Exhibit 99.02
NETWORK SERVICES, MARKETING AND COOPERATION AGREEMENT
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This NETWORK SERVICES, MARKETING AND COOPERATION AGREEMENT (as
amended, supplemented or otherwise modified from time to time, this "Agreement")
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is entered into as of September 28, 2000 by and between EXODUS COMMUNICATIONS,
INC. ("Exodus"), a Delaware corporation, and ASIA GLOBAL CROSSING LTD. ("AGC"),
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a Bermuda corporation. Exodus and AGC are sometimes referred to herein
individually as a "Party" and collectively as "Parties."
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W I T N E S S E T H:
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WHEREAS, pursuant to the Merger Agreement (such term and certain other
defined terms are defined in Section 1 hereof), Exodus is acquiring Center from
Global Crossing Ltd. ("GCL"), and the Parties have required the execution and
delivery of this Agreement as a condition precedent to AGC and Exodus entering
into the Merger Agreement;
WHEREAS, the Exodus Group is in the business generally described in
Part 1 of Annex A hereto (collectively, "Exodus Services," which term shall
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include enhancements, replacements or new versions of such services);
WHEREAS, among the Exodus Services is Internet Web-Hosting;
WHEREAS, among the various business segments engaged in by the AGC
Group is the business generally described in Part 2 of Annex A hereto
(collectively, "AGC Services" which term shall include enhancements,
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replacements or new versions of such services);
WHEREAS, among the AGC Services are the Network Services;
WHEREAS, the Parties desire that the AGC Group provide certain AGC
Services to the Exodus Group;
WHEREAS, the Parties desire that AGC be permitted to market the Exodus
Services; and
WHEREAS, the Parties desire to cooperate with respect to marketing and
development activities.
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties to this Agreement agree
as follows:
1. Definitions. Terms used herein which are not defined herein, but
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which have common meanings when used in the telecommunications or Internet
industry, shall have such common meanings when used herein. Terms defined in the
preamble, in the recitals and in the text hereof shall have their respective
meanings when used herein, and the following terms shall have the following
meanings:
"AGC Group" shall mean AGC and its direct and indirect Subsidiaries
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and its Affiliates which it Controls, excluding the Joint Venture Company.
"AGC Group Network" shall mean, collectively, the Metro-Networks, the
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Intra-Region Networks and the Inter-Regional Connections of AGC Group members,
in existence now or in the future owned and operated by the AGC Group.
"Affiliate" shall mean any corporation, company, partnership, joint
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venture, firm and/or entity
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which Controls, is Controlled by, or is under common Control with a Party.
"Capacity" shall mean transmission capacity delivered over network
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services or assets.
"Center" shall mean Global Center, Inc.
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"Change of Control" shall have the meaning set forth in Annex D
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hereto.
"Closing" shall mean the "Closing" as defined in the Merger Agreement.
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"Confidential Information" shall mean the provisions of this Agreement
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and any intellectual property or non-public technical or business information
written or orally disclosed or delivered by or on behalf of one party (the
"Disclosing Party") to the other party (the "Receiving Party"). Notwithstanding
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anything to the contrary in this Agreement, Confidential Information shall not
include:
(i) any information or material that is publicly known or available,
or becomes publicly known or available, without any act or
omission of the Receiving Party;
(ii) any information or material which prior to disclosure was
rightfully in the possession of the Receiving Party without
restriction on use or disclosure;
(iii) any information or material that is rightfully received by the
Receiving Party from a non-party without an obligation of
confidence; or
(iv) any information or material that is independently developed by
the Receiving Party without use or reference to any Confidential
Information of the Disclosing Party.
"Control", "Controlled" or "Controlling" shall mean the control of a
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person exercised through the direct or indirect ownership of greater than fifty
percent (50%) of the stock, shares or other voting interest of such person.
"GCL Group" shall mean, collectively, GCL and its direct and indirect
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Subsidiaries and Affiliates which it Controls, excluding the AGC Group and the
Joint Venture Company.
"Effective Time" shall mean the "Effective Time" as defined in the
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Merger Agreement.
"Exodus Group" shall mean, collectively, Exodus and its direct and
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indirect Subsidiaries and Affiliates which it Controls, including the Joint
Venture Company and its direct and indirect Subsidiaries and Affiliates in which
the Joint Venture Company has an ownership interest, but excluding the GCL Group
and the AGC Group.
"Internet Web-Hosting" shall mean the provision of physical space with
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Internet connectivity interconnected with servers or other types of data
processing equipment (other than solely data communications/networking
equipment).
"Intra-Region Network" shall mean a broadband network providing
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connections between AGC Group members city POPs in a particular region.
"Inter-Regional Connections" shall mean broadband telecommunication
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systems that connect Intra-Region Networks, consisting of submarine and
terrestrial links that are part of cable systems.
"Joint Venture Agreement" shall mean the Master Joint Venture
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Agreement, dated as of the date hereof, among Exodus and AGC relating to the
creation of a Joint Venture Company.
"Joint Venture Company" shall mean the "Company" as defined in the
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Joint Venture Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger, dated
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as of the date hereof, among GCL and Exodus and certain affiliated companies, as
the same may from time to time be amended, modified or supplemented.
