EXHIBIT NO. 99.3
AGREEMENT TO VOTE STOCK
THIS AGREEMENT TO VOTE STOCK, dated as of February 10, 1998 (the
"Agreement"), among the Granting Stockholders named on Schedule A hereto, Sprint
Corporation, a Kansas corporation ("Sprint") and Sprint Communications Company
L.P., a Delaware limited partnership ("Sprint L.P.") (the Granting Stockholders,
Sprint and Sprint L.P. are collectively referred to herein as the "Parties" and
individually as a "Party").
WHEREAS, the respective Boards of Directors of Sprint and EarthLink
Network, Inc., a Delaware corporation (the "Company") have determined to enter
into a strategic relationship in the area of Internet access and related
services and Sprint will make investments in Dolphin, Inc., a Delaware
corporation ("Newco") and the Company in connection with the Merger of Dolphin
Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Newco ("Newco
Sub") and the Company in order to enhance the capabilities for growth and
financial and strategic success;
WHEREAS, Sprint, Sprint L.P., the Company, Newco and Newco Sub have
entered into an Investment Agreement as of the date hereof (the "Investment
Agreement") contemplating that strategic alliance and addressing the terms and
conditions of such investment and related transactions;
WHEREAS, a condition to Sprint's obligations under the Investment
Agreement is that each of the Granting Stockholders execute and perform this
Agreement;
WHEREAS, Sprint proposes to make a tender offer (as it may be amended
from time to time as permitted under the Investment Agreement, with the
Company's consent if required hereby, the "Offer") to purchase 1,250,000 shares
of common stock, par value $.01 per share, of the Company (the "Common Stock"),
for an aggregate cash consideration of $56,250,000 and at a price per share of
Common Stock of $45 net to each seller in cash (such price, as may hereafter be
changed, the "Offer Price"), upon the terms and subject to the conditions set
forth in the Investment Agreement; and the Board of Directors of the Company has
approved the Offer and the other transactions contemplated in the Investment
Agreement and is recommending that the Company's stockholders who wish to
receive cash for their shares of Common Stock accept the Offer;
WHEREAS, immediately following the closing of the Offer, Sprint L.P.
proposes to purchase 4,102,941 shares of Series A Convertible Preferred Stock,
par value $.01 per share of Newco (the "Convertible Preferred Stock") in
exchange for (i) an aggregate cash consideration of $23,750,000, (ii) the
assignment to Newco of 100% of the Sprint Internet Passport Subscribers, and
(iii) entering into a network agreement whereby Newco and the Company will
utilize Sprint's long-distance network under specified terms and conditions (the
consideration under clauses (i), (ii) and (iii) is referred to collectively
herein as the "Contribution");
WHEREAS, Sprint L.P. will enter into an agreement whereby Newco and the
Company will utilize the Sprint brand under specified terms and conditions Newco
and Newco Sub will,
inter alia, have the right to use Sprint distribution channels under specified
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terms and conditions and agrees to sell certain Sprint products;
WHEREAS, Sprint shall provide Newco and the Company, as co-borrowers,
with up to $25 million of Convertible Senior Debt financing (the "Convertible
Debt Financing") on or after the Closing, with such amount to increase to up to
$100 million over time, such indebtedness to be evidenced by one or more
Convertible Senior Promissory Note(s) (the "Convertible Notes");
WHEREAS, the closing of the Contribution and the other transactions
referred to above other than the Offer shall take place concurrently with the
merger of Newco Sub into the Company (the "Merger") and the conversion of each
share of the Company's outstanding Common Stock into one share of Newco common
stock, par value $.01 per share ("Newco Common Stock") pursuant to the Merger,
in each case upon the terms and subject to the conditions set forth in the
Investment Agreement and/or the Ancillary Agreements (as defined below);
WHEREAS, Section 2.02(c) of the Investment Agreement includes as a
condition to the obligations of Sprint and Sprint L.P. to consummate the
transactions contemplated by the Investment Agreement and the Ancillary
Agreements that the Granting Stockholders shall execute, deliver and fully
perform this Agreement and that the terms and conditions of this Agreement shall
have been otherwise satisfied in all material respects;
WHEREAS, the Granting Stockholders desire to induce the parties to the
Investment Agreement to execute, deliver and perform such agreement and the
Ancillary Agreements and to satisfy the aforesaid condition to the Closing of
the Investment Agreement;
WHEREAS, capitalized terms used herein shall have the meaning set forth
