UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 20, 1999
PRODIGY COMMUNICATIONS CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
000-25333 04-3323363
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(Commission File Number) (IRS Employer Identification No.)
44 SOUTH BROADWAY, WHITE PLAINS, NY 10601
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(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code): (914) 448-8000
NA
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(Former name or former address, if changed since last report)
Page 1 of 6
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 20, 1999, Prodigy Communications Corporation ("Prodigy) acquired
certain of the consumer, business and campus dial-up subscribers of Cable &
Wireless USA, Inc. pursuant to an Asset Purchase Agreement, dated as of May 26,
1999, (the "Agreement"), by and among Cable & Wireless USA, Inc., Cable &
Wireless USA Internet, L.L.C. and Prodigy, a copy of which is attached as
Exhibit 1.1 to this Current Report on Form 8-K. At the closing, Prodigy paid
Cable & Wireless USA, Inc., $40.9 million in cash, which amount is subject to
certain post-closing adjustments based on the number of Cable & Wireless
customers who transition to Prodigy's service as more fully described in the
Agreement. Prodigy utilized cash proceeds raised in its initial public offering
to pay for the acquired assets.
Page 2 of 6
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro-forma financial information.
Not applicable.
(c) Exhibits.
Attached as Exhibit 1.1 to this Current Report on Form 8-K is the Asset Purchase
Agreement, dated as of May 26, 1999, by and among Cable & Wireless USA, Inc.,
Cable & Wireless USA Internet, L.L.C. and Prodigy.
Page 3 of 6
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 2, 1999 PRODIGY COMMUNICATIONS CORPORATION
(Registrant)
By: / S / ANDREA S. HIRSCH / S /
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Andrea S. Hirsch
Executive Vice President and General Counsel
Page 4 of 6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- - ----------- ----------- ----
<C> <S> <S>
1.1 Asset Purchase Agreement, dated as of May 6
26, 1999, by and among Cable & Wireless
USA, Inc., Cable & Wireless USA Internet,
L.L.C. and Prodigy. Portions of the
exhibit have been omitted pursuant to a
request for confidential treatment; this
material has been filed separately.
</TABLE>
Page 5 of 6
<PAGE>
EXHIBIT 1.1
Asset Purchase Agreement
Page 6 of 6
ASSET PURCHASE AGREEMENT
by and among
Cable & Wireless USA, Inc.,
Cable & Wireless USA Internet, L.L.C., and
Prodigy Communications Corporation
dated as of May 26, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION PAGE
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<S> <C> <C>
ARTICLE I
GENERAL
1.1 Definitions....................................................... 1
1.2 Terms Generally................................................... 1
ARTICLE II
THE TRANSACTION
2.1 Sale and Purchase of Assets....................................... 1
2.2 Purchase Price.................................................... 2
2.3 Final Dial-up Subscriber Number................................... 2
2.4 Assumption of Assumed Liabilities................................. 3
2.5 Closing........................................................... 3
2.6 Deliveries and Proceedings at the Closing......................... 4
2.7 Proration of Deferred Revenue..................................... 5
2.8 Consent of Third Parties.......................................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER
3.1 Qualification; Interests in Other Entities........................ 7
3.2 Authorization and Enforceability.................................. 7
3.3 No Violation of Laws or Agreements................................ 8
3.4 Financial Statements.............................................. 8
3.5 Subscriber Contracts and other Contracts.......................... 9
3.6 No Changes........................................................ 10
3.7 No Pending Litigation or Proceedings.............................. 10
3.8 Brokerage......................................................... 11
3.9 Title............................................................. 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Organization and Good Standing.................................... 11
4.2 Authorization and Enforceability.................................. 11
4.3 No Violation of Laws or Agreements................................ 11
4.4 Brokerage......................................................... 12
4.5 Financial Ability................................................. 12
4.6 <F1>.............................................................. 12
4.7 No Pending Litigation or Proceedings.............................. 12
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<F1>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
<PAGE>
ARTICLE V
ADDITIONAL COVENANTS
5.1 Conduct of Business............................................... 13
5.2 Mutual Covenants.................................................. 13
5.3 Consents and Filings; HSR Act..................................... 13
5.4 Public Announcement............................................... 14
5.5 Investigation..................................................... 14
5.6 Confidentiality................................................... 14
5.7 Reasonable Best Efforts........................................... 15
5.8 Conduct Relating to Operation of Business......................... 15
5.9 Marketing and Communication to Subscribers........................ 16
5.10 Campus Contracts.................................................. 16
5.11 Outsourcing Agreements............................................ 16
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Obligations of Buyer...................... 16
6.2 Conditions Precedent to Obligations of Parent and Seller.......... 17
ARTICLE VII
CERTAIN ADDITIONAL COVENANTS
7.1 Employees......................................................... 18
7.2 Certain Taxes and Expenses........................................ 19
7.3 Non-Competition/Non-Hire.......................................... 19
7.4 Non-Solicitation.................................................. 20
7.5 INTENTIONALLY OMITTED............................................. 21
7.6 Collection Activities............................................. 21
7.7 Accounts Receivable............................................... 21
7.8 Remittance of Payments............................................ 21
7.9 Email Forwarding and the URL License.............................. 21
7.10 <F2>.............................................................. 22
7.11 <F2>.............................................................. 22
7.12 <F2>.............................................................. 22
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
8.1 Survival.......................................................... 22
8.2 Indemnification by Parent and Seller.............................. 22
8.3 Indemnification by Buyer.......................................... 23
8.4 Notification of Claims............................................ 24
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<F2>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
<PAGE>
ARTICLE IX
TERMINATION; MISCELLANEOUS
9.1 Termination....................................................... 26
9.2 Further Assurances................................................ 26
9.3 Entire Agreement.................................................. 26
9.4 Benefit; Assignment............................................... 26
9.5 No Presumption.................................................... 27
9.6 Notices........................................................... 27
9.7 Counterparts; Headings............................................ 28
9.8 Severability...................................................... 28
9.9 No Reliance....................................................... 28
9.10 Governing Law..................................................... 28
9.11 Submission to Jurisdiction; Waivers............................... 28
9.12 Waiver............................................................ 29
9.13 Amendment......................................................... 29
</TABLE>
<PAGE>
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of May 26,
1999, by and among Cable & Wireless USA, Inc., a District of Columbia
corporation ("Parent"), Cable & Wireless USA Internet, L.L.C., a Delaware
limited liability company ("Seller"), and Prodigy Communications Corporation, a
Delaware corporation ("Buyer").
Seller is engaged in, among other things, the Business.
Buyer desires to purchase all of the Acquired Assets and Seller
desires to sell the Acquired Assets and to assign the Assumed Liabilities, and
Buyer desires to assume the Assumed Liabilities, all on the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants and agreements contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
GENERAL
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1.1 DEFINITIONS. Certain capitalized terms used in this Agreement
have the meanings specified in Annex A hereof.
1.2 TERMS GENERALLY. (a) Words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires, (b) the terms "hereof,"
"herein," "hereto" and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole (including
the Annex, all of the Schedules and Exhibits hereto) and not to any particular
provision of this Agreement, and Annex, Article, Section, paragraph, Exhibit and
Schedule references are to the Annex, Articles, Sections, paragraphs, Exhibits
and Schedules to this Agreement unless otherwise specified, (c) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified, (d) the word "or"
shall not be exclusive, and (e) terms not found in Annex A are defined elsewhere
in this Agreement.
ARTICLE II
THE TRANSACTION
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2.1 SALE AND PURCHASE OF ASSETS. Subject to the terms and conditions
of this Agreement, at the Closing, Seller shall sell, assign, transfer, deliver
and convey to Buyer, and Buyer shall purchase and assume, only the Acquired
Assets, free and clear of all Liens, for the Purchase Price specified in Section
2.2.
<PAGE>
2.2 PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, the aggregate purchase price to be paid by Buyer for the purchase of
the Acquired Assets (the "Purchase Price") shall be (i) $400.00 multiplied by
the Final Continuing Dial-up Subscriber Number (the "Final Cash Purchase
Price"), plus (ii) $1.5 million (the "Additional Amount"), plus (iii) the
Assumed Liabilities. Subject to the terms and conditions of this Agreement, at
the Closing, Buyer shall pay to Seller by wire transfer of immediately available
funds to the account designated by Seller in writing at least two Business Days
prior to the Closing Date an amount equal to (A) 70% of (a) $400 multiplied by
(b) the Closing Dial-up Subscriber Number (the "Closing Cash Payment") plus (B)
the Additional Amount (it being understood and agreed by the parties that,
notwithstanding anything to the contrary contained herein, Seller shall not be
entitled to receive as part of the Final Cash Purchase Price more than one
$400.00 payment per Subscriber).
2.3 FINAL DIAL-UP SUBSCRIBER NUMBER. (a) At least three days prior
to the Closing, Seller shall deliver to Buyer a list (the "Closing List")
showing its good faith estimate of the Closing Dial-up Subscribers. Buyer shall
have the right to review and approve (such approval not to be unreasonably
withheld) Seller's good faith estimate of the Closing Dial-up Subscribers (the
number of Closing Dial-up Subscribers as approved by Buyer prior to Closing is
the "Closing Dial-up Subscriber Number"). Seller shall make available to Buyer
all workpapers (including Seller's auditors' work papers) and other books and
records utilized in preparing the Closing List, reasonably requested by Buyer,
and shall make available to Buyer the appropriate personnel and auditors
involved in the preparation of the Closing List.
(b) As promptly as practicable after the Business Day that is 60
days after the completion of the distribution of Buyer's second invoice for
Internet access services to all Subscribers immediately prior to the Closing,
but in no event later than 120 days after the Closing Date, Buyer shall deliver
to Seller a list of the Continuing Dial-up Subscribers and the Additional
Subscribers ("Buyer's Continuing Dial-up Subscriber Schedule") which shall be in
substantially the same format as the Closing List, except that such list shall
also include the Special Continuing Subscribers (as such term is defined in
Section 5.8 below) and the Additional Subscribers. Seller will notify Buyer in
writing ("Seller's Dispute Notice") within 30 days after receiving Buyer's
Continuing Dial-up Subscriber Schedule if Seller disagrees with Buyer's
calculation of the number of Continuing Dial-up Subscribers, including Special
Continuing Subscribers or Additional Subscribers, as set forth in Buyer's
Continuing Dial-up Subscriber Schedule, which notice shall set forth in
reasonable detail the basis for such disagreement, and Seller's calculation of
the number of Continuing Dial-up Subscribers, including Special Continuing
Subscribers or Additional Subscribers. Buyer will give Seller and its
representatives reasonable access during the normal business hours of Buyer to
the personnel, books and records of the Business (and to Buyer's auditors and
their work papers) to assist Seller in reviewing the accuracy of Buyer's
Continuing Dial-up Subscriber Schedule and in the preparation of Seller's
Dispute Notice. If no Seller's Dispute Notice is received by Buyer within such
30-day period, Buyer's calculation of the number of Continuing Dial-up
Subscribers, including Special Continuing Subscribers and Additional
Subscribers, shall be final and binding upon the parties hereto.
