Execution Version
AGREEMENT AND PLAN OF MERGER
among
Exodus Communications, Inc.,
Exodus Acquisition Corp.,
Global Crossing GlobalCenter Holdings, Inc.,
GlobalCenter Holding Co.,
GlobalCenter Inc.
and
Global Crossing North America, Inc.
dated as of
September 28, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I THE MERGER............................................................................ 2
---------------------
1.1 The Merger............................................................................... 2
--- ----------
1.2 Closing; Effective Time.................................................................. 2
--- -----------------------
1.3 Effect of the Merger..................................................................... 2
--- --------------------
1.4 Certificate of Incorporation; Bylaws..................................................... 2
--- ------------------------------------
1.5 Directors and Officers................................................................... 3
--- ----------------------
1.6 Effect on Capital Stock.................................................................. 3
--- -----------------------
1.7 Exchange of Certificates................................................................. 4
--- ------------------------
1.8 No Further Ownership Rights in Company Capital Stock..................................... 5
--- ----------------------------------------------------
1.9 Tax Consequences......................................................................... 5
--- ----------------
1.10 Exemption from Registration.............................................................. 5
---- ---------------------------
1.11 Taking of Necessary Action; Further Action............................................... 5
---- ------------------------------------------
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES................................ 5
-----------------------------------------------------------------
A. Representations and Warranties of the Company............................................ 6
-- ---------------------------------------------
2.1 Organization, Standing and Power......................................................... 6
--- --------------------------------
2.2 Capital Structure........................................................................ 6
--- -----------------
2.3 Authority................................................................................ 7
--- ---------
2.4 SEC Documents; Financial Statements...................................................... 8
--- -----------------------------------
2.5 Absence of Certain Changes............................................................... 9
--- --------------------------
2.6 Absence of Undisclosed Liabilities....................................................... 10
--- ----------------------------------
2.7 Litigation............................................................................... 11
--- ----------
2.8 Real Estate; Title to Property........................................................... 11
--- ------------------------------
2.9 Intellectual Property.................................................................... 11
--- ---------------------
2.10 Environmental Matters.................................................................... 14
---- ---------------------
2.11 Taxes.................................................................................... 15
---- -----
2.12 Employee Benefit Plans................................................................... 16
---- ----------------------
2.13 Labor Matters............................................................................ 17
---- -------------
2.14 Compliance With Laws..................................................................... 18
---- --------------------
2.15 Brokers' and Finders' Fees............................................................... 18
---- --------------------------
2.16 Board and Stockholder Approval........................................................... 18
---- ------------------------------
2.17 Information Supplied..................................................................... 18
---- --------------------
2.18 Agreements and Commitments............................................................... 19
---- --------------------------
2.19 Warranties, Guarantees and Indemnities................................................... 20
---- --------------------------------------
2.20 Title to and Condition and Sufficiency of Global Center Group Assets..................... 20
---- --------------------------------------------------------------------
2.21 Customer Relationships................................................................... 20
---- ----------------------
2.22 Disruptions.............................................................................. 20
---- -----------
B. Representations and Warranties of GCG.................................................... 21
-- -------------------------------------
2.23 Authority................................................................................ 21
---- ---------
2.24 Accredited Investor; Investment Intent................................................... 21
---- --------------------------------------
C. Representations and Warranties of Global Crossing NA..................................... 21
-- ----------------------------------------------------
2.25 Global Crossing NA Authority............................................................. 21
---- ----------------------------
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE III REPRESENTATIONS AND WARRANTIES OF EXODUS....................................................... 22
-----------------------------------------------------
3.1 Organization, Standing and Power.................................................................... 22
--- --------------------------------
3.2 Capital Structure................................................................................... 22
--- -----------------
3.3 Authority........................................................................................... 23
--- ---------
3.4 SEC Documents; Financial Statements................................................................. 24
--- -----------------------------------
3.5 Board and Stockholder Approvals..................................................................... 25
--- -------------------------------
3.6 Absence of Certain Changes.......................................................................... 25
--- --------------------------
3.7 Absence of Undisclosed Liabilities.................................................................. 25
--- ----------------------------------
3.8 Litigation.......................................................................................... 26
--- ----------
3.9 Compliance With Laws................................................................................ 26
--- --------------------
3.10 Brokers' and Finders' Fees.......................................................................... 26
---- --------------------------
3.11 Taxes............................................................................................... 26
---- -----
3.12 Board Approval; Section 203 of the DGCL............................................................. 27
---- ---------------------------------------
3.13 Opinion of Financial Advisor........................................................................ 28
---- ----------------------------
3.14 Required Exodus Vote................................................................................ 28
---- --------------------
3.15 Exodus Proxy Statement.............................................................................. 28
---- ----------------------
3.16 No Business Activities.............................................................................. 28
---- ----------------------
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME............................................................. 29
-----------------------------------------------
4.1 Conduct of Business of the Company and Exodus....................................................... 29
--- ---------------------------------------------
4.2 Restriction on Conduct of Business of the Company................................................... 29
--- -------------------------------------------------
4.3 Restriction on Conduct of Business of Exodus........................................................ 31
--- --------------------------------------------
4.4 Capital Expenditures; Working Capital............................................................... 32
--- -------------------------------------
4.5 Leases.............................................................................................. 32
--- ------
4.6 Disclosures......................................................................................... 33
--- -----------
4.7 Extinguishments of Debt; No Cash.................................................................... 33
--- --------------------------------
4.8 Assumption of Lease Guarantees...................................................................... 33
--- ------------------------------
4.9 Exodus Acquisitions................................................................................. 33
--- -------------------
ARTICLE V ADDITIONAL AGREEMENTS............................................................................ 34
--------------------------------
5.1 Proxy Statement..................................................................................... 34
--- ---------------
5.2 Meeting of Stockholders............................................................................. 35
--- -----------------------
5.3 Access to Information............................................................................... 35
--- ---------------------
5.4 Confidentiality..................................................................................... 36
--- ---------------
5.5 Public Disclosure................................................................................... 36
--- -----------------
5.6 Consents; Cooperation............................................................................... 36
--- ---------------------
5.7 No Solicitation..................................................................................... 37
--- ---------------
5.8 Exodus Board........................................................................................ 38
--- ------------
5.9 Assumption of Options............................................................................... 38
--- ---------------------
5.10 Form S-8............................................................................................ 40
---- --------
5.11 Listing of Additional Shares........................................................................ 40
---- ----------------------------
5.12 Employees........................................................................................... 40
---- ---------
5.13 Best Efforts and Further Assurances................................................................. 41
---- -----------------------------------
5.14 Indemnification of Directors and Officers........................................................... 41
---- -----------------------------------------
5.15 Facilities Transition............................................................................... 41
---- ---------------------
5.16 Assumption of Certain Obligations................................................................... 42
---- ---------------------------------
5.17 Employee Loans; Employee Severance Arrangements..................................................... 42
---- -----------------------------------------------
5.18 Corporate Documents; Subsidiaries................................................................... 42
---- ---------------------------------
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE VI CONDITIONS TO THE MERGER........................................................................ 42
------------------------------------
6.1 Conditions to Obligations of Each Party to Effect the Merger........................................ 42
--- ------------------------------------------------------------
6.2 Additional Conditions to Obligations of the Company Parties......................................... 43
--- -----------------------------------------------------------
6.3 Additional Conditions to Obligations of Exodus Parties.............................................. 44
--- ------------------------------------------------------
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER.............................................................. 46
----------------------------------------------
7.1 Termination......................................................................................... 46
--- -----------
7.2 Effect of Termination............................................................................... 47
--- ---------------------
7.3 Expenses and Termination Fees....................................................................... 47
--- -----------------------------
7.4 Amendment........................................................................................... 48
--- ---------
7.5 Extension; Waiver................................................................................... 48
--- -----------------
ARTICLE VIII TAX MATTERS................................................................................... 48
-------------------------
8.1 Liability for Taxes................................................................................. 48
--- -------------------
8.2 Tax Refunds......................................................................................... 49
--- -----------
8.3 Amended Returns..................................................................................... 50
--- ---------------
8.4 Tax Returns......................................................................................... 51
--- -----------
8.5 Tax Contest Provisions.............................................................................. 52
--- ----------------------
8.6 Termination of Tax Allocation Agreements............................................................ 53
--- ----------------------------------------
8.7 Assistance and Cooperation.......................................................................... 53
--- --------------------------
8.8 Preservation of Reorganization Status............................................................... 53
--- -------------------------------------
ARTICLE IX GENERAL PROVISIONS.............................................................................. 53
------------------------------
9.1 Non-Survival at Effective Time...................................................................... 53
--- ------------------------------
9.2 Notices............................................................................................. 54
--- -------
9.3 Interpretation...................................................................................... 55
--- --------------
9.4 Counterparts........................................................................................ 55
--- ------------
9.5 Entire Agreement; Nonassignability; Parties in Interest............................................. 55
--- -------------------------------------------------------
9.6 Severability........................................................................................ 56
--- ------------
9.7 Remedies Cumulative................................................................................. 56
--- -------------------
9.8 Governing Law; Submission to Jurisdiction........................................................... 56
--- -----------------------------------------
9.9 Rules of Construction............................................................................... 56
--- ---------------------
9.10 Remedies for Breach................................................................................. 56
---- -------------------
ARTICLE X INDEMNIFICATION; REMEDIES. ....................................................................... 57
------------------------------------
10.1 Global Crossing NA's Obligation to Indemnify........................................................ 57
---- --------------------------------------------
10.2 Entitlement to Indemnification; Indemnification Amount; Double Recovery............................. 57
---- -----------------------------------------------------------------------
10.3 Sole Remedy......................................................................................... 58
---- -----------
10.4 Claims.............................................................................................. 58
---- ------
10.5 Survival............................................................................................ 58
---- --------
10.6 Satisfaction of Indemnity Obligations............................................................... 58
---- -------------------------------------
10.7 Adjustment to Purchase Price........................................................................ 59
---- ----------------------------
</TABLE>
iii
<PAGE>
EXHIBITS
Exhibit A - Certificate of Merger
Exhibit B - Form of Indemnification Agreement
Exhibit C - Form of Noncompetition Agreement
Exhibit D - Amendment No. 2 to Rights Plan
iv
<PAGE>
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
---------
entered into as of September 28, 2000, among Exodus Communications, Inc., a
Delaware corporation ("Exodus"), Exodus Acquisition Corp., a Delaware
------
corporation and a direct, wholly-owned subsidiary of Exodus ("Exodus Merger
-------------
Sub"), Global Crossing North America, Inc., a New York corporation ("Global
--- ------
Crossing NA"), Global Crossing GlobalCenter Holdings, Inc., a Delaware
-----------
corporation and an indirect wholly-owned subsidiary of Global Crossing NA
("GCG"), GlobalCenter Holding Co., a Delaware corporation and an indirect
---
wholly-owned subsidiary of Global Crossing NA and a wholly-owned subsidiary of
GCG (the "Company"), and GlobalCenter, Inc., a Delaware corporation and a direct
-------
wholly-owned subsidiary of the Company and an indirect wholly-owned subsidiary
of Global Crossing NA ("GlobalCenter"). For purposes of this Agreement the term
------------
"Exodus Parties" shall mean Exodus and Exodus Merger Sub, and the term "Company
-------------- -------
Parties" shall mean Global Crossing NA, GCG, the Company and GlobalCenter.
