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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 8)
------------------------------
SAVVIS COMMUNICATIONS CORPORATION
(Name of Issuer)
Common Stock, par value $.01 per share 805423 10 0
(Title of class of securities) (CUSIP number)
Nancy C. Gardner, Esq.
REUTERS AMERICA INC.
General Counsel
The Reuters Building
3 Times Square
New York, New York 10036
(646) 223-4203
(Name, address and telephone number of person authorized
to receive notices and communications)
March 18, 2002
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 8 Pages)
NY2:\1132920\07\_@6007!.DOC\69812.0248
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CUSIP No. 805423 10 0 13D Page 2 of 8
- ------------------------------------------------------------- ---------------------------------------------------------
- ------------------------ --------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON REUTERS GROUP PLC
I.R.S. IDENTIFICATION NO. IRS NO.
OF ABOVE PERSON
- ------------------------ --------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
- ------------------------ --------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------ --------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS: Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: England and Wales
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7 SOLE VOTING POWER: 0
NUMBER OF
SHARES
------------------- --------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 54,493,330
OWNED BY (see Item 5)
EACH ------------------- --------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER: 0
PERSON WITH
------------------- --------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER: 54,493,330
(see Item 5)
- ------------------------ --------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 54,493,330
(see Item 5)
- ------------------------ --------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ ]
- ------------------------ --------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 36.7%
(see Item 5)
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14 TYPE OF REPORTING PERSON: HC; CO
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- ------------------------------------------------------------- ---------------------------------------------------------
CUSIP No. 805423 10 0 13D Page 3 of 8
- ------------------------------------------------------------- ---------------------------------------------------------
- ------------------------ --------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON REUTERS HOLDINGS SWITZERLAND SA
I.R.S. IDENTIFICATION NO. IRS NO.
OF ABOVE PERSON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X]
(b) [ ]
- ------------------------ --------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------ --------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS: WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
- ------------------------ --------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: Switzerland
- ------------------------ --------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER: 0
NUMBER OF
SHARES
------------------- --------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 54,493,330
OWNED BY (see Item 5)
EACH ------------------- --------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER: 0
PERSON WITH
------------------- --------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER: 54,493,330
(see Item 5)
- ------------------------ --------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 54,493,330
(see Item 5)
- ------------------------ --------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ ]
- ------------------------ --------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 36.7%
(see Item 5)
- ------------------------ --------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON: CO
- ------------------------ --------------------------------------------------------------------------------------------------------
This Amendment No. 8 amends the Schedule 13D dated May 14, 2001, as
amended, filed by Reuters Group PLC ("RGPLC") and Reuters Holdings Switzerland
SA ("RHSSA" and, together with RGPLC, the "Reporting Persons"), with respect to
the common stock, par value $.01 per share ("Common Stock"), of Savvis
Communications Corporation ("Savvis").
Item 5. Interest in Securities of the Issuer
------------------------------------
Item 5 is hereby amended and supplemented as follows:
(a) The responses of the Reporting Persons to Rows (11)
through (13) of the cover pages of this Amendment No. 8 are incorporated herein
by reference.
On February 1, 2002, Savvis issued to RHSSA a Note in the
principal amount of $1,171,326 for the interest payable through that date on the
Notes previously issued by Savvis to RHSSA pursuant to the Securities Purchase
Agreement between RHSSA and Savvis (a copy of which was filed as Exhibit 6 to
Amendment No. 1 to Schedule 13D).
On March 18, 2002, Savvis issued and sold 117,200 shares of
its 11.5% Series A Convertible Preferred Stock (the "Series A Preferred Stock")
to Welsh, Carson, Anderson & Stowe VIII, L.P. ("WCAS") and certain other
investors (collectively with WCAS, the "Investors") for an aggregate purchase
price of $117,200,000. As a result of this transaction, under the terms of the
Notes and the Securities Purchase Agreement, on March 18, 2002, all of the Notes
(including all PIK Notes) held by RHSSA and all accrued and unpaid interest
thereon automatically converted into a total of 40,870 shares of Series A
Preferred Stock.
Under the terms of the certificate of designations for the
Series A Preferred Stock filed with the Secretary of State of the State of
Delaware, a copy of which is attached hereto as Exhibit 18 (the "Certificate of
Designations"), each share of Series A Preferred Stock and all accrued and
unpaid dividends thereon will be initially convertible into 1,333.3 shares of
Common Stock, subject to adjustment. However, holders of the Series A Preferred
Stock may not convert their shares of Series A Preferred Stock into Common Stock
until the "Effective Date", which is defined as the date on which a written
consent of Savvis' stockholders to approve increasing the number of authorized
shares of Common Stock to a number sufficient to permit the conversion of all
shares of the Series A Preferred Stock, which has been executed and delivered to
Savvis by the requisite holders of Savvis' voting stock, becomes effective under
the Delaware General Corporation Law and Regulation 14C under the Securities and
Exchange Act of 1934. Savvis has undertaken to take the actions necessary to
cause the Effective Date to occur as soon as practicable.
Except as provided in the Certificate of Designations or as
required under applicable law, on and after the Effective Date, holders of the
Series A Preferred Stock (including RHSSA) shall be entitled to vote (on an
as-converted basis) on all matters on which the holders of Common Stock shall be
entitled to vote, voting as a single class together with the holders of Common
Stock with one vote per share. The holders of the Series A Preferred Stock also
shall have the right to vote separately as a class on certain matters set forth
in Section 7.2 of the Certificate of Designations, including amendments to
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Savvis' certificate of incorporation that would adversely affect the rights,
preferences and powers of the Series A Preferred Stock, creation of any class of
equity securities of Savvis that are senior or pari passu with the Series A
Preferred Stock, payment of dividends on any equity securities of Savvis that
are junior to the Series A Preferred Stock (including the Common Stock), and
consummation of certain "change of control" events.
The Certificate of Designations provides that dividends on the
Series A Preferred Stock will be paid quarterly in the form of additional shares
of Series A Preferred Stock.
RHSSA is the owner of the 40,870 shares of Series A Preferred
Stock referred to above which, upon the Effective Date, will be entitled to vote
as and will be convertible into 54,493,330 shares of Common Stock (subject to
adjustment), and RGPLC, as the corporate parent of RHSSA, also is the beneficial
owner of such shares of Series A Preferred Stock and will be the beneficial
owner of such shares of Common Stock. These shares represent approximately 36.7%
of the outstanding shares of Common Stock (the outstanding shares of Common
Stock being determined, in accordance with Rule 13d-3(d)(1) under the Exchange
Act, to be 148,405,330, based on the sum of (i) 93,912,000 shares outstanding as
of October 31, 2001, based on Savvis' Quarterly Report on Form 10-Q for the
quarter ended September 30, 2001, and (ii) RHSSA's right to acquire 54,493,330
shares of Common Stock upon conversion of the Series A Preferred Stock. Although
RHSSA will not have the right to vote or to convert the Series A Preferred Stock
owned by it into Common Stock until the Effective Date occurs, the Reporting
Persons have elected to treat such Common Stock as being beneficially owned by
them for purposes of this Schedule 13D because the Reporting Persons believe the
Effective Date will take place within 60 days from the date of this Amendment
No. 8 to Schedule 13D. In accordance with Rule 13d-3(d)(1), the foregoing
percentages do not reflect the shares of Common Stock that WCAS and the other
Investors may acquire upon conversion of (or are entitled to vote as a result of
ownership of) the shares of Series A Preferred Stock they purchased from Savvis
in the transaction described above. If the conversion of the shares of Series A
Preferred Stock owned by WCAS and the other Investors were taken into account,
the Reporting Persons' beneficial ownership of Common Stock would be reduced to
approximately 17.8%.
Except as disclosed in this Item 5(a), none of the Reporting
Persons beneficially owns, and, to the best of their knowledge, none of their
directors or executive officers beneficially owns, any shares of Common Stock.
(b) The responses of the Reporting Persons to (i) Rows (7) through (10)
of the cover pages of this Amendment No. 8 and (ii) Item 5(a) hereof are
incorporated herein by reference.
(c) None of the Reporting Persons, nor, to the best of their knowledge,
any of their directors or executive officers, has effected any transaction in
the Common Stock of Savvis since the most recent filing on Schedule 13D.
(d) Not applicable.
(e) Not applicable.
5
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
------------------------------------------------------------------------
Securities of the Issuer
------------------------
Item 6 is hereby amended and supplemented as follows:
In connection with the conversion of the Notes held by RHSSA
into shares of Series A Preferred Stock described in Item 5 above, RHSSA became
a party to an Investor Rights Agreement, dated as of March 6, 2002, among
Savvis, WCAS, the other Investors and RHSSA (the "Investor Rights Agreement").
The Investor Rights Agreement provides RHSSA with certain registration and
preemptive rights. The Investor Rights Agreement is attached hereto as Exhibit
19. Upon execution of the Investor Rights Agreement, the previously executed
Registration Rights Agreement which was filed as Exhibit 10 to Amendment No. 1
to Schedule 13D was terminated. However, the Side Letter (filed as Exhibit 9 to
Amendment No. 1 to Schedule 13D) remains in full force and effect.
Item 7. Material to be Filed as Exhibits
--------------------------------
Exhibit 18. Certificate of Designations for Savvis' Series A Convertible
Preferred Stock.
Exhibit 19. Investor Rights Agreement, dated as of March 6, 2002, among
Savvis Communications Corporation, Welsh, Carson, Anderson &
Stowe VIII, L.P. ("WCAS"), the other entities and persons
affiliated with the WCAS signatories thereto, and Reuters
Holdings Switzerland SA.
Exhibit 20. Power of Attorney appointing Stephen P. Lehman as
attorney-in-fact for Reuters Group PLC.
Exhibit 21. Power of Attorney appointing Stephen P. Lehman as
attorney-in-fact for Reuters Holdings Switzerland SA.
6
SIGNATURES
----------
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Date: March 19, 2002
REUTERS GROUP PLC
By: /s/ Stephen P. Lehman
--------------------------------------
Name: Stephen P. Lehman
Title: Attorney-in-fact
REUTERS HOLDINGS SWITZERLAND SA
By: /s/ Stephen P. Lehman
--------------------------------------
Name: Stephen P. Lehman
Title: Attorney-in-fact
7
EXHIBIT INDEX
Exhibit 18. Certificate of Designations for Savvis' Series A Convertible
Redeemable Preferred Stock.
Exhibit 19. Investor Rights Agreement, dated as of March 6, 2002, among
Savvis Communications Corporation, Welsh, Carson, Anderson &
Stowe VIII, L.P. ("WCAS"), the other entities and persons
affiliated with the WCAS signatories thereto, and Reuters
Holdings Switzerland SA.
Exhibit 20. Power of Attorney appointing Stephen P. Lehman as
attorney-in-fact for Reuters Group PLC.
Exhibit 21. Power of Attorney appointing Stephen P. Lehman as
attorney-in-fact for Reuters Holdings Switzerland SA.
8
Exhibit 18
----------
SAVVIS COMMUNICATIONS CORPORATION
CERTIFICATE OF DESIGNATIONS
FOR
SERIES A CONVERTIBLE PREFERRED STOCK
SAVVIS COMMUNICATIONS CORPORATION, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Issuer"), does hereby certify that (i) pursuant to authority conferred upon the
Board of Directors of the Issuer by its Certificate of Incorporation, as amended
to date, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors authorized the
creation and issuance of the Issuer's Series A Convertible Preferred Stock
(referred to herein as the "Preferred Stock"), and (ii) the following
resolution, which was duly adopted by the Board of Directors on February 26,
2002, remains in full force and effect. Certain capitalized terms used herein
are defined in Section 12.
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Issuer by the provisions of the
Certificate of Incorporation, as amended from time to time (the
"Certificate of Incorporation"), and pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware, there be created from
the 50,000,000 shares of preferred stock, $0.01 par value, of the
Issuer authorized to be issued pursuant to the Certificate of
Incorporation, a series of preferred stock, having the number of shares
and, to the extent that the designations, powers, preferences and
relative and other special rights and the qualifications, limitations
and restrictions of such Preferred Stock are not stated and expressed
in the Certificate of Incorporation, the powers, preferences and
relative and other special rights and the qualifications, limitations
and restrictions, as follows:
1. Designation and Number of Shares.
--------------------------------
The series will be designated as the "Series A Convertible
Preferred Stock" and the number of shares constituting such series will be
210,000 shares.
2. Dividends.
---------
2.1 Payment of Dividends.
--------------------
(a) The Holders of Preferred Stock shall be entitled to
participating cumulative dividends, in preference to dividends on any Junior
Securities, which shall accrue as provided herein, and shall be paid when, as
and if declared by the Board of Directors. Dividends on each share of Preferred
Stock will accrue on a daily basis at the Dividend Accretion Rate on the
Accreted Value of such share from and including, the applicable Issuance Date to
the first to occur of (i) the date on which such share is redeemed in accordance
with Section 5, (ii) the date on which such share is converted in accordance
with Section 4, (iii) the date such share is purchased in accordance with
Section 9 or 10, or (iv) the date the Issuer is liquidated, dissolved or wound
up in accordance with Section 6. Dividends shall accrue as provided herein
whether or not such dividends (or a portion thereof) have been declared and
whether or not there are any unrestricted funds of the Issuer legally available
for the payment of dividends. Accrued but unpaid dividends shall accrete
quarterly by being added to the Accreted Value on each Dividend Accretion Date.
For purposes of determining the amount of dividends "accrued" (i) as of or
before the first Dividend Accretion Date and as of any date that is not a
Dividend Accretion Date, such amount shall be calculated on the basis of the
applicable Dividend Accretion Rate for the actual number of days elapsed from
and including, the applicable Issuance Date (in case of the first Dividend
Accretion Date and any date prior to the first Dividend Accretion Date) or the
last preceding Dividend Accretion Date (in case of any other date) to the date
as of which such determination is to be made, and (ii) as of any Dividend
Accretion Date after the first Dividend Accretion Date, such amount shall be
calculated on the basis of such rate per annum based on a 360-day year of twelve
30-day months.
(b) After March 18, 2010 the Company may, at its option, pay
in cash dividends on Preferred Stock that would accrue after such date.
