EXHIBIT 99.1
TERMINATION, MUTUAL RELEASE AND WAIVER AGREEMENT
THIS TERMINATION, MUTUAL RELEASE AND WAIVER AGREEMENT (this
"TERMINATION AND RELEASE") is made and entered into this 8th day of February,
2001 (the "EFFECTIVE DATE"), by and among SPRINT CORPORATION, a Kansas
corporation ("SPRINT"), SPRINT COMMUNICATIONS COMPANY L.P., a Delaware
limited partnership ("SPRINT L.P.", and together with Sprint, the "SPRINT
PARTIES"), and EARTHLINK, INC., a Delaware corporation ("EARTHLINK"), as
successor in interest to EarthLink Network, Inc., a Delaware corporation, and
Dolphin, Inc., a Delaware corporation. The Sprint Parties and their
respective Subsidiaries and EarthLink and its Subsidiaries may be referred to
herein individually as a "PARTY" and collectively as the "PARTIES".
W I T N E S S E T H:
WHEREAS, either or both of the Sprint Parties and EarthLink are
parties to certain Agreements relating to commercial arrangements between the
Sprint Parties and EarthLink and a strategic investment by the Sprint Parties
in equity securities of EarthLink (the "AGREEMENTS");
WHEREAS, the Sprint Parties and EarthLink desire to terminate the
Agreements set forth on EXHIBIT A to this Termination and Release (the
"TERMINATED AGREEMENTS"); and
WHEREAS, the Sprint Parties and EarthLink desire to release each
other from certain obligations, duties and liabilities arising under the
Terminated Agreements and to release each other from certain other specified
claims;
NOW THEREFORE, intending to be legally bound by this Termination and
Release, and in consideration of the premises, their respective agreements
here, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each of the Parties to this
Termination and Release, the Parties agree as follows:
SECTION 1. DEFINED TERMS
1.1 "MARKETING AND DISTRIBUTION AGREEMENTS" means, as further
defined and expanded on Exhibit A, the Original Marketing and Distribution
Agreement, the Amendment, the PCS Agreement, the ION Agreement, the MMDS
Agreement, the LTD Agreement (including SOWs #1, 2 and 3), and the MOU.
1.2 "PERSON" means any individual, corporation, partnership, limited
liability company, trust, unincorporated association or other entity.
1.3 "PRESERVED CLAIMS" means any and all obligations, debts,
demands, actions, causes of action, manners of action, suits, accounts, dues,
covenants, contracts, agreements, judgments, controversies, damages and any
and all claims, demands and liabilities whatsoever,
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both in law and at equity, known or unknown, that the Parties or any of their
Subsidiaries or successors and assigns have or may have as of the Effective
Date, may ever have had as of or before the Effective Date, or may have
hereafter, arising out of or relating to any actions, omissions, events or
circumstances occurring or existing on or before the Effective Date with
respect only to pending settlements of financial claims related to:
(a) the number of narrowband customers provided to EarthLink by
any of the Sprint Parties under any of the Marketing and
Distribution Agreements,
(b) the number of long distance customers provided to any of the
Sprint Parties by EarthLink under any of the Marketing and
Distribution Agreements,
(c) the number of customers of the Sprint Parties using broadband
or webhosting services of EarthLink as provided in any of the
Marketing and Distribution Agreements, and
1.4 "RELEASED CLAIMS" means the Terminated Agreement Released
Claims and the Specified Released Claims.
1.5 "SPECIFIED RELEASED CLAIMS" means any and all obligations,
debts, demands, actions, causes of action, manners of action, suits,
accounts, dues, covenants, contracts, agreements, judgments, controversies,
damages and any and all claims, demands and liabilities whatsoever, both in
law and at equity, known or unknown, that such Party or any of its
Subsidiaries or successors and assigns has or may have as of the Effective
Date, may ever have had as of or before the Effective Date, or may have
hereafter, arising out of or relating to any actions, omissions, events or
circumstances occurring or existing on or before the Effective Date with
respect to any of the matters set forth on EXHIBIT B to this Termination and
Release, except to the extent that such matters may be Preserved Claims.
