EXHIBIT 10.5
Asset Purchase Agreement
THIS ASSET PURCHASE AGREEMENT, dated as of November 16, 2001 (this
"Agreement"), is by and between AccessColo, Inc., a Delaware corporation (the
"Purchaser"), and BridgePoint International (USA) Inc., a Delaware corporation
(the "Seller").
WHEREAS, the Seller is engaged in the business of operating a
colocation facility located at the Leased Property (as defined in Section 1.1(a)
below), at which the Seller's customers install their own computer and
telecommunication equipment in a secure environment and connect to internet and
telecommunication networks (the "Business"); and
WHEREAS, the Purchaser desires to purchase, and obtain the assignment
of, from the Seller, and the Seller desires to sell, convey, assign and transfer
to the Purchaser, the Business and the Purchased Assets (as defined in Section
1.1 below) held by the Seller and utilized in the operation of the Datacenter
(as defined in Section 1.1(a) below), upon the terms and subject to the
conditions set forth below.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants, and agreements contained in this Agreement, the parties, each
intending to be legally bound hereby, agree as set forth below:
ARTICLE I.
PURCHASE AND SALE
1.1. Purchase and Sale of Assets. At the Closing (as defined in Section
1.7 below), the Seller shall sell, assign, transfer, convey, and deliver to the
Purchaser, and the Purchaser shall purchase and accept from the Seller, the
Business and all of the Seller's rights, title and interests in and to the
Purchased Assets, free and clear of all mortgages, security interests, charges,
encumbrances, liens, assessments, covenants, claims, title defects, pledges,
encroachments and burdens of every kind or nature whatsoever ("Encumbrances").
The term "Purchased Assets" means all the assets, properties, rights,
contractual rights of the Seller, and claims of the Seller, in respect of the
Business, tangible and intangible, known and unknown, including, but not limited
to, the following:
(a) All improvements constructed and/or installed by the Seller and
located at that certain colocation facility (the "Datacenter") constructed
and/or operated by the Seller, located at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
(the "Leased Property") as of the date hereof (the "Improvements");
(b) All fixtures, furniture, equipment and other tangible personal
property owned by the Seller and currently located at the Leased Property,
including the items listed on Schedule 1.1(b) hereto;
(c) All rights, title and interest of the Seller in and to the
build-out of the Datacenter, including, without limitation, any and all racks,
wiring, cages, power-distribution equipment, cabling and fuse panels, as more
specifically set forth on Schedule 1.1(c) hereto;
(d) All customer contracts, licenses and agreements, including, without
limitation, the Zone Agreement (as defined in Section 1.4 hereof) and any
customer security deposits, letters of credit or pre-paid service charges, each
as more specifically set forth on Schedule 2.12 hereto, and all rights and
claims thereunder (collectively, the "Assumed Colocation Agreements");
(e) All rights under all warranties, representations, and guarantees
made by suppliers, manufacturers, and contractors;
(f) All rights under confidentiality, nondisclosure and similar
agreements;
(g) All books and records of the Seller, including, without limitation,
any and all information with regard to customers at the Datacenter, data
processing records, employment and personnel records, records relating to
suppliers, supplier lists, cost information, vendor data, specifications and
drawings, correspondence and lists, product literature, artwork, design,
development and manufacturing files, quality records and other data;
(h) All operations manuals, methods and procedures;
(i) Any and all final construction drawings and plans and
specifications for the Leased Property and/or the Improvements; and
(j) Any interest in and to any refund of taxes relating to the
Purchased Assets or the operations of the Datacenter to the extent such taxes
are for, or applicable to, any taxable period (or portion thereof) beginning
after the Closing Date.
1.2. Retained Assets. Notwithstanding the foregoing, the Seller shall
retain, and the Purchased Assets shall not include, the following assets, each
as more specifically set forth on Schedule 1.2 hereto: (i) the consideration to
be delivered to the Seller pursuant to this Agreement; (ii) all other assets of
the Seller not relating to or associated with the Business or the operation of
the Datacenter; (iii) the Seller's other rights hereunder; (iv) the Seller's
minute books, stock books and seal; (v) all claims, choses in action, causes of
action and judgments in respect of any litigation matter and with respect to the
Retained Liabilities (as defined in Section 1.3 hereof); and (vi) all of the
Seller's cash in banks, cash equivalents, bank and mutual fund accounts, trade
and other notes and accounts receivable (as prorated up to the Closing Date), to
the extent attributable to periods preceding the Closing (subject to Section
4.10 hereof).
1.3. Assumed Liabilities; Retained Liabilities. At the Closing, the
Purchaser shall assume from the Seller and undertake to discharge only the
Seller's obligations to perform after the Closing under the (a) Assumed
Colocation Agreements; and (b) subject to the Seller's payment of the December
Payment (as defined in Section 4.1(b) hereof), the Master Lease Agreement, dated
February 8, 2001, by and between Fleet Business Credit Corporation and the
Seller, a true and complete copy of which is attached hereto as Exhibit A (the
"Fleet Lease") (to the extent that such liabilities and obligations set forth in
clauses (a) and (b) in this Section 1.3 do not arise as a result of any default
by the Seller prior to the Closing) (collectively, the "Assumed Liabilities").
Except as expressly provided in this Section 1.3, the Purchaser does not and
shall not assume or in any way be liable or responsible for or undertake to pay,
perform, satisfy or discharge any other liabilities, commitments or obligations,
whether known or unknown, disclosed or undisclosed, absolute, contingent,
inchoate, fixed or otherwise, of the Seller, including, without limitation, all
liabilities, commitments or obligations relating to or arising from taxes of any
nature; employee obligations; or the Purchased Assets or the use thereof (the
"Retained Liabilities") and the Seller shall pay and satisfy when due, in
accordance with Section 4.6 hereof, all of the Retained Liabilities.
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1.4. Purchase Price; Allocation of Additional Purchase Price.
(a) The aggregate purchase price (the "Purchase Price") for the
Business and all of the Purchased Assets shall consist of (x) the Purchaser's
(i) payment of the Xxxxxxx Money Deposit (in accordance with and as defined in
Section 1.5 below), (ii) payment to the Seller of Three Hundred and Ten Thousand
Dollars ($310,000), and (iii) assumption of the Assumed Liabilities
(collectively, the "Initial Purchase Price"); and (y) the Purchaser's payment to
the Seller, subject to Section 7.9 hereof, of up to Five Hundred Thousand
Dollars ($500,000) in the aggregate (the "Additional Purchase Price"), payable
in twelve (12) equal installments after the Closing, as and when the Purchaser
receives in full each of the corresponding monthly fees due from Zone Telecom,
Inc. ("Zone") to the Seller pursuant to that certain Co-location Services
Agreement, dated February 6, 2001, by and between the Seller and Zone (the "Zone
Agreement"), up to a maximum of Five Hundred Thousand Dollars ($500,000);
provided, however, that, in the event that Zone shall default on any monthly
payment, the Purchaser shall retain all, and shall not pay any, of the remaining
Additional Purchase Price, unless Zone shall have cured such default in
accordance with the Zone Agreement; provided, however, that the Purchaser shall
not be entitled to retain and not pay to the Seller the remaining Additional
Purchase Price if Zone's default on a monthly payment is due to a material
default on the part of the Purchaser to perform in accordance with the Zone
Agreement, uncured in accordance with the terms thereunder. The Purchaser shall
promptly give appropriate notice to the Seller of any default by Zone to pay a
monthly payment. In no event shall any draw down on the letter of credit
provided by Zone under the Zone Agreement and assigned to the Purchaser pursuant
hereto constitute a payment requiring the Purchaser to pay to the Seller any
portion of the Additional Purchase Price.
