Acquisition Agreement - EarthLink INc. and Netpliance Inc.
ACQUISITION AGREEMENT
This Acquisition Agreement (this "Agreement") is effective as of February
1, 2001 (the "Effective Date") between EarthLink, Inc., a Delaware corporation
("EarthLink"), and Netpliance, Inc., a Delaware corporation. ("Seller"). Each of
EarthLink and Seller are sometimes referred to as a "Party".
RECITALS
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1. Seller is the owner of all right, title and interest in and to the
assets described in Exhibit A hereto (the "Transferred Assets") which assets are
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used in or related to Seller's Internet service provider business (the
"Business"), and
2. Seller desires to sell and assign the Transferred Assets to EarthLink
and EarthLink desires to purchase from Seller the Transferred Assets, all on the
terms and subject to the conditions set forth in this Agreement.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
AGREEMENT
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1. DEFINITIONS. The following terms shall have the following meanings in this
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Agreement.
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.
"Bounty" means the amount that EarthLink will pay Seller for each
Qualified Member provided by Seller as specifically set forth in Exhibit A
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"Broadband Subscriber" means any Person that gains access to any Internet
related services through Seller via an Integrated Services Digital Network
(ISDN), Frame Relay, T-1, ADSL, SDSL, Cable, Ethernet or any other transport
mechanism. A listing of all Broadband Subscribers is attached on Exhibit A.
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"Dial-up Subscriber" means any Person that gains access to any Internet-
related services through Seller via the public switch telephone network. A
listing of all Dial-up Subscribers is attached on Exhibit A.
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"Domain Names" shall mean the Internet domain names listed on Exhibit A
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hereto.
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"EarthLink Member" means any authorized user of the EarthLink Service who
has contracted with EarthLink for the use of the EarthLink Service.
"EarthLink Service" means EarthLink's broadband and/or narrowband dial-up
Internet access service and/or Web Hosting Service.
"Opt-out Date" means the date between the Effective Date and the Subscriber
Transition Commencement Date specified in Seller's notice to Subscribers as
described in Section 2.1.2 of this Agreement.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or any governmental body.
"Qualified Member" means an EarthLink Member who pays EarthLink the full
and recurring standard access fee for the EarthLink Service for at least two (2)
consecutive months.
"Requirements of Laws" means any foreign, federal, state and local laws,
statutes, regulations, rules, codes or ordinances enacted, adopted, issued or
promulgated by any governmental body (including, without limitation, those
pertaining to electrical, building, zoning, environmental and occupational
safety and health requirements) or any common law.
"Subscriber" means collectively any Broadband Subscriber and Dial-up
Subscriber.
"Subscriber Transition Commencement Date" means the date on which the
transfer of Subscribers from Seller's system onto EarthLink's system begins.
"Subscriber Transition End Date" means the date on which the transfer of
Subscribers from Seller's systems onto EarthLink's systems is completed and
EarthLink begins to provide Internet services to such Subscribers, which shall
occur no later than March 31, 2001.
"Transition Period" means the period between the Effective Date and the
Subscriber Transition End Date. The components of the Transition Period are set
forth on Exhibit C.
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2. DUTIES AND OBLIGATIONS OF THE PARTIES.
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2.1 Duties and Obligations of Seller. In connection with this Agreement,
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Seller shall have the following duties and obligations:
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2.1.1 Sale of Transferred Assets. In exchange for the payment
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described in Section 2.2.1, Seller hereby sells, conveys, grants, assigns,
transfers and delivers to EarthLink and its successors and assigns, free and
clear of any and all liens, claims, charges and encumbrances, all of Seller's
right, title and interest in and to the Transferred Assets.