(c) In the event the Board of Directors of the Issuer shall
declare a cash dividend payable with respect to the then outstanding shares of
Common Stock in any particular quarter, which exceeds, on a per share basis, the
amount of the dividend accreted per share of Preferred Stock in such quarter
divided by the number of shares of Common Stock such share of Preferred Stock is
then convertible into (the "Per Share Preferred Dividend Amount"), then the
Holders of the Preferred Stock shall be entitled to, prior to the payment of any
such dividend declared with respect to the outstanding shares of Common Stock
(the "Per Share Common Dividend Amount"), (i) the accretion of dividends for
such quarter pursuant to Section 2.1(a) and (ii) the excess, in cash, of the Per
Share Common Dividend Amount over the Per Share Preferred Dividend Amount
multiplied by the number of shares of Common Stock into which the Preferred
Stock is then convertible. The Holders of Preferred Stock will not be required
to convert the shares of Preferred Stock held by such Holders as a condition to
receiving the cash dividend contemplated by this Section 2.1(c).
2.2 Declaration of Dividends.
------------------------
(a) Except as permitted under Section 7.2(c), (i) no dividends
or other distributions may be declared, made or paid upon, or any funds set
apart for the payment of dividends upon, any of the Junior Securities or Parity
Securities by the Issuer or any of its Subsidiaries, and (ii) no Junior
Securities or Parity Securities, may be purchased, redeemed or otherwise
acquired or retired for value for any consideration (and no money may be paid
into or set apart or made available for a sinking or other like fund for the
purchase, redemption or other acquisition or retirement for value of any shares
of any such stock) by the Issuer or any of its Subsidiaries. Notwithstanding
anything to the contrary contained herein, the provisions of this Section 2.2(a)
will be of no further force and effect upon the earlier of the date on which (A)
less than twenty percent (20%) of the aggregate of the number of shares of
Preferred Stock issued on all Issuance Dates remains outstanding or (B) less
than forty percent (40%) of the aggregate of the number of shares of Preferred
Stock issued on all Issuance Dates remains outstanding and such outstanding
Preferred Stock constitutes less than twenty percent (20%) of the total
outstanding voting power of the Issuer.
(b) If at any time the Issuer shall pay dividends in
accordance with Section 2.1(b) with respect to the Preferred Stock in an amount
2
that is less than the total amount of the Accrued Dividends, such dividends
shall be distributed ratably among the Holders based upon the aggregate Accrued
Dividends on the Preferred Stock held by each Holder.
3. Ranking.
-------
3.1 The Preferred Stock will, with respect to dividend distributions
and distributions upon a Liquidation Event, rank: (a) senior to all classes of
Junior Securities; (b) on a parity with Parity Securities; and (c) subject to
Section 7.2(b), junior to each class of Senior Securities.
3.2 Subject to applicable law and the terms of Section 7 of this
Certificate of Designations, the Issuer is entitled to amend its Certificate of
Incorporation to authorize one or more additional series of preferred stock,
file certificates of designation, and issue without restriction from time to
time, any series of Junior Securities, Parity Securities, or Senior Securities.
4. Conversion.
-----------
4.1 Conversion Rights.
-----------------
(a) Each Holder of Preferred Stock shall have the right, at
its option, at any time and from time to time after the Effective Date to
convert, subject to the terms and provisions of this Section 4, any or all of
such Holder's shares of Preferred Stock into Conversion Shares.
(i) The conversion right of a Holder of Preferred Stock under
this Section 4.1(a) shall be exercised by the Holder by the surrender
of the certificate representing shares to be converted to the Issuer
accompanied by a Conversion Notice.
(ii) If the conversion under this Section 4.1(a) is in
connection with an underwritten offering of securities registered
pursuant to the Securities Act, the conversion may, at the option of
any Holder tendering Preferred Stock for conversion, be conditioned
upon the closing with the underwriter of the sale of securities
pursuant to such offering, in which event the person(s) entitled to
receive the Common Stock issuable upon such conversion of the Preferred
Stock shall not be deemed to have converted such Preferred Stock until
immediately prior to the closing of the sale of such securities.
(b) Immediately prior to the close of business on any
Conversion Date, each Holder of Preferred Stock whose shares of Preferred Stock
have been converted in whole or in part pursuant to this Section 4.1 shall be
deemed to be the Holder of record of Common Stock issuable upon such conversion
of such Holder's Preferred Stock notwithstanding that the share register of the
Issuer shall then be closed or that certificates representing such Common Stock
shall not then be actually delivered to such Person.
(c) On any Conversion Date, all rights with respect to the
shares of Preferred Stock so converted, including the rights, if any, to receive
notices, will terminate, except the rights of Holders thereof to: (i) receive
certificates for the number of shares of Common Stock into which such shares of
Preferred Stock have been converted; and (ii) exercise the rights to which they
are entitled as Holders of Common Stock.
(d) If any Conversion Date shall not be a Business Day, then
the applicable conversion right shall be deemed exercised on the next Business
Day.
3
The conversion rights under Section 4.1(a) shall terminate
with respect to any share of Preferred Stock at the close of business on the
Business Day prior to the date of redemption or repurchase (permitted under this
Certificate of Designations) for such share of Preferred Stock unless the Issuer
shall default in making the payment due upon redemption or repurchase thereof.
4.2 The Conversion Price shall be subject to adjustment, without
duplication, from time to time as follows:
(a) Stock Splits and Combinations. In case the Issuer shall at
any time or from time to time after the Original Issuance Date (i) subdivide or
split the outstanding shares of Common Stock, (ii) combine or reclassify the
outstanding shares of Common Stock into a smaller number of shares or (iii)
issue by reclassification of the shares of Common Stock any shares of capital
stock of the Issuer, then, and in each such case, the Conversion Price in effect
immediately prior to such event or the record date therefor, whichever is
applicable, shall be adjusted so that the Holder of any shares of Preferred
Stock thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other securities of the Issuer which such
Holder would have owned or have been entitled to receive after the occurrence of
any of the events described above, had such shares of Preferred Stock been
surrendered for conversion immediately prior to the occurrence of such event or
the record date therefor, whichever is applicable. An adjustment made pursuant
to this subparagraph (a) shall become effective at the close of business on the
day upon which such corporate action becomes effective. Such adjustment shall be
made successively whenever any event listed above shall occur.
(b) Dividends and Distributions in Common Stock. In case the
Issuer shall at any time or from time to time after the Original Issuance Date
pay a dividend or make a distribution payable in shares of Common Stock on any
class of Capital Stock of the Issuer other than dividends or distributions of
shares of Common Stock or other securities with respect to which adjustments are
provided in paragraph (a) above, the Conversion Price shall be adjusted so that
the Holder of each share of Preferred Stock shall be entitled to receive upon
conversion thereof the number of shares of Common Stock determined by
multiplying (1) the applicable Conversion Price by (2) a fraction, the numerator
of which shall be the number of shares of Common Stock theretofore outstanding
and the denominator of which shall be the sum of such number of shares and the
total number of shares issuable in such dividend or distribution. The provisions
of this clause shall similarly apply to successive distributions.
(c) Distribution of Indebtedness, Securities or Assets. In
case the Issuer shall at any time or from time to time after the Original
Issuance Date distribute to any Holders of Common Stock (whether by dividend or
in a merger, amalgamation, consolidation or otherwise) evidences of
indebtedness, shares of Capital Stock of any class or series, other securities
or assets (other than securities referred to in subparagraph (d) below or a
dividend payable exclusively in cash and other than as a result of a Fundamental
Change) in respect of such Holder's Common Stock, the Conversion Price in effect
immediately prior to the close of business on the record date fixed for
determination of stockholders entitled to receive such distribution shall be
reduced by multiplying such Conversion Price by a fraction, the numerator of
which is the Volume Weighted Market Value on such record date less the fair
market value (as determined by the Board of Directors of the Issuer, whose
determination in good faith shall be conclusive) of the portion of such
evidences of indebtedness, shares of Capital Stock, other securities, cash and
assets so distributed applicable to one share of Common Stock and the
4
denominator of which is the Volume Weighted Market Value. Such adjustment shall
be made successively whenever any such event shall occur.
(d) Sales of Securities Below Conversion Price. Subject to the
last sentence of this Section 4.2(d), if the Issuer shall issue any Additional
Stock (as defined below) without consideration or for a consideration per share
less than the Conversion Price in effect immediately prior to the issuance of
such Additional Stock, then the Conversion Price in effect immediately prior to
each such issuance shall automatically be adjusted as set forth in this Section
4.2(d). Such adjustment shall be made successively whenever such event shall
occur.
(i) Whenever the Conversion Price is adjusted pursuant to this
Section 4.2(d), the new Conversion Price shall be determined by
multiplying the Conversion Price then in effect by a fraction, (x) the
numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance (the "Outstanding
Common") plus the number of shares of Common Stock that the aggregate
consideration (determined in the manner provided in Section 4(d)(iii))
received by the Issuer for such issuance would purchase at the
Conversion Price in effect immediately prior to such issuance; and (y)
the denominator of which shall be the number of shares of Outstanding
Common plus the number of shares of such Additional Stock. For purposes
of the foregoing calculation, the term "Outstanding Common" shall
include, without limitation, shares of Common Stock issued or issuable
upon the exercise, exchange or conversion of outstanding securities,
excluding Common Stock issuable upon the exercise, exchange or
conversion of options, warrants or similar rights to acquire Common
Stock, at a price greater than the Volume Weighted Market Value as of
the date of adjustment.
(ii) For purposes of this Section 4.2(d), "Additional Stock"
shall mean any shares of Common Stock issued (or deemed to have been
issued pursuant to Section 4.2(d)(iv)) by the Issuer other than: (1)
Common Stock issued pursuant to a transaction described in Section
4.2(a) or 4.2(b), (2) shares of Common Stock issued or issuable upon
conversion of the Preferred Stock, (3) in addition to the shares of
Common Stock described in 4.2(d)(ii)(4) below, shares of Common Stock
or options, warrants or similar rights to purchase shares of Common
Stock, which shares are issuable or issued to employees, consultants or
directors of the Issuer directly or pursuant to a stock option,
restricted stock, employee stock purchase or similar plan approved by
the Board of Directors of the Issuer and (4) shares of Common Stock
issued or issuable upon conversion of all securities convertible,
exchangeable or exercisable for, or rights to purchase, shares of
Common Stock validly issued and outstanding as of the Original Issuance
Date, including pursuant to warrants issued to creditors of the Issuer
on such date.
(iii) In the case of the issuance of Common Stock for cash,
the consideration shall be deemed to be the amount of cash paid
therefor before deducting any reasonable discounts, commissions or
other expenses allowed, paid or incurred by the Issuer for any
underwriting or otherwise in connection with the issuance and sale
thereof. In the case of the issuance of the Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair value thereof as
determined by the Board of Directors of the Issuer irrespective of any
accounting treatment.
5
(iv) In the case of the issuance of options to purchase or
rights to subscribe for Common Stock, securities by their terms or by
agreement with the Issuer convertible into or exchangeable for Common
Stock or options to purchase or rights to subscribe for such
convertible or exchangeable securities, the following provisions shall
apply for all purposes of this Section 4.2(d):
(1) The aggregate maximum number of shares of Common
Stock deliverable upon exercise (assuming the satisfaction of
any conditions to exercisability, including without
limitation, the passage of time, but without taking into
account potential antidilution adjustments) of such options to
purchase or rights to subscribe for Common Stock shall be
deemed to have been issued at the time such options or rights
were issued and for a consideration equal to the consideration
(determined in the manner provided in Section 4.2(d)(iii)), if
any, received by the Issuer upon the issuance of such options
or rights plus the minimum exercise price provided in such
options or rights (without taking into account potential
antidilution adjustments) for the Common Stock covered
thereby.
(2) The aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange (assuming
the satisfaction of any conditions to convertibility or
exchangeability, including, without limitation, the passage of
time, but without taking into account potential antidilution
adjustments, accrual of dividends or payment of any premiums
or preferences conditioned upon the occurrence of specified
transactions) for any such convertible or exchangeable
securities or upon the exercise of options to purchase or
rights to subscribe for such convertible or exchangeable
securities and subsequent conversion or exchange thereof shall
be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a
consideration equal to the consideration, if any, received by
the Issuer for any such securities and related options or
rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the minimum additional
consideration, if any, to be received by the Issuer (without
taking into account potential antidilution adjustments) upon
the conversion or exchange of such securities or the exercise
of any related options or rights (the consideration in each
case to be determined in the manner provided in Section
4.2(d)(iii)).
(v) Notwithstanding any other provisions of this Section
4.2(d), no adjustment of the Conversion Price pursuant to this Section
4.2(d) shall have the effect of increasing the Conversion Price above
the Conversion Price in effect immediately prior to such adjustment.
Notwithstanding anything herein to the contrary, this Section
4.2(d) will be effective only on and after the Effective Date, whether or not
the Issuer is subject to the Marketplace Rules of The Nasdaq Stock Market, Inc.
(e) Fundamental Changes. In case of any Fundamental Change,
the Holder of each share of Preferred Stock outstanding immediately prior to the
occurrence of such Fundamental Change shall have the right upon any subsequent
conversion to receive the kind and amount of stock, other securities, cash and
assets that such Holder would have received if such share had been converted
6
immediately prior thereto. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Section 4 with respect to the
rights of the Holders of Preferred Stock after the Fundamental Change to the end
that the provisions of this Section 4 shall be applicable after that event in a
manner as nearly equivalent as practicable as before the Fundamental Change.
(f) Limitation on Adjustments. Anything in the above
subparagraphs (a) through (e) to the contrary notwithstanding, the Issuer shall
not be required to give effect to any adjustment in the Conversion Price unless
and until the net effect of one or more adjustments (each of which shall be
carried forward until counted toward adjustment), determined as above provided,
shall have resulted in a change of the Conversion Price by at least 1%, and when
the cumulative net effect of more than one adjustment so determined shall be to
change the Conversion Price by at least 1%, such change in the Conversion Price
shall thereupon be given effect. In the event that, at any time as a result of
the provisions of this Section, the Holder of shares of Preferred Stock upon
subsequent conversion shall become entitled to receive any shares of Capital
Stock of the Issuer other than Common Stock, the number of such other shares so
receivable upon conversion of shares of Preferred Stock shall thereafter be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained herein.
(g) No Further Adjustment for Reorganization. There shall be
no adjustment of the Conversion Price in case of the issuance of any stock of
the Issuer in a merger, reorganization, acquisition, reclassification,
recapitalization or other similar transaction except as set forth in the above
subparagraphs (a) through (e).
(h) Deferral Until Occurrence of Event. In any case in which
the above subparagraphs (a) through (e) require that an adjustment as a result
of any event become effective from and after a record date, the Issuer may elect
to defer until after the occurrence of such event (i) issuing to the Holder of
any shares of Preferred Stock converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion over and above the shares issuable on the basis of the
Conversion Price in effect immediately prior to adjustment and (ii) paying to
such Holder any amount in cash in lieu of a fractional share of Common Stock.
