definition of
Intellectual Property.
"SPEs" shall mean Exodus Communications Real Property Managers
I, LLC, a Delaware limited liability company, Exodus Communications Real
Property I, a Delaware limited liability company, and Exodus Communications
Real Property I, L.P, a Texas limited partnership.
"Subsequent Disclosure Schedule" shall have the meaning set forth
in Section 10.9.
"Subsequent Event" shall have the meaning set forth in
Section 10.9.
"Subsequent Transfer" shall have the meaning set forth in
Section 2.8.
"Subsequent Transfer Date" shall have the meaning set forth in
Section 2.8.
"Subsidiary" shall mean, with respect to any Person at any time,
any corporation, partnership, joint venture, association, limited liability
company, joint-stock company, trust or estate, or unincorporated organization
of which (or in which) more than 50% of: (a) the issued and outstanding
shares of capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether at the
time shares of capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency); (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company; or (c) the beneficial interest in
such trust or estate, is, at such time, directly or indirectly owned by such
Person.
"Tax" or "Taxes" shall mean any and all federal, state, county,
local, foreign and other taxes, assessments, duties or charges of any kind
whatsoever, including, without limitation, corporate, business profits,
franchise, income, sales, use, ad valorem, gross receipts, value-added,
profits, license, minimum, alternative minimum, environmental, withholding,
payroll, employment, excise, property, customs and occupation taxes, and any
interest, fine, penalty, addition to tax and other amounts imposed with
respect thereto.
"Tax Returns" shall mean all returns, reports, forms, estimates,
information returns and statements (including any related or supporting
information) filed or required to be filed with any Taxing Authority in
connection with the determination, assessment, collection or administration
of any Taxes.
"Taxing Authority" shall mean any government or political
subdivision or territory or possession of any government or any authority or
agency therein or thereof having power to tax.
"Third Party Claims" shall have the meaning set forth in
Section 9.3.
"Trade Secrets" shall have the meaning set forth in the
definition of Intellectual Property.
"Trademarks" shall have the meaning set forth in the definition
of Intellectual Property.
"Transfer Taxes" shall have the meaning set forth in Section
5.1(a).
"Transferred Employees" shall have the meaning set forth in
Section 6.15.
"Transition Services Agreement B/S" shall have the meaning set
forth in Section 6.17(b).
"Transition Services Agreement S/B" shall have the meaning set
forth in Section 6.17(a).
"Transitional Use" shall have the meaning set forth in Section
6.19(a).
"Treasury Regulations" shall mean the income tax regulations,
including temporary regulations, promulgated under the Code, as may be
amended from time to time.
"UK Buyer" shall mean Cable & Wireless Alpha Limited or another
Designee named by Parent or Cable & Wireless Alpha Limited on or before the
fifth Business Day prior to the closing of the UK Transaction.
"UK Transaction" shall have the meaning set forth in Section
6.20(c).
"Use" shall have the meaning set forth in Section 6.13(b).
"WARN" shall mean the Worker's Adjustment and Retraining
Notification Act.
"WARN Obligations" shall have the meaning set forth in Section
6.16(f).
Section 1.2. Other Terms. Other terms may be defined elsewhere in
the text of this Agreement and, unless otherwise indicated, shall have such
meaning indicated throughout this Agreement.
Section 1.3. Other Definitional Provisions. (a) The words
"hereof", "herein", and "hereunder" and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. Where a reference in this Agreement
is made to a Section or Exhibit, such reference shall be to a Section of or
Exhibit to this Agreement unless otherwise indicated.
(b) The words and phrases "include," "includes," "including," and
"including, but not limited to," when used in this Agreement shall mean
"including, without limitation".
(c) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(d) Unless the context requires otherwise, any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case
of statutes) by succession of comparable successor statutes and references to
all attachments thereto and instruments incorporated therein; provided, that
no representation made with respect to any Reported Exodus Financial
Statement filed prior to the date hereof shall be deemed modified by the
filing of any amendment thereto after the date hereof by operation of this
sentence. References to a Person are also to its permitted successors and
assigns.
(e) The terms "dollars" and "$" shall mean United States Dollars.
ARTICLE II
THE PURCHASE AND SALE OF ASSETS
Section 2.1. Purchased Assets. (a) (i) Upon the terms and subject
to the conditions contained herein, on the Closing Date (subject to Section
2.8 hereof), the Sellers will, or will cause their Subsidiaries to, as the
case may be, sell, convey, transfer, assign and deliver to the Buyer and/or
one or more of its Designees, and the Buyer will, or will cause one or more
of its Designees to, as the case may be, purchase and acquire from the
Sellers or their Subsidiaries, as the case may be, all of the legal and
beneficial right, title and interest of the Sellers and their Subsidiaries,
as the case may be, in and to all of their respective properties, assets,
Contracts and rights used in the Business of whatever kind or nature, whether
real or personal, tangible or intangible, wherever located, including those
assets specified on Schedule 2.1(a)(i) (the "Purchased Assets") free and
clear of all Liens except Permitted Liens; provided, that (A) the Purchased
Assets shall not include any properties, assets, Contracts or rights which
Parent notifies Exodus at least five (5) Business Days prior to the Closing
Date or, to the extent not transferred on the Closing Date at least five (5)
Business Days prior to the Subsequent Transfer Date, shall not constitute
Purchased Assets (it being understood that there shall be no adjustment to
the Cash Consideration as a result of any exclusion of properties, assets,
Contracts or rights specified in any such notice), (B) with respect to
equipment subject to Scheduled Financing Leases, the Purchased Assets shall
include only that equipment subject to Selected Financing Leases, and not the
underlying leases, selected in accordance with Section 2.1(a)(ii), (C) with
respect to Scheduled Operating Leases, the Purchased Assets shall include
only the Selected Operating Leases determined in accordance with Section
2.1(a)(iii), and (D) with respect to the Scheduled Contracts, the Purchased
Assets shall include only those Contracts selected in accordance with Section
2.3.
(ii) Exodus shall use commercially reasonable efforts to
deliver to Parent, on or before December 13, 2001, Part I of Schedule
2.1(a)(ii), and, on or before January 3, 2002, Part II of Schedule
2.1(a)(ii), which Schedule shall set forth a list of equipment leases
which in the good faith judgment of Exodus constitute Financing Leases
pursuant to which Exodus or another Seller leases equipment used in the
Business. Part I of Schedule 2.1(a)(ii), when delivered, will specify
Financing Leases relating to equipment as to which there were at least
$115,000,000 in aggregate remaining capital lease obligations as of
September 30, 2001 (the "Primary Scheduled Financing Leases") and Part
II of Schedule 2.1(a)(ii), when delivered, will specify Financing Leases
relating to additional equipment as to which there were at least
$140,000,000 (when combined with Financing Leases set forth on Part I of
Schedule 2.1(a)(ii)) in remaining capital lease obligations as of
September 30, 2001 (the "Secondary Scheduled Financing Leases" and,
together with the Primary Scheduled Financing Leases, the "Scheduled
Financing Leases"). Appropriate notice of the Sale and Motions, along
with a copy of the Bidding Procedures Order and this Agreement,
including Part I or Part II of Schedule 2.1(a)(ii), as applicable, shall
be served by Exodus promptly after each Part is delivered to Parent, on
each counterparty to each Financing Lease listed in each such Part. Part
I and Part II of Schedule 2.1(a)(ii), when delivered, will, with respect
to each Financing Lease listed therein, specify in reasonable detail,
each supplement or amendment related thereto, and the individual items
of equipment and lessors covered thereby, and such other identifying
information required to provide adequate notice to the counterparties as
required by the Bankruptcy Code and the Bankruptcy Rules, and the
location (by Internet data center or office, as the case may be) of each
such item of equipment currently in use or operation by the Sellers or
any of their customers. Exodus shall use commercially reasonable efforts
to include in Part II of such Schedule the location of each such item of
equipment that is not currently in use or operation. On or before the
seventh Business Day prior to the date of the Primary Sale Hearing or
the Secondary Sale Hearing, as the case may be, Parent and the Buyer
will notify Exodus, in accordance with the terms of this Agreement, of
the equipment listed in Part I or Part II of Schedule 2.1(a)(ii), as the
case may be, which the Buyer elects to acquire and, promptly after
receipt of such notice, Exodus shall provide notice of Buyer's election
by overnight mail or facsimile to each relevant counterparty. Such
equipment, and not the underlying lease, shall thereafter constitute
Purchased Assets for all purposes of this Agreement. There shall be no
adjustment to the Cash Consideration as a result of the identification
of equipment to be acquired by the Buyer or its Designees pursuant to
this Section 2.1(a)(ii) unless the equipment identified by Parent and
the Buyer was, as of September 30, 2001, subject to aggregate remaining
capitalized lease obligations in excess of $50,000,000, in which event
the Cash Consideration shall be increased by an amount equal to such
excess (which excess, or applicable portion thereof, shall be paid at
the Closing and/or the Subsequent Transfer as appropriate to reflect the
equipment transferred at the Closing and/or the Subsequent Transfer). In
the event that it is determined that a Scheduled Financing Lease
relating to equipment selected by Parent or the Buyer pursuant to this
Section 2.1(a)(ii) constitutes a Non-Conforming Lease, Parent and Exodus
shall use commercially reasonable efforts to replace such equipment with
alternative equipment (whether owned by the Sellers or subject to
another Scheduled Financing Lease); provided that such equipment must be
reasonably satisfactory to Parent and the Buyer.
(iii) Exodus shall use commercially reasonable efforts to
deliver to Parent, on or before December 13, 2001, Part I of Schedule
2.1(a)(iii) and, on or before January 3, 2002, Part II of Schedule
2.1(a)(iii), which Schedule shall set forth a list of equipment leases
that do not constitute Financing Leases and pursuant to which Exodus or
another Seller leases equipment used in the Business. Part I of Schedule
2.1(a)(iii), when delivered, will specify equipment leases with
aggregate lease payments remaining after September 30, 2001 of at least
$21,400,000 (the "Primary Scheduled Operating Leases") and Part II of
Schedule 2.1(a)(iii), when delivered, will specify additional equipment
leases with aggregate lease payments remaining after September 30, 2001
of at least $25,700,000 (when combined with equipment leases set forth
on Part I of Schedule 2.1(a)(iii)) (the "Secondary Scheduled Operating
Leases" and, together with the Primary Scheduled Operating Leases, the
"Scheduled Operating Leases"). Appropriate notice of the Sale and
Motions, along with a copy of the Bidding Procedures Order and this
Agreement, including Part I or Part II of Schedule 2.1(a)(iii), as
applicable, shall be served on each counterparty to each Scheduled
Operating Lease listed in each such Part. Part I and Part II of Schedule
2.1(a)(iii), when delivered, will, with respect to each Scheduled
Operating Lease listed therein, specify in reasonable detail, each
supplement or amendment related thereto, and the individual items of
leased equipment and lessors covered thereby, and such other identifying
information required to provide adequate notice to the counterparties as
required by the Bankruptcy Code and Bankruptcy Rules, and the location
(by Internet data center or office, as the case may be) of each such
item of leased equipment currently in use or operation by the Sellers or
any of their customers, as well as (y) Exodus's good faith estimate of
the amounts necessary to "cure" (within the meaning of Section 365(b)(1)
of the Bankruptcy Code) any "defaults" (within the meaning of Section
365(b) of the Bankruptcy Code) applicable to any such Scheduled
Operating Lease and any supplement, purchase order, schedule, appendix
or amendment thereto that constitutes a separate executory contract for
purposes of Section 365 of the Bankruptcy Code (the cure amount so
specified with respect to any Scheduled Operating Lease or any
supplement, purchase order, schedule, appendix or amendment thereto, the
"Agreed Operating Lease Cure Amount"). Exodus shall use commercially
reasonable efforts to include in Part II of such Schedule the location
of each such item of equipment that is not currently in use or
operation. On or before the seventh Business Day prior to the date of
the Primary Sale Hearing or the Secondary Sale Hearing, as the case may
be, Parent and the Buyer will notify Exodus, in accordance with the
terms of this Agreement, of the equipment leased to the Sellers pursuant
to particular Scheduled Operating Leases (or associated supplements,
purchase orders, schedules, appendices or amendments) listed in Part I
of Schedule 2.1(a)(iii) (the "Primary Selected Operating Leases") or
Part II of Schedule 2.1(a)(iii) (the "Secondary Selected Operating
Leases" and, together with the Primary Selected Operating Leases, the
"Selected Operating Leases") which Parent and the Buyer elect (x) to
have the Sellers assume and assign to the Buyer or its Designee pursuant
to Section 365 of the Bankruptcy Code or (y) if not capable of being
assumed and assigned pursuant to clause (x) for any reason, to have the
Sellers assign to the Buyer or its Designee as required by, and in the
manner set forth in, Section 7.3(f). Promptly after receipt of such
election, Exodus shall provide notice of Buyer's election by overnight
mail or facsimile to the relevant lessors.
(iv) To the extent Parent or the Buyer has consented to the
rejection by any Seller of a Scheduled Financing Lease or a Scheduled
Operating Lease pursuant to Section 6.9 of this Agreement, then the
references to aggregate remaining capital lease obligations of
$115,000,000 and $140,000,000 and to aggregate remaining operating lease
payments of $21,400,000 and $25,700,000 in Sections 2.1(a)(ii) and
2.1(a)(iii), respectively, shall be adjusted accordingly.
(b) Excluded Assets. Notwithstanding anything to the contrary in
this Agreement, the Purchased Assets shall not include any of the following
(the "Excluded Assets"):
(i) the Sellers' rights under this Agreement and the Related
Documents to which they are parties;
(ii) the minute books, stockholder and transfer records and
Tax Returns (except for the Buyer's rights of access set forth herein)
of the Sellers and their Retained Subsidiaries;
(iii) the prepaid and other receivable accounts listed in
Schedule 2.1(b)(iii), the Sanrise StorageTone sale-type lease and the
StorageTone equipment securing such lease;
(iv) all right, title and interest owned or leased by any of
the Sellers in and to the tangible assets (A) located or used primarily
in, or otherwise primarily related to, any jurisdiction outside of the
United States or (B) located on or in real property (other than the
Acquired Sites and the other real property listed on Schedule 2.1(a)(i))
to the extent (x) attached to such real property (other than being
plugged into an electrical outlet(s) and/or rack mounted) or (y) such
assets are office equipment (other than computer, network or storage
equipment) or power or HVAC equipment;
(v) all Contracts of the Sellers other than Assigned
Contracts;
(vi) cash and cash equivalents;
(vii) the assets of all employee benefit plans;
(viii) any stock or other equity interests or any debt
securities or promissory notes or other Securities convertible into or
exchanged for the foregoing owned by the Sellers in, or issued by, any
company or joint venture other than the SPEs;
(ix) any claims for Tax refunds and other Tax assets of any
Seller; and
(x) all claims by the Sellers under Sections 544, 545, 547
and 548 of the Bankruptcy Code other than any claims under such sections
of the Bankruptcy Code that may exist against Parent, the Buyer or any
of its Affiliates.
(c) Assumed Liabilities. Upon the terms and subject to the
conditions of this Agreement, at the Closing the Buyer agrees to assume the
following liabilities and obligations, but only to the extent such
liabilities or obligations relate to Purchased Assets which are transferred
and assigned to the Buyer or its Designees at the Closing or such other later
transfer or assignment date expressly provided for in this Agreement
(collectively, the "Assumed Liabilities"):
(i) any liabilities and obligations arising out of or
resulting from the ownership, lease, license, operation or disposition
of the Purchased Assets by the Buyer or any of its Designees after the
Closing Date; or
(ii) any liabilities and obligations under the Assigned
Contracts actually assumed by the Buyer or its Designee solely to the
extent set forth in Section 2.4.
(d) Excluded Liabilities. Notwithstanding anything contained in
this Agreement to the contrary, the Buyer does not assume or agree to pay,
satisfy, discharge or perform, and shall not be deemed by virtue of the
execution and delivery of this Agreement or any other document delivered at
the Closing or Subsequent Transfer pursuant to this Agreement (except to the
extent expressly provided in such other document), or as a result of the
consummation of the transactions contemplated by this Agreement or such other
document, to have assumed, or to have agreed to pay, satisfy, discharge or
perform, and shall not be liable for, any liability, obligation, Contract or
indebtedness of any Seller or any Affiliate of any Seller or any other
Person, whether primary or secondary, direct or indirect (other than the
Assumed Liabilities and liability to the Sellers (x) for a portion of the
Agreed Operating Lease Cure Amounts to the extent provided in Section 2.4 of
this Agreement, (y) for the Accrued Vacation Benefits to the extent provided
in Section 6.17(c) and (z) as provided in Section 9.2(b) of this Agreement)
including, without limitation, those set forth below (all such liabilities
and obligations that are not Assumed Liabilities are referred to herein as
the "Excluded Liabilities"):
(i) all liabilities, obligations and indebtedness of any
Seller or any Affiliate of any Seller to the extent they relate to any
of the Excluded Assets;
(ii) all liabilities, obligations and indebtedness of any
Seller or any Affiliate of any Seller relating to Taxes (with respect to
the Purchased Assets or otherwise);
(iii) all liabilities, obligations and indebtedness for any
legal, accounting, investment, banking, brokerage or similar fees or
expenses incurred by any Seller or any Affiliate of any Seller, in
connection with, resulting from or attributable to the transactions
contemplated by this Agreement or the DIP Financing;
(iv) all obligations or liabilities for any borrowed money
incurred by any Seller or any Affiliate of any Seller other than the
SPEs, including, without limitation, the DIP Financing;
(v) all obligations of any Seller or any Affiliate of any
Seller related to the ownership or issuance of any capital stock or
other equity interest of the Sellers, including, without limitation, any
stock options or warrants;
(vi) all liabilities, obligations and indebtedness (whether
past, present, future, known or unknown, liquidated or unliquidated,
accrued or unaccrued) of any Seller or any Affiliate of any Seller
resulting from, caused by or arising out of, directly or indirectly, the
conduct of their respective businesses or the ownership or lease of any
of their respective properties or assets or any properties or assets
previously used by any Seller or any Affiliate of any Seller at any time
prior to or on the Closing Date, including, without limitation, such of
the foregoing (A) as constitute, may constitute or are alleged to
constitute a tort, breach of contract or violation of requirement of any
Law or (B) that relate to, result in or arise out of the existence or
imposition of any liability or obligation to remediate or contribute or
otherwise pay any amount under or in respect of any EHS Law or other
Laws (it being understood that any liabilities or other obligations
relating to the Secondary Purchased Assets shall constitute Excluded
Liabilities for all periods prior to the Subsequent Transfer Date);
(vii) any obligations to provide benefits coverage, notice
or severance under WARN, Section 4980B of the Code and Sections 601
through 608 of ERISA ("COBRA") or any Benefit Plan, or any applicable
State Laws providing for similar benefits or protections with respect to
(A) employees who are not Transferred Employees and (B) Transferred
Employees eligible for such benefits coverage, notice or severance on or
prior to the Closing Date, including employees on disability leave on
the Closing Date and including, in each case, any obligations arising in
connection with the consummation of the transactions contemplated
herein;
(viii) all liabilities, known or unknown, of any Seller or
any Affiliate of any Seller relating to the recruitment, employment,
potential employment or termination of employment on or prior to the
Closing Date of any Transferred Employees including, without limitation,
any claims arising under any Benefit Plan or Contract pertaining
thereto;
(ix) any liabilities or obligations relating to any current
or former employees of any Seller or SPE who is not a Transferred
Employee;
(x) all claims and causes of action against any Seller or
any Affiliate of any Seller, or their respective officers, directors,
employees, shareholders or agents, or any Affiliates of such Persons;
(xi) any credit, refund, service credit, offset,
reimbursement or similar entitlement with respect to services provided
or required to be provided by a Seller or any Subsidiary thereof on or
prior to the Closing Date pursuant to any Contract, including but not
limited to, any Assigned Contract (it being understood that any
liabilities or other obligations relating to the Secondary Assigned
Contracts shall constitute Excluded Liabilities for all periods on or
prior to the Subsequent Transfer Date); and
(xii) all mechanics', workmen's, repairmen's,
warehousemen's, carriers' or other like Liens and encumbrances attaching
to any Primary Purchased Asset or Secondary Purchased Asset as a result
of events or circumstances on or prior to the Closing Date or Subsequent
Transfer Date, as applicable.
Section 2.2. Consideration for the Purchased Assets. (a) Subject
to the terms and conditions of this Agreement, in consideration of the sale,
transfer, assignment, conveyance and delivery of the Purchased Assets
(including the assignment of the Assigned Contracts (to the extent actually
assumed and assigned)), the Buyer shall (i) assume the Assumed Liabilities;
(ii) pay to Exodus at Closing by wire transfer, in immediately available
funds, an amount equal to the Cash Consideration (subject to adjustment as
provided herein) minus (x) the Initial Deposit minus (y) the Escrowed Amount
minus (z) the Scheduled Lease Amount; (iii) deposit with the Escrow Agent, as
escrow agent, $56,000,000 in cash (the "Escrowed Amount"), to be held in
escrow and released by the Escrow Agent in accordance with the terms of the
Escrow Agreement, (iv) deposit with the Escrow Agent, to be held in escrow
and released by the Escrow Agent in accordance with the terms of the Escrow
Agreement, an amount in cash (the "Scheduled Lease Amount") equal to (x)
$50,000,000 minus (y) the sum of all Pre-Closing Lease Adjustments (provided
that the Scheduled Lease Amount shall not be less than zero) minus (z) the
amount of aggregate remaining capital lease obligations relating to Selected
Financing Leases (A) as to which the Primary Sale Order (or the Secondary
Sale Order, if prior to Closing) authorizes the transfer of the equipment,
pursuant to Section 363(f) of the Bankruptcy Code, free and clear of all
Liens and Claims or (B) as to which the lessor has agreed that such lease is
a Financing Lease, and (v) pay the Agreed Operating Lease Cure Amounts to the
extent required by Section 2.4. The "Cash Consideration" shall, prior to
adjustment as provided herein, equal (A) $560,000,000 plus (B) the Security
Deposit Amount minus (C) the sum of all Pre-Closing Lease Adjustments minus
(D) the Excluded Lease Amount. The Cash Consideration shall be adjusted in
accordance with this Section 2.2, the penultimate sentence of Section
2.1(a)(ii), Section 6.12(c) and Section 6.20(g)(ii).
(b)(i) Within forty (40) Business Days after Closing, Parent
shall prepare and deliver to Exodus a statement (the "Closing Receivables
Statement") of the Accounts Receivable Value as of the Closing Date. The
Closing Receivables Statement shall be prepared by Parent in good faith based
on the methods, principles, practices and policies set out in Schedule
2.2(b)(i) (without regard to consummation of the transactions contemplated by
this Agreement).
(ii) Concurrently with the delivery of the Closing
Receivables Statement, Parent shall prepare and deliver to Exodus a
statement (the "Closing Accounts Statement") of the Pre-Paid Accounts
Value as of the Closing Date. The Closing Accounts Statement shall be
prepared by Parent in good faith based on the methods, principles,
practices and policies set out in Schedule 2.2(b)(ii).
(c) After receipt of the Closing Receivables Statement and the
Closing Accounts Statement, Exodus (including its advisors) shall have
fifteen (15) Business Days to review such statements together with the work
papers used in the preparation thereof. Within such fifteen (15) Business Day
period, Exodus shall notify Parent in writing that either (A) it concurs with
the Closing Receivables Statement and the Closing Accounts Statement or (B)
it disagrees with the Closing Receivables Statement and/or the Closing
Accounts Statement, specifying in reasonable detail the items as to which
disagreement exists (the "Closing Disputed Matters"). If no notice of
disagreement is delivered by Exodus, then the Sellers will be deemed to have
consented to the Closing Receivables Statement and the Closing Accounts
Statement. If a notice of disagreement is delivered by Exodus, Parent and
Exodus shall negotiate in good faith to resolve in writing any Closing
Disputed Matters. If Parent and Exodus are unable to reach an agreement with
respect to the Closing Disputed Matters within a period of thirty (30) days
after the receipt by Parent of a notice of disagreement, then all Closing
Disputed Matters as to which written agreement has not been reached shall be
submitted to and reviewed by an accounting firm reasonably acceptable to both
Parent and Exodus (the "Independent Accountant"). The Independent Accountant
shall consider only the Closing Disputed Matters. The Independent Accountant
shall act promptly to resolve all Closing Disputed Matters and its decision
with respect thereto shall be final and binding upon the parties and shall be
made within thirty (30) days after the later of (x) the engagement of the
Independent Accountant and (y) the date of presentation of all information
initially requested thereby. The fees and expenses of the Independent
Accountant in connection with its review and determination of any Closing
Disputed Matters shall be borne in equal shares by Parent and Exodus.
