HomeMy WebLinkAbout027662 RES - 04/15/2008RESOLUTION
AUTHORIZING THE CITY MANAGER TO EXECUTE A TERMINATION AND
ASSET TRANSFER AGREEMENT EI T AMONG EARTHLING , INC., CITY OF
CORPUS CHRISTI, TEXAS, AND THE CC DIGITAL COMMUNITY
DEVELOPMENT CORPORATION TO (1) TERMINATE THE WI -FI NETWORK
ASSET PURCHASE AGREEMENT, WI -FI NETWORK SERVICES
AGREEMENT EEMENT AND WI -FI NETWORK FRANCHISE AGREEMENTS AMONG
THE PARTIES; AND (2) TRANSFER THE WI -FI NETWORK ASSETS FROM
EARTHLINK TO THE CITY OF CORPUS CHRISTI.
BE IT RESOLVED BY THE CITY OF CORPUS CHRISTI:
SECTION 1. The City Manager is hereby authorized to execute on behalf of the
City of Corpus Christi the Termination and Asset Transfer Agreement among
EarthLink, Inc., City of Corpus Christi, and the CC Digital Community
Development Corporation to (1) terminate the Wi-Fi Network Asset Purchase
Agreement, Wi-fi Network Services Agreement, and Wi-Fi Network Franchise
Agreements b t e n the parties; and (2) transfer the Wi-Fi Network Assets from
EarthLink to the City of Corpus Christi. A copy of the Agreement is attached.
ATTEST:
Armando Chapa
City Secretary
APPROVED this 1 day of
LA../).--t-
Lisa Aguilar
Assistant City Attorney
For City Attorney
CITY CORPUS CHRISTI. TEXAS
Henry Garr
Mayor
2008.
027662
Corpus Christi, Texas
164/-- of
2008
The above resolution was passed by the following vote:
Henry Garrett
Melody Cooper
Larry Elizondo, Sr.
Mike Rummell
Bill Kelly
Priscilla G. Leal
John E. Marez
Nelda Martinez
Michael McCutchon
-7.4iA , ,
----t--
,k,,._
Ale
s
027662
TERMINATION AND ASSET TRANSFER AGREEMENT
by and between
EARTHLINK, INC.
as Seller,
and
CITY OF CORPUS CHRISTI, TEXAS
as Purchaser,
and
CC DIGITAL COMMUNITY DEVELOPMENT CORPORATION
as Corporation
dated as of
April 1, 2008
TABLE OF CONTENTS
Page
ARTICLE 1 PURCHASE AND SALE 1
1.1 Sale of Purchased Assets 1
1.2 Excluded Assets 2
1.3 Assumed Liabilities. 3
1.4 Excluded Liabilities 3
1.5 Consideration; Termination and Release 3
1.6 Permitted Liens 4
1.7 Prorations 4
ARTICLE 2 CLOSING 5
2.1 Closing 5
2.2 Deliveries and Performance at Closing 5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER 5
3.1 Organization and Good Standing 5
3.2 Power and Authority 5
3.3 Binding Effect 5
3.4 No Violation; Consents 5
3.5 Title to Purchased Assets.6
3.6 Intellectual Property.6
3.7 Contracts.6
3.8 Permits and Licenses 7
3.9 Violation of Laws 7
.10 Taxes 7
3.11 Insurance 7
3.12 Litigation 7
3.13 Brokers 8
3.14 No Other Representations
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER AND
CORPORATION 8
4.1 Organization and Good Standing
4.2 Power and Authority
4.3 Binding Effect
4.4 No Violation; Consents
4.5 Litigation 9
4.6 Brokers 9
ARTICLE 5 COVENANTS PENDING CLOSING 9
5.1 Conduct of the Business Pending Closing 9
5.2 Updates 9
5.3 Approvals; Cooperation. 10
5.4 Additional Equipment 11
ARTICLE 6 CONDITIONS TO BE SATISFIED BY SELLER PRIOR TO CLOSING .,11
6.1 Representations and Warranties 11
6.2 Performance of Agreements 11
6.3 Closing Deliveries 11
6.4 No Injunctions 12
1
6.5 Third Party Consents 12
ARTICLE 7 CONDITIONS TO E SATISFIED BY PURCHASER AIT
CORPORATION PRIOR TO CLOSING 12
7.1 Representations and Warranties 12
7.2 Performance of Agreements 12
7.3 Closing Deliveries 12
7.4 No Injunctions 12
7.5 Third Party Consents 12
ARTICLE TERMINATION 13
8.1 Termination 13
8.2 Cut-off Date 13
8.3 Effect of Termination 13
ARTICLE 9 OTHER AGREEMENTS OF THE PARTIES 13
9.1 Expenses 13
9.2 Publicity 14
9.3 Taxes 14
9.4 Seller's Access to Information 14
9.5 Confidentiality 14
9.6 Third Party Warranties 14
9.7 IP License 14
9.8 Assignment of Motorola Rights 15
9.9 Assignment of ragonwa e Rights 15
9.10 Assignment of Alcatel Rights 15
9.11 Assignment of Cisco Rights 15
ARTICLE 10 LIMITATIONS ON LIABILITY 15
10.1 Survival of Representations and Warranties 15
10.2 Limitations on Seller's Liability. 15
10.3 Limitations on Purchaser's and Corporation's Liability 16
10.4 Administration of Third Party Claims, 16
10.5 No Consequential Damages 16
ARTICLE 11 MISCELLANEOUS P VISI NS 17
11.1 Notices. 17
11.2 Entire Agreement 18
11.3 Disclosure Schedules 18
11.4 Waiver; Amendment 18
11.5 Severability 18
11.6 Governing Law 18
11.7 Assignment 18
11.8 Binding Effect 18
11.9 Headings 18
11.10 Reference with Agreement 19
11.11 Interpretation 19
11.12 Definition of Knowledge 19
11.13 Further Assurances 19
11.14 Counterparts; Fax Signatures 19
ARTICLE 12 DEFINITIONS 19
11
12.1 Definitions
LIST OF EXHIBITS
Exhibit 1.1(a)
Exhibit 1.1(b)
Exhibit 1.1 (d)
Exhibit 1.1 (e)
Exhibit 1.5(a)
Exhibit 7.5
Exhibit 9.7(a)
Exhibit .b
Assumed Contracts
Tangible Personal nal Property
Certain SSIDs
Licensed Spectrum
Transaction Documents
Required Consents
Software on Purchased Assets
Licensed SSIDs
111
19
TERMINATION AND ASSET TRANSFER AGREEMENT
THIS TERMINATION AND ASSET TRANSFER AGREEMENT ("Agreement") is
made and entered into this day ofApril, 2008, by and among ARTHLINK, INC.,
Delaware corporation "Sr" , the CITY OF CORPUS CHRISTI, TEXAS('Purchaser"),
and CC DIGITAL COMMUNITY DEVELOPMENT COL ORATION, a Texas not-for-
profi
exclusively in connection with the operation ofthe Business as of the "Closing Date" defined
in Section 2.1) and specifically identified and set forth below, other than the "Excluded Assets"
(as defined in Section 1.2):
(a) Subject to Section 1.4 all of Seller's rights under all leases, contracts,
agreements, licenses and other similar arrangements specifically set forth on Exhibit 1.1(g); and
(b) Alt equipment, modems, fixtures and other tangible personal property,
including, without limitation any equipment owned by Seller that is required to provide RADIUS
authentication, all as specifically set forth on Exhibit _1.1(b);
(c) Alt maps of the Network;
(d) Certain SSIDs currently in use in the Network and its configuration and
set forth on Exhibit 1.1(d); and
(e) Subject to Section 1., the radio spectrum authorizations from the
Federal Communications Commissions set forth on Exhibit 1.1(e).
