AMENDMENT #2 TO ASSET PURCHASE AGREEMENT
AMENDMENT #2 TO ASSET PURCHASE AGREEMENT (this "Amendment #2"),
dated as of January 31, 2002, 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, the Sellers, the Buyer and Parent entered into an Asset
Purchase Agreement, dated as of November 29, 2001 (as modified by that
certain Mutual Limited Waiver dated as of January 5, 2002 and as amended by
that certain Amendment #1 to Asset Purchase Agreement dated as of January
10, 2002, the "Prior Agreement," and as amended hereby, the "Agreement");
and
WHEREAS, the Sellers, the Buyer and Parent desire to make certain
amendments and clarifications to the Prior Agreement.
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:
1. Defined Terms. (a) Section 1.1 of the Prior Agreement is hereby
amended to add the following defined terms:
"Xxxxxx Irrigation Repairs" shall have the meaning set forth in
Section 6.26.
"Xxxxxx Parking Lot Repairs" shall have the meaning set forth in
Section 6.26.
"Xxxxxx Stipulation" shall mean the stipulation, dated as of
January 31, 2002, executed by counsel for Exodus, Parent, the Buyer and
Xxxxxx Corporation, and consented to by Parent and the Buyer.
"Xxxxxx Sublease Agreement" shall mean the Sublease Agreement,
dated as of January 28, 1998, as subsequently amended, between Xxxxxx
Corporation and Exodus.
"Arca Contracts" shall have the meaning set forth in Section 6.28.
"Arca Employees" shall have the meaning set forth in Section 6.28.
"Contested Selections" shall have the meaning set forth in Section
6.27.
"Disputed Cure Escrow Account" shall have the meaning set forth in
the Primary Sale Order.
"FCC" shall have the meaning set forth in Section 6.29.
"FCC Licenses" shall have the meaning set forth in Section 6.29.
"January 7 Selection Notice" shall mean the notice, pursuant to
Section 2.3(d), of Contracts desired by Parent and the Buyer to be assigned
by the Sellers to the Buyer or its Designee, including the schedules
attached thereto, as delivered by Parent and the Buyer to Exodus on January
7, 2002 and as amended on January 25, 2002.
"Purchased Exodus Leased Real Properties" shall mean Exodus Leased
Real Properties constituting Purchased Assets.
"Title Company Escrow Agent" shall mean First American Title
Guaranty Company.
"Title Company Escrow Agreement" shall mean the Master Escrow
Instructions, as supplemented by the Supplemental Escrow Instructions,
dated January 29, 2002, by and between Exodus and the Title Company Escrow
Agent.
"Title Company Escrow Amount" shall have the meaning set forth in
Section 2.2(a).
(b) Section 1.1 of the Prior Agreement is hereby amended to delete
the definition of "Pro Rata Portion".
2. Excluded Liabilities. (a) Section 2.1(d)(vii) of the Prior
Agreement is hereby amended to read in its entirety as follows (added
language in bold):
"(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, INCLUDING, WITHOUT
LIMITATION, ANY COSTS ASSOCIATED WITH PAYING CLAIMS UNDER ANY SUCH BENEFIT
PLAN AND ANY COSTS ASSOCIATED WITH ADMINISTRATIVE FEES INCURRED IN
ADMINISTERING SUCH BENEFITS, 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;"
(b) Section 2.1(d)(xi) of the Prior Agreement is hereby amended to
read in its entirety as follows (added language in bold):
"(xi) any credit, refund, service credit, offset, reimbursement or
similar entitlement, TO THE EXTENT NOT REFLECTED IN THE RESERVES (INCLUDING
THE GENERAL CREDIT RESERVE, THE GENERAL AR RESERVE AND ANY CREDIT MEMO
RESERVES) INCLUDED IN THE CALCULATION OF THE ACCOUNTS RECEIVABLE VALUE,
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 "
3. CH2. (a) Item 1 of Schedule 2.1(a)(i) of the Prior Agreement is
hereby amended to add CH2 as an Acquired Site.