-------
RECITALS
A. The Boards of Directors of the Exodus Parties and the Company Parties
believe it is in the best interests of their respective companies and the
stockholders of their respective companies that the Company and Exodus Merger
Sub combine into a single company through the statutory merger of Exodus Merger
Sub with and into the Company (the "Merger").
------
B. Pursuant to the Merger, among other things, each outstanding share of
common stock, $.01 par value, of the Company ("Company Common Stock") shall be
--------------------
converted into shares of common stock, $.001 par value, of Exodus ("Exodus
------
Common Stock"), in the manner set forth herein.
------------
C. The Exodus Parties and the Company Parties desire to make certain
representations, warranties, covenants and other agreements in connection with
the Merger.
D. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code"), and to cause the Merger to qualify as a
----
reorganization under Section 368(a) of the Code.
E. Concurrently with the execution of this Agreement, Exodus, GCG and the
Company are entering into a Stockholder Rights Agreement (the "Stockholder
-----------
Agreement"), and a Registration Rights Agreement (the "Registration Rights
--------- -------------------
Agreement").
---------
NOW, THEREFORE, in consideration of the covenants and representations set
forth herein, and for other good and valuable consideration, the parties agree
as follows:
1
<PAGE>
ARTICLE I
THE MERGER
1.1 The Merger.
----------
At the Effective Time (as defined in Section 1.2) and subject to and upon
the terms and conditions of this Agreement, the Certificate of Merger attached
hereto as Exhibit A (the "Certificate of Merger") and the applicable provisions
--------- ---------------------
of the Delaware General Corporation Law ("Delaware Law"), Exodus Merger Sub
------------
shall be merged with and into the Company, the separate corporate existence of
Exodus Merger Sub shall cease and the Company shall continue as the surviving
corporation. The Company as the surviving corporation after the Merger is
hereinafter sometimes referred to as the "Surviving Corporation."
---------------------
1.2 Closing; Effective Time.
-----------------------
The closing of the transactions contemplated hereby (the "Closing") shall
-------
take place as soon as practicable following the satisfaction or waiver of each
of the conditions set forth in Article VI hereof, or at such other time as the
parties hereto agree (the "Closing Date"). The Closing shall take place at the
------------
offices of Fenwick & West LLP, Palo Alto, California, or at such other location
as the parties hereto agree. In connection with the Closing, the parties hereto
shall cause the Merger to be consummated by filing the Certificate of Merger,
together with the required officers' certificates, with the Secretary of State
of the State of Delaware in accordance with the relevant provisions of Delaware
Law (the time of effectiveness of the Merger under the Delaware Law being the
"Effective Time").
--------------
1.3 Effect of the Merger.
--------------------
At the Effective Time, the effect of the Merger shall be as provided in
this Agreement, the Certificate of Merger and the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company shall become the debts, liabilities
and duties of the Surviving Corporation.
1.4 Certificate of Incorporation; Bylaws.
------------------------------------
(a) Certificate of Incorporation. At the Effective Time, the
----------------------------
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by Delaware Law and such
Certificate of Incorporation.
(b) Bylaws. The Bylaws of Exodus Merger Sub, as in effect
------
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter amended.
2
<PAGE>
1.5 Directors and Officers.
----------------------
At the Effective Time, the directors of Exodus Merger Sub, as in effect
immediately prior to the Effective Time, shall be the directors of the Surviving
Corporation, until their respective successors are duly elected or appointed and
qualified. The officers of Exodus Merger Sub, as in effect immediately prior to
the Effective Time, shall be the officers of the Surviving Corporation, until
their respective successors are duly elected or appointed and qualified.
1.6 Effect on Capital Stock.
-----------------------
(a) Company Stock. At the Effective Time, each share of Company
-------------
Common Stock issued and outstanding immediately prior to the Effective Time
shall be converted into and exchanged for the right to receive a number of
shares of Exodus Common Stock equal to the Exchange Ratio. The Exchange Ratio
will equal the quotient obtained by dividing (i) the Total Exodus Shares (as
defined below) by (ii) the Total Number of GlobalCenter Securities (as defined
below). Such Exchange Ratio shall be rounded to four decimal places. The "Total
-----
Number of GlobalCenter Securities" shall equal the sum of (q) the number of
---------------------------------
shares of Company Common Stock outstanding immediately prior to the Effective
Time, plus (r) the total number of shares of Company Common Stock issuable or
deemed to be issuable under Company Options (as defined below) and the Global
Crossing Assumed Options (as defined below). As used herein, all references to
Exodus Common Stock shall include the associated stock purchase rights issued
pursuant to the Rights Agreement dated as of January 27, 1999 (the "Rights
------
Agreement"), between Exodus and BankBoston, N.A. The "Total Exodus Shares" shall
--------- -------------------
mean that number of shares of Exodus Common Stock equal to the quotient obtained
by dividing (A) the sum of (i) $6.525 Billion, plus (ii) the aggregate proceeds
from the exercise of all of the Company Options and Global Crossing Assumed
Options, minus (iii) the Global Crossing Cancelled Options Money Value (as
defined below), by (B) the Final Closing Price (as defined below), rounded to
the nearest whole share. The "Global Crossing Cancelled Options Money Value"
---------------------------------------------
shall mean (x) the product of (1) the average closing price per share as quoted
on the Nasdaq National Market of Global Crossing Ltd. (as defined below) common
stock for the ten (10) trading days prior to and including the trading day
ending two days prior to the Closing Date, and (2) the total number of shares of
Global Crossing Ltd. stock issuable pursuant to the Global Crossing Cancelled
Options (as defined below), minus (y) the aggregate proceeds from the exercise
of all of the Global Crossing Cancelled Options. The "Final Closing Price" shall
-------------------
mean the average closing price per share as quoted on the Nasdaq National Market
of Exodus Common Stock for the ten (10) trading days prior to and including the
trading day ending two days prior to the Closing Date; provided that if the
Final Closing Price is less than $56.41, the Final Closing Price shall equal
$56.41 and if the Final Closing Price is greater than $65.55, the Final Closing
Price shall equal $65.55.