<PAGE>
(c) Upon receipt by Buyer of Seller's Dispute Notice, Seller and
Buyer shall negotiate in good faith to resolve any disagreement with respect to
the number of Continuing Dial-up Subscribers, including Special Continuing
Subscribers or Additional Subscribers, set forth in Seller's Dispute Notice. To
the extent Buyer and Seller are unable to agree with respect to the number of
Continuing Dial-up Subscribers, including Special Continuing Subscribers or
Additional Subscribers, within 30 days after receipt by Buyer of Seller's
Dispute Notice, Buyer and Seller shall promptly submit their dispute to Ernst &
Young L.L.P. or another mutually acceptable nationally recognized accounting
firm with no material relationship to Buyer, Parent or Seller for a binding
resolution. The number of Continuing Dial-up Subscribers, including Special
Continuing Subscribers and Additional Subscribers, as agreed upon by Seller and
Buyer, as deemed agreed upon pursuant to the last sentence of Section 2.3(b) or
as determined by such accounting firm, in accordance herewith, shall be termed
the "Final Continuing Dial-up Subscriber Number." The fees and expenses of such
accounting firm shall be paid by the party hereto whose determination of the
Continuing Dial-up Subscribers, including Special Continuing Subscribers and
Additional Subscribers, as initially submitted to such accounting firm is
furthest away from the Final Continuing Dial-up Subscriber Number.
(d) If the Final Cash Purchase Price exceeds the Closing Cash
Payment, Buyer shall pay to Seller the amount of such excess, or if the Closing
Cash Payment exceeds the Final Cash Purchase Price, Seller shall pay to Buyer
the amount of such excess, in either case, within five Business Days after the
Final Continuing Dial-up Subscriber Number becomes final and binding on the
parties hereto, by wire transfer of immediately available funds to a bank
account designated by the party to receive the applicable payment.
2.4 ASSUMPTION OF ASSUMED LIABILITIES. (a) Subject to the
terms and conditions of this Agreement, at the Closing, Buyer shall assume
the Assumed Liabilities.
(b) Notwithstanding anything to the contrary contained herein, Buyer
shall not assume or be bound by or be obligated or responsible for any duties,
responsibilities, commitments, expenses, obligations or liabilities of Parent or
Seller or relating to the Acquired Assets or the Business (or which may be
asserted against or imposed upon Buyer as a successor or transferee of Seller as
an acquiror of the Acquired Assets or the Business or otherwise as a matter of
law) of any kind or nature (fixed or contingent, known or unknown, warranties,
employee benefit plan obligations or claims), other than the Assumed
Liabilities, (other than the Assumed Liabilities, collectively, the "Non-Assumed
Liabilities").
(c) Parent and Seller hereby irrevocably waive and release, and
shall cause their Affiliates to waive and release, Buyer from all Non-Assumed
Liabilities, including any liabilities or obligations created or which arise by
statute or common law.
2.5 CLOSING. Subject to the terms and conditions of this Agreement,
the closing of the sale and purchase of the Acquired Assets (the "Closing")
shall take place at 10:00 a.m., New York City time, on (i) the fifth Business
Day after the expiration or the early termination of the waiting period under
the HSR Act, (ii) such later date no later than September 14, 1999 mutually
satisfactory to Buyer and Seller which is no later than the fifth Business Day
<PAGE>
after satisfaction (or waiver) of the conditions to the Closing set forth in
Sections 6.1 and 6.2 hereof (other than those conditions which require the
delivery of any documents or the taking of other action at the Closing) at the
offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New
York, or (iii) such other date and at such other time or place as may be
mutually agreed upon by the parties hereto (the "Closing Date"). The parties
agree that they will use reasonable efforts to set the Closing Date on a date
that facilitates the orderly and timely billing of Subscribers for services
rendered to Subscribers before the Closing Date and the collection by Seller of
fees for such services in accordance with Section 7.6 hereof.
2.6 DELIVERIES AND PROCEEDINGS AT THE CLOSING. Subject to the terms
and conditions of this Agreement, at the Closing:
(a) DELIVERIES BY SELLER TO BUYER. Seller shall deliver to
Buyer:
(i) the Bill of Sale (as defined in Section 6.1(e)) and the
Assignment and Assumption Agreement (as defined in Section 6.1(f)), in each
case, duly executed by Seller;
(ii) Schedule 2.6(a)(ii) setting forth a list, in an
electronic format acceptable to Buyer, of each of Seller's Internet service
plans offered by the Business as of the date of this Agreement (the "Plans"),
the retail monthly charge for each Plan, the Closing List, and the user name,
password, name, payment method, address and user identification, and to the
extent available to Seller, the gender, birth date, day telephone number and
evening telephone number, in each case, for each Subscriber on the Closing List;
(iii) an amount equal to the Closing Deferred Revenue (as
defined in Section 2.7(a))(unless such amount is netted against the Closing Cash
Payment, at Buyer's election; provided, however, that for purposes of
determining the Closing Cash Payment under this Agreement, such netting shall
not be deemed to reduce the amount of the Closing Cash Payment);
(iv) a receipt for the payment of the Closing Cash Payment and
the Additional Amount duly executed by Seller;
(v) the certificates and other documents required to be
delivered by Parent or Seller pursuant to Section 6.1 hereof and certified
resolutions evidencing the authority of Parent and Seller as set forth in
Section 3.2 hereof; and
(vi) all such other documents and instruments of conveyance as
shall be reasonably requested by Buyer to transfer to Buyer the Acquired Assets
in accordance herewith and, where necessary or desirable, in recordable form.
(b) DELIVERIES BY BUYER TO SELLER. Buyer will deliver to Seller:
(i) wire transfer of immediately available funds in an amount
equal to the Closing Cash Payment (which may be reduced by the amount of the
Closing Deferred Revenue, as defined in Section 2.7(a)) and the Additional
Amount;
<PAGE>
(ii) the Assignment and Assumption Agreement (as defined in
Section 6.1(f)) duly executed by Buyer;
(iii) the certificates and other documents required to be
delivered by Buyer pursuant to Section 6.2 hereof and certified resolutions
evidencing the authority of Buyer as set forth in Section 4.2 hereof; and
(iv) all such other documents and instruments of assumption as
shall be reasonably requested by Seller for Buyer to assume the Assumed
Liabilities in accordance herewith.
(c) OTHER ACTIONS AT CLOSING. At the Closing, Buyer and Seller will
enter into a transition services agreement substantially in the form of Exhibit
A attached hereto (the "Transition Services Agreement") pursuant to which, among
other things, Seller will provide Buyer with certain specified transition
services.
2.7 PRORATION OF DEFERRED REVENUE.
(a) At least three days prior to the Closing, Seller shall deliver
to Buyer a schedule showing its good faith estimate of the Deferred Revenue
Liability (the "Deferred Revenue Schedule"). Buyer shall have the right to
review and approve (such approval not to be unreasonably withheld) Seller's good
faith estimate of the Deferred Revenue Liability. The amount of the Deferred
Revenue Liability as approved by Buyer prior to Closing is the "Closing Deferred
Revenue." Seller shall make available to Buyer all workpapers (including
Seller's auditors' work papers) and other books and records utilized in
preparing the Deferred Revenue Schedule and shall make available to Buyer the
appropriate personnel and auditors involved in the preparation of the Deferred
Revenue Schedule as reasonably requested by Buyer. At the Closing, Seller shall
pay Buyer an amount equal to the Closing Deferred Revenue, which amount, at
Buyer's option, can be netted against the Closing Cash Payment.
(b) As promptly as practicable after the 60th day following the
Closing Date, but in no event later than 90 days after the Closing Date, Buyer
shall deliver to Seller a schedule showing its determination of the Deferred
Revenue Liability ("Buyer's Deferred Revenue Schedule"). Seller will notify
Buyer in writing ("Seller's Deferred Revenue Dispute Notice") within 30 days
after receiving Buyer's Deferred Revenue Schedule if Seller disagrees with
Buyer's calculation of the Deferred Revenue Liability as set forth in Buyer's
Deferred Revenue Schedule, which notice shall set forth in reasonable detail the
basis for such disagreement. Buyer will give Seller and its representatives
reasonable access during the normal business hours of Buyer to the personnel,
books and records of the Business (and to Buyer's auditors and their work
papers) to assist Seller in the preparation of Seller's Deferred Revenue Dispute
Notice. If no Seller's Deferred Revenue Dispute Notice is received by Buyer
within such 30-day period, Buyer's calculation of the Deferred Revenue Liability
shall be final and binding upon the parties hereto.
(c) Upon receipt by Buyer of Seller's Deferred Revenue Dispute
Notice, Seller and Buyer shall negotiate in good faith to resolve any
<PAGE>
disagreement with respect to the Deferred Revenue Liability. To the extent Buyer
and Seller are unable to agree with respect to the Deferred Revenue Liability
within 30 days after receipt by Buyer of Seller's Deferred Revenue Dispute
Notice, Buyer and Seller shall promptly submit their dispute to Ernst & Young
L.L.P. or another mutually acceptable nationally recognized accounting firm with
no material relationship to Buyer, Parent or Seller for a binding resolution.
The amount of the Deferred Revenue Liability as agreed upon by Seller and Buyer,
as deemed agreed upon pursuant to the last sentence of Section 2.7(b) or as
determined by such accounting firm, in accordance herewith, shall be termed the
"Final Deferred Revenue Amount." The fees and expenses of such accounting firm
shall be paid by the party hereto whose determination of the Deferred Revenue
Liability as initially submitted to such accounting firm is furthest away from
the Final Deferred Revenue Amount.
(d) If the Final Deferred Revenue Amount exceeds the Closing
Deferred Revenue, Seller shall pay to Buyer the amount of such excess, or if the
Closing Deferred Revenue exceeds the Final Deferred Revenue Amount, Buyer shall
pay to Seller the amount of such excess, in either case, within five Business
Days after the Final Deferred Revenue Amount becomes final and binding on the
parties hereto, by wire transfer of immediately available funds to a bank
account designated by the party to receive the applicable payment.
(e) As soon as practicable after the determination of the Final
Continuing Dial-up Subscriber Number, Buyer shall deliver to Seller a schedule
("Buyer's Non-Converted Subscribers Deferred Revenue Schedule") showing its
determination of the amount of Deferred Revenue Liability for the period
following the end of the Term (as defined in the Transition Services Agreement)
attributable to Closing Dial-up Subscribers (the "Deferred Revenue Liability
Refund Amount") who did not convert into Continuing Dial-up Subscribers. The
review and dispute resolution mechanisms and time periods set forth in
subsections (b) and (c) of this Section 2.7 shall also apply to the final
determination of the amount of Deferred Revenue Liability Refund Amount. Buyer
shall pay to Seller the Deferred Revenue Liability Refund Amount as finally
determined in accordance with the immediately preceding sentence within five
Business Days after such amount becomes final and binding on the parties hereto,
by wire transfer of immediately available funds to a bank account designated by
Seller.
2.8 CONSENT OF THIRD PARTIES. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Contracts or any claim or right or any benefit arising thereunder or
resulting therefrom if an attempted assignment thereof, without the consent of a
third Person thereto, would constitute a breach or other contravention thereof
or in any way adversely affect the rights of Buyer thereunder. Parent and Seller
will use reasonable best efforts to obtain the consent of the other parties to
any such Contract for the assignment thereof to Buyer. If such consent is not
obtained prior to the Closing, or if an attempted assignment thereof would be
ineffective or would adversely affect the rights of Seller thereunder so that
Buyer would not in fact receive all such rights, Parent, Seller and Buyer will
cooperate to achieve a mutually agreeable arrangement under which Buyer would
obtain the benefits and assume the obligations thereunder (but only to the
extent such obligations would have constituted Assumed Liabilities if such
assignment occurred on the Closing Date) from and after the Closing Date in
accordance with this Agreement, including subcontracting, sublicensing or
<PAGE>
subleasing to Buyer, or under which Seller would enforce for the benefit of
Buyer any and all rights of Seller against any third party thereto. Seller will
pay Buyer promptly when received all monies received by Seller after the Closing
Date under any of the Contracts or any claim or right of any benefit arising
thereunder to the extent that Buyer would be entitled thereto pursuant hereto.
