EXHIBIT 10.1
DOMAIN PORTFOLIO PURCHASE AGREEMENT
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THIS AGREEMENT (hereinafter the "Agreement") made this 23rd day of
December, 2004, by and among EASYLINK SERVICES CORPORATION, a Delaware
corporation with its principal place of business at 00 Xxxxxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter the "Seller"); NJ DOMAINS LLC, a New
Jersey limited liability company with an address of 000 Xxxxxxxxxxxxx Xxxx,
Xxxxxxx, Xxx Xxxxxx 00000 (hereinafter the "Buyer"); and XXXXXX XXXXXX, an
individual with an address of 000 Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter "Xxxxxx"). The Seller, the Buyer and Xxxxxx are each a "Party" and
together the "Parties."
W I T N E S S E T H
WHEREAS, the Seller is the record or beneficial registrant of the
Internet domain names listed on Exhibit I hereto (hereinafter, each a "Name" and
collectively the "Portfolio"), and the Seller directly or indirectly through one
or more subsidiaries owns the Shares (as defined in Article One, Section 2); and
WHEREAS, Xxxxxx is a Director and Chairman of the Board of Seller; and
WHEREAS, the Seller has determined to sell the Portfolio and the
Shares; and
WHEREAS, Xxxxxx made a proposal to purchase the Portfolio and the
Shares; and
WHEREAS, the Board of Directors of the Seller appointed a Special
Committee of the Board of Directors to review and evaluate Xxxxxx'x proposal;
and
WHEREAS, the Special Committee, having considered the value of the
Portfolio and the value of Xxxxxx'x proposal (as amended from time to time since
the initial offer), and having reviewed the offers or indications of interest of
third parties for the Portfolio or portions thereof, has determined that it is
in the best interests of the Seller to sell, and has recommended that the Board
of Directors of the Seller approve the sale of, the Portfolio to the Buyer, an
entity controlled by Xxxxxx, under the terms and conditions set forth herein;
WHEREAS, the Board of Directors of the Seller having considered the
recommendation of the Special Committee, has approved the sale of the Portfolio
and the Shares to Buyer under the terms and conditions set forth herein;
NOW THEREFORE, The Buyer, the Seller, and Xxxxxx agree as follows:
ARTICLE ONE
TERMS OF THE TRANSACTION
1. Purchase and Sale of the Portfolio Generally
Upon the terms and conditions contained herein, the Seller hereby
sells, transfers and assigns all of the Seller's right, title and interest in,
to and under the Portfolio to the Buyer and the Buyer hereby buys all of the
Seller's right, title and interest in, to and under the Portfolio including any
IP Rights (as hereinafter defined) that Seller may have in the Portfolio. Except
as set forth below in Section 2, the "Sale" of the Portfolio (or of an
individual Name) as used herein means the authorization by the Seller of a
change of registration of all the Names within the Portfolio (or of a Name) from
the current registrant (which is either the Seller, a nominee for the Seller, or
a predecessor corporation of the Seller) to the Buyer.
2. Purchase and Sale of Specific Names and Rights
a. Xxxx.xxx Names
The Seller is the registrant of record for "Xxxx.xxx" and
"Xxxxxxxxx.xxx" (hereinafter the "Xxxx.xxx Names"), but the beneficial
registrant of the Xxxx.xxx Names is Xxxx.xxx, Inc., a corporation formed in
accordance with the laws of the state of Delaware and majority- owned by the
Seller. Therefore, with respect to the Xxxx.xxx Names, Sale shall mean that the
Seller is transferring to the Buyer, and the Buyer is accepting, all of the
Seller's and its subsidiaries' shares of capital stock of Xxxx.xxx, Inc. (the
"Xxxx.xxx Shares"), including all the rights, powers, obligations, and
liabilities appurtenant thereto. The Buyer acknowledges receipt of the stock
certificates numbered [____] together with an executed stock power in the form
attached hereto as Exhibit A. Each of the Xxxx.xxx Names shall be deemed to be a
Name and to be part of the Portfolio subject to the terms of this Agreement.
b. Xxxxx.xxx Names
The Seller is the registrant of record for "Xxxxx.xxx,"
"Xxxxxxxxxxx.xxx," "Xxxxx.xxx," "Xxxxxxxxxx.xxx," "Xxxxxxxxxxx.xxx,"
"XxXxxxx.xxx," "Xxxxx.xxx," "Xxxxxxxxxxxx.xxx," Xxxxxxxx.xxx," and
"Xxxxxxxx.xxx" (hereinafter the "Xxxxx.xxx Names") but the beneficial registrant
of the Xxxxx.xxx Names is Xxxxx.xxx, Inc., a corporation formed in accordance
with the laws of the state of New Jersey and wholly-owned by Seller. Therefore,
with respect to the Xxxxx.xxx Names, Sale shall mean that the Seller is
transferring to the Buyer, and the Buyer is accepting, all of the Seller's and
its subsidiaries' shares of capital stock of Xxxxx.xxx, Inc. (the "Xxxxx.xxx
Shares;" together with the Xxxx.xxx Shares, the "Shares"), including all the
rights, powers, obligations, and liabilities appurtenant thereto, provided
however that the Seller shall be responsible for any liabilities set forth on
Exhibit B (hereinafter "Excluded Liabilities"). Each of the Xxxxx.xxx Names
shall be deemed to be a Name and to be part of the Portfolio subject to the
terms of this Agreement.
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c. Telephone Number
The Seller is the registrant of record of the telephone number
"000-000-0000" and the Seller hereby sells, transfers and assigns all of the
Seller's right, title and interest in, to, and under said telephone number to
the Buyer. The Seller agrees to use its best efforts to transfer said telephone
number to the Buyer. The telephone number is not subject to the Domain Call
Option set forth below.
3. Closing of the Purchase and Sale
The Closing of the Sale is simultaneous with the execution of this
Agreement this even date.
4. Purchase Price
In consideration for the Sale of the Portfolio and the Shares to the
Buyer, the Buyer and Xxxxxx shall provide the following consideration to the
Seller:
a. Consideration at Closing
The Buyer and Xxxxxx are providing the following consideration at
the Closing:
i. Cash
One Million U.S. Dollars (US$1,000,000.00) delivered by the Buyer,
either by certified bank check or wire transfer of immediately available funds,
simultaneously with the execution of this Agreement.
ii. Conversion of Class B Stock
The conversion of the One Million (1,000,000) shares of Class B
common stock of the Seller owned by Xxxxxx into Class A common stock, such
conversion performed in accordance with the terms and conditions of the Seller's
Amended and Restated Certificate of Incorporation. Simultaneous with the
execution of this Agreement, Xxxxxx has executed a Notice to Convert, in the
form attached hereto as Exhibit C, and delivered said Notice to Convert to the
Seller together with the stock certificate or certificates representing such
shares. The Seller acknowledges receipt of such Notice to Convert.
iii. Termination of Employment Agreement
The termination of employment under, and the amendment of the
Employment Agreement by and between Xxxxxx and the Seller, dated November 12,
2002, and amended on November 12, 2003. Simultaneous with the execution of this
Agreement, Xxxxxx has terminated his employment under said Employment Agreement,
in the form attached hereto as Exhibit D, and delivered said termination to the
Seller. The Seller acknowledges receipt of such termination.
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b. Post Closing Consideration
The Buyer and Xxxxxx agree to provide additional consideration to
the Seller following the Closing as follows:
i. Domain Revenue Share
The Buyer shall pay to the Seller the following amounts:
(1) For the period running from the date of this
Agreement to the last day of the month during which
the first (1st) anniversary of this Agreement occurs
(hereinafter the "First Year"): The Buyer shall make
no payments during the First Year.
