EXHIBIT 10.1 ASSET PURCHASE AGREEMENT

 

 

TABLE OF CONTENTS

 

					Page
ARTICLE I DEFINITIONS					1
		Section 1.1	Definitions		1
		Section 1.2	Interpretation		8
		Section 1.3	Accounting Terms and Determinations		8
		Section 1.4	Legal Representation of the Parties		8
ARTICLE II PURCHASE AND SALE OF THE ACQUIRED ASSETS					9
		Section 2.1	Purchase and Sale		9
		Section 2.2	Assets		9
		Section 2.3	Liabilities		10
		Section 2.4	Closing		11
		Section 2.5	Deliveries		11
		Section 2.6	Allocation of Purchase Price		13
		Section 2.7	Purchase Price Adjustment		14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER					15
		Section 3.1	Organization, Good Standing and Power		15
		Section 3.2	Enforceability		15
		Section 3.3	No Conflict		16
		Section 3.4	Existing Condition		16
		Section 3.5	Assets — Title and Condition		16
		Section 3.6	Taxes		17
		Section 3.7	Compliance With Environmental Laws		17
		Section 3.8	Compliance With Applicable Laws		18
		Section 3.9	Legal Proceedings		18

 

 

 

 

		Section 3.10	Contracts		18
		Section 3.11	Intellectual Property		19
		Section 3.12	Brokers Fee		19
		Section 3.13	Certain Payments		19
		Section 3.14	Financial Statements		19
		Section 3.15	Employees; Labor		19
		Section 3.16	Interest In Other Entities; No Third Party Options		20
		Section 3.17	Seller’s Books and Records		21
		Section 3.18	Seller Disclosure Schedule		21
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER					21
		Section 4.1	Organization and Good Standing		21
		Section 4.2	Enforceability		21
		Section 4.3	No Conflicts; Consent		22
		Section 4.4	Certain Proceedings		22
		Section 4.5	Financing		22
		Section 4.6	Brokers Fee		22
		Section 4.7	Seller Consents		22
		Section 4.8	Investigation By Purchaser		22
ARTICLE V COVENANTS					23
		Section 5.1	Expenses		23
		Section 5.2	Additional Documents and Further Assurances; Cooperation		23
		Section 5.3	Access to Information		23
		Section 5.4	Public Disclosure		23
		Section 5.5	Employment Issues		23
		Section 5.6	Restrictive Covenants		24

 

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		Section 5.7	Accounting		25
ARTICLE VI INDEMNIFICATION; REMEDIES					25
		Section 6.1	Indemnification by Seller		25
		Section 6.2	Indemnification by Purchaser		26
		Section 6.3	Time Limitations on Obligations		26
		Section 6.4	Procedures		26
		Section 6.5	Dollar Limitation on Seller’s Indemnification Obligations		28
		Section 6.6	No Consequential Damages; Additional Limitations		28
		Section 6.7	Subrogation		29
		Section 6.8	Additional Environmental Covenant and Indemnity		29
ARTICLE VII MISCELLANEOUS					30
		Section 7.1	Amendments		30
		Section 7.2	Notices		30
		Section 7.3	Counterparts		31
		Section 7.4	Entire Agreement		31
		Section 7.5	No Third-Party Beneficiaries		32
		Section 7.6	Severability		32
		Section 7.7	Choice of Law		32
		Section 7.8	Enforcement; Venue		32
		Section 7.9	Waivers		32
		Section 7.10	No Assignment		33

 

