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EXHIBIT 10.46
TRANSITIONAL SERVICES AGREEMENT
This Transitional Services Agreement (the "Agreement") is entered into
on the tenth day of June, 1998, by and among HOMECOM COMMUNICATIONS, INC., a
Delaware corporation (the "Service Provider"), and SAGE NETWORKS ACQUISITION
CORP., a Delaware corporation, (the "Buyer").
WHEREAS, Buyer and the Service Provider has entered into the Asset
Purchase Agreement dated as of June 10, 1998, between Buyer and the Service
Provider as Seller (the "Purchase Agreement");
WHEREAS, in connection with the transactions contemplated by the
Purchase Agreement, the parties hereto desire to provide for certain transition
arrangements and services to be furnished by the Service Provider;
WHEREAS, this Agreement is being executed in connection with the
transactions contemplated by the Purchase Agreement; and
WHEREAS, terms used herein that are not defined herein shall have the
respective meanings set forth in the Purchase Agreement.
NOW, THEREFORE, in consideration of the matters described in the
foregoing recitals and the covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
1. Use of Seller's Office Space and Data Facility. In connection with
the transition arrangements contemplated herein, the Service Provider shall make
available to Buyer such office space and space in its data facility leased by
the Service Provider and located at Twelve Piedmont Center, Suite 110, 0000
Xxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000 (the "Transition Location") as Buyer
shall reasonably request for a period ending December 31, 1998 (the "Transition
Period"). The space to be included in the Transition Location is more
specifically described in Exhibit A hereto. The space included in the Transition
Location shall be fully furnished with furniture and equipment of the amount and
kind that furnished the Transition Location during the two week period prior to
the
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Closing Date. Such available space should in all events be sufficient for Buyer
to continue to operate and maintain the Business during the Transition Period
and shall include up to six offices. During the period from the date hereof to
December 31, 1998, Buyer shall reimburse the Service Provider for one-half of
its rent payable by Service Provider pursuant to and in accordance with the
lease for the Transition Location which Service Provider represents is $11,993
per month; provided, however, that if the landlord for the Transition Location
shall require the Buyer to vacate the Transition Location prior to the end of
the Transition Period, Buyer's obligations to make such reimbursement shall
terminate on the date that Buyer vacates the Transition Location. Buyer shall
use its reasonable commercial efforts to provide the Service Provider with ten
(10) days prior notice of the date on which the Buyer will vacate the Transition
Location if Buyer intends to vacate same prior to the end of the Transition
Period. During the Transition Period, the Service Provider shall permit Buyer to
use the Transition Location as an office and data facility. The fixed portion of
the rent shall be due on the first day of each month. The variable portion of
the rent, if any, shall be due ten days after the receipt of an invoice from the
Service Provider.
2. Transition Accounting and Billing Services. During the Transition
Period (except during regular system back-ups), the Service Provider (a) shall
provide access to the accounting and billing software and systems (including
normal administrative and back-up functions) used by the Service Provider in the
Business to the Buyer and (b) shall provide such transitional support and
assistance in connection with the transfer of the accounting and billing records
and systems for the Business to the Buyer's accounting and billing systems as
shall be reasonably required by Buyer. The services provided pursuant to this
paragraph shall include all necessary passwords and ongoing access to such
services and systems. The services provided pursuant to this Section 2 shall be
at no cost to the Buyer.
3. Internet Services. During the Transition Period, the Service
Provider shall make available to Buyer all local loop and internet connectivity
services (the "Connectivity Services") presently used or projected to be used by
Service Provider in connection with the Business (as such term is defined in the
Purchase Agreement),
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including, without limitation the services provided pursuant to the Service
Provider's Internet Access Agreement for Resellers dated May 9, 1996 and with
networkMCI, Inc. dated May 9, 1996 and CRL Network Services Communications
Services Agreement dated January 14, 1997 and Internet Service Authorization
dated January 15, 1997 with CRL Network. All Connectivity Services shall have an
availability during the Transition Period as set forth in Exhibit A. During the
time that the Buyer occupies the Transition Location, Buyer shall reimburse the
Service Provider for the Connectivity Services in an amount equal to sixty-five
percent (65%) of the Service Provider's total costs for local loop and internet
services. The Buyer shall pay the costs of any additional local loop and
internet services required to service other customers of Buyer, if any, which
Buyer transfers from another location to the Transition Location.
