MASTER ESTABLISHMENT AND TRANSITION AGREEMENT
BETWEEN
SAVVIS COMMUNICATIONS CORPORATION
AND
BRIDGE INFORMATION SYSTEMS, INC.
________________, 2000
TABLE OF CONTENTS
ARTICLE I......................................................................1
1.1 "Acquired Network Facilities"...........................................2
1.2 "Adverse Consequences"..................................................2
1.3 "Assumed Liabilities"...................................................2
1.4 "Buyer Subsidiaries"....................................................2
1.5 "Code"..................................................................2
1.6 "Contracts".............................................................2
1.7 "Employee Benefit Plan".................................................2
1.8 "ERISA".................................................................2
1.9 "Impermissible Security Interest".......................................2
1.10 "International Network Assets".........................................3
1.11 "IP Network"...........................................................3
1.12 "knowledge"............................................................3
1.13 "Lien".................................................................3
1.14 "Local Transfer Agreements"............................................3
1.15 "Retained Liabilities".................................................3
1.16 "Seller Subsidiaries"..................................................3
1.17 "US Network Assets"....................................................4
1.18 "WARN Act".............................................................4
1.19 "Terms"................................................................4
ARTICLE II.....................................................................6
2.1 Purchase and Sale of Purchased Assets; Effective Time...................6
2.2 Assumption of Liabilities...............................................6
2.3 Purchase Price..........................................................6
2.4 The Closing.............................................................7
2.5 Deliveries at the Closing...............................................7
2.6 Purchase Price Allocation and Adjustment................................7
ARTICLE III....................................................................8
3.1 Organization of Seller..................................................8
3.2 Authorization of Transaction............................................8
3.3 Noncontravention........................................................8
3.4 Brokers'Fees............................................................9
3.5 Purchased Assets........................................................9
3.6 Contracts..............................................................10
3.7 Employees..............................................................10
3.8 Disclaimer of Other Representations and Warranties.....................10
ARTICLE IV....................................................................10
4.1 Organization of the Buyer..............................................11
4.2 Authorization of Transaction...........................................11
4.3 Noncontravention.......................................................11
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4.4 Brokers'Fees...........................................................11
ARTICLE V.....................................................................11
5.1 Notices and Consents...................................................12
5.2 Call Right.............................................................12
5.3 Exercise of Call Right.................................................12
5.4 Seller's Obligation with Respect to Call Assets........................13
5.5 Buyer's Obligations with Respect to Call Assets........................14
5.6 Termination of Call Right..............................................14
5.7 Employee Services......................................................14
5.8 Offers of Employment...................................................14
5.9 Employee Benefits......................................................15
5.10 Access to Employee Information........................................16
5.11 WARN Act Indemnification..............................................16
5.12 Workers'Compensation Claims...........................................16
5.13 Employee Benefit Plans................................................16
5.14 Further Assurances....................................................16
ARTICLE VI....................................................................17
6.1 Survival of Representations and Warranties.............................17
6.2 Indemnification Provisions for Benefit of the Buyer....................17
6.3 Indemnification Provisions for Benefit of Seller.......................17
6.4 Matters Involving Third Parties........................................18
6.5 Call Right Remedies....................................................18
6.6 Exclusive Remedy.......................................................18
ARTICLE VII...................................................................19
7.1 No Third-party Beneficiaries...........................................19
7.2 Entire Agreement.......................................................19
7.3 Succession and Assignment..............................................19
7.4 Counterparts...........................................................19
7.5 Headings...............................................................19
7.6 Notices................................................................19
7.6 Governing Law..........................................................20
7.7 Arbitration............................................................20
7.8 Amendments and Waivers.................................................21
7.9 Severability...........................................................21
7.10 Expenses..............................................................21
7.11 Construction..........................................................21
7.12 Incorporation of Exhibits and Schedules...............................21
7.13 Bulk Transfer Laws....................................................21
Exhibit A.....................................................................23
Exhibit B.....................................................................24
Exhibit C.....................................................................38
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Exhibit D.....................................................................39
Exhibit E.....................................................................40
Exhibit F.....................................................................43
Exhibit G.....................................................................54
Exhibit H.....................................................................55
Exhibit I.....................................................................65
Exhibit J.....................................................................68
Exhibit K.....................................................................
Schedule 1.3..................................................................81
Schedule 1.10.................................................................82
Schedule 1.11.................................................................83
Schedule 1.12.................................................................84
Schedule 1.16.................................................................85
Schedule 1.17.................................................................
Schedule 2.3..................................................................86
Schedule 3.3..................................................................87
Schedule 3.5(a)...............................................................88
Schedule 3.6..................................................................89
Schedule 3.7..................................................................90
Schedule 5.1..................................................................91
Schedule 5.2(a)...............................................................92
Schedule 5.2(b)...............................................................93
Schedule 5.5..................................................................94
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MASTER ESTABLISHMENT AND TRANSITION AGREEMENT
This Master Establishment and Transition Agreement
("Agreement"), made this ____ day of __________, 2000, by and between SAVVIS
Communications Corporation, a Delaware corporation ("Buyer"), and Bridge
Information Systems, Inc., a Missouri corporation ("Seller"). Buyer and Seller
are referred to collectively herein as the "parties."
RECITALS
WHEREAS, Seller is engaged in the business of collecting and
distributing various financial, news and other data;
WHEREAS, Buyer is engaged in the business of providing
Internet protocol backbone and other data transport services;
WHEREAS, Seller and its subsidiaries own certain assets
relating to the
provision of Internet protocol backbone and other data transport services, such
assets consisting of (i) all of the equity interest (the "Interest") in Seller's
wholly-owned subsidiary, Global Network Assets, LLC, a Delaware limited
liability company (the "LLC"), and (ii) the International Network Assets
(defined below);
WHEREAS, Seller does not own outright but instead leases a
substantial portion of the US based assets comprising its Internet protocol
backbone ("Leased Assets"); and
WHEREAS, Seller and certain of its subsidiaries desire to
sell, and Buyer and certain of its subsidiaries desire to purchase, (i) the
Interest, and (ii) the International Network Assets (collectively, such acquired
assets are referred to herein as the "Purchased Assets"; provided, however, that
Call Assets first shall be added to the Purchased Assets as they are acquired
under a Local Transfer Agreement).