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EXHIBITS:
EXHIBIT A:		SECURED SUBORDINATED PROMISSORY NOTE		A-l
EXHIBIT B:		ASSIGNMENT AND ASSUMPTION AGREEMENT		B-l
EXHIBIT C:		BILL OF SALE		C-l
EXHIBIT D:		GROUND LEASE		D-l
EXHIBIT E:		REAL PROPERTY DEED		E-l
EXHIBIT F:		SUBLEASE AGREEMENT		F-l
EXHIBIT G:		MASTER SERVICES AGREEMENT		G-l
EXHIBIT H:		CONSULTING AGREEMENT		H-l
EXHIBIT I:		BUILDING DEED		I-1
EXHIBIT J:		SECURITY AGREEMENT		J-l
EXHIBIT K:		TRUST DEED		K-l
EXHIBIT L:		EMPLOYMENT AGREEMENT		L-l
EXHIBIT M:		GUARANTY		M-l
SCHEDULES:				S-1
Schedule 1.1		Calculation of Target Net Book Value
Schedule 2.2(a)		Acquired Assets
Schedule 2.2(b)		Excluded Assets
Schedule 2.3(a)		Assumed Liabilities
Schedule 2.3(b)		Excluded Liabilities
Schedule 2.6		Allocation of Purchase Price
Schedule 2.7(a)		Form of Closing Date Balance Sheet
Schedule 5.5		Employment Offers/Terms
DISCLOSURE SCHEDULES
Section 3.1		Jurisdictions
Section 3.3		Conflicts
Section 3.4		Existing Condition
Section 3.5		Title Exceptions
Section 3.7		Environmental Disclosures
Section 3.8		Compliance Disclosures
Section 3.9		Legal Proceedings
Section 3.11		Intellectual Property Disclosures
Section 3.14		Financial Statements
Section 3.15		Employees

 

 

ASSET PURCHAS E AGREEMENT

 

ASSET PURCHASE AGREEMENT, dated as of May 31, 2005 (this “Agreement”), by and between Consonus, Inc., a Utah corporation (the “Seller”), and Consonus Acquisition Corp., a Delaware Corporation (the “Purchaser”).

 

Seller is engaged in the business of designing, building, and operating data centers, information technology networks and web-enabled application delivery systems, which are delivered through Seller’s centers, voice and data network engineering, internet application integration and other managed services (the “Business”).

 

Seller wishes to sell to Purchaser and Purchaser wishes to purchase from Seller substantially all of the assets related to the Business as described in this Agreement, subject to the terms and conditions hereinafter set forth.

 

As an inducement to Purchaser to enter into this Agreement, Questar InfoComm, Inc., the immediate parent company of Seller, has agreed to indemnify and hold harmless Purchaser from certain claims as described in Article VI herein.

 

In consideration of the foregoing and the mutual covenants in this Agreement, and for such other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Purchaser, intending to be legally bound, agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1    Definitions . For purposes of this Agreement, the following terms and variations thereof have the meanings specified or referred to in this Section 1.1 :

 

“Accounting Firm” has the meaning set forth in Section 2.7(c).

 

“Acquired Assets” has the meaning set forth in Section 2.2(a).

 

“Agreement” has the meaning set forth in the first paragraph.

 

“Allocation Schedule” has the meaning set forth in Section 2.6.

 

“Assigned Contracts” has the meaning set forth in Section 2.2(a).

 

“Assignment and Assumption Agreement” has the meaning set forth in Section 2.1(b).

 

“Assumed Liabilities” has the meaning set forth in Section 2.3(a).

 

“Bill of Sale” has the meaning set forth in Section 2.5(a)(i).

 

 

“Book Value” means as of any date of determination, the excess of book value of the Acquired Assets as of such date over the Assumed Liabilities as of such date determined in accordance with GAAP.

 

“Breach” means any inaccuracy in or breach of (subject to any materiality or knowledge qualifiers as expressly set forth in this Agreement), or any failure to perform or comply with, a representation, warranty, covenant, obligation, or other provision of this Agreement.

 

“Building” means the building, but not the real property, located at 118 South 1000 West, Salt Lake City, Utah, together with all improvements located thereat and thereon, to be acquired by Purchaser on the Closing Date.

 

“Building Deed” has the meaning set forth in Section 2.5(a)(x).

 

“Business Day” means any day other than a Saturday, a Sunday or a day when commercial banks in New York, New York or Salt Lake City, Utah are authorized by law, rule or regulation to be closed.

 

“Claim Notice” has the meaning set forth in Section 6.4(a).

 

“Closing” has the meaning set forth in Section 2.4.

 

“Closing Date” means the date and time as of which the Closing actually takes place.

 

“Closing Date Balance Sheet” has the meaning set forth in Section 2.7(a).

 

“Closing Date Book Value” has the meaning set forth in Section 2.7(a). The Closing Date Book Value shall be calculated in the same manner as the Target Net Book Value.

 

“Closing Payment” has the meaning set forth in Section 2.1(b).

