EXHIBIT 10.5
PRIVILEGED & CONFIDENTIAL
CONFIDENTIAL MATERIALS HAVE BEEN OMITTED FROM THIS EXHIBIT PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
SERVICES AGREEMENT TERM SHEET
BETWEEN REUTERS LIMITED AND
SAVVIS COMMUNICATIONS CORPORATION
This Term Sheet (the "Term Sheet") confirms the understanding between
Reuters Limited, a company organized under the laws of England ("Reuters
Limited"), and SAVVIS Communications Corporation, a Delaware corporation
("SAVVIS"), regarding the supply by SAVVIS to Reuters of certain data transport
network services and the operation, management and maintenance thereof
(collectively, the "Services", which term shall include any New Services and
Modifications, as such terms are hereinafter defined). For the purposes of this
Term Sheet, "Reuters" shall mean all members of the Reuters group (including
Reuters Limited), unless the context shall require otherwise.
1. DEFINITIVE AGREEMENT. The parties intend to execute a definitive
network services agreement (the "Definitive Agreement") embodying the
terms set forth in this Term Sheet to govern the relationship between
SAVVIS and Reuters with respect to the rendering of the Services on the
terms set forth in this Term Sheet. The parties shall use their
reasonable best efforts to execute the Definitive Agreement by June 15,
2001, unless otherwise mutually agreed upon by the parties in writing.
Notwithstanding the foregoing, this Term Sheet shall be the binding
obligation of the parties with respect to the subject matter herein
contained until such time as the Definitive Agreement is executed, at
which time such Definitive Agreement shall replace this Term Sheet in
its entirety; provided, however, that Sections 3, 4, 5, 6, 9 and 10
hereof shall not be binding upon the parties until the conditions set
forth in Section 7 hereof are satisfied. It is contemplated that the
Definitive Agreement shall contain the provisions of this Term Sheet
and other commercially reasonable terms not inconsistent herewith.
2. TERM AND TERMINATION.
(a) Term Sheet: This Term Sheet shall expire upon the
execution of the Definitive Agreement, unless terminated sooner by
Reuters in accordance with the provisions hereof. Reuters shall have
the right, in its sole discretion, to terminate this Term Sheet (i) in
the event that SAVVIS, other than as a result of a breach by Reuters of
its funding obligations to be made pursuant to separate agreements to
be executed between SAVVIS and a member, or certain members, of Reuters
(the "Funding"), becomes the subject of a voluntary or involuntary
bankruptcy, insolvency, reorganization or liquidation proceeding, or
makes an assignment for the benefit of creditors or (ii) upon execution
of an agreement in respect of a business combination of SAVVIS with any
the parties listed on Exhibit A (or their present and future
affiliates), whether by consolidation, merger or other reorganization,
in which the holders of SAVVIS' outstanding voting securities
immediately prior to such transaction own, immediately after such
transaction, securities representing less than fifty percent (50%) of
the voting power of the corporation or entity surviving such
transaction (a "Change of
Control"), which right of termination pursuant to this Section 2(a)(ii)
shall be exercisable by Reuters at its sole discretion immediately
following execution of such agreement and for nine (9) months
thereafter. In addition to the foregoing rights, Reuters shall also
have the same rights to terminate this Term Sheet as Bridge Information
Systems, Inc. ("Bridge") has under Sections 7.1(a), 7.2(b) and Section
7.3 of the Network Services Agreement, dated as of February 18, 2000,
between Bridge and SAVVIS ("Bridge Network Services Agreement"),
provided that the "Quality of Service Standards" under the Bridge
Network Services Agreement shall be interpreted, for the purposes of
this Term Sheet, as referring to the service level agreements in
Section 6 hereunder.
(b) Definitive Agreement: The Definitive Agreement shall have
a term of five (5) years. Reuters shall have the right, in its sole
discretion, to terminate the Definitive Agreement in the event that (i)
SAVVIS, other than as a result of a breach by Reuters of its
obligations under the Funding, becomes the subject of a voluntary or
involuntary bankruptcy, insolvency, reorganization or liquidation
proceeding, or makes an assignment for the benefit of creditors, (ii)
there is a Change in Control of SAVVIS as defined in Section 2(a)(ii),
which right of termination shall be exercisable for the time period
referenced in Section 2(a)(ii), or (iii) upon material breach (as shall
be further defined in the Definitive Agreement) by SAVVIS of the
service level agreements described in Section 6 below.
3. SERVICES PROVIDED: SAVVIS agrees to provide, and cause its subsidiaries
to provide, as applicable, the following Services to Reuters from time
to time pursuant to the terms and conditions set forth in this Term
Sheet and the Definitive Agreement:
(a) SAVVIS Intelligent IP Network (SM) services, including:
(1) Client Intelligent IP Network delivery (including
Permanent Virtual Circuits),
(2) Multicast delivery (including Bridge Feed Broadcast
and the XNET network),
(3) Data Feed Collector collection network (including
Ticknet and the Data Feed Collector),
(4) Office Automation Network, and
(5) Internet access.
(b) Co-location services, including the following:
(1) co-location facilities, and
(2) ▇▇▇▇▇▇▇▇▇ Data Center facility.
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4. PRICING:
(a) From the first anniversary of the execution of the
Definitive Agreement (the "First Anniversary") and thereafter, the
Services shall be provided at the lesser of (a) applicable market rates
and (b) the most favorable terms SAVVIS offers for any products and
services similar in scope and type to the Services. The Definitive
Agreement shall contain a detailed pricing list for each item of the
Services, which in no event shall exceed the aggregate price for the
Services as reflected on the pricing list attached hereto as Exhibit B.
(b) (i) The pricing to be provided to Reuters until
the market pricing review on the First Anniversary shall be no greater
than the sum of the average Costs (as defined hereinafter) to SAVVIS of
providing the Services (which Costs include a ▇▇▇▇-up of no more than
[**], which in no event shall exceed the aggregate price for the
Services as reflected on the pricing list attached hereto as Exhibit B.
"Costs" shall mean the fully allocated and reasonable costs to SAVVIS
of providing the Services, including all direct costs of providing
Services (including personnel costs, depreciation and amortization
based on the acquisition price paid by SAVVIS to acquire certain
network assets from Bridge Information Systems, Inc. ("Bridge") as well
as subsequent network additions at cost, and cost of capital of the
network equipment finance). Prior to the execution of the Definitive
Agreement and as promptly as possible after the date hereof, SAVVIS
shall use its best efforts to review the details of such pricing with
Reuters.
(ii) Within fourteen (14) days following the
First Anniversary and each anniversary of the execution of the
Definitive Agreement thereafter, SAVVIS will review the pricing
provided to Reuters in accordance with the Definitive Agreement and
provide to Reuters any amendments to SAVVIS' pricing. Any price
reductions made pursuant to such pricing review shall be applicable to
new Services as well as to Services that SAVVIS has provided for at
least one year. Pursuant to such pricing review, the applicable market
rates for the Services shall be determined in accordance with this
Section 4(b). In respect of each item of the Services, SAVVIS shall
provide reasonable evidence that the proposed pricing is no greater
than the charge for services comparable in scope and type to the
Services ("Comparative Services") provided by the second lowest ranked
by price (the "Second Lowest Charge") of at least two (2) leading
global carriers of Comparative Services. In determining which carriers
shall be part of this pricing review, SAVVIS shall first nominate two
(2) carriers. In the event Reuters accepts such nominations by SAVVIS,
within fourteen (14) days of receipt of SAVVIS' pricing review, Reuters
will nominate one (1) additional carrier for a total of three (3)
carriers. Alternatively, in the event Reuters rejects such nominations
by SAVVIS, within fourteen (14) days of receipt of SAVVIS' pricing
review, Reuters shall nominate two (2) additional carriers for a total
of four (4) carriers. If either SAVVIS or Reuters are unable to agree
on a Second
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Lowest Charge for any reviewed Service, such party may elect to invoke
the benchmarking process described below.
(iii) Benchmarking shall be carried out to provide
an independent review of the Second Lowest Charge for Comparative
Services as determined by SAVVIS. Benchmarking may be invoked by
Reuters: (a) to benchmark a revised Service charge proposed by SAVVIS
as part of a pricing review of an existing Service, or (b) to benchmark
the price proposed by SAVVIS for a new Service. If SAVVIS and Reuters
cannot agree on an appropriate benchmark within thirty (30) days, an
independent adviser mutually agreed upon by SAVVIS and Reuters (in
accordance with the process set out in the Definitive Agreement) shall
carry out such benchmarking. In the event such independent adviser
determines that the benchmarked pricing for a Service is lower than the
Second Lowest Charge for such Service as determined by SAVVIS, SAVVIS
shall bear the cost of the independent adviser with respect to such
Service. In the event the independent adviser determines that the
benchmarked pricing for a Service is higher than the Second Lowest
Charge for such Service as determined by SAVVIS, Reuters shall bear the
cost of the independent adviser with respect to such Service. In the
event the benchmarked pricing is equal to the Second Lowest Charge for
a Service as determined by SAVVIS, Reuters and SAVVIS shall share
equally the costs of the independent adviser with respect to such
Service.