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"Metro-Network" shall mean, with respect to a specified metropolitan
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area, a broadband telecommunication system connecting the Exodus and the Joint
Venture Company data centers, as well as to the Intra-Region Network by way of
POPs, and to key peering and strategic partners and customers, in each case,
within such metropolitan area.
"Minimum AGC Service Levels" shall mean the service levels required by
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the last sentence of Section 2(c) hereof.
"Minimum Exodus Service Levels" shall mean the service levels required
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by the last sentence of Section 3(c) hereof.
"Network Services" shall mean Capacity and/or connectivity (and any
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successor or substitute technology), both fixed and usage based, asset and
service form, used for the purpose of transporting voice, data and video,
including, but not limited to, private line (local and long haul), ATM and Frame
and IP services, such as managed IP services and IP transit. Network Services
does not include paid peering (end route destination traffic which is traffic
bound only for the network that it is connected to).
"Required Percentage" shall mean 50% until the Closing and thereafter
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shall mean 60%, as such percentage may be adjusted pursuant to Section 12(b)
hereof.
"Restricted Period" shall mean the period from the Effective Time
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until the second anniversary thereof.
"Subsidiary" shall mean as to any Person (a) any corporation of which
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more than 50% of the outstanding stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or one
or more Subsidiaries of such Person and (b) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such person have more than a 50% equity interest therein.
"Term" shall mean the term of this Agreement, which term shall begin
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as of the date hereof and end on the tenth (10th) anniversary of the date of
this Agreement, unless earlier terminated in accordance with the terms hereof.
"Territory" shall mean "Territory" as defined in the Joint Venture
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Agreement
2. AGC Services.
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(a) When used herein, provisions to the effect that AGC will be the
"Primary Provider" with respect to any Network Services mean that (i) the Exodus
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Group will, during the Term, promote AGC as its primary provider of Network
Services for its network operations in the Territory as set forth in Section 7
hereof; and (ii) the Exodus Group will, during the Term, purchase such amount of
Network Services from the AGC Group on the AGC Group Network so that the total
amount of such Network Services acquired from the AGC Group in the Territory in
the First Period (as defined in Annex E) and in any calendar year thereafter is
greater than or equal to the Required Percentage (calculated on a dollar value
basis) of the total Network Services acquired by the Exodus Group in the
Territory in such Period or calendar year, as the case may be. For purposes of
calculating the formula in (ii) above, purchases under commitments existing
prior to the date of this Agreement shall not be included, but renewals of such
commitments shall be included. Annex E hereto describes the method by which the
Exodus Group may "make-up" for a failure to comply with the Required Percentage
in any calendar year after the First Period. For purposes of calculating the
formula in (ii) above, (1) the level of transit utilized under contracts held by
an entity at the time of acquisition after the date hereof of such entity by
Exodus shall not be included; provided, that Exodus shall use reasonable efforts
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to terminate such contracts as soon as practicable, (2) transit under a peering
contract in existence today including renewals at the same levels which transit
has no incremental cost to Exodus shall not be included, and (3) short term
transit arrangements under existing contracts utilized between the date of
this
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Agreement and April 1, 2001 shall not be included.
(b) Exodus hereby agrees that the AGC Group is and will be the Exodus
Group's Primary Provider for Network Services the Exodus Group requires from
time to time during the Term. Notwithstanding the fact that the Exodus Group
commits only to acquire the Required Percentage of Network Services from the AGC
Group, the Exodus Group will give the AGC Group the opportunity to provide at
least sixty-seven percent (67%) of the Exodus Group's Network Services
requirements in the Territory from the AGC Group and the Exodus Group will use
reasonable efforts consistent with its business objectives to exceed sixty-seven
percent (67%).
(c) All Exodus Group requirements for Network Services will be
effected by Exodus executing, delivering and complying with a capacity purchase
agreement and/or a dark fiber acquisition agreement, such agreements to contain
prices determined in accordance with Section 4 hereof and other mutually agreed
terms and conditions; provided, that the existing capacity purchase agreements
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between the Parties may be amended or modified to accomplish such acquisitions
of Network Services. All other AGC Services provided hereunder by the AGC Group
will be supplied pursuant to mutually acceptable agreements for such services.
Each such agreement will contain service levels which are no less than the more
favorable of: (i) any service level agreement for AGC Services in existence
between the Parties on the date of this Agreement; (ii) any service level
agreement for AGC Services entered into between an Exodus Group member and a AGC
Group member after the date of this Agreement; and (iii) service level
agreements which are industry standard at the time of entering into such
agreement.
(d) The Parties acknowledge and agree that the Exodus Group may apply
a portion, not to exceed $25,000,000 of the Credit Amount described in Section
2(d) of the Network Services, Marketing and Cooperation Agreement, dated as of
the date hereof, between Exodus and GCL (the "GCL Network Agreement"), against
purchases of assets or services by the Exodus Group under this Agreement (where
the commitment to purchase occurred after January 1, 2001, excluding leases) but
not against any payments to be made by the Exodus Group prior to January 1,
2001. Subject to the provisions of Section 2(d) of the GCL Network Agreement,
the $25,000,000 of the Credit Amount may be used by Exodus at any time, for any
purchase by the Exodus Group of Network Services on the AGC Group Network, in
Exodus' sole discretion, and will count towards Exodus' commitment under Section
2(a), above.
