{"id":43946,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stockholders-agreement-h-amp-r-block-inc-and-worldcom-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stockholders-agreement-h-amp-r-block-inc-and-worldcom-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/securities\/stockholders-agreement-h-amp-r-block-inc-and-worldcom-inc.html","title":{"rendered":"Stockholders Agreement &#8211; H&#038;R Block Inc., and WorldCom Inc."},"content":{"rendered":"<pre>                             STOCKHOLDERS AGREEMENT\n\n          THIS STOCKHOLDERS AGREEMENT (this 'Agreement') dated as of September\n7, 1997, by and among H&amp;R BLOCK, INC.,  a Missouri corporation ('H&amp;R Block'),\nH&amp;R BLOCK GROUP, INC., a Delaware corporation ('Block Group'), and WORLDCOM,\nINC., a Georgia corporation ('WorldCom'),\n\n                                  WITNESSETH:\n\n          WHEREAS, H&amp;R Block owns all of the issued and outstanding shares of\ncapital stock of Block Group;\n\n          WHEREAS, as of the date hereof, H&amp;R Block beneficially owns and Block\nGroup directly owns approximately 80.13% of the shares of common stock, par\nvalue $0.01 per share (the 'Common Shares'), of CompuServe Corporation, a\nDelaware corporation ('CompuServe') (all such CompuServe Common Shares which are\nnow owned by Block Group, together with all shares of capital stock of\nCompuServe which are hereafter acquired by Block Group or any of its Affiliates,\nare referred to herein as the 'Shares');\n\n          WHEREAS, WorldCom, Walnut Acquisition Company, L.L.C., a Delaware\nlimited liability company which is wholly owned by WorldCom ('WAC'), CompuServe,\nH&amp;R Block and Block Group have entered into an Agreement and Plan of Merger\ndated as of the date hereof (as amended from time to time, the 'Merger\nAgreement') (capitalized terms used but not otherwise defined in this Agreement\nhaving the meanings assigned to such terms in the Merger Agreement), which\nprovides for the merger of WAC with and into CompuServe (the 'Merger') in\naccordance with the laws of the State of Delaware and the provisions of the\nMerger Agreement; and\n\n          WHEREAS, the parties intend that WorldCom's acquisition of the Shares\nshall constitute a qualified stock purchase within the meaning of Section 338\n(d)(3) of the Code;\n\n          WHEREAS, as a condition to the willingness of WorldCom and WAC to\nenter into the Merger Agreement and incur the obligations set forth therein,\nWorldCom has required that H&amp;R Block and Block Group agree, and in order to\ninduce WorldCom to enter into the Merger Agreement, H&amp;R Block and Block Group\nhave agreed, to enter into this Agreement and undertake the obligations set out\nherein.\n\n          NOW, THEREFORE, in consideration of the foregoing premises and\nagreements contained herein, the parties hereto agree as follows:\n\n\n \n                                   ARTICLE I\n\n                   VOTING OF SHARES AND APPOINTMENT AS PROXY\n\n        1.1.  Voting Agreement. H&amp;R Block and Block Group hereby agree that\nduring the term hereof, at any meeting of the stockholders of CompuServe,\nhowever called, and in any action by consent of the stockholders of CompuServe,\nBlock Group shall vote, and H&amp;R Block shall cause Block Group to vote, the\nShares: (A) in favor of the Merger, the Merger Agreement and this Agreement and\nthe transactions contemplated by the Merger Agreement and this Agreement, (B)\nagainst any proposal for any recapitalization, merger (other than the Merger),\nshare exchange, exchange offer, tender offer, sale of assets or other business\ncombination between CompuServe or any CompuServe Entity and any person or entity\n(other than WorldCom or WAC) or any liquidation, dissolution or any other action\nor agreement that would result in a breach of any covenant, representation or\nwarranty or any other obligation or agreement of CompuServe, H&amp;R Block or Block\nGroup under the Merger Agreement or this Agreement or which would result in any\nof the conditions to the Merger Agreement or this Agreement not being fulfilled;\nand (C) in favor of any other matter necessary for the transactions contemplated\nhereby or the Merger Agreement with respect to which Block Group may be entitled\nto vote.\n\n        1.2.  No Disposition or Encumbrance of Shares. H&amp;R Block and Block\nGroup, jointly and severally, hereby covenant and agree that, from the date\nhereof until the termination of this Agreement, they shall not, and shall not\noffer or agree to, directly or indirectly, sell, transfer, tender, assign,\nhypothecate or otherwise dispose of, or create or permit to exist any\nEncumbrance (as hereinafter defined) on, the Shares, or any interest in the\nShares, at any time prior to the expiration of the term of this Agreement.\n\n        1.3.  Voting of Shares; Further Assurances.\n\n                (a)  H&amp;R Block and Block Group, by this Agreement, with respect\nto the Shares, do hereby constitute and appoint WorldCom, or any nominee of\nWorldCom, with full power of substitution, from the date hereof until the\ntermination of this Agreement, as its true and lawful attorney, agent and proxy\n(its 'Proxy'), for and in its name, place and stead, to vote the Shares in such\nmanner as it or its nominee shall in its sole discretion deem proper, and\notherwise act with respect to the Shares, at any meeting (whether annual or\nspecial and whether or not an adjourned meeting) of CompuServe's stockholders,\nincluding the right to sign its name (as stockholder) to any consent,\ncertificate or other document relating to CompuServe that the law of the State\nof Delaware may permit or require, regardless of the subject matter of such vote\nor other action:\n\n                (i)  in favor of the Merger, the Merger Agreement and this\nAgreement and the transactions contemplated by the Merger Agreement and this\nAgreement;\n\n                (ii) against any proposal for any recapitalization, merger\n(other than the Merger), share exchange, exchange offer, tender offer, sale of\nassets or other business combination between CompuServe or any CompuServe Entity\nand any person or \n\n                                       2\n\n \n        entity (other than WorldCom or WAC) or any liquidation, dissolution or\n        any other action or agreement that would result in a breach of any\n        covenant, representation or warranty or any other obligation or\n        agreement of CompuServe, H&amp;R Block or Block Group under the Merger\n        Agreement or this Agreement or which could result in any of the\n        conditions to the Merger Agreement or this Agreement not being\n        fulfilled; and\n\n                        (iii) in favor of any other matter necessary for\n        the transactions contemplated hereby or by the Merger Agreement with\n        respect to which Block Group may be entitled to vote.