(d) Once the Closing Receivables Statement and the Closing
Accounts Statement have been finalized in accordance with Sections 2.2(b) and
(c) (as so finalized, the "Final Closing Statements"), the Cash Consideration
shall be adjusted as follows: the Cash Consideration shall be either (w)
increased by the amount, if any, by which the Accounts Receivable Value as
set forth in the Final Closing Statements is greater than $180,599,000, or
(x) decreased by the amount, if any, by which the Accounts Receivable Value
as set forth in the Final Closing Statements is less than $180,599,000, and
either (y) increased by the amount, if any, by which the Pre-Paid Accounts
Value as set forth in the Final Closing Statements is greater than
$22,632,000 or (z) decreased by the amount, if any, by which the Pre-Paid
Accounts Value as set forth in the Final Closing Statements is less than
$22,632,000. The Cash Consideration as determined in accordance with this
Section 2.2(d) shall thereafter for all purposes under this Agreement be the
"Final Cash Consideration". The date on which the Final Cash Consideration is
accepted or finally determined in accordance with this Section 2.2(d) is
referred to as the "Determination Date". On the fifth Business Day following
the Determination Date, the following payment shall be made to an account
specified by the recipient prior to such date:
(i) if the Final Cash Consideration is greater than the Cash
Consideration, Parent, on behalf of itself or as agent for the Buyer,
shall promptly pay to Exodus an amount in immediately available same day
funds equal to such excess, together with interest on such amount at an
annual rate equal to the Prime Rate calculated on a 365-day year (the
"Interest Rate") from the Closing Date to the date of the payment of
such amount to Exodus; or
(ii) if the Final Cash Consideration is less than the Cash
Consideration, Exodus shall promptly pay to Parent, on behalf of itself
or as agent for the Buyer, an amount in immediately available same day
funds equal to such shortfall, together with interest on such amount in
cash at the Interest Rate from the Closing Date to the date of the
payment of such amount to Parent.
(e) To the extent any payment is required to be made by Exodus
pursuant to Section 2.2(d)(ii), Parent may elect, in its sole discretion, to
withdraw such amount from the escrow account established pursuant to the
Escrow Agreement.
(f) During the preparation of the Closing Receivables Statement
and the Closing Accounts Statement and the period of any review or dispute
within the contemplation of this Section 2.2, each of the Sellers, Parent and
the Buyer shall (i) provide the others and their authorized representatives
(including their respective accountants) with reasonable access at reasonable
times, and in a manner so as not to interfere in any material respect with
normal business operations, to all relevant books, records, work papers,
information and employees, and (ii) cooperate fully in the preparation,
calculation and review of the Closing Accounts Statement and the Closing
Receivables Statement or the resolution of any dispute relating thereto.
(g) Scheduled Lease Amount. To the extent it is determined by
agreement of Exodus and Parent or a court of competent jurisdiction that any
lease relating to equipment designated as Purchased Assets pursuant to
Section 2.1(a)(ii) does not constitute a Financing Lease, but instead
constitutes a true lease transferable to a buyer by means of assumption and
assignment pursuant to Section 365 of the Bankruptcy Code (a "Non-Conforming
Lease"), unless a substitution of equipment is effected as contemplated by
the last sentence of Section 2.1(a)(ii), the appropriate Seller will assume
and assign such Non-Conforming Lease to the Buyer or its Designee pursuant to
Section 365 of the Bankruptcy Code and, to the extent determined on or before
the last day of the ninth month following the Closing Date, the Cash
Consideration shall be reduced by, and following Closing Parent or the Buyer
shall be entitled withdraw from the Scheduled Lease Amount deposited pursuant
to the Escrow Agreement, an amount equal to the sum of (i) the amounts
necessary to "cure" (within the meaning of Section 365(b)(1) of the
Bankruptcy Code) any "defaults" (within the meaning of Section 365(b) of the
Bankruptcy Code) each such Non-Conforming Lease and (ii) the net present
value, assuming a discount rate of 5.5% per annum, of all future lease
payments pursuant to each such Non-Conforming Lease (the "Lease
Adjustments"). To the extent any determination that a lease constitutes a
Non-Conforming Lease is made on or prior to the Closing Date, the amount of
any Lease Adjustment with respect to the relevant Non-Conforming Lease shall
constitute a "Pre-Closing Lease Adjustment" and shall be deducted from the
Cash Consideration to be paid at the Closing in accordance with Section
2.2(a); provided, that the Pre-Closing Lease Adjustments, in the aggregate,
shall not exceed $50,000,000. Any Lease Adjustment with respect to a lease
described on Schedule 2.1(a)(iii) determined not to constitute a Financing
Lease after the Closing Date shall be paid out of the Scheduled Lease Amount
pursuant to the Escrow Agreement and shall be satisfied solely pursuant to
the terms of the Escrow Agreement; provided, that to the extent Parent or the
Buyer has not made a claim for reduction of the Cash Consideration with
respect to any portion of the Scheduled Lease Amount on or prior to last day
of the ninth month following the Closing Date, such unclaimed portion shall
be released to Exodus in accordance with the terms of the Escrow Agreement.
Section 2.3. Contract Assumption and Assignment.
(a) Customer Contracts. Exodus shall use commercially reasonable
efforts to deliver to Parent, on or before December 13, 2001, Part I of
Schedule 2.3(a) to this Agreement, which Schedule shall set forth a list of
Contracts relating to the Business pursuant to which any Seller provides
goods or services to customers. Part I of Schedule 2.3(a), when delivered,
shall list all such customer Contracts relating to the top 50 customers of
the Business (based on revenue for the nine months ended September 30, 2001)
and at least 90% (in number) of all customer Contracts. Part I of Schedule
2.3(a) shall be organized according to customer and with respect to any
Contract that consists of a master agreement and separate supplements,
schedules or amendments and for customer for whom there is no master
agreement, the relevant purchase orders or statements of work. Part I of
Schedule 2.3(a) shall describe each such document in reasonable detail,
including the Internet data center from which the relevant customer is
serviced. A copy of this Agreement, including the relevant portion of Part I
of Schedule 2.3(a), shall be served by Exodus, together with the Bidding
Procedures Order, on each counterparty to each customer Contract set forth
thereon promptly after the receipt of such Schedule by Parent. Part I of
Schedule 2.3(a), when delivered by Exodus, shall specify with respect to each
customer Contract set forth thereon, the name of such Contract, the date of
such Contract and any amendments thereto, the parties to such Contract, and
the correct address for notices to counterparties thereunder, and, if
applicable, the Sellers' good faith estimate of the amounts necessary to
"cure" (within the meaning of Section 365(b)(1) of the Bankruptcy Code) any
"defaults" (within the meaning of Section 365(b) of the Bankruptcy Code)
thereunder. Exodus shall use commercially reasonable efforts to deliver to
Parent, on or before January 3, 2002, Part II of Schedule 2.3(a) to this
Agreement, which Schedule shall set forth a list of additional Contracts
relating to the Business pursuant to which any Seller provides goods or
services to customers. To the extent not already included in Part I of
Schedule 2.3(a), Part II of Schedule 2.3(a), when delivered by Exodus, shall
list at least 95% (by number) of the customer Contracts relating to the top
400 customers of the Business (based on revenue for the nine months ended
September 30, 2001). Part II of Schedule 2.3(a) shall be organized according
to customer and with respect to any Contract that consists of a master
agreement and separate purchase orders, statements of work, invoices,
supplements, appendices, schedules or amendments, Part II of Schedule 2.3(a)
shall describe each such purchase order, statement of work, invoice,
supplement, appendix, schedule or amendment in reasonable detail. A copy of
this Agreement, including the relevant portion of Part II of Schedule 2.3(a),
shall be served by Exodus, together with the Bidding Procedures Order, on
each counterparty to each customer Contract set forth thereon promptly after
the receipt of such Schedule by Parent. Part II of Schedule 2.3(a), when
delivered, shall specify with respect to each customer Contract set forth
thereon, the name of such Contract, the date of such Contract and any
amendments thereto, the parties to such Contract, and the correct address for
notices to counterparties thereunder, and, if applicable, the Sellers' good
faith estimate of the amounts necessary to "cure" (within the meaning of
Section 365(b)(1) of the Bankruptcy Code) any "defaults" (within the meaning
of Section 365(b) of the Bankruptcy Code) thereunder.
(b) Network Contracts. Exodus shall use commercially reasonable
efforts to deliver to Parent, on or before December 13, 2001, Schedule 2.3(b)
to this Agreement, which Schedule shall set forth a list of Contracts
relating to the Business pursuant to which any Person provides network
services or capacity to any Seller or any Subsidiary of any Seller (including
customer circuits associates with the Acquired Sites). Schedule 2.3(a), when
delivered, shall list at least 90% (by number) of all Contracts used in the
Business relating to the Internet backbone, at least 90% (by number) of all
Contracts used in the Business relating to tail circuits and at least 90% (by
number) of Contracts used in the Business relating to peering relationships.
Schedule 2.3(b) shall be organized according to network provider and with
respect to any Contract that consists of a master agreement and separate
purchase orders, statements of work, invoices, supplements, appendices,
schedules or amendments, Schedule 2.3(b) shall describe each such purchase
order, statement of work, invoice, supplement, appendix, schedule or
amendment in reasonable detail and the portions of the Internet backbone, the
tail circuits or peering relationships covered thereby. A copy of this
Agreement, including the relevant portion of Schedule 2.3(b), shall be served
by Exodus, together with the Bidding Procedures Order, on each counterparty
to each network Contract set forth thereon promptly after the receipt of such
Schedule by Parent. Schedule 2.3(b), when delivered by Exodus, shall specify
with respect to each network Contract set forth thereon, the name of such
Contract, the date of such Contract and any amendments thereto, the parties
to such Contract, and the correct address for notices to counterparties
thereunder, and, if applicable, the Sellers' good faith estimate of the
amounts necessary to "cure" (within the meaning of Section 365(b)(1) of the
Bankruptcy Code) any "defaults" (within the meaning of Section 365(b) of the
Bankruptcy Code) thereunder.
(c) Other Contracts. Exodus shall use commercially reasonable
efforts to deliver to Parent, on or before December 13, 2001, Schedule 2.3(c)
to this Agreement, which Schedule shall set forth a list of all Contracts
relating to the Business (other than Contracts described in Section
2.1(a)(ii), Section 2.1(a)(iii), Section 2.3(a) and Section 2.3(b) and real
property leases with respect to the Acquired Sites described in Schedule
3.8(a)), including Intellectual Property license agreements, reseller
agreements and vendor agreements. Schedule 2.3(c) shall be organized
according to type of contract and thereafter by counterparty and with respect
to any Contract that consists of a master agreement and separate purchase
orders, statements of work, invoices, supplements, appendices, schedules or
amendments, Schedule 2.3(c) shall describe each such purchase order,
statement of work, invoice, supplement, appendix, schedule or amendment in
reasonable detail. A copy of this Agreement, including the relevant portions
of Schedule 2.3(c), shall be served by Exodus, together with the Bidding
Procedures Order, on each counterparty to each Contract set forth thereon
promptly. Schedule 2.3(c), when delivered by Exodus, shall specify with
respect to each Contract set forth thereon, the name of such Contract, the
date of such Contract and any amendments thereto, the parties to such
Contract, and the correct address for notices to counterparties thereunder,
and, if applicable, the Sellers' good faith estimate of the amounts necessary
to "cure" (within the meaning of Section 365(b)(1) of the Bankruptcy Code)
any "defaults" (within the meaning of Section 365(b) of the Bankruptcy Code)
thereunder.
(d) Selection of Contracts. When delivered, each of Part I to
Schedule 2.3(a), Part II to Schedule 2.3(a), Schedule 2.3(b) and Schedule
2.3(c) shall indicate, with respect to each Contract set forth thereon,
whether (x) the Sellers are capable of assuming and assigning such Contract
to Buyer or its Designee pursuant to Section 365 of the Bankruptcy Code or
(y) the consent of a third party is required pursuant to applicable Law or
the terms of such Contract in order to affect an assignment thereof the Buyer
or its Designee; provided that the fact that any Scheduled Financing Lease or
Scheduled Operating Lease described in Schedules 2.3(a)(ii) or 2.3(a)(iii) or
network Contract described in Section 2.3(b) contains provisions that would
not be severable absent consent from a counterparty shall not by itself
require the Seller to designate such Contract as the type described in this
clause (y). On or before the seventh Business Day prior to the date of the
Primary Sale Hearing, Parent and the Buyer will notify Exodus, in accordance
with the terms of this Agreement, of the Contracts set forth on Part I of
Schedule 2.3(a), Schedule 2.3(b) and Schedule 2.3(c) which, based on the
designations contained in such Schedules, Parent and the Buyer desire either
(A) to have the Sellers assume and assign to the Buyer or its Designee
pursuant to Section 365 of the Bankruptcy Code (each such Contract, together
with the Assumed Leases and the Primary Selected Operating Leases, a "Primary
365 Contract" and collectively the "Primary 365 Contracts") or (B) if not
capable of being assumed and assigned pursuant to clause (A), to have the
Sellers assign to the Buyer or its Designee as required by, and in the manner
set forth in, Section 7.3(f) (each such Contract, a "Primary Non 365
Contract" and collectively, the "Primary Non 365 Contracts" and the Primary
365 Contracts and the Primary Non 365 Contracts, collectively, the "Primary
Assigned Contracts"). On or before the seventh Business Day prior to the date
of the Secondary Sale Hearing, Parent and the Buyer will notify Exodus, in
accordance with the terms of this Agreement, of the Contracts set forth on
Part II of Schedule 2.3(a) which, based on the designations contained in such
Schedule, Parent and the Buyer desire either (A) to have the Sellers assume
and assign to the Buyer or its Designee pursuant to Section 365 of the
Bankruptcy Code (each such Contract, together with the Secondary Selected
Operating Leases, a "Secondary 365 Contract" and collectively the "Secondary
365 Contracts") or (B) if not capable of being assumed and assigned pursuant
to clause (A), to have the Sellers assign to Buyer or its Designee as
required by, and in the manner set forth in, Section 7.3(f) (each such
Contract, a "Secondary Non 365 Contract" and collectively, the "Secondary Non
365 Contracts", the Secondary 365 Contracts and the Secondary Non 365
Contracts collectively, the "Secondary Assigned Contracts" and the Primary
Assigned Contracts together with the Secondary Assigned Contracts, the
"Assigned Contracts"). Notwithstanding anything to the contrary contained
herein, the Sellers shall not be required to assume and assign any Contract
(other than a Selected Operating Lease or an Assumed Lease) if the Actual
Cure Amounts the Sellers would be required to bear in respect of such
Contract pursuant to Section 2.4(a) are so high relative to the benefits of
such Contract that Parent, if making the decision whether to assume such
Contract, and bear such Actual Cure Amounts, for its own account would not
assume such Contract.
(e) Notwithstanding the foregoing provisions of this Section 2.3,
no later than five (5) Business Days prior to the Closing Date, Parent may
elect not to have the Buyer assume one or more of the Assigned Contracts, in
which case any such Contract shall no longer be an Assigned Contract (it
being understood that there shall be no adjustment to the Cash Consideration
as a result of any such election by Parent).
(f) Confidentiality. Each of the parties hereto hereby agrees (i)
that it is in the best interests of the Sellers, Parent and the Buyer for the
lists of, or any other information regarding, the Scheduled Financing Leases
and the Assigned Contracts, specifically including the type of information
set forth in Section 2.1(a)(ii), Section 2.1(a)(iii), Section 2.3(a), Section
2.3(b) and Section 2.3(c) hereof (such information, the "Contract
Confidential Information"), to be kept confidential and not to be revealed,
disclosed or divulged to any other party (specifically excluding the
representatives of any official committee appointed in the Bankruptcy Cases
and Persons who have been identified by the Sellers' advisors as potential
participants in the auction process, in each case who enter into a customary
confidentiality agreement and their respective advisors and the Bankruptcy
Court (the "Bankruptcy Auction Interested Parties")) prior to the date (the
"Notice Date") on which the counterparties to the Assigned Contracts are
given notice of a motion with the Bankruptcy Court to have the Sellers assign
the Assigned Contracts to the Buyer or their Designees, (ii) not to disclose
any Contract Confidential Information to any third party (other than the
Bankruptcy Auction Interested Parties) including any of the other parties to
any of the Assigned Contracts ("Contract Parties"), (iii) that the Contract
Confidential Information shall be kept confidential from and shall not be
disclosed to any party (other than any Bankruptcy Auction Interested Party)
entitled to receive notice in the Bankruptcy Cases until after the Notice
Date, and (iv) notwithstanding any of the foregoing, Parent and the Buyer may
contact any of the Contract Parties in order to negotiate with such Contract
Parties the possible assignment and, if applicable, assumption of any
Assigned Contracts, provided that Parent and the Buyer shall their use
commercially reasonable efforts to notify and coordinate with Exodus prior to
any such negotiation.
Section 2.4. Contract Obligations.
(a) Except as set forth in the following sentence, the Sellers,
and not Parent or the Buyer, shall be liable for, and shall satisfy, any and
all amounts necessary to "cure" (within the meaning of Section 365(b)(1) of
the Bankruptcy Code) any "defaults" (within the meaning of Section 365(b) of
the Bankruptcy Code) relating to any Primary or Secondary 365 Contract (the
full amount thereof being the "Actual Cure Amounts") and Parent and the Buyer
shall have no responsibility to any third party therefor. The Buyer shall pay
to Exodus (i) the first $2,000,000 in Agreed Operating Lease Cure Amounts
with respect to the Selected Operating Leases validly assigned to the Buyer
pursuant to the Primary 365 Contracts Order or the Secondary 365 Contracts
Order relating to equipment with remaining lease obligations of up to
$12,000,000 as of September 30, 2001 and (ii) all Agreed Operating Lease Cure
Amounts with respect to the Selected Operating Leases validly assigned to the
Buyer pursuant to the Primary 365 Contracts Order or the Secondary 365
Contracts Order relating to equipment with remaining lease obligations in
excess of $12,000,000 as of such date. To the extent that the Actual Cure
Amount with respect to any particular Selected Operating Lease exceeds the
Agreed Operating Lease Cure Amount specified on Part I or Part II of Schedule
2.1(a)(iii), the Sellers shall be responsible for the difference, in each
case on a lease by lease basis. All other liabilities, obligations and
indebtedness relating to the Assigned Contracts shall be retained obligations
and liabilities of the Sellers.
(b) The Buyer shall be obligated to pay any amounts for services
rendered and goods provided on and after the Closing Date under any Assigned
Contract validly assigned to the Buyer or its Designees.
(c) The Sellers are responsible for the verification of all
"cure" (within the meaning of Section 365(b)(1) of the Bankruptcy Code)
amounts and all administrative responsibilities associated therewith, in
their Bankruptcy Cases or otherwise, and shall use their reasonable best
efforts to establish the proper "cure" (within the meaning of Section
365(b)(1) of the Bankruptcy Code) amount, if any, for each Primary or
Secondary 365 Contract, and file and prosecute any and all appropriate
proceedings in the Bankruptcy Court. The Actual Cure Amounts associated with
any Primary or Secondary 365 Contract assigned to the Buyer or its Designees
pursuant to any 365 Contracts Order shall be paid by the Sellers at or as
soon as practicable after determination and, to the extent Parent or the
Buyer satisfies any amount, with respect to any Contract, in excess of the
obligations of such persons under this Section 2.4, such excess shall be a
credit against the Cash Consideration.
Section 2.5. No Expansion of Third Party Rights. The assumption
by the Buyer of the Assumed Liabilities shall in no way expand the rights or
remedies of any third party against Parent, the Buyer or the Sellers as
compared to the rights and remedies which such third party would have had
against the Sellers absent the Bankruptcy Cases, had the Buyer not assumed
such Assumed Liabilities. Without limiting the generality of the preceding
sentence, the assumption by the Buyer of the Assumed Liabilities shall not
create any third-party beneficiary rights other than with respect to the
Person that is the obligee of such Assumed Liability.
Section 2.6. Closing. Upon the terms and subject to the
conditions hereof, the closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., local
time on the second Business Day following the satisfaction or waiver (subject
to applicable Law) of the conditions precedent specified in Article VII
(other than those conditions that by their nature are to be fulfilled only at
the Closing, but subject to the fulfillment or waiver (subject to applicable
Law) of such conditions) or at such other time and place as the parties
hereto may mutually agree (such date, the "Closing Date").
Section 2.7. Deliveries at Closing. (a) At the Closing, the
Sellers shall deliver, or cause to be delivered, to Parent and the Buyer, the
following:
(i) the officer's certificates contemplated by Section 7.3(d);
(ii) the membership or partnership agreements representing
interests in Exodus Communications Real Property Managers I, LLC and
Exodus Communications Real Property I, amended to replace Exodus, with
the Buyer, or other indicia of ownership required by the Buyer, to
evidence transfer thereof;
(iii) copies of all consents, waivers and approvals obtained
by any Seller or its Subsidiaries that are required for the consummation
of the transactions contemplated by this Agreement;
(iv) a duly executed copy of the Escrow Agreement, a duly
executed copy of the Transition Services Agreement S/B and a duly
executed copy of the Transition Services Agreement B/S, and such other
duly executed documents, instruments and certificates as may be
necessary or appropriate to be delivered by any Seller (or the Retained
Subsidiaries, as the case may be) pursuant to this Agreement;
(v) a duly executed xxxx of sale in form and substance
reasonably satisfactory to Parent and Exodus transferring the Primary
Purchased Assets to the Buyer;
(vi) a duly executed assignment and assumption agreement
between the Sellers and the Buyer in form and substance reasonably
satisfactory to Parent and Exodus; and
(vii) such other certificates and evidences of transfer as
either Parent or Exodus may reasonably require.
(b) At the Closing, Parent and/or the Buyer shall deliver, or
cause to be delivered, to Exodus, the following:
(i) an amount of cash, calculated as set forth in Section
2.2(a)(ii), by wire transfer of immediately available same day funds to
an account or accounts designated by Exodus at least three (3) Business
Days prior to the Closing Date;
(ii) copies of all consents, waivers and approvals obtained
by Parent, the Buyer or their Affiliates that are required for the
consummation of the transactions contemplated by this Agreement;
(iii) a duly executed copy of the Escrow Agreement, a duly
executed copy of the Transition Services Agreement S/B and a duly
executed copy of the Transition Services Agreement B/S, and such other
duly executed documents, instruments and certificates as may be
necessary or appropriate to be delivered by Parent or the Buyer pursuant
to this Agreement; and
(iv) a duly executed assignment and assumption agreement
between the Sellers and the Buyer in form and substance reasonably
satisfactory to Parent and Exodus.
(c) At the Closing, Parent or the Buyer shall deliver, or cause
to be delivered, the Escrowed Amount and the Scheduled Lease Amount to Escrow
Agent in accordance with the terms of the Escrow Agreement.
Section 2.8. Subsequent Transfer. (a) Upon the terms and subject
to the conditions hereof, the transfer of the Secondary Purchased Assets (the
"Subsequent Transfer") shall take place at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at
10:00 a.m., local time on the eleventh day (or the next following Business
Day) after the later of the date on which the Secondary Sale Order becomes a
Final Order and the date on which the Secondary 365 Contracts Order becomes a
Final Order (the "Subsequent Transfer Date"). At the Subsequent Transfer, the
Sellers, Parent and the Buyer shall each deliver such documents as are
appropriate to evidence the transfer of the Secondary Purchased Assets and
the assignment of the Secondary Assigned Contracts, such documentation to be
in form and substance reasonably satisfactory to Parent and Exodus and to
include appropriate certificates and other instruments of transfer, copies of
all consents, waivers and approvals obtained by the parties relating to the
Secondary Purchased Assets and the Secondary Assigned Contracts and a duly
executed xxxx of sale.