1.6 "SUBSIDIARY" of any Person as of any relevant date means a
corporation, company or other entity (i) more than 50% of whose outstanding
shares or equity securities are, as of such date, owned or controlled,
directly or indirectly through one or more Subsidiaries, by such Person, and
the shares or securities so owned entitle such Person and/or its Subsidiaries
to elect at least a majority of the members of the board of directors or
other managing authority of such corporation, company or other entity
notwithstanding the vote of the holders of the remaining shares or equity
securities so entitled to vote or (ii) which does not have outstanding shares
or securities, as may be the case in a partnership, joint venture or
unincorporated association, but more than 50% of whose ownership interest is,
as of such date, owned or controlled, directly or indirectly through one or
more Subsidiaries, by such Person, and in which the ownership interest so
owned entitles such Person and/or Subsidiaries to make the decisions for such
corporation, company or other entity.
1.7 "TERMINATED AGREEMENT RELEASED CLAIMS" means any and all
obligations, debts, demands, actions, causes of action,
manners of action, suits, accounts, dues,
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covenants, contracts, agreements, judgments, controversies,
damages and any and all claims, demands and liabilities
whatsoever, both in law and at equity, known or unknown.
Such claims cover those that such Party or any of its
Subsidiaries or successors and assigns:
- has or may have as of the Effective Date,
- may ever have had as of or before the Effective Date, or
- may have hereafter.
In addition such claims must arise out of any actual or alleged breach of any
Terminated Agreement, including the inaccuracy of any representation and
warranty or the failure to perform any covenant or other agreement contained
in any Terminated Agreement, except to the extent that such matters may be
Preserved Claims. The term "Terminated Agreement Released Claims" does not
mean any causes of action, damages, claims and liabilities, both in law and
at equity, which are unknown to the harmed party as of the Effective Date,
for violations of non-disclosure or confidentiality obligations or
infringement or misappropriation of intellectual property arising out of or
under any of the Terminated Agreements. The claims described in the previous
sentence are not released by this Agreement.
SECTION 2. TERMINATED AGREEMENTS
2.1 Except as described in Sections 2.2 and 2.3, and subject to
Section 3.3, the Parties hereby terminate the Terminated Agreements, and
agree that the Terminated Agreements are now null and void and have no
further effect. Such termination is without any liability of any Party to any
other Party. As to the Marketing and Distribution Agreements, the Parties
expressly agree that such termination is by mutual consent and not a
termination under or as a result of Sections 24(b)(ii), 24(c), 24(d)(i) or
24(d)(ii) of the Original Marketing and Distribution Agreement.
2.2 To the extent that either EarthLink or the Sprint Parties is, as
of the Effective Date, conducting a marketing campaign that uses the
trademarks, service marks or logos (collectively, the "Marks") of the other,
then the license to use such Marks, as granted in the applicable Marketing
and Distribution Agreement, will survive termination under Section 2.1 for so
long as, and only for so long as, it is necessary for the Party conducting
the marketing campaign to orderly terminate the campaign or complete a
transition to another marketing campaign as agreed to by the Parties, for a
period of no greater than 6 months from the Effective Date.
2.3 All confidentiality obligations of the Terminated Agreements
will survive and remain in full force and effect for a period of two years
from the date of this agreement for all confidential information exchanged or
received during the terms of the respective Terminated Agreements.
SECTION 3. TERMINATED AGREEMENT RELEASED CLAIMS; PAYMENT OF
AMOUNTS DUE UNDER THE MARKETING AND DISTRIBUTION AGREEMENTS; MASTER SERVICES
AGREEMENT
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3.1 Subject to Section 3.3, each of the Sprint Parties (on behalf of
itself and each of its Subsidiaries) does hereby fully, irrevocably and
unconditionally remise, release and forever discharge EarthLink and each of
its Subsidiaries, and each of their respective successors, assigns,
directors, officers, employees and agents, of and from any and all Terminated
Agreement Released Claims, and waives any and all rights that it (or any of
its Subsidiaries) may have with respect to them.
