EXHIBIT 99.01
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 GLOBAL CROSSING LTD. ("GCL"), a
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Bermuda corporation. Exodus and GCL are sometimes referred to herein
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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
GCL, and the Parties have required the execution and delivery of this Agreement
as a condition precedent to GCL 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 GCL
Group is the business generally described in Part 2 of Annex A hereto
(collectively, "GCL Services" which term shall include enhancements,
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replacements or new versions of such services);
WHEREAS, among the GCL Services are the Network Services;
WHEREAS, the Parties desire that GCL provide certain GCL Services to
Exodus;
WHEREAS, the Parties desire that GCL 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 which
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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:
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"AGC Group" shall mean Asia Global Crossing Ltd. ("AGC") and its
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direct and indirect Subsidiaries and entities in which AGC has an ownership
interest.
"Affiliate" shall mean any corporation, company, partnership, joint
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venture, firm and/or entity which Controls, is Controlled by, or is under common
Control with a Party.
"Applicable Territory" shall mean all areas of the world other than
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the Asian Territory.
"Asian Territory" shall mean "Territory" as defined in the Joint
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Venture Agreement.
"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.
"Credit Amount" means $100,000,000 which will be reduced dollar-for-
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dollar for each dollar of useage credit that Exodus applies to the AGC Group in
accordance with the terms of the Network Services, Marketing and Cooperation
Agreement, dated as of the date hereof,
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between Exodus and AGC; provided, however, Exodus agrees not to apply more than
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$25,000,000 of such useage credit to the AGC Group.
"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 Exodus Controls, excluding the Joint
Venture Company, the GCL Group and the AGC Group.
"GCL Group" shall mean, collectively, GCL and its direct and indirect
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Subsidiaries and Affiliates which GCL Controls, excluding the AGC Group and the
Joint Venture Company.
"GCL Group Network" shall mean, collectively, the Metro-Networks, the
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Intra-Region Networks and the Inter-Regional Connections of GCL Group members,
in existence now or in the future owned and operated by the GCL Group.
"Internet Web-Hosting" shall have the meaning set forth in Section
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30(f) hereof.
"Intra-Region Network" shall mean a broadband network providing
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connections between GCL Group members city POPs in a particular region, e.g.,
North American Crossing.
"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 the Parties and certain affiliated companies, as
the same may from time to time be amended, modified or supplemented.
"Metro-Network" shall mean, with respect to a specified metropolitan
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area, a broadband telecommunication system connecting Exodus and Center 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 Exodus Service Levels" shall mean the service levels required
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by the last sentence of Section 3(c) hereof.
"Minimum GCL Service Levels" shall mean the service levels required by
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the last sentence of Section 2(c) hereof.
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"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%, as such percentage may be
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adjusted pursuant to Section 12(b) hereof.
"Restricted Period" shall have the meaning given to such term in
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Section 30(a) hereof.
"Subsidiary" shall have the meaning given such term in Section 30(f)
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hereof.
"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.
2. GCL Services.
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(a) When used herein, provisions to the effect that GCL will be the
"Primary Provider" with respect to any Network Services mean that (i) Exodus
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will, during the Term, promote GCL as its primary provider of Network Services
for its network operations as set forth in Section 7 hereof; and (ii) the Exodus
Group will, during the Term, purchase such amount of Network Services from the
GCL Group on the GCL Group Network so that the total amount of such Network
Services acquired from the GCL Group in the Applicable 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 Applicable
Territory in such Period or calendar year, as the case may be. For purposes of
calculating the foregoing formula, purchases under commitments existing prior to
the date of this Agreement shall not be included, but renewals of such
commitments shall be included; provided, that the transition services provided
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under Section 5(g) hereof shall not be included in the calculations of the
Required Percentage. Annex E hereto describes the method by which 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 foregoing
formula, (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 to terminate
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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
Agreement and April 1, 2001 shall not be included.
(b) Exodus hereby agrees that the GCL 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.
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(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 GCL Services provided hereunder by the GCL Group
will be supplied pursuant to mutually acceptable agreements for such services.
Each such agreement will contain [***] of: (i) any [***] for GCL Services in
existence between the Parties on the date of this Agreement; (ii) any [***] for
GCL Services entered into between an Exodus Group member and a GCL Group member
after the date of this Agreement; and (iii) [***] which are industry standard at
the time of entering into such agreement.