4. Technical Transition Support. During the Transition Period, the
Service Provider shall provide such cooperation, assistance and technical
support to the Buyer as shall be reasonably required by Buyer in connection with
the Business, including, but not limited to the support described on Exhibit A.
The services provided pursuant to this Section 4 shall be at no cost to the
Buyer.
5. Telephone Services. (a) During the Transition Period, the Service
Provider shall make all local and long distance telephone service (including,
without limitation all 800 numbers) presently used or projected by the Service
Provider to be used in connection with the Business available to the Buyer.
Buyer shall reimburse the Service Provider for its actual costs incurred in
connection with such local and long distance telephone service promptly upon
receipt of the invoices therefor from the Service Provider.
(b) The Service Provider shall provide the Buyer with reasonable
access to its Siemens telephone system and automated attendant service and will
cooperate with Buyer (i) in connection with the reconfiguration of such system
to provide separate telephone service to Buyer during the Transition Period and
(ii) to secure additional equipment, connections and other services from Siemens
or otherwise in the same time and manner as such equipment, connections and
service are provided to the Service Provider. Any such reconfiguration
(including returning such system to its
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original configuration) and additional equipment, connections and services shall
be at the cost of the Buyer.
(c) Until December 31, 1999 the Service Provider will maintain an automated
attendant message containing Buyer's telephone numbers and call transfer
information on Service Provider's automated attendant service.
(d) After the Buyer vacates the Transition Location, until December 31, 1999,
the Buyer will maintain an automated or attended message service on the 800
number included as a Purchased Asset (as defined in the Purchase Agreement)
containing the Service Provider's telephone numbers and call transfer
information. Service Provider shall reimburse the Buyer for its actual costs
incurred in connection with such 800 number promptly upon receipt of the
invoices therefor from the Buyer.
6. Assistance with Audit. The Service Provider will make its personnel
and accounting records and workpapers available to Buyer and Buyer's independent
auditors as may be reasonably required in connection with Buyer's audit of the
Business. In addition the Service Provider will (i) prepare the financial
statements for the Business for the years ending and as at December 31, 1995,
1996 and 1997 and for the period ending on and as at the Closing Date and
provide such other information as Buyer's independent auditors may request in
connection with preparing such audit, in each case on or before June 15, 1998,
(ii) retrieve all detail items selected for audit on a timely basis and (iii)
provide in writing, at the request of such auditors, such representations and
other documents required by such auditors in connection with their certification
of such audit and the use of such audit by Buyer.
7. Security and Background Checks. If the Service Provider requires
security and background check for its personnel, Buyer agrees that the Service
Provider may request reasonable security and background checks for any personnel
hired by Buyer who were not previously employed by the Service Provider prior to
allowing any such personnel access to the Service Provider's network operations
center. Buyer will follow Service Provider's reasonable security procedures for
the network operations center.
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8. Notice of Customer and Vendor Issuers. The Service Provider shall
provide Buyer with notice of any customer communications or complaints relating
to the Business and any issues or potential issues with vendors, in each case,
promptly after Service Provider becomes aware of such communications, complaints
or issues in the normal course of business.
9. Indemnification. (a) Except as expressly provided herein, Buyer
does not assume, agree to pay, perform or discharge or otherwise have any
responsibility for any obligation or liability with respect to the Transition
Location or any of the Service Provider's personnel.
(b) The Service Provider agrees to indemnify, defend and hold Buyer
harmless from and against any and all demands, claims, losses, liabilities,
actions or causes of action, assessments, judgments, settlement payments,
damages, fines, penalties, costs and expenses (including, without limitation,
interest which may be imposed in connection therewith, reasonable fees and
disbursements of counsel and other experts, and the cost to Buyer of seeking
indemnification of any funds expended by reason of any of the events specified
in this Section 9) (the "Buyer Losses") incurred or suffered by Buyer based
upon, arising out of or otherwise in respect of the Transition Location other
than those proven by the Service Provider to have been caused by Buyer
(including, without limitation, any Buyer Losses with respect to Environmental
Laws not proven by the Service Provider to have been caused by Buyer), whether
or not such Buyer Losses occur, arise or are discovered during Buyer's use of
the Transition Location.
