EXHIBIT 99.2
AMENDED AND RESTATED
GOVERNANCE AGREEMENT
THIS AMENDED AND RESTATED GOVERNANCE AGREEMENT (this "AGREEMENT"),
dated as of February 8, 2001 (the "EFFECTIVE DATE"), is entered into by and
among SPRINT CORPORATION, a Kansas corporation ("SPRINT"), SPRINT
COMMUNICATIONS COMPANY L.P., a Delaware limited partnership ("SPRINT L.P."),
EARTHLINK, INC., a Delaware corporation ("EARTHLINK"), and its wholly-owned
subsidiary EARTHLINK OPERATIONS, INC., a Delaware corporation ("OPERATIONS").
WHEREAS, on February 10, 1998, the parties entered into
that certain Governance Agreement (the "GOVERNANCE AGREEMENT") intended to
govern the parties' strategic relationship, including Board representation,
Sprint's rights to purchase equity interests in EarthLink, Sprint's right to
acquire EarthLink under certain conditions and related governance matters;
WHEREAS, Sprint and EarthLink, in recognition of the evolution
of their relationship, have determined to amend and restate the Governance
Agreement in its entirety to reflect that evolution;
WHEREAS, contemporaneously herewith, the parties are also
restructuring their commercial relationship by terminating the existing
Marketing and Distribution Agreement of February 10, 1998, and entering into
a new Master Services Agreement of even date herewith (the "MASTER SERVICES
AGREEMENT"), amending their Registration Rights Agreement of February 10,
1998 by entering into the Amended and Restated Registration Rights Agreement
and restructuring and terminating various other ancillary agreements and
arrangements; and
WHEREAS, Sprint's representatives on the Board of Directors
shall also tender their resignations from the Board of Directors
contemporaneously with the execution of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" means, with respect to any Person, any other
Person controlling, controlled by, or under common control with such Person.
For purposes of this Agreement, the term "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with" as used with respect to any Person) means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person through ownership of securities.
"AFFILIATED EQUITY HOLDERS" means Sprint, Sprint L.P. and
each of their respective Affiliates (exclusive of EarthLink, Operations and
their Subsidiaries) that, as of any relevant date of determination, are
holders of Equity Securities.
"AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT" means
the Amended and Restated Registration Rights Agreement dated as of the date
hereof, by and among Sprint, Sprint L.P. and EarthLink.
"ANCILLARY AGREEMENTS" means the Master Services Agreement,
the Amended and Restated Registration Rights Agreement, and the Termination,
Mutual Release and Waiver Agreement.
"BOARD" or "BOARD OF DIRECTORS" means the Board of
Directors of EarthLink.
"BUSINESS COMBINATION" means a transaction or a series of
related transactions with a third party, other than an Affiliate of Sprint or
Sprint L.P., or third parties, other than Affiliates of Sprint or Sprint
L.P., who are acting as a group (as defined in Rule 13d-5 of the Exchange
Act), undertaken in any form whatsoever, involving a merger, consolidation,
combination, share exchange, reorganization or other extraordinary
transaction with respect to EarthLink in which, upon consummation thereof,
the shareholders of EarthLink immediately prior to such transaction or series
of related transactions would not own (immediately following the consummation
of such transaction or series of related transactions) at least 50% of the
total voting power represented by the outstanding Voting Equity Securities
or, if the outstanding Voting Equity Securities are converted or exchanged in
such transaction or series of related transactions into securities of a third
party, at least 50% of the total voting power represented by the outstanding
voting equity securities of such third party.
"CERTIFICATES OF DESIGNATION" means the Amended and
Restated Certificate of Designation of Rights, Preferences and Privileges for
the Series A Stock and the Amended and Restated Certificate of Designation of
Rights, Preferences and Privileges for the Series B Stock.
"CHANGE OF ENTITY TRANSACTION" means a transaction or
series of related transactions with a third party, other than an Affiliate of
Sprint or Sprint L.P., or third parties, other than Affiliates of Sprint or
Sprint L.P., who are acting as a group (as defined in Rule 13d-5 of the
Exchange Act), undertaken in any form whatsoever, involving a merger,
consolidation, combination, share exchange, reorganization or other
extraordinary transaction with respect to EarthLink, which (i) is not a
Business Combination and (ii) in which the outstanding Common Stock is
converted into or exchanged for securities of a third party (the "SUCCESSOR
ENTITY").
"COMMON STOCK" means the common stock, $.01 par value, of
EarthLink.
"CONFIDENTIAL INFORMATION" means the discussions,
negotiations and proposals related to this Agreement and the Ancillary
Agreements and (ii) any information exchanged in connection with this
Agreement concerning the other party's business including, without
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limitation, tangible, intangible, visual, electronic, written, oral, present,
or future information that contains: (w) trade secrets, (x) financial
information and pricing, (y) technical information, such as research,
development, procedures, algorithms, data, designs, and know-how, and/or (z)
business information, such as operations, planning, marketing interests, and
products.
"CONVERSION RATIO" means, with respect to the Series A
Stock and Series B Stock, the quotient of the "Liquidation Value" divided by
the "Conversion Price," as those terms are defined in the Certificates of
Designation, assuming the acceleration of the full amount of the Liquidation
Accretion Dividends as contemplated by the last sentence of Section 3(a)(i)
of the Certificates of Designation.
"DIRECTOR" means a member of the Board of Directors.
"EARTHLINK" is defined in the introductory paragraph.
"EARTHLINK OUTSTANDING STOCK REPORT" means a report
provided by EarthLink to Sprint pursuant to Section 6.02(a) hereof.
"EFFECTIVE DATE" is defined in the introductory paragraph.
"EQUITY SECURITY" means (i) any Common Stock, (ii) any debt
or equity securities of EarthLink convertible into or exchangeable for Common
Stock or other Voting Equity Securities, (iii) any options, rights or
warrants (or any other similar securities) issued by EarthLink to acquire
Common Stock or other Voting Equity Securities, or (iv) any security issuable
in connection with any stock split, stock dividend, recapitalization or other
similar transaction in which securities are issued on a proportionate basis
to all holders of a class of Equity Securities. In case of a Change of Entity
Transaction, the term "Equity Security" will refer to any common stock or
similar security of the Successor Entity and securities of the type referred
to in clauses (ii)-(iv) with respect to such common stock or similar security.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations of the
Federal Trade Commission thereunder.