(iv) For the avoidance of doubt, SAVVIS may not
increase any pricing as a result of the pricing review pursuant to this
Section 4, even in the event that the result of such pricing review is
a determination that the pricing is higher than the pricing proposed by
SAVVIS.
(c) Reuters Limited, or the appropriate member of the Reuters
group, will make, each month after any Services are provided to Reuters
after the satisfaction of the conditions in Section 7, the following
minimum monthly payments to SAVVIS for the provision of the
international Multicast and the Data Feed Collector collection network
Services less any payments made by Bridge, as debtor or debtor in
possession, or any trustee, examiner or other successor in interest
thereof (collectively, the "Bridge Estate") either directly to SAVVIS
or to the Bridge Estate on behalf of SAVVIS on or after May 3, 2001
("Bankruptcy Payments"), which Bankruptcy Payments relate to the
Services that will be provided to Reuters:
MINIMUM AMOUNT TOTAL MINIMUM
YEAR PER MONTH AMOUNT PER YEAR
---- --------- ---------------
Year 1 [**] million [**] million
Year 2 [**] million [**] million
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Year 3 [**] million [**] million
Year 4 [**] [**]
Year 5 [**] [**]
Total of Years 1-5 N/A [**] million
Notwithstanding the foregoing, Reuters will satisfy
the minimum payment obligations in this Section 4(c) upon making total
payments to SAVVIS of [**] million less any Bankruptcy Payments which
relate to the Services that will be provided to Reuters; provided,
however, until such time as Reuters has made total aggregate payments
to SAVVIS in the amount of [**] million pursuant to this Section 4(c),
Reuters shall make a monthly minimum payment of [**] million to SAVVIS.
However, the total minimum payment obligation of [**] million will be
increased, on a reasonable and agreed basis, if Reuters requires
bandwidth commitments in addition to the amounts provided hereunder
that result in any new cost commitments to SAVVIS in addition to its
then-existing cost commitments.
The minimum payment obligations in this Section 4(c)
shall be reduced (as specified in the Definitive Agreement) to reflect
usage of the SAVVIS international lines by third parties. SAVVIS shall
use commercially reasonable efforts to sell capacity on the
international lines to third parties. SAVVIS shall, on reasonable
written request of Reuters, provide Reuters with reasonable evidence of
its sales efforts and any such reductions; provided, however, that
Reuters shall not make such a request more than twice in any twelve
(12) month period.
(d) Reuters Limited, or the appropriate member of the Reuters
group, will make, each month after any Services are provided to Reuters
after the satisfaction of the conditions in Section 7, the following
minimum monthly payments to SAVVIS for the provision of the Services
other than the international Multicast and the Data Feed Collector
collection network Services less any Bankruptcy Payments, which
Bankruptcy Payments relate to the Services that will be provided to
Reuters:
MINIMUM AMOUNT TOTAL MINIMUM
YEAR PER MONTH AMOUNT PER YEAR
---- --------- ---------------
Year 1 [**] million [**] million
Year 2 [**] million [**] million
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Year 3 [**] million [**] million
Year 4 [**] million [**] million
Year 5 [**] million [**] million
Total of Years 1-5 N/A [**] million
(e) In the event of a business downturn beyond Reuters'
reasonable control that reduces the volume of network services required
by Reuters as contemplated hereunder (notwithstanding Reuters'
commercially reasonable efforts to avoid such reduction in the volume
of network services), SAVVIS and Reuters will mutually agree to reduce,
as appropriate, the above minimum payment obligations to reflect the
new revenue billing actuals after such business downturn. This
provision shall not apply in the event that Reuters decides to take any
of the preceding actions primarily to: (i) reduce its overall use of
telecommunications, other than in circumstances beyond Reuters'
reasonable control; or (ii) transfer portions of its traffic from the
customer base acquired from Bridge to carriers other than SAVVIS.
Reuters must give SAVVIS sixty (60) days' prior written notice of the
conditions it believes will require the application of this provision.
(f) In the event of the sale by Reuters of all or
substantially all of its assets, or the stock, or all or substantially
all of the assets of, any of its direct or indirect subsidiaries, that
reduces the volume of network services required by Reuters as
contemplated hereunder, SAVVIS and Reuters will mutually agree to
reduce, as appropriate, the above minimum payment obligations to
reflect the new revenue billing actuals after such sale; provided,
however, that Reuters shall use its commercially reasonable efforts to
cause the person acquiring such assets or stock to assume such amount
of minimum payment obligations that SAVVIS and Reuters agree to reduce.
(g) SAVVIS and Reuters shall immediately commence a
line-by-line circuit and circuit price audit review by an independent
third party selected by Reuters of the circuits being acquired by
Reuters from Bridge underlying the Services for the purpose of auditing
the basis for the above minimum payment obligations. The above minimum
payment obligations shall be adjusted as may be necessary to reflect
actual usage as determined by such audit. SAVVIS will refund the amount
of any and all overpayments identified in such audit. SAVVIS agrees to
cooperate with such audit. Reuters agrees to pay all reasonable
third-party costs relating to such audit. Reuters shall use
commercially reasonable efforts to use the results of any previously
completed audits of the circuits being acquired by Reuters from Bridge,
which Reuters determines, in its sole discretion, to be true and
complete.
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(h) (i) The parties shall use their reasonable
efforts to agree to a billing and invoicing process to be set forth in
the Definitive Agreement pursuant to which the appropriate subsidiaries
of SAVVIS shall ▇▇▇▇ and invoice the appropriate members of the Reuters
group. After such date as any Services are first provided to Reuters
and the conditions in Section 7 are satisfied, and in the event that
Reuters fails to purchase the Services described under Section 4(c)
from SAVVIS in an amount at least equal to the monthly minimum payment
obligations under such Section 4(c) or that Reuters fails to purchase
the Services described under Section 4(d) from SAVVIS in an amount at
least equal to the monthly minimum payment obligations under such
Section 4(d), SAVVIS shall invoice Reuters monthly for any excess of
such minimum monthly amount over any amounts of such Services actually
purchased by Reuters.
(ii) Subject to Section 4(h)(iii) hereof, the
subsidiaries of SAVVIS (including SAVVIS Communications Corporation, a
Missouri corporation) providing Services to Reuters hereunder shall
have the right to receive directly from Reuters Limited, or such other
member of the Reuters group designated by Reuters Limited, that portion
of any payments required to be made by Reuters for Services provided by
such subsidiary of SAVVIS pursuant to this Section 4 to Reuters, and
shall be entitled to enforce this right directly against Reuters
Limited, or the member of the Reuters group designated by Reuters
Limited to make payments to SAVVIS for Services rendered hereunder.
(iii) Reuters Limited shall have the right to
designate from time to time one or more members of the Reuters group to
make any payments required to be made to SAVVIS or the appropriate
subsidiary of SAVVIS, as applicable, pursuant to this Section 4 for
Services provided hereunder, and SAVVIS or the appropriate subsidiary
of SAVVIS, as the case may be, shall only invoice the member or members
of the Reuters group designated by Reuters Limited hereunder; provided,
however, that Reuters Limited shall remain jointly and severally liable
for all payment obligations of Reuters hereunder.
(i) SAVVIS and Reuters agree that they will cooperate in cost
reduction programs for SAVVIS. In the event any cost reductions are
generated from mutually agreed-upon cost reduction programs, such cost
reductions applicable to the Services shall be passed on to Reuters by
reducing the minimum payment obligations of Reuters.
(j) In order for Reuters to receive the benefits of
technological improvements, SAVVIS and Reuters shall agree to a
process, in accordance with the terms of this Section 4(j), to be set
forth in the Definitive Agreement pursuant to which requirements for
new Services ("New Services") and modifications, improvements or
enhancements to an existing Service ("Modifications") are presented to
SAVVIS. At its sole discretion, Reuters shall have the option to
procure New Services or Modifications from SAVVIS or any third party.
In the event Reuters requests that SAVVIS provide a New Service or
Modification, then
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SAVVIS shall as soon as is reasonably practicable and in any event
within thirty (30) days of receipt of Reuters request, either (i)
notify Reuters that it is unable or unwilling to provide such New
Service or Modification or (ii) provide Reuters with a reasonably
detailed proposal setting out details as to the costs of provision of
such New Service or Modification and, subject to the remainder of this
sub-section (j), the time period for implementation and such other
details as SAVVIS and Reuters shall set out in the Definitive
Agreement. SAVVIS shall have a reasonable time period (in relation to
the business needs of Reuters) to provide such New Service or
Modification to Reuters, which time period shall in no event extend
past the date which is six (6) months after Reuters' request for such
New Service or Modification; provided, however, that under certain
exceptional circumstances (which limited circumstances shall be
enumerated in the Definitive Agreement), SAVVIS and Reuters shall
mutually agree in writing upon a date by which SAVVIS shall provide
such New Service or Modification, which date shall in no event be later
than twelve (12) months after Reuters' request for such New Service or
Modification (unless SAVVIS and Reuters agree in writing to extend such
twelve (12) month period). In the event Reuters has requested that
SAVVIS provide a New Service or Modification but SAVVIS is unable or
unwilling to provide such New Service or Modification within the
prescribed time periods, the minimum monthly payment obligations set
forth in this Section 4 shall be reduced by the price, as determined in
accordance with this Section 4, of such amounts of Services canceled by
Reuters as a result of Reuters having to procure such New Service or
Modification from a third party.
