EXHIBIT A
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
March 6, 2002, is among SAVVIS COMMUNICATIONS CORPORATION, a Delaware
corporation (the "Company"), WELSH, CARSON, XXXXXXXX & XXXXX VIII, L.P., a
Delaware limited partnership ("WCAS VIII"), and the several other entities and
individuals affiliated with WCAS VIII listed on Annex I hereto (collectively
with WCAS VIII, the "WCAS Purchasers") and the other purchasers that become a
party to this Agreement in accordance with Section 8.11 hereof (the "Other
Purchasers" and collectively with the WCAS Purchasers, the "Purchasers").
WHEREAS, the Company desires to issue and sell to each Purchaser, and
each Purchaser desires to purchase from the Company, shares of the Company's
Series A Convertible Redeemable Preferred Stock, par value $.01 per share (the
"Series A Preferred Stock") on the terms and subject to the conditions set forth
herein;
WHEREAS, prior to the issuance of the Preferred Shares (as defined in
Section 1.01(a)), the Company will file a certificate of designation of the
powers, preferences and relative, participating, optional and other special
rights and qualifications, limitations and restrictions thereof relating to the
Series A Preferred Stock, in the form attached hereto as Exhibit A (the
"Certificate of Designation");
WHEREAS, in order to induce the Purchasers to consummate the
transactions contemplated by this Agreement, the Company has agreed to grant to
the Purchasers certain rights, pursuant to an Investor Rights Agreement, between
the Company and the investor parties thereto, substantially in the form
delivered by the Company to WCAS VIII on the date hereof (the "Investor Rights
Agreement"), including registration rights with respect to shares, including
those into which the Series A Preferred Stock is convertible (the "Conversion
Shares"), of the Company's Common Stock, $.01 par value ("Common Stock"); and
WHEREAS, the Company and the Purchasers acknowledge that the
transactions described or referred to herein in connection with the Closing (as
defined in Section 1.02(a)) are not in contemplation of the filing by the
Company or any of its subsidiaries of a petition for bankruptcy under Chapter 11
of the Bankruptcy Code of 1978, as amended.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
I. PURCHASE AND SALE OF SECURITIES; OTHER PURCHASERS
SECTION 1.01 AUTHORIZATION; AGREEMENTS TO SELL AND TO PURCHASE. (a) On
the Closing Date (as defined in Section 1.02(a)) and on the terms and subject to
the satisfaction of the applicable conditions set forth in this Agreement, the
Company shall issue and sell to each Purchaser, and each Purchaser, severally
and not jointly, shall purchase from the Company, that number of shares of
Preferred Stock (the "Preferred Shares") set forth opposite the name of each
such Purchaser in Annex I for a purchase price per share equal to $1,000 (the
"Purchase Price") payable as provided in Section 1.01(b).
(b) On the Closing Date and on the terms and subject to the
satisfaction of the applicable conditions set forth in this Agreement, as
payment in full for the Preferred Shares being purchased by each Purchaser on
such date and against delivery by the Company of the certificate or certificates
representing such Purchaser's Preferred Shares being purchased on such date,
each of the Purchasers set forth in Annex I shall pay the amount set forth
opposite the name of such Purchaser in Annex I under the heading "Aggregate
Purchase Price" by (i) wire transfer immediately available funds to an account
designated on the day immediately prior to the Closing Date by the Company
and/or (ii) the exchange of indebtedness of the Company held by such Purchaser
as contemplated by Section 1.01(c) below. The Purchasers agree that at least
$57,500,000 of such Aggregate Purchase Price will be paid to the Company in
cash pursuant to clause (i) of this Section 1.01(b). With respect to any amounts
to be paid by a Purchaser, in whole or in part, by exchange of indebtedness,
such Purchaser shall surrender to the Company for exchange at the Closing any
evidence of such indebtedness or shall execute an instrument of exchange in form
and substance reasonably acceptable to the Company and WCAS VIII.
(c) In accordance with the foregoing, (i) the Company and each WCAS
Purchaser who holds 10% Convertible Senior Secured Notes due 2006 of the Company
(the "Senior Notes") agree that a portion (equal to the aggregate principal
amount outstanding plus any accrued and unpaid interest thereon) of such WCAS
Purchaser's obligation to pay for its Preferred Shares hereunder shall be made
through the exchange of the indebtedness represented by the Senior Notes held by
such WCAS Purchaser on the Closing Date plus any Senior Notes issuable to such
WCAS Purchaser as interest in respect of such Senior Notes through the Closing
Date, whereupon all such Senior Notes shall be retired and cancelled; and (ii)
the Company and each WCAS Purchaser who holds indebtedness ("Senior Debt")
acquired pursuant to the Assignment (as defined in Section 4.03(a)(ii)) agree
that a portion (equal to the amount paid for such Senior Debt by such WCAS
Purchaser) of such WCAS Purchaser's obligation to pay for its Preferred Shares
hereunder shall be made through the exchange of such Senior Debt (plus accrued
but unpaid interest thereon through the Closing Date) on the Closing Date,
whereupon all such Senior Debt shall be retired and cancelled. In lieu of
issuing fractional shares of Series A Preferred Stock at the Closing, promptly
after the Closing Date, but in no event later than 10 business days thereafter,
the Company shall pay to each WCAS Purchaser who has delivered Senior Notes or
Senior Debt to the Company in accordance with this Section 1.01(c), an amount in
cash in accordance with footnote 1 of Annex I (the "Fractional Share Payments").
(d) PROVISIONS OF GENERAL APPLICATION. (i) At the Closing, the Company
shall issue and deliver to each Purchaser, against payment of the aggregate
Purchase Price therefor (whether in the form of cash, Senior Notes or Senior
Debt), certificates evidencing Preferred Shares being purchased by such
Purchaser, registered in the name of such Purchaser.
(ii) The failure of any of the Purchasers to perform their obligations
hereunder in respect of the Closing will not relieve any of the other Purchasers
from performing their obligations hereunder in respect of the Closing.
SECTION 1.02 ACTIONS AT OR AFTER CLOSING. (a) CLOSING. The issuance
and purchase contemplated by Section 1.01 (the "Closing") shall take place on a
date (the "Closing Date") to be specified by the Company and WCAS VIII, which
date shall be no later than the second business day after the date as of which
all the conditions set forth in Sections 6.01 and
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6.02 have been satisfied (or, to the extent permitted, waived by the parties
entitled to the benefit thereof, it being understood that no conditions to the
obligations of the Purchasers to consummate the Closing set forth in Section
6.01 may be waived without the prior written consent of WCAS VIII). The Closing
shall take place at the offices of Xxxxx & Xxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other place as may be mutually agreed upon by
WCAS VIII and the Company.
(b) CONVERSION OF REUTERS NOTES. Immediately upon consummation of the
Closing hereunder, the aggregate principal amount of and any accrued interest on
all of the Convertible Senior Secured Notes issued by the Company to Reuters
Holdings Switzerland, SA, a societe anonyme organized under the laws of
Switzerland ("Reuters"), pursuant to the Securities Purchase Agreement, dated
May 16, 2001, between Reuters and the Company, shall convert into Series A
Preferred Stock in accordance with terms of such notes (and, in any event, not
on terms more favorable than terms received by the Purchasers hereunder),
whereupon such notes will no longer be outstanding and the security interests
held by Reuters pursuant to such notes will be released.
(c) SUBSEQUENT SALES OF SERIES A PREFERRED STOCK. The Company will use
reasonable best efforts to sell, after the Consent Effectiveness Date (as
defined in Section 4.07) and on or before the six-month anniversary of the
Closing Date, an additional 45,000 shares of Series A Preferred Stock (the
"Additional Shares") to any Person (as defined in Section 2.02) or Persons
(acceptable to WCAS VIII) who offer to purchase such Additional Shares at a
price per share not less than the Purchase Price, and otherwise on the terms and
conditions not less favorable to the Company than those pursuant to which shares
of Series A Preferred Stock were issued to the WCAS Purchasers on the Closing
Date. WCAS VIII will have the right to waive any of the obligations of the
Company pursuant to this Section 1.02(c), including, but not limited to, the
Company's obligation to sell the Additional Shares at the Purchase Price.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers on the date
hereof and on the Closing Date as follows:
SECTION 2.01 ORGANIZATION AND QUALIFICATION. The Company is a
corporation validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own or lease and
operate its properties and assets and to carry on its business as it is now
being conducted. The Company is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the character
of its properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
have a material adverse effect on the properties, assets, financial condition,
operating results, business or prospects of the Company and its Subsidiaries (as
defined in Section 2.02), taken as a whole (a "Material Adverse Effect").