Purchaser and Corporation acknowledge and agree that, the Purchased Assets are being
purchased AS 1S, AS OF THE CLOSING DATE, WITH ALL FAULTS and WITHOUT
WARRANTY OF ANY KIND, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT.
1.2 Excluded Assets. Notwithstanding anything else herein to the contrary, all assets
of Seller other than the Purchased Assets (the "Excluded As ") are being retained by Seller
and are not being sold to Purchaser pursuant to this Agreement, including, without limitation, the
following:
(a) Alt assets of Seller not used exclusively in connection with the operation
of the Business;
(b) Accounts receivable, prepaid security deposits and rights to payment from
subscribers, cash and cash equivalents, all bank accounts, all lock box receipts and lock boxes,
letters of credit and guaranties, and all certificates of deposit and other bank deposits owned or
held by Seller or any of its affiliates;
(c) Subscriber accounts;
(d) Seller's corporate accounting journals, corporate books of account,
financial and other records of Seller related to the Business;
(e) Alt rights, claims, causes of action, recoveries and rights of reimbursement
arising out of or relating to the Excluded Liabilities (as defined in Section_ 1,43 or the Excluded
Assets;
2
(0 The insurance policies of Seller, the prepaid premiums under such policies
and all of Seller's rights thereunder;
(g) Al! intellectual property not specifically included in the Purchased Assets,
including all trademarks, service marks and trade names of Seller; and
(h) All personnel files, employee medical files and other employee books and
records.
1.3 Assumed Liabilities.
(a) Upon the terms and subject to the conditions contained in this Agreement,
at the Closing Purchaser shall assume and agree to perform and discharge when due the
following debts, liabilities and obligations of Seller (collectively the "Assumed is iI ti "):
(i) All debts, liabilities and obligations arising out of or relating to the
Purchased Assets following the Closing Date; and
(ii)All debts, liabilities and obligations arising out of or relating to all
contracts included in the Purchased Assets following the Closing Date.
(b) If any lease, contract, agreement, license or other similar arrangement to
be assigned to Purchaser as part of the Purchased Assets is not assignable or transferable, either
by virtue of the provisions thereof or under applicable lav, without the consent of some other
person or entity and such consent has not been obtained prior to the Closing, then such lease,
contract, agreement, license or other similar arrangement shall not be assigned to Purchaser at
the Closing. Instead, the Parties shall use their commercially reasonable efforts to obtain such
consent as soon as practical after the Closing (it being understood that the failure to obtain such
consents shall not relieve any Party from its obligation to consummate at the Closing the
transactions contemplated by this Agreement); and Seller shall use its commercially reasonable
efforts to obtain for Purchaser the practical benefit of such lease, contract, agreement, license or
other similar arrangement; and, assuming Purchaser receives the benefit thereof, Purchaser shall
assume the related liability therefor consistent with this Section 1.3. Notwithstanding the
foregoing, upon the receipt of any such required consent after the Closing, the corresponding
lease, contract, agreement, license or other similar arrangements shall be deemed automatically
assigned to Purchaser and Purchaser shall be deemed automatically to have assumed Seller's
obligations thereunder, all in a manner consistent with the provisions of this Section 1.3.
1.4 Excluded Liabilities, Notwithstanding anything else contained herein to the
contrary, all debts, liabilities and obligations of Seller other than the Assumed Liabilities
(collectively the "Excluded Liabilities") shalt remain the responsibility of Seller and shall not be
assumed by Purchaser pursuant to this Agreement.
1.5 Consideration;_ Termination and Release. As consideration for the sale of the
Purchased Assets, effective as of the Closing the Parties agree to the following:
(a) Bach Transaction Document, including, without limitation, those
Transactions Documents set forth on Exhibit 1.a, is terminated in its entirety and all
3
obligations of the Parties thereunder are terminated, including without limitation, Seller's
obligation to pay to Purchaser any portion of the "Holdback" (as defined in the Original
Agreement), the Parties' obligation to indemnify the other Parties as to certain claims or
liabilities under the Transaction Documents, Corporation's obligations under the Network
Agreement and Purchaser's obligations under the Guaranty. This Agreement supersedes and
replaces all agreements between the Parties prior to the Closing of this Agreement.
(b) Each of Purchaser and Corporation, on behalf of its officers, attorneys,
agents, employees, successors, and assigns, now and forever releases, acquits and discharges
Seller and its shareholders, officers, directors, attorneys, agents, employees, successors,
affiliates, subsidiaries, third -party entities in which Seller owns a controlling interest, and assigns
from any and all claims, demands, losses, expenses, damages, liability, actions, and causes of
action of any nature, including claims for interest, penalties, and attorneys' fees, whether in law
or equity, arising on account of, out of, and/or in any way related to or connected with the
Transaction Documents or the Business, other than claims pursuant to this Agreement. In
addition, and without limiting the scope of the foregoing release language, Purchaser and
Corporation release Seller from any continuing payment obligations and all other contractual
obligations under the Transaction Documents.
(c) Seller, on behalf of itself, its shareholders, officers, directors, attorneys,
agents, employees, successors, affiliates, subsidiaries, third -party entities in which it owns a
controlling interest, and assigns, now and forever releases, acquits and discharges each of
Purchaser and Corporation, its officers, attorneys, agents, employees, and assigns from any and
all claims, demands, losses, expenses, damages, liability, actions, and causes of action ofany
nature, including claims for interest, penalties, and attorneys' fees, whether in law or equity,
arising on account of, out of, and/or in any way related to or connected with the Transaction
Documents or the Business, other than claims pursuant to this Agreement. In addition, and
without limiting the scope of the foregoing release language, Seller hereby releases each of
Purchaser and Corporation from any continuing payment obligations and all other contractual
obligations under the Transaction Documents.
1.6 Permitted Liens. Seller agrees to promptly cause the release of any Permitted
Lien that becomes a permanent lien on the Purchased Assets as a result of Seller's failure to pay
Taxes when due and payable or thereafter without penalty.
1.7 Prorations. The Parties agree and acknowledge that all personal property taxes
(including ad valorem taxes) shall be prorated as of the Closing. Seller, on the one hand, and
Purchaser and Corporation, on the other hand, agree that if any of the aforesaid prorations cannot
be calculated accurately at the Closing, then the same shall be calculated within thirty days
or as soon as reasonably practicable after the Closing and either Party or Parties owing the other
Party or Parties a sum of money based on such subsequent proration shall promptly pay said sum
to the other Parties in immediately available funds.
4
ARTICLE
CLOSING
2.1 Closing. The purchase and sale of the Purchased Assets shall be consummated at
a closing (the "Closing") to take place by facsimile and electronic mail (with original signatures
and agreements delivered to each Party's counsel by overnight delivery) on a date within three
business days following the date on which all of the conditions set forth in Artieles 6 and 7
hereof have been fulfilled or waived or on such other date as the Parties shall mutually agree.