(b) The following Section 6.21(c) is hereby added to the Prior
Agreement:
"(c) Notwithstanding any election to the contrary made by
Exodus pursuant to Section 6.21(b), the parties agree that (i)
both CH1 and CH2 are Acquired Sites; (ii) the Sellers shall not be
required to take further steps to obtain the consent of the
landlord, or otherwise enter into an arrangement with the
landlord, to enable the Buyer or its Designee to assume, or to
enter into, a separate lease with respect to CH1; and (iii) the
Cash Consideration shall not be reduced by the Excluded Lease
Amount relating to CH1; provided, that, at or prior to the
Closing, Exodus shall have entered into a binding arrangement in
the form attached as Schedule 6.21(c) hereto with the landlord for
CH1 and CH2, and shall make such payments to the landlord as are
necessary, to enable the Buyer or its Designee to assume the lease
for CH1 and CH2 with no obligation to pay rent with respect to CH2
for the period between the Closing Date and the end of the 72nd
month following the Closing Date."
(c) Paragraph 13 of Schedule 2.1(a)(i) is hereby amended to change
the Site Code for "CH/CH1" to "CH/CH1 and CH2", to change the security
deposit amount for such sites to $7,666, and to delete the footnote to such
security deposit amount. Notwithstanding anything in Section 2.2 or Section
6.23 of this Agreement to the contrary, the amount of such security deposit
for CH1/CH2 as set forth in Item 13 of Schedule 2.1(a)(i) shall be added to
the Cash Consideration to be delivered at Closing, and the Buyer shall be
entitled to retain all rights to such security deposit.
(d) Schedule 6.23 is hereby amended to change the Site Code for
"CH/CH1" to "CH/CH1 and CH2," to change the security deposit amount for
such sites to $476,595, and to delete the footnote to such security deposit
amount. Notwithstanding anything in Section 6.23 of the Agreement to the
contrary, neither Parent nor the Buyer shall be deemed to be in breach of
Section 6.23 as a result of the failure to replace the related letter of
credit at Closing, provided that the Buyer shall continue to use
commercially reasonable efforts to cause the release to the Sellers of the
cash collateral securing Exodus' reimbursement obligation in respect of
such letter of credit as promptly as practicable following the Closing.
4. Consideration for the Purchased Assets. (a) Section 2.2(a) of
the Prior Agreement is hereby amended to read as follows (added language in
bold, deleted language in strikethrough):
"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 ([BEGIN STRIKETHROUGH]x[END
STRIKETHROUGH]W) the Initial Deposit, together with any interest
or other income earned thereon (less any fees payable to the
Deposit Escrow Agent under the Deposit Escrow Agreement) minus
([BEGIN STRIKETHROUGH]y[END STRIKETHROUGH]X) the Escrowed Amount
minus ([BEGIN STRIKETHROUGH]z[END STRIKETHROUGH]Y) the Scheduled
Lease Amount MINUS (Z) THE TITLE COMPANY ESCROW 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; [BEGIN STRIKETHROUGH]and[END STRIKETHROUGH] (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 $50,000,000; AND (V) DEPOSIT WITH THE TITLE COMPANY ESCROW
AGENT, TO BE HELD IN ESCROW AND RELEASED BY THE TITLE COMPANY
ESCROW AGENT IN ACCORDANCE WITH THE TERMS OF THE TITLE COMPANY
ESCROW AGREEMENT, AN AMOUNT IN CASH (THE "TITLE COMPANY ESCROW
AMOUNT") EQUAL TO $31,206,666. The "Cash Consideration" shall,
prior to adjustment as provided herein, equal (A) $560,000,000
plus (B) the Security Deposit Amount minus (C) the Excluded Lease
Amount. Following the Closing, the Buyer shall also pay the Agreed
Operating Lease Cure Amounts, and make available the Operating
Lease Amount, to the extent required by Section 2.10. The Cash
Consideration shall be adjusted in accordance with this Section
2.2, Section 6.12(c) and Section 6.20(g)(ii)."