SECTION 2.02 SUBSIDIARIES. Except for the Subsidiaries disclosed in
the Company SEC Filings (as defined in Section 2.08) or as set forth in Schedule
2.02 of the Disclosure Letter of the Company, dated the date hereof (the
"Disclosure Letter"), the Company
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does not own, beneficially or of record, any capital stock or other ownership
interest in any other Person. SAVVIS Communications Corporation, a Missouri
corporation ("SAVVIS Missouri") is a corporation validly existing and in good
standing under the laws of Missouri. Global Network Assets, LLC, a Delaware
limited liability company ("Global LLC"), is a limited liability company, duly
formed, validly existing and in good standing under the laws of Delaware. Savvis
Procurement Corporation, a Delaware corporation ("Savvis Procurement"), is a
corporation validly existing and in good standing under the laws of Delaware.
Each of SAVVIS Missouri, Global LLC and Savvis Procurement has all requisite
power and authority to own or lease and operate its properties and assets and to
carry out its business as it is now being conducted. Each of SAVVIS Missouri,
Global LLC and Savvis Procurement is duly qualified as a foreign corporation to
do business, and is in good standing, in each jurisdiction in which the
character of its properties owned or leased or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
would not have a Material Adverse Effect. As used in this Agreement, (i)
"Person" means any corporation, partnership, limited liability company, trust,
joint venture or other entity and (ii) "Subsidiary" means, with respect to any
Person, any corporation, association or other business entity of which more than
50% of the total voting power of shares of capital stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of such Person or a combination thereof. SAVVIS Missouri, Global LLC and Savvis
Procurement are the Company's only Significant Subsidiaries (as defined in Rule
1-02(w) of Regulation S-X).
SECTION 2.03 CAPITALIZATION. (a) As of the date hereof, the authorized
capital stock of the Company consists of 250,000,000 shares of Common Stock and
50,000,000 shares of Preferred Stock, $.01 par value ("Preferred Stock"). As of
the date hereof, 94,732,948 shares of Common Stock and no shares of Preferred
Stock are issued and outstanding. All outstanding shares of Common Stock have
been duly authorized and validly issued and are fully paid and non-assessable.
(b) As of the date hereof, except for options granted pursuant to the
Company's stock option plan (the "Stock Option Plan") to purchase an aggregate
7,910,457 shares of Common Stock, and except as set forth on Schedule 2.03(b) of
the Disclosure Letter, no subscription, warrant, option, convertible security,
stock appreciation or other right (contingent or other) to purchase or acquire
any shares of any class of capital stock of the Company or any of its
Subsidiaries is authorized or outstanding, and (except as otherwise expressly
contemplated by this Agreement) there is not any commitment of the Company or
any of its Subsidiaries to issue any shares, warrants, options or other such
rights or to distribute to holders of any class of its capital stock, any
evidences of indebtedness or assets.
(c) Upon the Closing, the authorized, issued and outstanding capital
stock of the Company will be as set forth on Schedule 2.03(c) of the Disclosure
Letter.
SECTION 2.04 AUTHORIZATION OF AGREEMENTS, ETC. (a) The Company has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement, each of the Section 4.03(a) Agreements (as defined in
Section 4.03(a)) and the Bridge Settlement Agreement. Except as set forth on
Schedule 2.04 of the Disclosure Letter,
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each of (i) the execution and delivery by the Company of this Agreement, each of
the Section 4.03(a) Agreements and the Bridge Settlement Agreement and the
performance by the Company of its obligations hereunder and thereunder and (ii)
the issuance, sale and delivery by the Company of all of the Preferred Shares to
be issued and sold to the Purchasers hereunder, will be duly authorized prior to
the Closing by all requisite corporate and stockholder action and will not
violate any provision of applicable law, any order of any court or other agency
of government, the Certificate of Incorporation or Bylaws of the Company, or any
provision of any indenture, agreement or other instrument to which the Company
or any of its Subsidiaries or their properties or assets is bound, or conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default, or result in the vesting, acceleration or material modification
of any benefits under any such indenture, agreement or other instrument or any
compensation agreement or benefit plan, or result in the creation or imposition
of any liens, claims, charges, restrictions, rights of others, security
interests, prior assignments or other encumbrances in favor of any third Person
upon any of the assets of the Company or any of its Subsidiaries.
(b) The issuance, sale and delivery of the Preferred Shares or the
Conversion Shares to the Purchasers hereunder are not and will not be subject to
any preemptive rights of stockholders of the Company or to any right of first
refusal or other similar right in favor of any Person.
(c) The Preferred Shares, when issued in accordance with the terms of
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable and will have the powers, preferences, rights and qualifications
set forth in the Certificate of Designation. On the Consent Effectiveness Date,
each of the Conversion Shares into which the Series A Preferred Stock to be
issued are convertible in accordance with the Certificate of Designations shall
have been duly authorized by the Company and duly reserved in contemplation of
the conversion of such Preferred Shares and, when issued in accordance with the
provisions of the Preferred Shares, will be validly issued, fully paid and
nonassessable shares of capital stock of the Company.
SECTION 2.05 VALIDITY. This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
Each of the Section 4.03(a) Agreements, when executed and delivered by the
Company in accordance with this Agreement will constitute, and the Bridge
Settlement Agreement constitutes, the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
that no representation is made as to (i) the enforceability of the
indemnification or contribution provisions of the Investor Rights Agreement and
(ii) the enforceability of this Agreement or any of the Section 4.03(a)
Agreements or the Bridge Settlement Agreement to the extent that their
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforceability of
creditors' rights generally or by general equitable principles.
SECTION 2.06 GOVERNMENTAL APPROVALS; CONSENTS. Subject to the accuracy
of the representations and warranties of the Purchasers set forth in Article III
and except for (i) any required filing and approval under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976,
5
as amended (the "HSR Act"), (ii) the filing of the Certificate of Designation
with the Secretary of State of Delaware which shall be made on or prior to the
Closing Date, (iii) applicable filings and approvals, if any, required by
applicable federal and state securities laws (including the filing with, and
approval by the SEC of, the Information Statement (as defined in Section 4.11))
and listing regulations, (iv) the effectiveness of the consents of the
stockholders of the Company contemplated by the Information Statement and
referred to in Section 5.05, and (v) the filing with the Secretary of State of
Delaware of the amendment to the Company's certificate of incorporation
contemplated by Section 4.08; no registration or filing with, or consent or
approval of, or other action by, any federal, state or other governmental
agency, court, instrumentality or securities exchange (each, a "Governmental
Authority") or any other third person or entity is or will be necessary for the
valid execution, delivery and performance of this Agreement, the Investor Rights
Agreement, or the issuance and delivery of the shares of Series A Preferred
Stock or the Conversion Shares.
SECTION 2.07 FINANCIAL STATEMENTS. (a) The Company has furnished to
the Purchasers the unaudited consolidated balance sheet of the Company and its
subsidiaries as of September 30, 2001 (the "Interim Balance Sheet") and the
related consolidated statements of operations, stockholders' equity and cash
flows for the nine months then ended. All such financial statements (including
but not limited to any related schedules and/or notes) have been prepared in
accordance with generally accepted accounting principles in the United States
("GAAP") consistently applied and consistent with prior periods, except for
normal year-end adjustments and the absence of footnotes. Such balance sheet
fairly presents in all material respects the consolidated financial position of
the Company and its subsidiaries as of September 30, 2001, and such statements
of operations, stockholders' equity and cash flows fairly present in all
material respects the consolidated results of operations, stockholders' equity
and cash flows of the Company and its subsidiaries for the nine months ended
September 30, 2001.
(b) Except as and to the extent (i) reflected on the Interim Balance
Sheet, (ii) incurred since September 30, 2001 in the ordinary course of business
consistent with past practice, (iii) set forth on Schedule 2.07(b) of the
Disclosure Letter, or (iv) as disclosed in the Company SEC Filings, neither the
Company nor any of its subsidiaries has any material liabilities or obligations
of any kind or nature, whether known or unknown, secured or unsecured, absolute,
accrued, contingent or otherwise, and whether due or to become due, that would
be required to be reflected on a balance sheet, or the notes thereto, prepared
in accordance with GAAP.
(c) Except as set forth on Schedule 2.07(c) of the Disclosure Letter
or as disclosed in the Company SEC Filings (as defined in Section 2.08), since
September 30, 2001, neither the Company nor any of its subsidiaries has suffered
any Material Adverse Effect.