The date on which the Closing occurs is sometimes hereinafter referred to as the "Closing Date,"
2.2 Deliveries and Performance at Closing. At the Closing, each Party shall make all
deliveries and take all other action required of it hereunder (or as otherwise reasonably requested
by the other Party), all in form and substance reasonably satisfactory to the other Party.
ARTICLE 3
REPRESENTATIONS Al TIES OF SELLER
Contemporaneously with the execution of this Agreement, Seller is delivering to
Purchaser and Corporation the disclosure schedule (the "Seller Disclosure Schedule")
referenced in this Article 3. Seller hereby represents and warrants to Purchaser and Corporation
as follows:
3.1 Organization and Good Standing. Seller is duly organized, validly existing and in
good standing under the laws of the State of Delaware.
3.2 Power and Authority. Seller has the necessary corporate power and authority to
carry on the Business as it is now being conducted, to own and lease the properties and assets it
now owns and leases in connection with the Business, to enter into this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the part of Seller, and
no other proceedings on the part of Seller are necessary to authorize the execution, delivery and
performance of this Agreement by Seller.
3.3 Binding Effect. This Agreement has been duly executed and delivered by Seller
and constitutes its legal, valid and binding obligation, enforceable against Seller in accordance
with its terms, except as enforceability may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally.
3.4 No Violation. Consents. Neither the execution and delivery of this Agreement by
Seller, nor the performance by it of its obligations hereunder, will:
(a) violate or conflict with any provision of its organizational documents;
(b) except as set forth in the Seller Disclosure Schedule, breach or otherwise
constitute or give rise to a default under any contract, commitment or other obligation to or by
which Seller is a party or is bound;
S
(c) except as set forth in the Seller Disclosure Schedule, violate in any
material respect any statute, ordinance, law, rule, regulation, judgment, order or decree of any
court or other Governmental Entity to which Seller is subject; or
(d) except as set forth in the Seller Disclosure Schedule, require any consent,
approval or authorization of, notice to, or filing, recording, registration or qualification with any
third party or Governmental Entity by Seller.
3.5 Title to Purchased Assets.
(a) Assuming that the representations and warranties of Purchaser and
Corporation in the Transaction Documents were accurate as of the date of such Transaction
Documents, Seller owns all ofthe material tangible personal property included in the Purchased
Assets, free and clear of all liens other than Permitted Liens.
(b) The location of the tangible Purchased Assets is as reflected on
Exhibit 1.1(b).
3.6 Intellectual Property.
(a) Assuming that the representations and warranties of Purchaser and
Corporation in the Transaction Documents were accurate as of the date of such Transaction
Documents, Seller owns all rights to use and protect, or holds a valid license to use and protect,
all Intellectual Property.
(b) To the knowledge of Seller and assuming that the representations and
warranties of Purchaser and Corporation in the Transaction Documents were accurate as of the
date of such Transaction Documents, Seller in the operation of the Business has not violated or
infringed any patent, copyright, trademark, service mark or other intellectual property right of
any other person or entity, and, to the knowledge of Seller, there are no claims pending or
threatened against Seller asserting that the use of any Intellectual Property by it in the operation
of the Business infringes the rights ofany other person or entity. Seller has not made or asserted
any claim of violation or infringement of any Intellectual Property against any other person or
entity in the operation of the Business, and Seller has no knowledge of any such violation or
infringement.
(c) Assuming that the representations and warranties of Purchaser and
Corporation in the Transaction Documents were accurate as of the date of such Transaction
Documents and except as set forth in the Seller Disclosure Schedule, Seller has not granted any
outstanding licenses or other rights to any such Intellectual Property to any other person or
entity.
3.7 Contracts.
(a) The Seller Disclosure Schedule contains a list which identifies the
contracts, agreements, leases, guaranties or commitments to which Seller is a party or by which
Seller is bound, which are included in the Purchased Assets and which are material to the
operation of the Business (collectively the "Material Contracts").
6
(b) Each of the Material Contracts was entered into in the ordinary course of
the Business, is in full force and effect, is valid and enforceable against Seller in accordance with
its terms and constitutes a legal and binding obligation of Seller. Except with respect to any
Material Contract between Seller, on the one hand, and Purchaser or Corporation, on the other
hand, as of the date of this Agreement i Seller has not given or received any written notice of
default, termination or partial termination under any of the Material Contracts, and (ii) there is no
existing or continuing material default by Seller under any of the Material Contracts.
3.8 Per mit and Licenses. Seller holds all required permits, licenses, approvals and
authorizations from all Governmental Entities material to the Business and which are necessary
to conduct the Business in a manner consistent with past practices.
3.9 Violation of Laws. Seller, in the operation of the Business, is not in violation in
any material respect of any statutes, laws, rules, regulations, orders, decrees and ordinances
applicable to it or the Purchased Assets. Except with respect to any dispute between Seller, on
the one hand, and Purchaser or Corporation, on the other hand, to the knowledge of Seller,
during the past twelve (12) months, Seller has not received any written notice from a
Governmental Entity alleging that the operation of the Business by Seller is in violation in any
material respect with any such statutes, laws, rules, regulations, orders, decrees or ordinances.
This Section 3.9 does not apply to Tax matters (for which Section 3.10 is applicable).
3.10 Taxes. Seller has duly and timely filed all required reports and returns with
respect to Taxes for the Purchased Assets the due date for which is prior to the date hereof, and
all of such reports and returns are correct and complete in all material respects. Seller has paid
all applicable Taxes with respect to the Purchased Assets required to be paid by it for any period
of time prior to the date hereof, except for Taxes accrued but not yet due and payable and except
for applicable Transfer Taxes, if any, with respect to the Original Agreement for which
Corporation is responsible. Seller is not a party or subject to any levy, assessment, collection or
pending action, proceeding or claim with respect to Taxes for the Purchased Assets, and, to the
knowledge of Seller, no notice of the possible institution of any of the foregoing has been
received by Seller.
3.11 Insurance, Seller has complied in all material respects with all terms, obligations
and provisions of each policy of insurance and bonds presently maintained by, or providing
coverage for, the Purchased Assets, and has paid all premiums due thereon, and no written
notice of cancellation with respect thereto has been received by Seller. Such insurance policies
are sufficient to comply with any minimum insurance requirements set forth in any material
agreement applicable to the Business.
3.12 Litigation. Except with respect to any disputes between Seller, on the one hand,
and Purchaser or Corporation, on the other hand: (a) there is no litigation, action, suit, arbitration,
mediation, hearing or governmental investigation pending or, to the knowledge of Seller,
threatened by or against Seller primarily related to the Business or the Purchased Assets and (b)
no judgment, award, order or decree has been rendered against Seller that is primarily related to
the Business or the Purchased Assets which is still outstanding.
7
3.13 Brokers. Seller has not incurred any liability for brokerage fees, finder's fees,
agent's commissions other similar forms of compensation in connection with the transactions
contemplated by this Agreement.