5. Xxxxxx Stipulation.
(a) The following Section 6.26 is hereby added to the Prior
Agreement:
"Section 6.26. Xxxxxx Stipulation. (a) In accordance with
the terms of the Xxxxxx Stipulation, the Buyer hereby assumes,
from and after the Closing, the obligations of Exodus, as
sublessee under the Xxxxxx Sublease Agreement to (i) complete the
remediation required by applicable governmental and regulatory
agencies resulting from the Diesel Oil Spill (as defined in the
Xxxxxx Stipulation), (ii) complete the repairs necessary to the
landscaping and irrigation system (the "Xxxxxx Irrigation
Repairs"), and (iii) complete the repairs necessary to the parking
lot (the "Xxxxxx Parking Lot Repairs"). All amounts necessary to
remedy the Diesel Oil Spill and make the Xxxxxx Irrigation Repairs
and the Xxxxxx Parking Lot Repairs shall constitute Actual Cure
Amounts and, to the extent there are funds available, shall be
paid out of the Disputed Cure Escrow Account. Exodus shall
reimburse Parent and the Buyer, either from the Disputed Cure
Escrow Account or, if there are not sufficient funds available in
the Disputed Cure Escrow Account, from other funds, for costs and
expenses incurred by Parent or the Buyer for remediation of the
Diesel Oil Spill and making the Xxxxxx Irrigation Repairs and the
Xxxxxx Parking Lot Repairs; provided, that such costs and expenses
are reasonable and necessary or otherwise required to cure the
Diesel Oil Spill and make the Xxxxxx Irrigation Repairs and the
Xxxxxx Parking Lot Repairs in accordance with the terms of the
Xxxxxx Sublease Agreement and the Xxxxxx Stipulation. The Buyer
shall consult with Exodus prior to making any such expenditures
and will consider in good faith any proposal by Exodus for
cost-effective alternatives to such expenditures."
6. Change of Corporate Name. (a) Section 6.19(a) of the Prior
Agreement is hereby renumbered as Section 6.19(a)(i).
(b) The following subsections 6.19(a)(ii) and (iii) are hereby
added to the Prior Agreement:
"(ii) As soon as reasonably practicable, but in no event
later than ten (10) Business Days after the Closing Date, Exodus
shall, and shall cause each of its U.S. Subsidiaries whose
corporate names include any of the Licensed Marks to, cause its
and their corporate names to be changed to names that do not
include any of the Licensed Marks. Notwithstanding the foregoing,
Exodus and each of its U.S. Subsidiaries may refer to its former
name for identification purposes only (but in no event for
commercial purposes).
(iii) The Sellers shall use commercially reasonable
efforts to cause all non-U.S. Exodus Subsidiaries incorporated
outside of the Licensed Territories whose corporate names include
any of the Licensed Marks to change their corporate names to names
that do not include any of the Licensed Marks within 30 days after
the Closing; provided, that it shall not be a breach of this
sentence if such corporate names are not so changed within such
30-day period if the Sellers have taken all commercially
reasonable actions that can be taken without further action by a
Governmental Entity or bankruptcy or insolvency administrator or
trustee and such delay is due to the failure of such Governmental
Entity or bankruptcy or insolvency administrator or trustee to
take such action and the Sellers are otherwise using their
commercially reasonable efforts to effect such name change as soon
as reasonably practicable. During such period, such Subsidiaries
shall not use the Licensed Marks for commercial purposes.
(iv) Except to the extent expressly permitted otherwise
herein or in the Related Documents, none of the Sellers or their
respective Subsidiaries shall have any right, after the Closing
Date, to use, register or maintain the registration of any domain
name incorporating any of the Licensed Marks (in whole or in
part), and to the extent any such domain names are not acquired by
the Buyer hereunder, Sellers shall terminate, and the Sellers
shall cause their respective Subsidiaries to terminate, the
registrations of any such domain names within 30 days after the
Closing Date. Notwithstanding anything to the contrary herein, the
Sellers agree to, and agree to cause their respective Subsidiaries
to, grant any consents and execute and deliver any documents that
may be required by any Governmental Entity with respect to, and
provide commercially reasonable cooperation to Parent and the
Buyer regarding, the registration by Parent and/or the Buyer in
any jurisdiction of any corporate name incorporating any of the
Licensed Marks and the filing by Parent and/or the Buyer of
Fictitious Business Name Statements or similar documents in any
jurisdiction. Notwithstanding the foregoing, with respect to
non-U.S. Subsidiaries of Exodus subject to insolvency proceedings,
the Sellers shall not be in breach of this paragraph if they use
commercially reasonable efforts to so terminate such domain names.