"ISSUANCE NOTICE" is defined in Section 3.01(b) hereof.
"MASTER SERVICES AGREEMENT" is defined in the third recital.
"OFFER NOTICE" is defined in Section 4.02(b) hereof.
"OPERATIONS" is defined in the introductory paragraph.
"OPTION ISSUANCE NOTICE" is defined in Section 3.01(c) hereof.
"OPTION TOP-UP PERIOD" is defined in Section 3.01(c) hereof.
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"PERSON" means an individual, a partnership, a joint
venture, a corporation, a limited liability company, a business or other
trust, an incorporated or unincorporated organization, a government or any
department or agency thereof.
"PREFERRED STOCK" means any shares of Preferred Stock
issued by EarthLink, including without limitation, shares of Series A Stock
and Series B Stock.
"RECOMMENDED THIRD-PARTY OFFER" is defined in Section
4.02(b) hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
"SERIES A STOCK" means the Series A Convertible Preferred
Stock, par value $.01 per share, of EarthLink.
"SERIES B STOCK" means the Series B Convertible Preferred
Stock, par value $.01 per share, of EarthLink.
"SPRINT" is defined in the introductory paragraph.
"SPRINT L.P." is defined in the introductory paragraph.
"SPRINT OFFER" means a written offer by Sprint to the Board
of Directors of EarthLink for Sprint and its Affiliates to acquire all, but
not less than all, of the outstanding Equity Securities not already owned by
the Affiliated Equity Holders in response to an offer of the type described
in Section 4.02.
"SPRINT OFFER PERIOD" is defined in Section 4.02(c) hereof.
"SPRINT OWNERSHIP CEILING" means, initially, a percentage
equal to Sprint's Percentage Interest on the Effective Date and subject to
future adjustments as described in Section 3.02.
"SPRINT OWNERSHIP REPORT" means a report provided by Sprint
to EarthLink pursuant to Section 6.02(b) hereof.
"SPRINT'S PERCENTAGE INTEREST" means, at the time of
determination, the percentage determined by converting the following fraction
into a decimal carried to the third place: (i) the numerator of which shall
be the sum of the total number of votes represented by all Equity Securities
then owned by the Affiliated Equity Holders, assuming that any convertible or
exercisable Equity Securities owned by the Affiliated Equity Holders are
fully converted or exercised at the then applicable conversion ratio or
exercise price, and (ii) the denominator of which shall be the sum of (x) the
number set forth in (i) hereof, and (y) the total number of votes represented
by all then outstanding Voting Equity Securities held by Persons who are not
Affiliated Equity Holders.
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"SUBSCRIPTION NOTICE" is defined in Section 3.01(b).
"SUBSIDIARY" has the same meaning as in Rule 12b-2
promulgated under the Exchange Act.
"SUCCESSOR ENTITY" is defined in the definition of "Change
of Entity Transaction."
"TERMINATION, MUTUAL RELEASE AND WAIVER AGREEMENT" means the
Termination, Mutual Release and Waiver Agreement, dated as of the date hereof,
by and among the parties hereto (among others).
"TOP-UP PERIOD" is defined in Section 3.01(b).
"TOP-UP RIGHT" means the Affiliated Equity Holder's right
to purchase Equity Securities pursuant to Sections 3.01(a), (b) and (c).
"UNAFFILIATED EQUITY HOLDERS" means, as of any relevant
date of determination, all holders of Equity Securities other than Affiliated
Equity Holders.
"VOTING EQUITY SECURITIES" means outstanding Equity
Securities of EarthLink that, at the date of such determination, entitle the
holders thereof to vote generally (not separately as a class) in any election
of Directors or generally (not separately as a class) with respect to any
Business Combination.
ARTICLE II
CORPORATE GOVERNANCE
SECTION 2.01. ADVISORY COMMITTEE TO EARTHLINK'S BOARD OF
DIRECTORS. EarthLink, in its discretion, may choose to create a special
advisory committee to assist and advise its Board of Directors (the
"ADVISORY COMMITTEE"). In such event, EarthLink may request that Sprint
appoint, and Sprint shall appoint, one or more representatives selected by
Sprint (the exact number to be determined by EarthLink but in no event more
than two (2) Sprint representatives) to serve on the Advisory Committee. The
Advisory Committee shall have no powers or authority to institute policies or
make decisions on behalf of EarthLink. The Advisory Committee shall, however,
provide such advice, assistance and consultation to the Board of Directors as
the Board of Directors may request from time to time. EarthLink shall enter
into customary indemnification agreements with each of the Sprint
representatives on the Advisory Committee. Sprint shall ensure the active
participation of its representatives in the affairs of the Advisory Committee.
SECTION 2.02. CERTIFICATE OF INCORPORATION AND BY-LAWS.
EarthLink shall take or cause to be taken all lawful action necessary to
ensure at all times that EarthLink's Certificate of Incorporation and By-laws
are not at any time inconsistent with the provisions of this Agreement. The
EarthLink Board of Directors shall adopt (and if necessary submit and
recommend for approval by stockholders) other amendments to EarthLink's
Certificate of Incorporation or By-laws reasonably necessary to implement the
provisions of this Agreement.
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SECTION 2.03. AMENDMENTS TO CERTIFICATES OF DESIGNATION. If
amendments to the Certificates of Designations that are necessary to
effectuate the terms of this Agreement contain no other amendments to which
Sprint objects, then the Affiliated Equity Holders shall vote any Equity
Securities held by them and required to be voted in favor of such amendments.
SECTION 2.04. VOTING OBLIGATIONS. Sprint and Sprint L.P.,
jointly and severally, covenant and agree that Sprint and Sprint L.P. shall,
and shall cause the Affiliated Equity Holders to, vote all of their Voting
Equity Securities on all proposals and other matters that may come before
EarthLink's stockholders for a vote; provided, however, that, notwithstanding
any other provision of this Agreement (other than Section 2.03), it shall be
within the Affiliated Equity Holders' sole discretion (a) to vote their
Voting Equity Securities for or against any matter proposed to stockholders,
and (b) to grant a proxy to any third party with respect to the Affiliated
Equity Holders' Voting Equity Securities in connection with any matter
proposed to stockholders, provided that the entity granting such proxy shall
instruct the third party to which the proxy is being granted that the Voting
Equity Securities subject to the proxy must be voted.