3.14 No Other Representations. SELLER DOES NOT MAKE ANY
REPRESENTATION 1 R WARRANTY ABOUT SELLER, THE PURCHASED ASSETS OR
THE BUSINESS, EXCEPT TO THE EXTENT EXPRESSLY MADE IN THIS ARTICLE 3. IN
ADDITION, SELLER DOES NOT MAKE ANY REPRESENTATION OR WARRANTY
WITH RESPECT TO ANY FORWARD-LOOKING PROJECTION, FORECAST, BUDGET,
FINANCIAL DATA OR OTHER INFORMATION. PURCHASER AND CORPORATION
ARE FULLY RESPONSIBLE FOR MAKING THEIR OWN EVALUATIONS OF SUCH
MATTERS.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND CORPORATION
Each of Purchaser and Corporation hereby represents and warrants to Seller as follows:
4.1 Oronization and Good Standing. Purchaser is a duly constituted and validly
organized municipality under the laws of the State of Texas. Corporation is a duly constituted
and validly organized local goverment corporation under the laws of the State of Texas.
4.2 Power and Authority. Each of Purchaser and Corporation has the power and
authority to enter into this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of Purchaser and Corporation, including obtaining all necessary
approvals by their respective City Council and board ofdirectors, and no other proceedings on
the part of Purchaser or Corporation are necessary to authorize the execution, delivery and
performance ofthis Agreement by it.
4.3 Binding Effect. This Agreement has been duly executed and delivered by each of
Purchaser and Corporation and constitutes the legal, valid and binding obligation ofPurchaser
and Corporation, enforceable against Purchaser and Corporation in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or other laws affecting the
enforcement ofcreditors' rights generally.
4.4 No Violation; Consents. Neither the execution and delivery ofthis Agreement b
Purchaser or Corporation, nor the performance by Purchaser or Corporation oftheir obligations
hereunder will:
(a) breach or otherwise constitute or give rise to a default under any contract,
commitment or other obligation to or by which Purchaser or Corporation is a party or is bound,
except to the extent any such breach or default, individually or in the aggregate, would not
materially impair the ability of Purchaser or Corporation to perform their obligations hereunder;
(b) violate any statute, ordinance, law, rule, regulation, judgment, order or
decree of any court or other Governmental Entity to which Purchaser or Corporation is subject,
S
except to the extent any such violation, individually or in the aggregate, would not materially
impair the ability of Purchaser or Corporation to perform its obligations hereunder; or
(c) require any consent, approval or authorization of, notice to, or filing,
recording, registration or qualification with any third party, court or Governmental Entity.
4.5 Ljtigation. There is no litigation, action, suit, arbitration, mediation, hearing or
governmental investigation pending or, to the knowledge of Purchaser or Corporation, threatened
by or against Purchaser or Corporation, and no judgment, award, order or decree has been
rendered against Purchaser or Corporati
5.3 A pro als cooper ion.
(a) Subject to the terms and conditions of this Agreement and all applicable
laws and regulations, each Party shall use commercially reasonable efforts to fulfill or obtain the
fulfillment of the conditions to the Closing and to do or cause to be done all things necessary to
cause the Closing to occur and to consummate and make effective the transactions contemplated
by this Agreement on or prior to the date set forth in Section 8.2, including, without limitation,
(i) the execution and delivery of all agreements required hereunder and (ii) defending against any
lawsuits, actions or proceedings, judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby, including seeking to have any
preliminary injunction, temporary restraining order, stay or other legal restraint or prohibition
entered or imposed by any court or other Governmental Entity that is not yet final and non -
appealable vacated or reversed; provided, however, that neither Seller nor any of its affiliates
shalt be required to make any material monetary expenditure, commence or be a plaintiff in any
litigation or offer or grant any material accommodation (financial or otherwise) to any third
party, including, without limitation, the offer for sale of any part of the Purchased Assets or other
business or assets to any third party.
(b) As promptly as reasonably practicable following the date of this
Agreement, Seller will use its commercially reasonable efforts to prepare and file all applications
required to be filed with the Federal Communications Commission to effectuate assignment to
Purchaser of the radio spectrum authorizations listed on Exhibit 1.1(e).
(c) In connection with the transition of the operation of the Network to
Purchaser, Seller shall use its commercially reasonable efforts during the period commencing on
the date of this Agreement and ending on or prior to Closing, but in any event not later than 45
days following the date of this Agreement (the "Transition Period"), to do the following:
(i) continue to operate the Network;
{iii provide Network Operations Center "NC services for the
Network, including (A) monitoring and troubleshooting of Network issues, trouble
ticket establishment and resolution for Severity 1 issues (meaning the Network is
inoperable) and Severity 2 issues (meaning major components of the Network are
inoperable), and (C) NOC to NOC service/support consistent with such service/support
provided as of the date of this Agreement;
(iii) inform its subscribers with respect to the Business of the date that
Seller services will no longer be available on such Network and, for a period of not more
than 30 days following such notice, provide continued service and customer service to its
subscribers of the Business;
(iv) provide to Purchaser reasonable phone support/transition meetings
to answer operational questions;
(v) provide to Purchaser copies of updated as -built materials and
documentation, including Internet Protocol Schema, device profiles, and Radio
Frequency/ engineering studies;
10
(vi)provide to Purchaser passwords to access the Network and
Network hardware/software and provide to Purchaser physical access to the Purchased
Assets secured in cabinets; and
(vii) subject to Section 14 14) and Section 9.7, provide to Purchaser a
listing of SSIDs currently in use in the Network and its configuration.
(d) Prior to the Closing, Purchaser and Corporation shall have the right to
inspect the Purchased Assets to ensure that the Network is operational.
5.4 Additional Equipment. The Parties acknowledge and agree that 204 Tropos
Radios, model 5210, are included in the Purchased Assets at no additional cost to Purchaser or
Corporation. The Parties acknowledge and agree that one (1) Tropos Drive Test Tool is included
in the Purchased Assets at no additional cost to Purchaser or Corporation and that this Drive Test
tool is in Purchaser's or Corporation's possession as of the date of this Agreement.
ARTICLE
CONDITIONS TO BE SATISFIED BY SELLER PRIOR TO CLOSING
All of the obligations of Purchaser and Corporation under this Agreement are subject to
the fulfillment prior to or at the Closing of each of the following conditions, any of which may
be waived by Purchaser and Corporation in their sole discretion:
6.1 Representations and Warranties. All representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects as of the date
hereof, and such representations and warranties (as updated pursuant to any Supplements) shall
be true and correct in all material respects as of the Closing as if made at and as of such time
(except that representations and warranties made with respect to a specified date need only be
true and correct as of such date).
6.2 Performance ofAgreements. Seller shall have performed and complied in all
material respects with all agreements and conditions required by this Agreement to be performed
or complied with by it prior to or at the Closing.
6.3 Closing Deliveries. Seller shall have delivered or caused to be delivered to
Purchaser and Corporation, as applicable, each of the following, in form and substance
reasonably satisfactory to Purchaser and Corporation:
(a) A duly executed bill of sale conveying in the aggregate all of Seller's
interest in the Purchased Assets, subject to the Permitted Liens;
(b) A duly executed assignment and assumption agreement (the "Assignment
and AssumptionAgreement') evidencing Seller's transfer and assignment of the Assumed
Liabilities and Purchaser's assumption of the Assumed Liabilities; and
(c) Such other bilis of sale, assignments and other instruments reasonably
necessary or appropriate to transfer and assign the Purchased Assets to Purchaser and terminate
the obligations of the Parties pursuant to the Transaction Documents, duly executed by Seller.