(b) Company Options and Global Crossing Options. At the Effective
-------------------------------------------
Time, each Company Option (as defined hereinafter) and Global Crossing Assumed
Option (as hereinafter defined) shall be assumed by Exodus in accordance with
Section 5.9(a) and thereafter shall constitute the right to receive options to
purchase such number of shares of Exodus Common Stock as set forth in Section
5.9(a). At the Effective Time, each Global Crossing Cancelled Option (as defined
hereinafter) will be canceled and Exodus will issue options to purchase shares
of Exodus Common Stock (the "New Exodus Options") in accordance with
------------------
3
<PAGE>
Section 5.9(b). "Company Options" means all options outstanding immediately
---------------
prior to the Effective Time under the GlobalCenter Management Stock Plan (the
"GlobalCenter Stock Option Plan"). "Global Crossing Assumed Options" means the
------------------------------ -------------------------------
options to purchase 2,934,493 shares of Global Crossing Ltd. (which are deemed
to be equivalent to 5,540,323 shares of Company Common Stock) granted pursuant
to the Global Crossing Ltd. 1998 Stock Option Plan (the "Global Crossing Stock
---------------------
Option Plan" and, together with the GlobalCenter Stock Option Plan, the "Company
----------- -------
Stock Option Plans"). "Global Crossing Cancelled Options" means all unvested
------------------ ---------------------------------
options held immediately prior to the Effective Time by Company employees (other
than Leo Hindery) granted pursuant to the Global Crossing Stock Option Plan,
excluding the unvested options included in the definition of Global Crossing
Assumed Options above.
(c) Cancellation of Company Common Stock Owned by the Company. At the
---------------------------------------------------------
Effective Time, all shares of Company Common Stock that are owned by the Company
as treasury stock, if any, shall be canceled and extinguished without any
conversion thereof.
(d) Adjustments to Exchange Ratio. The Exchange Ratio shall be
-----------------------------
adjusted to reflect fully the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities convertible
or exchangeable into Exodus Common Stock or capital stock of the Company),
reorganization, recapitalization or other like change with respect to Exodus
Common Stock or Company Common Stock occurring after the date hereof and prior
to the Effective Time, other than the stock splits or stock dividends in which
the Company will convert each currently outstanding share of its common stock
into 233,500 shares of its common stock and GlobalCenter will convert each
currently outstanding share of its common stock in to 233,500 shares of its
common stock (the "Stock Splits").
------------
(e) Fractional Shares. No fraction of a share of Exodus Common Stock
-----------------
will be issued, but in lieu thereof, each holder of shares of Company Common
Stock who would otherwise be entitled to a fraction of a share of Exodus Common
Stock (after aggregating all fractional shares of Exodus Common Stock to be
received by such holder) shall receive from Exodus an amount of cash (rounded to
the nearest whole cent) equal to the product of (i) such fraction, and (ii) the
closing price of one share of Exodus Common Stock on the Nasdaq National Market
on the last trading day before the Effective Time, as reported in the Wall
----
Street Journal.
--------------
(f) Exodus Merger Sub. Each share of capital stock of Exodus Merger
-----------------
Sub issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one share of the common stock of the Surviving
Corporation.
1.7 Exchange of Certificates.
------------------------
At the Closing, GCG shall surrender to Exodus Merger Sub all outstanding
certificates theretofore representing the Company Common Stock together with the
stock powers duly endorsed in blank and shall thereupon receive in exchange
therefor certificates for Exodus Common Stock as provided in Section 1.6.
4
<PAGE>
1.8 No Further Ownership Rights in Company Capital Stock.
----------------------------------------------------
All shares of Exodus Common Stock issued upon the surrender for
exchange of shares of Company Common Stock in accordance with the terms hereof
(including any cash paid in lieu of fractional shares) shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Company Common Stock, and following the Effective Time there shall be no further
registration of transfers on the records of the Surviving Corporation of shares
of Company Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and exchanged as
provided in this Article I.
1.9 Tax Consequences.
----------------
It is intended by the parties hereto that the Merger shall constitute a
reorganization within the meaning of Section 368(a) of the Code.
1.10 Exemption from Registration.
---------------------------
The shares of Exodus Common Stock to be issued in connection with the
Merger will be issued in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act"), by reason of Section
--------------
4(2) thereof.
1.11 Taking of Necessary Action; Further Action.
------------------------------------------
If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement and to vest
the Surviving Corporation with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of the Company, the officers
and directors of the Company and the Surviving Corporation are fully authorized
in the name of their respective corporations or otherwise to take, and will
take, all such lawful and necessary action, so long as such action is not
inconsistent with this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES
In this Agreement, any reference to any event, change, condition or
effect being "material" with respect to any entity or group of entities means
--------
any material event, change or condition materially affecting the financial
condition, properties, assets, business or prospects of the consolidated group
of which such entity or group of entities is a part. In this Agreement, any
reference to a "Material Adverse Effect" with respect to any entity or group of
-----------------------
entities means any event, change, violation, inaccuracy, circumstance or effect
that is materially adverse to the financial condition, properties, assets,
business or prospects of such entity and its direct and indirect subsidiaries,
taken as a whole; provided that "Material Adverse Effect" shall not include any
-----------------------
event, change or effect to the extent resulting from (i) changes in general
economic conditions or conditions in the industry in which Exodus and the
Company operate which generally affect industry participants, (ii) changes after
the date of this Agreement in generally accepted accounting principles ("GAAP"),
----
(iii) the announcement of this Agreement and the
5
<PAGE>
transactions contemplated hereby or (iv) changes in the trading prices of any
such entity (or any such entity's parent's) capital stock. In this Agreement,
any reference to a party's "knowledge" means actual knowledge of such party's
---------
(and in the case of the Company, the executive officers of GlobalCenter)
executive officers and directors, but in such connection, such persons shall be
deemed to be on notice of such matters as a reasonably prudent person serving in
such capacity as an executive officer or director would be aware.
A. Representations and Warranties of the Company
Global Crossing NA and the Company jointly and severally represent and
warrant to Exodus as follows:
2.1 Organization, Standing and Power.
--------------------------------
The Company is a corporation duly organized, validly existing and in good
standing under the laws of Delaware, and each of its direct and indirect
subsidiaries is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. The Company and each of its
subsidiaries has the corporate power to own its respective properties and to
carry on its respective business as now being conducted and is duly qualified to
do business and is in good standing in each jurisdiction in which the failure to
be so qualified and in good standing would have a Material Adverse Effect on the
Company. The Company and each of its subsidiaries has made available true and
correct copies of the Certificate of Incorporation and Bylaws or other charter
documents, as applicable, of the Company and its subsidiaries, each as amended
to date and true and complete copies of minute books of the Company and
GlobalCenter for the three year period ending on the date hereof. Neither the
Company nor any of its subsidiaries is in violation of any of the provisions of
its Certificate of Incorporation or Bylaws or equivalent organizational
documents. Except as set forth on Item 2.1 to the disclosure letter delivered by
--------
the Company to Exodus concurrently with the execution and delivery of this
Agreement and referring to the representations and warranties in this Agreement
(the "Company Disclosure Letter"), the Company does not directly or indirectly
-------------------------
own any equity or similar interest in, or any interest convertible or
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
2.2 Capital Structure.
-----------------
(a) As of the Closing Date, after giving effect to the Stock Splits,
the authorized capital stock of the Company will consist of 300,000,000 shares
of Company Common Stock, of which 233,500,000 shares will be issued and
outstanding.
(b) All outstanding shares of Company Common Stock are owned
beneficially and of record by GCG. There are no other outstanding shares of
capital stock or voting securities and no outstanding commitments to issue any
shares of Company capital stock or voting securities, other than pursuant to the
exercise of the Company Options and the Global Crossing Assumed Options.
(c) All outstanding shares of Company Common Stock are duly
authorized, validly issued, fully paid and non-assessable and are free of any
liens or encumbrances, and are not subject to preemptive rights or rights of
first refusal created by statute, the Certificate of
6
<PAGE>
Incorporation or Bylaws of the Company or any agreement to which the Company is
a party or by which it is bound. All outstanding shares of capital stock of each
of the subsidiaries of the Company are duly authorized, validly issued, fully
paid and non-assessable and are free of any liens or encumbrances, and are not
subject to preemptive rights or rights of first refusal created by statute, the
Certificate of Incorporation or Bylaws or other organizational documents of such
subsidiary or any agreement to which such subsidiary is a party or by which it
is bound. The Company owns, directly or indirectly, 100% of the outstanding
stock of each of the subsidiaries listed in Item 2.1 of the Company Disclosure
--------
Schedule. On the date hereof, (1) the Company Options consist of options to
purchase 25,616,795 shares of Company Common Stock granted pursuant to the
GlobalCenter Stock Option Plan, (2) the Global Crossing Assumed Options consist
of options to purchase 2,934,493 shares of Global Crossing Ltd., a company
organized under the laws of Bermuda ("Global Crossing Ltd.") (which are deemed
-------------------
to be equivalent to 5,540,323 shares of Company Common Stock) granted pursuant
to the Global Crossing Stock Option Plan, and (3) the Global Crossing Canceled
Options consist of options to purchase 1,898,877 shares of Global Crossing Ltd.
granted or committed to be granted pursuant to the Global Crossing Stock Option
Plan. Except for (i) the rights created pursuant to this Agreement; (ii) the
Company Options, the Global Crossing Assumed Options and the Global Crossing
Canceled Options; and (iii) up to 250,000 additional Global Crossing Cancelled
Options to be granted after the date hereof and before Closing; there are no
other options, warrants, calls, rights, commitments or agreements of any
character to which the Company or any of its subsidiaries is a party or by which
they are bound obligating the Company or any of its subsidiaries to issue,
deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,
repurchased or redeemed, any shares of capital stock of the Company or any of
its subsidiaries or obligating the Company or any of its subsidiaries to grant,
extend,e Exodus Group will continue
to support existing customers of the AGC Group that are utilizing Exodus
Services.