(b) Notwithstanding anything to the contrary contained herein, to
the extent that the Sellers are able to provide adequate notice in accordance
with the Bankruptcy Code and Bankruptcy Rules to all counterparties entitled
to receive notice of the Sellers' request for authorization of the sale,
transfer and delivery of all of the Purchased Assets and the assumption and
assignment of the Assigned Contracts such that the sale, transfer or delivery
of all of the Purchased Assets and the assumption and assignment of all of
the Assigned Contracts may be authorized at the Primary Sale Hearing (i) all
the Purchased Assets shall be transferred, and all of the Assigned Contracts
shall be assigned, at the Closing and (ii) all references in this Agreement
to defined terms incorporating the term "Secondary" shall be interpreted as
if such references instead incorporated the term "Primary".
Section 2.9. Performance. Parent shall cause the Buyer and its
Designees to perform its obligations under this Agreement and any Related
Document and shall make sufficient funds available to the Buyer to pay the
Cash Consideration and to deliver the Escrowed Amount and Scheduled Lease
Amount to the Escrow Agent in accordance with the terms of this Agreement.
Parent shall remain liable for any non-performance by the Buyer or it
Designees under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EXODUS
Except as disclosed in the written statement delivered by Exodus
to Parent and the Buyer on the date hereof (the "Sellers' Disclosure
Letter"), Exodus represents and warrants to Parent and the Buyer as set forth
below. All references in this Article III to any Schedule to this Agreement
shall be deemed to refer to the relevant section of the Sellers' Disclosure
Letter.
Section 3.1. Title to Purchased Assets. Except as set forth on
Schedule 3.1 hereto Exodus, another Seller or a Retained Subsidiary, is the
lawful owner, beneficially and of record, of the Purchased Assets. Subject to
the entry of the Primary Sale Order and the Primary Sale Order becoming a
Final Order (and the terms thereof), at the Closing, the Sellers will
deliver, or will cause the applicable Retained Subsidiaries to deliver, good
and valid title to the Purchased Assets to the Buyer or its Designees free
and clear of all Liens (other than Permitted Liens and Liens created by, or
on behalf of, the Buyer).
0 Section 3.2. Power and Authority. Subject to the entry of the
Primary Sale Order and the Primary Sale Order becoming a Final Order, each of
the Sellers has the requisite corporate power and authority to execute and
deliver this Agreement and any Related Documents to which it is or will be
party and to perform the transactions contemplated herein and therein to be
performed by it. All corporate proceedings and corporate actions on the part
of each Seller required by Law, its certificate of incorporation, or its
bylaws to authorize this Agreement and the Related Documents to which it is
or will be a party, the performance of the obligations hereunder and
thereunder to be performed by it and the consummation of the transaction
contemplated herein and therein have been duly taken, and no other corporate
proceedings or corporate actions on the part of any Seller, its board of
directors or its stockholders are necessary. As of the date hereof, the Board
of Directors of each Seller has resolved to request that the Bankruptcy Court
approve this Agreement and the transactions contemplated hereby. Subject to
the entry of the Primary Sale Order and the Primary Sale Order becoming a
Final Order (and the terms thereof), this Agreement is, and each of the
Related Documents to which each Seller is or will be a party will upon
execution be, a valid and binding agreement enforceable against such Seller
in accordance with its terms. Subject to the entry of the Bidding Procedures
Order (and the terms thereof), each Seller has full power and authority to
grant the Break-Up Fee and the Expense Reimbursement without further order of
the Bankruptcy Court (subject to verification of expenses).
Section 3.3. Organization, Authority and Qualification. (a) Each
Seller (i) is a corporation duly organized, validly existing and, where
applicable, is in good standing under the Laws of the state of its
incorporation; (ii) has all requisite corporate power and authority to own,
lease or operate the assets it now owns, leases or operates; and (iii) is
duly qualified or licensed to do business and, where applicable, is in good
standing in each jurisdiction in which the ownership or use of its assets or
conduct of its business requires it to be so qualified or licensed and in
good standing except where any such failure to be so qualified or licensed
and in good standing would not, individually or in the aggregate, have a
Material Adverse Effect on Exodus or on the Purchased Assets.
(b) Each SPE (i) is a partnership or limited liability company
duly organized, validly existing and, where applicable, is in good standing
under the Laws of the state of its formation; (ii) has all requisite
partnership or limited liability company power and authority to own, lease or
operate the assets it now owns, leases or operates; and (iii) is duly
qualified or licensed to do business and, where applicable, is in good
standing in each jurisdiction in which the ownership or use of its assets or
conduct of its business requires it to be so qualified or licensed and in
good standing except where any such failure to be so qualified or licensed
and in good standing would not, individually or in the aggregate, have a
Material Adverse Effect on Exodus or on the Purchased Assets..
Section 3.4. Capitalization of SPEs. The partnership interests
and membership interests, as the case may be, of each SPE are as set forth on
Schedule 3.4 hereto. The outstanding partnership interests or membership
interests, as the case may be, of each SPE have been duly authorized and
validly issued and are fully paid and nonassessable. There are no preemptive
or other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, agreements, arrangements or
commitments to issue or sell any partnership interests, membership interests
or other securities of any SPE or any securities or obligations convertible
or exchangeable into or exercisable for, or giving any Person a right to
subscribe for or acquire, partnership interests, membership interests or
other securities of any SPE, and no securities or obligations evidencing such
rights are authorized, issued or outstanding. No SPE has any outstanding
bonds, debentures, notes or other obligations the holders of which have the
right to vote (or convertible into or exercisable for securities having the
right to vote) with the partners or members thereof on any matter.
Section 3.5. Subsidiaries. Schedule 3.5 hereto sets forth a
complete and accurate list of the Subsidiaries of Exodus (the "Exodus
Subsidiaries" and each, individually, an "Exodus Subsidiary"), including,
with respect to each Seller and SPE, its jurisdiction of incorporation or
formation, its tax residence (if different from its jurisdiction of
incorporation or formation) and, to the extent a particular Seller or SPE is
not owned 100% by Exodus, the equity percentage held by each Person owning an
interest in such Exodus Subsidiary. Except as set forth in Schedule 3.5,
Exodus has heretofore delivered or made available to the Buyer accurate and
complete copies of the governing documents, as currently in full force and
effect, of each Seller and SPE. Except as set forth on Schedule 3.5 hereto,
Exodus does not directly or indirectly own any capital stock or subordinated
debt of, or other equity interests in, any Person, and Exodus is not a member
of or participant in any Person.
Section 3.6. SEC and Other Reports; Financial Statements. (a)
Except as set forth on Schedule 3.6(a), Exodus has timely filed all required
forms, reports and documents (the "Exodus SEC Reports") with the SEC since
December 31, 1999 through the date of this Agreement, each of which complied
at the time of filing in all material respects with all applicable
requirements of the Securities Act and the Exchange Act, as each such law was
in effect on the date such forms, reports and documents were filed. The
financial statements of Exodus included in the Exodus SEC Reports (the
"Reported Exodus Financial Statements") (including the related notes, where
applicable) fairly present in all material respects (subject, in the case of
unaudited statements, to normal recurring audit adjustments) the consolidated
results of the operations and changes in stockholders' equity and
consolidated financial position of Exodus and its Subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth;
each of the Reported Exodus Financial Statements (including the related
notes, where applicable) complied at the time of filing of the relevant
Exodus SEC Report in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, as such requirements or rules and regulations were in effect
of the time of filing the relevant Exodus SEC Report; and each of the
Reported Exodus Financial Statements (including the related notes, where
applicable) has been prepared in all material respects in accordance with
GAAP consistently applied during the periods involved, except, in each case,
as indicated in such statements or in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q promulgated by the SEC.
(b) [Intentionally Omitted]
(c) Except as would not materially and adversely impact the
conduct of the Business, each SPE has filed all reports, registrations and
statements, together with any amendments required to be made with respect
thereto, that it was required to file since their creation with any
Governmental Entity (other than the SEC), and has paid all fees and
assessments due and payable in connection therewith and all such reports,
registrations and statements complied in all material respects with the
requirements therefor.
(d) The SPEs have no liabilities (absolute, accrued, contingent,
unknown or otherwise) whether or not required by GAAP to be reflected on a
balance sheet except for (i) liabilities which arose in the ordinary course
of business after September 30, 2001; and (ii) liabilities set forth on
Schedule 3.6(d) hereto.
Section 3.7. Absence of Certain Changes or Events. (a) Except as
set forth in Schedule 3.7(a) hereto, since September 30, 2001 to the date
hereof, (i) the SPEs have engaged in no activity other than as specifically
required under the Securitization Documents and (ii) none of the SPEs has
experienced any material damage, destruction or loss (whether or not covered
by insurance) to its tangible property, software or electronic systems.
(b) Except as set forth in Schedule 3.7(b) hereto, since
September 30, 2001 to the date hereof, except for the filing and pendency of
the Bankruptcy Cases, (i) the Sellers and their Subsidiaries have conducted
the Business only in, and have not engaged in any material transaction other
than according to, the ordinary course of business consistent with past
practice and the commencement of the Bankruptcy Cases, (ii) there has not
been any material physical damage, destruction or loss (whether or not
covered by insurance) to any of the Purchased Assets and (iii) the Sellers
and their Subsidiaries have not taken any action that would have been
prohibited by Section 6.9(b).
(c) Since September 30, 2001 there has been no Material Adverse
Effect on Exodus or on the Purchased Assets.
(d) The Sellers have not effected any of the transactions
described on Schedule 6.9(d).
Section 3.8. Real Estate; Title to Properties. (a) Schedule
3.8(a) hereto lists all currently effective leases and subleases of real
property entered into by Exodus and each Exodus Subsidiary with respect to
the Acquired Sites and Exodus's corporate offices located in Santa Clara,
California (the "Exodus Leased Real Properties"), copies of each of which
have been made available to Parent. Except as set forth on Schedule 3.8(a)
hereto, Exodus or an Exodus Subsidiary has a valid and binding leasehold
interest in such Exodus Leased Real Property free and clear of any Liens,
except for: (i) any Liens explicitly described in the Reported Exodus
Financial Statements (including the related notes, where applicable); (ii)
any Liens for Taxes not yet due and payable or being contested in good
faith by appropriate proceedings; (iii) any mechanics', workmen's,
repairmen's, warehousemen's, carriers' or other like liens and encumbrances
imposed by operation of law arising in the ordinary course of business or
being contested in good faith by appropriate proceedings; and (iv)
easements, rights of way or other similar matters of title to real property
that do not materially affect the title to, or the use of such real
property (with items described in clauses (ii) and (iv) referred to
collectively as "Permitted Liens").
(b) Except as set forth in Schedule 3.8(b) hereto neither Exodus
nor any Exodus Subsidiary is in material default, other than, with respect to
a Primary or Secondary 365 Contract, a default which is unenforceable against
Exodus or such Subsidiary, as applicable, pursuant to Section 365 of the
Bankruptcy Code, under any lease or sublease of real property set forth on
Schedule 3.8(a) (the "Assumed Leases").
(c) Except as set forth on Schedule 3.8(c) hereto, neither Exodus
nor any Subsidiary owns any real property related to the Business.
(d) Each of the SPEs has good and marketable (subject to the
Securitization Documents) title to all the real property and other assets
which it purports to own. Subject to the entry of the Primary Sale Order and
the Primary Sale Order becoming a Final Order, the relevant Seller (or SPE)
will deliver good and marketable (subject to the Securitization Documents)
title to all the real property and other assets which constitute Purchased
Assets, except for immaterial exceptions.
(e) Schedule 3.8(e) hereto lists (i) any real property used by
any of the SPEs in which a leasehold interest is not held, or such real
property is not owned, by such SPE and (ii) any real property used by any
Seller in respect of the Purchased Assets in which a leasehold interest is
not held, or such real property is not owned, by such Seller.
(f) Except as set forth on Schedule 3.8(f) hereto neither this
Agreement nor any Related Document, nor the consummation of the transactions
contemplated herein or therein will result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of any lease or sublease of real property to
which any SPE is a party or by which it is bound or result in any increase in
the obligations of, or payments required by, any SPE thereunder.
(g) Except as set forth on Schedule 3.8(g), no real property
lease or sublease relating to an Acquired Site also relates to a Non-Acquired
Site or other facilities or properties not to be included in the Purchased
Assets.
Section 3.9. Litigation. (a) Except as set forth on Schedule
3.9(a) hereto, there are (i) no actions, suits, proceedings, pleadings,
charges, complaints, claims or demands ("Actions or Proceedings") pending, or
to the Knowledge of the Sellers, investigations pending or threatened or any
Action or Proceedings threatened against any of the SPEs, the Sellers or the
Purchased Assets at law or in equity before any court, arbitrator or other
Governmental Entity and (ii) no such Actions or Proceedings or investigations
which if adversely determined, individually or in the aggregate, which in the
case of clause (i) or (ii) would have a Material Adverse Effect on Exodus or
on the Purchased Assets.
(b) As of the date hereof, none of the SPEs, the Sellers or the
Purchased Assets is subject to any commitment letter or similar undertaking
to, or is subject to any order or directive by, or has adopted any board
resolutions at the request of, any Governmental Entity (a "Governmental
Directive"). There is no Governmental Directive that could reasonably be
expected to have a Material Adverse Effect on Exodus or on the Purchased
Assets.
Section 3.10. Compliance with Law. All approvals, permits and
licenses of Governmental Entities required for the Sellers, the SPEs and
their respective Subsidiaries to conduct the Business have been obtained,
except for any such approvals, permits or licenses the absence of which,
alone or in the aggregate, do not have a Material Adverse Effect on Exodus or
on the Purchased Assets. Schedule 3.10 sets forth an accurate list of all
approvals, permits and licenses which are material to the conduct of the
Business. Exodus and the Exodus Subsidiaries have conducted their operations
in compliance with all applicable Laws, except where the failure to comply
would not, individually or in the aggregate, have a Material Adverse Effect
on Exodus or on the Purchased Assets.
Section 3.11. Contracts. (a) None of the Sellers or any SPE is a
party to any agreement (other than this Agreement) for the acquisition, sale
or lease of any of the material assets or businesses of the SPEs or any
Purchased Assets (by merger, purchase, syndication or sale of assets or
otherwise).
(b) The Sellers have made or will make available to Parent a
correct and complete copy of such Scheduled Financing Leases, such Scheduled
Operating Leases and such Scheduled Contracts as requested by Parent or the
Buyer. Each Scheduled Operating Lease, and each Scheduled Contract is a
legal, valid and binding agreement of Exodus or the Exodus Subsidiary, as the
case may be, party thereto, enforceable in accordance with its terms subject
to applicable bankruptcy, reorganization, insolvency, moratorium (whether
general or specific), fraudulent conveyance and similar Laws affecting the
enforcement of creditors' rights generally, and general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity
or at law) and is in full force and effect. With respect to each Scheduled
Operating Lease and each Scheduled Contract, except as set forth on Schedule
2.1(a)(iii), Schedule 2.3(a), Schedule 2.3(b) or Schedule 2.3(c) (or any
parts thereof) as applicable, (x) Exodus or an Exodus Subsidiary, as the case
may be, party to such Contract has performed, in all material respects, the
obligations required to be performed by it to date under such Contract, and
(y) to the Knowledge of the Sellers, there is no default, other than with
respect to a Primary or Secondary 365 Contract, a default which is
unenforceable against Exodus or such Subsidiary, as applicable, pursuant to
Section 365 of the Bankruptcy Code, by any other party under such Contract.
Schedule 2.1(a)(ii), Schedule 2.1(a)(iii), Schedule 2.3(a), Schedule 2.3(b)
and Schedule 2.3(c) shall, when delivered, accurately reflect the information
purported to be reflected therein.
(c) The information contained in Schedule 2.1(a)(ii) and Schedule
2.3(a)(iii) will, when delivered, accurately set forth the information
required to be set forth therein.
(d) Except as set forth on Schedule 3.11(d) and other than the
Securitization Documents, no SPE is a party to any Contract.
Section 3.12. Consents and Approvals. Other than approvals
required under the HSR Act, any non-U.S. laws regulating competition,
antitrust, investment or exchange controls, or as set forth on Schedule 3.12
hereto, and (except as set forth in Section 6.4) subject to the entry of the
Sale Order and the Sale Order becoming a Final Order, the execution and
delivery of this Agreement by each Seller and the consummation by each Seller
and their respective Subsidiaries of the transactions contemplated hereby
will not: (a) violate any provision of the certificate of incorporation or
bylaws (or any comparable charter document) of any Seller or any SPE; (b)
violate any Law applicable to any Seller, any SPE, or any of their respective
properties or assets, including but not limited to the Purchased Assets; (c)
require any Seller or any SPE to make any filing with, obtain any permit,
consent, license or approval of, or give any notice to, any Governmental
Entity; (d) result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation
of, or right to require repurchase, pursuant to, any Assigned Contract or any
Contract to which any SPE is a party or by which any of their respective
properties or any of the Purchased Assets is bound or affected or (e) result
in the creation of any Lien on any Purchased Asset, except, in the case of
clauses (b), (c), (d) and (e) for such violations, filings, permits,
consents, licenses, approvals, notices, breaches or conflicts which would not
have a Material Adverse Effect on Exodus or on the Purchased Assets.
Section 3.13. Environmental and Health and Safety Matters. (a)
Except as set forth in Schedule 3.13(a), the Purchased Assets, the Business,
and the activities, operations and assets of the SPEs have been and are in
compliance in all material respects with all applicable laws, statutes,
ordinances, codes, orders, decisions, judgments, permits, approvals, rules,
regulations or requirements, including without limitation common law,
relating to: (i) protection, preservation or cleanup of the environment or
natural resources; (ii) the manufacture, use, handling, storage, treatment,
disposal or release of or exposure to any chemical substance or toxic,
hazardous or deleterious material, waste or agent (hereinafter "Hazardous
Substance"), including without limitation petroleum or any fraction thereof,
asbestos, and polychlorinated biphenyls; or (iii) health and safety (all such
laws and regulations, hereinafter "EHS Laws").
(b) There has been no Judgment, Action or Proceeding, citation or
written notice of violation against the SPEs or the Sellers, relating to
noncompliance with, or liabilities or obligations pursuant to, EHS Laws, and
to the Knowledge of the Sellers, no such matter has been threatened.
(c) No asbestos, polychlorinated biphenyls or underground storage
tanks are present at, in, on or under the Purchased Assets or the assets
owned or operated by the SPEs, and the presence and use of Hazardous
Substances at such properties have been limited to those types and amounts
typical of office or Internet data center environments.
(d) Except as set forth in Schedule 3.13(d), There are no
conditions or circumstances arising from or relating to the Purchased Assets,
the activities or operations of the Sellers with respect to the Purchased
Assets, or the activities, operations or assets of the SPEs, including
without limitation, the presence, release or disposal of any Hazardous
Substance, whether on or off of the Purchased Assets or the assets owned or
operated by the SPEs or the properties subject to the Assumed Leases, that
could result in liabilities or obligations pursuant to EHS Laws.
(e) The Sellers and the SPEs have provided to Parent all
assessments, audits, investigations, and sampling or similar reports relating
to the environment, compliance with and liabilities pursuant to EHS Laws, or
the presence or release of any Hazardous Substances, to the extent relating
to the Purchased Assets, the activities or operations of the Sellers with
respect to the Purchased Assets, the properties subject to the Assumed
Leases, or the activities, operations or assets of the SPEs.
Section 3.14. Tax Matters. Except as set forth on Schedule 3.14
hereto:
(a) subject to the entry of the Primary Sale Order and the
Primary Sale Order becoming a Final Order, Exodus and each Seller has or will
have paid in full all material Taxes required to be paid with respect to all
taxable periods ending on or before the Closing Date, except for (i) Taxes
being contested in good faith by appropriate proceedings and (ii) any Tax the
nonpayment of which would not result in a Lien in respect of any Purchased
Asset or in any liability of Parent, the Buyer or any Designee for such Tax
to the applicable Taxing Authority;
(b) subject to the entry of the Primary Sale Order and the
Primary Sale Order becoming a Final Order, no material Tax Lien in respect of
any Purchased Asset remains outstanding (except for Liens for Taxes not yet
due and payable or being contested in good faith by appropriate proceedings),
and no material claims are being asserted with respect to any Tax that could
result in a Tax Lien in respect of any Purchased Asset (except for Liens for
Taxes not yet due and payable or being contested in good faith by appropriate
proceedings) or in any liability of Parent, the Buyer or any Designee for
such Tax to the applicable Taxing Authority; and
(c) each of the SPEs is, and has been since its formation, a
partnership or a disregarded entity for U.S. federal, state, and local income
and franchise tax purposes.
Section 3.15. Intellectual Property. Except as expressly set
forth otherwise in Schedule 3.15:
(a) Schedule 3.15 sets forth a complete and correct list of the
following categories of Exodus Owned Intellectual Property: (i) registered
Trademarks; (ii) Patents (including issued and applications therefor); and
(iii) registered Copyrights. Schedule 3.15 also separately lists (x) all
agreements under which any Seller uses any material Exodus Licensed
Intellectual Property (including Software) (other than non-exclusive licenses
of commercial "shrink wrap" software and customer agreements entered into by
any Seller in the ordinary course); and (y) all agreements under which any
Seller has licensed to others the right to use any material Exodus
Intellectual Property (other than customer agreements entered into any Seller
in the ordinary course), in each case, specifying the parties to the
agreement.
(b) Except as set forth in Schedule 3.15(b), the Exodus
Intellectual Property constitutes all of the Intellectual Property that is
material or necessary to the operation of the Business as currently operated,
except for Intellectual Property that the Sellers could discontinue to use
without such a discontinuation having, individually or in the aggregate, a
Material Adverse Effect on Exodus or on the Purchased Assets. Exodus or
another Seller owns sufficient legal rights to use the Exodus Owned
Intellectual Property, free and clear of conditions, adverse claims or other
restrictions or any requirement of any past, present or future royalty
payments, and Exodus or another Seller owns, licenses or otherwise possesses
sufficient legal rights to use the Exodus Licensed Intellectual Property,
free and clear of conditions (except as provided in the relevant license
agreement) or to the Knowledge of the Sellers, adverse claims or other
restrictions, except to the extent that the failure to have any such rights
has not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Exodus or on the Purchased
Assets;
(c) The Sellers have taken reasonable steps to register all
material Exodus Intellectual Property with the applicable authorities in all
jurisdictions in which the Sellers have a principal place of business, and
all registrations for material Exodus Owned Intellectual Property, including
for Patents, Trademarks, and Copyrights, are registered in the name of one of
the Sellers and are subsisting;
(d) Exodus and each other Seller has secured valid written
assignments from all consultants and employees who contribute or have
contributed to the creation or development of Exodus Owned Intellectual
Property of the rights to such contributions that Exodus or such other Seller
does not already own by operation of law except to the extent that the
failure to have secured such assignments has not had and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect on Exodus or the Purchased Assets;
(e) Exodus and the Exodus Subsidiaries have taken commercially
reasonable steps to protect and preserve the confidentiality of all of the
material Trade Secrets that comprise any part of Exodus Intellectual Property
(except where failure to do so would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Exodus or the
Purchased Assets). To the Knowledge of Exodus, there are no unauthorized
uses, disclosures or infringements of any such material Trade Secrets; all
use by, and disclosure to, any Person of such material Trade Secrets that
comprise any part of Exodus Intellectual Property has been pursuant to the
terms of a written agreement with such Person; and all use by Exodus or any
Exodus Subsidiary of such material Trade Secrets owned by another Person has
been pursuant to the terms of a written agreement with such Person or is
otherwise lawful;
(f) there is no pending (or, to the Knowledge of Exodus or any
other Seller, threatened) assertion or claim and there has been no such
assertion or claim in the last six years: (i) challenging the validity or
enforceability of, or contesting Exodus's or the other Sellers' rights with
respect to, any material Exodus Owned Intellectual Property, (ii) challenging
Exodus's or the other Sellers' rights to use any material Exodus Licensed
Intellectual Property or the validity or enforceability of the agreement
relating thereto (except for claims asserted in the Bankruptcy Cases), (iii)
or asserting that Exodus's or any other Sellers' use or exploitation of any
material Exodus Intellectual Property or its or their provision of goods
and/or services in connection with the Business, infringes upon,
misappropriates, violates or conflicts in any way with the rights of any
third party (including rights in Intellectual Property); and, in each case,
to the Knowledge of Exodus and the other Sellers, there are no reasonable
grounds for any such assertion or claim, except where such assertion or
claim, in each case, individually or in the aggregate, would not have a
Material Adverse Effect on Exodus or the Purchased Assets; neither Exodus nor
any other Seller is a party to any suit, action or proceeding which involves
a claim of infringement or misappropriation of any Intellectual Property of
any third party;
(g) neither Exodus nor any other Seller has given or received any
notice of default or any event which with the lapse of time would constitute
a default under any agreement relating to any material Exodus Intellectual
Property; neither Exodus nor any other Seller nor, to their Knowledge, any
other party, currently is in default with regard to any agreement relating to
any material Exodus Intellectual Property, and there exists no condition or
event (including, without limitation, the execution, delivery and performance
of this Agreement) which, with the giving of notice or the lapse of time or
both, would constitute a default by Exodus or any other Seller under any
agreement relating to any material Exodus Intellectual Property, or would
give any person any rights of termination, cancellation, acceleration of any
performance under any such agreement or result in the creation or imposition
of any lien, in each case, except where such default would not have a
Material Adverse Effect on Exodus or the Purchased Assets;
(h) to Exodus's Knowledge, there are no unauthorized uses,
disclosures, infringements, or misappropriations by any third party of any
Exodus Intellectual Property or any material breaches by any third party of
any licenses or agreements involving Exodus Intellectual Property, except
where such actions would not have, individually or in the aggregate, a
Material Adverse Effect on Exodus or on the Purchased Assets; and
(i) Exodus and each other Seller has obtained any and all
necessary consents from customers of the Business with regard to Exodus's and
each Exodus Subsidiary's, as the case may be, collection and dissemination of
personal information of such Customers in accordance with any applicable
privacy policy published or otherwise communicated by Exodus or any other
Seller and to Exodus's Knowledge any applicable Laws. Exodus's and each other
Seller's practices regarding the collection and use of personal customer
information are and have been in accordance with such privacy policies in all
material respects and to Exodus's Knowledge, with all applicable Laws.