in the Investment Agreement unless otherwise defined herein; and
NOW, THEREFORE, in consideration of (i) the foregoing premises, (ii)
the benefits to be received equally by all stockholders of the Company upon the
execution, delivery and performance of the Investment Agreement and the
Ancillary Agreements, (iii) the interest of Sprint in purchasing shares of
Common Stock from the stockholders of the Company in the Offer, (iv) the
representations, warranties, covenants and agreements contained in this
Agreement, the Investment Agreement and the Ancillary Agreements, and (v) for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Agreement and Obligation to Vote. Each of the Granting Stockholders
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on and prior to the Termination Date agrees to cast, or cause to be cast, at any
duly called meeting of the stockholders, all of the votes represented by the
shares of Common Stock which they own of record or beneficially (within the
meaning of Rule 13d-3 under the Exchange Act as of the date hereof), which
number of shares is set forth opposite the Granting Stockholder's name on
Schedule A attached hereto (the "Owned Shares"; which term shall include any and
all other shares of capital stock or securities or rights issued or issuable in
respect thereof on or after the date hereof), (which for this purpose shall also
include all shares of Newco Common Stock
received upon conversion of the Owned Shares into Newco Common Stock pursuant to
the Merger) which such Granting Stockholder has the right or power to vote,
directly or indirectly, or has the right or power to vote by holding a proxy to
vote such shares or otherwise, in favor of the following matters only (a) the
Merger, (b) the issuance and sale of the Convertible Preferred Stock, the
Convertible Notes and the Newco Common Stock issuable upon conversion of the
Convertible Preferred Stock and/or the Convertible Notes, in each case in
accordance with the Investment Agreement and the applicable Ancillary
Agreements, (c) the other transactions contemplated by the Investment Agreement
and the Ancillary Agreements, and (d) any related matter that must be approved
by the holders of Common Stock or Newco Common Stock in order for the
transactions contemplated by the Investment Agreement or any Ancillary Agreement
to be consummated so long as not inconsistent with the Investment Agreement and
the Ancillary Agreements.
2. Agreement Not to Dispose of Shares. Each Granting Stockholder hereby
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covenants and agrees as follows between the date hereof and the Termination
Date:
(a) The Granting Stockholders will not, and will not agree to, directly
or indirectly, (i) sell, transfer, assign, pledge, hypothecate, cause to be
redeemed or repurchased or otherwise dispose of any of the Owned Shares, (ii)
grant any proxy, power of attorney or interest in or with respect to the Owned
Shares, or (iii) enter into a voting agreement with respect to the Owned Shares,
in any such case prior to the Closing of the Merger and the other transactions
contemplated by the Investment Agreement and the Ancillary Agreements, provided,
such Granting Stockholder may pledge such shares in connection with bona fide
margin facilities.
(b) The Granting Stockholders will request the Company to have the
certificates evidencing those shares which are owned of record by such Granting
Stockholders to bear substantially the following legend and to request the
Company to instruct its transfer agent to stop the transfer of any certificates
bearing such legend that is not made in accordance with this Agreement:
THE TRANSFER OF AND VOTING OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE PRIOR RIGHTS AND LIMITATIONS
IMPOSED BY THE AGREEMENT TO VOTE DATED AS OF FEBRUARY 10, 1998
AMONG SPRINT CORPORATION, A KANSAS CORPORATION, SPRINT
COMMUNICATIONS COMPANY L.P. AND CERTAIN GRANTING STOCKHOLDERS
WHO ARE SIGNATORIES THERETO. A COPY OF SUCH AGREEMENT WILL BE
FURNISHED BY THE COMPANY'S SECRETARY UPON WRITTEN REQUEST AND
WITHOUT CHARGE.
(c) Notwithstanding the foregoing, each Granting Stockholder shall be
permitted to tender any or all Owned Shares into the Offer.
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3. Representations and Warranties. Each of the Granting Stockholders,
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as to itself only, represents and warrants to Sprint and Sprint L.P. as follows:
(a) Each Granting Stockholder that is an entity is a corporation,
limited liability company or partnership that is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized and has the power and authority to execute, deliver
and perform this Agreement. Each Granting Stockholder that is a natural person
has the capacity and the full legal right to execute, deliver and perform this
Agreement.