7. Employee Benefits. (a) Section 6.16(c) of the Prior Agreement
is hereby amended to read in its entirety as follows (added language in
bold, deleted language in strikethrough):
"(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. 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"), EXODUS SHALL PAY TO
EACH SUCH TRANSFERRED EMPLOYEE HIS OR HER ACCRUED VACATION BENEFIT
(THE AGGREGATE TOTAL FOR ALL TRANSFERRED EMPLOYEES TO BE REFERRED
TO AS THE "AGGREGATE VACATION BENEFIT"), AT THE TIME OF
TERMINATION OF SUCH TRANSFERRED EMPLOYEE FROM SELLERS' EMPLOY, IN
FULL AND COMPLETE SATISFACTION OF THE SELLERS' OBLIGATIONS IN
RESPECT OF SUCH TRANSFERRED EMPLOYEE'S ACCRUED VACATION BENEFIT.
NOT LATER THAN TWO (2) BUSINESS DAYS AFTER THE CLOSING, EXODUS
SHALL DELIVER TO PARENT AND THE BUYER EVIDENCE OF PAYMENT OF SUCH
AGGREGATE VACATION BENEFIT. WITHIN TEN (10) BUSINESS DAYS
FOLLOWING THE CLOSING, PARENT AND THE BUYER SHALL REIMBURSE EXODUS
FOR PAYMENT OF SUCH AGGREGATE VACATION BENEFIT; PROVIDED, HOWEVER,
THAT, IN NO EVENT WILL THE BUYER BE RESPONSIBLE TO PAY MORE THAN
$20 MILLION WITH RESPECT TO THE AGGREGATE VACATION BENEFIT.[BEGIN
STRIKETHROUGH]; 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."[END STRIKETHROUGH]
(b) Section 6.16(d) of the Prior Agreement is hereby deleted and
replaced with the following:
"(d) The Sellers shall use their commercially reasonable
efforts to maintain during the 120-day period following the
Closing their existing health insurance coverage, including
continuation health coverage under COBRA, for (i) current or
former employees (and their respective eligible dependents) of the
Sellers who are not Transferred Employees and who are eligible for
such coverage during such 120-day period and (ii), with respect to
COBRA coverage, any Transferred Employees (and their respective
eligible dependents) who are eligible for such coverage on the
Closing Date, including, but not limited to, employees on a
disability leave as of the Closing Date. In the event that the
Sellers are unable, despite their commercially reasonable efforts,
to maintain such health insurance (including COBRA) coverage
during such 120-day period, the Buyer and/or its Affiliates shall
permit those individuals described in clause (i) and (ii) of the
preceding sentence who reside in the U.S. to participate in the
group health coverage offered by the Buyer to its similarly
situated U.S. employees for the remainder of such 120-day period.
In addition, if the Sellers have discontinued their health
insurance coverage, the Buyer and/or its Affiliates shall also
provide continuation health coverage under COBRA, from the end of
such 120-day period for so long as the period required under COBRA
had Sellers continued to maintain their existing health insurance
coverage, for all current or former employees (and their
respective eligible dependents) of the Sellers who reside in the
U.S. and who are eligible for such coverage as of the 120th day
following the Closing. The Sellers shall be responsible for all
costs incurred by the Buyer and/or its Affiliates to provide such
coverage, and 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)."
8. Sanrise. As reflected in the record of the Primary Sale Hearing
held on January 16-17, 2002, Item 11 of Schedule 2.1(a)(i) of the Prior
Agreement is hereby deleted in its entirety. The reseller agreement between
Sanrise, Inc. and Exodus (together with the assets identified in former
Item 11 of Schedule 2.1(a)(i), other than the $5 million promissory note
referred to in former Item 11 of Schedule 2.1(a)(i) (which has been
repaid), the "Sanrise Assets") shall not be assumed and assigned at the
Closing, but shall be made available to the Buyer pursuant to the
Transition Services Agreement S/B. The Sellers will transfer and assign to
the Buyer, and the Buyer will assume the Sanrise Assets promptly following
resolution of the dispute between Sanrise and the Sellers with respect to
such assets, as such assets are modified by such resolution; provided, that
the $5 million promissory note referred to in Item 11 of Schedule 2.1(a)(i)
(which has been repaid) shall not be included in the Sanrise Assets. The
Sellers will not consent to any settlement of such dispute, or any
amendment to or waiver of its rights under, any matter or agreement,
referred to in such former Item 11, without the written consent of Buyer,
which shall not be unreasonably withheld or delayed. In the event the
Sellers enter into a voluntary settlement without such consent of the
Buyer, Exodus shall pay the Buyer $2,500,000 in the nature of liquidated
damages, and in such event the Sanrise Assets shall not be transferred to
the Buyer. The parties agree that if the dispute is decided by the
Bankruptcy Court, Exodus shall have no obligation to make the $2,500,000
payment described in the preceding sentence.