Section 3.16. Labor Matters.
(a) None of the SPEs or any Seller is a party to any labor or
collective bargaining agreement with respect to any Business Employees; no
Business Employees are represented by any labor organization; to the
Knowledge of any Seller, no labor organization or Business Employee has made
a pending demand for recognition or request for certification to the SPEs or
any Seller; and there are no representation or certification proceedings or
petitions seeking a representation election presently pending or, to the
Knowledge of any Seller, threatened, to be brought or filed with the National
Labor Relations Board or other labor relations tribunal involving the SPEs or
any Seller.
(b) There are no strikes, lockouts, work stoppages or slowdowns
pending or, to the Knowledge of any Seller, threatened against or involving
the SPEs or any Seller.
(c) Except as set forth on Schedule 3.16(c), there are no unfair
labor practice charges, arbitrations, grievances or complaints pending or, to
the Knowledge of any Seller, threatened in writing against the SPEs or any
Seller relating to the employment or termination of employment of any
Business Employee by the SPEs or any Seller.
(d) There are no material complaints, charges, administrative
proceedings or claims against the SPEs or any Seller pending or, to the
Knowledge of any Seller, threatened in writing to be brought or filed with
any Governmental Entity based on or arising out of the employment (including,
without limitation, the termination of such employment) by the SPEs or any
Seller of any Business Employee.
(e) The SPEs and the Sellers are in material compliance with all
Laws relating to the employment of labor, independent contractors and "leased
employees" (within the meaning of Section 414(n) of the Code) including all
such Laws relating to wages, hours, collective bargaining, discrimination
(including, but not limited to, based upon age, sex, marital status, race,
national origin, disability or veteran status), civil rights, safety and
health, workers' compensation and the collection and payment of withholding
and/or Social Security Taxes and similar Taxes.
(f) The SPEs and the Sellers have not incurred any material
liability or obligation under WARN or similar state Laws, which remains
unpaid or unsatisfied.
(g) Except as set forth on Schedule 3.16(g) hereto, the
employment of each Business Employee is at-will, and the Sellers and/or the
SPEs, as the case may be, have the right to terminate such employees'
employment, and such employees have the right to resign their employment, at
any time, without reason or cause. Schedule 3.16(g) lists all written (and
includes a summary of all legally binding oral) employment and consulting
agreements to which any Business Employee is a party or by which such
employee is bound. Complete and correct copies of the agreements or
arrangements listed and summarized on Schedule 3.16(g) have been provided or
made available to Parent prior to the date hereof.
(h) The employment by Parent, the Buyer or the SPEs of the
Business Employees following the Closing Date, as contemplated in Section
6.15, does not and will not conflict with, breach, violate or cause a default
under any Contract or Judgment, including without limitation any
non-competition or non-solicitation agreements, to which any Seller or the
SPEs are a party or by which they are bound.
(i) Except as set forth in Schedule 3.16(i), there are no
liabilities, whether absolute or contingent, of the Sellers and any of the
SPEs relating to workers compensation benefits that are not fully insured
against by a bona fide third-party insurance carrier (except for deductibles,
retentions or rights to retroactive premium adjustment that may be provided
for in the respective policy and that are set forth in Schedule 3.16(i)).
Except as set forth on Schedule 3.16(i), with respect to each workers'
compensation arrangement that is funded wholly or partially through an
insurance policy or public or private fund, all premiums required to have
been paid to date under the insurance policy or fund have been paid, all
premiums required to be paid under the insurance policy or fund through the
Closing will have been paid on or before the Closing and, as of the Closing,
there will be no liability of the Company under any such insurance policy,
fund or ancillary agreement with respect to such insurance policy or fund in
the nature of a retroactive rate adjustment, loss sharing arrangement or
other actual or contingent liability arising wholly or partially out of
events occurring prior to the Closing.
Section 3.17. Employee Benefits.
(a) Schedule 3.17(a) hereto contains a list of each "employee
pension benefit plan" (as defined in Section 3(2) of ERISA) (a "Pension
Plan"), each "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA), whether or not subject to ERISA and whether or not maintained in the
United States, and each stock option or other equity based, bonus, incentive
or deferred compensation, severance, retention or change in control or other
welfare, fringe or compensation agreement, plan, program, policy or
arrangement maintained, contributed to or required to be contributed to or
with respect to which there may be any liability by any SPE or any Seller or
any person or entity that, together with any SPE or any Seller, is treated as
a single employer under Section 414(b), (c) or (m) of the Code (each, a
"Commonly Controlled Entity") or which is currently in effect for the benefit
of any Business Employees (collectively, "Benefit Plans").
(b) With respect to each Benefit Plan, a complete and correct
copy of each of the following documents (if applicable) has been provided or
made available to Parent: (i) the most recent plan and related trust
documents, and all amendments thereto; (ii) the most recent summary plan
description, and all related summaries of material modifications; (iii) the
most recent Form 5500 (including schedules); (iv) the most recent IRS
determination letter; (v) the most recent actuarial reports (including for
purposes of Financial Accounting Standards Board report nos. 87, 106 and
112); and (vi) any filings or other documentation concerning any Benefit Plan
provided to any Governmental Entity.
(c) Except as set forth in Schedule 3.17(c), none of the Benefit
Plans is subject to Title IV of ERISA or Section 412 of the Code.
(d) Except as set forth in Schedule 3.17(d), none of the SPEs or
any Seller is, or was during the preceding six years, obligated to contribute
to, or contributes to, any "multiemployer plan" within the meaning of Section
3(37) of ERISA.
(e) Except as set forth in Schedule 3.17(e), none of the SPEs or
any Seller has any liability (contingent or otherwise) or potential liability
to any entity arising under Title IV of ERISA or Section 412 of the Code.
(f) The Benefit Plans and their related trusts that are intended
to qualify under Sections 401 and 501(a) of the Code, respectively, or
similar provisions under applicable Law, have been determined to, or will be
timely submitted to the IRS or the applicable Governmental Entity for a
determination that such Benefit Plans do, qualify under such Sections, as
amended by the Tax Reform Act of 1986, or provisions and, to the Knowledge of
the Sellers, nothing has occurred since the time of such favorable
determination that might cause the loss of such qualified status.
(g) All contributions required to have been made by the Sellers
or the SPEs under any Benefit Plan or any Law to any trusts established
thereunder or in connection therewith have been made by the due date therefor
(including any valid extensions).
(h) Except as set forth in Schedule 3.17(h), the Benefit Plans
have been maintained in compliance with their terms and applicable Laws,
including but not limited to the timely filing of applicable reports,
documents and notices regarding any Benefit Plans with the Secretary of Labor
and the Secretary of the Treasury, and the furnishing of such documents to
participants and beneficiaries in the Benefit Plans. To the Knowledge of
Sellers, there has been no "prohibited transaction" (including without
limitation as a result of any of the transactions contemplated hereby) within
the meaning of Section 4975(c) of the Code or Section 406 of ERISA involving
the assets of any Benefit Plan after giving effect to the exemptions set
forth in Section 4975(d) of the Code and Section 408(b) of ERISA.
(i) Except as set forth in Schedule 3.17(i), there are no pending
or, to the Knowledge of any Seller, threatened actions, claims or proceedings
against the SPEs or any Seller, any Benefit Plan or its assets, plan sponsor,
plan administrator or fiduciaries with respect to such plan (other than
benefit claims in the ordinary course).
(j) Except as disclosed in Schedule 3.17(j) hereto, to the
Knowledge of Sellers, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereunder will (i)
increase any benefits or the amount of compensation to any Business Employee
or (ii) result in the acceleration of the time of payment, funding or vesting
of any such compensation or benefits. In addition, except as disclosed and
described in Schedule 3.17(j) hereto, no Benefit Plan or agreement, program,
policy or other arrangement by or to which the SPEs or the Sellers are a
party, is bound or is otherwise liable, by its terms or in effect would or
could possibly require any payment or transfer of money, property or other
consideration on account of or in connection with the transactions
contemplated by this Agreement, including but not limited to any Business
Employee (whether or not any such payment would constitute a "parachute
payment" or "excess parachute payment" within the meaning of Section 280G of
the Code).
(k) Except as disclosed in Schedule 3.17(k) hereto and as
required by Section 4980B of the Code or Part 6 of Title I of ERISA, none of
the SPEs or the Sellers has any obligation to provide medical or death
benefits (whether or not insured) with respect to any Business Employee
beyond their retirement or other termination of employment. Except as
disclosed in Schedule 3.17(k) hereto, any continuation coverage provided
under any welfare benefit plan complies with Section 4980B of the Code and is
at the expense of the participant or beneficiary.
(l) Exodus has provided to Parent a true, complete and correct
list, as of the date hereof, of each Business Employee, together with each
such employee's (i) starting date of employment, (ii) job description, (iii)
present hourly or, if salaried, annual compensation rate and (iv) status of
employment (i.e., active, inactive, leave of absence, short or long-term
disability, etc.)
(m) With respect to each Benefit Plan that is a defined benefit
plan that will be assumed by Parent, the Buyer or any of their Affiliates, as
of the Closing Date, the actuarially determined present value of all benefit
liabilities, determined on the basis of the actuarial assumptions contained
in the applicable Benefit Plan's most recent actuarial valuation, do not
exceed the then current value of the assets of such Benefit Plan or, with
respect to any foreign plan not subject to any funding requirement, if such
liabilities do exceed such assets, the amount thereof was properly reflected
on the financial statements of the SPE being acquired by Parent or the Buyer
in connection with the transactions contemplated hereby.
Section 3.18. Insurance. Schedule 3.18 hereto lists the insurance
policies (including the premiums payable in connection therewith and the
amount of the coverage provided thereunder) maintained by Exodus and the
Exodus Subsidiaries which policies provide coverage for the business of
Exodus and the Exodus Subsidiaries in accordance with customary industry
practice for similarly-situated companies. All of such policies are in full
force and effect and none of Exodus or any of the Exodus Subsidiaries is in
material default of any provision thereof.
Section 3.19. Brokers and Finders. Except as set forth in
Schedule 3.19, no broker, finder, consultant or intermediary is entitled to a
broker's, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement or upon the consummation of the
transaction contemplated hereby, or if the Closing does not occur.
Section 3.20. Information Technology. Except as set forth in
Schedule 3.20, the information technology of Exodus and its Subsidiaries,
including the Oracle financial systems, the Siebel CRM infrastructure systems
and the Portal billing systems, is in good working order, is capable of
supporting the Business as conducted on the date hereof and, only in the case
of information technology owned by the Sellers, performs in all material
respects in accordance with specifications.
Section 3.21. Sufficiency of Purchased Assets. Except as set
forth on Schedule 3.21 hereto, the assets described on Schedule 2.1(a)(i),
the other equipment subject to the Scheduled Financing Leases and the
Scheduled Operating Leases, and the Scheduled Contracts will include all
assets, property, rights, Contracts and systems of Exodus and its
Subsidiaries necessary to operate the Business as it is currently being
operated, in each case except to the extent Parent has elected, or will elect
pursuant hereto, not to acquire such assets, property, rights, Contracts or
systems or to the extent provided in the Transition Services Agreement S/B.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Sellers as set forth below:
Section 4.1. Power and Authority. Parent and the Buyer each has
the requisite power and authority to execute and deliver this Agreement and
any Related Document to which it is or will be party and to perform the
transactions contemplated hereby and thereby to be performed by it. All
corporate proceedings and corporate actions on the part of Parent and the
Buyer required by Law or its constituent documents to authorize this
Agreement and the Related Documents to which it is or will be a party, the
performance of the obligations hereunder and thereunder to be performed by it
and the consummation of the transaction contemplated hereby and thereby have
been duly taken, and no other corporate proceedings or actions on the part of
Parent or the Buyer are necessary. This Agreement is, and each of the Related
Documents to which Parent or the Buyer is or will be a party will upon
execution be, a valid and binding agreement enforceable against Parent or the
Buyer, as applicable, in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, receivership, fraudulent
conveyance or other similar laws now or hereafter in effect limiting or
affecting the rights of creditors generally and to general equitable
principles.
Section 4.2. Organization, Authority and Qualification. Each of
Parent and the Buyer (i) is duly organized, validly existing and, where
applicable, in good standing under the Laws of its jurisdiction of formation,
(ii) has all requisite power and authority to own, lease or operate the
assets it now owns, leases or operates, and (iii) is duly qualified or
licensed to do business and, where applicable, is in good standing in each
jurisdiction in which the ownership or use of its assets or conduct of its
business requires it to be so qualified or licensed and in good standing
except where any such failure to be so qualified or licensed and in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect on Parent.
Section 4.3. Brokers and Finders. No broker, finder, consultant
or intermediary is entitled to a broker's, finder's or similar fee or
commission in connection with the transactions contemplated by this Agreement
or upon the consummation of the transactions contemplated hereby, or if the
Closing does not occur, except for such fees or commissions payable, unless
reimbursed pursuant to Section 6.4 hereof, solely by Parent or one of its
Subsidiaries.
Section 4.4. Consents and Approvals. Other than approvals
required under the HSR Act, any non-U.S. laws regulating competition,
antitrust, investment or exchange controls, the execution and delivery of
this Agreement by Parent and the Buyer and the consummation by Parent and the
Buyer of the transactions contemplated hereby will not: (a) violate any
provision of Parent's or the Buyer's constituent documents; (b) violate any
Law applicable to Parent or the Buyer; (c) require Parent or the Buyer to
make any filing with, obtain any permit, consent, license or approval of, or
give any notice to, any Governmental Entity; or (d) result in the creation of
any Lien on any properties or assets of Parent or the Buyer, except, in the
case of clauses (b), (c) and (d) for such violations, filings, permits,
consents, licenses, approvals, notices, breaches or conflicts which would not
have a Material Adverse Effect on Parent.
Section 4.5. Litigation. No Actions or Proceedings are pending
or, to the Knowledge of Parent, threatened against Parent or the Buyer which
seek to delay or prevent the consummation of, or which would materially
adversely affect Parent's and the Buyer's ability to consummate, the
transactions contemplated by this Agreement.
Section 4.6. Availability of Funds. Parent and the Buyer will
have sufficient funds to enable them to pay the Initial Deposit, upon entry
by the Bankruptcy Court of the Bidding Procedures Order, and to pay the
balance of Cash Consideration at Closing. Upon the consummation of the
transactions contemplated by this Agreement, (i) the Buyer will not be
insolvent, (ii) the Buyer will not be left with unreasonably small capital,
(iii) the Buyer will not have incurred debts beyond its ability to pay such
debts as they mature, (iv) the capital of the Buyer will not be impaired and
(v) immediately following closing, Buyer will have sufficient capital to
continue the Business as a going concern (it being understood that the Buyer
will have no obligation to continue all or any portion of the Business as a
going concern).
ARTICLE V
TAX MATTERS
Section 5.1. Transfer Taxes. (a) Notwithstanding anything herein
to the contrary, to the extent not exempt under section 1146(c) of the
Bankruptcy Code or otherwise, the Sellers shall bear and be responsible for
any sales, use, transfer, ad valorem, gross receipts, value-added, stamp,
documentary and other similar non-net income Taxes which may be imposed or
assessed as a result of Sellers' transfers of the Purchased Assets to the
Buyer or Designee, including the stock or interests in the SPEs, if any (all
such taxes, "Transfer Taxes"). At any Seller's request, the Buyer will use
commercially reasonable efforts and cooperate in good faith with Sellers to
minimize Transfer Taxes, if any, including obtaining any certificate of
exemption or similar document in respect of Transfer Taxes, if any. The
Sellers shall prepare and file all Transfer Tax Returns with respect to
Transfer Taxes, if any. Sellers shall promptly forward a copy of any such
filed Transfer Tax Returns to Parent, and Parent, Buyer and their Affiliates
shall not take any action with respect to Transfer Taxes, on any Tax Return
or otherwise, that is inconsistent with any such Transfer Tax Returns. For
the avoidance of doubt, the preceding sentence shall not affect the rights of
Parent, Buyer and any of their Affiliates to take any action, on any Tax
Return or otherwise, with respect to Taxes other than Transfer Taxes.
(b) Sellers shall reimburse Buyer for all reasonable
out-of-pocket costs incurred by Buyer in its efforts, if requested by a
Seller pursuant to Section 5.1(a), to minimize Transfer Taxes, if any,
including efforts to obtain any exemption certificates or similar documents.
Section 5.2. Allocation of Purchase Price. Alpha may, at its
election, deliver to Parent a proposed allocation of the Cash Consideration
and other relevant items (the "Proposed Allocation") among the assets
acquired or deemed to be acquired with respect to the purchase of the Primary
Purchased Assets. If after ten (10) Business Days after the delivery of such
Proposed Allocation to Parent, Parent does not notify Alpha in writing of its
disagreement with the Proposed Allocation, such Allocation shall be the final
allocation (the "Final Allocation"). If Parent notifies Alpha in writing that
it disagrees with any aspect of the Proposed Allocation within ten (10)
Business Days after delivery of the Proposed Allocation, Parent and Alpha
shall attempt in good faith to agree to an allocation within five (5)
Business Days after such notification. If Parent and Alpha agree upon an
allocation, then such allocation shall be the Final Allocation. Only the
Final Allocation determined under this Section 5.2, if there is one, shall be
final and binding as among the Sellers, Parent, the Buyer and their
respective Affiliates and none of the Sellers, Parent, the Buyer or any
Affiliate thereof shall take any position on any Tax Return, including,
without limitation, IRS Form 8594, that is inconsistent with the Final
Allocation. If a Subsequent Transfer takes place, then any additional Cash
Consideration and other relevant items shall be allocated to the Secondary
Purchased Assets in a manner that is consistent with the Final Allocation.
Section 5.3. Tax Information. The Buyer and the Sellers shall
promptly provide each other with any reasonably requested information for
purposes of determining any Tax liability in respect of any Purchased Asset,
and shall otherwise make available to each other all information, records or
documents relating to Tax liabilities in respect of the Purchased Assets. The
Buyer and Sellers shall preserve all such information, records and documents
until the expiration of any statute of limitations or extensions thereof.
ARTICLE VI
CERTAIN COVENANTS AND AGREEMENTS
OF THE SELLERS AND THE BUYER
Section 6.1. Submission for Bankruptcy Court Approval. (a) On the
timetables set forth below, Exodus and, if appropriate, each Seller shall (x)
file with the Bankruptcy Court one or more motions and proposed orders, each
in form and substance reasonably satisfactory to Parent, set forth below, (y)
notify, as required by the Bankruptcy Code and the Bankruptcy Rules, all
parties entitled to notice of such motions and orders (including all relevant
Taxing Authorities), as modified by orders in respect of notice which may be
issued at any time and from time to time by the Bankruptcy Court, and such
additional parties as Parent may request, and (z) subject to the provisions
of this Agreement, including the provisions of Article VIII, use commercially
reasonable efforts to obtain Bankruptcy Court approval of such orders without
any stay, modification, reversal or amendment adverse or unacceptable to
Parent, the Buyer or any Designee.
(i) Bidding Procedures Order. As promptly as possible, but
in no event later than November 30, 2001, Exodus and, if appropriate,
each Seller, shall file a motion (the "Bidding Proceedings Motion") and
proposed order (the "Bidding Procedures Order") with the Bankruptcy
Court seeking approval of a process for the sale of the Purchased
Assets. The Sellers shall use commercially reasonable efforts to cause
the Bankruptcy Court to enter a Bidding Procedures Order (A) authorizing
and scheduling an auction at which the Sellers will receive Bids, (B)
approving the terms of Section 6.3 and Section 6.4 hereof and
authorizing the observance and performance of the terms and obligations
thereunder by the Sellers and their Subsidiaries and Parent and the
Buyer during the pendency of the Bankruptcy Cases, (C) scheduling with
the Bankruptcy Court a hearing (the "Primary Sale Hearing") to consider
approval of the Primary Sale Order and the Primary 365 Contracts Order
under, inter alia, Sections 105, 363, 365 and 1146 of the Bankruptcy
Code, (D) scheduling with the Bankruptcy Court a hearing (the "Secondary
Sale Hearing") to consider, if necessary, the approval of the Secondary
Sale Order and the Secondary 365 Contracts Order under, inter alia,
Sections 105, 363, 365 and 1146 of the Bankruptcy Code and (E) approving
the form and manner of notice required under the Bankruptcy Code and the
Bankruptcy Rules in connection with the foregoing and the transactions
related thereto. Upon entry of the Bidding Procedures Order, Parent will
make a deposit on the Cash Consideration of $16,800,000 (the "Initial
Deposit"), to be held by the Sellers' counsel in their client trust
account until the earlier of the Closing Date or the termination of this
Agreement, at which time the Initial Deposit shall, if the Closing shall
occur, be applied to the payment of the Cash Consideration, or if this
Agreement shall terminate, be returned to Parent.
(ii) Sale Orders and 365 Orders. As promptly as possible,
but in no event later than the dates set forth below, Exodus, and if
appropriate, each Seller shall file one or more motions and proposed
orders (collectively, the "Orders") with the Bankruptcy Court seeking
the approval of the Bankruptcy Court pursuant to Sections 105, 363, 365
and 1146 of the Bankruptcy Code of the transfers of the Purchased Assets
and the assumption by the Sellers and assignment to the Buyer or its
Designees of the Contracts set forth below; provided, that for all
purposes (including for purposes of providing notice to any
counterparty) such motions and proposed orders, the terms Primary
Purchased Assets and Secondary Purchased Assets shall include all
equipment subject to any Primary Scheduled Financing Lease or Secondary
Scheduled Financing Lease as ultimately determined by the Bankruptcy
Court, as the case may be, and the terms Primary Assigned Contracts and
Secondary Assigned Contracts shall including any Primary Scheduled
Operating Lease and any Primary Scheduled Contract or any Secondary
Scheduled Operating Lease and any Secondary Scheduled Contracts as
ultimately determined by the Bankruptcy Court, as the case may be, it
being understood that Parent and the Buyer shall be required to identify
the portion of such equipment to be acquired in accordance with Sections
2.1(a)(ii), 2.1(a)(iii), 2.3(a), 2.3(b) and 2.3(c), as the case may be,
and on or before the seventh Business Day prior to the date of the
Primary Sale Hearing, in the case of the Primary Sale Order and the
Primary 365 Contracts Order, and on or before the seventh Business Day
prior to the date of the Secondary Sale Hearing, in the case of the
Secondary Sale Order and the Secondary 365 Contracts Order.