SECTION 2.08 SEC FILINGS. The Company has filed all forms, reports and
documents required to be filed with the Securities and Exchange Commission (the
"SEC") since the completion of the Company's initial public offering on February
18, 2000, and the Company has made available to the Purchasers, as filed with
the SEC, complete and accurate copies of (i) the Annual Report of the Company on
Form 10-K for the years ended December 31, 1999 and 2000, and (ii) all other
reports, statements and registration statements (including but not limited to
Current Reports on Form 8-K and Quarterly Reports on Form 10-Q) filed by the
Company
6
with the SEC since December 31, 2000, in each case including but not limited to
all amendments and supplements (collectively, the "Company SEC Filings"). The
Company SEC Filings (excluding any financial statements or schedules included
therein, which are covered by the representations and warranties of the Company
in Section 2.07(a)), (i) were prepared in compliance with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder, as the case may be, and (ii) did not at the time of
filing (or if amended, supplemented or superseded by a filing prior to the date
hereof, on the date of that filing) contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
SECTION 2.09 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
on Schedule 2.09 of the Disclosure Letter or in the Company SEC Filings, and
except as otherwise expressly contemplated by this Agreement, since September
30, 2001, neither the Company nor any of its Subsidiaries has (a) issued any
stock, bonds or other corporate securities, (b) borrowed or refinanced any
indebtedness for borrowed money other than borrowings under (i) the Amended and
Restated Credit Agreement dated as of September 5, 2000 (as amended from time to
time, the "Credit Agreement"), among the Company, SAVVIS Missouri, Nortel
Networks Inc. ("Nortel"), as Administrative Agent, and the lenders named therein
or (ii) the Master Lease Agreement No. 6857500 with General Electric Credit
Corporation, dated as of March 28, 2000, (c) discharged or satisfied any
material claim or incurred or paid any obligation or liability (absolute or
contingent) other than current liabilities shown on the Interim Balance Sheet
and current liabilities incurred since the date of such balance sheet in the
ordinary course of business consistent with past practice, (d) in the case of
the Company only, declared or made any payment or distribution to stockholders,
or purchased or redeemed any shares of its capital stock or other securities, or
(e) except in connection with this Agreement and the transactions contemplated
hereby, entered into any agreement, letter of intent or similar undertaking to
take any of the actions listed in clauses (a) through (d) above.
SECTION 2.10 ACTIONS PENDING. Except as set forth on Schedule 2.10 of
the Disclosure Letter or in the Company SEC Filings, there is no action, suit,
investigation or proceeding pending or, to the best knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries to which
its or any of its Subsidiaries' property is subject, before any court or by or
before any governmental body or arbitration board or tribunal, which the Company
would be required to disclose pursuant to Item 1 of Part II of Form 10-Q if such
Form 10-Q were required to be filed on and as of the date hereof. For the
purposes of this Agreement, the term "best of the knowledge of the Company"
shall mean the actual knowledge, upon reasonable inquiry, of the executive
officers of the Company.
SECTION 2.11 COMPLIANCE WITH LAW; PERMITS. Neither the Company nor any
of its Subsidiaries is in default in any respect under any order or decree of
any court, governmental authority, arbitrator or arbitration board or tribunal
or under any laws, ordinances, governmental rules or regulations to which the
Company or any of such Subsidiaries or any of their respective properties or
assets is subject, except where such default would not have a Material Adverse
Effect. The Company possesses all permits, authorizations, approvals,
registrations, variances and licenses ("Permits") necessary for the Company or
its Subsidiaries to
7
own, use and maintain their properties and assets or required for the conduct of
its business in substantially the same manner as it is currently conducted,
except where the failure to possess any such Permit would not have a Material
Adverse Effect. Except to the extent the failure of any of the following to be
correct would not have a Material Adverse Effect, each Permit is in full force
and effect, and no proceeding is pending or, to the best knowledge of the
Company, threatened to modify, suspend, revoke or otherwise limit any Permit,
and no administrative or governmental actions have been taken or, to the best
knowledge of the Company, threatened in connection with the expiration or
renewal of any Permit.
SECTION 2.12 CONTRACTS. Except as disclosed in the Company SEC Filings
or as set forth on Schedule 2.12(i) of the Disclosure Letter, there are no
contracts or agreements that are material to the conduct of the Company's
business or to the financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, that the Company would be required to
disclose pursuant to paragraph 10 of Item 601 of Regulation S-K if a Form 10-Q
were required to be filed on and as of the date hereof. Except as set forth in
the SEC Filings or on Schedule 2.12(ii) of the Disclosure Letter, each of the
agreements (collectively, the "Material Agreements") disclosed as an exhibit in
the Company SEC Filings in response to paragraph 10 of Item 601 of Regulation
S-K under which there are continuing rights or obligations is a valid and
enforceable obligation of the Company and, to the best knowledge of the Company,
of the other parties thereto, except where the failure to be valid or
enforceable would not have a Material Adverse Effect and provided that no
representation is made as to the enforceability of such agreements to the extent
that their enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforceability of
creditors' rights generally or by general equitable principles. Except as set
forth on Schedule 2.12(iii) of the Disclosure Letter, to the best knowledge of
the Company, the Company has not been notified in writing of any claim that any
Material Agreement is not valid and enforceable in accordance with its terms for
the periods stated therein (other than where such enforceability is in violation
of public policy or law), or that there is under any such contract any existing
default or event of default or event that with notice or lapse of time or both
would constitute such a default, except any such failure to be valid or
enforceable and any such defaults that, in the aggregate, would not have a
Material Adverse Effect. Except as set forth on Schedule 2.12(iv) of the
Disclosure Letter, the Company is not a party to any contract or agreement that
would result in an obligation of the Company to make any payments under such
agreement or contract solely as a result of the execution and delivery of this
Agreement or the Investor Rights Agreement or the consummation of any of the
transactions contemplated hereby or thereby (including, but not limited to, the
issuance, sale and delivery of the Preferred Shares or the Conversion Shares).
The Company has heretofore provided true and correct copies of the Material
Agreements to WCAS VIII.
SECTION 2.13 INSURANCE. The Company maintains insurance with respect
to its businesses, properties, officers, directors and employees customary with
industry practices. The Company has heretofore made available for inspection by
WCAS VIII true and complete copies of all such insurance policies. Such policies
are, and will be, on the Closing Date, in full force and effect and are, and
will be upon the Closing, free from any right of termination or limitation
(other than for non-payment) on the part of the insurance carriers.
SECTION 2.14 INFORMATION STATEMENT. The Information Statement (and any
amendment thereof or supplement thereto), at the date mailed to stockholders of
the Company
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and at the time it becomes effective, will (i) not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading and (ii) comply in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder; except that no representation is made by the Company
with respect to statements made in the Information Statement to the extent based
solely on information supplied in writing by the Purchasers to the Company
specifically for inclusion therein.
SECTION 2.15 OFFERING OF THE PREFERRED SHARES. Assuming the accuracy
of the representations and warranties of the Purchasers set forth in Article III
hereof, neither the Company nor any Person acting on the Company's behalf has
taken or will take any action (including but not limited to, without limitation,
any offer, issuance or sale of any securities of the Company under circumstances
which might require the integration of such transactions with the sale of the
Preferred Shares under the Securities Act or the rules and regulations of the
SEC thereunder) which would require the offering, issuance or sale of the
Preferred Shares to the Purchasers (but not including the resale thereof)
pursuant to this Agreement to be registered under the Securities Act.
SECTION 2.16 RELATED-PARTY TRANSACTIONS. Except (i) as set forth in
the Company SEC Filings or as set forth on Schedule 2.16 of the Disclosure
Letter, or (ii) as contemplated hereby, there are no existing material
arrangements or proposed material transactions between the Company and any
Person or entity that the Company would be required to disclose pursuant to Item
404 of Regulation S-K of the SEC if a proxy statement of the Company were
required to be filed on or as of the date hereof, other than arrangements or
transactions between the Company and any of the Purchasers.
SECTION 2.17 BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by the Company
directly with the Purchasers, without the intervention of any other Person on
behalf of the Company in such manner as to give rise to any valid claim by any
other Person against the Purchasers for a finder's fee, brokerage commission or
similar payment.
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, represents and warrants to
the Company on the date hereof and on the Closing Date, as follows:
SECTION 3.01 ORGANIZATION. Such Purchaser (other than any Purchaser
who is an individual) is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and has all requisite
corporate, limited liability or limited partnership power and authority to
operate its properties and assets and to carry on its business as it is now
being conducted.
