Exhibit
10.1


 


Execution
Copy


 


 




 





 


CONTRIBUTION AGREEMENT


 


AMONG


 


HELIO LLC


 


HELIO, INC. 

(for purposes of Section 2.1.1, Article IV and Section 7.16
only)


 


SK TELECOM USA HOLDINGS, INC.


 


AND


 


EARTHLINK, INC.


 


Dated as of November 7, 2007


 




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Certain Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Other Terms

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  CONTRIBUTIONS

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.1A

  	
  SKT Note Purchase

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Management Company and Operating Company

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  SKT Holdings Contributions

  	
  6

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Closing

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS AND WARRANTIES

  	
  7

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Representations and Warranties of the Operating
  Company

  	
  7

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Representations and Warranties of SKT Holdings

  	
  11

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Representations and Warranties of EarthLink

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CERTAIN COVENANTS AND AGREEMENTS

  	
  13

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Conduct of Business

  	
  13

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Registrations, Filings and Consents

  	
  15

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Transfer Taxes

  	
  15

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Further Assurances

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  CONDITIONS TO SKT Note Purchase and CLOSING

  	
  16

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Conditions to SKT Holdings’ Obligation to Effect the
  SKT Note Purchase

  	
  16

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Conditions to Each Party’s Obligation to Effect the
  Closing

  	
  16

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Conditions to Obligation of EarthLink and Operating
  Company

  	
  17

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Conditions to Obligations of SKT Holdings

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  TERMINATION

  	
  18

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Termination

  	
  18

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Effect of Termination

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  MISCELLANEOUS

  	
  19

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Entire Agreement; Amendment and Waiver

  	
  19

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Expenses

  	
  19

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  Public Disclosure

  	
  19

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Assignment

  	
  20

  



 


i

















 


	
  7.5

  	
  Fulfillment of Obligations

  	
  20

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  Third Party Beneficiaries

  	
  20

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  Counterparts

  	
  20

  
	
   

  	
   

  	
   

  
	
  7.8

  	
  Section Headings

  	
  20

  
	
   

  	
   

  	
   

  
	
  7.9

  	
  Notices

  	
  20

  
	
   

  	
   

  	
   

  
	
  7.10

  	
  Governing Law

  	
  22

  
	
   

  	
   

  	
   

  
	
  7.11

  	
  Survival of Representations, Warranties and
  Covenants

  	
  22

  
	
   

  	
   

  	
   

  
	
  7.12

  	
  Dispute Resolution

  	
  22

  
	
   

  	
   

  	
   

  
	
  7.13

  	
  Severability

  	
  24

  
	
   

  	
   

  	
   

  
	
  7.14

  	
  No Personal Liability

  	
  24

  
	
   

  	
   

  	
   

  
	
  7.15

  	
  Further Assurances

  	
  25

  
	
   

  	
   

  	
   

  
	
  7.16

  	
  Amendment of Note Purchase and Security Agreement
  and Guaranty

  	
  25

  



 


EXHIBITS AND SCHEDULES


 


	
  Exhibit
  A

  	
  Form of Brand License and
  Marketing Agreement

  
	
  Exhibit
  B

  	
  Form of Operating Company
  Agreement

  
	
  Exhibit
  C

  	
  Form of Stockholders’
  Agreement

  
	
  Exhibit
  D

  	
  Form of Certificate of
  Incorporation of Management Company

  
	
  Exhibit
  E

  	
  Form of Additional Note

  
	
  Exhibit
  F-1

  	
  Form of SKT Secured
  Exchangeable Promissory Note

  
	
  Exhibit F-2

  	
  Form of EarthLink Secured Exchangeable Promissory
  Note

  
	
   

  	
   

  
	
  Schedule
  3.1.4

  	
  Capitalization
  Summary

  
	
  Schedule
  3.1.10

  	
  Intellectual Property

  
	
  Schedule
  3.1.11

  	
  Litigation

  
	
  Schedule
  3.1.14

  	
  Taxes

  
			



 


ii

















 


THIS CONTRIBUTION AGREEMENT (this “Agreement”), dated as of November 7, 2007, is among HELIO LLC, a Delaware limited
liability company (“Operating Company”),
SK
Telecom USA Holdings, Inc., a
Delaware corporation (“SKT Holdings”), EarthLink, Inc., a Delaware corporation (“EarthLink”) and, for purposes of Section 2.1.1,  Article IV and Section 7.16 only,
HELIO, Inc., a Delaware corporation (“Management
Company”).


 


WHEREAS, in March 2005 SKT, SKT Holdings and EarthLink entered into a joint venture for the purpose of
developing and marketing branded wireless telecommunications services conducted
through the Operating Company;


 


WHEREAS, the Operating Company is managed by Management Company;


 


WHEREAS, the Parties are entering into this Agreement to set forth their
agreement as to the SKT Holdings Contribution
and the conditions to such contribution;


 


WHEREAS, in connection with the closing of the transactions contemplated by
this Agreement, (i) SKT Holdings, EarthLink and
Operating Company will be amending and restating the Operating Company
Agreement, (ii) SK Telecom Co., Ltd. (“SKT”), EarthLink and the Management Company will be amending and restating
the Stockholders’ Agreement, (iii) the Management Company will be amending and
restating the Certificate of Incorporation and (iv) SKT, EarthLink and the
Operating Company will be amending and restating the Brand License and
Marketing Agreement, all in accordance with the terms hereof; and


 


WHEREAS, the Parties intend that, for federal income tax purposes, the SKT Holdings Contribution shall qualify as a transfer of
assets under the provisions of Section 721 of the Internal Revenue Code of
1986, as amended (the “Code”);


 


NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and undertakings contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:


 


ARTICLE I

DEFINITIONS


 


1.1          Certain Definitions.
As used in this Agreement, the following terms shall have the respective
meanings set forth below:


 


“Additional
Membership Units” shall have
the meaning set forth in Section 2.1.2.


 


“Additional
Note” shall have the meaning
set forth in Section 2.7.


 


“Affiliates” shall mean with respect to any
Person, any Person directly or indirectly Controlling, Controlled by, or under
common Control with such other Person at any time during the period for which
the determination of affiliation is being made.


 

















 


“Agreement” shall mean this Contribution
Agreement, the Schedules hereto, and the Exhibits hereto, as the same may be
amended or supplemented from time to time in accordance with the terms hereof.


 


“Ancillary Agreements” shall mean,
collectively, the Operating Company Agreement, the Brand License and Marketing
Agreement and the Stockholders’ Agreement.


 


“Bankruptcy and Equity Exception” shall have
the meaning set forth in Section 3.1.5.


 


“Brand License and Marketing Agreement” shall mean that certain Second Amended and
Restated Brand License and Marketing Agreement among EarthLink, SKT and
Operating Company, substantially in the form of Exhibit A attached hereto.


 


“Business Day” shall mean any day other than
a Saturday, a Sunday or a day on which banks in New York City are authorized or
obligated by law or executive order to close.


 


“Certificate of Incorporation” shall have
the meaning set forth in Section 2.1.1.


 


“Closing” shall have the meaning set forth
in Section 2.3.1.


 


“Closing Date” shall have the meaning set
forth in Section 2.3.1.


 


“Code” shall have the meaning set forth in
the Recitals.


 


“Confidential Information” shall have the
meaning set forth in Section 3.1.10(c).


 


“Contracts” shall mean all agreements,
contracts, leases and subleases, purchase orders, arrangements, commitments,
non-governmental licenses, notes, mortgages, indentures or other obligations.


 


“Control” as used with respect to any
Entity, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of management policies of such Entity through the
ownership of voting securities or by Contract.


 


“CPR”
shall have the meaning set forth in Section
7.12.2.


 


“Document Escrow Agent” shall mean Baker
& McKenzie LLP, counsel to SKT Holdings.


 


“EarthLink” shall have the meaning set forth
in the Preamble.


 


“Encumbrances” shall mean liens, charges,
encumbrances, pledges, security interests, options, or any other restrictions
or third party rights.


 


“Entity” shall mean any corporation, firm,
unincorporated organization, association, partnership, limited partnership,
limited liability company, limited liability partnership, business trust, joint
stock company, joint venture organization, entity or business.


 


2

















 


“Environmental Laws” shall have the meaning set forth in Section 3.1.20.


 


“FCC
Approval” shall have the
meaning set forth in Section 5.1.1.


 


“Final Order” shall have the meaning set
forth in Section 5.1.1.


 


“Financial Statements” shall have the
meaning set forth in Section 3.1.6.