(2) For two consecutive twelve (12) month periods running
from the conclusion of the First Year (hereinafter
each twelve month period a "Fifteen Percent Year" and
together the "Fifteen Percent Years"): Fifteen
percent (15%) of all revenue earned by the Buyer from
the licensing, lease or other use of any Name or from
the Shares.
(3) For two consecutive twelve (12) month periods running
from the conclusion of the second Fifteen Percent
Year (hereinafter each twelve month period a "Ten
Percent Year" and together the "Ten Percent Years"):
Ten percent (10%) of all revenue earned by the Buyer
from the licensing, lease or other use of any Name or
from the Shares.
The period of license or other use of a Name or the time of
declaration of a distribution in respect of the Shares shall be determinative of
the appropriate percentage of Domain Revenue Share to be paid to the Seller,
regardless of the date of actual receipt of payments by the Buyer. By way of
example, if a license payment is due to the Buyer for use of a Name during the
First Year, then no Domain Revenue Share shall be due to the Seller regardless
of when the license revenue is actually received by the Buyer. If a license
payment is due for use of a Name during the Fifteen Percent Years, but the
payment is late and made during the Ten Percent Years, the Domain Revenue Share
shall nevertheless be fifteen percent (15%).
For purposes of this provision, the amount of "revenue" shall mean
the amounts actually received by the Buyer at any time for the licensing, lease
or other use of a Name, excluding any applicable refunds and sales and VAT
taxes, or from distributions in respect of Shares. "Revenue" shall include all
receipts by the Buyer in connection with any Name or the Shares, regardless of
how such receipt is characterized or from whom it is received, excluding any
applicable refunds and sales and VAT taxes. If the Buyer shall make direct use
of a Name, then "revenue" shall include all revenue generated by the Buyer's use
of the Name. During the Control Period (as defined below), the Buyer shall
accept only cash as consideration for the licensing, lease or other use of any
Name. However, the Buyer may accept non-cash consideration if the following
conditions are met: (i) the Seller receives its applicable percentage of each
kind of consideration; and (ii) the Buyer has obtained the prior approval of the
Seller for non-cash consideration which approval shall not be unreasonably
withheld.
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All amounts due hereunder shall be paid by the Buyer to the Seller
within thirty (30) days of the conclusion of the Fifteen Percent Year or Ten
Percent Year during which such revenue was received by the Buyer.
ii. Seller Approval
(1) Required Approvals
Except as provided below, during the First Year, Fifteen
Percent Years, and Ten Percent Years (hereinafter collectively the "Control
Period"), the Buyer shall not, directly or indirectly, voluntarily or
involuntarily:
(a) sell, transfer, assign or otherwise dispose of
(including any disposition occurring by merger, consolidation or operation of
law involving Buyer or any other person) any Name or any of the Shares; or
(b) grant any security interest, lien or other encumbrance
(other than the grant of any license, lease or other right to use the Name that
does not violate the time restriction contained in clause (c) below) upon any of
Buyer's right, title and interest in, to or under any Name (hereinafter each a
"Security Interest" and collectively "Security Interests") or any of the Shares
unless (i) any such Security Interest is fully subordinated to the rights of the
Seller under this Agreement, including the Domain Revenue Share and the Domain
Call Option; (ii) the Seller's rights under this Agreement are recorded and of
public record through the filing of a Form UCC-1 Financing Statement or
otherwise; (iii) prior to the creation of any Security Interest, the prospective
secured party is notified of the existence of the Domain Call Option and agrees
to permit full pre-payment without premium or penalty of the Buyer's secured
debt in the event the Seller exercises the Domain Call Option; (iv) the cash
proceeds received by the Buyer from the Seller's exercise of the Domain Call
Option are used to fully retire the Buyer's debt secured by the Security
Interests; and (v) at all times prior to the expiration of the Domain Call
Option, the aggregate value of all debt secured by Security Interests shall not
exceed two million two hundred fifty thousand dollars ($2,250,000); or
(c) grant any license, lease or other right to use any Name
(whether by re-direction of Internet traffic for the Name to any other Internet
site or otherwise) which allows such license, lease or use of such Name after
the Control Period; or
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(d) use or permit any other person to use the Names in any
manner that is in violation of applicable law or the rights of any third parties
(it being understood that the Buyer may comply with its obligations under this
clause (d) with respect to any other person by obtaining contractual agreements
from such persons);
except, in the case of clauses (a), (b) or (c), with the prior written approval
of the Seller (hereinafter each a "Required Approval"). In the case of clauses
(a), (b) and (c), the Seller shall have sole and absolute discretion in its
decision whether to grant or deny a Required Approval and may deny a Required
Approval for any reason or for no reason; provided, however, that, in the case
of clause (c), the Seller shall not unreasonably deny a Required Approval if the
license, lease or other right to use any Name does not allow such license, lease
or use after one year after the Control Period. Unless otherwise agreed in
writing by the Seller, any such sale, transfer, assignment or other disposition,
license, lease or other right to use, or security interest, lien or other
encumbrance to which the Seller consents in writing shall be subject to and
subordinate to the Seller's rights under this Agreement and shall be conditioned
upon the other party thereto acknowledging in writing such rights and agreeing
to be bound by the Buyer's obligations hereunder with respect to the applicable
Name or Names or Shares. Any such sale, transfer, assignment or other
disposition, license, lease or other right to use, or security interest, lien or
other encumbrance to which the Seller shall not consent in writing shall be void
ab initio.
(2) Procedure
When the Buyer must obtain a Required Approval, the Buyer
shall give written notice of the proposed transaction to the Seller and shall
disclose to the Seller all of the terms and conditions relating to such
transaction (including any agreements to be executed and delivered in connection
therewith), the identity of the other party to such transaction and any direct
or indirect relationship or association (if any) between such party and the
Buyer before and after the consummation of the transaction. The Seller may
approve or reject any such proposed transaction in its sole and absolute
discretion and the Seller may also condition its approval of a proposed
transaction upon the Seller receiving a portion of the transaction proceeds. The
Seller shall respond in writing within fifteen (15) business days (excluding the
date of receipt of the proposal) with either its approval or rejection of the
proposed transaction. If the Seller does not respond in writing within fifteen
(15) business days as required hereunder, then the Buyer shall be entitled to
assume that the Seller has approved the proposed transaction. If the Seller
rejects a proposal, the Seller may, but is not required, to explain the basis
for its rejection in order to facilitate a re-negotiation of an acceptable (to
the Seller) transaction with respect to the Name or Shares in question.
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iii. Multi-Year Leases/Licenses
The Buyer agrees that if it grants any license, lease or other use
of a Name for a period longer than one (1) year, the amount of consideration
paid by the lessee/licensee under any such agreement shall be level and not
increase or decrease except for adjustments to reflect inflation or revenues
earned by the other party. In addition, no agreement shall provide for a
disproportionate amount of the consideration to be paid during the First Year.
iv. Audit Rights
During the Control Period, the Buyer shall maintain adequate books
and records (including but not limited to copies of all agreements entered into
and all revenues earned) relating to all transactions relating to the Names in
order to permit verification of compliance with the terms of this Agreement,
including but not limited to the determination of revenues earned from the
license, lease or other use of the Names, and the Seller shall have the right to
audit, not less frequently than annually and upon reasonable notice, the books
and records of the Buyer to verify such compliance. To the extent any revenue is
collected directly by Xxxxxx, or by an entity other than the Buyer, the Seller
shall have the right to review Xxxxxx'x books and records or the books and
records of such other entity.
v. Domain Call Option
During the Ten Percent Years, the Seller shall have the right to
purchase the Portfolio as it is then constituted (excluding, however, those
Names set forth in Exhibit E), and the Shares, and all of Buyer's rights, title
and interest in, to and under any agreements or arrangements relating to the
Names, from the Buyer for Four Million Five Hundred Thousand U.S. Dollars
(US$4,500,000.00), said option price to be payable by the Seller in cash at
closing, either by certified bank check or wire transfer. The Seller shall
exercise such right by sending written notice to Buyer at any time during the
Ten Percent Years and on or before the end of the Control Period. In order to
permit the Seller to consider whether to exercise its right to purchase the
Portfolio (as described above) and the Shares, upon the request of the Seller,
the Buyer shall deliver to the Seller copies of all agreements, books and
records relating to the Names and the Shares (or Xxxx.xxx, Inc. and Xxxxx.xxx,
Inc.) and disclose to the Seller any liabilities or obligations, whether
contingent or otherwise, to which the Names or the Shares (or Xxxx.xxx, Inc. and
Xxxxx.xxx, Inc.) are then subject and of which Buyer has knowledge.