\n\n        (b)  In addition, upon WorldCom's exercise of the Option in accordance\nwith the terms hereof, the power of attorney and proxy granted in Section 1.3(a)\nshall automatically and without the necessity of any additional action, consent,\nother writing or agreement on the part of WorldCom, H&amp;R Block or Block Group be\nexpanded in scope to permit WorldCom or its nominee to act for Block Group as\nits Proxy, for and in its name, place and stead, with full power of\nsubstitution, to vote the Shares in such manner as it or its nominee shall in\nits sole discretion deem proper, and otherwise act with respect to the Shares,\nat any meeting and to exercise the full rights of the owner or holder of the\nShares, including the right to request or call and attend any and all meetings\n(whether annual or special and whether or not an adjourned meeting) of\nCompuServe's stockholders, including the right to sign its name (as stockholder)\nto any consent, certificate or other document relating to CompuServe that the\nlaw of the State of Delaware may permit or require, regardless of the subject\nmatter of such vote or other action .\n\n        (c)  SUBJECT ONLY TO THE EXPIRATION OF THE TERM OF THIS AGREEMENT, THE\nFOREGOING PROXY AND POWER OF ATTORNEY IS IRREVOCABLE, IS GRANTED IN\nCONSIDERATION OF WORLDCOM AND WAC ENTERING INTO THE MERGER AGREEMENT AND THIS\nAGREEMENT AND IS COUPLED WITH AN INTEREST SUFFICIENT IN LAW TO SUPPORT AN\nIRREVOCABLE POWER. This appointment shall revoke all prior powers of attorney\nand proxies appointed by H&amp;R Block or Block Group at any time with respect to\nthe Shares and no subsequent powers of attorney or proxies will be appointed by\nH&amp;R Block or Block Group, or be effective with respect thereto, during the term\nof this Agreement.\n\n        (d)  H&amp;R Block and Block Group shall each perform such further acts and\nexecute such further documents and instruments as may reasonably be required to\nvest in WorldCom the power to carry out and give effect to the provisions of\nthis Article I, including applying a legend reasonably satisfactory to WorldCom\npromptly after the date hereof to the certificates evidencing the Shares\nreflecting the provisions of this Agreement and, at the request of WorldCom, to\ndeliver such certificates to WorldCom to hold in custody.\n\n                                  ARTICLE II\n\n                                GRANT OF OPTION\n\n        2.1  Grant of Option.\n\n                                       3\n\n \n        (a)  Subject to the terms and conditions hereof, H&amp;R Block and Block\nGroup hereby grant to WorldCom an irrevocable option (the 'Option') to purchase\n(the 'Purchase') all (but not less than all) of the Shares, whether before or\nafter any transfer of such Shares, for and in consideration of the payment of\nthe Purchase Price described below to Block Group. WorldCom shall not be under\nany obligation to elect to purchase the Shares and may allow this Agreement to\nterminate without effecting the purchase of Shares hereunder.\n\n        (b)  The per Share price for each Share shall equal a fraction of a\nshare of WorldCom Common Stock equal to the Exchange Ratio (defined below),\nsubject to the payment of cash in lieu of any fractional share as provided in\nparagraph (d) below (the aggregate of such shares of WorldCom Common Stock,\ntogether with such cash payment in lieu of fractional shares, is referred to\nherein as the 'Purchase Price'). The 'Exchange Ratio' shall be determined as\nfollows: (i) if the Average Trading Price of a WorldCom Common Share is greater\nthan or equal to $29.54, the Exchange Ratio shall equal 0.40625; (ii) if the\nAverage Trading Price of a WorldCom Common Share is greater than or equal to\n$24.00 but less than $29.54, the Exchange Ratio shall equal a fraction (rounded\nto the nearest hundred-thousandth) determined by dividing $12.00 by the Average\nTrading Price of a WorldCom Common Share; and (iii) if the Average Trading Price\nof a WorldCom Common Share is less than $24.00, the Exchange Ratio shall equal\n0.5. The Exchange Ratio shall be subject to appropriate adjustment in the event\nof a stock split, stock dividend or recapitalization after the date of this\nAgreement applicable to shares of the WorldCom Common Stock or the CompuServe\nCommon Stock.\n\n        (c) In order to allow the transaction that would result from the\nexercise of the Option to constitute a qualified stock purchase under Section\n338 of the Code and not a tax-free reorganization, Block Group shall have the\nright to elect to (1) reduce the aggregate Purchase Price otherwise payable to\nBlock Group hereunder by such number of shares of WorldCom Common Stock the\naggregate value of which, based on the Average Trading Price, is equal to\n$1,100,000, subject to appropriate adjustment in the event of a stock split,\nstock dividend or recapitalization after the date of this Agreement applicable\nto shares of the WorldCom Common Stock and not reflected in the Average Trading\nPrice, and (2) in lieu of such shares, receive $1,000,000 in cash.