 


“GAAP” shall have the
meaning set forth in Section 3.1.6.


 


“Governmental Entity” shall mean any
governmental or regulatory authority, court, agency, commission, body or other
similar entity.


 


“Governmental Filings” shall mean the SKT Holdings Governmental Filings, the EarthLink
Governmental Filings and any notices, reports or other filings required to be
made by the Operating Company or its Subsidiaries with, or any consents,
registrations, approvals, permits or authorizations required to be obtained by
the Operating Company or its Subsidiaries from, any Governmental Entity in
connection with the execution and delivery of this Agreement


 


“ICC” shall have the meaning set forth in Section 7.12.3.


 


“Intellectual Property”
shall have the meaning set forth in Section
3.1.10(a).


 


“knowledge”, “knowledge of the Operating Company” or
similar expressions shall mean the actual knowledge of the Chief Executuive
Officer, the Chief Operating Officer, or the Chief Financial Officer
of the Operating Company.


 


“Laws”
shall mean any federal, state, local or foreign law, statute, ordinance,
regulation, judgment, order, decree, injunction, arbitration award, franchise,
license, authorization, opinion, agency requirement or permit of any
Governmental Entity or common law.


 


“Management Company” shall have the meaning
set forth in the Recitals.


 


“Material Adverse Effect”  shall mean, (i) with respect to SKT Holdings, a material adverse change in the financial
condition, properties, business or results of operations of SKT Holdings and their respective Subsidiaries taken as a
whole that has had or is reasonably likely to have a material adverse effect on
the performance of its obligations under this Agreement or any Ancillary
Agreement to which it is a party or on
Operating Company or Management Company, an event that would prevent,
materially delay or materially impair SKT Holdings’ ability to consummate the transactions contemplated by this
Agreement; or an event that would prevent the performance by SKT Holdings of any material obligation under this
Agreement or any Ancillary Agreement; (ii) with respect to EarthLink, a
material adverse change in the financial condition, properties, business or
results of operations of EarthLink and its Subsidiaries taken as a whole that
has had or is reasonably likely to have a material adverse effect on its
performance of its obligations under this Agreement or any Ancillary Agreement
or on Operating Company or Management Company; an event that would prevent,
materially delay or materially impair EarthLink’s ability to consummate the
transactions contemplated by this 


 


3

















 


Agreement;
or an event that would prevent the performance by EarthLink of any material obligation
under this Agreement or any Ancillary Agreement; and (iii) with respect to
Operating Company or Management Company, a material adverse effect on the
financial condition, properties, or results of operations of Operating Company
and Management Company, taken together as a whole, assuming for such purposes
the completion of the transactions contemplated hereunder in each case.


 


“Material Agreements”
means any agreement or other commitment for capital expenditures, notes,
mortgages, or indentures, whether written or oral, to which the Operating
Company has agreed or otherwise committed and which has a value in excess
(individually or in the aggregate) of US$5,000,000 (excluding any agreement or
other commitment between the Operating Company and SKT Holdings or an Affiliate
of SKT).


 


“Membership Unit” shall have the meaning
ascribed to such term in the Operating Company Agreement.


 


“Note” shall have the meaning set forth in Section 2.2.


 


“Note Purchase Date” shall have the meaning
set forth in Section 2.1A.


 


“Obligations” shall have the meaning set forth in Section
7.14.


 


“Operating Company” shall have the meaning
set forth in the Preamble.


 


“Operating Company Agreement” shall mean the
Second Amended and Restated Limited Liability Company Agreement of Operating
Company, by and among SKT Holdings, EarthLink and Management Company substantially in the form attached
hereto as Exhibit B.


 


“Order” shall have the meaning set forth in Section 5.1.2.


 


“Parties” shall mean collectively EarthLink,
Operating Company, SKT Holdings, and “Party” shall mean each of EarthLink, Operating Company, and SKT Holdings.


 


“Person” shall mean any natural person or
Entity.


 


“SKT”
shall have the meaning set forth in the Preamble.


 


“SKT Holdings
Contribution” shall have the meaning set forth in Section 2.2.


 


 “SKT
Holdings” shall have the meaning set forth in the Preamble.


 


“SKT Note
Purchase” shall have the
meaning set forth in Section 2.1A.


 


“Stockholders’ Agreement” shall mean the
Amended and Restated Stockholders’ Agreement to be entered into at Closing by
and among SKT, EarthLink and Management Company, substantially in the form set
forth in Exhibit C.


 


4

















 


“Subsidiary” shall mean, as to any Person,
any Entity (i) of which such Person, directly or indirectly, owns securities or
other equity interests representing fifty percent (50%) or more of the
aggregate voting power or (ii) of which such Person possesses the right to
elect fifty percent (50%) or more of the directors or Persons holding similar
positions. The Operating Company shall be deemed to be a Subsidiary of the
Management Company.


 


“Taxes” shall mean all federal, state, local
and foreign income, profits, franchise, gross receipts, environmental, customs
duty, capital stock, severance, stamp, payroll, sales, employment,
unemployment, disability, use, property, withholding, excise, production, value
added, occupancy and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such penalties and
additions.


 


“Tax Returns”
shall have the meaning set forth in Section 3.1.14.


 


“Termination Date” shall have the meaning
set forth in Section 6.1.


 


“Transfer Taxes” shall mean all federal,
state, local or foreign sales, use, value added, documentary, stamp or similar
Taxes that may be imposed in connection with the transfers contemplated by this
Agreement, together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such penalties and
additions.


 


1.2          Other Terms. Other
terms may be defined elsewhere in this Agreement and, unless otherwise
indicated, shall have such meaning throughout this Agreement.


 


ARTICLE II

CONTRIBUTIONS


 


2.1A       SKT Note Purchase.


 


On the terms and subject to the conditions
set forth herein, as soon as practicable following the date hereof but
no later than November 12, 2007 (the “Note Purchase Date”), SKT Holdings
shall purchase
a $40,000,000 Secured Promissory Note (the
“Additional Note”) from the
Operating Company in substantially the form attached hereto as Exhibit E. Such
purchase of the Additional Note is herein collectively referred to as the “SKT Note Purchase”.


 


2.1          Management Company and Operating Company.


 


2.1.1       Organizational Documents. Prior to the Closing, Management Company shall file a second
amended and restated certificate of incorporation of Management Company
substantially in the form attached hereto as Exhibit D
(the “Certificate of Incorporation”) with the
Secretary of State of the State of Delaware. At the Note Purchase Date,
EarthLink, Management Company and Operating Company shall each execute all
Ancillary Documents to which it is a party and deposit such executed Ancillary
Documents in escrow with the Document Escrow Agent to be held until released as
follows: (i) the executed Ancillary Documents shall be automatically released
to SKT Holdings upon the satisfaction or waiver of the conditions contained in Section 5.2 and Section 5.3, or
(ii) the executed Ancillary 


 


5

















 


Documents
shall be automatically released and returned to the EarthLink, Operating
Company and Management Company, as applicable, upon a termination of this Agreement
pursuant to Section 6.1.


 


2.1.2       Membership
Units. At the Closing, in exchange for the SKT Holdings Contribution (as described in Section 2.2 below), the Operating Company shall issue to SKT Holdings 23,333,333
Preferred Membership Units plus such number of Preferred Membership Units that will become issuable
to SKT Holdings for the accrued and unpaid interest in respect of the Note and
the Additional Note as at the Closing Date in accordance with the terms and
conditions thereof (the “Additional Membership
Units”).


 


2.2          SKT
Holdings Contributions. On
the terms and subject to the conditions set forth herein, at the Closing, SKT Holdings shall exchange each of (i) the Additional Note and (ii) the $30,000,000
Secured Promissory Note from the Operating Company to SKT Holdings, dated September 21, 2007 (the “Note”) and, in each case, the accrued and unpaid
interest thereon as at the Closing Date for Preferred Membership Units
of the Operating Company. Such exchange
of the Note and the Additional Note are
herein collectively referred to as the “SKT Holdings
Contribution”.


 


2.3          Closing.


 


2.3.1       Time and Location of Closing. The
consummation of the transactions contemplated hereby (the “Closing”)
shall take place at 600 Peachtree Street, Atlanta, Georgia, as promptly as is
practicable on the first Business Day following the day on which the conditions
set forth in Article V hereof have been
satisfied or are duly waived (other than those conditions that by their nature
are to be satisfied at the Closing, but subject to the satisfaction or waiver
of those conditions), or at such other time and place as the Parties may
mutually agree. The date on which the Closing occurs is called the “Closing Date.”