11
6.4 No Injunctions. No preliminary or permanent injunction or other order by any
federal, state or local court which prevents the consummation of the transactions contemplated
by this Agreement shall have been issued and remain in effect.
6.5 Third Party Consents. Seller shall have received the consent of each vendor set
forth on Exhibit 7.5 with respect to the agreement listed therein to resell the Purchased Assets.
ARTICLE
CONDITIONS TO BE SATISFIED BY PURCHASER AND CORPORATIONPRIOR TO
CLOSING
All of the obligati
ARTICLE
TERMINATION
8.1 Termination. This Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Closing, as follows:
(a) the written consent of the Parties;
(b) Purchaser and Corporation, if each of Purchaser and Corporation is
prepared to close and all conditions ofSeller's obligations to close pursuant to Article 7 have
been satisfied or waived by Purchaser and Corporation, and Seller fails to close in accordance
with Article 2;
(c) By Purchaser and Corporation, if Seller fails to cure any material breach
by it of this Agreement within thirty (3 0) days after receiving written notice thereof from
Purchaser and Corporation;
(d) Seller, if Seller is prepared to close and all conditions to Purchaser's
and Corporation's obligations to close pursuant to Article 6 have been satisfied or waived by
Seller, and Purchaser and Corporation fail to close in accordance with Article 2;
(e) Purchaser and Corporation, if the Parties' determine no later than
May 15, 2008 and following the Parties' inspection of the Network, , that Seller is not delivering
wireless broadband Internet access services to Corporation at average transmission speeds of 1.0
Mbps downstream/ 1.0 Mbps upstream, calculated consistent with the methodology used by
Seller during the term of the Network Agreement, and such delivery standard is not cured by
Seller within two (2) weeks after such determination; or
By Seller, if Purchaser or Corporation fails to cure any material breach of
it of this Agreement within thirty (30) days after receiving written notice thereof from Seller.
8.2 Cut -Off Date. If the Closing shall not have occurred on or before May 30, 2008,
any Party may terminate this Agreement by delivering written notice thereof to the other Parties.
8.3 Effect of Termination. In the event this Agreement is terminated, this Agreement
shall become null and void and of no further force and effect and no Party shall have any further
liability or obligation hereunder to the other Parties (except to the extent a Party is in breach of
this Agreement as of the date of termination), except for i the provisions of this Agreement
relating to expenses, (ii) the provisions of this Section 8.3, and (iii) the provisions of Article 10.
In the event this Agreement is terminated pursuant to Section .1b,_.1 c. 8.1(d) or 8.1(0, then
the terminating Party shall be entitled to pursue any and all rights and remedies available to it
hereunder against the other Parties.
ARTICLE 9
OTHER AGREEMENTS of THE PARTIES
9.1 Expenses. Subject to Section 9.3, each Party hereto shall pay its own fees and
expenses (including the fees and expenses of its attorneys, accountants, investment bankers,
13
brokers, financial advisors and other professionals) incurred in connection with this Agreement
and all transactions contemplated hereby.
9.2 Publicity. No Party shall issue any press release, written public statement or
announcement relating to this Agreement or the transactions contemplated hereby without the
prior written approval of the other Parties in each instance, except to the extent such disclosure is
required by law (in which case such Party shall use all reasonable efforts to give the other Parties
prior notice thereof with the opportunity to comment).
9.3 Taxes. Purchaser shall be solely responsible for paying any and all sales, use,
transfer, stamp or other similar Taxes (collectively "Transfer Taxes") arising as a result of the
transactions contemplated by this Agreement.
9.4 Seller's Access to Information. For a period of seven years following the
Closing, Purchaser shall, upon reasonable advance notice from Seller: (a) afford to Seller and its
representatives, agents, counsel and accountants access during normal business hours to the
books, records, employees, facilities and agents of the Business conducted by Seller prior to the
Closing Date, and furnish such financial and operating data and other information relating to
the Business or the Purchased Assets, in each case to the extent necessary to permit Seller to
determine any matter relating to its rights and obligations under this Agreement or with respect
to any period prior to or including the Closing.
9.5 Confidentiality. To the extent permitted by applicable law, neither Purchaser nor
Corporation shall disclose any Confidential Information of Seller for a period of three year
following Closing; provided, however, that Confidential Information constituting a "trade secret"
pursuant to applicable law shall not be disclosed for so long as such Confidential Information
remains a trade secret, Should Purchaser or Corporation receive a request under the Texas
Public Information Act for information that may be Confidential Information of Seller, Purchaser
or Corporation will refer the request to the Texas Attorney General and will provide a copy of
the request and referral to Seller so that Seller may raise its appropriate legal defenses to
disclosure.
9.6 Third Party warranties. Each Party agrees that it shall take all such action as is
reasonably requested by the other Parties to ensure that Purchaser and Corporation receive the
full benefit of any third party warranties associated with ownership of the Purchased Assets;
provided, however, that Seller shall not be obligated to incur any third party fees in connection
with such obligation.
9.7 IP License. For consideration paid and subject to the provisions of this
Agreement, effective as of the Closing, Seller hereby grants, and Purchaser and Corporation
hereby accept, a perpetual, fully paid-up, royalty -free, worldwide, non -revocable, transferable
license to use, sell, offer for sale, distribute, and sublicense (1) the Wi-Fi network architecture
installed in Corpus Christi, Texas by or on behalf of EarthLink, Inc., (2) the Purchased Assets set
forth on Exhibit 9.7(a), and (3) certain SSIDs currently in use in the Network and its
configuration and set forth on Exhibit 9.7(b). The Parties hereto acknowledge and agree,
however, that no license is granted to Purchaser or Corporation in or to the proprietary
EarthLink, Inc. infrastructure software.
