EXHIBIT 10.2
Execution Copy
Agreement Resolving All Outstanding SAVVIS-BIS Issues
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This Agreement is made this 8th day of February, 2002 (the "Effective Date) by
and between SAVVIS Communications Corporation, a Delaware corporation (together
with and on behalf of its direct and indirect subsidiaries, "SAVVIS"), and BIS
Administration, Inc. (together with and on behalf of its direct and indirect
subsidiaries, "BIS").
WHEREAS, the parties hereto wish to set forth the terms and conditions to bring
to closure all outstanding issues between them.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the sufficiency of which the parties mutually
acknowledge, the parties hereby agree as follows:
1. Satisfaction of Note and Pre-Petition Claims Setoff and Offsets
a. As per Amendment No. 2 dated January 8, 2002 to the Agreement
Regarding the Supplemental Terms of the Interim SAVVIS
Financing dated May 3, 2001 (the "Supplemental Agreement"),
the parties have extended the deadline for SAVVIS to obtain
long term financing (the "Funding") until February 28, 2002.
The parties hereby extend such deadline further to March 31,
2002 and SAVVIS agrees to use its best efforts to close
formally such Funding by that date (the "Closing"). The
parties recognize, however, that regulatory requirements
outside of SAVVIS' control will dictate the Closing date.
Provided that SAVVIS files the requisite HSR filing on or
before February 15, 2002, the parties hereby agree that if
such case arises, the Funding deadline will be extended to
April 30, 2002.
b. In lieu of the issuance of Preferred Stock of SAVVIS as
required by the Note and Pre-Petition Claims Setoff (the
"Setoff") under the Supplemental Agreement, the parties hereto
agree that such Setoff shall be satisfied by aggregating the
Setoff plus certain additional amounts owed to BIS by SAVVIS,
offset by certain amounts owed to SAVVIS by BIS, each
enumerated in this Section b, in order to calculate the
"Aggregated Setoff". The Aggregated Setoff shall then be
multiplied by a factor of $.431 (the "Setoff Factor"), the
result of which shall be the "Total Setoff", which SAVVIS
shall pay to BIS in cash at the Closing. The Total Setoff is
determined as follows:
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Setoff $23,300,000
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Plus an amount owed to BIS by
SAVVIS to settle the US billing
adjustment 6,500,000
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Plus an amount owed to BIS by
SAVVIS to settle all remaining
obligations in connection with the
purchase of the stock of Bridge
Japan KK by SAVVIS 800,000
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Less an amount owed to SAVVIS
by BIS to settle claims for unpaid
bills in Latin America (1,400,000)
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Less an amount owed to SAVVIS
by BIS to settle claims for unpaid
bills in Europe (1,200,000)
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Less an amount owed to SAVVIS
by BIS to settle claims in
connection with SAVVIS' right to
sell certain routers to BIS under
the Network Services Agreement,
dated February 18, 2000 (500,000)
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Aggregated Setoff $27,500,000
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Multiplied by the Setoff Factor X 0.431
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TOTAL SETOFF $11,850,000
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c. Upon SAVVIS paying the Total Setoff in cash, the Setoff and
the other amounts owed by SAVVIS to BIS and by BIS to SAVVIS
described above will be deemed to have been paid in full and
no further obligation on the part of either party with respect
to such matters shall thereafter exist.
d. Assignment of Claims. SAVVIS shall assign to BIS all remaining
claims, if any, held by SAVVIS against any BIS affiliate
outside the United States, other than Canada (the "Assigned
Claims").
2. Sharing Agreement
a. SAVVIS and BIS are parties to the Sharing Agreement and Mutual
Release with General Electric Capital Corporation, for itself
and as agent for certain participants (collectively, "GECC"),
Bank of Nova Scotia Trust
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Company of New York, ▇▇▇▇▇▇ Trust Savings Bank and ▇▇▇▇▇▇▇
Sachs Credit Partners, L.P. (the "Sharing Agreement").
b. Pursuant to the Sharing Agreement, BIS has paid to GECC
approximately $2.1M. SAVVIS will reimburse BIS $0.9M of such
payment in cash at the Closing.
3. Canada. Pursuant to the October 29, 2001 letter agreement (the
"Canada Letter") between SAVVIS, SAVVIS Canada and BIS, regarding
Payments to Telecommunication Service Providers of Bridge
Information Systems, Canada, Inc. ("▇▇▇▇▇▇ ▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇
will distribute to SAVVIS its remaining proportionate share of the
Bridge Canada assets, which the parties estimate will be CA$2.5M.