 


2.3.2       Closing Deliveries. At
the Closing:


 


(a)           SKT Holdings shall exchange the Additional Note for
Preferred Membership Units of the Operating Company;


 


(b)           SKT Holdings shall
exchange the Note for Preferred Membership Units of Operating Company;


 


(c)           The Operating Company shall issue the Membership Units in
the amounts specified in Section 2.1.2,
free and clear of all Encumbrances, other than those Encumbrances contained in
the Operating Company Agreement; and


 


(d)           Operating Company and EarthLink shall cause to be delivered the documents set forth in Sections 5.1 and 5.4, and SKT
Holdings shall cause to be delivered the documents set forth in Section 5.3.


 


6

















 


ARTICLE III

REPRESENTATIONS AND WARRANTIES


 


3.1          Representations
and Warranties of the Operating Company. Except as set forth
on the Schedules referenced in this Section 3,
the Operating Company represents and warrants to SKT Holdings as follows:


 


3.1.1       Organization and Standing; Operating Company Agreement.
The Operating Company is a limited liability company duly organized and
existing, and is in good standing, under the laws of the State of Delaware. The
Operating Company has the requisite limited liability company power and
authority to own and operate its properties and assets, and to carry on its
business as presently conducted and as proposed to be conducted.


 


3.1.2       Limited Liability Company Power. The Operating Company will have on the Closing Date
all requisite legal and limited liability company power and authority to execute and deliver this Agreement,
to issue the Additional Membership Units to SKT Holdings (or, at SKT Holding’s
election, to a Subsidiary of SKT Holdings) in accordance with the Operating
Company Agreement, and to carry out and perform its obligations under the terms
of this Agreement.


 


3.1.3       Subsidiaries. Except
for Management Company, SKT, SKT Holdings, SK Telecom International, Inc. and
EarthLink, the Operating Company has no subsidiaries or affiliated companies
and does not otherwise own or control, directly or indirectly, any equity
interest in any Entity; provided that the Operating Company or Management
Company may hold warrants or equity interests in in other Entities issued in
the course of business transactions.


 


3.1.4       Capitalization.


 


(a)           As of October 31, 2007, the capital
of the Operating Company consists of One Hundred Five Million Five Hundred
Fifty-Eight Thousand Eight Hundred Twenty-Seven (105,558,827) Membership Units
of which (i) Five Million Five Hundred Fifty-Eight Thousand Eight Hundred
Twenty-Seven (5,558,827) Common Membership Units are currently issued and
outstanding, fully paid and nonassessable; (ii) 
One Hundred Million (100,000,000) Preferred Membership Units are issued
and outstanding, fully paid and nonassessable; and (iii) the Additional
Membership Units are being issued at the Closing and immediately thereafter
will be issued and outstanding, fully paid and nonassessable and will be held
by SKT Holdings.


 


Except with respect to options, warrants, exchangeable
promissory notes and other similar securities reflected on Schedule 3.1.4, there are no outstanding
warrants, options, agreements, convertible securities or other commitments
pursuant to which the Operating Company is or may become obligated to issue any
Membership Units or other securities other than pursuant to the transaction
contemplated by this Agreement. There are no preemptive or similar rights to
purchase or otherwise acquire Membership Units of the Operating Company from
the Operating Company pursuant to any provision of law, or, except as set forth
in the Operating Company Agreement as amended to date, any agreement to which
the 


 


7

















 


Operating Company is a party, and (except as set forth in the
Operating Company Agreement) there is no agreement, restriction or encumbrance
with respect to the sale or voting of any Membership Units of the Operating
Company (whether outstanding or issuable upon conversion or exercise of
outstanding securities). Except as set forth in the Operating Company
Agreement, the Operating Company has no obligation (contingent or otherwise) to
purchase, redeem, or otherwise acquire any of its equity securities or any
interest therein or to pay any dividend or make any other distribution in
respect thereof. All of the issued and outstanding Membership Units of the
Operating Company have been offered, issued and sold by the Operating Company
in compliance with applicable federal and state securities laws.


 


(b)           As of October 31, 2007, the
authorized share capital of the Management Company consists of Two Hundred
Million Four (200,000,004) shares of capital stock of which (i) One Hundred
Eighty Million Two (180,000,002) shares are authorized as Class A Common Stock,
par value $0.01 per share, Five Million Five Hundred Fifty-Eight Thousand Eight
Hundred Twenty-Five (5,558,825) of which are currently issued and outstanding,
fully paid and nonassessable, Eight Million Two Hundred Thirty Thousand One
Hundred Twenty-Five (8,230,125) of which are issuable upon exercise of options
granted to employees or others, Five Million Eight Hundred Ninety Thousand
Eight Hundred Twenty-Five (5,890,825) of which are reserved for issuance upon
exercise of options issuable to employees or others pusuant to Management
Company’s equity incentive plans, Six Million Three Hundred Thirteen Thousand
Eight Hundred Eighty-Three (6,313,883) of which are issuable upon exercise of
warrants granted by the Management Company and One Hundred Million Two
(100,000,002) of which are reserved for issuance upon exchange of the
Membership Units held by SKT Holdings and EarthLink, and (ii) Two (2) shares
are authorized as Class B Common Stock, par value $0.01 per share, Two (2) of
which are currently issued and outstanding, fully paid and nonassessable.


 


Except with respect to options, warrants, exchangeable
promissory notes and other similar securities reflected on Schedule 3.1.4, there are no warrants,
options, agreements, convertible securities or other commitments pursuant to
which the Management Company is or may become obligated to issue any share
capital or other securities other than pursuant to the transaction contemplated
by this Agreement. Except with respect to exchangeable promissory notes, the
number of shares, if any, issuable in connection with the securities described
in the immediately preceding sentence is not subject to adjustment by reason of
the issuance of the Membership Units hereunder or the issuance of the Class A
Common Stock upon exchange of such Membership Units. There are no preemptive or
similar rights to purchase or otherwise acquire share capital of the Management
Company from the Management Company pursuant to any provision of law, the
Certificate of Incorporation as amended to date, the Bylaws of the Management
Company or, except as set forth in the Stockholders’ Agreement, any agreement
to which the Management Company is a party, and (except as set forth in the
Certificate of Incorporation and the Stockholders’ Agreement) there is no
agreement, restriction or encumbrance with respect to the sale or voting of any
share capital of the Management Company (whether outstanding or issuable upon
conversion, exchange or exercise of outstanding securities). Except as set
forth in the Certificate of Incorporation, the Management Company has no
obligation (contingent or otherwise) to purchase, redeem, or otherwise acquire
any of its equity securities or any interest therein or to pay any dividend or
make any other distribution in respect thereof. Except with respect to warrants
issued to SKT or SKT Holdings, all of the 


 


8

















 


issued and outstanding shares of capital stock of the
Management Company have been offered, issued and sold by the Management Company
in compliance with applicable federal and state securities laws.


 


3.1.5       Authorization. All limited
liability company action on the part of the Operating Company and the
Management Company necessary for the authorization, execution, delivery and
performance of this Agreement by the Operating Company, the authorization,
sale, issuance and delivery of the Preferred Membership Units, and the
performance of all of the Operating Company’s obligations hereunder shall have
been taken prior to the Closing. This Agreement, when executed and delivered by
the Operating Company, shall constitute a valid and binding obligation of the
Operating Company, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles (the “Bankruptcy and Equity
Exception”). This Agreement has been
duly authorized by all requisite limited liability company action. Without
limiting the generality of the foregoing, the Operating Company shall have
given all requisite notice to (or has obtained a valid waiver of such notice
from) and shall have obtained all material requisite consents to the
transactions contemplated by this Agreement. The Membership Units, when issued
in compliance with the provisions of this Agreement, will be validly issued,
fully paid and nonassessable and will have the rights, preferences, privileges
and restrictions described in the Operating Company Agreement.


 


3.1.6       Financial Statements. The audited combined balance sheets of the Operating
Company and Management Company as of December 31, 2006 and 2005, the statements
of operations and cash flows as of and for the period ended December 31, 2006
and the period January 25, 2005 (inception) to December 31, 2005 (the “Audited Financial Statements”), an unaudited combined
balance sheet for the Operating Company and Management Company as of September
30, 2007 and the unaudited statements of operations and cash flows as of and
for the nine months ended September 30, 2007 (the “Unaudited
Financial Statements”) have been provided to SKT Holdings. The
Audited Financial Statements present fairly, in all material respects, the
combined financial position of the Operating Company and Management Company at
December 31, 2006 and 2005, and the combined results of its operations and its
cash flows for the year ended December 31, 2006, and for the period January 27,
2005 (inception) through December 31, 2005 in conformity with U.S. generally
accepted accounting principles applied on a consistent basis. Unless previously
communicated to SKT in writing, the Unaudited Financial Statements have been
prepared on a basis consistent with the preparation of the Audited Financial
Statements, except that the Unaudited Financial Statements do not contain
footnotes and have not been audited by a third party accounting firm.