(d) If upon the termination of this Agreement for any reason, the
Exodus Group shall not have fulfilled its Required Percentage obligation under
Section 2(a) hereof, the Exodus Group will promptly purchase such amount of
Network Services, or otherwise meet its Required Percentage obligation, so that
it brings itself into compliance with such obligation.
30. Joint Venture Agreement. The parties acknowledge the provisions
------------------------
of Sections 6.9 and 6.13 of the Joint Venture Agreement, and nothing contained
herein is intended in any way to reduce either party's obligations under such
provisions.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Network Services,
Marketing and Cooperation Agreement as of the date first above written.
EXODUS COMMUNICATIONS, INC.
By: /s/ Ellen M. Hancock
--------------------
Ellen M. Hancock
Chief Executive Officer and Chairman
ASIA GLOBAL CROSSING LTD.
By: /s/ Charles F. Carroll
----------------------
Charles F. Carroll
Senior Vice President and General
Counsel
13
<PAGE>
ANNEX A
SERVICES
--------
Part 1
------
Exodus Services
---------------
Internet infrastructure services incorporating:
. Internet Web-Hosting;
. IP network services, using primarily the Exodus network;
. hardware and software procurement and installation;
. content distribution, integration and management services;
. systems applications; and
. professional services.
Part 2
------
AGC Services
------------
AGC is a provider of global Internet Protocol, or "IP", and data and voice
services for both wholesale and retail customers. It is building a state-of-
the-art fiber optic network of global scope and scale to serve as the backbone
for its services. AGC provides services in several principal segments. The
segment that comprises the "AGC Services" is the telecommunications services
segment which offers a variety of integrated telecommunications products and
services through its global fiber optic network, including domestic and
international voice services, data products and structured bandwidth services,
and other communications products and other services offered by the AGC Group.
AGC Services include Network Services.
<PAGE>
ANNEX B
PRICING FOR NETWORK SERVICES
The AGC Group will provide Network Services to each member of the Exodus Group
purchasing any such Network Services at a price equal to the lower of:
(1) the lowest price of any sale (excluding co-build arrangements and other
arrangements whereby an entity participates in a network system during
construction through a purchase [***] of the proposed initial capacity of such
system and/or by sharing in [***] of the construction costs, known as "anchor
tenant" arrangements) of such service (on a similar product basis) to a non-
Affiliated entity activating such asset or service ("MFN"), less five percent
(5%); or
(2) the lowest price of any sale of such service (on a similar product basis) to
an Affiliated party in which a AGC Group member has direct or indirect ownership
[***] of the stock, shares or other voting interest of the non-Affiliated party
activating such asset or service; or
(3) if there is no instance of a non-Affiliated entity activating a particular
asset or service and there is an instance for one or more Affiliates activating
such asset or service for its own use, the lowest price of any sale of such
asset or service (on a similar product basis) to any such Affiliated party; or
[***]
________________________
[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
ANNEX C
PRICING FOR EXODUS SERVICES
---------------------------
[To be completed by the Parties Pursuant to Section 4(b) hereof.].
<PAGE>
ANNEX D
CHANGE OF CONTROL
-----------------
"Change of Control" shall mean any of the following: (i) a merger, consolidation
or other business combination or transaction to which AGC or Exodus is a party
if the shares of AGC's or Exodus' (as the case may be) common stock outstanding
immediately prior to the effective date of such merger, consolidation or other
business combination or transaction (or the shares of common stock into which
they are converted or exchanged pursuant to such merger, consolidation or other
business combination or transaction) do not represent 50% or more of the voting
power of the surviving corporation (or its parent) following such merger,
consolidation or other business combination or transaction; (ii) an acquisition
by any entity of 50% or more of the voting power of AGC or Exodus, other than by
a parent company which has substantially the same shareholders as AGC or Exodus
(as the case may be) had prior to such event; or (iii) a sale of all or
substantially all the consolidated assets of AGC or Exodus to any entity, other
than to a parent company which has substantially the same shareholders as AGC or
Exodus (as the case may be) had prior to such event.
<PAGE>
ANNEX E
REQUIRED PERCENTAGE CALCULATION
The Required Percentage shall be calculated as follows: the first period (the
"First Period") of calculation shall be from the date of this Agreement until
-------------
[***], thereafter, the Required Percentage shall be calculated on an annual
calendar year basis.
If, in any calendar year following the First Period, the Exodus Group fails to
meet its Required Percentage but, has at least met one half of its Required
---
Percentage obligation for that year, the Exodus Group will be entitled to, and
shall be obligated to, make up such shortfall in the following calendar year as
follows:
(a) all purchases of Network Services in such following calendar year shall be
applied first to meet the Required Percentage for such year; and
(b) any such shortfall plus the "Applicable Premium" shall be paid in such
following calendar year (the "Applicable Premium" shall mean an amount equal to
------------------
the product of (A) the Required Percentage for the previous year multiplied by
the total Network Services purchased by the Exodus Group in such year from all
providers and (B) [***]).
If in the First Period or any succeeding calendar year the Exodus Group exceeds
the Required Percentage, the amount of such excess may not be carried forward as
a credit for the following calendar year.
______________________
[***] Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
post $r=ËXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXcate Ö™t$r=Ë ;xƒ¶ ÿ>¸j•O þ ûÏ partnership,
each individual executing this Lease on behalf of said corporation or
partnership, as the case may be, represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of said entity in
accordance with its corporate bylaws, statement of partnership or certificate of
limited partnership, as the case may be, and that this Lease is binding upon
said entity in accordance with its terms. Landlord, at its option, may require a
copy of such written authorization to enter into this Lease.
K. Exhibits. All exhibits, amendments, riders and addenda
attached hereto are hereby incorporated herein and made a part hereof.
L. Lease Summary. The Lease Summary attached to this Lease is
intended to provide general information only. In the event of any inconsistency
between the Lease Summary and the specific provisions of this Lease, the
specific provisions of this Lease shall prevail.
M. Memorandum of Lease. This Lease shall not be recorded
without the prior consent of both Landlord and Tenant; provided, however, that
upon the written request of Tenant, Landlord and Tenant shall execute and
acknowledge, in recordable form, a memorandum of this Lease in form reasonably
acceptable to both Landlord and Tenant, and shall cause such memorandum to be
recorded in the Official Records of the County of San Mateo, State of
California. Upon expiration of the term of this Lease or earlier termination of
this Lease, Tenant shall execute, acknowledge and deliver to Landlord an
appropriate instrument prepared by Landlord which Landlord may then record in
the Official Records of San Mateo County to expunge this Lease and any
memorandum thereof from the public record with respect to the Premises. In
addition, Tenant hereby irrevocably constitutes and appoints Landlord as its
true and lawful attorney in fact, in its name and in its behalf, to make,
execute, acknowledge, deliver, and file any and all such instruments that Tenant
so fails or refuses to execute. Tenant expressly understands and acknowledges
that the foregoing special power of attorney is coupled with an interest, is
irrevocable, and shall survive the dissolution or insolvency of Tenant, or the
transfer by Tenant of the whole or any portion of its interest in this Lease
(provided that any such transfer shall be subject to the restrictions set forth
in this Lease).
49
<PAGE> 56
THIS LEASE is effective as of the date the last signatory
necessary to execute the Lease shall have executed this Lease.
TENANT:
Dated: ,1998 AT HOME CORPORATION,
--------- a Delaware corporation
By: /s/ KENNETH A. GOLDMAN
---------------------------------------
Its:
---------------------------------------
By:
---------------------------------------
Its:
---------------------------------------
LANDLORD:
Dated: MARTIN/CAMPUS ASSOCIATES, L.P.,
------------- a Delaware limited partnership
By: Martin/Redwood Partners,
L.P., a California limited
partnership, its General Partner
By: TMG Redwood LLC,
A California limited liability
Company
Its: General Partner
By: The Martin Group of
Companies, Inc., a
California corporation,
Its General Partner
By: /s/
----------------------
Its: Vice President
----------------------
50
<PAGE> 57
EXHIBIT A
---------
PREMISES
--------
<PAGE> 58
EXHIBIT B
---------
WORK LETTER AGREEMENT
---------------------
THIS WORK LETTER ("Agreement") is made and entered into by and
between Landlord and Tenant as of the date of the Lease. This Agreement shall be
deemed a part of the Lease to which it is attached. Capitalized terms which are
used herein and defi
incurred in the Ordinary Course since the Balance Sheet Date, and (iii) those
incurred in connection with the execution and performance of this Agreement.
