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Exhibit 10.75
EXODUS COMMUNICATIONS, INC.
$1,000,000,000 11 5/8% Senior Notes due 2010
(EURO) 200,000,000 11 3/8% Senior Notes due 2008
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Purchase Agreement
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June 28, 2000
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Chase Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
FleetBoston Robertson Stephens Inc.
Thomas Weisel Partners LLC
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
As representative of the Several
Purchasers Named on Schedule I
hereto
Ladies and Gentlemen:
Exodus Communications, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$1,000,000,000 principal amount of 11 5/8% Senior Notes due 2010 (the "Dollar
Securities") and (EURO)200,000,000 principal amount of 11 3/8% Senior Notes due
2008 (the "Euro Securities" and together with the Dollar Securities, the
"Securities").
1. The Company represents and warrants to, and agrees with, the
Purchasers that:
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(a) A preliminary offering circular, dated June 20, 2000 (the
"Preliminary Offering Circular") and an offering circular, dated June 28, 2000
(the "Offering Circular") has been prepared in connection with the offering of
the Securities. Additionally, the Company has previously prepared the following
documents: the Company's Quarterly Reports on Form 10-Q for the quarter ended
March 31, 2000, the Company's Annual Report on Form 10-K for the year ended
December 31, 1999, the Company's Current Reports on Form 8-K, filed April 7,
2000 and June 21, 2000 (together the "Exchange Act Reports"). Any reference
(other than in Section 7(a) hereof) to the Offering Circular shall be deemed to
refer to and include the Exchange Act Reports, and any reference (other than in
Section 7(a) hereof) to the Offering Circular as amended or supplemented as of
any specified date after the date hereof shall be deemed to include (i) the
Exchange Act Reports and all subsequent documents filed with the United States
Securities and Exchange Commission (the "Commission") pursuant to Section 13(a),
13(c) or 15(d) of the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the date of the Offering Circular and prior to such
specified date and (ii) any Additional Issuer Information (as defined in Section
5(f)) furnished by the Company, prior to the completion of the distribution of
the Securities. The Exchange Act Reports, when they were filed with the
Commission, conformed in all material respects to the applicable requirements of
the Exchange Act and the applicable rules and regulations of the Commission
thereunder. The Preliminary Offering Circular, the Offering Circular and the
Exchange Act Reports did not, as of their respective dates, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by a
Purchaser through Goldman, Sachs & Co. expressly for use therein. Since June 21,
2000, the Company has not filed any documents with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act other than the Exchange Act
Reports;
(b) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Offering Circular any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular; and, otherwise than
as set forth or contemplated in the Offering Circular, since the respective
dates as of which information is given in the Offering Circular, there has not
been any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development that is
reasonably likely to result in a material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries;
(c) The Company has no subsidiary that is a "Significant Subsidiary"
of the Company within the meaning of Regulation S-X under the Securities Act of
1933, as amended (the "Securities Act");
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(d) The Company and its subsidiaries own no material real property.
The Company and its subsidiaries have good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Offering Circular or such as do
not materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries;
(e) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Offering Circular, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction where the failure to be so qualified could be
reasonably expected to have a material adverse effect on the business, financial
condition or results of operations of the Company, and each subsidiary of the
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
(g) The Dollar Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
Indenture to be dated as of July 6, 2000 (the "Dollar Indenture") between the
Company and Chase Manhattan Bank and Trust Company, National Association, as
Trustee (the "Trustee"), relating to the Dollar Securities, under which they are
to be issued, which will be substantially in the form previously delivered to
you; and the Euro Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
Indenture to be dated as of July 6, 2000 (the "Euro Indenture", and, together
with the Dollar Indenture, the "Indentures") between the Company and the
Trustee, relating to the Euro Securities, under which they are to be issued,
which will be substantially in the form previously delivered to you; and the
Securities and the Indentures conform to the descriptions thereof in the
Offering Circular and are in substantially the form previously delivered to you;
(h) The Indentures have been duly authorized and, when executed and
delivered by the Company and the Trustee, will constitute valid and legally
binding instruments, enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of
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creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law);
(i) Those certain Exchange and Registration Rights Agreements among
the Company and the Purchasers to be dated as of July 6, 2000 (the "Registration
Rights Agreements") have been duly authorized and, when executed and delivered
by the Company, will constitute valid and legally binding instruments,
enforceable in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law);
(j) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Securities) will violate or result in a violation of Section 7 of the Exchange
Act, or any regulation promulgated thereunder, including, without limitation,