 


3.1.7       Absence of Changes. Since September 30, 2007, no Material Adverse Effect has
occurred.


 


3.1.8       Material Liabilities. Except as set
forth in the Financial Statements and liabilities that have arisen since
September 30, 2007 in the ordinary course of business (such as inventory
purchases, marketing expenditures and carrier costs) or that would not result
in a Material Adverse Effect on the Operating Company, to the knowledge of the
Operating Company, it has no liabilities or obligations, absolute or contingent
(individually or in 


 


9

















 


the aggregate, matured or unmatured, fixed or
contingent) of a type required to be reflected as liabilities on a balance
sheet prepared in accordance with U.S. generally accepted accounting
principles.


 


3.1.9       Compliance with Other Instruments, None Burdensome, etc. Unless otherwise disclosed to SKT Holdings or SKT in
writing or orally at a meeting of the Board of Directors of Management Company,
to Operating Company’s knowledge, the Operating Company is not in violation or
breach of, or in default under, any term of the Operating Company Agreement, or
to the Operating Company’s knowledge, in any material respect, of any term or
provision of any mortgage, indebtedness, indenture, Contract, agreement,
instrument, judgment or decree, the violation of which would have a Material
Adverse Effect on the combined financial results of the Operating Company and
Management Company and, to the Operating Company’s knowledge, it is not in
violation of any order, statute, rule or regulation applicable to the Operating
Company, the violation of which would have a Material Adverse Effect on the
Operating Company. The execution, delivery and performance of and compliance
with this Agreement and the issuance of the Membership Units have not resulted
and will not result in any material violation of, or conflict with, or
constitute a material default under, the Operating Company Agreement or result
in the creation of any mortgage, pledge, lien, Encumbrance or charge upon any
of the properties or assets of the Operating Company.


 


3.1.10     Intellectual Property.


 


(a)  To the
knowledge of the Operating Company, the Operating Company owns, has licensed, or has the right to use, all of the patents,
trademarks, service marks, copyrights, trade names, software and trade secrets,
and any applications therefor or registrations thereof (collectively, “Intellectual Property”) used in the conduct
of its business as now conducted, except as would not, individually or in the
aggregate, have a Material Adverse Effect on the Operating Company.


 


(b)  Unless
otherwise disclosed to SKT Holdings or SKT in writing or orally at a meeting of
the Board of Directors of Management Company or as provided on Schedule 3.1.10, to the knowledge of the
Operating Company, (i) it is not infringing upon or misappropriating any
Intellectual Property of any third Person, and (ii) no third Person is
infringing upon or misappropriating any Intellectual Property of the Operating
Company, except in each case as such infringement or misappropriation would not
have a Material Adverse Effect on the Operating Company. The Operating Company
has not received any written notice of any claimed conflict with respect to any
of the foregoing that would have a Material Adverse Effect on the Operating
Company, except as has been disclosed to SKT Holdings or SKT.


 


(c)  The
Operating Company has taken commercially reasonable steps to secure all trade
secret, proprietary, confidential or other non-public information material to
the Operating Company (collectively “Confidential
Information”) from general access.


 


3.1.11     Litigation, etc. Except as has been
previously disclosed to SKT Holdings or SKT in writing or orally at a meeting
of the Board of Directors of Management Company or as provided on Schedule 3.1.11, there are no actions, suits, or proceedings
of which the Operating Company has received notice pending before any court or
Governmental Entity or, 


 


10

















 


to the knowledge of the Operating Company, threatened against
the Operating Company, which would have a Material Adverse Effect on the
Operating Company, or which seek rescission of, seek to enjoin the consummation
of, or which questions the validity of, this Agreement or any of the
transactions contemplated hereby.


 


3.1.12     Material Agreements. Each Material
Agreement is a valid and binding obligation of the Operating Company, as applicable, and, to the knowledge of the Operating Company, each other party thereto, enforceable in accordance
with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other laws of general
application affecting enforcement of creditors’ right generally, and (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and has been duly executed and
delivered by the Operating Company and, to the knowledge of the Operating Company, each other party thereto. To the knowledge of the Operating Company, there is no existing default or breach by the Operating Company, except for any default or breach that would not
have a Material Adverse Effect on the Operating Company.


 


3.1.13     Governmental Consent, etc. Except for required filings with the Federal Communications
Commission and related analysis by “Team Telecom” (including the United States
Department of Homeland Security, the United States Department of Justice, the
Federal Bureau of Investigation and the Central Intelligence Agency), no
consent, approval or authorization of (or designation, declaration of filing
with) any Governmental Entity on the part of the Operating Company is required
in connection with the valid execution and delivery of this Agreement, or the
offer, sale or issuance of the Membership Units, or the consummation of any
other transaction contemplated hereby the failure to receive of which would
have a Material Adverse Effect on the Operating Company.


 


3.1.14     Tax Matters. The Operating
Company (i) has filed all tax returns required to have been filed by it prior to the date hereof (“Tax Returns”),
(ii) has paid all material Taxes required to have been paid by it prior to the
date hereof, (iii) is not under audit or examination by any Governmental Entity
relating to Tax Returns or Taxes, and (iv) has not received any notice of any
deficiency relating to Tax Returns or Taxes from any Governmental Entity,
except in each case as would not have a Material Adverse Effect on the
Operating Company or as provided on Schedule 3.1.14.


 


3.1.15     Brokers or Finders; Other Offers. The Operating Company has not, nor have any of its
officers, employees or Members, employed any broker or finder in connection
with the transactions contemplated by this Agreement, and no person or entity
will have, as a result of the transactions contemplated by this Agreement, any
right to, interest in, or claim against or upon the Operating Company or the
Parties for, any commission, fee or other compensation as a finder or broker
because of any act or omission by the Operating Company or any agent of the
Operating Company.


 


3.2          Representations and
Warranties of SKT Holdings. SKT Holdings represents and warrants
to the Operating Company as of the date hereof and as of the Closing that:


 


11

















 


3.2.1       Organization, Good Standing and
Qualification. SKT Holdings is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.


 


3.2.2       Governmental Filings; No
Violations.


 


(a)           Except for required filings with the
Federal Communications Commission and related analysis by “Team Telecom”
(including the United States Department of Homeland Security, the United States
Department of Justice, the Federal Bureau of Investigation and the Central
Intelligence Agency), no
notices, reports or other filings are required to be made by SKT Holdings with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by SKT Holdings from, any Governmental Entity in
connection with the execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated herein, except those that
the failure to make or obtain would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on Operating Company or
Management Company.


 


(b)           The execution, delivery and performance by SKT Holdings of this
Agreement and the Ancillary Agreements to which it is party do not, and the
consummation by SKT Holdings of the transactions contemplated hereby will not,
constitute or result in a breach or violation of, or a default under, its
certificate of incorporation or by-laws or other comparable governing
documents.


 


3.2.3       Required Third Party
Consents. No
consent or approval of any third party is required by virtue of the execution
hereof by SKT Holdings or the consummation of any of the transactions
contemplated herein by SKT Holdings to avoid the violation or breach of, or the
default under, any agreement to which SKT Holdings is a party or by which it is
bound, except for consents and approvals which if not obtained, would not have
a Material Adverse Effect on Operating Company or Management Company.


 


3.2.4       Corporate Authority; Approval. SKT
Holdings has all requisite corporate power and authority and has taken all
corporate action necessary in order to execute, deliver and perform its
obligations under this Agreement and the Ancillary Agreements to which it is a
party. This Agreement and each of the Ancillary Agreements to which SKT
Holdings is a party are, or will be when executed, the legal, valid and binding
agreement of SKT Holdings, enforceable against it in accordance with each of
their respective terms, subject to the Bankruptcy and Equity Exception.


 


3.2.5       No Other Representations and
Warranties. Except for representations and warranties contained in
this Agreement, none of SKT Holdings nor any of its Affiliates (not including
the Operating Company), nor any other Person makes any express or implied
representation or warranty on behalf of SKT Holdings with respect to the
subject matter of this Agreement.


