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Exhibit 2.2
ASSET PURCHASE AGREEMENT
AGREEMENT made as of this tenth day of June, 1998 between HOMECOM
COMMUNICATIONS, INC., a Delaware corporation with a principal place of business
at 00 Xxxxxxxx Xxxxxx, Xxxxx 000, 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
(the "Company"), and SAGE NETWORKS ACQUISITION CORP., a Delaware corporation
having an office at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Buyer").
W I T N E S S E T H :
WHEREAS, the Company desires to sell and the Buyer desires to purchase
on the date hereof (the "Closing Date") substantially all of the Internet Web
hosting business of the Company as a going concern which including, without
limitation, the virtual hosting business under the trade name of "HostAmerica".
NOW THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by all parties, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE; REPRESENTATIONS AND WARRANTIES
SECTION 1. PURCHASE AND SALE. Subject to the terms and conditions of
this Agreement, the Company hereby sells, assigns and transfers to the Buyer and
the Buyer hereby purchases and acquires from the Company, as a going concern,
that portion of the Business (hereinafter defined) consisting of all of the
right, title and interest of the Company in and to the Purchased Assets (as
hereinafter defined) for a purchase price determined as set forth in Exhibit A,
as adjusted in accordance with Exhibit A (the "Purchase Price") and for the
assumption of the Assumed Liabilities (hereinafter defined). The Buyer shall
receive, at the Closing, the Buyer's Credit as set forth in Exhibit A. For
purposes of this Agreement, "Business" shall mean the Internet Web hosting
business conducted by the Company including, without limitation, the virtual
hosting business under the trade name of "HostAmerica", other than the Internet
Web hosting services provided by the Company to the Excluded Customers (as
hereinafter defined).
SECTION 2. REPRESENTATIONS OF THE COMPANY. The following agreements,
representations and warranties are made by the Company to the Buyer.
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(A) Corporate Matters; No Conflict. The Company is duly organized,
validly existing and in good standing under the laws of the State of Delaware
and the State of Georgia. The fact that the Company has not qualified to do
business in any other state has not had a material adverse effect on the
Business. The Company maintains offices relating to the Business only at the
site(s) listed on Exhibit A and has no operations other than from those site(s).
The Company has the corporate power to enter into this Agreement, to perform its
obligations hereunder and to conduct its business as currently conducted. The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby by the Company will not (i) conflict with or violate, in any
material respect, the provisions of any applicable law (including, without
limitation, any bulk sales laws), rule or order, (ii) conflict with or violate
the Articles or Certificate of Incorporation, by-laws or any other
organizational or governing documents of the Company, (iii) in any material
respect, conflict with or constitute a default under any agreement or contract
by which the Company is bound or (iii) require the consent or approval of, or
filing with, any governmental body or third party except as set forth on Exhibit
C-5. The execution, delivery and performance by the Company of this Agreement
has been duly authorized and approved by all requisite corporate action on the
part of the Company. Set forth on Exhibit B is a list of officers and directors
of the Company, all trade names used by the Business and all jurisdictions in
which the Business is conducted. This Agreement and the consummation of the
transactions contemplated hereby have been approved by the board of directors of
the Company, and the authorized officers of the Company named on Exhibit A are
authorized and empowered by the Company to execute and deliver this Agreement in
the name and on behalf of the Company. This Agreement and the consummation of
the transactions contemplated hereby do not require any approval by the
shareholders of the Company.
(B) Purchased Assets. (i) All vendor and customer contracts,
confidentiality agreements, purchase and sales orders and other agreements to
which the Company is a party and which relate in any manner to the Business
and/or the relationship between the Company and the Customers (hereinafter
defined), whether written or oral, shall be referred to herein collectively as
the "Business Agreements". The Company has not granted any powers of attorney
with respect to the Business. The Company has delivered to Buyer, on or before
the Closing Date, true and correct copies of all written Business Agreements in
its possession, including, without limitation, all Business Agreements in
electronic form. Except for the written Business Agreements provided by the
Company to the Buyer, all of the company's written Business Agreements are in
the standard form of customer service agreement accessible on the Company's Web
site for the Business or the reseller agreement known as the Star VAR Agreement.
The Company's general business practice is not to make or enter into oral
business arrangements. To the best knowledge of the Company after reasonable
investigation, there are no oral business arrangements which relate to the
Business which provide for payments by the customer thereunder or contain
obligations or liabilities of the Company thereunder, in either case, in an
amount of $1,000 individually or in an aggregate amount in excess of $10,000.
Attached hereto as Exhibit C-1 are true and correct copies of the only forms of
agreements which have been entered into between the Company and its Customers
concerning the Business. Also attached as part of Exhibit C-1 is a schedule
stating the identity of the Customer to each of those agreements which are in
force and effect as of the Closing Date, together with a designation of which
form of agreement each such Customer has entered into. Annexed as Exhibit C-2 is
a copy of all written Business Agreements between the Company and vendors or
service providers, or which relate to
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any strategic partnerships, reselling arrangements or joint ventures between the
Company and others, concerning the Business. Listed on Exhibit C-3 is a
description of each equipment and personal property lease (collectively, the
"Leases") to which the Company is a party and which relates to the Business. The
Leases are also included within the definition of Business Agreements as said
term is used herein. The Company does not own, lease or use any real estate in
connection with the Business except the office and data facilities located at
the Sites. A copy of the lease for the data facility is annexed to Exhibit C-3
hereto. Neither the Company nor, to the knowledge of the Company, any other
party, is in default under any Business Agreement and no other party to any
Business Agreement has made any claim or given the Company notice of any dispute
under any Business Agreement, except as set forth on Exhibit C-4. Each Business
Agreement is in full force and effect and is enforceable by the Company in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency and similar laws. The Company has the right to assign the
Business Agreements to the Buyer and its affiliates and the Company has obtained
all required consents to the assignment and transfer thereof, except as set
forth on Exhibit C-5. The Company is not the owner or lessee of any motor
vehicles which are used in the Business. The Company does not own or lease any
interest in any personal property or any equipment used in the Business, except
as expressly stated on Exhibit C-3.
(ii) All of the tangible assets of the Company used in the
Business, including, without limitation, all machinery, office and other
equipment, furniture, computers and related equipment, business machines,
telephone systems, parts and accessories, telephone and facsimile numbers set
forth on Exhibit E, Web sites, e-mail addresses and Internet domain addresses
presently utilized by the Company in the Business, shall be referred to herein
collectively as the "Tangible Assets". Attached hereto as Exhibit E is a true
and correct list or description of the material Tangible Assets. The Tangible
Assets include all of the hardware, software (other than off-the-shelf software
licensed by the Company) and other equipment used to support, maintain and
service the customers which are parties to the Business Agreements. As of the
Closing Date, each of the Tangible Assets is in good and operable condition,
normal wear and tear excepted.
