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Exhibit 4.06
AMENDMENT NO. 2 TO RIGHTS AGREEMENT
AMENDMENT NO. 2, dated as of January 9, 2001 (this "Amendment No. 2"), to
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the Rights Agreement, dated as of January 27, 1999 (the "Rights Agreement"),
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between Exodus Communications, Inc., a Delaware corporation (the "Company") and
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Fleet National Bank. (the "Rights Agent").
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WHEREAS, the Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement;
WHEREAS, Section 27 of the Rights Agreement provides that the Company may,
and the Rights Agent shall, if the Company directs, supplement or amend the
Rights Agreement without the approval of any holders of Right Certificates to
make any provisions or changes with respect to the Rights which the Company may
deem necessary or desirable;
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Board of
Directors of the Company has determined that an amendment to the Rights
Agreement is necessary and desirable to effect the following and the Company and
the Rights Agent desire to evidence such amendment in writing;
WHEREAS, the Company, Exodus Acquisition Corp., a Delaware Corporation and
a direct wholly-owned subsidiary of the Company ("Exodus Merger Sub"), Global
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Crossing North America, Inc., a New York corporation ("Global Crossing NA"),
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Global Crossing GlobalCenter Holdings, Inc., a Delaware corporation and a direct
wholly-owned subsidiary of Global Crossing NA ("GCG"), GlobalCenter Holding Co.,
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a Delaware corporation and an indirect wholly-owned subsidiary of Global
Crossing NA ("GlobalCenter Holding"), and GlobalCenter Inc., a Delaware
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corporation and a direct wholly-owned subsidiary of GlobalCenter Holding and an
indirect wholly-owned subsidiary of Global Crossing NA ("GlobalCenter") have
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entered into an Agreement and Plan of Merger dated as of September 28, 2000 (the
"Merger Agreement"), which provides for the merger of Exodus Merger Sub with and
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into GlobalCenter Holding (the "Merger"), and the Board of Directors of the
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Company has approved the Merger Agreement and the Merger;
WHEREAS, GCG is an indirect wholly-owned subsidiary of Global Crossing
Ltd., a Bermuda company, and, upon the closing of the Merger, Global Crossing
Ltd. and its Affiliates and Associates (collectively, "Global Crossing") may own
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in excess of 15% of the Company's outstanding Common Shares, and the Company
desires to exclude from the definition of an "Acquiring Person" such
shareholders, provided that their ownership does not exceed a designated
percentage of the Company's outstanding Common Shares;
WHEREAS, the definition of an "Acquiring Person" was previously amended by
Amendment No. 1, dated as of October 20, 1999, to the Rights Agreement, which
amendment is superseded by this Amendment No. 2;
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THEREFORE, in consideration of the foregoing and the mutual agreements set
forth herein, the parties hereto agree as follows:
1. Section 1(a) of the Rights Agreement is hereby amended and restated
as follows:
(a) "Acquiring Person" shall mean any Person who or which, together
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with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% (the "Designated Percentage") or more of
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the Common Shares of the Company then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or any
Subsidiary of the Company or (iv) any entity holding Common
Shares for or pursuant to the terms of any such plan;
provided, however, that
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(x) in the case of in the case of FMR Corp. and its
Affiliates and Associates, including any accounts for which FMR
Corp. and its Affiliates and Associates have investment
management or advisory responsibilities (including the Fidelity
Investment mutual funds, but not including any of its
Affiliates identified in clauses (i), (ii), (iii) or (iv) of
this sentence), the Designated Percentage shall be 20% (the
"Designated FMR Percentage"); and
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(y) in the case of Global Crossing and its Affiliates and
Associates, the Designated Percentage shall be the percentage of
outstanding Common Shares beneficially owned by Global Crossing
and its Affiliates and Associates immediately following the
closing of the Merger plus one percent (1%) (the "Designated
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Global Crossing Percentage"), provided that if Global Crossing
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or any of its Affiliates or Associates transfers any Common
Shares such that the percentage of outstanding Common Shares
beneficially owned by Global Crossing and its Affiliates and
Associates plus one percent (1%) (the "Lower Percentage") is
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less than the Designated Global Crossing Percentage then in
effect, then the Designated Global Crossing Percentage shall
be revised downward to equal the Lower Percentage (but shall
not be reduced below the Designated Percentage).