9. Certain Contracts. The following Section 6.27, and Schedule
6.27(a) and Schedule 6.27(c) attached hereto, are hereby added to the Prior
Agreement:
"Section 6.27. Disputed Contracts. (a) Part I of Schedule
6.27(a) sets forth those items identified in the January 7
Selection Notice as Contracts desired by the Parent and the Buyer
to be assigned by the Sellers to the Buyer or its Designee, but
which the Sellers assert are not required to be assigned to the
Buyer or its Designee pursuant to the last sentence of Section
2.3(d) because the Actual Cure Amounts the Sellers would be
required to bear in respect of such Contracts pursuant to Section
2.4(a) of the Agreement are so high relative to the benefits of
each 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 Contracts. Part II of Schedule
6.27(a) sets forth those items identified in the January 7
Selection Notice as Contracts desired by the Parent and the Buyer
to be assigned by the Sellers to the Buyer or its Designee, but
which the Sellers assert are not required to be assigned to the
Buyer or its Designees because such items do not constitute
Contracts. The items set forth on Schedule 6.27(a) are hereafter
referred to as the "Contested Selections".
(b) Subject to the last sentence of this paragraph, until
the earlier of (i) the date which is sixty (60) days following the
Closing or (ii) the date on which the Buyer or its Designee enters
into an alternative arrangement in accordance with the following
sentence, the Sellers shall provide the Buyer or its Designee with
the use and benefits of the Contested Selections, and the Buyer or
its Designee shall reimburse the Sellers, pursuant to and in
accordance with the terms of the Transition Services Agreement
S/B. From the date of this Amendment through the date which is
sixty (60) days following the Closing, the Buyer or its Designee
shall use its commercially reasonable efforts to enter into
alternative arrangements to the Contested Selections in order that
the Sellers shall not be required to assign such Contested
Selections to the Buyer or its Designee, and the Sellers shall
reasonably cooperate with such efforts by the Buyer or its
Designee. In the event that the Buyer or its Designee enters into
such an alternative arrangement with respect to a Contested
Selection, (x) Parent or the Buyer shall promptly notify Exodus in
writing that they no longer desire to have the Contested Selection
assigned to Buyer or its Designee, (y) the Sellers shall be
permitted to reject or terminate the Contested Selection, and (z)
the Sellers shall cease to provide the use and benefits of the
Contested Selection to Buyer or its Designee pursuant to the
Transition Services Agreement S/B. During such 60-day period, the
parties shall be deemed to have reserved, and following such
60-day period, the parties shall be free to assert, all rights
relating to the characterization and treatment under this
Agreement of the Contested Selections, including, without
limitation, the right of Parent and the Buyer, on the one hand, to
assert that the Contested Selections are required to be assumed by
the Sellers and assigned to the Buyer or its Designees in
accordance with the terms of the Agreement, and the right of the
Sellers, on the other hand, to assert that the Contested are not
required to be assigned to the Buyer or its Designee.
(c) Notwithstanding their inclusion in the January 7
Selection Notice or any subsequent notice from Parent or the
Buyer, the Contracts listed on Schedule 6.27(c) shall not be
Assigned Contracts. To the extent that Contracts listed on
Schedule 6.27(c) are Contracts to which Exodus UK, Exodus Germany
or Exodus Japan is a party, such Contracts will be included,
directly in the case of Exodus UK and Exodus Germany and
indirectly in the case of Exodus Japan, in the UK Transaction, the
German Transaction and the Japanese Transaction, respectively. To
the extent that Contracts listed on Schedule 6.27(c) are Contracts
to which a Seller is a party, but which relate to customers
installed exclusively in Internet data centers in the United
Kingdom, Germany or Japan, the Sellers shall use commercially
reasonable efforts to assign such Contracts to Exodus UK, Exodus
Germany or Exodus Japan prior to consummation of the UK
Transaction, the German Transaction or the Japanese Transaction,
as the case may be; provided, that if the Sellers are unable to so
assign such a Contract prior to the relevant transaction
consummation, the Sellers will provide the benefits (subject to
the obligations) of such Contract to the UK Buyer, the German
Buyer or the Japanese Buyer from the date of closing of the
relevant transaction through the date of such assignment, through
a subcontracting or similar arrangement reasonably satisfactory to
the Sellers and the UK Buyer, the German Buyer or the Japanese
Buyer, as the case may be. The Contracts listed on Schedule
6.27(c) shall be treated in the same manner as the assets of
Exodus UK, the assets of Exodus Germany and the stock and debt of
Exodus Japan for purposes of Sections 6.20(g)(i) and (ii).