(d) Effective upon the Closing, GCL will grant Exodus a usage credit
equal to the Credit Amount to be applied 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: (i) in the case of the first half of the Credit
Amount, prior to the later of January 1, 2001 and the Closing; and (ii) in the
case of the remaining amount, prior to January 1, 2002. Subject to the foregoing
sentence, the Credit Amount may be used by Exodus at any time, for any purchase
by the Exodus Group of Network Services on the GCL Group Network, in Exodus'
sole discretion, and will count towards Exodus' commitment under Section 2(b),
above.
(e) The Exodus Group may refer its customers to the GCL Group for GCL
Services or request a GCL Group member to co-bid, in which case GCL will pay
Exodus a commission in an amount to be agreed. The Exodus Group will not resell,
lease or otherwise dispose of GCL Services purchased by it except as expressly
permitted by the next sentence. The Exodus Group shall be entitled to resell GCL
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 GCL Services as part of a bundle of Exodus Services. GCL will ensure that
all pricing to the Exodus Group for resale of GCL 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 GCL Services, the parties will negotiate a
resale contract that is separate from this Agreement, containing terms and
conditions mutually agreeable to the Parties.
(f) GCL acknowledges that Exodus may desire to terminate some assets
or services it acquires from the GCL or has acquired from the GCL Group prior to
the date of this Agreement and replace such assets or services with different
assets or services. The GCL 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
(ii) for purchased assets, Exodus shall have the right to resell an asset to GCL
[***] for the purchase of other assets or services of equal or greater value
provided that the Parties can account for such resale in a way that does not
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disrupt the accounting treatment for IRU sales employed by GCL from time to time
and the economics of the asset purchase transactions are preserved.
(g) If the GCL Group cannot meet the Exodus Group's availability
needs (type of Capacity at the time and location needed) for any GCL 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 for the purpose of calculating the Required Percentage;
provided, that if the Exodus Group desires Network Services in a location where
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Network Services from the GCL Group are not available, the GCL 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 GCL 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 GCL Group Service, the Parties
shall have agreed on the costs to be reimbursed to the Exodus Group. If any
Network Services purchased from the GCL Group by the Exodus Group are not
maintained at the Minimum GCL 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 limitation to its other obligations hereunder, Exodus
agrees that, after [***] and on or before [***], it will cause the Exodus Group
to purchase and pay for, on an irrevocable and nonrefundable basis, [***] of
Network Services to be used later. Such commitment is in addition to the
existing Exodus commitment (signed on the date hereof) to pay [***] prior to
[***] for Capacity on GCL facilities.
3. Exodus Services. (a) When used herein, provisions to the effect that
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Exodus will be the "Exclusive Provider" with respect to any Internet Web-Hosting
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services mean that the GCL Group will, during the Restricted Period, exclusively
utilize the Exodus Group for all Internet Web-Hosting services the GCL Group
requires or wishes to resell or market or use for its internal purposes;
provided, that the GCL Group may use itself or other sources for any such
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services in the event that (i) Exodus Group cannot meet the GCL Group
availability needs (type of service, including space, power or infrastructure at
the time needed) or (ii) Exodus does not respond affirmatively within three
business days of receipt of a request for a service, or (iii) Exodus does not
meet or exceed the Minimum Exodus Service Levels for the particular service for
a particular customer, the customer has notified GCL that such service levels
have not been met and GCL reasonably believes it has to move the customer to
provide the service and such service levels provided, that GCL shall first
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diligently try to solve the problem with Exodus, including utilizing appropriate
escalation procedures as mutually agreed or (iv) in response to a request by
GCL, Exodus 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 GCL 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
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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
GCL to perform services for customers needs, or (x) in response to a request by
GCL on behalf of a customer, Exodus 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) GCL hereby agrees to use the Exodus Group as the GCL
Group's Exclusive Provider for Internet Web-Hosting services the GCL Group
requires from time to time during the Restricted Period.
(c) All GCL requirements for Internet Web-Hosting will be
effected by GCL 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 [***] of: (i) any [***] for Exodus Services in
existence between the Parties on the date of this Agreement; (ii) any [***] for
Exodus Services entered into between an Exodus Group member and a GCL Group
member after the date of this Agreement; and (iii) [***] which are industry
standard at the time of entering into such agreement.