(i) Adjustment After Record Date. If the Issuer shall take a
record of the Holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution, and shall thereafter and before the
distribution to shareholders thereof legally abandon its plan to pay or deliver
such dividend or distribution, then thereafter no adjustment in the number of
shares of Common Stock issuable upon exercise of the right of conversion granted
by the above subparagraphs (a) through (e) or in the Conversion Price then in
effect shall be required by reason of the taking of such record.
(j) Certificate of Adjustment. In each case of an adjustment
or readjustment of the Conversion Price for the number of shares of Common Stock
or other securities issuable upon conversion of the Preferred Stock, the Issuer,
at its expense, shall compute such adjustment or readjustment in accordance with
the provisions hereof and prepare a certificate showing such adjustment or
readjustment, and shall deliver such certificate to each Holder of Preferred
Stock in accordance with the terms of Section 13. The certificate shall set
forth such adjustment or readjustment, showing in detail the facts upon which
such adjustment or readjustment is based.
7
(k) Notice of Holders of Certain Events. Upon (i) any taking
by the Issuer of a record of the Holders of any class of securities in
accordance with the terms thereof for the purpose of determining the Holders
thereof who are entitled to receive any dividend or other distribution, or
otherwise participate in any event for which the Conversion Price is adjusted
pursuant to this Section 4, (ii) any subdivision or combination of the
outstanding Common Stock, (iii) any Fundamental Change or (iv) any Liquidation
Event, the Issuer shall mail to each Holder of Preferred Stock at least twenty
(20) days prior to the record date specified therein a notice specifying (A) the
date on which any such record is to be taken for the purpose of such dividend,
distribution or other event and a description of such dividend, distribution or
other event, (B) the date on which any such subdivision, combination,
Fundamental Change or Liquidation Event is expected to become effective, and (C)
the date, if any, that is to be fixed as to when the Holders of Common Stock (or
other securities) shall be entitled to exchange their shares of Common Stock (or
other securities) for securities or other property deliverable upon such
subdivision, Fundamental Change or Liquidation Event.
4.3 From and after the Effective Date, the Issuer shall at all times
reserve and keep available for issuance upon the conversion of the Preferred
Stock such number of its authorized but unissued shares of Common Stock as will
from time to time be sufficient to permit the conversion of all outstanding
shares of Preferred Stock, and shall take all action required to increase the
authorized number of shares of Common Stock if at any time there shall be
insufficient authorized unissued shares of Common Stock to permit such
reservation or to permit the conversion of all outstanding shares of Preferred
Stock.
4.4 The issuance or delivery of certificates for Common Stock upon the
conversion of shares of Preferred Stock shall be made without charge to the
converting Holder of shares of Preferred Stock for such certificates or for any
tax in respect of the issuance or delivery of such certificates or the
securities represented thereby, and such certificates shall be issued or
delivered in the respective names of, or in such names as may be directed by,
the Holders of the shares of Preferred Stock converted; provided, however, that
the Issuer shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate in
a name other than that of the Holder of the shares of Preferred Stock converted,
and the Issuer shall not be required to issue or deliver such certificate unless
or until the Person or Persons requesting the issuance or delivery thereof shall
have paid to the Issuer the amount of such tax or shall have established to the
reasonable satisfaction of the Issuer that such tax has been paid.
5. Redemption.
----------
(a) On or after the March 18, 2010, the Issuer shall have the
option to redeem, from time to time, all or any portion of the outstanding
shares of Preferred Stock at a price per share equal to the Redemption Price.
The Issuer shall send notice of each such redemption (the "Redemption Notice")
as well as the amount of consideration to be paid for each share of Preferred
Stock to be redeemed, to each of the Holders of shares of Preferred Stock at
least thirty (30) and not more than sixty (60) days' prior to the redemption
date (each, a "Redemption Date") set forth in such notice. On any Redemption
Date, the Issuer shall pay the Redemption Price in cash.
(b) With respect to each share of the Preferred Stock that the
Issuer elects not to redeem on March 18, 2010 (whether or not the Issuer has
sufficient legally available funds to effect such redemption), from and after
8
such date, the Dividend Accretion Rate with respect to each such share shall be
increased to twenty percent (20%); provided, that this increase will not have
any effect on a right of a Holder of Preferred Stock to receive dividends
pursuant to Section 2.1(c) to the extent any such declared dividends are in
excess of such increased Dividend Accretion Rate.
(c) If on any Redemption Date the shares of Preferred Stock to
be redeemed shall be less than all of the outstanding shares of Preferred Stock
on such date, the shares shall be redeemed pro rata among all Holders of
Preferred Stock based on their holdings as of such Redemption Date with any
fractional shares round to the nearest whole share.
(d) Any Redemption Notice delivered to Holders of Preferred
Stock shall not in any way limit such Holder's right to convert such Holder's
shares of Preferred Stock into Common Stock in accordance with Section 4 prior
to the applicable Redemption Date.
(e) (i) On or before the applicable Redemption Date, each
Holder of shares of Preferred Stock to be redeemed shall surrender his
certificate or certificates representing such shares of Preferred Stock
(properly endorsed or assigned, or transferred, if the Issuer shall so require
and the Redemption Notice shall so state) to the Issuer in the manner and at the
place designated in the Redemption Notice.
(ii) On the applicable Redemption Date, the Issuer shall pay
or deliver, upon receipt of such certificates, to the Holder whose name
appears on such certificate or certificates as the owner thereof, the
full Redemption Price due such Holder.
(iii) The shares represented by each certificate to be
surrendered shall be automatically (and without any further action of
the Issuer or the Holder) canceled as of the applicable Redemption Date
whether or not certificates for such shares are returned to the Issuer.
(iv) If fewer than all the shares represented by any such
certificate are to be redeemed, a new certificate shall be issued
representing the unredeemed shares, without cost to the Holder,
together with the amount of cash, if any, in lieu of fractional shares.
(f) If a Redemption Notice shall have been given as provided
in Section 5.1(a), all rights of the Holders thereof as stockholders of the
Issuer with respect to shares so called for redemption (including but not
limited to, the right to receive dividends on the shares of Preferred Stock to
be redeemed, but excluding for the right to receive from the Issuer the
Redemption Price) shall cease either (i) from and after the Redemption Date
(unless the Issuer shall default in the payment of the Redemption Price, in
which case such rights shall not terminate at the Redemption Date) or (ii) if
the Issuer shall so elect and state in the Redemption Notice, from and after the
time and date (which date shall be the Redemption Date or an earlier date not
less than twenty (20) days after the date of mailing of the Redemption Notice)
on which the Issuer shall irrevocably deposit in trust for the Holders of the
shares to be redeemed with a designated paying agent an amount in cash
sufficient to pay at the office of such paying agent, on the Redemption Date,
the Redemption Price. Any money so deposited with such paying agent that shall
not be required for such redemption shall be returned to the Issuer forthwith.
Subject to applicable escheat laws, any moneys so set aside by the Issuer and
unclaimed at the end of one year from the Redemption Date shall revert to the
9
general funds of the Issuer, after which reversion the Holders of such shares so
called for redemption shall look only to the general funds of the Issuer for
payment of the Redemption Price without interest. Any interest accrued on funds
held by the paying agent shall be paid to the Issuer from time to time.
(g) Notwithstanding anything herein to the contrary, the
Issuer shall not be able to exercise its option to redeem all or any portion of
the outstanding Preferred Stock pursuant to this Section 5 unless and until it
has obtained the approval (by written consent or otherwise) of a majority of the
members of a Special Board Committee designated by the Board of Directors of the
Issuer for such purpose.
6. Liquidation Preference.
----------------------
(a) Upon any Liquidation Event, Holders of the Preferred Stock
will be entitled to be paid, out of assets of the Issuer available for
distribution, the Liquidation Preference per share as of the date of the
Liquidation Event, before any distribution is made on any Junior Securities,
including, without limitation, the Common Stock. Payments required to be made
pursuant to this Section 6(a) shall be made in cash.
(b) If, upon any Liquidation Event, the amounts payable with
respect to the Liquidation Preference and the liquidation preference of all
other Parity Securities are not paid in full, the Holders of the Preferred Stock
and the Parity Securities will share pro rata in proportion to the full
distribution to which each is entitled. After the payment of the full
Liquidation Preference, such Holders shall not be entitled to any additional
distribution of assets of the Issuer.
7. Voting Rights.
-------------
7.1 Except as otherwise provided herein or as required by applicable
law, the Holders of the Preferred Stock shall on and after the Effective Date be
entitled to vote on all matters on which the Holders of Common Stock shall be
entitled to vote, in the same manner and with the same effect as the Holders of
Common Stock, voting together with the Holders of Common Stock as a single
class. For this purpose, the Holders of the Preferred Stock shall be given
notice of any meeting of stockholders as to which the Holders of Common Stock
are given notice in accordance with the Bylaws of the Issuer. As to any matter
on which the Holders of the Preferred Stock shall be entitled to vote, each
Holder of Preferred Stock shall be entitled to that number of votes (calculated
as of the close of business on the record date for the meeting of stockholders,
if such matter is subject to a vote at a meeting of stockholders, or on the
execution date of any written consent, if such matter is subject to a written
consent of the stockholders without a meeting of stockholders) equal to the
number of Conversion Shares into which such Holder's shares of Preferred Stock
could be converted pursuant to the provisions of Section 4 hereof (without
giving effect, for purposes of this Section 7.1 only, to Section 4.2(d)).
10
7.2 Special Voting Rights.
---------------------
The Issuer shall not, and shall not permit any of its
Subsidiaries to take any of the following actions unless each such action is
taken following receipt of the vote or consent of the Holders of at least 66
2/3% of the outstanding Preferred Stock, voting as a separate class:
(a) amend, alter or repeal any provision of (i) the
Certificate of Incorporation of the Issuer, (ii) Bylaws of the Issuer
or (iii) this Certificate of Designations, in each case, that would
adversely affect the rights, preferences and powers (including, without
limitation, the voting powers set forth in this Section 7) or
privileges of the Holders of the Preferred Stock;
(b) authorize, create, reclassify or issue any series or class
of Senior Securities (or security convertible into Senior Securities or
evidencing a right to purchase any shares of any series or class of
Senior Securities) or any series or class of Parity Securities (or
security convertible into Parity Securities or evidencing a right to
purchase any shares of any class or series of Parity Securities), or
any other class or series of debt securities convertible or
exchangeable into Common Stock or any other class or series of
preferred stock, the payment or deemed payment of dividends with
respect to which (for federal income tax purposes) could reasonably be
expected to cause the inclusion of dividends accrued, accreted or paid
with respect to the Preferred Stock pursuant to this Certificate of
Designations in the taxable income of any Holder of Preferred Stock;
(c) pay any dividends or purchase, redeem or acquire or retire
for value (including, in connection with any merger or reorganization
of the Issuer or any of its Subsidiaries), or make any other
distribution (other than any of the foregoing made pursuant to the
terms of Junior Securities that have been approved by Holders of at
least 66 2/3% of the outstanding Preferred Stock, voting separately as
a class) in respect of, any Junior Securities; and
(d) consummate or agree to consummate any Designated Change of
Control Event other than any such event that contemplates the Issuer
making a Change of Control Offer in accordance with Section 9(a).
Notwithstanding anything to the contrary contained herein, the
provisions of Section 7.2(b) and 7.2(c) will be of no further force or effect
upon the earlier of the date on which (i) less than twenty percent (20%) of the
aggregate of the number of shares of Preferred Stock issued on all Issuance
Dates remains outstanding or (ii) less than forty percent (40%) of the aggregate
of the number of shares of Preferred Stock issued on all Issuance Dates remains
outstanding and such outstanding Preferred Stock constitutes less than twenty
percent (20%) of the total outstanding voting power of the Issuer.
8. Amendment, Supplement and Waiver.
--------------------------------
(a) Without the consent of any Holder of the Preferred Stock,
subject to the requirements of the General Corporation Law of the State of
Delaware, the Issuer may amend or supplement this Certificate of Designation to
cure any ambiguity, defect or inconsistency.
(b) This Certificate of Designation may be amended by the
Issuer with the consent of the Holders of at least 66 2/3% of the outstanding
shares of Preferred Stock.
11
9. Change of Control.
-----------------
(a) (i) Upon the occurrence of a Change of Control, the Issuer
may offer (a "Change of Control Offer") to repurchase all, but not less than
all, of the outstanding shares of Preferred Stock, if any, at a purchase price
per share in cash equal to the Change of Control Purchase Amount. If the Issuer
elects to make a Change of Control Offer, it shall, within twenty (20) days
following the occurrence of such Change of Control mail a notice to each Holder
of shares of Preferred Stock describing the transaction or transactions that
constitute the Change of Control and offering to repurchase shares of Preferred
Stock, on a date specified in such notice (the "Change of Control Purchase
Date"), which date shall be no earlier than ninety (90) days and no later than
one hundred and twenty (120) days from the date such notice is mailed, pursuant
to the procedures described in such notice. The Issuer shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations to the extent such laws and regulations are applicable.
(ii) On the Change of Control Purchase Date, the Issuer shall,
to the extent lawful:
(1) accept for payment all shares of Preferred Stock
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to
the Change of Control Purchase Amount in respect of all shares
of Preferred Stock so tendered; and
(3) deliver or cause to be delivered to the Transfer
Agent all certificates for shares of Preferred Stock so
accepted together with an officer's certificate stating the
aggregate number of shares being purchased by the Issuer.
(iii) The paying agent shall promptly mail or transfer by wire
transfer to each Holder of shares of Preferred Stock so tendered the
Change of Control Purchase Amount for such shares of Preferred Stock,
and the Transfer Agent shall promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new certificate for
any shares of Preferred Stock not tendered that are represented by the
surrendered certificate. The Issuer shall notify each Holder of
Preferred Stock the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Purchase Date.