Nothing in this Section 2.8 shall limit Buyer's right to assert that the
conditions to its obligations set forth in Section 6.1(b) have not been
satisfied.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
OF PARENT AND SELLER
--------------------
Parent and Seller hereby jointly and severally represent and warrant
to Buyer as follows:
3.1 QUALIFICATION; INTERESTS IN OTHER ENTITIES. Seller is a limited
liability company duly formed, validly existing and in good standing under the
laws of the state of Delaware and has all requisite corporate power and
authority to own, lease and operate the Acquired Assets and the Business as
presently being conducted. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the District of Columbia and has
all requisite corporate power and authority to own, lease and operate its
business as presently being conducted. Seller is duly licensed or qualified to
do business and is in good standing as a foreign entity in all jurisdictions
wherein the nature of the Business or Seller's ownership or use of the Acquired
Assets make such licensing or qualification necessary except such failures to be
licensed or qualified or to be in good standing, if any, which when taken
together with all such other failures of Seller would not have a material
adverse effect on the Business or the Acquired Assets or on Parent's or Seller's
ability to perform their respective obligations under this Agreement and all
other agreements and instruments to be executed in connection herewith (this
Agreement and such other agreements and instruments being hereinafter referred
to collectively as the "Transaction Documents") to which Parent or Seller is a
party.
3.2 AUTHORIZATION AND ENFORCEABILITY. Each of Parent and Seller has
full corporate power and authority to execute, deliver and perform this
Agreement and the Transaction Documents to which Parent or Seller is a party.
The execution, delivery and performance by Parent and Seller of this Agreement
and the Transaction Documents to which Parent or Seller is a party have been
duly authorized by all necessary corporate action on the part of Parent or
Seller, as the case may be. This Agreement has been duly executed and delivered
by Parent and Seller, and, as of the Closing Date, the other Transaction
Documents to which Parent or Seller is a party will be duly executed and
delivered by Parent or Seller, as the case may be. This Agreement is a legal,
valid and binding obligation of Parent and Seller, enforceable against Parent
and Seller in accordance with its terms, except as such enforceability may be
limited by applicable laws relating to bankruptcy, insolvency, fraudulent
conveyance, reorganization or affecting creditors' rights generally and except
to the extent that injunctive or other equitable relief is within the discretion
of a court. As of the Closing Date, each of the other Transaction Documents to
which Parent or Seller is a party will be duly executed and delivered by Parent
or Seller, as the case may be, and will constitute the legal, valid and binding
<PAGE>
obligations of Parent or Seller, as the case may be, enforceable against Parent
or Seller in accordance with its terms, except as such enforceability may be
limited by applicable laws relating to bankruptcy, insolvency, fraudulent
conveyance, reorganization or affecting creditors' rights generally and except
to the extent that injunctive or other equitable relief is within the discretion
of a court.
3.3 NO VIOLATION OF LAWS OR AGREEMENTS. The execution, delivery, and
performance by Parent and Seller of this Agreement and the Transaction Documents
to which Parent or Seller is a party do not, and the consummation by Parent and
Seller of the transactions contemplated hereby and thereby, will not, (a)
violate, conflict with or result in the breach of any provision of the
Certificate of Incorporation, By-Laws, Certificate of Formation or Operating
Agreement (or similar organizational documents with different names) of Parent
or Seller or (b) except as set forth on Schedule 3.3(b), violate, conflict with,
result in a breach of, or constitute a default (or an event which would, with
the passage of time or the giving of notice or both, constitute a default)
under, require any consent under, or notice to, or filings with or result in or
permit the termination, amendment, modification, acceleration, suspension,
revocation or cancellation of, or result in the creation or imposition of any
Lien of any nature whatsoever upon any of the Acquired Assets or give to others
any interests or rights therein under (i) any indenture, mortgage, loan or
credit agreement, license, instrument, lease, contract, plan, permit or other
agreement or commitment, oral or written, to which Parent or Seller is a party,
or by which the Business, or any of the Acquired Assets may be bound or
affected, except for such violations, conflicts, breaches, defaults, consents,
notices, filings, terminations, modifications, amendments, accelerations,
suspensions, revocations, cancellations, Liens, interests or rights which,
individually and in the aggregate, do not have a material adverse effect on the
Business or the Acquired Assets or on Parent's or Seller's ability to perform
their respective obligations under this Agreement and the other Transaction
Documents to which Parent or Seller is a party, or (ii) any judgment,
injunction, writ, award, decree, restriction, ruling, or order of any court,
arbitrator or Governmental Entity or any applicable constitution, or Law, to
which Parent or Seller is subject or which is applicable to the Business, or any
of the Acquired Assets other than those violations, conflicts, breaches or
defaults which individually and in the aggregate would not have a material
adverse effect on the Business or the Acquired Assets or on Parent's or Seller's
ability to perform their respective obligations under this Agreement and the
other Transaction Documents to which Parent or Seller is a party and except for
filings under the HSR Act and the expiration of the applicable waiting period
under the HSR Act.
3.4 FINANCIAL STATEMENTS. A true, correct and complete copy of the
unaudited statement of income of the Business for the period beginning September
14, 1998 and ending March 31, 1999 is attached hereto as Part A of Schedule 3.4
(the "Financial Statements"). The Financial Statements were prepared in
accordance with the books and records of Seller and, to the best of Parent's and
Seller's knowledge, fairly present in all material respects the results of
operations of the Business for the period indicated, in conformity with GAAP
throughout the specified period, except (i) as expressly set forth therein, (ii)
that the Financial Statements do not contain footnotes and (iii) as set forth on
Part B of Schedule 3.4.
<PAGE>
3.5 SUBSCRIBER CONTRACTS AND OTHER CONTRACTS.
(a) Subscriber Contracts.
(i) Except as set forth on Schedule 3.5(a)(i), there are no
disputes pending or, to Parent's and Seller's knowledge, threatened, under or in
respect of any of the Subscriber Contracts other than those that, individually
and in the aggregate, are not reasonably likely to have a material adverse
effect on the Business, the Acquired Assets or on Parent's or Seller's ability
to perform their obligations under this Agreement and the other Transaction
Documents to which Parent or Seller is a party.
(ii) Attached hereto as Schedule 3.5(a)(ii) is, in an
electronic format, (1) a list of each of the Plans, (2) the retail monthly
charge for each Plan, (3) the total number of Subscribers as of the date hereof
for each of the consumer, business and campus segments of the Business, and (4)
the user identification for each Subscriber as of the date hereof for each Plan.
(iii) Attached hereto as Schedule 3.5(a)(iii) is the form of
subscriber contract (the "Form Subscriber Contract") which Seller has entered
into with each of its Subscribers.
(b) Contracts.
(i) Schedule 3.5(b) lists all the Contracts. A true and
correct copy of each Contract has been provided to Buyer prior to the date of
this Agreement. With respect to each Contract, except as set forth on Schedule
3.5(b)(i), neither Seller, nor, to Parent's and Seller's knowledge, any other
party thereto, is in breach or default and no event has occurred which with
notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under any such Contract, except for
such breaches, terminations, modifications, accelerations or defaults which,
individually and in the aggregate, are not reasonably likely to have a material
adverse effect on the Business, the Acquired Assets or on Parent's or Seller's
ability to perform their obligations under this Agreement and the other
Transaction Documents to which Parent or Seller is a party. There are no
disputes pending or, to Parent's and Seller's knowledge, threatened, under or in
respect of any of the Contracts other than those that, individually and in the
aggregate, are not reasonably likely to have a material adverse effect on the
Business, the Acquired Assets or on Parent's or Seller's ability to perform
their obligations under this Agreement and the other Transaction Documents to
which Parent or Seller is a party.
(ii) Except as set forth on Schedule 3.5(b)(ii), each of the
Contracts is in full force and effect and constitutes the legal, valid and
binding obligation of, and is legally enforceable against, Seller, and, to
Parent's and Seller's knowledge, any other party thereto, in accordance with its
terms, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) other than such failures to be legal, valid and binding
obligations and enforceable as are not reasonably likely to, individually or in
the aggregate, have a material adverse effect on the Business, the Acquired
<PAGE>
Assets or on Parent's or Seller's ability to perform their obligations under
this Agreement and the other Transaction Documents to which Parent or Seller is
a party.
(iii) Except as set forth on Schedule 3.5(b)(iii), each of the
Contracts is fully assignable to Buyer without the consent, approval or waiver
of any other Person.
(c) Contracts with MCI.
With respect to each Contract designated with two asterisks on
Schedule 3.5(b) (the "MCI Contracts") between Parent, Seller or their
Affiliates, on the one hand, and MCI Telecommunications Corporation, its
successors and any of their Affiliates ("MCI"), on the other hand, relating to
the provision of services to Parent or Seller which are the subject of the
Transition Services Agreement, neither Parent, Seller, nor their Affiliates is
in breach or default and no event has occurred which with notice or lapse of
time would constitute a breach or default, or permit termination, modification,
or acceleration, under any such MCI Contract.
(d) MCI Agreement and MCI Contracts.
Attached hereto as Exhibit B is a true and correct copy of the MCI
Agreement and the MCI Contracts. Neither the MCI Agreement nor the MCI Contracts
in any way limit the ability of Buyer to operate the Business or the Acquired
Assets as currently operated by Seller, except for insignificant exceptions and
except as provided in Sections 7.2(A) and (B) of the MCI Agreement and the
corresponding identical provisions in the MCI Contracts.
3.6 NO CHANGES. Except as set forth on Schedule 3.6, since March 31,
1999, Seller has conducted the Business only in the ordinary course and
consistent with past practices and there has not been:
(a) any material adverse change in the Business or any Acquired
Assets, except for material adverse changes that result from the public
announcement of the execution of this Agreement;
(b) any sale, transfer or other disposition of any Acquired Assets;
or
(c) any termination of any Contract (other than Subscriber Contracts
which expire in accordance with their terms).
3.7 NO PENDING LITIGATION OR PROCEEDINGS. Except as set forth on
Schedule 3.7, there are no claims, actions, suits, arbitrations, inquiries,
investigations or proceedings pending against or affecting, or, to Parent's and
Seller's knowledge, threatened, since September 14, 1998, against, Seller or the
Business, or affecting any of the Acquired Assets before any court or arbitrator
or other Governmental Entity. Except as set forth on Schedule 3.7, there are no
outstanding judgments, decrees, writs, injunctions or orders of any court or
arbitrator or other Governmental Entity against Seller (nor, to Parent's and
Seller's knowledge threatened to be imposed against Seller), which relate to or
arise out of the conduct of the Business or the ownership, condition or
operation of the Business, or the Acquired Assets which individually or in the
<PAGE>
aggregate could reasonably be expected to have a material adverse effect on the
Business or the Acquired Assets or on Parent's or Seller's ability to perform
their obligations under this Agreement and the other Transaction Documents to
which Parent or Seller is a party.
3.8 BROKERAGE. Neither Parent, Seller nor any of their Affiliates
has made any agreement or taken any other action which might cause any Person to
become entitled to a broker's or finder's fee or commission or other fee as a
result of or in connection with the transactions contemplated hereunder.
3.9 TITLE. Seller has and will convey to Buyer at the Closing good
and valid title to all of the Acquired Assets, free and clear of all Liens.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
OF BUYER
--------
Buyer hereby represents and warrants to Parent and Seller as
follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2 AUTHORIZATION AND ENFORCEABILITY. Buyer has full corporate power
and authority to execute, deliver and perform this Agreement and all other
Transaction Documents to which Buyer is a party. The execution, delivery and
performance by Buyer of this Agreement and the other Transaction Documents to
which Buyer is a party have been duly authorized by all necessary corporate
action on the part of Buyer. This Agreement has been duly executed and delivered
by Buyer, and, as of the Closing Date, the other Transaction Documents to which
Buyer is a party will be duly executed and delivered by Buyer. This Agreement is
a legal, valid and binding obligation of Buyer, enforceable against Buyer, in
accordance with its terms, except as such enforceability may be limited by
applicable laws relating to bankruptcy, insolvency, fraudulent conveyance,
reorganization or affecting creditors' rights generally and except to the extent
that injunctive or other equitable relief is within the discretion of a court.