 

“Code” means the Internal Revenue Code of 1986, as amended to date.

 

“Conflict” means any contravention, conflict, violation or breach.

 

“Consent” means any approval, consent, registration, filing, ratification, waiver, or other authorization.

 

“Consulting Agreement” has the meaning set forth in Section 2.5(a)(viii).

 

“Contract” means any written agreement, contract, obligation, promise, or undertaking that is legally binding.

 

“Deductible” has the meaning set forth in Section 6.5.

 

“Deed” has the meaning set forth in Section 2.5(a)(iv).

 

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“Employee Benefit Plan” means any (i) “employee benefit plan” as defined in Section 3(3) of ERISA, and (ii) bonus, equity option, equity purchase, deferred compensation, severance, incentive plan or arrangement or other employee fringe benefit plan.

 

“Employment Agreement” has the meaning set forth in Section 2.5(b)(viii).

 

“Enforceability Exceptions” means bankruptcy, insolvency, reorganization, moratorium or other similar laws now or later in effect relating to creditors’ rights generally and by general principles of equity, regardless of whether the proceeding is in equity or at law.

 

“Environmental Law” means any applicable binding and enforceable federal, state or local statute, law, rule, regulation, ordinance or code relating to the environment or Hazardous Materials, as currently enforced, including the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq, as amended, the Resource Conservation and Recovery Act 42 U.S.C. §6901 et seq; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq; the Clean Air Act, 42 U.S.C. § 7401 et seq; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq; and the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq (to the extent it regulates occupational exposure to Hazardous Materials).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Excluded Assets” has the meaning set forth in Section 2.2(b).

 

“Excluded Liabilities” has the meaning set forth in Section 2.3(b).

 

“Facilities” means the Building and the Real Property.

 

“GAAP” means United States generally accepted accounting principles, consistently applied.

 

“Governmental Authorization” means any: (a) Consent, permit, license, certificate, franchise, concession, approval, consent, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Entity or pursuant to any Law; or (b) right under any Contract with any Governmental Entity.

 

“Governmental Entity” means any: (a) nation, state, county, city, town, village, district, or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (d) multi-national organization or body; or (e) body exercising, or entitled to

 

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exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

 

“Ground Lease” has the meaning set forth in Section 2.5(a)(iii).

 

“Ground Lease Title Commitment” has the meaning set forth in Section 2.5(a)(xi).

 

“Hazardous Materials” means any substances that are defined or listed in, or otherwise classified pursuant to Environmental Laws as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” “pollutants,” “toxic pollutants,” “hazardous air pollutants,” “contaminant” or any other similar designation.

 

“Indemnified Party” means a Person entitled to indemnification under Section 6.1 or 6.2.

 

“Indemnifying Party” means a Person obligated to provide indemnification under Section 6.1 or 6.2.

 

“Intellectual Property” means all intellectual property owned or licensed (as licensor or licensee) by Seller in which Seller has a proprietary interest, including:

 

(i)        Seller’s name, all assumed fictional business names, trade names, registered and unregistered trademarks, service marks and applications (collectively, “Marks”);

 

(ii)       All patents, patent applications and inventions and discoveries that may be patentable (collectively, “Patents”);

 

(iii)      all registered copyrights in both published works and unpublished works (collectively, “Copyrights”);

 

(iv)      all rights in mask works;

 

(v)       all know how, trade secrets, confidential or proprietary information, customer lists, software, technical information, data, process technology, plans, drawings and blue prints (collectively, “Trade Secrets”); and

 

(vi)      all rights in internet domain names presently used by Seller (collectively “Net Names”).

 

“Law” means any federal, state, local, municipal, foreign, international, multinational, or other constitution, law, ordinance, principle of common law, regulation, rule, statute, treaty, or administrative order.

 

“Leases” mean collectively the Ground Lease and the Sublease.

 

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“Liens” means all mortgages, liens, security interests, charges, easements, leases, subleases, rights of way, options, claims or other similar encumbrances. A Lien shall not include any Permitted Liens.

 

“Losses” means any out-of-pocket loss, liability, claim, damage or expense (including reasonable legal fees and expenses), fines or penalties.