\n\n        (d)  No fractional shares of WorldCom Common Stock shall be issued\nhereunder nor will any fractional share interest involved entitle the holder\nthereof to vote, to receive dividends or to exercise any other rights of a\nshareholder of WorldCom. In lieu thereof, if Block Group would otherwise be\nentitled to a fractional share of WorldCom Common Stock pursuant to the\nprovisions hereof, it shall receive in lieu of such fractional share an amount\nin cash equal to the value of such fractional share. The value of such\nfractional share shall be the product of such fraction multiplied by the Average\nTrading Price, subject to appropriate adjustment in the event of a stock split,\nstock dividend or recapitalization after the date of this Agreement applicable\nto shares of the WorldCom Common Stock and not reflected in the Average Trading\nPrice.\n\n        (e)  For purposes of this Agreement, the 'Average Trading Price' shall\nmean the average of the daily closing prices per WorldCom Common Share, as\nquoted by NASDAQ as reported in The Wall Street Journal, Eastern Edition, or if\n                                -----------------------         \nnot reported thereby, The \n                      ---\n\n                                       4\n\n \nNew York Times, for the twenty consecutive full NASDAQ trading days ending on\n--------------\nthe date immediately prior to the third full NASDAQ trading day immediately\npreceding the day on which the Closing (as defined below) occurs.\n\n        2.2  Exercise of Option. Upon the occurrence of one or more of the\nevents set forth below (the 'Triggering Events'), WorldCom may exercise the\nOption, in whole but not in part, at any time during the term of this Agreement\nas set forth in Section 7.2 hereof:\n\n             (a)  the Board of Directors of CompuServe or any committee thereof\nshall have withdrawn or modified in a manner adverse to WorldCom its approval or\nrecommendation of the CompuServe Proposal, or failed to reconfirm its\nrecommendation within fifteen business days after a written request to do so, or\nthe Board of Directors of CompuServe or any committee thereof shall have\nresolved to take any of the foregoing actions;\n\n             (b)  CompuServe shall fail to call, give notice of, convene and\nhold the CompuServe Stockholders Meeting as soon as practicable pursuant to\nSection 8.6 of the Merger Agreement; or\n\n             (c)  Any party to the Merger Agreement shall have terminated such\nagreement pursuant to Section 11.1(b) thereof or WorldCom shall have terminated\nthe Merger Agreement pursuant to Section 11.1(c), (d) or (f) thereof and, in any\nsuch case, H&amp;R Block, Block Group or CompuServe shall have breached one of its\ncovenants or agreements thereunder or a condition to WorldCom's obligations\nthereunder that is within the control of H&amp;R Block, Block Group or CompuServe\nshall not have been satisfied at the time of such termination, including,\nwithout limitation, the failure of the CompuServe stockholders to approve the\nCompuServe Proposal.\n\nH&amp;R Block and Block Group shall notify WorldCom promptly in writing of the\noccurrence of any Triggering Event, it being understood that the giving of such\nnotice by H&amp;R Block or Block Group shall not be a condition to the right of\nWorldCom to exercise its Option or obtain the expanded proxy rights described in\nSection 1.3(b).\n\n       2.3.  Notice of Exercise; Conditions to Closing. If WorldCom desires to\nexercise the Option, it shall notify Block Group in writing of its election.\nOnce WorldCom has delivered its notice of exercise of the Option, it shall be\nobligated to consummate the Purchase, except that, notwithstanding the delivery\nof any such notice:\n\n        (a)  WorldCom's obligation to close the Purchase shall be subject to the\nfollowing conditions being fulfilled on or prior to the date of Closing,\nany of which may be waived by WorldCom, in its discretion:\n\n                (i)  Representations and Warranties of H&amp;R Block.  The\n                     -------------------------------------------\n   representations and warranties of H&amp;R Block, Block Group and CompuServe set\n   forth in this Agreement that are qualified by Material Adverse Effect or\n   otherwise as to materiality shall be true and correct, and those that are not\n   so qualified shall be true and correct except for failures to be true and\n   correct as would not have a Material Adverse\n\n                                       5\n\n \nEffect on CompuServe, as of the date of this Agreement and as of the Closing as\nthough made at and as of the Closing, except to the extent that such\nrepresentations and warranties expressly relate to a specific earlier date (in\nwhich case such representations and warranties that are qualified by a Material\nAdverse Effect shall be true and correct, and those that are not so qualified\nshall be true and correct except for failures to be true and correct as would\nnot, individually or in the aggregate, have a Material Adverse Effect on\nCompuServe, on and as of such earlier date). None of the representations or\nwarranties regarding CompuServe or any of the CompuServe Entities incorporated\nherein from Article III of the Merger Agreement, disregarding any qualifications\nregarding materiality (including any reference to Material, Material Adverse\nChange or Material Adverse Effect), shall be untrue or incorrect, except for\nsuch untrue or incorrect representations or warranties that, when taken together\nas a whole, do not constitute a Material Adverse Effect .\n\n        (ii) Performance of this Agreement.  Each of the covenants and\n             -----------------------------\nagreements of H&amp;R Block and Block Group to be performed or observed at or prior\nto the Closing pursuant to the terms hereof shall have been duly performed or\nobserved, except where such failure would not have a Material Adverse Effect on\nCompuServe or would not materially impair the ability of H&amp;R Block, Block Group\nor CompuServe to consummate the Purchase and the other transactions \ncontemplated hereby.\n\n\n        (iii)  No Material Adverse Change.  Neither CompuServe nor any\n               --------------------------\nCompuServe Entity shall have suffered a Material Adverse Change from the date of\nthe CompuServe Balance Sheet to the Closing.