14
9.8 Assignment of Motorola gi_gh. Solely with respect to the Purchased Assets and
effective as of the Closing, Seller hereby assigns to Purchaser and Corporation Seller's right to
license the software referenced in that certain Product Sales, Services and Support Agreement,
dated as December 22, 200 5, by and between EarthLink, Inc. and Motorola, Inc., and Purchaser
and Corporation hereby agree to assume the obligations and be subject to the terms of the license
and other provisions (solely with respect to the Purchased Assets) contained in such agreement, a
complete and correct copy of which has been delivered by Seller to Purchaser and Corporation
9.9 Assignment of ragnwav Rights. Solely with respect to the Purchased Assets
and effective as of the Closing, Seller hereby assigns to Purchaser and Corporation Seller's right
to license the software referenced in that certain Product Sales and Support Agreement between
the parties dated June 12, 2006 by and between EarthLink, Inc. and Dragonwave, Inc., and
Purchaser and Corporation hereby agree to assume Seller's intellectual property and
confidentiality obligations solely with respect to the Purchased Assets contained in such
agreement, a complete and correct copy of which has been delivered by Seller to Purchaser and
Corporation
9.10 Assignment of Alcatel Rights. Solely with respect to the Purchased Assets and
effective as of the Closing, Seller hereby assigns to Purchaser and Corporation Seller's right to
license the software referenced in that certain USA Supply Agreement between the parties dated
May 16, 2007 by and between EarthLink, Inc. and Alcatel USA Marketing, Inc., and Purchaser
and Corporation hereby agree to keep such software and any associated documentation in
confidence and to comply with the licensing provisions set forth in Section 9 of such agreement
solely with respect to the Purchased Assets. A complete and correct copy of such agreement has
been delivered by Seiler to Purchaser and Corporation
9.11 Assignment of Cisco Rights. Solely with respect to the Purchased Assets and
effective as of the Closing, Seller hereby assigns to Purchaser and Corporation Seller's right to
license the software referenced in that certain Cisco Internet Commerce Agreement between the
parties dated July 2, 2003 by and between EarthLink, Inc. and Cisco System, Inc., and Purchaser
and Corporation hereby agree to abide by the Software License terms set forth in such agreement
solely with respect to the Purchased Assets. A complete and correct copy of such agreement has
been delivered by Seller to Purchaser and Corporation
ARTICLE 10
LIMITATIONS ON LIABILITY
10.1 Survival of Representations and Warranties. Notwithstanding anything else
contained herein to the contrary, the representations and warranties made in this Agreement shall
survive the Closing for a period of six months, and any claim pursuant to this Agreement
must be made prior to the expiration of such period; provided, however, that the limitations set
forth in this Section 10.1 shall not apply to any claim pursuant to Section 1.6 hereof
10.2 Limitations on seller's Liability.
(a) Notwithstanding anything else contained herein to the contrary, the
aggregate liability of Seller pursuant to this Agreement, whether pursuant to breach of contract,
15
any tort theory or any other action in law or in equity, shall not exceed an amount equal to
$50,000; provided, however, that the limitations set forth in this Section 10.2(a) shall not apply
to any claim pursuant to Section 1.6 hereof.
(b) Notwithstanding ithstanding anything else contained herein to the contrary, Seller
shall not have any liability to Purchaser or Corporation pursuant to this Agreement, whether
pursuant to breach of contract, any tort theory or any other action in law or in equity, unless and
until the aggregate amount of all losses for which Purchaser and Corporation are entitled to
pursuant to this Agreement exceeds $5,000, in which event Purchaser and Corporation shall only
be entitled to recover its losses in excess of such amount.
(c) Notwithstanding anything else contained herein to the contrary, Seller
shall not have any liability to Purchaser or Corporation pursuant to this Agreement, whether
pursuant to breach of contract, any tort theory or any other action in law or in equity, for any
claim based on a breach or liability of which Purchaser or Corporation had knowledge and
nonetheless elected to consummate the transactions contemplated by this Agreement.
10.3 Limitation on Purchaser's and Corporation's Liability. Notwithstanding
anything else contained herein to the contrary,aggregatey the liability of Purchaser and
Corporation pursuant to this Agreement shall not exceed an amount equal to $50,000.
10.4 Administration of Thir _Party_ Claims.
(a) In the event of any claim by one Party against another Party pursuant to
this Agreement that results from or in connection with any claim or legal proceeding by a person
who is not a party to this Agreement (a "Third Parte Claim"), the Party against whom such
claim or legal proceeding is made (the "Notifying sir Par0") shall promptly give the other Party or
Parties (the "Receiving Party"notice of the claim or legal proceeding and shall also specify, if
known, the amount or a good faith estimate of the amount of the losses arising therefrom.
(b) The Notifying Party shall not settle or compromise or voluntarily enter
into any binding agreement to settle or compromise, or consent to entry of any judgment arising
from, any Third Party Claim except in accordance with this Section 10.4. With respect to any
Third Party Claim, the Receiving Party shall undertake the defense thereof by representatives of
p
its own choosing and shall have the right to compromise or settle such Third Party Claim at its
expense. The Notifying Party shall have the right to participate in any such defense of a Third
Party Claim with advisory counsel of its own choosing at its own expense. Assuming it has
received reasonably adequate advance notice of a covered claim, in the event the Receiving
Party, after two-thirds of the period for the presentation of a defense against any such Third Party
Claim, fails to begin to diligently defend it (or at any time thereafter ceases to diligently defend
it), the Notifying Party will have the right to undertake the defense, compromise or settlement of
such Third Party Claim on behalf of, and for the account of, the Receiving Party, at the expense
and risk ofthe Receiving Party.
10.5 No Consequential D4mages. Notwithstanding ithstanding anything else contained herein to
the contrary, no Party shall have any liability hereunder to the other Parties or to any other
person or entity for any consequential damages, including, without limitation, loss of profit, loss
16
of use, diminution in value, or business stoppage or any indirect, special, exemplary or punitive
damages.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Notices.
(a) All notices, consents, requests and other communications hereunder shall
be in writing and shall be sent by hand delivery, by certified or registered mail (return -receipt
requested), or by a recognized national overnight courier service as set forth below:
If to Seller, to:
EarthLink, Inc.
1375 Peachtree Street NW
Atlanta, Georgia 30309
Attention: General Counsel
with a copy to:
Troutman Sanders LLP
600 Peachtree Street
Suite 5200
Atlanta, Georgia 30308
Attention: Andrea M. Farley, Esq.
If to Purchaser or Corporation, to:
City of Corpus Christi
1201 Leopard Street
Corpus Christi, Texas 78401
Attention: City Attorney
with a copy to:
City ofCorpus Christi
1201 Leopard Street
Corpus Christi, Texas 78401
Attention: City Manager
(b) Notices delivered pursuant to Section 11.1 shall be deemed given: (0 at
the time delivered, if personally delivered; (ii) at the time received, if mailed; and (iii) two (2)
business days after timely delivery to the courier, if by overnight courier service.
(c) Any Party hereto may change the address to which notice is to be sent by
written notice to the other Party in accordance with this Section 11,1,
17
11.2 Entire Agreement. This Agreement, including all schedules and exhibits hereto,
each of which is incorporated herein by reference, contains the entire agreement and
understanding concerning the subject matter hereof between the Parties and specifically
supersedes any other agreement or understanding between the Parties related to the subject
matter hereof.
11.3 Disclosure Schedules. Any fact or item disclosed on any part ofthe Seller
Disclosure Schedule shall be deemed disclosed on all other parts of the Seller Disclosure
Schedule to which such fact or item may reasonably apply so long as such disclosure is in
sufficient detail to enable a Party to identify the facts or items to which it applies. Any fact or
item disclosed on the Seller Disclosure Schedule shall not solely by reason of such inclusion be
deemed to be material and shall not be employed as a point of reference in determining any
standard of materiality under this Agreement.
11.4 waiver; Amendment. No waiver, termination or discharge of this Agreement, or
any of the terms or provisions hereof, shall be binding upon a Party unless confirmed in writing.
No waiver by a Party of any term or provision of this Agreement or of any default hereunder
shall affect such Party's rights thereafter to enforce such term or provision or to exercise any
right or remedy in the event of any other default, whether or not similar. This Agreement may
not be modified or amended except by a writing executed by all Parties.
11.5 Severability, If any provision of this Agreement shall be held void, voidable,
invalid or inoperative, no other provision of this Agreement shall be affected as a result thereof,
and, accordingly, the remaining provisions of this Agreement shall remain in full force and effect
as though such void, voidable, invalid or inoperative provision had not been contained herein.