(b) If the Issuer does not make a Change of Control Offer as
provided in Section 9(a), subject to Section 9(d), all of the outstanding shares
of Preferred Stock held by each Holder will automatically be converted into a
number of shares of Common Stock (or, if the Change of Control is a Designated
Change of Control Event, the type of securities or other consideration
distributed to the Holders of Common Stock upon such Change of Control, if
applicable) having a value equal to the Change of Control Purchase Amount (after
giving effect to the Change of Control and the dilution per share of Common
Stock incurred in connection with the automatic conversion contemplated by this
Section 9(b)) effective upon the twenty-first (21st) day following the
occurrence of a Change of Control. Upon any conversion in accordance with this
Section 9(b), all rights with respect to the shares of Preferred Stock so
converted, including the rights, if any, to receive notices, will terminate,
except the rights of Holders thereof to: (i) receive certificates for the number
of shares of Common Stock into which such shares of Preferred Stock have been
12
converted; and (ii) exercise the rights which they are entitled as Holders of
Common Stock (including any rights to receive a portion of the consideration to
be paid to such Holders in the Change of Control).
(c) The provisions of this Section 9 that permit the Issuer to
make a Change of Control Offer shall be applicable regardless of whether any
other provisions of this certificate are applicable. Except as set forth in this
paragraph, no Holder of shares of Preferred Stock shall have any right to
require the Issuer to repurchase or redeem the shares of Preferred Stock, in the
event of a takeover, recapitalization or other similar transaction.
(d) No provision of this Section 9 shall not in any way limit
the right of any Holder of Preferred Stock to convert such Holder's shares of
Preferred Stock into Common Stock in accordance with Section 4 prior to the
Change of Control Purchase Date.
(e) Notwithstanding anything herein to the contrary, the
Issuer shall not be able to make a Change of Control Offer pursuant to Section
9(a) unless and until it has obtained the approval (by written consent or
otherwise) of a majority of the members of a Special Board Committee designated
by the Board of Directors of the Issuer for such purpose.
10. Purchase Offer.
--------------
(a) The Issuer shall have the right (but not the obligation),
at any time and from time to time after the second anniversary of the Original
Issuance Date, to offer (the "Purchase Offer") to repurchase all or any part of
the outstanding shares of Preferred Stock at a purchase price per share in cash
equal to the Purchase Offer Amount. In the event the Purchase Offer is for fewer
than all of the outstanding shares of Preferred Stock, the number of shares of
Preferred Stock held by each Holder which shall be subject to the Purchase Offer
shall be selected on a pro rata basis (with any fractional shares being rounded
to the nearest whole share). If the Issuer elects to make a Purchase Offer, the
Issuer shall mail a notice to each Holder of shares of Preferred Stock (with a
copy to the Transfer Agent) offering to repurchase shares of Preferred Stock on
a date specified in such notice (the "Purchase Payment Date"), which date shall
be no earlier than ninety (90) days and no later than one hundred and twenty
(120) days from the date such notice is mailed, pursuant to the procedures
described in such notice. The Issuer shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations to
the extent such laws and regulations are applicable.
(b) On the Purchase Payment Date, the Issuer shall, to the
extent lawful:
(i) accept for payment all shares of Preferred Stock properly
tendered pursuant to the Purchase Offer;
(ii) deposit with the paying agent an amount equal to the
Purchase Offer Amount in respect of all shares Preferred Stock so
tendered; and
(iii) deliver or cause to be delivered to the Transfer Agent
all certificates for shares of Preferred Stock so accepted together
with an officer's certificate stating the aggregate number of shares
being purchased by the Issuer.
(c) The paying agent shall promptly mail or transmit by wire
transfer to each Holder of shares of Preferred Stock so tendered the Purchase
13
Offer Amount for such shares of Preferred Stock, and the Transfer Agent shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each such Holder a new certificate for any shares of Preferred Stock not
tendered that are represented by the surrendered certificate. The Issuer shall
notify the Holders of Preferred Stock the results of the Purchase Offer on or as
soon as practicable after the Purchase Payment Date.
(d) If a Holder of shares of Preferred Stock subject to the
Purchase Offer elects not to, or otherwise fails to, properly tender such amount
of such Holder's shares of Preferred Stock proportionate to the amount of total
shares of Preferred Stock the Issuer has offered to repurchase in the Purchase
Offer, then with respect to each share of such proportionate amount of Preferred
Stock that such Holder fails to tender, from and after the expiration of the
Purchase Offer the Dividend Accretion Rate with respect to each such share shall
be reduced to five percent (5%) per annum; provided, that this reduction shall
not have any effect on the right of a Holder of Preferred Stock to receive
dividends pursuant to Section 2.1(c) to the extent any such declared dividends
are in excess of such reduced Dividend Accretion Rate.
(e) Nothing in this Section 10 shall in any way limit such
Holder's right to convert such Holder's shares of Preferred Stock into Common
Stock in accordance with Section 4 prior to the Purchase Payment Date.
(f) Notwithstanding anything herein to the contrary, the
Issuer shall not be able to make a Purchase Offer pursuant to Section 10(a)
unless and until it has obtained the approval (by written consent or otherwise)
of a majority of the members of a Special Board Committee designated by the
Board of Directors of the Issuer for such purpose.
11. Transfer Restriction.
--------------------
Without the prior vote or consent of Holders of at least 66 2/3% of the
outstanding Preferred Stock, voting separately as a class, together with the
prior consent of the Issuer, the Preferred Stock, may not be offered, sold,
transferred, assigned, pledged, encumbered, distributed or otherwise disposed,
in whole or in part, directly or indirectly, by or on behalf of any Holder of
Preferred Stock to a Prohibited Transferee; provided, that nothing contained in
this Section 11 will prohibit any such transfer of Preferred Stock otherwise
expressly provided for in this Certificate of Designations.
12. Certain Definitions.
-------------------
Set forth below are certain defined terms used in this Certificate of
Designation.
"Accreted Value" means, with respect to any share of Preferred Stock on
any date, $1,000 plus the amount of all dividends that have accreted with
respect to such share through such date by being added to the Accreted Value
pursuant to Section 2.1(a).
"Accrued Dividends" means, with respect to any share of Preferred Stock
on any date, all dividends that have accrued with respect to such share since
the last Dividend Accretion Date (or, in the case of the period before the first
Dividend Accretion Date, the applicable Issuance Date) and have not been paid.
"Additional Stock" has the meaning set forth in Section 4.2(d)(ii).
14
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "common control with"), as used with respect to any specified Person, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such other Person, whether through
the ownership of Voting Stock, by agreement of or otherwise.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in the City of New York or other place where
payment is to be received are authorized by law, regulation or executive order
to remain closed. If a payment date is a not a Business Day at a place of
payment, payment may be made at that place on the next succeeding day that is a
Business Day, and no interest shall accrue for the intervening period.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock or
partnership or membership interests, whether common or preferred.
"Change of Control" means the occurrence of any of the following
events: (a) any Person (other than a Permitted Holder) or Group (other than a
Group of Permitted Holders) is or becomes the beneficial owner (as defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
Voting Stock of the Issuer; or (b) the Issuer sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets, as an entirety in a single transaction or series of related
transactions, to any Person (other than a Permitted Holder) or Group (other than
a Group of Permitted Holders), (c) the Issuer consolidates with, or merges with
or into, another Person, or any Person consolidates with, or merges with or into
the Issuer, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Issuer is converted into or exchanged for cash, securities
or other property, other than any such transaction where (i) the outstanding
Voting Stock of the Issuer is converted into or exchanged for Voting Stock of
the surviving or transferee corporation or its parent corporation and/or cash,
securities or other property and (ii) immediately after such transaction no
Person (other than a Permitted Holder) or Group (other than a Group of Permitted
Holders) is the beneficial owner (as defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total Voting Stock of the
surviving or transferee corporation, as applicable; or (d) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors (together with any new directors whose
nomination for election by the stockholders of the Issuer or whose election as
director was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office.
"Change of Control Offer" has the meaning set forth in Section 9(a).
15
"Change of Control Purchase Amount" means an amount equal to (i) the
Accreted Value plus the Minimum Dividend Amount per share if the Change of
Control Purchase Date is prior to the first anniversary of the Original Issuance
Date, (ii) 125% of the sum of the Accreted Value plus the Minimum Dividend
Amount per share if the Change of Control Purchase Date is after the first
anniversary of the Original Issuance Date and prior to the fifth anniversary of
the Original Issuance Date or (iii) 125% of the sum of the Accreted Value per
share and any Accrued Dividends thereon if the Change of Control Purchase Date
is after the fifth anniversary of the Original Issuance Date.
"Change of Control Purchase Date" means the meaning set forth in
Section 9(a).
"Closing Market Price" means, on any Trading Day, the last sale price
for shares of Common Stock on such day as reported in the Consolidated Last Sale
Reporting System or as quoted in the National Association of Securities Dealers
Automated Quotation System, or if such last sale price is not available, the
average of the closing bid and asked prices as reported in either such system,
or in any other case, the higher bid price quoted for such day as reported by
the Wall Street Journal and the National Quotation Bureau pink sheets.
"Common Stock" means the Issuer's authorized $.01 par value Common
Stock.
"Conversion Date" means any date on which the Issuer receives a
Conversion Notice.
"Conversion Notice" means a written notice from the Holder to the
Issuer stating that the Holder elects to convert all or a portion of the shares
of Preferred Stock represented by certificates delivered to the Issuer
contemporaneously, such Conversion Notice to specify or include: (i) the number
of shares of Preferred Stock being converted by the Holder, (ii) the name or
names (with address and taxpayer identification number) in which a certificate
or certificates for shares of Common Stock are to be issued, (iii) a written
instrument or instruments of transfer in form reasonably satisfactory to the
Issuer, duly executed by the Holder or its duly authorized legal representative,
or in blank, and (iv) transfer tax stamps or funds therefor, if required
pursuant to Section 4.4.
"Conversion Price" means $0.75, as may be adjusted from time to time as
provided herein.
"Conversion Shares" means, in connection with any conversion pursuant
to Section 4.1 to be consummated: that whole number of fully paid and
nonassessable shares of Common Stock as is equal, subject to Section 4.3, to the
product of the number of shares of Preferred Stock being so converted multiplied
by the quotient of (a) the Accreted Value plus all Accrued Dividends through the
applicable Conversion Date divided by (b) the Conversion Price then in effect.
"Designated Change of Control Event" means the occurrence of a Change
of Control pursuant to paragraph (a), (b) or (c) in the definition thereof.
"Dividend Accretion Date" means the first day of April, July, October
and January of each year, commencing April 1, 2002.
"Dividend Accretion Rate" means eleven and a half percent (11.5%) per
annum, unless otherwise adjusted pursuant to the terms of this Certificate of
Designations.
16
"Effective Date" means the date on which the Stockholder Action becomes
effective in accordance with the Delaware General Corporation Law and the
provisions of Regulation 14C under the Exchange Act; provided however, that to
the extent it is determined that the consent of the stockholders of the Issuer
to clause (c) of Action One of the Stockholder Action is not required by the
Marketplace Rules of The Nasdaq Stock Market, Inc., then the Effective Date of
the Stockholder Action for the purposes of Section 4.1(a) and Section 7.1 shall
be the Original Issuance Date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Face Amount" means, with respect to any share of Preferred Stock,
$1,000.
"Fundamental Change" means any transaction or event, including, without
limitation, any merger, consolidation, sale of assets, reclassification,
recapitalization, compulsory share exchange or liquidation, in which all or
substantially all outstanding shares of the Issuer's Common Stock are converted
into or exchanged for stock, other securities or assets.
"Group" means a group within the meaning of Section 13(d)(3) of the
Exchange Act.
"Holder" means a Person in whose name shares of Capital Stock are
registered.
"Issuance Date" means with respect to any share of Preferred Stock the
date on which the Issuer issues such share of Preferred Stock.
"Issuer" means SAVVIS Communications Corporation, a Delaware
corporation.
"Junior Securities" means Common Stock and each other class of Capital
Stock or series of preferred stock issued by the Issuer, which is established
after the date of this Certificate of Designation by the Board of Directors of
the Issuer, the terms of which do not expressly provide that such class or
series will rank senior to or on a parity with the Preferred Stock as to
dividend distributions and distributions upon a Liquidation Event.
"Liquidation Event" means any voluntary or involuntary liquidation,
dissolution or winding up of the Issuer.
"Liquidation Preference" means the greater of (i) the Accreted Value
plus any Accrued Dividends thereon as of the date of the Liquidation Event and
(ii) the fair market value of the Common Stock (as determined by an independent
third party appraiser of national standing chosen by the Company and the Holders
of 66 2/3% of the then outstanding Preferred Stock) as of the date of the
Liquidation Event multiplied by the number of shares of Common Stock such share
of Preferred Stock is convertible into.
"Minimum Dividend Amount" means, on any date, with respect to any share
of Preferred Stock issued on any Issuance Date, the aggregate amount of
cumulative dividends that would accrue pursuant to Section 2.1(a) from such
Issuance Date to and including the fifth anniversary of the Original Issuance
Date less the amount of dividends that have accreted pursuant to Section 2.1(a)
through such date.
"Original Issuance Date" means the first date on which the Issuer
issues any shares of Preferred Stock.
"Outstanding Common" has the meaning set forth in Section 4.2(d)(i).
17
"Parity Securities" means any class of Capital Stock or series of
preferred stock issued by the Issuer, which is established after the date of
this Certificate of Designation by the Board of Directors of the Issuer, the
terms of which expressly provide that such class or series will rank on a parity
with the Preferred Stock as to dividend distributions and distributions upon a
Liquidation Event.
"Permitted Holder" means Welsh, Carson, Anderson & Stowe VIII, L.P. or
any of its Affiliates.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock issuer, interest,
trust or unincorporated organization (including any subdivision or ongoing
business of any such entity or substantially all of the assets of any such
entity, subdivision or business).
"Preferred Stock" means the Preferred Stock authorized in this
Certificate of Designation.
"Prohibited Transferee" any Person (other than the Holders of Preferred
Stock having purchased such Preferred Stock from the Issuer on an Issuance Date)
who or which, directly or indirectly, owns in excess of 25% of the Voting Stock
of, manages, operates or controls, any business which provides data networking,
related Internet or managed hosting services.
"Purchase Offer" has the meaning set forth in Section 10(a).
"Purchase Offer Amount" means an amount equal to the greater of (i)
200% of the Face Amount and (ii) the Volume Weighted Market Value as of the
Purchase Payment Date multiplied by the number of shares of Common Stock such
shares of Preferred Stock is convertible into.
"Purchase Payment Date" has the meaning set forth in Section 10(a).
"Redemption Date" has the meaning set forth in Section 5(a).
"Redemption Price" means the amount equal to the Accreted Value plus
any Accrued Dividends thereon as of the applicable Redemption Date.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Senior Securities" means Capital Stock or series of preferred stock
issued by the Issuer, which is established after the date of this Certificate of
Designation by the Board of Directors of the Issuer, the terms of which
expressly provide that such class or series will rank senior to the Preferred
Stock as to dividend distributions and distributions upon a Liquidation Event.