SECTION 2.05. RESIGNATION OF DIRECTORS. Upon the
effectiveness of this Agreement, Sprint shall cause its two representatives
on EarthLink's Board of Directors to immediately tender their resignations
from the Board if they have not previously done so. Neither Sprint, Sprint
L.P. nor any of their Affiliates shall have any continuing right to designate
or have elected members of the Board of Directors.
ARTICLE III
EQUITY PURCHASES FROM EARTHLINK
SECTION 3.01. TOP-UP RIGHTS.
(a) If EarthLink issues new Voting Equity Securities which
result in a reduction of Sprint's Percentage Interest, whether in connection
with an acquisition transaction, financing transaction, or otherwise (except
as to issuances described in clauses (b) or (c) below), EarthLink shall,
within five (5) business days from each such issuance, provide written notice
to Sprint of such issuance, setting forth the date of issuance, the number
and type of Voting Equity Securities issued, the number of Equity Securities
and Voting Equity Securities outstanding after the issuance and the resulting
Sprint's Percentage Interest (the "ISSUANCE NOTICE"). During the period
commencing on the date Sprint receives the Issuance Notice and ending at
11:59 p.m. on the 180th day following the date Sprint receives the Issuance
Notice (the "TOP-UP PERIOD"), the Affiliated Equity Holders shall have the
right to purchase, from time to time, in the open market or in one or more
private transactions from third parties such number of shares of Common Stock
as results in the Affiliated Equity Holders owning in the aggregate an amount
of Equity Securities up to (but no more than) the amount that causes Sprint's
Percentage Interest to equal the then applicable Sprint Ownership Ceiling. To
the extent that the Affiliated Equity Holders fail to exercise this purchase
rights during the Top-up Period, the Affiliated Equity Holders shall be
foreclosed during the term of this Agreement from acquiring additional Equity
Securities,
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whether in the form of Common Stock or otherwise, as a result of the
issuance(s) described in the Issuance Notice. Notwithstanding the foregoing,
if EarthLink mistakenly gives Sprint an Issuance Notice that it was not
required to give under this Section, and the Affiliated Equity Holders, in
reliance thereon, acquires Equity Securities so that Sprint's Percentage
Interest exceeds Sprint's Ownership Ceiling, then Sprint and Sprint L.P.
shall, and shall cause the Affiliated Equity Holders to, dispose of shares of
Equity Securities in accordance with Section 3.04.
(b) If EarthLink proposes to issue Voting Equity Securities
that for any reason, other than as a result of antidilution provisions, stock
dividends rights and substantially similar features, have voting power that
may, with respect to their number of common stock equivalent votes, fluctuate
over time, EarthLink shall provide written notice (a "SUBSCRIPTION NOTICE")
to Sprint of its intent to effect such issuance at least five (5) business
days prior to the date on which the Board of Directors authorizes such
issuance. The Subscription Notice shall set forth (i) the number and terms of
such Voting Equity Securities, (ii) the consideration (or manner of
determining the consideration by reference to the market price), if any, for
which such Voting Equity Securities are proposed to be issued and the terms
of payment, (iii) the number of Equity Securities and Voting Equity
Securities that will be outstanding after the proposed issuance, (iv) the
then-current Sprint Percentage Interest and (v) the date of the proposed
issuance. If Sprint, within ten (10) business days after receipt of a
Subscription Notice, indicates its intention to EarthLink to exercise its
rights pursuant to this Section 3.01(b), Sprint or any of the Affiliated
Equity Holders shall have the right to purchase up to a percentage of such
Equity Securities equal to the then-current Sprint Ownership Ceiling. Such
purchase shall be on the same terms and conditions as the Voting Equity
Securities are issued and sold to the other purchasers (by way of example, if
the Voting Equity Securities are sold in an underwritten public offering,
then the terms and conditions, including price, on which they are offered to
the public; if the Equity Securities are sold through a placement agent, then
on the terms and conditions, including price, on which they are offered to
the public or private purchasers by the placement agent, as the case may be)
(except that, if such Voting Equity Securities are issued for consideration
other than cash, Sprint shall pay the lower of (x) the same purchase price
per share and other terms, including the same form of consideration paid by
the other purchasers of the Voting Equity Securities or (y) the fair market
value per share thereof, determined by an independent appraiser mutually
selected by EarthLink and Sprint, in either case, times the number of shares
Sprint is entitled to purchase); PROVIDED, HOWEVER, that if Sprint's purchase
of such Voting Equity Securities would, in the opinion of its counsel, give
rise to the application of waiting periods under the HSR Act, Sprint shall be
obligated to consummate such purchase as soon as practicable after the
applicable waiting period has elapsed or terminated on an unconditional
basis, and Sprint and EarthLink shall, during such time, diligently and in
good faith seek expiration or termination of the applicable waiting period.