2.1.2 Notification Email and Opt-out Provision. On or before the
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Subscriber Transition Commencement Date, Seller will send an e-mail to all
Subscribers notifying all Subscribers that (a) Seller is in the process of
selling its accounts to EarthLink, (b) Seller will terminate service to all
Subscribers as of the Subscriber Transition End Date, (c) each Subscriber will
have the opportunity to opt out of the transfer of the Subscriber's account to
EarthLink by notifying Seller by means of a specified procedure on or before the
Opt-out Date, (d) each Subscriber who opts out on or before the transfer will
need to find an Internet service provider other than Seller, (e) the accounts of
all Subscribers who do not opt out on or before the Opt-out Date will be
transferred to EarthLink, (f) each Subscriber will be given an opportunity to
review EarthLink's Internet Service Agreement by means of a hyperlink to such
agreement prominently displayed in the e-mail, (g) unless a Subscriber opts out
of the transfer, each Subscriber shall be deemed to be bound by the terms and
conditions of the EarthLink Internet Services Agreement.
2.1.3 Opt-out Follow Up. On or before the Opt-out Date, Seller shall
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send a follow-up e-mail to all Subscribers with substantially the same content
as the e-mail referred to in Section 2.1.2 above.
2.1.4 Forward Subscribers Email. Seller will forward each Subscriber's
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e-mail for a period of thirty (30) days after the Subscriber Transition End
Date, to such Subscriber's new EarthLink e-mail address. Seller will collaborate
with Earthlink to ensure an orderly transition of e-mail services to Earthlink.
Seller will also include in such e-mail other text requested by EarthLink that
is mutually agreed-upon by the parties.
2.1.5 Operation of the Business During the Transition Period. Except
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as expressly permitted or required hereby, at all times during the Transition
Period, Seller will continue to operate the Business in the ordinary course
consistent with past practice (including, without limitation, with regard to
billing and collection practices and efforts to retain existing Subscribers and
to obtain new Subscribers) and will not engage in any practice, take any action,
embark on any course of action or enter into any transaction outside the
ordinary course of the Business, and Seller shall operate the Business in
accordance with the terms of the Business' licenses and in all material respects
with all applicable governmental requirements. In relation to the Business and
except as expressly contemplated by this Agreement and without limiting the
generality of the foregoing, during the Transition Period Seller will take all
actions reasonably necessary to effectuate a transfer of the Transferred Assets
and will not: (a) sell, lease, license or otherwise dispose of any of the
Transferred Assets; (b) suffer or permit any encumbrance to arise or be granted
or created against or upon any of the Transferred Assets; (c) sell, assign,
pledge, mortgage or otherwise transfer, or suffer any damage, destruction or
loss (whether or not covered
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by insurance) to, any of the Transferred Assets; (d) with regard to the
Transferred Assets, make any acquisitions or capital expenditures, including,
without limitation, replacements of equipment described on Exhibit A in the
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ordinary course of the Business, or enter into commitments therefore, except for
such capital expenditures or commitments therefore which have been approved by
the prior written consent of EarthLink; (e) make or enter into any material
vendor, supply, sales, distribution, franchise, or other agreement related to
the Transferred Assets without first obtaining the prior written consent of
EarthLink; (f) amend, terminate or fail to renew any contract (including,
without limitation, any Subscriber contracts), agreement, lease, franchise,
license or other agreement related to the Transferred Assets without first
obtaining the prior written consent of EarthLink; (g) with regard to the
Transferred Assets, waive any accounts receivable or outstanding bills, discount
future bills or provide any services without payment; (h) enter into any credit
arrangement or assume any debt obligation related to the Transferred Assets; (i)
enter into any transaction or agreement relating to the Transferred Assets that
would have a material adverse effect on the Transferred Assets; or (j) agree or
commit to do any of the foregoing.
2.1.6 Preservation of Transferred Assets. Except as expressly
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permitted or required hereby, at all times during the Transition Period, Seller
will use all commercially reasonable efforts to keep the Transferred Assets
substantially intact, including, without limitation, the present Internet
service provider operations, physical facilities, working conditions, rights and
franchises and relationships with Subscribers, lessors, licensers, suppliers,
customers and employees. Until the Subscriber Transition End Date, Seller will
continue to provide support services to all Subscribers consistent with its
existing services, including handling inquiries about the transition.