(d) At Closing, the Sellers shall assume and assign to
the Buyer the U.S. Domestic On-net Services Agreement between
Exodus and Cable & Wireless USA Internet, Inc. dated August 2,
1999 (the "C&W Network Agreement"). Notwithstanding any prior
statement or representation, the Sellers, Parent and the Buyer
acknowledge that no Cure Amount, whether monetary or non-monetary,
shall be owed with respect to the assumption and assignment of the
C&W Network Agreement, and Parent and the Buyer release and
discharge the Sellers from any and all claims, obligations and
liabilities with respect to the C&W Network Agreement."
10. Leased Equipment. Section 2.10(e)(ii) of the Prior Agreement
is hereby amended to read in its entirety as follows (added language in
bold, deleted language in strikethrough):
"(ii) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, all of the Scheduled Financing Leases and Scheduled
Operating Leases (INCLUDING ALL SEVERABLE LEASE SCHEDULES) will be
included in the Transition Services Agreement S/B AT LEAST UNTIL
THE SIXTIETH (60TH) CALENDAR DAY FOLLOWING THE CLOSING DATE OR
SUCH EARLIER DATE ON WHICH THE EQUIPMENT UNDER A SCHEDULED LEASE
(OR SEVERABLE LEASE SCHEDULE) IS TRANSFERRED TO THE BUYER IN
ACCORDANCE WITH SECTION 2.10(A) OR (C), IT BEING UNDERSTOOD THAT,
AFTER SUCH 60-DAY PERIOD, PARENT OR THE BUYER MAY ELECT THAT ANY
SCHEDULED LEASE (OR SEVERABLE LEASE SCHEDULE) SHOULD NOT BE
INCLUDED UNDER THE TRANSITION SERVICES AGREEMENT S/B, IN WHICH
CASE THE SELLERS SHALL HAVE NO OBLIGATION TO CONTINUE TO MAKE SUCH
SCHEDULED LEASE (OR SEVERABLE LEASE SCHEDULE) AVAILABLE TO THE
BUYER OR ITS DESIGNEE PURSUANT TO THE TRANSITION SERVICES
AGREEMENT S/B AND SHALL HAVE THE RIGHT TO IMMEDIATELY REJECT SUCH
SCHEDULED LEASE (OR SEVERABLE LEASE SCHEDULE) AND TAKE ALL STEPS
NECESSARY TO EFFECT SUCH REJECTION. [BEGIN STRIKETHROUGH]except to
the extent Parent or the Buyer has notified Exodus that particular
leases or lease schedules should not be included under the
Transition Services Agreement S/B.[END STRIKETHROUGH] The parties
shall negotiate in good faith such changes to the form of the
Transition Services Agreement S/B as may be necessary to effect
the provisions of this Section 2.10."
11. Retained Claims. The "and" following clause 2.1(b)(xi) of the
Prior Agreement is hereby deleted. The "." following clause 2.1(b)(xii) of
the Prior Agreement is hereby deleted and replaced with the following:
";
(xiii) Claims of the Sellers under the Consulting
Services Agreement between Xxxxxxxx Consulting LLP and Exodus,
dated October 30, 2000, to the extent such Claims relate to the
validity or amount of "cure" costs under such agreement."
12. Arca. The following Section 6.28, and Schedule 6.28 attached
hereto, are hereby added to the Prior Agreement:
"Section 6.28. Arca Contracts. Notwithstanding anything
in this Agreement, or any schedule hereto or notice hereunder, to
the contrary, (i) the Contracts between Arca Systems, Inc.
("Arca") and certain Government Entities listed on Schedule 6.28
(the "Arca Contracts") shall not be assumed and assigned to Buyer
or its Designee at Closing, and (ii) certain Business Employees of
Arca identified by Exodus and Parent (the "Arca Employees") shall
not become Transferred Employees upon the Closing. The Buyer or
its Designee, Exodus and Arca will enter into a mutually
satisfactory Transition Service Schedule under the Transition
Services Agreement S/B with respect to the Arca Contracts. The
Sellers shall use commercially reasonable efforts to cause the
assignment of the Arca Contracts to the Buyer."