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the parties agree as follows.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the words and phrases listed
below shall have the meanings given below, and all defined terms shall include
the plural as well as the singular. Unless otherwise stated, the words "herein",
"hereunder" and other similar words refer to this Agreement as a whole and not
to a particular Section or other subdivision. The words "included" and
"including" shall not be construed as terms of limitation. The following terms
shall have the meanings set forth below:
1.1 "Acquired Network Facilities" means the US Network Assets,
the International Network Assets, but the Call Assets are included only to the
extent acquired by Buyer and Buyer's subsidiaries pursuant to this Agreement and
the Local Transfer Agreements.
1.2 "Adverse Consequences" means all actions, suits,
proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, reasonable amounts paid in settlement, liabilities, obligations,
taxes, liens, losses, expenses, and fees, including court costs and reasonable
attorneys' fees and expenses.
1.3 "Assumed Liabilities" means all liabilities and
obligations of Seller and the Seller Subsidiaries (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due) fulfilling both of the following requirements:
(a) which are directly associated with (i) the Purchased
Assets, (ii) the use of the IP Network, (iii) the Contracts, or (iv) those
matters set forth on Schedule 1.3 attached hereto; and
(b) which are not Retained Liabilities.
1.4 "Buyer Subsidiaries" means the direct and indirect
subsidiaries of the Buyer which will be involved in the operation or ownership
of the Acquired Network Facilities, including those subsidiaries purchasing
certain of the International Network Assets pursuant to the Local Transfer
Agreements.
1.5 "Code" means the Internal Revenue Code of 1986, as
amended.
1.6 "Contracts" means any and all contracts, agreements,
arrangements, leases understandings, purchase orders, and offers, written or
oral, of the Seller and the Seller Subsidiaries relating to the provision of the
IP Network and related data transport services, including without limitation the
agreements set forth on Schedule 3.6 attached hereto; provided, however, such
obligations and other agreements concerning Call Jurisdictions or with respect
to the Satellite Rights shall first become "Contracts" upon exercise of the
respective Call Right.
1.7 "Employee Benefit Plan" means all "employee benefit plans"
as such term is defined in Section 3(3) of ERISA and all stock option,
restricted stock, stock appreciation or other equity plans and all bonus,
severance, change in control, retention, deferred compensation or other
compensatory plans maintained or contributed to by the Seller in which any
Employee participates, in addition to all documents describing Seller's
employment policies and procedures.
1.8 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
1.9 "Impermissible Security Interest" means any Lien, other
than (a)
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mechanic's, materialmen's, and similar liens, (b) liens for taxes not yet due
and payable or for taxes that the taxpayer is contesting in good faith through
appropriate proceedings, (c) purchase money liens and liens securing rental
payments under capital lease arrangements, and (d) other liens arising in the
ordinary course of business and not incurred in connection with the borrowing of
money.
1.10 "International Network Assets" means the IP Network
assets located outside the United States as set forth on Schedule 1.10 attached
hereto and all rights of the Seller and the Seller Subsidiaries under Contracts
relating thereto.
1.11 "IP Network" means, except as set forth on Schedule 1.11,
those assets that are used by Seller and its subsidiaries solely in providing
telecommunications utilizing the Internet protocol between Seller and its
subsidiaries, and their suppliers and customers, and shall include, as well, all
the contractual rights relating solely thereto.
1.12 "Knowledge" means actual knowledge (i.e., the conscious
awareness of facts or other information), or belief, without undertaking any
investigation, and not constructive knowledge. The words "know", "knowing" and
"known" shall be construed accordingly. In the case of the Seller, knowledge
means the knowledge of the persons listed on Schedule 1.12 attached hereto.
1.13 "Lien" means any lien, security interest, mortgage,
option, lease, tenancy, occupancy, covenant, condition, easement, agreement,
pledge, hypothecation, charge, claim, restriction, or other encumbrance of every
kind and nature.
1.14 "Local Transfer Agreements" means the various transfer
agreements, including local asset transfer agreements ("Local Asset Transfer
Agreements") and local contracts of assignment and assumption ("Local Contracts
of Assignment") executed by the direct and indirect subsidiaries of the Seller
and of the Buyer involved in this transaction to effectuate the transfer of the
International Network Assets. Each such agreement shall be substantially in the
form of Exhibit E or Exhibit F, attached hereto and incorporated herein by
reference.
1.15 "Retained Liabilities" means liabilities which result
from or arise out of the ownership or operation of the IP Network prior to the
Effective Time, including liabilities which exist with respect to (i)
obligations under the Contracts, other than an obligation to make payment, which
are required to be fulfilled by Seller wholly prior to Closing, or (ii)
obligations to make payment, to the extent such payment is for services rendered
under the Contracts prior to Closing. Provided, further, that the liabilities
resulting from or arising out of the ownership or operation of the IP Network in
the Call Jurisdictions shall be included in the definition of the Retained
Liabilities until the Call Right is exercised, and such liabilities shall remain
the responsibility of the Seller and/or the appropriate Seller Subsidiaries to
the extent they result from or arise out of the ownership or operation of the IP
Network in such countries prior to the effective date under each respective Call
Asset Transfer Agreement.
