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SECURITIES ANDEXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
September 28, 2000
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Date of Report (Date of Earliest Event Reported)
Exodus Communications, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 0-23795 77-0403076
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(State of Incorporation) (Commission file number) (I.R.S. Employer
Identification No.)
2831 Mission College Boulevard
Santa Clara, California 95054
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(Address of principal executive offices, including zip code)
(408) 346-2200
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(Registrant's telephone number, including area code)
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ITEM 5: OTHER EVENTS.
On September 28, 2000, Exodus Communications, Inc. ("Exodus") entered into
a definitive merger agreement under which Exodus will acquire GlobalCenter
Holding Co. ("GlobalCenter"), a Delaware corporation and an indirect wholly
owned subsidiary of Global Crossing North America, Inc., a New York corporation
("Global Crossing"). Pursuant to the terms of the Agreement and Plan of Merger
(the "Merger Agreement"), at the effective time of the merger each outstanding
share of GlobalCenter common stock will be converted into the right to receive a
number of shares of Exodus common stock equal to $6.525 billion divided by the
average closing price of Exodus stock for the ten trading days prior to and
including the day two days prior to the closing of the transaction, subject to a
collar. Based on the collar and Exodus' closing stock price of $53.25 on
September 27, 2000, the value of the transaction as of September 28, 2000 was
approximately $6.1 billion. In addition, at the effective time of the merger,
each GlobalCenter option and certain other options of GlobalCenter affiliates
will be assumed by Exodus and thereafter will constitute the right to receive
options to purchase shares of Exodus common stock. No fractional shares will be
issued in the merger, but in lieu thereof each holder of GlobalCenter stock who
would otherwise be entitled to receive a fraction of a share of Exodus common
stock, after aggregating all fractional shares of Exodus common stock to be
received by such holder, will receive an amount of cash equal to the product of
such fraction and the closing price of one share of Exodus common stock on the
last trading day before the effective time of the merger. Completion of the
merger is subject to the satisfaction or waiver of various conditions, including
the expiration or early termination of the waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act and the approval of the merger by the
stockholders of Exodus. The transaction will be accounted for as a purchase.
Concurrently with and pursuant to the merger agreement, Exodus entered into
a Stockholder Agreement and a Registration Rights agreement, each dated as of
September 28, 2000, with Global Crossing GlobalCenter Holdings, Inc. ("GCGCH"),
a Bermuda corporation, and Global Crossing Ltd. ("GCL"), a Bermuda company (each
an "Investor"). Under the Registration Rights Agreement, each Investor will be
entitled to offer for sale registrable shares of Exodus pursuant to a shelf
registration statement that Exodus has agreed to file with the SEC within four
months after the effective time of the merger. In addition, Exodus has agreed
that, anytime after the first anniversary of the effective time of the merger,
the Investors will have the right to ask Exodus to register their shares if and
when Exodus offers any of its shares of common stock for sale in an underwritten
offering. Exodus may suspend an offering of securities under circumstances
delineated in the agreement. Under the Stockholder Agreement, GCGCH will have
the right to designate one nominee for election to the board of directors of
Exodus. This right will terminate if at anytime the Investors beneficially own
in the aggregate less than 10% of the total voting power of Exodus. In addition,
the Investors agreed to vote either in the manner recommended by the board of
directors of Exodus or in the same proportion as all votes cast by disinterested
shareholders. This agreement regarding voting expires five years after the
effective time of the merger, or sooner if there is a change of control or if
the Investors own less than 10% of the total voting power of Exodus. The
Investors have also agreed to certain standstill provisions regarding Exodus
common stock and have agreed not to sell or
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transfer any shares of Exodus common stock until after the first anniversary of
the effective date of the merger.
On September 28, 2000, as a condition precedent to GCL and Exodus entering
into the Merger Agreement, Exodus entered into two Network Services, Marketing
and Cooperation Agreements, one with GCL and the other with Asia Global Crossing
Ltd., a Bermuda corporation ("AGC"). Pursuant to these agreements, for a period
of 10 years, Exodus has agreed to promote GCL and AGC and their respective
subsidiaries and affiliates as the primary provider of network services for its
network operations. Exodus has also agreed to purchase 50% or more of its future
network needs outside of Asia from GCL and has agreed, with respect to its
future network needs in Asia, to purchase 50% of its future network needs from
AGC prior to closing of the merger and 60% or more thereafter. In return, GCL
and AGC have agreed to use Exodus and its affiliates as GCL's and AGC's and
their affiliates' exclusive provider of internet Web hosting services for a
period of two years after the closing of the merger and have also agreed to
provide Exodus with preferred pricing on all network services and assets offered
by GCL and AGC, including circuits, IRUs and dark fiber.