Regulations T, U, and X of the Board of Governors of the Federal Reserve System,
if applicable;
(k) Prior to the date hereof, neither the Company nor any of its
affiliates (as such term is defined in Rule 144 promulgated under the Securities
Act of 1933, as amended (the "Securities Act")) has taken any action which is
designed to or which has constituted or which might have reasonably been
expected to cause or result in stabilization or manipulation of the price of any
security of the Company in connection with the offering of the Securities;
(l) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indentures, the
Registration Rights Agreements and this Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by this Agreement or the Indentures,
except the filing of a notice on Form D by the Company with the Commission
pursuant to Section 5(h) hereof and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Securities
by the Purchasers;
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(m) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or Bylaws or in default in the performance
or observance of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may be
bound;
(n) The statements set forth in the Offering Circular under the
captions "Description of Notes" insofar as they purport to constitute a summary
of the terms of the Securities, the Indentures and the Registration Rights
Agreements and under the captions "Certain United States Federal Income Tax
Considerations" and "Underwriting", insofar as they purport to describe the
provisions of the documents referred to therein, are accurate, complete and
fair;
(o) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future financial position, stockholders' equity
or results of operations of the Company and its subsidiaries; and, to the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(p) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning of
Rule 144A under the Securities Act) as securities which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system;
(q) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(r) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be an "investment company", as such term is
defined in the United States Investment Company Act of 1940, as amended (the
"Investment Company Act");
(s) Neither the Company nor any or its subsidiaries, nor any person
acting on its or their behalf has offered or sold the Securities by means of any
general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act or, with respect to Securities sold outside the United
States to persons who are not U.S. persons (as defined in Rule 902 under the
Securities Act), by means of any directed selling efforts within the meaning of
Rule 902 under the Securities Act and the Company, any affiliate of the Company
and any person acting on its or their behalf has complied with and will
implement the "offering restrictions" within the meaning of such Rule 902, it
being understood that the Company makes no representations in this clause (s) as
to the Purchasers;
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(t) Within the six months prior to the date hereof, neither the
Company nor any other person acting on behalf of the Company has offered or sold
to any person any Securities, or any substantially similar securities of the
Company, other than Securities offered or sold to the Purchasers hereunder. The
Company will take reasonable precautions designed to insure that any offer or
sale, direct or indirect, in the United States or to any U.S. person (as defined
in Rule 902 under the Securities Act) of any Securities or any substantially
similar security issued by the Company, within six months subsequent to the date
on which the distribution of the Securities has been completed (as notified to
the Company by Goldman, Sachs & Co), is made under restrictions and other
circumstances reasonably designed not to affect adversely the status of the
offer and sale of the Securities in the United States and to U.S. persons
contemplated by this Agreement as transactions exempt from the registration
provisions of the Securities Act;
(u) KPMG LLP, which has certified certain financial statements of the
Company and its subsidiaries is an independent public accountant as required by
the Securities Act and the rules and regulations of the Commission thereunder;
(v) The Company owns or possesses, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions, copyrights, know-
how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now operated by it,
and the Company has not received any notice of, and is not otherwise aware of,
any infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would render
invalid, or otherwise prevent or materially inhibit the Company from utilizing,
any Intellectual Property necessary to carry on the business now conducted by
the Company, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding), invalidity, prevention or inhibition,
singly or in the aggregate, is reasonably likely to result in a material adverse
change in the general affairs, management, financial position, stockholders'
equity or results of operations of the Company;
(w) Except as described in the Offering Circular and except as would
not, singly or in the aggregate, result in a material adverse change in or
affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company, (A) the Company is not in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company has all permits, authorizations and
approvals
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required under any applicable Environmental Laws and is in compliance with their
requirements, (C) there are no pending or, to the best of the Company's
knowledge, threatened administrative, regulatory or judicial action, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company and (D) to the best of the Company's knowledge, there are no events or
circumstances that might reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or government body or agency, against or affecting the Company relating to
Hazardous Materials or any Environmental Laws;
2. (a) Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97.25% of the principal amount thereof, plus accrued interest, if any,
from July 6, 2000 to the Time of Delivery hereunder, the principal amount of
Securities set forth opposite the name of such Purchaser in Schedule I hereto.