2.1.7 Performance of Obligations. Seller agrees to (a) during all
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times prior to the Subscriber Transition End Date, to perform in full any
obligations or agreements existing between Seller and any third party relating
to the Transferred Assets and to extinguish any indebtedness owing by Seller to
any third party related to the Transferred Assets, and (b) for a period of three
(3) months after the Subscriber Transition End Date, not to commence any
voluntary bankruptcy proceeding.
2.1.8 Notice of Developments. During the Transition Period, Seller
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will give prompt written notice to EarthLink of any material development
affecting the Transferred Assets, including liabilities, business, financial
condition, operations, contracts (including, without limitation, the Subscriber
contracts), or results of operations.
2.1.9 Access. At all times during the Transition Period, Seller will
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provide representatives of EarthLink with reasonable access to the relevant
personnel, officers, agents, employees, assets (including, without limitation,
the Transferred Assets and any equipment used in relation to the Transferred
Assets), properties, titles, contracts (including, without limitation,
Subscriber contracts), books, records (including, without limitation, tax
records), files and
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documents (including, without limitation, financial, tax basis, budget
projections, auditors' work papers and such other information as EarthLink may
reasonably request), customers, suppliers, legal counsel, independent auditors
and other representatives of or pertaining to the Transferred Assets.
2.1.10 Taxes. Seller shall agrees to retain and pay when due all of
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its liabilities and any transfer taxes, bulk sales or similar taxes that may be
imposed upon the transfer and sale of the Transferred Assets pursuant to this
Agreement. Seller is solely responsible for all taxes on Bounties paid to Seller
under this Agreement by EarthLink, including all state and local use, sales,
property (ad valorem) and similar taxes.
2.1.11 Expenses. Seller agrees that all expenses incurred by the
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Business during the Transition Period shall be discharged by, and be the
obligation of, Seller.
2.1.12 Web Content. The parties acknowledge that Seller currently
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provides content to Subscribers. Earthlink acknowledges that Seller content may
consist of (a) content substantially similar to the content delivered as of the
Effective Date in the form of the "Netpliance portal," or (b) fixed hyperlinks
to Earthlink Web pages.
2.1.13 Consents. Seller shall deliver any and all consents reasonably
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necessary for the execution, delivery and performance of this Agreement.
2.2 Duties and Obligations of EarthLink. In connection with this
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Agreement, EarthLink shall have the following duties and obligations:
2.2.1 Bounty Payment. EarthLink shall pay Seller a Bounty for each of
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Seller's Subscribers that becomes a Qualified EarthLink Member. The total
purchase price for the Transferred Assets shall be equal to the Bounty, as set
forth in Exhibit A, times the total number of Seller's existing Subscribers that
become EarthLink Qualified Members (the "Purchase Price"). The Purchase Price
shall be payable to Seller in two payments as follows:
a. First Payment. Promptly after Seller's Subscriber database is
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merged into Earthlink's subscriber database, , EarthLink
shall pay one half of the estimated Purchase Price,
$4,375,000 (the "First Payment") by wire transfer of funds
to Seller's account as set forth on Exhibit B hereto (the
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"Seller's Account").
b. Final Payment. EarthLink shall determine the number of actual
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Qualified Members after two monthly billing cycles. After
that determination, EarthLink shall pay the balance of the
Purchase Price ("Final Payment") by wire transfer to the
Seller's Account.
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2.2.2 [Reserved]
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2.2.3 Notification; Email Support. EarthLink shall cooperate in the
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preparation of the e-mail notices contemplated in Sections 2.1.2 and 2.1.3
above, including, without limitation, providing Seller with any requested text,
providing Seller with relevant information requested by Seller and answering any
questions of Seller with respect to such notices.
2.3 Press Release. No Party shall issue a press release or similar
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public announcement of any kind regarding this Agreement without the prior
written approval of the other Party.