SECTION 3.02 AUTHORIZATION. The execution, delivery and performance by
such Purchaser of this Agreement and the Investor Rights Agreement, and the
purchase and receipt by such Purchaser of the Preferred Shares being acquired by
it hereunder, have been duly authorized by all requisite action on the part of
such Purchaser and will not violate any provision
9
of applicable law, any order of any court or other agency of government, the
charter or other governing documents of such Purchaser.
SECTION 3.03 VALIDITY. This Agreement has been duly executed and
delivered by such Purchaser and constitutes the legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms. The Investor Rights Agreement, when executed and delivered in
accordance with this Agreement, will constitute the legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms.
SECTION 3.04 INVESTMENT REPRESENTATIONS. (a) Such Purchaser is
acquiring the Preferred Shares being purchased by such Purchaser hereunder for
such Purchaser's own account, for investment, and not with a view toward the
resale or distribution thereof.
(b) Such Purchaser understands that it must bear the economic risk of
such Purchaser's investment for an indefinite period of time, because the
Preferred Shares and, when issued upon conversion of Preferred Shares, the
Conversion Shares are not registered under the Securities Act or any applicable
state securities laws and may not be resold unless subsequently registered under
the Securities Act and such other laws or unless an exemption from such
registration is available.
(c) Such Purchaser has the ability to bear the economic risks of the
investment in the Preferred Shares being purchased hereunder for an indefinite
period of time. Such Purchaser further acknowledges that it has received copies
of the Company SEC Filings and has had the opportunity to ask questions of, and
receive answers from, officers of the Company with respect to the business and
financial condition of the Company and the terms and conditions of the offering
of the Preferred Shares and to obtain additional information necessary to verify
such information or can acquire it without unreasonable effort or expense.
(d) Such Purchaser has such knowledge and experience in financial and
business matters that such Purchaser is capable of evaluating the merits and
risks of its investment in the Preferred Shares. Such Purchaser further
represents that it is an "accredited investor" as such term is defined in Rule
501 of Regulation D of the SEC under the Securities Act with respect to its
purchase of the Preferred Shares, and that any such Purchaser that is a limited
partnership has not been formed solely for the purpose of purchasing the
Preferred Shares.
SECTION 3.05 GOVERNMENTAL APPROVALS; CONSENTS. Except for any required
filing and approval under the HSR Act, no registration or filing with, or
consent or approval of, or other action by, any Governmental Authority is or
will be necessary by the Purchasers for the valid execution, delivery and
performance of this Agreement and the Investor Rights Agreement.
SECTION 3.06 OWNERSHIP OF SENIOR NOTES AND SENIOR DEBT. As of the
Closing Date, if such Purchaser is a WCAS Purchaser, such Purchaser owns the
principal amount of Senior Notes and Senior Debt set forth opposite the name of
such Purchaser in the side letter delivered by WCAS VIII to the Company on such
date.
10
IV. COVENANTS OF THE COMPANY
SECTION 4.01 OPERATION OF BUSINESS. From the date hereof until the
Closing Date, except as expressly provided for in this Agreement or as consented
to in advance by WCAS VIII in writing, the Company shall not:
(a) amend its Certificate of Incorporation or bylaws;
(b) split, combine or reclassify any shares of the Common Stock;
(c) issue any capital stock other than pursuant to this Agreement or
other contractual obligations disclosed in Schedule 2.03(b) of the Disclosure
Letter or referred to in Section 2.03(b), or declare or pay any dividend or
distribution (whether in cash, stock or property) in respect of its Common
Stock;
(d) take any action, or knowingly omit to take any action, that would,
or that would reasonably be expected to, result in (A) any of the
representations and warranties of the Company set forth in Article III becoming
untrue, (B) any of the conditions to the obligations of the Purchasers set forth
in Section 6.01 not being satisfied, or (C) the operation of the business of the
Company or its Subsidiaries outside the ordinary course of business consistent
with past practice, giving due regard to the Company's financial condition,
including but not limited to the filing for bankruptcy by Bridge Information
Systems, Inc., a Delaware corporation ("Bridge"), the Company's cash funding
requirements and the Company's current management of its trade payables; or
(e) enter into any agreement or commitment to do any of the foregoing.
SECTION 4.02 ACCESS TO INFORMATION. From the date hereof until the
Closing Date, the Company will (a) furnish to the Purchasers and their
authorized representatives such financial and operating data and other
information relating to the Company and its Subsidiaries as such Persons may
reasonably request and (b) instruct its counsel, independent accountants and
financial advisors to cooperate with the Purchasers and their authorized
representatives in its investigation of the Company. Any investigation pursuant
to this Section shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the Company.
SECTION 4.03 AGREEMENT TO TAKE NECESSARY AND DESIRABLE ACTIONS. The
Company shall (a) promptly upon the execution of this Agreement and in no event
later than three (3) business days following the date hereof, execute each of
(i) the Investor Rights Agreement, (ii) the Assignment, Acceptance and Amendment
Agreement, among the Company, certain WCAS Purchasers and Nortel, substantially
in the form delivered by the Company to WCAS VIII on the date hereof (the
"Assignment"), (iii) the Agreement and Mutual Release, among the Company,
certain affiliates of the Company, Nortel and certain WCAS Purchasers,
substantially in the form delivered by the Company to WCAS VIII on the date
hereof (the "Mutual Release"), (iv) the Amended and Restated Purchase Agreement,
between Nortel and the Company, substantially in the form delivered by the
Company to WCAS VIII on the date hereof (the "Amended Purchase Agreement"), (v)
the Warrant Agreement between the Company and Nortel, substantially in the form
delivered by the Company to WCAS VIII on the date hereof (the "Nortel Warrant
Agreement"), (vi) the Amended and Restated Master Lease
11
Agreement No. 6857500, among General Electric Capital Corporation ("GECC"), the
Company and the other parties thereto, substantially in the form delivered by
the Company to WCAS VIII on the date hereof (the "Amended Master Lease"), and
(vii) the Warrant Agreement between the Company and GECC, substantially in the
form delivered by the Company to WCAS VIII on the date hereof (the "GECC Warrant
Agreement") (the agreements referred to in this Section 4.03(a), collectively,
the "Section 4.03(a) Agreements"); (b) subject to the satisfaction of the
conditions set forth in Section 6.02, execute and deliver such other documents,
certificates, agreements and other writings, and (c) take such other actions, in
each case, as may be reasonably necessary, desirable or requested by any of the
Purchasers in order to consummate or implement the issuance, sale and delivery
of the Preferred Shares to the Purchasers in accordance with the terms of this
Agreement.
SECTION 4.04 COMPLIANCE WITH CONDITIONS; COMMERCIALLY REASONABLE
EFFORTS. The Company shall use all commercially reasonable efforts to cause all
conditions precedent to the obligations of the Company and the Purchasers to be
satisfied. Upon the terms and subject to the conditions of this Agreement, the
Company will use all commercially reasonable efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable consistent with applicable laws to consummate and make
effective in the most expeditious manner practicable the issuance, sale and
delivery of the Preferred Shares to the Purchasers in accordance with the terms
of this Agreement.
SECTION 4.05 HSR ACT NOTIFICATION. To the extent required by the HSR
Act, the Company shall, to the extent it has not already done so, (a) use all
commercially reasonable efforts to file or cause to be filed, as promptly as
practicable after the execution and delivery of this Agreement, with the United
States Federal Trade Commission and the Antitrust Division of the United States
Department of Justice, all reports and other documents required to be filed by
it under the HSR Act concerning the transactions contemplated hereby and (b) use
all commercially reasonable efforts to promptly comply with or cause to be
complied with any requests by the United States Federal Trade Commission or the
Antitrust Division of the United States Department of Justice for additional
information concerning such transactions, in each case so that the waiting
period applicable to this Agreement and the transactions contemplated hereby
under the HSR Act shall expire as soon as practicable after the execution and
delivery of this Agreement. The Company agrees to request, and to cooperate with
the Purchasers in requesting, early termination of any applicable waiting period
under the HSR Act. The Company shall be responsible for the filing fees of the
Purchasers payable under the HSR Act as contemplated by Section 5.03 of this
Agreement. Notwithstanding any other provisions hereof, in no event will the
Company or any of its controlled affiliates (as such terms are defined in Rule
12b-2 promulgated under the Exchange Act) be required to enter into or offer to
enter into any divestiture, hold-separate, business limitation or similar
agreement or undertaking in connection with this Agreement or the transactions
contemplated hereby.