(A) As promptly as practicable, but in no event later
than November 30, 2001, one or more motions and proposed orders
shall be filed for the transfer of the Primary Purchased Assets to
the Buyer or its Designees and the assumption by the Sellers and
assignment to the Buyer or its Designees of the Primary Assigned
Contracts (any such motion and order with respect to the Primary
Purchased Assets, a "Primary Sale Motion" and a "Primary Sale
Order", respectively, and any such motion and order with respect to
the Primary Assigned Contracts, a "Primary 365 Contracts Motion" and
a "Primary 365 Contracts Order", respectively); and
(B) To the extent that the Sellers have been unable to
provide adequate notice in accordance with the Bankruptcy Code and
Bankruptcy Rules to all counterparties entitled to receive notice of
the Sellers' request for authorization of the sale, transfer and
delivery of all of the Purchased Assets and of the assumption and
assignment of all of the Assigned Contracts, no later than January
3, 2002, one or more motions and proposed orders shall be filed for
the transfer of the Secondary Purchased Assets to the Buyer or its
Designees and the assumption by the Sellers and assignment to the
Buyer or its Designees of the Secondary Assigned Contracts (any such
motion and order with respect to the Secondary Purchased Assets, a
"Secondary Sale Motion" and a "Secondary Sale Order", respectively,
and any such motion and order with respect to the Secondary Assigned
Contracts, a "Secondary 365 Contracts Motion" and a "Secondary 365
Contracts Order", respectively).
(C) The Bidding Procedures Motion, the Primary Sale
Motion and the Primary 365 Contracts Motion may be brought in a
single motion. The Primary Sale Order and the Primary 365 Contracts
Order may be consolidated in a single order. To the extent such
relief is sought, the Secondary Sale Motion and the Secondary 365
Contracts Motion may be brought in a single motion and the Secondary
Sale Order and the Secondary 365 Contracts Order may be consolidated
in a single order.
The Sellers shall use their commercially reasonable efforts
to cause the Bankruptcy Court to enter the Orders containing, among
other provisions reasonably requested by Parent, the following
provisions (it being understood that certain of such provisions must
constitute findings of fact or conclusions of Law to be made by the
Bankruptcy Court as part of the Orders):
1) the transfers of the Purchased Assets and the assignment of
the Assigned Contracts by the Sellers to the Buyer or its Designees in
accordance with this Agreement (i) are or will be legal, valid and
effective transfers of such Purchased Assets and assignment of such
Assigned Contracts, as the case may be, (ii) vest or will vest the Buyer
or its Designees with all right, title and interest of the Sellers in
and to the Purchased Assets pursuant to Section 363(f) of the Bankruptcy
Code free and clear of any and all Liens (other than Liens created by
Parent or the Buyer) and Claims whatsoever, whether known or unknown,
fixed, liquidated, contingent or otherwise, including, but not limited
to, any Claims held by any of the Sellers' or their Affiliates'
creditors, vendors, suppliers, employees or lessors, and any other
person (collectively, the "Claimants"), and that none of Parent, the
Buyer nor their Affiliates (including any Designee) shall be liable in
any way (as assignee, successor entity or otherwise) for any Claims that
any of the Claimants or any other third party may have against the
Sellers, their Affiliates (including any Designee), or the business of
the Sellers or their Affiliates (including any Designee), or under any
such Contract, other than Claims on the account Assumed Liabilities and
a portion of the Agreed Operating Lease Cure Amounts to the extent
provided in Section 2.4 of this Agreement, and (iii) constitute
transfers for reasonably equivalent value and fair consideration;
2) all amounts to be paid by any Seller to Parent or the Buyer
or to be borne by any Seller pursuant to this Agreement shall constitute
administrative expenses under Sections 503(b) and 507(a)(1) of the
Bankruptcy Code, and shall be immediately payable if and when any
Seller's obligation to pay or bear such amount may arise under this
Agreement without any further order of the Bankruptcy Court;
3) the Bankruptcy Court retains exclusive jurisdiction to
interpret, construe and enforce the provisions of, and to resolve any
and all disputes that may arise under or in connection with the
assumption and assignment of any Assigned Contract or under this
Agreement, the Transition Services Agreement, the Escrow Agreement, and
the Orders, in all respects, and further to hear and determine any and
all disputes among the Sellers, the Sellers' Affiliates, Parent, the
Buyer and/or the Buyer's Affiliates (including any Designee), as the
case may be, and any non-Sellers party thereto that may arise under or
in connection with (a) the assumption and assignment of any Assigned
Contract or (b) Excluded Liabilities;
4) the provisions of the Orders are nonseverable and mutually
dependent;
5) the transactions contemplated by this Agreement, the
Transition Services Agreement, the Escrow Agreement and the Orders are
undertaken by the Sellers, Parent and the Buyer at arm's length, without
collusion and in good faith within the meaning of Section 363(m) of the
Bankruptcy Code, and such parties are entitled to the protections of
Section 363(m) of the Bankruptcy Code;
6) a determination that approval of this Agreement, the
Transition Services Agreement, the Escrow Agreement and the Order, and
consummation of the transactions contemplated hereby and thereby, are in
the best interests of the Sellers, their creditors and estates;
7) a determination that the terms and conditions of this
Agreement, the Transition Services Agreement and the Escrow Agreement
and the transactions contemplated thereby, including without limitation,
the transfer of the relevant Purchased Assets free and clear of any and
all Liens and Claims, are fair and reasonable;
8) the Sellers may, and may cause their Affiliates to, assign
and transfer to the Buyer or its Designees all of the Sellers' and their
Affiliates' right, title and interest (including common law rights) to
all of their intangible property included in the Purchased Assets and
Assigned Contracts, subject to their obtaining actual or deemed third
party consents to the extent required by applicable law;
9) provides that the sale of the Purchased Assets and the
assumption and assignment of the Assigned Contracts is being undertaken
by the Sellers in furtherance of effectuating a plan of reorganization,
to the extent permitted by Section 1146(c) of the Bankruptcy Code, shall
be exempt from transfer, stamp and certain other taxes,;
10) provides that any stay of orders authorizing the use, sale
or lease of property, or the assignment of an executory contract or
unexpired lease as provided for in Bankruptcy Rules 6004(g) or 6006(d)
shall not apply to the Orders and that the Orders are immediately
effective and enforceable;
11) provides that none of the Buyer or its Affiliates
(including any Designee) shall be liable, either directly or indirectly,
as successor, transferee or otherwise, for any liabilities of any Seller
or any of its Affiliates (whether under federal or State law or
otherwise) as a result of the sale of the Purchased Assets or the
assumption and assignment of the Assigned Contracts, in each case to the
fullest extent permitted by Section 1146(c) of the Bankruptcy Code and
other applicable Law;
12) provides that none of the Buyer or its Affiliates
(including any Designee) shall assume liabilities of any Seller or its
Affiliates other than the Assumed Liabilities and a portion of the
Agreed Operating Lease Cure Amounts to the extent provided in Section
2.4 of this Agreement;
13) provides that neither the Buyer nor its Affiliates
(including any Designee) shall be liable, either directly or indirectly,
as a successor, transferee or otherwise, for any Tax liability under
Rev. Tax. Codess.ss.6811 and 6812 of the California Code or any similar
state or local statute;
14) approves the Sellers' assumption and assignment to the
Buyer or its Designees of the Assigned Contracts pursuant to Sections
363 and 365 of the Bankruptcy Code;
15) determines that adequate assurance of future performance
has been demonstrated by or on behalf of the Buyer with respect to the
Assigned Contracts;
16) holds that any party that may have had the right to
consent to the assumption or assignment of the Assigned Contracts is
deemed to have consented to such assumption and assignment as required
by Section 365(c) of the Bankruptcy Code if it fails to object to such
assumption or assignment;
17) determines or provides for the determination of amounts
necessary to "cure" (within the meaning of Section 365(b)(1) of the
Bankruptcy Code) all "defaults" (within the meaning of Section 365(b) of
the Bankruptcy Code) under the Assigned Contracts and orders the Sellers
to pay the related Actual Cure Amounts;
18) provides that there shall be no rent accelerations,
assignment fees, increases or any other fees charged to the Buyer or its
Affiliates (including any Designee) as a result of the Sellers'
assumption or assignment to the Buyer or its Designees of the Assigned
Contracts, and that the validity of such assumption or assignment shall
not be affected by any dispute between the Sellers or any of their
Affiliates and any counterparty to any Assigned Contract; and
19) provides that the Assigned Contracts, upon assignment to
the Buyer or its Designees, shall still be deemed valid and binding, in
full force and effect in accordance with their terms.
(b) The Primary Sale Motion and the Secondary Sale Motion shall
request authorization pursuant to Section 363(f) of the Bankruptcy Code to
transfer to the Buyer or its Designees the equipment (and not the underlying
leases) subject to the Primary Scheduled Financing Leases and Secondary
Scheduled Financing Leases, respectively, free and clear of all Liens and
Claims. The Primary Sale Motion and the Secondary Sale Motion shall also
request, in the alternative, authorization pursuant to Section 365 of the
Bankruptcy Code to assume and assign the Primary Scheduled Financing Leases
and the Secondary Scheduled Financing Leases, respectively, if it is
determined that any Primary Scheduled Financing Lease or Secondary Scheduled
Financing Lease constitutes a Non-Conforming Lease. In that event, the
Sellers shall use commercially reasonable efforts to cause the Bankruptcy
Court to enter such an order which contains, among other provisions
reasonably requested by Parent, provisions consistent with those set forth in
Section 6.1(a)(ii). For the avoidance of doubt, the provisions of this
Section 6.1(b) shall survive the Closing.
(c) If any Order or any other order of the Bankruptcy Court
relating to this Agreement shall be appealed by any Person (or a petition for
certiorari or motion for rehearing, reargument or stay shall be filed with
respect thereto), the Sellers agree to, and to cause their Affiliates to,
take all commercially reasonable steps, and use commercially reasonable
efforts, to defend against such appeal, petition or motion, and Parent and
the Buyer agree to cooperate in such efforts. Each of the parties hereto
hereby agrees to use commercially reasonable efforts to obtain an expedited
resolution of such appeal; provided, however, that nothing herein shall
preclude the parties hereto from consummating the transactions contemplated
hereby if any Order shall have been entered and have not been stayed and
Parent, in its reasonable judgment, has waived in writing the requirement
that such Order be a Final Order, in which event the Buyer and its Designees
shall be able to assert the benefits of Section 363(m) of the Bankruptcy Code
and, as a consequence of which, such appeal shall become moot.
Section 6.2. Consultation; Notification; No Conflict. The Sellers
shall, and shall cause their Affiliates to, (a) consult with Parent, prior to
their submission to the Bankruptcy Court, on the form and substance of the
Bidding Procedures Order, the Orders, the Motions and all court submissions
by any of the Sellers relating to this Agreement, and (b) promptly deliver to
Parent copies of any and all pleadings, motions, notices, statements,
schedules, applications, reports, proposed orders and other documents filed
by the Sellers or related to the Bankruptcy Cases, including, but not limited
to, any objections to this Agreement, any of the pleadings filed with the
Bankruptcy Court in connection with this Agreement, or the transfer,
assumption or assignment of any Purchased Assets. The Sellers further
covenant and agree that, to the extent this Agreement and the transactions
contemplated hereby are approved by the Bankruptcy Court, the terms of any
plan of reorganization or liquidation submitted by the Sellers or their
Affiliates to the Bankruptcy Court for confirmation shall not conflict with,
supersede, abrogate, nullify, modify or restrict the terms of this Agreement
and the rights of Parent, the Buyer or their Affiliates hereunder, or in any
way prevent or interfere with the consummation or performance of the
transactions contemplated hereby, including, without limitation, any
transaction that is contemplated by or approved pursuant to the Bidding
Procedures Order or any Order.
Section 6.3. Bidding Procedures. The Sellers acknowledge that
this Agreement is the culmination of an extensive process undertaken by the
Sellers to identify and negotiate a transaction with a bidder prepared to pay
the highest or otherwise best purchase price for the Purchased Assets while
assuming or otherwise satisfying certain liabilities in order to maximize the
value for the Sellers and their estates. Set forth below are the bidding
procedures (the "Bidding Procedures") to be employed with respect to this
Agreement concerning the sale of the Purchased Assets of the Sellers to the
Buyer (the "Sale"). The Sale is subject to competitive bidding only as set
forth herein and approval by the Bankruptcy Court at the Primary Sale Hearing
of the Primary Sale Order. There shall be no competitive bidding in
connection with the Secondary Sale Hearing. The following overbid provisions
and related bid protections are designed to compensate Parent and the Buyer
for their efforts and agreements to date and to facilitate a full and fair
process designed to maximize the value of the Purchased Assets for the
benefit of the Sellers' and their Subsidiaries' creditors and stakeholders.
(a) Bid Deadline. All Bids must be submitted to Exodus, 0000
Xxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 Attention: Xxxx
Xxxxxx, Chief Financial Officer, with copies to (i) Exodus's counsel,
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, at (A) Xxxx Xxxxx Xxxxxx, Xxx Xxxx
Xxx Xxxx 00000 Attention: J. Xxxxxxx Xxxxxx and (B) 000 Xxxxxxxxxx Xxxxxx,
Xxxx Xxxx, XX 00000 Attention: Xxxx X. Xxxxxx, (ii) Xxxxxx Freres & Co. LLC,
Attention: Xxxxx Xxxxxx and (iii) counsel to the Official Unsecured
Creditors' Committee appointed in the Bankruptcy Cases (the "Committee"),
Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx X. Xxxxxxxx and Xxxx Xxxxxxx, so as to be received
not later than 11:00 A.M. (EST), on the date which is five (5) Business Days
prior to the date scheduled by the Bankruptcy Court for the Primary Sale
Hearing (the "Bid Deadline"). Exodus will immediately distribute by facsimile
transmission, personal delivery or reliable overnight courier service in
accordance with Section 10.12, a copy of each Bid to Parent c/o Company
Secretary, Parent's counsel x/x Xxxxx X. Xxxxxxx, Xxxxxx, Xxxxxxxx, Xxxxx &
Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: 000-000-0000) and
counsel to the lead arranger under the Sellers' DIP Financing. For purposes
of this Agreement, "Bid" shall mean a letter from one or more Persons who
Exodus's Board of Directors, in the good faith exercise of its fiduciary duty
and after consultation with its advisers, has determined is financially able
to consummate the purchase, either jointly or separately, of the Purchased
Assets (a "Qualified Bidder") stating that (A) such Qualified Bidder offers
to purchase the Purchased Assets upon the terms and conditions set forth in a
copy of this Agreement, together with all Exhibits and Schedules hereto (the
"Definitive Sale Documentation"), marked to show those amendments and
modifications to the Definitive Sale Documentation, including, but not
limited to, the price and time of closing, that such Qualified Bidder
proposes, (B) such Qualified Bidder is prepared to enter into and consummate
the transaction within not more than fifteen (15) days after the entry of an
order by the Bankruptcy Court approving any Alternative Transaction, subject
to receipt of any governmental or regulatory approvals (which must be
obtained within sixty (60) days after entry of such order), and (C) such
Qualified Bidder's offer is irrevocable until the closing of its purchase of
the Purchased Assets. For purposes of determining the existence of a Bid, a
Bid may be in the form of a joint bid from more than one Person.
(b) Qualified Bid. Only Qualified Bids will qualify for
consideration at the Auction (as defined below). For purposes of this
Agreement, a "Qualified Bid" is a Bid that:
(i) complies in all respects with Section 6.3(a);
(ii) has a cash component of at least an amount sufficient
to satisfy 100% of the Break-Up Fee;
(iii) is a proposal that Exodus determines in the good faith
opinion of the Board of Directors of Exodus after consultation with the
independent financial advisors of Exodus and the Committee has a value,
taking into account the burdens and conditions associated with such
proposal, greater than or equal to the sum of (x) the value, as
reasonably determined by the independent financial advisors of Exodus,
of the Buyer's offer plus (y) the amount of the Break-Up Fee plus (z) in
the case of the initial Qualified Bid, $10,000,000, and in the case of
any subsequent Qualified Bids, $1,000,000 over the preceding Qualified
Bid;
(iv) is accompanied by satisfactory evidence of committed
financing or other ability to perform;
(v) is accompanied by a deposit (by means of a certified
bank check from a U.S. bank or by wire transfer) equal to or greater
than $1,000,000; and
(vi) includes a commitment to consummate the purchase of the
Purchased Assets (including the receipt of any required governmental or
regulatory approvals) within not more than 15 days after entry of an
order by the Bankruptcy Court approving such purchase, subject to the
receipt of any governmental or regulatory approvals which must be
obtained within 60 days after entry of such order.
If the Sellers do not receive any Qualified Bids other than this Agreement,
the Sellers will report the same to the Bankruptcy Court and will proceed
with the Sale pursuant to the terms of this Agreement. For purposes of the
Auction, Parent and the Buyer shall constitute Qualified Bidders, and this
Agreement, including any amendments thereto, shall constitute a Qualified
Bid, for all purposes.
(c) Auction, Bidding Increments, and Bids Remaining Open.
(i) If the Sellers receives at least one Qualified Bid in
addition to this Agreement, the Sellers will conduct an auction (the
"Auction") at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the date that is three
(3) Business Day prior to the date scheduled by the Bankruptcy Court for
the Primary Sale Hearing, beginning at 11:00 A.M. (EST) or such later
time or other place as Exodus shall notify all Qualified Bidders who
have submitted Qualified Bids. Only Exodus, Parent, the Buyer, any
representative of the Committee and any representative of General
Electric Capital Corporation, as lead arranger under the DIP Financing
(and the legal and financial advisers to each of the foregoing), and any
Qualified Bidder who has timely submitted a Qualified Bid shall be
entitled to attend the Auction, and only Parent, the Buyer and Qualified
Bidders will be entitled to make any subsequent Qualified Bids at the
Auction. At the Auction, bidding shall begin initially with the highest
or otherwise best Qualified Bid. Bidding at the Auction be in increments
of $1,000,000 and will continue until such time as the highest or
otherwise best Qualified Bid is determined. Immediately upon selection
of the highest or otherwise best Qualified Bid, such Qualified Bidder
shall pay (by means of a certified bank check from a U.S. bank or by
wire transfer) pay an additional deposit equal to (A) 100% of the
Break-Up Fee minus (B) the amount of such Qualified Bidder's initial
deposit under Section 6.3(b)(v) hereto, to be held in escrow by the
Escrow Agent until the earlier of the Closing Date or the termination of
the Qualified Bid. Exodus may announce at the Auction additional
procedural rules that are reasonable under the circumstances (e.g., the
amount of time allotted to make subsequent overbids) for conducting the
Auction so long as such rules are not inconsistent with these Bidding
Procedures.
(ii) At least one Business Day prior to the Auction, Exodus
will give Parent, the Buyer, counsel to the Committee, counsel to
General Electric Capital Corporation and all other Qualified Bidders a
copy of the highest or otherwise best Qualified Bid and copies of all
other Qualified Bids. In addition, Exodus will inform Parent and each
other Qualified Bidder who has expressed its intent to participate in
the Auction of the identity of all Qualified Bidders that may
participate in the Auction.
Section 6.4. Expense Reimbursement and Break-Up Fee. (a) Exodus
hereby agrees, in the event that any Seller (i) accepts a Bid, other than
that of the Buyer, as the highest or otherwise best offer (an "Auction
Transaction") or (ii) sells, transfers, leases or otherwise disposes,
directly or indirectly, including through an asset sale, stock sale, merger,
reorganization or other similar transaction (by the Sellers or their
Affiliates or otherwise), all or a substantial portion of the Purchased
Assets (or agrees to do any of the foregoing) in a transaction or series of
transactions to a party or parties other than the Buyer or its Designees
within six (6) months from the date hereof (any of clause (i) or (ii) being,
an "Alternative Transaction"), to pay to Parent a break-up fee (the "Break-Up
Fee") in the amount of $16,800,000 which reimburses Parent and the Buyer for
their expenses incurred in connection with the transactions contemplated by
this Agreement and compensates Parent and the Buyer for the time and expense
dedicated to this transaction and the value added by Parent and the Buyer in
(A) establishing a bid standard or minimum for other bidders, (B) placing the
Sellers' estate property in a sales configuration mode attracting other
bidders to the Auction and (C) for serving, by its name and its expressed
interest, as a catalyst for other potential or actual bidders. The Break-Up
Fee shall constitute an administrative priority claim against the Sellers'
estates under Sections 503(b) and 507(a)(1) of the Bankruptcy Code and shall
be paid immediately, without further order of the Bankruptcy Court, upon the
entry by the Bankruptcy Court of an order approving an Alternative
Transaction.
(b) Exodus hereby agrees, in the event that (i) the Sellers
withdraw or determine not to prosecute the Sale Motion, or (ii) a plan of
reorganization or liquidation is filed by any of the Sellers or the Committee
with the Bankruptcy Court which, if approved by the Bankruptcy Court, would
be inconsistent with the transfer and assignment of the Purchased Assets to
the Buyer or its Designees as contemplated by this Agreement, to pay to
Parent an amount equal to the actual out-of-pocket costs and expenses
(including, without limitation, expenses of counsel, expenses of financial
advisors and expenses of other consultants and the HSR Act filing fee)
incurred by Parent and the Buyer in connection with this Agreement and the
transactions contemplated hereby, but in no event more than $5,000,000 (the
"Expense Reimbursement"); provided, however, that in no event shall the
Expense Reimbursement be payable to Parent (x) if Parent or the Buyer
terminate this Agreement (other than in the event of an Auction Transaction)
for any reason other than the willful breach by Exodus of any representation,
warranty, covenant or agreement set forth in this Agreement, or (y) if this
Agreement is terminated by Exodus pursuant to Sections 8.1(c) or (k). The
Expense Reimbursement shall constitute an administrative priority claim
against Sellers' estates under Sections 503(b) and 507(a)(1) of the
Bankruptcy Code and shall be paid immediately, without further order of the
Bankruptcy Court, upon occurrence of the earlier of either of the events
referred to in clause (i) or upon entry by the Bankruptcy Court of an order
approving the plan referred to in clause (ii) of this Section 6.4(b).
Section 6.5. Other Assets and Agreements. Upon the discovery by
any Seller or any of its Affiliates of any item included within the
definition of Purchased Assets but not transferred, conveyed or assigned to
the Buyer or any Designee, such Seller shall, and shall cause its Affiliates
to, (a) deliver written notice to Parent of the existence and non-transfer,
non-conveyance or non-assumption of such item and provide Parent with all the
information about and with access to such item as Parent may reasonably
request, and (b) if requested by Parent, shall use commercially reasonable
efforts to transfer, convey or assign to the Buyer or its Designee (as
specified by Parent) such item in the manner and on the terms and conditions
as if it were a Purchased Asset under this Agreement, subject to applicable
Law and the terms of this Agreement. For the avoidance of doubt, the
provisions of this Section 6.5 shall survive the Closing.
