SUBSCRIBER ACQUISITION AGREEMENT
--------------------------------
This Subscriber Acquisition Agreement (this "Agreement")
is effective as of March 18 2002 (the "Effective Date") between
EarthLink, Inc., a Delaware corporation ("EarthLink"), and Greenhold
Group, Inc.. ("Seller"). Each of EarthLink and Seller is sometimes
referred to as a "Party" or "Parties".
RECITALS
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Seller is the owner of all right, title and interest in
and to the assets described on Exhibit A hereto (the
"Transferred Assets") which assets are used in or related to
Seller's Internet service provider business of providing 56K
dial-up access (the "Business"); and
Seller desires to sell and assign all its right, title and
interest in and to the Transferred Assets to EarthLink and EarthLink
desires to purchase from Seller such Transferred Assets, subject to
the terms and conditions set forth in this Agreement.
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:
AGREEMENT
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1. DEFINITIONS. The terms below shall have the following meanings
ascribed to them in this Agreement:
a) "Active Subscriber" means a Subscriber who has logged onto
Seller's system at least once.
b) "Affiliate" means, with respect to any Person, any other Person
which directly or indirectly controls, is controlled by or is
under common control with such Person.
c) "Bounty" means the amount that EarthLink will pay Seller for
each Qualified Member provided by Seller as specifically set
forth on Exhibit A.
d) "Subscriber" means any Person billed by Seller that gains access
to any Internet-related services through the public switch
telephone network.
e) "Domain Names" shall mean the Internet domain names listed on
Exhibit A hereto.
f) "EarthLink Member" means any authorized user of the EarthLink
Service who has contracted with EarthLink for the use of the
EarthLink Service.
g) "EarthLink Service" means EarthLink's broadband, wireless and/or
narrowband dial-up Internet access service, satellite service
and/or Web Hosting Service.
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h) "Opt-out Date" means the date between the Effective Date and the
Subscriber Transition Commencement Date specified in Seller's
notice to Subscribers as described in Section 2(a)(ii) of this
Agreement.
i) "Person" means any individual, corporation, partnership, sole
proprietor, joint venture, association, joint-stock company,
limited liability company, trust, unincorporated organization or
any governmental body.
j) "Qualified Member" means an EarthLink Member who is active (has
used the EarthLink Service at least once) and pays EarthLink the
full and recurring standard access fee for the EarthLink Service
for at least two (2) consecutive months from the Opt-out Date.
k) "Requirements of Laws" means any foreign, federal, state and
local laws, statutes, regulations, rules, codes or ordinances
enacted, adopted, issued or promulgated by any governmental body
(including, without limitation, those pertaining to electrical,
building, zoning, telephone or cable lines, environmental and
occupational safety and health requirements) or any common law.
l) "Subscriber Transition Commencement Date" means the date on
which the transfer of Subscribers from Seller's system onto
EarthLink's system begins. Specifically, this refers to the
date upon which a properly formatted, complete and valid
Subscriber database is successfully merged into the EarthLink
database, as determined by EarthLink.
m) "Subscriber Transition End Date" means the date on which the
transfer of Subscribers from Seller's systems onto EarthLink's
systems is completed and EarthLink begins to provide Internet
services to such Subscribers.
n) "Transition Period" means the period between the Effective Date
and the Subscriber Transition End Date. The components of the
Transition Period are set forth on Exhibit C.
2. DUTIES AND OBLIGATIONS OF THE PARTIES.
a) Duties and Obligations of Seller. In connection with this
Agreement, Seller shall have the following duties and obligations:
(i) Sale of Transferred Assets. Seller hereby sells,
conveys, grants, assigns, transfers and delivers to
EarthLink and its successors and assigns, free and clear
of any and all liens, claims, charges or encumbrances, all
of Seller's right, title and interest in and to the
Transferred Assets.
(ii) Notification Email and Opt-out Provision. On or before
the Subscriber Transition Commencement Date, Seller will
send an e-mail to all Subscribers notifying all
Subscribers that (A) Seller is in the process of selling
its Transferred Assets to EarthLink, (B) Seller will
terminate service to all Subscribers as of the Subscriber
Transition End Date, (C) each Subscriber will have the
opportunity to opt out of the transfer of the Subscriber's
account to EarthLink by notifying Seller via a specified
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procedure on or before the Opt-out Date, such specified
procedure to be determined by EarthLink, (D) each
Subscriber who opts out on or before the transfer will
need to find an Internet service provider other than
Seller, (E) the accounts of all Subscribers who do not opt
out on or before the Opt-out Date will be transferred to
EarthLink, (F) each Subscriber will be given an
opportunity to review EarthLink's Internet Service
Agreement by means of a hyperlink to such agreement
prominently displayed in the notification email and (G)
unless a Subscriber opts out of the transfer, each
Subscriber shall be deemed to be bound by the terms and
conditions of the EarthLink Internet Services User
Agreement. EarthLink must pre-approve the notification
email and any accompanying or subsequent e-mails, direct
mailings or telephone calls in writing before any such
notification is sent to Subscribers by Seller.