1.16 "Seller Subsidiaries" means the LLC and the direct and
indirect subsidiaries of the Seller involved in the operation or ownership of
the IP Network, including
3
those subsidiaries selling certain of the International Network Assets pursuant
to (i) the Local Transfer Agreements, and (ii) at the time of any subsequent
Call Right exercise and related transfers, the "Call Asset Transfer Agreements"
in the form attached as Exhibit J.
1.17 "US Network Assets" means the assets owned by the LLC as
set forth on Schedule 1.17 attached hereto and all rights of the Seller and the
Seller Subsidiaries under Contracts relating thereto.
1.18 "WARN Act" means the Workers Adjustment and Retraining
Notification Act of 1988, as amended.
1.19 "Terms". The following terms shall have the meanings set
forth in the below referenced sections of this Agreement:
"Arbitration Costs" Section 7.7(g)
"Arbitration Demand" Section 7.7(b)
"Arbitrators" Section 7.7(c)
"Bridge Plan" Section 5.9(a)
"Buyer" Preface
"Call Asset Transfer Agreements" Section 1.15
"Call Assets" Section 5.2
"Call Jurisdictions" Section 5.2(a)
"Call Right" Section 5.2
"Closing" Section 2.4
"Dispute Notice" Section 7.7(b)
"Employees" Section 3.7
"Employment Date" Section 5.8(a)
"Expiration Date" Section 5.2
"Effective Time" Section 2.1
"Global Operative Agreements" Section 2.5(a)
4
"Indemnified Party" Section 6.4
"Indemnifying Party" Section 6.4
"Interest" Recitals
"Leased Assets" Recitals
"LLC" Recitals
"Local Asset Transfer Agreements" Section 1.13
"Local Contracts of Assignment" Section 1.13
"Local Operative Agreements" Section 2.5(b)
"Note" Section 2.3
"Original Asset Value" Section 2.6(a)
"Public Offering Proceeds" Section 2.3
"Purchase Price" Section 2.3
"Purchased Assets" Recitals
"Revised Asset Value" Section 2.6(b)
"Rules" Section 7.7(a)
"Satellite Rights" Section 5.2(b)
"Savvis Plan" Section 5.9(a)
"Seller" Preface
"Short-Term Call Assets" Section 5.5
"Third Party Claim" Section 6.4
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ARTICLE II
PURCHASE & SALE
2.1 Purchase and Sale of Purchased Assets; Effective Time. On
and subject to the terms and conditions of this Agreement, the Buyer hereby
purchases from Seller (or shall cause the Buyer Subsidiaries to purchase from
the appropriate Seller Subsidiaries), and Seller hereby sells, transfers,
conveys, and delivers to the Buyer (or shall cause the Seller Subsidiaries to
sell, transfer, convey and deliver to the appropriate Buyer Subsidiaries), all
of the Purchased Assets at the Closing for the consideration specified in
Section 2.3 hereof. The Closing shall be effective as of
_____________________________, 2000 ("Effective Time"). The closing under any
transfer of Call Assets shall be effective as provided in the respective Local
Asset Transfer Agreement.
2.2 Assumption of Liabilities.
(a) On and subject to the terms and conditions of this
Agreement, the Buyer hereby assumes and becomes responsible for (or shall cause
the Buyer Subsidiaries to assume and become responsible for) all of the Assumed
Liabilities.
(b) To the extent that Seller or any of the Seller
Subsidiaries makes payment on any Assumed Liabilities which are comprised of
undisputed liabilities for payment of services received under the Contracts,
then Buyer or a Buyer Subsidiary shall reimburse Seller for such payment
promptly upon receipt of an appropriate invoice from Seller. Likewise, to the
extent that Buyer or any of the Buyer Subsidiaries makes payment on any Retained
Liabilities which are comprised of undisputed liabilities under the Contracts
for payment of services received under the Contracts, then Seller or a Seller
Subsidiary shall reimburse Buyer for such payment promptly upon receipt of an
appropriate invoice from Buyer.
2.3 Purchase Price. The Buyer agrees to pay to the Seller $
________, which shall be an amount equal to $150,000,000 less the book value of
all the Call Assets and less the net present value of the sublease payments to
be made by Buyer related to the Leased Assets, both of which amounts will be
determined by the parties at Closing (the "Purchase Price"). The Purchase Price
allocable to the Interest shall be paid partially with cash and partially with a
promissory note (the "Note") substantially in the form attached hereto as
Exhibit I. The cash portion of the Purchase Price is intended to be paid from
the net proceeds of the initial public offering by Buyer of its shares, after
payment of all costs and expenses of such offering including fees and expenses
of legal counsel, investment bankers, accountants and other professionals
directly engaged in connection with such public offering, which public offering
is being made simultaneously with the Closing ("Public Offering Proceeds"). The
cash portion of the Purchase Price shall be equal to an amount determined
according to the following formula: One Hundred Million Dollars ($100,000,000)
of the first Three Hundred Million Dollars ($300,000,000) of Public Offering
Proceeds and 50% of the remaining Public Offering Proceeds in excess of Three
Hundred Million ($300,000,000), up to the full payment of the Purchase Price in
cash. The principal amount of the Note shall be the Purchase Price less this
cash payment. The Purchase Price allocable to the International Network Assets
shall be allocated
6
first from this cash amount. The cash portion of the Purchase Price shall be
paid by the legal entities set forth on Schedule 2.3, or as otherwise agreed by
the parties.
2.4 The Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Bryan Cave LLP, 211 N. Broadway, St. Louis, Missouri, commencing at 10:00
a.m. local time on the date hereof.