2.7 Litigation.
----------
There is no private or governmental action, suit, proceeding, claim,
arbitration or investigation (each an "Action") pending or, to the knowledge of
------
the Company or any of its subsidiaries, threatened before any agency, court or
tribunal, foreign or domestic, against the Company or any of its subsidiaries or
any of their respective properties or any of their respective officers or
directors (in their capacities as such) that would reasonably be expected to
have a Material Adverse Effect on the Company. As of the date hereof, there is
no Order against the Company or any of its subsidiaries, or, to the knowledge of
the Company or any of its subsidiaries, any of their respective directors or
officers (in their capacities as such), that would reasonably be expected to
have a Material Adverse Effect on the Company.
2.8 Real Estate; Title to Property.
------------------------------
The Company and its subsidiaries have good and valid title to all of
their respective properties, interests in properties and assets, real and
personal, reflected in the Balance Sheet or acquired after the Balance Sheet
Date (except properties, interests in properties and assets sold or otherwise
disposed of since the Balance Sheet Date in the Ordinary Course), or with
respect to leased properties and assets, valid leasehold interests in, free and
clear of all Liens, except (i) Permitted Liens, (ii) such imperfections of
title, liens and easements as would not have a Material Adverse Effect on the
Company, and (iii) liens securing debt which is reflected on the Balance Sheet.
Item 2.8 of the Company Disclosure Schedule sets forth all real property owned,
--------
leased or otherwise used by the Company or GlobalCenter or any of their
subsidiaries regardless of the party currently named as lessee or sublessee on
the applicable agreement for such space, and such schedule shall include the
addresses of such locations, the name and address of the landlords, if
applicable, and any sublessors, if applicable.
2.9 Intellectual Property.
---------------------
(a) For purposes of this Agreement, "Intellectual Property"
means:
(i) all issued patents, reissued or reexamined patents,
revivals of patents, utility models, certificates of invention, registrations of
patents and extensions thereof, regardless of country or formal name
(collectively, "Issued Patents");
--------------
(ii) all published or unpublished nonprovisional and
provisional patent applications, reexamination proceedings, invention
disclosures and records of invention (collectively "Patent Applications" and,
-------------------
with the Issued Patents, the "Patents");
--------
(iii) all semiconductor topography and mask work rights,
including all rights of authorship, use, publication, reproduction,
distribution, performance transformation, moral rights and rights of ownership
of copyrightable works, semiconductor topography works and mask works, and all
rights to register and obtain renewals and extensions of registrations, together
with all other interests accruing by reason of international copyright,
semiconductor topography and mask work conventions (collectively, "Copyrights");
----------
11
<PAGE>
(iv) trademarks, registered trademarks, applications for
registration of trademarks, service marks, registered service marks,
applications for registration of service marks, trade names, registered trade
names and applications for registrations of trade names (collectively,
"Trademarks");
----------
(v) all technology, ideas, inventions, designs,
proprietary information, manufacturing and operating specifications, know-how,
formulae, trade secrets, technical data and proprietary processes;
(v) all databases and all collected data and all rights
therein throughout the world;
(vii) all computer software, including all source code,
object code firmware, development tools, files, records and data and all media
on which any of the foregoing is recorded; and
(viii) all URLs, Web addresses and domain names.
(b) The Company and its subsidiaries own, or are licensed or
otherwise possess legally enforceable rights to use, all Intellectual Property,
including without limitation, patents, trademarks, trade names, service marks,
domain names, trade dress, copyrights, copyrightable works, mask works,
hardware, discoveries, databases, systems, networks, documentation, drawings,
research and development, schematics, technology, know-how, trade secrets,
inventions, ideas, algorithms, processes, computer software programs or
applications (in source code and/or object code form), and proprietary
information or material that are used in and material to the business of the
Company or any of its subsidiaries as currently conducted.
(c) With respect to each item of Intellectual Property
incorporated into any product of Company or its subsidiaries or used in
connection with any service offered or provided by Company or its subsidiaries
or otherwise used in the business of Company or its subsidiaries (except "off
the shelf" or other software widely available through regular commercial
distribution channels at a cost not exceeding $50,000 per copy or seat on
standard, non-negotiated terms and conditions) ("Company Intellectual
--------------------
Property"), Item 2.9(b) of the Company Disclosure Letter lists as of the date of
-------- -----------
this Agreement:
(i) all Patents, all registered Trademarks, and all
registered Copyrights owned by the Company and its subsidiaries, including the
jurisdictions in which each such intellectual property has been issued or
registered or in which any application for such issuance and registration of a
Patent, Trademark or Copyright has been filed.
(ii) the following agreements relating to the products or
service offerings or capabilities of Company and its subsidiaries, including
products or service offerings or capabilities currently under development
(collectively the "Company Services") or other Company Intellectual Property:
----------------
all (A) agreements granting any right to distribute or sublicense any of the
Company Services on any exclusive basis, (B) any exclusive licenses of
intellectual property from Company or any of its subsidiaries, (C) joint
development agreements not terminable within thirty (30) days by either party,
and (D) any agreement by which Company or any of its subsidiaries grants any
ownership right to any Company Intellectual Property owned
12
<PAGE>
by Company or any of its subsidiaries other than nonexclusive software licenses
entered into with customers in the Ordinary Course.
(d) As of the date of this Agreement the Company and its
subsidiaries do not have any licenses, sublicenses and other agreements to which
Company or any of its subsidiaries is a party and pursuant to which Company or
any of its subsidiaries is authorized to use any Company Intellectual Property
owned by any third party (except software or other Intellectual Property widely
available through regular commercial distribution channels or software or other
Intellectual Property that the Company or its subsidiaries could replace if its
rights were terminated without incurring any additional costs material to the
Company.) ("Third Party Intellectual Property").
---------------------------------
(e) To the knowledge of the Company, as of the date of this
Agreement, there is no unauthorized use, disclosure, infringement or
misappropriation of any Company Intellectual Property, including any Third Party
Intellectual Property, by the Company or its subsidiaries or by any other third
party.
(f) Neither Company nor any of its subsidiaries is in breach of
any license, sublicense or other agreement relating to the Company Intellectual
Property.
(g) To the knowledge of the Company, neither Company nor any of
its subsidiaries has infringed, misappropriated or made unlawful use of, is not
currently infringing, misappropriating or making unlawful use of, and has not
received any written notice or written communication alleging or relating to any
actual, alleged, possible or potential infringement, misappropriation or
unlawful use of, any Patents, Copyrights or trade secrets owned or used by any
third party. Without limiting the foregoing, to the knowledge of the Company the
offering and sale of the Company Services by Company and its subsidiaries does
not, the business of Company and its subsidiaries as conducted as of the date
hereof does not, and Company's and its subsidiaries' use of patents, copyrights
or trade secrets as of the date hereof does not, infringe or violate any
Patents, Copyrights or trade secrets of any other person. There is no proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its subsidiaries, nor has any written claim or demand been made against
the Company or any of its subsidiaries, which challenges the legality, validity,
enforceability or ownership of any item of Company Intellectual Property or
Third Party Intellectual Property. As of the date hereof, neither Company nor
any of its subsidiaries has brought a proceeding alleging infringement of
Company Intellectual Property or breach of any license or agreement involving
Patents, Copyrights or trade secrets against any third party.
(h) All current, and, except as would not have a Material
Adverse Effect on the Company Intellectual Property, former employees engaged in
development of Company Services and products of Company or its subsidiaries
("Company Products") have executed and delivered to Company or one of its
----------------
subsidiaries an agreement (containing no exceptions or exclusions from the scope
of its coverage other than as set forth in the standard form) regarding the
protection of proprietary information and the assignment to Company or
GlobalCenter of any Intellectual Property arising from services performed for
Company or its subsidiaries by such persons, the form of which has been supplied
to Exodus. All current employees have executed
13
<PAGE>
and delivered to the Company or one of its subsidiaries a non-disclosure
agreement, the form of which has been supplied to Exodus.
(i) Company has taken all commercially reasonable and customary
measures and precautions necessary to protect and maintain the confidentiality
of all Company Intellectual Property (except such Company Intellectual Property
whose value would be unimpaired by public disclosure) and otherwise to maintain
and protect the full value of all Company Intellectual Property owned by it as
of the date of this Agreement.
(j) Neither Company nor any subsidiary is subject to any
proceeding or outstanding decree, order, judgment, or stipulation which is
reasonably likely to affect the validity, use or enforceability of any Company
Intellectual Property or restrict in any manner the use, transfer, or licensing
thereof by Company or any subsidiary.
(k) Except as set out in Item 2.9(k) to the Company Disclosure
-----------
Letter or as set forth in GlobalCenter's standard master service agreement,
Company and its subsidiaries have not granted any reseller, distributor, sales
representative, original equipment manufacturer, value added reseller or other
third party any exclusive right to reproduce, manufacture, sell, license,
furnish or distribute any Company Services in any market segment or geographic
location.
2.10 Environmental Matters.
---------------------
As of the date hereof:
(a) (i) The Company and its subsidiaries comply and have
complied with all applicable Environmental Laws, and possess and comply with and
have possessed and complied with all Environmental Permits, the failure to
comply with which would have a Material Adverse Effect on the Company; (ii)
there are and have been no Materials of Environmental Concern, or other
conditions, at any property owned, operated, or otherwise used by the Company or
any of its subsidiaries now or in the past, or at any other location, in
circumstances that would reasonably be expected to result in a Material Adverse
Effect on the Company.