(iii) Opt-out Follow Up. On or before the Opt-out Date, as
reasonably determined by Seller in consultation with
EarthLink, Seller shall send a follow-up e-mail, direct
mail and/or telephone call to all Subscribers with
substantially the same content as the correspondence
referenced in Section 2(a)(ii) above.
(iv) Forward Subscribers Email. Seller will forward each
Subscriber's e-mail, for a period of thirty (30) days
after the Subscriber Transition End Date, to such
Subscriber's new EarthLink e-mail address. Seller will
also include in such e-mail any other text requested by
EarthLink.
(v) Performance of Obligations. Seller agrees during all
times prior to the six (6) month anniversary of the
Subscriber Transition End Date, (A) to perform in full any
obligations or agreements existing between Seller and any
third party relating to the Business and/or the
Transferred Assets and (B) to extinguish any indebtedness
owing by Seller to any third party, including its
Subscribers, related to the Business and/or the
Transferred Assets.
(vi) Notice of Developments. During the Transition Period,
Seller will give prompt written notice to EarthLink of any
development affecting the assets of the Business
(including, without limitation, the Transferred Assets),
liabilities, business, financial condition, operations,
contracts (including, without limitation, the Subscriber
contracts), disputes, results of operations or future
prospects of the Business and/or the Transferred Assets.
(vii) Access. At all times during the Transition Period,
Seller will provide representatives of EarthLink with
access to the personnel, officers, agents, employees,
assets (including, without limitation, the Transferred
Assets and any equipment used in the operation of the
Business), properties, titles, contracts (including,
without limitation, any contract disputes and any
Subscriber contracts), books, current, pending and
prospective litigation, records (including, without
limitation, tax records), files and documents (including,
without limitation, financial, tax basis, budget
projections, auditors' work papers and such other
information as EarthLink may reasonably request),
customers, suppliers, legal counsel, independent auditors
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and other representatives of or pertaining to the Business
and/or Transferred Assets.
(viii) Taxes. Seller shall retain and pay when due all of
its liabilities and any transfer taxes, bulk sales or
similar taxes that may be imposed upon the transfer and
sale of the Transferred Assets pursuant to this Agreement.
Seller is solely responsible for all taxes on any Bounties
paid to Seller under this Agreement by EarthLink,
including all state and local use, sales, property (ad
valorem) and similar taxes.
(ix) Expenses. Seller agrees that all expenses incurred by
the Business during the Transition Period shall be
discharged by, and be the sole obligation of, Seller.
(x) Domain Name Assignment. Seller shall assign EarthLink
its right, title and interest in and to the Domain Name(s)
listed on Exhibit A.
(xi) Consents. Seller shall deliver any and all consents
necessary for the execution, delivery and performance of
this Agreement.
(xii) Data Format. Seller shall provide complete and properly
formatted Subscriber data as specifically set forth on
Exhibit D.
(A) Seller shall provide a preliminary database of
all Active Subscribers in a comma delimited text
file in accordance with the data dictionary on
Exhibit D within 10 business days of the execution
of this Agreement. The preliminary database must
be formatted per Exhibit D or EarthLink may refuse
to accept such database. Any initial payment will
be reduced by five percent (5%) if the preliminary
database is not delivered within 10 business days
from the Effective Date, ten percent (10%) if not
delivered within 15 business days and twenty
percent (20%) for each day thereafter. EarthLink
may terminate this Agreement and its obligations
herein shall be extinguished if the preliminary
database is not delivered by Seller in the
specified format within 30 days from the Effective
Date.
(B) As EarthLink deems necessary, Seller shall
provide updates to the preliminary database of all
Active Subscribers in a comma delimited text file
in accordance with the data dictionary on Exhibit D.
(C) Seller shall provide a final database of all
Active Subscribers in a comma delimited text file in
accordance with the data dictionary at Exhibit D on
a date to be determined by EarthLink. The final
database shall not contain Subscribers that (1) have
previously requested service cancellation from the
Seller, (2) have not paid Seller for Seller's
service within 60 days prior to the Seller's
delivery of Subscriber data to EarthLink.
b) Duties and Obligations of EarthLink. In connection with
this Agreement, EarthLink shall have the following duties and obligations:
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(i) Payment. EarthLink shall pay Seller a Bounty for
each of Seller's Subscribers that becomes a Qualified Member.