(iii) All patents, trademarks, trade names, service marks,
service names, logos, designs, Web sites, formulations, copyrights and other
trade rights and all registrations and applications therefor, all know-how,
trade secrets, technology or processes, and all computer programs, control
panels, surcharge calculators, data bases and software documentation owned or
used by the Company in the Business, other than off-the-shelf software licensed
by the Company, shall be referred to herein collectively as the "Intellectual
Property". Attached hereto as Exhibit F is a true and correct copy of all of the
Intellectual Property. Such exhibit also indicates which of such items have been
patented or registered or are in the process of application for same. To the
best knowledge of the Company, the Company not infringing on the rights of any
third parties to Intellectual Property used, but not owned by, the Company. The
Company has valid and fully-paid licenses for all off-the-shelf software used by
the Company in its operation of the Business. Included among the Intellectual
Property, among other things, are all trade names utilized by the Company in the
Business, including, but not limited to, those trade names listed on Exhibit B.
On the Closing Date, the Company will deliver to Buyer written proof in form and
substance satisfactory to Buyer and its counsel that the Company will no
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longer do business under any of the trade names listed on Exhibit B and further,
within ten (10) days from the Closing, Company will cause to be filed in all
applicable governmental or quasi-governmental offices, any required instruments
to terminate any previously filed assumed name or similar certificates regarding
such trade names. Promptly after such filing, the Company will deliver proof of
said filing to Buyer.
(iv) The Company will deliver at the Closing a true and
complete copy of the Company's customer list as of a date not more than five (5)
business days prior to the Closing Date relating to the Business which includes,
in the case of each customer, the name of the customer, its billing and domain
addresses, identity and contact information of each relevant contact person (the
"Customer List"). A statement of the monthly or annual (as indicated) service
charges relating to each customer on the Customer List and the Company's paper
and electronic files regarding each such customer, including, without
limitation, the data files residing on the Company's accounting and billing
systems, will be made available to Buyer from time to time at Buyer's request
after the Closing Date at the Company's corporate headquarters listed on Exhibit
A. All customers of the Company relating to the Business, including without
limitation, those customers included on the Customer List (but expressly
excluding those customers listed on Exhibit G-2 (the "Excluded Customers")),
together with the good will and business opportunities of the Company as it
relates to the Business shall be referred to herein as the "Customers".
(v) As used herein, the term "Purchased Assets" shall be
defined as the assets of the Company (including good will) utilized by the
Company to operate and maintain the Business, including, without limitation, the
Business Agreements, the Tangible Assets, the Intellectual Property, the
Customer List, the Customers and all other assets of the Company used in
connection with the operation of the Business, wherever located, tangible or
intangible, excluding, however, Excluded Assets (as defined below). The
Purchased Assets are not subject to (i) any lien or encumbrance of any character
whatsoever except as set forth on Exhibit M or (ii) any adverse claims by any
third parties. At the Closing upon consummation of the transactions contemplated
by this Agreement, Buyer will receive good and marketable title to the Purchased
Assets, free and clear of all liens, equipment leases, claims and encumbrances
of any character whatsoever, except as set forth on Exhibit M. The Purchased
Assets include all rights, properties, interests and assets used by Company
and/or necessary to permit Buyer to carry on the Business as presently conducted
by the Company except for Excluded Assets.
(vi) The Company reasonably expects that the business
represented by the Business Agreements will continue after the date hereof
subject to normal customer turnover. The Company has no knowledge that any
customers included on the Customer List, other than those listed on Exhibit G-1,
intend to terminate their relationship with the Company or significantly reduce
the amount of business they presently do with the Company.
(vii) Excluded Assets. The Company is not selling and
Purchaser is not buying or acquiring hereunder the following items ("Excluded
Assets") which are not included in the defined term "Purchased Assets": (a) all
cash and cash equivalents and notes receivable; (b) the Company's corporate
minute and stock books, general ledger and accounting records, tax returns and
other records having to do solely with the Company's organization and/or
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capitalization or with the other businesses of the Company; (c) all outstanding
billed and unbilled accounts receivable of the Company as of May 31, 1998 (the
"Closing Accounts Receivable"); (d) any rights to any of the Company's claims
for any federal, state or local tax refunds; (e) any rights which accrue or will
accrue to the Company under this Agreement or the transactions contemplated
hereby; (f) all rights the Company may have under any insurance policies
relating to the Purchased Assets, (g) the assets listed on Exhibit L and (h) the
assets not related to the Business.
(C) Financial Statements. The Company has delivered to the Buyer copies
of the Company's audited financial statements for the last three fiscal years of
the Company ended December 31, 1997, 1996 and 1995, respectively. Attached
hereto as Exhibit H is a certified audited balance sheet and profit and loss
statement for the fiscal year ended December 31, 1997 and unaudited financial
statements for the quarter ending March 31, 1998 and for the month ending April
30, 1998, all of which reflect the assets, liabilities, net worth, profit and
loss, and cash flow of the Company with respect to the Business. Exhibit H also
sets forth a true and correct statement of the monthly revenues of the Business
for the period beginning on January 1, 1998 and ending on April 30, 1998, in
each case, determined in accordance with generally accepted accounting
principles. All financial statements referred to herein are complete and correct
in all material respects, present fairly the financial condition and results of
operations of the Company as at the dates of such statements and have been
prepared in accordance with generally accepted accounting principles. The books
of account and records of the Company have been maintained in accordance with
good business practice and reflect fairly all properties, assets, liabilities
and transactions of the Company. The Company has no material liabilities or
obligations of any kind (whether accrued, absolute, direct, indirect, contingent
or otherwise) with respect to the Business which are not fully accrued or
reserved against in the Company's financial statements in accordance with
generally accepted accounting principles. The Company has previously provided to
Buyer an accurate and complete schedule of the Company's aged receivables with
respect to the Business as of May 31, 1998. Since the last day of the Company's
last fiscal year, the Company has conducted the Business only in the ordinary
and usual course and has not experienced any material adverse change in the
Business or the financial condition of the Company, except as disclosed in the
Company's filings with the Securities Exchange Commission. Since April 30, 1998,
the Company has had no loss in net monthly recurring revenue from the Business.
Between April 30, 1998 and the Closing Date, the Company did not withdraw,
expend or apply any cash or other assets of the Company, except in the ordinary
course of operations of the Business of the Company in accordance with past
practices of the Company. The books and records of the Company with respect to
the Business relating to the fiscal years of the Business ending December 31,
1995, 1996 and 1997, are adequate to permit an audit of the Business at and for
the fiscal years then ended.
(D) Assumed Liabilities. The Buyer shall not be liable for and is not
assuming any liabilities of the Company whatsoever, whether related or unrelated
to the Purchased Assets, or whether arising under the Business Agreement or
otherwise, except as specifically listed on Exhibit J hereto (the "Assumed
Liabilities"). The Company has no outstanding loans, borrowings, guarantees or
debt of any kind with respect to the Business except as set forth on Exhibit M
and none of the Company's obligations with respect to the Business have been
guaranteed by any other person or entity except as set forth on Exhibit M.
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(E) Existing Employment Arrangements. Except as set forth on Exhibit K
the Company has no employment agreements, labor or collective bargaining
agreements or employee benefit or welfare plans or retirement plans, in any such
case with respect to the Business. All vacation pay, if any, due to employees of
the Company who are employed in the Business has been fully paid by the Company,
except as set forth on Exhibit K. No employees of the Company who are employed
in the Business are entitled to any sick pay, except as set forth on Exhibit K.