Notwithstanding any provisions of this Term Sheet to
the contrary, and without prejudice to the provisions of section 4(e)
and (f), Reuters shall have no obligation to use any Services
(including, without limitation, any obligation to require any of its
customers, whether such customers are those acquired from Bridge or
otherwise, to use any Services), and Reuters may cancel the Services at
any time for any reason; provided, however, that Reuters shall remain
subject to any minimum payment obligations in accordance with the
provisions of this Section 4 (including, without limitation, any
provisions of this Section 4 relating to the adjustment of such minimum
payment obligations). In the event that Reuters decides to cancel any
Services (including, without limitation, upon the cancellation of
Services by a Reuters' customer), SAVVIS shall take no action which
shall frustrate or otherwise hinder such termination or the migration
of Reuters' customers to another carrier.
(k) The Funding provided by Reuters to SAVVIS shall be secured
by this Term Sheet and the Definitive Agreement. The parties agree
that, upon the occurrence of any uncured default by SAVVIS pursuant to
the Funding (and any agreements in connection therewith), Reuters
Limited, or the appropriate member of the Reuters group, may set off
its total aggregate minimum payment obligations in this Section 4
against the principal amount of such Funding plus
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any and all interest accrued through the date such set off is made
(collectively, the "Defaulted Debt").
After any Bankruptcy Payments are applied to reduce
the minimum monthly payment obligations in accordance with Section
4(n), the Defaulted Debt shall be applied to further reduce the minimum
monthly payment obligations of Reuters Limited, or the appropriate
member of the Reuters group, hereunder in inverse order of when such
payments are due and payable, provided that such Defaulted Debt shall
be applied first against the minimum payment obligations in Section
4(d) and then against the minimum payment obligations in Section 4(c).
Notwithstanding the foregoing, any Defaulted Debt which is outstanding
on the date of termination of the Definitive Agreement (or the Term
Sheet, unless the Term Sheet is terminated pursuant to the execution of
the Definitive Agreement) shall be set off against any remaining and
outstanding payment obligations (including minimum monthly payment
obligations) of Reuters Limited, or the appropriate member of the
Reuters group, hereunder on such date of termination.
For illustrative purposes only, if the Bankruptcy
Payments are [**] million, the Defaulted Debt is equal to [**] million
and the minimum payment obligations are those specified hereunder,
Reuters will receive the following credits against its payment
obligations: In month sixty (60), when the minimum payment obligation
under Section 4(d) is [**] million, the [**] million Bankruptcy Payment
shall be applied against such [**] million minimum payment obligation
and Reuters shall only be required to pay SAVVIS for the excess of any
amounts owed for Services hereunder over such [**] million payment
obligation. [**] In month fifty-nine (59), when the minimum payment
obligations under Section 4(d) is [**] million, the [**] million in
Defaulted Debt shall be applied against such [**] million minimum
payment obligation and Reuters shall only be required to pay SAVVIS for
the excess of any amount owed for Services hereunder over such [**]
million payment obligation.
Alternatively, if the Bankruptcy Payments are equal
to [**] million, the Defaulted Debt is equal to [**] million and the
minimum payment obligations are those specified hereunder, Reuters will
receive the following credits against its payment obligations: In month
sixty (60), when the minimum payment obligation under Section 4(d) is
[**] million, the [**] million Bankruptcy Payment and the [**] million
in Defaulted Debt shall be applied against such [**] million minimum
payment and Reuters shall only be required to pay SAVVIS [**] million
plus any excess of any amounts owed for Services hereunder over the
[**] million minimum payment obligation.
(l) In the event that SAVVIS receives notice of a payment
default with respect to any payments owed by it to any of its
telecommunications
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providers, SAVVIS shall, as promptly as practicable, but in any event
within seven (7) days of receiving such notice, inform Reuters Limited
thereof and provide Reuters Limited a copy of such notice, and Reuters
Limited, or the appropriate member of the Reuters group, shall have the
right to make such payments directly to such telecommunications
providers on behalf of SAVVIS and to apply such payments against any
payment obligations (including the minimum payment obligations) of
Reuters to SAVVIS, or otherwise collect such payments.
(m) For the avoidance of doubt, any adjustments required by
Sections 4(e), 4(f), 4(g), 4(i), 4(j), 4(k) and 4(l) to the minimum
payment obligations pursuant to Sections 4(c) and 4(d) shall apply
equally to such Sections 4(c) and 4(d).
(n) Upon receipt by SAVVIS of any Bankruptcy Payment, SAVVIS
shall immediately (and in no event later than five (5) days after
receipt of such Bankruptcy Payment) notify Reuters Limited in writing
of the amount and nature of such Bankruptcy Payment.
The parties agree that the Bankruptcy Payments shall
be applied to reduce the minimum monthly payment obligations of Reuters
Limited, or the appropriate member of the Reuters group, hereunder in
inverse order of when such payments are due and payable, provided that
such Bankruptcy Payments shall be applied first against the minimum
payment obligations in Section 4(d) and then against the minimum
payment obligations in Section 4(c). Either (i) upon termination of the
Definitive Agreement (or the Term Sheet, unless the Term Sheet is
terminated pursuant to the execution of the Definitive Agreement) at a
time when Bankruptcy Payments have been made and applied against
minimum payment obligations for periods after such termination (such
that the Bankruptcy Payments are effectively being applied for payment
for Services that will not be performed) or (ii) in the event that no
further minimum monthly payments are due and payable, SAVVIS shall
promptly provide a full refund to the appropriate member of the Reuters
group of an amount equal to such Bankruptcy Payments.
(o) If for regulatory or compliance reasons Reuters is
permitted to acquire only part of the assets of Bridge contemplated in
that certain Asset Purchase Agreement, dated as of May 3, 2001, between
Bridge and Reuters America Inc. and Reuters S.A., as the same may be
amended from time to time (the "Asset Purchase Agreement"), the above
minimum payment obligations shall be reduced to reflect the assets
actually acquired and the volume of network services actually required
by Reuters with respect to such assets actually acquired, as compared
to the volume of network services contemplated hereunder with respect
to all of the assets contemplated under the Asset Purchase Agreement.
Upon the occurrence of any regulatory or compliance condition that
would require the application of this provision, Reuters shall give
SAVVIS notice (the
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"Regulatory Notice") as soon as reasonably practicable after the
occurrence of such condition. In the event the above minimum payment
obligations are reduced by fifteen percent (15%) or more pursuant to
this Section 4(o), the Chief Operating Officer of SAVVIS and Managing
Director - Reuters shall renegotiate in good faith the pricing terms
required under Section 4(a) hereof for any Services still to be
provided by SAVVIS to Reuters. Irrespective of such renegotiation and
review of the pricing terms of Section 4(a), SAVVIS shall offer each
such Service to Reuters that is subject to renegotiation and review
pursuant to this Section 4(o) at no greater than the lesser of (a) the
applicable market rate and (b) the most favorable price SAVVIS offers
for any product and service similar in scope and type to such Service.
If the Chief Operating Officer and Managing Director cannot reach
agreement on such pricing terms of any such Service still to be
provided by SAVVIS to Reuters by the date (the "Dispute Date") that is
fifteen (15) days after the date SAVVIS receives the Regulatory Notice,
then the parties shall as soon as possible thereafter implement the
pricing review procedures set forth in Sections 4(b)(ii), 4(b)(iii) and
4(b)(iv) of this Term Sheet (provided that none of the time periods
specified in such Sections 4(b)(ii), 4(b)(iii) and 4(b)(iv) shall apply
to any pricing review to be conducted pursuant to this Section 4(o)),
including, without limitation, the determination of any comparative
services as contemplated in Section 4(b)(ii) of this Term Sheet for any
reviewed Service and benchmarking as contemplated in Section 4(b)(iii)
of this Term Sheet, and each party shall use its reasonable best
efforts to implement such procedures and establish the pricing terms
for such Service within thirty (30) days of the Dispute Date.
5. ADMINISTRATION. Until the first anniversary of the date hereof, the
parties shall mutually agree to certain administrative, operational or
technical services to be provided by Reuters to SAVVIS, and which are
reasonably necessary for SAVVIS to continue to provide the Services
hereunder. SAVVIS will use its commercially reasonable efforts to
discontinue such services from Reuters as promptly as possible after
the date hereof. In no event after the one-year anniversary of the date
hereof shall Reuters be required to provide any such administrative,
operational or technical services to SAVVIS, unless otherwise mutually
agreed upon by SAVVIS and Reuters in writing. To the extent any such
services are provided, SAVVIS will pay for such services at standard
arms'-length market rates.
