Letter of Intent (Amendment) - SAVVIS Communications Corp. and MoneyLine Network Inc.
SAVVIS Communications Corp.
12851 WORLDGATE DRIVE
HERNDON, VIRGINIA 20170 USA
Tel. 1-703-234-8000
Fax. 1-703-234-8374
October 18, 2001
Via Facsimile and Express Mail
Mr. Larry Ng
MoneyLine Network, Inc.
233 Broadway
23rd Floor
New York, NY 10279
Re: Amendments to Letter of Intent dated August 16, 2001
Dear Larry:
Based on our recent discussions, below is our proposal to meet the new pricing
and business term requirements that you have outlined. This "Letter Amendment
No. 1" will serve to amend the Letter of Intent between us dated August 16, 2001
("LOI") and any terms and conditions not defined herein are as set forth in the
LOI.
1. Overall pricing discounts on the Client IP pricing levels.
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YEAR MINIMUM COMMITMENT MINIMUM COMMITMENT MINIMUM CLIENT IP PRICE
CLIENT IP MULTICAST COMMITMENT TOTAL DISCOUNT OFF LOI RATE
-------------- --------------------- --------------------- ------------------- -------------------------
Year 1 [**] [**] $70M [**]
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Year 2 [**] [**] $50M [**]
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Year 3 [**] [**] $35M [**]
-------------- --------------------- --------------------- ------------------- -------------------------
Year 4 [**] [**] $25M [**]
-------------- --------------------- --------------------- ------------------- -------------------------
Year 5 [**] [**] $20M [**]
-------------- --------------------- --------------------- ------------------- -------------------------
SAVVIS agrees to defer payment of [**] of the $70M minimum commitment in
Year 1, which is equivalent to [**]. The [**] deferred payment will apply
to billed charges for the first twelve months of Year 1 of the Network
Serves Agreement ("Agreement") to be entered into by us and will have to be
paid in the first two months, prorated evenly, of Year 2 (months 13 and 14
of the Agreement.) SAVVIS will only accept the deferred payment terms
[**] CONFIDENTIAL TREATMENT REQUESTED
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if MoneyLine meets all the payment terms from the Letter of Intent during
the term of the Agreement.
In addition, SAVVIS will agree to establish additional regional pricing for
the Tier 1 cities/regions in Europe and Asia to reflect any variations in
access loop cost.
2. In addition to the above discounts, SAVVIS will offer MoneyLine additional
discounts off of the Client IP rates in Years 4 and 5. At the end of Year
3, SAVVIS [**] (for sites that have been installed since day 1 of the
Agreement). This discount, which is in addition to the discounts in Years 4
and 5 above, [**].
3. If SAVVIS maintains ownership of the local access lines and CPE, we will
offer MoneyLine a [**] discount off of the Client IP pricing, on all second
"logical connections" to a site. This would allow MoneyLine to offer
multiple content applications from themselves or partners to the same site
for a very cost effective rate.
4. Office Automation Network: SAVVIS proposes that MoneyLine can buy the
Office Automation network connectivity at the Tier [**] Client IIP rates as
outlined in the LOI, with the discounts in section 1 above applying. The
Office Automation will cost no more than [**] per month. If MoneyLine shall
fail to meet the Minimum Commitment Total set forth in section 1 in any
Year of the Agreement, then the amount it spends on Office Automation in
that Year will be credited toward its Minimum Commitment.
5. Managed Service Fee: For the Bridge Satellite Networks and Legacy Telerate
Network, SAVVIS agrees to manage these services. The cost to manage these
services will be [**]. As MoneyLine migrates the Legacy Telerate Network
circuits over to the Client IP service, the Client IP pricing will apply.
6. Legacy Telerate Network Maintenance Fee: For maintenance of the Legacy
Telerate Network, Savvis will bill MoneyLine [**] per month plus travel,
parts and direct expenses for the first 9 months and will renegotiate that
fee after the first 9 months based upon its review of the migration success
of such Network. MoneyLine, however, will remain responsible for desktop
support at customer sites, such as application upgrades. If MoneyLine shall
fail to meet the Minimum Commitment Total set forth in section 1 in any
Year of the Agreement, then the amount it spends on Legacy Telerate Network
Maintenance in that Year will be credited toward its Minimum Commitment.
7. Personnel: SAVVIS agrees to take over responsibility for certain
Bridge/Telerate personnel to be agreed upon in Europe and Asia that operate
the MoneyLine network and services ("Transition Employees"). SAVVIS will
assume responsibility for the Transition Employees, including payroll,
subject to the reservations in this section, for a six month transition
period ("Transition Period"). By the end of the Transition Period, SAVVIS
will determine which of the Transition Employees it shall retain in order
to provide the agreed upon network services to MoneyLine ("Retained
Employees"). Each Transition Employee
[**] CONFIDENTIAL TREATMENT REQUESTED
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who is not retained by SAVVIS beyond the Transition Period ("Non-Retained
Employees") shall receive from the Bridge/Telerate estate, or in lieu
thereof, from MoneyLine, the severance he/she would have received had
he/she not become a Transition Employee.
With respect to Transition/Retained Employees in countries where SAVVIS
does not currently have legal authority to hire employees, MoneyLine shall
remain responsible for such Employees and will invoice SAVVIS for the
associated costs, including payroll, until such time as SAVVIS is
authorized to assume responsibility for such Employees (which will endeavor
to become within a commercially reasonable time period) .
This section 7 replaces in its entirety section 15 of the LOI regarding
transferring SAVVIS employees to MoneyLine.
8. Call Countries: For countries where SAVVIS is not licensed to sell service,
SAVVIS shall have the option to acquire the networking assets from
MoneyLine, once we are licensed to sell service, [**]. In the interim
period, SAVVIS will use the MoneyLine licenses to provide service in these
"Call Countries." The Call Countries are: Poland, Hungary, Malaysia,
Venezuela, Bahrain, China, Kuwait, Saudi Arabia, Thailand and the United
Arab Emirates.
9. Distributor Countries. For certain other countries where SAVVIS is not
licensed to sell services directly, the local end of the services are
provided through a customer distributor. Distributor countries include:
Bahamas, Columbia, India, Indonesia, Panama, Phillipines, South Africa,
South Korea, and Turkey.
We will work with you in good faith to enter into the definitive Network
Services Agreement contemplated by the LOI within a reasonable timeframe, and
until such time, the LOI as amended by this Letter, shall continue in full force
and effect.
If these terms are acceptable to you, please so indicate below. I look forward
to working together on the definitive Agreement.
Sincerely,
/s/ Matt Fanning
Matt Fanning
EVP Strategic Development
Agreed
[**] CONFIDENTIAL TREATMENT REQUESTED
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/s/ Larry Ng
Larry Ng
Executive Vice President
MoneyLine
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