(e) The Exodus Group may refer its customers to the AGC Group for AGC
Services or request a AGC Group member to co-bid, in which case AGC will pay
Exodus a commission in an amount to be agreed. The Exodus Group will not
resell, lease or otherwise dispose of AGC Services purchased by it except as
expressly permitted by the next sentence. The Exodus Group shall be entitled to
resell AGC Services in connection with: (i) providing dedicated Internet
access, (ii) moving data between data centers as part of Internet Web-Hosting,
(iii) providing transit services to move its traffic, or (iv) occasionally
reselling such AGC Services as part of a bundle of Exodus Services. AGC will
ensure that all pricing to the Exodus Group for resale of AGC Services will
allow the Exodus Group to be competitive with third parties in the marketplace.
If at any time the Exodus Group desires to resell AGC Services, the parties will
negotiate a resale contract that is separate from this Agreement, containing
terms and conditions mutually agreeable to the Parties.
(f) AGC acknowledges that Exodus may desire to terminate some assets
or services it acquires from the AGC Group or has acquired from the AGC Group
prior to the date of this Agreement and replace such assets or services with
different assets or services. The AGC Group will accommodate all such requests
as follows: (i) for leased lines (services) Exodus shall have the right to
replace commitments with new assets or services of equal or greater value and
take advantage of future price reductions on a go forward basis; and (ii) for
purchased assets, Exodus shall have the right to resell an asset to AGC and
receive credit for the unused remaining useful life of the asset (based on the
then current Exodus book value or other value of the asset at the time of resale
as determined by the parties) for the purchase of other assets or services of
equal or greater value provided that the Parties can account for such resale in
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a way that does not disrupt the accounting treatment for IRU sales employed by
AGC from time to time and the economics of the asset purchase transactions are
preserved.
(g) If the AGC Group cannot meet the Exodus Group's availability needs
(type of Capacity at the time and location needed) for any AGC Services, then
the Exodus Group member may secure the service or asset from another provider
and such replacement services shall not be considered purchases of Network
Services
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for the purpose of calculating the Required Percentage; provided, that if the
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Exodus Group desires Network Services in a location where Network Services from
the AGC Group are not available, the AGC Group may, at its sole option, choose
to make such Services available to the Exodus Group at a reasonable future date,
so long as during the interim period the AGC Group "makes whole" the Exodus
Group for any excess costs incurred by the Exodus Group because it obtained
temporary service from a third party. Before the Exodus Group shall be
obligated to acquire the delayed AGC Group Service, the Parties shall have
agreed on the costs to be reimbursed to the Exodus Group. If any Network
Services purchased from the AGC Group by the Exodus Group are not maintained at
the Minimum AGC Service Levels and the Exodus Group purchases replacement
Network Services from another provider, then such replacement services shall not
be considered in calculating the Required Percentage.
(h) Without limiting the obligations contained in (c) and (b) above,
and distinct therefrom, the Exodus Group will notify AGC of its needs for
additional Network Services in the Territory at least five (5) days before it
notifies other carriers in the Territory and will give the AGC Group the
opportunity to provide such Network Services in the Territory.
3. Exodus Services. (a) When used herein, provisions to the effect that
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the Exodus Group will be the "Exclusive Provider" with respect to any Internet
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Web-Hosting services mean that the AGC Group will, during the Restricted Period,
exclusively utilize the Exodus Group for all Internet Web-Hosting services the
AGC Group requires or wishes to resell or market or use for its internal
purposes within the Territory; provided, that the AGC Group may use itself or
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other sources for any such services in the event that (i) Exodus Group cannot
meet the AGC Group availability needs (type of service, including space, power
or infrastructure at the time needed) or (ii) the Exodus Group does not respond
affirmatively within three business days of receipt of a request for a service,
or (iii) the Exodus Group does not meet or exceed the Minimum Exodus Service
Levels for the particular service for a particular customer, the customer has
notified AGC that such service levels have not been met and AGC reasonably
believes it has to move the customer to provide the service and such service
levels provided, that AGC shall first diligently try to solve the problem with
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the Exodus Group, including utilizing appropriate escalation procedures as
mutually agreed or (iv) in response to a request by AGC, the Exodus Group
declines to develop an enhancement or new version of such service or declines to
provide a product, in each case that the Exodus Group is developing for or
providing to one or more of its customers, or (v) a customer of AGC wants a
service included in the Internet Web-Hosting services in a location where the
Exodus Group is not located; provided that Exodus shall first be allowed to try
to convince the customer that another location is suitable or provide such
services through a third party or (vi) the service is not competitively priced
by the Exodus Group (provided that the Parties will develop a fair mechanism to
determine when such prices are not competitive), or (vii) the customer's
expansion rights for space or services are expressly limited by contract by the
Exodus Group, or (viii) the customer has left the Exodus Group and refuses to
use its services after consultation with the Exodus Group, or (ix) the Exodus
Group cannot provide reasonable access for AGC to perform services for customers
needs, or (x) in response to a request by AGC on behalf of a customer, the
Exodus Group declines to develop an enhancement or new version of such service
or declines to provide a product, in each case that another provider is offering
such customer, and such enhancement or new version or such product cannot be
reasonably severed from the overall service desired by such customer.
(b) AGC hereby agrees to use the Exodus Group as the AGC Group's
Exclusive Provider for Internet Web-Hosting services the AGC Group requires from
time to time during the Restricted Period.