All vacation pay and sick pay due to employees of the Company who are employed
in the Business and terminated by the Company in connection with the
transactions contemplated by this Agreement shall be paid in full on the Closing
Date. There are no pending or, to the knowledge of the Company, threatened
strikes, job actions or other labor disputes affecting the Company or its
employees and there have been no such disputes for the past three years. Also
set forth on Exhibit K is a true and complete list of all employees of the
Company employed in connection with the Business, which list provides, among
other things, the name, residence address, title, job description and salary
information concerning each employee.
(F) Claims, Litigation, Disclosure. Except as set forth on Exhibit D,
there is no claim, litigation, tax audit, proceeding or investigation pending
or, to the Company's knowledge, threatened against the Company, with respect to
the Business or any of the Purchased Assets of the Company (including, any
claims of infringement or actions of opposition with respect to Intellectual
Property), nor does the Company know of any facts which would provide a basis
for any such claim, litigation, audit, proceeding or investigation.
(G) Taxes. Except as specifically set forth on Exhibit I (the "Tax
Liabilities"), the Company has correctly prepared and timely filed all Federal,
state and local tax returns, estimates and reports, and paid all such taxes as
and when due. For purposes of this paragraph, taxes shall mean all taxes,
charges, fees, levies or other assessments of any kind whatsoever (including,
without limitation, income, franchise, sales, use and withholding taxes). The
Company is not a party to any tax sharing agreement.
(H) No Other Agreements to Sell Assets or Business. The Company is not
a party to any existing agreement which obligates the Company to sell to any
other person or firm the Purchased Assets (other than sales in the ordinary
course of business).
(I) No Brokers. The only broker, leasing agent, finder or similar
person or entity with whom the Company has made contact or had any dealings with
or entered into any agreement, arrangement or understanding with concerning this
Agreement and to whom the Company is responsible to pay a finder's fee,
brokerage commission or similar payment in connection with the transactions
contemplated by this Agreement is the party or parties listed in item 4 on
Exhibit A, if any, and the Company shall be solely responsible for the payment
of any such fee, commission or payment.
(J) Environmental Compliance. (i) To the best knowledge of the Company,
neither the Company nor any operator of the Company's properties is in
violation, or alleged to be in violation, of any federal, state or local
judgment, decree, order, consent agreement, law (including common law), license,
rule or regulation pertaining to environmental health or safety
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matters, including without limitation those arising under the Resource
Conservation and Recovery Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, as amended, Water Act, as
amended, the Federal Clean Air Act, as amended, the Toxic Substances Control
Act, or any state or local analogue (hereinafter "Environmental Laws").
(ii) The Company has not received a notice, complaint, order,
directive, claim or citation from any third party, including without limitation
any federal, state or local governmental authority, indicating or alleging that
the Company or any predecessor may have any liability or obligation under any
Environmental Law.
(iii) To the best knowledge of the Company, (a) no portion of
the property of the Company has been used by any person for the generation,
handling, processing, treatment, storage or disposal of Hazardous Materials
except in accordance with applicable Environmental Laws; (B) no underground tank
or other underground storage receptacle for Hazardous Materials,
asbestos-containing materials or polychlorinated biphenyls are located on any
portion of any location occupied by the Company each of which is listed as a
Site on Exhibit A; (C) in the course of any activities conducted by the Company
or its invitees, agents, contractors, licensees or employees in connection with
the Business of the Company, no Hazardous Materials have been generated or are
being used except in accordance with applicable Environmental Laws; and (D)
there have been no releases (i.e., any past or present releasing, spilling,
leaking, leaching, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or threatened releases of Hazardous Materials
on, upon, into or from the property currently or formerly owned, operated or
leased by the Company, which releases would have a material adverse effect on
the value of any of the property or adjacent properties or the environment.
(iv) To the best knowledge of the Company, the execution,
delivery and performance of this Agreement is not subject to any Environmental
Laws which condition, restrict or prohibit the sale, lease or other transfer of
property or operations, including, without limitation, any so-called
"environmental cleanup responsibility acts" or requirements for the transfer of
permits, approvals, or licenses. To the best knowledge of the Company, there
have been no environmentally related audits, studies, reports, analyses
(including soil and groundwater analyses), or investigations of any kind
performed with respect to the currently or previously owned, leased, or operated
properties of the Company.
For purposes of this Section, "Hazardous Material" shall mean any
hazardous waste, as defined by 42 U.S.C. Section 6903(5), any hazardous
substances or wastes as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) or any toxic substances or
wastes, oil or hazardous materials or other chemicals or substances regulated by
any public or governmental authority.
(K) Licenses and Compliance with Laws. The Company holds no material
governmental or regulatory licenses, permits, consents or approvals in
connection with the Business, and to the best knowledge of the Company, the
Company is in compliance with all material laws and regulations applicable to
the Business.
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(L) True and Complete. No representation or warranty made by Company in
this Agreement, nor any statement, certificate or exhibit furnished by or on
behalf of Company pursuant to this Agreement, nor any document or certificate
delivered to Buyer pursuant to this Agreement, or in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact, or omits or shall omit to state a material fact necessary to make the
statements contained therein not misleading. The Company has not failed to
disclose to Buyer any pending developments or circumstances of which it is aware
which are reasonably likely to have a material adverse effect on the Business.
SECTION 3. REPRESENTATIONS OF THE BUYER. Buyer represents and warrants
to the Company as follows.
(A) Corporate Matters; No Conflict. Buyer is a wholly owned subsidiary
of Sage Networks, Inc. ("Parent"). Each of the Buyer and Parent is duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, is in good standing in each other jurisdiction in which it is doing
business, except where failure to be in good standing would not have a material
adverse effect on the business of Buyer or Parent, and has the corporate power
to enter into this Agreement, to perform its obligations hereunder and to
conduct its business as currently conducted. The execution, delivery and
performance of this Agreement and the transactions contemplated hereby (and
thereby) by the Buyer and Parent, respectively, will not (a) conflict with or
violate the provisions of any applicable law, rule or order or the Buyer's or
the Parent's respective Certificate of Incorporation or by-laws, (b) conflict
with or constitute a default under any agreement or contract by which the Buyer
or Parent is bound or (c) require the consent or approval of, or filing with,
any governmental body or third party. The execution, delivery and performance by
the Buyer of this Agreement has been authorized and approved by all requisite
corporate action on the part of the Buyer.
(B) No Brokers. The only broker, leasing agent, finder or similar
person or entity with whom the Buyer or Parent has made contact or had any
dealings with or entered into any agreement, arrangement or understanding with
concerning this Agreement and to whom the Buyer and/or the Parent is responsible
to pay a finder's fee, brokerage commission or similar payment to is the party
listed in item 5 on Exhibit A, if any, and the Buyer shall be solely responsible
for the payment of any such fee, commission or payment.
(C) No Litigation. There is no litigation pending or, to the Buyer's
knowledge, threatened against the Buyer, which would enjoin or otherwise affect
the transactions contemplated by this Agreement.
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ARTICLE II.
CERTAIN COVENANTS OF THE COMPANY AND THE BUYER
SECTION 1. NON-COMPETITION; NON-SOLICITATION. (A) Covenant of the
Company.