Section 6.6. Additional Matters and Further Assurances. (a) To
the extent that, under applicable Law, any Assigned Contract (or any Seller's
rights thereunder) may not be assigned to the Buyer or its Designee or
transferred without the consent of a third party and such consent has not
been obtained, this Agreement shall not constitute an agreement to assign or
transfer such Assigned Contract if an attempted assignment or transfer would
constitute a breach thereof or be unlawful, and the Sellers shall:
(i) use their commercially reasonable efforts to procure
such consent and an assignment or a novation of such Assigned Contract;
(ii) if they are unable to procure such consent and
assignment or novation of such Assigned Contract, use their commercially
reasonable efforts to establish a reasonable arrangement designed to
provide the benefits and burdens of such Assigned Contract to the Buyer
or its Designee, including by sublicense, sublease, subcontract, escrow
or similar arrangement at no additional charge or obligation to the
Buyer or any of its Affiliates (including any Designee); and
(iii) remit any rents, revenues, security deposits or any
other dollar amounts, notices or documents received by any Seller or its
Subsidiaries in connection with such Assigned Contract to the Buyer or
its Designee within five (5) Business Days of its receipt thereof,
provided that the Buyer or Designee to whom such Contract was to be
assigned shall be responsible all obligations arising under such
Assigned Contract after the Closing Date.
(b) For the avoidance of doubt, the provisions of this
Section 6.6 shall survive the Closing.
Section 6.7. Access and Information. (a) The Sellers shall
permit, and shall cause the other Exodus Subsidiaries to permit, Parent, the
Buyer and their representatives after the date of execution of this Agreement
to have reasonable access, during regular business hours and upon reasonable
advance notice, to the properties, officers and employees of Exodus and the
Exodus Subsidiaries (and the Sellers shall use their commercially reasonable
efforts to cause the Sellers' outside independent accountants to be available
to Parent and the Buyer on the same basis), and shall furnish, or cause to be
furnished, to Parent and the Buyer any financial and operating data, tax
information, books and records, contracts and documents and other information
that is available with respect to Exodus, the Exodus Subsidiaries and the
Purchased Assets as Parent and the Buyer shall from time to time reasonably
request (including any work papers of the Sellers' accountants); provided,
that the foregoing shall not require the Sellers to permit any inspection, or
to disclose any information, that in its reasonable judgment would result in
the disclosure of any trade secrets of third parties or violate the Sellers'
or the SPEs' obligations with respect to confidentiality.
(b) Exodus shall provide Parent with copies of (i) all reports,
appraisals, statements and other documents and information provided to the
lenders or any agent therefor under the DIP Financing (including any reports
on working capital) on the same date such materials are delivered to such
Persons and (ii) copies of any filing, statement, document or other
information or material Exodus or any of its Subsidiaries files with,
submits, presents to, or otherwise makes available to the Bankruptcy Court,
the Office of the United States Trustee or any official committee appointed
in the Bankruptcy Cases on the same date such filing, statement, document or
other information or material is so made, presented or submitted.
(c) Exodus shall provide Parent with bi-weekly reports regarding
(i) customer churn by data center, (ii) cashflow, (iii) new bookings, (iv)
credit issuance and (v) employee turnover. Exodus shall promptly, and in no
event more than five (5) Business Days following the occurrence thereof,
notify Parent of any Material Adverse Effect with respect to the Purchased
Assets, which notice shall include a detailed description of such Material
Adverse Effect.
(d) The Sellers shall use their commercially reasonable efforts
to help Parent and the Buyer identify, with respect to each Scheduled
Financing Lease and each Scheduled Operating Lease, the locations of all
equipment subject thereto and, to the extent applicable, the customers
associated with each such piece of equipment.
(e) All information provided or obtained pursuant to clauses (a)
and (b) above shall be held by the Buyer in accordance with and subject to
the terms of the Confidentiality Agreement, dated September 21, 2001 (the
"Confidentiality Agreement"), between Parent and Exodus, all of the terms of
which (other than the fifth and sixth paragraphs thereof) shall remain in
full force and effect notwithstanding the execution and delivery of this
Agreement or the termination hereof.
Section 6.8. Registrations, Filings and Consents. (a) After the
date hereof each of the parties hereto shall (i) promptly file documentary
materials required by Section 3.12 and Section 4.4 hereto and promptly file
any additional information requested as soon as practicable after receipt of
request therefor; (ii) furnish the other parties with copies of all documents
(except documents or portions thereof for which confidential treatment has
been requested) and correspondence (A) prepared by or on behalf of it for
submission to any Governmental Entity and (B) received by or on behalf of it
or its counsel from any Governmental Entity, in each case in connection with
the transactions contemplated by this Agreement; and (iii) use its
commercially reasonable efforts to consult with and keep the other parties
informed as to the status of such matters. Parent, the Buyer and the Sellers
shall, and the Sellers shall cause the SPEs to, use their respective
commercially reasonable efforts to promptly take, or cause to be taken, all
other action and do, or cause to be done, all other things necessary, proper
or appropriate under applicable Laws to consummate and make effective the
transactions contemplated by this Agreement as soon as practicable. The
Sellers, Parent and the Buyer will cooperate and use their respective
commercially reasonable efforts to obtain, as promptly as practicable all
consents, approvals, waivers and authorizations required by Section 7.3(f)
and under the items set forth on Schedule 7.3(g) hereto. Notwithstanding any
other provision of this Agreement, nothing in this Agreement shall require or
be construed to require Parent, the Buyer, their Designees or any
Subsidiaries thereof, in order to obtain the consent of, or successful
termination of any review by, any Governmental Entity regarding the
transactions contemplated hereby, to (A) sell or hold separate, or agree to
sell or hold separate, before or after the Closing, any of the Purchased
Assets or any assets or businesses (or any interests in any assets or
businesses), of Parent, the Buyer, their Designees, the SPEs or any of their
respective Affiliates (or to consent to any sale, or agreement to sell, by
Parent, the Buyer, any Designee, any Seller or any SPE, of any assets or
businesses, or any interests in any assets or businesses), or any change in
or restriction on the operation by Parent, the Buyer, any Designee, or any
SPE of the Purchased Assets or any other assets or businesses, or (B) enter
into any agreement or be bound by any obligation that, in Parent's good faith
judgment, may have an adverse effect on the benefits to Parent or the Buyer
of the transactions contemplated in this Agreement.
(b) The Sellers, Parent and the Buyer shall take all actions
necessary to file as soon as practicable (and in any event within fifteen
(15) Business Days after the date hereof) all notifications, filings and
other documents required under the HSR Act, and to respond as promptly as
practicable to any inquiries or requests received from the FTC, the Antitrust
Division of the Department of Justice or any other Governmental Entity,
including for additional information or documentation. Subject to Section
6.8(a), Parent and the Buyer agree to take promptly all commercially
reasonable steps necessary to avoid or eliminate each and every impediment
under any antitrust or competition law that may be asserted by any
Governmental Entity so as to enable the parties to expeditiously close the
transactions contemplated by this Agreement; provided, that Parent and the
Buyer shall not be obligated to prosecute or defend any litigation against
any Governmental Entity in order to obtain approval of, or avoid or eliminate
an impediment to, the consummation of the transactions contemplated by this
Agreement.
Section 6.9. Conduct of Business. Except (A) as expressly
contemplated by this Agreement, the Related Documents or the transactions
contemplated herein or therein, (B) as set forth in Schedule 6.9 hereto or
(C) with the prior written consent of a representative of Parent designated
by Parent (which consent shall not be unreasonably withheld), the Sellers
agree that, between the date of this Agreement and the Closing Date:
(a) the Sellers shall and shall cause each of their Subsidiaries
to (x) operate the Business, including the SPEs and Acquired Sites, only in
the ordinary course consistent with past practice and, if applicable, the
commencement and pendency of the Bankruptcy Cases, (y) use their commercially
reasonable efforts to preserve intact their current business organizations
related to the Business and (z) use their commercially reasonable efforts to
maintain their tangible assets in proper working order; and
(b) the Sellers shall not, and shall not permit any of their
Subsidiaries to:
(i) sell, lease, transfer, grant a participation or security
interest (except those arising automatically upon purchase of equipment
under existing Financing Leases) in, mortgage, pledge, assign, or
otherwise encumber or subject to a Lien involving more than $100,000
individually or $500,000 in the aggregate (x) any of the Purchased
Assets, (y) any assets of any SPE, tangible or intangible, or (z) any
other material assets, tangible or intangible, if doing so would
reasonably be expected to adversely impact the assets described in
clause (i)(x) or (i)(y);
(ii) enter into, amend, modify, cancel or waive any rights
under any Assigned Contract or other Contract related to the Business or
any of the Purchased Assets involving more than $500,000 individually or
Contracts involving $1,000,000 in the aggregate, other than in the
ordinary course of business consistent with past practices;
(iii) reject, modify or terminate any Contract reasonably
required to provide services in accordance with Section 6.17;
(iv) change their credit approval or underwriting practices
and policies (including with respect to non-accrual classification,
collection efforts, provision of credit losses, reserves, write-downs
and charge-offs or income recognition);
(v) fail to preserve Purchased Assets or deploy maintenance
capital in the ordinary course;
(vi) grant any license or sublicense of any rights under or
with respect to any Acquired Intellectual Property other than in the
ordinary course consistent with past practice;
(vii) issue, sell, or otherwise dispose of any membership or
partnership interests, or grant any options, warrants, or other rights
to purchase or obtain (including upon conversion, exchange, or exercise)
any membership or partnership interests of any SPE;
(viii) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock (whether in cash or in
kind) or redeem, purchase, or otherwise acquire any of its capital stock
or effect any reclassification, recapitalization, stock split or
combination, exchange or readjustment of shares, or, in the case of the
SPEs, repay any intercompany indebtedness owed to Exodus or any of its
other Subsidiaries or otherwise transfer cash to Exodus or any of its
other Subsidiaries except (A) in payment of services rendered or
reimbursement of expenses incurred for the SPEs in the ordinary course
of business consistent with past practice and (B) the SPEs may prior to
Closing make dividends or other distributions to Exodus of the amount of
any unrestricted cash balances held by the SPEs that are not necessary
for the SPEs to satisfy their obligations in the ordinary course
consistent with past practice;
(ix) except as required by GAAP, the rules and regulations
promulgated by the SEC or applicable Laws, make any change in its
accounting methods, principles or practices;
(x) establish or increase any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase,
employment, severance or other employee benefit plan, program,
arrangement or agreement, or otherwise increase the compensation payable
to, or to become payable to, any Business Employee except (A) as
required by terms of existing Contracts and (B) extensions or
replacements of directors' and officers' liability insurance;
(xi) sell, lease, transfer, grant a participation or
security interest in, mortgage, pledge, or otherwise encumber or subject
to a Lien any of the Purchased Assets, other than non-exclusive licenses
of Intellectual Property granted in a manner and on terms consistent
with past practice;
(xii) enter into, amend or modify in any meaningful respect,
cancel or waive any meaningful rights under any Scheduled Financing
Lease, any Scheduled Operating Lease or any Scheduled Contract other
than in the ordinary course of business consistent with past practice;
(xiii) fail to manage inventory used in the Business in the
ordinary course consistent with past practice; or
(xiv) grant, promise or otherwise agree to extend to any
customer or prospective customer of the Business any credit for products
or services to be provided after the date of this Agreement except as
required under a binding Contract existing on the date hereof, except
for credits granted in the ordinary course consistent with past practice
and limited to services provided in the calendar quarter in which such
credit was granted.
(c) The Sellers shall cause the SPEs not to engage in any
activity other than as specifically required under the Securitization
Documents.
(d) The Sellers shall not proceed with any of the
transactions described on Schedule 6.9(d).
Section 6.10. Retention of Books and Records. Parent and the
Buyer shall cause the SPEs to retain, until the applicable Tax statutes of
limitation (including periods of waiver) have expired, all books, records and
other documents pertaining to the SPEs in existence on the Closing Date that
are required to be retained under current retention policies and to make the
same available after the Closing Date for inspection and copying by Exodus or
its agents at Exodus's expense, during regular business hours and upon
reasonable request and upon reasonable advance notice. Exodus shall, and
shall cause its agents to, hold all such information in strict confidence.
After the expiration of such period, no such books and records shall be
destroyed by Parent and the Buyer without first advising Exodus in writing
detailing the contents thereof and giving Exodus at least 120 days to obtain
possession thereof.
Section 6.11. Delivery of Corporate Minutes and Bank Signature
Cards. At the Closing, the Sellers shall deliver to the Buyer the minutes and
other partnership or limited liability company record books of the SPEs, and
promptly following the Closing shall deliver signature cards from all banks
or financial institutions with which the SPEs have any account designating
signatures approved by the Buyer.
Section 6.12. Further Assurances. (a) At any time after the
Closing Date, the Sellers shall, and the Buyer shall cause the SPEs to,
promptly execute, acknowledge and deliver any other assurances or documents
reasonably requested by Parent, the Buyer or Exodus, as the case may be, and
necessary for Parent, the Buyer or Exodus, as the case may be, to satisfy its
obligations hereunder or obtain the benefits contemplated hereby.
(b) The Sellers shall use commercially reasonable efforts to, in
an orderly manner and without disruption of service to any affected customer,
promptly transition customers from the Non-Acquired Sites to the Acquired
Sites. The Sellers shall consult with Parent as to the methods and progress
of such customer transition.
(c) The Sellers shall, prior to the Closing, cause each of the
licenses or other agreements listed in clauses (a), (b), (e), (f), (h) and
(i) of item 25 of Section 3.15(y) of the Sellers' Disclosure Letter to be
terminated. The Cash Consideration shall be reduced by an amount equal to
$2,500,000 for each such license or agreement that has not been terminated on
or before the Closing Date. In addition, each Seller (i) shall use
commercially reasonable efforts to cause the licenses or other agreements
listed in clauses (c), (d) and (g) of such item 25 of Section 3.15(y) of the
Sellers' Disclosure Letter to be terminated as soon as practicable and (ii)
shall not take any action, or omit to take any commercially reasonable
action, that would permit the direct or indirect assignment or other
exploitation by the counterparties to such agreements of the intellectual
property licensed to such counterparties under such agreements, including
consenting to any assignment of any such license or agreement or transferring
any interest in such agreement, whether by transfer of shares or other
interests in such counterparty prior to the termination of the relevant
license or agreement or otherwise.
(d) For the avoidance of doubt, the provisions of this Section
6.12 shall survive the Closing.
Section 6.13. Non-Solicitation of Employees; Confidentiality of
Information; Use of Intellectual Property.
(a) The Sellers agree that, for a period of two years from the
Closing Date, the Sellers shall not, directly or indirectly: (i) solicit,
hire or recruit any Person known to the Sellers to be a Transferred Employee,
provided, however, that the foregoing restriction shall not apply to any
Transferred Employee whose employment with Parent or the Buyer is terminated
by Parent or the Buyer or to general solicitations not targeted specifically
at any Transferred Employees; or (ii) disclose or furnish to anyone any
confidential information relating to the SPEs or the Purchased Assets (other
than as required under applicable Law) or otherwise use such confidential
information for their own benefit or the benefit or any other Person (other
than as necessary for Exodus to operate and liquidate its remaining assets
and other than as required or permitted under the Transition Services
Agreement B/S and the Transition Services Agreement S/B ("Permitted
Activities")).
(b) From and after the Closing, none of the Sellers or any of
their Retained Subsidiaries shall have any right, title or interest in or to
any of the Exodus Intellectual Property included in the Purchased Assets,
including, without limitation, any right to directly or indirectly use,
license, sublicense, sell, lease, transfer, reproduce, distribute, display,
modify, create derivative works of or otherwise exploit (collectively, "Use")
any of the Exodus Intellectual Property, except as granted under the
Transition Services Agreement B/S and except for Use permitted under the
License Agreement. The Sellers shall not, and shall cause their Subsidiaries
to not, take any action or permit any action to be taken that is inconsistent
with the foregoing sentence, including, without limitation, Use or attempt to
Use any of the Exodus Intellectual Property beyond the scope of the
Transition Services Agreement B/S and the License Agreement. If any Exodus
Intellectual Property is comprised within any Excluded Asset, prior to the
Closing the Sellers shall, and shall cause their Subsidiaries to cease Use of
any Exodus Intellectual Property, except as may otherwise be contemplated by
or required in connection with the Transition Services S/B, the Transition
Services B/S and License Agreement.
(c) The parties recognize that the performance of the obligations
under this Section 6.13 by the Sellers are special, unique and extraordinary
in character, and that in the event of the breach by any Seller of the terms
and conditions of this Section 6.13 to be performed by the Sellers, each of
Parent, the Buyer and the SPEs shall be entitled, if it so elects, to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to obtain damages for any breach of this Section
6.13, to enforce the specific performance thereof by the Sellers and their
Affiliates and/or to enjoin the Sellers and their respective Affiliates from
actions in violation of this Section 6.13.
Section 6.14. Closing. Subject to the last sentence of Section
6.8(a), the parties agree to use all commercially reasonable efforts to
ensure the satisfaction or waiver of the conditions set forth in Article VII
so as to enable the parties to effect the Closing on or prior to the date set
forth in Section 8.1(b).
Section 6.15. Employment. Prior to the Closing Date (to be
effective on the Closing Date), Parent or the Buyer will offer regular
full-time or part-time employment, as applicable, to such full-time employees
and part-time employees, respectively, of the Sellers as Parent shall
hereafter designate to the Sellers (collectively, the "Business Employees").
Employees who accept offers of employment made by Parent or the Buyer
pursuant to this Section 6.15 shall be referred to herein as the "Transferred
Employees", provided, however, that any Business Employee who is not actively
at work on the Closing Date on account of sickness, vacation or short-term
disability shall be deemed a "Transferred Employee" upon his or her return to
active employment with Parent, the Buyer, a Designee or any of the Acquired
Companies after the Closing Date. Nothing in Section 6.15 shall be deemed to
require, however, that the employment of any Transferred Employee be
continued for any specific period of time after the Closing Date. The Sellers
shall be responsible for and shall indemnify, defend and hold harmless
Parent, the Buyer and their Affiliates from any liabilities relating to any
current or former employee of the Sellers or any SPE who is not a Transferred
Employee (including, without limitation, any liabilities arising under any
Benefit Plan or other compensation program, arrangement or agreement of the
Sellers or any SPE). The Sellers shall make their employees available to
Parent and the Buyer, at reasonable times and in a manner intended not to
disrupt ongoing operations, for the purpose of making employment offers to
such employees.
Section 6.16. Benefit Plans.
(a) Subject to Section 6.15, Parent or the Buyer shall offer the
Transferred Employees employee benefit plans, compensation and payroll
arrangements, and other arrangements providing benefits which are
substantially similar, in the aggregate, as the benefits provided by Parent
or the Buyer to similarly situated employees of Parent or the Buyer, as
applicable, as such plans or arrangements may be amended or modified from
time to time.
(b) To the extent that any employee benefit plan or arrangement
is made available following the Closing Date except for any vacation plan or
arrangement, (i) the Buyer shall, or shall cause the Acquired Companies to,
grant all such Transferred Employees after the Closing Date credit for all
service with the Sellers prior to the Closing Date for all purposes, except
for benefit accrual purposes, for which such service was recognized by the
Sellers, provided that there shall be no duplication of benefits; and (ii)
with respect to any "Employee Benefit Welfare Plan" (as that term is defined
in Section 3(l) of ERISA), the Buyer shall, to the extent permitted under any
applicable insurance policy, (x) waive any exclusions for pre-existing
conditions that would result in a lack of coverage for any condition for
which the applicable Transferred Employee would have been entitled to
coverage under the corresponding Benefit Plan in which such Transferred
Employee was a participant immediately prior to his or her commencement of
participation in the Buyer's corresponding benefit plans; and (y) waive any
waiting period or medical examination requirement applicable to any
Transferred Employee under any such Buyer benefit plan that such participant
was not subject to under such corresponding plan.
(c) Notwithstanding the foregoing, the Sellers shall retain
liability under any Employee Benefit Welfare Plan for claims incurred by a
Transferred Employee on or prior to the Closing Date, including, but not
limited to, (i) disability or workers' compensation claims which commence on
or prior to the Closing Date and extend beyond the Closing Date and (ii)
claims of Transferred Employees not actively at work with the Buyer or the
SPEs as of the Closing Date regarding ongoing medical conditions first
arising on or before Closing for which treatment will continue after Closing.
For purposes of this Section 6.16, a claim is "incurred" on the date the
first event giving rise thereto occurs. The Sellers shall retain liability
and be responsible for, and indemnify, defend and hold harmless Parent, the
Buyer and their Affiliates from any and all liabilities in respect of all
employees of the Business attributable to the period prior to, and including,
the Closing Date, including, without limitation, any accrued and unpaid
bonuses (including any bonuses that become payable upon consummation of the
transactions contemplated by this Agreement ) with respect to the Transferred
Employees; provided that, except as otherwise provided below, with respect to
any accrued and unpaid vacation of any Transferred Employee attributable to
the period prior to, and including, the Closing Date (the "Accrued Vacation
Benefit"), Parent or the Buyer shall pay to such Transferred Employee his or
her Accrued Vacation Benefit in cash within ten (10) Business Days of the
Closing Date in full and complete satisfaction of the Sellers' obligations in
respect of such Transferred Employee's Accrued Vacation Benefit; provided,
however, that, in no event will the Buyer be responsible to pay more than $20
million in the aggregate for the aggregate Accrued Vacation Benefits of all
Transferred Employees (the "Aggregate Vacation Benefit") and in the event the
Aggregate Vacation Benefit exceeds $20 million, the Buyer shall pay to each
Transferred Employee an amount equal to the product of (A) $20 million and
(B) a fraction, the numerator of which is such Transferred Employees' Accrued
Vacation Benefit and the denominator of which is the Aggregate Vacation
Benefit (the amount so paid to such Transferred Employee, the "Pro Rata
Portion") in full and complete satisfaction of such Transferred Employee's
Accrued Vacation Benefit; provided further that, the Sellers shall provide in
Schedule 6.16(c) hereto, which shall be delivered to Parent no later than the
10th day prior to the Closing Date, the amount of each Business Employee's
Accrued Vacation Benefit as of the Closing Date, based on the applicable
vacation plan or policy of the Sellers in effect on the date hereof. In the
event the Aggregate Vacation Benefit exceeds $20 million, the Sellers shall
pay in cash within ten (10) Business Days of the Closing Date to each
Transferred Employee the difference between (A) such Transferred Employee's
Accrued Vacation Benefit and (B) such Transferred Employee's Pro Rata
Portion.
(d) The Sellers shall be responsible for maintaining continuation
health coverage under Section 4980B of the Code and Part 6 of Title I of
ERISA for employees who are not Transferred Employees and for any Transferred
Employees eligible for such coverage on the Closing Date, including, but not
limited to, employees on a disability leave as of the Closing Date. The
Sellers shall indemnify, defend and hold harmless Parent, the Buyer and their
Affiliates (including any Designees) from any Claims arising from or relating
to the recruitment, employment, potential employment or termination of
employment of any Transferred Employee on or prior to the Closing Date
(including, without limitation, any Claims arising under Section 4980B of the
Code or any Benefit Plan or other compensation program, indemnification
arrangement, or other arrangement or agreement of the Sellers).
(e) The Sellers shall retain liability and be responsible for,
and indemnify, defend and hold harmless Parent, the Buyer and their
Affiliates from, (i) any sales commissions, guaranteed draws, incentive pay,
bonuses and any other payments to Transferred Employees related to any sale
programs, agreements or arrangements in effect on or prior to the Closing
Date and (ii) any severance, termination or change in control agreements or
arrangements entered into with the Transferred Employees on or prior to the
Closing Date.
(f) To the extent that any obligations might arise under WARN, or
under similar provisions of any federal, state, regional, foreign or local
law, rule or regulation (collectively, "WARN Obligations"), (i) Sellers shall
be responsible for any WARN Obligations, including, without limitation as a
result of the transactions contemplated herein arising as a result of any
employment losses, in respect of any employee who (A) is not a Transferred
Employee and (B) with respect to any such employment losses occurring on or
prior to the Closing Date, the Transferred Employees; and (ii) Parent and the
Buyer shall be responsible for any WARN Obligations in respect of the
Transferred Employees arising as a result of any employment losses occurring
after the Closing Date.
Section 6.17. Transition Services; License . (a) Parent, the
Buyer and the Sellers shall enter into a transition Services Agreement
substantially in the form attached hereto as Exhibit A (the "Transition
Services Agreement S/B"), pursuant to which Exodus and the Retained
Subsidiaries shall provide transitional services, including the services
described in Appendix A to Exhibit A, to Parent and the Buyer on an arm's
length basis for 120 days following the Closing in order to facilitate an
orderly separation from Exodus and transition to ownership by the Buyer of
the Purchased Assets. The first $40,000,000 in charges, costs and expenses
for transition services provided pursuant to the Transition Services
Agreement S/B shall be deemed to have been paid by virtue of the payment of
the Cash Consideration and the assumption by Parent and the Buyer of the
Assumed Liabilities.