3.2 Subject to Section 3.3, EarthLink (on behalf of itself and each
of its Subsidiaries) does hereby fully, irrevocably and unconditionally
remise, release and forever discharge the Sprint Parties and each of their
respective Subsidiaries, and each of their respective successors, assigns,
directors, officers, employees and agents, of and from any and all Terminated
Agreement Released Claims, and waives any and all rights that it (or any of
its Subsidiaries) may have with respect to them.
3.3 Notwithstanding the termination of the Marketing and
Distribution Agreements and the releases set forth in Sections 3.1 and 3.2,
for a period of no greater than 6 months from the Effective Date, all payment
obligations of either Party to the other Party under any of the Marketing and
Distribution Agreements on account of the other Party's performance prior to
the date hereof (including, without limitation, amounts payable for bounty
payments, services rendered, services provided, products supplied,
products delivered and development costs incurred) will be invoiced by the
appropriate Party to the other Party in the ordinary course of business in
accordance with the terms of the applicable Marketing and Distribution
Agreement, including the terms of any payment schedules pursuant thereto. The
continuing payment obligations under this Section 3.3 do not include fees set
forth in Section 24 of the Original Marketing and Distribution Agreement.
3.4 In consideration of the releases, terms, covenants and
conditions of this Agreement, the Sprint Parties will cause the appropriate
Subsidiary to pay to EarthLink within 5 business days of the date of this
Agreement, the amount of $390,922 in immediately available funds.
3.5 The Sprint Parties represent, warrant and covenant to EarthLink
that Sprint/United Management Company ("Sprint UMC") has, and shall retain
throughout the term of the Master Services Agreement between EarthLink and
Sprint UMC of even date with this Agreement (the "MSA"), all the rights and
authority to bind the Sprint Equity Affiliates (as defined in the MSA) to the
obligations set forth in the MSA, including without limitation, all
obligations related to customer ownership, marketing restrictions with
respect to customers, and the protection of confidential information..
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SECTION 4. SPECIFIED RELEASED CLAIMS
4.1 Except for the right to payment set forth in Section 3.3, each
of the Sprint Parties (on behalf of itself and each of its Subsidiaries) does
hereby fully, irrevocably and unconditionally remise, release and forever
discharge EarthLink and each of its Subsidiaries, and each of their
successors, assigns, directors, officers, employees and agents, of and from
any and all Specified Released Claims, and waives any and all rights that it
(or any of its Subsidiaries) may have with respect to them.
4.2 Except for the right to payment set forth in Section 3.3 and
3.4, EarthLink (on behalf of itself and each of its Subsidiaries) does hereby
fully, irrevocably and unconditionally remise, release and forever discharge
the Sprint Parties and each of their respective Subsidiaries, and each of
their successors, assigns, directors, officers, employees and agents, of and
from any and all Specified Released Claims, and waives any and all rights
that it (or any of its Subsidiaries) may have with respect to them.
SECTION 5. PARTIES' UNDERSTANDINGS, REPRESENTATIONS AND WARRANTIES
5.1 NO ACTIONS. The Parties warrant one to the other that they have
not commenced any action or proceeding against any other Party concerning the
Released Claims, before any agency or other governmental authority, at law,
in equity, in arbitration, or otherwise.
5.2 POWER AND AUTHORITY. Each Party warrants that it has the
requisite power and authority to enter into this Termination and Release on
behalf of its Subsidiaries, successors and assigns, and to perform according
to the terms of this Termination and Release.