\n\n          (b) Block Group's obligation to close the Purchase shall be subject to\nthe following conditions being fulfilled on or prior to the date of Closing, any\nof which may be waived by WorldCom, in its discretion:\n\n        (i)  Representations and Warranties of WorldCom. The representations and\n             ------------------------------------------\nwarranties of WorldCom set forth in this Agreement that are qualified by\nMaterial Adverse Effect or otherwise as to materiality shall be true and\ncorrect, and those that are not so qualified shall be true and correct except\nfor failures to be true and correct as would not have a Material Adverse Effect\non WorldCom as of the date of this Agreement and as of the Closing as though\nmade at and as of the Closing, except to the extent that such representations\nand warranties expressly relate to a specific earlier date (in which case such\nrepresentations and warranties that are qualified by a Material Adverse Effect\nshall be true and correct, and those that are not so qualified shall be true and\ncorrect except for failures to be true and correct as would not, individually or\nin the aggregate, have a Material Adverse Effect on WorldCom, on and as of such\nearlier date).\n\n         (ii) Performance of this Agreement.  Each of the covenants and\n              -----------------------------\nagreements of WorldCom to be performed or observed at or prior to the Closing\npursuant to the terms hereof shall have been duly performed or observed except\nwhere such failure would not have a Material Adverse Effect on WorldCom or would\nnot materially impair the ability of WorldCom to consummate the Merger and the\nother transactions \n\n                                       6\n\n \ncontemplated hereby.\n\n\n            (iii)  Minimum Average Trading Price. The Average Trading Price\n                   -----------------------------\nshall be no less than $24.00, after appropriate adjustment in the event of a\nstock split, stock dividend or recapitalization after the date of this Agreement\napplicable to shares of the WorldCom Common Stock.\n\n          (c) WorldCom's and Block Group's obligations to close the Purchase\nshall be subject to the following conditions being fulfilled on the date of\nClosing, to the extent applicable to such party:\n\n              (i)  No Injunction or Action. No Governmental Entity shall have\n                   -----------------------\nenacted, issued, promulgated, enforced or entered any statute, rule, regulation,\ninjunction or other order, whether temporary, preliminary or permanent, which is\nin effect and which has or would have the effect of making the transactions\ncontemplated by this Agreement illegal or restraining or prohibiting\nconsummation of such transactions.\n\n              (ii) Hart-Scott-Rodino Act. Any mandatory waiting period (and any\n                   ---------------------\nextension thereof) applicable to the consummation of the Purchase under the HSR\nAct, any foreign competition law or similar law shall have expired or been\nterminated .\n\n              (d)  WorldCom and H&amp;R Block and Block Group will cooperate in\nfiling any notifications or applications required and shall otherwise cooperate\npromptly in taking any actions necessary to satisfy the conditions referred to\nin this Section.\n\n              (e)  Upon the giving by WorldCom to Block Group of the written\nnotice of exercise of the Option provided for under this Section 2.3 and the\ntender of the applicable Purchase Price, WorldCom shall be deemed to be the\nholder of record of the Shares issuable upon such exercise, notwithstanding that\nthe stock transfer books of CompuServe shall then be closed or that certificates\nrepresenting such Shares shall not then have actually been delivered to\nWorldCom. H&amp;R Block shall pay all expenses, and any and all United States\nfederal, state, and local taxes and other charges that may be payable in\nconnection with the preparation, issuance and delivery of stock certificates\nunder this Section in the name of WorldCom or its assignee, transferee, or\ndesignee.\n\n        2.4.  Closing.\n\n              (a)  Date of Closing.  Subject to the terms and conditions hereof,\n                   ---------------\nthe closing (the 'Closing') for the purchase of Shares hereunder shall occur on\nthe date designated by WorldCom in its written notice to Block Group of its\ndesire to purchase its Shares as provided in Section 2.2 above, subject to the\nfulfillment or waiver of the conditions to the parties obligations hereunder,\nprovided that the Closing shall take place no earlier than two Business Days\nafter and no later than five Business Days after the satisfaction or waiver of\nsuch conditions. Unless otherwise agreed by the parties, the Closing shall take\nplace at the offices of Bryan Cave LLP, Washington, D.C. at 10:00 a.m. local\ntime.\n\n                                       7\n\n \n        (b)  Closing Procedure.  At the Closing, (i) H&amp;R Block and Block Group\n             -----------------\nshall deliver or cause to be delivered to WorldCom all of the certificates\nevidencing the Shares to be sold hereunder, with appropriate stock powers\nattached, properly signed, with any necessary documentary or transfer tax stamps\nduly affixed and (ii) WorldCom shall deliver, or cause to be delivered such\ncertificates evidencing such number of shares of WorldCom Common Stock (and such\ncash to be paid in lieu of fractional shares of such WorldCom Common Stock and\nto be paid pursuant to Block Group's election to receive cash, if any, under\nSection 2.1(c)) in order to satisfy its obligation to pay the Purchase Price to\nBlock Group.\n\n        (c)  Closing Deliveries.  H&amp;R Block and Block Group, on the one hand,\n             ------------------\nand WorldCom, on the other hand, will use reasonable efforts to deliver or cause\nto be delivered to the other at or prior to the Closing hereunder the\ncertificates, opinions and other documents contemplated by Article X of the\nMerger Agreement, provided that references therein to the Merger, the Merger\nAgreement, the Closing Date or the Effective Time shall be deemed modified as\ncontemplated by Section 3.4, Section 5.2 and Article VI hereof; and provided\nfurther that H&amp;R Block and Group agree to execute and deliver the Standstill\nAgreement and the Noncompete\/Nonsolicitation Agreement, the Registration Rights\nLetter, and a Registration Rights Letter for the benefit of WorldCom with\nrespect to the Shares purchased hereunder in substantially the form contemplated\nby the Merger Agreement.