(b) This Agreement has been duly executed and delivered and constitute
a valid and binding agreement and is enforceable in accordance with its terms,
except to the extent that the enforcement of this Agreement may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, and (ii) general
principles of equity regardless of whether enforceability is considered in a
proceeding in equity or at law.
(c) The execution and delivery of this Agreement did not, and the
performance thereof, without obtaining the consent of any third party will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under (i) to their knowledge, the certificate of
incorporation or bylaws of the Company, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit or
license applicable to the Granting Stockholder or the Owned Shares, or (iii) any
Law applicable to the Granting Stockholders. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity or any party to a Contract is required by or with respect to the
applicable Granting Stockholder or by the Granting Stockholder in connection
with the execution and delivery of this Agreement except under the Exchange Act.
(d) Each of the Owned Shares is free and clear of all Liens except for
bona fide margin facilities permitted under Section 2(a), and, except as
contemplated by this Agreement and the Stockholder's Agreement, is not subject
to any (i) right of first refusal, (ii) right to purchase, acquire or vote, or
(iii) power of attorney.
(e) Each Granting Stockholder has the sole power, right and authority
to vote the Owned Shares in accordance with the terms of this Agreement.
(f) Notwithstanding the foregoing, Quantum Industrial Partners LDC
("QIP") has granted discretionary authority to vote and dispose of its Owned
Shares to Xxxxx Fund Management LLC, although such grant will not affect QIP's
obligations hereunder.
4. Term. This Agreement and the obligations hereunder shall commence on
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the date hereof and continue until the earlier of (a) consummation of the
Merger, (b) termination of the Investment Agreement pursuant to Section 6.01
thereof, (c) the modification, waiver or amendment, in any manner, adverse to
the Granting Stockholders, of the Investment Agreement or the Ancillary
Agreements, and (d) June 15, 1998 (the "Termination Date").
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5. Miscellaneous Provisions. (a) Unless otherwise provided herein, any
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notice, request, waiver, instruction, consent or document or other communication
required or permitted to be given by this Agreement shall be effective only if
it is in writing and (i) delivered by hand or sent by certified mail, return
receipt requested, (ii) if sent by a nationally-recognized overnight delivery
service with delivery confirmed, or (iii) if telexed or telecopied, with receipt
confirmed as follows:
Granting Stockholders Hunton & Xxxxxxxx
in care of their attorneys: NationsBank Plaza, Suite 4100
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Hobby, Esq.
Telecopy No.: (000) 000-0000
Sprint and Sprint L.P.: Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Chief Financial Officer
Telecopy No.: (000) 000-0000
with a copy to: Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Corporate Secretary
Telecopy No.: (000) 000-0000
with an additional copy to: Xxxxxxx, Mag & Fizzell, P.C.
1201 Walnut, Suite 2800
P.O. Box 419251
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
The parties shall promptly notify each other of any change in their respective
addresses or facsimile numbers or of the Person or office to receive notices,
requests or other communications under this Section 5(a). Notice shall be deemed
to have been given as of the date when so personally delivered, when physically
delivered by the U.S. Postal Service at the proper address, the next day when
delivered during business hours to an overnight delivery service properly
addressed or when receipt of a telex or telecopy is confirmed, as the case may
be, unless the sending party has actual Knowledge that such notice was not
received by the intended recipient.
(b) This Agreement embodies the entire agreement and understanding of
the Parties in respect to the matter contemplated hereby and thereby and
supersede and render null and void all other prior agreements and
understandings, written and oral, with respect to the subject matter hereof and
thereof, provided that this provision shall not abrogate any other written
agreement
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between the Parties executed simultaneously with this Agreement. No Party shall
be liable or bound to any other Party in any manner by any promises, conditions,
representations, warranties, covenants, agreements and understandings, except as
specifically set forth herein or therein.
(c) Except as otherwise permitted in this Agreement, this Agreement may
not be amended or supplemented, unless set forth in a writing signed by and
delivered to, all the Parties. Except as otherwise permitted in this Agreement,
the terms or conditions of this Agreement may not be waived unless set forth in
a writing signed by the Party or Parties entitled to the benefits thereof. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of such provision at any time in the future or a waiver of
any other provision hereof. The rights and remedies of the Parties are
cumulative and not alternative. Except as otherwise provided in this Agreement,
neither the failure nor any delay by any Party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
(d) This Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned or transferred, in whole or in part, by
any of the Parties without the prior written consent of the other Parties;
provided, however, that such assignment or transfer may be made by (i) Sprint or
Sprint L.P. to any of their Affiliates, (ii) by any Affiliate of Sprint to any
other Affiliate of Sprint, or (iii) pursuant to any merger, consolidation,
reorganization or sale of substantially all of the assets of Sprint or such
Affiliates (or any transaction having such effect). Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the Parties and their respective successors and assigns.