 


3.3          Representations and
Warranties of EarthLink. EarthLink hereby represents and
warrants to SKT Holdings as of the date hereof and as of the Closing that:


 


12

















 


3.3.1       Organization, Good Standing and
Qualification. It is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.


 


3.3.2       Governmental Filings; No
Violations.


 


(a)           No notices, reports or other filings are required to be made by it or
its Subsidiaries with, nor are any consents, registrations, approvals, permits
or authorizations required to be obtained by it or its Subsidiaries from, any
Governmental Entity in connection with the execution and delivery of this
Agreement by it, except those that the failure to make or obtain would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on Operating Company or Management Company.


 


(b)           The execution, delivery and performance of this Agreement and the
Ancillary Agreements by EarthLink do not, and the consummation by it of the
transactions contemplated hereby will not, constitute or result in a breach or
violation of, or a default under, its certificate of incorporation or by-laws.


 


3.3.3       Required Third Party
Consents. No
consent or approval of any third party is required by virtue of the execution
hereof by EarthLink or the consummation of any of the transactions contemplated
herein by EarthLink to avoid the violation or breach of, or the default under,
any agreement to which EarthLink is a party or by which it is bound, except for
consents and approvals which if not obtained, would not have a Material Adverse
Effect on Operating Company or Management Company.


 


3.3.4       Corporate Authority; Approval. EarthLink
has all requisite corporate power and authority and has taken all corporate
action necessary in order to execute, deliver and perform its obligations under
this Agreement and the Ancillary Agreements. This Agreement and each of the
Ancillary Agreements are, or will be when executed, the legal, valid and
binding agreement of EarthLink, enforceable against EarthLink in accordance
with their respective terms, subject to the Bankruptcy and Equity Exception.


 


3.3.5       No Other Representations and
Warranties. Except for representations and warranties contained in
this Agreement, neither EarthLink nor any of its Subsidiaries or Affiliates,
nor any other Person makes any express or implied representation or warranty on
behalf of EarthLink with respect to the subject matter of this Agreement.


 


ARTICLE IV

CERTAIN
COVENANTS AND AGREEMENTS


 


4.1          Conduct of Business.


 


4.1.1       Conduct of SKT Holdings’ Business. During the period from the
date hereof until the Closing, except (x) as otherwise expressly contemplated
by this Agreement or any Ancillary Agreement in effect prior to the Closing or
(y) as EarthLink shall otherwise agree in writing (such agreement not to be
unreasonably withheld or delayed), and subject to fiduciary duties to third
parties, SKT Holdings shall use commercially reasonable efforts to operate its
business, so that its ability to consummate the transactions contemplated by 


 


13

















 


this Agreement, or perform its obligations under this Agreement or the
Ancillary Agreements, will not be prevented, materially delayed or materially
impaired. Without limiting the foregoing, none of SKT Holdings nor its
Subsidiaries shall:


 


(a)           enter into any Contract
or participate in any transaction which conflicts with any material obligation
of SKT Holdings under this Agreement; or


 


(b)           authorize or enter into an agreement
to do any of the foregoing.


 


4.1.2       Conduct of EarthLink’s Business. During the period from the date
hereof until the Closing, except (x) as otherwise expressly contemplated by
this Agreement or any Ancillary Agreement in effect prior to the Closing or (y)
as SKT Holdings shall otherwise agree in writing (such agreement not to be
unreasonably withheld or delayed), and subject to fiduciary duties to third
parties, EarthLink covenants and agrees that it shall use commercially
reasonable efforts to operate its business so that EarthLink’s ability to
consummate the transactions contemplated by this Agreement, or perform its
obligations under this Agreement or the Ancillary Agreements, will not be
prevented, materially delayed or materially impaired. Without limiting the
foregoing, neither EarthLink nor its Subsidiaries shall:


 


(a)           enter into any Contract or
participate in any transaction which conflicts with any material obligation of
EarthLink under this Agreement; or


 


(b)           authorize or enter into an agreement
to do any of the foregoing.


 


4.1.3       Conduct of Operating Company and
Management Company Business. During the period from the date hereof until the Closing,
except (x) as otherwise expressly contemplated by this Agreement or any
Ancillary Agreement in effect prior to the Closing or (y) as SKT Holdings shall
otherwise agree in writing (such agreement not to be unreasonably withheld or
delayed), and subject to fiduciary duties to third parties, each of the
Operating Company and the Management Company shall use commercially reasonable
efforts to operate its business, so that the ability of Operating Company and
Management Company to consummate the transactions contemplated by this
Agreement, or perform their obligations under this Agreement or the Ancillary Agreements,
will not be prevented, materially delayed or materially impaired. Without
limiting the foregoing, none of Operating Company, Management Company nor their
respective Subsidiaries shall:


 


(a)           enter into any Contract
or participate in any transaction which conflicts with any material obligation
of either Operating Company or Management Company under this Agreement; or


 


(b)           authorize or enter into an agreement
to do any of the foregoing.


 


14

















 


4.2          Registrations, Filings and Consents.


 


4.2.1       Governmental Filings. Each of SKT Holdings,
EarthLink and Operating Company shall cooperate with each other and use (and
shall cause their respective Subsidiaries to use) commercially reasonable
efforts to take or cause to be taken all actions, and do or cause to be done
all things, necessary, proper or advisable on its part under this Agreement and
applicable Laws to consummate and make effective the transactions contemplated
by this Agreement as soon as reasonably practicable, including preparing and
filing as promptly as reasonably practicable all documentation to effect all
necessary applications, notices, petitions, filings and other documents and to
obtain as promptly as reasonably practicable all consents, registrations,
approvals, permits and authorizations necessary or advisable to be obtained
from any third party and/or any Governmental Entity in order to consummate the
transactions contemplated by this Agreement. In addition to the foregoing, each
of SKT Holdings, EarthLink and Operating Company shall use commercially
reasonable efforts to file or cause to be filed within thirty (30) days
following the date of this Agreement (or such shorter period as may be required
by applicable law) all documentation, filings and other documents necessary in
connection with any required application, report or other filing or request for
approval or notifications with any domestic or foreign Governmental Entity from
which consent, approval or clearance is required to be obtained in connection
with the transactions contemplated by this Agreement. Subject to applicable
Laws relating to the exchange of information, each of SKT Holdings, EarthLink
and Operating Company shall have the right to review in advance, and to the
extent practicable each will consult the others on, all the information
relating to any of SKT Holdings, EarthLink or Operating Company, as the case
may be, with respect to the contents of any filing made with, or written
materials submitted to, any third party and/or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of SKT Holdings, EarthLink and Operating Company
shall act reasonably and as promptly as reasonably practicable.


 


4.2.2       Information Necessary for Filings. Each of SKT Holdings,
EarthLink and Operating Company shall, upon request by any other party, furnish
the others with all information concerning itself, its Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with any statement, filing, notice or application
made by or on behalf of SKT Holdings, EarthLink or Operating Company or any of
their respective Subsidiaries or Affiliates to any third party and/or any
Governmental Entity in connection with the transactions contemplated by this
Agreement.


 


4.2.3       Status of Filings. Each of SKT Holdings,
EarthLink and Operating Company shall keep the others apprised of the status of
matters relating to completion of the transactions contemplated hereby,
including promptly furnishing the other with copies of notices or other
communications received by SKT Holdings, EarthLink or Operating Company or any
of their respective Subsidiaries, as the case may be, from any third party
and/or any Governmental Entity with respect to the transactions contemplated by
this Agreement.


 


4.3          Transfer
Taxes. SKT Holdings shall
pay any Transfer Taxes imposed with respect to the SKT Holdings Contribution.


 


15

















 


4.4          Further
Assurances. At any time following the Closing Date, each of SKT
Holdings, EarthLink and Operating Company shall promptly execute, acknowledge
and deliver any other assurances or documents reasonably requested by Operating
Company, the SKT Holdings or EarthLink, as the case may be, and necessary for
SKT Holdings, EarthLink or Operating Company, as the case may be, to satisfy
its obligations under this Agreement or obtain the benefits contemplated by
this Agreement.


 


ARTICLE V

CONDITIONS TO SKT NOTE PURCHASE AND CLOSING


 


5.1          Conditions
to SKT Holdings’ Obligation to Effect the SKT Note Purchase. SKT Holdings’ obligation to to consummate the Note
Purchase contemplated under Section 2.1A are subject to the satisfaction or waiver
prior to the Note Purchase Date of each of the following conditions:


 


5.1.1       Deposit of Ancillary Agreements
in Escrow. Each of EarthLink, Operating
Company, Management Company, SKT and SKT Holdings shall have executed and
deposited in escrow with Document Escrow Agent each of the Ancillary Agreements
to which it is a party.