 

“Lowest Cost Response” means the response required or allowed under Environmental Laws that addresses the condition present at (x) the lowest cost (considered as a whole taking into consideration any negative impact such response may have on the conduct of the applicable Party’s business and any potential additional costs or liabilities that may arise as a result of such response) as compared to any other response that is consistent with Environmental Laws and (y) consistent with the policies of such Party to address similar conditions present, if any, at such Party’s other properties. Taking no action shall constitute the Lowest Cost Response if, after investigation, taking no action is determined to be consistent with Environmental Laws, any requirements of contracts, leases or other agreements binding on the property and any requirements of any governmental authority with jurisdiction. If taking no action is not consistent with Environmental Laws, the least costly non-permanent remedy (such as mechanisms to contain or stabilize hazardous substances) shall be the Lowest Cost Response, provided that such non-permanent remedy is consistent with the Environmental Laws and least costly permanent remedy.

 

“Material Adverse Effect” means a material adverse effect on (i) the long term business, financial condition, operations, assets or properties or results of operations of the Business or (ii) the consummation of the transactions contemplated by this Agreement; provided that the foregoing shall not include events or effects relating to or arising from (a) the economy of the United States generally or of the state of Utah in particular, (b) any disruption or adverse change in the financial or capital markets generally or (c) events or circumstances that affect a Party’s business in the same manner and to the same extent as other businesses in such industry generally.

 

“Master Services Agreement” has the meaning set forth in Section 2.5(a)(vii).

 

“Notice of Disagreement” has the meaning set forth in Section 2.7(b)

 

“Order” means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Entity or by any arbitrator.

 

“Party” means either Purchaser or Seller, as the case may be.

 

“Permitted Lien” means (a) mechanics’, carriers’, workers’ and repairers’ Liens, purchase money security interests and other similar liens arising or incurred in the ordinary course of business related to obligations as to which (i) there is no default on the part of the applicable Party and (ii) Seller has not received notice of the commencement of foreclosure

 

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actions with regard thereto; (b) Liens for current Taxes and assessments not yet delinquent, or the amount or validity of which is being contested in good faith by appropriate proceedings during which collection or enforcement against the relevant property is stayed; (c) applicable zoning laws and ordinances and municipal regulations and rights reserved to or vested in any Governmental Entity to control or regulate real property and realty rights; (d) Liens, easements, encumbrances and reservations and restrictions of record, or those not arising pursuant to an instrument of record, but that would be disclosed by an accurate survey; and (e) any other Liens disclosed in Section 3.5 of the Seller Disclosure Schedule or that would not reasonably be expected to have a Material Adverse Effect; provided that none of the items described in (c) and (d) above violate or prohibit the use of the property as a Data Center and activities ancillary thereto.

 

“Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or any Governmental Entity.

 

“Pre-Existing Environmental Condition” shall have the meaning set forth in Section 6.8(a).

 

“Proceeding” means any action, arbitration, audit, hearing, written claim, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Entity or arbitrator.

 

“Purchase Price” has the meaning set forth in Section 2.1(b).

 

“Purchaser” has the meaning set forth in the first paragraph.

 

“Purchaser Documents” has the meaning set forth in Section 2.5(b).

 

“Real Property” means the real property and building owned by Seller located at 7202 South Campus Drive, West Jordan, Utah to be acquired by Purchaser on the Closing Date.

 

“Real Property Deed” has the meaning set forth in Section 2.5(a)(iv).

 

“Real Property Title Commitment” have the meaning set forth in Section 2.5(a)(v).

 

“Reasonable Efforts” means the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to achieve that result in a timely manner; provided, however, that a Person required to use Reasonable Efforts under this Agreement will not be required to make any material change to its business, participate in any litigation, dispose of any material asset, expend material funds, incur any material burden or take actions that would result in a material adverse change in the benefits to such Person.

 

“Related Agreements” has the meaning set forth in Section 2.5(a)(ix).

 

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“Representative” means with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of the Person, including legal counsel, accountants, and financial advisors.

 

“Secured Subordinated Promissory Note” has the meaning set forth in Section 2.1(b).

 

“Security Agreement” has the meaning set forth in Section 2.5(b)(iii).

 

“Seller” has the meaning set forth in the first paragraph.

 

“Seller Disclosure Schedule” means the disclosure schedule Seller delivered to Purchaser concurrently with the execution and delivery of this Agreement.