As of the Closing Date, each of the other Transaction Documents to which Buyer
is a party will be duly executed and delivered by Buyer and will constitute the
legal, valid and binding obligations of Buyer, enforceable against Buyer, in
accordance with its terms, except as such enforceability may be limited by
applicable laws relating to bankruptcy, insolvency, fraudulent conveyance,
reorganization or affecting creditors' rights generally and except to the extent
that injunctive or other equitable relief is within the discretion of a court.
4.3 NO VIOLATION OF LAWS OR AGREEMENTS. The execution, delivery and
performance by Buyer of this Agreement and the Transaction Documents to which
Buyer is a party do not, and the consummation by Buyer of the transactions
contemplated hereby and thereby, will not, (a) violate, conflict with or result
in the breach of any provision of the Certificate of Incorporation or Bylaws of
<PAGE>
Buyer or (b) violate, conflict with, result in a breach of, or constitute a
default (or an event which would, with the passage of time or the giving of
notice or both, constitute a default) under, require any consent under, or
notice to, or filings with or result in or permit the termination, amendment,
modification, suspension, revocation, acceleration or cancellation of, (i) any
indenture, mortgage, loan or credit agreement, license, instrument, lease,
contract, plan, permit or other agreement or commitment, oral or written, to
which Buyer is a party, or by which any of its assets or properties may be bound
or affected, except for such violations, conflicts, breaches, defaults,
consents, notices, filings, terminations, modifications, amendments,
accelerations, suspensions, revocations, cancellations, interests or rights
which, individually and in the aggregate, do not have a material adverse effect
on its ability to perform its obligations under this Agreement and the other
Transaction Documents to which it is a party, or (ii) any judgment, injunction,
writ, award, decree, restriction, ruling, or order of any court, arbitrator or
Governmental Entity or any applicable constitution or Law, to which Buyer is
subject other than those violations, conflicts, breaches or defaults which
individually and in the aggregate would not have a material adverse effect on
its ability to perform its obligations under this Agreement and the other
Transaction Documents to which Buyer is a party and except for filings under the
HSR Act and the expiration of the applicable waiting period under the HSR Act.
4.4 BROKERAGE. Except for Veronis, Suhler & Associates Inc., whose
fees shall be the sole responsibility of Buyer, neither Buyer nor any of its
Affiliates has made any agreement or taken any other action which might cause
any Person to become entitled to a broker's or finder's fee or commission or
other fee as a result of or in connection with the transactions contemplated
hereunder.
4.5 FINANCIAL ABILITY. Buyer has sufficient cash and/or access to
sufficient credit to pay the Purchase Price and to make all other necessary
payments of fees and expenses in connection with the transactions contemplated
by this Agreement and the Transaction Documents.
4.6 <F3>
4.7 NO PENDING LITIGATION OR PROCEEDINGS. Except as set forth in
Amendment No. 3 dated February 1999 to Buyer's Registration Statement in Form
S-1 relating to Buyer's initial public offering of common stock or in Buyer's
quarterly report on Form 10-Q for the quarter ended March 31, 1999, as of the
date of this Agreement, there are no claims, actions, suits, arbitrations,
inquiries, investigations or proceedings pending against or affecting, or, to
Buyer's knowledge, threatened, against, Buyer, before any court or arbitrator or
other Governmental Entity, which individually or in the aggregate could
reasonably be expected to have a material adverse effect on Buyer's ability to
- - ----------
<F3>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
<PAGE>
perform its obligations under this Agreement and the other Transaction Documents
to which Buyer is a party.
ARTICLE V
ADDITIONAL COVENANTS
--------------------
5.1 CONDUCT OF BUSINESS. Except (i) as otherwise specifically
permitted by this Agreement, or (ii) with the prior written consent of Buyer,
from and after the date of this Agreement and until the Closing Date, Parent
shall cause Seller to, and Seller shall, conduct the Business as presently
conducted and only in the ordinary course of business consistent with past
practice, and neither Parent or Seller shall:
(a) mortgage, pledge or subject to any Lien any of the Acquired
Assets;
(b) sell, lease or otherwise transfer any Acquired Assets; or
(c) change any terms of any of the Plans, adopt any new Plans for
Subscribers or make changes to the Form Subscriber Contract.
5.2 MUTUAL COVENANTS. The parties hereto mutually covenant from the
date of this Agreement to the Closing Date (and subject to the other terms of
this Agreement):
(a) to cooperate with each other in determining whether filings are
required to be made or consents required to be obtained in any jurisdiction in
connection with the consummation of the transactions contemplated by this
Agreement and in making or causing to be made any such filings promptly and in
seeking to obtain timely any such consents (each party hereto shall furnish to
the other and to the other's counsel all such information as may be reasonably
required in order to effectuate the foregoing action); provided, however, that
nothing in this Section 5.2(a) shall require either party to pay any
extraordinary out-of-pocket expenses or incur additional liabilities; and
(b) to advise the other parties promptly if such party determines
that any condition precedent to its obligations hereunder will not be satisfied
in a timely manner.
5.3 CONSENTS AND FILINGS; HSR ACT. Each of the parties hereto shall
(and shall cause its Affiliates to) use all reasonable efforts to obtain or
make, as the case may be, as soon as possible, all filings with the applicable
Government Entities as may be required to be obtained or made, as the case may
be, by it (and/or any of its Affiliates) in order to enable such party (and/or
any of its Affiliates) to perform its obligations under this Agreement. Within
ten Business Days after the date of this Agreement, Buyer and Parent shall each
file or cause to be filed with the United States Federal Trade Commission (the
"FTC") and the United States Department of Justice (the "DOJ") their respective
filings and any other required initial submissions under the HSR Act. Without
limiting the generality of the preceding sentence, Buyer and Parent shall
promptly file or cause to be filed any additional documents with the FTC and the
DOJ that are required to be filed by such parties and their Affiliates under the
HSR Act in connection with this Agreement and the transactions contemplated
<PAGE>
hereby and shall comply in a timely manner with all requests for further
information by the FTC or DOJ.
5.4 PUBLIC ANNOUNCEMENT. Except as may be required by applicable
law, no party hereto shall make or issue, or cause to be made or issued, any
public announcement or written statement concerning this Agreement or the
transactions contemplated hereby without the prior written consent of the other
parties hereto (which will not be unreasonably withheld or delayed). To the
extent practicable, from the date of this Agreement until the earlier of the
termination of this Agreement in accordance with its terms or the end of the
Term (as defined in the Transition Services Agreement), Buyer and Seller will
cooperate with each other in the development and distribution of all press
releases, and other public announcements with respect to this Agreement and the
transactions and ongoing obligations contemplated hereby.
5.5 INVESTIGATION. From the date hereof until the Closing, Seller
shall give Buyer and its representatives (including Buyer's accountants,
consultants, counsel, employees and authorized agents), upon reasonable notice
and during normal business hours, reasonable access to the properties,
contracts, employees, books, records and affairs of Seller to the extent
relating to the Business, and shall cause its officers, directors, employees,
agents, representatives, accountants and counsel to furnish to Buyer all
documents, records and information (and copies thereof) relating to the
Business, as Buyer may reasonably request; provided, however, that such
investigation shall not unreasonably interfere with the business operations of
Seller. No investigation or receipt of information by Buyer pursuant to, or in
connection with, this Agreement, shall diminish or obviate any of the
representations, warranties, covenants or agreements of Seller under this
Agreement or the conditions to the obligations of Buyer under this Agreement.
5.6 CONFIDENTIALITY. (a) Parent and Seller agree to, and shall cause
their agents, representatives, Affiliates, employees, officers and directors to:
(i) treat and hold as confidential (and not disclose or provide access to any
Person) all confidential information with respect to the Business, (ii) in the
event that Parent, Seller or any such agent, representative, Affiliate,
employee, officer or director becomes legally compelled to disclose any such
information, provide Buyer with prompt written notice of such requirement so
that Buyer may seek a protective order or other remedy or waive compliance with
this Section 5.6, (iii) in the event that such protective order or other remedy
is not obtained, or Buyer waives compliance with this Section 5.6, furnish only
that portion of such confidential information which is legally required to be
provided and exercise its best efforts to obtain assurances that confidential
treatment will be accorded such information; PROVIDED, HOWEVER, that this
sentence shall not apply to any information that, at the time of disclosure, is
available publicly and was not disclosed in breach of this Agreement by Parent,
Seller, their agents, representatives, Affiliates, employees, officers or
directors. Parent and Seller agree and acknowledge that remedies at law for any
breach of their obligations under this Section 5.6 are inadequate and that in
addition thereto Buyer shall be entitled to seek equitable relief, including
injunction and specific performance, in the event of any such breach.
<PAGE>
(b) If this Agreement or any provision of the MCI Contracts or the
MCI Agreement is required to be filed by Buyer with the Securities and Exchange
Commission (the "SEC") as part of or as an exhibit to any of Buyer's filings
with the SEC, then, prior to the initial filing thereof, Buyer will seek
confidential treatment of the provisions of the MCI Contracts, the MCI Agreement
and Sections 7.10, 7.11, 7.12 and 8.3(a)(iv) of this Agreement. Seller agrees to
pay or reimburse Buyer for Buyer's reasonable legal fees and expenses incurred
in connection with the preparation of such request and any follow up with the
SEC in an amount not to exceed $5,000. If requested to do so, Seller will
cooperate with Buyer in the preparation and follow up of such request.
(c) Buyer agrees that (i) it will not use any information with
respect to Subscribers under the Excluded Campus Contracts as defined in Section
5.10 and; (ii) in the event that the Closing does not occur, Buyer will not use
any information with respect to Subscribers provided by Seller to Buyer pursuant
to Section 3.5(a)(ii) hereof.
5.7 REASONABLE BEST EFFORTS. Without limiting the specific
obligations of any party hereto under any covenant or agreement hereunder, each
party hereto shall use reasonable best efforts to take all action and do all
things necessary in order to promptly consummate the transactions contemplated
hereby, including, without limitation, satisfaction, but not waiver, of the
Closing conditions set forth in Article VI. Notwithstanding anything to the
contrary contained in this Agreement, including this Section 5.7, neither Buyer,
nor any of Buyer's Affiliates shall be required to divest themselves of any of
their respective assets or properties or agree to limit the ownership or
operation by Buyer of any assets including any of the Acquired Assets.
5.8 CONDUCT RELATING TO OPERATION OF BUSINESS. During the period
beginning on the Closing Date and ending 105 days after the Closing Date, Buyer
agrees (i) to operate the Acquired Assets and provide dial-up Internet access
services to Closing Dial-up Subscribers and Additional Subscribers who register
for its service in a commercially reasonable manner generally consistent with
Buyer's past practice and performance level (including Buyer's policy regarding
termination of active Internet usage sessions), (ii) not to increase the retail
monthly charge for the Internet service plans offered to Closing Dial-up
Subscribers or Additional Subscribers by Buyer above the prices charged or
offered to be charged to such Subscribers by Seller as of the date of this
Agreement, and (iii) not to reduce the number or megabyte size of personal web
pages offered to Closing Dial-up Subscribers or Additional Subscribers as of the
Closing by Seller. Notwithstanding anything to the contrary contained herein,
Seller's, Parent's and the other Seller Indemnified Parties' sole remedy for the
breach by Buyer of any of the provisions contained in this Section 5.8 shall be
that a Closing Dial-up Subscriber that has terminated its account with Buyer due
primarily to Buyer's failure to comply with the provisions contained in clauses
(i)-(iii) of the immediately preceding sentence, shall be deemed to be a
Continuing Dial-up Subscriber (such Closing Dial-up Subscribers are referred to
as "Special Continuing Subscribers"). The parties agree that Seller's, Parent's
and the other Seller Indemnified Parties' exclusive remedy for Buyer's breach of
this Section 5.8 shall be the remedy described in the immediately preceding
sentence as finally determined in accordance with Section 2.3.