"Special Board Committee" means a special committee of the Board of
Directors of the Issuer, a majority of whose members are not Affiliates of any
Holder of Preferred Stock.
"Stockholder Action" means the stockholder action by written consent
executed by the requisite Holders of Common Stock on March 6, 2002.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
18
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or a combination
thereof.
"Transfer Agent" shall have the meaning set forth in Section 12.
"Trading Day" means any business day on which the Nasdaq National Stock
Market (or any U.S. national securities exchange or quotation system (including,
without limitation, any over-the-counter trading system, if the Common Stock is
not then listed on an exchange) on which the Common Stock is then listed) is
open for the transaction of business.
"Volume Weighted Market Value" means as of any date, the price per
share of Common Stock which equals (i) the sum of the products, for each of the
twenty (20) Trading Days ending on and including the Trading Day immediately
prior to such date, of the Closing Market Price on such Trading Day multiplied
by the volume of shares traded on such day, divided by (ii) the total volume of
shares traded over such twenty (20) Trading Day period. If the Closing Market
Price cannot be determined in accordance with the definition thereof, the Volume
Weighted Market Value shall be the fair market value of the Common Stock (as
determined by an independent third party appraiser of national standing chosen
by the Company and the Holders of 66 2/3% of the then outstanding Preferred
Stock) as of such date.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote generally for the election of
directors, managers or other voting members of the governing body of such
Person.
13. Transfer Agent.
--------------
Mellon Investor Services LLC (or the Issuer for an interim
period) shall be the duly appointed transfer agent for the Preferred Stock (the
"Transfer Agent"). The Issuer may, in its sole discretion, remove the Transfer
Agent in accordance with the agreement between the Issuer and the Transfer
Agent; provided that the Issuer shall appoint a successor transfer agent who
shall accept such appointment prior to the effectiveness of such removal.
14. Notices.
-------
Any notices given pursuant to this Certificate of Designation
shall be by (i) first class mail, postage prepaid or (ii) by a nationally
recognized overnight courier, and sent to the address of the Holders as shown on
the books of the Transfer Agent. Any notice required by the provisions of this
Certificate of Designation shall be in writing and shall be deemed effectively
given (i) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid or (ii) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt.
15. Other Provisions.
----------------
15.1 With respect to any notice to a Holder of shares of the Preferred
Stock required to be provided hereunder, neither failure to mail such notice,
nor any defect therein or in the mailing thereof, to any particular Holder shall
affect the sufficiency of the notice or the validity of the proceedings referred
to in such notice with respect to the other Holders or affect the legality or
validity of any distribution, right, warrant, reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any such action. Any notice which was mailed in the manner herein
19
provided shall be conclusively presumed to have been duly given whether or not
the Holder receives the notice.
15.2 Shares of Preferred Stock issued and reacquired will be retired
and canceled promptly after reacquisition thereof and, upon compliance with the
applicable requirements of Delaware law, have the status of authorized but
unissued shares of preferred stock of the Issuer undesignated as to series and
may with any and all other authorized but unissued shares of preferred stock of
the Issuer be designated or redesignated and issued or reissued, as the case may
be, as part of any series of preferred stock of the Issuer except that any
issuance or reissuance of shares of Preferred Stock must be in compliance with
this Certificate of Designation.
15.3 In the Issuer's discretion, no fractional shares of Common Stock
or securities representing fractional shares of Common Stock will be issued upon
conversion, redemption, or as dividends payable in the Preferred Stock. Any
fractional interest in a share of Common Stock resulting from conversion,
redemption, or dividend payment will be paid in cash based on the last reported
sale price of the Common Stock on the Nasdaq National Stock Market (or any
national securities exchange or authorized quotation system on which the Common
Stock is then listed) at the close of business on the trading day next preceding
the date of conversion or such later time as the Issuer is legally and
contractually able to pay for such fractional shares.
15.4 The shares of Preferred Stock shall be issuable in whole shares.
15.5 All notice periods referred to herein shall commence on the date
of the mailing of the applicable notice.
20
IN WITNESS WHEREOF, SAVVIS Communications Corporation caused
this Certificate of Designations to be signed this 18th day of March, 2002.
SAVVIS COMMUNICATIONS CORPORATION,
a Delaware corporation
By: /s/ Nancy A. Bridgman Lysinger
--------------------------------------
Name: Nancy A. Bridgman Lysinger
Title: Vice President and Treasurer
21
Exhibit 19
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INVESTOR RIGHTS AGREEMENT
INVESTOR RIGHTS AGREEMENT, dated as of March 6, 2002, among
SAVVIS COMMUNICATIONS CORPORATION, a Delaware corporation ("Savvis" or the
"Company"), WELSH, CARSON, ANDERSON & STOWE VIII, L.P., a Delaware limited
partnership ("WCAS"), and the several other entities and persons affiliated with
WCAS listed on the signature pages hereto (the "WCAS Persons" and collectively
with WCAS, the "WCAS Investors"), Reuters Holdings Switzerland SA, a societe
anonyme organized under the laws of Switzerland ("Reuters"), the other
investor-parties that hold Preferred Stock (as defined below) or Warrants (as
defined below) that are listed under "Other Investors" on the signature pages
hereto or become a party to this Agreement in accordance with Section 10
(collectively, the "Other Investors") and any Permitted Transferees (as defined
below) that become a party to this Agreement in accordance with Section 12(d)
(together with the Other Investors, the WCAS Investors and Reuters, the
"Investors").
W I T N E S S E T H:
WHEREAS, the WCAS VIII is the record and beneficial holder of
an aggregate of 6,250,000 shares (the "February 2000 Common Shares") of Common
Stock, par value $.01 per share ("Common Stock"), of Savvis;
WHEREAS, Bridge Information Systems, Inc. and Savvis granted
to WCAS certain registration rights pursuant to the Registration Rights
Agreement, dated as of February 7, 2000 (the "February 2000 Rights Agreement")
and Savvis granted to (i) the WCAS Investors certain registration rights
pursuant to the Registration Rights Agreement, dated as of February 20, 2001
(the "February 2001 Rights Agreement") and (ii) Reuters certain registration
rights pursuant to the Registration Rights Agreement, dated as of May 16, 2001
(together with the February 2000 Rights Agreement and the February 2001 Rights
Agreement, the "Existing Rights Agreements");
WHEREAS, the WCAS Investors, certain Other Investors and
Savvis are parties to a Securities Purchase Agreement, dated as of the date
hereof (the "Purchase Agreement"), pursuant to which Savvis desires to sell to
the WCAS Investors and such Other Investors, their successors and permitted
assigns shares of Series A Convertible Redeemable Preferred Stock, par value,
$.01 per share (the "Preferred Stock"), convertible into such number of shares
of Common Stock determined according to Article 4 of the Certificate of
Designations relating to the Preferred Stock (the "Covered Converted Common
Shares");
WHEREAS, in connection with the transactions contemplated by
the Purchase Agreement, Nortel Networks Inc. ("Nortel Networks") and General
Electric Capital Corporation ("GECC") have entered into agreements relating to
their respective financing arrangements with the Company and, in connection
therewith, the Company has issued to each of GECC and Nortel Networks warrants
to purchase Common Stock (the "Warrants");
WHEREAS, in order to induce the WCAS Investors and such Other
Investors to enter into the Purchase Agreement, to induce GECC and Nortel
Networks to enter into the amended financing arrangements, and to consummate the
transactions contemplated by the foregoing, the WCAS Investors and Reuters have
agreed to terminate the Existing Rights Agreements and Savvis has agreed to
grant the Investors certain registration rights pursuant to this Agreement with
respect to the Covered Common Shares and certain other shares of Common Stock
from time to time held by the Investors; and
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings set forth below:
"Affiliate" means WCAS, any other WCAS Investor or any
investment limited partnership affiliated therewith, any general
partner or principal of WCAS, any such other WCAS Investor or any such
investment limited partnership.
"Commission" means the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Covered Common Shares" means the Covered Converted Common
Shares and the Covered Warrant Common Shares.
"Covered Warrant Common Shares" means the shares of Common
Stock into which the Warrants are exercisable and any other shares of
Common Stock distributable on, with respect to, or in substitution of
such shares.
"Effective Date" means the Closing Date (as defined in the
Purchase Agreement).
"Eligible Investor" means at any time (a) WCAS or its
Permitted Transferees, Reuters or any Other Investor (other than Nortel
Networks or GECC), so long as such Person owns Preferred Stock
representing at least ten percent (10%) of the then outstanding voting
power of Savvis and (b) WCAS (together with its Affiliates), Reuters or
any Other Investor (other than Nortel Networks or GECC), so long as
each such Person owns Savvis Stock representing at least five percent
(5%) of the outstanding Savvis voting power.
"Exchange Act" means the Securities Exchange Act of 1934 or
any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"New Capital Stock" shall mean any Savvis Stock or securities
exchangeable, convertible or exercisable into shares of Savvis Stock
whether or not authorized on the date hereof; provided, however, that
"New Capital Stock" shall not include the following: (i) shares of
Savvis Stock outstanding on the date hereof; (ii) shares of Preferred
Stock (whether or not issued pursuant to the Purchase Agreement); (iii)
Covered Common Shares; (iv) capital stock issued to officers, directors
or employees of, or consultants to, Savvis pursuant to a stock grant,
2
option plan or purchase plan or other stock incentive program,
including without limitation sales of shares to such Persons pursuant
to restricted stock purchase agreements approved by the Board of
Directors of the Savvis; (v) capital stock issued as a dividend or
distribution on capital stock or in connection with any stock split,
stock dividend or similar transaction; (vi) capital stock issued in a
firm-commitment underwritten public offering pursuant to a registration
statement filed under the Securities Act; and (vii) securities issued
pursuant to business combination transactions or the acquisition of
technology or other assets of other businesses approved by the Board of
Directors.
"Permitted Transferee" has the meaning ascribed to such term
in Section 12(d).
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
issuer, interest, trust or unincorporated organization (including any
subdivision or ongoing business of any such entity or substantially all
of the assets of any such entity, subdivision or business).
"Pro Rata Share" shall, with respect to any Eligible Investor,
mean the percentage obtained when (i) the sum of the number of Covered
Converted Common Shares held by such Eligible Investor plus the number
of shares of Common Stock issuable upon exercise of options or warrants
to purchase Common Stock or other Savvis Stock convertible into Common
Stock held by such Eligible Investor plus the number of shares of
Common Stock then held by such Eligible Investor is divided by (ii) the
sum of the total number of shares of Common Stock then outstanding plus
the total number of Covered Converted Common Shares and other
securities convertible into or exchangeable or exercisable for Common
Stock then outstanding.
"Restricted Stock" means, at any time, (i) the Covered Common
Shares and any shares of Common Stock issuable upon or issuable with
respect to the Covered Common Shares by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise, in each
case only so long as such shares have not been sold to the public
pursuant to an effective registration statement under, or pursuant to
Rule 144 under, the Securities Act; and (ii) any other shares of Common
Stock held by an Investor who is an affiliate (as such term if defined
in Rule 12b-2 promulgated under the Exchange Act) of Savvis.
"Savvis Stock" means any shares of capital stock of Savvis.
"Savvis Voting Stock" means shares of Savvis Stock having the
power to vote generally for the election of directors of the Company.
"Securities Act" means the Securities Act of 1933 (or any
successor federal statute) and the rules and regulations of the
Commission thereunder, as the same shall be in effect at the time.
"Transfer" means, with respect to any Savvis Stock, the sale,
transfer, assignment, pledge, encumbrance, distribution or other
disposition of such securities.
3
SECTION 2. Shares; Restrictions on Transfer; Legends. (a) Each
Investor owns or will own as of the Effective Date, the respective number of
shares of Common Stock and Preferred Stock and the Covered Warrant Common Shares
set forth opposite such Investor's name in Annex I.
(b) If any Investor shall Transfer any shares of Preferred
Stock, then within three days following the consummation of such Transfer, such
Investor shall deliver notice thereof to Savvis.
(c) Each Investor agrees that it will not effect any Transfer
of any shares of Restricted Stock unless such Transfer is (i) not prohibited
pursuant to the Certificate of Designations relating to the Preferred Stock and
(ii) made pursuant to an effective registration statement under the Securities
Act or pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act (and, in either case, in
compliance with all applicable state securities laws).
(d) Savvis agrees, and each Investor understands and consents,
that Savvis will not cause or permit the Transfer of any shares of Preferred
Stock or Restricted Stock to be made on its books (or on any register of
securities maintained on its behalf) unless the Transfer is permitted by, and
has been made in accordance with, (x) the terms of this Agreement and (y) all
applicable federal and state securities laws. Each Investor agrees that in
connection with any Transfer of Preferred Stock or Restricted Stock that is not
made pursuant to a registered public offering, Savvis may request an opinion of
legal counsel reasonably acceptable to Savvis (it being agreed that Reboul,
MacMurray, Hewitt, Maynard & Kristol shall be satisfactory) for the transferring
Investor stating that such transaction is exempt from registration under all
applicable laws; provided, however, that no such opinion shall be required in
the case of a Transfer by any Investor to its affiliates or, if any such entity
is a partnership or limited liability company, a transfer by any Investor or its
affiliates to its partners or members. Any Transfer of Preferred Stock or
Restricted Stock other than in accordance with this Section will be void.
(e) From and after the date hereof (and until such time as
such securities have been sold to the public pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144 or the
holder of such securities shall have requested the issuance of new certificates
in writing and delivered to Savvis an opinion of legal counsel reasonably
acceptable to Savvis (it being agreed that Reboul, MacMurray, Hewitt, Maynard &
Kristol shall be satisfactory) to such effect) all certificates representing
shares of Preferred Stock or Restricted Stock that are held by any Investor
shall bear legends which shall state the following:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR ANY
APPLICABLE STATE LAW, AND NO INTEREST HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, DISTRIBUTED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A)
THERE IS AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER
SAID ACT AND LAWS OR (B) SUCH TRANSACTION IS EXEMPT FROM SUCH
REGISTRATION.
4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF AN INVESTOR RIGHTS AGREEMENT AMONG THE
ISSUER AND THE OTHER PARTIES THERETO. COPIES OF SUCH AGREEMENT MAY BE
OBTAINTED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE ISSUER."
SECTION 3. Registration Rights.