 

“Seller Documents” has the meaning set forth in Section 2.5(a).

 

“Sublease” has the meaning set forth in Section 2.5(a)(vi).

 

“Target Net Book Value” means US $12,983,368. The calculation of the Target Net Book Value is set forth on Schedule 1.1.

 

“Tax” means (a) any income, gross receipts, ad valorem, premium, excises, value-added, sales, use, transfer, franchise, license, severance, stamps, occupation, service, lease, withholding, employment, social security, unemployment, real property, personal property, environmental, profit, vehicle, payroll, or property tax, alternative or add-on minimum tax, or other tax fee or assessment, together with any interest and any penalty, addition to tax or additional amount imposed by any Governmental Entity responsible for the imposition of any such tax, with respect to Seller and (b) any liability of Seller for the payment of any amount of the type described in clause (a) as a result of Seller being a member of an affiliated or combined group with, or a successor to, or transferee of, any other Person prior to the Closing Date.

 

“Third Party Claim” has the meaning set forth in Section 6.4(a).

 

“Title Agent” has the meaning set forth in Section 2.5(a)(v).

 

“Threatened” means, with respect to a claim, Proceeding, dispute, action, or other matter, that any written demand has been made or any written notice has been given to the applicable Party.

 

“Transactions” means all of the transactions contemplated by this Agreement, including (a) the purchase and sale of the Acquired Assets, the assumption of the Assumed Liabilities by the Purchaser and the retention and assumption of the Excluded Liabilities by Seller; and (b) the performance by Purchaser and Seller of their respective covenants and obligations under this Agreement.

 

“Trust Deed” has the meaning set forth in Section 2.5(b)(vii).

 

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Section 1.2    Interpretation . In this Agreement, unless a clear contrary intention appears:

 

(a)       the singular number includes the plural number and vice versa;

 

(b)       reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;

 

(c)       reference to any gender includes each other gender;

 

(d)       reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof;

 

(e)       reference to any Law means such Law as in effect on the date of this Agreement;

 

(f)        “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section or other provision hereof;

 

(g)       “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term;

 

(h)       “or” is used in the inclusive sense of “and/or”;

 

(i)        with respect to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding”;

 

(j)        “knowledge,” (or words of similar import) when used with respect to Seller, means the actual knowledge of either of Shahab Saeed or David Fawson; and

 

(k)       references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto.

 

Section 1.3    Accounting Terms and Determinations . Unless otherwise specified herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP.

 

Section 1.4    Legal Representation of the Parties . This Agreement was negotiated by the Parties with the benefit of legal representation, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any Party shall not apply to any construction or interpretation hereof.

 

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ARTICLE II
PURCHASE AND SALE OF THE ACQUIRED ASSETS

 

Section 2.1    Purchase and Sale.

 

(a)       On the terms of, and subject to the conditions in, this Agreement and for the purchase price set forth below, Purchaser, in reliance upon Seller’s representations and warranties made herein, agrees to (i) purchase from Seller, and Seller agrees to sell, convey, transfer, assign and deliver to Purchaser, on the Closing Date, all of Seller’s right, title and interest in and to all of the Acquired Assets, free and clear of all Liens, except for (A) Liens related to the Assumed Liabilities and (B) Permitted Liens and (ii) assume and be responsible for the timely satisfaction of all of the Assumed Liabilities, whether such liabilities are direct or indirect, matured or unmatured, fixed or contingent or otherwise.

 

(b)       As full consideration for the sale of the Acquired Assets to Purchaser, and subject to the terms and conditions of this Agreement, Purchaser shall pay to Seller against delivery to Purchaser of all of Seller’s right, title and interest in and to the Acquired Assets a total purchase price of US $16,300,000 (as the same may be adjusted pursuant to Section 2.7, the “Purchase Price”). Subject to the terms and conditions hereof, the Purchase Price shall be payable as follows: (i) Purchaser shall deliver to Seller a wire transfer of immediately available funds to Seller’s account, in the amount of US $12,750,000 (the “Closing Payment”); and (ii) Purchaser shall execute and deliver to Seller, simultaneous with the execution hereof, a secured promissory note payable to Seller in the principal amounts of US $3,550,000, a copy of which is attached hereto as Exhibit “A” (the “Secured Subordinated Promissory Note”), and an Assignment and Assumption Agreement, a copy of which is attached hereto as Exhibit “B” (the “Assumption Agreement”).