\n\n\n                                  ARTICLE III\n\n          REPRESENTATIONS AND WARRANTIES OF H&amp;R BLOCK AND BLOCK GROUP\n\n        H&amp;R Block and Block Group, jointly and severally, hereby make the\nfollowing representations and warranties to WorldCom, each of which shall be\ntrue and correct on the date hereof, on the date on which WorldCom delivers\nnotice of its exercise of the Option, if it does so, and on the date of the\nClosing, if any.\n\n        3.1.  Representations and Warranties Under the Merger Agreement\nRestated. Subject to the Schedules to the Merger Agreement, H&amp;R Block and Block\nGroup, jointly and severally, hereby make the representations and warranties to\nWorldCom contained in Articles III, IV and V of the Merger Agreement, except\nthat (a) any such representation and\/or warranty as to the effect of the Merger\nAgreement or the Merger on any of H&amp;R Block, Block Group or CompuServe (or any\nof their associated Entities) shall be considered a representation and\/or\nwarranty as to the effect of this Agreement or the Purchase, as the case may be,\non any such entity or entities, as appropriate, and (b) the following\nrepresentations and warranties are not hereby repeated: Sections 3.19 and 4.11.\nH&amp;R Block and Block Group further jointly and severally represent and warrant\nthat Block Group has, and the transfer of the Shares upon exercise of the Option\nwill pass to WorldCom, good and marketable title to the Shares, free and clear\nas provided in Section 5.2 of the Merger Agreement.\n\n        3.2  Rights Agreement  .  CompuServe has effected an amendment to the\nCompuServe Rights Agreement with the effect that (a) (i) WorldCom will not be\ndeemed to be an 'Acquiring Person' (as defined in the CompuServe Rights\nAgreement), (ii) neither the \n\n                                       8\n\n \n'Shares Acquisition Date' nor the 'Distribution Date' (each as defined in the\nCompuServe Rights Agreement) will be deemed to occur, and (iii) the 'Rights' (as\ndefined in the CompuServe Rights Agreement) will not separate from the\nCompuServe Common Shares, in any such event as a result of the execution,\ndelivery or performance of this Agreement or any other agreement provided for\nherein or the taking of any action provided for herein.\n\n          3.3  Takeover Statutes.  The Board of Directors of CompuServe has\ntaken all necessary actions so that the restrictions contained in Section 203 of\nthe DGCL will not apply to the execution, delivery or performance of this\nAgreement by CompuServe, H&amp;R Block or WorldCom or the consummation of the\ntransactions contemplated hereby.\n\n\n                                  ARTICLE IV\n\n                            SECURITIES LAWS MATTERS\n\n        Each of WorldCom and Block Group hereby makes the following\nrepresentations and warranties to the other, solely with respect to matters\nrelating to itself, each of which shall be true and correct on the date hereof,\non the date on which WorldCom delivers notice of its exercise of the Option, if\nit does so, and on the date of the Closing, if any:\n\n        4.1  Qualification.  Each of WorldCom and Block Group has such knowledge\n             -------------\nand experience in financial and business matters that it is capable of\nevaluating the merits and risks of the agreements and obligations entered into\nby them hereunder and bearing the economic risks associated therewith. The\ninformation provided by WorldCom and Block Group to the other concerning its\nknowledge and experience is correct in all material respects. Each of WorldCom\nand Block Group has received and reviewed such information concerning the\nsecurities which may be issued to it hereunder (the 'Securities') as it has\ndeemed appropriate, including the filings with the Securities and Exchange\nCommission made by CompuServe and WorldCom, respectively, since January 1, 1995,\nand has had the opportunity to ask questions and receive answers thereto\nconcerning CompuServe, WorldCom and the Merger and the transactions contemplated\nhereby, and to obtain such further information as it has determined desirable.\nEach of WorldCom and Block Group has been advised by counsel and financial\nadvisors with respect to this Agreement and the agreements and obligations\ncontained herein. Each of WorldCom and Block Group is an 'accredited investor'\nwithin the meaning of Rule 501 of Regulation D promulgated under the Securities\nAct of 1933, as amended (the 'Securities Act').\n\n        4.2 Not Registered Under Securities Act. Each of WorldCom and Block\n            -----------------------------------\nGroup understands that the Securities will not, when delivered hereunder, be\nregistered under the Securities Act, in reliance on an exemption thereunder for\ntransactions not involving a public offering and that the Securities have not\nbeen approved or disapproved by the Securities and Exchange Commission or any\nother federal or state agency. Each of WorldCom and Block Group acknowledges\nthat the other has relied upon its representations and warranties contained in\nthis Agreement as a basis for such exemption.\n\n                                       9\n\n \n        4.3  Investment Purpose.  Each of WorldCom and Block Group will be\n             ------------------\nacquiring any Securities which it may acquire hereunder for its own account, for\ninvestment purposes only, and not with a view to the sale or other distribution,\nin whole or in part, except as permitted by law.