(b) For purposes of this Agreement, the terms below shall be
defined as follows:
(i) "Environmental Laws" shall mean any and all laws,
------------------
rules, orders, regulations, statutes, ordinances, codes, decrees, or other
legally enforceable requirement of any foreign government, the United States, or
any state, local, municipal or other governmental authority, regulating,
relating to or imposing liability or standards of conduct concerning protection
of the environment or of human health, or employee health and safety.
(ii) "Environmental Permits" shall mean any and all
---------------------
permits, licenses, registrations, notifications, exemptions and any other
authorization required under any applicable Environmental Law.
14
<PAGE>
(iii) "Materials of Environmental Concern" shall mean any
----------------------------------
gasoline or petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, and any other substances defined as
hazardous or toxic under any Environmental Law.
2.11 Taxes.
-----
(a) Except to the extent indicated in Item 2.11, and except as
---------
would not have a Material Adverse Effect on the Company:
(i) all Tax Returns that are required to be filed by or with
respect to the Company and its subsidiaries through the Closing Date have been
or will be duly and timely filed and are or will be accurate, complete and
correct in all material respects;
(ii) all Taxes of the Company and its subsidiaries which are
due and payable have been paid in full, other than Taxes for which a reserve has
been established on the Financial Statements in accordance with GAAP;
(iii) there is no deficiency that has in writing been
threatened, proposed or assessed or any dispute or claim concerning any
liability with respect to Taxes of the Company or its subsidiaries that has been
claimed or raised by any Tax Authority in writing;
(iv) neither the Company nor any of its subsidiaries is now
subject to a claim for the assessment of Taxes nor is the Company or any of its
subsidiaries under examination by any Tax Authority;
(v) no extensions, waivers of statutes of limitation, or
consents to extend the period for assessment or collection have been given by or
requested with respect to any Taxes or Tax Returns of the Company or its
subsidiaries;
(vi) there are no liens with respect to Taxes, other than liens
for Taxes not yet due and payable;
(vii) each of the Company and its subsidiaries has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party and the Company and its subsidiaries have each
complied with all reporting requirements with respect to such Taxes;
(viii) neither the Company nor any of its subsidiaries has (x)
any liability for the Taxes of any person (other than the Company and its
subsidiaries or the members of the federal consolidated group of which Global
Crossing NA is the common parent (the "Global Crossing NA Group")) under
------------------------
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign law) or (y) any liability for Taxes of any person (other than the
Company or its subsidiaries) as a transferee or successor, or by contract
(including under any Tax sharing or Tax allocation agreement); and
15
<PAGE>
(ix) the Company has not filed any elections under
Section 341(f) of the Code.
(b) For purposes of this Agreement, the following terms have the
following meanings: "Tax" (and, with correlative meaning, "Taxes" and "Taxable")
--- ----- -------
means any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any governmental entity (a "Tax Authority") responsible for the
-------------
imposition of any such tax (domestic or foreign). "Tax Return" shall mean any
----------
return, statement, report or form (including, without limitation, estimated tax
returns and reports, withholding tax returns and reports that are required to be
filed with any Tax Authority).
2.12 Employee Benefit Plans.
----------------------
(a) Item 2.12 contains a true and complete list of each
---------
"employee benefit plan" (within the meaning of Section 3(3) of the Employee
---------------------
Retirement Income Security Act of 1974, as amended ("ERISA") and each stock
-----
purchase, stock option, severance, change-in-control, fringe benefit, bonus,
deferred compensation and all other employee benefit plans, agreements,
programs, or policies (i) under which any current or former employee, director
or consultant of the Company or any of its subsidiaries (the "Company
-------
Employees") has any current or future right to benefits or (ii) under which the
---------
Company or any of its subsidiaries has any current or future liability ("Company
-------
Plans") in excess of $200,000.
-----
(b) As of the Effective Time, with respect to each Company Plan
that applies to Company Employees, the Company will have made available to
Exodus a current, accurate and complete copy (or, to the extent no such copy
exists, an accurate description) thereof and, to the extent applicable: (i) any
related trust agreement or other funding instrument; (ii) the most recent
determination letter; (iii) any summary plan description; and (iv) for the two
most recent years (A) the Form 5500 and attached schedules and (B) audited
financial statements.
(c) Except as is not material to the Company and its
subsidiaries, taken as a whole, (i) each Company Plan has been established and
administered in accordance with its terms, and in compliance with the applicable
provisions of ERISA, the Code and other U.S. or foreign applicable laws, rules
and regulations; (ii) each Company Plan which is intended to be qualified within
the meaning of Code Section 401(a) has received a favorable determination letter
as to its qualification, and nothing has occurred, whether by action or failure
to act, that is reasonably likely to cause the loss of such qualification; and
(iii) no event has occurred and no condition exists that would subject the
Company, either directly or by reason of its affiliation with any member of its
"Controlled Group" (within the meaning of Section 414(b), (c), (m) or (o) of the
----------------
Code), to any tax, fine, lien, penalty or other liability imposed by ERISA
(including Title IV thereof), the Code or other U.S. or foreign applicable laws,
rules and regulations.
(d) Except as disclosed on Item 2.12, no Company Plan exists
---------
that, as a result solely of the execution of this Agreement or the transaction
contemplated by this Agreement,
16
<PAGE>
would result in the payment to any Company Employee of any money or other
property or would result in the increase, acceleration or provision of any other
rights or benefits to any Company Employee. Each individual who has a
contractual agreement providing for a cash payment to such individual for an
excise tax under Code Section 4999 (each, a "Contract Holder") is disclosed on
---------------
Item 2.12 and each such individual will sign prior to Closing an Indemnification
---------
Agreement substantially in the form of Exhibit B attached hereto.
---------
(e) In the event a Company Plan that is a group medical, dental,
vision or other health or welfare plan that is fully or partially self-funded is
terminated, any stop-loss coverage relating to such plan will cover all claims
of an individual covered by such Company Plan that are incurred on or prior to
the date such Company Plan is terminated.
(f) Other than as set forth on Item 2.18, no Company Employee is
---------
currently, or will be prior to the Merger, entitled to forgiveness of any debt
owed to the Company.
2.13 Labor Matters.
-------------
(a) As of the date hereof, neither the Company nor any of its
subsidiaries is a party to any collective bargaining agreement or other labor
union contract, and neither the Company nor any of its subsidiaries knows of any
activities or proceedings of any labor union in connection with an attempt to
organize any such employees. As of the date hereof, there is no labor strike,
slowdown, work stoppage, lockout or other material labor controversy in effect
or, to the Company's knowledge, threatened against the Company or any of its
subsidiaries. As of the date hereof, neither the Company nor any of its
subsidiaries is a party to, or otherwise bound by, any consent decree with, or
citation by, any Government agency relating to employees or employment
practices.
(b) Except as is not material to the Company and its
subsidiaries, taken as a whole, the Company and its subsidiaries are in
compliance with all applicable laws, agreements and contracts relating to
employment, employment practices, immigration, wages, hours and terms and
conditions of employment, including, but not limited to, employee compensation
matters, and has correctly classified employees as exempt employees and non-
exempt employees under the Fair Labor Standards Act. A list of all employees,
officers and consultants of the Company and their current title and/or job
description and compensation is set forth on Item 2.13(a). Item 2.13(b) lists
------------ -----------
each employment contract and consulting agreement with the Company or any
subsidiary of the Company that is currently in effect. Other than the Chief
Executive Officer of the Company, whose employment contract has been assumed by
Global Crossing Ltd. or a subsidiary not being acquired hereunder, neither the
Company nor any of its subsidiaries has any employment contracts or consulting
agreements (which do not include option agreements) currently in effect that are
not terminable at will without penalty or payment of compensation (other than
agreements with the sole purpose of providing for the confidentiality of
proprietary information or assignment of inventions). All employees of the
Company and its subsidiaries are legally permitted to be employed in the United
States of America in their current job capacities and by the Company and its
subsidiaries.
17
<PAGE>
2.14 Compliance With Laws.
--------------------
Except for noncompliance that would not result in a Material Adverse
Effect on the Company, Company has complied in all material respects, with all
applicable laws, ordinances, regulations and rules, and all orders, writs,
injunctions, awards, judgments and decrees, applicable to Company or its
subsidiaries or to the assets, properties and business thereof, including,
without limitation: (a) all applicable federal and state securities laws and
regulations except as disclosed in Item 2.14 to the Company Disclosure Letter,
---------
(b) all applicable federal, state and local laws, ordinances and regulations,
and all orders, writs, injunctions, awards, judgments and decrees, pertaining to
(i) the sale, licensing, leasing, ownership or management of owned, leased or
licensed real or personal property, products or technical data, (ii) employment
or employment practices, terms and conditions of employment, or wages and hours
and (iii) safety, health, fire prevention, environmental protection (including
toxic waste disposal and related matters), building standards, zoning or other
similar matters, (c) the Export Administration Act and regulations promulgated
thereunder and other laws, regulations, rules, orders, writs, injunctions,
judgments or decrees applicable to the export or re-export of controlled
commodities or technical data, (d) the Immigration Reform and Control Act and
(e) all governmental and nongovernmental regulations related to the operation
and use of the Internet. Except as disclosed in Item 2.14, Company has received
---------
all permits and approvals from, and has made all filings with, third parties,
including government agencies and authorities, that are necessary to the conduct
of its business as presently conducted except where the failure to receive such
permit or approval or make such filing would not have a Material Adverse Effect
on Company.