(e) This Agreement shall be governed by the laws of the State of
Delaware, without regard to conflict of laws principles.
(f) If any term or provision of this Agreement or the application
thereof to any Party or set of circumstances shall, in any jurisdiction and to
any extent, be finally held invalid or unenforceable, such term or provision
shall only be ineffective as to such jurisdiction, and only to the extent of
such invalidity or unenforceability, without invalidating or rendering
unenforceable any other terms or provisions of this Agreement or under any other
circumstances, and the Parties shall negotiate in good faith a substitute
provision which comes as close as possible to the invalidated or unenforceable
term or provision, and which puts each Party in a position as nearly comparable
as possible to the position it would have been in but for the finding of
invalidity or unenforceability, while remaining valid and enforceable.
(g) This Agreement may be executed in one or more counterparts each of
which when so executed and delivered shall for all purposes be deemed to be an
original but all of which, when taken together, shall constitute one and the
same Agreement.
(h) The captions and headings used in this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction or
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interpretation hereof.
(i) Nothing in this Agreement, express or implied, shall create or
confer upon any Person, other than the Parties or their respective successors
and permitted assigns, any legal or equitable rights, remedies, obligations,
liabilities or claims under or with respect to this Agreement, except as
expressly provided herein.
(j) Unless specifically stated otherwise, references to sections refer
to sections in this Agreement. References to "includes" and "including" mean
"includes without limitation" and "including without limitation."
(k) Each Granting Stockholder is a sophisticated legal entity or
individual that was advised by experienced counsel and, to the extent it deemed
necessary, other advisors in connection with this Agreement. Accordingly, each
Party hereby acknowledges that no Party has relied or will rely in respect of
this Agreement or the transactions contemplated hereby or thereby upon any
document or written or oral information previously furnished to or discovered by
it or its representatives, other than this Agreement or the documents and
instruments delivered at the Closing.
(l) No provision of this Agreement shall be interpreted in favor of, or
against, any Party by reason of the extent to which such Party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or thereof.
(m) The Parties agree that any Action arising out of or relating to
this Agreement shall be brought by the Parties and held and determined only in a
Delaware state court or a federal court sitting in that state which shall be the
exclusive venue of any such Action. Each Party waives any objection which such
Party may now or hereafter have to the laying of venue of any such Action, and
irrevocably consents and submits to the jurisdiction of any such court (and the
appropriate appellate courts) in any such Action. Any and all service of process
and any other notice in any such Action shall be effective against such Party
when transmitted in accordance with subsection (a) of this Section 5. Nothing
contained herein shall be deemed to affect the right of any Party to serve
process in any manner permitted by Law.
(n) All representations, warranties and covenants in this Agreement
shall survive the execution and delivery of this Agreement and shall continue
for their respective statute of limitations period, except for any covenant
which by its terms continues in effect for a longer time period, and shall in no
way be affected by any investigation of the subject matter thereof made by or on
behalf of any Party or any information capable of being acquired by any Party.
(o) THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT
THAT THEY MAY HAVE TO A TRIAL BY JURY IN ANY ACTION INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING
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IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first above written.
SPRINT CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
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Title: Vice President-Strategic
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Planning and Corporate Development
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SPRINT COMMUNICATIONS
COMPANY L.P.
By: US Telecom, Inc., General Partner
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
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Title: Vice President and Secretary
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SIGNATURE PAGE FOR AGREEMENT TO VOTE STOCK
/s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
QUANTUM INDUSTRIAL PARTNERS LDC
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: Attorney-in-Fact
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/s/ Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
SIGNATURE PAGE FOR AGREEMENT TO VOTE STOCK
Schedule A
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Name and Address Owned Shares
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Xxxxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 214,545
Quantum Industrial Partners LDC
c/o Soros Fund Management
Attn: Xxxx XxXxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 1,456,095
Xxxx Xxxxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000 1,042,473
Xxxxxx Xxxxx
c/o Unitel Cellular Communications Systems
Xxxxxxx Xxx, Xxxxx 000
Xxxx Xxxxxxxx Xxxx, XX 00000 236,884