3. REPRESENTATIONS AND WARRANTIES.
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3.1 Representations and Warranties of Seller. Seller represents and
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warrants to EarthLink as follows:
3.1.1 Due Organization. Seller is a corporation duly organized,
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validly existing, and in good standing under the laws of Delaware, and has full
corporate power and authority to own and lease its properties and assets and to
carry on its business as now conducted. Seller is qualified to do business in
all other jurisdictions where such qualification would be required as a result
of Seller's ownership and operation of the Business and the Transferred Assets,
except where the failure to be so qualified does not and would not reasonably be
expected to have a material adverse effect on the Business or the Transferred
Assets.
3.1.2 Due Authorization. Seller has full power and authority to
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execute, deliver and perform this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Seller and constitutes the valid and binding obligation of the
Seller, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by laws affecting creditors' rights and debtors'
obligations generally, and legal limitations relating to remedies of specific
performance and injunctive and other forms of equitable relief (the "Equitable
Exceptions"). The execution, delivery, and performance of this Agreement (as
well as any other instruments, agreements, certificates, or other documents
contemplated hereby) by Seller, does not (i) violate any Requirements of Laws or
any court order of any governmental body applicable to Seller, or Seller's
property, (ii) violate or conflict with, or permit the cancellation of, or
constitute a default under, any material agreement to which Seller is a party,
or by which Seller or any of Seller's property is bound, (iii) permit the
acceleration of the maturity of any material indebtedness of, or indebtedness
secured by the property of Seller which will not be paid in full as of the date
of this Agreement, (iv) violate or conflict with any provision of the charter or
bylaws of Seller, or (v) require any consent, approval or authorization of, or
notice to, or declaration, filing or registration with, any governmental body or
other third party.
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3.1.3 Transferred Assets. Seller has full and unrestricted legal
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title to the Transferred Assets and all revenue generated by the Transferred
Assets, free and clear of any and all liens, claims, revenue sharing or referral
fees, charges, encumbrances or restrictions of any kind, and upon EarthLink's
receipt of the Transferred Assets, EarthLink shall own the Transferred Assets,
free and clear of any liens, claims, charges, encumbrances or restrictions of
any kind. All the information relating to the Transferred Assets set forth on
Exhibit A is true and accurate in all material respects.
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3.1.4 Claims. There are no claims, actions, suits, proceedings, or
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investigations pending or, to the best knowledge and belief of Seller,
threatened against or affecting Seller relating to the Transferred Assets, at
law or in equity, before or by any court, municipality or other governmental
body which, if adversely determined, would individually or in the aggregate have
a material adverse effect on the Transferred Assets. Except as previously
disclosed to EarthLink, Seller has not been and Seller is not now, subject to
any court order, stipulation, or consent of or with any court or governmental
body. No inquiry, action or proceeding has been instituted or, to the best
knowledge of Seller, threatened or asserted against Seller to restrain or
prohibit the carrying out of the transactions contemplated by this Agreement or
to challenge the validity of such transactions or any part thereof or seeking
damages on account thereof. To the best knowledge of Seller, there is no basis
for any such valid claim or action.
3.2 Representations and Warranties of EarthLink. EarthLink represents and
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warrants to Seller as follows:
3.2.1 Due Organization. EarthLink is a corporation duly organized,
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validly existing, and in good standing under the laws of the state of Delaware
and has full corporate power and authority to carry on its business as now
conducted.
3.2.2 Due Authorization. EarthLink has full power and authority to
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execute, deliver and perform this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by EarthLink and constitutes the valid and binding obligations of
EarthLink, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by the Equitable Exceptions.
4. COVENANTS.
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4.1 Non-Compete. Seller agrees that, for a period of two (2) years after
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the Subscriber Transition End Date, neither it nor its Affiliates will, without
the prior written consent of EarthLink, either individually, or in partnership
or jointly or in conjunction with any Person as principal, agent, employee or
shareholder or in any other manner whatsoever, (i) contact or solicit any
Subscribers or other customers of EarthLink (directly or indirectly) for the
purpose of diverting any existing or future business of such Subscribers or
other customers to a competing source, (ii) contact or solicit any employees of,
or vendors to, EarthLink (directly or indirectly) for the
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purpose of causing, inviting or encouraging any such employee or vendor to alter
or terminate his, her or its employment or business relationship with EarthLink
or (iii) willfully and tortiously make any public statement or perform or do any
other act intentionally prejudicial or injurious to the reputation or goodwill
of EarthLink or otherwise interfere with the business of EarthLink or any of its
Affiliates.