(c) All AGC requirements for Internet Web-Hosting will be effected by
AGC executing, delivering and complying with a master service agreement,
reseller agreement and/or sales representative agreement in mutually agreed
forms, which agreements shall provide for, among other things, service, support,
maintenance, installation, help desk, billing, technical sales support and
project management. In addition, such agreements shall provide for marketing
support, including, without limitation, joint advertisements, press
announcements, collateral material, training, co-branding arrangements and RFP
support. All other Exodus Services provided hereunder by the Exodus Group will
be supplied pursuant to mutually acceptable agreements for such Services. Each
such agreement will contain service levels which are no less than the more
favorable of: (i) any service level agreement for Exodus Services in existence
between the Parties on the date of this Agreement; (ii) any service level
agreement for Exodus Services entered into between an Exodus Group member and a
AGC Group member after the date of this Agreement; and (iii) service level
agreements which are industry standard at the time of entering into such
agreement.
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(d) Without the written permission of Exodus, the AGC Group will not,
during the term of this Agreement, sell Internet access to any customer for such
customer's operations within a data center operated by an Exodus Group member.
4. Payment Terms for Services. (a) Pricing terms for Network Services
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shall be as set forth in Annex B. AGC will ensure that all pricing of the AGC
Group to the Exodus Group for AGC Services, which are not Network Services, will
be competitive in the marketplace.
(b) During the Restricted Period, Exodus will ensure that all pricing
of the Exodus Group to the AGC Group for Exodus Services (i) will in the case of
Internet Web-Hosting to be used by the AGC Group for its own use, be based on
the standards for the pricing offered by the AGC Group in items (2) [***], (3)
and/or (4) of Annex B and (ii) will, in all other cases, allow the AGC Group to
be competitive with third parties in the marketplace. The Parties will meet to
adopt a formula for such Exodus Group pricing in accordance with the foregoing
guidelines, and at such time the Parties shall complete Annex C hereto.
(c) The Parties will consult with each other regarding increases of
prices for services and the basis therefor.
5. Network Arrangements. (a) As reasonably requested by the Exodus Group
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and mutually agreed to by the Parties, AGC will extend the Metro-Networks within
each city served by the AGC Group Network (the "New Network") to provide
connectivity between Joint Venture Company Data Centers and the AGC Network in
order to enable the Exodus Group to meet anticipated future demands and to
permit the Exodus Group to purchase services in accordance with the terms
hereof. AGC will use reasonable efforts to complete such new construction or
acquisitions on or before the date set forth for completion in the capacity
purchase agreement defining the precise specifications and needs of the New
Network which date will not be later than six (6) months from the date of such
capacity purchase agreement. Exodus will cooperate in all reasonable manners
with such new construction. The New Network is more specifically described in
paragraphs (b), (c) and (d) below.
(b) The New Network will consist of a 2.5 GB/s, wavelength based,
Intra-Region Network, which will be upgraded as soon as reasonably practicable
to 10 GB/s on terms to be agreed.
(c) The Intra-Region Networks will be linked by the Inter-Regional
Connections.
(d) At Exodus' request, the AGC Group will, extend the Intra-Regional
Network to the Joint Venture Company data centers, provide connectivity within a
metropolitan area between such data centers and/or provide connectivity between
such data centers and Exodus key partner locations; provided, that Exodus, the
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Joint Venture Company, or its key partner, as the case may be, will provide, at
its sole cost and expense, the building access rights, co-location space for the
transmission equipment, racking, power, HVAC, riser cable, etc. to provision
such service to the Joint Venture Company data centers or key party locations.
Exodus or the Joint Venture Company will pay for the construction of such
extensions and connectivity either on a [***] basis or on another basis mutually
agreed to by the Parties. If Exodus or the Joint Venture Company elects the
cost-plus payment plan, AGC will arrange financing for Exodus or the Joint
Venture Company, as the case may be, which may be secured by the construction.
(e) AGC will establish a preferred peering relationship with Exodus,
which will allow the AGC Group IP users direct access to Exodus and Center data
centers. During the Term (i) the Parties will establish and maintain
interconnections between their respective layer 3 networks on a settlement free
basis, (ii) Exodus and AGC will share equally all of the infrastructure costs
both one-time and recurring associated with the peering links, (iii) peering
will be established separately in each region of the world or at mutually agreed
upon locations, (iv) in the event that the peering relationship causes a
material undue economic burden on one of the Parties, the Parties will meet in
good faith to find a resolution to such situation, (v) the peering
interconnection will maintain [***] capacity headroom and will be upgraded as
needed to maintain this headroom, (vi) each Party will be responsible for its
own purchase, deployment and maintenance of equipment needed to support these
interconnections, and (vii) the
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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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Parties will establish a service level agreement with latency and packet loss
benchmarks, which in no event will be less than the respective Minimum Service
Levels.
(f) During the Term, AGC will make all AGC Services available to the
Exodus Group on an equal access basis. During the Term, AGC may, in its sole
discretion, make available to the Exodus Group at the pricing set forth in Annex
B, Network Services which the AGC Group resells in the ordinary course of its
business, provided that, the Exodus Group's purchases of such services or assets
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shall be considered in the calculation of the Required Percentage.