-------------------
(a) Demand Registration Rights. If Savvis shall at any time
after the Effective Date, be requested by WCAS, Reuters, any Other Investor
constituting an Eligible Investor or the holders of at least 25% of the Covered
Warrant Common Shares in a writing that states the number of shares of
Restricted Stock to be sold and the intended method of disposition thereof (each
such written request, a "Demand Notice"), to effect a registration under the
Securities Act of all or any portion of the Restricted Stock then held by such
person, Savvis shall immediately notify in writing (each such notice, a "Demand
Further Notice") each other Investor (other than the requesting Investor) of
such proposed registration and shall use its reasonable best efforts to register
under the Securities Act (each such registration, a "Demand Registration"), for
public sale in accordance with the method of disposition specified in such
Demand Notice, the number of shares of Restricted Stock specified in such Demand
Notice (plus the number of shares of Restricted Stock specified in any written
requests for registration of shares of Restricted Stock that are received from
other Investors (other than the requesting Investors) within 30 days after
receipt by such other Investors of a Demand Further Notice). Notwithstanding
anything to the contrary contained herein, Savvis shall not be obligated
pursuant to this paragraph (a) to file and cause to become effective (i) more
than two Demand Registrations in the aggregate requested by WCAS or its
Permitted Transferees, two Demand Registrations in the aggregate requested by
Reuters or its Permitted Transferees, two Demand Registrations in aggregate
requested by Other Investors constituting Eligible Investors, and one Demand
Registration by holders of the Covered Warrant Common Shares or (ii) any Demand
Registration with a proposed aggregate offering price of less than $25.0
million.
(b) Additional Short-Form Registration Rights. If Savvis
becomes eligible to use Form S-3 or a successor form, Savvis shall use its
reasonable best efforts to continue to qualify at all times for registration on
Form S-3 or such successor form. If (x) Savvis is eligible to register shares of
Common Stock on Form S-3 or a successor form and (y) it is requested by WCAS or
any Other Investor or Other Investors, in a writing that states the number of
shares of Restricted Stock to be sold and the intended method of disposition
thereof (each such written request, a "Short Form Registration Notice"), to
effect a registration on Form S-3 or such successor form (a "Short Form
Registration") of all or any portion of the Restricted Stock then held by such
requesting Investor, Savvis shall immediately notify in writing (each such
notice, a "Short Form Further Notice") each other Investor (other than the
requesting Investor) of such proposed registration and shall use its reasonable
best efforts to register on Form S-3 or such successor form, for public sale in
accordance with the method of disposition specified in such Short Form
Registration Notice, the number of shares of Restricted Stock specified in such
Short Form Registration Notice (plus the number of shares of Restricted Stock
specified in any written requests for registration of shares of Restricted Stock
that are received from other Investors (other than the requesting Investors)
within 30 days after receipt by such other Investors of a Short Form Further
Notice); provided, no Investor or group of Investors shall have the right to
request a Short Form Registration unless the proposed aggregate offering price
5
(which shall be specified in the Short Form Registration Notice delivered in
connection therewith) is at least $10.0 million.
(c) Certain Provisions Relating to Required Registrations.
Notwithstanding anything to the contrary contained in this Agreement, Savvis
shall not be obligated to effect any registration under paragraph (a) or (b)
above except in accordance with the following provisions:
(i) the obligations of Savvis under paragraph (a) or (b)
above, as the case may be, to effect a registration shall be deemed
satisfied only when a registration statement covering all of the shares
of Restricted Stock specified in the applicable Demand Notice or Short
Form Registration Notice, as the case may be, for sale in accordance
with the intended method of disposition specified by the requesting
Investors, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such
shares of Restricted Stock shall have been sold pursuant thereto;
(ii) so long as Savvis has provided written notice of a prior
registration statement to each Investor in compliance with paragraph
(d) below, Savvis shall not be obligated under paragraph (a) or (b)
above to file and cause to become effective any registration statement
so long as such written notice was received by Investors prior to the
delivery of the applicable Demand Notice or Short Form Registration
Notice, as the case may be (and such prior registration statement has
not been withdrawn); provided, Savvis shall not be permitted to delay a
requested registration under paragraph (a) or (b) above in reliance on
this paragraph (c)(ii) more than 180 days following the effective date
of such prior registration statement;
(iii) if the proposed method of disposition specified by the
requesting Investors shall be an underwritten public offering, the
number of shares of Restricted Stock to be included in such an offering
may be reduced (pro rata among the Investors seeking to include
Restricted Stock in such offering based on the number of shares of
Restricted Stock so requested to be registered by such Investors, it
being understood that there will be no such reduction of shares of
Restricted Stock owned by Investors unless and until such reduction is
first applied against shares of Common Stock held by stockholders of
the Company who are not Investors and who, through other contractual
rights with the Company, determine to participate in any such Demand
Registration or Short Form Registration, and then applied to any shares
of Common Stock to be sold by the Company for its own account) if and
to the extent that, in the good faith opinion of the managing
underwriter of such offering, inclusion of all shares would adversely
affect the marketing (including, without limitation, the offering
price) of the Restricted Stock to be sold;
(iv) in the event that the proposed method of disposition
specified by the requesting Investors shall be an underwritten public
offering, the requesting Investors holding a majority of the Restricted
Stock included in such offering shall choose the managing underwriter
(which shall be a nationally recognized investment banking firm
reasonably acceptable to the Company);
6
(v) Savvis shall be entitled to include in any registration
referred to in paragraph (a) or (b) above, as the case may be, for sale
in accordance with the method of disposition specified by the
requesting Investors, shares of Common Stock to be sold by Savvis for
its own account, except as and to the extent that, in the opinion of
the managing underwriter of such offering (if such method of
disposition shall be an underwritten public offering), such inclusion
would adversely affect the marketing (including, without limitation,
the offering price) of the Restricted Stock to be sold;
(vi) except as provided in paragraph (c)(v) above, Savvis will
not effect any other registration of Common Stock, whether for its own
account or that of other holder(s) of Common Stock of Savvis, from the
date of receipt of a Demand Notice or the date of receipt of a Short
Form Registration Notice, as the case may be, for an underwritten
public offering until the completion of the period of distribution of
the registration contemplated thereby (determined as hereinafter
provided);
(vii) if any Investor (other than the requesting Investor)
requests that some or all of such Investor's shares of Restricted Stock
be included in an offering initiated pursuant to paragraph (a) or (b)
above, and the registration is to be, in whole or in part, an
underwritten public offering of Common Stock, such request by such
Investor shall specify that such Investor's Restricted Stock is to be
included in the underwriting on the same terms and conditions as the
shares of Restricted Stock otherwise being sold through the
underwriter; and
(viii) if, while a registration is pending, Savvis determines
in good faith that the filing of a registration statement would require
the disclosure of a material transaction or another set of material
facts and such disclosure would either have a material adverse effect
on such material transaction or Savvis and its subsidiaries (taken as a
whole), then Savvis shall not be required to effect a registration
pursuant to paragraph (a) or (b) above, as the case may be, until the
earlier of (A) the date upon which such material information is
otherwise disclosed to the public or ceases to be material and (B) 90
days after Savvis makes such good faith determination; provided, Savvis
shall not be permitted to delay a requested registration under
paragraph (a) or (b) above in reliance on this paragraph (c)(viii) more
than twice or for more than an aggregate of 90 days in any consecutive
twelve-month period.
(d) Piggyback Registration Rights. If at any time Savvis
proposes to register any of its Common Stock under the Securities Act for sale
to the public, whether for its own account or for the account of other security
holders or both (other than a registration on Form S-4 or Form S-8 promulgated
under the Securities Act (or any successor forms thereto) or any other form not
available for registering the Restricted Stock for sale to the public), it will
give written notice (each such notice a "Piggyback Notice") at such time to each
Investor of its intention to do so. Upon the written request of any Investor,
given within 30 days after receipt by such holder of the Piggyback Notice, to
register any of its Restricted Stock (which request shall state the amount of
Restricted Stock to be so registered and the intended method of disposition
thereof), Savvis will use its reasonable best efforts to cause the Restricted
Stock, as to which registration shall have been so requested, to be included in
the securities to be covered by the registration statement proposed to be filed
by Savvis, all to the extent requisite to permit the sale or other disposition
by such Investor (in accordance with its written request) of such Restricted
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Stock so registered; provided, nothing herein shall prevent Savvis from
abandoning or delaying such registration at any time. In the event that any
registration referred to in this paragraph (d) shall be, in whole or in part, an
underwritten public offering of Common Stock of Savvis, any request by an
Investor pursuant to this paragraph (d) to register Restricted Stock shall
specify either that (i) such Restricted Stock is to be included in the
underwriting on the same terms and conditions as the shares of Savvis Common
Stock otherwise being sold through underwriters under such registration or (ii)
such Restricted Stock is to be sold in the open market without any underwriting,
on terms and conditions comparable to those normally applicable to offerings of
Common Stock in reasonably similar circumstances. The number of shares of
Restricted Stock to be included in such an underwritten offering may be reduced
(x) if the stockholder or stockholders of Savvis requesting to have shares of
Restricted Stock included in a registration contemplated by this Section 3(d)
are Investors, pro rata among the requesting Investors based upon the number of
shares of Restricted Stock so requested to be registered or (y) if stockholders
of Savvis other than Investors also request to have their shares of Common Stock
included in a registration contemplated by this Section 3(d), pro rata among all
the requesting stockholders based upon the number of shares of Common Stock of
Savvis so requested to be registered, if and to the extent that the managing
underwriter of such offering shall be of the good faith opinion that such
inclusion would adversely affect the marketing (including, without limitation,
the offering price) of the securities to be sold by Savvis therein, or by the
other security holders for whose benefit the registration statements has been
filed.
(e) Holdback Agreement. Notwithstanding anything to the
contrary contained in this Agreement, (i) if there is a firm commitment
underwritten public offering of securities of Savvis pursuant to a registration
covering Restricted Stock and an Investor does not elect to sell his Restricted
Stock to the underwriters of Savvis's securities in connection with such
offering, such Investor shall refrain from selling such Restricted Stock during
the period of distribution (determined as hereinafter provided) of Savvis's
securities by such underwriters and the period in which the underwriting
syndicate participates in the after market; provided, such Investor shall, in
any event, be entitled to sell its Restricted Stock commencing on the 180th day
after the effective date of such registration statement; and (ii) if there is a
firm commitment underwritten public offering of securities of Savvis by Savvis,
each Investor agrees that, except to the extent otherwise permitted to
participate in such offering pursuant to paragraph (d) above, upon the request
of the managing underwriter in such offering, such Investor shall not sell
Savvis Common Stock held by such Investor for a period of 180 days from the
effective date of the registration statement relating thereto and such Investor
shall execute a lockup agreement in the form customarily used in such
transactions.
(f) Certain Registration Procedures. If and whenever Savvis is
required by the provisions of this Section 3 to use its reasonable best efforts
to effect the registration of Restricted Stock under the Securities Act, Savvis
will, as expeditiously as possible:
(i) prepare (and afford counsel for the selling Investors
reasonable opportunity to review and comment thereon) and file with the
Commission a registration statement with respect to such securities and
use its reasonable best efforts to cause such registration statement to
become and remain effective for the period of the distribution
contemplated thereby (determined as hereinafter provided);
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(ii) prepare (and afford counsel for the selling Investors
reasonable opportunity to review and comment thereon) and file with the
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period
of distribution contemplated thereby (determined as hereinafter
provided) and to comply with the provisions of the Securities Act with
respect to the disposition of all Restricted Stock covered by such
registration statement in accordance with the selling Investors'
intended method of disposition set forth in such registration statement
for such period;
(iii) furnish to each selling Investor and to each underwriter
such number of copies of the registration statement and the prospectus
included therein (including, without limitation, each preliminary
prospectus) as such persons may reasonably request in order to
facilitate the public sale or other disposition of the Restricted Stock
covered by such registration statement;
(iv) use its reasonable best efforts to register or qualify
the Restricted Stock covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the sellers of
Restricted Stock or, in the case of an underwritten public offering,
the managing underwriter, shall reasonably request; provided, Savvis
will not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this paragraph (iv), (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any
jurisdiction;
(v) immediately notify each selling Investor under such
registration statement and each underwriter, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing, and each Investor agrees to refrain from further using
such prospectus upon receipt of such notice;
(vi) use its reasonable best efforts (if the offering is
underwritten) to furnish, at the request of any selling Investor, on
the date that Restricted Stock is delivered to the underwriters for
sale pursuant to such registration: (A) an opinion dated such date of
counsel representing Savvis for the purposes of such registration,
addressed to the underwriters and to such selling Investor, stating
that such registration statement has become effective under the
Securities Act and that (1) to the best knowledge of such counsel, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (2) the registration statement,
the related prospectus, and each amendment or supplement thereof,
comply as to form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder (except that such counsel need express no opinion
as to financial statements, the notes thereto, and the financial
schedules and other financial and statistical data contained therein)
and (3) to such other effects as may reasonably be requested by counsel
for the underwriters, and (B) a letter dated such date from the
9
independent public accountants retained by Savvis, addressed to the
underwriters, stating that they are independent public accountants
within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of Savvis included in the
registration statement or the prospectus, or any amendment or
supplement thereof, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act, and such
letter shall additionally cover such other financial matters
(including, without limitation, information as to the period ending no
more than five business days prior to the date of such letter) with
respect to the registration in respect of which such letter is being
given as such underwriters may reasonably request; and
(vii) make available for inspection by any selling Investor,
any underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent
retained by such selling Investor or its Permitted Transferee or
underwriter, all financial and other records, pertinent corporate
documents and properties of Savvis, and cause Savvis's officers,
directors and employees to supply all information reasonably requested
by any such selling Investor or its Permitted Transferee, underwriter,
attorney, accountant or agent in connection with such registration
statement and permit such selling Investor, attorney, accountant or
agent to participate in the preparation of such registration statement.
For purposes of paragraphs (f)(i) and (f)(ii) above (as well as paragraphs
(c)(vi) and (e) above), the "period of distribution" of Restricted Stock in a
firm commitment underwritten public offering shall be deemed to extend until
each underwriter has completed the distribution of all securities purchased by
it, and the period of distribution of Restricted Stock in any other registration
shall be deemed to extend until the sale of all Restricted Stock covered
thereby, but in either case, such period shall not extend beyond the 180th day
(or, in the case of paragraph (c)(vi) above, the 90th day) after the effective
date of the registration statement filed in connection therewith.
(g) Information From Selling Investors. In connection with
each registration hereunder, Investors selling Restricted Stock will furnish to
Savvis in writing such information with respect to themselves and the proposed
distribution by them as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws.