4.2 Post-Transition Conduct. During the period commencing on the
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Subscriber Transition End Date and expiring on the earlier of (i) the two (2)
year anniversary of the Subscriber Transition End Date or (ii) the liquidation
and dissolution of Seller, Seller will refer all customer inquiries relating to
the Transferred Assets to EarthLink, or its Affiliates, at the direction of
EarthLink. During the period commencing on the Effective Date and expiring on
the earlier of the two (2) year anniversary of the Effective Date or the
liquidation and dissolution of Seller, Seller will not take any intentional
action that primarily is designed or intended to have the effect of discouraging
any Subscriber, lessor, licensor, or supplier of Seller from maintaining the
same business relations with EarthLink (or to another Person at the direction of
EarthLink) after the date hereof as it maintained with Seller prior to the date
hereof.
5. CONFIDENTIALITY. Except as otherwise provided in this Agreement, Seller
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and EarthLink each agree that all information communicated to one by the other
or the other's affiliates, whether before or after the Effective Date, will be
received in strict confidence, will be used only for purposes of this Agreement
and will not be disclosed by the recipient Party, its agents, subcontractors or
employees without the prior written consent of the other Party. Each Party
agrees to take all reasonable precautions to prevent the disclosure to outside
parties of such information, including, without limitation, the terms of this
Agreement, except as required by legal, accounting, securities exchange, or
regulatory requirements; provided, however, that if any information (including
the terms of this Agreement) is required to be disclosed to any third party as
described herein, the recipient Party will contact the other Party prior to any
third party disclosure and such other Party shall have a reasonable opportunity
to prevent or limit the third party disclosure. The provisions of this Section
shall survive the expiration or termination of this Agreement for any reason.
6. LIABILITY, INDEMNIFICATION AND RIGHT OF OFFSET.
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6.1 No Assumption of Liabilities. EarthLink shall not assume or be liable
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for, and Seller shall retain and remain responsible for, all of Seller's and the
Business's debts, liabilities and obligations of any nature whatsoever
including, without limitation, all prepaid accounts, all contracts, capital
leases, operating leases and Subscriber credits and/or refunds, whether accrued,
absolute or contingent, whether known or unknown, whether due or to become due
and whether related to the Transferred Assets or otherwise, and regardless of
when asserted. Seller shall not assume or be liable for, and EarthLink shall
retain and remain responsible for, all debts, liabilities and obligations of any
nature whatsoever incurred by EarthLink (or any EarthLink agent or Affiliate)
following the Effective Date with regard to the Transferred Assets.
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6.2 Indemnification. Seller agrees to indemnify and hold harmless
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EarthLink, and each officer, director, and Affiliate of EarthLink, including
without limitation any successor of EarthLink (collectively, the "EarthLink
Indemnified Parties") from and against any and all damages, losses, claims,
liabilities, demands, charges, suits, penalties, costs and expenses (including
court costs and reasonable attorneys' fees and expenses incurred in connection
with any litigation or proceeding) (collectively, the "Indemnifiable Costs"),
which any of the EarthLink Indemnified Parties may sustain, or to which any of
the EarthLink Indemnified Parties may be subjected, arising out of (a) any
misrepresentation, breach or default by Seller of or under any of the
representations, covenants, agreements or other provisions of this Agreement or
any agreement or document executed in connection herewith; (b) any noncompliance
with the provisions of any applicable bulk sales law or regulation; or (c) any
liability or obligation of Seller arising out of the conduct of the Business
prior to the Effective Date, whether or not disclosed herein and any claim or
claims made against EarthLink arising out of liabilities or asserted liabilities
of Seller or its Affiliates which may be asserted against EarthLink as successor
to the Transferred Assets. EarthLink agrees to indemnify and hold harmless
Seller, and each officer, director, and Affiliate of Seller, including without
limitation any successor of Seller (collectively, the "Seller Indemnified
Parties") from and against any and all Indemnifiable Costs which any of the
Seller Indemnified Parties may sustain, or to which any of the Seller
Indemnified Parties may be subjected, related to any liability or obligation
arising out of EarthLink's use of the Transferred Assets following the Effective
Date. Notwithstanding anything herein to the contrary, neither Party shall be
liable to the other for any Indemnification Costs (as calculated in the
aggregate) in excess of the amount paid or payable by EarthLink to Seller
hereunder.