(c) On or before January 15 of each calendar year,
EarthLink shall provide written notice to Sprint setting forth the number and
type of Voting Equity Securities issued by EarthLink during the previous
calendar year as a result of the exercise or conversion, as applicable, of
options, warrants and other convertible Equity Securities that are not also
Voting Equity Securities (the "OPTION ISSUANCE NOTICE"). In addition, from
time to time, upon the
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exercise or conversion of an aggregate number of non-Voting Equity Securities
into Voting Equity Securities as results in an increase of the total voting
power of the outstanding Voting Equity Securities by one-half of one percent
(1/2%) or more (as compared to such total voting power prior to any such
exercises or conversions), EarthLink shall provide written notice to Sprint
setting forth the number and type of Voting Equity Securities so issued
(also, an Option Issuance Notice). During the period commencing on the date
Sprint receives the Option Issuance Notice and ending at 11:59 p.m. on the
180th day following the date that Sprint receives the Option Issuance Notice
(the "OPTION TOP-UP PERIOD"), the Affiliated Equity Holders shall have the
right to purchase from time to time in the open market or in one or more
private transactions from third parties such number of shares of Common Stock
as results in the Affiliated Equity Holders owning in the aggregate an amount
of Equity Securities up to (but no more than) the amount that causes Sprint's
Percentage Interest to equal the then applicable Sprint Ownership Ceiling. To
the extent that the Affiliated Equity Holders fail to exercise this purchase
right during the Option Top-up Period, the Affiliated Equity Holders shall be
foreclosed during the term of this Agreement from acquiring additional Equity
Securities, whether in the form of Common Stock or otherwise, as a result of
the issuance(s) reported in the Option Issuance Notice. Notwithstanding the
foregoing, if EarthLink mistakenly gives Sprint an Option Issuance Notice
that it was not required to give under this Section, and the Affiliated
Equity Holders, in reliance thereon, acquires Equity Securities so that
Sprint's Percentage Interest exceeds Sprint's Ownership Ceiling, then Sprint
and Sprint L.P. shall, and shall cause the Affiliated Equity Holders to,
dispose of shares of Equity Securities in accordance with Section 3.04.
SECTION 3.02. RESETTING OF SPRINT'S OWNERSHIP CEILING.
(a) To the extent the Affiliated Equity Holders fail to
fully exercise their Top-up Rights within the Top-up Period or Option Top-up
Period, as applicable, Sprint's Ownership Ceiling shall be immediately
reduced to a level equal to Sprint's Percentage Interest as of the end of
such period (assuming, for this purpose, that the Affiliated Equity Holders
have exercised in full their Top-up Rights with respect to any other
then-pending Top-up Period(s) or Option Top-up Period(s)).
(b) If any of the Affiliated Equity Holders sells,
transfers or otherwise disposes of any Equity Securities, except for
transfers in accordance with Section 5.01(a) by and between Sprint, Sprint
L.P., the Affiliated Equity Holders and any Affiliates of any of the
foregoing, Sprint's Ownership Ceiling shall be immediately reduced to a level
equal to Sprint's Percentage Interest immediately after such sale, transfer
or disposition (assuming, for this purpose, that the Affiliated Equity
Holders have exercised in full their Top-up Rights with respect to any
then-pending Top-up Period(s) or Option Top-up Period(s)).
SECTION 3.03. SUSPENSION OF TOP-UP RIGHTS. The Affiliated
Equity Holders' rights to purchase additional Equity Securities pursuant to
Section 3.01 shall be automatically suspended and of no force and effect if,
and for so long as, Sprint's Percentage Interest is greater than Sprint's
Ownership Ceiling. The Affiliated Equity Holders' rights to acquire
additional Equity Securities under Section 3.01 shall recommence and be in
full force and effect, subject to the other terms and conditions of this
Agreement, at such time as Sprint's Percentage Interest is less than Sprint's
Ownership Ceiling.
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SECTION 3.04. SPRINT'S OBLIGATION TO REMEDY. If any agent,
representative or Affiliate of an Affiliated Equity Holder shall violate any
provision of this Article III by purchasing Equity Securities for the account
of any Affiliated Equity Holder or an Affiliate of any Affiliated Equity
Holder or take any other action in violation of this Article III for or on
behalf of any Affiliated Equity Holder or an Affiliate of any Affiliated
Equity Holder, Sprint and Sprint L.P., jointly and severally, covenant and
agree to, and shall cause each Affiliated Equity Holder to, within 14 days of
becoming aware of such violation, take such action as is necessary to remedy
such violation, including selling all Equity Securities purchased in
violation of this Article III, and, upon effecting such remedy, such
violation shall not be deemed to be a breach of this Agreement. Sprint and
Sprint L.P., jointly and severally, covenant and agree that neither Sprint,
Sprint L.P. nor any of the Affiliated Equity Holders will vote any Voting
Equity Security acquired (either directly or upon conversion of a convertible
Equity Security) in violation of this Agreement, and any attempt to do so
shall be null, void and of no effect.
ARTICLE IV
PURCHASES OF ADDITIONAL EQUITY SECURITIES; BUSINESS COMBINATIONS
SECTION 4.01. GENERAL STANDSTILL OBLIGATIONS.
(a) Subject to the following provisions and except for (1)
purchases of shares made by the Affiliated Equity Holders permitted under the
provisions of Section 3.01, or (2) offers, purchases and other matters
effected by Sprint in accordance with the provisions of Section 4.02, Sprint
and Sprint L.P., jointly and severally, covenant and agree that neither
Sprint, Sprint L.P. nor any of the Affiliated Equity Holders nor any
Affiliates of any of the foregoing will, nor will Sprint, Sprint L.P. or any
Affiliated Equity Holders or any of their Affiliates authorize any of their
agents or representatives to, without prior written consent of EarthLink's
Board of Directors, directly or indirectly, acting alone or in concert with
other Persons:
(i) acquire, offer to acquire, or agree to
acquire, directly or indirectly, by purchase or otherwise, any Equity
Securities or direct or indirect rights to acquire any Equity Securities, or
any equity securities of any Subsidiary of EarthLink, material assets of
EarthLink or any Subsidiary or division of EarthLink or of any successor or
controlling Person of any of the foregoing, except for its right to convert
Series A Stock, Series B Stock or other Equity Securities in accordance with
their express terms, and to receive stock dividends, stock splits and other
distributions of Equity Securities;
(ii) make, initiate or in any way encourage,
directly or indirectly, any "solicitation" of proxies to vote (as such terms
are used in the rules of the SEC), or seek to advise or influence any person
or entity, other than the Affiliated Equity Holders, with respect to the
voting of any Equity Securities of EarthLink; PROVIDED, HOWEVER, the
Affiliated Equity Holders may respond to or support a proxy solicitation for
a stockholder proposal, or contest of a proposal, initiated by a third party,
EXCEPT that in no event may Sprint respond to or support any proposal in
opposition to EarthLink's Board of Directors with respect to (1) Sprint's
obligations, rights, prohibitions and limitations under this Agreement, or
(2) the structure of, authority of, or composition of EarthLink's Board of
Directors, or (3) the institution, removal, redemption or
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buy-out of a stockholder's rights plan instituted by the Board of Directors
in accordance with this Agreement;
(iii) make any public announcement with respect
to, or submit a proposal for, or offer to effect (with or without conditions)
any purchase of any of the assets of EarthLink or any Subsidiary or division
of EarthLink, any tender or exchange offer for any of the Equity Securities
of EarthLink or a merger, consolidation, combination, share exchange,
reorganization or other extraordinary transaction involving EarthLink or any
of its Equity Securities or assets or any Subsidiary of EarthLink or any of
such Subsidiary's equity securities or assets, or otherwise, except for any
announcement required in connection with Section 4.02 hereof;
(iv) form, join or in any way participate in a
"group" as defined in Rule 13d-5(b) under the Exchange Act in connection with
any of the foregoing; or
(v) request EarthLink or any of its
representatives, directly or indirectly, to amend or waive any provision of
this Section 4.01. PROVIDED, HOWEVER, that none of Section 4.01(a) shall
prohibit Sprint from offering to acquire or acquiring any entity that holds
Equity Securities if Sprint (i) provides an irrevocable proxy to EarthLink or
its designee to vote such shares of Equity Securities simultaneously with the
completion of such acquisition and (ii) seeks to transfer such Equity
Securities to a Person or Persons other than an Affiliated Equity Holder
within 14 days of the acquisition, or if that time period is not reasonable
given market conditions and the number of Equity Securities held by the
acquired entity, as promptly as reasonably practicable (consistent with
maximizing value) after the completion of such acquisition; PROVIDED FURTHER,
that if such entity holds 5% or more of EarthLink's outstanding Equity
Securities, Sprint shall be permitted to offer to acquire such entity but may
not acquire such entity unless it has first disposed of sufficient Equity
Securities to bring such percentage below 5%.