In the event the Seller exercises the Domain Call Option, this
Agreement shall terminate, except for the obligations of the parties under
Article Six and Article Eight which shall survive termination.
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5. Allocation of Receipts
All payments received by the Buyer after the Closing for the license,
lease or other use of a Name or in respect of the Shares prior to the Closing
shall belong to the Seller and the Buyer shall account for same and promptly
remit such payments to the Seller upon receipt. All payments received by the
Seller before or after the Closing for the license, lease or other use of a Name
or in respect of the Shares after the Closing shall belong to the Buyer, and the
Seller shall account for same and promptly remit such payments to the Buyer upon
receipt. Any payments made by the Seller prior to the Closing for expenses
related to the Portfolio for periods following the Closing shall belong to the
Seller and the Buyer shall account for same and promptly remit such payments to
the Seller.
ARTICLE TWO
REPRESENTATIONS AND COVENANTS OF THE BUYER
The Buyer represents and warrants that:
1. The Buyer is duly organized, validly existing and in good standing
under the laws of the State of New Jersey and has full power and authority to
enter into this Agreement and perform its obligations hereunder.
2. The Buyer is qualified to conduct business in New Jersey.
3. This Agreement has been duly executed and delivered on behalf of the
Buyer and is a valid and binding contract of the Buyer, enforceable in
accordance with its terms.
4. The Buyer represents that, with the exception of the representations
and warranties set forth in Article Four hereto, it is not relying upon any
representation of the Seller respecting the condition of the Portfolio or any
Name or any of the Shares or Xxxx.xxx, Inc. or Xxxxx.xxx, Inc. and acknowledges
that the Portfolio and the Shares are being sold "as is" and with "all faults."
The Buyer acknowledges the disclosures set forth on Exhibit F.
5. The Buyer agrees to comply with the restrictions set forth on
Exhibit G.
6. Prior to the Closing, copies of all of the written agreements set
forth on Exhibit H to the extent in the possession of Seller were made available
to the Buyer. The Buyer acknowledges that not all of the agreements set forth on
Exhibit H have been reduced to writing or if reduced to writing are in the
possession of Seller.
7. Subject to its right to indemnification hereunder, the Buyer agrees
to assume all rights, responsibilities and risks associated with the Portfolio,
the Names and the Shares and further agrees to assume all risk of third party
claims relating to the Portfolio, the Names or the Shares, including but not
limited to claims that the use of one or more of the Names violates the rights
of third parties or applicable law and known or unknown liabilities of Xxxx.xxx,
Inc. or Xxxxx.xxx, Inc.
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8. The Buyer agrees that if it intends to let the registration of any
Name on Exhibit I, part 1, lapse for any reason, the Buyer will notify the
Seller of such intent in writing at least thirty (30) days prior to any such
proposed lapse, and the Seller shall have the right to resume the registration
of the Name without payment to the Buyer, and upon such registration Buyer shall
transfer and assign to Seller all of Buyer's right, title and interest in and to
such Name. If the Seller does not give notice of its intent to resume
registration of the Name within such thirty (30) day time period, the Buyer
shall be free to let such the registration of such Name lapse. The Buyer agrees
that it will not let the registration of any Name on Exhibit I, part 2, lapse
for any reason other than as permitted in paragraph 3 of Schedule 5.3 of that
certain Asset Purchase Agreement by and between Xxxx.xxx Inc. and Net2Phone
Email, Inc., dated March 30, 2001, assigned to eXact Advertising LLC on May 10,
2002, and further assigned to xxxx.xxx Corporation on November 12, 2003.
ARTICLE THREE
REPRESENTATIONS AND COVENANTS OF XXXXXX
Xxxxxx represents and warrants that:
1. This Agreement constitutes the legal, valid, and binding obligation
of Xxxxxx, enforceable against him in accordance with its terms.
2. Neither the execution and delivery of this Agreement by Xxxxxx nor
the consummation or performance by Xxxxxx hereunder will, directly or
indirectly, with or without notice or lapse of time, contravene, conflict with
or result in a violation or breach of any provision of any other agreement to
which Xxxxxx is a party.
3. To Xxxxxx'x actual knowledge, the agreements set forth on Exhibit H
are complete and accurate list of all agreements concerning the licensing, sale
or other use of one or more specific Names.
4. Xxxxxx is the owner of one hundred percent (100%) of the ownership
interests of the Buyer. No other person has any interest, whether legal or
equitable, in the Buyer or any of its assets.
5. Prior to the Closing, copies of all of the written agreements in
Seller's possession set forth on Exhibit H were made available to Xxxxxx. Xxxxxx
acknowledges that not all of the agreements set forth on Exhibit H have been
reduced to writing or are in Seller's possession.
Xxxxxx agrees that he shall not transfer (including transfers occurring
by merger, consolidation, issuance by Buyer of any equity interests or operation
of law) any ownership interests in the Buyer until the conclusion of the Control
Period, provided however that (i) a lifetime transfer of ownership interests in
the Buyer to another legal entity that is wholly owned and controlled by Xxxxxx
or (ii) a transfer at death of ownership interests in the Buyer to Xxxxxx'x
spouse and/or children, or to one or more trusts for the benefit of Xxxxxx'x
spouse and/or children shall not be considered a transfer of ownership
hereunder, provided that, in each case, such transfer is expressly subject to
the terms and conditions of this Agreement.
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ARTICLE FOUR
REPRESENTATIONS OF THE SELLER
The Seller represents and warrants that:
1. The Seller is duly organized, validly existing, and in good standing
under the laws of the State of Delaware and has full corporate power and
authority to enter into this Agreement and complete the transaction contemplated
herein.
2. The Seller is qualified to conduct business in New Jersey.
3. This Agreement has been duly executed and delivered on behalf of the
Buyer and is a valid and binding contract of the Seller enforceable in
accordance with its terms.
4. All of the agreements set forth on Exhibit H that have been reduced
to writing and are in the possession of the Seller were provided by the Seller
to the Buyer and Xxxxxx for their review prior to the Closing.
5. To the knowledge of the Seller, except for the security interests
described in Section 2(b) of Article Five, the Portfolio, the Names and the
Shares are free and clear of all liens and security interests.
6. The Portfolio consists of all of Seller's rights, title and interest
in, to and under the Names as set forth on the attached Exhibit I, parts 1 and
2, other than Seller's rights under this Agreement. Exhibit I, part 1, lists the
Names within the Portfolio for which the Seller owns the MX records. Exhibit I,
part 2, lists the Names within the Portfolio for which the Seller does not own
the MX records. MX record means, for any Name, that portion of the registration
data with respect to such Name which permits Internet mail ("email") to be
directed to an email address at such Name (e.g. xxxx@xxxxxxxxxx.xxx). Except as
otherwise set forth herein, the Seller does not make, and expressly disclaims,
any express or implied warranties of any kind whatsoever relating to the
Portfolio, the Names, the Shares, Xxxx.xxx, Inc. and Xxxxx.xxx, Inc., including
but not limited to, implied warranties of merchantability or fitness for a
particular purpose, warranties of title or non infringement.