\n\n        4.4  Restrictions on Transfers. Each of WorldCom and Block Group\n             -------------------------\nunderstands that the Securities may not be assigned, pledged, hypothecated,\nsold, made subject to a security interest, or otherwise transferred without (i)\nan effective registration statement for such Securities under the Securities Act\nand such applicable state securities laws, or (ii) delivery to the issuer of\nsuch Securities of an opinion of counsel prepared at the expense of the holder\nthereof, which form of opinion and counsel shall be reasonably satisfactory to\nthe issuer and its counsel, that an exemption from registration is available\nunder the Securities Act or under any applicable state securities laws. Each of\nWorldCom and Block Group further understands that there will be placed on the\ncertificate(s) representing the Securities a legend stating in substance:\n\n        THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN\n        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 'SECURITIES\n        ACT'), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED\n        UNTIL A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH\n        APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD\n        THERETO, OR, IN THE OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER OF THESE\n        SHARES, REGISTRATION UNDER SUCH SECURITIES ACT OR SUCH APPLICABLE\n        SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED\n        TRANSFER.\n\n                                 ARTICLE V\n\n                  REPRESENTATIONS AND WARRANTIES OF WORLDCOM\n\n        WorldCom hereby makes the following representations and warranties to\nH&amp;R Block and Block Group, each of which shall be true and correct on the date\nhereof, on the date on which WorldCom delivers notice of its exercise of the\nOption, if it does so, and on the date of the Closing, if any:\n\n          5.1.  Representations and Warranties Under the Merger Agreement\nRestated.  Subject to the Schedules to the Merger Agreement, WorldCom hereby\nmakes the representations and warranties to H&amp;R Block and Block Group contained\nin Article VI of the Merger Agreement, except that any such representation\nand\/or warranty as to the effect of the Merger Agreement or the Merger on\nWorldCom or any WorldCom Entity shall be considered a representation and\/or\nwarranty as to the effect of this Agreement or the Purchase on any such entity\nor entities, as appropriate.\n\n                                  ARTICLE VI\n\n                                   COVENANTS\n\n                                       10\n\n \n          The parties hereto each hereby agree to their respective covenants\ncontained in Articles II, VIII (other than Sections 8.17, 8.24 and 8.25) and IX\nand the first sentence of Section 11.5(a) of the Merger Agreement as independent\nobligations of such parties under this Agreement, it being agreed that H&amp;R Block\nand Block Group further agree to cause CompuServe and the CompuServe Entities to\nperform their covenants under the Merger Agreement, which covenant of H&amp;R Block\nand Block Group shall be considered a separate obligation under this Agreement,\nprovided that (a) no such covenant is repeated herein to the extent it relates\nsolely to the mechanics required to effectuate a merger, (b) any covenant that\nrefers to the Merger Agreement shall be deemed to refer to this Agreement, as\nappropriate, and (c) any covenant that refers to the 'Closing Date' or the\n'Effective Time' shall be deemed to refer to the Closing hereunder, as\nappropriate.  Without limiting the foregoing, the parties agree that (a) the\nindemnification covenants under Section 8.4 of the Merger Agreement are hereby\nagreed to as applicable to breaches of representations, warranties and covenants\nunder this Agreement, and (b) Section 9.1(a)(i) of the Merger Agreement is\nhereby agreed to as applicable to the Purchase.  The parties agree to make the\nElections described in Article IX of the Merger Agreement, as they apply to the\nPurchase, if the Purchase is consummated.\n\n\n                                  ARTICLE VII\n\n                               TERM OF AGREEMENT\n\n          7.1  Commencement of Agreement.  The rights and obligations of the\nparties under this Agreement are effective as of the date hereof.\n\n          7.2  Term.\n\n          (a) This Agreement and the rights granted hereunder shall remain in\neffect until the earlier of (i) the Closing hereunder, (ii) the Closing under\nthe Merger Agreement, and (iii) thirty (30) business days following the\ntermination of the Merger Agreement pursuant to Section 11.1 thereof.\n\n          (b) Notwithstanding the foregoing paragraph (a), upon exercise of the\nOption, the rights and obligations of the parties shall remain in effect\nfollowing termination of the Merger Agreement, provided that, after exercise,\nthe Option and this Agreement shall terminate if the Closing does not take place\nwithin one year following the date of termination of the Merger Agreement.\n\n\n                                 ARTICLE VIII\n\n                                 MISCELLANEOUS\n\n          8.1  Representations and Warranties; Survival''''.  The\nrepresentations, warranties, covenants and agreements contained in this\nAgreement, including those referenced from the Merger Agreement, or in any\ninstrument delivered pursuant to this Agreement shall \n\n                                       11\n\n \nsurvive the termination of the Merger Agreement and the Option and the Closing\nhereunder.\n\n          8.2  Notices''''.  Any notices or other communications required or\ndesired to be given hereunder shall be deemed to have been properly given if\nsent by hand delivery, facsimile and overnight courier, registered or certified\nmail, return receipt requested, postage prepaid, to the parties hereto at the\nfollowing addresses, or at such other address as such party may advise the\nothers in writing from time to time by like notice:\n\n          If to WorldCom:\n\n                    WorldCom, Inc.\n                    515 East Amite Street\n                    Jackson, Mississippi 39201\n                    Attention:  Charles T. Cannada\n                    Facsimile:  (601) 360-\n\n          with copies to:\n\n                    WorldCom, Inc.