11.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, excluding its conflicts of law principles and
venue for any dispute hereunder shall be exclusively in the United States District Court for the
Southern District of Texas, Corpus Christi Division, or in a Texas state court sitting in Nueces
County.
11.7 Assignment. No Party may assign this Agreement, in whole or in part, without
the prior written consent of the other Parties, and any attempted assignment not in accordance
herewith shall be null and void and of no force or effect; provided, however, that upon fifteen
(15) days written notice to Seller, Purchaser or Corporation may assign this Agreement, or any
portion of it specified in such notice, to each other or to another entity created by Purchaser,
provided that such new entity is authorized to and capable offulfilling all obligations to which it
succeeds.
11.8 Bindimg Effect. This Agreement shall be binding upon and shall inure to the
benefit of the Parties and their respective successors and permitted assigns.
11.9 fleading. The titles, captions and headings contained in this Agreement are
inserted for convenience of reference only and are not intended to be a part of or to affect in any
way the meaning or interpretation of this Agreement.
18
11.10 Reference with Agreement. Numbered or lettered articles, sections, paragraphs,
subsections, schedules and exhibits herein contained refer to articles, sections, paragraphs,
subsections, schedules and exhibits of this Agreement unless otherwise expressly stated. The
words "herein," "hereof," "hereunder," "hereby," "this Agreement" and other similar references
shall be construed to mean and include this Agreement and all amendments to it unless the
context shall clearly indicate or require otherwise.
11.11 Interpretation. This Agreement shall not be construed more strictly against any
Party hereto regardless of which Party is responsible for its preparation, it being agreed that this
Agreement was fully negotiated by all Parties.
11.12 Definition of Knowledge. Any reference in this Agreement or in any certificate
delivered pursuant hereto to the "knowledge" of Seller (whether to "the best of' such knowledge
or other similar expressions relating to the knowledge or awareness of Seller) means the
conscious awareness of the following officers of Seller as of the date of this Agreement: the
Chief Executive Officer, the Chief Financial Officer, the General Counsel, the Controller or the
Vice President Operations — Municipal Wireless Networks.
11.13 Further Assurances. Upon the reasonable request of a Party, each Party agrees to
take any and all actions, including, without limitation, the execution of certificates, documents or
instruments, necessary or appropriate to give effect to the terms and conditions set forth in this
Agreement.
11.14 Counterparts; _Fax Signatures. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which together shall
constitute the same Agreement. Any signature page of any such counterpart, or any electronic
facsimile thereof, may be attached or appended to any other counterpart to complete a fully
executed counterpart of this Agreement, and any telecopy or other facsimile transmission of any
signature shall be deemed an original and shall bind such Party.
ARTICLE 12
DEFINITIONS
12.1 Definitions. ns. The following terms shall have the respective meanings set forth
below throughout this Agreement:
hereof.
"Agreement' has the meaning set forth in the Preamble hereof.
"Assignment and Assumption Agreement' has the meaning set forth in Section 6.3(b1
"Assumed Liabilities" has the meaning set forth in Section 1.3(a) hereof.
"Business" has the meaning set forth in the Background section hereof.
"Closing" has the meaning set forth in Section 2.1 hereof.
"Closing Date" has the meaning set forth in Section 2.1 hereof.
19
"Confidential Information" means h business, financial, subscriber, vendor and
technical information of Seller that is confidential or otherwise a trade secret under applicable
law.
"Corporation" has the meaning set forth in the Preamble hereof.
"Excluded Assets" has the meaning set forth in Section 1.2 hereof.
"Excluded Liabilities" has the meaning set forth in Section 1.4 hereof.
"GAAP" means generally accepted accounting principles in the United States of
America, consistently applied.
"Governmental Entity" means any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign.
"Guaranty" has the meaning set forth in the Background section hereof.
"Intellectual ro rty" or "HP' means all copyrights, trademarks, service marks, logos,
trade names, patents, inventions and computer software (including, to the extent applicable,
registrations, applications, and renewals for registrations of each of the foregoing) which are
owned or held for use by Seller exclusively in connection with the operation of the Business.
"Material Contracts" has the meaning set forth in Section_.17Q hereof.
"Network" has the meaning set forth in the Background section hereof.
"Network Agreement" has the meaning set forth in the Background section hereof.
"NOC" has the meaning set forth in Section 5.3(c) hereof.
"Notifying Part " has the meaning set forth in Section 10.4(a) hereof.
"Original Agre n nt" has the meaning set forth in the Background section hereof.
"Party" or "Parties" has the meaning set forth in the Preamble hereof.
"Permitted Liens" means 1 the restrictions set forth in any contract or agreement
included in the Purchased Assets; (ii) liens for Taxes, assessments and other governmental
mental
charges that are not yet due and payable or that may thereafter be paid without penalty or that are
being contested in good faith by appropriate proceedings; and (iii) similar matters that will not
adversely affect Purchaser's ability to operate the Network in a manner substantially consistent
with past practices.
"Purchased Assets" has the meaning set forth in Section 1.1 hereof.
"Purchaser" has the meaning set forth in the Preamble hereof.
"Receiving Party" has the meaning set forth in Section 10.4(a) hereof.
20
"Seer" has the meaning set forth in the Preamble hereof.
"Seer Disclosure Schedule" has the meaning set forth in the preliminary statement of
Article 3 hereof.
"Supplement" has the meaning set forth in Section 5.2 hereof.
"Tax" means all Federal, state, city, county, foreign or other governmental taxes,
assessments, duties, fees, levies or similar charges of any kind, including all income, profit,
franchise, excise, property, use, intangibles, sales, payroll, employment, withholding and other
taxes, and including all interest and penalties imposed with respect to such amounts.
"Third Party Claim" has the meaning set forth in Section 1 o.a hereof.
"Transaction tion Documents" has the meaning set forth in the Background section hereof,
"Transfer Taxes" has the meaning set forth in Section 9.3 hereof.
"Transition Period" has the meaning set forth in Section , hereof.
(Signature page follows)
21
IN WITNESS WHEREOF, the Parties have executed or have caused their duly
authorized officers to execute this Agreement ent a of the date first written above.
"Purchaser"
CITY OF CORPUS CHRISTI, TEXAS
By:
Name:
Title:
"Corporation"
CC DIGITAL COMM LAITY DEVELOPMENT
CORPORATION
By:
Name:
Title:
"Seller"
EARTHLINK, INC,
By:
Name:
Title:
Exhibit1.1(aj
Assumed Contracts
1. Electricity Sales Agreement by and between EarthLink, Inc. and Reliant Energy effective
as of April 1, 2007.
Exhibit 1.1(d)
Certain SSIDs for Network
FUSS (Corpus Christi)
Exhibit 1.1(e)
FCC Licensed Spectrum
FCC Call Sign
Transmit Location
Receive Loc.. A
: Receive Loc. It
Receive Loc. C
WQHT700
Savage Lane
Fleet
ON Stevens
_
WQH170 1
EOC
Fleet
WQHT7 3
ON Stevens
Fleet
Sava Lane
WQHT71 0
Fleet
Savage Lane
EOC
ON Stevens _ ,
Exhibit 1.5(a)
Transaction Documents
1. Asset Purchase Agreement, dated as of March 6, 2007, among EarthLink, Inc., the City
of Corpus Christi, Texas and CC Digital Community Development Corporation,
2. Network Services Agreement, dated as of March 6, 2007, by and between EarthLink, Inc.
and CC Digital Community Development Corporation.