The Seller expressly makes no representations, and gives no warranties,
with respect to the existence, status, assets, liabilities or condition of
either Xxxx.xxx, Inc. or Xxxxx.xxx, Inc.
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ARTICLE FIVE
CLOSING DELIVERIES
1. Xxxxxx'x Deliveries
a. Termination of Employment
Simultaneous with the execution of this Agreement, Xxxxxx hereby
terminates his employment by the Seller and resigns his position as a director
of the Board of Directors of the Seller and as Chairman of the Board of
Directors of the Seller. The Seller acknowledges receipt of Xxxxxx'x
resignations in the form attached hereto as Exhibit J.
b. Guaranty
Simultaneous with the execution of this Agreement, Xxxxxx guarantees
the performance of this Agreement by the Buyer and delivers a guaranty in the
form attached hereto as Exhibit K (hereinafter the "Guaranty"). The Seller
acknowledges receipt of the Guaranty.
c. Release
Simultaneous with the execution of this Agreement, Xxxxxx hereby
delivers to the Seller a release in the form attached hereto as Exhibit L
(hereinafter the "Xxxxxx Release"). The Seller acknowledges receipt of the
Xxxxxx Release.
2. Seller's Deliveries
a. Authorizations to Transfer Names
Simultaneous with the execution of this Agreement, the Seller is
forwarding the executed documents necessary to effect the Sale, the format of
which is attached hereto as Exhibit M, to the appropriate registries.
b. Termination of Liens on Portfolio
As promptly as practicable after the execution and delivery of this
Agreement, the Seller shall repay the entire principal of, and accrued interest
on, the promissory notes held by Pentech Financial Services, Inc. ("Pentech")
and GATX Financial Corporation - Capital Division ("GATX") which are secured, in
part, by a lien upon the Seller's interest in the Portfolio. The Seller shall
file, or cause to be filed, discharges of the liens, in the forms executed and
delivered by The Bank of New York as collateral agent for Pentech and GATX, with
the appropriate recording agency or agencies, upon receipt of the executed forms
from The Bank of New York.
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c. Assignment of Existing Agreements affecting Specific Names
i. The Seller hereby assigns to the Buyer all of its right, title
and interest in, to and under any and all agreements that relate to one or more
of the Names in the Portfolio as set forth in Exhibit H. All other terms and
provisions of any such agreements are not assigned to Buyer but expressly
retained by and for the Seller. Buyer accepts the assignment of all agreements
concerning specific Names or the Shares and the Buyer agrees to fully perform
under all assigned agreements. The Seller shall use reasonable commercial
efforts to procure the assignment to the Buyer of all contracts relating to the
Names or the Shares as promptly as practicable after the Closing. If any
contract is not assignable by Seller to Buyer, Seller shall, to the extent
feasible and practicable, give Buyer the benefit of the contract to the same
extent as if the Seller had not been excluded from assigning such contract to
the Buyer to the extent legally permissible without violating such contract, and
the Buyer shall act as the Seller's subcontractor and agent and shall perform
all of the obligations, receive all of the revenues under such contract and
assume all of the liabilities under such contract or shall reimburse the Seller
for its payment and performance thereunder. Notwithstanding anything to the
contrary contained herein, nothing in this Agreement shall be construed as an
attempt to assign any contract that by its terms is not assignable without the
consent of the other party.
ii. With respect to the Names listed on part 2 of Exhibit I, the MX
records for such Names are currently pointed to a location specified by xxxx.xxx
Corporation, a Delaware corporation (hereinafter "MCC"). MCC currently has sole
control over where the MX records are pointed via an agreement among MCC, the
Seller, and Xxxxxxxx.xxx (or other accredited registrar) (hereinafter the "MX
Record Agreement"). Seller has assigned all of its right, title and interest in
and to the MX Record Agreement to the Buyer pursuant to this Domain Name
Purchase Agreement. The Buyer shall enter into its own agreement with MCC and
Xxxxxxxx.xxx (or other accredited registrar) to ensure that MCC continues to
have sole control over the location to which the MX records are pointed. Until
such agreement is entered into, the Buyer agrees that each Name listed on part 2
of Exhibit I shall be subject to the MX Record Agreement. Further, in the event
the Buyer sells or otherwise transfers any Name listed on part 2 of Exhibit I to
a third party, the Buyer shall require that third party to be bound by the terms
of this subparagraph. The parties agree that MCC is a third-party beneficiary of
this subparagraph of the Domain Portfolio Purchase Agreement.
x. Xxxxxxxxx Agreement
In lieu of the severance provided under the Employment Agreement by
and between Xxxxxx and the Seller, dated November 12, 2002, as amended,
severance shall be paid in accordance with the Severance Agreement executed this
even date hereby by Xxxxxx and the Seller in the form attached hereto as Exhibit
N.
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e. Release
Simultaneous with the execution of this Agreement, the Seller
hereby delivers to Xxxxxx a release in the form attached hereto as Exhibit O
(hereinafter the "Seller Release"). Xxxxxx acknowledges receipt of the Seller
Release.
ARTICLE SIX
INDEMNIFICATION
1. Indemnification by the Buyer
Except as provided in paragraph 5 below (concerning indemnification for
expenses), the Buyer shall indemnify and hold harmless the Seller and its
employees, officers, directors, agents, and affiliates (hereinafter "Seller
Indemnified Persons") from and against, and shall pay to said Seller Indemnified
Persons, any and all loss, liability, claim, damage (including incidental and
consequential damages), expense (including reasonable costs of investigation and
defense and reasonable attorneys' fees) or diminution of value, whether or not
involving a third-party claim (collectively, "Damages"), resulting or arising,
directly or indirectly, from or in connection with:
a. A breach of any representations, warranties, covenants or agreements
of the Buyer hereunder or the failure by the Buyer to fully perform in
accordance with this Agreement or any of the other agreements executed in
connection with this Agreement;
b. The failure by the Buyer to fully perform in accordance with the
agreements assigned to the Buyer pursuant to this Agreement (hereinafter the
"Assignment Indemnification"); or
c. The claim of any person the gravamen of which is "cybersquatting" or
"trademark infringement" with respect to a Name (hereinafter the "Cybersquatting
Indemnification").
Notwithstanding the foregoing, the Buyer does not indemnify the Seller
for any loss in value of the Portfolio or any Name that results from (i) legal
or other disputes regarding the ownership of, or right to use, any Name; (ii)
changes in law or regulation which affect the ownership or right to use any
Name; or (iii) the Buyer's election to not renew the registration of any Name
for any reason, provided that Buyer has complied with its obligations under the
last paragraph of Article II; and provided further, however, that the Buyer
shall indemnify the Seller for failure to renew the registration of any Name set
forth on Exhibit I, part 2 except for such non-renewals as permitted in
paragraph 3 of Schedule 5.3 of that certain Asset Purchase Agreement by and
between Xxxx.xxx Inc. and Net2Phone Email, Inc., dated March 30, 2001, assigned
to eXact Advertising LLC on May 10, 2002, and further assigned to xxxx.xxx
Corporation on November 12, 2003.
13
2. Xxxxxx Indemnification Rights Under Charter, By-laws and Indemnification
Agreements
Xxxxxx'x right to indemnification under the Seller's Amended and
Restated Certificate of Incorporation, the Seller's Bylaws and any existing
indemnification agreements between the Seller and Xxxxxx (hereinafter the "D&O
Indemnification") shall remain in full force and effect after the Closing and
shall survive the termination of Xxxxxx'x employment in accordance with their
existing terms and conditions.