(1) For a period commencing on the Closing Date and ending on the third
anniversary of the Closing Date (the "Non-Competition Period"), neither the
Company nor any successor thereto or acquiror of substantially all of the equity
or assets thereof shall engage in any capacity in an Internet Web hosting
business which is similar to or in competition with the Business. The parties
understand and specifically acknowledge that the Business operates world-wide
and its location is not limited to a specific geographical area. For this
reason, the parties agree that the Company's agreement not to compete in
accordance with this Article II, Section 1 is not limited to any specific
geographical area but is world wide. Notwithstanding the foregoing, the Company
may, during the Non-Competition Period or thereafter:
(a) acquire, merge with or into or be acquired by (a "Business
Combination") any business entity which engages in the Internet Web
hosting business, so long as the Company offers, or causes the
successor in such Business Combination to offer (x) to sell, transfer
or assign to Buyer (in either case, free and clear of all liens and
encumbrances) all of the Web hosting customer base of such entity
(other than customers that are Financial Services Companies) at a
purchase price equal to 20% of the gross revenues of such acquired Web
hosting customer base during the five year period following the date of
the consummation of such Business Combination (which purchase price
shall be payable by the Buyer quarterly in arrears during such five
year period) and otherwise on customary terms and conditions for such a
sale, transfer or assignment or (y) to the extent that such web hosting
customer base cannot legally be sold, transferred or assigned, to enter
into a Co-location Agreement with the Buyer with respect to such Web
hosting customer base pursuant to which the Buyer shall receive 80% of
the gross revenues of such acquired Web hosting customer base during
the five year period following the date of the consummation of such
Business Combination (which payments shall be made to the Buyer
quarterly in arrears during such five year period) and otherwise on
customary terms and conditions for such a Co-location Agreement ((x)
and (y) shall collectively be referred to as the "Offer"); provided,
however, that the Company shall not be required to make an Offer with
respect to any Web hosting business that solely serves Financial
Services Companies (as hereinafter defined);
(b) to engage in a Web hosting business that solely serves
Financial Services Companies; or
(c) be acquired by or merge with a business entity that is a
public company with a market cap in excess of $100,000,000.
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(2) During the Non-Competition Period, the Company shall make each
Offer to the Buyer by written notice (the "Offer Notice"). The Offer Notice
shall set forth the name of the owner of the Web hosting business that is the
subject of the Offer, the annual revenues from the Web hosting customer base to
be acquired (determined in accordance with Article II, Section 1(1)(a)) and the
other material terms and conditions thereof. The Buyer may accept any Offer
within thirty (30) days of receipt of the Offer Notice. If Buyer accepts any
Offer, Buyer shall consummate the acquisition of such Web hosting business on
terms (other than purchase price) no less favorable than those contained in the
Offer Notice within thirty (30) days following the date of acceptance of such
Offer. If the Buyer does not accept any Offer within the required time or does
not consummate an accepted Offer within the required time, the Company may
consummate the Business Combination and shall not be deemed to be in violation
of the provisions of Article II, Section 1 (A) (1).
(3) For purposes of this Agreement, "Financial Services Companies"
shall mean banks, savings and loan associations, credit unions, mortgage
companies, insurance companies, broker-dealers, securities placement agents,
financial advisory firms, investor relations firms, hedge funds, mutual funds
and financial Web sites for other companies that offer financial services.
(4) Buyer and the Company acknowledge and agree that the damages to
Buyer as a result of the Company entering into any Business Combination in
breach of the provisions of Article II, Section 1(A)(1) of this Agreement cannot
be easily quantified. For this reason, Buyer and the Company expressly agree
that in the event of any such breach, the Company shall pay to Buyer liquidated
damages in the amount of $3,000,000 immediately upon the occurrence of any such
breach.
(5) The Company understands that pursuant to this Agreement they have
received confidential and proprietary information of Buyer, Parent and their
respective affiliates, including, without limitation, customer lists and other
trade secrets. Neither the Company nor any of its officers, directors,
shareholders, employees, agents or contractors who received or learned of such
confidential and proprietary information shall at any time, either before or
after the Closing Date, disclose to any third party any such confidential or
proprietary information of Buyer, Parent or their respective affiliates or make
use of any of such information except in evaluating whether to enter into this
Agreement or unless such information is made public by a source other than the
Company or such disclosure is required by law or regulation or court or
administrative order. In connection with such evaluation, the Company may
disclose such proprietary information to its legal and financial consultants on
a need to know basis on the condition that those consultants are similarly
prohibited from further disclosing such information as provided herein.
(6) For a period commencing on the Closing Date and ending on the
second anniversary of the Closing Date, the Company, unless acting with the
express written consent of the Buyer or Parent, will not, directly or
indirectly, interfere with, solicit or endeavor to entice away:
(a) any person who was an employee, subcontractor or
consultant of the Company with respect to the Business (provided on or
after the Closing Date such employee, subcontractor or consultant is
engaged by Buyer or Parent to render
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services with respect to Parent's Internet Web hosting and related
businesses), the Buyer, the Parent or any of their affiliates during
the twelve months immediately preceding the date of such solicitation,
interference or endeavor; or
(b) any person or entity who was a customer or client of the
Company or of the Buyer or of the Parent, or any person or entity who
requested or received a proposal from Buyer, Parent or the Company,
with respect to any Internet Web hosting business similar to or in
competition with the Business in which the Company, Buyer, Parent, or
any of their affiliates is or has been engaged after the date of this
Agreement.
(B) Covenant of the Buyer.
(1) The Buyer understands that pursuant to this Agreement it has
received confidential and proprietary information of the Company and its
affiliates that is not related to the Business, including, without limitation,
customer lists and other trade secrets. Neither the Company nor any of its
officers, directors, shareholders, employees, agents or contractors who received
or learned of such confidential and proprietary information shall at any time,
either before or after the Closing Date, disclose to any third party any such
confidential or proprietary information of the Company and its affiliates or
make use of any of such information except in evaluating whether to enter into
this Agreement or unless such information is made public by a source other than
the Company or such disclosure is required by law or regulation or court or
administrative order. In connection with such evaluation, the Buyer may disclose
such proprietary information to its legal and financial consultants on a need to
know basis on the condition that those consultants are similarly prohibited from
further disclosing such information as provided herein.
(2) For a period commencing on the Closing Date and ending on the
second anniversary of the Closing Date, neither the Buyer nor the Parent, unless
acting with the express written consent of the Company will, directly or
indirectly, interfere with, solicit or endeavor to entice away any person who
was an employee, subcontractor or consultant of the Company during the twelve
months immediately preceding the date of such solicitation, interference or
endeavor.
(C) Mutual Covenant. Each of the Company and the Buyer expressly
acknowledges, understands and agrees (i) that remedies at law for any breach of
this Article II, Section 1 will be inadequate, (ii) that the damages resulting
from such breach are not readily susceptible to measurement in monetary terms
and (iii) that, in the case of a breach of Article II, Section 1 by the Company,
Buyer and/or Parent, and in the case of a breach of Article II by Buyer, the
Company, shall be entitled to immediate injunctive relief and may obtain
temporary and permanent orders restraining any threatened or further breach of
this Article II, Section 1 by the Company or the Buyer, as the case may be. Each
of the Company and the Buyer has been advised by its counsel with respect to the
meaning and effect of this Article II, Section 1.