5.3 DUE INCORPORATION OR FORMATION; AUTHORIZATION OF AGREEMENTS;
REGULATORY. Each Party represents for itself that: (1) the Party is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (2) the Party has the full power and
authority to execute and deliver this Termination and Release and to perform
its obligations under this Termination and Release; and (3) the Party has
made and obtained all necessary regulatory filings and approvals to perform
its obligations under this Termination and Release.
5.4 NO CONFLICT; NO DEFAULT. Each Party represents for itself that
neither the execution, delivery and performance of this Termination and
Release nor the consummation by the Party of the transactions contemplated in
this Termination and Release will conflict with, violate or result in a
breach of:
(a) any law, regulation, order, writ, injunction, decree,
determination or award of any governmental authority or any arbitrator,
applicable to the Party, or
(b) any of the terms, conditions or provisions of the
certificate of limited partnership or certificate or articles of
incorporation or bylaws (or other governing documents) of
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the Party, or
(c) any material agreement of the Party, or
(d) any material instrument to which the Party is or may be
bound or to which any of its material properties or assets is subject.
5.5 LITIGATION. Each Party represents for itself that there are no
actions, suits, proceedings or investigations pending or, to the knowledge of
the Party, threatened against or affecting the Party or any of its
properties, assets or businesses in any court or before or by any
governmental agency which could, if adversely determined, reasonably be
expected to have a material adverse effect on the Party's ability to perform
its obligations under this Termination and Release.
5.6 NO ASSIGNMENT OF CLAIMS. Each Party warrants that it has not
made any partial or full assignment or other transfer to any person or entity
of any of the Released Claims.
5.7 REPRESENTED BY ATTORNEYS. Each Party warrants that it has been
represented by attorneys of its choice throughout the negotiations that
preceded the execution of this Termination and Release. Each Party was
involved in preparing this Termination and Release.
SECTION 6. COVENANTS AND OTHER GENERAL PROVISIONS
6.1 NO FURTHER ACTIONS. No Party will commence, aid in any way,
prosecute or cause or permit to be commenced or prosecuted against any other
Party, any action or other proceeding arising under or relating to the
Released Claims. Nothing in this paragraph will prohibit any Party from
disclosing information in its possession as may be required by law, including
under any court or government order, subpoena, or decree.
6.2 CONTRACT. The Parties understand that the terms in this
Termination and Release are contractual and not a mere recital, and that the
Parties are not relying upon any statement or representation made by any
Party released, any such Party's agents or attorneys, or any other Person,
concerning the nature, extent or duration of the injuries and/or damages, or
concerning any other thing or matter, but are relying solely and exclusively
upon their own knowledge, belief and judgment.
6.3 NO ADMISSION. It is expressly understood and agreed that this
Termination and Release is a compromise of disputed claims and that execution
of, making of payments under, and performing of obligations under this
Termination and Release are not to be construed as an admission of liability
on the part of any Party.
6.4 EXPENSES. The Parties will pay their own expenses and attorneys'
fees incurred in connection with the negotiation and execution of this
Termination and Release.
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6.5 ADDITIONAL FACTS. The Parties are aware that they may after the
date of this Termination and Release discover claims or facts in addition to
or different from those they now know or believe to be true with respect to
Released Claims. Nevertheless, it is the intention of the Parties to fully,
finally and forever settle and release all such claims, including claims for
damages and losses that are presently unknown or unanticipated. In
furtherance of such intention, the releases given in this Termination and
Release are and will remain in effect as full and complete mutual releases of
Released Claims, notwithstanding the discovery or existence of any additional
or different facts relative to them. In executing this Termination and
Release and furnishing the releases set forth in this Termination and
Release, each Party assumes the risk of any mistake. Without limiting the
generality of the foregoing, each Party waives and relinquishes any right or
benefit, which such Party has or may have under any provision of statutory or
non-statutory law, which may provide that a release does not extend to claims
which a person does not know or suspect to exist at the time of execution of
the release which, if known, would or may have materially affected the
decision to give the release.