1.5. Deposit. Simultaneously herewith, the Purchaser shall deliver a
check made out to an escrow agent, as selected by the Purchaser (the "Escrow
Agent"), totaling Twenty-Five Thousand Dollars ($25,000) (the "Xxxxxxx Money
Deposit") within two (2) business days of selection of an Escrow Agent, which
Xxxxxxx Money Deposit shall be held by the Escrow Agent, pursuant to the terms
and provisions of an escrow agreement by and among the Seller, the Purchaser and
the Escrow Agent in the form of Exhibit B hereto (the "Escrow Agreement"), until
the Closing Date, at which time the Xxxxxxx Money Deposit shall be paid to the
Seller. The remainder of the Initial Purchase Price and the Additional Purchase
Price shall be paid in accordance with Section 1.6 below. If the Closing shall
not occur by December 31, 2001, for any reason other than a material breach by
the Purchaser under this Agreement, the Xxxxxxx Money Deposit shall be returned
promptly to the Purchaser. If such a breach is alleged by the Seller in writing
pursuant to this Agreement, the Escrow Agent shall hold the Xxxxxxx Money
Deposit until it receives an order from a court of competent jurisdiction or
joint written instructions.
1.6. Payment of Initial Purchase Price and Additional Purchase Price.
(a) Initial Purchase Price. At the Closing and subject to the
release of the Xxxxxxx Money Deposit to the Seller in accordance with the
provisions of Section 1.5 hereof, (i) the balance of the Initial Purchase Price
shall be paid by the Purchaser to the Seller by wire transfer of immediately
available funds in the amount of Three Hundred and Ten Thousand Dollars
($310,000); and (ii) the Purchaser shall assume the Assumed Liabilities and
purchase the Purchased Assets.
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(b) Additional Purchase Price. After the Closing, the
Additional Purchase Price shall be paid, subject to the provisions of Section
1.4 above, in twelve (12) equal installments of $41,667.
1.7. Closing. The transfer of the Purchased Assets and the assumption
of the Assumed Liabilities contemplated hereby shall be deemed to take place at
a closing (the "Closing") at the offices of Xxxxxxxxxxx & Xxxxxxxx LLP, 1251
Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, on November 30,
2001 (the "Closing Date"), or on such other date as the Purchaser and the Seller
may mutually agree to in writing, subject to termination pursuant to Section 6.1
hereof.
1.8. Allocation of Purchase Price. The Purchase Price shall be
allocated on or prior to the Closing, as mutually agreed to by the parties and
in compliance with the United States Internal Revenue Code of 1986, as amended
from time to time. The Purchaser and the Seller shall report the federal, state
and local income and other tax consequences of the purchase and sale
contemplated hereby in a manner consistent with such allocation and shall not
take any position inconsistent therewith upon examination of any tax return, in
any refund claim, in any litigation, or otherwise.
1.9. Proration of Expenses. Subject to Section 7.9 hereof, all accrued
expenses associated with the Lease between 75 Broad, LLC and BridgePoint
International (CANADA) Inc. ("BridgePoint Canada"), dated January 18, 20000 (the
"Lease") and/or the Business, such as electricity, gas, water, sewer, telephone,
property taxes, security services and similar items, shall be prorated between
the Purchaser and the Seller as of the Closing Date.
1.10. Passage of Title. Title to all of the Purchased Assets shall pass
from the Seller to the Purchaser at the Closing, subject to the terms and
conditions of this Agreement. The Purchaser assumes no risk of loss to any of
the Purchased Assets prior to the Closing.
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ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser as follows:
2.1. Due Organization and Qualification. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. The Seller has all requisite power and authority
to own, lease and operate its assets and properties, and to carry on the
business of the Datacenter as presently conducted (the "Business"). The Seller
is duly qualified to transact business and is in good standing in each
jurisdiction in which the nature of its business or the locations of its
property requires such qualification, except where the failure to do so would
not have a material adverse effect on the Seller's business, operations, assets
or condition (financial or otherwise).
2.2. Power and Authority. The Seller has the requisite corporate power
and authority to operate the Business and to execute and deliver this Agreement
and all other agreements contemplated by this Agreement and all of the
agreements, schedules, exhibits, documents and instruments specifically provided
for hereunder to be executed and/or delivered by the respective parties (the
"Transaction Documents") and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Transaction Documents have been duly authorized by all necessary corporate
action on the part of the Seller. This Agreement has been duly executed and
delivered by the Seller and is the valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, moratorium, insolvency,
reorganization or other similar laws now or hereafter in effect generally
affecting the enforcement of creditors' rights, specific performance, injunctive
or other equitable remedies. When executed and delivered by the Seller at the
Closing, each of the Transaction Documents will be the valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as such enforceability may be limited by bankruptcy, moratorium,
insolvency, reorganization or other similar laws now or hereafter in effect
generally affecting the enforcement of creditors' rights, specific performance,
injunctive or other equitable remedies.
2.3. Compliance with Laws. The Seller is in compliance in all material
respects with all Federal, state, local and foreign laws, statutes, ordinances,
regulations, orders, judgments, injunctions, awards or decrees (collectively,
"Laws") applicable to any of the Purchased Assets or its Business operations.
The Seller has not received any notice of material violation or alleged material
violation of any Law by it. The Seller has all licenses, permits, orders and
approvals of Federal, state, local and foreign governmental or regulatory bodies
necessary for the conduct of the Business and operation of the Datacenter.
2.4. No Breach; Consents. Neither the execution and delivery of this
Agreement or any of the Transaction Documents to which the Seller is or is to
become a party, the consummation of the transactions contemplated hereby or
thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by the Seller will: (i) contravene any provision of
any certificate or articles of incorporation or By-laws (the "Governing
Documents") of the Seller; (ii) conflict with, result in a breach of, constitute
a default or an event of default (or an event that might, with the passage of
time or the giving of notice or both, constitute a default or event of default)
under any of the terms of, result in the termination of, result in the loss of
any right under, or give to any other person or entity the right to cause such a
termination of or loss under, any of the Assumed Colocation Agreements or any
other contract, agreement or instrument by which any of the Purchased Assets may
be bound or affected; (iii) result in the creation, maturation or acceleration
of any of the Assumed Liabilities or any other liability of the Seller affecting
any of the Purchased Assets (or give to any other Person the right to cause such
a creation, maturation or acceleration); (iv) violate any Laws or violate any
judgment or order of any court, government (Federal, state, local or foreign),
department, commission, board, bureau, agency, official or other regulatory,
administrative or governmental authority or instrumentality (a "Governmental
Body") to which the Seller is subject and by which any of the Purchased Assets
or Datacenter may be bound or affected; or (v) result in the creation or
imposition of any Encumbrance upon any of the Purchased Assets or the Datacenter
or give to any other person or entity any interest or right therein. No consent,
approval or authorization of, or registration or filing with, any person or
entity or Governmental Body is required in connection with the execution and
delivery by the Seller of this Agreement or any of the Transaction Documents to
which the Seller is or is to become a party pursuant to the provisions hereof or
the consummation by the Seller of the transactions contemplated hereby or
thereby.