SECTION 4.06 CONSENTS AND APPROVALS. The Company (a) shall use all
commercially reasonable efforts to obtain all necessary consents, waivers,
authorizations and approvals of all Governmental Authorities (other than as
required under the HSR Act, which is subject to Section 4.05), and of all other
Persons required in connection with the execution, delivery and performance of
this Agreement or the Investor Rights Agreement or the consummation of the
transactions contemplated hereby or thereby; and (b) shall diligently assist
12
and cooperate with the Purchasers in preparing and filing all documents required
to be submitted by the Purchasers to any Governmental Authority in connection
with the issuance, sale and delivery of the Preferred Shares to the Purchasers
(which assistance and cooperation shall include timely furnishing to the
Purchasers all information concerning the Company and its Subsidiaries that
counsel to the Purchasers reasonably determines is required to be included in
such documents or would be helpful in obtaining any such required consent,
waiver, authorization or approval).
SECTION 4.07 RESERVATION OF SHARES. From and after the effective date
of the stockholder action by written consent referred to in Section 5.05 (the
"Consent Effectiveness Date") and so long as any of the shares of Series A
Preferred Stock are outstanding, the Company shall keep reserved for issuance a
sufficient number of shares of Common Stock to satisfy its conversion
obligations under the Certificate of Designation.
SECTION 4.08 FILING OF CERTIFICATE OF DESIGNATION AND AMENDMENT TO
CERTIFICATE OF INCORPORATION. Prior to the Closing, the Company shall file or
cause to be filed the Certificate of Designation with the Secretary of State of
the State of Delaware in accordance with the requirements of the DGCL. Promptly
upon the effectiveness of the stockholder action by written consent referred to
in Section 5.05, the Company shall file or cause to be filed an amendment to its
Certificate of Incorporation increasing the number of shares of authorized
Common Stock to 600,000,000 shares with the Secretary of State of the State of
Delaware in accordance with the requirements of the DGCL.
SECTION 4.09 LISTING OF SHARES. The Company shall use all commercially
reasonable efforts to cause the Conversion Shares issuable upon conversion of
the Preferred Shares to be listed or otherwise eligible for trading on the
NASDAQ National Market System or such other exchange or market at which the
Common Stock is traded at the time of conversion.
SECTION 4.10 USE OF PROCEEDS. The Company shall not, without the prior
written consent of WCAS VIII, use the aggregate proceeds to be received upon
issuance of the Preferred Shares other than for working capital, reduction of
debt and payables in accordance with the Bridge Settlement Agreement, the Lucent
Letter Agreement, and Section 1.01(c) of this Agreement (as defined in Section
4.01(e)) and general corporate purposes substantially in accordance with the
operating budget provided to the Board of Directors of the Company on February
26, 2002 as such amended budgets as may be from time to time as provided to the
Board of Directors.
SECTION 4.11 INFORMATION STATEMENT. In satisfaction of the Company's
obligations under Regulation 14C under the Exchange Act relating to the
stockholder action by written consent referred to in Section 5.05, as promptly
as practicable after the date hereof, the Company shall, at its sole expense,
prepare and file with the SEC, and the Purchasers shall, at the Company's sole
expense, cooperate with the Company in such preparation and filing of, a
preliminary information statement relating to this Agreement and the
transactions contemplated hereby; and the Company shall use its best efforts to
furnish the information required to respond promptly to any comments made by the
SEC with respect to the preliminary information statement to be mailed to its
stockholders and thereafter to mail the information statement to the Company's
stockholders. Such preliminary information statement as filed with the SEC and
13
subsequently mailed to the stockholders of the Company (as amended and
supplemented from time to time) is herein referred to as the "Information
Statement." The Company further agrees (i) to consult with WCAS VIII in
connection with the preparation and filing of the Information Statement and (ii)
that the Information Statement will not contain anything inconsistent or in
conflict with this Agreement, the Investor Rights Agreement, or the transactions
contemplated hereby or thereby.
SECTION 4.12 ADDITIONAL COVENANTS. From the date hereof until the
Consent Effectiveness Date, except as expressly consented to in advance by WCAS
VIII in writing, the Company shall not issue any Additional Stock (as such term
is defined in the Certificate of Designation) without consideration or for
consideration per share less than the Conversion Price (as such term is defined
in the Certificate of Designation).
V. COVENANTS OF THE PURCHASERS
SECTION 5.01 AGREEMENT TO TAKE NECESSARY AND DESIRABLE ACTIONS. Each
Purchaser shall (a) subject to the satisfaction of the conditions set forth in
Section 6.01, execute and deliver the Investor Rights Agreement and such other
documents, certificates, agreements and other writings and (b) take such other
actions, in each case, as may be reasonably necessary, desirable or requested by
the Company in order to consummate or implement the issuance, sale and delivery
of the Preferred Shares to the Purchasers in accordance with the terms of this
Agreement.
SECTION 5.02 COMPLIANCE WITH CONDITIONS; COMMERCIALLY REASONABLE
EFFORTS. Each Purchaser will use all commercially reasonable efforts to cause
all of the obligations imposed upon it in this Agreement to be duly complied
with, and to cause all conditions precedent to the obligations of the Company
and the Purchasers to be satisfied. Upon the terms and subject to the conditions
of this Agreement, each Purchaser will use all commercially reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable consistent with applicable law to
consummate and make effective in the most expeditious manner practicable the
issuance, sale and delivery of the Preferred Shares to such Purchaser in
accordance with the terms of this Agreement.
SECTION 5.03 HSR ACT NOTIFICATION. To the extent required by the HSR
Act, each Purchaser shall, if it has not already done so, (a) use all
commercially reasonable efforts to file or cause to be filed, as promptly as
practicable after the execution and delivery of this Agreement, with the United
States Federal Trade Commission and the Antitrust Division of the United States
Department of Justice, all reports and other documents required to be filed by
it under the HSR Act concerning the transactions contemplated hereby and (b) use
all commercially reasonable efforts to promptly comply with or cause to be
complied with any requests by the United States Federal Trade Commission or the
Antitrust Division of the United States Department of Justice for additional
information concerning such transactions in each case so that the waiting period
applicable to this Agreement and the transactions contemplated hereby under the
HSR Act shall expire as soon as practicable after the execution and delivery of
this Agreement. Each Purchaser agrees to request, and to cooperate with the
Company in requesting, early termination of any applicable waiting period under
the HSR Act. Notwithstanding any other provisions hereof, in no event will any
Purchaser or any of their respective controlled
14
affiliates (as such terms are defined in Rule 12b-2 promulgated under the
Exchange Act) be required to enter into or offer to enter into any divestiture,
hold-separate, business limitation or similar agreement or undertaking in
connection with this Agreement or the transactions contemplated hereby.
SECTION 5.04 CONSENTS AND APPROVALS. Each Purchaser (a) shall use all
commercially reasonable efforts to obtain all necessary consents, waivers,
authorizations and approvals of all Governmental Authorities (other than as
expressly set forth in Section 5.03 regarding the HSR Act), and of all other
Persons required in connection with the execution, delivery and performance of
this Agreement or the Investor Rights Agreement, or the consummation of
transactions contemplated hereby or thereby and (b) shall diligently assist and
cooperate with the Company in preparing and filing all documents required to be
submitted by the Company to any Governmental Authority in connection with such
transactions (which assistance and cooperation shall include, without
limitation, timely furnishing to the Company all information concerning such
Purchaser that counsel to the Company reasonably determines is required to be
included in such documents or would be helpful in obtaining any such required
consent, waiver, authorization or approval).
SECTION 5.05 ACTION BY WRITTEN CONSENT. Upon execution of this
Agreement, WCAS VIII will, and will cause other WCAS Purchasers designated by
WCAS VIII to, (a) vote, or cause to be voted, by written consent, all of the
shares of Common Stock owned by it in favor of the approval of the matters
relating to the transactions contemplated by this Agreement, the Investor Rights
Agreement and the transactions set forth on Schedule 5.05 of the Disclosure
Letter and (b) at the Company's sole expense, provide the Company with all
information concerning it which is necessary and customary to be included in the
Information Statement.
SECTION 5.06 RELEASE OF SECURITY INTERESTS. On or prior to the
Closing, the WCAS Purchasers shall execute or cause to be executed all such
instruments and documents as shall be necessary to release the security interest
granted under the Missouri Future Advance Deed of Trust and Security Agreement,
dated as of February 19, 2001, as amended, by and between Savvis Missouri and
certain of the WCAS Purchasers.