(b) Sprint will promptly advise EarthLink in writing of any
inquiry or proposal made to it or any of the Affiliated Equity Holders with
respect to any of the foregoing and describe in writing, in reasonable
detail, the terms and conditions thereof.
(c) If Sprint, Sprint L.P., any Affiliated Equity Holder or
any agent, or representative or Affiliate of any of the foregoing shall
violate any provision of this Section 4.01 by purchasing Equity Securities
for the account of Sprint, Sprint L.P., any Affiliated Equity Holder or any
Affiliate of any of the foregoing or take any other action in violation of
this Section 4.01 for or on behalf of Sprint, Sprint L.P., any Affiliated
Equity Holder or any Affiliate of any of the foregoing, Sprint and Sprint
L.P., jointly and severally, covenant and agree to, and shall cause each
Affiliated Equity Holder and each Affiliate of the Affiliated Equity Holders
to, within 14 days of becoming aware of such violation, take such action as
is necessary to remedy such violation, including selling all Equity
Securities purchased in violation of this Section 4.01, and, upon effecting
such remedy, such violation shall not be deemed to be a breach of this
Agreement. Sprint and Sprint L.P., jointly and severally, covenant and agree
that neither Sprint, Sprint L.P. nor any of the Affiliated Equity Holders
will vote any Voting Equity Security
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acquired (either directly or upon conversion of a convertible Equity
Security) in violation of this Agreement, and any attempt to do so shall be
null, void and of no effect.
SECTION 4.02. BUSINESS COMBINATION DISCUSSIONS AND
THIRD-PARTY OFFERS.
(a) At such time as EarthLink commences bona fide
discussions with another entity, or group of related entities, to affect a
Business Combination, EarthLink shall promptly notify Sprint and shall
continue to keep Sprint reasonably informed on a regular basis of the
substance of the discussions, the progress being made with respect to the
transaction that is the subject of the discussions, the material commercial
terms of the subject transaction and other such information reasonably
related to the discussions. All such information disclosed by EarthLink to
Sprint shall constitute Confidential Information.
(b) If EarthLink receives an offer from a third party,
whether that offer was solicited by EarthLink or not, and whether or not
EarthLink has provided a notice pursuant to Section 4.02(a), then at such
time, if any, as EarthLink believes that the transaction subject to the offer
will become subject to a definitive agreement and publicly announced and
recommended to EarthLink's stockholders by EarthLink (a "RECOMMENDED
THIRD-PARTY OFFER") within the next ten (10) calendar days, EarthLink shall
immediately deliver to Sprint a written notice describing the form and
structure of the possible Business Combination and the then proposed terms
and conditions (including pricing information) for such transaction (the
"OFFER NOTICE").
(c) If subsequent to EarthLink's delivery of an Offer
Notice:
(i) if the transaction consideration payable with
respect to the transaction that is the subject of the Offer Notice is stated
either solely in the form of a specific cash amount per share, or in the form
of a cash amount per share determined by applying a numerical factor to the
stock price of either EarthLink or the other entity that is party to the
transaction and either (A) such specific cash amount per share or (B) the
numerical factor to be applied to the stock price (but not the time period,
if any, used in determining the cash amount per share) is increased or
decreased by 10% or more from the amount or factor specified in the Initial
Offer Notice; or
(ii) if the transaction consideration payable with
respect to the transaction that is the subject of the Offer Notice is stated
solely in the form of an exchange ratio applicable to the securities of
EarthLink and the other entity that is a party to the transaction, and the
exchange ratio applicable to the share exchange (but not the time period, if
any, used in determining some element of the exchange ratio) is increased or
decreased by 10% or more from the ratio specified in the Initial Offer
Notice; or
(iii) if the transaction consideration payable
with respect to the transaction that is the subject of the Offer Notice is
stated in the form of both securities of EarthLink and the other entity that
is a party to the transaction and cash, and either component (as described in
clauses (i) and (ii) above) is increased or decreased by 10% or more from the
component specified in the Initial Offer Notice;
11
then EarthLink shall provide a subsequent Offer Notice to Sprint.