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2.5. Condition of Assets; Business; Title. The Purchased Assets (a true
and complete list of which is set forth on Schedule 2.5 hereto) have been
maintained in accordance with good business practice and are in good working
order and are reasonably suitable for the purposes for which they are used in
the Business. The Purchased Assets are all located at the Datacenter and include
all assets that are currently used in and which are necessary for the operation
of the Business in accordance with best business practices. The Improvements
represent all improvements or alterations made at the Datacenter. Except as set
forth on Schedule 2.5 hereto, the Seller has good, marketable and exclusive
title to all of the Purchased Assets and, upon the consummation of the
transactions contemplated hereby, the Purchaser will acquire good, marketable
and exclusive title to all of such Purchased Assets, free and clear of all
Encumbrances.
2.6. Seller Financial Information. The revenues for the Datacenter for
the three- (3) month period ended September 30, 2001, as reflected on Schedule
2.6(a) hereto (the "Revenues"), and the expenses for the Datacenter for the
three- (3) month period ended September 30, 2001, as reflected on Schedule
2.6(b) hereto (the "Expenses"), have been prepared in accordance with Canadian
generally accepted accounting principles ("GAAP") and fairly present in all
material respects the financial condition, Revenues, Expenses and results of
operations of the Seller in respect of the operation of the Datacenter in the
ordinary course of business as of the dates and for the periods indicated
thereby. The Revenues do not, nor will the revenues reflected in the Updated
Revenues and Expenses (as defined in Section 4.9 hereof), reflect any accounts
receivable of the Seller, the transactions for which have not been collected
within ninety (90) days after such accounts receivable were due by the
Datacenter customer, unless such customer has made a payment within the last
thirty (30) days.
2.7. Accounts Receivable. Schedule 2.7 hereto sets forth a true and
complete list of all accounts receivable (the "Accounts Receivable), together
with any unpaid interest or fees accrued thereon or other amounts due with
respect thereto, of the Seller in respect of the Datacenter as of October 31,
2001. Each of the Accounts Receivable arose (i) pursuant to the Assumed
Colocation Agreements and (ii) from bona fide transactions in the ordinary
course of business consistent with the Seller's past practices. To the knowledge
of the Seller, there are no setoffs or counterclaims in respect of such Accounts
Receivable.
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2.8. Litigation. Except as set forth on Schedule 2.8 hereto, there are
no suits or actions, administrative, arbitration or other proceedings or
governmental investigations pending or, to the Seller's knowledge, threatened
against or affecting any of the Purchased Assets or the Assumed Liabilities or
the transactions contemplated by this Agreement or any of the Transaction
Documents. There are no judgments, orders, injunctions, decrees or awards
against the Seller in respect of the Purchased Assets or the Assumed Liabilities
that are not satisfied or remain outstanding or that would prohibit the
execution and delivery of this Agreement or any of the Transaction Documents.
2.9. Absence of Undisclosed Liabilities. The Seller does not have any
liabilities, commitments or obligations, whether accrued, absolute, contingent
or otherwise affecting the Business or any of the Purchased Assets that have not
been described in Schedule 2.9 hereto.
2.10. Absence of Certain Changes. Since September 30, 2001, the Seller
has conducted the Business only in the ordinary course. Without limiting the
generality of the foregoing sentence, since September 30, 2001, except as set
forth on Schedule 2.10 hereto, there has not been any: (i) material adverse
change in the earnings, revenues, Purchased Assets, Accounts Receivable, Assumed
Liabilities, Business or earning power or prospects thereof; (ii) material
damage or destruction to or loss of any of the Purchased Assets or any portion
of the Datacenter, whether or not covered by insurance; (iii) creation of any
Encumbrance on any of the Purchased Assets or the Datacenter; (iv) disposition
of any of the Purchased Assets (other than inventory in the ordinary course of
business); (v) any failure to pay or perform any of the Assumed Liabilities when
due; (vi) creation, termination or amendment of, or waiver of any right under,
any of the Assumed Colocation Agreements or the Lease; or (vii) agreement or
commitment to do any of the foregoing.
2.11. Taxes. The Seller has no liability for any tax in respect of the
Purchased Assets or the Datacenter except for taxes disclosed on Schedule 2.11
hereto.
2.12. Assumed Colocation Agreements; Compliance. Set forth on Schedule
2.12 hereto is a true and complete list and brief description of each of the
Assumed Colocation Agreements, including, without limitation, the Zone Agreement
and the letter of credit thereunder. Each of the Assumed Colocation Agreements
is the legal, valid and binding obligation of the Seller and is in full force
and effect. The Seller has performed all material obligations required to be
performed by either of them under each of the Assumed Colocation Agreements and
are not in breach or default, and are not, to the Seller's knowledge, alleged to
be in breach or default, in any respect thereunder, and no event has occurred
and no condition or state of facts exists (or would exist upon the giving of
notice or the lapse of time or both) that would become or cause a breach,
default or event of default thereunder, would give to any person or entity the
right to cause such a termination or would cause an acceleration of any
obligation thereunder. Except as set forth on Schedule 2.7 hereto, all payments
due to the Seller by the Datacenter customers under the Assumed Colocation
Agreements are, as of the date hereof, current. The Seller is not currently
renegotiating any of the Assumed Colocation Agreements nor has the Seller
received any notice of non-renewal intent to terminate or any other modification
that would adversely affect the rights of the Seller with respect to any of the
Assumed Colocation Agreements. The Seller has no reason to believe that any of
the Datacenter customers under the Assumed Colocation Agreements would not
continue after the Closing under the same terms and provisions thereunder.
Except for the Assumed Colocation Agreements, the Fleet Lease or the Lease,
there are no other agreements, contracts or understandings which are material to
the Business.
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2.13. Assumed Fleet Lease. The Fleet Lease is the legal, valid and
binding obligation of the Seller and is in full force and effect. The Seller has
performed all material obligations required to be performed by it under the
Fleet Lease and is not in breach or default, and is not alleged to be in breach
or default, in any respect thereunder, and no event has occurred and no
condition or state of facts exists (or would exist upon the giving of notice or
the lapse of time or both) that would become or cause a breach, default or event
of default thereunder, would give to any person or entity the right to cause
such a termination or would cause an acceleration of any obligation thereunder.
The Seller is not currently renegotiating the Fleet Lease nor has the Seller
received any notice of non-renewal, intent to terminate or any other
modification that would adversely affect the rights of the Seller with respect
to the Fleet Lease. The Seller has no reason to believe that Fleet Business
Credit Corporation would not continue after the Closing under the same terms and
provisions under the Fleet Lease. All payments due under the Fleet Lease are, as
of the date hereof, current. As of the date hereof, thirty-one (31) monthly
payments shall be due and owing under the Fleet Lease.