2.5 Deliveries at the Closing. The Parties shall make the
following deliveries at Closing:
(a) The Seller shall execute and deliver to Buyer and the
Buyer shall cause Savvis Communications Corporation, a Missouri corporation and
Buyer's wholly-owned subsidiary, to execute and deliver to Seller each of the
following agreements: (i) the Network Services Agreement substantially in the
form of Exhibit A attached hereto, (ii) the Administrative Services Agreement
substantially in the form of Exhibit B attached hereto, (iii) the Technical
Services Agreement substantially in the form of Exhibit C attached hereto, and
(iv) the Bill of Sale substantially in the form of Exhibit D attached hereto
(collectively, the agreements listed in (a)(i) through (a)(iv) are sometimes
referred to herein as the "Global Operative Agreements").
(b) The Seller shall cause the appropriate Seller Subsidiaries
to execute and deliver, and Buyer shall cause the appropriate Buyer Subsidiaries
to execute and deliver each of the following agreements: (i) the Local Contracts
of Assignment substantially in the form of Exhibit E attached hereto, (ii) the
Local Asset Transfer Agreements substantially in the form of Exhibit F attached
hereto, (iii) the Local Network Services Agreements substantially in the form of
Exhibit G attached hereto, (iv) the Equipment Collocation Permits substantially
in the form of Exhibit H attached hereto, and (v) the Local Administrative
Services Agreements described in the Administrative Services Agreement
(collectively, the agreements listed in (b)(i) through (b)(v) are sometimes
referred to herein as the "Local Operative Agreements").
(c) Seller and the Seller Subsidiaries shall have delivered to
the Buyer satisfactory evidence of such consents to assignment of the Contracts
(as defined in Section 5.1 hereof) and attainment of governmental approvals as
Seller and the Seller Subsidiaries shall have received as of the date hereof. To
the extent Seller and the Seller Subsidiaries shall not have received such
consents or governmental approvals, the rights and obligations of the parties
with respect thereto shall be governed by Section 5.1 hereof.
(d) The Buyer will deliver to the Seller, or Buyer will cause
the Buyer Subsidiaries to deliver to the Seller Subsidiaries, the Purchase Price
as specified in Section 2.3 above.
2.6 Purchase Price Allocation and Adjustment.
(a) Subject to adjustment as provided in Section 2.6(b), the
Purchase Price shall be allocated among the Purchased Assets as follows: The
Purchase Price allocable to the International Network Assets shall be equal to
the sum of the agreed upon value of such assets,
7
as set forth on Schedule 1.10 ("Original Asset Value"). The Purchase Price
allocable to the Interest shall be equal to the difference between the Purchase
Price and the Original Value. The Parties believe that the allocations in this
Section 2.6(a) reflect that most of the fair value of the Purchased Assets is
contained in the assets of the LLC because of the positive cash flows generated
by the US Network Assets.
(b) Within fifteen days after the Closing, Seller shall update
Schedule 1.10 and Schedule 1.17 attached hereto to include all US Network Assets
and all International Network Assets owned by Seller and the Seller Subsidiaries
as of the close of business on December 31, 1999. If the sum of the agreed upon
value of the International Network Assets shown on such revised Schedule 1.10
(the "Revised Asset Value") exceeds the Original Asset Value, then the amount of
the Purchase Price allocable to the International Network Assets pursuant to
Section 2.6(a) above shall be increased, dollar for dollar, by such excess and
the amount of the Purchase Price allocable to the Interest shall be decreased by
such excess. Likewise, if the Revised Asset Value is less than the Original
Asset Value, then the amount of the Purchase Price allocable to the
International Network Assets pursuant to Section 2.6(a) above shall be
decreased, dollar for dollar, by such amount and the amount of the Purchase
Price allocable to the Interest shall be increased by such amount. In either
event, Seller shall redistribute the cash portion of the Purchase Price paid by
the Buyer hereunder such that the Seller Subsidiaries are compensated for the
sale of International Network Assets entirely in cash. In the event sufficient
cash is not available in the Purchase Price for this purpose, then the deficit
shall be funded by means of an early prepayment under the Note.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to the Buyer that the
statements contained in this Article III are correct and complete as of the date
of this Agreement.
3.1 Organization of Seller. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Missouri. Each of the Seller Subsidiaries is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction in which such
entity was organized.
3.2 Authorization of Transaction. Seller has full corporate
power and authority to execute and deliver this Agreement and the Global
Operative Agreements and to perform its obligations hereunder and thereunder.
Each of this Agreement and the Global Operative Agreements constitutes the valid
and legally binding obligation of the Seller, enforceable in accordance with its
terms and conditions. Each of the Seller Subsidiaries has full corporate power
and authority to execute and deliver the respective Local Operative Agreements
and to perform its obligations thereunder. The respective Local Operative
Agreements constitute the valid and legally binding obligation of each of the
Seller Subsidiaries, enforceable in accordance with their terms and conditions.
3.3 Noncontravention. Except as set forth on Schedule 3.3, and
except as would not result in the imposition of any Impermissible Security
Interest upon any of the
8
Purchased Assets or US Network Assets, and except where the violation, conflict,
breach, default, acceleration, termination, modification, cancellation, failure
to give notice, or Impermissible Security Interest would not materially impair
the value or use of the International Network Assets or the US Network Assets or
have a material adverse effect on the ability of the parties to consummate the
transactions contemplated by this Agreement or the Global Operative Agreements,
or the ability of the parties' affiliates to consummate the transactions
contemplated by the Local Operative Agreements to the extent these are executed
and delivered at Closing, neither the execution and the delivery of this
Agreement and the consummation of the transactions contemplated hereby by the
Seller, nor the execution and delivery of the Global and Local Operative
Agreements and the consummation of the transactions contemplated thereby by the
Seller and by each of the Seller Subsidiaries will:
(a) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Seller or the Seller
Subsidiaries, as the case may be, is subject or any provision of the charter or
bylaws of the Seller or the Seller Subsidiaries, as the case may be,
(b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Seller or the Seller Subsidiaries, as the case may be, is a party or by
which they are bound or to which any of the Purchased Assets or US Network
Assets are subject; or
(c) to the knowledge of Seller, require Seller to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any third party, government or governmental agency.