4. Mechanic's Liens
a. Notwithstanding anything to the contrary herein, BIS and
SAVVIS agree that their respective claims against each other
for losses, costs, expenses, or damages that arise from or
relate to charges for labor or materials supplied for the
improvement of the real property and improvements located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "717 Building"), ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(the "795 Building"), each located in Creve Coeur, Missouri,
and the SAVVIS Data Center Building located at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in Hazelwood, Missouri (the "Data Center")
shall be resolved as follows:
i. 717 Building. Two mechanic's liens are asserted
against this property by Sachs Electric Company
("Sachs") for improvements that were enjoyed by both
BIS (as owner) and SAVVIS (as tenant). The parties
agree that the amounts asserted are commensurate with
the value of the improvements. Therefore, BIS and
SAVVIS shall stipulate to the entry of a judgment in
the Adversary Proceeding # ▇▇-▇▇▇▇-▇▇▇ (the
"Adversary Proceeding") to enforce mechanic's liens
that are pending in the Bankruptcy Court, allowing
the claims for the full principal amount asserted,
the aggregate amount of which is $79,932.19. Promptly
following entry of this judgment, BIS shall pay 40%
of such amount (which is approximately $32,000) from
the escrowed proceeds received by BIS from its sale
of such assets to Reuters relating to such claims
(the "Reuters Proceeds"). SAVVIS shall pay the
remaining 60% of such amount (which is approximately
$48,000).
ii. 795 Building. Three mechanic's liens are asserted
against this property by Sachs for improvements that
were enjoyed by both BIS (as owner) and SAVVIS (as
tenant). The parties agree that the
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amounts asserted are commensurate with the value of
the improvements. Therefore, BIS and SAVVIS shall
stipulate to the entry of a judgment in the Adversary
Proceeding, allowing the claims for the full
principal amount asserted, the aggregate amount of
which is $210,485.14. Promptly following entry of
this judgment, BIS shall pay 30% of such amount
(which is approximately $63,000) from the Reuters
Proceeds. SAVVIS shall pay the remaining 70% of such
amount (which is approximately $147,000).
iii. Data Center. Several mechanic's liens (the "Data
Center Liens") are asserted by contractors and
material suppliers (the "Data Center Lien Claimants")
against SAVVIS' interests in the Data Center and
against the BIS' proceeds from its sale of the
underlying real property to Reuters, which is a
component of the Reuters Proceeds. The extent,
validity and priority of the Data Center Liens is to
be determined by the Bankruptcy Court in the context
of the Adversary Proceeding, which currently has a
trial date of March 11, 2002. SAVVIS and BIS are
negotiating the terms of a settlement with the Data
Center Lien Claimants which SAVVIS and BIS agree may
include the following elements: (1) entry of a
Consent Judgment in the Adversary Proceeding in favor
of the Data Center Lien Claimants in an amount to be
negotiated; (2) immediate partial satisfaction of the
Consent Judgment from the Reuters Proceeds; (3)
periodic payments by SAVVIS until the Consent
Judgment is satisfied; (4) collateral security for
the Consent Judgment in form and substance mutually
satisfactory to the parties; and (5) stay of
execution of the Consent Judgment. If needed to
strike a settlement, SAVVIS will consent to a Consent
Judgment for 100% of the principal amount claimed by
the Data Center Lien Claimants and will commit to pay
up to $0.6M upon entry of the Consent Judgment and
thereafter $.3M per month and BIS will commit to pay
up to $1.4M from the Reuters Proceeds upon entry of
the Consent Judgment. Whether or not the Data Center
Liens are resolved through settlement, SAVVIS agrees
to indemnify BIS fully against any and all sums paid
by BIS toward satisfaction of the Data Center Liens
and the Data Center Lien Claimants' claims, which
claim for indemnity shall be secured by a first
priority lien and judgment against SAVVIS' interests
in the Data Center and ground lease. The
aforementioned lien will be subordinated to the Data
Center Lien Claimants' judgment until their share of
the judgment against SAVVIS is paid in full. If
SAVVIS refinances or sells the Data Center, SAVVIS
shall satisfy the Data Center Lien Claimants'
judgment and BIS' subrogation claim in cash from the
closing proceeds of any such sale.
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b. If any amounts remain due and owing to BIS under this section
4 on the date of the Closing, SAVVIS shall pay such amount to
BIS in cash at Closing in addition to the Total Setoff.
5. Assignment of Patents, Other Interests. BIS shall assign to SAVVIS,
at no additional charge, the smart rack patent and set top box
patent and any interest it has in any plans, drawings and
warranties respecting the Data Center.
6. Board Representation. The SAVVIS Board of Directors has agreed to
provide BIS, upon execution of this Agreement, one Board
representative for a term ending on the earlier of: (a) three
years; (b) the date upon which BIS' ownership of SAVVIS'
outstanding voting stock falls below 20%; or (c) date upon which
the SAVVIS shares held by BIS are distributed to its creditors. BIS
agrees to vote its shares of SAVVIS' stock and cause its Board
representative to vote in favor of the Funding, substantially in
the form of that certain confidential term sheet relating to the
Funding, the terms of which are agreeable to BIS.