2.15 Brokers' and Finders' Fees.
--------------------------
Neither the Company nor any of its subsidiaries has incurred, nor will
it incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby, except
with respect to any advisor whose fees and expenses will be paid by Global
Crossing NA.
2.16 Board and Stockholder Approval.
------------------------------
The Board of Directors of the Company has (i) approved this Agreement
and the Merger, (ii) determined that the Merger is in the best interests of the
stockholders of the Company and is on terms that are fair to such stockholder
and (iii) recommended that the sole stockholder of the Company approve this
Agreement and the Merger. GCG, as sole stockholder of the Company, has approved
this Agreement and the Merger by unanimous written consent and such consent has
not been withdrawn.
2.17 Information Supplied.
--------------------
None of the information supplied or to be supplied in writing by the
Company or any of its subsidiaries specifically for inclusion or incorporation
by reference in the proxy statement filed pursuant to SEC Regulation 14A in
connection with the Merger (the "Exodus Proxy Statement") will, when submitted
----------------------
in the Exodus Proxy Statement to the SEC, when the Exodus
18
<PAGE>
Proxy Statement is first mailed or at the time of the Exodus Stockholder
Meeting, 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.
2.18 Agreements and Commitments.
--------------------------
As of the date hereof, except as disclosed in Item 2.18 to the Company
---------
Disclosure Letter, neither Company nor any subsidiary is a party or subject to
any agreement or contract of the following nature that is material to the
Company:
(a) Any franchise agreement;
(b) Any joint venture contract or arrangement or any other
agreement that involves a sharing of profits with other persons or the payment
of royalties to any other person, excluding non-exclusive software licenses;
(c) Any instrument evidencing indebtedness for borrowed
money by way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee or otherwise, except for trade indebtedness or any
advance to any employee of Company or any of its subsidiaries incurred or made
in the Ordinary Course, and except as disclosed in the GlobalCenter Financial
Statements;
(d) Any contract containing covenants purporting to limit
Company's or any subsidiary's freedom to compete in any line of business, market
or industry and/or in any geographic area;
(e) Any material agreement entered into outside the
Ordinary Course by Company or its subsidiaries to encumber, transfer or sell
rights in or with respect to any material item of Company Intellectual Property,
excluding non-exclusive software licenses;
(f) Any agreement entered into after the Balance Sheet Date
for the sale or lease of real or tangible personal property outside the Ordinary
Course by the Company involving more than $500,000 per year; and
(g) Any material agreement under which Company or its
subsidiaries provide Internet data center and internet connectivity services
that materially deviates from the GlobalCenter standard master service agreement
(except for any agreements entered into in the Ordinary Course);
(h) Any contract for the employment of any officer,
employee or consultant of Company or any of its subsidiaries or any other type
of contract or commitment with any officer, employee or consultant of Company or
any of its subsidiaries, other than agreements with respect to Company Options,
Global Crossing Assumed Options or Global Crossing Cancelled Options, that is
not immediately terminable by Company or any of its subsidiaries without cost or
other liability; or
19
<PAGE>
(i) any intercompany agreements to which the Company and
any of Global Crossing Ltd. or its subsidiaries (other than the Company and its
subsidiaries) are parties and which relate to research and development
activities.
Except as noted therein, to the Company's knowledge, all agreements,
obligations and commitments disclosed in Item 2.18 to the Company Disclosure
---------
Letter are valid and in full force and effect, except where the failure to be
such would not have a Material Adverse Effect on the Company. Except as noted in
Item 2.18 of the Company Disclosure Letter, as of the date hereof, neither the
---------
Company nor to the Company's knowledge any other party is in breach of or
default under any material term of any such agreement, obligation or commitment
nor has such other party threatened such a breach or default. To the Company's
knowledge, the Company is not a party to any contract or arrangement that would
have a Material Adverse Effect on the Company.
2.19 Warranties, Guarantees and Indemnities.
--------------------------------------
Except as disclosed in Item 2.19 to the Company Disclosure Letter, or
---------
which individually or in the aggregate would not be reasonably expected to have
a Material Adverse Effect on the Company, the Company has not provided to its
customers or any third parties (i) any warranties or guarantees regarding the
Company Services; (ii) any rights to obtain refunds with respect to Company
Services or (iii) any indemnities with respect to intellectual property
infringement or Year 2000 compliance, except as provided in the current and
predecessor versions of the Company's standard master service agreement, the
current version of which is attached to Item 2.19.
---------
2.20 Title to and Condition and Sufficiency of GlobalCenter Group
------------------------------------------------------------
Assets.
------
Except as set forth in Item 2.20 to the Company Disclosure Letter,
---------
the Company or its subsidiaries (the "Group") own or at the Closing will own all
-----
assets owned by Global Crossing Ltd. or any of its subsidiaries and used in the
Group's business as currently conducted. Immediately after the Closing, all
leases and subleases of real property or personal property from Global Crossing
Ltd. to any member of the Group shall remain in effect in accordance with their
respective terms in effect on the date of this Agreement.
2.21 Customer Relationships.
----------------------
Except as disclosed in Item 2.21 to the Company Disclosure Letter, no
---------
customer accounting for more than five percent (5%) of the Company's revenues
during the quarter ended June 30, 2000 has canceled or otherwise terminated its
relationship with Company prior to the date of this Agreement or threatened in
writing to do so.
2.22 Disruptions.
-----------
Except to the extent disclosed on Item 2.22 to the Company
---------
Disclosure Letter, there has not occurred any recurring, material disruptions to
network operations, or any material delays in planned facility or network build
out or construction activities, or any repeated, material performance failures
by the Company, in any such case that have resulted in material, recurring
customer complaints or recurring, material breaches of customer installation
commitments, in each case with respect to the Company.
20
<PAGE>
B. Representations and Warranties of GCG.
2.23 Authority.
---------
GCG has all requisite corporate power and authority to enter into this
Agreement, the Stockholder Agreement (the "Stockholder Agreement") and the
---------------------
Registration Rights Agreement (the "Registration Rights Agreement" and, together
-----------------------------
with the Stockholder Agreement, the "Ancillary Agreements"), and to consummate
--------------------
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of GCG, except for the filing of the
Certificate of Merger, together with the required officers' certificates, with
the Secretary of State of the State of Delaware pursuant to Section 1.2. Each of
this Agreement and the Ancillary Agreements has been duly executed and delivered
by GCG and constitutes the valid and binding obligation of GCG enforceable
against GCG in accordance with its terms. The execution and delivery of this
Agreement and the Ancillary Agreements by GCG does not, and the consummation of
the transactions contemplated hereby and thereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation under (i) any provision of the Certificate of
Incorporation or Bylaws of GCG, as amended, or (ii) any mortgage, indenture,
lease, contract or other agreement or instrument, permit, franchise or license
to which GCG is a party, or (iii) any Order binding on GCG or any of its
properties or assets, which conflict, violation, default, termination,
cancellation, acceleration would have a Material Adverse Effect on GCG or would
materially adversely effect the ability of GCG to perform its obligations under
this Agreement.
2.24 Accredited Investor; Investment Intent.
--------------------------------------
GCG is an "accredited investor" as such term in defined in Regulation
-------------------
D promulgated under the Securities Act. GCG is aware that none of the shares of
Exodus Common Stock to be received by GCG in the Merger are registered under the
Securities Act or under any state securities laws. GCG is not an "underwriter,"
-----------
as such term is defined under the Securities Act, with respect to such shares of
Exodus Common Stock and GCG is acquiring the shares of Exodus Common Stock
pursuant to the Merger Agreement solely for its own account for investment
purposes, with no present intention to distribute any such shares of Exodus
Common Stock to any person, and will not sell or otherwise dispose of shares of
Exodus Common Stock except in compliance with the registration requirements, or
in transactions exempt from the registration requirements, of the Securities Act
and the rules and regulations promulgated thereunder, or any other applicable
securities laws.