6. SERVICE LEVEL AGREEMENT. The Services shall meet or exceed the quality
of service standards and service credits provided in Exhibit C (except
that in the case of co-location services other than the ▇▇▇▇▇▇▇▇▇ Data
Center facility, the quality of service standards and service credits
shall be provided in the Definitive Agreement); provided, however, that
in any event, such quality of service standards and service credits
shall be at least equal to the service standards and service credits
SAVVIS has committed to provide Bridge as of the date hereof.
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7. CONDITIONS TO SERVICES AND PAYMENTS UNDER THIS TERM SHEET. The
obligations of the parties under Sections 3, 4, 5, 6, 9 and 10 of this
Term Sheet shall be contingent on the satisfaction of the following
conditions:
(a) The completion of the Closing (as defined in the Asset
Purchase Agreement).
(b) Execution of an agreement satisfactory to each of the parties
for the $30 million financing (or such other amount of
financing otherwise agreed to by the parties) to be provided
to SAVVIS by Reuters concurrently herewith or promptly after
the date hereof, or such other date agreed to by the parties.
8. CONDITIONS TO THE DEFINITIVE AGREEMENT. The obligations of the parties
under the Definitive Agreement shall also be conditioned upon the
satisfaction of the conditions set forth in Section 7 hereof.
9. SUBLEASE. Concurrently with the execution of the Definitive Agreement,
the appropriate member of the Reuters group shall enter into a mutually
agreed-upon sublease agreement for twenty-five percent (25%) of the
building space located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ at a
monthly rental rate of [**] (including rental of rack space and the
2*GIG-e equipment). This amount shall be applied to the monthly minimum
payment obligations described in Section 4. Among other provisions,
such sublease agreement will provide such member of the Reuters group
the right, upon prior written consent of SAVVIS (which consent shall
not be unreasonably withheld), to sublet such space to a third party of
its choosing, including other members of the Reuters group; provided,
however, that such member of the Reuters group shall remain liable for
its obligations under such sublease agreement.
10. OFFSET. The payment obligations of SAVVIS and Reuters hereunder shall
be subject to any legal rights of offset.
11. REPRESENTATIONS AND WARRANTIES OF SAVVIS.
(a) Financial Statements. The cash flow forecasts and current
business plan of SAVVIS, copies of which are attached hereto as Exhibit
D, and SAVVIS' Annual Report on Form 10-K for the fiscal year ended
December 31, 2000 ("2000 Form 10-K") were prepared in good faith, and
SAVVIS believes that the underlying assumptions and projections made
therein are reasonable and complete in all material respects.
(b) Authority. SAVVIS has the corporate power and authority to
enter into this Term Sheet and to carry out its obligations hereunder.
The execution, delivery, and performance of this Term Sheet by SAVVIS
and the consummation by SAVVIS of the transactions contemplated hereby
have been duly authorized
[**] CONFIDENTIAL TREATMENT REQUESTED
12
by all requisite corporate actions. This Term Sheet has been duly and
validly executed and delivered by SAVVIS and (assuming this Term Sheet
constitutes a valid and binding obligation of Reuters) constitutes a
valid and binding agreement of SAVVIS, enforceable against SAVVIS in
accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium, and other laws affecting
creditors' rights generally from time to time in effect and to general
equitable principles.
(c) Consents and Approvals. No consent, approval,
authorization or permit of, or filing with or notification to, any
governmental authority, domestic or foreign, or of any other person is
required to be made or obtained by SAVVIS in connection with the
execution, delivery, and performance of this Term Sheet and the
consummation of the transactions contemplated hereby.
(d) No Violations. Neither the execution, delivery, or
performance of this Term Sheet by SAVVIS , nor the consummation by
SAVVIS of the transactions contemplated hereby, nor compliance by
SAVVIS with any of the provisions hereof, will (a) conflict with or
result in any breach of any provisions of the certificate of
incorporation or bylaws of SAVVIS, (b) result in a violation or breach
of, or constitute (with or without due notice or lapse of time) a
default (or give rise to any right of termination, cancellation,
acceleration, vesting, payment, exercise, suspension, or revocation)
under any of the terms, conditions, or provisions of any note, bond,
mortgage, deed of trust, security interest, indenture, license,
contract, agreement, plan, or other instrument or obligation to which
SAVVIS is a party or by which SAVVIS or SAVVIS' properties or assets
may be bound or affected, (c) violate any order, writ, injunction,
decree, statute, rule, or regulation applicable to SAVVIS or SAVVIS'
properties or assets, (d) result in the creation or imposition of any
encumbrance on any asset of SAVVIS, or (e) cause the suspension or
revocation of any permit, license, governmental authorization, consent,
or approval necessary for SAVVIS to conduct its business as currently
conducted, except in the case of clauses (b), (c), (d), and (e) for
violations, breaches, defaults, terminations, cancellations,
accelerations, creations, impositions, suspensions, or revocations that
would not individually or in the aggregate have a material adverse
effect on SAVVIS.
12. NO EXCLUSIVITY. This Term Sheet and the Definitive Agreement shall in
no event be construed to create any exclusive relationship between any
member of the Reuters group and SAVVIS.
13. RELATIONSHIP OF THE PARTIES. Nothing in this Term Sheet shall be
construed to create a joint venture, partnership or agency relationship
between SAVVIS and any member of the Reuters group. Neither SAVVIS nor
Reuters is authorized to represent, bind, obligate, or contract on
behalf of the other, nor is this Term Sheet intended to create an
exclusive relationship between SAVVIS and any member of the Reuters
group.
13
14. PRESS RELEASES. The parties hereto shall consult with each other and
shall mutually agree (the agreement of each party not to be
unreasonably withheld or delayed) upon the content and timing of any
press release or other public statements with respect to the
transactions contemplated by this Term Sheet and shall not issue any
such press release or other public statement prior to such consultation
and agreement, except as may be required by applicable law or by
obligations pursuant to any listing agreement with any securities
exchange or any stock exchange regulations as advised by counsel;
provided, however, that to the extent practicable, each party shall
give prior notice to the other party of the content and timing of any
such press release or other public statement prior to issuance.
15. CONFIDENTIALITY.
(a) Nondisclosure. Each party agrees to maintain in
confidence, and take all reasonable precautions to protect as each
party employs with respect to its most confidential information, but in
no event less than reasonable precautions, all Proprietary Information
(as defined hereinafter) disclosed or to be disclosed to it either
before, at the time of or following the execution and delivery of this
Term Sheet. Proprietary Information received by or disclosed to a party
(the "Receiving Party") or any of its Agents (as defined hereinafter)
from another party (the "Furnishing Party") (a) shall not be reproduced
or copied in whole or part, except for use as authorized in this Term
Sheet or the Definitive Agreement, and (b) shall, together with any
full or partial copies thereof, be returned to the Furnishing Party or
destroyed when no longer needed. Each Receiving Party shall use
Proprietary Information only for the purposes contemplated by this Term
Sheet and the Definitive Agreement. Each party shall use its
commercially reasonable efforts to cause its officers, directors,
employees and consultants and the officers, directors, employees and
consultants of its Affiliates (as hereinafter defined) (collectively
"Agents") to comply with the terms of this Section 15. An "Affiliate"
of a person is any other person that, directly or indirectly through
one or more intermediaries, controls, is controlled by or is under
common control with such person.
(b) Certain Permitted Disclosures. A party may disclose
Proprietary Information to its Agents, but the Receiving Party shall
remain liable for any failure by those persons to keep Proprietary
Information confidential in accordance with this Section 15. If a
Receiving Party is required by law to disclose any Proprietary
Information of a Furnishing Party, then such Receiving Party shall (a)
promptly notify the Furnishing Party in writing of the existence, terms
and circumstances surrounding such requirement of law, and (b)
cooperate with such Furnishing Party in any efforts the Furnishing
Party makes or requests the Receiving Party to make in order to seek or
obtain a protective order or other remedy or to resist or narrow the
requirement of law or to otherwise assure that such Proprietary
Information is withheld from the public record and public availability.
The Receiving Party shall disclose only that portion of such
14
information which is legally required to be disclosed at that time in
order to avoid liability for contempt or other material legal penalty,
provided that such Receiving Party exercises its best efforts to
preserve the confidentiality of such information, including cooperating
with the Furnishing Party to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded
such information by the person or persons to whom such information is
required to be disclosed.
(c) Definition of Proprietary Information. The "Proprietary
Information" of a party as used herein, shall mean any information
which has commercial and other value in the respective business of such
party and is confidential or proprietary in nature (including, without
limitation, trade secrets, patents, patent applications, copyrights,
know-how, processes, ideas, inventions (whether patentable or not),
formulas, computer programs, databases, technical drawings, designs,
algorithms, technology, circuits, layouts, designs, interfaces,
materials, schematics, names and expertise of employees and
consultants, any other technical, business, financial, customer and
product development plans, supplier information, forecasts, strategies
and other confidential information), or which may be marked as
"confidential" or "proprietary", and references to the Proprietary
Information of Reuters Limited shall include the Proprietary
Information of Reuters. Information will not be deemed to be
Proprietary Information, and the Receiving Party shall have no
obligation with respect thereto, or to any part thereof, to the extent
such information: (i) is already known to the Receiving Party at the
time of receipt or disclosure, free of any obligation to keep it
confidential, as evidenced by written records made prior to such
receipt or disclosure, and did not become known to such Receiving Party
through disclosure by a third party known to the Receiving Party to be
subject to an obligation to maintain the confidentiality thereof; (ii)
is already publicly available prior to receipt or disclosure or (iii)
subsequently becomes publicly available without any fault of the
Receiving Party or any of its Agents.