 


5.1.2       Issuance by Operating Company of
Replacement Notes.
Each of SKT Holdings and EarthLink shall have received, in full substitution of
their respective Secured Promissory Notes issued by the Operating Company on
July 25, 2007, Secured Exchangeable Promissory Notes in substantially the forms
attached hereto as Exhibit F-1 and Exhibit F-2, respectively.


 


5.2          Conditions to Each Party’s
Obligation to Effect the Closing. The respective obligations of
the Parties to consummate the transactions contemplated under Article II (except for Section 2.1A) are
subject to the satisfaction or waiver prior to the Closing Date of each of the
following conditions:


 


5.2.1       Governmental Filings. All
Governmental Filings, the failure of which to be made or obtained would be
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect on Operating Company or Management Company or prevent or materially
delay or impair the consummation of the transactions contemplated hereby, in
each case shall have been made or obtained (as the case may be) pursuant to a
Final Order, free of any conditions (other than conditions that would not be
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect on Operating Company or Management Company following the Closing). For
the purposes of this Agreement, “Final Order”
means an action or decision that has been granted as to which (i) no request
for a stay or any similar request is pending, no stay is in effect, the action
or decision has not been vacated, reversed, set aside, annulled or suspended
and any deadline for filing such a request that may be designated by statute or
regulation has passed, (ii) no petition for rehearing or reconsideration or
application for review is pending and the time for the filing of any such
petition or application has passed, (iii) no Governmental Entity has undertaken
to reconsider the action on its own motion and the time within which it may
initiate such reconsideration has passed, and (iv) no appeal is pending or in
effect and any deadline for filing any such appeal that may be specified by
statute or rule has 


 


16

















 


passed.
For the purpose of this Section
5.1.1, “Government Filing” shall be deemed to include the receipt of
the approval of the Federal Communications Commission in respect of the
application for Section 214 authorizations for assignment or transfer of
control (the “FCC Approval”).


 


5.2.2       No
Injunction. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law (whether temporary, preliminary or permanent) that is in effect and enjoins
or otherwise prohibits consummation of the transactions contemplated by this
Agreement (an “Order”), no Governmental Entity
shall have instituted any proceeding seeking any such Order and no third party
shall have instituted any proceeding seeking any such Order that is reasonably
likely to be enacted, issued or promulgated.


 


5.2.3       Organizational Documents. The Parties shall have filed the Certificate of
Incorporation with the Secretary of State of the State of Delaware.


 


5.3          Conditions to Obligation of
EarthLink and Operating Company. The obligation of EarthLink and
Operating Company to consummate the transactions contemplated under Article II (other than under Section 2.1A) is further subject to the
satisfaction or due waiver by EarthLink and Operating Company at or prior to
the Closing of each of the following conditions:


 


5.3.1       Delivery of Ancillary Agreements. Document Escrow Agent shall have delivered to EarthLink and
Operating Company each of the Ancillary Agreements fully executed by SKT
Holdings and SKT, as applicable, and any Ancillary Agreements in effect prior
to the Closing shall not have been terminated.


 


5.3.2       Third
Party Consents. SKT Holdings shall have obtained and made available to EarthLink and the
Operating Company the consent or approval (in form and substance reasonably satisfactory
to EarthLink) of each Person whose consent or approval shall be required in
order to consummate the transactions contemplated by this Agreement and the
Ancillary Agreements, except those for which the failure to obtain such consent
or approval is not reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect on Operating Company or the Management Company.


 


5.3.3       SKT Holdings Contribution. SKT Holdings shall
have exchanged the Additional Note and the Note for Preferred Membership Units
of the Operating Company in accordance with Section 2.3.


 


5.4          Conditions to Obligations of
SKT Holdings. The obligations of SKT Holdings to consummate the
transactions contemplated under Article II
(except for Section 2.1A) are
further subject to the satisfaction or due waiver by SKT Holdings on or prior to the Closing Date of each of the
following conditions:


 


5.4.1       Representations and Warranties. The representations and
warranties of the Operating Company contained herein that are qualified by
reference to Material Adverse Effect or another materiality qualifier shall be
true and correct as of the date hereof and as of the Closing Date as if made as
of the Closing Date, and all other representations and 


 


17

















 


warranties of the Operating Company shall be true and correct as of the
date hereof and as of Closing as if made as of the Closing Date, except for
such inaccuracies as would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on Operating Company (except in
each case that representations and warranties that are made as of a specific
date or as of the date hereof need be true and correct only as of such date),
and SKT Holdings shall have received a certificate to such effect dated the
Closing Date and executed by duly authorized officers of Operating Company.


 


5.4.2       Covenants. The covenants and agreements
of Operating Company to be performed or complied with on or prior to the
Closing shall have been duly performed or complied with, as the case may be, in
all material respects, and SKT Holdings shall have received a certificate to
such effect dated the Closing Date and executed by duly authorized officers of
Operating Company.


 


5.4.3       Delivery of Ancillary Documents. Document
Escrow Agent shall have delivered to SKT Holdings each of the Ancillary
Agreements fully executed by EarthLink, Operating Company and Management
Company, as applicable, and any Ancillary Agreements in effect prior to the
Closing shall not have been terminated.


 


5.4.4       Third
Party Consents. Operating Company and EarthLink shall
have obtained and made available to SKT
Holdings the consent or approval (in form and substance reasonably
satisfactory to SKT Holdings) of each Person whose consent or approval shall be
required in order to consummate the transactions contemplated by this Agreement
and the Ancillary Documents, except those for which the failure to obtain such
consent or approval is not reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect on Operating Company or Management Company.


 


ARTICLE VI

TERMINATION


 


6.1          Termination. This
Agreement may be terminated at any time prior to the Closing:


 


(a)           by mutual written agreement of SKT
Holdings and EarthLink; or


 


(b)           by SKT
Holdings or
EarthLink, by giving written notice of such termination to the other Parties,
if any other Party shall have breached any of its material obligations or
agreements under this Agreement and such breach shall be incapable of cure or
has not been cured within sixty (60) days following the giving of written
notice by the non-breaching Party to the other Parties of such breach; provided  that the cure period may be extended for an additional thirty
(30) days if the breach is capable of being cured and the breaching party is
actively and diligently exerting good faith efforts to cure the breach; or


 


(c)           by either SKT
Holdings or
EarthLink, by giving written notice of such termination to the other Parties,
if (i) any order permanently enjoining or otherwise prohibiting consummation of
the transactions contemplated hereby shall become final 


 


18

















 


and non-appealable or (ii) any required regulatory
approval or review is not completed within ninety (90) days from the date
hereof; or


 


(d)           by either SKT
Holdings or
EarthLink, by giving written notice of such termination to the other, if the
Closing shall not have occurred on or prior to three (3) months following the
date hereof (the “Termination Date”);
provided that a Party will not have the right to terminate this Agreement
pursuant to this Section 6.1(d)
for so long as such Party is in material breach of its obligations under this
Agreement.


 


6.2          Effect of Termination.
In the event of the termination of this Agreement in accordance with Section 6.1 hereof, this Agreement shall
thereafter become void and have no effect, and no Party hereto or its Affiliates or their respective directors,
officers, employees, agents or advisors shall have any liability to the other Party hereto or its Affiliates or their
respective directors, officers or employees, except for the obligations of the
parties hereto contained in this Section 6.2
and in Sections 7.2 (Expenses), 7.3 (Public Disclosure), 7.9 (Notices), 7.10 (Governing Law) and 7.11
(Dispute Resolution) hereof, the agreements contained in Section 7.16 (Amendment of Note Purchase and Security Agreement and Guaranty) and
except that nothing herein will relieve any Party
from liability for any breach of this Agreement prior to such termination.


 


ARTICLE VII

MISCELLANEOUS


 


7.1          Entire Agreement; Amendment
and Waiver. This Agreement (including any Exhibits and Schedules
hereto) and the Ancillary Agreements (including any exhibits and schedules
thereto), supersede all prior agreements, written or oral, among the Parties
with respect to the subject matter hereof and thereof and contain the entire
agreement among the Parties with respect to the subject matter hereof and
thereof. This Agreement may not be amended, supplemented or modified, and no
provisions hereof may be modified or waived, except by an instrument in writing
signed by Operating Company, SKT Holdings and EarthLink. No waiver of any
provisions hereof by any Party shall be deemed a waiver of any other provisions
hereof by any such Party, nor shall any such waiver be deemed a continuing
waiver of any provision hereof by such Party.