3.4 Brokers' Fees. Seller has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
3.5 Purchased Assets.
(a) Except as set forth on Schedule 3.5(a), the International
Network Assets and the US Network Assets constitute all of the material assets
of the Seller and the Seller Subsidiaries used in the IP Network.
(b) Each of the Seller and the Seller Subsidiaries has good
title to, or a valid leasehold interest in, the Purchased Assets and the US
Network Assets, free and clear of all Impermissible Security Interests, and
there exists no restriction on the transfer of such property, other than
Impermissible Security Interests or restrictions which would not, in the
aggregate, have a material adverse affect on the ability of the parties to
consummate the transactions contemplated by this Agreement, the Global Operative
Agreements or the Local Operative Agreements or on the value or use of the
International Network Assets or the US Network Assets.
9
(c) Other than (i) the Assumed Liabilities incurred by Seller
and Seller Subsidiaries in the ordinary course of business after November 15,
1999, (ii) the Contracts, and (iii) the Assumed Liabilities listed on Schedule
1.3, there are no Assumed Liabilities which are material to the business
comprised of the Acquired Network Facilities, taken as a whole.
3.6 Contracts. Each of the Contracts material to the operation
and use of the IP Network, taken as a whole, is set forth on Schedule 3.6 and is
a valid and binding obligation of the parties thereto, enforceable in accordance
with their terms and is in full force and effect. No party to any such contract
is in material breach or violation thereof or default thereunder. Except for
matters which would not, in the aggregate, have a material adverse effect on the
Purchased Assets or US Network Assets, taken as a whole, no event has occurred
which, through the passage of time or the giving of notice, or both, would
constitute, and neither the execution of this Agreement nor the consummation of
the transactions contemplated hereby do or will constitute or result in, a
breach or violation of or default under any contract, or would cause the
acceleration of any obligation of any party thereto or the creation of any
Impermissible Security Interest upon any Purchased Assets or US Network Assets.
3.7 Employees. Schedule 3.7 sets forth the names and current
compensation of all employees of the Seller who will be transferred to the Buyer
on or before thirty (30) days following the Closing (the "Employees").
3.8 Disclaimer of Other Representations and Warranties EXCEPT
AS EXPRESSLY SET FORTH IN THIS ARTICLE III, NEITHER THE SELLER NOR ANY OF THE
SELLER SUBSIDIARIES MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT
LAW OR IN EQUITY, IN RESPECT OF ANY OF ITS ASSETS (INCLUDING, WITHOUT
LIMITATION, THE PURCHASED ASSETS), LIABILITIES OR OPERATIONS, INCLUDING, WITHOUT
LIMITATION, WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE, AND ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY
DISCLAIMED. BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE EXTENT
SPECIFICALLY SET FORTH IN THIS ARTICLE III, THE BUYER AND EACH BUYER SUBSIDIARY
IS PURCHASING THE PURCHASED ASSETS ON AN "AS-IS, WHERE-IS" BASIS. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, NEITHER THE SELLER NOR THE SELLER
SUBSIDIARIES MAKES ANY REPRESENTATION OR WARRANTY REGARDING ANY ASSETS OTHER
THAN THE ACQUIRED NETWORK FACILITIES AND THE INTEREST AND SELLER AND SELLER
SUBSIDIARIES EXPRESSLY HEREBY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES
REGARDING THE CALL ASSETS PRIOR TO SUCH ASSETS BEING ACQUIRED BY BUYER OR BUYER
SUBSIDIARIES HEREUNDER OR REGARDING ANY LIABILITIES OTHER THAN THE ASSUMED
LIABILITIES, AND NONE SHALL BE IMPLIED AT LAW OR IN EQUITY.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller that the
statements contained in this Article IV are correct and complete as of the date
of this Agreement.
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4.1 Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Missouri. Each of the Buyer Subsidiaries is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction in which such
entity was organized.
4.2 Authorization of Transaction. The Buyer has full corporate
power and authority to execute and deliver this Agreement and the Global
Operative Agreements and to perform its obligations hereunder and thereunder.
Each of this Agreement and the Global Operative Agreements constitutes the valid
and legally binding obligation of the Buyer, enforceable in accordance with its
terms and conditions. Each of the Buyer Subsidiaries has full corporate power
and authority to execute and deliver the respective Local Operative Agreements
and to perform its obligations thereunder. The respective Local Operative
Agreements constitute the valid and legally binding obligation of each of the
Buyer Subsidiaries, enforceable in accordance with their terms and conditions.
4.3 Noncontravention. Except as would not have a material
adverse effect on ability of the parties to consummate the transactions
contemplated by this Agreement or the Global Operative Agreements or the ability
of the parties' affiliates to consummate the transactions contemplated by the
Local Operative Agreements, neither the execution and the delivery of this
Agreement and the consummation of the transactions contemplated hereby by the
Buyer, nor the execution and delivery of the Global and Local Operative
Agreements and the consummation of the transactions contemplated thereby by the
Buyer and by each of the Buyer Subsidiaries will:
(a) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer or the Buyer
Subsidiaries, as the case may be, is subject or any provision of the charter or
bylaws of the Buyer of the Buyer Subsidiaries, as the case may be;
(b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer or the Buyer Subsidiaries, as the case may be, is a party or by which
they are bound; or
(c) require Buyer to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency.