16. GOVERNING LAW. This Term Sheet shall be governed by and construed in
accordance with the laws of the State of New York, without regard to
the conflicts of laws principles of such state.
17. NO THIRD PARTY BENEFICIARIES. Except as expressly provided in this Term
Sheet, nothing in this Term Sheet, express or implied, is intended or
shall be construed to confer upon or give any person (including
creditors and affiliates of any party) other than the parties hereto
any remedy or claim under or by reason of this Term Sheet or any term,
covenant or condition hereof, all of which shall be for the sole and
exclusive benefit of the parties.
18. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Term Sheet and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties and their respective successors, legal representatives and
permitted assigns; provided, however, that neither this Term Sheet nor
any of the rights, interests or
15
obligations of any party hereunder shall be assigned or delegated
without the prior written consent of the other party, not to be
unreasonably withheld or delayed. Notwithstanding the foregoing,
Reuters Limited shall have the right, in its sole discretion, to assign
this Term Sheet or the Definitive Agreement to any other member of the
Reuters group, provided, however, that if Reuters Limited does not
receive the prior written consent of SAVVIS, not to be unreasonably
withheld or delayed, Reuters Limited shall remain liable for its
obligations under the Definitive Agreement.
19. ENTIRE AGREEMENT. Subject to the completion and execution of the
Definitive Agreement, this Term Sheet sets forth the entire agreement
and understanding among the parties hereto as to the subject matter
hereof and merges and supersedes all prior discussions and agreements
between the parties with respect to the subject matter hereof.
20. AMENDMENTS AND WAIVERS. This Term Sheet may not be amended, modified or
supplemented unless approved in writing by each party to this Term
Sheet; provided, however, that any amendment to Section 4(h)(ii) must
also be approved in writing by Nortel Networks Inc., which approval
shall not be unreasonably withheld or delayed. No waiver of any right
or remedy or of compliance with any provisions hereof, and no consent
provided for herein, shall be effective unless evidenced by an
instrument in writing executed by the party sought to be charged with
such waiver or consent. The rights and remedies herein expressly
provided are cumulative and not exclusive of any other rights or
remedies which any party hereto would otherwise have at law, in equity,
by statute or otherwise.
21. NO IMPLIED WAIVERS. No action taken pursuant to this Term Sheet,
including, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, agreements, covenants,
obligations or commitments contained herein or made pursuant hereto.
The waiver by any party of a breach of any provision of this Term Sheet
shall not operate or be construed as a waiver of any preceding or
succeeding breach and no failure by any party to exercise any right,
privilege or remedy hereunder shall be deemed a waiver of such party's
rights, privileges or remedies hereunder or shall be deemed a waiver of
such party's rights to exercise the same at any subsequent time or
times hereunder.
22. COUNTERPARTS. This Term Sheet may be executed in one or more
counterparts, each of which shall be deemed to be an original of the
party or parties executing the same and all of which together shall be
deemed to constitute one and the same agreement.
23. HEADINGS. The headings of the Sections contained in this Term Sheet are
solely for convenience of reference, are not part of the agreement of
the parties and shall not affect the meaning or interpretation of this
Term Sheet.
16
24. FURTHER ASSURANCES. Each party shall cooperate and take such actions as
may be reasonably requested by another party in order to carry out the
provisions and purposes of this Term Sheet and the transactions
contemplated hereby.
25. SEVERABILITY. If any provision of this Term Sheet or the application
thereof to any person or circumstance is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no
way be affected, impaired or invalidated thereby; provided that, if any
provision hereof or the application thereof shall be so held to be
invalid, void or unenforceable by a final judgment of a court of
competent jurisdiction, then such court may substitute therefor a
suitable and equitable provision in order to carry out, so far as may
be valid and enforceable, the intent and purpose of the invalid, void
or unenforceable provision and if such court shall fail or decline to
do so, the parties shall negotiate in good faith a suitable and
equitable substitute provision.
26. SPECIFIC PERFORMANCE. The parties agree that Section 15 of this Term
Sheet shall be specifically enforceable, it being agreed by the parties
that the remedy at law, including monetary damages, for breach of such
section may be inadequate compensation for any loss and that any
defense in any action for specific performance that a remedy at law
would be adequate is waived.
27. ARBITRATION. Any disputes which cannot be resolved by the parties shall
be resolved in accordance with this Section. The parties agree to
settle any disputes hereunder by binding arbitration before a panel of
three arbitrators. The arbitration shall be administered by the
American Arbitration Association in accordance with its rules as in
effect on the date hereof. Each party shall nominate one arbitrator,
and such arbitrators such nominate the third arbitrator. The parties
shall share equally all fees and expenses of the arbitrators, unless
the arbitrators determine otherwise. Notwithstanding the foregoing, if
the arbitrators shall fail to come to a decision within ninety (90)
days of their appointment, the parties may bring suit in federal, state
or local courts or before other governmental authorities.
28. SURVIVAL. Sections 12-27 of this Term Sheet shall survive the
expiration or termination of this Term Sheet for any reason.
[THE REMAINDER OF THIS AGREEMENT IS INTENTIONALLY LEFT BLANK.]
17
IN WITNESS WHEREOF, the parties hereto have caused this Term Sheet to
be executed as of May 21, 2001.
REUTERS LIMITED SAVVIS COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ ---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President Title: Vice President, General Counsel
Date: May 21, 2001 Date: May 21, 2001
---------------------------- -------------------------------------
18
EXHIBIT A
Global Crossing
Bloomberg
Thomson Financial
Standard & Poors / McGraw Hill
Dow ▇▇▇▇▇
SunGard Data Systems
19
EXHIBIT B
1. CLIENT INTELLIGENT IP NETWORK DELIVERY PRICING:
UNITED STATES:
====================================================================================================================================
TIER 1 CLIENT CHARGES (1)
---------------------------------------------------------------------------------------------------
CLIENT TYPE DISTANCE FROM POP 64 KBPS 128 KBPS 256 KBPS 384 KBPS 512 KBPS 768 KBPS 1 MBPS T1 2 MBPS(3) 4 MBPS(3) DS3(3)
====================================================================================================================================
Less than or equal
to 25 miles [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
Tier 1 Over 25 miles
to 300 miles [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
Over 300 miles [**] [**] [**] [**] [**] [**] [**] [**] ICB ICB ICB
====================================================================================================================================
Less than or equal
to 25 miles [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
Tier 2 Over 25 miles
to 300 miles [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
Over 300 miles [**] [**] [**] [**] [**] [**] [**] [**] ICB ICB ICB
====================================================================================================================================
Less than or equal
to 25 miles [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
Tier 3 Over 25 miles
to 300 miles [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**]
Over 300 miles [**] [**] [**] [**] [**] [**] [**] [**] ICB ICB ICB
====================================================================================================================================
-------------------------------------------------------
INSTALLS (1)
---------------------------------
SPEED 1 YR 2 YR 3 YR
-------------------------------------------------------
Up to T1 [**] [**] [**]
Greater than T1 (2) [**] [**] [**]
-------------------------------------------------------
-------------------------------------------------------
MODIFICATIONS
---------------------------------
SPEED MOVE UPGRADE DOWNGRADE
-------------------------------------------------------
Up to T1 [**] [**] [**]
Greater than T1 (2) [**] [**] [**]
-------------------------------------------------------
(1) Bundled Monthly Recurring and Installation Charge per client logical connections include:
* Local Access
* Network Access Port
* Logical Connection
* Customer Premises ARN Router or Integrated Access Device
* Network Usage
* CPE Management and Maintenance
* Analog dial line for Out-of-Band management
* Base Intelligent IP features
(2) Up to DS3
(3) Includes DS3 Local Access
Notes:
1. Minimum 1 Year term per customer site ordered
2. All connections are Service Class 1
3. Additional logical connections (over the same loop) to same site will be discounted 50%
[**] CONFIDENTIAL TREATMENT REQUESTED
20
SAVVIS COMMUNICATIONS
INTERNATIONAL:
-----------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL CLIENT
CHARGES (1)
-----------------------------------------------------------------------------------------------------------------------------
REGION CLIENT TYPE 64 KBPS 128 KBPS 256 KBPS 384 KBPS 512 KBPS ▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇ ▇▇ ▇▇
-----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Tier 1 [**] [**] [**] [**] [**] [**] [**] [**] ICB
-------------------------------------------------------------------------------------------------------------------
Tier 2 [**] [**] [**] [**] [**] [**] [**] [**] ICB
-------------------------------------------------------------------------------------------------------------------
Tier 3 [**] [**] [**] [**] [**] [**] [**] [**] ICB
-----------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------