(b) The Company may offer and sell such dollar-denominated senior
notes in an aggregate principal amount not to exceed $100,000,000 and such euro-
denominated senior notes in an aggregate principal amount not to exceed
(EURO)100,000,000, (the "Additional Securities") before the maturity date of the
Securities and upon written notice to Goldman, Sachs & Co. of its intention to
issue such Additional Securities; provided, however, that the Company shall have
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entered into a purchase agreement on substantially similar terms and conditions
as this Agreement and an Exchange and Registration Rights Agreement on
substantially similar terms and conditions as the Registration Rights Agreement,
in each case, with Goldman, Sachs & Co. (or such other underwriter as the
Company shall choose in the event that Goldman, Sachs & Co. shall decline the
representation of the Company in such offering) and such other of the Purchasers
as the Company and Goldman, Sachs & Co. shall mutually agree upon for the sale
and issuance of the Additional Securities. The purchase price for any such
Additional Securities shall be equal to the then current market price of the
Dollar Securities less an initial purchaser's discount equal to 2.75% of the
principal amount of such Additional Securities or such other percentage as shall
be reasonably acceptable to Goldman, Sachs & Co and the Company. Holders of
Additional Securities shall be entitled to receive an interest payment equal to
the holders of the Dollar Securities, on a percentage basis, on all Interest
Payment Dates (as defined in the Indentures) occurring after the date of
issuance of such Additional Securities.
3. Upon the authorization by Goldman, Sachs & Co. of the release of the
Securities, the several Purchasers propose to offer the Securities for sale upon
the terms and conditions set forth in this Agreement and the Offering Circular
and each Purchaser hereby represents and warrants to, and agrees with, the
Company that:
(a) It will offer and sell the Securities only to: (i) persons which
it reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Securities Act in transactions meeting the
requirements of Rule 144A or, (ii) upon the terms and conditions set forth in
Annex I to this Agreement;
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(b) Upon request of the Company, it will notify the Company upon
completion of the distribution of the Securities;
(c) It is an Institutional Accredited Investor; and
(d) It has not offered and will not offer or sell the Securities by
any form of general solicitation or general advertising, including but not
limited to the methods described in Rule 502(c) under the Securities Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will
be represented by one or more definitive Securities in book-entry form which
will be deposited by or on behalf of the Company to Goldman, Sachs & Co. with
The Depository Trust Company ("DTC") or other appropriate depository for the
account of such purchaser, or its designated custodian. The Company will deliver
the Securities to Goldman, Sachs & Co. for the account of each Purchaser against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer, payable to the order of the Company in Federal (or other same day)
funds, by causing DTC or other appropriate depository to credit the Securities
to the account of Goldman, Sachs & Co. at DTC or other appropriate depository.
The Company will cause the certificates representing the Securities to be made
available to Goldman, Sachs & Co. for checking at least twenty-four hours prior
to the Time of Delivery (as defined below) at the office of DTC or its
designated custodian (the "Designated Office") or at another place designated by
Goldman, Sachs & Co. The time and date of such delivery and payment shall be
9:30 a.m., New York City time, on July 6, 2000 or such other time and date as
Goldman, Sachs & Co. and the Company may agree upon in writing. Such time and
date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross-
receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(h) hereof, will be delivered at such time and
date at the offices of Fenwick & West LLP, Two Palo Alto Square, Palo Alto,
California 94306 (the "Closing Location"), and the Securities will be delivered
at the Designated Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 6:00 p.m., New York City time, on the New York Business
Day next preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to
make no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
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(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering
Circular and each amendment or supplement thereto signed by an authorized
officer of the Company and with the independent accountants' report(s) in the
Offering Circular, and any amendment or supplement containing amendments to the
financial statements covered by such report(s), signed by the accountants, and
additional copies thereof in such quantities as you may from time to time
reasonably request, and if, at any time prior to the expiration of nine months
after the date of the Offering Circular, any event shall have occurred as a
result of which the Offering Circular as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Offering Circular is
delivered, not misleading, or, if for any other reason it shall be necessary or
desirable during such same period to amend or supplement the Offering Circular,
to notify you and upon your request to prepare and furnish without charge to
each Purchaser and to any dealer in securities as many copies as you may from
time to time reasonably request of an amended Offering Circular or a supplement
to the Offering Circular which will correct such statement or omission or effect
such compliance;
(d) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company that are substantially similar to the Securities
(other than Additional Securities);
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, for the benefit of holders from time to time of
Securities, to furnish at its expense, upon request, to holders of Securities
and prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Securities Act;