4.4 Brokers' Fees. The Buyer has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS OF THE PARTIES
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5.1 Notices and Consents. Except as set forth on Schedule 5.1
attached hereto, the Seller has given and obtained (or caused the Seller
Subsidiaries to give or obtain) all third-party notices and consents and
governmental approvals necessary to effect the purchase of the Purchased Assets
and the assignment of the Contracts and the assumption of the Assumed
Liabilities hereunder. With respect to any third party notices or consents or
governmental approvals that have not been given or obtained as of the date
hereof, Seller covenants and agrees to use its reasonable best efforts to give
or obtain (or cause the Seller Subsidiaries to give or obtain) the same. The
Buyer agrees to fully cooperate with (and cause the Buyer Subsidiaries to fully
cooperate with) the Seller and the Seller Subsidiaries in such efforts. Until
such time as Seller or the Seller Subsidiaries shall have obtained all necessary
third party consents to assignment by Buyer or the Buyer Subsidiaries of the
Contracts and the assumption by the Buyer or the Buyer Subsidiaries of the
Assumed Liabilities, Seller shall continue (or shall cause the Seller
Subsidiaries to continue) to discharge and perform when due all obligations
associated therewith, and Buyer shall reimburse Seller for any expenses directly
attributable thereto.
5.2 Call Right. Seller, for itself and the Seller
Subsidiaries, hereby grants to Buyer and the Buyer Subsidiaries the right to
purchase (the "Call Right") the following assets ("Call Assets"):
(a) in each of the jurisdictions set forth on Schedule 5.2(a)
hereof and such other jurisdictions as Buyer and Seller may, from time to time,
mutually agree (the "Call Jurisdictions"), all of the IP Network assets owned by
the Seller and/or the Seller Subsidiaries in each Call Jurisdiction, including
all contract rights associated therewith; and
(b) all the rights and obligations with respect to the
satellite communications agreements and all rights and obligations in specific
countries with respect thereto, as described in Schedule 5.2(b) (the "Satellite
Rights").
Unless earlier terminated pursuant to Section 5.6 hereunder, the Call Right
granted hereunder shall expire on the tenth anniversary of the date hereof
("Expiration Date"); provided, however, that if the term of the Network Services
Agreement is extended beyond the Expiration Date, then the Expiration Date shall
be the date upon which the Network Services Agreement, attached as Exhibit A
hereto, is terminated. Upon the exercise of the Call Right in any Call
Jurisdiction or with respect to the Satellite Rights, Buyer shall assume all
liabilities and obligations of the Seller and/or the Seller Subsidiaries related
to the respective Call Assets to the extent that such liabilities arise on or
after the date of exercise.
5.3 Exercise of Call Right. Buyer shall use its reasonable
best efforts, from and after the Closing, to secure the consents, licenses, and
other authorizations, whether from governments or private parties, and to
establish such foreign legal presence and to fulfill such other conditions, as
are necessary in order to permit Buyer to acquire the Call Assets; provided,
however, that this obligation shall not require that Buyer permit third parties
to own a portion of any subsidiaries of Buyer unless Buyer otherwise agrees to
such ownership. Prior to the receipt of all such material consents, licenses,
and authorizations and the establishment of any necessary foreign presence,
Buyer shall not be obligated to exercise the Call Right with respect to any or
all of the Call Jurisdictions or with respect to the Satellite Rights, nor shall
Buyer be obligated to
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exercise all the Call Rights at one time; rather, Buyer may exercise the Call
Right in each Call Jurisdiction and with respect to the Satellite Rights
separately, from time to time, and at any time prior to the Expiration Date
subject to the immediately following provision. Upon the receipt of all material
consents, licenses and authorizations and the establishment of any necessary
foreign presence in any Call Jurisdiction or with respect to all the Satellite
Rights connected with a particular third-party satellite contract, Buyer shall
be obligated to proceed expeditiously with the exercise of the Call Right with
respect to such Call Jurisdiction or Satellite Rights. The exercise price of the
Call Right, other than with respect to Satellite Rights, in each Call
Jurisdiction shall be $1.00 plus the net book value of the Call Assets in the
applicable Call Jurisdiction(s) on the date of exercise of the Call Right for
such Call Jurisdiction. The exercise of the Call Right with respect to the
Satellite Rights shall only be permitted if made with respect to all Satellite
Rights under a particular global satellite contract as set forth on Schedule
5.2(b), and the exercise price shall be $1 plus the assumption of all
obligations of Seller with respect to such contract. The Call Assets shall be
transferred via a Call Asset Transfer Agreement in substantially the form
attached as Exhibit J hereto.
5.4 Seller's Obligation with Respect to Call Assets. Until the
earliest of (a) the Expiration Date, (b) the date upon which no Call Assets
remain subject to the Call Right, or (c) the Call Right is terminated pursuant
to Section 5.6, and subject at all times to the rights and obligations set forth
in the Network Services Agreement executed between the parties as of the same
date as the date of this Agreement:
(a) Seller shall maintain and operate (or cause the Seller
Subsidiaries to maintain and operate) the Call Assets in the same manner and to
the same extent as Seller and the Seller Subsidiaries, as the case may be, have
maintained such assets to date. Seller shall take (and shall cause the Seller
Subsidiaries to take) any and all actions reasonably necessary to fulfill its
obligations hereunder;
(b) Seller shall not (nor shall it permit the Seller
Subsidiaries to) dispose of, encumber or otherwise transfer any interest in, or
amend, waive or modify any provision of or terminate any Contract relating to,
the Call Assets without the prior written consent of Buyer which consent shall
not be unreasonably withheld;
(c) Seller shall provide (and shall cause the Seller
Subsidiaries to provide) Buyer with notice of any events that have, or may have,
a material adverse effect on the Call Assets or on Buyer's right or ability to
exercise the Call Right with respect to any of the Call Assets;
(d) If Buyer chooses to exercise any Call Right prior to the
receipt of all consents, licenses and other authorizations or establishment of
the appropriate foreign legal presence, it does so with the assumption of all
risk or other liability arising from such absence of necessary consents, license
or other authorizations or legal presence. Upon exercise of any Call Right,
Seller shall use its reasonable best efforts to obtain any required consent of
any other contracting parties to the assignment or novation of any agreement
pertaining to the applicable Call Assets, and Buyer shall use its reasonable
best efforts to assist Seller in all such endeavors. Unless and until such
consent shall be forthcoming and any relevant agreements shall have been
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assigned or novated, Buyer shall at its own cost and expense assume Seller's
obligations under such agreements and Seller shall account to Buyer for all sums
received therefrom. Seller will at Buyer's request and expense give to Buyer all
assistance in the power of Seller to enable Buyer to enforce any of the
agreements so assigned against the other contracting party or parties and,
without prejudice to the generality of the foregoing, will provide all such
relevant books, documents and other information as Buyer may require in relation
thereto; and
(e) Buyer shall have no rights to use the Call Assets prior to
exercise of the Call Rights, except as otherwise consented to by Seller, such
consent not to be unreasonably withheld.