(d) For the longer of seven (7) calendar days or five (5)
business days following Sprint's receipt of an Offer Notice (the "SPRINT
OFFER PERIOD"), EarthLink may not enter into a definitive agreement with
respect to the Offer and must continue to provide information required to be
provided pursuant to Sections 4.02(a) and (b). During the Sprint Offer
Period, the Affiliated Equity Holders shall be released from their
obligations under Section 4.01 insofar as is necessary, and only to the
extent necessary, to permit the Affiliated Equity Holders, subject to the
terms and conditions of this Agreement, to make a single Sprint Offer to
EarthLink's Board of Directors. If requested by EarthLink's Board of
Directors to do so, the Affiliated Equity Holders shall be further released
from their obligations under Section 4.01 insofar as is necessary, and only
to the extent necessary, to permit them to negotiate the terms of the Sprint
Offer with EarthLink's Board of Directors. Otherwise, Sprint's obligations
under Section 4.01 shall continue in full force and effect.
(e) If EarthLink executes a definitive agreement to effect
a Business Combination or the Board of Directors otherwise recommends such
transaction to EarthLink's stockholders, the Affiliated Equity Holders shall
be released from their obligations under Section 4.01 insofar as necessary,
and only to the extent necessary, to permit Sprint, subject to the terms and
conditions of this Agreement, to make a single Sprint Offer to the Board of
Directors. If requested by EarthLink's Board of Directors to do so, the
Affiliated Equity Holders shall be further released from their obligations
under Section 4.01 insofar as is necessary, and only to the extent necessary,
to permit them to negotiate the terms of the Sprint Offer with EarthLink's
Board of Directors. Otherwise, Sprint's obligations under Section 4.01 shall
continue in full force and effect.
(f) If EarthLink's Board of Directors determines to
recommend a Sprint Offer to EarthLink's stockholders, the Affiliated Equity
Holders will be temporarily released from the standstill obligations of
Section 4.01 insofar as is necessary, and only to the extent necessary, for
the Affiliated Equity Holders to pursue and consummate the transaction
contemplated by the Sprint Offer; otherwise, Section 4.01 shall continue in
full force and effect.
(g) Upon the commencement of a third-party transaction,
which, if consummated, would constitute a Business Combination, that the
Board of Directors does not recommend to its stockholders for approval, and
if Sprint's board of directors determines, in good faith upon consultation
with independent legal counsel and its outside financial advisors, that the
consummation of such transaction is reasonably likely to occur, then the
Affiliated Equity Holders shall be released from its obligations under
Section 4.01 insofar as is necessary, and only to the extent necessary, to
permit Sprint, subject to the terms and conditions of this Agreement, to make
a single Sprint Offer to the Board of Directors; otherwise, Section 4.01
shall continue in full force and effect.
(h) None of the Affiliated Equity Holders shall be entitled
to exercise rights of appraisal under Section 262 of the Delaware General
Corporation Law (or any successor thereto) as to any of the Equity Securities
owned by them in respect of any Business Combination effected in connection
with a Recommended Third-Party Offer.
12
SECTION 4.03. TAKEOVER DEFENSES. EarthLink may adopt a
stockholders' rights plan (commonly known as a "poison pill") at any time and
in its sole discretion. However, stockholders' rights plan must be structured
so that Sprint's then current level of ownership of Equity Securities, and
its subsequent level of ownership of Equity Securities permitted by this
Agreement, does not result in any Affiliated Equity Holder being deemed an
"acquiring person" or similar designation under the stockholders' rights plan
or otherwise being adversely affected by such plan in a manner inconsistent
with this Agreement. The holders of Series A Stock and Series B Stock shall
be entitled to vote as a class on any matter proposed to EarthLink's
stockholders, the effect of which would be (a) to amend such stockholders'
rights plan in a manner adverse to such holders, or (b) to adopt a new
stockholders' rights plan that would be adverse to such holders.
ARTICLE V
TRANSFER OF EQUITY SECURITIES
SECTION 5.01. TRANSFER OF EQUITY SECURITIES.
(a) None of the Affiliated Equity Holders shall, directly
or indirectly, sell, transfer or otherwise dispose of any Equity Securities
except in accordance with federal and state law.
(b) None of the Affiliated Equity Holders shall, directly
or indirectly, sell, transfer or otherwise dispose of any interest in any
Equity Securities, including the disposition of the securities of an
Affiliated Equity Holder, to any purchaser or group (within the meaning of
Rule 13d-5(b) under the Exchange Act) of purchasers, if, after giving effect
to such sale, such purchaser or group of purchasers would own, or have the
right to acquire, 5% or more of the Equity Securities then outstanding;
however, if EarthLink has a stockholders rights plan (a "poison pill") in
effect, the 5% ceiling shall be increased to a level equal to the ownership
threshold necessary to trigger the stockholders rights plan.
(c) Purported transfers of Equity Securities that are not
in compliance with this Article V shall be void and of no force or effect.
(d) Notwithstanding the foregoing, sales, transfers and
dispositions among a group consisting only of Affiliated Equity Holders
and/or Affiliates of the Affiliated Equity Holders shall not constitute a
breach of this Section 5.01.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 6.01. REPRESENTATIONS AND WARRANTIES.
(a) Each of Sprint and Sprint L.P. represents and warrants
to EarthLink and Operations as follows:
13
(i) Sprint is a corporation, and Sprint L.P. is a
partnership, that is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated and has the
power and authority to execute, deliver and perform this Agreement.
(ii) This Agreement has been duly executed and
delivered by each of Sprint and Sprint L.P., constitutes 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 (A)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, and (B)
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement
did not, and the performance hereof, 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 (A) in the
case of Sprint, the certificate of incorporation or bylaws of Sprint, (B) in
the case of Sprint L.P., the partnership agreement of Sprint L.P., (C) any
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit or license applicable to either Sprint or
Sprint L.P. or any of the Equity Securities owned by either, or (D) any
federal, state, local, municipal, foreign, international, multinational or
other judicial or administrative order, judgment, decree, constitution, law
ordinance, common law of the State of Kansas, regulation, statute or treaty
applicable to either of Sprint or Sprint L.P. or any of the Equity Securities
owned by either. 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 either Sprint or Sprint
L.P. or in connection with the execution and delivery of this Agreement.
(iv) Except as set forth in this Agreement, none
of the Equity Securities owned by either of Sprint or Sprint L.P. is subject
to (A) any right of first refusal, (B) any right to purchase, acquire or
vote, or (C) any power of attorney.
(v) Each of Sprint and Sprint L.P. has the sole
power, right and authority to vote the Voting Equity Securities beneficially
owned by it in accordance with the terms of this Agreement.