The total purchase price for the Transferred Assets shall be
equal to the Bounty, as set forth on Exhibit A, times the
total number of Seller's existing Subscribers that become
Qualified Members (the "Purchase Price"). The Purchase Price
shall be payable as follows:
A) First Payment. After Seller's Subscriber
database is deliverd to EarthLink's, EarthLink
shall pay 50% of the estimated Purchase Price,
(the "First Payment") by wire transfer of funds to
Seller's account as set forth on Exhibit B hereto
(the "Seller's Account"). The database must be
properly formatted and accurate per Exhibit D.
EarthLink will deduct $19.95 for the aggregate
number of prepaid months that must be honored from
the initial and/or final payment. This deduct will
not apply for any subscribers that receive refunds
from the Greenhold Group.
B) Final Payment. EarthLink shall determine the
number of actual Qualified Members (as defined in
Section 1(j) above) within ten (30) days of
completion of two consecutive monthly billing
cycles. After that determination, EarthLink shall
pay the balance, if any, of the Purchase Price
("Final Payment") by wire transfer to the Seller's
Account.
(ii) Notification Email Support. EarthLink shall
participate in the preparation of the e-mail notices
or any other form of notice as contemplated in
Sections 2(a)(ii)-(iii) above, including, without
limitation, providing Seller with any requested and
relevant text, providing Seller with relevant
information requested by Seller and answering any
relevant questions of Seller with respect to such
notices.
c) Press Release. No Party shall issue a press release or
similar public announcement of any kind regarding this Agreement without
the prior written approval of the other Party. A VIOLATION OF
THIS PROVISION WILL CONSTITUTE A MATERIAL BREACH OF THIS
AGREEMENT. SELLER UNDERSTANDS AND AGREES THAT IN THE EVENT OF
SUCH BREACH, EARTHLINK MAY IMMEDIATELY TERMINATE THIS AGREEMENT
AND TAKE WHATEVER STEPS NECESSARY TO EXERCISE ITS REMEDIES AT
LAW AND/OR EQUITY
3. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
a. Representations and Warranties of Seller. Seller represents
and warrants to EarthLink as follows:
(i) Due Organization. Seller is a corporation duly
organized, validly existing, and in good standing under
the laws of the state of incorporation, and has full
corporate power and authority to own, sell, assign and
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lease its properties and assets and to carry on its
business as now conducted. Seller is qualified to do
business in all other jurisdictions where such
qualification would be required as a result of Seller's
ownership and operation of the Business and the
Transferred Assets, except where the failure to be so
qualified does not and could not reasonably be expected to
have an adverse effect on the Business and/or the
Transferred Assets.
(ii) Due Authorization. Seller has full power and authority
to execute, deliver and perform this Agreement and to
carry out the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered
by Seller and constitutes the valid and binding obligation
of the Seller, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by
laws affecting creditors' rights and debtors' obligations
generally, and legal limitations relating to remedies of
specific performance and injunctive and other forms of
equitable relief (the "Equitable Exceptions"). The
execution, delivery and performance of this Agreement (as
well as any other instruments, agreements, certificates or
other documents contemplated hereby) by Seller, does not
(i) violate any Requirements of Laws or any court order of
any governmental body applicable to Seller or Seller's
property, (ii) violate or conflict with, or permit the
cancellation of, or constitute a default under, any
agreement to which Seller is a party or by which Seller or
any of Seller's property is bound, (iii) permit the
acceleration of the maturity of any indebtedness of, or
indebtedness secured by, the property of Seller which will
not be paid in full as of the Effective Date of this
Agreement, (iv) violate or conflict with any provision of
the charter or bylaws of Seller or (v) require any
consent, approval or authorization of, or notice to, or
declaration, filing or registration with, any governmental
body or other third party.
(iii) Subscriber Database. Seller represents and warrants
that the number of Subscribers, Active Subscribers and
Subscribers of any Prepaid Service (as defined in Section
5(a) below) that it sets forth on Exhibit A is correct and
complete as of the Effective Date of this Agreement and
will be correct and complete as of the Subscriber
Transition End Date. A VIOLATION OF THIS PROVISION WILL
CONSTITUTE A MATERIAL BREACH OF THIS AGREEMENT. SELLER
UNDERSTANDS AND AGREES THAT IN THE EVENT OF SUCH BREACH,
EARTHLINK MAY IMMEDIATELY TERMINATE THIS AGREEMENT AND
TAKE WHATEVER STEPS NECESSARY TO EXERCISE ITS REMEDIES AT
LAW AND/OR EQUITY.
(iv) Transferred Assets. Seller has full and unrestricted
legal title to the Transferred Assets and all revenue
generated by the Transferred Assets, free and clear of
any and all liens, claims, revenue sharing or referral
fees, charges, encumbrances or restrictions of any kind,
and upon EarthLink's receipt of the Transferred Assets,
EarthLink shall own the Transferred Assets, free and
clear of any liens, claims, revenue sharing or referral
fees, charges, encumbrances or restrictions of any kind.