(h) Underwriting Agreement. In connection with any
registration pursuant to this Section 3 that covers an underwritten public
offering, Savvis and Investors selling Restricted Stock each agree to enter into
a written agreement with the managing underwriter selected in the manner herein
provided in such form and containing such provisions as are customary in the
securities business for such an arrangement between underwriters, selling
stockholders and companies of Savvis' size and investment stature; provided, (i)
such agreement shall not contain any such provision applicable to Savvis which
is inconsistent with the provisions hereof and (ii) the time and place of the
closing under said agreement shall be as mutually agreed upon among Savvis, such
managing underwriter and, except in the case of a registration pursuant to
paragraph (d) above, WCAS, if participating in such offering.
(i) Expenses. Savvis will pay all Registration Expenses
incurred by it in complying with Section 3 of this Agreement. All Selling
Expenses incurred in connection with any registered offering of securities
pursuant to this Section 3, including Restricted Stock, shall be borne by the
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participating sellers in proportion to the number of shares sold by each, or by
such persons other than Savvis (except to the extent Savvis shall be a seller)
as they may agree. All expenses incident to performance of or compliance by
Savvis with Section 3 hereof, including, without limitation, all Commission,
stock exchange or National Association of Securities Dealers, Inc. ("NASD")
registration and filing fees (including, without limitation, fees and expenses
incurred in connection with the listing of the Common Stock of Savvis on any
securities exchange or exchanges), printing, distribution and related expenses,
fees and disbursements of counsel and independent public accountants for Savvis
and the reasonable fees and expenses of one counsel for all selling
securityholders, all fees and expenses incurred in connection with compliance
with state securities or blue sky laws and the rules of the NASD or any
securities exchange, transfer taxes and fees of transfer agents and registrars,
but excluding any Selling Expenses, are herein called "Registration Expenses".
All underwriting discounts and selling commissions applicable to the sale of
Restricted Stock are herein called "Selling Expenses".
SECTION 4. Indemnification Rights and Obligations In Respect
of Registered Offerings of Restricted Stock.
(a) Savvis Indemnification of Selling Investors. In the event
of a registration of any of the Restricted Stock under the Securities Act
pursuant to Section 3 of this Agreement, Savvis will indemnify and hold harmless
each seller of Restricted Stock thereunder and each other person, if any, who
controls such seller within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, (or actions in respect
thereof) to which such seller or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Restricted Stock was registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller and each such controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, Savvis will not be liable in any such case if and to the extent that
any such loss, claim, damage, liability or action arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
so made in conformity with information furnished by such seller or such
controlling person in writing specifically for use in such registration
statement or prospectus.
(b) Selling Investor Indemnification of Savvis and the Other
Selling Stockholders. In the event of a registration of any of the Restricted
Stock under the Securities Act pursuant to Section 3 of this Agreement, each
seller of such Restricted Stock thereunder, severally and not jointly, will
indemnify and hold harmless Savvis and each person, if any, who controls Savvis
within the meaning of the Securities Act, each officer of Savvis who signs the
registration statement, each director of Savvis, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
and each other seller of Restricted Stock and each person who controls any such
other seller of Restricted Stock, against all losses, claims, damages or
liabilities, joint or several, (or actions in respect thereof) to which Savvis
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or such officer or director or underwriter or other seller or controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Restricted Stock was registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse Savvis and each such
officer, director, underwriter, other seller of Restricted Stock and controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, such seller will be liable hereunder in any such case if and
only to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
information pertaining to such seller, as such, furnished in writing to Savvis
by such seller specifically for use in such registration statement or
prospectus; provided, further, the liability of each seller hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of shares sold
by such seller under such registration statement bears to the total public
offering price of all securities sold thereunder, but not to exceed the proceeds
(net of underwriting discounts and commissions) received by such seller from the
sale of Restricted Stock covered by such registration statement.
(c) Indemnification Procedures. Promptly after receipt by an
indemnified party hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party other than under this
Section 4. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 4 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party, or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified party shall have the right to select
a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred. Notwithstanding the foregoing,
any indemnified party shall have the right to retain its own counsel in any such
action, but the fees and disbursements of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party shall have failed to
retain counsel for the indemnified person as aforesaid or (ii) the indemnifying
party and such indemnified party shall have mutually agreed to the retention of
12
such counsel. It is understood that the indemnifying party shall not, in
connection with any action or related actions in the same jurisdiction, be
liable for the fees and disbursements of more than one separate firm qualified
in such jurisdiction to act as counsel for the indemnified party. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. The indemnification of underwriters provided for
in this Section 4 shall be on such other terms and conditions as are at the time
customary and reasonably required by such underwriters. In that event the
indemnification of the sellers of Restricted Stock in such underwriting shall at
the sellers' request be modified to conform to such terms and conditions.
(d) Contribution. If the indemnification provided for in
paragraphs (a) and (b) of this Section 4 is unavailable or insufficient to hold
harmless an indemnified party under such paragraphs in respect of any losses,
claims, damages or liabilities or actions in respect thereof referred to
therein, then each indemnifying party shall in lieu of indemnifying such
indemnified party contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or actions in
such proportion as appropriate to reflect the relative fault of Savvis, on the
one hand, and the underwriters and the sellers of such Restricted Stock, on the
other, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or actions as well as any other relevant
equitable considerations, including, without limitation, the failure to give any
notice under paragraph (c) above. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact relates to information supplied by Savvis, on the one hand,
or the underwriters and the sellers of such Restricted Stock, on the other, and
to the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. Savvis and each of
the Investors agree that it would not be just and equitable if contributions
pursuant to this paragraph were determined by pro rata allocation (even if all
of the sellers of such Restricted Stock were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or action in respect thereof, referred to above in this paragraph,
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, the sellers
of such Restricted Stock shall not be required to contribute any amount in
excess of the amount, if any, by which the total price at which the Restricted
Stock sold by each of them was offered to the public exceeds the amount of any
damages which they would have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
SECTION 5. Rule 144. Savvis has filed and agrees with the
Investors that from and after the date hereof it shall continue to file any and
all reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the Commission thereunder, or, if
Savvis is not required to file any such reports, it shall, upon the written
request of any Investor, make publicly available such information as is
necessary to permit sales pursuant to Rule 144 under the Securities Act. Upon
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the written request of any Investor, Savvis shall promptly furnish to such
Investor a written statement by Savvis as to its compliance with the reporting
requirements set forth in this Section 5.
SECTION 6. Nomination of Directors.
------------------------
(a) Each Eligible Investor (other than Reuters or its
transferees) shall have the right to nominate for election to the Board of
Directors that number of directors (each, a "Designated Director") determined in
accordance with the following formula: the total number of members of the Board
of Directors (which, as of the date of this Agreement is eight (8)) multiplied
by the percentage of the total voting power of all outstanding Savvis Voting
Stock represented by the Savvis Voting Stock owned by such Eligible Investor,
rounded down to the nearest whole number; provided that, in the event that WCAS
and its Affiliates collectively own of record Savvis Voting Stock representing
more than 50% of the voting power represented by the then validly issued and
outstanding Savvis Voting Stock, the number of Designated Directors such
Investors shall be able to appoint shall not be less than a number that is at
least half of the members of the Board; and provided further that each such
Eligible Investor will be entitled to nominate at least one director for
election to the Board in accordance with this Section 6(a) so long as such
Eligible Investor (and, solely in the case of WCAS, together with its
Affiliates) owns of record Savvis Voting Stock representing at least five
percent (5%) of the total voting power of all outstanding Savvis Voting Stock.
(b) In the event that any Investor ceases to be such an
Eligible Investor or otherwise ceases to own a sufficient number of shares of
Savvis Voting Stock to entitle it to nominate the number of directors it then
has on the Board of Directors, such Investor shall use its best efforts promptly
to cause the resignation of one or more of its Designated Director(s) from the
Board of Directors and, if such resignation is not obtained, to vote its shares
of Savvis Voting Stock in favor of the removal of one or more of its Designated
Director(s) from the Board of Directors, in each case so that the number of
Designated Directors, if any, of such Investor shall be consistent with such
Investor's rights under Section 6(a).
(c) The Investors and Savvis hereby further agree that in the
event a Designated Director shall cease to serve as a director of Savvis, the
vacancy resulting therefrom (including a vacancy on any committee of the Board
of Directors) will be filled promptly by the Board or the stockholders of
Savvis, as the case may be, in each case as provided in the Bylaws of the
Company, with a substitute Designated Director nominated pursuant to Section
6(d) below.
(d) The selection of a substitute Designated Director to fill
a vacancy on the Board of Directors shall be made as follows:
(1) in the event the vacancy has been created by the
resignation or removal of the Designated Director of an Eligible
Investor pursuant to Section 6(b), the substitute Designated Director
shall be selected by the remaining members of the Board of Directors,
or, if another Eligible Investor has replaced the Eligible Investor
whose Designated Director has resigned or been removed, then such other
Eligible Investor shall select the substitute Designated Director.
14
(2) in the event the vacancy has been created other than by
reason of the resignation or removal of the Designated Director of an
Eligible Investor pursuant to Section 6(b), the substitute Designated
Director shall be selected by the Eligible Investor who nominated the
director whose position is to be filled.
(e) Savvis agrees subject to fiduciary obligations to take all
actions necessary to cause the terms of Section 6(a) to be affected in
accordance with their terms.
(f) The provisions of this Section 6 shall continue in force
and effect until the earlier to occur of (i) the date on which no shares of
Preferred Stock are outstanding and (ii) the date on which there are no Eligible
Investors.
SECTION 7. Preemptive Rights.
-----------------
(a) Savvis hereby grants to each Eligible Investor a right
(the "Preemptive Right") to purchase all or any part of its Pro Rata Share of
any amount of New Capital Stock that Savvis may, from time to time, propose to
sell and issue.
(b) In the event that Savvis proposes to undertake an issuance
of New Capital Stock, it shall give each Eligible Investor written notice (the
"Preemptive Right Notice") of its intention, describing the type of New Capital
Stock, the price, and the material terms and conditions upon which Savvis
proposes to issue the same to any Person. Such Eligible Investor shall have 20
business days after issuance of the Preemptive Right Notice to agree to purchase
all or any portion of its Pro Rata Share of such amount of New Capital Stock at
the price and upon the terms specified in the notice (which terms shall be no
less favorable than those offered to any third party purchaser) by giving
written notice to Savvis and stating therein the quantity of New Capital Stock
to be purchased.
(c) In the event that any shares of New Capital Stock subject
to the Preemptive Right are not purchased by an Eligible Investor within the
period specified above, Savvis shall have 90 days thereafter to sell (or enter
into an agreement pursuant to which the sale of New Capital Stock that had been
subject to the Preemptive Right shall be closed, if at all, within 45 days from
the date of said agreement) the New Capital Stock with respect to which the
rights of all of the Eligible Investors were not exercised at a price and upon
terms and conditions, including manner of payment, no more favorable to the
purchasers thereof than specified in the Preemptive Right Notice. In the event
Savvis has not sold all offered New Capital Stock within such 90 day period (or
sold and issued New Capital Stock in accordance with the foregoing within 45
days from the date of such agreement) Savvis shall not thereafter issue or sell
any New Capital Stock, without first offering a portion of such New Capital
Stock to the Eligible Investors in the manner provided above in this Section 7.
(d) The provisions of this Section 7 shall continue in force
and effect until the earlier to occur of (i) the date on which no shares of
Preferred Stock are outstanding and (ii) the date on which there are no Eligible
Investors.
SECTION 8. Effectiveness. Notwithstanding anything herein to
the contrary, the rights and obligations of the Investors set forth in this
Agreement (other than Nortel Networks) shall not be effective until the
Effective Date. To the extent the Effective Date shall not have occurred prior
15
to March 31, 2002 or the Purchase Agreement shall have otherwise been
terminated, this Agreement shall be automatically terminated and of no further
force or effect with respect to all Investors other than Nortel Networks. This
Agreement shall be effective between the Company and Nortel Networks on the date
the Company issues a Warrant to Nortel Networks, which date shall then be
considered the "Effective Date."
SECTION 9. Duration of Agreement. Unless otherwise set forth
in this Agreement, the provisions of this Agreement shall survive so long as any
Investor owns Restricted Stock.
SECTION 10. Joinder. The Investors and the Company agree that
any Person who becomes a party to the Purchase Agreement in accordance with
Section 8.11 thereof will automatically become a party to this Agreement and for
all purposes be considered an "Other Investor" hereunder. In addition, upon the
express written consent of WCAS and the Company, any other holder of Preferred
Stock may become a party to this Agreement and be considered an "Other Investor"
hereunder to the extent such other holder agrees in writing to become a party to
this Agreement and to assume the rights and obligations of an Other Investor
hereunder.
SECTION 11. Representations and Warranties. Each party hereto,
severally and not jointly, represents and warrants to the other parties hereto
as follows:
(i) such party has the corporate or partnership power and
authority, as the case may be, to execute and deliver this Agreement
and to perform its obligations hereunder. The execution, delivery and
performance by such party of this Agreement have been duly authorized
by all requisite corporate or partnership action, as the case may be,
on the part of such party and will not (i) violate any provision of
law, any order of any court or other agency of government, the charter
and other organizational documents of such party, or any provision of
any indenture, agreement or other instrument by which such party or any
of such party's properties or assets is bound; (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time
or both) a default under any such indenture, agreement or other
instrument; or (iii) result in the creation or imposition of any lien,
charge or encumbrance of any nature upon any of the properties or
assets of such party; and
(ii) this Agreement has been duly executed and delivered by
such party and constitutes a legal, valid and binding agreement of such
party, enforceable against such party in accordance with its terms,
subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws from time to
time in effect affecting the enforcement of creditors' rights generally
and to general principles of equity.
SECTION 12. Miscellaneous.
-------------
(a) Additional Registration Rights. Without the prior written
consent of WCAS, Reuters and each Other Investor (so long as such Person holds
any Restricted Stock representing 5% of the outstanding Savvis Voting Stock),
Savvis shall not grant any registration rights to any other person that are
inconsistent or conflict with the registration rights granted hereunder,
including, without limitation, rights to participate in a Demand Registration
which could result in reduction (on a pro rata or other basis) in the number of
16
shares of Common Stock held by WCAS or its Permitted Transferees, Reuters or any
Other Investor, as applicable, to be included in any underwritten offering made
in respect of such Demand Registration.
(b) Headings. Headings of sections and paragraphs of this
Agreement are inserted for convenience of reference only and shall not affect
the interpretation or be deemed to constitute a part hereof.