SECTION 2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
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(A) The representations and warranties of the parties herein contained
shall survive the closing of the purchase contemplated by this Agreement,
notwithstanding any investigation at any time made by or on behalf of the other
party, provided that any claims for indemnification in accordance with Article
II, Section 2 below with respect to any representation or warranty must be made
(and will be null and void unless made) on or before April 30, 2000 (except in
the case of representations contained in Paragraphs (G), (I) and (J) of Article
I, Section 2 hereof, which must be made within six (6) months following the
expiration of the applicable statute of limitations).
(B) The Company hereby agrees to indemnify and hold Buyer, Parent, and
their respective officers, directors, stockholders, affiliates, employees,
representatives and other agents harmless from and against any and all claims,
liabilities, losses, damages or injuries, together with costs and expenses,
including reasonable legal fees, arising out of or resulting from (i) any
breach, misrepresentation or material omission of the representations and
warranties made by the Company in this Agreement or in any Exhibit hereto or
other documents delivered in connection herewith, (ii) any breach in any
material respect by the Company, unless waived in writing by the Buyer, of any
covenant or agreement contained in or arising out of this Agreement, or any
other agreement delivered in connection herewith on the Closing Date, (iii) the
Business conducted by the Company prior to the Closing Date and any actions or
events associated therewith, (iv) any and all liabilities of the Company, other
than the Assumed Liabilities, and (v) any failure by the Company to comply with
any provisions of the bulk sales or similar laws of any jurisdiction which are
applicable to this Agreement or the transactions contemplated hereby.
(C) Buyer hereby agrees to indemnify and hold the Company and its
officers, directors, stockholders, affiliates, employees, representatives and
other agents harmless from and against any and all claims, liabilities, losses,
damages or injuries, together with costs and expenses, including reasonable
legal fees, arising out of or resulting from (i) any breach, misrepresentation
or material omission in the representations and warranties made by the Buyer in
this Agreement, (ii) any breach in any material respect by Buyer, unless waived
in writing by the Company, of any covenant or agreement of Buyer contained in or
arising out of this Agreement, or any other agreement delivered in connection
herewith on the Closing Date or (iii) the Business as conducted by Buyer, after
the Closing Date.
(D) Any party claiming a right to indemnification hereunder (the
"Indemnified Party") shall give the other party from whom indemnification is
sought (the "Indemnifying Party") prompt written notice of any claim, demand,
action, suit, proceeding or discovery of fact (any of which shall be a "Claim")
upon which the Indemnified Party intends to base a claim for indemnification
under this Article II, Section 2, provided, however, that no failure to give
such notice shall excuse any Indemnifying Party from any obligation hereunder
except to the extent the Indemnifying Party is materially prejudiced by such
failure. The Indemnified Party shall not settle or compromise any Claim by a
third party without the prior written consent of the Indemnifying Party, which
will not be unreasonably withheld or delayed, unless suit in respect of such
Claim shall have been instituted against the Indemnified Party and the
Indemnifying Party shall not have chose to participate in the defense of such
suit after notification thereof if the
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Indemnifying Party is entitled to participate under paragraph (E) of this
Section.
(E) In connection with any Claim resulting from or arising out of any
claim or legal proceeding by a third party, the Indemnifying Party, may, upon
written notice to the Indemnified Party within 15 days following the Indemnified
Party's notice of the Claim, assume the defense of any such action with its own
counsel and its own expense if the Indemnifying Party acknowledges to the
Indemnified Party in writing its obligation to indemnify the Indemnified Party
pursuant to this Article II, Section 2 in respect of such Claim; provided,
however, that such counsel is reasonably acceptable to the Indemnified Party and
is able to represent the Indemnified Party without having any conflict of
interest. If the Indemnifying Party assumes the defense or prosecution of any
such action or proceeding, it shall take all steps reasonably necessary in the
defense, prosecution and settlement of such action or proceeding. The
Indemnifying Party shall not, in the defense or prosecution of any such action
or proceeding except with the written consent of the Indemnified Party, consent
to the entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof, a release by the third party of the
Indemnified Party from all liability in respect of the matter which is the
subject of such action or proceeding. The Indemnified Party shall cooperate in
the defense or prosecution of any such action or proceeding; provided that the
Indemnifying Party shall pay or reimburse the Indemnified Party for any actual
costs or expenses attributable to such cooperation.
(F) The obligations of the Company pursuant to paragraph (B) of this
Section and the obligations of the Buyer pursuant to paragraph (C) of this
Section shall, in each case be limited to an aggregate amount not in excess of
the Purchase Price. Neither the Company nor the Buyer shall make any Claim
hereunder unless and until the aggregate amount of such Claim exceeds $50,000;
provided, however, that if the aggregate amount of Claims by the Buyer or the
Company, respectively, exceeds $50,000, the obligations of the Company or the
Buyer, respectively, hereunder shall be with respect to the entire amount of
such Claims.
SECTION 3. SECURITY BOND. The Company may substitute a security bond
for the for amounts held in the Escrow Account pursuant to the Escrow
Agreement in order to secure its obligations to the Buyer under this Agreement.
Any such security bond shall be issued by a nationally recognized security
bonding firm reasonably satisfactory to the Buyer in an amount equal to $250,000
and have such other terms and conditions as are reasonably satisfactory to the
Buyer (the "Security Bond"). The Security Bond will, by its terms, require the
payment to the Buyer of the amount of any Claim of the Buyer with respect to
which the Company has indemnified the Buyer, the Parent or any other person
pursuant to Article II, Section 2(B) of this Agreement upon the request of the
Buyer. Indemnity claims by Buyer, Parent or any such person shall be satisfied
first from the Security Bond and thereafter by the Company. The Security Bond
does not constitute a limit on the liability of the Company to Buyer, the Parent
or any such person hereunder, it being understood and agreed that the Company
shall remain liable to satisfy the amount of Claims which exceed the amount of
the Security Bond. The Security Bond shall be released on May 1, 1999, to the
extent that it has not previously been applied pursuant to the terms hereof and
thereof, unless a Claim for indemnification by Buyer, Parent or any other person
pursuant to Article II, Section 2(B) is then pending against the Company.
SECTION 4. ADDITIONAL COVENANTS OF THE COMPANY. (a) All vacation pay
and
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sick pay due to employees of the Company who are employed in the Business and
terminated by the Company in connection with the transactions contemplated by
this Agreement shall be paid in full on the Closing Date.
(b) The Company shall be solely responsible for the payment of any and
all Tax Liabilities which are payable with respect to the Purchased Assets for
the period ending on the Closing Date or arising out of the transfer of the
Purchased Assets, whether or not due or payable on or before the Closing Date.
Buyer shall have no obligation or liability with respect to any such Tax
Liabilities.
(c) The Company shall provide for the forwarding of all e-mails,
telephone calls and facsimiles relating to the Business to the Buyer. All
physical records relating to the Business have been, or promptly following the
Closing Date will be, delivered to Buyer at the Site located at Twelve Piedmont
Center Suite 110.