(vi) Each of Sprint and Sprint L.P. will take all
action necessary to cause other Affiliated Equity Holders bound by the terms
of this Agreement to abide by the terms of this Agreement.
(b) Each of EarthLink and Operations represents and
warrants to Sprint and Sprint L.P. as follows:
(i) EarthLink and Operations are corporations that
are duly organized, validly existing and in good standing under the laws of
the jurisdiction in which they are incorporated or organized and have the
power and authority to execute, deliver and perform this Agreement.
14
(ii) This Agreement has been duly executed and
delivered by each of EarthLink and Operations, constitutes 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 (A)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, and (B)
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement
did not, and the performance hereof, 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 (A) the
certificates of incorporation or bylaws of EarthLink or Operations, (B) any
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit or license applicable to either EarthLink or
Operations, or (D) any federal, state, local, municipal, foreign,
international, multinational or other judicial or administrative order,
judgment, decree, constitution, law ordinance, common law of the State of
Delaware, regulation, statute or treaty applicable to either of EarthLink or
Operations. 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 either EarthLink or Operations or
in connection with the execution and delivery of this Agreement.
SECTION 6.02. STOCK OWNERSHIP REPORTS. The following
informational reporting requirements shall apply during the term of this
Agreement:
(a) EARTHLINK STOCK REPORT. EarthLink shall provide to
Sprint in writing a monthly report (the "EARTHLINK OUTSTANDING STOCK REPORT")
setting forth certain information and data pertaining to EarthLink for each
calendar month (a "MONTH"), which shall be delivered to Sprint on or before
the 15th day of the next following month (a "REPORT DELIVERY DATE"). The
EarthLink Outstanding Stock Report shall be reasonable in detail and shall
clearly set forth all of the following information:
(i) the number of Voting Equity Securities issued
by EarthLink during the Month;
(ii) the number of Equity Securities that are not
Voting Equity Securities issued by EarthLink during the Month;
(iii) the total number of shares of Common Stock
outstanding on the last day of the Month;
(iv) the total number of shares of each type of
Voting Equity Securities outstanding on the last day of the Month; and
(v) EarthLink's calculation of Sprint's Percentage
Interest as of the last day of the Month.
15
(b) SPRINT OWNERSHIP REPORT. Sprint shall provide to
EarthLink in writing a monthly report clearly setting forth, in reasonable
detail, the number of shares of Equity Securities of EarthLink bought and
sold by the Affiliated Equity Holders during the Month and Sprint's
calculation of Sprint's Percentage Interest as of the last day of the Month,
which calculation shall not be binding on Sprint, Sprint L.P. or the
Affiliated Equity Holders for the purpose of determining Sprint's Percentage
Interest (the "SPRINT OWNERSHIP REPORT"), which shall be delivered to
EarthLink on or before the Report Delivery Date; PROVIDED, HOWEVER, that
Sprint's only obligation with respect to furnishing a Sprint Ownership Report
for a month in which no ownership changes occurred shall be to notify
EarthLink in writing of that fact.
(c) Each EarthLink Outstanding Stock Report and Sprint
Ownership Report (individually, a "REPORT" and together, the "REPORTS") shall
state the month to which it applies, and shall be signed by an authorized
officer of the applicable party. EarthLink represents and warrants that each
EarthLink Outstanding Stock Report shall be true and correct in all material
respects on the Report Delivery Date. Sprint represents and warrants that
each Sprint Ownership Report shall be true and correct in all material
respects on the Report Delivery Date. If a Report is determined to be
incorrect in any respect at any time after delivery to the other party, the
submitting party must resubmit a true and accurate replacement Report which
identifies all such corrections; PROVIDED, HOWEVER, that the submission of
any replacement Report or the failure of any party to submit such replacement
Report shall not constitute a waiver by any other party hereto of any
substantive rights otherwise existing under this Agreement.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. TERMINATION. This Agreement shall terminate
at the earlier of (i) such time as Sprint's Ownership Ceiling is less than
five percent (5%), or (ii) the consummation of a Business Combination, or
(iii) such time as Sprint's Percentage Interest is one hundred percent (100%).
SECTION 7.02. SUSPENSION OF OBLIGATIONS AND RIGHTS.
Sprint's obligations and rights, and EarthLink's obligations and rights, set
forth in Articles II, III and IV shall be suspended commencing on the date
that Sprint's Percentage Interest is less than ten percent (10%) provided
that all Top-up Periods and Option Top-up Periods have expired. The
obligations, rights, prohibitions and restrictions of Articles III and IV
shall recommence and be in full force and effect at such time as Sprint's
Percentage Interest is equal to or greater than ten percent (10%).
SECTION 7.03. CONFIDENTIALITY. Each party will keep
Confidential Information of the other confidential and will only use such
Confidential Information to perform their respective obligations under this
Agreement. Upon termination or expiration of this Agreement, or upon written
request, each party will return or destroy all Confidential Information of
the other. Notwithstanding any other provision of the Agreement, neither
party will be restricted in using, in connection with its business
operations, any ideas, concepts, know-how and techniques which are retained
in the minds of employees who have had access to the other
16
party's Confidential Information (without reference to any physical or
electronic embodiment of such information), unless such use shall infringe
any of such party's patent rights or copyrights. This Section 7.03 shall
survive termination of this Agreement for two (2) years.
Confidential Information does not include information that
is:
(a) rightfully known to the recipient prior to negotiations
leading up to this Agreement except for Confidential Information exchanged by
the parties under other agreements they are or have been a party to;
(b) independently developed by the recipient without any
reliance on Confidential Information;
(c) part of the public domain or is lawfully obtained by
the recipient from a third party not under an obligation of confidentiality;
or
(d) required to be disclosed by law or legal process, so
long as the recipient uses reasonable efforts to cooperate with the
disclosing party in limiting disclosure.