(d) Without the written permission of Exodus, the GCL 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
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Services shall be as set forth in Annex B. GCL will ensure that all pricing of
the GCL Group to the Exodus Group for GCL 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 GCL Group for Exodus Services (i) will in the
case of Internet Web-Hosting to be used by the GCL Group for its own use, be
based on the standards for the pricing offered by the GCL Group in items (2)
[***], (3) and/or (4) of Annex B and (ii) will, in all other cases, allow the
GCL 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.
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5. Network Arrangements. (a) As reasonably requested by Exodus and
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mutually agreed to by the Parties, GCL will create a new "network" for the
Exodus Group (the "New Network") in order to permit the Parties to more easily
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"scale" the Network Services available to the Exodus Group to meet anticipated
future demands and to permit Exodus to purchase services in accordance with the
terms hereof. The New Network will consist of current and future GCL Group
systems and new construction or acquisitions by GCL. GCL 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 cinsist of a 2.5GB/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 GCL Group will, extend the Intra-Regional
Network to the Exodus Group 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 or its
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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 Exodus
data centers or key party locations. Exodus 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 elects the [***] plan, GCL will
arrange financing for Exodus, which may be secured by the construction.
(e) GCL will establish a preferred peering relationship with Exodus,
which will allow the GCL 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 GCL 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 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) At present, the GCL Group holds space in Center's MDC's that it
uses as a long haul domestic POP location to house various types of transmission
and switching equipment. The GCL Group will be permitted to preserve this
arrangement holding neutral the
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economics and operational benefits of the current arrangements, unless such
arrangements are unreasonable in light of customary industry standards, in which
case the terms will be renegotiated in good faith to such standards. The GCL
Group may not expand its current space without the prior written agreement of
the Exodus Group, which agreement will not be unreasonably withheld.
(g) Pursuant to a Transition Services Agreement to be entered into by
the Parties under the Merger Agreement, for as long as Exodus requires, but not
longer than [***] from the Closing under the Merger Agreement, GCL will continue
to provide Center with IP network bandwidth services until Center can be
migrated to the Exodus backbone. Such IP network bandwidth transition support
shall be provided to Exodus on the same terms (including price) and conditions
as Center paid GCL prior to the Closing. Notwithstanding any other provision of
this Agreement, the credit provided to Exodus pursuant to Section 2(d) hereof
may not be used to pay for such services.
(h) During the Term, GCL will make all GCL Services available to the
Exodus Group on an equal access basis. During the Term, GCL may, in its sole
discretion, make available to the Exodus Group at the pricing set forth in Annex
B, Network Services which the GCL 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 to
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cooperate in good faith to develop mutually beneficial products for Exodus and
GCL customers.
(b) Each of Exodus and GCL agrees to assist the other in achieving
and maintaining technological and operational superiority. Each of Exodus and
GCL will provide the other with [***]. Among other things, Exodus will help
educate and train GCL's employees to aid GCL in the marketing of Exodus Services
and Exodus will establish support teams to provide GCL 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 such
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review finds material discrepancies in compliance by-a Party, then the next
review may take place [***]
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[***] 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. (a) During the Term, Exodus will
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promote GCL as its Primary Provider of Network Services.
(b) Exodus and GCL will promptly issue a joint press
release announcing this Agreement.
8. Marketing. (a) The GCL Group may sell or use Exodus Services
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on any one or more of the following bases and the GCL Group shall be offered
equal access to all Exodus Services:
(i) The GCL 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 Exodus Group is providing the basic service; and/or
(ii) The GCL Group may refer its customers to Exodus
or request Exodus to co-bid, in which case Exodus shall pay
GCL 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 GCL Group's rights to resell Exodus
Services under this Section 8.
(d) After the Restricted Period, Exodus will be the GCL
Group's "preferred" provider, which means that if GCL periodically wishes to
choose a non-exclusive third party to provide a significant portion of its
Internet Web-Hosting services, GCL will notify Exodus and give Exodus the
opportunity to make the first offer to provide such services.
9. Intellectual Property. Each Party will own all intellectual
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property 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) GCL hereby represents and warrants to Exodus
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that (i) GCL is a corporation duly organized and validly existing under the laws
of Bermuda; (ii) the execution, delivery and performance of this Agreement by
GCL has been duly authorized by all necessary corporate action on the part of
GCL and this Agreement is a valid, binding and enforceable obligation of GCL
enforceable with its terms and (iii) the execution, delivery and performance of
this Agreement by GCL does not violate, conflict with or constitute a breach of
the organizational documents, any contract binding on the GCL Group, or any
order, decree or judgment of any court, tribunal or governmental authority
binding on any member of the GCL Group.