6. Cooperation and Development Committee. (a) The Parties hereby agree
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to cooperate in good faith to develop mutually beneficial products for Exodus
and AGC customers.
(b) Each of Exodus and AGC agrees to assist the other in achieving and
maintaining technological and operational superiority. Each of Exodus and AGC
will provide the other [***]. Among other things, Exodus will help educate and
train AGC's employees to aid AGC in the marketing of Exodus Services and Exodus
will establish support teams to provide AGC with technical sales support and
product management, for example, product and market feedback.
(c) The Parties will promptly establish a Development Committee to (i)
carry out the provisions of paragraphs (a) and (b) above, (ii) publicly promote
customer success stories, (iii) implement the provisions of this Agreement and
(iv) assure compliance by each Party with applicable provisions of this
Agreement (including, without limitation, to monitor and ensure compliance with
the pricing provisions and the Required Percentage provisions set forth herein).
(d) In connection with its obligations under clause (iv) of Section
6(c) hereof, if requested by a Party, the Development Committee shall arrange
for a qualified independent third party to review the methods and procedures
utilized by a Party in complying with the pricing and Required Percentage
provisions of this Agreement. Such review shall be done in the least intrusive
manner possible and such review shall not include a review of all of the books
and records of a Party. Such review may not be undertaken until after the
[***]of the Closing and not more than [***] thereafter; provided, that if any
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such review finds material discrepancies in compliance by a Party, then the next
review may take place [***] thereafter. The Party requesting such a review
shall pay all expenses of such review. Any discrepancy discovered by such
review shall be promptly cured by the responsible Party.
7. Preferred Provider Marketing. During the Term, Exodus will promote
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the AGC Group as the Exodus Group's Primary Provider of Network Services.
8. Marketing. (a) The AGC Group may sell or use Exodus Services on any
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one or more of the following bases and the AGC Group shall be offered equal
access to all Exodus Services:
(i) The AGC Group may resell Exodus Services (subject to
restrictions imposed by suppliers of third-party products and
services); provided, that the customer shall be informed that the
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Exodus Group is providing the basic service; and/or
(ii) The AGC Group may refer its customers to Exodus or request
Exodus to co-bid, in which case Exodus shall pay AGC a commission in
an amount to be agreed.
(b) Among other marketing aids, Exodus will provide the services
described as being part of the agreements referred to in Section 3(c) hereof.
(c) The Development Committee established under Section 6(c) shall be
responsible for resolving channel conflict issues with respect to the resale of
Exodus Services caused by the AGC Group's rights to resell Exodus Services under
this Section 8.
(d) After the Restricted Period, the Exodus Group will be the AGC
Group's "preferred"
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[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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provider, which means that if AGC periodically wishes to choose a non-exclusive
third party to provide a significant portion of its Internet Web-Hosting
services, AGC will notify the Exodus Group and give the Exodus Group the
opportunity to make the first offer to provide such services.
9. Intellectual Property. Each Party will own all intellectual property
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owned or developed by it. Neither Party grants the other a license to use its
intellectual property. Each Party will safeguard and keep confidential the
other Party's intellectual property.
10. Representations. (a) AGC hereby represents and warrants to Exodus
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that (i) AGC is a corporation duly organized and validly existing under the laws
of Bermuda; (ii) the execution, delivery and performance of this Agreement by
AGC has been duly authorized by all necessary corporate action on the part of
AGC and this Agreement is a valid, binding and enforceable obligation of AGC
enforceable with its terms and (iii) the execution, delivery and performance of
this Agreement by AGC does not violate, conflict with or constitute a breach of
the organizational documents, any contract binding on the AGC Group, or any
order, decree or judgment of any court, tribunal or governmental authority
binding on any member of the AGC Group.
(b) Exodus hereby represents and warrants to AGC that (i) Exodus is a
corporation duly organized and validly existing under the laws of the State of
Delaware; (ii) the execution, delivery and performance of this Agreement by
Exodus has been duly authorized by all necessary corporate action on the part of
Exodus and this Agreement is a valid, binding and enforceable obligation of
Exodus enforceable in accordance with its terms; and (iii) the execution,
delivery and performance of this Agreement by Exodus does not violate, conflict
with or constitute a breach of the organizational documents, any contract
binding on the Exodus Group, or any order, decree or judgment of any court,
tribunal or governmental authority binding on any member of the Exodus Group.
11. AGC. THIS SECTION LEFT INTENTIONALLY BLANK.
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12. Change of Control. (a) In the event that AGC undergoes a Change of
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Control, and the acquiring party has a business that includes some of the
Internet Web-Hosting services, then AGC shall have the option, at its sole
election, to terminate the provisions of this Agreement in Section 3(b) hereof
relating to AGC's obligation to use the Exodus Group as AGC's Exclusive Provider
for Internet Web-Hosting services on not less than 60 days' written notice, as
soon as a proposed Change of Control becomes known to AGC (and which notice may
be given prior to the effectiveness of the Change of Control but will not be
effective until after the Change of Control occurs) or at any time thereafter.
Nothing in this Section 12(a) shall affect the AGC Groups' obligations under
Section 30 of this Agreement.