(g) If requested by you, to use its best efforts to cause (i) the
Dollar Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc. and (ii) the Euro Securities to be
eligible for listing on the Luxembourg Stock Exchange;
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(h) If applicable, to file with the Commission, not later than 15
days after the Time of Delivery, five copies of a notice on Form D under the
Securities Act (one of which will be manually signed by a person duly authorized
by the Company); to otherwise comply with the requirements of Rule 503 under the
Securities Act; and to furnish promptly to you evidence of each such required
timely filing (including a copy thereof);
(i) To furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the date of the Offering Circular), consolidated summary financial
information of the Company and its subsidiaries for such quarter in reasonable
detail;
(j) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which the Securities or any class of securities of the Company is listed; and
(ii) such additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission) provided that you agree to hold in
confidence any confidential or non-public information so provided;
(k) The Company agrees that, to the extent required under the Senior
Notes Indenture (as defined below), it will use the net proceeds of the sale of
the Securities to finance the purchase or other acquisition of any property,
inventory, asset or business directly or indirectly, by the Company or any
Restricted Subsidiary used in, or to be used in, the System and Network
Management Business or for such other purposes permitted by the Senior Notes
Indenture (as defined below). Neither the Company nor any of its Restricted
Subsidiaries has, as of the date hereof, incurred any Debt under Section
1008(11) of the Senior Notes Indenture. "Debt" has the meaning given thereto in
the Senior Notes Indenture. "Restricted Subsidiary" shall mean any subsidiary of
the Company that has not been designated an "Unrestricted Subsidiary" pursuant
to the Indenture dated as of December 1, 1999 between the Company and the Chase
Manhattan Bank and Trust Company, National Association, as trustee governing the
Company's 10 3/4% Senior Notes due 2009 (as amended or supplemented from time to
time, the "Senior Notes Indenture"). "System and Network Management Business"
means: (i) server and other hardware hosting; (ii) connectivity, data
networking, telecommunications or content for computer or data networks or
systems; (iii) management of computer or data networks or systems; (iv)
technology services, equipment sales or leasing or software licensing for
computer or data networks or systems (including Internet Protocol and any
successor protocol(s) based networks); and (v) businesses reasonably related,
complementary or incidental thereto;
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(l) The Company and its affiliates and all persons acting on its
behalf (other than the Purchasers, as to whom the Company makes no
representation) will comply in all material respects with the offering
restrictions requirements of Regulation S in connection with the offering of the
Securities outside the United States.
6. The Company covenants and agrees with the several Purchasers that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
issue of the Securities and all other expenses in connection with the
preparation, printing and filing of the Preliminary Offering Circular and the
Offering Circular and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Purchasers and dealers; (ii) the cost of
printing or producing this Agreement, any Agreement among Purchasers, the
Indentures, the Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) the cost of preparing the Securities; (vi) the fees and expenses of the
Trustee and any agent of the Trustee and the fees and disbursements of counsel
for the Trustee in connection with the Indentures and the Securities; (vii) any
cost incurred in connection with the designation of the Dollar Securities for
trading in PORTAL and the listing of the Euro Securities on the Luxembourg Stock
Exchange; and (viii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Purchasers will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of the Time of Delivery, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) Wilson Sonsini Goodrich & Rosati, Professional Corporation,
counsel for the Purchasers, shall have furnished to you such opinion or
opinions, dated the Time of Delivery, with respect to the matters covered in
paragraphs (i), (ii), (v), (vi), (vii), (x), (xi), (xii) and (xiii) of
subsection (b) below as well as such other related matters as you may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
(b) Fenwick & West LLP, counsel for the Company, (or such other
counsel as the Company shall deem appropriate and which shall be reasonably
acceptable to
-11-
<PAGE>
Goldman, Sachs & Co.) shall have furnished to you their written opinion, dated
the Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and corporate authority to own its properties and
conduct its business as described in the Offering Circular;
(ii) The Company had, as of the dates specified in the Offering
Circular, duly authorized capital stock as set forth under the caption
"Capitalization" in the Offering Circular, and all of the issued and outstanding
shares of capital stock of the Company described therein have been duly and
validly authorized and issued, are non-assessable and to such counsel's
knowledge, are fully paid;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each jurisdiction within the United States in which it owns or leases
properties or employs personnel, where the failure to be so qualified would have
a material adverse effect on the business, financial condition or results of
operations of the Company;
(iv) To such counsel's knowledge and other than as set forth in
the Offering Circular, there are no legal or governmental proceedings pending to
which the Company is a party or of which any property of the Company is the
subject which, if determined adversely to the Company, would individually or in
the aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of operations
of the Company; and, to such counsel's knowledge, no such proceedings are
threatened by governmental authorities or threatened by others;
(v) This Agreement has been duly authorized, executed and
delivered by the Company to you;
(vi) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company;
(vii) The Indentures and the Registration Rights Agreements have
been duly authorized, executed and delivered by the Company and constitute valid
and legally binding instruments, enforceable in accordance with their respective
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(viii) The issue and sale of the Securities being delivered at
the Time of Delivery and the compliance by the Company with all of the
provisions of the Securities, the Indentures, this Agreement and the
Registration Rights Agreements and the consummation of the transactions herein
and therein contemplated were they to be
-12-
<PAGE>
completed on or prior to the date of such opinion and assuming the absence of
any applicable cure period, waiting period or other similar provision, do not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any of the agreements filed as
exhibits to the Company's Annual Report filed on Form 10-K for the year ended
December 31, 1999, its Quarterly Report on Form 10-Q for the quarter ended March
31, 2000 or any other Exchange Act Report or any agreements entered into by the
Company after March 31, 2000 that would be required to be filed as a material
agreement exhibit on Form 10-Q or any other Exchange Act Report (in each case, a
"Material Agreement") (provided that in determining which documents would be
required to be so filed, such counsel may rely on an officer's certificate that
specifies agreements that the Company or any of its significant subsidiaries has
entered into since March 31, 2000) nor does such action result in any violation
of the provisions of the Certificate of Incorporation or Bylaws of the Company
or any of its significant subsidiaries or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its significant subsidiaries or
any of their properties;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any United States court or United States governmental
agency or United States body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions contemplated
by this Agreement, the Indentures or the Registration Rights Agreements, except
(A) such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Purchasers (as to which such counsel renders no opinion) or (B) such consents,
approvals, authorizations, orders, registrations or qualifications as are
referenced in the Offering Circular;
(x) The statements set forth in the Offering Circular insofar
as they purport to constitute a summary of the terms of the Securities, the
Indentures and the Registration Rights Agreements, and under the captions
"Certain United States Federal Income Tax Considerations" and "Underwriting,"
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate and complete in all material respects;
(xi) The Exchange Act Reports (other than the financial
statements and related notes and schedules (and financial data) therein, as to
which such counsel need express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the Exchange Act, and the rules and regulations of the Commission promulgated
thereunder;
(xii) No registration of the Securities under the Securities Act,
and no qualification of an indenture under the Trust Indenture Act of 1939 with
respect thereto, is required for the offer and sale to, and initial resale of
the Securities by, the Purchasers in the manner contemplated by this Agreement;
and
-13-
<PAGE>
(xiii) The Company is not an "investment company," as such term
is defined in the Investment Company Act.
In addition, such counsel shall state that, although they are not passing
upon and do not assume any responsibility for, nor have they independently
verified, the accuracy, completeness or fairness of the statements contained in
the Preliminary Offering Circular and the Offering Circular, except for and to
the extent of those referred to in the opinion in subsection (x) of this Section
7(b), they have participated in certain conferences with officers and other
employees of the Company, representatives of the Company's independent certified
public accountants and representatives of the Purchasers with respect to the
preparation of the Preliminary Offering Circular and the Offering Circular, and
no facts have come to the attention of attorneys devoting attention to the
representation of the Company in its preparation of the Preliminary Offering
Circular and the Offering Circular that have caused them to believe that, as of
their respective dates and as of the Time of Delivery, the Preliminary Offering
Circular and the Offering Circular or any further amendments thereto made by the
Company prior to such Time of Delivery (other than the financial statements and
related notes, related schedules and financial data included therein, as to
which such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Further, such counsel shall state that,
although they are not passing upon and do not assume any responsibility for, nor
have they independently verified, the accuracy, completeness or fairness of the
statements contained in the Exchange Act Reports, they have participated in
certain conferences with officers and other employees of the Company, and
representatives of the Company's independent certified public accountants with
respect to the preparation of the respective Exchange Act Reports, and no facts
have come to the attention of attorneys devoting attention to the representation
of the Company in its preparation of the respective Exchange Act Reports that
have caused them to believe that as of the dates on which the respective
Exchange Act Reports were filed with the Commission, the Exchange Act Reports
(other than the financial statements and related notes, related schedules and
financial data included therein, as to which such counsel need express no
opinion) contained an untrue statement of material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made when such
documents were so filed, not misleading.