2.14. Leased Property.
(a) Schedule 2.14(a) hereto contains an accurate description of all of
the BridgePoint Canada's leasehold interest in the Leased Property and a
description of all of the Improvements used in or necessary to conduct the
operations of the Business.
(b) Except as disclosed on Schedule 2.14(b) hereto, the Datacenter,
including, without limitation, all fixtures, furniture and equipment and
Improvements located thereon, conforms in all material respects to all Lease
restrictions (if any), restrictive covenants and applicable Laws. BridgePoint
Canada has not received written notice of any pending, threatened or
contemplated action to take by eminent domain or otherwise to condemn any part
of the Leased Property.
(c) The Seller has the right to quiet enjoyment of the Leased Property
for the full term, including all renewal rights, of the Lease. BridgePoint
Canada has not received written notice of any proposed, planned or actual
curtailment of service of any utility supplied to the Datacenter. Such utilities
are all connected pursuant to valid permits, are all in good working order and
are adequate to service the operations of the Datacenter as currently conducted
and permit full compliance with all requirements of Law.
(d) Except as provided in the Lease and on Schedule 2.14(d) hereto,
none of the Leased Property is leased, sublet or assigned to any person. The
Lease is a valid agreement in full force and effect in accordance with its terms
and has not been modified or amended, except as set forth in Schedule 2.14(d),
and no party thereto is in default under any of the terms contained therein nor
has any notice thereof been delivered by any party thereto.
(e) Schedule 2.14(e) hereto sets forth a true and complete list of all
contractors, subcontractors, materialmen and consultants (collectively, the
"Providers") who, within the eight (8) months preceding the date hereof, have
provided any services or materials in connection with any work, changes,
improvements, additions, installations or other alterations to the Leased
Property (the "Alterations") made by, or on behalf of, the Seller in respect of
the Leased Property. All payments due and owing to the Providers for the
Alterations within such eight- (8) month period have been paid in full by the
Seller, and the Seller has provided the Purchaser with a copy of each release
and satisfaction of lien received by the Seller from each of the Providers in
respect of such payments.
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2.15. Environmental Matters. Except as disclosed on Schedule 2.15
hereto:
(a) Compliance; No Liability. The Seller has operated the Business and
the Leased Property in compliance with all applicable laws relating to public
health and safety arising out of the environment or protection of the
environment, including common law nuisance, property damage and similar common
law theories ("Environmental Laws"). The Seller is not subject to any liability,
penalty or expense (including legal fees), and the Purchaser will not suffer or
incur any loss, liability, penalty or expense (including legal fees), by virtue
of any violation of any Environmental Law by the Seller in respect of the Leased
Property occurring prior to the Closing or any environmental activity conducted
by the Seller on or with respect to the Leased Property at or prior to the
Closing.
(b) Treatment; CERCLIS. The Seller has not treated, stored, generated,
recycled or disposed of any hazardous substance as defined by any Environmental
Law and any other material regulated by any applicable Environmental Law,
including petroleum, petroleum-related material, crude oil or any fraction
thereof, polychlorinated biphenyls, and any friable asbestos, but not including
any cleaning agents normally stored for use in commercial premises ("Regulated
Material") on the Leased Property, and no other person or entity, to the
Seller's knowledge, has treated, stored, recycled or disposed of any Regulated
Material on any part of the Leased Property. There has been no release by the
Seller or, to the Seller's knowledge, of any Regulated Material at, on or under
the Leased Property. The Seller has not transported any Regulated Material or
arranged for the transportation of any Regulated Material to any location that
is listed or proposed for listing on the National Priorities List pursuant to
the Comprehensive Environmental Response Compensation and Liability Act of 1980,
42 U.S.C. Sections 6901 et seq., as amended ("Superfund"), or the Comprehensive
Environmental Response Compensation Liability Information System List
("CERCLIS") or any other location that is the subject of federal, state or local
enforcement action or other investigation that may lead to claims against the
Seller for cleanup costs, remedial action, damages to natural resources, to
other property or for personal injury including claims under Superfund. None of
the Leased Property is listed or, to the knowledge of the Seller (without due
inquiry), proposed for listing on the National Priorities List pursuant to
Superfund, CERCLIS or any state or local list of sites requiring investigation
or cleanup.
(c) Notices; Existing Claims; Certain Regulated Materials; Storage
Tanks. The Seller has not received any request for information, notice of claim,
demand or other notification that it is or may be potentially responsible with
respect to any investigation, abatement or cleanup of any threatened or actual
release of any Regulated Material. Except as set forth on Schedule 2.15(c)
hereto, the Seller has not transported any Regulated Material for recycling,
treatment, disposal, other handling or otherwise to the Leased Property.
2.16. Customer Relations. There exists no condition or state of facts
or circumstances involving the Seller's customers, suppliers, distributors or
representatives in respect of the Datacenter that the Seller can reasonably
foresee could materially adversely affect the Business or the Purchased Assets
after the Closing Date.
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2.17. Insurance. The Purchaser has been provided with a copy of each
insurance policy since December 1st, 1999 as to which the Seller is the owner,
insured or beneficiary, whether on an "occurrence" or a "claims made" basis,
together with a summary of such policies and copies of certificates of insurance
executed by each insurer or its authorized agent evidencing such insurance.
2.18. Finders' Fees. Except for PricewaterhouseCoopers, whose
remuneration remains the sole responsibility of the Seller, neither the Seller,
nor any of its officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fee, commission or finders'
fee in connection with any of the transactions contemplated hereby or by any of
the Transaction Documents.
2.19. Accuracy of Information Furnished. To the Seller's knowledge, no
representation or warranty made by the Seller in this Agreement, including the
Schedules hereto, and no statement provided in any certificate or other document
furnished or to be furnished by or on behalf of the Seller at the Closing
contains or will contain as of the date such representation and warranty is made
or such Schedule or certificate is delivered any untrue statement of a material
fact or, to Seller's knowledge, omits or will omit to state as of the date that
such representation or warranty is made or such Schedule or certificate is
delivered any material fact that is necessary to make the statements contained
herein or therein not misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Seller as follows:
3.1. Due Organization and Qualification. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware. The Purchaser has all requisite power and authority to own, lease and
operate its assets and properties. The Purchaser is duly qualified to transact
business and is in good standing in each jurisdiction in which the nature of its
business or the locations of its property requires such qualification, except
where the failure to do so would not have a material adverse effect on
Purchaser's business, operations, assets or condition (financial or otherwise).
3.2. Power and Authority. The Purchaser has the requisite corporate
power and authority to execute and deliver this Agreement and all other
agreements contemplated by this Agreement and the Transaction Documents and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and the Transaction Documents have been duly
authorized by all necessary corporate action on the part of the Purchaser. This
Agreement has been duly executed and delivered by Purchaser and is the valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, moratorium, insolvency, reorganization or other similar
laws now or hereafter in effect generally affecting the enforcement of
creditors' rights, specific performance, injunctive or other equitable remedies.
When executed and delivered by the Purchaser at the Closing, each of the
Transaction Documents will be the valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as such
enforceability may be limited by bankruptcy, moratorium, insolvency,
reorganization or other similar laws now or hereafter in effect generally
affecting the enforcement of creditors' rights, specific performance, injunctive
or other equitable remedies.