INSTALLS (1)
-------------------------------------
SPEED 1 YR 2 YR 3 YR
-------------------------------------------------------------------
Up to T1/E1 [**] [**] [**]
-------------------------------------------------------------------
> T1/E1 (2) [**] [**] [**]
-------------------------------------------------------------------
-------------------------------------------------------------------
MODIFICATIONS
-------------------------------------
SPEED MOVE UPGRADE DOWNGRADE
-------------------------------------------------------------------
Up to T1/E1 [**] [**] [**]
-------------------------------------------------------------------
> T1/E1 (2) [**] [**] [**]
-------------------------------------------------------------------
(1) Bundled Monthly Recurring and Installation Charge per client logical connections includes:
* Network Access Port
* Logical Connection
* Customer Premises ARN Router or Integrated Access Device
* Network Usage
* CPE Management and Maintenance
* Analog dial line for Out-of-Band management
* Base Intelligent IP features
* Local Access Excluded and passed through
(2) Up to DS3/E3
Notes:
1. Minimum 1 Year term per customer site ordered
2. All connections are Service Class 1
3. Additional logical connections (over the same loop) to same site will be discounted 50%
[**] CONFIDENTIAL TREATMENT REQUESTED
21
2. MULTICAST DELIVERY PRICING:
----------------------------------------------------------------
MULTICAST HUB CHARGE (1)
------------------------------------------
LOCATION INSTALL MONTHLY
----------------------------------------------------------------
St. Louis N/A [**]
----------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
MULTICAST REGIONAL CHARGE (2)
---------------------------------------------------------------------------------------------------------------------------------
FEED #1 FEED #2 (3)
---------------------------------------------------------------------------------------------------------------------------------
LOCATION INSTALL FIXED PER MBPS FIXED PER MBPS
---------------------------------------------------------------------------------------------------------------------------------
US [**] [**] [**] [**] [**]
---------------------------------------------------------------------------------------------------------------------------------
Canada [**] [**] [**] [**] [**]
---------------------------------------------------------------------------------------------------------------------------------
Europe [**] [**] [**] [**] [**]
---------------------------------------------------------------------------------------------------------------------------------
Asia [**] [**] [**] [**] [**]
---------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
MODIFICATIONS
----------------------------------------------------------------
SPEED MOVE UPGRADE DOWNGRADE
--------------------------------------------------------------------------------------
Hub [**] [**] [**]
--------------------------------------------------------------------------------------
Regional [**] [**] [**]
--------------------------------------------------------------------------------------
(1) Bundled Monthly Recurring Charge per Multicase Hub includes:
* Local Access
* BLN Routers
* Management
* 2 Hub Multicast Connections (dual feeds to each Regional site)
(2) Bundled Monthly Recurring Charge per Multicase Regional Site includes:
* Local Access between POPs
* BLN Routers
* Backbone
* Dual POPs per city (2 Multicast feeds per POP)
* Minimum 2 Mbps bundled (incremental per mbps thereafter)
(3) Pricing applicable into Second POP in same city
Notes:
1. Minimum 1 Year term per Multicast site ordered
[**] CONFIDENTIAL TREATMENT REQUESTED
22
INTERNATIONAL MULTICASTING WITH TWO FEEDS INTO TWO DIFFERENT POPS:
CITY POP # FIXED FEED 1 VARIABLE FEED 1 FIXED FEED 2 VARIABLE FEED 2 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Toronto 1 [**] [**] [**] [**] [**]
2 [**] [**] [**] [**] [**]
Montreal 1 [**] [**] [**] [**] [**]
2 [**] [**] [**] [**] [**]
Calgary 1 [**] [**] [**] [**] [**]
2 [**] [**] [**] [**] [**]
Vancouver 1 [**]] [**] [**] [**] [**]
2 [**] [**] [**] [**] [**]
BRIDGE INTERNATIONAL MULTICASTING WITH TWO FEEDS INTO SAME POP:
CITY POP # FIXED FEED 1 VARIABLE FEED 1 FIXED FEED 2 VARIABLE FEED 2 TOTAL
------------------------------------------------------------------------------------------------------------------------------------
Toronto 1 [**] [**] [**] [**] [**]
Montreal 1 [**] [**] [**] [**] [**]
Calgary 1 [**] [**] [**] [**] [**]
Vancouver 1 [**] [**] [**] [**] [**]
MULTICAST TOTAL [**]
[**] CONFIDENTIAL TREATMENT REQUESTED
23
3. DATA FEED COLLECTOR COLLECTION NETWORK PRICING:
--------------------------------------------------------------------------------
DFC Collection Network - IIP Service Option (US Only)
--------------------------------------------------------------------------------
Location DFC Charge
--------------------------------------------------------------------------------
Install Monthly
--------------------------------------------------------------------------------
US See Client IIP Delivery Charges - Tier 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DFC Collection Network - Actual Charges
--------------------------------------------------------------------------------
Location DFC Charge
--------------------------------------------------------------------------------
Bandwidth (Mbps) Monthly (2 Feeds)
--------------------------------------------------------------------------------
New York 4M [**]
--------------------------------------------------------------------------------
Atlanta 2M [**]
--------------------------------------------------------------------------------
Chicago 2M [**]
--------------------------------------------------------------------------------
San Francisco 2M [**]
--------------------------------------------------------------------------------
Los Angeles 2M [**]
--------------------------------------------------------------------------------
Dallas 2M [**]
--------------------------------------------------------------------------------
Toronto 2M [**]
--------------------------------------------------------------------------------
Montreal 1M [**]
--------------------------------------------------------------------------------
Vancouver 1M [**]
--------------------------------------------------------------------------------
London 2M [**]
--------------------------------------------------------------------------------
Frankfurt 2M [**]
--------------------------------------------------------------------------------
Copenhagen 1M [**]
--------------------------------------------------------------------------------
Brussels 1M [**]
--------------------------------------------------------------------------------
Zurich 1M [**]
--------------------------------------------------------------------------------
Paris 1M [**]
--------------------------------------------------------------------------------
Madrid 768K [**]
--------------------------------------------------------------------------------
Amsterdam 768K [**]
--------------------------------------------------------------------------------
Vienna 256K [**]
--------------------------------------------------------------------------------
Budapest 256K [**]
--------------------------------------------------------------------------------
Milan 768K [**]
--------------------------------------------------------------------------------
Oslo 512K [**]
--------------------------------------------------------------------------------
Rome 512K [**]
--------------------------------------------------------------------------------
Warsaw 256K [**]
--------------------------------------------------------------------------------
Athens 512K [**]
--------------------------------------------------------------------------------
Istanbul 256K [**]
--------------------------------------------------------------------------------
Luxembourg 512K [**]
--------------------------------------------------------------------------------
Helsinki 512K [**]
--------------------------------------------------------------------------------
Stockholm 512K [**]
--------------------------------------------------------------------------------
Johannesburg 512K [**]
--------------------------------------------------------------------------------
Singapore 2M [**]
--------------------------------------------------------------------------------
Tokyo 2M [**]
--------------------------------------------------------------------------------
Hong Kong 2M [**]
--------------------------------------------------------------------------------
Sydney 2M [**]
--------------------------------------------------------------------------------
Manila 512K [**]
--------------------------------------------------------------------------------
Melbourne 512K [**]
--------------------------------------------------------------------------------
Taipei 512K [**]
--------------------------------------------------------------------------------
Seoul 512K [**]
--------------------------------------------------------------------------------
Bangkok 256K [**]
--------------------------------------------------------------------------------
Beijing 512K [**]
--------------------------------------------------------------------------------
Jakarta 512K [**]
--------------------------------------------------------------------------------
Mumbai 512K [**]
--------------------------------------------------------------------------------
Delhi 512K [**]
--------------------------------------------------------------------------------
Kuala Lampur 512K [**]
--------------------------------------------------------------------------------
Wellington 512K [**]
--------------------------------------------------------------------------------
Buenos Aires 512K [**]
--------------------------------------------------------------------------------
Bogota 512K [**]
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ 512K [**]
--------------------------------------------------------------------------------
Caracas 512K [**]
--------------------------------------------------------------------------------
Mexico City 512K [**]
--------------------------------------------------------------------------------
Panama City 384K [**]
--------------------------------------------------------------------------------