\n                    10777 Sunset Office Drive\n                    Suite 330\n                    St. Louis, Missouri 63127\n                    Attention:  P. Bruce Borghardt\n                    Facsimile:  (314) 909-4101\n\n                    and\n \n                    Bryan Cave LLP\n                    One Metropolitan Square, Suite 3600\n                    St. Louis, Missouri  63102-2750\n                    Attention: R. Randall Wang\n                    Facsimile:  (314) 259-2020\n\n          If to H&amp;R Block or Block Group:\n\n                    H&amp;R Block, Inc.\n                    World Headquarters\n                    4400 Main Street\n                    Kansas City, MO  64111\n                    Attention:  Frank L. Salizzoni\n\n                                       12\n\n \n          with a copy to:\n\n                    H&amp;R Block, Inc.\n                    World Headquarters\n                    4400 Main Street\n                    Kansas City, MO  64111\n                    Attention:  James Ingraham\n\n                    and\n\n                    Sullivan &amp; Cromwell\n                    125 Broad Street\n                    New York, New York  10004\n                    Attention:  Benjamin F. Stapleton\n                    Facsimile:  (212) 558-3588\n\nAll such notices or other communications shall be deemed to have been duly given\non the date of hand delivery or telecopy or facsimile, if receipt is confirmed,\nor on the next Business Day following timely deposit of such communications with\novernight courier or on the third Business Day following the date of mailing, if\ndelivered by registered or certified mail.\n\n          8.3  Governing Law and Dispute Resolution.  This Agreement shall\nbe interpreted, construed and enforced in accordance with the law of the State\nof Delaware, applied without giving effect to any conflicts-of-law principles,\nexcept to the extent that Missouri law is applicable to the internal affairs of\nH&amp;R Block or Georgia law is applicable to the internal affairs of WorldCom.  Any\ndispute relating to this Agreement or the transactions contemplated hereby shall\nbe resolved in the state courts of general jurisdiction, or the Chancery Court\nif it has subject matter jurisdiction, of the State of Delaware or in the United\nStates District Court for the District of Delaware.  Each party irrevocably\nsubmits to such courts' exclusive jurisdiction and acknowledges that such courts\nare a convenient forum and consents to service of process at the address for\nsuch party set forth in Section 8.2.\n\n          8.4  Specific Performance.  Each party acknowledges and agrees\nthat, in the event of an actual or threatened breach of any of the provisions of\nthis Agreement by such party, the harm to the others will be immediate,\nsubstantial and irreparable and that monetary damages will be inadequate.\nAccordingly, each party agrees that, in such an event, the others will be\nentitled to equitable relief, including an injunction and an order of specific\nperformance, in addition to any and all other remedies at law or in equity.\n\n          8.5  Severability.    The provisions of this Agreement shall be\ndeemed severable and the invalidity or unenforceability of any provision shall\nnot affect the validity or enforceability of the other provisions hereof.  If\nany provision of this Agreement or the application thereof to any Person or any\ncircumstance is invalid or unenforceable, (a) a suitable and equitable provision\nshall be substituted therefor in order to carry out, so far as may be valid and\nenforceable, the intent and purpose of such invalid or unenforceable provision\nand (b) the remainder of this Agreement and the application of such provision to\nother persons, entities or \n\n                                       13\n\n \ncircumstances shall not be affected by such ginvalidity or unenforceability, nor\nshall such invalidity or unenforceability affect the validity or enforceability\nof such provision, or the application thereof, in any other jurisdiction.\n\n          8.6  Captions.  The captions or headings in this Agreement are made\nfor convenience and general reference only and shall not be construed to\ndescribe, define or limit the scope or intent of the provisions of this\nAgreement.\n\n          8.7  Entire Agreement. This Agreement, together with the Merger\nAgreement and the Standstill Agreement, and any documents delivered by the\nparties in connection therewith and herewith, constitute the entire agreement\namong the parties with respect to the subject matter hereof and supersede all\nprior agreements and understandings among the parties with respect thereto. No\naddition to or modification of any provision of this Agreement shall be binding\nupon any party hereto unless made in writing and signed by all parties hereto.\n\n          8.8  Counterparts. This Agreement may be executed in several\ncounterparts, each of which, when so executed, shall be deemed to be an\noriginal, and such counterparts shall, together, constitute and be one and the\nsame instrument.\n\n          8.9  Binding Effect; Assignability. This Agreement shall be binding\non, and shall inure to the benefit of, only the parties hereto, and their\nrespective successors and assigns, and nothing in this Agreement, express or\nimplied is intended to or shall confer upon any Person any right, benefit or\nremedy of nature whatsoever under or by virtue of this Agreement. No party may\nassign or delegate any right or obligation hereunder without the prior written\nconsent of the other party; provided, however, that WorldCom may assign any or\nall of its rights to a direct or indirect subsidiary of WorldCom or, with the\nprior written consent of Block Group, which shall not be unreasonably withheld,\nto any other Person. Any assignment of rights or delegation of obligations not\nin compliance herewith shall be null and void.\n\n          8.10  No Rule of Construction. The parties acknowledge that all\nparties have read and negotiated the language used in this Agreement. The\nparties agree that, because all parties participated in negotiating and drafting\nthis Agreement, no rule of construction shall apply to this Agreement which\nconstrues ambiguous language in favor of or against any party by reason of that\nparty's role in drafting this Agreement.