(c) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, KPMG LLP shall have furnished
to you a letter or letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, to the effect set forth in Annex II
hereto;
(d) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the
-14-
<PAGE>
Offering Circular, and (ii) since the respective dates as of which information
is given in the Offering Circular there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Offering Circular, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the Purchasers so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities on the terms and in the
manner contemplated in this Agreement and in the Offering Circular;
(e) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(f) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either Federal
or New York or California State authorities; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Purchasers makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Offering Circular;
or (v) the occurrence of any material adverse change in the existing financial,
political or economic conditions in the United States or elsewhere which, in the
judgment of the Purchasers, would materially and adversely affect the financial
markets or markets for the Securities or other debt securities;
(g) The Dollar Securities have been designated for trading on PORTAL;
(h) The Company shall have furnished to you executed copies of the
Indentures and the Registration Rights Agreements; and
(i) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsection (d) of this Section and as
to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser
-15-
<PAGE>
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Circular or the Offering
Circular, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading, and will reimburse each Purchaser
for any legal or other expenses reasonably incurred by such Purchaser in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Preliminary Offering Circular or the
Offering Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Purchaser
through Goldman, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Circular or the Offering Circular, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Preliminary Offering Circular or
the Offering Circular or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such
Purchaser through Goldman, Sachs & Co. expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in
-16-
<PAGE>
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Purchasers on
the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Purchasers on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Purchasers, in each case as set forth
in the Offering Circular. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by
-17-
<PAGE>
reason of such untrue or alleged untrue statement or omission or alleged
omission. The Purchasers' obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations and not
joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Act; and the obligations of the Purchasers
under this Section 8 shall be in addition to any liability which the respective
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by
any Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities,
-18-
<PAGE>
or if the Company shall not exercise the right described in subsection (b) above
to require non-defaulting Purchasers to purchase Securities of a defaulting
Purchaser or Purchasers, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Purchaser or the Company, except for
the expenses to be borne by the Company and the Purchasers as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Purchaser from liability
for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
13. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 32 Old Slip, 21st Floor, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary; provided, however, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Company and each person who controls
the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns,
-19-
<PAGE>
and no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Purchaser shall be
deemed a successor or assign by reason merely of such purchase.
15. In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company will indemnify each Purchaser
against any loss incurred by such Purchaser as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which a Purchaser is able to purchase United
States dollars with the amount of judgment currency actually received by such
Purchaser. The foregoing indemnity shall constitute a separate and independent
obligation of the Company and shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of or conversion into United States dollars.
16. Time shall be of the essence of this Agreement.
17. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
-20-
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us ten (10) counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
EXODUS COMMUNICATIONS, INC.
By: /s/ R. Marshall Case
-------------------------------------
Name: R. Marshall Case
-----------------------------------
Title: Executive Vice President, Finance
----------------------------------
and Chief Financial Officer
-----------------------------------------
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Chase Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
FleetBoston Robertson Stephens Inc.
Thomas Weisel Partners LLC
By: /s/ Goldman, Sachs & Co.
--------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
-21-
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal
Amount of
Securities
to be
Purchaser Purchased
--------- ---------
<S> <C>
Goldman, Sachs & Co. $ 500,000,000.00
Merrill Lynch, Pierce, Fenner & Smith Incorporated $ 200,000,000.00
Morgan Stanley & Co. Incorporated $ 70,000,000.00
Chase Securities Inc. $ 70,000,000.00
Donaldson, Lufkin & Jenrette Securities Corporation $ 70,000,000.00
FleetBoston Robertson Stephens Inc. $ 45,000,000.00
Thomas Weisel Partners LLC $ 45,000,000.00
-----------------
Total $1,000,000,000.00
=================
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount of
Securities
to be
Purchaser Purchased
--------- ---------
<S> <C>
Goldman, Sachs & Co. (EURO) 100,000,000.00
Morgan Stanley & Co. Incorporated (EURO) 40,000,000.00
Merrill Lynch, Pierce, Fenner & Smith Incorporated (EURO) 14,000,000.00
Chase Securities Inc. (EURO) 14,000,000.00
Donaldson, Lufkin & Jenrette Securities Corporation (EURO) 14,000,000.00
FleetBoston Robertson Stephens Inc. (EURO) 9,000,000.00
Thomas Weisel Partners LLC (EURO) 9,000,000.00
---------------------
Total (EURO) 200,000,000.00
=====================
</TABLE>
-22-
<PAGE>
ANNEX I
(1) The Securities have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. Each Purchaser represents that it has
offered and sold the Securities, and will offer and sell the Securities (i) as
part of their distribution at any time and (ii) otherwise until 40 days after
the later of the commencement of the offering and the Time of Delivery, only in
accordance with Rule 903 of Regulation S or Rule 144A under the Securities Act.