7. Limitation of Claims. BIS and SAVVIS agree that any obligation or
liability arising from any and all transactions between the
parties, and any direct or indirect subsidiaries of either, up to
and including the date of this Agreement, shall be limited to the
obligations and liabilities set forth in this Agreement.
8. BIS Bankruptcy Proceedings
a. SAVVIS shall support Bankruptcy Court approval of the BIS
disclosure statement and confirmation of the BIS liquidation
plan.
b. SAVVIS shall (a) not object to the rejection by BIS of any
executory contracts and unexpired leases between any BIS
debtor entity and SAVVIS and (b) waive, release and forever
discharge BIS from any and all damage claims including,
without limitation, any claim for indemnity or contribution
regarding any claims of third parties, resulting from the
rejection of any executory contract or unexpired lease between
any BIS debtor entity and SAVVIS.
9. Waiver of Claims. In consideration of the mutual promises and
payments to be made pursuant to this Agreement, BIS and SAVVIS
waive any and all claims against each other, and forever and
finally release each other from any and all liability, for any and
all damages, whether now known or unknown, whether now present or
discovered in the future, whether direct or consequential, arising
from any and all transactions between the parties up to and
including the date of this Agreement; provided that: (a) SAVVIS
shall not waive or release any claim against a non-debtor BIS
affiliate underlying the Assigned Claims, which such claims will be
assigned to BIS at the Closing; and (b) nothing herein shall
release the parties from their obligations under this Agreement.
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10. Approvals. This Agreement is subject to approval by the Bankruptcy
Court and the SAVVIS Board of Directors. SAVVIS and BIS will
endeavor to obtain all such approvals expeditiously.
11. General Provisions
a. Waiver. Any waiver or consent by either party to any variation
from any provision of this Agreement shall be valid only in
the specific instance in which it is given, and no such waiver
or consent shall act as a waiver of any other provision of
this Agreement or with respect to any similar instance or
circumstance.
b. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their
respective successors and assigns.
c. Amendment. This Agreement may not be amended, altered, or
modified except by an instrument in writing, duly executed by
both parties.
d. Limitation on Benefits of this Agreement. It is the explicit
intention of the parties hereto that no person or entity other
than the parties hereto is or shall be entitled to bring any
action to enforce any provision of this Agreement against
either of the parties hereto, and that the covenants,
undertakings, and agreements set forth in this Agreement shall
be solely for the benefit of, and shall be enforceable only
by, the parties hereto and their respective successors and
assigns as permitted hereunder.
e. Entire Agreement. This Agreement contain the entire agreement
between the parties with respect to the subject matter hereof
and supersedes all prior oral or written agreements,
commitments, or understandings with respect to the matters
provided for herein.
f. Due Authorization. Each party represents that it has the full
power and authority to enter into this Agreement and to
perform all of its obligations hereunder and the execution,
delivery and performance of this Agreement has been duly
authorized by all requisite corporate actions, subject to
Section 10 on Approvals above, and constitutes a valid and
binding agreement, enforceable against each party in
accordance with its terms.
g. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
(U.S.A.) (not including the choice-of-law rules thereof), and
the parties hereby irrevocably submit to the exclusive
jurisdiction and venue of the state and federal courts sitting
in the State of New York for the purpose of all legal
proceedings arising out of or relating to this Agreement.
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h. Construction. Each party hereto hereby acknowledges that all
parties hereto participated equally in the negotiation and
drafting of this Agreement and that, accordingly, no court
construing this Agreement shall construe it more stringently
against one party than against the other.
i. Execution. To facilitate execution, this Agreement may be
executed in counterparts and by facsimile; and it shall not be
necessary that the signatures of each party appear on each
counterpart; but it shall be sufficient that the signature of
each party appear on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement.
j. Notice. All notices required or permitted hereunder shall be
in writing and shall be deemed given when either delivered to
the applicable party or on the third business day after having
been mailed to such party with adequate first class postage
affixed or sent, postage prepaid, by registered or certified
mail, return receipt requested. Notices mailed to SAVVIS shall
be mailed to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention--Legal. Notices mailed to BIS shall be mailed to it
at BIS Administration, Inc., c/o Reuters, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention--Chief Restructuring
Officer, with a copy to--Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇-▇▇▇▇,
Attention--▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇. Either party may from time to
time designate a different address for notices to be sent to
such party by giving the other party due notice hereunder of
such different address.
{signature page follows}
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed on its behalf, as of the Effective Date.
SAVVIS Communications Corporation
By: /s/ Lane ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: Lane ▇. ▇▇▇▇▇▇▇▇▇▇
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Title: Acting General Counsel
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BIS Administration, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Chief Restructuring Officer
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