Notwithstanding the foregoing,
(A) No Person shall become an Acquiring Person if the Board
of Directors of the Company determines in good faith that
a Person who would otherwise be an Acquiring Person has
become such inadvertently, and such Person as promptly as
practicable takes such actions as may be necessary so
that such Person would no longer be considered an
Acquiring Person;
(B) Neither Global Crossing nor any Person which acquires
control of Global Crossing Ltd. shall become an Acquiring
Person by virtue of the acquisition of control of Global
Crossing Ltd. by such a Person which, together with all
Affiliates and Associates of such
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Person, is, immediately prior to such acquisition, the
Beneficial Owner of Common Shares which, when added to
the Common Shares of which Global Crossing is the
Beneficial Owner immediately prior to such acquisition,
would equal or exceed the Designated Global Crossing
Percentage, provided that such Person as promptly as
practicable after such acquisition takes such actions as
may be necessary to reduce the number of Common Shares of
which such Person, together with all Affiliates and
Associates of such Person, is the Beneficial Owner to
less than the Designated Global Crossing Percentage;
(C) No Person shall become an "Acquiring Person" as the result
of an acquisition of Common Shares by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such
Person and such Person's Affiliates and Associates to the
Designated Percentage or more of the Common Shares of the
Company then outstanding; provided, however, that if a
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Person, together with such Person's Affiliates and
Associates, shall become the Beneficial Owner of the
Designated Percentage or more of the Common Shares of the
Company then outstanding by reason of share purchases by
the Company and such Person, together with its Affiliates
and Associates, shall, after public announcement of such
share purchases by the Company, become the Beneficial
Owner of any additional Common Shares of the Company and
upon such acquisition, such Person, together with the
Affiliates and Associates of such Person, becomes the
Beneficial Owner of more than the applicable Designated
Percentage, then such Person shall be deemed to be an
"Acquiring Person."
2. This Amendment No. 2 to the Rights Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware
and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
3. This Amendment No. 2 to the Rights Agreement may be executed in one
or more counterparts, each of which shall be an original but all of
which counterparts shall together constitute one and the same
instrument. Terms not defined herein shall, unless the context
otherwise requires, have the meanings assigned to such terms in the
Rights Agreement.
4. In all respects not inconsistent with the terms and provisions of
this Amendment No. 2 to the Rights Agreement, the Rights Agreement
is hereby ratified, adopted, approved and confirmed. In executing
and delivering this Amendment, the Rights Agent shall be entitled
to all the privileges and immunities afforded to the Rights Agent
under the terms and conditions of the Rights Agreement.
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5. If any term, provision, covenant or restriction of this Amendment
No. 2 to the Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Amendment No. 2 to the Rights Agreement,
and of the Rights Agreement, shall remain in full force and effect
and shall in no way be effected, impaired or invalidated.
6. This Amendment No. 2 to the Rights Agreement shall not become
effective until immediately prior to the time that Global Crossing
becomes the Beneficial Owner of the Common Shares to be issued to
GCG pursuant to the Merger Agreement, at which time this Amendment
shall take full force and effect. If the Merger does not occur
prior to the termination of the Merger Agreement in accordance with
its terms, then this Amendment No. 2 shall terminate and be of no
force or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed and attested, all as of the date and year first above written.
EXODUS COMMUNICATIONS, INC. FLEET NATIONAL BANK
By: /s/ Adam W. Wegner By: /s/ Joshua McGinn
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Name: Adam W. Wegner Name: Joshua McGinn
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Title: Senior Vice President, Title: Senior Account Manager
Legal and Corporate ---------------------------
Affairs, General Counsel
and Secretary
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