(b) In the event that Exodus undergoes a Change of Control, and the
acquiring party is a Network Services provider, then Exodus shall have the
option, at its sole election, to send a notice to terminate this Agreement
(such termination to be effective thirty-six (36) months following the
effectiveness of the Change of Control) as soon as the proposed Change of
Control becomes known to Exodus (and which notice may be given prior to the
effectiveness thereof) or at any time prior to the effectiveness of the Change
of Control. If Exodus exercises its right under this Section 12(b) to terminate
this Agreement, the Required Percentage for the first twelve month period
following the effectiveness of the Change of Control shall be 60%, for the
second twelve month period following the effectiveness of the Change of Control
shall be 45%, and for the last twelve (12) month period following the
effectiveness of the Change of Control shall be 30%, and the last sentence of
Section 2(b) will cease to apply, provided that in no event will the Agreement
be terminated or the Required Percentage be reduced in the first three(3) years
of the Term. Any portion of the credit described in Section 2(d) which is
unused as of the date of notice of termination under this Section shall be
forfeited by Exodus.
13. [THIS SECTION LEFT INTENTIONALLY BLANK].
---------------------------------------
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS XX XXX XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA.
15. No Third Party Beneficiaries. The Joint Venture Company shall be a
----------------------------
third party beneficiary of
8
this Agreement. Except as set forth in the previous sentence, this Agreement
does not provide and is not intended to provide third parties (including, but
not limited to, customers of AGC and Exodus) with any remedy, claim, liability,
reimbursement, cause of action or any other right.
16. Assignment. (a) This Agreement and all of the provisions hereof shall
----------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(b) AGC shall solely be responsible for complying with all of the
terms binding on the AGC Group hereunder and shall not be permitted to assign,
transfer or otherwise dispose of any or all of its right, title or interest
hereunder or delegate any or all of its obligations hereunder to any person or
entity except that AGC shall be permitted to (i) effect a collateral assignment
of its rights hereunder to one or more lenders to AGC or its Affiliates and (ii)
assign all of its rights hereunder and delegate any or all of its obligations
hereunder to any present or future entity succeeding to substantially all the
assets of AGC. AGC shall give Exodus notice of any such assignment, transfer or
other disposition or any such delegation.
(c) Exodus shall solely be responsible for complying with all of the
terms binding on "the Exodus" Group hereunder and shall not be permitted to
assign, transfer or otherwise dispose of any or all of its right, title or
interest hereunder or delegate any or all of its obligations hereunder to any
person or entity except that Exodus shall be permitted to (i) effect a
collateral assignment of its rights hereunder to one or more lenders to Exodus
or its Affiliates and (ii) assign all of its rights hereunder and delegate all
of its obligations hereunder to any present or future entity succeeding to
substantially all of the assets of Exodus. Exodus shall give AGC notice of any
such assignment, transfer or other disposition or any such delegation.
(d) Any Party may assign rights hereunder (but not delegate
obligations, although the assignee may assume and agree to pay and perform such
obligations) to Affiliates; provided, that such assigning Party shall remain
--------
primarily liable to pay and perform all its obligations and liabilities
hereunder.
(e) Any assignment, transfer or other disposition by any party hereto
which is in violation of this Section shall be void and of no force and effect.
17. Notices. Each notice, demand, certification or other communication
-------
given or made under this Agreement shall be in writing in English and shall be
delivered by hand or sent by registered mail or by facsimile transmission to the
address of the respective party as shown below (or such other address as may be
designated in writing to the other party hereto in accordance with the terms of
this Section):
If to Exodus:
Exodus Communications, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: General Counsel
If to AGC:
Asia Global Crossing Ltd.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: General Counsel
9
Any change to the name, address and facsimile numbers may be made at any
time by giving fifteen (15) days prior written notice in accordance with this
Section. Any such notice, demand or other communication shall be deemed to have
been received, if delivered by hand, at the time of delivery or, if posted, at
the expiration of seven (7) days after the envelope containing the same shall
have been deposited in the post maintained for such purpose, postage prepaid,
or, if sent by facsimile, at the date of transmission if confirmed receipt is
followed by postal notice.
18. Severability. If any provision of this Agreement is found by an
------------
authority having jurisdiction to be void or unenforceable, such provision shall
be deemed to be deleted from this Agreement and the remaining provisions shall
continue in full force and effect.
19. Headings. The Section headings of this Agreement are for convenience
--------
of reference only and are not intended to restrict, affect or influence the
interpretation or construction of provisions of such Section.
20. Counterparts. This Agreement may be executed in counterparts, each of
------------
which when executed and delivered shall be deemed an original. Such
counterparts shall together (as well as separately) constitute one and the same
instrument.
21. Entire Agreement. This Agreement supersedes all prior understandings
----------------
between the parties hereto with respect to the subject matter hereof and
constitutes the entire agreement with respect to the subject matter herein.
This Agreement shall not be modified or amended except by a writing signed by
authorized representatives of the parties hereto.