(b) Parent and Exodus shall enter into a transition services
agreement substantially in the form attached hereto as Exhibit B (the
"Transition Services Agreement B/S"), pursuant to which Parent and the Buyer
shall provide transitional services, including the services set forth on
Schedule 6.17(b), to Exodus and the Retained Subsidiaries on an arm's length
basis for so long as necessary to facilitate the orderly disposition of the
remaining businesses and assets of Exodus and the Retained Subsidiaries.
(c) For the avoidance of doubt, to the extent Parent and the
Buyer elect to have the Sellers assume and assign to Buyer or its Designee
any customer Contract related primarily to a data center in the United States
or to the provision of professional services for a client located in the
United States, but pursuant to which goods or services are to be provided to
such customer outside of the United States, the Buyer and Exodus shall use
commercially reasonable efforts to enter into a subcontracting or similar
arrangement pursuant to which goods or services to be provided outside of the
United States under such Contract shall be provided by Exodus or one of the
Retained Subsidiaries. To the extent a customer Contract retained by Exodus
or any of its Subsidiaries relates primarily to a data center outside of the
United States or to the provision of professional services for a client
located outside of the United States, but pursuant to which goods or services
are to provided to such customer outside of the United States, the Buyer and
Exodus shall use commercially reasonable efforts to enter into a
subcontracting or similar arrangement pursuant to which goods or services to
be provided outside of the United States under such Contract shall be
provided by Exodus or one of the Retained Subsidiaries.
(d) Buyer and certain of the Excluded Subsidiaries shall enter
into a License Agreement substantially in the form attached hereto as Exhibit
C (the "License Agreement") pursuant to which the Buyer shall license certain
Intellectual Property to the Sellers.
(e) Effective as of the Closing Date, the Buyer or a Designee, as
the case may be, covenants to Exodus and GlobalCenter, Inc.("GlobalCenter")
not to bring any claim against Exodus or GlobalCenter in any legal or other
proceeding based on any allegation of infringement or misappropriation of any
Embedded Non-Acquired Sites Technology by Exodus or GlobalCenter arising
after the Closing Date arising out of or related to Exodus' or GlobalCenter's
ownership and/or operation of the Non-Acquired Sites, provided that Exodus
and or GlobalCenter do not, at any time, except as permitted under the
Transition Services Agreement S/B (which period of operation, for the
avoidance of doubt, shall not exceed the term of such agreement), operate
such Non-Acquired Sites as Internet data centers or other substantially
similar businesses. The covenant set forth in the immediately preceding
sentence shall extend to any purchaser or purchasers of the Non-Acquired
Sites without any limitation on the operation of the Non-Acquired Sites,
provided that such purchaser or purchasers do not otherwise infringe or
misappropriate any of Buyer's Intellectual Property, including the Exodus
Intellectual Property. Any assignment of the Embedded Non-Acquired Sites
Technology by Buyer or a Designee, as of the case may be, shall be subject to
the covenant set forth above.
(f) Immediately following the Closing, Alpha and each of the
Retained Subsidiaries shall cease use of any Source Code (as defined in the
License Agreement) included in the Purchased Assets and promptly thereafter
shall destroy or purge its systems and files of any such Source Code.
Section 6.18. Conduct After Closing. The Sellers Agree that from
and after the Closing Date through the last day of the period specified in
Section 6.19(a) (or such shorter period as Parent shall specify in writing
pursuant to the Transition Services Agreement), the Sellers shall, and shall
cause their respective Subsidiaries to, exercise commercially reasonable
efforts to maintain their assets, executory contracts, unexpired leases and
any Scheduled Financing Leases as to which no determination has been made as
of the Closing Date regarding the status thereof as a Financing Lease in
order to provide transition services in accordance with the terms of the
Transition Services Agreement, including, without limitation, by (a) not
rejecting any such executory contract or unexpired lease, (b) continuing to
perform all post-petition obligations thereunder, and (c) not proposing or
seeking confirmation of any plan of reorganization or liquidation that would
be inconsistent with this Section 6.20 or the Transition Services Agreement
S/B.
Section 6.19. Use of Licensed Marks. (a) As of the Closing Date,
the Buyer agrees to grant, and hereby does grant, to the Sellers and the
Excluded Subsidiaries a personal, non-exclusive, non-transferable,
non-sublicenseable and royalty-free license, for a term of 120 days
commencing on the Closing Date, to use the Licensed Marks in the Licensed
Territories solely for the limited purpose of winding down the use of each of
the Licensed Marks in the conduct of the businesses of the Sellers in the
Licensed Territories, solely in connection with business activities and
products and services in existence, and in the manner conducted and used in
such businesses, in each case as of the Closing Date or the limited purpose
of identifying assets retained by the Sellers for the purpose of maximizing
the proceeds therefor ("Transitional Use").
(b) The Sellers acknowledge, agree and covenant that: (i) as of
the Closing Date, the Licensed Marks and the goodwill associated therewith
are the exclusive and valuable intellectual property of the Buyer, and none
of the Sellers shall challenge the validity or enforceability of any Licensed
Xxxx or the Buyer's ownership thereof in any form or manner in any
jurisdiction; and (ii) none of the Sellers shall knowingly use the Licensed
Marks in any manner likely to impair the validity or enforceability, diminish
the value of the Licensed Marks to the Buyer, or otherwise dilute, tarnish,
disparage or reflect adversely on the Buyer or the Licensed Marks, in each
case in any jurisdiction (it being understood that the conduct of business by
the Excluded Subsidiaries in a manner consistent with the manner in which
such business was conducted prior to the Closing shall not constitute a
breach of this Section 6.19).
(c) Except as expressly provided in this Section 6.19, the
Sellers are not granted any rights in any Licensed Xxxx, or any goodwill
therein or related thereto. The Sellers hereby acknowledge, agree and
covenant that (i) all goodwill arising out of the Sellers' use of the
Licensed Marks shall inure exclusively to the Buyer, and (ii) all goodwill in
the Licensed Marks that may be held by the Sellers notwithstanding the
foregoing hereby is assigned to the Buyer without any further action by any
party, and the Sellers shall cooperate with the Buyer to take any action
reasonably necessary to effect such assignments, which shall be made without
additional consideration.
(d) The Sellers acknowledge that the Licensed Marks have
established extremely valuable goodwill and reputation, and that it is of
great importance to the Buyer that high standards and reputation of the
Licensed Marks be maintained. Accordingly, in their operation of the Sellers'
businesses in the Licensed Territories and in their use of the Licensed Marks
as permitted hereunder, the Sellers shall at all times maintain high quality
control standards that are substantially equivalent to or stricter than those
standards used by the Sellers in connection with the Sellers' business in the
Licensed Territories prior to the Closing Date. The Sellers' rights under
Section 6.19(a) hereof are limited to using the Licensed Marks in the
identical style, typeface and graphic appearance in which such marks are used
by the Sellers as of the Closing Date.
(e) In the event that the Sellers materially breach any of the
terms of this Section 6.19, the license granted to use the Licensed Marks
shall terminate ten (10) days after issuance by the Buyer of a notice
specifying a breach of this Section 6.19 by the Sellers, provided that, with
respect to any such breach that is curable, the Sellers have not commenced
steps to cure such breach within such ten (10) day period and actually cured
such breach within thirty (30) days after such notice.
Section 6.20. Non-US Transactions. (a) The Sellers and Parent
shall, and shall cause Exodus Germany and the German Buyer, respectively, to,
(i) use their commercially reasonable efforts, subject to the requisite
approvals of the German Buyer and applicable Law, to enter into an agreement
to sell the assets and liabilities of Exodus Germany upon the terms and
subject to the conditions set forth on Schedule 6.20(a) for an aggregate
purchase price of $8,000,000, subject to adjustment in accordance with the
terms of the definitive documentation to be entered into with respect to such
transaction (the "German Transaction") and (ii) in furtherance of clause (i),
promptly following the date hereof, enter into negotiations in good faith of
the definitive documentation with respect to the German Transaction
(including a transition services agreement, to the extent necessary to
operate the German Business for no more than 120 days following the
consummation of the German Transaction, and an escrow agreement) and
consummating the transactions contemplated thereby. Exodus shall consider in
good faith, at the request of Parent, transaction structures that would
involve putting Exodus Germany into insolvency proceedings prior to the
consummation of the German Transaction under the laws of Germany (or any
other structures to limit Parent's and its Affiliates' risks in consummating
the German Transaction), provided that such structures do not adversely
affect Exodus.
(b) Exodus and Parent shall, and shall use commercially
reasonable efforts to cause the Minority Shareholders and the Japanese Buyer,
respectively, to, (i) use their commercially reasonable efforts, subject to
the requisite approvals of the Japanese Buyer and applicable Law, to enter
into an agreement to sell all of the issued and outstanding capital stock of
Exodus Japan to the Japanese Buyer for an aggregate purchase price of $1.00
and to assign all amounts owed by Exodus Japan to Exodus or any of its
Affiliates for a purchase price of $1.00, in each case in accordance with the
terms and conditions set forth on Schedule 6.20(b) (the "Japanese
Transaction") and (ii) in furtherance of clause (i), promptly following the
date hereof, enter into negotiations in good faith of the definitive
documentation with respect to the Japanese Transaction (including a
transition services agreement, to the extent necessary to maintain the
continued operations of Exodus Japan for no more than 120 days following
consummation of the Japanese Transaction) consummating the transactions
contemplated thereby. Parent shall consider in good faith, at the request of
Exodus, alternative transaction structures for the Japanese Transaction,
taking into account, among other things, tax considerations, provided that
such alternative structures do not adversely affect Parent or the Japanese
Buyer.
(c) The Sellers and Parent shall, and shall cause Exodus UK and
the UK Buyer, respectively, to, (i) use their commercially reasonable
efforts, subject to the requisite approvals of the UK Buyer and applicable
Law, to enter into an agreement to sell the assets and liabilities of Exodus
UK upon the terms and subject to the conditions set forth on Schedule 6.20(c)
for an aggregate purchase price of $8,000,000, subject to adjustment in
accordance with the terms of the definitive documentation entered into with
respect to such transaction (the "UK Transaction") and (ii) in furtherance of
clause (i), promptly following the date hereof, enter into negotiations in
good faith of the definitive documentation with respect to the UK Transaction
(including a transition services agreement, to the extent necessary to
operate the UK Business for no more than 120 days following the consummation
of the UK Transaction, and an escrow agreement) and consummating the
transactions contemplated thereby.
(d) The obligation of each of the parties to the transactions
described in this Section 6.20 to consummate such transactions shall be
subject in all respects to the execution and delivery of definitive
documentation in form and substance satisfactory to the Sellers and Parent,
and, in the case of each of the German Buyer, the Japanese Buyer and the UK
Buyer, the completion of diligence satisfactory to the relevant Buyer prior
to the consummation of such transactions. Exodus shall use its commercially
reasonable efforts to cause Exodus UK, Exodus Germany and Exodus Japan to
permit, Parent, the relevant Buyer and their representatives after the date
of execution of this Agreement to have reasonable access, during regular
business hours and upon reasonable advance notice, to the properties,
officers and employees of Exodus UK, Exodus Germany and Exodus Japan (and the
Sellers shall use their commercially reasonable efforts to cause the outside
independent accountants of Exodus UK, Exodus Germany and Exodus Japan to be
available to Parent and each such Buyer on the same basis), and shall
furnish, or cause to be furnished, to Parent and the relevant Buyer any
financial and operating data, tax information, books and records, contracts
and documents and other information that is available with respect to Exodus
UK, Exodus Germany and Exodus Japan as Parent and each such Buyer shall from
time to time reasonably request (including any work papers of the
accountants); provided, that the foregoing shall not require the Sellers to
permit any inspection, or to disclose any information, that in its reasonable
judgment would result in the disclosure of any trade secrets of third parties
or violate any obligations with respect to confidentiality or other
obligations under applicable Law. The parties agree and acknowledge that
Closing is not conditioned on completion of any of the UK Transaction, the
German Transaction or the Japanese Transaction.
(e) Exodus shall, and shall cause each of its Subsidiaries to,
(i) use its commercially reasonable efforts to ensure that each of Exodus UK,
Exodus Germany and Exodus Japan from the date hereof until the closing of, or
such time as the parties determine not to proceed with, the UK Transaction,
the German Transaction or the Japanese Transaction, respectively, (A) operate
their respective businesses only in the ordinary course consistent with past
practice and, if applicable, the commencement and pendency of the Bankruptcy
Cases, (B) use its commercially reasonable efforts to preserve intact their
current business organizations and (C) use its commercially reasonable
efforts to maintain their tangible assets in proper working order and,
subject to applicable Law, to not permit Exodus UK, Exodus Germany or Exodus
Japan to take any of the actions referred to in Section 6.20(b) (with all
references therein to the Business and Purchased Assets being deemed to refer
to the business and assets of Exodus UK, Exodus Germany and Exodus Japan,
respectively), (ii) not take any action or assert any claim held by them (in
its capacity as creditors or direct or indirect shareholders of Exodus
Germany, Exodus Japan or Exodus UK, or otherwise) in a manner which would
prevent or delay the consummation of the German Transaction, the Japanese
Transaction or the UK Transaction, and (iii) subject to applicable Law, use
commercially reasonable efforts to prevent Exodus Germany, Exodus Japan and
Exodus UK from becoming subject to any insolvency proceedings, other than one
requested by Parent, and taking any action that could have a material and
adverse effect on the business of Exodus Germany, Exodus Japan or Exodus UK.
(f) Notwithstanding anything contained in this Section 6.20 to
the contrary, none of the Sellers or any of their Affiliates shall have any
liability to Parent, the Buyer or their Designees or Affiliates for any
action or inaction by the Minority Shareholders.
(g) (i) The Sellers will not, and, subject to applicable Law,
will use commercially reasonable efforts to ensure that each of Exodus UK,
Exodus Germany and Exodus Japan will not, directly or indirectly, (x) solicit
or encourage any inquiries, discussions or proposals regarding, (y) continue,
propose or enter into negotiations or discussions with respect to, or (z)
enter into any agreement or other understanding providing for, any (A) direct
or indirect acquisition or purchase of any voting securities of, or equity
interest in, any of Exodus UK, Exodus Germany or Exodus Japan, (B) merger,
consolidation, sale of a material portion of the assets, recapitalization,
liquidation, dissolution or similar transaction involving any of Exodus UK,
Exodus Germany or Exodus Japan or (C) other transaction which would
reasonably be expected to impede, interfere with, prevent or materially delay
any of the German Transaction, Japanese Transaction or UK Transaction (an
"Alternative Non- US Transaction").
(ii) In the event that at any time prior to the six month
anniversary of the Closing the Sellers receive any proposal from a third
party to enter into an Alternative Non-US Transaction that the Sellers
would wish to accept, the Sellers shall give written notice to Parent of
such proposal, including the terms and conditions of such Alternative
Transaction. Parent shall have the right to elect (either directly or
through a Designee), by written notice delivered to the Sellers not more
than ten (10) Business Days after the receipt of such notice from the
Sellers, to pursue the Alternative Non-US Transaction on the basis set
forth in such notice from the Sellers. If Parent makes such election and
the consideration payable to the Sellers in connection with the
Alternative Non-US Transaction exceeds the amounts contemplated in
Sections 6.20(a), 6.20(b) and 6.20(c), respectively, Parent shall be
entitled to (A) reduce the Cash Consideration by the amount of such
excess (if such Alternative Non-US Transaction is accepted prior to the
Closing) or (B) claim against and deduct from the Escrowed Amount the
amount of such excess (in all other cases). If Parent does not elect to
pursue the Alternative Transaction as set forth above, the Sellers shall
be entitled to accept the proposal for the Alternative Transaction on
the basis set forth in the notice from the Sellers referred to above.
Section 6.21. Consents to Severance of Leases. (a) Exodus shall
use commercially reasonable efforts to obtain the consent of the relevant
landlord, or otherwise to enter into arrangements with the relevant landlord,
to enable the Buyer or its any of its Designees to assume and assign, or to
enter into, a separate lease with respect to the Internet data centers
identified as Chicago 1, DC 4 (Buildings 1 and 2 in Phase I of the relevant
lease) and Dallas 1, (Buildings 1 and 2 in the relevant lease), in each case,
(i) without any obligation on the part of the Buyer or any such Designee,
whether to pay rent or otherwise, in respect of any of the other property
currently covered by the existing leases relating to such data centers, (ii)
for a rental rate not exceeding the portion of the existing rent obligations
under such lease allocable to such Internet data center (which allocation is
set forth in column "A" of Schedule 6.21), and (iii) on such other terms and
conditions not less favorable to the Buyer or its Designee than the terms and
conditions set forth in such existing lease (except for any terms and
conditions as do not currently apply to such Internet data center). The costs
and expenses of obtaining such consents or making such other arrangements
shall be borne by Exodus. Parent shall, and shall cause the Buyer and its
Designees to, provide reasonable cooperation to Exodus in connection with the
obtaining of such consents or making of such arrangements.
(b) Notwithstanding the provisions of Section 6.21(a), at the
election of Exodus by written notice to Parent on or prior to the fifth (5th)
Business Day prior to the Closing Date, in lieu of obtaining any of the
consents, or entering into such other arrangements, as are described in
Section 6.21(a) Exodus may specify that any of the Internet data center
described in Schedule 6.21 shall thereafter be deemed a Non-Acquired Site and
the relevant lease shall not be deemed an Assumed Lease, in which event the
Cash Consideration shall be reduced by the amount set forth with respect to
such Internet data center in column "B" of Schedule 6.21 (the aggregate of
any such reductions, the "Excluded Lease Amount").
Section 6.22. Additional Payments in respect of Austin 2. Parent
and the Buyer agree that Exodus may, directly or indirectly through the SPEs,
enter into an agreement prior to the Closing to dispose of the Internet data
center referred to as Austin 2, in which event the Buyer will use
commercially reasonable efforts to consummate, at Exodus' expense, such sale,
provided that any such agreement shall be conditional upon the receipt of any
necessary consents under the Securitization Documents. In the event any such
disposition is completed within six (6) months after the Closing, Buyer shall
pay to Exodus, within ten (10) Business Days after the completion of such
disposition, an amount equal to the first $15,000,000 of the net proceeds
received in connection with such disposition and fifty percent (50%) of any
net proceeds received in excess of $15,000,000. For this purpose, "net
proceeds" mean the cash proceeds received from any such disposition less any
costs, fees or expenses incurred by the Buyer (or the SPE) in connection with
such disposition.
Section 6.23. Letters of Credit; Security Deposits. (a) The Buyer
will use commercially reasonable efforts to cause the release to the Sellers
at the Closing of the cash deposits set forth in Schedule 2.1(a)(i) and any
cash collateral securing Exodus's reimbursement obligation in respect of the
letters of credit set forth in Schedule 6.23. Such efforts shall include
arranging for the issuance of replacement letters of credit in an amount not
to exceed the amount of each such letter of credit set forth on Schedule
6.23.
(b) For a period of six (6) months following the Closing, Exodus
shall be entitled to receive from Parent or the Buyer if, and to the extent
that, Exodus obtains and delivers to Parent or Buyer an estoppel letter from
the owner of the relevant property in a form reasonably satisfactory to the
Buyer, in which such owner agrees in substance not to make any claims against
any security deposits (or agrees to limit such claims) included in the
Purchased Assets except in respect of action or omissions after the date of
such estoppel letter, a payment in an amount equal to the amount of such
security deposit (or portion thereof).
Section 6.24. Shutdown of Certain Non-Acquired Sites. The Sellers
shall use commercially reasonable efforts to shutdown the eleven (11)
Internet data centers specified on Schedule 6.24 as promptly as practicable
in accordance with the anticipated shutdown dates set forth in such Schedule,
but in no event later than April 30, 2002. For purposes of this Section 6.24,
to "shutdown" an Internet data center shall mean to terminate all services to
customers serviced in such Internet data center, and to remove all personal
property that is not attached to real property (other than being plugged into
an electrical outlet(s) and/or rack mounted) at the Internet data center.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1. Conditions Precedent to Obligations of the Sellers
and the Buyer. The respective obligations of each party to effect the
transactions contemplated by this Agreement shall be subject to the
satisfaction at or prior to the Closing Date of the following conditions
precedent:
(a) a Primary Sale Order and a Primary 365 Contracts Order (which
may be the same order), in form and substance reasonably satisfactory to the
Buyer and meeting the requirements of Section 6.1(a)(ii) hereof, shall be
entered by the Bankruptcy Court;
(b) The applicable appeal periods with respect to the Primary
Sale Order and the Primary 365 Contracts Order shall have expired and such
Orders shall have become Final Orders; provided, however, notwithstanding
Section 7.1(a) hereof, the Buyer shall be obligated to close following the
expiration of the applicable appeal periods even if such Orders have been
appealed, so long as (i) the effectiveness of such Orders has not been stayed
pending appeal by a court of competent jurisdiction, (ii) in the reasonable
good faith judgment of Parent, after consultation with counsel and taking
into account Section 363(m) of the Bankruptcy Code, the reversal or
modification of such Orders as a result of any then pending appeal would not
have a Material Adverse Effect on the Purchased Assets, and (iii) Section
363(m) of the Bankruptcy Code shall remain in full force and effect and there
shall have been no material change in the judicial interpretation of such
statutory provision;
(c) (i) any applicable waiting period under the HSR Act or any
applicable comparable foreign merger control authority, and any extensions
thereof obtained by request or other action of the FTC, the Antitrust
Division or applicable non-U.S. antitrust or competitive regulatory
authorities, shall have expired or been earlier terminated and (ii) if
required by applicable Law, the parties shall have received a decision from
the European Commission under Regulation 4064/89 that the transactions
contemplated by this Agreement and any matters arising therefrom fall within
either Article 6.1(a) or Article 6.1(b) of such Regulation and that, in any
event, the Merger will not be referred to any competent authority or dealt
with by the European Commission pursuant to Article 9.3 of such Regulation
and (iii) no condition or requirement unacceptable to Parent in its
reasonable opinion shall be imposed on or required of Parent or any of its
Subsidiaries or Affiliates as a result of or as a condition to the foregoing;
(d) the regulatory consents, approvals and filings that are set
out in Schedule 3.12 shall have been obtained or made in form and substance
reasonably satisfactory to the Parties;
(e) no action, suit or proceeding (including any proceeding over
which the Bankruptcy Court has jurisdiction under 28 U.S.C. ss. 157(b) and
(c)) shall be pending by any Governmental Entity to enjoin, restrain or
prohibit the transactions contemplated by this Agreement, or that would be
reasonably likely to prevent or make illegal the consummation of the
transactions contemplated by this Agreement or that, if adversely determined,
would constitute or reasonably be expected to constitute a Material Adverse
Effect on the Purchased Assets; and
(f) there shall not be in effect any Law of any Governmental
Entity of competent jurisdiction restraining, enjoining or otherwise
preventing consummation of the transactions contemplated by this Agreement.
Section 7.2. Conditions Precedent to Obligations of the Sellers.
The obligation of the Sellers to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing Date of the following additional conditions precedent:
(a) the representations and warranties of Parent contained in
this Agreement that are qualified by materiality or Material Adverse Effect
shall be true and correct in all respects as of the Closing Date as if made
on such date (except for representations and warranties that relate to a
specified date which shall be true and correct as of such specified date),
and all representations and warranties of Parent and the Buyer contained in
this Agreement that are not so qualified shall be true and correct with only
such exceptions as individually or in the aggregate do not constitute, and
would not be reasonably expected to constitute, a Material Adverse Effect on
Parent;
(b) Parent and the Buyer shall have performed in all material
respects their respective obligations under this Agreement required to be
performed at or prior to the Closing Date, including, without limitation,
payment of the Cash Consideration.