6.3 Right of Offset. In the event that prior to the date of payment of all
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of the Purchase Price, the Indemnified Parties seek indemnification from Seller
under Section 6.2 hereof as a result of, including but not limited to incorrect
or inaccurate information regarding Transferred Assets and undisclosed liens,
claims, revenue sharing or referral fees, charges, encumbrances or restrictions
of any kind upon EarthLink's receipt of the Transferred Assets, then EarthLink,
in lieu of receiving a cash payment from Seller in satisfaction of Seller's
indemnification obligations under Section 6.2 hereof, may in good faith elect to
offset against the unpaid Purchase Price the amount of any claim or loss upon
written notice to Seller describing the amount withheld and a detailed
description of the matter giving rise to such offset.
6.4 WITH THE EXCEPTION OF THE WARRANTIES HEREIN, SELLER DISCLAIMS ALL
WARRANTIES, EITHER EXPRESS OR IMPLIED, REGARDING THE TRANSFERRED ASSETS, THEIR
MERCHANTABILITY OR THEIR FITNESS FOR ANY PARTICULAR PURPOSE. EXCEPT FOR CLAIMS
ARISING UNDER SECTION 5 OR PAYMENTS OBLIGATIONS ARISING UNDER SECTION 2.2 OR
6.2, NETHER PARTY WILL BE LIABLE FOR ANY PUNITIVE, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM THIS AGREEMENT, WHETHER BASED IN CONTRACT,
TORT (INCLUDING NEGLIGENCE), INTENDED CONDUCT OR OTHERWISE,
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INCLUDING WITHOUT LIMITATION, DAMAGES RELATING TO THE LOSS OF PROFITS, INCOME OR
GOODWILL, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. EXCEPT FOR DAMAGES ARISING UNDER A BREACH OF SECTION 5, NEITHER
PARTY'S LIABILITY TO THE OTHER SHALL EXCEED THE AMOUNT PAID OR PAYABLE BY
EARTHLINK TO SELLER HEREUNDER.
7. GENERAL PROVISIONS.
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7.1 Entire Agreement. The Agreement, including any exhibits attached
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hereto, constitutes the entire understanding and agreement with respect to its
subject matter, and supersedes any and all prior or contemporaneous
representations, understandings and agreements whether oral or written between
the Parties relating to the subject matter of this Agreement, all of which are
merged in this Agreement. The Agreement shall not be revised, amended, or in
any way modified except in writing executed by both Parties.
7.2 Waivers. The waiver by any Party of any of its rights or breaches of
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the other Party under this Agreement in a particular instance shall not be
construed as a waiver of the same or different rights or breaches in subsequent
instances. All remedies, rights, undertakings and obligations hereunder shall
be cumulative and none shall operate as a limitation of any other remedy, right,
undertaking or obligation thereof. No failure or delay by any Party in
exercising any right, power or privilege hereunder (and no course of dealing
between or among any of the parties) shall operate as a waiver of any such
right, power or privilege.
7.3 Expenses. Each of the parties shall bear all costs, charges and
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expenses incurred by such Party in connection with this Agreement and the
consummation of the transactions contemplated herein.