6.6 WAIVERS. No waiver by a Party of any breach of or default under
this Termination and Release will be deemed to be a waiver of any other
breach or default of any kind or nature of this Termination and Release. No
acceptance of payment or performance by a Party after any such breach or
default will be deemed to be a waiver of any breach or default of this
Termination and Release, whether or not such Party knows of such breach or
default at the time it accepts such payment or performance. No failure or
delay on the part of a Party to exercise any right it may have will prevent
the exercise of that right by that Party at any time the other Party
continues to be in default, and no such failure or delay will operate as a
waiver of any default.
6.7 INJUNCTIVE RELIEF. Each Party acknowledges and agrees that in
the event of any breach of this Termination and Release, the non-breaching
Party or Parties may be irreparably harmed and may not be made whole by
monetary damages. Accordingly, the Parties, in addition to any other remedy
to which they may be entitled, to the extent permitted by applicable law,
will be entitled to seek injunctive or other equitable relief in aid of
arbitration in any court of competent jurisdiction.
6.8 GOVERNING LAW. This Termination and Release will be interpreted
in accordance with the laws of the State of Delaware without reference to the
conflicts of laws principles of any jurisdiction.
6.9 AMENDMENTS. This Termination and Release may be modified or
amended only by a written amendment signed by each of the Parties affected by
the amendment.
6.10 ASSIGNMENT. No Party may assign any of its rights under this
Termination and Release or delegate its duties under it to any person or
entity not a Party unless it obtains the prior written consent of the other
Parties to this Termination and Release, which consent may be withheld at
such Party's absolute discretion.
6.11 LIMITATION ON RIGHTS OF OTHERS. Nothing in this Termination and
Release,
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whether express or implied, will be construed to give any person other than
the Parties any legal or equitable right, remedy or claim under or in respect
of this Termination and Release.
6.12 ENTIRE AGREEMENT. This Termination and Release, together with
the Exhibits A through B, constitutes the entire agreement between the
Parties with respect to the subject matter in this Termination and Release.
6.13 COUNTERPARTS. This Termination and Release may be signed in
counterpart or duplicate copy and by facsimile signature, and any signed
counterpart, duplicate or facsimile copy is the equivalent to a signed
original for all purposes.
6.14 BINDING EFFECT. Except as otherwise provided in this
Termination and Release, this Termination and Release will be binding upon
and inure to the benefit of the Parties and their respective successors and
assigns.
6.15 CONSTRUCTION. This Termination and Release will be construed
simply according to its fair meaning and not strictly for or against any
Party.
6.16 SEVERABILITY. Every provision of this Termination and Release
is intended to be severable. If any term or provision of this Termination and
Release is illegal, invalid or unenforceable for any reason whatsoever, that
term or provision will be enforced to the maximum extent permissible so as to
effect the intent of the Parties, and such illegality, invalidity or
unenforceability will not affect the validity, legality or enforceability of
the remainder of this Termination and Release. If necessary to effect the
intent of the Parties to this Termination and Release, the Parties will
negotiate in good faith to amend this Termination and Release to replace the
unenforceable language with enforceable language, which as closely as
possible reflects such intent.
6.17 CONFIDENTIALITY; PUBLICITY. The terms and provisions of this
Termination and Release are confidential and proprietary to the Sprint
Parties and to EarthLink. Except for legally-mandated disclosures relating to
this Termination and Release, any news releases, public announcements or
other disclosures relating to this Termination and Release or its terms, must
be mutually agreed to in writing by the Parties.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, each of the Parties has duly executed this
Termination and Release, on its own behalf and on behalf of each of its
Subsidiaries as of the Effective Date.
SPRINT CORPORATION
By: /s/
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Name:
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Title:
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SPRINT COMMUNICATIONS COMPANY L.P.
By: /s/
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Name:
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Title:
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EARTHLINK, INC.
By: /s/
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Name:
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Title:
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Exhibits omitted but will be provided upon request.