(c) the Sellers shall have received a certificate, in form and
substance to the reasonable satisfaction of the Sellers, dated as of the
Closing Date, executed on behalf of Parent and the Buyer by an authorized
officer of Parent, certifying in such detail as the Sellers may reasonably
request, that the conditions of Sections 7.1 hereof and this Section 7.2 have
been fulfilled;
(d) the Transition Services Agreement B/S shall have been duly
executed; and
(e) all third party consents, waivers and approvals with respect
to the DIP Financing lenders shall have been received.
Section 7.3. Conditions Precedent to the Obligations of Parent
and the Buyer. The obligation of Parent and the Buyer to effect the
transactions contemplated by this Agreement shall be subject to the
satisfaction or waiver at or prior to the Closing Date of the following
additional conditions precedent:
(a) the representations and warranties of Exodus contained in
this Agreement qualified by materiality or Material Adverse Effect shall be
true and correct in all respects without further qualification as of the
Closing Date as if made on such date (except for representations and
warranties that relate to a specified date which shall be true and correct as
of such specified date), and all representations and warranties of Exodus
contained in this Agreement that are not so qualified shall be true and
correct with only such exceptions as, individually or in the aggregate, do
not constitute and would not be reasonably expected to constitute a Material
Adverse Effect on Exodus or on the Purchased Assets;
(b) each Seller shall have performed in all material respect its
covenants and obligations under this Agreement required to be performed by
such Seller at or prior to the Closing Date with only such exceptions as,
individually or in the aggregate, do not constitute and would not reasonably
be expected to constitute a Material Adverse Effect on Exodus or on the
Purchased Assets;
(c) no Material Adverse Effect on the Purchased Assets shall have
occurred since the date of this Agreement;
(d) Parent shall have received a certificate, in form and
substance to the reasonable satisfaction of Parent, dated as of the Closing
Date, executed on behalf of the Sellers by an authorized executive officer of
Exodus, certifying in such detail as the Buyer may reasonably request, that
the conditions in Section 7.1 hereof and this Section 7.3 have been
fulfilled;
(e) the Sellers shall have delivered to Parent resignations and
releases of all officers of the SPEs (other than any officer of an SPE that
is not a designee of the Sellers or another SPE), except as otherwise
requested by Parent no less than ten (10) Business Days prior to the Closing
Date;
(f) the Sellers shall have delivered to Parent and the Buyer duly
executed assignments of the Primary Non-365 Contracts, together with all
third party consents required pursuant to applicable Law or the terms thereof
in order to effect such assignment to the Buyer or its Designees, in form and
substance reasonably satisfactory to Parent other than assignments or
consents the failure of which to obtain would not, individually or in the
aggregate, materially impair the ability of Parent and the Buyer to conduct
the Business after the Closing;
(g) all third party consents, waivers and approvals for the items
listed on Schedule 7.3(g) shall have been received;
(h) each of the Sellers shall furnish to Parent, on or before the
Closing Date, a statement issued by each Seller pursuant to Treasury
Regulation Section 1.1445-2(b), certifying as to each such Seller's
non-foreign status and dated not more than ten (10) days prior to the Closing
Date; and
(i) the Transition Services Agreement S/B shall have been duly
executed by each of the Sellers party thereto.
ARTICLE VIII
TERMINATION
Section 8.1. Termination. Anything contained herein to the
contrary notwithstanding, this Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing
Date:
(a) by mutual written consent of Exodus and Parent;
(b) by Parent, if the Auction does not occur on or before January
14, 2002 or the Closing does not occur on or before February 15, 2002;
provided, however, that the right to terminate this Agreement pursuant to
this Section 8.1(b) shall not be available to Parent if Parent or the Buyer
shall have failed to perform, or caused any of its respective Subsidiaries to
perform, any of its respective material obligations under this Agreement;
(c) by Exodus, if the Closing does not occur on or before March
31, 2002; provided, however, that the right to terminate this Agreement
pursuant to this Section 8.1(c) shall not be available to Exodus if Exodus or
any Seller shall have failed to perform, or caused any of its respective
Subsidiaries to perform, any of its respective material obligations under
this Agreement;
(d) by either Exodus, on the one hand, or Parent on the other
hand, if consummation of the transactions contemplated by Article II would
violate any non-appealable final Judgment of any court or Governmental Entity
having competent jurisdiction;
(e) by Parent on or before December 20, 2001, if the Bankruptcy
Court has not entered the Bidding Procedures Order, in form and substance
reasonably satisfactory to Parent and meeting the requirements of Section
6.1(a)(ii) hereof, on or before December 13, 2001;
(f) by Parent, if the Bankruptcy Court has not entered the
Primary Sale Order, in form and substance reasonably satisfactory to Parent
and meeting the requirements of Section 6.1(a)(iii) hereof, or such Sale
Order has not become a Final Order, on or before February 5, 2002;
(g) by Exodus, if Exodus accepts or is about to accept a
Qualified Bid at the Auction other than that of Parent and the Buyer,
provided that such termination shall be of no effect if Exodus does not enter
into an agreement with respect to such Qualified Bid immediately after
termination hereunder;
(h) by Parent, if Exodus gives written notice to Parent that it
is unable to obtain the consents required by Section 7.3(f) or Section 7.3(g)
or Exodus is otherwise unable to provide Parent or Buyer the benefit of the
Contract with respect to which such consents have not been obtained;
(i) by Parent or Exodus, in the event Exodus enters into a
binding commitment with respect to, or consummates, an Alternative
Transaction;
(j) by either Parent or Exodus if any condition precedent to the
obligations of Parent and the Buyer or the obligations of the Sellers,
respectively, shall be or become incapable of being satisfied at or prior to
the date set forth in Section 8.1(b);
(k) by Exodus, upon a breach of any covenant or agreement on the
part of Parent or the Buyer set forth in this Agreement, or if any
representations or warranty of Parent or the Buyer shall have been or become
untrue, in each case such that the conditions set forth in Section 7.2(a) or
(b) would not be satisfied, so long as Exodus is not then in breach of its
obligations under this Agreement; provided, however, that if any such breach
is curable prior to January 31, 2002 by Parent or the Buyer through the use
of commercially reasonable efforts, following written notice of such breach
from Exodus, for as long as Parent or the Buyer shall be using its
commercially reasonable best efforts to cure such breach, Exodus may not
terminate this Agreement pursuant to this Section 8.1(k); and
(l) by Parent, upon a breach of any covenant or agreement on the
part of the Sellers set forth in this Agreement, or if any representations or
warranty of the Sellers shall have been or become untrue, in each case such
that the conditions set forth in Section 7.3(a) or (b) would not be
satisfied, so long as Parent is not then in breach of its obligations under
this Agreement; provided, however, that if any such breach is curable prior
to January 31, 2002 by the Sellers through the use of commercially reasonable
best efforts, following written notice of such breach from Parent, for as
long as such Seller shall be using its commercially reasonable efforts to
cure such breach, Parent may not terminate this Agreement pursuant to this
Section 8.1(l).
Section 8.2. Notice of Termination. In the event of any
termination pursuant to this Article VIII, written notice thereof setting
forth the reasons therefor shall promptly be given to the other parties and
the transactions contemplated by this Agreement shall be terminated, without
further action by any party.
Section 8.3. Abandonment. If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described in Section 8.1,
this Agreement shall become void and of no further force or effect, except
for the provisions of (i) Section 6.7 relating to the obligations of the
Sellers, on the one hand, and Parent and the Buyer, on the other hand, to
keep confidential certain information and data obtained by them, (ii) Section
6.4, relating to certain payments to be made to Parent in connection with an
Alternative Transaction, (iii) Section 10.3, relating to publicity, and (iv)
Section 10.2, relating to certain expenses. Nothing in this Section 8.3 shall
be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement or to impair the right of
any party to compel specific performance by any other party of its
obligations under this Agreement, except in the event Parent, Buyer or its
Designees shall have received the Break-Up Fee or Expense Reimbursement, in
which case no such liability shall attach.
ARTICLE IX
INDEMNIFICATION
Section 9.1. Survival of Representations. The representations and
warranties of Exodus and Parent contained in Article III and Article IV of
this Agreement or in any other instrument delivered in connection herewith
shall survive for six months following the Closing Date, after which such
representations or warranties shall terminate and not have any force or
effect and shall not constitute the basis for any further claim in contract,
tort or otherwise by Parent or the Buyer against any Seller or by any Seller
against Parent, absent fraud. Following the Closing Date, the remedies
provided in this Article IX shall be the sole recourse of each of the parties
hereto for all claims, liabilities, losses, damages, costs and expenses
arising out of this Agreement, other than those in Section 2.2(d)(ii),
Section 2.2(g), the penultimate sentence of Section 2.4(a), Article V,
Section 6.13 and Section 6.16. Each of the covenants of the parties hereto
shall terminate as of the Closing other than those which by their terms
contemplate performance after the Closing Date.
Section 9.2. Agreement to Indemnify. (a) Upon the terms and
subject to the conditions of this Article IX, Exodus shall indemnify, defend
and hold harmless Parent and the Buyer and their respective directors,
officers, employees, agents and Affiliates (including any Designee) from any
losses, liabilities, claims (as defined in Section 101 of the Bankruptcy
Code), damages or expenses (including reasonable legal fees and expenses)
whatsoever, whether known or unknown, fixed, liquidated, contingent or
otherwise (collectively, "Claims") which result from (i) the Excluded
Liabilities and/or (ii) any breach of (A) the representations made by the
Sellers in Article III of this Agreement or (B) the covenants made by the
Sellers in this Agreement or (C) in the event the Japanese Transaction is
consummated, the representations and covenants of Exodus contained in the
definitive documentation entered into with respect to the Japanese
Transaction.
(b) Upon the terms and subject to the conditions of this Article
IX, Parent shall indemnify, defend and hold harmless Exodus and its
directors, officers, employees, agents and Affiliates from any Claims which
result from (i) the Assumed Liabilities, (ii) any breach of (A) the
representations made by Parent and the Buyer in Article IV of this Agreement
or (B) the covenants made by Parent and the Buyer in this Agreement and/or
(iii) the operation of the Business by Parent and/or the Buyer or Parent's
and/or the Buyer's ownership, operation or use of the Purchased Assets
following the Closing Date.
Section 9.3. Conditions of Indemnification for Third-Party
Claims. Subject to the provisions of Section 9.4, the obligations and
liabilities of Exodus and Parent, in the case of Section 9.2, with respect to
Claims made by or against third parties ("Third Party Claims") shall be
subject to the following terms and conditions:
(a) The person to whom such Third Party Claim relates (the
"Indemnified Party") will give the party required to provide such
indemnification (the "Indemnifying Party") prompt notice of such Third Party
Claim, and the Indemnifying Party will (except as otherwise contemplated by
the proviso to Section 9.3(b) hereof) assume the defense thereof with counsel
selected by it (such counsel to be reasonably satisfactory to the Indemnified
Party); provided, that the Indemnified Party shall be entitled to participate
in such action and to employ counsel at its own expense to assist in the
handling of such Third Party Claim.
(b) If the Indemnifying Party, within a reasonable time after
notice of any such Third Party Claim, fails to assume the defense thereof
with counsel reasonably satisfactory to the Indemnified Party, the
Indemnified Party shall have the right to undertake the defense or, with the
consent of the Indemnifying Party (such consent not to be unreasonably
withheld), to undertake a compromise or settlement of such Third Party Claim
on behalf of and for the account and risk of the Indemnifying Party. The
Indemnifying Party shall not be liable for any compromise or settlement of a
Third Party Claim effected without its written consent (such consent not to
be unreasonably withheld so long as such compromise or settlement requires
only the payment of money damages). During any period when the Indemnifying
Party is contesting any such Third Party Claim in good faith, the Indemnified
Party shall not pay, compromise or settle such Third Party Claim without the
Indemnifying Party's consent; provided, that the Indemnified Party may
nonetheless pay, compromise or settle such Third Party Claim without such
consent during such period, in which event it shall, automatically and
without any further action on its part, waive any right (whether or not
pursuant to this Agreement) to indemnity in respect of all losses,
liabilities, damages or expenses relating to such Third Party Claim. If the
Indemnifying Party shall defend any such Third Party Claim until such Third
Party Claim shall be adjudicated by order, decree, ruling or other action,
then the Indemnified Party shall have the right, in the exercise of its
exclusive discretion, to determine whether or not to appeal such
adjudication.
(c) Anything in this Section 9.3 to the contrary notwithstanding,
the Indemnifying Party shall not, without the written consent of the
Indemnified Party (which consent shall not be withheld unreasonably or
delayed), settle or compromise any Third Party Claim or consent to the entry
of any Judgment which does not include as an unconditional term thereof the
giving by the Claimant and/or plaintiff to the Indemnified Party of a release
from all liabilities in respect of such Third Party Claim.
(d) The Indemnified Party shall, and shall cause its Affiliates
to, provide the Indemnifying Party with such assistance (without charge) as
may reasonably be requested by the Indemnifying Party in connection with any
indemnification or defense provided for herein, including, without
limitation, providing the Indemnifying Party with such information, documents
and records as shall be reasonably available and reasonable access to the
services of and consultations with such personnel of the Indemnified Party or
its Affiliates as the Indemnifying Party shall reasonably deem necessary
(provided that such access shall not unreasonably interfere with the
performance of the duties performed by or responsibilities of such
personnel).
Section 9.4. Limitation of Indemnification. Any Claim brought
under Section 9.2 is subject in each case to the following limitations and
restrictions:
(a) Except as otherwise provided in this Agreement, claims
described in Section 9.2 may not be asserted at any time after the close of
business on the first Business Day that is one year after the Closing Date.
(b) Claims made pursuant to Section 9.2(a) (except for any Claims
based on Section 5.1) will be paid only to the extent that the aggregate
amount of all such Claims exceeds $2,500,000 (the "Deductible") at which
point Exodus shall be liable for the amount of such Claims in excess thereof,
provided, however, that the aggregate amount recoverable pursuant to Section
9.2(a) in excess thereof shall in no event exceed the Escrowed Amount
together with any interest or earnings thereon. Claims made pursuant to
Section 9.2(b) (except for any Claims based on Section 5.1) will be paid only
to the extent that the aggregate amount of all such Claims exceeds $2,500,000
at which point Parent shall be liable for the amount of such Claims in excess
thereof; provided, however, that the aggregate amount recoverable pursuant to
Section 9.2(b) (except for any Claims based on Section 5.1) shall in no event
exceed $56,000,000.
(c) Each Claim shall be reduced by the amount of any insurance
proceeds (net of expenses of collection) actually received in connection with
such Claim; the parties covenant to exercise commercially reasonable efforts
to collect insurance proceeds under applicable insurance policies that are
then in force if and to the extent that such Claim relates to an event
covered by such insurance policies and if Parent or the Buyer shall receive
any insurance proceeds after payment of any Claim by Exodus, Parent or the
Buyer shall deposit in the escrow account established pursuant to the Escrow
Agreement the lesser of the amount of insurance proceeds (net of expenses of
collection) and the amount actually paid by Exodus to Parent or the Buyer in
respect of such Claim.
(d) In determining whether Parent or the Buyer is entitled to
recover for any Claim under Section 9.2(b)(i), (A) all references to the
Knowledge of any Person in the representations and warranties of Sellers
shall be disregarded, (B) the representations and warranties of Sellers shall
not be deemed qualified by any references to materiality, Material Adverse
Effect contained therein and (C) any breaches thereof shall be determined
without regard to whether such breach constitutes a Material Adverse Effect;
provided, however, that in no event will Parent or the Buyer be entitled (i)
to recover for any Claim relating to or arising out of a breach of any
representation or warranty herein of Exodus pursuant to which the aggregate
loss, expense, liability or damage does not exceed $200,000; (ii) to
aggregate any such items with a value of $200,000 or less for the purpose of
exceeding the limitation set forth in clause (i) of this Section 9.4(d) or
the Deductible; or (iii) to otherwise submit such items as Claims
reimbursable pursuant to this Article IX.
Section 9.5. Security for Indemnification. To secure the
obligations of the Sellers (a) pursuant to Section 2.2(d)(ii), Section
2.2(g), the penultimate sentence of Section 2.4(c) and Section 6.16, (b)
pursuant to Article V and (c) to indemnify the Buyer and its directors,
officers, employees, agents and Affiliates (including any Buyer's Designee)
under this Article IX, at the Closing, Parent will deposit the Escrowed
Amount and the Scheduled Lease Amount with the Escrow Agent, to be held and
released in accordance with the terms of the Escrow Agreement. Any Lease
Adjustment, any payment required to be made by the Sellers pursuant to
Article V and any indemnification required to be made by the Sellers pursuant
to this Article IX shall be satisfied solely pursuant to the terms of the
Escrow Agreement; provided, that the Buyer may, in its sole discretion, seek
recovery of any amounts owed by the Sellers pursuant to Section 2.2(d)(ii)
and the penultimate sentence of Section 2.4(a) directly from the Sellers. The
term of the Escrow Agreement shall run for one year plus any additional
period required to resolve any disputed claim thereunder.
Section 9.6. Purchase Price Adjustment. Any payment by the
Sellers under this Article IX shall be treated by the parties hereto for all
Tax purposes as a reduction to the Cash Consideration in a manner consistent
with the Final Allocation determined under Section 5.2.
ARTICLE X
MISCELLANEOUS
Section 10.1. Amendment and Waiver. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by each of the
Sellers, Parent and the Buyer, or in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by any party
or parties in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
Section 10.2. Expenses. Except as otherwise expressly provided in
this Agreement, including, without limitation, Section 6.4, whether or not
the transactions contemplated by this Agreement are consummated, the parties
shall bear their own respective expenses (including, but not limited to, all
compensation and expenses of counsel, financial advisors, consultants,
actuaries and independent accountants) incurred in connection with this
Agreement and the transactions contemplated hereby. Exodus shall bear any
expenses or fees necessary to obtain the consents and waivers required by
items A, B and C of Schedule 7.3(g).
Section 10.3. Public Disclosure. Each of the parties to this
Agreement agrees with the other parties hereto that, except as may be
required to comply with the requirements of applicable Law or the requests,
rules and regulations of each stock exchange upon which the securities of one
of the parties or its Affiliates is listed, no press release or similar
public announcement or communication will be made or caused to be made
concerning the execution or performance of this Agreement unless specifically
approved in advance by all parties hereto; provided, however, that to the
extent that either party to this Agreement is required by applicable Law or
the requests, rules and regulations of any stock exchange upon which the
securities of one of the parties or its Affiliates is listed to make such a
public disclosure, such public disclosure shall only be made after prior
consultation with the other party to this Agreement.
Section 10.4. Specific Performance. The parties recognize that if
any party breaches this Agreement or refuses to perform under the provisions
of this Agreement, monetary damages alone would not be adequate to compensate
the non-breaching party or parties for their injuries. The non-breaching
party or parties shall therefore be entitled, in addition to any other
remedies that may be available, to obtain specific performance of the terms
of this Agreement. If any action is brought by the non-breaching party or
parties to enforce this Agreement, the party in breach shall waive the
defense that there is an adequate remedy at law.
Section 10.5. Assignment. This Agreement and the rights and
obligations of the parties hereunder shall not be assigned, delegated or
otherwise transferred, by Parent, the Buyer or the Sellers; provided,
however, that the Buyer may assign their rights to purchase the Purchased
Assets or assume any Assigned Contract to one or more of their wholly-owned
Subsidiaries, but in no event will such assignment relieve the Buyer of its
obligations hereunder.
Section 10.6. Entire Agreement. This Agreement (including all
Schedules hereto) contains the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, except for the
Confidentiality Agreement, which will (other than the fifth and sixth
paragraphs thereof) remain in full force and effect for the term provided for
therein.
Section 10.7. Fulfillment of Obligations. Any obligation of any
party to any other party under this Agreement, which obligation is performed,
satisfied or fulfilled by an Affiliate of such party, shall be deemed to have
been performed, satisfied or fulfilled by such party.
Section 10.8. Parties in Interest; No Third Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any Person other
than Parent, the Buyer and the Sellers, or their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.
Section 10.9. Schedules. The inclusion of any matter in any
Schedule to this Agreement shall be deemed to be an inclusion for all
purposes of this Agreement, to the extent that such disclosure is sufficient
to identify the section to which such disclosure is responsive, but inclusion
therein shall not be deemed to constitute an admission, or otherwise imply,
that any such matter is material or creates a measure for materiality for the
purposes of this Agreement. If, subsequent to the date of this Agreement and
prior to the Closing Date, an event occurs that renders untrue any
representation or warranty of Exodus (a "Subsequent Event"), Exodus shall
promptly deliver to Parent an amended or supplemental Schedule (a "Subsequent
Disclosure Schedule") which will contain a description of the Subsequent
Event; provided, however, that this Section 10.9 is not intended to permit
the Sellers to alter or amend the representations and warranties as made
herein and shall not cure the inaccuracy thereof for any purpose under this
Agreement. The disclosure of any particular fact or item in any Schedule,
Disclosure Letter or Subsequent Disclosure Schedule shall not be deemed an
admission as to whether the fact or item is "material" or would constitute a
"Material Adverse Effect."
Section 10.10. Counterparts. This Agreement and any amendments
hereto may be executed in one or more counterparts, each of which shall be
deemed to be an original by the parties executing such counterpart, but all
of which shall be considered one and the same instrument.
Section 10.11. Headings. The section and paragraph headings and
table of contents contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this
Agreement.
Section 10.12. Notices. All notices and other communications
hereunder shall be deemed given if in writing and delivered personally, sent
by facsimile (confirm receipt), by registered or certified mail (return
receipt requested) or nationally recognized overnight courier to the parties
at the following addresses (or at such other addresses as shall be specified
by like notice):
(a) if to any Seller:
Exodus Communications, Inc.
0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000
Attn: Chief Executive Officer
With a copies to:
Exodus Communications, Inc.
0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000
Attn: General Counsel
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: J. Xxxxxxx Xxxxxx
Fax: (000) 000-0000
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Fax: (000) 000-0000
(b) if to Parent or the Buyer:
Cable and Wireless plc
000 Xxxxxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attn: Company Secretary
Fax: x00 00 0000 0000
With a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: 000-000-0000
Any notice given by mail shall be effective when received.
Section 10.13. No Strict Construction. Notwithstanding the fact
that this Agreement has been drafted or prepared by one of the parties, the
parties confirm that both they and their respective counsel have reviewed,
negotiated and adopted this Agreement as the joint agreement and
understanding of the parties, and the language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction construing ambiguities
against the draftsperson shall be applied against any Person.
Section 10.14. Governing Law. Except to the extent the mandatory
provisions of the Bankruptcy Code apply, this agreement shall be governed by,
and construed in accordance with, the laws of the State of New York
applicable to contracts made and to be performed entirely in such state
without regard to principles of conflicts or choice of laws or any other law
that would make the laws of any other jurisdiction other than the State of
New York applicable hereto. The parties agree that, except as provided herein
or in the Escrow Agreement, without limitation of any party's right to appeal
any order of the Bankruptcy Court, (a) the Bankruptcy Court shall retain
exclusive jurisdiction to enforce the terms of this Agreement and to decide
any claims or disputes which may arise or result from, or be connected with,
this Agreement, any breach or default hereunder, or the transactions
contemplated herein; and (b) any and all claims, actions, causes of action,
suits and proceedings relating to the foregoing shall be filed and maintained
only in the Bankruptcy Court, and the parties hereby consent and submit to
the jurisdiction of the Bankruptcy Court.
Section 10.15. Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the application
thereof to any person or entity or any circumstance, is invalid or
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity
or unenforceability.
[Remainder of this page intentionally left blank.
Signature page follows.]
IN WITNESS WHEREOF, this Agreement has been signed on behalf of
each of the parties hereto as of the date first written above.
EXODUS COMMUNICATIONS, INC. CABLE AND WIRELESS PLC
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxx
------------------------- ----------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxx Xxxxxx
Title: Executive Vice President, Title: Deputy Group Finance Officer
Finance, Chief
Administrative Officer
and Chief Financial
Officer
AMERICAN INFORMATION SYSTEMS, INC. DIGITAL ISLAND INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxxx
------------------------- ----------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer Title: Chief Strategy Officer
ARCA SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
COHESIVE TECHNOLOGY SOLUTIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
GLOBALCENTER HOLDING, CO.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
GLOBALCENTER, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
SERVICE METRICS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