VI. CONDITIONS PRECEDENT
SECTION 6.01 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASERS
IN CONNECTION WITH THE CLOSING. With regard to the Closing, the obligations of
the Purchasers hereunder are, at their option, subject to the satisfaction of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties of the Company contained in this Agreement that
are qualified as to materiality or Material Adverse Effect shall be true and
correct and all other representations and warranties of the Company shall be
true and correct in all material respects, each on the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of such date.
15
(b) PERFORMANCE. The Company shall have performed and complied in all
material respects with all agreements, covenants and conditions contained herein
required to be performed or complied with by it prior to or on the Closing Date.
(c) ALL PROCEEDINGS TO BE SATISFACTORY. All corporate and other
proceedings to be taken by the Company and all waivers and consents to be
obtained by the Company in connection with the transactions contemplated hereby,
including but not limited to those set forth as items 1 and 2 in Schedule 2.04
of the Disclosure Letter, shall have been taken or obtained by the Company.
(d) LEGAL PROCEEDINGS. On the Closing Date, no preliminary or
permanent injunction or other order, decree or ruling issued by any court of
competent jurisdiction nor any statute, rule, regulation or order entered,
promulgated or enacted by any governmental, regulatory or administrative agency
or authority, or national securities exchange shall be in effect that would
prevent the consummation of the transactions contemplated by this Agreement.
(e) AGREEMENTS IN FULL FORCE AND EFFECT; CERTAIN DELIVERIES. Each of
(i)(A) the Agreement Resolving All Outstanding Savvis-BIS Issues, dated February
8, 2002 and approved by the U.S. Bankruptcy Court on February 13, 2002 (the
"Bridge Settlement Agreement"), and (B) the Section 4.03(a) Agreements will be
in full force and effect (with all conditions to effectiveness (other than the
actions to be consummated on the Closing Date as set forth in this Agreement),
if any, having been fully satisfied) and no party thereto will be in breach of
any of its obligations thereunder; (ii) the letter agreement between WCAS VIII
and Lucent Technologies, Inc. ("Lucent") of even date herewith will be in full
force and effect and Exhibit A to such letter agreement shall have been fully
executed and delivered by Lucent and shall be in full force and effect and
Lucent will not be in breach of any of its obligations thereunder; and (iii) the
Company and Level 3 Communications, LLC ("Level 3") shall have entered into a
written settlement agreement containing terms and conditions no more favorable
to Level 3 than those set forth in the term sheet attached as Exhibit B hereto,
such agreement shall be of full force and effect (with all conditions to
effectiveness, if any, having been fully satisfied), and no party thereto will
be in breach of any of its obligations thereunder.
(f) GOVERNMENTAL APPROVALS. All necessary governmental and regulatory
consents and approvals, including, but not limited to expiration or termination
under the HSR Act, and necessary third party consents shall have been obtained
or shall have expired, as applicable.
(g) NASDAQ MATTERS. All requirements of the NASDAQ Marketplace Rules
in connection with the consummation of the transactions contemplated by this
Agreement to be completed at the Closing shall have been satisfied or an
exemption therefrom shall have been obtained from the Director of Regulatory
Policy at the NASDAQ Stock Market, Inc.
(h) CERTIFICATE OF DESIGNATION. The Company shall have filed the
Certificate of Designation with the Secretary of State of Delaware and which
such document shall be in full force and effect.
16
(i) NO MATERIAL ADVERSE EFFECT. Except for the effects of the matters
set forth in Schedule 2.09 of the Disclosure Letter, disclosed in the Company
SEC Filings or set forth on Schedule 6.01(i) of the Disclosure Letter, there
shall have been no Material Adverse Effect since April 17, 2001, the date on
which the Company filed its Form 10-K for the year ended December 31, 2000.
(j) OPINIONS OF COUNSEL. The Purchasers shall have received from Xxxxx
& Xxxxxxx, L.L.P. and the chief legal officer of the Company opinion, each,
dated the Closing Date, in the forms attached respectively as Exhibits C-1 and
C-2 hereto.
SECTION 6.01 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY IN
CONNECTION WITH THE CLOSING. With regard to the Closing, the obligations of the
Company hereunder are, at its option, subject to the satisfaction of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties of the Purchasers contained in this Agreement
shall be true and correct in all material respects on the Closing Date with the
same effect as though such representations and warranties had been made on and
as of such date.
(b) PERFORMANCE. The Purchasers shall have performed and complied in
all material respects with all agreements, covenants and conditions contained
herein required to be performed or complied with by them prior to or on the
Closing Date.
(c) ALL PROCEEDINGS TO BE SATISFACTORY. All proceedings to be taken by
the Purchasers and all waivers and consents to be obtained by the Purchasers in
connection with the transactions contemplated hereby shall have been taken or
obtained by the Purchasers.
(d) LEGAL PROCEEDINGS. On the Closing Date, no preliminary or
permanent injunction or other order, decree or ruling issued by any court of
competent jurisdiction nor any statute, rule, regulation or order entered,
promulgated or enacted by any governmental, regulatory or administrative agency
or authority, or national securities exchange shall be in effect that would
prevent the consummation of the transactions contemplated by this Agreement.
(e) AGREEMENTS IN FULL FORCE AND EFFECT; CERTAIN DELIVERIES. Each of
(i)(A) the Bridge Settlement Agreement, (B) the Lucent Letter Agreement, and (C)
the Section 4.03(a) Agreements will be in full force and effect (with all
conditions to effectiveness, if any, having been fully satisfied) and no party
thereto will be in breach of any of its obligations thereunder; (ii) Exhibit A
to the Lucent Letter Agreement shall have been executed and delivered by Lucent;
and (iii) the Company and Level 3 shall have entered into a written
settlement agreement containing terms and conditions no more favorable to Level
3 than those set forth in the term sheet attached as Exhibit B hereto.
(f) GOVERNMENTAL APPROVALS. All necessary governmental approvals and
regulatory approvals and necessary third party consents, including, but not
limited to, expiration or termination of the waiting period under HSR Act, shall
have been obtained or shall have expired, as applicable.
17
(g) NASDAQ MARKETPLACE RULES REQUIREMENTS. All requirements of the
NASDAQ Marketplace Rules in connection with the consummation of the transactions
contemplated by this Agreement to be completed at the Closing shall have been
satisfied or an exemption therefrom shall have been obtained from the Director
of Regulatory Policy at the Nasdaq Stock Market, Inc.
VII. SURVIVAL OF REPRESENTATIONS; INDEMNITY
SECTION 7.01 SURVIVAL OF REPRESENTATIONS. Subject as set forth below,
all representations and warranties made by any party hereto in this Agreement or
pursuant hereto shall survive for the period commencing on the date hereof and
ending on the first anniversary of the date hereof.
SECTION 7.02 GENERAL INDEMNITY. (a) Subject to the terms and
conditions of this Article, the Company hereby agrees to indemnify, defend and
hold the Purchasers harmless from and against all demands, claims, actions or
causes of action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and reasonable attorneys'
fees and expenses (collectively, "Damages"), asserted against, resulting to,
imposed upon or incurred by the Purchasers by reason of or resulting from a
breach of any representation, warranty or covenant of the Company contained in
or made pursuant to this Agreement.
(b) Subject to the terms and conditions of this Article VII, each
Purchaser hereby agrees severally and not jointly to indemnify, defend and hold
the Company harmless from and against all Damages asserted against, resulting
to, imposed upon or incurred by the Company by reason of or resulting from a
breach of any representation, warranty or covenant of such Purchaser contained
in or made pursuant to this Agreement.