 

Section 2.2    Assets .

 

(a)       “Acquired Assets” means (1) all inventories, equipment, components, parts and supplies listed in Schedule 2.2(a); (2) the tangible assets listed in Schedule 2.2(a); (3) all trade accounts and notes receivable; (4) all prepaid assets, including, without limitation, all prepaid rentals, taxes (excluding income taxes) and deposits; (5) all equipment owned and leased listed in Schedule 2.2(a); (6) all licenses and permits listed in Schedule 2.2(a) (to the extent such licenses and permits may be transferred under Law); (7) all of Seller’s customer contracts, supply contracts, and other contracts and arrangements listed as Assigned Contracts in Section 2.2(a) of the Seller Disclosure Schedule (the “Assigned Contracts”); (8) all books and records with respect to the operation of Seller’s business including, without limitation, customer lists; (9) as authorized by its insurers and to the extent assignable, all insurance policies (maintained solely by Seller); (10) all Intellectual Property listed in Schedule 2.2(a); (11) the Real Property and the Building; and (12) such other assets listed in Schedule 2.2(a). Acquired Assets shall not include any of the Excluded Assets.

 

(b)       The term “Excluded Assets” means:

 

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(i)        the stock ledgers, minute books and corporate seals of Seller, any other books and records related to internal corporate matters of Seller, all claims and rights to any Tax refunds for periods prior to the Closing relating to the Acquired Assets, any Contracts not assumed by Purchaser, all cash and cash equivalents of Seller and all other assets of Seller not specifically identified in Section 2.2(a), including without limitation the assets listed in Schedule 2.2(b);

 

(ii)       all rights, claims and credits of Seller relating to any Excluded Asset or any Excluded Liability, including any such items arising under insurance policies, and all guarantees, warranties, indemnities and similar rights in favor of Seller in respect of any Excluded Asset or any Excluded Liability;

 

(iii)      all inter-company notes receivable;

 

(iv)      all cash sums of Seller on deposit; and

 

(v)       all business, properties, assets, goodwill and rights of Seller that are not Acquired Assets, including, without limitation, the assets listed in Schedule 2.2(b).

 

(c)       Subject to the terms of this Agreement, this Agreement shall not constitute an agreement to assign or transfer any Governmental Authorization, Contract or other agreement or arrangement or any claim, right or benefit arising thereunder or resulting from such, if an assignment or transfer or an attempt to make such an assignment or transfer, would constitute a breach or violation of such or affect adversely the rights of Purchaser or Seller thereunder; and any transfer or assignment to Purchaser by Seller of any interest under any such Governmental Authorization, Contract or other agreement or arrangement that requires the Consent of a third party shall be made with such Consent being obtained. In the event any such Consent is not obtained on or prior to the Closing Date, Seller and Purchaser shall cooperate and Seller shall continue to use its Reasonable Efforts to obtain any such Consent after the Closing Date until such time as such Consent has been obtained, and Seller will cooperate with Purchaser in any lawful arrangement to provide that Purchaser shall receive the interest of Seller, as the case may be, in the benefits under any such Governmental Authorization, Contract or other agreement or arrangement, including performance by Seller, as the case may be, as agent, provided that Purchaser shall undertake to pay or satisfy the corresponding liabilities for the enjoyment of such benefit to the extent Purchaser would have been responsible therefor if such Consent had been obtained. Seller shall have no obligation to pay or discharge, and shall have no obligation to indemnify and hold Purchaser harmless from and against, any and all costs of seeking to obtain or obtaining any such Consent or Governmental Authorization whether before or after the Closing Date.

 

Section 2.3    Liabilities .

 

(a)       The term “Assumed Liabilities” means all of the liabilities set forth in Schedule 2.3(a), including all the following liabilities, obligations and commitments of Seller:

 

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(i)        any and all liabilities, obligations and commitments of Seller under the Assigned Contracts, whether such liabilities, obligations and commitments relate to a period prior to or from and after the Closing, but not any such liabilities, obligations or commitments arising out of any material breach by Seller of any Assigned Contract prior to the Closing other than those liabilities, obligations or commitments that would constitute . Assumed Liabilities under clause (ii) of this Section 2.3(a); and

 

(ii)       except for the liabilities related to the Pre-Existing Environmental Condition and the Remedial Action Plan (as defined in Section 3.7), any and all liabilities, obligations and commitments relating to the use, ownership, operation or management of the Acquired Assets that arise, accrue or are incurred after the Closing.