3. Guaranty, dated as of March 6, 2007, by City of Corpus Christi, Texas in favor of
EarthLink, Inc.
4. Antennae Site License Agreement (Fleet Maintenance Building), dated as of March 6,
2007, by and between EarthLink, Inc. and CC Digital Community Development
Corporation.
5. Antennae Site License Agreement (Flour Bluff), dated as of March 6, 2007, by and
between EarthLink, Inc. and CC Digital Community unity Development Corporation.
6. Antennae Site License Agreement (Holly Road), dated as of March 6, 2007, by and
between EarthLink, Inc. and CC Digital Community Development Corporation.
7. Antennae Site License Agreement (0.N. Stevens), dated as of March 6, 2007, by and
between EarthLink, Inc. and CC Digital Community Development Corporation.
8. Antennae Site License Agreement (Savage Lane), dated as of March 6, 2007, by and
between EarthLink, Inc. and CC Digital Community Development Corporation.
9. One Year Franchise Agreement, dated as of March 6, 2007, between the City of Corpus
Christi, Texas and EarthLink, Inc.
10. Ten Year Franchise Agreement, dated as of March 6, 2007, between the City of Corpus
Christi, Texas and EarthLink, Inc.
Exhibit ' .5
Required Consents
1. Supply Agreement, dated as of March 29, 2007, between EarthLink, Inc. and
Alvarion Inc.
2. USA Supply Agreement, dated as of March 16, 2007, between EarthLink, Inc. and
Alcatel USA Marketing.
3. Supply Agreement between EarthLink, Inc, and Cisco Systems, Inc.
Exhibit 9.7(a)
Software on Purchased Assets
• Tropos Software (EMS) - software version: 6,5.1.4
• Cisco 15 versions (these versions are also listed in the asset list):
• Cisco Router (model 2811 ):located at City Hall -software version: c2 nm -
adv s ecurityl9 -m .12 - g. b in
• Cisco Router (model 7 :l sated at City Hall -software version: c 7 -
advipsery icesl9-m.122-2 , SED 1.bin
• Cisco Router (model 295 :located at Fleet -software version: c29 -i q l -m . l 1-
22.Aa.bin
• Cisco Router (model 7 :l sated at Fleet -software version: c 7-ipservices-m .122-
2 .SEE2.bin
▪ Cisco Router (model 2 11):located at Holly Pump -software version: c2 nm-ipbase-
,12- .in
▪ Cisco Router (model 2811):located at ON Stevens -software version: c2 nrn-i base-
m.12-g.bin
• Cisco Router (model 2811):located at Portofino -software version: c nm-ipbase-
Y ,12 - g,bin
▪ Cisco Router (model 2811 :located at Savage -software version: e2 on-ipbase-
,12- g,bin
• Alcatel (these versions are also listed in the asset list):
• Alcatel 7450 ESS -1 (located at Portafino) software version: 7450-TiMOS-4.0.R14
• Alcatel 7450 ESS -1: (located at Holly Pump) software version: 7450-TiMOS-4.0.R14
• Alcatel 7450 ESS -1: (located at Savage) software version: 7450 -Til S- . .R1{4
o Alcatel 7450 ESS -1: (located at ON Stevens) software version: 7450-TiMOS-4.0,R14
o Alcatel 7770 SR- l : (located at City Hall) software ware version: 7750-TiMOS-4.0.R9
o Alcatel 7770 SR -I : (located at City Hall) software version: 7750-TiM S- . .R9
• Dragonwave (loaded with firmware)
• Alvarion (loaded with firmware)
Exhibit 9.7(b)
Licensed SSIDs
FeatherSecure WPA1&2-1X (Non -Broadcast)
Seller Disclosure Schedule to Termination and Asset Transfer AgLeement
by and between
EarthLink, Inc.
and
City of Corpus Christi, Texas
and
CC Digital Community Development Corporation
April _, 2008
This Disclosure Schedule is qualified in its entirety by reference to specific provisions of
the Termination and Asset Transfer Agreement (the "Agreement"), and is not intended to
constitute, and shall not be construed as constituting, representations or warranties of Seller
except to the extent expressly provided in the Agreement. Matters reflected in this Seller
Disclosure Schedule are not necessarily limited to matters required by the Agreement to be
reflected in this Seller Disclosure Schedule. To the extent any such additional matters are
included, they are included for informational purposes only and do not necessarily include other
matters of a similar nature. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Agreement.
Headings and subheadings have been inserted herein for convenience of reference only
and shall to no extent have the effect of amending or changing the express description hereof as
set forth in the Agreement. Any item or matter disclosed in one section of this Seller Disclosure
Schedule shall be deemed to be a disclosure in another section or sections of this Seller
Disclosure Schedule so long as such disclosure is in sufficient detail to enable a Party to identify
the facts or items to which it applied.
Seller Disclosure Schedule 3.4
No Violation; Consent
Section 3.4(b)
1. Electricity Sales Agreement by and between EarthLink, Inc. and Reliant Energy effective
as of April 1, 2007.
2. Federal Communications Commission radio spectrim authorizations listed on
Exhibit 1.1(e).
3. Supply Agreement, dated as ofMarch 29, 2007, between EarthLirl, Inc. and
Alvarion Inc.
4. USA Supply Agreement, dated as of March 16, 2007, between EarthLink, Inc. and
Alcatel USA Marketing.
5. Master Services Agreement between EarthLink, Inc. and Cisco Systems, Inc.
Section 3.4(d)
See Schedule 3.4(b)
Seller Disclosure Schedule 3.6
Intellectual Proverb/
Section 3.6(c)
EarthLink has or will be granting a perpetual, fully paid-up, royalty free, worldwide, non -
revocable, transferable license to each purchaser of a network created by EarthLink with respect
to the provision of WiFi broadband Internet service using 802.11 protocol to subscribers in a
particular city related to (1) the network architecture installed by EarthLink in that city, (2) the
assets related exclusively to the network in that city that are purchased by such purchaser, and
certain SSIDs currently in use in that network and its configuration.
In addition, Seller has assigned or will be assigning to each purchaser of a network
created by EarthLink its rights with respect to the assets transferred for a particular network
pursuant to the following agreements:
• that certain Product Sales, Services and Support Agreement, dated as December
22, 2005, by and between EarthLink, Inc. and Motorola, Inc.
• that certain Supply Agreement, dated as of March 29, 2007, between EarthLink,
Inc. and Alvarion Inc.
• that certain Master Services Agreement between EarthLink, Inc, and Cisco
Systems, Inc.
• that certain Product Sales & Support Agreement, dated as of June 12, 2006,
between EarthLink, Inc. and DragonWave, Inc.
Seller Disclosure Schedule 3.7
Material Contracts
Section 3.7(a)
1. Electricity Sales Agreement by and between EarthLink, Inc. and Reliant Energy effective
as of April 1, 2007.