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3.3. No Breach; Consents. Neither the execution and delivery of this
Agreement or any of the Transaction Documents to which the Purchaser is or is to
become a party, the consummation of the transactions contemplated hereby or
thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by the Purchaser will: (i) contravene any of the
Governing Documents of the Purchaser; or (ii) violate any Law or violate any
judgment or order of any Governmental Body to which the Purchaser is subject. No
consent, approval or authorization of, or registration or filing with, any
person or entity or Governmental Body is required in connection with the
execution and delivery by the Purchaser of this Agreement or any of the
Transaction Documents to which the Purchaser is or is to become a party pursuant
to the provisions hereof or the consummation by the Purchaser of the
transactions contemplated hereby or thereby.
3.4. Litigation. Except as set forth on Schedule 3.4 hereto, there are
no suits or actions, administrative, arbitration or other proceedings or
governmental investigations pending or, to Purchaser's knowledge, threatened
against or affecting any of the transactions contemplated by this Agreement or
any of the Transaction Documents. There are no judgments, orders, injunctions,
decrees or awards against the Purchaser that are not satisfied or remain
outstanding and that would prohibit the execution and delivery of this Agreement
or any of the Transaction Documents.
3.5. Finders' Fees. Neither the Purchaser nor any of its officers,
directors or employees has employed or dealt with any broker or finder or
incurred any Liability for any brokerage fee, commission or finders' fee in
connection with any of the transactions contemplated hereby.
3.6. Financial Resources. The Purchaser has the capacity and financial
resources available to pay the Initial Purchase Price while respecting all
financial tests that may have been imposed by law, lenders or other creditors.
ARTICLE IV.
CERTAIN COVENANTS
4.1. Conduct of Business Pending Closing. From and after the date
hereof and until the Closing Date or earlier termination hereof, unless the
Purchaser shall otherwise consent in writing, the Seller shall conduct its
affairs as follows:
(a) Ordinary Course; Compliance. The Business shall be conducted only
in the ordinary course and consistent with past practice. The Seller shall, in
accordance with good business practice, maintain the Purchased Assets in good
condition, make scheduled payments in accordance with the terms of the Assumed
Liabilities and shall comply in a timely fashion with the provisions of the
Lease and all Assumed Colocation Agreements and its other agreements and
commitments in respect of the Purchased Assets or the Datacenter. The Seller
shall keep available the services of certain of its present employees at the
Datacenter and employ reasonable efforts consistent with past practices to
preserve the goodwill of its suppliers, customers and others having business
relations with it in connection with the Datacenter. The Seller shall maintain
in full force and effect its policies of insurance, subject only to variations
required by the ordinary operations of the Business, or else shall obtain, prior
to the lapse of any such policy, substantially similar coverage with insurers of
recognized standing.
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(b) Transactions. The Seller shall not: (i) transfer or dispose of any
of the Purchased Assets; (ii) enter into any contract or commitment, the
performance of which might extend the Closing Date; (iii) fail to pay or perform
any of the Assumed Liabilities when due, including, without limitation, the
monthly payment due and owing as of December 2001 under the Fleet Lease (the
"December Payment"); (iv) take any action or omit to take any action that will
cause a breach or termination of the Lease or any of the Assumed Colocation
Agreements; or (v) take any other actions that would cause the representations
and warranties in this Agreement not to be true in any material respect on the
Closing Date.
4.2. Access to and Inspection of the Purchased Assets. The Seller
covenants and agrees that from and after the date of the execution of this
Agreement until the Closing or earlier termination of this Agreement, the
Purchaser and its employees, contractors, agents and/or representatives
(including accountants, attorneys, environmental consultants and engineers) may
enter upon any portion of the Datacenter or the Leased Property from time to
time during reasonable business hours, or otherwise at a time agreed to by the
Seller, without any disruption of the normal conduct of the Seller's Business at
the Datacenter, and upon reasonable notice to the Seller, for the purpose of
inspections, making surveys and testing, examination of title and operating
condition of the Purchased Assets and the Leased Property and showing the
Datacenter to prospective customers. The Seller shall similarly make available
to the Purchaser, its employees, contractors, agents and/or representatives all
of the properties, books, contracts, commitments, records, officers, personnel,
accountants (including independent public accountants and their workpapers) and
current Datacenter customers of the Seller, and shall furnish the Purchaser all
such documents and copies of documents and all information with respect to the
Purchased Assets and the Leased Property as the Purchaser may reasonably
request.
4.3. Acquisition Proposals. The Seller shall not (nor shall it permit
any of its affiliates to), directly or indirectly, solicit, initiate or
encourage any inquiries or the making of any proposals from, engage or
participate in any negotiations or discussions with, provide any confidential
information or data to, or enter into (or authorize) any agreement or agreement
in principle with any person or announce any intention to do any of the
foregoing, with respect to any offer or proposal to acquire all or any part of
the Purchased Assets, the Leased Property or the Datacenter, whether by merger,
purchase of capital stock or assets or otherwise.
4.4. Fulfillment of Agreements. The Purchaser and the Seller shall use
commercially reasonable efforts to cause all of those conditions to the
obligations of the other under Article V that are not beyond its reasonable
control to be satisfied on or prior to the Closing and shall use its
commercially reasonable efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement.
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4.5. Certain Transitional Matters. The Seller shall cooperate with and
assist the Purchaser (at the Purchaser's cost) and its authorized
representatives in order to provide, to the extent reasonably requested by the
Purchaser, an efficient transfer of control of the Business and the Purchased
Assets and to avoid any undue interruption in the activities and operations of
the Business following the Closing Date, including, without limitation: (i)
sufficient notification by the Seller, prior to the Closing in form and
substance satisfactory to Purchaser, to all of the Datacenter customers (the
"Customers Notice") of this Agreement and the transactions contemplated hereby,
which notice shall instruct such customers to make all payments, subject to and
following the Closing, directly to the order of the Purchaser and (ii)
assistance with any attempts made by the Purchaser to hire any of the Datacenter
employees; provided, however, that, the Purchaser shall have the right, but not
the obligation, on or after the Closing Date to employ any or all of the
employees of the Seller. In that regard, the Seller shall use its best efforts
to ensure that all of the Assumed Colocation Agreements, the Fleet Lease and any
rights under all warranties, representations and guaranties, including those
made by any of the Providers in respect of any of the Alterations, under terms
no less favorable than those existing as of the date hereof, are assigned to the
Purchaser by the Closing. The Seller shall notify the Purchaser immediately of
any default or breach, or any alleged default or breach by the Seller or any
counterparty under the Lease or any of the Assumed Colocation Agreements. The
Seller also shall not hire or obtain the services of any of the Providers to
perform any Alterations. To the extent that any Encumbrance in respect of
Alterations exists at any time from the date hereof until the Closing, the
Seller shall obtain an appropriate release and satisfaction of lien, reasonably
satisfactory to the Purchaser (the "Releases").
4.6. Retained Assets and Retained Liabilities. From and after the
Closing, the Seller shall keep the Retained Assets and shall satisfy when due
all Retained Liabilities.