\n\n  8.11  Adjustment upon Changes in Capitalization.\n\n        (a)  In the event of any change in capitalization of CompuServe prior to\npurchase of the Shares by reason of any stock dividend, split-up, merger,\nrecapitalization, combination, exchange of shares or the like, the price and the\nnumber and kind of securities subject to the Option and the Purchase Price\ntherefor shall be appropriately adjusted and proper provision shall be made in\nthe agreements governing such transaction so that WorldCom shall receive, upon\nexercise of the Option, the number and class of shares or other securities or\nproperty that WorldCom would have received in respect of the Shares if the\nOption had been exercised immediately prior to such event, or the record date\ntherefor, as applicable. If, on or after the date hereof, CompuServe should\ndeclare or pay any cash or stock dividend or other \n\n                                       14\n\n \ndistribution or issue any rights with respect to the Shares, payable or\ndistributable to shareholders of record on a date prior to the transfer to the\nname of WorldCom or its nominee on the stock transfer records of CompuServe of\nany Shares or other securities purchased hereunder, then the amount of any such\ncash dividend or cash distribution, and the whole of any such non-cash dividend\ndistribution or right which would have been payable with respect to each Share\npurchased by WorldCom, will be promptly remitted and transferred by Block Group\nto WorldCom. Upon the purchase of the Shares, to the extent consistent with law,\npending remittance, WorldCom will be entitled to all rights and privileges as\nowner of any such non-cash dividend, distribution or right.\n\n        (b)  In the event that CompuServe shall enter into an agreement (i) to\nconsolidate with or merge into any person, other than WorldCom or one of its\nsubsidiaries, and shall not be the continuing or surviving corporation of such\nconsolidation or merger, (ii) to permit any person, other than WorldCom or one\nof its subsidiaries, to merge into CompuServe and CompuServe shall be the\ncontinuing or surviving corporation, but, in connection with such merger, the\nthen outstanding Common Shares shall be changed into or exchanged for stock or\nother securities of CompuServe or any other person or cash or any other property\nor the outstanding Common Shares immediately prior to such merger shall after\nsuch merger represent less than 50% of the outstanding Common Shares and share\nequivalents of the merged company, or (iii) to sell or otherwise transfer all or\nsubstantially all of its assets to any person, other than WorldCom or one of its\nsubsidiaries, then, and in each such case, the agreement governing such\ntransaction shall make proper provisions so that the Option shall, upon the\nconsummation of any such transaction and upon the terms and conditions set forth\nherein, be converted into, or exchanged for, an option to acquire the number and\nclass of shares or other securities or property that WorldCom would have\nreceived in respect of Shares if the Option had been exercised immediately prior\nto such consolidation, merger, sale or transfer, or the record date therefor, as\napplicable. Notwithstanding the foregoing, H&amp;R Block and Block Group covenant\nand agree to take any and all actions within their power to prevent any such\nagreement from being entered into by CompuServe during the term of this\nAgreement.\n\n        (c)  If any event described in paragraph (a) or (b) above shall occur in\nrespect of WorldCom or the WorldCom Common Stock to be issued to Block Group on\nexercise of the Option, corresponding adjustments to the rights of Block Group\nand the obligations of WorldCom shall be made on terms corresponding to those\nset forth in such paragraphs.\n\n\n             [The remainder of this page intentionally left blank]\n\n                                       15\n\n \n  IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to\nbe executed by its officer thereunto duly authorized as of the date first\nwritten above.\n\n                                       H&amp;R BLOCK, INC.\n                                   \n                                   \n                                       By  \/s\/Frank L. Salizzoni\n                                          ------------------------------ \n                                          Name: Frank L. Salizzoni\n                                          Title: President and Chief\n                                                 Execuitve Officer\n                                   \n                                       H&amp;R BLOCK GROUP, INC.\n                                   \n                                   \n                                       By  \/s\/Frank L. Salizzoni\n                                          ------------------------------ \n                                          Name: Frank L. Salizzoni\n                                          Title: President\n                                   \n                                   \n                                       WORLDCOM, INC.\n                                   \n                                   \n                                       By  \/s\/Charles T. Cannada\n                                          ------------------------------ \n                                          Name: Charles T. Cannada\n                                          Title: Senior Vice President\n\n                                       16\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7707,9361],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9629,9633],"class_list":["post-43946","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-h-r-block-inc","corporate_contracts_companies-worldcom-inc","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-securities","corporate_contracts_types-securities__shareholder"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43946"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43946"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43946"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}