<PAGE>
5.9 MARKETING AND COMMUNICATION TO SUBSCRIBERS. Schedule 5.9 is a
copy of a marketing and communication program designed by Buyer with Seller's
input (the "Program") to encourage Subscribers of the Business as of the Closing
Date to register for Buyer's Internet access service and to convert into
Continuing Dial-up Subscribers. Parent and Seller acknowledge that the Program
is satisfactory and will cooperate with Buyer in the execution of the Program.
Buyer shall implement the Program substantially as specified in Schedule 5.9,
provided, however, that Buyer shall be entitled to revise the Program from time
to time, as it deems necessary or advisable, if Buyer reasonably believes that
such revisions could result in additional Subscribers of the Business converting
into Continuing Dial-up Subscribers.
5.10 CAMPUS CONTRACTS. No later than five days before the Closing,
Seller will provide Buyer with a list of the campus contracts listed on Schedule
3.5(b) (the "Campus Contracts") which Seller would like removed from such
Schedule (the "Excluded Campus Contracts"), and from and after the delivery of
such list, such removed contracts shall no longer constitute a Contract and the
Subscribers under those Excluded Campus Contracts shall not be deemed Closing
Dial-up Subscribers or Continuing Dial-up Subscribers.
5.11 OUTSOURCING AGREEMENTS. Assuming that the vendors are
performing the contracts designated with three asterisks on Schedule 3.5(b),
Buyer will utilize the services provided thereunder for the initial term
thereof.
ARTICLE VI
CONDITIONS PRECEDENT
--------------------
6.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligations of
Buyer to acquire the Acquired Assets and assume the Assumed Liabilities and to
consummate the other transactions contemplated hereby are subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions (any one or more of which may be waived in writing in whole or in
part by Buyer in its sole discretion):
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations and warranties of Parent and Seller contained in this Agreement
or in any certificate, document or instrument delivered in connection herewith
shall be true and correct in all material respects on and as of the date of this
Agreement and at and as of the Closing with the same effect as though such
representations and warranties had been made at and as of the Closing, except
for representations and warranties that speak as of a specific date or time
other than the Closing (which need only be true and correct in all material
respects as of such date or time); PROVIDED, HOWEVER, that if any portion of any
such representation or warranty is already qualified by materiality, for
purposes of determining whether this condition has been satisfied with respect
to such portion of such representation or warranty, such portion of such
representation or warranty as so qualified shall be true and correct in all
respects. Parent and Seller shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by them at or prior to the Closing. Parent shall
furnish Buyer with a certificate dated the Closing Date and signed by a
corporate officer of Parent to the effect that the conditions set forth in this
Section 6.1(a) have been satisfied.
<PAGE>
(b) HSR ACT; REQUIRED CONSENTS. The waiting period (and any
extension thereof) under the HSR Act applicable to the transactions contemplated
hereby shall have expired or been terminated. Seller shall have obtained, in
form and substance reasonably satisfactory to Buyer in its sole and absolute
discretion, all statutory and regulatory consents and approvals which are
required under any applicable laws and all consents and approvals required from
third parties including under the Acquired Assets in order to consummate the
transactions contemplated hereby and to permit Buyer to conduct the Business as
conducted as of the date of this Agreement (it being understood and agreed that
Seller's failure to obtain all required consents to assignment of the Campus
Contracts to Buyer shall not give Buyer the right to assert that the conditions
to its obligations set forth in this Section 6.1(b) have not been satisfied,
provided that the provisions in Section 2.8 shall remain applicable to the
Campus Contracts for which the required consents have not been obtained).
(c) INJUNCTION. No party to this Agreement shall be subject to any
order, stay, injunction or decree of any court of competent jurisdiction in the
United States restraining or prohibiting the consummation of the transactions
contemplated hereby.
(d) TRANSITION SERVICES AGREEMENT. Seller shall have executed and
delivered to Buyer the Transition Services Agreement.
(e) BILL OF SALE. Seller shall have executed and delivered to Buyer
a bill of sale for the Acquired Assets in the form of Exhibit C attached hereto
(the "Bill of Sale").
(f) ASSIGNMENT AND ASSUMPTION AGREEMENT. Seller shall have executed
and delivered to Buyer an assignment and assumption agreement with respect to
the Assumed Liabilities in the form of Exhibit D attached hereto (the
"Assignment and Assumption Agreement").
(g) DOCUMENTS. Seller shall have delivered to Buyer at the Closing
such other documents and instruments as shall be reasonably necessary to
transfer to Buyer the Acquired Assets as contemplated by this Agreement. Seller
shall have delivered all the certificates, instruments, contracts and other
documents specified to be delivered hereunder, including pursuant to Section 2.6
hereof.
6.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND SELLER. The
obligations of Parent and Seller to transfer the Acquired Assets and to
consummate the other transactions contemplated hereby are subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions (any one or more of which may be waived in writing in whole or in
part by Parent and Seller in their sole discretion):
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations and warranties of Buyer contained in this Agreement or in any
certificate, document or other instrument delivered in connection herewith shall
be true and correct in all material respects on and as of the date of this
Agreement and at and as of the Closing with the same effect as though such
representations and warranties had been made at and as of the Closing, except
for representations and warranties that speak as of a specific date or time
<PAGE>
other than the Closing (which need only be true and correct in all material
respects as of such date or time); PROVIDED, HOWEVER, that if any portion of any
such representation or warranty is already qualified by materiality, for
purposes of determining whether this condition has been satisfied with respect
to such portion of such representation or warranty, such portion of such
representation or warranty as so qualified shall be true and correct in all
respects. Buyer shall have performed and complied in all material respects with
all covenants and agreements required by this Agreement to be performed and
complied with by it at or prior to the Closing. Buyer shall furnish Seller with
a certificate dated the Closing Date and signed by a corporate officer of Buyer
to the effect that the conditions set forth in this Section 6.2(a) have been
satisfied. Notwithstanding anything to the contrary contained herein, neither
Parent nor Seller shall be entitled to assert that a condition to their
obligations under this Section 6.2(a) has not been satisfied due to any pending
or threatened litigation involving MCI or any of its Affiliates.
(b) INJUNCTION. No party to this Agreement shall be subject to any
order, stay, injunction or decree of any court of competent jurisdiction in the
United States restraining or prohibiting the consummation of the transactions
contemplated hereby.
(c) HSR ACT. The waiting period (and any extension thereof) under
the HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
(d) ASSIGNMENT AND ASSUMPTION AGREEMENT. Buyer shall have executed
and delivered to Seller the Assignment and Assumption Agreement with respect to
the Assumed Liabilities.
(e) DOCUMENTS. Buyer shall have delivered to Seller at the Closing
such other documents and instruments as shall be reasonably necessary for the
assumption by Buyer of the Assumed Liabilities as contemplated by this
Agreement. Buyer shall have delivered all the certificates, instruments,
contracts and other documents specified to be delivered by it hereunder,
including pursuant to Section 2.6 hereof.
ARTICLE VII
CERTAIN ADDITIONAL COVENANTS
----------------------------
7.1 EMPLOYEES. (a) On or prior to the Closing, Buyer may, if it so
elects, offer employment to one or more Business Employees on such terms and
conditions as may be established by Buyer. However, Buyer shall not be obligated
to offer employment to any Business Employee or other Person. Seller shall
afford Buyer reasonable opportunities to interview Business Employees and
neither Parent nor Seller shall discourage Business Employees from accepting
offers of employment from Buyer. Any Business Employee who accepts an offer of
employment from Buyer and becomes an employee of Buyer shall be referred to
herein as a "Transferred Employee."
(b) Seller shall be solely responsible for any and all obligations
or liabilities arising under the Worker Adjustment and Retraining Notification
Act (the "WARN Act"), 29 U.S.C. ss.2101, Et. SEQ., or any similar state or local
<PAGE>
law with respect to the employees of the Business as a result of the
transactions contemplated by this Agreement. Buyer shall be solely responsible
for any and all obligations or liabilities arising under the WARN Act or any
similar state or local law with respect to any Transferred Employee as a result
of actions taken by Buyer or its subsidiaries after the Closing.
(c) Buyer shall not assume or be bound by or be obligated or
responsible for any duties, responsibilities, commitments, expenses, obligations
or liabilities of Parent or Seller or relating to the Acquired Assets or the
Business (or which may be asserted against or imposed upon Buyer as a successor
transferee of Parent or Seller as an acquiror of the Acquired Assets or the
Business or otherwise as a matter of law) which arise from, or relate to, any
employee benefit plan, policy or arrangement at any time sponsored, maintained
or contributed to by Parent or Seller or any of their Affiliates or any entity
treated as single employer with Seller under Section 414(b), (c) or (m) of the
Code, or the employment or termination of employment of any current or former
employee of the Business by Parent or Seller or any of their Affiliates,
including, but not limited to, liabilities for salaries, wages, bonuses,
sickness or disability pay, vacation pay, severance pay or benefits under any
other employee benefit plan, policy or arrangement, workers compensation or
unemployment insurance premiums, tax withholding, occupational injury, illness
or disability, liabilities arising under Section 4980B of the Code or Title IV
of the Employee Retirement Income Security Act of 1974, as amended, or claims
arising under any employment, labor or discrimination laws. Any such duty,
responsibility, commitment, expense, obligation or liability shall be a
Non-Assumed Liability.
7.2 CERTAIN TAXES AND EXPENSES. Seller and Buyer shall each be
responsible for one-half of any state and local sales, use, transfer, real
property transfer, documentary stamp, recording and other similar taxes arising
from and with respect to the sale and purchase of the Acquired Assets. Except as
otherwise expressly provided in this Agreement, each of the parties hereto shall
bear its respective accounting, legal and other expenses incurred in connection
with the transactions contemplated by this Agreement.
7.3 NON-COMPETITION/NON-HIRE. (a) Parent and Seller covenant and
agree that, if the Closing is consummated, for a period of two years after the
Closing Date, neither Parent nor Seller will, and Parent and Seller will cause
their Affiliates not to, directly or indirectly, (i) engage in the Business or
any portion thereof in the United States, or (ii) solicit or provide dial-up
Internet access services in the United States to customers of the Business or
any portion thereof; PROVIDED, HOWEVER, that nothing herein shall be construed
to prevent: (A) Parent or Seller from (i) owning, in the aggregate, up to 5% of
the stock or equity interest in any Person that engages in the Business, (ii)
engaging in Affinity Bundled Offerings, (iii) offering dial-up Internet access
on a wholesale basis; (iv) offering dial-up Internet access exclusively to
business customers other than Continuing Dial-up Subscribers or Additional
Subscribers, (v) continuing to provide dial-up Internet access services to
Subscribers in the Excluded Campus Contracts, or (vi) directly or indirectly
engaging in any activities which would violate the noncompete provisions of this
Section 7.3(a), provided that such activities do not generate in the aggregate
more than $10.0 million per year of revenues, (B) a bona fide acquisition
(including, by way of merger or consolidation) of Parent or Cable and Wireless
plc by any Person that is not an Affiliate of Parent, or (C) on only one
occasion, directly or indirectly, purchasing or otherwise acquiring any Person
<PAGE>
whose operations include a dial-up Internet access business, provided that
Parent, Seller or their Affiliates, as the case may be, divests such competing
business within three months of the closing of such purchase or acquisition and
further provided, that the period of this Non-Compete shall then be extended by
a period of three months (it being understood and agreed that the exception set
forth in the immediately preceding clause (C), shall not be deemed to be
utilized by Seller if one of the other exceptions set forth above is then
available to Seller).