All the information relating to the Transferred Assets
set forth on Exhibit A is true and accurate in all
respects.
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(v) Claims. There are no claims, actions, suits,
proceedings or investigations pending or threatened
against or affecting Seller relating to the Business or
any of the Transferred Assets, at law or in equity,
before or by any court, municipality or other
governmental body which, if adversely determined, could
individually or in the aggregate have an adverse effect
on the Transferred Assets or the Business. Seller has
not been and Seller is not now, subject to any court
order, stipulation or consent of or with any court or
governmental body. No inquiry, action or proceeding has
been instituted or threatened or asserted against Seller
to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement or to
challenge the validity of such transactions or any part
thereof or seeking damages on account thereof. To the
best knowledge of Seller, there is no basis for any such
valid claim or action.
(b) Representations and Warranties of EarthLink. EarthLink
represents and warrants to Seller as follows:
(i) Due Organization. EarthLink is a corporation
duly organized, validly existing and in good
standing under the laws of the state of Delaware
and has full corporate power and authority to
carry on its business as now conducted.
(ii) Due Authorization. EarthLink has full power and
authority to execute, deliver and perform this
Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly
and validly executed and delivered by EarthLink and
constitutes the valid and binding obligations of
EarthLink, enforceable in accordance with its terms,
except to the extent that enforceability may be
limited by the Equitable Exceptions.
4. COVENANTS.
a. Non-Competition. Seller agrees that, for a period of three (3)
years after the Subscriber Transition End Date, it shall not
and its officers as set forth on Exhibit E hereto shall not,
without the prior written consent of EarthLink, either
individually, or in partnership or jointly or in conjunction
with any Person as principal, agent, employee or shareholder or
in any other manner whatsoever, (i) invest in, become
associated with, accept employment with, serve as a consultant
to, or accept compensation from, any person, firm or
corporation (including any new business started by Seller alone
or with others) engaged in the Business in the counties of Lee,
Charlotte, Collier, Hendry, Glades, Miami-Dade, Broward, Palm
Beach and Monroe in the state of Florida (the "Territory"),
(ii) invest in, become associated with or employed, except for
any employment with EarthLink, in the Business anywhere in the
Territory, (iii) contact or solicit any Subscribers or other
customers of EarthLink (directly or indirectly) for the purpose
of diverting any existing or future business of such
Subscribers or other customers to a competing source,
(iv) contact or solicit any employees of, or vendors to,
EarthLink (directly or indirectly) for the purpose of causing,
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inviting or encouraging any such employee or vendor to alter or
terminate his, her or its employment or business relationship
with EarthLink or (v) willfully make any public statement or
perform or do any other act prejudicial or injurious to the
reputation or goodwill of EarthLink or otherwise interfere with
the business of EarthLink or any of its Affiliates. The Seller
and its officers shall execute the Non-Competition Agreement
attached hereto as Exhibit E.
b. Post-Transition Conduct. During the period commencing on the
Subscriber Transition End Date and expiring on the earlier of
(i) the three (3) year anniversary of the Subscriber
Transition End Date or (ii) the liquidation and dissolution
of Seller, Seller will refer all customer inquiries relating
to the Business within the Territory to EarthLink or its
Affiliates, at the direction of EarthLink. During the period
commencing on the Effective Date and expiring on the earlier
of the three (3) year anniversary of the Effective Date or
the liquidation and dissolution of Seller, Seller will not
take any action that is designed or intended to discourage
any Subscriber, lessor, licensor, licensee, customer, vendor,
supplier or other business associate of Seller from
maintaining the same business relations with EarthLink, its
Affiliates or to another Person at the direction of EarthLink
after the date hereof as it maintained with Seller prior to
the date hereof.
c. CONFIDENTIALITY. Except as otherwise provided in this
Agreement, Seller and EarthLink each agree that all
information communicated to one by the other or the other's
Affiliates, whether before or after the Effective Date, will
be received in strict confidence, will be used only for
purposes of this Agreement and will not be disclosed by the
recipient Party, its agents, subcontractors or employees
without the prior written consent of the other Party. Each
Party agrees to take all reasonable precautions to prevent
the disclosure to outside parties of such information,
including, without limitation, the terms of this Agreement,
except as mandated by legal, accounting or regulatory
requirements. The provisions of this Section 4(c) shall
survive the expiration or termination of this Agreement for
any reason.