Accordingly, each Purchaser agrees that neither it, its affiliates nor any
persons acting on its or their behalf has engaged or will engage in any directed
selling efforts with respect to the Securities, and it and they have complied
and will comply with the offering restrictions requirement of Regulation S.
Each Purchaser agrees that, at or prior to confirmation of sale of Securities
(other than a sale pursuant to Rule 144A), it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the distribution
compliance period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and the
closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities, except with its affiliates or with the prior written consent of
the Company.
(2) Notwithstanding the foregoing, Securities may be offered, sold and
delivered by the Purchasers in the United States and to U.S. persons pursuant to
Section 3(a)(i) of this Agreement without delivery of the written statement
required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great
<PAGE>
Britain with respect to anything done by it in relation to the Securities in,
from or otherwise involving the United Kingdom, and (c) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issuance of the Securities to a person who
is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 of Great Britain or is a
person to whom the document may otherwise lawfully be issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Goldman, Sachs & Co.'s express written consent and then only at its own
risk and expense.
-2-
<PAGE>
ANNEX II
Pursuant to Section 7(c) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of Section 101 of
the AICPA Code of Professional Conduct;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the Offering
Circular comply as to form in all material respects with the applicable
requirements of the Exchange Act and the related published rules and
regulations;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the four most recent fiscal years included in the Offering Circular
agrees with the corresponding amounts (after restatements where applicable)
in the audited consolidated financial statements for such four fiscal
years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Offering Circular, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Offering Circular are not in conformity with generally
accepted accounting principles applied on the basis substantially
consistent with the basis for the audited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance sheet
items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the
<PAGE>
corresponding amounts in the audited consolidated financial statements
included in the Offering Circular;
(C) the unaudited financial statements which were not included
in the Offering Circular but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Offering Circular and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the Offering
Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to form
in all material respects with the applicable accounting requirements
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Offering Circular or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity or other
items specified by the Purchasers, or any increases in any items
specified by the Purchasers, in each case as compared with amounts
shown in the latest balance sheet included in the Offering Circular
except in each case for changes, increases or decreases which the
Offering Circular discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Purchasers, or
any increases in any items specified by the Purchasers, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the Purchasers,
except in each case for decreases or increases which the Offering
Circular discloses have occurred or may occur or which are described
in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they
-2-
<PAGE>
have carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Purchasers, which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Offering Circular, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
-3-
<PAGE>
June ____, 2000
Dear KPMG LLP:
Goldman, Sachs & Co., as representative of the Purchasers of Senior Notes
due to be issued by Exodus Communications, Inc. (the "Company"), will be
reviewing certain information relating to the Company that will be included
(incorporated by reference) in the Offering Circular. This review process,
applied to the information relation to the issue, is (will be) substantially
consistent with the due diligence review process that we would perform if this
placement of securities were being registered pursuant to the Securities Act of
1933 (the "Act"). It is recognized however that what is "substantially
consistent" may vary from situation to situation and may not be the same as that
done in a registered offering of the same securities for the same issuer and
whether the procedures being, or to be, followed will be "substantially
consistent" will be determined by us on a case-by-case basis. We are
knowledgeable with respect to the due diligence review process that would be
performed if this placement of securities were being registered pursuant to the
Act. We hereby request that you deliver to us a "comfort" letter concerning the
financial statements of the issuer and certain statistical and other data
included in the offering document. We will contact you to identify the
procedures we wish you to follow and the form we wish the comfort letter to
take.
Very truly yours,
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(Goldman, Sachs & Co.)