It is the desire and intent of the parties hereto that the
provisions of this Section 7.3 shall be enforced to the fullest extent permitted
under the laws and public policies of each jurisdiction in which enforcement is
sought. If any court determines that any provision of this Section 7.3 is
unenforceable, such court shall have the power to reduce the duration or scope
of such provision, as the case may be, or terminate such provision and, in
reduced form, such provision shall be enforceable; it is the intention of the
parties that the foregoing restrictions shall not be terminated, unless so
terminated by a court, but shall be deemed amended to the extent required to
render them valid and enforceable, such amendment to only apply with respect to
the operation of this Section 7.3 in the jurisdiction of the court that has made
the adjudication.
(b) Parent and Seller covenant and agree that, if the Closing is
consummated, for a period of one year after the Closing Date, neither Parent or
Seller will, and Parent and Seller will cause their subsidiaries and Affiliates
not to, directly or indirectly, hire, either as an employee or a consultant, any
Transferred Employee.
(c) The parties acknowledge and agree that the restrictions
contained in Sections 7.3(a) and (b) are a reasonable and necessary protection
of the immediate interests of Buyer, and any violation of these restrictions
would cause substantial injury to Buyer and that Buyer would not have entered
into this Agreement without receiving the additional consideration offered by
Parent and Seller in binding themselves to these restrictions. In the event of a
breach or a threatened breach by Parent or Seller or any of their subsidiaries
or Affiliates of these restrictions, Buyer shall be entitled to apply to any
court of competent jurisdiction for an injunction restraining such Person from
such breach or threatened breach (without the necessity of proving the
inadequacy of money damages as a remedy); PROVIDED, HOWEVER, that the right to
apply for injunctive relief shall not be construed as prohibiting Buyer from
pursuing any other available remedies for such breach or threatened breach.
7.4 NON-SOLICITATION. For a period of 12 months commencing upon
consummation of the Closing, without the prior written consent of Seller (which
consent may be withheld by Seller in its reasonable discretion), neither Buyer
nor any of its subsidiaries shall directly or indirectly solicit for employment
or seek to hire (other than through advertisements of general circulation) any
Business Employees engaged in sales, marketing, engineering, maintenance,
customer service or other operations relating to the Business, which Buyer has
come into contact with by virtue of the transactions contemplated by this
Agreement, except for Transferred Employees.
<PAGE>
7.5 INTENTIONALLY OMITTED.
7.6 COLLECTION ACTIVITIES. From and after the Closing, except as
provided in Section 7.7 below, neither Parent, Seller nor any of their
Affiliates shall forward any invoices to or attempt to collect any outstanding
receivables that may be due from Subscribers for Internet access services
rendered by Parent or Seller prior to the Closing. As of the Closing, all
collection activities by Parent, Seller and their Affiliates with respect to the
Closing Dial-up Subscribers shall cease and shall not resume except to the
extent permitted under Section 7.7; provided, however, that after consultation
with and prior written approval from Buyer, Seller may send one reminder note to
each Subscriber for outstanding invoices (or in lieu thereof, contact such
Subscriber by telephone for the same purpose), in each case, as may be
specifically approved by Buyer, which approval shall not be unreasonably
withheld.
7.7 ACCOUNTS RECEIVABLE. As promptly as practicable after the 90th
day following the Closing Date, but in no event later than 120 days after the
Closing Date, Buyer shall deliver to Seller a list of those Subscribers who were
Closing Dial-up Subscribers who did not convert into Continuing Dial-up
Subscribers (the "Non-Continuing Subscribers Schedule"). Upon delivery of the
Non-Continuing Subscribers Schedule, Seller shall be free to collect any
uncollected accounts receivable due for Internet access services rendered by
Parent or Seller prior to the Closing from the Subscribers on the Non-Continuing
Subscribers Schedule.
7.8 REMITTANCE OF PAYMENTS. From and after the Closing until the
first anniversary of the Closing, to the extent Buyer receives payments from
Subscribers for services rendered by Seller prior to the Closing, Buyer will
remit such payments to Seller on a monthly basis within ten Business Days after
the end of the calendar month in which such payments were received. From and
after the Closing until the first anniversary of the Closing, to the extent
Seller or Parent receive payments from Subscribers for services rendered by
Buyer after the Closing, Seller or Parent will remit such payments to Buyer on a
monthly basis within ten Business Days after the end of the calendar month in
which such payments were received.
7.9 EMAIL FORWARDING AND THE URL LICENSE. For the period commencing
on the Closing Date and ending one year from the Closing Date, Seller shall
forward all email delivered to Subscribers' email addresses bearing any of the
domain names listed on Schedule 7.9 to email addresses designated in writing by
Buyer. For the period commencing on the Closing Date and ending twelve months
from the Closing Date, Seller hereby grants to Buyer a non-transferable royalty
free license to modify, display and use Seller's web pages that are at the
Closing Date associated with the URLs listed on Schedule 7.9, provided that such
modification, display or use of the web pages is solely in connection with
Buyer's provision of Internet access services to Subscribers. Notwithstanding
anything to the contrary in this Agreement, the parties acknowledge and agree
that the Acquired Assets do not include any of Seller's trademarks or
servicemarks relating to the Business and that, except as set forth in this
Section 7.9, Seller shall retain all right, title and interest in and to the
trademarks and servicemarks.
<PAGE>
7.10 <F4>
7.11 <F4>
7.12 <F4>
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
-------------------------
8.1 SURVIVAL. The representations and warranties contained in
Sections 3.4, 3.5 (other than 3.5(d)), 3.6 and 3.7 and the related indemnity
obligations set forth in Sections 8.2(a)(i) shall survive the Closing (and not
be affected in any respect by any investigation conducted by any party hereto)
and shall terminate on, and no claim or action with respect thereto may be
brought after, the date that is 18 months after the Closing Date. Except for the
representations and warranties listed in the foregoing sentence, all other
representations and warranties and all covenants and agreements contained in
this Agreement or the other Transaction Documents shall survive (and not be
affected in any respect by) the Closing indefinitely and any investigation
conducted by any party hereto. The representations and warranties which
terminate on the date that is 18 months after the Closing Date and the liability
of any party hereto with respect thereto pursuant to this Article VIII, shall
not terminate with respect to any claim, whether or not fixed as to liability or
liquidated as to amount, with respect to which the Indemnifying Party has been
given written notice setting forth the facts upon which the claim for
indemnification is based prior to the date that is 18 months after the Closing
Date.
8.2 INDEMNIFICATION BY PARENT AND SELLER. (a) Parent and Seller
shall jointly and severally indemnify and hold Buyer and its employees,
officers, directors and agents (collectively, the "Buyer Indemnified Parties")
harmless from and against, and agree promptly to defend any Buyer Indemnified
Party from and reimburse any Buyer Indemnified Party for, any and all Losses
which any Buyer Indemnified Party may at any time suffer or incur, or become
subject to, as a result of or in connection with:
(i) any breach or inaccuracy as of the date of this Agreement
or the Closing Date of any of the representations and warranties made by Parent
- - ----------
<F4>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
<PAGE>
or Seller in or pursuant to this Agreement, or in any instrument or certificate
delivered by Parent or Seller at the Closing in accordance herewith (it being
understood and agreed that, notwithstanding anything to the contrary contained
in this Agreement, to determine if there had been an inaccuracy or breach of a
representation or warranty of Parent or Seller and the Losses arising from such
inaccuracy or breach, such representation and warranty shall be read as if it
were not qualified by materiality, including, without limitation, qualifications
indicating accuracy in all material respects, or accuracy except to the extent
the inaccuracy will not have a material adverse effect on the Business or the
Acquired Assets or on Parent's or Seller's ability to perform their obligations
under this Agreement and the other Transaction Documents to which Parent or
Seller is a party);
(ii) any failure by Parent or Seller to carry out, perform,
satisfy and discharge any of their respective covenants, agreements,
undertakings, liabilities or obligations under this Agreement or under any of
the other Transaction Documents to which Parent or Seller is a party;
(iii) the Non-Assumed Liabilities;
(iv) the Campus Contracts with respect to services other than
those that relate exclusively to the provision by Buyer of Internet dial-up
access services after the Closing;
(v) the MCI Contracts and the MCI Agreement; and
(vi) any penalties imposed on Buyer under (A) the Call Center
Outsourcing Agreement effective as of April 7, 1999 by and between Parent and
SYKES Enterprises, Inc. or (B) the Call Center Outsourcing Agreement effective
as of April 5, 1999 by and between Parent and CALLTECH Communications, Inc., in
each case, insofar as the penalties relate to failure to satisfy any minimum
volume requirements.
(b) Notwithstanding any other provision herein to the contrary, (i)
Parent and Seller shall not be required to indemnify and hold harmless any Buyer
Indemnified Party pursuant to Section 8.2(a)(i), unless the applicable Buyer
Indemnified Party has asserted a claim with respect to such matters within the
applicable survival period set forth in Section 8.1 hereof, and (ii) Parent and
Seller shall not be required, pursuant to Section 8.2(a)(i), to indemnify and
hold harmless any Buyer Indemnified Party until the aggregate amount of Buyer
Indemnified Parties' Losses under Section 8.2(a)(i) exceeds 1% of the sum of (1)
the Final Cash Purchase Price and (2) the Additional Amount (the "Basket
Amount") after which Parent and Seller shall be obligated for all such Losses of
Buyer Indemnified Parties including the Basket Amount. Notwithstanding anything
to the contrary in this Agreement, Parent's and Seller's cumulative indemnity
obligations under Section 8.2(a)(i) shall not exceed the sum of (x) Final Cash
Purchase Price plus (y) the Additional Amount.
8.3 INDEMNIFICATION BY BUYER. (a) Buyer shall indemnify and hold
Parent, Seller and their employees, officers, directors and agents
(collectively, the "Seller Indemnified Parties") harmless from and against, and
agree promptly to defend any Seller Indemnified Party from and reimburse any
Seller Indemnified Party for, any and all Losses which any Seller Indemnified
<PAGE>
Party may at any time suffer or incur, or become subject to, as a result of or
in connection with:
(i) any breach or inaccuracy as of the date of this Agreement
or the Closing Date of any of the representations and warranties made by Buyer
in or pursuant to this Agreement, or in any instrument or certificate delivered
by Buyer at the Closing in accordance herewith (it being understood and agreed
that, notwithstanding anything to the contrary contained in this Agreement, to
determine if there had been an inaccuracy or breach of a representation or
warranty of Buyer and the Losses arising from such inaccuracy or breach, such
representation and warranty shall be read as if it were not qualified by
materiality, including, without limitation, qualifications indicating accuracy
in all material respects, or accuracy except to the extent the inaccuracy will
not have a material adverse effect on the ability of Buyer to perform its
obligations under this Agreement and the other Transaction Documents to which it
is a party);
(ii) any failure by Buyer to carry out, perform, satisfy and
discharge any of its covenants, agreements, undertakings, liabilities or
obligations under this Agreement (other than any failure by Buyer to carry out,
perform, satisfy or discharge any of its covenants, agreements, undertakings,
liabilities or obligations pursuant to Sections 5.8, 7.10 and 7.11) or under any
of the other Transaction Documents to which it is a party;
(iii) the Assumed Liabilities;
(iv) <F5>
(v) the improper use by Buyer of gender and birthdates of
Subscribers provided by Seller to Buyer pursuant to Section 2.6(a)(ii) hereof.
(b) Notwithstanding any other provision herein to the contrary,
Buyer shall not be required to indemnify and hold harmless any Seller
Indemnified Party pursuant to Section 8.3(a)(i), unless the applicable Seller
Indemnified Party has asserted a claim with respect to such matters within the
applicable survival period set forth in Section 8.1 hereof.