3. Indemnification by Xxxxxx
Xxxxxx shall indemnify and hold the Seller harmless from and against,
and shall pay to the Seller, any Damages resulting or arising, directly or
indirectly, from or in connection with:
a. A breach of any representations, warranties, covenants or agreements
of Xxxxxx hereunder; or
b. The failure by Xxxxxx to fully perform under this Agreement and any
of the agreements set forth as Exhibits hereto and executed by Xxxxxx this even
date herewith in connection with this Agreement.
4. Indemnification by the Seller
The Seller shall indemnify and hold harmless the Buyer and its
employees, officers, directors, agents, and affiliates (hereinafter "Buyer
Indemnified Persons") from and against, and shall pay to said Buyer Indemnified
Persons, any Damages resulting or arising, directly or indirectly, from or in
connection with:
a. A breach of any representations, warranties, covenants or agreements
of the Seller hereunder;
b. A failure by the Seller to fully discharge the Excluded Liabilities
when due; or
c. The failure by the Seller to fully perform in accordance with this
Agreement or any of the other agreements executed in connection with this
Agreement.
5. Expense Indemnification
If a suit or claim is asserted by the Seller against the Buyer or
Xxxxxx, or by the Buyer or Xxxxxx against the Seller, and there are no third
party plaintiffs or third party defendants involved in such suit or claim, then
if such suit or claim entitles a Party to indemnification by another Party under
this Agreement, the Party asserting the right of indemnification shall be
entitled to indemnification for all expenses only in the event said Party
prevails in the underlying suit or claim. In all other situations, the Party
entitled to indemnification hereunder shall be entitled to indemnification for
all expenses regardless of the ultimate outcome of any underlying suit or claim.
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6. Third Party Claims After Closing
Each Party shall bear its own costs arising from the claim of any
person that the Sale is in violation of the rights of that person, or of other
persons.
7. Notice and Defense of Claims
The Party claiming indemnification hereunder (hereinafter the
"Indemnified Party") may make claims for indemnification by giving written
notice to the Party from whom indemnification is sought (hereinafter the
"Indemnifying Party") within the period in which indemnification claims can be
made hereunder. If indemnification is sought for a claim or liability asserted
by a third party, the Indemnified Party shall also give written notice thereof
to the Indemnifying Party promptly after it receives notice of the claim or
liability being asserted, but the failure to do so shall not relieve the
Indemnifying Party from any liability except to the extent that it is prejudiced
by the failure or delay in giving such notice. Such notice shall summarize the
bases for the claim for indemnification and any claim or liability being
asserted by a third party. Within twenty (20) days after receiving such notice
the Indemnifying Party shall give written notice to the Indemnified Party
stating whether it will defend against any third party claim or liability at its
own cost and expense. The Indemnifying Party shall be entitled to direct the
defense against a third party claim or liability with counsel selected by it
(subject to the consent of the Indemnified Party, which consent shall not be
unreasonably withheld) as long as the Indemnifying Party is conducting a good
faith and diligent defense. The Indemnified Party shall at all times have the
right to fully participate in the defense of a third party claim or liability at
its own expense directly or through counsel. If no such notice of intent to
dispute and defend a third party claim or liability is given by the Indemnifying
Party, or if such good faith and diligent defense is not being or ceases to be
conducted by the Indemnifying Party, the Indemnified Party shall have the right,
at the expense of the Indemnifying Party, to undertake the defense of such claim
or liability (with counsel selected by the Indemnified Party), and to compromise
or settle it, exercising reasonable commercial judgment. If the third party
claim or liability is one that by its nature cannot be defended solely by the
Indemnifying Party, then the Indemnified Party shall make available such
information and assistance as the Indemnifying Party may reasonably request and
shall cooperate with the Indemnifying Party in such defense. The Indemnifying
Party shall pay the Indemnified Party for all expenses as incurred.
ARTICLE SEVEN
TAXES
Buyer and Seller shall endeavor in good faith to agree upon an
allocation (the "Allocation") of the purchase price among the Names and the
Shares. If Buyer and Seller agree upon the Allocation, then each of Buyer and
Seller agrees to file all tax reports, returns and other statements (including,
but not limited to, Internal Revenue Service Form 8594), and conduct any audit,
tax proceeding or tax litigation relating thereto consistent with the Allocation
so agreed. Neither Buyer nor Seller shall take any position (whether in audits,
tax returns, or otherwise) that is inconsistent with the agreed Allocation
unless required to do so by applicable law.
15
ARTICLE EIGHT
MISCELLANEOUS
1. Legal Fees
Each Party shall bear his or its own legal expenses in connection with
the Sale.
2. Registration Fees
The Buyer shall promptly reimburse the Seller for one-half (1/2) of the
cost of the re-registration fees necessary to effect the Sale.
3. Additional Expenses
The Seller has borne the cost associated with the initial preparation
of the documents authorizing the re-registration of the Names to effect the
Sale, as set forth in Exhibit M. The Seller has prepared such documents in good
faith. However, if any registrar shall refuse to re-register any Name for any
reason, any additional costs associated with re-registration shall be shared in
equal parts by the Buyer and the Seller. The Parties acknowledge that any such
subsequent costs will, as a practical matter, be borne initially by the Seller
because the Seller is the current registrant of the Names. Therefore, the Seller
shall, in good faith, calculate any such costs, based upon the hourly wage of
the person or persons involved and the time actually spent, and the Buyer shall
promptly reimburse the Seller for one-half (1/2) of such costs.
4. Cooperation
Each Party agrees to execute such documents and undertake such actions
after the Closing as shall be reasonably required to effectuate the purpose of
this Agreement.
5. Confidentiality
Except to the extent disclosure is required by law, regulation, stock
market rule or an order of a court of competent jurisdiction, the Parties agree
to keep the terms and conditions of this Agreement confidential and shall
disclose the terms and conditions of this Agreement only to professional
advisors on a need-to-know basis. In addition, Xxxxxx may disclose the general
parameters of this Agreement to immediate family members, provided that they
have been advised of this confidentiality provision and have agreed to be bound
by it.
6. Survival
a. This Agreement survives the Closing and shall govern the
relationships among the Parties with respect to the Portfolio for the Control
Period.
16
b. Except as set forth below concerning the survival of specific
provisions of this Agreement, this Agreement shall terminate upon the conclusion
of the Control Period. This Agreement may be terminated prior to the conclusion
of the Control Period only by the exercise of the Domain Call Option or by the
unanimous written agreement of the Parties.
c. The Assignment Indemnification and the Cybersquatting
Indemnification shall each survive until the sixth (6th) anniversary of this
Agreement.
d. The D&O Indemnification shall survive in accordance with the terms
thereof.
e. The representations of the Parties shall survive until the second
(2nd) anniversary of this Agreement.
f. All other indemnifications hereunder shall survive until sixty (60)
days following the expiration of the period of limitations for bringing claims
under this Agreement.
g. Any Domain Revenue Share accrued but not paid prior to the
termination of this Agreement shall be paid by the Buyer to the Seller within
thirty (30) days of the receipt of any revenues by the Buyer.
7. Press Announcement
The Seller and Xxxxxx shall jointly prepare a press announcement
acceptable to both concerning the transactions contemplated hereby and Xxxxxx'x
resignation from the Seller.
8. Non-Disparagement
Each Party agrees to not make any disparaging, negative, or other
statements regarding any other Party which could be reasonably expected to have
an adverse effect on the business, affairs, or reputation of the other Party.
9. Choice of Law
This Agreement and all disputes, controversies, or claims arising out
of or relating to this Agreement or a breach thereof shall be governed by the
laws of the State of New Jersey without reference to the principles of conflicts
of law that would apply the law of another state.