13. FCC Licenses. The following Section 6.29 is hereby added to
the Prior Agreement:
"Section 6.29. FCC Licenses. The Sellers and the Buyer
will cooperate with each other and use commercially reasonable
efforts to effect the transfer of the following radio licenses:
(i) license with registration number WPOY734 (granted September 7,
1999 and expiring September 7, 2004), (ii) license with
registration number WPPY479 (granted March 14, 2000 and expiring
March 14, 2005) and (iii) license with registration number WPSH575
(granted April 27, 2001 and expiring April 27, 2011) (the "FCC
Licenses"), including without limitation, preparing, submitting
and prosecuting any applications required by the Federal
Communications Commission (the "FCC"). The parties agree that the
FCC Licenses shall not be transferred or assigned to the Buyer or
its Designee prior to receipt of any necessary approval by the
FCC. If requested by the Buyer or its Designee, the benefits of
such FCC Licenses shall be provided by the Sellers pursuant to the
Transition Services Agreement S/B. If either party deems it
necessary or helpful in obtaining FCC approval, the parties shall
execute a separate instrument setting forth the provisions of this
Section 6.29. Notwithstanding the provisions of Sections 3.10 and
3.12 of this Agreement, the failure to assign or transfer the FCC
Licenses on the Closing Date shall not be considered constitute a
breach of this Agreement or to have a Material Adverse Effect on
the Sellers, the Buyer, the Parent, the Purchased Assets or on the
transaction as a whole."
14. Letters of Credit; Security Deposits. Section 6.23(b) is
hereby amended to add the following sentence at the end of such section:
"For the avoidance of doubt, Exodus shall not be entitled
to receive from Parent or the Buyer, and Parent and the Buyer
shall not be obligated to reimburse Exodus or any other Seller
for, any security deposit (or portion thereof) to the extent
Exodus or any other Seller receives such security deposit (or
portion thereof) directly from the owner or lessor of the relevant
property."
15. Shutdown of Certain Non-Acquired Sites. (a) Schedule 6.24 of
the Prior Agreement is hereby replaced with Schedule 6.24 attached hereto.
(b) The first sentence of Section 6.24 of the Prior Agreement is
hereby deleted and replaced in its entirety with the following (amendment
in bold):
"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, EXCEPT FOR THE NON-ACQUIRED SITES
REFERRED TO AS SN2, WHICH WILL BE SHUTDOWN NO LATER THAN MAY 15,
2002, AND DC7, WHICH WILL BE SHUTDOWN NO LATER THAN MAY 31, 2002."
16. Miscellaneous. (a) Section 2(a) of Amendment #1 to Asset
Purchase Agreement, dated January 10, 2002 ("Amendment #1"), is hereby
amended to delete the reference to "Section 1.1." immediately following the
first colon.
(b) Section 4(a) of Amendment #1 is hereby amended to delete the
reference to "Section 1.2." immediately following the first colon.
(c) Section 5(j) of Amendment #1 is hereby amended to replace the
phrase "the 8th sentence of Section 2.3(a)" with the phrase "the 9th
sentence of Section 2.3(a)."
(d) Section 8 of Amendment #1 is hereby amended to delete the
reference to "Section 1.3." immediately following the first colon.
[Remainder of this page intentionally left blank. Signature page
follows.]
IN WITNESS WHEREOF, this Amendment #2 to Asset Purchase Agreement
has been signed on behalf of each of the parties hereto as of the date
first written above.
GLOBALCENTER INC. EXODUS COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- -----------------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer Title: Executive Vice President,
Finance,Chief Administrative
Officer and Chief Financial
Officer
SERVICE METRICS, INC. AMERICAN INFORMATION SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: Xxxxxxx X. Xxxxxx
------------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer Title: Chief Financial Officer
CABLE AND WIRELESS PLC ARCA SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- ----------------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Deputy Group Finance Title: Chief Financial Officer
Director
DIGITAL ISLAND INC. COHESIVE TECHNOLOGY SOLUTIONS, INC.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------------------- ---------------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Chief Strategy Officer Title: Chief Financial Officer
GLOBAL CENTER HOLDING CO.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
[SIGNATURE PAGE TO AMENDMENT #2 TO ASSET PURCHASE AGREEMENT]