SECTION 5. ALLOCATION OF PURCHASE PRICE. The Buyer and the Company
agree that $250,000 of the Purchase Price shall be allocated to the Tangible
Assets for sales (and similar) tax purposes.
ARTICLE III
CLOSING AND DELIVERIES AT CLOSING
SECTION 1. CLOSING. The closing of the purchase and sale of the
transaction contemplated herein shall take place on June 10, 1998 (the
"Closing"), at the offices of Xxxxx Xxxxxxxxxx LLP, located at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. The deliveries described in
Section 2 and 3 of this Article III shall be made at the Closing.
SECTION 2. DELIVERIES BY THE COMPANY. On the Closing Date, the Company
will deliver, or cause to be delivered, to the Buyer the following:
(A) Such instruments of transfer or conveyance executed by the Company,
as Buyer may reasonably request in order to convey and transfer to Buyer good
and marketable title to all of the Purchased Assets, free and clear of all
liens, equipment leases, claims, encumbrances and other charges, except as set
forth in Exhibit M, including, without limitation, an Assignment Agreement and a
Xxxx of Sale.
(B) Physical delivery of all Tangible Assets by making them available
at the Sites listed on Exhibit A, together with any and all warranties, manuals,
instructions, and other literature in the possession of the Company relating to
the ownership or operation of the Tangible Assets. In addition, such notices to
telephone companies and others required to transfer the Company's e-mail
addresses and domain addresses, used in the Business to Buyer.
(C) Physical delivery of all original or certified copies of
documentation concerning the Intellectual Property, by making them available at
the Sites listed on Exhibit A, including, without limitation, registrations and
applications of any patents, trademarks or service
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marks, original artwork, data bases, computer programs and software.
(D) The following corporate documentation:
(i) The Company's Articles or Certificate of Incorporation
certified as of a date within thirty (30) days prior to the Closing
Date by the Secretary of State of the state of the Company's
organization and good standing certificates certified as of recent date
by the Secretary of State of the state of the Company's organization
and principal place of business;
(ii) The Company's By-Laws certified as of the Closing Date by
the President or Secretary of the Company as being in full force and
effect and unmodified; and
(iii) Corporate Resolutions of the Board of Directors of the
Company, approving this Agreement and all the transactions contemplated
hereby, certified by the President or Secretary of the Company as being
in full force and effect and unmodified.
(E) The opinion of outside counsel to the Company, in a form reasonably
acceptable to Buyer and its counsel.
(F) An Assignment and Assumption Agreement, Xxxx of Sale and Assignment
of Trademark in a form reasonably acceptable to Buyer.
(G) The Escrow Agreement in substantially the form attached hereto as
Exhibit Q, duly executed by the Company and the Escrow Agent.
(H) Copies of written proof in form and substance satisfactory to Buyer
and its counsel that the Company will no longer do business under any of the
trade names listed on Exhibit B as required pursuant to Article I, Section 2,
Paragraph (B) (iii) hereof.
(I) The Company shall use its reasonable best efforts to deliver a
Non-Disclosure and Intellectual Property Agreement in a form to be provided by
Buyer prior to the Closing, executed by each employee of the Company who will be
employed by Buyer or its affiliate immediately following the Closing.
(J) A certificate of an officer of the Company to the effect that
notices of termination of all employees of the Company employed in connection
with Business satisfactory to Buyer, will be delivered to such employees
promptly following the Closing.
(K) The Transitional Services Agreement in substantially the form
attached hereto as Exhibit N, the Co-Location Agreement (HomeCom) in
substantially the form attached hereto as Exhibit O, and the Non-Exclusive
Software License Agreement in substantially the form attached hereto as Exhibit
P, each executed by the Company.
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(L) Such notice or notices as Buyer may reasonably request in order to
notify the customers included on the Customer List that the Business has been
sold to Buyer.
(M) Consent to assignments of Business Agreements.
(N) A letter from Coopers & Xxxxxxx, acceptable to Buyer, to the effect
that the books and records of the Company relating to the Business for the
fiscal years of the Company as at and ended December 31, 1996 and 1997 and for
the period from January 1, 1998 to the Closing Date are auditable and that
Coopers & Xxxxxxx has been engaged to complete such an audit on or before the
date 60 days following the Closing Date at a cost not to exceed $73,750.
SECTION 3. DELIVERIES BY THE BUYER.
On the Closing Date, the Buyer will deliver, or cause to be delivered,
to the Company the following:
(A) The Purchase Price by wire transfer of federal funds to the account
of the Company, as the Company shall direct in writing on or before the Closing
Date; provided, however, Buyer may, upon written agreement of all parties
hereto, deduct from the Purchase Price and pay directly amounts due any creditor
of the Company, including, without limitation, the Tax Liabilities (but
excluding any amounts due for any of the Assumed Liabilities), in which event,
evidence of such payment shall be presented at the Closing and Buyer may deduct
from the Purchase Price the aggregate amount of Deferred Revenues with respect
to the Business as set forth on a balance sheet for the Business as at the
Closing Date prepared in accordance with generally accepted accounting
principles.
(B) Such instruments of assignment and assumption executed by the
Buyer, as the parties hereto reasonably may determine necessary to effectuate
the assignment to the Buyer of the Business Agreements and the assumption by
Buyer of the Assumed Liabilities.
(C) The Transitional Services Agreement in substantially the form
attached hereto as Exhibit N and the Co-Location Agreement (HomeCom) in
substantially the form attached hereto as Exhibit O, each executed by the Buyer.
(D) Resolution of the Board of Directors of Buyer, authorizing the
execution of this Agreement and the transactions contemplated hereby.
(E) The opinion of outside counsel to the Buyer, in a form reasonably
acceptable to the Company and its counsel.
(F) The Escrow Agreement in substantially the form attached hereto as
Exhibit Q, duly executed by the Buyer and the Escrow Agent.
ARTICLE IV
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OBLIGATIONS FOLLOWING CLOSING
SECTION 1. FURTHER COOPERATION. Each of the Company and the Buyer will,
at any time and from time to time after the Closing Date, execute and deliver
such further instruments of conveyance, transfer and license, and take such
additional actions as Buyer, Parent or the Company or their respective
successors and/or assigns, may reasonably request, to effect, consummate,
confirm or evidence the transfer to Buyer of the Purchased Assets pursuant to
this Agreement.
SECTION 2. TRANSITION ASSISTANCE AND ADJUSTMENTS.
(A) The Company shall cooperate and provide assistance to the Buyer as
shall be reasonably necessary during the transition of the Business and the
Purchased Assets from the Company to the Buyer, or its successors and/or
assigns, after the Closing Date. Buyer shall reimburse the Company for
reasonable out-of-pocket expenses incurred in rendering such cooperation and
assistance, but not for any time of any personnel. The Company shall introduce
the Buyer to Xxxxx Xxxxxx of Software Strategies (770 -475-4249), the consultant
retained by the Company in connection with the Company's negotiations with
Microsoft relating to the Company's inclusion in the Microsoft front page
program.