 


7.2          Expenses. Except
as otherwise expressly provided in this Agreement, whether or not the
transactions contemplated by this Agreement are consummated, the Parties shall
bear their own respective expenses (including, but not limited to, Transfer
Taxes and all compensation and expenses of counsel, financial advisors,
consultants, actuaries and independent accountants) incurred in connection with
this Agreement and the transactions contemplated hereby.


 


7.3          Public Disclosure.
Each Party hereby agrees that, except as may be required to comply with the
requirements of applicable Law or the rules and regulations of any national
securities exchange upon which the securities of one of the Parties or its
Affiliates is listed, no press release or similar public announcement or
communication will be made or caused to be made concerning the execution or
performance of this Agreement unless specifically approved in advance by the
Parties; provided, however, that to the extent that either Party to this 


 


19

















 


Agreement is required by
Law or the rules and regulations of any stock exchange upon which the
securities of one or more of the Parties or its Affiliates is listed to make
such a public disclosure, such public disclosure shall only be made after prior
consultation with and delivery of a copy of the proposed disclosure
substantially in the form it will be disclosed to the public to the other
Party, if consultation and delivery is reasonably practicable.


 


7.4          Assignment. No
Party may assign any of its rights or obligations under this Agreement without
the prior written consent of the other Parties; provided that any Party may
assign this Agreement to an Affiliate so long as the Party assigning this
Agreement agrees to guarantee, without restriction, the performance of all such
Affiliate’s obligations hereunder. Notwithstanding the foregoing, SKT Holdings
may assign its rights and obligations under this Agreement to a direct or
indirect wholly-owned Subsidiary of SKT.


 


7.5          Fulfillment of Obligations.
Any obligation of any Party to any other Party under this Agreement, which
obligation is performed, satisfied or fulfilled by an Affiliate of such Party,
shall be deemed to have been performed, satisfied or fulfilled by such Party.


 


7.6          Third Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the
Parties and Management Company and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to confer
upon any Person other than SKT Holdings, EarthLink, Operating Company or their
respective successors any rights or remedies under or by reason of this
Agreement. Without limiting the foregoing, under no circumstances will any
third party (including without limitation any creditors of any Party or of
Management Company) be entitled to rely upon any covenant of any Party hereto to
make any capital contribution hereunder.


 


7.7          Counterparts.
For the convenience of the Parties hereto, this Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original and
all of which shall together constitute the same agreement.


 


7.8          Section Headings.
The section and paragraph headings and table of contents contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.


 


7.9          Notices. All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be deemed given (i) on the first calendar day following
the date of delivery in person or by telecopy (in each case with telephonic
confirmation of receipt by the addressee), (ii) on the first calendar day
following timely deposit with an overnight courier service, if sent by
overnight courier specifying next day delivery or (iii) on the first calendar
day that is at least five (5)  days following
deposit in the mails, if sent by registered or certified mail, to the Parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):


 


20
















 


If to
SKT Holdings:


 


SK Telecom USA Holdings, Inc.


c/o SK Telecom Co., Ltd.


11, Euljiro2-ga, Jung-gu


Seoul 100-999, Korea


Attention:  Mr. Seung-Kook Synn


Facsimile: (822) 6100-7966


 


with a copy to:


 


Baker & McKenzie LLP


14th Floor,
Hutchinson House, 10 Harcourt


Hong Kong, SAR


Attention:  Mr. Won Lee


Facsimile:  (852) 2845-0476


 


If to EarthLink:


 


EarthLink, Inc.


1375 Peachtree Street, N.E.


Atlanta, Georgia 30309


Attention:  Chief Executive Officer


Facsimile:  (404) 892-7616


Copy to:  General Counsel


 


with a copy to:


 


Troutman
Sanders LLP


600 Peachtree
Street, N.E., Suite 5200


Atlanta,
Georgia 30308


Attention:  David M. Carter


Facsimile:  (404) 962-6598


 


If to Operating Company:


 


HELIO LLC


10960 Wilshire Blvd., Suite 700


Los Angeles, California 90024


Attention: 
Sky D. Dayton, Chief Executive Officer


Facsimile: 
(310) 996-1368


 


21

















 


with a copy to:


 


HELIO, Inc.


10960 Wilshire Blvd., Suite 700


Los Angeles, California 90024


Attention: 
Legal Department


Facsimile: 
(310) 312-8889


 


With a copy to:


 


Kirkpatrick & Lockhart Preston Gates
Ellis LLP


10100 Santa Monica Blvd, Seventh Floor


Los Angeles,
California 90067


Attn:  Thomas J. Poletti


Facsimile: 
(310) 552-5001


 


Any
notice given by mail shall be effective when received.


 


7.10        Governing
Law. This Agreement and the rights and obligations of the
Parties shall be governed by and construed in accordance with and subject to
the laws of the State of New York.


 


7.11        Survival of Representations, Warranties and Covenants. The representations and warranties of the parties
contained herein shall survive the Closing hereunder for a period equal to two
(2) years, with the exception of Section
3.1.4, Section 3.1.5
and Section 3.1.8 hereof which
shall survive for the applicable statute of limitations. Each of the parties
may rely on such representations and warranties irrespective of any
investigation made, or notice or knowledge held, by it or any other person. All
statements contained in any certificate or other instrument delivered by any
party pursuant to this Agreement or in connection with the transactions
contemplated by this Agreement shall constitute representations and warranties
by such party under this Agreement, subject to the qualifications set forth
herein and therein. Any covenant of the parties contained herein shall survive
the Closing hereunder for an indefinite period of time hereunder unless
otherwise specified herein.


 


7.12        Dispute Resolution. Any dispute arising out of or relating to
this Agreement shall be resolved in accordance with the procedures specified in
this Section 7.12, which shall be
the sole and exclusive procedure for the resolution of any such dispute.


 


7.12.1     Negotiation Between Executives. Operating Company, EarthLink and SKT Holdings shall attempt in good faith to
resolve any dispute arising out of or relating to this Agreement promptly by
direct negotiation among executives who have authority to settle the
controversy and who are at a higher level of management than the persons with
direct responsibility for administration of this Agreement, unless there is no
executive of a higher level. Any Party
may give the other Parties written notice
of any dispute not resolved in the normal course of business. Within fifteen
(15) days after delivery of the notice, the receiving Parties shall submit to the others a written response. The notice
and the response shall include: 
(a) a statement of each Party’s position and a summary of arguments
supporting that position; and, (b) the name and title of the executive who will
represent that Party and of any other
person 


 


22

















 


who
will accompany the executive. Within thirty (30) days after delivery of the
disputing Party’s notice, the executives of each of Operating Company, SKT
Holdings and EarthLink shall meet at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to attempt to resolve
the dispute. All reasonable requests for information made by one Party to the others will be honored. All
negotiations pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence.


 


7.12.2     Mediation With Mutually Agreed-Upon Neutral. If the dispute has not been resolved by
negotiation within forty-five (45) days of the disputing Party’s notice, or if
Operating Company, SKT Holdings and EarthLink fail to meet within twenty (20)
days, Operating Company, SKT Holdings and EarthLink shall submit the dispute to
non-binding mediation under the then-current CPR Institute for Dispute
Resolution’s (“CPR”) Model
Mediation Procedure for Business Disputes, and endeavor (but not be obligated)
to settle the dispute in such mediation. CPR’s address at the time of this Agreement
is 366 Madison Avenue, 14th Floor, New York, New York 10017
(212-949-6490) and its website is “www.cpradr.org.”  Operating Company, SKT Holdings and EarthLink
agree to use their best efforts and good faith to agree mutually on a mediator,
to be selected from the CPR Technology Panel of Neutrals. If Operating Company,
SKT Holdings and EarthLink fail to select a mutually acceptable mediator within
thirty (30) days after any party’s notice to the others party that they request
non-binding mediation pursuant to this subsection, CPR will appoint a mediator
from the Technology Panel.


 


7.12.3     Arbitration. All
disputes arising out of or relating to this Agreement not resolved pursuant to
non-binding mediation within thirty (30) days or as this time period may be
extended by written agreement of the Parties shall be settled finally in an
arbitration conducted under the Rules of Arbitration of the International
Chamber of Commerce (“ICC”) and as
provided in this Section 7.12.3.


 


(a)           The arbitration proceedings shall be conducted in New York, New York,
U.S.A.