Bermuda 384K [**]
--------------------------------------------------------------------------------
Ta il Circuits Various [**]
--------------------------------------------------------------------------------
Notes:
1. Minimum 1 Year term per DFC site
2. All IIP DFC Connections are Service Class 1
3. All connections are homed back to St. Louis
---------------------------------------------------------------------------
[**] CONFIDENTIAL TREATMENT REQUESTED
24
INTERNATIONAL DATA FEED COLLECTOR COLLECTION NETWORK PRICING:
DFC LOCATION BANDWIDTH (1 FEED) PRICE (2 FEEDS)
--------------------------------------------------------------------------------
Toronto 2 Meg $ [**]
Montreal 1 Meg $ [**]
Vancouver 1 Meg $ [**]
Tail Circuits TBD
---------------------
TOTAL $ [**]
OFFICE AUTOMATION NETWORK PRICING:
--------------------------------------------------------------------------------
OFFICE NETWORK - IIP SERVICE OPTION (US ONLY)
--------------------------------------------------------------------------------
OFFICE CHARGE
---------------------------------------------------
LOCATION INSTALL MONTHLY
--------------------------------------------------------------------------------
US See Client IIP Delivery Charges - Tier 3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OFFICE NETWORK - BUNDLE CHARGES (1)
--------------------------------------------------------------------------------
OFFICE CHARGE
--------------------------------------------------------------------------------
LOCATION BANDWIDTH (MBPS) MONTHLY (1)
--------------------------------------------------------------------------------
St Louis 30M [**]
--------------------------------------------------------------------------------
New York 1 22M [**]
--------------------------------------------------------------------------------
New York 2 17M [**]
--------------------------------------------------------------------------------
Boston T1 [**]
--------------------------------------------------------------------------------
Chicago T1 [**]
--------------------------------------------------------------------------------
San Francisco T1 [**]
--------------------------------------------------------------------------------
Los Angeles T1 [**]
--------------------------------------------------------------------------------
Atlanta T1 [**]
--------------------------------------------------------------------------------
Dallas T1 [**]
--------------------------------------------------------------------------------
Minneapolis T1 [**]
--------------------------------------------------------------------------------
Washington DC T1 [**]
--------------------------------------------------------------------------------
Kansas City 6M [**]
--------------------------------------------------------------------------------
(1) Each Connection includes: Office Date Network
* Office Data Network
* Bridge Network Connection
* ATM Voice Trunks
Notes:
1. Minimum 1 Year term per Office connection
2. All IIP Office connections are Service Class 3
[**] CONFIDENTIAL TREATMENT REQUESTED
25
5. INTERNET ACCESS PRICING:
----------------------------------
US BURSTABLE RATE INTERNET
----------------------------------
INTERNET PORT
SPEE ---------------
(MBPS INSTAL MONTHL
----------------------------------
0-45 [**]
45.01 [**]
70.01 [**] [**]
100.01 [**]
----------------------------------
Greater than 15 TB [**]
----------------------------------
-----------------------------
UK FLAT RATE INTERNET
INTERNET PORT
SPEE ------------------
(MBPS INSTAL MONTHL
-----------------------------
46 [**] [**]
-----------------------------
Notes
1. Minimum 1 Year term per Internet
6. CO-LOCATION FACILITIES PRICING:
-----------------------------------
COLOCATI
-----------------------------------
RACK
----------------
DFC INSTAL MONTHL
-----------------------------------
Rack [**] [**]
Additional Power [**] [**]
-----------------------------------
(1) Standard 19" rack includes 2 FE ports and 20
(2) 20 amp
Notes
1. Minimum 1 year term per
INTERNATIONAL POP CO-LOCATION
PRICING FOR DATA FEED COLLECTOR CONNECTION NETWORK:
CITY # OF RACKS PRICE TOTAL
---------------------------------------
Toronto 1 [**] [**]
Montreal 1 [**] [**]
Vancouver 1 [**] [**]
3 [**]
26
7. ▇▇▇▇▇▇▇▇▇ DATA CENTER PRICING:
--------------------------------------------------------------
St. Louis
--------------------------------------------------------------
Data Center
---------------------------------------
Service Install Monthly
--------------------------------------------------------------
Colocation N/A [**]
--------------------------------------------------------------
Power (1) [**]/amp [**]/amp
--------------------------------------------------------------
2x Gig E-Connectivity [**] [**]
--------------------------------------------------------------
(1) Minimum of 10 amp increments
[**] CONFIDENTIAL TREATMENT REQUESTED
27
EXHIBIT C
1. SERVICE LEVEL AGREEMENTS FOR: (A) CLIENT INTELLIGENT IP NETWORK, (B) DATA
FEED COLLECTOR COLLECTION NETWORK AND (C) OFFICE AUTOMATION NETWORK:
--------------------------------------------------------------------------------
Intra-North America
--------------------------------------------------------------------------------
Class of Average Average Average
Service Availability SAVVIS SAVVIS Core
(Core/To Edge) Core RTD Packet Loss
--------------------------------------------------------------------------------
Class 1 100% Core 75ms < .1%
99.99 to Redundant
Edge
99.9% To Edge*
Class 2 100% Core 80ms < .25%
99.99% To Redundant
Edge
99.9% To Edge*
Class 3 100% Core 90ms <.5%
99.99% To Redundant
Edge
99.9% To Edge*
Class 4 100% Core 100ms <1% On-Net
99.99% To Redundant <5% Off-Net
Edge
99.9% To Edge*
--------------------------------------------------------------------------------
28
--------------------------------------------------------------------------------
Intra-Europe
--------------------------------------------------------------------------------
Class of Average Average Average
Service Availability SAVVIS SAVVIS Core
(Core/To Edge) Core RTD Packet Loss
--------------------------------------------------------------------------------
Class 1 100% Core 90ms < 1%
99.99% To Redundant
Edge
99.9% To Edge*
Class 2 100% Core 100ms < 2%
99.99% To Redundant
Edge
99.9% To Edge*
Class 3 100% Core 110ms < 3%
99.99% To Redundant
Edge
99.9% To Edge*
Class 4 100% Core 120 ms < 5%
99.99% To Redundant
Edge
99.9% To Edge*
--------------------------------------------------------------------------------
29
--------------------------------------------------------------------------------
Intra - Asia Pacific
--------------------------------------------------------------------------------
Class of Average Average Average
Service Availability SAVVIS Core SAVVIS Core
(Core/To Edge) RTD Packet Loss
--------------------------------------------------------------------------------
Class 1 100% Core 450ms < 1%
99.99% To Redundant
Edge
99.9% To Edge*
Class 2 100% Core 500ms < 2%
99.99% To Redundant
Edge
99.9% To Edge*
Class 3 100% Core 550ms < 3%
99.99% To Redundant
Edge
99.9% To Edge*
Class 4 100% Core 600ms < 5%
99.99% To Redundant
Edge
99.9% To Edge*
--------------------------------------------------------------------------------
30
--------------------------------------------------------------------------------
Trans-Atlantic
--------------------------------------------------------------------------------
Class of Average Average Average
Service Availability SAVVIS Core SAVVIS Packet Loss
(Core/To Edge) RTD
--------------------------------------------------------------------------------
Class 1 100% Core 110ms < 1%
99.99% To Redundant
Edge
99.9% To Edge*
Class 2 100% Core 120ms < 2%
99.99% To Redundant
Edge
99.9% To Edge*
Class 3 100% Core 130ms < 3%
99.99% To Redundant
Edge
99.9% To Edge*
Class 4 100% Core 150ms < 5%
99.99% To Redundant
Edge
99.9% To Edge*
--------------------------------------------------------------------------------
31
--------------------------------------------------------------------------------
Trans-Pacific
--------------------------------------------------------------------------------
Class of Average Average Average
Service Availability SAVVIS Core SAVVIS Core
(Core/To Edge) RTD Packet Loss
---------------------------------------- ---------------------------------------
Class 1 100% Core 450ms < 1%
99.99% To Redundant
Edge
99.9% To Edge*
Class 2 100% Core 500ms < 2%
99.99% To Redundant
Edge
99.9% To Edge*
Class 3 100% Core 550ms < 3%
99.99% To Redundant
Edge
99.9% To Edge*
Class 4 100% Core 600ms < 5%
99.99% To Redundant
Edge
99.9% To Edge*
---------------------------------------- ---------------------------------------
1. DEFINITIONS
AVAILABILITY: Availability is defined a any network event resulting in downtime
during which a customer cannot pass traffic for a period in excess of five (5)
minutes will be deemed unavailability of the customer connection (an "Outage")
provided that such Outage is on the SAVVIS network.
Monthly Average Availability is calculated via the following formula:
Average Monthly Availability(%) = (Total hours in month-total unavailable hours in month) *100
-----------------------------------------------------
Total hours in a month
OUTAGE: An Outage shall be deemed to commence upon the opening of a trouble
ticket with the SAVVIS Network Control Center and shall be deemed to terminate
upon the restoration of
32
service. An Outage shall not be deemed to occur upon the occurrence of routine
maintenance for which the customer has been notified or upon the occurrence of
an act outside of the control of SAVVIS such as loss of power at the customer
premises or an act of nature.
CORE NETWORK: Core network is defined as the SAVVIS Network between SAVVIS
Points of Presence (POPs), meaning all network elements from the ingress
customer network port on the network node to the egress customer network port on
the network node. Local access and customer premise equipment are specifically
excluded.
EDGE: Edge is defined as inclusive of customer network port, local access, and
customer premise equipment, measured end to end.
ON-NET: On-Net is defined as any services which are exclusively delivered across
the SAVVIS Core Network and are fully managed and supported by SAVVIS.
OFF-NET: Off-Net is defined as any service that is not exclusively delivered
across the SAVVIS Core Network and are fully managed and supported by SAVVIS.