5.5 Buyer's Obligations with Respect to Call Assets. With
respect to those Call Jurisdictions set forth on Schedule 5.5 ("Short-Term Call
Assets"), Buyer and Seller expect the exercise of the Call Right to occur within
the calendar year 2000. Regardless if such exercise actually occurs in 2000,
with respect to the Short-Term Call Assets, Buyer or the Buyer Subsidiaries
shall reimburse the Seller or the Seller Subsidiaries for all incremental costs
directly associated with the use, maintenance and operation of the Short-Term
Call Assets, including, but not limited to, maintenance of leased lines. Seller
shall invoice Buyer monthly for such costs. Likewise, Seller shall compensate
Buyer for the use of the Short-Term Call Assets pursuant to such Network
Services Agreement executed between the parties as of the same date as the date
of this Agreement. Such obligations of Buyer and Seller shall run concurrently
and shall continue until the Expiration Date, unless earlier terminated by
mutual agreement of Buyer and Seller. No similar obligations will exist for
Buyer or Seller with respect to the remaining Call Assets prior to the exercise
of the Call Rights with respect thereto.
5.6 Termination of Call Right. The Call Right shall terminate
automatically on the earlier of the Expiration Date or the date upon which Buyer
has exercised the Call Right in each of the Call Jurisdictions. Prior to the
Expiration Date, at any time and from time to time, the Call Right may be
terminated with respect to any or all of the Call Jurisdictions upon the mutual
agreement of the parties.
5.7 Employee Services. From and after the Closing until such
time as the Employees are transferred to the Buyer pursuant to Section 5.8,
Seller shall make all of the Employees available to Buyer on a full-time basis.
Buyer shall reimburse Seller, on a monthly basis, for all payroll costs directly
associated with such Employees.
5.8 Offers of Employment.
(a) Buyer shall, on or before January 1, 2000, offer
employment with the Buyer to the Employees. The Seller agrees to release from
their employment, on or before January 1, 2000, those Employees who are offered
and accept employment with the Buyer to enable them to commence their employment
with the Buyer. The date upon which such Employees commence employment with the
Buyer shall be referred to herein as the "Employment Date."
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(b) Seller shall furnish Buyer with all employee data files
related to the Employees. The Seller makes no representations or warranties
concerning such files, or the contents or sufficiency thereof.
5.9 Employee Benefits.
(a) Employees shall continue to participate in each Employee
Benefit Plan maintained by Seller until such time as Buyer establishes and
maintains a substantially similar Employee Benefit Plan; provided that, as of
the Employment Date, an Employee shall cease to be eligible to participate in
the Bridge Information Systems, Inc. 401(k) Salary Savings Plan ("Bridge Plan")
and shall be eligible to participate in the Savvis Communications Co. 401(k)
Plan ("Savvis Plan"), in accordance with the terms of Section 5.9(b) and subject
to the terms of the Savvis Plan. During the period in which Employees are
participating in Seller's Employee Benefit Plans, Buyer shall reimburse Seller
for any employer-paid amounts under such Employee Benefit Plans.
(b) As soon as practicable after the Employment Date, Seller
shall cause to be transferred from the Bridge Plan to the Savvis Plan all Bridge
Plan assets representing account balances of Employees under the Bridge Plan.
Buyer and Seller shall take all such actions as are necessary to ensure that
such transfer complies with all relevant provisions of Section 411(d)(6) of the
Code and the regulations thereunder. Buyer shall amend the Savvis Plan, to the
extent necessary, to provide that each Employee is credited, for all purposes
under the Savvis Plan and subject to the other provisions of such plan, with all
service completed prior to the Employment Date with Seller.
(c) Buyer shall assume the obligations in connection with
accrued but unused vacation and shall be responsible for vacation pay at and
after the Employment Date with respect to service (whether prior to or after the
Employment Date) of all Employees. Buyer shall afford Employees credit for their
period of employment with Seller for purposes of determining the amount of
vacation to which the Employees are entitled each year and for purposes of
determining all other seniority based benefits.
(d) Buyer and Seller acknowledge and agree that the
transactions contemplated by this Agreement shall not constitute a termination
of employment of any Employee.
(e) No provision of this Agreement, including without
limitation this Section 5.9, shall create any third-party beneficiary rights in
any person or organization, including without limitation employees or former
employees (including any beneficiary or dependent thereof) of Seller, unions or
other representatives of such employees or former employees, or trustees,
administrators, participants, or beneficiaries of any Employee Benefit Plan, and
no provision of this Agreement, including this Section 5.9, shall create such
third-party beneficiary rights in any such person or organization in respect of
any benefits that may be provided, directly or indirectly, under any Employee
Benefit Plan.
(f) Seller and Buyer shall cooperate as may reasonably be
required with respect to each of the filings, calculations, and other actions
necessary to effect the transactions
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contemplated by this Section 5.9 and in obtaining any government approvals as
may be required hereunder.
