Item 1.01
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Entry into a Material Definitive Agreement
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Transaction Agreement
On December 6, 2016, Equinix, Inc. (Equinix) entered into a transaction agreement (the Transaction Agreement) with Verizon
Communications Inc. (Verizon), pursuant to which Equinix agreed, subject to the terms and conditions set forth in the Transaction Agreement, to acquire Verizons colocation services business (the Business) at 24 data
center sites, consisting of 29 data center buildings, located in the United States, Brazil and Colombia (the Acquired Data Centers) for a cash purchase price of $3.6 billion, subject to certain adjustments described in the Transaction
Agreement (the Transaction). Equinix expects to fund the Transaction with a combination of cash on hand and the proceeds of debt and equity financings.
The Transaction will be effected by the acquisition by Equinix of all of the equity interests of wholly-owned subsidiaries of Verizon that, immediately prior
to the closing of the Transaction, will hold certain assets and be liable for certain liabilities relating to the Business. As part of the Transaction, Equinix will also acquire fee or leasehold real estate interests at the Acquired Data Centers. At
the closing of the Transaction, Verizon and Equinix will enter into colocation and lease agreements pursuant to which Equinix will provide colocation services to Verizon at the Acquired Data Centers and will lease or sublease certain portions of the
Acquired Data Centers to Verizon. Verizon will continue to operate businesses other than the Business at the Acquired Data Centers after the closing. The Transaction is expected to close by mid-2017.
The Transaction Agreement contains representations, warranties, and covenants of the parties that are customary for transactions of this type. Until the
closing of the Transaction, Verizon has agreed, subject to certain exceptions, to, and to cause its subsidiaries to, conduct the Business in the ordinary course consistent with past practice. Both Verizon and Equinix have agreed, following the
closing of the Transaction, to indemnify the other party for losses arising from certain breaches of the Transaction Agreement and for certain other liabilities, subject to certain limitations.
The completion of the Transaction is subject to closing conditions, including (i) the absence of any injunction, law or order that makes unlawful the
consummation of the Transaction, (ii) the material accuracy of the representations and warranties of, and the material compliance with covenants by, the other party and (iii) the delivery of required closing documents. Equinixs
obligation to consummate the Transaction is also conditioned on, among others, (i) the absence of any pending or threatened proceeding brought by a governmental authority pursuant to applicable antitrust laws that seeks to enjoin or preclude
the closing of the Transaction or seeks to impose certain restrictions on Equinix or the Business and (ii) no material adverse effect having occurred with respect to the Business. There is no financing condition to the Transaction.
The Transaction Agreement provides Equinix and Verizon with certain termination rights, including if the Transaction does not close by September 6, 2017 (the
End Date), provided that the End Date may be extended to December 6, 2017 in certain circumstances. Additionally, either party may terminate the Transaction Agreement upon a breach by the other party of any representation, warranty or
covenant made by such breaching party in the Transaction Agreement, such that the applicable condition to closing is not satisfied and such breach is not cured by the earlier of 30 days after written notice or the End Date. The Transaction Agreement
also provides that upon termination of the Transaction Agreement under specified antitrust-related circumstances, Equinix will pay to Verizon a termination fee of up to $200.0 million.
The foregoing summary of the Transaction Agreement and the Transaction contemplated thereby does not purport to be complete and is qualified in its entirety
by reference to the terms and conditions of the Transaction Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference.
The representations and warranties and covenants set forth in the Transaction Agreement have been made only for
the purposes of the Transaction Agreement and solely for the benefit of the parties to the Transaction Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for
the purpose of allocating contractual risk between the parties to the Transaction Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those
applicable to investors. In addition, such representations and warranties were made only as of the dates specified in the Transaction Agreement. Accordingly, the Transaction Agreement is included in this filing only to provide investors with
information regarding the terms of the Transaction Agreement and not to provide investors with any other factual information regarding the parties or their respective businesses.
Debt Financing
In connection with the execution
of the Transaction Agreement, Equinix has entered into a commitment letter (the Commitment Letter), dated December 6, 2016, with JPMorgan Chase Bank, N.A., Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the Commitment Parties), pursuant to which the Commitment Parties have committed to provide a senior unsecured bridge facility in aggregate principal amount of $2.0 billion for the purposes of funding (i) a portion of
the cash consideration for the Transaction and (ii) the fees and expenses incurred in connection with the Transaction. The financing commitments of the Commitment Parties are subject to various conditions set forth in the Commitment Letter.