C. Representations and Warranties of Global Crossing NA.
2.25 Global Crossing NA Authority.
----------------------------
Global Crossing NA has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have
21
<PAGE>
been duly authorized by all necessary corporate action on the part of Global
Crossing NA, except for the filing of the Certificate of Merger, together with
the required officers' certificates, with the Secretary of State of the State of
Delaware pursuant to Section 1.2. This Agreement has been duly executed and
delivered by Global Crossing NA and constitutes the valid and binding obligation
of Global Crossing NA enforceable against Global Crossing NA in accordance with
its terms. The execution and delivery of this Agreement by Global Crossing NA
does not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation under (i) any provision of the
Certificate of Incorporation or Bylaws or other charter documents of Global
Crossing NA or Global Crossing Ltd. respectively, as amended, or (ii) any
mortgage, indenture, lease, contract or other agreement or instrument, permit,
franchise or license to which Global Crossing NA or Global Crossing Ltd. is a
party, or (iii) any Order binding on Global Crossing NA or Global Crossing Ltd.
or any of their properties or assets, which conflict, violation, default,
termination, cancellation, acceleration would have a Material Adverse Effect on
Global Crossing NA or Global Crossing Ltd. or would materially adversely effect
the ability of Global Crossing NA to perform its obligations under this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EXODUS
Exodus represents and warrants to the Company as follows:
3.1 Organization, Standing and Power.
--------------------------------
Exodus is a corporation duly organized, validly existing and in good
standing under the laws of Delaware, and each of its subsidiaries is in good
standing under the laws of its jurisdiction of organization. Exodus and each of
its subsidiaries has the corporate power to own its properties and to carry on
its respective business as now being conducted and is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified and in good standing would have a Material Adverse Effect on
Exodus. Exodus is not in violation of any of the provisions of its Certificate
of Incorporation or Bylaws. Exodus Merger Sub is a corporation duly organized,
validly existing and in good standing under the laws of Delaware. Exodus Merger
Sub has the corporate power to own its properties and to carry on its business
as now being conducted and is duly qualified to do business and is in good
standing in each jurisdiction in which the failure to be so qualified and in
good standing would have a Material Adverse Effect on Exodus Merger Sub. Exodus
Merger Sub is not in violation of any of the provisions of its Certificate of
Incorporation or Bylaws or equivalent organizational documents.
3.2 Capital Structure.
-----------------
The authorized capital stock of Exodus consists of
1,500,000,000 shares of Exodus Common Stock, $0.001 par value per share, and
5,000,000 shares of Preferred Stock, $0.001 par value per share ("Exodus
------
Preferred Stock"), of which there were issued and outstanding as of the close of
---------------
business on September 22, 2000, 421,654,138 shares of Exodus
22
<PAGE>
Common Stock, and no shares of Exodus Preferred Stock. The shares of Exodus
Common Stock to be issued in the Merger in exchange for Company Common Stock or
upon the exercise of the assumed Company Options and the Global Crossing Assumed
Options and the New Exodus Options will be duly authorized, validly issued,
fully paid, and non-assessable. Except for issued and outstanding warrants to
purchase an aggregate total of 346,664 shares of Exodus Common Stock (the
"Exodus Warrants"), there are no other outstanding shares of capital stock or
---------------
voting securities and no outstanding commitments to issue any shares of capital
stock or voting securities, other than pursuant to the exercise of options
outstanding as of such date under Exodus's existing employee stock option plans.
As of September 22, 2000, 84,006,007 shares are subject to outstanding,
unexercised Exodus Options and 29,812,479 shares are available for issuance
under the Exodus Stock Option Plans. Except for (i) the rights created pursuant
to this Agreement, (ii) outstanding Exodus Options, there are no other options,
warrants, calls, rights, commitments or agreements of any character to which
Exodus is a party or by which it is bound obligating Exodus to issue, deliver,
sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased
or redeemed, any shares of capital stock of Exodus or obligating Exodus to
grant, extend, accelerate the vesting of, change the price of, or otherwise
amend or enter into any such option, warrant, call, right, commitment or
agreement; and (iii) outstanding Exodus Warrants.
3.3 Authority.
---------
(a) Exodus has all requisite corporate power and authority to
enter into this Agreement and the Stockholder Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Stockholder Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Exodus, other than the approval of the issuance
of shares of Exodus Common Stock in the Merger by Exodus stockholders at the
Exodus Stockholders Meeting. This Agreement has been duly executed and delivered
by Exodus and constitutes the valid and binding obligation of Exodus enforceable
against Exodus in accordance with its terms. Except as set forth on Item 3.3 to
--------
the disclosure letter delivered by Exodus to the Company concurrently with the
execution and delivery of this Agreement and referring to the representations
and warranties in this Agreement (the "Exodus Disclosure Letter"), the execution
------------------------
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under (A) any provision of the Certificate
of Incorporation or Bylaws of Exodus, as amended, (B) any mortgage, indenture,
lease, contract or other agreement or instrument, permit, concession, franchise
or license to which Exodus or any of its subsidiaries is a party, or (C) any
Order binding on Exodus or its subsidiaries or their respective properties or
assets, which conflict, violation, default termination, cancellation or
acceleration would have a Material Adverse Effect on Exodus. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity, is required by or with respect to the Exodus
Parties in connection with the execution and delivery of this Agreement by the
Exodus Parties or the consummation by the Exodus Parties of the transactions
contemplated hereby, except for (i) the filing of the Certificate of Merger,
together with the required officers' certificates, as provided in Section 1.2,
(ii) the filing of a Form 8-K with the SEC and National Association of
Securities Dealers
23
<PAGE>
("NASD") within fifteen (15) days after the Closing Date, (iii) any filings as
----
may be required under applicable state securities laws and the securities laws
of any foreign country, (iv) such filings as may be required under HSR, (v) the
filing with the Nasdaq National Market of a Notification Form for Listing of
Additional Shares with respect to the shares of Exodus Common Stock issuable
upon conversion of the Company Common Stock in the Merger and upon exercise of
the Company Options and Global Crossing Assumed Options assumed by Exodus and,
if necessary, upon exercise of the New Exodus Options, and a Form 10-C, (vi) the
filing of a registration statement on Form S-8 with the SEC, or other applicable
form covering the shares of Exodus Common Stock issuable pursuant to outstanding
Company Options and Global Crossing Assumed Options assumed by Exodus and, if
necessary, pursuant to the New Exodus Options, (vii) the filing with, and the
clearance by the SEC of, the Exodus Proxy Statement relating to the proposal
that the Exodus stockholders approve the issuance of shares of Exodus Common
Stock in the Merger and (viii) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, would not have a
Material Adverse Effect on Exodus and would not prevent, materially alter or
delay any of the transactions contemplated by this Agreement.
(b) Exodus Merger Sub has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Exodus Merger Sub. This Agreement has been duly
executed and delivered by Exodus Merger Sub and constitutes the valid and
binding obligation of Exodus Merger Sub enforceable against Exodus Merger Sub in
accordance with its terms.
3.4 SEC Documents; Financial Statements.
-----------------------------------
(a) Exodus has filed all required reports, registration statements
(with the prospectus in the form filed pursuant to Rule 424(b) of the Securities
Act), definitive proxy statements, schedules, forms, statements and other
documents required to be filed with the SEC by Exodus since December 31, 1997
(collectively, including all exhibits thereto, the "Exodus SEC Documents"). In
--------------------
addition, Exodus has made available to the Company all Exodus SEC Documents
filed prior to the date hereof, and will promptly make available to the Company
all exhibits to any additional Exodus SEC Documents filed prior to the Effective
Time. As of their respective filing dates (and, if amended or superceded by a
filing prior to the date of this Agreement, then on the date of such filing),
Exodus SEC Documents complied as to form in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act"), and the Securities Act and the rules and regulations promulgated
thereunder. As of their respective filing dates (and, if amended or superceded
by a filing prior to the date of this Agreement, then on the date of such
filing), none of Exodus SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
in which they were made, not misleading.
(b) Certain of the Exodus SEC Documents include audited financial
statements for Exodus as at and for the twelve-month periods ended December 31,
1999, 1998 and 1997 and unaudited financial statements for Exodus at and for the
three month period ended June 30, 2000 (collectively, the "Exodus Financial
----------------
Statements"). The Exodus Financial
----------
24
<PAGE>
Statements (including the related notes) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods indicated and with
each other. The Exodus Financial Statements fairly present, in all material
respects, the financial position and results of operations and cashflows of
Exodus as of the dates, and for the periods, indicated therein, all in
conformity with GAAP consistently applied during the periods involved except as
otherwise noted therein, and subject, in the case of the unaudited interim
financial statements, to the absence of notes and normal year-end adjustments.
3.5 Board and Stockholder Approvals.
-------------------------------
The Boards of Directors of Exodus and Exodus Merger Sub and Exodus, as the
sole stockholder of Exodus Merger Sub, have approved this Agreement and the
Merger and each of the other transactions and agreements contemplated hereby and
have resolved to recommend that the stockholders of Exodus approve the issuance
of shares of Exodus Common Stock in the Merger.
3.6 Absence of Certain Changes.
--------------------------
Except as set forth on Item 3.6 to Exodus Disclosure Letter, from June 30,
--------
2000 to the date of this Agreement in the case of clause (a) below and to the
date of this Agreement and to the Closing Date in the case of all clauses except
clause (a) below, Exodus and each of its subsidiaries have conducted their
respective businesses in the Ordinary Course consistent with past practice and
there has not occurred:
(a) any change, event or condition (whether or not covered by
insuran