As part of the transaction, on September 28, 2000, Exodus and AGC entered
into a Joint Venture Agreement relating to the formation of Exodus Asia-Pacific
Ltd., in order to provide complex Web hosting and managed services in Asia.
Under the agreement, Exodus will own 67% of the venture and AGC will own 33%.
Both companies have agreed to contribute to the joint venture all of their
assets related to Web hosting in Asia. AGC will be the primary network provider
for Exodus Asia Pacific in Asia. Exodus will manage and operate the joint
venture.
Copies of each of the foregoing agreements are included in this report as
Exhibits 2.01, 4.01, 4.02, 99.01, 99.02, and 99.3. The foregoing descriptions
are qualified in their entirety by reference to the full text of such exhibits.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
2.01 Agreement and Plan of Merger among Exodus Communications, Inc.,
Einstein Acquisition Corp., Global Crossing GlobalCenter Holdings,
Inc., GlobalCenter Holding Co., GlobalCenter Inc., and Global
Crossing North America, Inc., dated as of September 28, 2000.
4.01 Stockholder Agreement among Exodus Communications, Inc., Global
Crossing Ltd., and Global Crossing GlobalCenter Holdings, Inc., dated
as of September 28, 2000.
4.02 Registration Rights Agreement by and among Exodus Communications,
Inc., Global Crossing GlobalCenter Holdings, Inc., Global Crossing
Ltd., and its other
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direct and indirect subsidiaries mentioned therein, dated as of September 28,
2000.
99.01* Networking Services, Marketing and Cooperation Agreement by and
between Exodus Communications, Inc. and Global Crossing Ltd., dated
as of September 28, 2000.
99.02* Networking Services, Marketing and Cooperation Agreement by and
between Exodus Communications, Inc. and Asia Global Crossing Ltd.,
dated as of September 28, 2000.
99.03 Joint Venture Agreement relating to Exodus Asia-Pacific Ltd. among
Exodus Communications, Inc., Asia Global Crossing, Ltd. and Exodus
Asia-Pacific Ltd., dated as of September 28, 2000.
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* Confidential treatment has been requested for certain portions of these
documents pursuant to an application for confidential treatment filed with
the Securities and Exchange Commission on October 13, 2000. Such portions
have been redacted and marked with a triple asterisk. The non-redacted
versions of these documents have been filed separately with the Securities
and Exchange Commission.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: October 13, 2000
EXODUS COMMUNICATIONS, INC.
By: /s/ Adam W. Wegner
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Adam W. Wegner, Senior Vice President, Legal
and Corporate Affairs, General Counsel and
Secretary
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EXHIBIT INDEX
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Exhibit Description
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2.01 Agreement and Plan of Merger among Exodus Communications, Inc.,
Einstein Acquisition Corp., Global Crossing GlobalCenter Holdings,
Inc., GlobalCenter Holding Co., GlobalCenter Inc., and Global
Crossing North America, Inc., dated as of September 28, 2000.
4.01 Stockholder Agreement among Exodus Communications, Inc., Global
Crossing Ltd., and Global Crossing GlobalCenter Holdings, Inc.,
dated as of September 28, 2000.
4.02 Registration Rights Agreement by and among Exodus Communications,
Inc., Global Crossing GlobalCenter Holdings, Inc., Global Crossing
Ltd., and its other direct and indirect subsidiaries mentioned
therein, dated as of September 28, 2000.
99.01* Networking Services, Marketing and Cooperation Agreement by and
between Exodus Communications, Inc. and Global Crossing Ltd., dated
as of September 28, 2000.
99.02* Networking Services, Marketing and Cooperation Agreement by and
between Exodus Communications, Inc. and Asia Global Crossing Ltd.,
dated as of September 28, 2000.
99.03 Joint Venture Agreement relating to Exodus Asia-Pacific Ltd. among
Exodus Communications, Inc., Asia Global Crossing, Ltd. and Exodus
Asia-Pacific Ltd., dated as of September 28, 2000.
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* Confidential treatment has been requested for certain portions of these
documents pursuant to an application for confidential treatment filed with the
Securities and Exchange Commission on October 13, 2000. Such portions have
been redacted and marked with a triple asterisk. The non-redacted versions of
these documents have been filed separately with the Securities and Exchange
Commission.