(c) The Buyer agrees to indemnify, defend and hold the Service Provider
harmless from and against any and all demands, claims, losses, liabilities,
actions or causes of action, assessments, judgments, settlement payments,
damages, fines, penalties, costs and expenses (including, without limitation,
interest which may be imposed in connection therewith, reasonable fees and
disbursements of counsel and other experts, and the cost to the Service Provider
of seeking indemnification of any funds expended by reason of any of the events
specified in this Section 9) (the "Service Provider Losses") incurred or
suffered by the Service Provider caused by Buyer (including, without limitation,
any Service Provider Losses with respect to Environmental Laws proven by the
Service Provider to have
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been caused by Buyer), whether or not such Service Provider Losses occur, arise
or are discovered during Buyer's use of the Transition Location.
(d) The obligations of the Company pursuant to Section 2(B) hereof and the
obligations of the Buyer pursuant to Section 2(C) hereof shall, in each case, be
limited to an aggregate amount not in excess of the Purchase Price (as defined
in the Purchase Agreement).
10. Specific Performance. Each of the parties acknowledges that money
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and obligations of the parties under this
Agreement shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. A party's right to specific
performance shall be in addition to all other legal or equitable remedies
available to such party.
11. Notices. All notices, requests, demands, applications, services of
process and other communications which are required to be or may be given under
this Agreement shall be deemed to have been duly given if sent by telefax (with
confirming telefax receipt) or delivered by recognized courier service (with
receipt acknowledged) to the parties hereto at the following addresses:
If to Buyer:
Sage Networks Acquisition Corp.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Operating Officer
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and
Sage Networks, Inc.
c/o McCarthy, Fingar, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P.
00 Xxxxxxx Xxxxxx - 00xx Xx.
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
General Counsel
with a copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: E. Xxx Xxxx, Esq.
If to the Service Provider:
HomeCom Communications, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
with a copy to:
Xxxx Moss Kline & Xxxxx LLP
Suite 310 - 400 Northpark Town Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
or to such other address as any party shall furnish to the other by notice given
in accordance with this Section 11. Each such notice, request, demand,
application, service of process and other communication shall be deemed to have
been given only when actually received by the addressee.
12. No Assignment; Successors. This Agreement is not assignable by
either party hereto without the prior written consent of the other party;
provided, however, that Buyer may assign this agreement to any Affiliate of
Buyer and after December 31, 1998, the Service Provider may assign this
Agreement to any Affiliate of Service Provider. This Agreement shall inure to
the benefit of and be binding upon Service Provider and Buyer and their
successors and
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permitted assigns and any third party which succeeds to all or substantially all
of the assets and business of either such party.
13. No Benefit to Others. The covenants and agreements contained in
this Agreement are for the sole benefit of the parties hereto and, and they
shall not be construed as conferring any rights on any other persons.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed an original and all
of which together shall be deemed to be one and the same instrument.
15. Choice of Law. This Agreement shall be governed by and interpreted
under the laws of the State of Georgia without giving effect to any conflict of
laws provisions.
16. Separability. If any provision of this Agreement or the
application thereof to any person or circumstance is held invalid or
unenforceable in any jurisdiction, the remainder of this Agreement, and the
application of such provision to such person or circumstance in any other
jurisdiction or to other persons or circumstances in any jurisdiction, shall not
be affected thereby, and to this end the provisions of this Agreement shall be
separable.