8.4 NOTIFICATION OF CLAIMS. (a) If any Buyer Indemnified Party, on
the one hand, or Seller Indemnified Party, on the other hand (an "Indemnified
Party"), receives written notice of any claim or the commencement of any action
or proceeding by a third party which could give rise to an obligation to provide
indemnification pursuant to Sections 8.2 or 8.3, the Indemnified Party will give
the applicable Person or Persons required hereunder to provide indemnification
(an "Indemnifying Party") prompt written notice thereof (the "Third Party
- - ----------
<F5>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
<PAGE>
Indemnification Claim"); PROVIDED, HOWEVER, that the failure of the Indemnified
Party to so promptly notify the Indemnifying Party shall not prevent any
Indemnified Party from being indemnified for any Losses, except to the extent
that the failure to so promptly notify actually damages the Indemnifying Party.
(b) Any Third Party Indemnification Claim will describe the claim in
reasonable detail. If the Indemnifying Party confirms in writing to the
Indemnified Party within 15 days after receipt of the Third Party
Indemnification Claim the Indemnifying Party's responsibility to indemnify and
hold harmless the Indemnified Party therefor in accordance herewith and within
such 15-day period demonstrates to the Indemnified Party's reasonable
satisfaction that, as of such time the Indemnifying Party has sufficient
financial resources in order to indemnify for the full amount of any potential
liability in connection with such claim, the Indemnifying Party may elect to
compromise or defend, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, which counsel shall be reasonably satisfactory
to the Indemnified Party, any such matter involving the asserted liability of
the Indemnified Party. If the Indemnifying Party elects to compromise or defend
any such asserted liability, it shall within 15 days (or sooner, if the nature
of the asserted liability so requires) notify the Indemnified Party of its
intent to do so, and the Indemnified Party shall cooperate, at the expense of
the Indemnifying Party, in the compromise of, or defense against, any such
asserted liability; provided that (i) the Indemnified Party may, if it so
desires, employ counsel at its own expense to assist in the handling of any such
third party claim, (ii) the Indemnifying Party shall keep the Indemnified Party
advised of all material events with respect to any such third party claim, (iii)
the Indemnifying Party shall obtain the prior written approval of the
Indemnified Party (which approval may not be unreasonably withheld) before
ceasing to defend against such third party claim or entering into any
settlement, adjustment or compromise of such third party claim involving
injunctive or similar equitable relief being asserted against any Indemnified
Party or any of their Affiliates and (iv) no Indemnifying Party will, without
the prior written consent of each Indemnified Party, settle or compromise or
consent to the entry of any judgment in any pending or threatened demand, claim,
action or cause of action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Indemnified
Party is a party to such demand, claim, action or cause of action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of all such Indemnified Parties from all liability arising
out of such claim, action, suit or proceeding. Notwithstanding anything
contained herein to the contrary, (1) the Indemnifying Party shall not be
entitled to have sole control over the defense, settlement, adjustment or
compromise of any third party non-monetary claim that seeks an order, injunction
or other equitable relief against any Indemnified Party or its Affiliates which,
if successful, could reasonably materially interfere with the business, assets,
liabilities, obligations, financial condition or results of operations of the
Indemnified Party or any of its Affiliates, <F6>
- - ----------
<F6>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
<PAGE>
If the party who is entitled to control, settle or compromise the
litigation (the "Controlling Party") elects not to defend, settle, or compromise
the asserted liability, or fails to notify the other applicable party hereto
(the "Other Party") of its election as herein provided, the Other Party may
defend, settle, or compromise such asserted liability and if entitled hereunder,
to seek indemnification therefor; provided, however, that (i) the Controlling
Party may, if it so desires, employ counsel at its own expense to assist in the
handling of any such third party claim and (ii) such Other Party shall keep the
Controlling Party advised of all material events with respect to any such third
party claim.
ARTICLE IX
TERMINATION; MISCELLANEOUS
9.1 TERMINATION. (a) This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date, as follows: (i) by the mutual written agreement of Buyer and
Seller, and (ii) by Buyer or Seller if the Closing has not occurred on or before
September 14, 1999, provided, however, that Buyer, in the case of termination by
Buyer, and Seller and Parent, in the case of termination by Seller, is not in
breach of its or their obligations hereunder.
(b) Except for the obligations contained in Sections 7.2, 5.4,
5.6(c) and this Section 9.1(b) which shall survive any termination of this
Agreement, upon the termination of this Agreement pursuant to Section 9.1, this
Agreement shall forthwith become null and void, and no party hereto or any of
its officers, directors, employees, agents, consultants, stockholders or
principals shall have any rights, liabilities or obligations hereunder or with
respect hereto; PROVIDED, HOWEVER, that nothing contained herein shall relieve
any party hereto from liability for any knowing breach or inaccuracy of any
representation or warranty contained herein or any willful failure to comply
with any covenant or agreement contained herein.
9.2 FURTHER ASSURANCES. From time to time prior to, at and after the
Closing Date, each party hereto shall cooperate and deliver such instruments and
take such action as may be reasonably requested by any other parties hereto in
order to carry out the provisions and purposes of this Agreement and the
transactions contemplated hereby.
9.3 ENTIRE AGREEMENT. This Agreement and the documents and
agreements referred to herein and to be delivered pursuant hereto constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof, and supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions of the parties, whether oral or written, except the
Confidentiality Agreement between Buyer and Parent dated March 18, 1999 which
will terminate upon the consummation of the Closing.
9.4 BENEFIT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of and shall be enforceable by the parties hereto and their
respective successors and permitted assigns. This Agreement shall not be
assigned by any party hereto without the prior written consent of the other
parties hereto; PROVIDED, HOWEVER, that Buyer may assign any or all of its
rights hereunder to one or more subsidiary of Buyer without the consent of, but
<PAGE>
with prior written notice to, Seller; provided further, that Buyer shall remain
liable hereunder notwithstanding such assignment. Any assignment in violation of
this Agreement shall be null and void AB INITIO.
9.5 NO PRESUMPTION. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by Buyer, Parent and Seller and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
9.6 NOTICES. All notices, requests, claims, demands and other
communications provided for herein shall be in writing and shall be deemed given
only if delivered to the party personally or sent to the party by telecopy, by
registered or certified mail (return receipt requested) with postage and
registration or certification fees thereon prepaid, or by any nationally
recognized overnight courier, addressed to the party at its address set forth
below:
If to Seller or Parent: Cable & Wireless USA Internet,
L.L.C.
c/o Cable & Wireless, USA, Inc.
8219 Leesburg Pike
Vienna, VA 22182
Attention: General Counsel
Telecopy No.: (703) 760-3746
With a copy to: Cable & Wireless, USA, Inc.
8219 Leesburg Pike
Vienna, VA 22182
Attention: Liran Gordon
Telecopy No.: (703) 287-6953
And a copy to: Rogers & Wells L.L.P.
200 Park Avenue
New York, NY 10166
Attention: John K. Keitt, Jr.
Telecopy No.: (212) 878-8375
If to Buyer: Prodigy Communications Corporation
44 South Broadway
White Plains, NY 10601
Attention: Andrea Hirsch
Telecopy No.: (914)448-8198
With a copy to: Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
Attention: Kenneth A. Lefkowitz
Telecopy No.: (212) 422-4726
<PAGE>
or to such other address as a party may from time to time designate in writing
in a notice given in accordance with this Section 9.6. All notices, requests,
claims, demands and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt, provided that the original of any such notice, request, claim,
demand or other communication is delivered to Seller or Parent, or Buyer, as the
case may be, at their respective addresses provided above.
9.7 COUNTERPARTS; HEADINGS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement. The Article and Section
headings in this Agreement are inserted for convenience of reference only and
shall not constitute a part hereof or affect in any way the meaning or
interpretation of this Agreement.
9.8 SEVERABILITY. If any term, provision, clause or part of this
Agreement or the application thereof under certain circumstances is held
invalid, illegal or incapable of being enforced by any Law or public policy, all
other terms, provisions and parts of this Agreement shall nevertheless remain in
full force and effect so long as the economic and legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term, provision or part
of this Agreement is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
9.9 NO RELIANCE. Except for any assignees permitted by Section 9.4
of this Agreement and the indemnified persons pursuant to Sections 8.2 and 8.3:
(a) no third party is entitled to rely on any of the
representations, warranties, covenants or agreements of the parties hereto
contained in this Agreement; and
(b) the parties hereto assume no liability to any third party
because of any reliance on the representations, warranties, covenants or
agreements of such parties contained in this Agreement.
9.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws.
9.11 SUBMISSION TO JURISDICTION; WAIVERS. The parties hereto hereby
irrevocably and unconditionally agree that:
(a) Except as otherwise expressly provided in Sections 2.3 and 2.7,
all suits, actions and proceedings arising out of or relating to this Agreement
shall be heard and determined in any New York state or Federal court sitting in
the City of New York and any appellate court from any thereof, and each of the
<PAGE>
parties hereto hereby irrevocably submits to the exclusive jurisdiction of such
courts in any such suit, action or proceeding and irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of any such suit, action or proceeding and any objection to any
such suit action or proceeding whether on the grounds of venue, residence or
domicile. A final judgment in any such suit, action, or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
any other manner provided by law.
(b) Service of process in any such suit, action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its
address as provided in Section 9.6.
9.12 WAIVER. Any party to this Agreement may (a) extend the time for
the performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and warranties of the other
parties contained herein or in any document delivered by the other parties
pursuant hereto or (c) waive compliance with any of the agreements or conditions
of the other parties contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party to be
bound thereby. Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this Agreement. The
failure of any party to assert any of its rights hereunder shall not constitute
a waiver of any such rights.
9.13 AMENDMENT. This Agreement may not be amended, modified or
supplemented except by an instrument in writing signed by, or on behalf of, each
of the parties hereto.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
CABLE & WIRELESS USA, INC.
By: /S/ LIRAN GORDON
Name:_____________________________
Title: VICE PRESIDENT
CABLE & WIRELESS USA INTERNET, L.L.C.
By: /S/ LIRAN GORDON
Name:_____________________________
Title: AUTHORIZED SIGNATORY
PRODIGY COMMUNICATIONS CORPORATION
By: /S/ ANDREA S. HIRSCH
Name:_____________________________
Title: EVP GENERAL COUNSEL
<PAGE>
Annex A
DEFINITIONS
1. For purposes of this Agreement, the following terms shall have
the following meanings:
"Acquired Assets" means (i) all right, title and interest of Seller
in, to and under the Subscriber Contracts; (ii) all books, records, ledgers,
files, documents (including customer and supplier lists (past, present or
future)), correspondence, memoranda, forms, and lists (other than those that
relate exclusively to the MCI Litigation, except to the extent they are material
to the conduct of the Business), to the extent used or held for use with respect
to the Business (with respect to documents relating to the MCI Litigation,
Seller need only provide Buyer with copies of such documents); (iii) all rights
or choses in action arising out of occurrences before or after the Closing Date
and related to any portion of the Business, including third party warranties and
guarantees and all related claims, credits, rights of recovery and setoff and
other similar contractual rights, as to third parties held by or in favor of
Seller and arising out of, resulting from or relating to the Business or the
Acquired Assets; provided, however, that Acquired Assets shall not include any
<PAGE>
rights of Seller or any of its Affiliates arising in connection with or
otherwise relating to the MCI Litigation; (iv) all right, title and interest of
Seller in, to and under the contracts listed on Schedule 3.5(b); (v) all right,
title and interest of Seller in, to and under the MCI Agreement insofar as it
relates to the Business or the Acquired Assets, other than to the extent it
relates to the MCI Litigation; and (vi) all right, title and interest of Seller
in, to and under the MCI Contracts insofar as they relate to services to be
provided by Seller to Buyer under the Transition Services Agreement, other than
to the extent they relate to the MCI Litigation (clause (iv),(v) and (vi),
collectively, the "Contracts").