SECTION 7.03 CONDITIONS OF INDEMNIFICATION. The respective several
obligations and liabilities of the Purchasers, on the one hand, and the Company,
on the other hand (the "indemnifying party"), to the other (the "party to be
indemnified") under Section 7.02 hereof with respect to claims resulting from
the assertion of liability by third parties shall be subject to the following
terms and conditions:
(a) within 20 days after receipt of notice of commencement of any
action or the assertion in writing of any claim by a third party, the party to
be indemnified shall give the indemnifying party written notice thereof together
with a copy of such claim, process or other legal pleading, and the indemnifying
party shall have the right to undertake the defense thereof by representatives
of its own choosing;
(b) in the event that the indemnifying party, by the 30th day after
receipt of notice of any such claim (or, if earlier, by the tenth day preceding
the day on which an answer or other pleading must be served in order to prevent
judgment by default in favor of the Person asserting such claim), does not elect
to defend against such claim, the party to be indemnified will (upon further
notice to the indemnifying party) have the right to undertake the defense,
compromise or settlement of such claim on behalf of and for the account and risk
of the indemnifying party, subject to the right of the indemnifying party to
assume the defense of such claim at any time prior to settlement, compromise or
final determination thereof, provided that the indemnifying
18
party shall be given at least 15 days prior written notice of the effectiveness
of any such proposed settlement or compromise;
(c) anything in this Section 7.03 to the contrary notwithstanding (i)
if there is a reasonable probability that a claim may materially and adversely
affect the indemnifying party other than as a result of money damages or other
money payments, the indemnifying party shall have the right, at its own cost and
expense, to compromise or settle such claim, but (ii) the indemnifying party
shall not, without the prior written consent of the party to be indemnified,
settle or compromise any claim or consent to the entry of any judgment which
does not include as an unconditional term thereof the giving by the claimant or
the plaintiff to the party to be indemnified a release from all liability in
respect of such claim; and
(d) in connection with any such indemnification, the indemnified party
will cooperate in all reasonable requests of the indemnifying party.
VIII. MISCELLANEOUS
SECTION 8.01 RESTRICTIVE LEGENDS. Each Preferred Share and each
certificate representing the Conversion Shares and any shares of capital stock
received in respect thereof, whether by reason of a stock split or share
reclassification thereof, a stock dividend thereon or otherwise, and each
certificate for any such securities issued to subsequent transferees of any such
certificate shall be stamped or otherwise imprinted with the legends, if any,
required to be borne by such securities by the Investor Rights Agreement, except
as expressly otherwise provided in such agreement.
SECTION 8.02 EXPENSES, ETC. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense; provided, that, upon execution of this Agreement, the Company shall pay
the legal, due diligence and other reasonable out-of-pocket costs and expenses
of the Purchasers, and, thereafter, shall pay, on a monthly basis, the
reasonable out-of-pocket costs and expenses of such Purchasers (and their
counsel) through the effectiveness of the stockholder action by written consent
referred to in Section 5.05 hereof.
SECTION 8.03 SURVIVAL OF AGREEMENTS. All covenants, agreements and
representations and warranties (except in the case of representations and
warranties, as limited in Section 7.01) made herein shall survive the execution
and delivery of this Agreement, the issuance, sale and delivery of the Preferred
Shares and the making of the Fractional Share Payments pursuant hereto,
notwithstanding any investigation made at any time by or on behalf of any party
hereto. All statements contained in any certificate or other instrument
delivered by the Company hereunder shall be deemed to constitute representations
and warranties made by the Company.
SECTION 8.04 NOTICES. Any notice or other communications required or
permitted hereunder shall be deemed to be sufficient if contained in a written
instrument delivered in person or duly sent by first class certified mail,
postage prepaid, by nationally recognized overnight courier, or by facsimile
addressed to such party at the address or facsimile
19
number set forth below or such other address or facsimile number as may
hereafter be designated in writing by the addressee to the addressor listing all
parties:
if to the Company, to
SAVVIS Communications Corporation
00000 Xxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxxx Xxxxxxxx
with a copy to
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
if to any WCAS Purchaser to:
x/x Xxxxx, Xxxxxx, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxx X. Xxxxx
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
if to any Other Purchaser to such Purchaser's address listed on
the signature pages hereto.
or, in any case, at such other address or addresses as shall have been furnished
in writing by such party to the other parties hereto. All such notices,
requests, consents and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of mailing, on the fifth business day following the date of such
mailing, (c) in the case of delivery by overnight courier, on the business day
following the date of delivery to such courier, and (d) in the case of
facsimile, when received.
SECTION 8.05 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. All public
announcements or disclosures relating to this Agreement shall be made only if
mutually agreed
20
upon by the Company and WCAS VIII except to the extent such disclosure is, in
the opinion of the Company's and any such Purchaser's legal counsel, required by
law or by regulation of any applicable national stock exchange or any SEC
recognized trading market or equivalent foreign exchange or trading market;
provided that any such required disclosure shall only be made, to the extent
consistent with law and regulation of any applicable national stock exchange or
SEC recognized trading market or equivalent foreign exchange or trading market,
after consultation with and agreement by such Purchaser or the Company as
applicable.
SECTION 8.06 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflict of laws principles.
SECTION 8.07 ENTIRE AGREEMENT. This Agreement (including the Schedules
and Exhibits thereto) constitutes the entire agreement of the parties with
respect to the subject matter hereof and may not be amended or modified nor any
provisions waived except as set forth in Section 8.10.
SECTION 8.08 ASSIGNMENT; NO THIRD PARTY BENEFICIARIES. This Agreement
and the rights, duties and obligations hereunder may not be assigned or
delegated by the Company without the prior written consent of WCAS VIII, and may
not be assigned or delegated by any Purchaser (other than pursuant to Section
8.11 hereof) without the Company's prior written consent. This Agreement and the
provisions hereof shall be binding upon and shall inure to the benefit of each
of the parties and their respective successors and permitted assigns. This
Agreement is not intended to confer any rights or benefits on any Persons other
than the parties hereto, except as expressly set forth in Section 7.02 or as
contemplated by this Section 8.08. Any designee or assignee permitted under this
Section 8.08 is referred to herein as a "Permitted Designee."
SECTION 8.09 TERMINATION. (a) This Agreement may be terminated at any
time prior to the Closing:
(i) by mutual written agreement of the Company and WCAS VIII;
(ii) by either the Company or WCAS VIII if the Closing shall not
have been consummated on or before March 24, 2002, unless extended by
mutual agreement or unless the failure to consummate the Closing is
attributable to a failure on the part of the party seeking to
terminate this Agreement to perform any obligation required to be
performed by such party at or prior to the Closing Date; or
(iii) by either the Company or WCAS VIII if consummation of the
transactions contemplated hereby to be consummated on the Closing Date
would violate any nonappealable final order, decree or judgment of any
court or Governmental Authority having competent jurisdiction.
(b) The party desiring to terminate this Agreement pursuant to Section
8.09(a)(ii) or (iii) hereof shall promptly give notice of such termination to
the other party.
21
(c) If this Agreement is terminated as permitted by this Section 8.09,
such termination shall be without liability of either party (or any stockholder,
director, officer, employee, agent, consultant or representative of such party)
to the other parties to this Agreement; provided that if such termination shall
result from the willful (i) failure of either party to fulfill a condition to
the performance of the obligations of the other party, (ii) failure of either
party to perform a covenant of such party in this Agreement or (iii) breach by
either party hereto of any representation or warranty or agreement contained
herein, such party shall be fully liable for any and all losses incurred or
suffered by the other party as a result of such failure or breach. The
provisions of Sections 8.02, 8.03, 8.04, 8.05, 8.06, and 8.10 shall survive any
termination hereof pursuant to this Section 8.09.
SECTION 8.10 AMENDMENTS AND WAIVERS. (a) Subject to Section 8.11
hereof and footnote 1 of Annex I, any provision of this Agreement may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed,
by the Company and WCAS VIII.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder will operate as a waiver thereof, nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege, nor will any waiving of any
right power or privilege operate to waive any other subsequent right, power or
privilege. The rights and remedies herein provided will be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 8.11 JOINDER. At any time between the date hereof and the
Closing, additional third party purchasers may agree to purchase (a) all or any
portion of the Preferred Shares agreed to be purchased for cash by a WCAS
Purchaser on the Closing Date or (b) any of the authorized but unissued
Preferred Shares at the Purchase Price on the Closing Date, in each case by
executing and delivering a joinder agreement in the form attached hereto as
Exhibit D hereto (each, a "Joinder Agreement"). Each Joinder Agreement, if
executed pursuant to clause (a) in the first sentence of this Section 8.11, will
constitute an effective assignment pursuant to Section 8.08. Upon execution and
delivery of a Joinder Agreement by any such purchaser, such purchaser will be
considered an "Other Purchaser" and a "Purchaser" for purposes of this Agreement
and Annex I hereto will be amended to account for such Preferred Shares to be
purchased by such Other Purchaser pursuant to the Joinder Agreement.
SECTION 8.12 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 8.13 PARTIES IN INTEREST. All covenants and agreements
contained in this Agreement by or on behalf of any party hereto shall bind and
inure to the benefit of the respective successors and Permitted Designees of
such party hereto whether so expressed or not.