17. Force Majeure; Cure Periods. (a) Neither party hereto shall be
deemed to be in breach of this Agreement as a result of the occurrence of any of
the following: if by reason of acts of God; strikes; lockouts or other
industrial disturbances; acts of public enemies; orders of any kind of the
Government of the United States, of the State of Georgia or of the State of New
York, or any department, agency, political subdivision, court or official of
either of them, or any civil or military authority; insurrections; riots;
epidemics; landslides; floods; washouts; droughts; arrests; restraint of
government and people; civil disturbances; explosions; breakage or accident to
machinery; partial or entire failure of utilities; or any cause or event not
reasonably within the control of such party, a party hereto is unable in whole
or in part to carry out any one or more of its agreements or obligations
contained in this Agreement, other than the obligations of such party make
payments to the other party hereunder, such party shall not be deemed in breach
of this Agreement by reason of not carrying out said agreement or agreements or
performing said obligation or obligations during the
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continuance of such inability. Any failure of a party hereto to perform its
obligations to make payments hereunder shall constitute a breach of this
Agreement regardless of the reason for such failure to perform.
(b) A party hereto may exercise its remedies at law and equity with
respect to any breach of (i) any provision of this Agreement, which breach
materially and adversely affects the Buyer's ability to conduct its Web hosting
business which remains uncured after 24 hours receipt by the Service Provider of
written notice from Buyer advising it with specificity of such breach, unless
within 48 hours of such notice such breach is cured or (ii) any other material
provision of this Agreement, which breach remains uncured following a reasonable
period in the light of the circumstances of such breach after receipt by the
party in breach of written notice from the other party advising it with
specificity of such breach, unless within such period the party in breach
commenced curing such breach and continues to act diligently until such breach
is cured.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the date first above written.
SAGE NETWORKS ACQUISITION CORP.,
as Buyer
By:
---------------------------------
Name:
Title:
HOMECOM COMMUNICATIONS, INC.,
as Seller
By:
---------------------------------
Name:
Title:
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EXHIBIT A
SPACE INCLUDED IN TRANSITION LOCATION. The Buyer will have full access to
all areas of the Service Provider's data facility on a 24 hour, seven day a week
basis.
The Buyer will have access to the Service Provider's switches and SNMP
monitoring system in order to verify the Service Provider's calculations of the
reimbursements pursuant to Section 3. Monitoring capabilities will be provided
with the assistance of the Service Provider.
ACCOUNTING AND BILLING SERVICES. The Service Provider will provide
passwords and ongoing access to its Platinum accounting systems so that customer
accounts can be monitored. The Buyer will have access to Service Provider's
accounting personnel and books and records relating to the Business during
normal business hours.
AVAILABILITY. Network uptime will meet or exceed 99.0% on a monthly basis.
If network uptime for any one month is less than 99.0%, Buyer will not be
required to pay for bandwidth costs for that particular month. Network uptime is
defined as the periods when Buyer has access to the internet via the Service
Provider's network hardware and the Service Provider's internet bandwidth.
The Service Provider will continue to provide back-up and other network
system administration functions for any hardware and software with respect to
which it currently provides these services for the Business. The Buyer will use
its reasonable commercial efforts to obtain its own back-up and other network
system administrative function following the Closing Date (as defined in the
Purchase Agreement).
TECHNICAL SUPPORT. The Service Provider will provide all support reasonably
required by Buyer for all software applications that are being acquired by the
Buyer, including but not limited to, the HostAmerica Web site, the Customer
Control Panel, the Customer Access database, provisioning systems, and the
application that calculates customer surcharges for bandwidth and disk space.
The Service Provider will provide any available documentation and assist the
Buyer in understanding the operations of the software applications.
The Service Provider is installing a redundant T3 connection to the
internet. The Buyer's servers will have connectivity to such redundant T3
following installation by the Service Provider. Buyer's servers will also have
connectivity to the Service Provider's existing T1 and T3 services.
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The Service Provider will make the Buyer part of its page alert system so
that the Buyer will be notified of network problems, in the same manner that
employees of the Service Provider are currently notified of network problems.
The Service Provider will provide the Buyer with the capability to telnet
to the Service Provider's and the Buyer's servers through the Service Provider's
security systems. The Buyer will supply the Service Provider with a list of
people who will need this access and the Service Provider will add such people
to the Service Provider's authentication method.
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