5.10 Access to Employee Information. From and after the
Closing, the parties hereto will cooperate with each other in the administration
of any applicable Employee Benefit Plans and programs. To the extent permitted
by law, at the Employment Date or within a reasonable time thereafter, the
Seller will provide the Buyer the necessary employee data or copies thereof,
including personnel and benefit information, maintained with respect to the
Employees by the Seller or by its independent contractors, such as insurance
companies and actuaries.
5.11 WARN Act Indemnification. The Buyer agrees to indemnify
the Seller and its directors, officers, employees, consultants and agents for,
and to hold the Seller and its directors, officers, employees, consultants and
agents harmless from and against, any and all losses arising or resulting, or
alleged to arise or result from the notification or other requirements of the
WARN Act.
5.12 Workers' Compensation Claims. The Seller will be
responsible for any workers' compensation claims by any Employee for injuries
incurred prior to such Employee's Employment Date. The Buyer will be responsible
for any workers' compensation claims for injuries incurred by any Employee on or
after such Employee's Employment Date.
5.13 Employee Benefit Plans. Except as expressly provided in
this Article V, the Buyer will not adopt, assume or otherwise become responsible
for, either primarily or as a successor employer, any assets or liabilities of
any Employee Benefit Plans, arrangements, commitments or policies currently
provided by the Seller or by any member of its controlled group of corporations.
In addition, the Buyer will not assume Seller's obligations under Code Section
4980B and ERISA Section 606 relating to individuals who are neither Employees
nor dependents of Employees. Buyer shall be responsible for satisfying
obligations under ERISA Section 606 and Code Section 4980 to provide
continuation coverage to or with respect to any Employees with respect to any
"qualifying event" which occurs on or following the Employment Date.
5.14 Further Assurances. From and after Closing, the parties
shall do such acts and execute such documents and instruments as may be
reasonably required to make effective the transactions contemplated hereby. In
the event that consents, approvals, other authorizations or other acts
contemplated by this Agreement have not been fully effected as of Closing, the
parties will continue after Closing, without further consideration, to use their
reasonable best efforts to carry out such transactions; provided, however, in
the event that certain approvals, consents or other necessary documentation
cannot be secured, then the party having legal responsibility, ownership or
control shall act on behalf of the other party, without further consideration,
to effect the essential intention of the parties with respect to the
transactions contemplated by this Agreement.
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ARTICLE VI
REMEDIES FOR BREACHES OF THIS AGREEMENT
6.1 Survival of Representations and Warranties. The
representations and warranties of the Seller contained in Article III of this
Agreement and of the Buyer contained in Article IV of this Agreement shall
survive for a period of one year following the Closing.
6.2 Indemnification Provisions for Benefit of the Buyer.
(a) Subject to the limitations set forth in Section 6.2(c)
below, in the event the Seller or any Seller Subsidiary breaches any of its
representations, warranties, and covenants contained in this Agreement, provided
that the Buyer makes a written claim for indemnification against the Seller with
respect to its representations and warranties within the survival period set
forth in Section 6.1, then the Seller agrees to indemnify the Buyer and the
Buyer Subsidiaries from and against the entirety of any Adverse Consequences the
Buyer and the Buyer Subsidiaries shall suffer through and after the date of the
claim for indemnification (but excluding any Adverse Consequences the Buyer or
the Buyer Subsidiaries shall suffer after the end of any applicable survival
period) caused proximately by the breach.
(b) Subject to the limitations set forth in Section 6.2(c)
below, Seller agrees to indemnify the Buyer and the Buyer Subsidiaries from and
against the entirety of any Adverse Consequences the Buyer and the Buyer
Subsidiaries shall suffer caused proximately by any liability of the Seller or
any Seller Subsidiary which is a Retained Liability (including any liability of
the Seller or any Seller Subsidiary that becomes a liability of the Buyer or any
Buyer Subsidiary under any bulk transfer law of any jurisdiction, under any
common law doctrine of de facto merger or successor liability, or otherwise by
operation of law).
(c) Notwithstanding anything to the contrary, (i) Seller shall
not have any liability under this Article VI in respect of any individual claim
(or group of related claims) unless such claim or group of related claims
exceeds $50,000, (ii) Seller shall not have any liability under this Article VI
except and only to the extent the aggregate of permitted claims exceeds a
deductible amount of $1,500,000, and (iii) Seller's aggregate liability under
this Article VI shall not exceed $______________ , which shall be an amount
equal to the sum of the present value of the sublease payments to be made by
Buyer related to the Leased Assets and the Purchase Price; provided, however,
that the foregoing limitations shall not apply to Seller's obligations under
Section 2.2(b) above.
6.3 Indemnification Provisions for Benefit of Seller.
(a) In the event the Buyer or any Buyer Subsidiary breaches
any of its representations, warranties, and covenants contained in this
Agreement, provided that the Seller makes a written claim for indemnification
against the Buyer within the survival period with respect to its representations
and warranties, then the Buyer agrees to indemnify the Seller and the Seller
Subsidiaries from and against the entirety of any Adverse Consequences the
Seller and the Seller Subsidiaries shall suffer through and after the date of
the claim for indemnification
17
(but excluding any Adverse Consequences the Seller and the Seller Subsidiaries
shall suffer after the end of any applicable survival period) caused proximately
by the breach.
(b) Buyer agrees to indemnify the Seller and the Seller
Subsidiaries from and against the entirety of any Adverse Consequences the
Seller and the Seller Subsidiaries shall suffer caused proximately by any
liability of the Buyer or any Buyer Subsidiary which is an Assumed Liability.
6.4 Matters Involving Third Parties.
(a) If any third party shall notify any party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against the other party (the
"Indemnifying Party") under this Article VI, then the Indemnified Party shall
promptly (and in any event within five business days after receiving notice of
the Third