22
IN WITNESS WHEREOF, the Company and the Purchasers have executed this
Agreement as of the day and year first above written.
SAVVIS COMMUNICATIONS
CORPORATION
By:________________________
Name:
Title:
23
WELSH, CARSON, XXXXXXXX &
XXXXX VIII, L.P.
By WCAS VIII Associates LLC,
General Partner
By:________________________
Xxxxxxxx X. Rather
Managing Member
WELSH, CARSON, XXXXXXXX &
XXXXX VII, L.P.
By WCAS VII Partners L.P.,
General Partner
By:________________________
Xxxxxxxx X. Rather
General Partner
WELSH, CARSON, XXXXXXXX &
XXXXX VI, L.P.
By WCAS VI Partners L.P.,
General Partner
By:________________________
Xxxxxxxx X. Rather
General Partner
24
WCAS MANAGEMENT CORPORATION
By:________________________
Xxxxxxxx X. Rather
Treasurer
Xxxxxxx Xxxxxx
Xxxxx X. Xxxxxxxx
XXX FBO Xxxxx X. Xxxxxxxx
Xxxxxx Xxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xx Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxx
Estate of Xxxxxxx Xxxxxx
X. Xxxxx Xxxxxxx
Xxxxxx Xxxxx
XXX FBO Xxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxxx
Xxxx X. Xxx
XXX FBO Xxxxxxxx X. Rather
Xxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxx Xxx Xxxxx
By:________________________
Xxxxxxxx X. Rather
Individually and as Attorney-in-Fact
25
XXXXXX XXXXXXXX TRUST
By:________________________
Name:
Title:
XXXXXXX XXXXXXXX TRUST
By:________________________
Name:
Title:
XXXX XXXXXXXX TRUST
By:________________________
Name:
Title:
26
ANNEX I
-------
Purchase of Preferred Shares 1
AGGREGATE PURCHASE NUMBER OF
NAME AND ADDRESS OF PURCHASER PRICE PREFERRED SHARES
----------------------------- ------------------ ----------------
Purchasers:
WCAS Purchasers
---------------
Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P. $97,851,266 97,851
Welsh, Carson, Xxxxxxxx & Xxxxx VII, L.P. 5,952,000 5,952
Welsh, Carson, Xxxxxxxx & Xxxxx VI, L.P. 7,939,000 7,939
Xxxxxxx Xxxxxx 916,252 916
Xxxxx Xxxxxxxx 964,252 964
XXX-Xxxxx Xxxxxxxx 122,000 122
Xxxxxx Xxxxxxxx Trust 10,000 10
Xxxxxxx Xxxxxxxx Trust 10,000 10
Xxxx Xxxxxxxx Trust 10,000 10
Xxxxxx Xxxx 668,187 668
Xxxxxx Xxxxxxxxx 292,400 292
Xxxxxxx xx Xxxxxx 126,200 126
Xxxx Xxxxxxx 26,440 26
Xxxxxxxx Xxxxxx 85,200 85
Estate of Xxxxxxx Xxxxxx 6,660 6
D. Xxxxx Xxxxxxx 8,220 8
Xxxxxx Xxxxx 8,220 8
XXX FBO Xxxxx X. Xxxxxxxx 8,220 8
Xxxx Xxxxx 8,220 8
_____________________
1 The calculation of "Aggregate Purchase Price" in this Annex I assumes that the
WCAS Purchasers will collectively pay $95,000,000 (in the form of cash and the
exchange of indebtedness and accrued but unpaid interest thereon) including, but
not limited to, the aggregate principal amount of any Senior Notes held by such
Purchasers (including any Senior Notes issued or issuable as interest on such
Senior Notes) for the Preferred Shares to be purchased by such Purchasers on the
Closing Date. For purposes of the calculation of interest on the Senior Notes,
the Closing Date is assumed to occur on March 15, 2002. To the extent the
Closing occurs on a different date, the actual Aggregate Purchase Price paid by
each WCAS Purchaser will be revised to equal $95,000,000 plus the aggregate
principal amount of all such indebtedness and accrued but unpaid interest
thereon. In accordance with the foregoing, the actual number of Preferred Shares
to be issued to each WCAS Purchaser will be revised to equal the amount of such
Purchaser's Aggregate Purchase Price divided by the Purchase Price; rounded down
to the nearest whole share, with any remaining amount being paid by the Company
to such Purchaser as a Fractional Share Payment. On the Closing Date, with no
further action by the Company or any Purchaser, Annex I will be amended and
restated in its entirety to reflect the actual interest accrued and Preferred
Shares issued.
27
AGGREGATE PURCHASE NUMBER OF
NAME AND ADDRESS OF PURCHASER PRICE PREFERRED SHARES
----------------------------- ------------------ ----------------
Xxxx Xxxxxxx 8,220 8
Xxxx Xxxxxxx 8,220 8
Xxxx Xxx 3,888 3
XXX FBO Xxxxxxxx X. Rather 8,220 8
WCAS Management Corporation 2,018,164 2,018
Xxxxx Xxxxxx (XXX) 54,000.00 54
Xxxxxxx Xxxxx 81,000.00 81
Xxxxx Xxx Xxxxx 6,000.00 6
Other Purchasers
----------------
None.
TOTAL........................... $117,200,451 117,195
28
EXHIBIT A
---------
[Form of Certificate of Designations to be attached]
29
EXHIBIT B
---------
[Term Sheet with Level 3 Communications LLC to be attached]
29
EXHIBIT C-1
-----------
[Form of Xxxxx & Xxxxxxx LLP Opinion to be attached]
31
EXHIBIT C-2
-----------
[Form of Company Chief Legal Officer Opinion to be attached]
32
EXHIBIT D
---------
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of [ ], 200__, between SAVVIS
Communications Corporation, a Delaware corporation (the "Company") and [ ],
a [ ] (the "Joining Party").
WHEREAS, the Company and certain other purchasers are parties to a
Securities Purchase Agreement, dated as of February ___, 2002 (the "Purchase
Agreement");
WHEREAS, Section 8.11 of the Purchase Agreement provides that the
Company may enter into a Joinder Agreement (as defined in the Purchase
Agreement) with one or more additional purchasers who wish to become parties to
the Purchase Agreement to purchase Preferred Shares (as defined in the Purchase
Agreement);
WHEREAS, the Joining Party wishes to join and become a party to the
Purchase Agreement, and the Company is willing to permit the Joining Party to
become a party thereto, all on the terms and subject to the conditions set forth
in this Agreement; and
WHEREAS, this Agreement is a Joinder Agreement (as such term is
defined in the Purchase Agreement) and as such is delivered pursuant to and
conforms to the requirements of Section 8.11 and Exhibit C of the Purchase
Agreement;
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby agree as follows:
1. DEFINITIONS.
Capitalized terms used and not otherwise defined in this Agreement
have the meanings attributed to such terms in the Purchase Agreement.
2. JOINDER; PURCHASE OF OTHER PREFERRED STOCK.
The Joining Party hereby joins and becomes a party to, and the Company
hereby accepts the Joining Party as a party to, the Purchase Agreement. The
Company and the Joining Party each acknowledge that the terms "Other Purchasers"
and "Purchasers", each as defined in the Purchase Agreement, includes the
Joining Party and that the rights and obligations of the Joining Party as an
Other Purchaser and Purchaser are set forth in the Purchase Agreement. The
Joining Party further agrees that it will purchase ___________ shares of Series
A Preferred Stock for an aggregate purchase price equal to such number of shares
times the Purchase Price on ________________. The Joining Party acknowledges
that the rights and preferences of such Preferred Shares are in accordance with
the Certificate of Designations attached as Exhibit A to the Purchase Agreement.
33
3. ACKNOWLEDGMENT AND RATIFICATION.
The Joining Party acknowledges that it has received copies of the
Purchase Agreement. The Joining Party hereby ratifies all past actions of the
Purchasers pursuant to the Purchase Agreement.
4. NOTICE.
For purposes of Section 8.04 of the Purchase Agreement, the Joining
Party's address and facsimile number are:
Address: [ ]
[ ]
Attention: [ ]
Facsimile: [ ]
6. GOVERNING LAW.
This Agreement shall be governed in all respects by the laws of the
State of New York, without reference to the conflict of laws principles thereof.
7. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, can each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
* * * * *
34
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above stated.
SAVVIS COMMUNICATIONS
CORPORATION
By___________________________
Name:
Title:
[NAME OF JOINING PARTY]
By___________________________
Name:
Title:
35