5. LIABILITY, INDEMNIFICATION AND RIGHT OF OFFSET.
a. No Assumption of Liabilities. EarthLink shall not assume or
be liable for, and Seller shall retain and remain responsible
for, all of Seller's and the Business' debts, liabilities and
obligations of any nature whatsoever including, without
limitation, all prepaid accounts, all contracts, capital
leases, operating leases and Subscriber credits and/or
refunds, whether accrued, absolute or contingent, whether
known or unknown, whether due or to become due and whether
related to the Transferred Assets or otherwise, and
regardless of when asserted, including, without limitation,
any of Seller's services that have been prepaid by a
Subscriber (the "Prepaid Service"). Furthermore, Seller shall
refund to Subscriber any unused portion of the Prepaid
Service within 10 days following the Subscriber Transition
End Date, or at EarthLink's election, EarthLink may deduct
this amount from the Purchase Price (unless the parties agree
to some other mutually agreeable method for handling any
liability related to the Prepaid Service).
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b. Indemnification. Seller agrees to indemnify and hold
harmless EarthLink, and each officer, director, employee and
Affiliate of EarthLink, including without limitation, any
successor, licensee or assignee of EarthLink (collectively,
the "Indemnified Parties") from and against any and all
damages, losses, claims, liabilities, demands, charges,
suits, penalties, costs and expenses (including court costs
and reasonable attorneys' fees and expenses incurred in
connection with any litigation or proceeding) (collectively,
the "Indemnifiable Costs"), which any of the Indemnified
Parties may sustain, or to which any of the Indemnified
Parties may be subjected, arising from (i) any
misrepresentation, breach, omission or default by Seller of
or under any of the representations, covenants, agreements or
other provisions of this Agreement or any agreement or
document executed in connection herewith; (ii) any
noncompliance with the provisions of any applicable bulk sales
law or regulation; (iii) any liability or obligation of Seller
arising from the conduct of the Business prior to the Effective
Date, whether or not disclosed herein; or (iv) any claim or
claims made against EarthLink arising from liabilities or
asserted liabilities of Seller or its Affiliates which may be
asserted against EarthLink as successor to the Transferred
Assets.
c. Right of Offset. In the event that prior to the date of
payment of all of the Purchase Price, the Indemnified Parties
seek indemnification from Seller under Section 5(b) hereof as
a result of, including but not limited to, incorrect or
inaccurate information regarding Transferred Assets and
undisclosed liens, claims, revenue sharing or referral fees,
charges, encumbrances or restrictions of any kind upon
EarthLink's receipt of the Transferred Assets, then
EarthLink, in lieu of receiving a cash payment from Seller in
satisfaction of Seller's indemnification obligations under
Section 5(b) hereof, may in good faith elect to offset the
amount of any claim or loss against the unpaid Purchase
Price.
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6. GENERAL PROVISIONS.
a. Entire Agreement. The Agreement, including any and all
exhibits attached hereto, constitutes the entire
understanding and agreement with respect to its subject
matter, and supersedes any and all prior or contemporaneous
representations, understandings and agreements whether oral
or written between the Parties relating to the subject matter
of this Agreement, all of which are merged in this Agreement.
The Agreement shall not be revised, amended or in any way
modified except in a writing executed by both Parties.
b. Waivers. The waiver by any Party of any of its rights or
breaches of the other Party under this Agreement in a
particular instance shall not be construed as a waiver of the
same or different rights or breaches in subsequent instances.
All remedies, rights, undertakings and obligations hereunder
shall be cumulative and none shall operate as a limitation of
any other remedy, right, undertaking or obligation thereof.
No failure or delay by any Party in exercising any right,
power or privilege hereunder (and no course of dealing
between or among any of the parties) shall operate as a
waiver of any such right, power or privilege.
c. Expenses. Each of the parties shall bear all costs, charges
and expenses incurred by such Party in connection with this
Agreement and the consummation of the transactions
contemplated herein.
d. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of Seller and EarthLink and
each of their respective heirs, representatives, successors
and permitted assigns in accordance with the terms hereof.
This Agreement shall not be assignable by Seller without the
prior written consent of EarthLink. This Agreement shall be
assignable by EarthLink to any of its Affiliates without the
prior written consent of Seller.
e. Governing Law. The laws of Georgia shall govern this
Agreement without giving effect to applicable conflict of
laws provisions. The federal and state courts located in
Atlanta, Georgia alone have jurisdiction over all disputes
arising from or related to this Agreement. Seller consents to
the personal jurisdiction of such courts sitting in Georgia
with respect to such matters or otherwise between Seller and
EarthLink and waives Seller's rights to removal or consent to
removal. In the event any litigation or other proceeding is
brought by either Party in connection with this Agreement,
the prevailing Party in such litigation or other proceeding
shall be entitled to recover from the other Party all costs,
attorneys' fees and other expenses incurred by the prevailing
Party in such litigation.
f. Effects of Expiration or Termination. Upon the expiration or
termination of this Agreement, all rights and obligations of
the Parties under this Agreement shall terminate, except the
rights and obligations under Sections 2(c), 3(a)(iii), 4, 5
and 6 herein shall survive expiration or termination of the
Agreement.