(B) Buyer and its successors and/or assigns shall have the right at any
time and from time to time upon reasonable notice and during normal business
hours to examine and make copies of all corporate books, records and other
documents of the Company relating to the Business and generated prior to the
Closing Date, which documents will be maintained by the Company for a period of
five (5) years after the Closing Date. The Company and its successors and/or
assigns shall have the right at any time and from time to time upon reasonable
notice and during normal business hours to examine and make copies of all
corporate books, records and other documents of the Buyer relating to the
Business acquired by the Buyer pursuant to this Agreement, which documents will
be maintained by the Buyer for a period of five (5) years after the Closing
Date.
(C) The Company will reasonably cooperate with Buyer in notifying the
customers included on the Customer List (other than the Excluded Customers) that
the Business has been sold to Buyer, including, without limitation, executing
any additional notices which Buyer may reasonably request. The Company will not,
directly or indirectly, take any action which is designed or intended to have
the effect of discouraging customers, suppliers or vendors and other business
associates of the Business, from maintaining the same business relationships
with Buyer or its successors and/or assigns after the Closing Date as were
maintained with the Company with respect to the Business prior to the Closing
Date.
(D) The Buyer shall use its reasonable commercial efforts, without
out-of-pocket cost to Buyer, to collect, on behalf of the Company, all Closing
Accounts Receivable of the Company. If payment of any Closing Account Receivable
is received by the Company, it shall promptly forward to Buyer the full amount
so received. The Company will cooperate with Buyer in establishing a bank
account of Buyer in the name of "HostAmerica" in order to facilitate the
negotiation of checks received from customers of the Business after the Closing.
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The Company shall promptly negotiate and forward to Buyer any and all payments
received by Company with respect to the Purchased Assets on and after the
Closing Date.
(E) All of the Company's right, title and interest in and to the name
"HostAmerica" constitutes a Purchased Asset and has been transferred to the
Buyer in accordance with this Agreement. Following the Closing, neither the
Company nor any affiliate of the Company (as defined under federal securities
laws), shall not use the name "HostAmerica" or any confusingly similar name to
said trade name in any trade or business. The Company expressly acknowledges,
understands and agrees (i) that remedies at law for any breach of this Article
IV, Section 2((E) will be inadequate, (ii) that the damages resulting from such
breach are not readily susceptible to measurement in monetary terms and (iii)
that the Buyer shall be entitled to immediate injunctive relief and may obtain
temporary and permanent orders restraining any threatened or further breach of
this Article IV, Section 2(E) by the Company. The Company has been advised by
its counsel with respect to the meaning and effect of this Article IV, Section
2(E).
SECTION 3. AUDIT OF BUSINESS. The Company shall make available to
Buyer, on the terms and conditions set forth in the Transition Service
Agreement, its books, records and workpapers with respect to the Business
relating to the fiscal years of the Business ending December 31, 1995, 1996 and
1997, and its financial and accounting personnel, to the extent reasonably
required by Buyer and its independent accountants to complete an audit of the
Business at and for the fiscal years then ended.
ARTICLE V
MISCELLANEOUS
SECTION 1. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Georgia; provided, however, that the non-competition covenant of
the Company contained in Article II, Section 1 of this Agreement shall be
governed by the laws of the State of Delaware.
SECTION 2. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
SECTION 3. CONFIDENTIALITY. The Company, on the one hand, and the
Buyer, on the other hand, each agree not to disclose or use any information
acquired by it about the other party during the course of the negotiations of
this Agreement and the transactions to which it relates which is confidential in
nature or not otherwise generally available to the public without the prior
written consent of such other party unless required to do so by applicable law
or regulation or by order of a court of competent jurisdiction or an
administrative agency. SECTION 3. CONFIDENTIALITY. THE COMPANY, ON THE ONE HAND,
AND THE BUYER, ON THE OTHER HAND, EACH AGREE NOT TO DISCLOSE OR USE ANY
INFORMATION ACQUIRED BY IT ABOUT THE OTHER PARTY DURING THE COURSE OF THE
NEGOTIATIONS OF THIS AGREEMENT AND THE TRANSACTIONS TO WHICH IT RELATES WHICH IS
CONFIDENTIAL IN NATURE OR NOT OTHERWISE GENERALLY AVAILABLE TO THE PUBLIC
WITHOUT THE PRIOR WRITTEN CONSENT OF SUCH OTHER PARTY UNLESS REQUIRED TO DO SO
BY APPLICABLE LAW OR BY ORDER
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OF A COURT OF COMPETENT JURISDICTION. Each party shall be liable for any breach
by its respective employees, officers, directives, shareholders, agents and/or
contractors of the provisions of this Section.
SECTION 4. AMENDMENTS. This Agreement supersedes any prior contracts
relating to the subject matter hereof between the Buyer, Parent, and the
Company. This Agreement cannot be changed, modified or amended and no provision
or requirement hereof may be waived without the consent in writing of the
parties hereto.
SECTION 5. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. Each provision of this Agreement shall be deemed to be the agreement of
the parties hereto to the full extent that the power to enter into such
provisions shall have been conferred on the parties by law.
SECTION 6. BENEFIT; ASSIGNMENT. This Agreement is binding upon and
inures to the benefit of the parties, their successors and permitted assigns.
This Agreement may not be assigned or the duties of the parties hereunder
delegated to others without the prior written consent of all parties hereto,
except that Buyer may assign its rights, duties and obligations hereunder to
Parent or an affiliate of Buyer or Parent without the Company's consent.
SECTION 7. CONSTRUCTION. All exhibits annexed hereto are hereby
incorporated herein by reference and made a part of this Agreement. Whenever
used in this Agreement and the context so requires, the singular shall include
the plural and the plural shall include the singular.
SECTION 8. IMPUTED KNOWLEDGE. Any reference in this Agreement to the
"knowledge of" the Company, or words of similar import, the knowledge of any and
all of the officers or directors of the Company (including, without limitation,
its President and Chief Executive Officer, Xxxxxx Xxx), shall be imputed to be
the knowledge of the Company. Any reference in this Agreement to the "knowledge
of" the Buyer or the Parent, or words of similar import, the knowledge of its
officers and directors (including, without limitation, Buyer's President and
Parents Co-Chairman, Xxxxxxx X. Xxxxxxx) shall be imputed to be the knowledge of
the Buyer.
SECTION 9. NOTICES. All notices and other communications hereunder
shall be in writing and deemed to have been duly given when delivered by hand,
when received by registered or certified mail, postage prepaid, return receipt
requested, when given by prepaid courier delivery services such as Federal
Express, DHL or other similar services on the day received, or when given by
facsimile transmission upon receipt by sender of confirmed answer-back, as
follows:
(a) if to Buyer, at
Sage Networks Acquisition Corp.
000 Xxxxx Xxxxxx
00
00
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telecopier No.:
with copies to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 00000
Attention: E. Xxx Xxxx, Esq.
Telecopier No.: (000) 000-0000
and
Sage Networks Acquisition Corp.
C/X XxXxxxxx, Finger, Xxxxxxx, Xxxxxx & Xxxxx LLP
00 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxx, Esq.