 

(b)       The term “Excluded Liabilities” means all liabilities, obligations and commitments of Seller, including, without limitation, the liabilities, obligations and commitments of Seller set forth on Schedule 2.3(b) and the Permitted Liens, except for Permitted Liens set forth on Schedule 2.3(a); provided, however, Excluded Liabilities do not include those liabilities, obligations or commitments that constitute Assumed Liabilities under Section 2.3(a). Excluded Liabilities shall also include the liabilities related to the Pre-Existing Environmental Condition and the Remedial Action Plan (as defined in Section 3.7), for which Purchaser is indemnified for under Section 6.8. Seller shall be responsible for the timely satisfaction of all the Excluded Liabilities, whether such liabilities are direct, indirect, matured or unmatured, fixed, contingent or otherwise.

 

Section 2.4    Closing . The purchase and sale of the Acquired Assets, the assumption of the Assumed Liabilities, and the consummation of the other transactions contemplated by this Agreement (the “Closing”) takes place at the offices of Holme Roberts & Owen, 299 South Main Street, Suite 1800, Salt Lake City, Utah 84111, simultaneous with the execution of this Agreement.

 

Section 2.5    Deliveries . Concurrent with the execution of this Agreement:

 

(a)       Seller shall deliver or cause to be delivered to Purchaser, against payment of the Purchase Price the following (collectively, the “Seller Documents”):

 

(i)        an executed Bill of Sale, a copy of which is attached to this Agreement as Exhibit “C” ;

 

(ii)       an executed real property lease with respect to the real property located at 118 South 1000 West, Salt Lake City, Utah, a copy of which is attached to this Agreement as Exhibit “D” (the “Ground Lease”);

 

(iii)      an executed special warranty deed with respect to the Real Property, a copy of which is attached to this Agreement as Exhibit “E” (the “Real Property Deed”);

 

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(iv)      an irrevocable commitment (the “Real Property Title Commitment”) from Metro National Title Company, a Utah corporation (the “Title Company”), to issue to Purchaser a standard coverage owner’s title insurance policy insuring that Purchaser owns a fee interest in the Real Property, having a policy limit equal to US $7,050,000 and listing no exceptions to title other than the exceptions set forth in the Real Property Title Commitment; and

 

(v)       an executed real property sublease between Questar Corporation and Purchaser with respect to the real property located at 180 East 100 South, Salt Lake City, Utah 84111, a copy of which is attached to this Agreement as Exhibit “F” (the “Sublease”);

 

(vi)      an executed Master Services Agreement between Questar Gas Company and Purchaser a copy of which is attached to this Agreement as Exhibit “G” (the “Master Services Agreement”);

 

(vii)     an executed Consulting Agreement between Questar Gas Company and Purchaser, a copy of which is attached to this Agreement as Exhibit “H” (the Data Center Services Agreement);

 

(viii)    a certificate from the secretary of each of Seller and Questar InfoComm, Inc. (A) certifying that attached to such certificate are all requisite resolutions of Seller’s board of directors approving the execution and delivery of this Agreement and the agreements, documents and instruments contemplated herein (the “Related Agreements”) and the consummation of the Transactions; (B) certifying that attached to such certificate is the requisite consent of the shareholders of Seller approving and authorizing the Transactions and the Related Agreements; and (C) certifying to the incumbency of the officers of Seller executing this Agreement and the Related Agreements;

 

(ix)       an executed special warranty deed with respect to the Building, a copy of which is attached to this Agreement as Exhibit “I” (the “Building Deed”);

 

(x)        an irrevocable commitment (the “Ground Lease Title Commitment”) from the Title Company, to issue Purchaser a standard coverage owner’s title insurance policy insuring that Purchaser owns a leasehold interest in the Ground Lease, having a policy limit equal to US $4,800,000 and listing no exceptions to title other than the exceptions set forth in the Ground Lease Title Commitment;

 

(xi)       an executed amendment to Seller’s Articles of Incorporation (to be filed by Purchaser following the Closing) to change Seller’s corporate name to no longer include the term “Consonus;” and

 

(xii)      such other documents as reasonably required by Purchaser.