17
10. Jurisdiction
Each Party agrees to the exclusive personal jurisdiction of the courts
of the State of New Jersey and the Federal courts for the District of New Jersey
for all matters arising from this Agreement. Each Party waives all claims of
forum non conveniens in the selection of forum by any other Party.
11. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument, and shall become effective when one or
more counterparts have been signed by each of the Parties.
12. Entire Agreement, Amendment
This Agreement constitutes the complete and entire agreement among the
Parties with respect to the subject matter herein and supersedes any prior
agreement, oral or written, among the Parties concerning this matter. This
Agreement may be amended only by the written consent of all the Parties.
13. Binding Agreement; No Third Party Beneficiaries; Assignment
This Agreement is the binding agreement of each of the Parties and
shall be binding upon, and inure to the benefit of, each Party's successors,
heirs, and assigns. Except as expressly set forth in the second paragraph of
Section 2.c. of Article Five of this Agreement, the representations, warranties,
covenants and agreements contained in this Agreement are for the sole benefit of
the parties hereto, the parties indemnified hereunder and the respective
successors and permitted assigns of all of the foregoing and they shall not be
construed as conferring and are not intended to confer any rights on any other
persons, including the right to enforce any of the provisions of this Agreement.
Without limiting the generality of the foregoing, this Agreement expressly does
not confer any rights, and is not intended to confer any rights, on any persons
who are party to any of the agreements set forth on Exhibit H (other than the
parties hereto, the parties indemnified hereunder and the respective successors
and permitted assigns of all of the foregoing).
Neither this Agreement nor any rights, duties or obligations hereunder
shall be assigned by any party hereto without the prior written consent of the
other parties hereto, except that the Seller may assign its rights hereunder to
any lender to secure debt obligations owed to such lender and in connection with
a merger or consolidation of the Seller with, or a transfer of all or
substantially all of the Seller's assets to, another person.
18
14. Context
In all references herein to any parties, persons, or entities, the use
of any particular gender or the plural or singular number is intended to include
the appropriate gender or number as the text of this Agreement may require. All
references herein to this Agreement shall include all Exhibits to this Agreement
as well as this Agreement itself.
15. Notices
All notices, consents, requests, instructions, approvals, and other
communications provided for herein shall be deemed validly given if in writing
and delivered personally or sent by overnight courier, or by certified mail,
postage prepaid and return receipt requested, to:
If to the Buyer: Xxxxxx Xxxxxx
000 Xxxxxxxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
With copy to: Xxxxxxx Xxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Xxxx LLP
00 XxXxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
If to Xxxxxx: Xxxxxx Xxxxxx
000 Xxxxxxxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
With copy to: Xxxxxxx Xxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Wood LLP
00 XxXxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
If to the Seller:
EasyLink Services Corporation
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
With copy to: Xxxxx Xxxxxxxx, Esq.
Executive Vice President and General Counsel
EasyLink Services Corporation
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Notice shall be deemed to have been given on the date of delivery if delivered
personally or by overnight courier and on the third day following the date of
mailing if delivered by certified mail.
19
IN WITNESS WHEREOF, we have hereunto affixed our seals and our
signatures on the date first written above.
ATTEST EASYLINK SERVICES CORPORATION, SELLER
/s/Xxxxx Xxxxxxxx By: /s/Xxxxxx Xxxxxxxx
--------------------------- ------------------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxxx Xxxxxxxx
Title: EVP, GC & Secretary Title: President and Chief Executive
Officer
WITNESS NJ DOMAINS, LLC, BUYER
/s/Xxxxxxxx Xxxx By: /s/Xxxxxx Xxxxxx
--------------------------- ------------------------------------
Name: Xxxxxxxx Xxxx Name: Xxxxxx Xxxxxx
Title: Manager
WITNESS XXXXXX XXXXXX
/s/Xxxxxxxx Xxxx /s/Xxxxxx Xxxxxx
--------------------------- ------------------------------------
Name: Xxxxxxxx Xxxx Xxxxxx Xxxxxx
20
EXHIBIT D
Amendment No. 2 dated December ___, 2004
(Termination of Employment Agreement)
To
Employment Agreement dated November 12, 2002
Amendment No. 2 (this "Amendment") dated December ____, 2004 to
Employment Agreement (the "Agreement") dated November 12, 2002 between EasyLink
Services Corporation ("EasyLink") and Xxxxxx Xxxxxx (the "Executive"), amended
previously on November 12, 2003.
WHEREAS, the Company and the Executive desire to terminate the
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the terms and conditions of that
certain Domain Portfolio Purchase Agreement of even date herewith, the Company
and the Executive hereby agree as follows:
1. The parties hereto hereby agree that, except as expressly set forth below,
the Agreement is terminated effective this even date herewith.
2. The following provisions of the Agreement, as previously amended, shall
survive this termination:
a. Section 5 concerning "Confidentiality and Restrictive Covenants;"
b. Section 6 concerning "Intellectual Property;" and
c. Section 8 containing miscellaneous provisions.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first written above.
EXECUTIVE EASYLINK SERVICES CORPORATION
___________________________________ By:_________________________________
Xxxxxx Xxxxxx Name:
Title:
EXHIBIT K
THIS GUARANTY OF DOMAIN PORTFOLIO PURCHASE AGREEMENT (hereinafter the
"Guaranty") made and delivered this ____day of December, 2004, by XXXXXX XXXXXX,
an individual with an address of (hereinafter "Xxxxxx") in favor of EasyLink
Services Corporation, a Delaware corporation with its principal place of
business at 00 Xxxxxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
"EasyLink").
IN CONSIDERATION of the terms and conditions of that certain Domain
Portfolio Purchase Agreement executed this even date herewith by and among
EasyLink, Xxxxxx, and NJ Domains, LLC, a New Jersey limited liability company
(hereinafter "NJ Domains") with its principal place of business at 000
Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged:
1. Guaranty and Suretyship. Xxxxxx hereby unconditionally and
irrevocably becomes surety to EasyLink, its successors and assigns for the full,
faithful and punctual performance of each and all of the covenants, agreements,
and conditions of the Domain Portfolio Purchase Agreement to be kept and
performed by NJ Domains or its successors or assigns, including the punctual
payment of all monetary obligations due and owing by NJ Domains or its
successors or assigns under the Domain Portfolio Purchase Agreement, together
with all costs and expenses (including costs of indemnification and reasonable
attorneys' fees and cost of suit, all as described in the Domain Portfolio
Purchase Agreement) incurred by EasyLink in connection with the foregoing
(hereinafter collectively referred to as the "Liabilities"). The Liabilities
expressly do not include the liabilities of Xxxx.xxx, Inc., Xxxxx.xxx, Inc., or
NJ Domain's liabilities to third parties.
2. Representation of Xxxxxx. Xxxxxx represents that at the time of the
execution and delivery of this Guaranty nothing exists to impair the
effectiveness of the obligations of Xxxxxx to EasyLink hereunder, or the
immediate taking effect of this Guaranty between Xxxxxx and EasyLink with
respect to Xxxxxx becoming a surety for the Liabilities.
3. Limitation of Waivers by EasyLink. The waiver of any right by
EasyLink or its failure to exercise promptly any right shall not be construed as
the waiver of any other right, including the right to exercise the same at any
time thereafter. No waiver or modification of any of the terms or conditions of
this Guaranty shall be binding against EasyLink unless such waiver or
modification is in a writing signed by EasyLink.
4. Binding Effect. The provisions of this Guaranty shall bind all of
the respective heirs, executors, administrators, legal representatives,
successors and assigns of Xxxxxx and shall inure to the benefit of EasyLink, its
successors and assigns.
5. Termination. This Guaranty shall survive for so long as any NJ
Domains obligations shall remain in effect under the Domain Portfolio Purchase
Agreement.