22. Publicity and Confidentiality. (a) Confidential Information will be
-----------------------------
kept confidential and shall not be disclosed, in whole or in part, to any person
other than affiliates, officers, directors, employees, agents or representatives
of a party or a Party's legal counsel or independent auditors, or prospective
lenders to either Party (collectively, "Representatives") who need to know such
Confidential Information for the purpose of negotiating, executing and
implementing this Agreement and the transactions contemplated hereby. Each
Party agrees to inform each of its Representatives of the non-public nature of
the Confidential Information and to direct such persons to treat such
Confidential Information in accordance with the terms of this Section. Each
Party agrees to be liable to the other Party for any breach of the terms hereof
by its Representatives. Nothing herein shall prevent a Party from disclosing
Confidential Information (i) upon the order of any court or administrative
agency, (ii) as required by law or upon the request or demand of, or pursuant to
any regulation of, any regulatory agency or authority, (iii) to the extent
reasonably required in connection with the exercise of any remedy hereunder,
and/or (iv) to any actual or proposed permitted assignee of all or part of its
rights hereunder provided that such actual or proposed assignee agrees in
writing to be bound by the provisions of this Section. Notwithstanding the
foregoing, in the event that either Party intends to disclose any Confidential
Information pursuant to clause (i) or (ii) of the preceding sentence, such Party
agrees to (x) provide the other Party with prompt notice before such disclosure
in order that such Party may attempt to obtain a protective order or other
assurance that confidential treatment will be accorded such Confidential
Information and (y) cooperate with such Party in attempting to obtain such order
or assurance. Each Party agrees that it will maintain all Confidential
Information disclosed to it in strict confidence and will take all reasonable
measures to maintain the confidentiality of all such Confidential Information in
its possession or control, but in no event less than the measures it uses to
maintain the confidentiality of its own information of similar importance.
(b) The Parties will agree upon a mutually satisfactory press release
describing this Agreement.
23. LIMITATION OF LIABILITY. IN NO EVENT SHALL EXODUS (OR ANY OF ITS
-----------------------
SUBSIDIARIES OR AFFILIATES) OR AGC (OR ANY OF ITS SUBSIDIARIES OR AFFILIATES) BE
LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR
PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUE, LOSS OF
BUSINESS OPPORTUNITY OR THE COSTS ASSOCIATED THEREWITH.
24. Approvals; Licenses. The performance of this Agreement by each Party
-------------------
hereto is contingent upon the obtaining and continuance of such governmental
approvals, consents, authorizations, licenses and permits as may be required by
such party for performance by a Party hereunder. The Parties shall use
reasonable efforts to
10
obtain and continue, and to have continued, such approvals, consents, licenses
and permits. No license under patents is granted by either Party or shall be
implied or arise by estoppel in the other Party's favor with respect to any
apparatus, system or method used by either Party in connection with the
transactions contemplated hereby.
25. Default. If either Party is in breach of this Agreement and such
-------
breach continues for a period of at least thirty (30) days after written notice
from the non-breaching Party of such breach and if such breach is not fully
remedied within thirty (30) days of such notification, the non-breaching Party
shall be entitled to pursue any and all rights and legal and equitable remedies,
including its rights and remedies to enforce the breaching Party's obligations
under this Agreement.
26. Force Majeure. Neither Party shall be responsible for any loss,
-------------
damage, delay or failure of performance resulting directly or indirectly from
any cause which is beyond its reasonable control ("Force Majeure"), including
but not limited to: delay in obtaining or failure to obtain or loss of any
approvals, permits, licenses or rights-of-way (or any renewals thereof), except
to the extent that any such delay or failure is caused by the responsible
Party's negligence in applying or maintaining any such approval, permit, license
or right-of-way; acts of God or of the public enemy; acts or failure to act of
any governmental authority not caused by any act or omission of such Party;
government codes, ordinances, laws, rules, regulations or restrictions, unless
any such restriction applies only to the responsible Party because of any act or
omission of such Party, and not generally to providers of similar services; or
war or warlike operations, civil war or commotion, mobilizations or military
call-up, and acts of similar nature; revolution, rebellions, sabotage, and
insurrections or riots; fires, floods, epidemics or quarantine restrictions;
strikes, and other labor actions; material shortages or unavailability or other
delay not resulting from the responsible Party's failure to place timely orders;
freight embargoes; unworkable weather; or acts or omissions of transporters or
contractors, other than ones hired by the AGC Group unless caused by a Force
Majeure. If any Force Majeure causes an increase in the time required for
performance of either Party's obligations hereunder, such Party shall be
entitled to an equitable extension of time to complete such obligations in each
case equal to at least one day for each day of delay resulting from the Force
Majeure.
27. Relationship of the Parties. This Agreement shall not form a joint
---------------------------
venture or partnership or similar business arrangement between the Parties
hereto, and nothing contained herein shall be deemed to constitute a partnership
or joint venture or similar business arrangement or make a Party the agent of
the other Party for any purposes. A Party has no authority or power to bind, to
contract in the name of, or to create a liability for the other Party in any way
or for any purpose.
28. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TO THE FULLEST
--------------------
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.
29. Effectiveness; Term; True-Up. (a) This Agreement shall become
----------------------------
effective immediately upon execution and delivery hereof. At the end of the
Term this Agreement will terminate.
(b) Notwithstanding the foregoing, if the Merger Agreement is
terminated prior to the Closing taking place, then AGC or Exodus may elect, at
its sole discretion, by written notice to the other Party received within [***]
of termination of the Merger Agreement, to cause this Agreement to terminate
effective [***] following the date of the notice of termination.
(c) The Parties rights and obligations under Sections 9, 14, 15, 17 to
23 and 28 shall survive and continue beyond the termination of this Agreement.