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g. Severability of Provisions. In the event that any provision
of this Agreement is found to be invalid or unenforceable
pursuant to judicial decree or decision, the remainder of
this Agreement shall remain valid and enforceable according
to its terms.
h. Notices. All notices or other communications hereunder shall
be in writing and shall be delivered by hand, facsimile or
sent, postage prepaid, by registered or certified mail or
reputable overnight courier service and shall be deemed given
when so delivered by hand or facsimile or, if mailed, five
days after mailing (one business day in the case of overnight
courier) addressed to the intended recipient as set forth
below:
If to Seller: (Company):
Xxxx X. Xxxxxx
President
Greenhold Group, Inc. and Online Services USA, Inc.
0000 Xxxx Xxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxx 00000
cc: General Counsel
with a copy to: Xxxx X. Xxxxxx, Esq.
0000 Xxxx Xxxxxxx Xxxx Xxxxxxxxx
xxxxx 000
Xxxxxxx Xxxx, Xxxxxxx 00000
If to EarthLink: Xxxxx Xxxxxx
Director of Acquisitions
EarthLink, Inc.
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxx X
Xxxxxxx, XX 00000
cc: General Counsel
with a copy to: EarthLink, Inc.
0000 Xxx Xxxx Xxxxx
Xxxxxxxx Xxxxxxxxxx 00000
Attn: Legal Department
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Each of the Parties has executed this Agreement as of the
Effective Date.
EARTHLINK:
EARTHLINK, INC.
By:____________________________
Title:___________________________
Date:___________________________
SELLERS:
Greenhold Group, Inc.
By:___________________________
Title:__________________________
Date:__________________________
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EXHIBIT A
TRANSFERRED ASSETS
Subscribers.
Subscriber Number of Applicable
Category Subscribers Bounty per
as of 03/26/02 Qualified
Member
Dialup $165.00
monthly
Subscribers
claimed by
Seller other
than Prepaid
Service
Subscribers
Dialup
Prepaid
Service
Subscribers
claimed by
Seller
Equipment.
----------
None
Domain Names.
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None
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EXHIBIT B
SELLER'S WIRING INSTRUCTIONS
Bank:
ABA Routing Number:
Account Name:
Account Number:
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EXHIBIT C
[Graph of Transition Period]
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EXHIBIT D
Data Dictionary
The customer database file shall be delivered in a comma delimited
text file in accordance with the data dictionary described below.
Each data file shall have a header row.
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EXHIBIT E
FORM OF NON-COMPETITION AGREEMENT
---------------------------------
THIS NON-COMPETITION AGREEMENT (this "Agreement") is effective
as of ______________________, 2001 (the "Effective Date") by and
between EarthLink, Inc., a Delaware corporation ("EarthLink"), and
Greenhold Group, Inc., Online Services USA, Inc. and their officers
("Seller"). All capitalized terms, unless otherwise specified, shall
have the meanings ascribed to them in the Subscriber Acquisition
Agreement dated as of __________________________, 2002 between
EarthLink and Seller (the "Underlying Agreement"). This Exhibit E,
together with the Underlying Agreement, represents the "Agreement" in
its entirety.
RECITALS
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Seller owns the Transferred Assets; and
The Transferred Assets of Seller are to be acquired by EarthLink
pursuant to the Underlying Agreement; and
The officers of Seller have intimate knowledge of the Seller's
business practices, which, if exploited by Seller in contravention of
this Agreement, would seriously, adversely and irreparably affect the
interests of EarthLink; and
To induce EarthLink to enter into the Underlying Agreement, and
consummate the other transactions contemplated by the Underlying
Agreement, Seller and] Seller's officers have agreed to execute and
deliver this Agreement.
In consideration of the transactions contemplated by the
Underlying Agreement, the payment by EarthLink to Seller of the
Purchase Price for the Transferred Assets, the above premises, the
mutual promises and covenants of the parties hereto set forth herein,
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and EarthLink
agree as follows:
1. Agreement not to compete. Unless otherwise consented to in
writing by EarthLink, Seller agrees that during the period of
three (3) years from the Effective Date (the "Restricted
Period"), it will not, within the Territory, either directly or
indirectly, on its own behalf or in the service or on behalf of
others, engage in any competing business or provide managerial,
supervisory, administrative, financial or consulting services or
assistance to, or own a beneficial interest (except as a
stockholder holding less than five percent (5%) interest in a
corporation whose shares are actively traded on a regional or
national securities exchange) in any Competing Business.