"Additional Subscriber" means a Person who is not a Closing Dial-up
Subscriber or a Continuing Dial-up Subscriber and who has, within 45 days after
the Closing Date, registered with Buyer for provision of Internet access
services if such registration is based on fulfillment kits provided to such
Person by or for Seller on or before the Closing Date; PROVIDED that such Person
or Subscriber, on the 120th day after the Closing Date (i) is being charged by
and is obligated under contract to pay to Buyer the rates for Internet access
services provided by Buyer, and has paid such rate to Buyer for two consecutive
monthly bills sent to such Subscriber by on or behalf of Buyer after the Closing
in the ordinary course of business and has not failed to pay the next subsequent
bill mailed to such Subscriber by or on behalf of Buyer for a period of more
than 45 days after any such bill was mailed to such Subscriber and (ii) has not
requested that Buyer cancel its account with Buyer for the provision of Internet
access services.
"Affiliate" means, with respect to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"Affinity Bundled Offerings" means dial-up Internet access services
bundled with Seller's and Parent's long-distance products and services offered
exclusively to members of associations or employees of business customers of
Parent or Seller and marketed by or for associations exclusively to its members
or offered by employers to their employees.
"Assumed Liabilities" shall mean the obligations arising exclusively
from, and accruing exclusively with respect to, the operation of the Business
after the Closing under (i) the Subscriber Contracts and (ii) the Contracts (it
being understood and agreed that Buyer shall not assume any obligation under the
MCI Contracts except to the extent that they relate to services directly
provided thereunder to Buyer under the Transition Services Agreement); PROVIDED,
HOWEVER, that Assumed Liabilities shall not include: (i) any liability or
obligation arising out of any Contract that was not capable of being assigned to
Buyer as of the Closing until such time that such Contract has effectively been
assigned to Buyer; (ii) any liability or obligation under or with respect to any
Subscriber Contract or Contract required by the terms thereof to be discharged
on or prior to the Closing; (iii) any liability or obligation to the extent the
existence of which constitutes a breach of any representation or warranty of
Parent and Seller contained in or made pursuant to this Agreement; (iv) any
liability or obligation arising out of a breach or default by Parent and Seller
on or prior to the Closing (including any event occurring at or prior to the
Closing that with the lapse of time or the giving of notice, or both, would
become a breach of default) under any Subscriber Contract or Contract; or (v)
any liability for Taxes of Seller.
<PAGE>
"Business" means Seller's business of offering dial-up Internet
access services to customers within the United States, excluding the Excluded
Campus Contracts.
"Business Day" means any day other than a Saturday, Sunday, or a day
on which banking institutions in New York City are authorized or obligated by
law or executive order to close.
"Business Employees" means the employees of Seller listed on
Schedule 7.1(a), which schedule shall be delivered by Seller to Buyer within 5
days after the date of this Agreement.
"Closing Dial-up Subscribers" means only those Subscribers, other
than Subscribers under the Excluded Campus Contracts, which at the Closing: (i)
are under contract with Seller pursuant to the Form Subscriber Contract, (ii)
are currently being charged by and obligated to pay to Seller the applicable
rate for the applicable Internet access service as specified in Schedule
3.5(a)(ii), (iii) each of which has paid in full without discount at least one
monthly bill generated in the ordinary course of business, (iv) are not
Delinquent, and (v) have paid a bill to Seller in full within the 60 days prior
to the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Continuing Dial-up Subscriber" means (i) a Closing Dial-up
Subscriber or (ii) any Subscriber that would have been a Closing Dial-up
Subscriber but who did not satisfy clause (iv) of such definition, that, 120
days after the Closing Date (A) is being charged by and is obligated under
contract to pay to Buyer the rates for Internet access services provided by
Buyer, and has paid such rate to Buyer for two consecutive monthly bills sent to
such Subscriber by on or behalf of Buyer after the Closing in the ordinary
course of business and has not failed to pay the next subsequent bill mailed to
such Subscriber by or on behalf of Buyer for a period of more than 45 days after
any such bill was mailed to such Subscriber and (B) has not requested that Buyer
cancel its account with Buyer for the provision of Internet access services.
Notwithstanding anything to the contrary contained herein, with respect to any
Closing Dial-up Subscribers (1) who are on prepaid Plans whose prepayment
continues through the 120th day after the Closing Date, or (2) who enroll in a
new prepaid plan of Buyer prior to the 120th day after the Closing Date, such
Subscribers shall be deemed Continuing Dial-up Subscribers so long as such
Subscribers have not requested that Buyer cancel their account or terminate
their participation in such new plan as of the date that is 120 days after the
Closing Date.
"Deferred Revenue Liability" means deferred revenue liability of
Seller as of the Closing attributable to the Closing Dial-up Subscribers for
Subscriber accounts for which Seller has invoiced and collected revenue in
advance of providing Internet access services, determined in accordance with
GAAP.
"Delinquent" means a Subscriber who has not paid in full as of the
Closing Date all monthly bills mailed by Seller 60 or more days prior to the
Closing Date.
"GAAP" means United States generally accepted accounting
principles.
<PAGE>
"Governmental Entity" means (i) any multinational, federal,
provincial, state, municipal, local or other governmental or public department,
court, commission, board, bureau, agency or instrumentality, domestic or
foreign; (ii) any subdivision, agent, agency, commission, board, or Governmental
Entity of any of the foregoing; or (iii) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing governmental authority under
or for the account of any of the foregoing.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvement Act
of 1976, as amended.
"Laws" means all statutes, codes, ordinances, decrees, rules,
regulations, municipal by-laws, judicial or arbitral or administrative or
ministerial or departmental or regulatory judgments, orders, decisions, rulings
or awards, policies, voluntary restraints, guidelines, or any provisions or
interpretations of the foregoing, including general principles of common and
civil law and equity, binding on or affecting the Person referred to in the
context in which such word is used.
"Lien" means any lien, (including, without limitation, environmental
and tax liens) charge, claim, pledge, security interest, conditional sale
agreement or other title retention agreement, lease, mortgage, security
agreement, right of first refusal, option, restriction, tenancy, license,
covenant, right of way, easement or other encumbrance (including the filing of,
or agreement to give, any financing statement under the Uniform Commercial Code
or statute or law of any jurisdiction), preferential arrangement or restriction
of any kind (including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes).
"Losses" means any losses, costs, expenses, damages including
compensatory, exemplary, or punitive damages, Taxes, penalties, fines, charges,
demands, liabilities, obligations and claims of any kind (including interest,
penalties and reasonable attorneys' and consultants' fees, expenses and
disbursements).
"MCI Agreement" means the Stock Purchase Agreement dated as of
September 3, 1998 among Cable & Wireless Internet Holdings, Inc., Cable and
Wireless plc, WorldCom, Inc. and MCI Telecommunications Corporation, as in
effect as of the date of this Agreement and as has been provided to Buyer by
Seller prior to the date of this Agreement.
"MCI Litigation" means the pending lawsuit styled CABLE &
WIRELESS USA, INC. AND CABLE AND WIRELESS PLC, V. MCI WORLDCOM, INC., filed
in the United States District Court for the District of Delaware on or about
March 31, 1999, CA No. 99-204.
<PAGE>
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, limited partnership, association, firm,
Governmental Entity, a trust unincorporated organization or other entity or
organization.
<F7>
"Subscriber Contracts" means all contracts with Subscribers to
one of the Plans of the Business.
"Subscribers" means a Person who is an Internet service subscriber
to one of the Plans offered by the Business prior to and on the Closing Date, or
a Person who is an Internet service subscriber to one of the Internet service
plans offered by Buyer after the Closing Date; PROVIDED, HOWEVER, that (i) the
term Subscriber for all purposes of this Agreement shall not be deemed to
include any Person who is a subscriber of the American Family Online Service or
Persons who are subscribers under the Excluded Campus Contracts and, (ii) to the
extent a customer account covers multiple users who are Subscribers, each of
which pays a separate retail monthly charge, each such multiple user shall be
deemed to be one Subscriber.
"Taxes" means any and all federal, state, local and foreign taxes,
fees, levies, duties, tariffs, imposts, and other charges of any kind
whatsoever, including, without limitation, income, payroll, withholding, excise,
sales, use, lease, personal and other property, use and occupancy, business and
occupation, mercantile, real estate, gross receipts, license, employment,
severance, stamp, premium, windfall profits, social security (or similar
unemployment), disability, transfer, registration, value added, alternative or
add-on minimum, estimated, or capital stock and franchise and other tax of any
kind whatsoever, including any interest, penalty or addition thereto, or
additional amounts imposed with respect thereto, whether disputed or not.
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<F7>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
<PAGE>
2. The following terms shall have the meanings ascribed to them in
the section of this Agreement indicated below:
DEFINED TERM SECTION
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<F8>
"Additional Amount"........................................................2.2
"Agreement"...........................................................Preamble
"Assignment and Assumption Agreement"...................................6.1(f)
"Basket Amount".........................................................8.2(b)
"Bill of Sale"..........................................................6.1(e)
"Buyer"...............................................................Preamble
"Buyer Indemnified Parties"................................................8.2
<F8>
"Buyer's Continuing Dial-up Subscriber Schedule"........................2.3(b)
"Buyer's Deferred Revenue Schedule".....................................2.7(b)
"Buyer's Non-Converted Subscribers Deferred Revenue Schedule"...........2.7(e)
"Campus Contracts"........................................................5.10
"Closing"..................................................................2.5
"Closing Cash Payment".....................................................2.2
"Closing Date".............................................................2.5
"Closing Deferred Revenue"..............................................2.7(a)
"Closing Dial-up Subscriber Number".....................................2.3(a)
"Closing List"..........................................................2.3(a)
"Controlling Party".....................................................8.4(b)
"DOJ"......................................................................5.3
"Deferred Revenue Liability Refund Amount"..............................2.7(e)
"Deferred Revenue Schedule".............................................2.7(a)
"Excluded Campus Contracts"...............................................5.10
"FTC"......................................................................5.3
"Final Cash Purchase Price"................................................2.2
"Final Continuing Dial-up Subscriber Number."...........................2.3(b)
"Final Deferred Revenue Amount."........................................2.7(c)
"Financial Statements".....................................................3.4
"Form Subscriber Contract"..............................................3.5(a)
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<F8>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
<PAGE>
"Indemnified Party".....................................................8.4(a)
"Indemnifying Party"....................................................8.4(a)
"MCI"...................................................................3.5(c)
"MCI Contracts".........................................................3.5(c)
"Non-Assumed Liabilities"...............................................2.4(b)
"Non-Continuing Subscribers Schedule"......................................7.7
"Other Party"...........................................................8.4(b)
"Parent"..............................................................Preamble
"Plans".................................................................2.6(a)
"Program"..................................................................5.9
<F9>
"Purchase Price"...........................................................2.2
<F9>
"SEC"...................................................................5.6(b)
"Seller's Deferred Revenue Dispute Notice"..............................2.7(b)
"Seller's Dispute Notice"...............................................2.3(b)
"Seller"..............................................................Preamble
"Seller Indemnified Parties"............................................8.3(a)
"Special Continuing Subscribers"...........................................5.8
"Third Party Indemnification Claim".....................................8.4(a)
"Transaction Documents"....................................................3.1
"Transferred Employee"..................................................7.1(a)
"Transition Services Agreement".........................................2.6(c)
"WARN Act"..............................................................7.1(b)
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<F9>
Material has been omitted pursuant to a request for confidential treatment and
the material has been filed separately.