PACKET LOSS:
Average Packet Loss
per region(%) = Sum of Packets Lost per region in a month *100
------------------------------------------
Total packets sent per region in a month
Average Packet Loss for each region is defined as the number of packets
delivered when sent between 2 points of presence (POPs) on a 256 kbps port
within a region of the following average distance:
North America: 1500 miles
Europe: 800 miles
Asia: 3300 miles
Trans Atlantic: 3500 miles
Trans Pacific: 5500 miles
REDUNDANT EDGE: Redundant Edge is defined as a customer implementation where
more than one local access, SAVVIS-managed customer premise equipment, and
customer network port has been put in place with diverse routing for resiliency
purposes, measured end to end.
REGION: Is defined as below:
North America: Is defined as Canada and the USA.
Europe: Is defined as UK, Netherlands, Germany, Italy, France, Belgium,
Switzerland and Sweden.
33
Asia: Is defined as Japan, Hong Kong, Singapore, and Australia.
Trans-Atlantic: Is defined as New York to London.
Trans-Pacific: Is defined as Los Angeles to Tokyo.
ROUND TRIP DELAY (RTD):
Average Round Trip Delay
per region = Sum of month's RTD readings for region in milliseconds
-------------------------------------------------------
Total readings counted in a month per region
Average Round Trip Delay for each Region is defined as the delay required for a
packet on a 256 kbps port to travel round trip an average distance of:
North America: 1500 miles
Europe: 800 miles
Asia: 3300 miles
Trans Atlantic: 3500 miles
Trans Pacific: 5500 miles
2. CREDITS
AVAILABILITY:
Penalties will be paid for availability as listed below if the elapsed time from
Ticket Open exceed the following:
Up to 2 hours: [**] of monthly billed site revenue per affected site,
excluding local access.
2 to 4 hours: [**] of monthly billed site revenue per affected site,
excluding local access.
Over 4 hours: [**] of monthly billed site revenue per affected site,
excluding local access.
ROUND TRIP DELAY:
If RTD exceeds targets listed in Section 1, SAVVIS will credit [**] of monthly
billed site revenue per site on any sites connected to the affected POP,
excluding local access.
PACKET LOSS:
If Packet Loss exceeds targets listed in Section 1, SAVVIS will credit [**]of
monthly billed site revenue per site on any sites connected to the affected POP,
excluding local access.
[**] CONFIDENTIAL TREATMENT REQUESTED
34
2. INTERNET ACCESS SERVICE LEVEL AGREEMENT:
The service level agreement for Internet access is the same as that for
Class 4 of the service level agreements for Client Intelligent IP Network, Data
Feed Collector collection network and Office Automation Network listed above.
3. MULTICAST DELIVERY SERVICE LEVEL AGREEMENT:
--------------------------------------------------------------------------------
Multicast Delivery
--------------------------------------------------------------------------------
Delivery Average Average SAVVIS Average SAVVIS Core
Location Availability Core RTD Packet Loss
--------------------------------------------------------------------------------
North America 100% Core 70ms < .1%
Trans-Atlantic 100% Core 110ms < .25%
Trans-Pacific 100% Core 450ms < .5%
--------------------------------------------------------------------------------
1. DEFINITIONS
AVAILABILITY: Availability is defined a any network event resulting in downtime
during which a customer cannot pass traffic for a period in excess of five (5)
minutes will be deemed unavailability of the customer connection (an "Outage")
provided that such Outage is on the SAVVIS network.
Monthly Average Availability is calculated via the following formula:
Average Monthly Availability(%) = (Total hours in month-total unavailable hours in month) *100
-----------------------------------------------------
Total hours in a month
OUTAGE: An Outage shall be deemed to commence upon the opening of a trouble
ticket with the SAVVIS Network Control Center and shall be deemed to terminate
upon the restoration of service. An Outage shall not be deemed to occur upon the
occurrence of routine maintenance for which the customer has been notified or
upon the occurrence of an act outside of the control of SAVVIS such as loss of
power at the customer premises or an act of nature.
CORE NETWORK: Core network is defined as the SAVVIS Network between SAVVIS
Points of Presence (POPs), meaning all network elements from the ingress
customer network port on the network node to the egress customer network port on
the network node. Local access and customer premise equipment are specifically
excluded.
ON-NET: On-Net is defined as any services which are exclusively delivered across
the SAVVIS Core Network and are fully managed and supported by SAVVIS.
PACKET LOSS:
35
Average Packet Loss within = Sum of Packets Lost per region in a month *100
North America (%) -----------------------------------------
Total packets sent per region in a month
Average Packet Loss is defined as the number of packets delivered when sent
between 2 points of presence (POPs) on a 256 kbps port within North America with
an average distance of 1500 miles.
REGION: Is defined as below:
North America: Is defined as Canada and the USA.
Trans-Atlantic: Is defined as New York to London.
Trans-Pacific: Is defined as Los Angeles to Tokyo.
Round Trip Delay (RTD):
Average Round Trip Delay = Sum of month's RTD readings for region in milliseconds
------------------------------------------------------
Total readings counted in a month per region
Average Round Trip Delay is defined as the delay required for a packet on a 256
kbps port to travel round trip an average distance of 1500 miles.
2. CREDITS
SAVVIS will provide the following credits to Reuters:
Availability:
Penalties will be paid for availability as listed below if the elapsed time from
Ticket Open exceed the following:
Up to 2 hours: [**] of monthly billed site revenue per affected site,
excluding local access.
2 to 4 hours: [**] of monthly billed site revenue per affected site,
excluding local access.
Over 4 hours: [**] of monthly billed site revenue per affected site,
excluding local access.
ROUND TRIP DELAY:
If RTD exceeds targets listed in Section 1, SAVVIS will credit [**] of monthly
billed site revenue per site on any sites connected to the affected POP,
excluding local access.
PACKET LOSS:
If Packet Loss exceeds targets listed in Section 1, SAVVIS will credit [**] of
monthly billed site revenue per site on any sites connected to the affected POP,
excluding local access.
[**] CONFIDENTIAL TREATMENT REQUESTED
36
4. ▇▇▇▇▇▇▇▇▇ DATA CENTER FACILITY SERVICE LEVEL AGREEMENT:
1. DEFINITIONS
A. "Facility Downtime" is any service interruption, only if such
interruption is due to either a facility power failure of an
environmental control failure.
B. A "Facility" means the building in which the racks are
located.
2. MAINTENANCE
SAVVIS will perform maintenance in accordance with the standard practices.
SAVVIS reserves the right to perform emergency maintenance as needed. SAVVIS
will make commercially reasonable efforts to inform Customer prior to performing
scheduled or emergency maintenance. If such advance notice is not possible,
SAVVIS shall notify Customer about such emergency maintenance as soon as is
practicable.
3. SERVICE LEVEL AGREEMENT FOR FACILITY UPTIME
A. SAVVIS guarantees an overall availability of 100% for the
Facility.
B. If Customer requests a credit for Facility Downtime, and such
request is validated by SAVVIS, SAVVIS shall credit the
Customer in accordance with the provisions hereunder:
If in one calendar month the Facility Downtime exceeds 1
minute, the Customer will be entitled to a credit towards the
invoice which Customer receives two months following the month
in which the Facility Downtime was reported. For the purpose
of determining the amount of any credit, Facility Downtime
will be deemed to commence when SAVVIS opens a "trouble
ticket" to track such Facility Downtime and will be deemed to
end when SAVVIS has restored availability and closed the
applicable "trouble ticket." The Customer will not be entitled
to receive a credit if (i) Customer has violated the SAVVIS
Acceptable Use Policy (AUP), or (ii) Customer is greater than
45 days late in its invoice payment.
C. The amount of the credit will be determined as follows:
1) If there is Facility Downtime for more than 1 minute
but less than 44 minutes in any calendar month,
Customer shall be entitled to a credit of [**] of
that month's invoice for the portion of the invoice
that corresponds to the Facility in which the
Facility Downtime occurred.
2) If there is Facility Downtime for more than 44
minutes but less than 3.6 hours in any calendar
month, Customer shall be entitled to a credit of [**]
of that month's invoice for the portion of the
invoice that corresponds to the Facility in which the
Facility Downtime occurred.
3) If there is Facility Downtime for more than 3.6
hours, but less than 7.2 hours in any calendar month,
Customer shall be entitled to a credit of [**] of
that month's
37
invoice for the portion of the invoice that
corresponds to the Facility in which the Facility
Downtime occurred.
4) If there is Facility Downtime for more than 7.2 hours
in any calendar month, Customer shall be entitled to
a credit of [**] of that month's invoice for the
portion of the invoice that corresponds to the
Facility in which the Facility Downtime occurred.
4. APPLYING FOR CREDIT
In order to receive any credit, Customer must notify SAVVIS, in writing, within
thirty (30) days from the time Customer becomes eligible to receive such credit
(i.e. the Trouble Ticket is closed). Customer's failure to notify SAVVIS within
that period shall result in the waiver of Customer's right to receive any such
credit.
[**] CONFIDENTIAL TREATMENT REQUESTED
38
EXHIBIT D
Attached hereto are:
1. the current business plan of SAVVIS, and
2. cash flow forecasts of SAVVIS for 2001 through 2010.
39