"Competing Business" shall mean any business organization of
whatever form engaged, either directly or indirectly, in any
business or enterprise which is the same as, or substantially
17
the same as, the Business. "Directly or Indirectly" shall mean
(i) acting as an agent, representative, consultant, officer,
director, independent contractor or employee of a Competing
Business; (ii) participating in any such Competing Business as
an owner, partner, limited partner, joint venturer, creditor or
stockholder (except as a stockholder holding less than five
percent (5%) interest in a corporation whose shares are actively
traded on a regional or national securities exchange); and (iii)
communicating to any such Competing Business the names or
addresses or any other information concerning any past, present,
or identified prospective client or customer of Seller or of
EarthLink or any entity having title to the goodwill of Seller.
2. Agreement not to solicit customers. Seller agrees that during
the Restricted Period, Seller will not, without the prior
written consent of EarthLink, either directly or indirectly, on
its own behalf or in the service or on behalf of others (i)
solicit, divert or appropriate to or for a Competing Business
any person which is a customer of the business at the Effective
Date or (ii) attempt to solicit, divert or appropriate to or for
a Competing Business, any such person.
3. Agreement not to solicit employees. Seller agrees that during
the Restricted Period, Seller will not, without the prior
written consent of EarthLink, either directly or indirectly, on
its own behalf or in the service or on behalf of others,
solicit, divert, or hire away, or attempt to solicit, divert, or
hire away, from the employment of the Seller, any person
employed by the Seller, whether or not such employee is a full-
time employee or temporary employee of such persons, and whether
or not such employment is pursuant to a written agreement and
whether or not such employment is for a determined period or is
at will. Further, Seller agrees that it will not, without the
prior written consent of EarthLink, either directly or
indirectly, on its own behalf or in the service or on behalf of
others, hire or attempt to hire any such employee of Seller that
voluntarily terminates his or her employment with Seller during
the Restricted Period.
4. Confidentiality.
A. Seller and EarthLink each agree that all information
communicated to one by the other or the other's Affiliates,
whether before or after the Effective Date, will be received in
strict confidence, will be used only for purposes of this
Agreement and will not be disclosed by the recipient Party, its
agents, subcontractors or employees without the prior written
consent of the other Party. Each Party agrees to take all
reasonable precautions to prevent the disclosure to outside
parties of such information, including, without limitation, the
terms of this Agreement, except as mandated by legal, accounting
or regulatory requirements. The provisions of this Section 4(A)
shall survive the expiration or termination of this Agreement
for any reason. All proprietary information, and all materials
containing them, received by Seller are confidential to
EarthLink and Seller, and will remain EarthLink's and as
appropriate, Seller's property exclusively. Seller will hold
all proprietary information in strict confidence, and will not
use, reproduce, disclose or otherwise distribute the proprietary
information, or any materials containing them, except in the
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ordinary course of business and will take those actions
reasonably necessary to protect any proprietary information.
Seller's obligations regarding confidential information will
survive the expiration or termination of this Agreement.
B. In the event Seller is required by any court or
legislative or administrative body (by oral questions,
interrogatories, requests for information or documents,
subpoena, civil investigation demand or similar process) to
disclose any proprietary information of the EarthLink or the
Seller, Seller shall provide EarthLink with prompt notice of
such requirement in order to afford EarthLink an opportunity to
seek an appropriate protective order.
5. Remedies.
A. Seller acknowledges and agrees that, by virtue of its
relationship with the Seller and EarthLink, great loss and
irreparable damage would be suffered by the Seller and
EarthLink, including, without limitation, damage to the goodwill
and proprietary interests of the Seller and EarthLink, if Seller
should breach or violate any of the terms or provisions of the
covenants and agreements set forth in Sections 1,2, 3 and 4
hereof. Seller further acknowledges that Seller has examined in
detail such restrictive covenants and agreements and agrees that
the restraints imposed thereby on Seller are reasonable in the
sense that they are no greater than are necessary to protect the
goodwill of the Seller invested in by EarthLink pursuant to the
Underlying Agreement and to protect EarthLink in its legitimate
business interests, and the restrictive covenants and agreements
are reasonable in the sense that they are not unduly harsh or
oppressive.
B. The parties acknowledge and agree that any breach of
Sections 1, 2, 3 or 4 of this Agreement by Seller would result
in irreparable injury to the Seller and EarthLink, and therefore
Seller agrees and consents that EarthLink shall be entitled to a
temporary restraining order and a permanent injunction to
prevent a breach or contemplated breach of any of the covenants
or agreements of Seller contained herein.
C. In addition, EarthLink shall be entitled, upon any breach
of Sections 1, 2, 3 or 4 of this Agreement by Seller, to demand
an accounting and repayment of all profits and other monetary
compensation realized by Seller, directly or through any
Competing Business controlled by Seller, as a result of any such
breach.