 


(b)           The arbitration proceedings shall be governed by the laws of the State
of New York.


 


(c)           The language of the arbitration proceedings shall be English.


 


(d)           The arbitral tribunal shall consist of three (3) arbitrators, one (1)
of whom shall be selected by SKT Holdings, one (1) of whom shall be selected by EarthLink, and one (1) of whom
shall be selected by the Operating Company.


 


(e)           The International Bar Association’s Rules on the Taking of Evidence in
International Commercial Arbitration shall apply together with the ICC Rules
governing any submission to arbitration incorporated in this Agreement.


 


(f)            Every award shall be binding on each of
Operating Company, SKT Holdings and EarthLink. By submitting the dispute to
arbitration under the ICC 


 


23

















 


Rules, the Parties undertake to carry out any award without delay and
shall be deemed to have waived their right to any form of recourse insofar as
such waiver can validly be made.


 


(g)           This agreement to arbitrate shall be binding on the Parties and their
respective successors, assigns and Affiliates.


 


(h)           The prevailing Party in any
arbitration proceeding conducted pursuant to this Agreement may recover its
reasonable fees both for legal representation and related costs in any action
to enforce this Agreement in any judicial or arbitration proceeding.


 


(i)            The Parties waive any right or claim to
punitive or exemplary damages and agree that punitive or exemplary damages are not
within the contemplation of this Agreement. No arbitral tribunal may order an
award consisting in whole or in part of punitive or exemplary damages.


 


7.12.4     Tolling of Statutes of Limitation. All
applicable statutes of limitation and defenses based on the passage of time
shall be tolled while the procedures specified in Section 7.12
are pending. Operating Company, SKT Holdings and EarthLink shall take such
action, if any, required to effectuate such tolling.


 


7.12.5     Right to Injunctive Relief Before Appointment of Arbitrators. With
respect to any violations of this Agreement that would cause or might cause
irreparable injury to any one of the Parties
to this Agreement (and any time periods and notice periods specified thereon),
such Party may, in addition to any other rights under this Agreement or any
Ancillary Agreement and notwithstanding the dispute resolution procedures
including, particularly, the mediation provisions and arbitration agreement
contained in this Section 7.12 (and any time periods and notice periods
specified thereon), seek specific performance of this Agreement and
injunctive relief in any court of competent jurisdiction against any ongoing
violation of this Agreement. Prior to the appointment of the arbitrators
pursuant to the arbitration agreement, any Party hereto may seek provisional or
interim measures from any court of competent jurisdiction. After the
appointment of the arbitrators, the arbitrators shall have exclusive power to
consider and grant requests for provisional or interim measures.


 


7.13        Severability.
The provisions of this Agreement shall be deemed severable and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Party or any circumstance, is
invalid or unenforceable, (i) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (ii) the remainder of this Agreement and the application of such provision
to other Parties or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in
any other jurisdiction.


 


7.14        No
Personal Liability. The
Parties agree that they shall have no claim or right to bring any claim against
and hereby waive, release, acquit and forever discharge all 


 


24

















 


employees, officers,
directors, and/or shareholders of the Operating Company or the Management
Company, including, but not limited to, those persons listed in the definition
of “knowledge”, or “knowledge of the Operating Company” as provided in Section
1.1 hereof, from any and all claims, actions, charges, complaints, grievances
and causes of action arising out of any actual or alleged breach of any of the
representations, warranties, covenants or any other agreements made herein
except to the extent of willful misconduct by such officer as determined by a
final, definitive and nonappealable judgment adjudicated in a court of
competent jurisdiction. It is further expressly understood and agreed by the
Parties, SKT and the Management Company, that this Section 7.14 and all of its
terms shall be binding upon their respective representatives, affiliates,
heirs, executors, administrators, successors and assigns.


 


7.15        Further
Assurances. At any time following the Closing Date, each
of the SKT Holdings, EarthLink and
Operating Company shall promptly execute, acknowledge and deliver any other
assurances or documents reasonably requested by Operating Company, SKT Holdings or EarthLink, as the case
may be, and necessary for SKT Holdings,
EarthLink or Operating Company, as the case may be, to satisfy its obligations
under this Agreement or obtain the benefits contemplated by this Agreement.


 


7.16        Amendment
of Note Purchase and Security Agreement and Guaranty. Each of the Parties and Management Company hereby
agrees to amend that certain Note Purchase and Security Agreement and Guaranty,
dated July 23, 2007 (the “Note Purchase
Agreement”), as follows:


 


7.16.1     Section 1(o) of
the Note Purchase Agreement shall be deleted in its entirety and replaced with
the following:


 


“Maximum Note Amount” shall mean Two Hundred
Ten Million Dollars ($210,000,000).”


 


and the
references to “$200,000,000” in Section 1(d) and Section 1(k) of the Note
Purchase Agreement shall be deleted and replaced with “$210,000,000”.


 


7.16.2     The last
sentence in Section 1(e) of the Note Purchase Agreement shall be
deleted in its entirety.


 


7.16.3     The last
sentence in Section 2.2(a) of the Note Purchase Agreement shall be
deleted in its entirety and replaced with the following:


 


“Notes shall only be purchased by Lenders on a Purchase Date
and the Note purchased by a Lender on such Purchase Date shall be the amount
set forth in the Purchase Notice.”


 


7.16.4     The second sentence
of Section 2.2(b) of the Note Purchase Agreement shall be
deleted in its entirety and replaced with the following:


 


“On each Closing Date, provided the conditions precedent
specified herein have been satisfied or waived, the Lenders shall purchase the
Commitments 


 


25

















 


requested to be purchased by the Company pursuant to
the applicable Purchase Notice.”


 


7.16.5     Section 2.4(b) of the Note
Purchase Agreement shall be deleted in its entirety and
replaced with the following:


 


“Each Lender shall purchase Notes hereunder according to its
Commitment, and the Company shall make each payment or prepayment of principal
of the Notes or of interest on the Notes to the Lenders in accordance with
their Pro Rata Share of the Commitments.”


 


7.16.6     The last
sentence in Section 8.3 of the Note Purchase Agreement shall be
deleted in its entirety and replaced with the following:


 


“The rights of EarthLink and SKT USA with respect to the
foregoing Collateral shall be in proportion to each Lender’s Pro Rata Share,
and neither will have priority over the other Lender with respect to the
proceeds thereof.”


 


7.16.7     The fifth
paragraph of the Form of Note contained in Exhibit B to the Note
Purchase Agreement shall be deleted in its entirety and
replaced with the following:


 


“This Note is one of a series of Notes issuable to the
Lenders pursuant to the terms of the Purchase Agreement and in accordance with
the Lenders’ Commitments as described therein. All payments made to Lenders under
this Note and any other Notes shall be made by the Company to each Lender at
the same time and in proportion to each Lender’s Pro Rata Share. No
Lender shall have a priority of payment over another Lender with respect to
payments due under the Notes.”


 


7.16.8     The
second paragraph of the Form of Purchase Notice contained in Exhibit C to the Note
Purchase Agreement shall be deleted in its entirety and replaced with the
following:


 


“Pursuant
to Sections 2.1 and 2.2 of the Purchase Agreement, the Company desires that
[EarthLink/SKT USA] purchase a Note in a principal amount of $          .
The proceeds of such Note shall be applied in accordance with Section 2.3 of
the Purchase Agreement.”


 


26

















 


IN
WITNESS WHEREOF, this Agreement has been signed on behalf of each of the
Parties hereto as of the date first written above.


 


 


	
   

  	
  HELIO
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dr. Wonhee Sull

  
	
   

  	
   

  	
  Name:

  	
  Dr.
  Wonhee Sull

  
	
   

  	
   

  	
  Title:

  	
  President
  and COO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SK
  TELECOM USA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jin Woo So

  
	
   

  	
   

  	
  Name:

  	
  Jin
  Woo So

  
	
   

  	
   

  	
  Title:

  	
  President
  and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EARTHLINK,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel R. DeSimone, Jr.

  
	
   

  	
   

  	
  Name:

  	
  Samuel
  R. DeSimone, Jr.

  
	
   

  	
   

  	
  Title:

  	
  EVP,
  General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  For purposes of Section 2.1.1, Article IV, and 

  Section 7.16 only:

  
	
   

  	
  HELIO,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Dr. Wonhee Sull

  
	
   

  	
   

  	
  Name:

  	
  Dr.
  Wonhee Sull

  
	
   

  	
   

  	
  Title:

  	
  COO

  
						



 


[Signature
Page to Contribution Agreement]