SECTION 7.04. NOTICES. Unless otherwise provided herein,
any 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 (a) delivered by hand or sent by
certified mail, return receipt requested, (b) if sent by a
nationally-recognized overnight delivery service with delivery confirmed, or
(c) if telefaxed or telecopied, with receipt confirmed as follows:
EarthLink and Operations: 0000 Xxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn.: CEO
Telecopy No.: (000) 000-0000
and
0000 Xxxx Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attn: CEO
Telecopy No.: (000) 000-0000
With a copy to: Hunton & Xxxxxxxx
4100 Bank of America Plaza
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Hobby, Esq.
Telecopy No.: (000) 000-0000
17
Sprint: 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
and with an additional
copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxx III, Esq.
Telecopy No.: (000) 000-0000
The parties hereto 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. Notice
shall be deemed to have been given as of the date when so personally
delivered, when actually 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.
SECTION 7.05. ENTIRE AGREEMENT. This Agreement embodies the
entire agreement and understanding of the parties in respect to the matters
contemplated hereby and thereby and supersedes and renders null and void all
other prior agreements and understandings, written and oral, with respect to
the subject matter hereof and thereof including the Governance Agreement and
all amendments thereto, prior to the effective date of this Agreement,
PROVIDED, THAT, this provision shall not abrogate any other written agreement
between the parties executed simultaneously with this Agreement, including,
without limitation, the Master Services Agreement, the Amended and Restated
Registration Rights Agreement and the Termination, Waiver and Release
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.
SECTION 7.06. WAIVER. 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 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 permitted in this
Agreement, neither the failure nor any delay by any party in exercising any
right, power or privilege under this
18
Agreement or the documents referred to in this Agreement or therein 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.
SECTION 7.07. SUCCESSORS AND ASSIGNS.
(a) Neither 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 Sprint or Sprint L.P. to any of their respective Affiliates who are
"controlled" (as such term is defined in Rule 12b-2 promulgated pursuant to
the Exchange Act) by Sprint or Sprint L.P., or (iii) pursuant to any merger
or sale of substantially all of the assets of Sprint or such Affiliates (or
any transaction having such effect) that is pursuant to an agreement entered
into after the Effective Date; PROVIDED, HOWEVER, that, in either such case,
before such assignment may take effect, the proposed successor or assignee
agrees in writing to be bound by all of the provisions hereof and neither
Sprint nor Sprint L.P. shall be released from their obligations hereunder by
any such assignment or transfer. 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. Any attempted
assignment in violation of this Section shall be void.
(b) In the event of any Change of Entity Transaction,
EarthLink will cause the Successor Entity, at or prior to the consummation of
the Change of Entity Transaction, to assume and agree to be bound by all of
EarthLink's obligations under this Agreement, and EarthLink shall deliver to
Sprint an agreement executed by a duly authorized officer of the Successor
Entity to such effect. In such event, all references to EarthLink in this
Agreement shall be deemed to be references to the Successor Entity.
SECTION 7.08. GOVERNING LAW. This Agreement shall be
construed in accordance with and governed by the laws of the State of
Delaware, without regard to conflict of laws principles.
SECTION 7.09. SEVERABILITY. If any term or provision of
this Agreement or the application thereof to either 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.
SECTION 7.10. COUNTERPARTS. This Agreement may be executed
in one or more counterparts each of which when so executed and delivered
shall for all purposes be
19
deemed to be an original but all of which, when taken together, shall
constitute one and the same Agreement.
SECTION 7.11. HEADINGS. The table of contents, 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 interpretation hereof.
SECTION 7.12. NO THIRD-PARTY BENEFICIARIES. Nothing in this
Agreement or any Ancillary Agreements, express or implied, shall create or
confer upon any Person (including but not limited to any employees), 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.
SECTION 7.13. INTERPRETATION.
(a) Each party is a sophisticated legal entity 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 upon any document or
written or oral information previously furnished to or discovered by it or
its representatives, other than this Agreement and the documents and
instruments contemplated hereby.
(b) No provision of this Agreement shall be interpreted in
favor of, or against, either of the parties by reason of the extent to which
either 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.
SECTION 7.14. EXCLUSIVE JURISDICTION AND CONSENT TO SERVICE
OF PROCESS. The parties agree that any legal action arising out of or
relating to this Agreement or the transactions contemplated hereby or thereby
shall be instituted by the parties 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 Section 7.04. Nothing
contained herein shall be deemed to affect the right of any party to serve
process in any manner permitted by applicable law.
SECTION 7.15. AMENDMENT. No amendment, modification or
alteration of the terms or provisions of this Agreement or any Ancillary
Agreement, including any Schedules and Exhibits hereto or thereto, shall be
binding unless the same shall be in writing and duly executed by the party
against whom such amendment, modification or alteration is sought to be
enforced.
SECTION 7.16. WAIVER OF JURY TRIAL. EACH OF EARTHLINK,
OPERATIONS, SPRINT AND SPRINT L.P. HEREBY IRREVOCABLY
20
AND UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN
ANY ACTION INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
SECTION 7.17. SPECIFIC PERFORMANCE. The parties agree that
immediate irreparable damages for which there is no adequate remedy at law
would occur in the event that any provision of this Agreement is not
performed in accordance with the specific terms hereof or is otherwise
breached. It is accordingly agreed that in the event of a failure by a party
to perform its obligations under this Agreement, the non-breaching party
shall be entitled to specific performance through injunctive relief to
prevent breaches of the provisions of this Agreement and to enforce
specifically the provisions of this Agreement in any action instituted in
any court having subject matter jurisdiction, in addition to any other remedy
to which such party may be entitled, at law or in equity.
SECTION 7.18. FILING OF CERTIFICATES OF DESIGNATIONS.
Immediately upon execution of this Agreement, EarthLink shall cause the
Certificates of Designation, as amended pursuant to the certificates of
amendment therefor and of even date herewith (attached hereto as composite
EXHIBIT A), to be filed with the Secretary of State of the State of Delaware,
and shall provide Sprint with proof of such filing.
21
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
SPRINT CORPORATION
By: /s/
------------------------------------
Name:
Title:
SPRINT COMMUNICATIONS COMPANY L.P.
By: U.S. Telecom, Inc., General Partner
By: /s/
------------------------------------
Name:
Title:
EARTHLINK, INC.
By: /s/
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: CEO
EARTHLINK OPERATIONS, INC.
By: /s/
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: CEO
[Signature Page for Amended and Restated Governance Agreement]
