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EXHIBIT 10.44
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 ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Company"), and SAGE NETWORKS ACQUISITION CORP., a Delaware
corporation having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("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
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relate to 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.
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SECTION 2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.
(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 Agreementin 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.
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SECTION 4. ADDITIONAL COVENANTS OF THE COMPANY. (a) 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.
(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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 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 ▇▇▇▇ 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,
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including, without limitation, registrations and applications of any patents,
trademarks or service 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, ▇▇▇▇ 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 & ▇▇▇▇▇▇▇, 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 & ▇▇▇▇▇▇▇ 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.
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ARTICLE IV
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 ▇▇▇▇▇ ▇▇▇▇▇▇ 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
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facilitate the negotiation of checks received from customers of the Business
after the Closing. 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. 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
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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, ▇▇▇▇▇▇ ▇▇▇), 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, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) 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.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.:
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with copies to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: E. ▇▇▇ ▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Sage Networks Acquisition Corp.
C/▇ ▇▇▇▇▇▇▇▇, Finger, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
(b) if to the Company, at:
HomeCom Communications, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
Telecopier No.:
with a copy to:
▇▇▇▇ Moss Kline & ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, 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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
HOMECOM COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇▇▇, 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
1
24
**
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:
4
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
5
28
EXHIBIT C-3
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
LEASES
6
29
EXHIBIT C-4
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
CLAIMS OF DISPUTES UNDER BUSINESS AGREEMENTS
7
30
EXHIBIT C-5
TO
ASSET PURCHASE AGREEMENT
BETWEEN
SAGE NETWORKS ACQUISITION CORP.
AND
HOMECOM COMMUNICATIONS, INC.
CONSENTS TO TRANSFER AND ASSIGNMENT NOT OBTAINED
8
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:
-----------------
-----------------
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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
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