(b) if to the Company, at:
HomeCom Communications, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn:
Telecopier No.:
with a copy to:
Xxxx Moss Kline & Xxxxx XXX
Xxxxx 000
000 Xxxxxxxxx Xxxx Center
0000 Xxxxxxxxx Xxxx XX
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Telecopier No.:
Each of the parties may, by notice given as aforesaid, change its
address for all subsequent notices.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
SAGE NETWORKS ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx, President
HOMECOM COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxx
-------------------------------------
Xxxxxx Xxx, President
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DESCRIPTION OF EXHIBITS:
Exhibit A - Basic Provisions
Exhibit B - Officers; Directors; Trade Names; Jurisdictions
Exhibit C-1 - Forms of Business Agreements with Customers
Exhibit C-2 - Copy of all Business Agreements
Exhibit C-3 - Leases
Exhibit C-4 - Claims of Disputes Under Business Agreements
Exhibit C-5 - Consents to Transfer or Assign Not Obtained
Exhibit D - Litigation
Exhibit E - Tangible Assets
Exhibit F - Intellectual Property
Exhibit G-1 - Customer Terminations
Exhibit G-2 Excluded Customers
Exhibit H - Financial Statements
Exhibit I - Aged Receivables and Tax Liabilities of the Company
Exhibit J - Assumed Liabilities
Exhibit K - Existing Employment Agreements, Labor or Collective Bargaining
Agreements, Employee Benefit or Welfare Plans, Retirement
Plans, Description of Employees
Exhibit L - Excluded Assets
Exhibit M - Liens; Encumbrances
Exhibit N - Form of Transitional Services Agreement
Exhibit O - Form of Co-Location Agreement (HomeCom)
Exhibit P - Form of Non-Exclusive Software License Agreement
Exhibit Q - Form of Escrow Agreement
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EXHIBIT A
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
BASIC PROVISIONS
1. Name of BUYER: SAGE NETWORKS ACQUISITION CORP.
2. Name of COMPANY: HOMECOM COMMUNICATIONS, INC.
(a) STATE OF INCORPORATION of COMPANY: Delaware
(b) AUTHORIZED OFFICERS of the COMPANY:
[Name; Title]
(c) Address of each SITE from which the COMPANY conducts the Business:
3. PURCHASE PRICE: [$4,500,000 less the amount of the Deferred Revenues
properly set forth on a balance sheet for the Business as at the Closing Date,
prepared in accordance with generally accepted accounting principles.]
4. COMPANY'S BROKER:
5. BUYER'S BROKER: Am-Tech Associates
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**
POST CLOSING PURCHASE PRICE ADJUSTMENT. (i) The parties to this
Agreement agree that notwithstanding the Closing Date, revenues and expenses of
the Business should be adjusted as of June 1, 1998. Accordingly, not more than
forty-five (45) days following the Closing Date, the Company shall deliver to
Buyer a statement of revenues (including a statement of the change in the
balance of deferred revenues from June 1, to June 8, 1998) and direct expenses
of the Business (in each case, determined in accordance with generally accepted
accounting principles) for the period from June 1, 1998 to the Closing Date (the
"Closing Statement").
(ii) Within thirty (30) days after receipt of the Closing Statement,
Buyer shall communicate in writing to Seller any objection or disagreement that
it may have with the Closing Statement (an "Objection"). The Company shall have
fifteen (15) days after receipt of an Objection in which to respond in writing
to such Objection. If, after five (5) days following such fifteen day period,
Buyer and the Company have not resolved the matter in dispute, such matter shall
be submitted to KPMG Peat Marwick (or any other independent certified public
accountants, as Buyer and the Company may agree) for determination. Such
determination shall be made on or prior to the date that is sixty (60) days
following the date of the initial receipt by Buyer of the Closing Statement and
shall be binding on Buyer and the Company (the "Final Determination"). The cost
of such accountants shall be shared equally by the Buyer and the Company.
(iii) If the revenues (after being adjusted by the change in deferred
revenues) exceed the direct expenses as set forth on the Closing Statement (as
resolved by the Buyer and the Company or as set forth in any Final
Determination), the Company shall pay the amount of such excess to Buyer. If the
direct expenses exceed the revenues (after such adjustment), the Buyer shall pay
the amount of such excess to the Company. Any payment pursuant to this Article
I, Section 2(b) shall be paid within five (5) business days after Buyer's and
the Company's resolution of the Closing Statement or receipt of the Final
Determination, if any.
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EXHIBIT B
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORK ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
OFFICERS:
DIRECTORS:
TRADE NAMES:
JURISDICTIONS IN WHICH COMPANY IS DOING BUSINESS:
3
26
EXHIBIT C-1
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
FORMS OF BUSINESS AGREEMENTS WITH CUSTOMERS
SEE ANNEXED
PERSONAL PROPERTY LEASES:
EQUIPMENT LEASES:
5
27
EXHIBIT C-2
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
COPIES OF ALL BUSINESS AGREEMENTS AND VENDOR/SERVICE
PROVIDER AND OTHER AGREEMENTS
6
28
EXHIBIT C-3
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
LEASES
7
29
EXHIBIT C-4
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
CLAIMS OF DISPUTES UNDER BUSINESS AGREEMENTS
8
30
EXHIBIT C-5
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
CONSENTS TO TRANSFER AND ASSIGNMENT NOT OBTAINED
9
31
EXHIBIT E
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
TANGIBLE ASSETS
SEE ANNEXED
TELEPHONE NUMBERS:
____________________
____________________
FACSIMILE NUMBERS:
____________________
____________________
INTERNET DOMAIN ADDRESSES:
____________________
____________________
10
32
EXHIBIT F
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
INTELLECTUAL PROPERTY
SEE ANNEXED
11
33
EXHIBIT G
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
CUSTOMER LIST AND RELATED INFORMATION
SEE ANNEXED
12
34
EXHIBIT G-1
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
CUSTOMER TERMINATIONS
13
35
EXHIBIT G-2
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
EXCLUDED CUSTOMERS
14
36
EXHIBIT H
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
FINANCIAL STATEMENTS
SEE ANNEXED
15
37
EXHIBIT I
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
BAD DEBTS AND TAX LIABILITIES OF THE COMPANY
SEE ANNEXED
16
38
EXHIBIT J
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
ASSUMED LIABILITIES
[1. Obligations of the Company to provide Internet Web hosting and
related services under those written customer agreements in force
and effect as of the Closing Date which are in the form of one of
the form agreements annexed hereto as Exhibit C-1.
17
39
EXHIBIT K
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
EXISTING EMPLOYMENT AGREEMENTS, LABOR
OR COLLECTIVE BARGAINING AGREEMENTS AND
EMPLOYEE BENEFIT OR WELFARE PLANS AND
RETIREMENT PLANS
DESCRIPTION OF EMPLOYEES
SEE ANNEXED
18
40
EXHIBIT L
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
EXCLUDED ASSETS
LICENSE AND SERVICES AGREEMENT DATED AS OF JUNE 18, 1997, BETWEEN HOMECOM
COMMUNICATIONS AND EXCALIBUR GROUP.
19
41
EXHIBIT M
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
LIENS; ENCUMBRANCES
20
42
EXHIBIT N
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
FORM OF TRANSITIONAL SERVICES AGREEMENT
SEE ANNEXED
43
EXHIBIT N
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
FORM OF TIME WARNER CO-LOCATION AND SERVICES AGREEMENT
SEE ANNEXED
44
EXHIBIT Q
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
ESCROW AGREEMENT
SEE ANNEXED