4.7. Covenant Against Competition and Disclosure. The Seller shall not
directly or indirectly: (i) for a period of five (5) years after the Closing
Date, control the operation of any colocation facility within a one hundred
(100) mile radius, measured by automobile, of any colocation facility owned and
controlled, directly or indirectly, by the Purchaser on the Closing Date, as set
forth on Schedule 4.7 hereto; or (ii) disclose to anyone, or use in competition
with the Purchaser, any information with respect to any confidential or secret
aspect of the operations of the Business. The Seller acknowledges that the
remedy at law for breach of the provisions of this Section 4.7 will be
inadequate and that, in addition to any other remedy the Purchaser may have, it
will be entitled to an injunction restraining any such breach or threatened
breach, without any bond or other security being required. If any court
construes the covenant in this Section 4.7 or any part thereof, to be
unenforceable because of its duration or the area covered thereby, the court
shall have the power to reduce the duration or area to the extent necessary so
that such provision is enforceable. Until the second (2nd) anniversary of the
Closing Date, the Seller shall not directly or indirectly solicit or offer
employment to any person who is then an employee of the Purchaser or was an
employee of the Purchaser at any time after the Closing to engage in any
business similar to or in competition with the business of the Seller as it has
been conducted prior to Closing. As used herein, the term "control" shall mean,
directly or indirectly, either voting or operational management authority
sufficient to determine the conduct of a business, or the right to make
financial, booking and/or personnel decisions for the business. The ownership of
fifty percent (50%) of the equity of a corporation or fifty percent (50%) of an
interest in a partnership shall be deemed control, with or without any
operational or any other authority.
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4.8. Purchaser's Lease; Performance of Lease Obligations. On or before
the Closing, the Seller shall have caused the termination of the Lease and the
Purchaser and the Seller shall use their collective best efforts to effect a
lease agreement between the Purchaser and the landlord of the Leased Property
(the "Landlord") in respect of the Datacenter on such terms acceptable to the
Purchaser in its sole and absolute discretion (the "Purchaser's Lease"). Prior
to and up until the Closing Date, the Seller shall cause BridgePoint Canada to
perform all of its obligations under the terms of the Lease.
4.9. Supplemental Disclosure. The Seller agrees that, with respect to
its representations and warranties made in this Agreement, it will have a
continuing obligation to promptly provide detailed disclosure to the Purchaser
with respect to any matter hereafter arising or discovered that, if existing or
known at the date of this Agreement and on the Closing Date, would have been
required to be set forth or described in the Schedules hereto; provided,
however, that none of such disclosures shall be deemed to modify, amend or
supplement the representations and warranties of the Seller or the schedules
herein unless the Purchaser shall have consented thereto in writing. Within five
(5) days before the Closing, the Seller shall provide to the Purchaser updated
information regarding the Revenues and Expenses as of the last day of the month
preceding the Closing (the "Updated Revenues and Expenses"), which shall have
been prepared in accordance with GAAP.
4.10. Receipt of Accounts Receivables. Prior to the Closing, the Seller
shall make all arrangements, including providing the Customers Notice and
executing a power of attorney, necessary to ensure that the Purchaser, after the
Closing Date, will receive all of the Accounts Receivable; provided, however,
that, upon receipt thereof, the Purchaser shall, in turn, remit payment thereof
to the Seller; and provided, further, that although the Purchaser shall use
commercially reasonable efforts to collect the Accounts Receivable, the
Purchaser shall, under no circumstances, be liable for any non-collection by the
Purchaser of the Accounts Receivable. Within one (1) day before the Closing, the
Seller shall provide to the Purchaser an aged schedule of the accounts
receivable as of such date (the "Updated Accounts Receivable").
4.11. Further Assurances. The Purchaser and the Seller hereby agree to
execute and deliver at or following the Closing, such other documents,
certificates, agreements and other writings and to take such other actions,
including obtaining assignments (and consents thereto) of the Assumed Colocation
Agreements, each on terms no less favorable than those existing as of the date
hereof, and consents, as may be necessary or reasonably desirable, to consummate
the transactions contemplated hereby.
ARTICLE V.
CONDITIONS TO CLOSING; TERMINATION
5.1. Conditions of Purchaser's Obligation to Close. The obligation of
the Purchaser to close under this Agreement is subject to the satisfaction of
the following conditions, any of which may be waived by the Purchaser in writing
at or prior to the Closing:
(a) Due Diligence. The Purchaser shall have completed, to its
satisfaction, its business, legal, tax and accounting due diligence.
(b) Agreements, Covenants and Conditions. On or before the Closing
Date, the Seller shall have complied with and duly performed in all material
respects all agreements, covenants and conditions on its part to be complied
with and performed pursuant to or in connection with this Agreement on or before
the Closing Date.
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(c) Representations and Warranties. The representations and warranties
of the Seller contained in this Agreement, or otherwise made in connection with
the transactions contemplated hereby, shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made on and as of the Closing Date.
(d) No Legal Proceedings. No court or governmental action or proceeding
shall have been instituted or threatened to restrain or prohibit the
transactions contemplated hereby, and on the Closing Date there will be no court
or governmental actions or proceedings pending or threatened against or
affecting the Seller that involve a demand for any judgment or liability,
whether or not covered by insurance, and that may result in any material adverse
change in the Business or any of the Purchased Assets.
(e) Absence of Material Changes. The Seller shall have not suffered any
material adverse change in the Business or any of the Purchased Assets since
September 30, 2001.
(f) Certificate. The Purchaser shall have received a certificate dated
the Closing Date and executed by an authorized officer of the Seller to the
effect that the conditions expressed in Sections 5.1(b), 5.1(c), 5.1(d) and
5.1(e) have been fulfilled.
(g) Consents. The Purchaser shall have received all consents necessary
to effectuate this Agreement and to consummate the transactions contemplated
hereby.
(h) Purchaser's Lease. The Purchaser shall have executed the
Purchaser's Lease.
(i) Opinion of Counsel. The Seller shall have furnished to the
Purchaser a favorable opinion of Xxxxx & XxXxxxxx, counsel for the Seller, dated
as of the Closing Date, in form and substance satisfactory to the Purchaser.
(j) Bills of Sale. The Purchaser shall have received such bills of
sale, assignments and other documents, including, without limitation, the
Releases, if any, in form and substance satisfactory to the Purchaser conveying
the Purchased Assets to the Purchaser.
(k) Updated Revenues and Expenses. The Purchaser shall have received a
copy of the Updated Revenues and Expenses from the Seller, which shall not
reflect a material decrease from the Revenues or a material increase from the
Expenses.
(l) Receipt of Accounts Receivable. The Purchaser shall have received
the Updated Accounts Receivable and the Seller shall have made appropriate
arrangements, subject to the terms and provisions of Section 4.10 hereof, to
ensure that the Purchaser will receive the Accounts Receivable on behalf of the
Seller after the Closing.
(m) Escrow Agreement. The Seller and the Escrow Agent shall have
executed and delivered the Escrow Agreement to the Purchaser.
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(n) Closing Deliveries. The Purchaser shall have received at or prior
to the Closing all documents set forth in this Section 5.1 and such other
documents, instruments, or certificates as the Purchaser may reasonably request,
including, without limitation, a certificate signed by an authorized
representative of the Seller attesting to the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement.