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(b) Exodus hereby represents and warrants to GCL 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. Each of the Parties acknowledges and agrees that (i) Exodus
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and AGC have entered into the Joint Venture Agreement; and (ii) Exodus and AGC
have entered into a Network Services agreement dated as of the date hereof for
purchases by the Exodus Group of AGC Network Services.
12. Change of Control. (a) In the event that GCL 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 GCL shall have the option, at its sole
election, to terminate the provisions of this Agreement in Section 3(b) hereof
relating to GCL's obligation to use the Exodus Group as GCL'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 GCL (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 GCL 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 [***] 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 last [***] prior to termination of the Agreement under this
Section shall be [***], provided that in no event will the Agreement be
terminated or the Required Percentage be reduced in the [***] 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 ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AMERICA.
15. No Third Party Beneficiaries. This Agreement does not provide and
----------------------------
is not intended to provide third parties (including, but not limited to,
customers of GCL and Exodus) with any remedy, claim, liability, reimbursement,
cause of action or any other right.
11
------------
[***] 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.
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) GCL shall solely be responsible for complying with all of the
terms binding on the GCL 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 GCL shall be permitted to (i) effect a collateral assignment
of its rights hereunder to one or more lenders to GCL 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 GCL. GCL 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 GCL 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.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
12
If to GCL:
Global Crossing Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
and
Global Crossing Telecommunications, Inc.
Carrier Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President, Global Carrier Services
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
13
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 GCL (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 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.
14
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 GCL 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 GCL or Exodus may elect, at
its sole discretion, by written
15
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) If the Merger Agreement is terminated prior to the Closing, under
circumstances that could not lead to a payment by Exodus pursuant to Section
7.3(b) of the Merger Agreement, GCL shall grant Exodus a $50,000,000 useage
credit to be applied against purchases of assets and services by the Exodus
Group from the GCL Group (where the commitments to purchase occur after January
1, 2001, excluding leases) for payments due after January 1, 2001.
(d) The Parties rights and obligations under Sections 9, 14, 15, 17
to 23, 28 29(c) and, except in the event of termination under Section 29(b),
Section 30, 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 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 GCL Group that are
utilizing Exodus Services.
(e) 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. Non-Competition. (a) GCL hereby agrees that, during the period from
---------------
the Effective Time until the second anniversary thereof (the "Restricted
Period"), neither it nor any member of the GCL Group which it Controls shall,
directly or indirectly, engage in (whether by itself or by selling, re-selling,
promoting or providing the services of a third party), or own, manage, control,
or participate in the ownership, management or control of, Internet Web-Hosting.
(b) Notwithstanding the provisions of paragraph (a) of this Section,
GCL and the GCL Group members shall be permitted to:
(i) maintain investments existing on the date hereof and make
investments of ten percent (10%) or less of any class of equity
securities of any Person directly or indirectly engaged in Internet
Web-Hosting, provided that neither GCL nor any of the GCL Group members
participates in the management or control of such Person;
(ii) acquire securities representing a majority of the voting
power of a Person whose business includes an Internet Web-Hosting
business that represents greater than 45% of such Person's consolidated
revenues for the most recent four calendar quarters, provided that the
acquiring company divests such Internet Web-Hosting business within one
year of its acquisition (prior to divesting such business, GCL shall
provide written notice to Exodus of the consideration it intends to
receive in respect of such divestiture and the other relevant principal
terms and Exodus shall, within 15 days
16
-------------
[***] 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.
of receiving such notice, provide GCL with written notice of whether it
is interested in acquiring such business on such terms, and if Exodus
is so interested, the parties shall in good faith negotiate long form
definitive documents setting forth the details of such transaction
within the following thirty (30) days, and if the parties cannot reach
mutually acceptable terms within such time period GCL shall be
permitted to sell such business to other parties, provided no such sale
shall be at a materially lower price or on terms which, in the
aggregate, are materially less favorable to GCL than those offered to
Exodus);
(iii) acquire securities representing a majority of the voting
power of a Person whose business includes an Internet Web-Hosting
business that represents less than 45% of such Person's consolidated
revenues for the most recent four calendar quarters, provided that the
acquiring company shall, at the time of the acquisition, provide
written notice of the acquisition to Exodus and, if Exodus is
interested in acquiring such business, consider any proposal from
Exodus to purchase such business from the acquiring company.