 

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(b)       Purchaser shall deliver or cause to be delivered to Seller, against delivery of the Acquired Assets, the following (collectively, the “Purchaser Documents”):

 

(i)        the Closing Payment;

 

(ii)       an executed Secured Subordinated Promissory Note.

 

(iii)      an executed Security Agreement, a copy of which is attached to this Agreement as Exhibit “J” ;

 

(iv)      an executed Assumption Agreement;

 

(v)       an executed Ground Lease;

 

(vi)      a completed UCC-1, securing the obligations of Purchaser under the Secured Subordinated Promissory Note, and this Agreement;

 

(vii)     an executed Trust Deed, a copy of which is attached to this Agreement as Exhibit “K” ;

 

(viii)    an executed employment agreement with Daniel Milburn (“Employment Agreement”), a copy of which is attached to this Agreement as Exhibit “L” ;

 

(ix)       an executed Sublease;

 

(x)        an executed Master Services Agreement;

 

(xi)       an executed Consulting Agreement;

 

(xii)      an executed Guaranty, a copy of which is attached to this Agreement as Exhibit “M” ;

 

(xiii)     a certificate from the secretary of Purchaser (A) certifying that attached to such certificate are all requisite resolutions of Purchaser’s board of directors approving the execution and delivery of this Agreement and the Related Agreements and the consummation of the Transactions; and (B) certifying to the incumbency of the officers of Seller executing this Agreement and the Related Agreements; and

 

(xiv)    such other documents as reasonably required by Seller.

 

Section 2.6    Allocation of Purchase Price . Seller and Purchaser shall allocate the Purchase Price (including, for purposes of this Section, any other consideration paid by Buyer and the Assumed Liabilities) among the Acquired Assets in the manner set forth on Schedule 2.6 (the “Allocation Schedule”). Seller and Purchaser each agree to file Internal Revenue Service Form 8594 and any required attachments thereto, together with all federal, state, local, and foreign tax returns, in accordance with the Allocation Schedule. Purchaser and Seller shall use such allocation for all tax reporting purposes. If, contrary to the intent

 

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of the Parties hereto as expressed in this Section 2.6 , any Governmental Entity makes or proposes an allocation different from that contemplated in this Section 2.6 , Seller and Buyer shall cooperate with each other in good faith to contest such Governmental Entity’s allocation (or proposed allocation).

 

Section 2.7    Purchase Price Adjustment .

 

(a)       As soon as practical and in no event later than thirty (30) days following the Closing Date, Seller shall deliver to the Purchaser a balance sheet of Seller as of the Closing (“Closing Date Balance Sheet”), setting forth the Book Value at the Closing Date (“Closing Date Book Value”). The Closing Date Balance Sheet shall be prepared in accordance with GAAP and consistently with the calculation of Target Net Book Value and shall be in the form attached hereto as Schedule 2.7(a) .

 

(b)       During the forty-five (45) day period immediately following the Purchaser’s receipt of the Closing Date Balance Sheet, Purchaser shall be permitted to review Seller’s working papers and trial balance related to the preparation of the Closing Date Balance Sheet. The Closing Date Balance Sheet shall become final and binding upon the Parties thirty (30) days following the Purchaser’s receipt thereof, unless Purchaser shall give written notice of its disagreement (a “Notice of Disagreement”) to Seller prior to such date. If a timely Notice of Disagreement is delivered to Seller, then the Closing Date Balance Sheet (as revised in accordance with clause (x) or (y) below) shall become final and binding upon the Parties on the earlier of (x) the date the parties resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or (y) the date all matters in dispute are finally resolved in writing by the Accounting Firm (defined below). During the forty-five (45) days following delivery of a Notice of Disagreement, the Parties shall seek in good faith to resolve in writing any differences which they have with respect to the matters specified in the Notice of Disagreement; provided that any settlement negotiations will not be discoverable by or communicated to the Accounting Firm.

 

(c)       At the end of the forty-five (45) day period referred to above, the Parties shall submit to Deloitte & Touche LLP (San Francis