5.2. Conditions of the Seller's Obligation to Close. The obligation of
the Seller to close under this Agreement are subject to the following conditions
any of which may be waived by the Seller in writing at or prior to the Closing:
(a) Agreements, Covenants and Conditions. On or before the Closing
Date, the Purchaser shall have complied with and duly performed in all material
respects all agreements, covenants and conditions on its part to be complied
with and performed pursuant to or in connection with this Agreement on or before
the Closing Date.
(b) Representations and Warranties. The representations and warranties
of the Purchaser contained in this Agreement, shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made on and as of the
Closing Date.
(c) No Legal Proceedings. No court or governmental action or proceeding
shall have been instituted or threatened to restrain or prohibit the
transactions contemplated hereby.
(d) Closing Certificate. The Seller shall have received a certificate
dated the Closing Date and executed by authorized officers of the Purchaser to
the effect that the conditions contained in Sections 5.2(a), 5.2(b) and 5.2(c)
have been fulfilled.
(e) Consents. The Seller shall have received all consents necessary to
effectuate this Agreement and to consummate the transactions contemplated
hereby, unless the Purchaser shall have waived this condition.
(f) Escrow Agreement. The Purchaser and the Escrow Agent shall have
executed and delivered the Escrow Agreement to the Seller.
(g) Closing Deliveries. The Seller shall have received at or prior to
the Closing all documents set forth in this Section 5.2 and such other
documents, instruments, or certificates as the Seller may reasonably request,
including, without limitation, a certificate signed by authorized
representatives of the Purchaser attesting to the authenticity of the
resolutions authorizing the transactions contemplated by this Agreement.
ARTICLE VI.
TERMINATION
6.1. Termination.
This Agreement may be terminated at any time prior to Closing:
(a) at any time by the mutual consent in writing of the parties hereto;
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(b) by the Seller or the Purchaser in writing if the Closing shall not
have occurred by December 31, 2001, but only if the Closing shall not have
occurred for a reason other than the breach by such terminating party of any of
its representations, warranties, covenants or agreements contained herein;
(c) at any time by the Purchaser in writing upon a material breach of
any of the representations, warranties, covenants or agreements of the Seller
contained in this Agreement; or
(d) at any time by the Seller in writing upon a material breach of any
of the representations, warranties, covenants or agreements of the Purchaser
contained in this Agreement.
In the event of termination of this Agreement by the Seller or the
Purchaser prior to the Closing as set forth above, this Agreement shall
forthwith terminate and there shall be no liability on the part of the Seller or
the Purchaser; provided, however, that no party shall be relieved of any loss,
damage or liability occurring or sustained as a result of a termination
following such party's material breach of any representation, warranty, covenant
or agreement contained in this Agreement. Notwithstanding any termination of
this Agreement, the provisions of this Section 6 and Section 8 hereof shall
survive.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1. Survival of Representations. The representations and warranties of
the Seller in this Agreement or in any document or certificate delivered
pursuant hereto shall survive the Closing Date for a period of three (3) years,
and shall then terminate; provided, however, that (i) any such representation
and warranty shall survive the time it would otherwise terminate only with
respect to claims of which notice has been given as provided in this Agreement
prior to such termination and (ii) such time limitation shall not apply to the
representations and warranties set forth in Sections 2.5, 2.9, 2.11, 2.18, and
3.5 hereof, which shall survive until the expiration of the applicable statute
of limitations.
7.2. Indemnitors; Indemnified Persons. For purposes of this Section 7,
each party that, pursuant to this Section 7, shall agree to indemnify any other
person or entity shall be referred to, as applicable, as the "Indemnitor", and
each such person and entity who is entitled to be indemnified by any Indemnitor
shall be referred to as the "Indemnified Person" with respect to such
Indemnitor.
7.3. Indemnity of Seller. The Seller hereby agrees to defend,
indemnify, hold harmless and reimburse the Purchaser and its directors,
officers, agents and employees from and against any and all claims, liabilities,
losses, damages and expenses incurred by such Indemnified Persons (including
reasonable attorneys' fees and disbursements) that shall be caused by or related
to or shall arise out of: (a) any breach (or alleged breach in connection with a
claim asserted by a third party) of any representation or warranty of the Seller
contained in this Agreement and in any document or certificate delivered by the
Seller pursuant hereto; (b) any breach of any covenant or agreement of the
Seller contained in this Agreement; and (c) any failure by the Seller to satisfy
the Retained Liabilities and the operation of the Business prior to the Closing,
and shall reimburse such Indemnified Persons for all costs and expenses
(including reasonable attorneys' fees and disbursements) as they shall be
incurred, in connection with paying, investigating, preparing for or defending
any action, claim, investigation, inquiry or other proceeding, whether or not in
connection with pending or threatened litigation, that shall be caused by or
related to or shall arise out of such breach (or alleged breach in connection
with a claim asserted by a third party), whether or not any such Indemnified
Person shall be named as a party thereto and whether or not any liability shall
result therefrom. The Seller further agrees that it shall not, without the prior
written consent of the Purchaser settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder unless such settlement,
compromise or consent shall include an unconditional release of each Indemnified
Person under this Section 7.3 from all liability arising out of such claim,
action, suit or proceeding.
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7.4. Indemnity of Purchaser. The Purchaser hereby agrees to defend,
indemnify, hold harmless and reimburse the Seller and its directors, officers,
agents and employees from and against any and all claims, liabilities, losses,
damages and expenses incurred by them (including reasonable attorneys' fees and
disbursements) that shall be caused by or related to or shall arise out of: (a)
any breach (or alleged breach in connection with a claim asserted by a third
party) of any representation or warranty of the Purchaser contained in this
Agreement; (b) subject to Section 4.10 hereof, any breach of any covenant or
agreement of the Purchaser contained in this Agreement and in any certificate
delivered by Purchaser and/or Parent pursuant hereto; and (c) any failure by the
Purchaser to satisfy the Assumed Liabilities and the operation of the Business
after Closing, and shall reimburse such Indemnified Persons for all costs and
expenses (including reasonable attorneys' fees and disbursements) as shall be
incurred, in connection with paying, investigating, preparing for or defending
any action, claim, investigation, inquiry or other proceeding, whether or not in
connection with pending or threatened litigation, that shall be caused by or
related to or shall arise out of such breach (or alleged breach in connection
with a claim asserted by a third party), whether or not such Indemnified Persons
shall be named as a party thereto and whether or not any liability shall result
therefrom. The Purchaser further agrees that it shall not, without the prior
written consent of the Seller, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder unless such settlement,
compromise or consent shall include an unconditional release of each Indemnified
Person under this Section 7.4 from all liability arising out of such claim,
action, suit or proceeding.
7.5. Procedures for Indemnification; Defense. Promptly after receipt by
an Indemnified Person of notice of the commencement of any action or proceeding
with respect to which indemnification may be sought hereunder, such Indemnified
Person shall notify the Indemnitor of the commencement of such action or
proceeding, but failure to so notify the Indemnitor shall not relieve the
Indemnitor from any liability that the Indemnitor may have hereunder or
otherwise, unless the Indemnitor shall be materially prejudiced by such failure.