WITNESS XXXXXX XXXXXX
------------------------------- ------------------------------------------
Name: Xxxxxx Xxxxxx
EXHIBIT L
THIS RELEASE (the "Release") is made and delivered this ____ day of
December, 2004 by Xxxxxx Xxxxxx, an individual with an address of 000
Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000 (hereinafter "Xxxxxx") in favor of
EasyLink Services Corporation, a Delaware corporation with its principal place
of business at 00 Xxxxxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
"EasyLink") in connection with the execution this even date herewith of that
certain Domain Portfolio Purchase Agreement.
IN CONSIDERATION of the terms and conditions of the Domain Portfolio
Purchase Agreement executed this even date herewith by and among EasyLink,
Xxxxxx, and NJ Domains, LLC, a New Jersey limited liability company, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged,
1. Xxxxxx acknowledges and agrees that, in granting the releases below,
he is acting of his own free will, voluntarily and on behalf of himself, his
heirs, administrators, executors, successors and assigns.
2. Xxxxxx hereby releases EasyLink and its subsidiaries, affiliates,
directors, officers, employees, and agents, and each of them, from any and all
Claims (as hereinafter defined but expressly excluding Claims arising from
Xxxxxx'x employment by EasyLink), arising from the beginning of time until the
date of this Agreement, expressly excluding however any Claims which may arise
under:
a. Any agreement executed this even date herewith; and
b. Any agreement providing for the indemnification of Xxxxxx
as a director or officer of EasyLink, whether such agreement is found
in EasyLink's Amended and Restated Certificate of Incorporation,
EasyLink's bylaws, or an agreement between Xxxxxx and EasyLink
concerning such indemnification.
For purposes of this Release, "Claims" shall mean debts, obligations,
claims, demands, judgments, or causes of action of any kind whatsoever, in tort,
contract, by statute, or on any other basis, for compensatory, punitive, or
other damages, expenses, reimbursements, or costs of any kind.
WITNESS XXXXXX XXXXXX
------------------------------- ------------------------------------------
Name: Xxxxxx Xxxxxx
EXHIBIT N
THIS SEVERANCE AGREEMENT (hereinafter the "Severance Agreement") made
this ____ day of December, 2004, by and between XXXXXX XXXXXX, an individual
with an address of 000 Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter "Xxxxxx") and EASYLINK SERVICES CORPORATION, a Delaware corporation
with its principal place of business at 00 Xxxxxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 (hereinafter the "Corporation"). Xxxxxx and the Corporation are
each a "Party" and together the "Parties."
WHEREAS, Xxxxxx is Chairman of the Board of Directors of the
Corporation; and
WHEREAS, Xxxxxx has resigned as Chairman and Director of the
Corporation this even date herewith; and
WHEREAS, the Parties wish to ensure that Xxxxxx'x resignation does not
disrupt the operations of the Corporation;
NOW THEREFORE, the Parties agree as follows:
1. Severance Payments
Provided that Xxxxxx has not revoked his acceptance of this Agreement
in accordance with Paragraph 16 hereof, the Corporation will pay severance to
Xxxxxx in the amount of two hundred fifty thousand dollars ($250,000.00) payable
over a period of two (2) years (the "Severance Period") in accordance with the
Corporation's standard payroll procedures. Severance payments will be subject to
normal payroll taxes and deductions and will commence within two (2) weeks of
the expiration of the revocation period set forth in Paragraph 16.
2. Health Insurance
x. Xxxxxx shall continue to participate in the Corporation's group health
plan for a period of six (6) months. During such period, each of the
Corporation and Xxxxxx shall continue to pay its or his monthly
premium for Xxxxxx'x continued participation in the group health plan
in accordance with the usual policy of the Corporation. During the
initial six (6) month period, any increase to the Corporation's
premium shall be borne by the Corporation and any increase to Xxxxxx'x
premium shall be borne by Xxxxxx.
b. Following the initial six (6) months, Xxxxxx shall elect continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") for the standard COBRA period of eighteen (18) months.
The Corporation shall pay Xxxxxx'x monthly COBRA premiums during such
period up to the dollar amount paid by the Corporation at the
conclusion of the initial six (6) month period and Xxxxxx shall pay
all amounts in excess thereof.
c. If, at any time during the Severance Period, Xxxxxx would prefer to
obtain private health insurance in lieu of participation in the
Corporation's group health plan, the Corporation shall pay for the
premiums for such private health insurance during the balance of the
Severance Period, provided however that the Corporation shall not pay,
in monthly premiums to the private insurer, an amount in excess of the
monthly premium which the Corporation would otherwise be paying under
subparagraph a. or b., above.
3. Options
The vesting of options shall terminate upon the execution of this
Severance Agreement.
4. Life Insurance
During the Severance Period, the Corporation shall continue to provide
Xxxxxx with life insurance as provided immediately prior to the execution of the
Severance Agreement, provided however that the Corporation shall not pay any
premium for such insurance in excess of the premiums paid immediately prior to
the execution of this Severance Agreement.
5. 401(k) Plan
Xxxxxx'x participation in the Corporation's 401(k) plan shall terminate
upon execution of this Severance Agreement and the Corporation shall provide
Xxxxxx with information regarding roll-over rights.
6. Unused Vacation
In accordance with the Corporation's usual practice, Xxxxxx shall be
entitled to a lump sum payment, subject to normal payrolls taxes and deductions,
as payment for all vacation which Xxxxxx has accrued, but not used, as of the
date hereof. Said payment shall be made within two (2) weeks of the expiration
of the revocation period set forth in Paragraph 16.
7. Office
Xxxxxx shall be entitled to use his office at the Corporation for a
period of four (4) months following the date of this Severance Agreement, during
which time the secretarial support services of the Corporation will continue to
be available to him.
8. Return of Property
Xxxxxx agrees to immediately return to the Corporation all company
property, records, and files belonging to the Corporation which he has in his
possession including, but not limited to, all memoranda, notes, records,
reports, plans, forecasts, spreadsheets, and other documents in any form
whatsoever (including information contained in computer memory or any computer
disks, tapes, and other media) relating to the Corporation's business, which
Xxxxxx obtained while employed by or otherwise servicing or acting on behalf of
the Corporation. Xxxxxx further agrees to take all necessary actions, if
required by and at the cost of the Corporation, to vest such property rights in
the Corporation. Xxxxxx may retain the Corporation's laptop computer once all
Corporation information has been removed.
9. Confidentiality
Xxxxxx agrees to maintain the confidentiality of all information
relating to the Corporation, including, but not limited to, the business,
finances, customers, trade practices, trade secrets, developments, methods and
know-how of the Corporation and agree not to disclose any such confidential
information to anyone, or to make any use of any such confidential information,
on his own behalf or on behalf of any third party, without the Corporation's
prior written consent.
10. Nondisparagement
The Corporation and Xxxxxx each agree that neither will make, nor cause
to be made, any statements, observations or opinions, or communicate any
information (whether oral or written) that disparages or is likely in any way to
harm the reputation of the other.
11. Remedies
a. In the event the Corporation breaches this Severance Agreement,
Xxxxxx may only institute an action for specific enforcement of the
terms of this Agreement and seek damages resulting from that breach.
Xxxxxx may not institute before any local or state administrative
agency, or before any court, any proceeding based on any claims related
to his employment with the Corporation or the termination of his
employment with the Corporation as released herein. The prevailing
party in any action to enforce this Severance Agreement will be
entitled to an award of attorneys' fees and costs in addition to any
other legal or equitable relief.
x. Xxxxxx agrees that any unauthorized disclosure to third parties of
any such confidential information would cause irreparable damage to the
trade secret status of such information, if applicable, and to the
Corporation, and that, since the Corporation would have no adequate
remedy at law, in the event such a disclosure or threatened disclosure
is proven, the Corporation will be entitled to an injunction,
prohibiting Xxxxxx from any such disclosure or attempted disclosure.