D. The rights of EarthLink under this Section 5 shall not be
in limitation or in lieu of any and all other remedies that may
be available to EarthLink under the Underlying Agreement or any
other agreement, document or instrument provided for therein, or
other remedies otherwise available at law or in equity. The
existence of any claim, demand, action or cause of action
against EarthLink whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by
EarthLink of any then valid covenants or agreements herein.
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6. Entire Agreement. The Agreement, including any and all exhibits
attached thereto, constitutes the entire understanding and
agreement with respect to its subject matter, and supersedes any
and all prior or contemporaneous representations, understandings
and agreements whether oral or written between the parties
relating to the subject matter of this Agreement, all of which
are merged in this Agreement. The Agreement shall not be
revised, amended or in any way modified except in a writing
executed by all parties.
7. Waivers. The waiver by any party of any of its rights or
breaches of the other party under this Agreement in a particular
instance shall not be construed as a waiver of the same or
different rights or breaches in subsequent instances. All
remedies, rights, undertakings and obligations hereunder shall
be cumulative and none shall operate as a limitation of any
other remedy, right, undertaking or obligation thereof. No
failure or delay by any party in exercising any right, power or
privilege hereunder (and no course of dealing between or among
any of the parties) shall operate as a waiver of any such right,
power or privilege.
8. Expenses. Each of the parties shall bear all costs, charges and
expenses incurred by such party in connection with this
Agreement and the consummation of the transactions contemplated
herein.
9. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of Seller and EarthLink and each of
their respective heirs, representatives, successors and
permitted assigns in accordance with the terms hereof. This
Agreement shall not be assignable by Seller without the prior
written consent of EarthLink. This Agreement shall be
assignable by EarthLink without the prior written consent of
Seller.
10. Governing Law. The laws of Georgia shall govern this
Agreement without giving effect to applicable conflict of laws
provisions. The federal and state courts located in Atlanta,
Georgia alone have jurisdiction over all disputes arising from
or related to this Agreement. Seller consents to the personal
jurisdiction of such courts sitting in Georgia with respect to
such matters or otherwise between Seller and EarthLink and
waives Seller's rights to removal or consent to removal. In the
event any litigation or other proceeding is brought by either
party in connection with this Agreement, the prevailing party in
such litigation or other proceeding shall be entitled to recover
from the other party all costs, attorneys' fees and other
expenses incurred by the prevailing party in such litigation.
11. Effects of Expiration or Termination. Upon the expiration
or termination of this Agreement, all rights and obligations of
the Parties under this Agreement shall terminate, except the
rights and obligations under Sections 1, 2, 3, 4 and 5 herein
shall survive expiration or termination of the Agreement.
12. Severability of Provisions. In the event that any
provision of this Agreement is found to be invalid or
unenforceable pursuant to judicial decree or decision, the
remainder of this Agreement shall remain valid and enforceable
according to its terms.
13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed original, but
all of which together shall constitute one and the same
instrument
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14. Notices. All notices or other communications hereunder
shall be in writing and shall be delivered by hand, facsimile or
sent, postage prepaid, by registered or certified mail or
reputable overnight courier service and shall be deemed given
when so delivered by hand or facsimile or, if mailed, five days
after mailing (one business day in the case of overnight
courier) addressed to the intended recipient as set forth below:
If to Seller: Xxxx X. Xxxxxx
President
Greenhold Group, Inc. and Online
Services USA, Inc.
0000 Xxxx Xxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxx 00000
cc: General Counsel
with a copy to: Xxxx X. Xxxxxx, Esq.
0000 Xxxx Xxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxx 00000
If to EarthLink: Xxxxx Xxxxxx
Director of Acquisitions
EarthLink, Inc.
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxx X
Xxxxxxx, XX 00000
cc: General Counsel
with a copy to: EarthLink, Inc.
0000 Xxx Xxxx Xxxxx
Xxxxxxxx Xxxxxxxxxx 00000
Attn: Legal Department
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IN WITNESS WHEREOF, EarthLink and Seller have each executed and
delivered this Agreement as of the date first written above.
EARTHLINK:
----------
EARTHLINK, INC.
By:____________________________
Title:___________________________
Date:___________________________
SELLERS:
--------
GREENHOLD GROUP, INC.
By:___________________________
Title:__________________________
Date:__________________________
ONLINE SERVICES USA, INC.
By:___________________________
Title:__________________________
Date:__________________________
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SELLER'S OFFICERS:
By:___________________________
Title:__________________________
Date:__________________________
SELLER'S OFFICERS:
By:___________________________
Title:__________________________
Date:__________________________
SELLER'S OFFICERS:
By:___________________________
Title:__________________________
Date:__________________________
SELLER'S KEY EMPLOYEES:
By:___________________________
Title:__________________________
Date:__________________________
SELLER'S KEY EMPLOYEES:
By:___________________________
Title:__________________________
Date:__________________________
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