If the Indemnitor shall so elect, the Indemnitor shall assume the defense of
such action or proceeding, including the employment of counsel reasonably
satisfactory to such Indemnified Person, and shall pay the fees and
disbursements of such counsel. In the event, however, that such Indemnified
Person shall reasonably determine in its judgment that having common counsel
would present such counsel with a conflict of interest or alternative defenses
shall be available to an Indemnified Person or if the Indemnitor shall fail to
assume the defense of the action or proceeding in a timely manner, then such
Indemnified Person may employ separate counsel to represent or defend it in any
such action or proceeding and the Indemnitor shall pay the reasonable fees and
disbursements of such counsel; provided, however, that the Indemnitor shall not
be required to pay the fees and disbursements of more than one (1) separate
counsel for all Indemnified Persons in any jurisdiction in any single action or
proceeding. In any action or proceeding the defense of which the Indemnitor
shall assume, the Indemnified Person shall have the right to participate in (but
not control) such litigation and to retain its own counsel at such Indemnified
Person's own expense except as otherwise provided above in this Section 7.5, so
long as such participation does not interfere with the Indemnitor's control of
such litigation.
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7.6. Limitation on Indemnification. Notwithstanding any provision of
this Section 7 to the contrary, no Indemnified Person shall be entitled to
assert any claim for indemnification in respect of claims for breach of
representations or warranties under each of Sections 7.3(a) and 7.4(a) hereof
until such time as claims for indemnification thereunder shall exceed $5,000;
provided, however, that the dollar amount of such indemnification obligations
may not exceed, in the aggregate, the amount of the Purchase Price to the extent
actually paid (the "Claims Limitation"), unless the Indemnitor shall have
provided information to the Purchaser or the Seller, as the case may be, in
connection herewith, or made representations or warranties hereunder, that, in
either case, were fraudulent or made in bad faith, in which event the Claims
Limitation shall not apply; and provided, further, that the Purchaser's
post-Closing obligations under Section 4.10 hereof shall not be subject to the
provisions of this Section 7.
7.7. Relationship with Allocation of Additional Purchase Price.
Notwithstanding any payment that may be due by the Purchaser to the Seller under
Section 1.4 hereof, the indemnity provisions of this Section 7 shall remain in
full force and effect without any modification or diminution thereof.
7.8. Exclusive Remedy. Each of the Purchaser and the Seller
acknowledges and agrees that from and after the Closing that (absent fraud and
subject to applicable Law) its sole exclusive remedy (at law or equity) with
respect to any and all claims against the other party shall be made pursuant to
the indemnification provisions set forth in this Section 7.
7.9. Set-Off Rights. Subject to the limitations set forth in Section
7.6 hereof, any obligation due from the Seller hereunder (including any
indemnification claim may be first satisfied, at the Purchaser's election,
through an offset against the Additional Purchase Price.
ARTICLE VIII.
MISCELLANEOUS
8.1. Costs and Expenses. The Purchaser and the Seller shall each pay
their respective costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of this Agreement and the Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, all fees and expenses of agents,
representatives, counsel, brokers or finders and accountants. All transfer taxes
incurred as a result of the transfer of the Purchased Assets shall be paid by
the Seller.
8.2. Further Assurances. Each party shall, at any time and from time to
time on and after the Closing Date, upon request by the other party and without
further consideration, take or cause to be taken such actions and execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming the Purchased Assets to the requesting
party.
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8.3. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given when delivered by hand or by
facsimile transmission, when telexed, or upon receipt when mailed by registered
or certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to the Purchaser, to:
AccessColo, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
(b) if to the Seller, to:
BridgePoint International, Inc.
000 xxxx. Xxxxxx-Xxxxxx, xxxxx 000
Xxxxx-Xxxxxxx, Xxxxxx, X0X 0X0
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxxxx-Chatillon
Any party hereto may change the address to which notice to it, or
copies thereof, shall be addressed, by giving notice thereof to the other
parties hereto in conformity with the foregoing.
8.4. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely within such jurisdiction
8.5. Transferability. This Agreement and all the rights and powers
granted hereby shall bind and inure to the benefit of the parties hereto and
their respective permitted successors and assigns. This Agreement and the
rights, interests and obligations hereunder may not be assigned by any party
hereto without the prior written consent of the other parties hereto, except
that the Purchaser may make such assignments to any affiliate of the Purchaser,
provided, that the Purchaser remains liable hereunder.
8.6. Amendment and Waiver. To be effective, any amendment or waiver
under this Agreement must be in writing and be signed by the party against whom
enforcement of the same is sought. Neither the failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or to insist
upon compliance by any other party with its obligations hereunder, nor any
custom or practice of the parties at variance with the terms hereof shall
constitute a waiver by such party of its right to exercise any such right, power
or remedy or to demand such compliance.
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8.7. Entire Agreement. Except as set forth in this Section 8.7, this
Agreement and the Schedules and Exhibits hereto set forth all of the promises,
covenants, agreements, conditions and undertakings between the parties hereto
with respect to the subject matter hereof, and supersede all prior or
contemporaneous agreements and understandings, negotiations, inducements or
conditions, express or implied, oral or written.
8.8. Severability. If any term or other provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
8.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PURCHASER:
ACCESSCOLO, INC.
By: /s/ A. Xxxx Xxxx
--------------------------------------
Name: A. Xxxx Xxxx
Title: President
SELLER:
BRIDGEPOINT INTERNATIONAL
(USA) INC.
By: /s/ Yves Grou
--------------------------------------
Name: Yves Grou
Title: Director
INTERVENTION
Bridgepoint International (Canada) Inc. hereby intervenes to this Agreement in
order to acknowledge as true and accept the terms hereof and more specifically
covenants and agrees that it shall use its best efforts to accomplish the
objectives of the transactions contemplated hereby and assign, transfer, convey
and deliver to the Purchaser all of its rights, title and interests, if any, in
and to the Purchased Assets and any other assets in respect of the Datacenter.
BRIDGEPOINT INTERNATIONAL (CANADA) INC
By : /s/ Xxxxxx Xxxxxxxxxxxx-Chatillon
-----------------------------------------------
Xxxxxx Xxxxxxxxxxxx-Chatillon
Secretary
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SCHEDULES
Schedule 1.1(b) - Personal Property
Schedule 1.1(c) - Build-out Assets
Schedule 1.2 - Retained Assets
Schedule 2.5 - Purchase Assets
Schedule 2.6(a) - Revenues
Schedule 2.6(b) - Expenses
Schedule 2.7 - Accounts Receivable
Schedule 2.8 - Litigation
Schedule 2.9 - Absence of Undisclosed Liabilities
Schedule 2.10 - Absence of Certain Changes
Schedule 2.11 - Taxes
Schedule 2.12 - Assumed Colocation Agreements
Schedule 2.14(a) - Leasehold Interest
Schedule 2.14(b) - Lease Restrictions
Schedule 2.14(d) - Sublease/Assignment
Schedule 2.14(e) - Providers/Alterations
Schedule 2.15 - Environmental Matters
Schedule 3.4 - Litigation
Schedule 4.7 - Purchaser's Colocation Facilities
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EXHIBITS
Exhibit A - Fleet Lease
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