(c) Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein shall, for any reason, be held to be invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement.
(d) Benefits of Agreement. All covenants and agreements
contained herein by or on behalf of any of the parties hereto shall bind and
inure solely and exclusively to the benefit of the respective successors and
permitted assigns of the parties hereto. Except as expressly permitted hereby,
each party's rights and obligations under this Agreement shall not be subject to
assignment or delegation by any party hereto, and any attempted assignment or
delegation in violation hereof shall be null and void. Notwithstanding anything
to the contrary contained in this Agreement, each Investor will be entitled to
assign all or any portion of its rights and obligations under this Agreement to
a transferee of Restricted Stock or Preferred Stock (to the extent permitted or
not prohibited by Section 2) held by such Investor (each such transferee, a
"Permitted Transferee") which Permitted Transferee shall be treated as a party
to this Agreement with the same rights and obligations as such transferring
Investor; provided, however, that (i) any such Permitted Transferee shall agree
to be bound by this Agreement and (ii) the rights of Investors (other than
Nortel Networks and GECC) under Section 3(a) will not be transferable to or
exercisable by a Permitted Transferee unless such Permitted Transferee purchases
and continues to hold Restricted Stock representing at least five (5%) (on a
fully diluted basis) of the voting capital stock of Savvis.
(e) Entire Agreement; Termination of Existing Agreements. This
Agreement and the Purchase Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof. The parties hereto agree that
from and after the date hereof, each of the Existing Rights Agreements and any
other registration rights agreement to which any of the Investors and the
Company are a party, shall be terminated and of no further force or effect, with
neither Savvis nor any Investor retaining any rights or obligations pursuant to
such agreements. The parties acknowledge that this Agreement shall not terminate
or otherwise amend or change the side letter between Reuters and the Company,
dated May 16, 2001, relating to Board of Director observer rights and other
matters.
(f) Modification. This Agreement may not be modified or
amended except by a writing signed by Savvis, WCAS, Reuters and each Other
Investor (so long as such Person holds Restricted Stock representing 5% of the
outstanding Savvis Voting Stock); provided that this Agreement may not be so
amended in any manner that disproportionately adversely affects the rights or
obligations of any Investor unless the consent of such Investor is obtained in
writing prior to the effectiveness of such amendment. Any waiver of any
provision of this Agreement must be in a writing signed by the party against
whom enforcement of such waiver is sought.
17
(g) Notices. Any notice or other communications required or
permitted hereunder shall be deemed to be sufficient if contained in a written
instrument delivered in person or duly sent by national overnight courier
service, by first class certified mail, postage prepaid, or by facsimile
(followed by delivery by overnight courier) addressed to such party at the
address or facsimile number set forth on the signature pages hereto or, in any
case, at such other address or facsimile number as shall have been furnished in
writing by such party to the other parties hereto. All such notices, requests,
consents and other communications shall be deemed to have been received (1) in
the case of personal or courier delivery, on the date of such delivery, (2) in
the case of mailing, on the fifth business day following the date of such
mailing and (3) in the case of facsimile, when received.
(h) Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
(i) Changes in Common Stock of Savvis. If, and as often as,
there are any changes in the Common Stock of Savvis by way of stock split, stock
dividend, combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof as may be required so that the
rights and privileges granted hereby shall continue with respect to the
Restricted Stock as so changed.
(j) Specific Performance. Each party hereto agrees that a
remedy at law for any breach or threatened breach by such party of this
Agreement would be inadequate and therefore agrees that any other party hereto
shall be entitled to specific performance of this Agreement in addition to any
other available rights and remedies in case of any such breach or threatened
breach.
(k) Binding Effect. Anything herein to the contrary
notwithstanding, it is hereby expressly agreed and understood by each of the
parties hereto that this Agreement shall be a binding obligation of the Company
with regard to each Investor executing this Agreement, and a binding obligation
of each Investor executing this Agreement with regard to the Company, in each
case in accordance to with the terms hereof. The failure or refusal of any
Investor to execute this Agreement shall in no way negate, relieve, invalidate
or otherwise affect the rights and obligations of the Company and each Investor
executing this Agreement as set forth herein.
(l) Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of laws provisions thereof.
* * * * *
18
IN WITNESS WHEREOF, each of the parties hereto has duly
executed and delivered this Agreement as of the day and year first above
written.
SAVVIS:
SAVVIS COMMUNICATIONS CORPORATION
a Delaware Corporation
By /s/ David Frear
----------------------
Name: David Frear
Title:
Address: 12851 World Gate Drive
Herndon, VA 20170
Attention: Nancy Lysinger
Facsimile: (703) 234-8315
19
WCAS INVESTORS:
WELSH, CARSON, ANDERSON
& STOWE VIII, L.P.
By WCAS VIII Associates LLC,
General Partner
By: /s/ Jonathan M. Rather
----------------------------------
Name: Jonathan M. Rather
Title: Managing Member
Address: 320 Park Avenue, Suite 2500
New York, NY 10022
Attention: Mr. John D. Clark
Facsimile: (212) 893-9575
WELSH, CARSON, ANDERSON &
STOWE VII, L.P.
By WCAS VII Partners L.P.,
General Partner
By: /s/ Jonathan M. Rather
----------------------------------
General Partner
WELSH, CARSON, ANDERSON &
STOWE VI, L.P.
By WCAS VI Partners L.P.,
General Partner
By: /s/ Jonathan M. Rather
----------------------------------
Attorney-in-fact
Address: 320 Park Avenue, Suite 2500
New York, NY 10022
Attention: Mr. Jonathan M. Rather
Facsimile: (212) 893-9575
20
WCAS MANAGEMENT CORPORATION
By:/s/ Jonathan M. Rather
------------------------------------------------
Jonathan M. Rather
Treasurer
Address: 320 Park Avenue, Suite 2500
New York, NY 10022
Attention: Mr. Jonathan M. Rather
Facsimile: (212) 893-9575
Patrick J. Welsh
Russell Carson
Bruce K. Anderson
IRA FBO Bruce K. Anderson
Thomas E. McInerney
Andrew Paul
Robert A. Minicucci
Anthony J. De Nicola
Paul B. Queally
Lawrence B. Sorrel
Estate of Rudolph Rupert
D. Scott Mackesy
Sanjay Swani
IRA FBO James R. Mathews
John D. Clark
Sean Traynor
John Almeida
Eric J. Lee
IRA FBO Jonathan M. Rather
James Hoover
Richard Stowe
Laura Van Buren
By: /s/ Jonathan M. Rather
----------------------------------------
Jonathan M. Rather
Individually and as Attorney-in-Fact
Address: 320 Park Avenue, Suite 2500
New York, NY 10022
Attention: Mr. Jonathan M. Rather
Facsimile: (212) 893-9575
21
DANIEL ANDERSON TRUST
By:
-----------------------------------------------
Name:
Title:
Address: c/o Welsh, Carson,
Anderson & Stowe
320 Park Avenue, Suite 2500
New York, NY 10022
Attention: Mr. Jonathan M. Rather
Facsimile: (212) 893-9575
KRISTEN ANDERSON TRUST
By:
-----------------------------------------------
Name:
Title:
Address: c/o Welsh, Carson,
Anderson & Stowe
320 Park Avenue, Suite 2500
New York, NY 10022
Attention: Mr. Jonathan M. Rather
Facsimile: (212) 893-9575
MARK ANDERSON TRUST
By:
-----------------------------------------------
Name:
Title:
Address: c/o Welsh, Carson,
Anderson & Stowe
320 Park Avenue, Suite 2500
New York, NY 10022
Attention: Mr. Jonathan M. Rather
Facsimile: (212) 893-9575
22
[THIS PAGE INTENTIONALLY LEFT BLANK]
23
REUTERS:
REUTERS HOLDINGS SWITZERLAND SA
By: /s/ Eric Lint
---------------------
Name: Eric Lint
Title: Attorney-in-fact
Address: The Reuters Building
3 Times Square, 20th Floor
New York, NY 10036
Attention: Mr. David Distel
Facsimile: (646) 223-4237
24
OTHER INVESTORS:
NORTEL NETWORKS INC.
By_______________________________
Name:
Title:
Address: GMS 991 15 A4D
221 Lakeside Blvd.
Richardson, TX 75082-4399
Attention: Mr. Paul D. Day, Vice President,
Customer Finance, North America
Charles M. Helm, Esq.
Facsimile: (972) 684-3679
GENERAL ELECTRIC CAPITAL
CORPORATION
By_______________________________
Name:
Title:
Address: 10 Riverview Drive
Danbury, CT 06810
Attention: Robert W. Wotten
Facsimile: (203) 749-6287
25
[INSERT SIGNATURE BLOCKS FOR ANY OTHER
INVESTORS THAT HOLD PREFERRED STOCK AND
BECOME A PARTY TO THIS AGREEMENT]
26
ANNEX I
[TO COME]
27
Exhibit 20
----------
POWER OF ATTORNEY
THIS POWER OF ATTORNEY given by REUTERS GROUP PLC ("the Company"), whose
registered office is 85 Fleet Street, London, EC4P 4AJ, England WITNESSES as
follows:
1. APPOINTMENT
The Company appoints STEPHEN P LEHMAN of 3 Times Square, New York, NY 10036
(hereinafter referred to as "the Attorney") to be its Attorney with authority to
do on its behalf the acts and things specified in clause 2.
2. AUTHORITY
The Attorney has authority in the name and on behalf of the Company and on such
terms and conditions as may seem expedient to do the acts and things specified
below:
(a) to file from time to time Forms 3, 4 and 5 under Section 16 of the
Securities Exchange Act of 1934 (the "Act") and Schedules 13D and 13G
under Sections 13(d) and 13(g) of the Act, each regarding Savvis
Communications Corporation, a Delaware corporation, and required to be
filed by the Company with the United States Securities and Exchange
Commission; and
(b) to do appropriate acts and things to give effect to or to further the
actions contemplated by or referred to in paragraph (a) above.
3. INDEMNITY
The Company agrees to ratify whatever the Attorney shall lawfully do or cause to
be done by virtue of this power of attorney and to indemnify the Attorney
against all expenses, losses and liabilities incurred by the Attorney when
acting in pursuance of this power of attorney, except such as arise in
consequence of his negligence, wilful default or bad faith.
4. MISCELLANEOUS
This power of attorney shall:
(i) have effect from 1 January 2002 which is (or is deemed to be)
the effective date of entry into force of it and the Company
agrees to ratify and confirm all and any acts and things
lawfully done by the Attorney on behalf of the Company as from
such effective date;
(ii) be binding and conclusive in favour of all third parties who
shall not have received notice of its revocation;
(iii) lapse automatically on the earlier of (a) the date on which
the Attorney ceases to be employed by the Reuters Group (being
Reuters Group PLC and all its subsidiaries (as defined in
Section 736 of the Companies Act 1985) from time to time), (b)
the second anniversary of the effective date of this power of
attorney and (c) revocation by written act of the Company;
(iv) not be changed orally; and
(v) be construed and interpreted according to the law of England
and Wales.
IN WITNESS WHEREOF the Company has caused its Common Seal to be affixed the 7th
day of January 2002.
The COMMON SEAL )
of REUTERS GROUP PLC )
was hereunto affixed )
in the presence of: )
SIGNED by
/s/ Philip Green
- ------------------------------------
Philip Green, Director
duly authorised for and on behalf of
REUTERS GROUP PLC
SIGNED by
/s/ Rosemary Martin
- ------------------------------------
Rosemary Martin, Secretary
duly authorised for and on behalf of
REUTERS GROUP PLC
2
Exhibit 21
----------
POWER OF ATTORNEY
THIS POWER OF ATTORNEY is given by REUTERS HOLDINGS SWITZERLAND SA (the
"Company"), whose registered office is at 153 Route Thonon, 1245
Collonge-Bellerive, Switzerland WITNESSES as follows:
1. APPOINTMENT
The Company appoints STEPHEN P LEHMAN currently of Reuters America Inc., 3 Times
Square, 20th Floor, New York, NY 10036 (referred to as the "Attorney"), to be
its Attorney with authority to do on its behalf the acts and things specified in
clause 2.
2. AUTHORITY
The Attorney has authority in the name and on behalf of the Company and on such
terms and conditions as may seem expedient to do the acts and things specified
below:
(a) to file from time to time Forms 3, 4 and 5 under Section 16 of the
Securities Exchange Act of 1934 (the "Act") and Schedules 13D and 13G
under Sections 13(d) and 13(g) of the Act, each regarding Savvis
Communications Corporation, a Delaware corporation, and required to be
filed by the Company with the United States Securities and Exchange
Commission; and
(b) to do appropriate acts and things to give effect to or to further the
actions contemplated by or referred to in paragraph (a) above.
3. NO AUTHORITY
The Attorney does not have the power by virtue of this power of attorney to
divest the Company of any interest whatsoever in the Investee except within the
Reuters Group, or to make any additional investments in the Investee (other than
by virtue of a conversion, exchange or other disposition of an existing
Investment) or to take any action which would result in a benefit to himself
personally. For these purposes "Reuters Group" shall mean Reuters Group PLC and
all its subsidiaries from time to time.
4. INDEMNITY
The Company agrees to ratify whatever the Attorney shall lawfully do or cause to
be done by virtue of this power of attorney and to indemnify the Attorney
against all expenses, losses and liabilities incurred by the Attorney when
acting in pursuance of this power of attorney, except such as arise in
consequence of his negligence, wilful default or bad faith.
5. MISCELLANEOUS
This power of attorney shall:
(i) have effect from 1 January 2002 which is (or is deemed to be)
the effective date of entry into force of it and the Company
agrees to ratify and confirm all and any acts and things
lawfully done by the Attorney on behalf of the Company as from
such effective date;
(ii) be binding and conclusive in favour of all third parties who
shall not have received notice of its revocation;
(iii) lapse automatically on the earlier of (a) the date on which
the Attorney ceases to be employed by the Reuters Group (being
Reuters Group PLC and all its subsidiaries (as defined in
Section 736 of the Companies Act 1985) from time to time), (b)
the second anniversary of the effective date of this power of
attorney and (c) revocation by written act of the Company;
(iv) not be changed orally; and
(v) be construed and interpreted according to the laws of
Switzerland.
IN WITNESS WHEREOF the Company has duly executed this Power on the 7th day of
January 2002.
SIGNED by
/s/ Douglas F. Curtis
- ------------------------------------------
Douglas F. Curtis
duly authorised for and on behalf of
REUTERS HOLDINGS SWITZERLAND SA
2