All capacity purchase, dark fiber, web-hosting, distribution and other
agreements existing at the time of termination and executed pursuant to or
contemplated by this
_______________________
[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
11
Agreement shall not be affected by such termination unless they expressly state
otherwise. Without limitation to the foregoing, the Exodus Group will continue
to support existing customers of the AGC Group that are utilizing Exodus
Services.
(d) If upon the termination of this Agreement for any reason, the
Exodus Group shall not have fulfilled its Required Percentage obligation under
Section 2(a) hereof, the Exodus Group will promptly purchase such amount of
Network Services, or otherwise meet its Required Percentage obligation, so that
it brings itself into compliance with such obligation.
30. Joint Venture Agreement. The parties acknowledge the provisions
------------------------
of Sections 6.9 and 6.13 of the Joint Venture Agreement, and nothing contained
herein is intended in any way to reduce either party's obligations under such
provisions.
12
IN WITNESS WHEREOF, the parties hereto have executed this Network Services,
Marketing and Cooperation Agreement as of the date first above written.
EXODUS COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
Chief Executive Officer and Chairman
ASIA GLOBAL CROSSING LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President and General
Counsel
13
ANNEX A
SERVICES
--------
Part 1
------
Exodus Services
---------------
Internet infrastructure services incorporating:
. Internet Web-Hosting;
. IP network services, using primarily the Exodus network;
. hardware and software procurement and installation;
. content distribution, integration and management services;
. systems applications; and
. professional services.
Part 2
------
AGC Services
------------
AGC is a provider of global Internet Protocol, or "IP", and data and voice
services for both wholesale and retail customers. It is building a state-of-
the-art fiber optic network of global scope and scale to serve as the backbone
for its services. AGC provides services in several principal segments. The
segment that comprises the "AGC Services" is the telecommunications services
segment which offers a variety of integrated telecommunications products and
services through its global fiber optic network, including domestic and
international voice services, data products and structured bandwidth services,
and other communications products and other services offered by the AGC Group.
AGC Services include Network Services.
ANNEX B
PRICING FOR NETWORK SERVICES
The AGC Group will provide Network Services to each member of the Exodus Group
purchasing any such Network Services at a price equal to the lower of:
(1) the lowest price of any sale (excluding co-build arrangements and other
arrangements whereby an entity participates in a network system during
construction through a purchase [***] of the proposed initial capacity of such
system and/or by sharing in [***] of the construction costs, known as "anchor
tenant" arrangements) of such service (on a similar product basis) to a non-
Affiliated entity activating such asset or service ("MFN"), less five percent
(5%); or
(2) the lowest price of any sale of such service (on a similar product basis) to
an Affiliated party in which a AGC Group member has direct or indirect ownership
[***] of the stock, shares or other voting interest of the non-Affiliated party
activating such asset or service; or
(3) if there is no instance of a non-Affiliated entity activating a particular
asset or service and there is an instance for one or more Affiliates activating
such asset or service for its own use, the lowest price of any sale of such
asset or service (on a similar product basis) to any such Affiliated party; or
[***]
________________________
[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ANNEX C
PRICING FOR EXODUS SERVICES
---------------------------
[To be completed by the Parties Pursuant to Section 4(b) hereof.].
ANNEX D
CHANGE OF CONTROL
-----------------
"Change of Control" shall mean any of the following: (i) a merger, consolidation
or other business combination or transaction to which AGC or Exodus is a party
if the shares of AGC's or Exodus' (as the case may be) common stock outstanding
immediately prior to the effective date of such merger, consolidation or other
business combination or transaction (or the shares of common stock into which
they are converted or exchanged pursuant to such merger, consolidation or other
business combination or transaction) do not represent 50% or more of the voting
power of the surviving corporation (or its parent) following such merger,
consolidation or other business combination or transaction; (ii) an acquisition
by any entity of 50% or more of the voting power of AGC or Exodus, other than by
a parent company which has substantially the same shareholders as AGC or Exodus
(as the case may be) had prior to such event; or (iii) a sale of all or
substantially all the consolidated assets of AGC or Exodus to any entity, other
than to a parent company which has substantially the same shareholders as AGC or
Exodus (as the case may be) had prior to such event.
ANNEX E
REQUIRED PERCENTAGE CALCULATION
The Required Percentage shall be calculated as follows: the first period (the
"First Period") of calculation shall be from the date of this Agreement until
-------------
[***], thereafter, the Required Percentage shall be calculated on an annual
calendar year basis.
If, in any calendar year following the First Period, the Exodus Group fails to
meet its Required Percentage but, has at least met one half of its Required
---
Percentage obligation for that year, the Exodus Group will be entitled to, and
shall be obligated to, make up such shortfall in the following calendar year as
follows:
(a) all purchases of Network Services in such following calendar year shall be
applied first to meet the Required Percentage for such year; and
(b) any such shortfall plus the "Applicable Premium" shall be paid in such
following calendar year (the "Applicable Premium" shall mean an amount equal to
------------------
the product of (A) the Required Percentage for the previous year multiplied by
the total Network Services purchased by the Exodus Group in such year from all
providers and (B) [***]).
If in the First Period or any succeeding calendar year the Exodus Group exceeds
the Required Percentage, the amount of such excess may not be carried forward as
a credit for the following calendar year.
______________________
[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