(iv) acquire securities representing less than thirty percent
(30%) of the voting power of a Person whose business includes an
Internet Web-Hosting business that represents less than 30% of such
Person's consolidated revenues for the most recent four calendar
quarters, provided that neither GCL or any GCL Group member
participates in the management or control of such of such Internet Web-
Hosting Business;
(v) provide, directly or indirectly, services on its
Dedicated Private Extranet Network including, without limitation, the
provision of remote access, Internet access and redundancy, in each
case in connection or associated with providing such services;
(vi) engage in (whether by itself or by selling, re-selling,
promoting or providing the services of a third party) or own, manage,
control or participate in the ownership, management and control of
Internet Web-Hosting in the Asian Territory as contemplated by the
Joint Venture Agreement referred to therein;
(vii) without limitation to clause (v) above, continue to
provide, directly or indirectly, the products and services provided at
present by IXnet; and
(viii) participate in the activities permitted by the proviso
to Section 3(b) and/or by Section 8.
(c) If GCL is acquired by a third party during the Restricted
Period, the provisions of this Section shall not prevent the new parent of GCL
from engaging in, owning, managing, controlling or participating in the
ownership, management or control of entities engaged in the Internet Web-Hosting
business but all members of the GCL Group, excluding the acquiror, will continue
to be bound by this Section 30 during the Restricted Period, except as provided
in the next sentence. If GCL is acquired by a third party during the Restricted
Period and, upon its acquisition by such third party, (i) GCL or a GCL Group
member is merged with or into the acquiror or a substantial portion of GCL's
assets are acquired by the acquiror pursuant to an asset acquisition and such
GCL Group assets are commingled with those of the acquiror such
17
that the GCL Group assets do not remain independently identifiable, and (ii) the
acquiror is materially engaged in the business of Internet Web-Hosting, then the
provisions of this Section shall cease to apply to such GCL Group assets and
Exodus will have the right to terminate this Agreement effective immediately
upon the closing of the transaction.
(d) Each of GCL and Exodus hereby agree that, during the Restricted
Period, it will not and will cause its Subsidiaries not to, directly or
indirectly, solicit the employment or consulting services of any of the
employees of the other (other than employees not involved with the negotiations
or performance of this Agreement); provided, however, nothing contained in this
--------
Section shall prohibit advertisements or other general solicitation not targeted
at the other party's employees.
(e) The Parties acknowledge that the performance of the obligations
of this Section are special, unique and extraordinary in character, and that in
the event of the breach by any Party of the terms and conditions of this
Section, the other Party shall be entitled, if it so elects (in addition to any
other remedy that may be available to it) to the extent permitted by applicable
law, to institute and prosecute proceedings in any court or competent
jurisdiction, either at the law or in equity, to enforce the specific
performances thereof by such Party or to enjoin any Party or their respective
employees, officers, directors or advisors from violating the provisions of this
Section.
(f) Defined terms used in this Section which are not defined in this
Agreement shall have the following meanings when used in this Section:
"Dedicated Private Extranet Network" shall mean a private IP network
connecting communities of interest.
"Person" shall mean any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated organization,
government or other department or agency or other entity.
"Subsidiary" shall mean as to any Person (a) any corporation of which
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.
"Internet Web-Hosting" shall mean the provision of physical space with
Internet connectivity interconnected with servers or other types of data
processing equipment (other than solely data communications/networking
equipment).
18
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.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:___________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
and Chairman
GLOBAL CROSSINGS LTD.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
By:___________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Chief Executive Officer
19
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
------
GCL Services
------------
GCL 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. GCL provides services in several principal segments. The segment
that comprises the "GCL 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 GCL Group. GCL
Services include Network Services.
1
ANNEX B
PRICING FOR NETWORK SERVICES
[***]
------------
[***] 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.
[***]
2
------------
[***] 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.].
1
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 GCL or Exodus is a party
if the shares of GCL'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 GCL or Exodus, other than by
a parent company which has substantially the same shareholders as GCL 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 GCL or Exodus to any entity, other
than to a parent company which has substantially the same shareholders as GCL or
Exodus (as the case may be) had prior to such event.
D-1
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.
E-1
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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 res[ect to the omitted portions.