7.4 Binding Effect; Assignment. This Agreement shall be binding upon and
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inure to the benefit of Seller and EarthLink and each of their respective heirs,
representatives, successors, and permitted assigns, in accordance with the terms
hereof. This Agreement shall not be assignable by Seller without the prior
written consent of EarthLink. This Agreement shall be assignable by EarthLink
to any of its Affiliates without the prior written consent of Seller.
7.5 Governing Law. The laws of Georgia shall govern this Agreement without
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giving effect to applicable conflict of laws provisions. In the event any
litigation or other proceeding is brought by either Party in connection with
this Agreement, the prevailing Party in such litigation or other proceeding
shall be entitled to recover from the other Party all reasonable costs,
attorneys' fees and other expenses incurred by such prevailing Party in such
litigation.
7.6 Effects of Expiration or Termination. Upon the expiration or
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termination of this Agreement, all rights and obligations of the Parties under
this Agreement shall terminate, except
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the rights and obligations under Sections 2.3, 4, 5, 6 and 7 herein shall
survive expiration or termination of the Agreement.
7.7 Severability of Provisions. In the event that any provision of this
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Agreement is found to be invalid or unenforceable pursuant to judicial decree or
decision, the remainder of this Agreement shall remain valid and enforceable
according to its terms.
7.8 Notices. All notices or other communications hereunder shall be in
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writing and shall be delivered by hand, facsimile or sent, postage prepaid, by
registered or certified mail or reputable overnight courier service and shall be
deemed given when so delivered by hand or facsimile, or, if mailed, five days
after mailing (one business day in the case of overnight courier) addressed to
the intended recipient as set forth below:
If to Seller: Netpliance, Inc.
7501B N. Capital of Texas Hwy.
Austin, Texas 78703
Attn. Legal Department
If to EarthLink: Cliff Bryant
Director of Acquisitions
EarthLink, Inc.
Suite 400
1430 West Peachtree Street, NW
Atlanta, GA 30309
with copies to: EarthLink, Inc.
Suite 400
1430 West Peachtree Street, NW
Atlanta, GA 30309
Attn: Legal Department
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Each of the Parties has executed this Agreement as of the Effective Date.
EARTHLINK:
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EARTHLINK, INC.
______________________________
By:___________________________
Title:________________________
Date:_________________________
SELLER:
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NETPLIANCE, INC.
______________________________
By:___________________________
Title:________________________
Date:_________________________
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Exhibit A
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TRANSFERRED ASSETS
A. Subscribers.
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------------------------------------------------------------------------
Number of Applicable Bounty
Subscriber Category Subscribers as of per Qualified
01/29/01 Member
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Dial-Up 50,000 $175
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Broadband 0 $0
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B. Equipment.
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C. Domain Names.
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Exhibit B
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SELLER'S WIRING INSTRUCTIONS
Netpliance, Inc.
The Chase Manhattan Bank
Austin, TX
Account Name: Operating Account
Account Number 9.923E+09
ABA Number: 113000609
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Exhibit C
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Timeline
TRANSITION PERIOD
[FLOW CHART APPEARS HERE]
EFFECTIVE OPT OUT DATE SUBSCRIBER SUBSCRIBER
DATE TRANSITION TRANSITION
The date between the Effective COMMENCEMENT END DATE
The date of this Date and the Subscriber DATE
Agreement Transition Commencement Date The date on which the
specified in Seller's notice The date on which the transfer transfer of Subscribers
to Subscribers as described in of Subscribers from Seller's from Seller's systems onto
Section 2.1.2 of this Agreement system onto EarthLink's system EarthLink's systems is
begins. completed and EarthLink
begins to provide Internet
services to such Subscribers.
FIRST PAYMENT FINAL PAYMENT
Promptly after Seller's Subscriber EarthLink shall determine the
database is merged into EarthLink's number of actual Qualified Members
subscriber database, EarthLink shall after two monthly billing cycles.
pay one half of the estimated After that determination, EarthLink
Purchase Price to Seller shall pay the balance of the Purchase
Price to Seller
15