12. Release
In consideration of the terms and conditions of this letter, which
constitute good and valuable consideration, Gorman
a. Agrees that he is hereby acting of his own free will, voluntarily
and on behalf of himself, his heirs, administrators, executors,
successors and assigns, and
b. Understands and agrees that this Severance Agreement is legally
binding and that by signing it, he is giving up certain rights; and
c. Releases the Corporation and its subsidiaries, parent, and
affiliates, together with each of those entities' directors, officers,
employees, shareholders, fiduciaries, administrators, and agents, and
each of them (collectively the "Released Parties"), from any and all
debts, obligations, claims, demands, judgments, or causes of action of
any kind whatsoever, in tort, contract, by statute, or on any other
basis, for compensatory, punitive, or other damages, expenses,
reimbursements, or costs of any kind, including but not limited to any
and all claims, demands, rights, and/or causes of action arising out of
his employment, or the termination of his employment, with the
Corporation or relating to purported employment discrimination or
violations of civil rights, such as, but not limited to, those arising
under Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Civil Rights Acts of 1866 and/or 1871, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit
Protection Act of 1990, the Americans with Disabilities Act of 1990,
the Family and Medical Leave Act of 1993, the Fair Labor Standards Act,
the National Labor Relations Act, the Worker Adjustment and Retraining
Notification Act, Executive Order 11246, the Equal Pay Act of 1963, the
Rehabilitation Act of 1973 (including Section 504 thereof), the
Employee Retirement Income Security Act of 1974, the New Jersey Law
Against Discrimination, N.J.S.A. 10:5-1 et. seq., (all as they may have
been amended) or any other applicable federal, state, or local
employment discrimination statute or ordinance or any other claim,
whether statutory or based on common law, arising by reason of Xxxxxx'x
employment, or the termination of his employment, with the Corporation,
or relating in any way to his employment relationship with the
Corporation or any of the other Released Parties, or by reason of any
other matter, cause, or thing whatsoever, from the first date of
Xxxxxx'x employment to the date of this Severance Agreement. This
release specifically includes, but is not limited to, any claims based
upon the right to the payment of wages, bonuses, vacation, pension
benefits, stock benefits or any other employee benefits, or any other
rights arising under federal, state or local laws prohibiting
discrimination and/or harassment on the basis of age, race, color,
religion, creed, sex, affectional or sexual orientation, national
origin, ancestry, nationality, mental or physical disability, alienage
or citizenship status, marital status, familial status, liability for
service in the Armed Forces of the United States, atypical hereditary
cellular or blood trait or any other genetic information, AIDS and HIV
infection, harassment or any other basis prohibited by law, and
d. Represents that he has not filed against the Corporation or any of
the other Released Parties, any complaints, charges or lawsuits with
any governmental agency or any court prior to the date hereof.
13. Review Period
Xxxxxx shall have twenty-one (21) days from the date this Severance
Agreement is delivered to him to consider the terms detailed herein. By
executing this Severance Agreement, Xxxxxx acknowledges that he has been given
this twenty-one (21) day period within which to consider this Severance
Agreement.
14. Consideration
Xxxxxx hereby acknowledges that the consideration he is receiving
hereunder and under that certain Domain Portfolio Purchase Agreement executed
this even date herewith is greater than he would otherwise have received had he
not signed this Severance Agreement and that the consideration thus received is
given in exchange for all of the provisions hereof.
15. Attorney Consultation
Xxxxxx has been advised by the Corporation to consult with an attorney
before signing this letter, and this Paragraph 15 constitutes such advice in
writing. By executing this Severance Agreement, Xxxxxx acknowledges that he has
been advised by an attorney or has knowingly waived his right to be so advised.
16. Revocation Period
For a period of seven (7) days following his execution of this
Severance Agreement, Xxxxxx may revoke this letter by written notification to
the Corporation. The terms of this Severance Agreement shall not become
effective or enforceable until the seven (7) day revocation period has expired.
17. No Admission of Liability
Xxxxxx acknowledges that payment by the Corporation of the severance
payments described herein is not an admission of any liability whatsoever on the
part of Corporation in connection with Xxxxxx'x employment by the Corporation
and/or the termination of said employment.
18. Cooperation During Transition Period
Xxxxxx will fully cooperate with the Corporation following the date of
this Severance Agreement in order to assist the Corporation with the transition
of his duties from time to time. Such cooperation shall include, but not be
limited to, answering questions regarding the Corporation's business, customer
relationships, and items of a similar nature.
19. Non-Disclosure
Xxxxxx agrees that the amounts paid to him, as well as the terms and
conditions set forth in this Severance Agreement, will be kept confidential by
him, and that he will not reveal the terms and conditions set forth in Severance
Agreement except in response to a valid subpoena or other legal process, or to
his professional advisors and immediate family members, provided that they are
made aware of this Non-Disclosure provision and agree to abide by it. Xxxxxx
acknowledges that the terms and conditions of this Severance Agreement may be
disclosed by the Corporation in accordance with the requirements of applicable
law.
20. Entire Agreement
This Severance Agreement constitutes the entire agreement between
Xxxxxx and the Corporation concerning the subject matter herein and may not be
altered or modified except in writing signed by both parties. In the event of
any conflict between the terms of this Severance Agreement and the terms of
Xxxxxx'x employment agreement, the Corporation's stock option plan[s], or any of
Xxxxxx'x stock option grant agreements, the terms of this Severance Agreement
will govern. This Severance Agreement will be governed by the laws of the state
of New Jersey without reference to its choice of law rules.
IN WITNESS WHEREOF, Xxxxxx and the Corporation have hereunto set their
hands and seals on the date first written above.
ATTEST EASYLINK SERVICES CORPORATION
___________________________________ By:_________________________________
Name: Name:
Title: Title:
WITNESS ACCEPTED AND AGREED
___________________________________ ____________________________________
Name: Xxxxxx Xxxxxx
Date:______________________________ Date:_______________________________
EXHIBIT O
THIS RELEASE (the "Release") is made and delivered this ____ day of
December, 2004 by EasyLink Services Corporation, a Delaware corporation with its
principal place of business at 00 Xxxxxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter "EasyLink") in favor of Xxxxxx Xxxxxx, an individual with an
address of 000 Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000 (hereinafter
"Xxxxxx") in connection with the execution this even date herewith of that
certain Domain Portfolio Purchase Agreement by and among EasyLink, Xxxxxx, and
NJ Domains, LLC, a New Jersey limited liability company, with its principal
place of business at 000 Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter "NJ Domains").
IN CONSIDERATION of the terms and conditions of the Domain Portfolio
Purchase Agreement executed this even date herewith by and among EasyLink,
Xxxxxx, and NJ Domains, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged,
EASYLINK hereby releases Xxxxxx from any and all Claims (as hereinafter
defined), arising from the beginning of time until the date hereof, including,
but not limited to, any and all Claims arising out of Xxxxxx'x employment by
EasyLink Services Corporation (or any predecessor thereto). This Release
expressly excludes any Claims which may arise after the date hereof under the
Domain Portfolio Purchase Agreement, the Guaranty of Domain Portfolio Purchase
Agreement, or any of the transactions contemplated thereby. "Claims" shall mean
debts, obligations, claims, demands, judgments, or causes of action of any kind
whatsoever, in tort, contract, by statute, or on any other basis, for
compensatory, punitive, or other damages, expenses, reimbursements, or costs of
any kind.
ATTEST EASYLINK SERVICES CORPORATION
_______________________________ By:_______________________________________
Name: Name:
Title: Title:
