Document:

EXHIBIT
4.8

AMENDMENT
NO. 2

TO

RIGHTS AGREEMENT

AMENDMENT NO. 2 to
RIGHTS AGREEMENT (this “Amendment”) between Veritas DGC Inc., a Delaware
corporation (the “Company”), and Mellon Investor Services LLC, previously known
as ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company, as Rights Agent (the “Rights Agent”) is effective this 4th day of
September, 2006.

W I T N E S S E T H:

WHEREAS, on
May 23, 1997, the Company and the Rights Agent entered into that one
certain Rights Agreement, which agreement was amended by that certain Amendment
No. 1 to Rights Agreement, effective May 31, 2005, between the Company and the
Rights Agent (collectively, the “Rights Agreement”);

WHEREAS, the
Company desires to further amend the Rights Agreement pursuant to Section 27
thereof; and

WHEREAS, the
Distribution Date (as defined in the Rights Agreement) has not yet occurred and
the Company has met all requirements for amendment of the Rights Agreement;

NOW, THEREFORE, in
consideration of the premises and of the mutual agreements herein set forth,
the parties hereto agree as follows:

Section 1.               Amendments. 
The Rights Agreement is amended as follows:

(a)           Section
1 (l) is deleted in its entirety and replaced with the following:

“‘Expiration Date’ means
the earliest of (i) the Final Expiration Date, (ii) the time at which all
Rights are redeemed as provided in Section 23 or exchanged as provided in
Section 24 or (iii) immediately prior to the Merger I Effective Time (as
defined in the Merger Agreement).”

(b)           The
following shall be added as Section 1 (n) and the existing Sections 1(n)
through (y) shall be re-numbered as Sections 1(o) through (z):

“‘Merger Agreement’ means
the Agreement and Plan of Merger, dated as of September 4, 2006, by and among
the Company, Compagnie Générale de Géophysique, a société anonyme organized
under the laws of the Republic of France (“Parent”), Volnay Acquisition Co. I,
a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub I”)
and Volnay Acquisition Co. II, a Delaware corporation and wholly owned
subsidiary of Parent (“Merger Sub II”).”

 

(c)           The
following shall be added as Section 35:

“Section 35.  Exception for Merger Agreement.  Notwithstanding any provision of this
Agreement to the contrary, neither an event described in Section 11(a)(ii), an
event described in sub-clauses (x), (y) or (z) of Section 13(a), a Distribution
Date, nor a Stock Acquisition Date shall be deemed to have occurred, none of
Parent, Merger Sub I, Merger Sub II or any of their Affiliates or Associates
shall be deemed to have become an Acquiring Person, and no holder of any Rights
shall be entitled to exercise such Rights under, or be entitled to any rights
pursuant to, any of Sections 3(c), 7(a), 7(b), 11(a) or 13 of this Agreement,
in any such case by reason of (a) the approval, execution or delivery of the
Merger Agreement (or any amendments thereto) or (b) the commencement or, prior
to termination of the Merger Agreement, the consummation of any of the
transactions contemplated by the Merger Agreement, including the Mergers (as
defined in the Merger Agreement).”

Section 2.               Effect
of this Amendment.  It is the intent of the parties that this
Amendment constitutes an amendment of the Rights Agreement as contemplated by
Section 27 thereof.  This Amendment shall be deemed effective as of
the date hereof as if executed by both parties hereto on such date.  Except as expressly provided in this
Amendment, the terms of the Rights Agreement remain in full force and effect.

Section 3.               Counterparts. 
This Amendment may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.

Section 4.               Governing
Law.  This Amendment shall be deemed
to be a contract made under the laws of the State of Texas and for all purposes
shall be governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such state.

Section 5.               Severability.  If any term, provision, covenant or
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, illegal or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

Section 6.               Descriptive
Headings.  The captions herein are
included for convenience of reference only, do not constitute a part of this
Amendment and shall be ignored in the construction and interpretation hereof.

 2
 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed as
of the day and year first above written.

	
  

  	
  VERITAS DGC INC.

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ MARK E. BALDWIN

  	
   

  
	
   

  	
   

  	
   

  	
  Mark E. Baldwin

  
	
   

  	
   

  	
   

  	
  Executive Vice
  President, Chief

  Financial Officer and Treasurer

  
	
  By:

  	
  /s/ LARRY L.
  WORDEN

  	
   

  
	
   

  	
  Larry L. Worden

  
	
   

  	
  Vice President, General
  Counsel and

  Secretary

  
	
   

  	
   

  
	
   

  
	
   

  	
  MELLON INVESTOR SERVICES

  LLC (previously known as “ChaseMellon

  Shareholder Services, L.L.C.), AS
  RIGHTS

  AGENT

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ruth
  Brunette

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  
	
  By:

  	
  /s/ Jane A.
  Marten

  	
   

  
	
   

  	
  (Signature)

  	
   

  	
  Ruth Brunette

  	
   

  
	
   

  	
   (Typed or
  Printed Name)

  	
   

  
	
  Jane A. Marten

  	
   

  	
   

  
	
   (Printed
  or Typed Name)

  	
   

  	
  Assistant Vice
  President

  	
   

  
	
   

  	
   

  	
   (Title)

  	
   

  
	
  Assistant Vice
  President

  	
   

  	
   

  	
   

  
	
   (Title)

  	
   

  	
   

  	
   

  

 

 3Exhibit 10.1

EXECUTION COPY

 

ASSET PURCHASE AGREEMENT

by and between

ABOVENET COMMUNICATIONS, INC.

and

DIGITAL ABOVE, LLC

Dated as of September 27, 2006

 

 

 

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  
	
  ARTICLE 1 DEFINITIONS AND CONSTRUCTION

  	
  1

  	
   

  	
   

  
	
  1.1

  	
  Definitions.

  	
  1

  	
   

  	
   

  
	
  1.2

  	
  Certain
  Interpretive Matters.

  	
  9

  	
   

  	
   

  
	
  1.3

  	
  Recitals.

  	
  10

  	
   

  	
   

  
	
  ARTICLE 2 PURCHASE AND SALE

  	
  10

  	
   

  	
   

  
	
  2.1

  	
  Acquired
  Assets.

  	
  10

  	
   

  	
   

  
	
  2.2

  	
  Excluded
  Assets.

  	
  11

  	
   

  	
   

  
	
  2.3

  	
  Retained
  Right of Use.

  	
  13

  	
   

  	
   

  
	
  ARTICLE 3 PURCHASE PRICE

  	
  13

  	
   

  	
   

  
	
  3.1

  	
  Purchase
  Price.

  	
  13

  	
   

  	
   

  
	
  3.2

  	
  Payment
  of Cash Purchase Price.

  	
  13

  	
   

  	
   

  
	
  3.3

  	
  Allocation
  of Consideration

  	
  13

  	
   

  	
   

  
	
  3.4

  	
  Apportionment
  of Income and Expenses

  	
  13

  	
   

  	
   

  
	
  ARTICLE 4 LIMITED ASSUMPTION OF LIABILITIES

  	
  14

  	
   

  	
   

  
	
  4.1

  	
  Assumption
  of Liabilities.

  	
  14

  	
   

  	
   

  
	
  4.2

  	
  Excluded
  Liabilities.

  	
  14

  	
   

  	
   

  
	
  ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER

  	
  15

  	
   

  	
   

  
	
  5.1

  	
  Organization.

  	
  15

  	
   

  	
   

  
	
  5.2

  	
  Authority.

  	
  15

  	
   

  	
   

  
	
  5.3

  	
  Non-Contravention.

  	
  15

  	
   

  	
   

  
	
  5.4

  	
  Financial
  Matters.

  	
  16

  	
   

  	
   

  
	
  5.5

  	
  Governmental
  Consents.

  	
  16

  	
   

  	
   

  
	
  5.6

  	
  Compliance
  with Laws

  	
  16

  	
   

  	
   

  
	
  5.7

  	
  Environmental
  Matters.

  	
  16

  	
   

  	
   

  
	
  5.8

  	
  Permits.

  	
  17

  	
   

  	
   

  
	
  5.9

  	
  Litigation,
  etc.

  	
  17

  	
   

  	
   

  
	
  5.10

  	
  Employees
  and Benefits.

  	
  17

  	
   

  	
   

  
	
  5.11

  	
  Ownership
  and Transfer of Acquired Assets.

  	
  18

  	
   

  	
   

  
	
  5.12

  	
  Assets
  used by the Business.

  	
  18

  	
   

  	
   

  
	
  5.13

  	
  Contracts.

  	
  18

  	
   

  	
   

  
	
  5.14

  	
  Assigned
  Receivables.

  	
  19

  	
   

  	
   

  
	
  5.15

  	
  Taxes.

  	
  19

  	
   

  	
   

  
	
  5.16

  	
  Existing
  Condition.

  	
  20

  	
   

  	
   

  
	
  5.17

  	
  Labor
  Matters

  	
  20

  	
   

  	
   

  
	
  5.18

  	
  Insurance
  Policies.

  	
  20

  	
   

  	
   

  
	
  5.19

  	
  Transactions
  with Affiliates.

  	
  20

  	
   

  	
   

  
	
  5.20

  	
  Real
  Estate.

  	
  20

  	
   

  	
   

  
	
  5.21

  	
  Brokers,
  Finders, etc.

  	
  23

  	
   

  	
   

  
	
  ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER

  	
  23

  	
   

  	
   

  
	
  6.1

  	
  Organization.

  	
  23

  	
   

  	
   

  
	
  6.2

  	
  Authority.

  	
  23

  	
   

  	
   

  
	
  6.3

  	
  Non-Contravention.

  	
  24

  	
   

  	
   

  
	
  6.4

  	
  Governmental
  Consents.

  	
  24

  	
   

  	
   

  

 

 

 

	
  6.5

  	
  Litigation,
  etc.

  	
  24

  	
   

  	
   

  
	
  6.6

  	
  Brokers,
  Finders, etc.

  	
  24

  	
   

  	
   

  
	
  6.7

  	
  Financial
  Capacity.

  	
  24

  	
   

  	
   

  
	
  6.8

  	
  Ability
  to Perform Assumed Contracts.

  	
  24

  	
   

  	
   

  
	
  6.9

  	
  Opportunity
  for Independent Investigation.

  	
  25

  	
   

  	
   

  
	
  ARTICLE 7 ADDITIONAL AGREEMENTS

  	
  25

  	
   

  	
   

  
	
  7.1

  	
  Conduct
  of the Business.

  	
  25

  	
   

  	
   

  
	
  7.2

  	
  Access
  to Information

  	
  26

  	
   

  	
   

  
	
  7.3

  	
  Mutual
  Cooperation; Further Assurances

  	
  27

  	
   

  	
   

  
	
  7.4

  	
  Updating
  of Schedules.

  	
  29

  	
   

  	
   

  
	
  7.5

  	
  Employees.

  	
  29

  	
   

  	
   

  
	
  7.6

  	
  Public
  Disclosures.

  	
  29

  	
   

  	
   

  
	
  7.7

  	
  “As
  Is” Condition of the Acquired Assets.

  	
  30

  	
   

  	
   

  
	
  7.8

  	
  Bulk
  Sales.

  	
  30

  	
   

  	
   

  
	
  7.9

  	
  Tax
  Allocations

  	
  30

  	
   

  	
   

  
	
  7.10

  	
  Use
  of Name.

  	
  30

  	
   

  	
   

  
	
  7.11

  	
  Confidentiality.

  	
  30

  	
   

  	
   

  
	
  7.12

  	
  Insurance
  Proceeds, Litigation Rights.

  	
  31

  	
   

  	
   

  
	
  7.13

  	
  Notice
  of Litigation.

  	
  31

  	
   

  	
   

  
	
  7.14

  	
  Exclusivity.

  	
  31

  	
   

  	
   

  
	
  7.15

  	
  Title
  Commitments; Survey; Searches.

  	
  32

  	
   

  	
   

  
	
  7.16

  	
  Deed.

  	
  33

  	
   

  	
   

  
	
  ARTICLE 8 CONDITIONS TO CLOSING

  	
  34

  	
   

  	
   

  
	
  8.1

  	
  Conditions
  to the Obligations of Seller and Buyer.

  	
  34

  	
   

  	
   

  
	
  8.2

  	
  Conditions
  to Obligations of Seller.

  	
  34

  	
   

  	
   

  
	
  8.3

  	
  Conditions
  to Obligations of Buyer.

  	
  35

  	
   

  	
   

  
	
  ARTICLE 9 CLOSING

  	
  37

  	
   

  	
   

  
	
  9.1

  	
  Closing
  Date.

  	
  37

  	
   

  	
   

  
	
  9.2

  	
  Buyer
  Deliveries.

  	
  37

  	
   

  	
   

  
	
  9.3

  	
  Seller
  Deliveries.

  	
  38

  	
   

  	
   

  
	
  ARTICLE 10 TERMINATION OF AGREEMENT

  	
  38

  	
   

  	
   

  
	
  10.1

  	
  Termination.

  	
  38

  	
   

  	
   

  
	
  10.2

  	
  Effect
  of Termination.

  	
  39

  	
   

  	
   

  
	
  ARTICLE 11 INDEMNIFICATION

  	
  39

  	
   

  	
   

  
	
  11.1

  	
  Survival
  of Representations and Warranties.

  	
  39

  	
   

  	
   

  
	
  11.2

  	
  Indemnification.

  	
  40

  	
   

  	
   

  
	
  11.3

  	
  Limitations
  on Indemnity.

  	
  42

  	
   

  	
   

  
	
  11.4

  	
  Claim
  Procedures

  	
  44

  	
   

  	
   

  
	
  11.5

  	
  Additional
  Procedures for Third-Party Claims

  	
  44

  	
   

  	
   

  
	
  11.6

  	
  Reduction
  of Losses

  	
  45

  	
   

  	
   

  
	
  11.7

  	
  Subrogation.

  	
  46

  	
   

  	
   

  
	
  11.8

  	
  No
  Double Recovery.

  	
  46

  	
   

  	
   

  
	
  11.9

  	
  Treatment
  of Indemnity Payments Between the Parties.

  	
  46

  	
   

  	
   

  
	
  ARTICLE 12 GENERAL

  	
  46

  	
   

  	
   

  
	
  12.1

  	
  Notices.

  	
  46

  	
   

  	
   

  

 

 

 

	
  12.2

  	
  Further
  Assurances; Asset Returns.

  	
  47

  	
   

  	
   

  
	
  12.3

  	
  Expenses.

  	
  47

  	
   

  	
   

  
	
  12.4

  	
  Non-Assignability.

  	
  48

  	
   

  	
   

  
	
  12.5

  	
  Amendment;
  Waiver.

  	
  48

  	
   

  	
   

  
	
  12.6

  	
  Exhibits
  and Schedules.

  	
  48

  	
   

  	
   

  
	
  12.7

  	
  No
  Third Party Beneficiaries.

  	
  48

  	
   

  	
   

  
	
  12.8

  	
  Governing
  Law.

  	
  49

  	
   

  	
   

  
	
  12.9

  	
  Consent
  to Jurisdiction.

  	
  49

  	
   

  	
   

  
	
  12.10

  	
  Entire
  Agreement.

  	
  49

  	
   

  	
   

  
	
  12.11

  	
  Severability.

  	
  49

  	
   

  	
   

  
	
  12.12

  	
  Counterparts;
  Facsimile Signatures.

  	
  49

  	
   

  	
   

  
	
  12.13

  	
  Waiver of Jury Trial.

  	
  50

  	
   

  	
   

  

 

	
  Exhibits

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  —

  	
   

  	
  Assumption
  Agreement

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  —

  	
   

  	
  Bill of Sale and Assignment

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  —

  	
   

  	
  Assignment and Assumption of Lease

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  C.1 — NY Lease

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  C.2 — VA Lease — September 3, 1997

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  C.3 — VA Lease — January 30, 1998

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  —

  	
   

  	
  Real Property Documents

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  D.1 — Real Property Deed

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  D.2 — Easement

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  —

  	
   

  	
  Seller Colocation Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  E.1 — Omnibus Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  E.2 — Deed of Colocation Lease (VA2)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  E.3 — Colocation Agreement (VA1)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  E.4 — Colocation Agreement (NY1)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  E.5 — Colocation Agreement (NY2)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  E.6 — Conduit License Agreement (VA1)

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  —

  	
   

  	
  Transition Services Agreement

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  —

  	
   

  	
  Landlord Estoppel Certificate

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  G.1 — NY Lease

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  G.2 — VA Lease — September 3, 1997

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  G.3 — VA Lease — January 30, 1998

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  —

  	
   

  	
  Title Affidavits

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  —

  	
   

  	
  Audit Representation Letter

  	
   

  	
   

  
	
  Exhibit J

  	
   

  	
  —

  	
   

  	
  Joint Escrow Instruction Letter

  	
   

  	
   

  

 

 

 

	
  Schedules

  	
   

  	
   

  
	
  Schedule A

  	
   

  	
  Data Center Facilities

  
	
  Schedule 1.1(a)

  	
   

  	
  Colocation Services

  
	
  Schedule 1.1(b)

  	
   

  	
  Knowledge — Seller

  
	
  Schedule 1.1(c)

  	
   

  	
  Knowledge — Buyer

  
	
  Schedule 1.1(d)

  	
   

  	
  Personal Property Permitted Liens

  
	
  Schedule 1.1(e)

  	
   

  	
  Real Property Permitted Liens

  
	
  Schedule 1.1(f)

  	
   

  	
  Colocation Space

  
	
  Schedule 2.1(a)(i)

  	
   

  	
  Owned Real Property

  
	
  Schedule 2.1(a)(ii)

  	
   

  	
  Real Property Leases

  
	
  Schedule 2.1(a)(iii)

  	
   

  	
  Equipment

  
	
  Schedule 2.2(i)(y)

  	
   

  	
  Retained Contracts

  
	
  Schedule 2.2(i)(z)

  	
   

  	
  Non-Assignable Contracts

  
	
  Schedule 2.2(k)

  	
   

  	
  Conduit & Fiber Optic Cables

  
	
  Schedule 2.2(n)

  	
   

  	
  Other Excluded Assets

  
	
  Schedule 2.3

  	
   

  	
  Acquired Assets Subject to Retained Right to Use

  
	
  Schedule 3.3

  	
   

  	
  Purchase Price Allocation

  
	
  Schedule 4.1(d)

  	
   

  	
  Other Assumed Liabilities

  
	
  Schedule 5.1

  	
   

  	
  Jurisdictions in which Seller is Authorized to do
  Business

  
	
  Schedule 5.3

  	
   

  	
  Exceptions to No Conflicts

  
	
  Schedule 5.4

  	
   

  	
  Financial Statements

  
	
  Schedule 5.5

  	
   

  	
  Governmental Consents

  
	
  Schedule 5.6

  	
   

  	
  Exception to Compliance with Laws

  
	
  Schedule 5.7

  	
   

  	
  Environmental Matters

  
	
  Schedule 5.8

  	
   

  	
  Licenses

  
	
  Schedule 5.10(a)/(b)

  	
   

  	
  Employees and Benefit Plans

  
	
  Schedule 5.11(c)

  	
   

  	
  Third Parties at Owned Real Property or Leased Real
  Property

  
	
  Schedule 5.13(a)

  	
   

  	
  Colocation Contracts

  
	
  Schedule 5.13(b)

  	
   

  	
  Other Assumed Contracts

  
	
  Schedule 5.13(c)

  	
   

  	
  Assumed Contract Payment Disputes and Defaults

  
	
  Schedule 5.15

  	
   

  	
  Tax Matters

  
	
  Schedule 5.16

  	
   

  	
  Existing Conditions

  
	
  Schedule 5.18

  	
   

  	
  Insurance Claims

  
	
  Schedule 5.20(c)/(d)

  	
   

  	
  Real Estate Matters

  
	
  Schedule 5.20(g)

  	
   

  	
  Notices of Special Tax Assessments

  
	
  Schedule 5.21

  	
   

  	
  Seller Broker Agreements

  
	
  Schedule 7.5

  	
   

  	
  Employees to Whom Employment Shall be Offered by
  Buyer

  
	
  Schedule 7.15

  	
   

  	
  Title Commitments

  
	
  Schedule 8.3(h)

  	
   

  	
  Required Employees

  

 

 

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT
(the “Agreement”), is made and entered into effective as of September
27, 2006 (the “Execution Date”), by and between Digital Above, LLC, a
Delaware limited liability company (“Buyer”), and AboveNet Communications,
Inc., a Delaware corporation (“Seller”).

R E  C  I  T  A
L  S:

Seller provides Colocation Services at the data center
facilities specified on Schedule A (the “Business”).

Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, all right, title and interest of Seller in and to all of
the tangible and intangible assets, properties and rights owned by Seller and
used by Seller principally in connection with the operation of the Business,
and in connection therewith, Buyer is willing to assume certain liabilities of
Seller relating thereto, all upon the terms and subject to conditions contained
herein.

NOW, THEREFORE, in consideration of the premises and
the mutual promises herein made, and in consideration of the representations,
warranties, covenants and agreements herein contained, the parties agree as
follows:

ARTICLE 1

DEFINITIONS AND
CONSTRUCTION

1.1           Definitions.  Except as otherwise herein expressly
provided, the following terms and phrases shall have the meanings set forth below:

“Acquired Assets” has the meaning given to such
term in Section 2.1(a).

“Additional Remedy Ticket” means a Colocation
Contract arising after the Execution Date and prior to Closing as a result of
the issuance of “remedy tickets” in the Ordinary Course of Business by Seller;
provided that such additional “remedy tickets” do not result in aggregate
post-Closing expenses in excess of $50,000 and where non-overhead expenses are
incurred such “Remedy Tickets” have offsetting revenues.

“Affiliate” or “affiliate” of any
specified Person means any Person that, directly, or indirectly through one or
more intermediaries, Controls, is Controlled by, or is under common Control
with or of, such entity.  The term “Control”
(including, with correlative meaning, the terms “controlled by” and “under
common Control with”), as used with respect to any entity, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.

 1
 

 

“Agreement” has the meaning given to such term
in the introductory paragraph to this Agreement.

“Assigned Receivables” has the meaning given to
such term in Section 2.1(a) (v).

“Assumed Contracts” means the Real Property
Leases, Colocation Agreements, Other Assumed Contracts and other Contracts
included in the Acquired Assets.

“Assumed Liabilities” has the meaning given to
such term in Section 4.1.

“Assumption Agreement” means the Assumption
Agreement, substantially in the form attached hereto as Exhibit A.

“Bill of Sale” means the Bill of Sale,
substantially in the form attached hereto as Exhibit B.

“Business” has the meaning given to such term
in the recitals to this Agreement.

“Business Day” means a day other than a
Saturday, a Sunday or a day on which banks are open for domestic and foreign
exchange business in New York City, New York.

“Buyer” has the meaning given to such term in
the introductory paragraph to this Agreement.

“Buyer Basket Exclusions” has the meaning given
to such term in Section 11.3(b).

“Buyer’s Exception Notice” has the meaning
given to such term in Section 7.15(d).

“Buyer Losses” has the meaning given to such
term in Section 11.2(a).

“Cash Purchase Price” has the meaning given to
such term in Section 3.1(a).

“Claim” has the meaning given to such term in
Section 11.4.

“Closing” has the meaning given to such term in
Section 9.1.

“Closing Date” has the meaning given to such
term in Section 9.1.

“Closing Employee Election Notice has the meaning
given to such term in Section 8.3(h).

“Closing Employee Notice” has the meaning given
to such term in Section 8.3(h).

“Code” means the Internal Revenue Code of 1986,
as amended, and the regulations thereunder.

“Colocation Contract” means any Contract pursuant
to which Seller grants any Person the right to lease, sublease, license or
otherwise physically occupy or use any portion of the Owned

 2
 

 

Real Property or the Leased Real Property or agrees to
provide any Colocation Services to any Person at the Owned Real Property or the
Leased Real Property (“Colocation Rights”), provided, however, in any
case where such Colocation Rights are granted under a Contract pursuant to
which Seller provides services in addition to Colocation Rights (whether such
additional services are documented by means of a separate purchase order
relating to such Contract or the same purchase order), the term Colocation
Contract shall refer only to the portions of such Contract relating to the
Colocation Rights.

“Colocation Services” means the services listed
on Schedule 1.1(a).

“Confidentiality Agreement” means that certain
Confidentiality Agreement, dated February 6, 2006, executed by Buyer or one of
its Affiliates in connection with the transaction contemplated hereby.

“Consent” means any License of, filing or
registration with, or notice to, any Person or Governmental Authority.

“Contracts” means all contracts, commitments,
agreements and other legally binding arrangements, written or oral, to which
Seller is a party or by which any of its assets is bound.

“Customer Prepayments” has the meaning given to
such term in Section 2.1(a)(viii).

“Customer Security Deposits” has the meaning
given to such term in Section 2.1(a)(viii).

“Debt” shall mean,
as of any date, (without duplication) with respect to any Person, any
indebtedness outstanding, secured or unsecured, contingent or otherwise, which
is for borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), or evidenced
by bonds, notes, debentures or similar instruments or representing the balance
deferred and unpaid of the purchase price of any property (excluding, without
limitation, any balances that constitute trade payables) and shall also
include, to the extent not otherwise included (i) any capital lease
obligations determined in accordance with GAAP, (ii) obligations of
Persons other than such Person secured by a lien to which the property or
assets owned or held by such Person is subject, whether or not the obligation
or obligations secured thereby shall have been incurred or assumed by such
Person, (iii) all indebtedness of others of the types described in the
other clauses of this definition (including all dividends of other Persons) the
payment of which is guaranteed, directly or indirectly, by such Person or that
is otherwise its legal liability or which such Person has agreed to purchase or
repurchase or in respect of which such Person has agreed contingently to supply
or advance funds (whether or not such items would appear upon the balance sheet
of the guarantor), (iv) all obligations for the reimbursement of any
obligation or on any letter of credit, banker’s acceptance or similar credit
transaction, and (v) and obligations under any currency or interest rate
swap, hedge or similar protection device of any such Person.  Notwithstanding any other provision of the
foregoing definition, Debt shall not include (a) any liability for federal,
state, local or other taxes or (b) any trade payable arising from the purchase
of goods or materials or for services obtained in the Ordinary Course of
Business.

 3
 

 

“Easement” means
an instrument providing for an easement at the Owned Real Property,
substantially in the form of Exhibit D.2.

“Environmental Law” includes the Comprehensive
Environmental Response Compensation and Liability Act (“CERCLA”), 42
U.S.C. 96901 et seq., as amended; the Resource Conservation and Recovery Act (“RCRA”),
42 U.S.C. 6901 et seq., as amended: the Clean Air Act (“CAA”), 42 U.S.C.
7401 et seq., as amended; the Clean Water Act (“CWA”), 33 U.S.C. 1251 et
seq., as amended; the Occupational Safety and Health Act (“OSHA”), 29
U.S.C. 655 et seq, as amended; and any other material federal or state law,
statute or regulation imposing liability or establishing standards of conduct
for protection of the environment.

“Environmental Permits” has the meaning given
to such term in Section 5.7(a).

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

“ERISA Affiliate” means any corporation, other
entity or trade or business, whether or not incorporated, that is, or at any
time prior to the date hereof was, controlled by, controlling or under common
control with Seller (within the meaning of Section 414 of the Code or Section
4001(a)(14) or 4001(b) of ERISA).

“Earnest Money Deposit” means the $300,000
deposited by Digital Realty Trust, L.P. with the Escrow Agent as required by
the certain letter of intent, dated May 3, 2006, entered into by Seller and an
affiliate of Buyer, Digital Realty Trust, L.P., a Delaware limited partnership.

“Equipment” means any machinery, equipment,
tools, furniture, furnishings, supplies, goods and other tangible items of
personal property.

“Escrow Agent” means Commonwealth Land Title
Company.

“Excluded Assets” has the meaning given to such
term in Section 2.2.

“Excluded Contracts” has the meaning given to
such term in Section 2.2(i).

“Excluded Liabilities” has the meaning given to
such term in Section 4.2.

“Execution Date” has the meaning given to such
term in the introductory paragraph to this Agreement.

“Exhibits” means the exhibits to this
Agreement.

“GAAP” means United States of America generally
accepted accounting principles.

“Governmental Authority” means (a) the United
States of America, the European Union or any foreign country, (b) any domestic
or foreign state, territory, province, county, city or other unit or
subdivision thereof or (c) any entity, authority, agency, department, board,
commission,

 4
 

 

official, instrumentality, court, arbitrator or
tribunal (or other judicial body) of any of the foregoing exercising
legislative, judicial, regulatory or administrative functions.

“Hazardous Substance” means any chemicals,
materials, substances or wastes which are currently defined as “hazardous
substances,” “hazardous materials,” “hazardous wastes,” “extremely hazardous
wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,”
“pollutants,” or “contaminants” under any Environmental Law.

“Indemnified Buyer Group” has the meaning given
to such term in Section 11.2(a).

“Indemnified Party” means a Person that is
entitled to the benefits of indemnification from an Indemnifying Party in
accordance with the terms and conditions of Article 11 of this Agreement.

“Indemnified Seller Group” has the meaning
given to such term in Section 11.2(b).

“Indemnifying Party” means a Party to this
Agreement that has the obligation to indemnify an Indemnified Party in
accordance with the terms and conditions of Article 11 of this Agreement.

“Indemnity Cap” has the meaning given to such
term in Section 11.3(a).

“IRS” means the Internal Revenue Service.

“Joint Escrow Instruction Letter” is a Joint
Escrow Instruction Letter substantially in the form attached hereto as Exhibit
J.

“Knowledge” or “knowledge” means (a)
with respect to Seller, the actual Knowledge of the Persons listed on Schedule
1.1(b) and (b) with respect to Buyer, the actual Knowledge of the Persons
listed on Schedule 1.1(c).

“Law” means any law, order, statute, treaty, writ,
judgment, decree, injunction, rule, regulation, by-law, ordinance, code
or other policy, guideline, interpretation or pronouncement having the effect
of law of any Governmental Authority.

“Lease Assignments” means the Assignments and
Assumptions of Lease, substantially in the forms attached hereto as Exhibits
C-1, C-2 and C-3.

“Leased Real Property” means the premises
demised pursuant to the Real Property Leases.

“Leasehold Title Commitment” has the meaning
given to such term in Section 7.15(a).

“Leasehold Title Policy” has the meaning given
to such term in Section 7.15(a).

“Liability” means any debts, liabilities,
obligations, claims, expenses, Taxes, contracts, accounts payable or
commitments of any kind, character or description, whether accrued or

 5
 

 

fixed, absolute or contingent, asserted or unasserted,
liquidated or unliquidated, matured or unmatured, known or unknown, determined
or undetermined.

“License” means any license, permit,
certificate, authorization, approval, franchise, order, registration,
qualification, waiver or similar consent issued by any Governmental Authority.

“Lien” means any lien, claim, encumbrance,
charge, mortgage or pledge or security interest of any kind.

“Losses” means, collectively, Buyer Losses and
Seller Losses.

“Non-Assignable Contract” means each Assumed
Contract to the extent the sale, assignment, transfer or conveyance thereof, or
attempted sale, assignment, transfer or conveyance thereof, without the consent
of a third Person, would constitute a breach or violation of such Assumed
Contract or affect adversely the rights of Seller or, upon such sale,
assignment, transfer or conveyance, the rights of Buyer thereunder (including
in the case of Colocation Contracts, as a result of the inability to sever the
provisions of any such Contract in a manner which permits the assignment
of  the rights and obligations of the
parties with respect to the Colocation Rights while preserving for the Seller
the rights and obligations of the parties with respect to any other services
provided by Seller under such Contract); it being understood and agreed that
upon receipt of all necessary consents and, to the extent such consents are
received after Closing, the assignment and assumption of such Assumed Contract
in accordance with Section 7.3(b), such Assumed Contract shall cease to be a
Non-Assignable Contract.

“On Leave Employee” means any employee of
Seller engaged in the Business (a) receiving salary continuation benefits under
any short-term disability or salary continuation program, (b) on military
service or other approved absence or (c) absent from work pursuant to sick
leave or other leave granted or required to be granted under the terms of the
Family and Medical Leave Act.

“Ordinary Course of Business” has the meaning
given to such term in Section 5.16.

“Other Assumed Contracts” has the meaning given
to such term in Section 5.13(b).

“Owned Real Property” has the meaning given to
such term in Section 2.1(a) (i).

“Package Contracts” has the meaning given to
such term in Section 7.3(c).

“Parties” means the parties to this Agreement.

“Permitted Liens” means, collectively, Personal
Property Permitted Liens and Real Property Permitted Liens.

“Person” means any natural person, corporation,
general partnership, limited partnership, limited liability company,
proprietorship, other business organization, trust, union, association or other
entity or Governmental Authority.

 6
 

 

“Personal Property Permitted Liens” means any
(a) Lien for Taxes not yet due or payable or, if due, being contested in good faith;
(b) mechanic’s, workman’s, warehouseman’s, carrier’s or materialman’s Lien and
any other like Lien arising in the Ordinary Course of Business for sums not yet
due or payable or, if due, being contested in good faith; (c) title retention
or security interests under conditional sales contracts and equipment leases
with third parties entered into in the Ordinary Course of Business; (d) Lien
arising from the failure of Seller to comply with bulk sales Laws in any
jurisdiction; (e) Lien listed on Schedule 1.1(d); or (f) Lien which,
individually or in the aggregate, would not reasonably be expected to
materially detract from the value or impair the existing use of the Acquired
Assets subject to such Lien.

“Plans” has the meaning given to such term in
Section 5.10(b).

“Pre-Closing Tax Period” shall mean
(i) any Tax period ending before the Closing Date and (ii) with
respect to any Straddle Period, the portion of such period prior to the Closing
Date.

“Property Taxes” has the meaning given to such
term in Section 7.9.

“Purchase Price” has the meaning given to such
term in Section 3.1(a).

“Real Property Deed” means an instrument
providing for the conveyance of the Owned Real Property, substantially in the
form of Exhibit D.1.

“Real Property Leases” has the meaning given to
such term in Section 2.1(a) (ii).

“Real Property Permitted Liens” means (x) with
respect to the Leased Real Property, any (a) restriction contained in any
covenant or deed of record; (b) easement, license, covenant, right-of-way or
other similar restriction, including any other agreement or restriction which
would be shown by a current title report or other similar report or listing;
(c) condition that may be shown by a current survey, title report or physical
inspection; (d) zoning, land use, building or other similar restriction, so
long as none of the items in (a), (b), (c) or (d) renders the title of such
real property unmarketable or prevents the use of such real property
substantially as currently used; (e) any Lien listed on Schedule 1.1(e);
(f) any Lien which affects only the underlying fee simple property and not the
Seller’s interest in such property under the Real Property Lease or (g) the
pre-printed exceptions set forth in, and the exceptions set forth on Schedule
B-Part 2 to, the Leasehold Title Commitments other than those exceptions that
are removed through delivery of the Title Affidavits, and (y) with respect to
the Owned Real Property, (i) the pre-printed exceptions set forth in, and the
exceptions set forth on Schedule B-Part 2 to, the Title Commitment other than
those exceptions that are removed through delivery of the Title Affidavits and
(ii) the exclusions and reservations set forth in the Real Property Deed.

 “Retained
Businesses” means the businesses of Seller other than the Business and
shall include the Internet exchange facilities, telecommunications networks and
facilities based IP access businesses of Seller and the provision of Colocation Services at the data
center facilities located at 150 South First Street, San Jose, California 95119.

“Retained Receivables” has the meaning given to
such term in Section 2.2(g).

 7
 

 

“Schedule” means the disclosure schedules
delivered by the Parties hereto on the date hereof and attached hereto.

“Searches” has the meaning given to such term
in Section 7.15(c).

“Seller” has the meaning given to such term in
the introductory paragraph of this Agreement.

“Seller Basket Exclusions” has the meaning
given to such term in Section 11.3(a).

“Seller Colocation Agreement” means,
collectively, an Omnibus Agreement substantially in the form of Exhibit E.1, a
Deed of Colocation Lease substantially in the form of Exhibit E.2, a Colocation
Agreement (VA1), substantially in the form of Exhibit E.3, a Colocation
Agreement (NY1) substantially in the form of Exhibit E.4, a Colocation
Agreement (NY2) substantially in the form of Exhibit E.5 and a Conduit License
Agreement (VA1), substantially in the form of Exhibit E.6,  pursuant to which Seller leases or licenses
the right to use the conduits and portions of the available colocation space
listed on Schedule 1.1(f) at the Owned Real Property or the Leased Real
Property.

“Seller Losses” has the meaning given to such
term in Section 11.2(b).

“Seller Material Adverse Effect” means a
material adverse effect upon (a) the business, financial condition or results
of operation of the Business, taken as a whole, or (b) the ability of Seller to
consummate the transactions contemplated by the Agreement; provided, however,
a Seller Material Adverse Effect shall not include any change in or effect upon
Seller or the Business directly or indirectly arising out of or attributable to
(i) conditions, events or circumstances generally affecting the United States
economy as a whole or the industries or segments in which Seller or the
Business operates or (ii) entering into this Agreement.

“Straddle Period” has the meaning given to such
term in Section 7.9.

“Subsequent Title Defects” has the meaning
given to such term in Section 7.15(d).

“Survey” has the meaning given to such term in
Section 7.15(b).

“Taxes” means all federal, provincial,
territorial, state, municipal, local, foreign or other taxes (including
governmental imposts, levies and other assessments) including all income,
franchise, gains, capital, profits, gifts, real property, goods and services,
transfer, value added, gross receipts, windfall profits, severance, ad valorem,
personal property, production, sales, use, license, stamp, documentary stamp,
mortgage recording, excise, employment, payroll, social security, unemployment,
disability, estimated or withholding taxes, and all customs and import duties,
together with any interest, additions, fines or penalties with respect thereto
or in respect of any failure to comply with any requirement regarding Tax
Returns and any interest in respect of such additions, fines or penalties.

 8

 

“Tax Return” means any return, report,
information statement or similar document filed or required to be filed under
applicable Law by any Person with respect to Taxes.

“Title Company” shall mean Commonwealth Land
Title Insurance Company.

“Third-Party Claim” has the meaning given to
such term in Section 11.5.

“Threshold” has the meaning given to such term
in Section 11.3(a).

“Title Commitment” has the meaning given to
such term in Section 7.15(a).

“Title Objections” has the meaning given to
such term in Section 7.15(d).

“Title Policy” has the meaning given to such
term in Section 7.15(a).

 “Transaction
Documents” means this Agreement, the Assumption Agreement, the Bill of
Sale, the Lease Assignments, the Real Property Deed, the Easement, the Seller
Colocation Agreements, the Transition Services Agreement and the other
agreements, documents and instruments to be executed and delivered in
connection with any of the foregoing.

“Transfer Taxes” has the meaning given to such
term in Section 12.3.

“Transferred Employees” has the meaning given
to such term in Section 7.5(a).

“Transition Services Agreement” means the
Transition Services Agreement substantially in the form attached hereto as
Exhibit F.

“Treasury Regulations” means the United States
Treasury regulations promulgated under the Code from time to time.

 “Vehicles”
means all motor vehicles, automobiles, buses, trucks, other vehicles or rolling
stock.

1.2      Certain Interpretive Matters.  In this Agreement, unless the context
otherwise requires:

(a)      words of the masculine or neuter gender
shall include, as applicable, the masculine, neuter and/or feminine gender, and
words in the singular number or in the plural number shall each include, as
applicable, the singular number or the plural number;

(b)     reference
to any Person includes such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such Person in any
other capacity;

(c)      any accounting term used
and not otherwise defined in this Agreement or any Transaction Document has the
meaning assigned to such term in accordance with GAAP;

 9
 

 

 

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

(e)      reference to any law (including statutes
and ordinances) means such law as amended, modified codified or reenacted, in
whole or in part, and in effect from time to time, including rules and regulations
promulgated thereunder;

(f)      the terms “hereof,” “herein,” “hereby” and
derivative or similar words refer to this entire Agreement and not to any
particular provision of this Agreement;

(g)      the
terms “Article” or “Section” refer to the specified Article or Section of this
Agreement;

(h)      section
headings are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement; and

(i)       all monetary amounts specified in this
Agreement shall represent United States Dollars.

The Parties further
acknowledge and agree that: 
(i) this Agreement is the result of negotiations between the
Parties and shall not be deemed or construed as having been drafted by any one
party, (ii) each Party and its counsel have reviewed and negotiated the
terms and provisions of this Agreement (including any Exhibits and Schedules
attached hereto) and have contributed to its revision, (iii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting Party shall not be employed in the interpretation of this Agreement,
and (iv) the terms and provisions of this Agreement shall be construed
fairly as to all Parties hereto and not in favor of or against any Party,
regardless of which Party was generally responsible for the preparation of this
Agreement.

1.3  Recitals.  The Recitals set forth above are incorporated
herein by this reference.

ARTICLE 2

PURCHASE AND SALE

2.1  Acquired
Assets. 
(a) On the terms, and subject to the conditions of this Agreement
(including Sections 2.1(b), 2.2 and 2.3), on the Closing Date, Seller shall
sell, assign, transfer, convey and deliver to Buyer, free and clear of all
Liens other than Permitted Liens, and Buyer shall purchase from Seller, all of
Seller’s right, title and interest in and to all tangible and intangible
assets, properties and rights primarily used in the operation of the Business
(such assets, properties and rights being referred to herein as the “Acquired Assets”), including
the following assets, properties and rights:

       (i)  Owned Real Property.  Those parcels of real property set forth on Schedule
2.1(a)(i) and all rights arising out of the ownership thereof or
appurtenant thereto,

 10
 

 

together with all buildings, structures, facilities,
fixtures and other improvements thereon (collectively, the “Owned Real
Property”);

            (ii)      Real
Property Leases.  The leases or
subleases of real property set forth on Schedule 2.1(a)(ii), including
all amendments, modifications and supplements thereto, regardless of the form
of such documents or instruments, and all leasehold improvements appurtenant to
such leases or subleases as of the date of this Agreement (collectively, the “Real
Property Leases”);

            (iii)     Equipment.  All Equipment described on Schedule 2.1(a)
(iii);

            (iv)     Books and Records.  Originals or copies of all material files,
documents, instruments, computer files, papers, books and records of Seller
relating primarily to the Business;

            (v)      Receivables.   All accounts receivable, notes and other
amounts receivable from third parties for services provided by the Business on
or after the Closing Date under the Colocation Contracts or other Assumed
Contracts (including under any such Contracts which are Non-Assignable
Contracts not being transferred on the Closing Date), whether billed or
unbilled, whether or not in the Ordinary Course of Business, together with any
unpaid financing charges or interest thereon from and after the Closing Date
(collectively, “Assigned Receivables”);

            (vi)     Contracts.  All Colocation Contracts and other Assumed
Contracts;

            (vii)    Licenses.  All Licenses granted or issued to Seller
which are primarily used in the Business, to the extent transferable to Buyer;
and

            (viii)   Customer Security Deposits and Prepayments.  Any amounts deposited by any customer with
Seller in accordance with the terms of, and solely to secure such customer’s
obligations under, any Colocation Contract (other than any such Contract which
is an Excluded Contract) (the “Customer Security Deposits”) and any
prepayment by a customer of its obligations under a Colocation Contract for
services to be rendered from and after the Closing Date (other than any such
Contract which is an Excluded Contract) (“Customer Prepayments”).

(b)      Restrictions on
Acquired Assets.  It is understood
and agreed that the Acquired Assets in Sections 2.1(a) (iii), (iv), (vi) and
(vii) above shall not include any assets, properties or rights of Seller which
are primarily used by it in the operation of any business other than the
Business, including the Retained Businesses.

2.2      Excluded Assets.  Notwithstanding the foregoing, Seller shall
not sell, assign, transfer, convey or deliver, and Buyer shall not purchase,
pursuant to this Agreement, and the term “Acquired Assets” shall not
include, any of the following assets, properties or rights (collectively, the “Excluded
Assets”):

 11
 

 

 

(a)      Non-Business Assets. 
Any assets, properties or rights of Seller (i) not used in the Business
or (ii) of the kind described in Sections 2.1(a)(iii), (iv), (vi) or (vii)
which are primarily used by Seller in the operation of a business other than
the Business, including the Retained Businesses;

(b)      Cash.  All cash and cash equivalents, other than any
Customer Security Deposits and Customer Prepayments;

(c)      Corporate Accounts, etc. 
Any interest in and to the capital stock of Seller and all minute books,
stock records, Tax Returns, income Tax records and similar corporate documents
of Seller;

(d)           Rights Under Transaction
Documents.  All rights of Seller
under this Agreement and the other Transaction Documents;

(e)      Rights to Tax Refunds. 
Any rights with respect to any Tax refunds, credits or other Tax
attributes except for such rights directly related to Taxes paid or assumed by
Buyer under this Agreement;

(f)      Rights to Insurance Policies.  Any insurance policies and any rights or
claims thereunder;

(g)      Retained Receivables.  Any receivable of Seller from any of its
Affiliates and any accounts receivable, notes and other amounts receivable from
third parties for services provided by the Business prior to the Closing Date,
whether billed or unbilled, whether or not in the Ordinary Course of Business,
together with any unpaid financing charges or interest thereon through the
Closing Date (“Retained Receivables”);

(h)      Prepaid Expenses and
Security Deposits.  Any prepaid
expenses, excess premiums or other like assets and any amounts deposited by or
on behalf of Seller in connection with any Real Property Lease or other Assumed
Contract;

(i)       Excluded Contracts.  Each (x) Contract between Seller and any of
its Affiliates, (y) Contract of the nature described on Schedule 2.2(i)(y)
and (z) Non-Assignable Contract listed on Schedule 2.2(i)(z) and
Additional Remedy Ticket that remains a Non-Assignable Contract as of the
Closing ((x) through (z) collectively, the “Excluded Contracts”);

(j)       Seller Colocation Equipment.  Any Equipment installed or stored in any
colocation space leased or licensed by Seller from Buyer pursuant to a Seller
Colocation Agreement;

(k)      Seller Conduit and Fiber.  Any conduit and fiber
optic cables listed in Schedule 2.2(k);

(l)       Corporate Trade Name. 
The name “AboveNet” and any trademarks, service marks, logos, trade
names, corporate names and Internet domain names, whether or not registered,
including all common law rights therein, and registrations and applications for
registration thereof used by the Business;

 12
 

 

 

(m)     Corporate
Administrative Services Assets.  The
assets, properties and rights used by Seller in connection with the provision
of corporate administrative service functions (including legal, accounting,
finance, sales, marketing, collections and network services) to the Retained
Businesses; and

(n)      Other Assets.  The assets, properties and rights listed on Schedule
2.2(n).

2.3      Retained Right of Use.  In addition to the rights
of Seller under the Seller Colocation Agreement(s), Seller shall have the right
to use the Acquired Assets listed on Schedule 2.3 in the ordinary course
of operating the Retained Businesses and in a manner consistent with past
practice without any consideration therefor being payable to Buyer. 

ARTICLE 3

PURCHASE PRICE

3.1      Purchase Price.  The aggregate purchase price to be paid by
Buyer for the Acquired Assets shall be (i) forty million seventy five thousand
dollars ($40,075,000) (the “Cash Purchase Price”), and (ii) the
assumption by Buyer of the Assumed Liabilities (collectively, the “Purchase
Price”).

3.2      Payment of Cash Purchase Price.  The Cash Purchase Price shall be payable by
Buyer by wire transfer of immediately available federal funds to such bank
account or accounts as shall be designated by Seller to Buyer prior to the
Closing.  The Cash Purchase Price payable
by Buyer hereunder shall be reduced by an amount equal to the Earnest Money
Deposit actually released to Seller at the Closing.

3.3      Allocation of Consideration.  (a) The Purchase Price shall be allocated
among the Acquired Assets in accordance with Schedule 3.3.  The Parties agree (i) that the allocations
set forth in Schedule 3.3 have been made in accordance with the
applicable provisions of the Code and the Treasury Regulations, (ii) to treat
and report for income tax purposes the transactions contemplated hereby in a
manner consistent with such allocation and (iii) not to take any action for
income tax purposes inconsistent with such allocation.  The Parties acknowledge and agree that the
allocations made pursuant to this Section 3.3 are solely for income tax
purposes.

(b)   Not later than ten (10) days prior to the
filing of its respective IRS Form 8594 relating to this transaction, each Party
shall deliver to the other Party a copy of its IRS Form 8594.

3.4      Apportionment of Income and Expenses.  All revenue and expenses pertaining to the
Business, including, without limitation, all prepaid sums and fees, service
charges, advertising, rental charges, utility charges, payroll taxes, payments
under assigned agreements, and accrued and prepaid expenses, shall be prorated
between Buyer and Seller as of

 13
 

 

the Closing Date so that the Seller shall receive all
revenues and shall be responsible for all expenses and liabilities allocable to
the period prior to the Closing Date and Buyer shall receive all revenues and
shall be responsible for all expenses and liabilities allocable to the period
beginning on and continuing after the Closing Date, provided, however, in no
event shall Seller be obligated to give Buyer credit for or on account of any
accrued revenue which remains uncollected as of the Closing Date.  Buyer and Seller shall cooperate with each
other in calculating all such prorated items and shall make a payment one to
the other, as appropriate, within sixty (60) days after the Closing Date of the
net amount of such prorated items.

ARTICLE 4

LIMITED ASSUMPTION OF LIABILITIES

4.1      Assumption of Liabilities. On the
terms and subject to the conditions, representations and warranties contained
herein, on the Closing Date, Buyer will hereby assume, and agree to pay,
perform and discharge when due, the following liabilities of Seller relating to
Business (collectively, the “Assumed Liabilities”):

(a)       the
Liabilities of Seller which are to be paid, performed or discharged from and
after the Closing Date under the Assumed Contracts;

(b)      any liability or obligation for Taxes
required to be paid by Buyer pursuant to Section 12.3 or otherwise arising out
of or relating to operation of the Business on or after the Closing Date, it
being agreed that the Taxes of Buyer for any Straddle Period shall be
determined in accordance with Section 7.9;

(c)       the
Liabilities and obligations undertaken or assumed by Buyer pursuant to the
other provisions of this Agreement or the other Transaction Documents; and

(d)      the Liabilities set forth on Schedule
4.1(d).

4.2      Excluded Liabilities. Except for the Assumed Liabilities,
Buyer shall not assume, pay, perform or discharge any other Liabilities of
Seller under this Agreement (the “Excluded Liabilities”) including:

(a)      any Debt of Seller;

 

(b)      any liability or obligation for Taxes of
Seller for any Pre-Closing Tax Period (including all liabilities of Seller for Taxes
related to the transactions contemplated by this Agreement except to the extent
such Taxes are to be paid by the Buyer pursuant to Section 12.3 hereof), it
being agreed that the Taxes of Seller for any Straddle Period shall be
determined in accordance with Section 7.9;

 

(c)      any liability or obligation arising out of
or relating to an Excluded Asset;

 14
 

 

 

(d)      the obligations, liabilities and expenses
(including for any accounting, legal, investment banking, brokerage or similar
fees or expenses) incurred by Seller in connection with the negotiation and
preparation of this Agreement and each of the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby; and

 

(e)      the obligations or liabilities relating to
employees or former employees of Seller, including Transferred Employees, for
periods prior to the Closing Date.

The Parties expressly
understand and agree that the Assumed Liabilities shall not include any
Liabilities to the extent attributable to (a) the ownership of the Acquired
Assets or the operation of the Business prior to the Closing and (b) any
Excluded Asset.

ARTICLE 5

REPRESENTATIONS
AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as follows:

5.1      Organization.  Seller is a corporation duly organized,
validly existing and in good standing under the Laws of the State of
Delaware.  Seller is duly licensed or
qualified to do business in each jurisdiction in which the ownership of the
Acquired Assets or the operation of the Business makes such licensing or
qualification necessary, except where the failure to be so licensed or
qualified to do business would not reasonably be expected to result in a Seller
Material Adverse Effect.  Each such
jurisdiction is disclosed on Schedule 5.1.

5.2      Authority.   Seller has all requisite corporate power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and
thereby.  Seller has obtained all
necessary corporate approvals for the execution and delivery of this Agreement
and the other Transaction Documents to which it is a party, the performance of
its obligations hereunder and thereunder and the consummation by Seller of the
transactions contemplated hereby and thereby. 
This Agreement has been, and upon execution and delivery by Seller of
each of the other Transaction Documents to which it is a party will be, duly
executed and delivered by Seller and (assuming due authorization, execution and
delivery by the other parties hereto and thereto) constitutes or will
constitute, as applicable, Seller’s legal, valid and binding obligations,
enforceable against Seller in accordance with their respective terms, except as
such enforceability may be (a) limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting the
enforcement of creditor’s rights, or (b) subject to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).

5.3      Non-Contravention.  Except as disclosed on Schedule 5.3,
none of the execution and delivery by Seller of this Agreement or the other
Transaction Documents to which it is a party, the performance of its
obligations hereunder or thereunder or the consummation by

 15
 

 

 

Seller of the transactions contemplated hereby or thereby (a) will
conflict with Seller’s certificate of incorporation or by-laws or (b) will,
with or without notice, the passage of time or both, constitute a breach or
violation of, conflict with, or constitute or create a default under, or result
in the creation or imposition of any Liens upon any Acquired Assets pursuant
to, any material Contract to which Seller is a party or by which it or any of
its material properties are bound, except, in the case of (b), for such
breaches, violations, conflicts and defaults which would not reasonably be expected
to result in a Seller Material Adverse Effect.

 

5.4      Financial Matters.  Set forth as Schedule 5.4 are complete
and accurate schedules of:

(i)       all revenue generated by
the Business and by each data center included in the Business (but excluding
any revenue associated with the Contracts referenced in item 2 of Schedule
2.2(i)(y)) during the six calendar month period ending June 30, 2006;

 

(ii)     all direct expenses paid or payable by
Seller in connection with the operation of each data center included in the
Business with respect to the six calendar month period ended June 30, 2006 (it
being understood that such direct expenses exclude personal property taxes,
insurance, SG&A and other allocated general expenses); and

 

(iii)     all Customer Security
Deposits and Customer Prepayments as of June 30, 2006.

5.5      Governmental Consents.  Except as disclosed on Schedule 5.5,
no Consents of any Governmental Authority are required on the part of Seller
under applicable Law in connection with the execution and delivery of this
Agreement, the performance of its obligations hereunder or the consummation by
Seller of the transactions contemplated hereby, other than any Consents which
have already been obtained or made or the failure to obtain or the absence of
which would not reasonably be expected to result in a Seller Material Adverse
Effect.

5.6      Compliance with Laws.  Except as disclosed on Schedule 5.6
and for any failure to comply which would not reasonably be expected to result
in a Seller Material Adverse Effect, to the Knowledge of Seller, Seller has
conducted and continues to conduct the Business in compliance with all
applicable Laws.  No notice has been
received from, and, to the Knowledge of Seller, no investigation or review is
pending or threatened by, any Governmental Authority with regard to any alleged
violation of any such law by Seller in connection with the operation of the
Business, other than any violation which would not reasonably be expected to
result in a Seller Material Adverse Effect.

5.7      Environmental Matters.   Except as set forth on Schedule 5.7
hereto:

(a)     Seller holds and is in
material compliance with all Licenses required under Environmental Laws
applicable to the Business and the Acquired Assets (the “Environmental
Permits”);

 16
 

 

 

(b)                      Seller
has not stored, treated, generated, transported or released any Hazardous
Substances at any Owned Real Property or Leased Real Property in violation of
any Environmental Law, except for any such violations that would not reasonably
be expected to result in a Seller Material Adverse Effect; and

 

(c)      Seller
has not entered into nor is Seller subject to any outstanding judgment, decree,
order or other directive issued by or consent arranged with any Governmental
Authority under any Environmental Law, with respect to clean up, remediation,
or removal of Hazardous Substances.

 

5.8      Permits.   Schedule 5.8 sets forth all Licenses
(other than any License to do business in any jurisdiction), including
certificates of occupancy with respect to occupancy of the Owned Real Property
and the Leased Real Property by Seller, granted to Seller in connection with
the ownership of the Acquired Assets, use of the Acquired Assets as currently
used or operation of the Business as currently conducted.  Each License set forth on Schedule 5.8
is valid and in full force and effect. 
None of the Licenses set forth on Schedule 5.8 will be terminated
or impaired or become terminable as a result of the transactions contemplated
hereby, provided, however, Seller makes no representation as to the
assignability or transferability of any such License.

5.9      Litigation, etc.  There are no judicial or administrative
actions, suits, arbitrations or proceedings pending or, to the Knowledge of
Seller, threatened involving the Business or the Acquired Assets which would
reasonably be expected to result in a Seller Material Adverse Effect.

5.10    Employees and Benefits.   (a)  
Schedule 5.10(a) sets forth a list of all of the employees of
Seller primarily engaged in the Business and their respective salaries, in each
case as of the date set forth on such Schedule (including all On Leave
Employees (with all such On Leave Employees and their respective reasons for
leave being appropriately disclosed on Schedule 5.10(a))).

(b)     Schedule 5.10(b) lists all material
employee benefit plans of Seller covering or otherwise benefiting employees or
former employees of Seller engaged in the Business, including any plan,
program, arrangement, agreement or commitment that is an employment,
consulting, severance, termination, deferred compensation or change in control
agreement, or any bonus, stock option, stock purchase, pension, incentive,
profit sharing, deferred compensation, executive compensation, retiree medical
or life insurance, supplemental retirement, severance, life, health,
disability, accident, medical or dental insurance, vacation or other welfare or
other employee benefit plan, program, arrangement, agreement or commitment
(whether oral or written, whether for the benefit of a single individual or
more than one individual), including any “employee benefit plan” as defined in
Section 3(3) of ERISA, whether or not subject thereto (collectively, the “Plans”).

 17

 

 

(c)          Each Plan (and Seller’s operation of
each Plan) is in compliance in all material respects with its respective terms
and with the applicable provisions of the Code and ERISA. 

(d)         Neither Seller nor any ERISA Affiliate
has contributed to, contributes to or has any Liability under ERISA or the Code
with respect to (i) any “multiemployer pension plan,” as such term is defined
in Section 3(37) of ERISA, (ii) any “employer benefit plan,” as defined in
Section 3(3) of ERISA that is or was subject to Title IV of ERISA, Section 302
of ERISA or Section 412 of the Code or (iii) any employer benefit plan that
provides retiree medical benefits (other than any health care continuation to
the extent required by ERISA or the Code) or benefits to any persons outside the
United States. 

5.11         Ownership and Transfer of
Acquired Assets.  (a)   Seller has good and marketable title to or,
in the case of leased or subleased Acquired Assets, valid and subsisting
leasehold interests in, all of the Acquired Assets which are tangible personal
property (other than the Owned Real Property and the Lease Real Property which
are addressed in Section 5.11(b) below), free and clear of all Liens other than
Personal Property Permitted Liens.

(b)        To the Knowledge of Seller, Seller is
the record owner and has good and marketable fee simple title to the Owned Real
Property, free and clear of all Liens other than Real Property Permitted
Liens.    Prior to Closing, Seller shall
deliver to the Title Company for recording in the land records of Fairfax
County, Virginia a proper instrument formally and affirmatively terminating the
Lease dated June 15, 1999, between 1807 Faraday Court Limited Partnership, a
Virginia limited partnership, as landlord, and Seller, as tenant.

(c)         Other than Seller and the other parties
to the Colocation Contracts and as set forth on Schedule 5.11(c), there
are no parties physically occupying or using any portion of the Owned Real
Property or Leased Real Property nor do any other parties have the right to
physically occupy or use any portion of such premises.

(d)        To the Knowledge of Seller, Seller has
or at Closing will have a valid leasehold interest in each of the Real Property
Leases, free and clear of all Liens other than Permitted Liens.

5.12         Assets used by the Business.  There is no material intellectual property
used in the Business except (a) to the extent intellectual property is imbedded
in Equipment used in the Business and (b) the “know how” of the employees of
the Seller engaged in the Business.   
Other than the Excluded Assets and the “know how” possessed by an
individual employee who is not a Transferred Employee, the Acquired Assets
constitute all of the assets, properties and rights necessary to conduct the
Business in substantially the manner as currently conducted by Seller.

5.13         Contracts.  (a)  Schedule
5.13(a) lists the Colocation Contracts (other than Colocation Contracts
arising as a result of Additional Remedy Tickets) and separately lists all
Colocation Contracts which are Package Contracts.

 18
 

 

 

(b)        Schedule 5.13(b) lists each
Contract (other than Colocation Contracts, Real Property Leases and Plans) to
which Seller is a Party and which is primarily used in the Business (the “Other
Assumed Contracts”).

(c)         Seller has furnished or made available
to Buyer a true, complete and correct copy of each Real Property Lease,
Colocation Agreement (except to the extent such Colocation Contracts are
bracketed on Schedule 5.13(a) or arose as a result of Additional Remedy
Tickets) and Other Assumed Contract. 
Except as disclosed on Schedule 5.13(a) or (b), each
Assumed Contract is a legal, valid obligation of Seller, is in full force and
effect, and is enforceable in accordance with its terms except as enforcement
may be (i) limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting the enforcement of
creditor’s rights, or (ii) subject to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity). Seller has paid in full all amounts which are due and payable by
Seller under the Assumed Contracts and has satisfied in all material respects
its liabilities and obligations which are due and payable thereunder, except
for amounts or liabilities disputed in good faith by Seller as described on
Schedule 5.13(c).  The Seller is not in
default under any Assumed Contract, nor to the Knowledge of the Seller, except
as set forth on Schedule 5.13(c), does any condition exist that, with notice or
lapse of time or both, would reasonably be expected to constitute a default
thereunder, other than in each case any default which would not reasonably be
expected to result in a Seller Material Adverse Effect.  To the Knowledge of the Seller, except as set
forth on Schedule 5.13(c), no other party to any Assumed Contract is in default
thereunder, nor, except as set forth on Schedule 5.13(c), does any condition
exist that, with notice or lapse of time or both, would reasonably be expected
to constitute a default thereunder, other than in each case any default which
would not reasonably be expected to result in a Seller Material Adverse Effect.

5.14         Assigned Receivables.  The Assigned Receivables represent, or will
represent, as applicable, amounts billed to customers for services to be
provided in the Ordinary Course of the Business under the Colocation Contracts
and other Assumed Contracts after the Closing. 
Seller has good and valid title to the Assigned Receivables, free and
clear of Liens other than Personal Property Permitted Liens.

5.15         Taxes.   Except as disclosed on Schedule 5.15,
all Tax Returns required to be filed by Seller covering Taxes of the Business
which are due and payable prior to the Closing Date have been or will be filed,
and all Taxes (other than Property Taxes for the Straddle Period which shall be
apportioned in accordance with Section 7.9) which are shown to be due and
payable on such Tax Returns have been paid, other than such amounts as are
being contested by Seller in good faith by appropriate proceedings. All Taxes
relating to the Acquired Assets or the Business, including, without limitation,
Taxes imposed by any foreign taxing authority on the employees of the Business,
which have been claimed in writing to be due by any taxing authority from
Seller, have been properly paid other than such amounts as are being contested
by Seller in good faith by appropriate proceedings as described on Schedule
5.15.   Except as disclosed on Schedule
5.15, the Seller has not received any notice of assessment or proposed
assessment in connection with any of the Acquired Assets.  Except as disclosed on Schedule 5.15,
there is no 

 19
 

 

 

pending, or to the
Knowledge of the Seller, threatened Tax audit of any Tax Return filed by or on
behalf of the Seller or with respect to the Seller’s income, assets or
operations, including the Acquired Assets. 
The Seller has made all deposits required by Law to be made with respect
to employees’ withholding and other employment Taxes including, without
limitation, the portion of such deposits relating to Taxes imposed upon the
Seller.

5.16         Existing Condition.  Except as set forth on Schedule 5.16,
since June 30, 2006, Seller has operated the Business in the ordinary course of
business, consistent with past practice and without violation of the provisions
of this Agreement (the “Ordinary Course of Business”), and there has not
been any event, condition, change, action, failure to act or transaction which,
individually or in the aggregate, has had or would reasonably be expected to
have a Seller Material Adverse Effect.

5.17         Labor Matters.  (a) 
Seller is not a party to any collective bargaining agreement covering
any employee of Seller engaged in the Business and, to the Knowledge of Seller,
no collective bargaining agreement is currently being negotiated; to the
Knowledge of Seller, there is no labor union representing any employee of
Seller engaged in the Business; to the Knowledge of Seller, no attempt is
currently being made or has been made during the past three (3) years to
organize Seller’s employees engaged in the Business to form or enter a labor
union or similar organization; and, to the Knowledge of Seller, there are no
pending or threatened representations, campaigns, elections, certification
proceedings or petitions seeking a representation proceeding brought or filed
with the National Labor Relations Board regarding Seller’s employees engaged in
the Business.

(b)        There is no organized labor strike or
walkout by Seller’s employees engaged in the Business occurring presently or,
to the Knowledge of Seller, threatened, and Seller has not been notified of any
employee grievances which would lead to any of the foregoing.  Seller has not experienced any organized
labor strike or walkout by its employees engaged in the Business during the
past three (3) years.

5.18         Insurance Policies.  Set forth on Schedule 5.18 is a list
and brief description of all claims in excess of $25,000 (including pending
claims) relating to the Business or the Acquired Assets made by the Seller
under Seller’s policies of fire, casualty, liability, product liability,
burglary, fidelity, worker’s compensation, life, vehicular or other forms of
insurance relating to the Business or the Acquired Assets held by or on behalf
of the Seller during Seller’s past two (2) fiscal years and the amount paid
out, if any, under each policy with respect to such claims.

5.19         Transactions with
Affiliates.  The Company
is not party to any transactions with any of its Affiliates which relate in any
manner to the Business.

5.20         Real Estate.

(a)         Improvements.  The improvements, buildings and structures
located on the Owned Real Property and the Leased Real Property are to the
knowledge of Seller (i) structurally sound with no known defects and
(ii) in operating condition and repair suitable for the use by the 

 20
 

 

 

Business as currently
operated, subject to ordinary wear and tear. 
All improvements, repairs, alterations and any other work required to be
performed as of the Execution Date by the landlord under any of the Real
Property Leases for Seller’s benefit, and all payments required to be made by
Seller to any landlord for such work, have been fully performed and paid in
full.

(b)        Title Commitment.  Except as reflected in the Title Commitment,
Seller has not, and on or prior to Closing shall not, (i) grant any easements
and/or rights-of-way and/or other encumbrances over or through the Owned Real
Property, (ii) enter into any agreements or any proffers or other commitments
encumbering title to the Owned Real Property, other than Colocation Agreements
and other agreements with customers and agreements with contractors, in each
case, entered into by Seller in the Ordinary Course of Business,  (iii) further encumber title to the Owned
Real Property, (iv) construct or install any improvements or allow any existing
improvements or natural deposits to be wasted, removed, sold or in any way
encumbered, in each case at the Owned Real Property or (v) make or permit any
changes, modifications, additions or deletions to the approved site plan or any
other governmental approval for the 
Owned Real Property.  Except as
reflected in the Leasehold Title Commitment, Seller has not, and on or prior to
Closing shall not, (i) grant any easements and/or rights-of-way and/or other
encumbrances over or through the Real Property Lease, (ii) enter into any
agreements or any proffers or other commitments encumbering title to the Real
Property Lease, other than Colocation Agreements and other agreements with
customers and agreements with contractors, in each case, entered into by Seller
in the Ordinary Course of Business, 
(iii) further encumber title to the Real Property Lease, (iv) other than
in connection with the Project (as defined in the Transition Services
Agreement), construct or install any improvements or remove, sell or encumber
any existing improvements, in each case at the Leased Real Property or (v) make
any changes, modifications, additions or deletions to the approved site plan or
any other governmental approval for the Real Property Lease.

(c)         No Breach.  Except as set forth on Schedule 5.20(c),
to the Knowledge of Seller, no breach or event has occurred and is continuing
that with the giving of notice, the lapse of time, or both, would constitute a
breach or event of default by Seller or any other Person under any agreements,
arrangements, contracts, covenants, conditions, deeds, deeds of trust, rights
of way, easements, mortgages, restrictions and other documents entered into or
otherwise assumed by or binding on Seller with respect to the Owned Real
Property, including the Declaration of Protective Covenants, dated November 7,
1966, by John Hancock Mutual Life Insurance Company and Reston VA, Inc.
(formerly know as Palindrome Corporation) recorded among the land records of
Fairfax County, Virginia in Deed Book 2845 at Page 517.  Except as set forth on Schedule 5.20(c),
to the Knowledge of Seller, (i) Seller has not received any written notice of
default under any of the Real Property Leases that remains uncured as of the
date hereof and (ii) there is no current default by Seller under any of the
Real Property Leases.  Except as set
forth on Schedule 5.20(c), to the Knowledge of Seller, (x) no landlord
under any of the Real Property Leases is in default of any of its obligations
under the Real Property Leases and (y) Seller has not sent any notice of
default to the landlord under any of the Real Property Leases with respect to
any default that remains uncured as of the date hereof.

 21
 

 

 

(d)        Other Obligations.  Except as set forth on Schedule 5.20(d)
and for covenants, conditions and restrictions set forth in The Reston Center
for Industry and Government Declaration of Protective Covenants and
Restrictions, dated October 30, 1964, by Palindrome Corporation and D.G. Linn,
Trustee, as heretofore amended by amendments recorded in the land records of
Fairfax County, Virginia in favor of the Lake Fairfax Owners’ Association which
require payment of dues and may require contributions towards off-site improvements,
the Owned Real Property is not subject to any condition or obligation to any
governmental authority or other person requiring the owner or any transferee
thereof to donate land, money, or other property or to make off-site public
improvements.

(e)         Condemnation.  Seller has not received any written notice
from any Governmental Authority concerning or threatening condemnation
proceedings or the taking of the Owned Real Property, or any portion thereof,
by eminent domain.  In the event that
Seller receives written notice from any Governmental Authority concerning or
threatening condemnation proceedings or the taking of the Owned Real Property,
or any portion thereof, by eminent domain, between the date hereof and the
Closing Date, Seller shall notify Buyer who shall, to the extent permitted by
applicable law, have the right to participate in any negotiations with regard
to such condemnation or eminent domain proceeding, to such extent as is
necessary to protect Buyer’s interest, so long as such participation does not
reduce the amount of any compensation that Seller may recover with respect to
such taking if the Closing does not occur. 
This representation and warranty shall not apply to any portion of the
Owned Real Property which is to be dedicated as right-of-way or other public
use. Seller has not received written notice that there are any pending or, to
the Knowledge of the Seller, threatened condemnation, eminent domain or similar
proceedings affecting the Leased Real Property, any improvements thereon or any
portion thereof.  In the event that
Seller receives written notice, or a copy of any written notice, from any
Governmental Authority concerning or threatening condemnation proceedings with
respect to or the taking of any portion of the Leased Real Property (which
shall include the taking of any portion of the real property of which the
Leased Real Property is a part that adversely affects the Leased Real Property)
by eminent domain, between the date hereof and the Closing Date, Seller shall
notify Buyer and to the extent permitted by applicable law and the applicable
Real Property Lease, consult with Buyer regarding how to address such
condemnation or eminent domain proceeding. 
The Seller has not received written notice that there are any pending or
threatened requests, applications or proceedings to alter or restrict any
zoning or other use restrictions applicable to the Owned Real Property or any
improvements thereon or the Leased Real Property of any improvements thereon
which would interfere with the conduct of the Business or the use of the
Acquired Assets consistent with past practice.

(f)         No Liens.  All bills and claims for labor performed and
materials furnished to Seller for the benefit of the Owned Real Property and/or
any of the Leased Real Property for all periods prior to the Closing Date have
been (or prior to or as of the Closing Date will be) paid in full, and on the
Closing Date there shall be no mechanics’ liens or materialmen’s liens caused
or incurred by Seller, whether or not perfected, on or affecting any portion of
the Owned Real Property or any of the Leased Real Property, or if there shall
be any such liens, Seller shall obtain the release of the same on or before the
Closing Date (or make arrangements reasonably acceptable to Buyer’s title
insurer) so that Buyer’s owner’s policy of title insurance 

 22
 

 

 

shall contain no
exception for such liens.  However, any
bills, claims or liens relating to or arising from Buyer’s pre-closing
activities on the Owned Real Property and/or any of the Leased Real Property
are expressly excluded from the provisions of this warranty.  In connection therewith, Seller agrees, at
Closing, to execute any customary affidavits and/or agreements consistent with
the foregoing which may be reasonably required by Buyer’s title insurer in
order for Buyer to obtain from such title insurer an owner’s policy of title
insurance covering the Owned Real Property, or a leasehold owner’s policy of
title insurance covering any of the Leased Real Property, without exception for
mechanics’ liens or rights of parties in possession.

(g)        Special Assessments.  Except as described on Schedule 5.20(g),
Seller has not received written notice, or a copy of any written notice, of any
proposed or pending special taxes, assessments, fees or other impositions
affecting or which may affect the Owned Real Property or any part thereof or
any of the Leased Real Property.

5.21         Brokers, Finders, etc.  Except as described on Schedule 5.21,
Seller is not a party to any agreement with any finder or broker, or in any
other way obligated to any finder or broker, for any commissions, fees or
expenses in connection with (x) the origination, negotiation, execution or
performance of this Agreement, the other Transaction Documents, the
transactions contemplated hereby or thereby or the Real Property Leases or (y)
the acquisition, leasing or disposition of the Owned Real Property.

Except for the
representations and warranties contained in this Article 5, neither Seller nor
any other Person makes any other express or implied representation or warranty
on behalf of Seller, including any representation or warranty as to the
probable success or profitability of the ownership, use or operation of the
Business or the Acquired Assets by Buyer after the Closing.

ARTICLE 6

REPRESENTATIONS
AND WARRANTIES OF BUYER

Buyer represents and
warrants to Seller as follows:

6.1           Organization.  The Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware.  The Buyer has all requisite
power and authority to own, lease and operate its properties and assets and to
carry on its business as now being or heretofore conducted.

6.2           Authority.  The Buyer has the full right and power and
all authority and approvals required to enter into, execute and deliver this
Agreement and the other Transaction Documents to which it is or will be a party
and to perform fully its obligations hereunder and thereunder. Buyer has
obtained all necessary corporate or organizational approvals for the execution
and delivery of this Agreement and the other Transaction Documents to which it
is party, the performance of its obligations hereunder and thereunder and the
consummation by Buyer of the transactions contemplated hereby and thereby.  This Agreement has been duly executed and
delivered by the Buyer and, on the Closing Date, the other Transactions
Documents to which the Buyer is a party on the Closing Date will be duly
executed and delivered by the 

 23
 

 

 

Buyer.  Assuming due execution and delivery hereof
and thereof by the Seller, this Agreement and each of the other Transactions
Documents will be valid and binding obligations of the Buyer and will be
enforceable against the Buyer in accordance with their respective terms, except
that such enforceability may be subject to (i) bankruptcy, insolvency,
reorganization or other similar laws affecting or relating to enforcement of
creditors’ rights generally and (ii) general equitable principles.

6.3           Non-Contravention.   The execution and delivery of this Agreement
by the Buyer and the execution of the other Transaction Documents to which the
Buyer is or will be a party, the consummation of the transactions contemplated
hereby and thereby and the performance by the Buyer of this Agreement and the other
Transaction Documents, as applicable, will not (a) violate any provision of the
organizational documents of the Buyer, (b) violate any Law applicable to,
against, or binding upon, the Buyer, or by which any of the securities,
business or property of the Buyer are bound, (c) violate or result in the
revocation or suspension of the permits of the Buyer or (d) with or without
notice, the passage of time or both, conflict with or result in the breach of
any material provision of or constitute or create a default under or result in
the creation or imposition of a Lien upon any assets of Buyer any contract,
indenture, agreement, instrument, mortgage, lease or commitment to which the
Buyer may be bound.

6.4           Governmental Consents.  The execution and delivery of this Agreement
and the other Transaction Documents to which the Buyer is or will be a party,
the consummation by the Buyer of the transactions contemplated hereby and
thereby and compliance by the Buyer with any of the provisions hereof and
thereof will not require any Consent of any Governmental Body or any other
Person.

6.5           Litigation, etc.  There are no actions, suits, demands, or
claims or legal, administrative or arbitral proceedings, hearings or
investigations pending or, to the Knowledge of Buyer, threatened against or
involving the Buyer, or any outstanding orders, judgments, injunctions, awards
or decrees of any court, governmental or regulatory body or arbitration
tribunal against or involving the Buyer which challenge in any material respect
the validity of this Agreement or any of the transactions contemplated hereby
or, if adversely determined, could materially impair the ability of the Buyer
to consummate the transactions contemplated hereby.

6.6           Brokers, Finders, etc.   Buyer is not a party to any agreement with
any finder or broker, or in any other way obligated to any finder or broker,
for any commissions, fees or expenses in connection with the origination,
negotiation, execution or performance of this Agreement, the other Transaction
Documents or the transactions contemplated hereby or thereby.

6.7           Financial Capacity.  Buyer has and at Closing will have available
the cash necessary to consummate the transactions contemplated by this
Agreement.

6.8           Ability to Perform Assumed
Contracts.  Buyer has the
ability to perform all of its obligations from and after the Closing under the
Assumed Contracts.

 24
 

 

 

6.9           Opportunity for
Independent Investigation. 
Prior to its execution of this Agreement, Buyer has conducted to its
satisfaction an independent investigation and verification of the current
condition of the Acquired Assets and the Business.  In making its decision to execute this
Agreement and to purchase the Acquired Assets, Buyer has relied and will rely
solely upon the results of such independent investigation and verification, and
the terms and conditions of this Agreement including the representations and
warranties set forth herein.  The Buyer
is not relying in any manner on any information contained in the Confidential
Information Memorandum prepared on behalf of Seller or on any projections
provided by or on behalf of Seller (whether or not included in the Confidential
Information Memorandum).

ARTICLE 7

ADDITIONAL
AGREEMENTS

7.1           Conduct of the Business.  Seller covenants and agrees that, between the
date hereof and the Closing Date, it will cause the Business to be conducted
only in the Ordinary Course of Business, and will use its commercially
reasonable efforts to maintain and preserve intact the Acquired Assets, the
Business and its material relationships with its suppliers and its
customers.  Without limiting the
generality of the foregoing, between the date hereof and the Closing Date,
Seller shall not without the prior written consent of Buyer:

(a)         sell, lease, transfer, mortgage,
encumber or otherwise dispose of any Acquired Asset, real, personal or mixed;

(b)        increase the rate of compensation of, or
pay or agree to pay any benefit to, officers or employees of the Business,
except in the Ordinary Course of Business or as may be required by any existing
plan, agreement or arrangement, including, without limitation, any Plan;

(c)         enter into, adopt or amend any Plan, or
employment or severance agreement, or grant any increase in compensation or
benefits to any such employee relating to the Business, except in the Ordinary
Course of Business or as required by Law;

(d)        adopt a plan of complete or partial
liquidation, dissolution, restructuring, recapitalization or other
reorganization or otherwise permit its corporate existence or any of the material
Licenses under which the Business operates to lapse or be suspended or revoked;

(e)         materially change its billing or
pricing methods or practices;

(f)         create or incur any indebtedness or
liability other than in the Ordinary Course of Business, or guarantee any debt
or other liability of any other Person, in each case that would constitute an
Assumed Liability;

(g)        alter the procedures of the Business
regarding the collection of accounts receivable or the payment of accounts;

 25
 

 

 

(h)        take any action, other than in the
Ordinary Course of Business, with respect to accounting policies or procedures
of the Business;

(i)          make any commitments for, make or
authorize any capital expenditures relating to the Business other than in
amounts less than $10,000 individually and $50,000 in the aggregate;

(j)          settle or compromise any material
Liability which is an Assumed Liability, except in the Ordinary Course of
Business;

(k)         make any material amendments or
modifications to any of the Assumed Contracts, except in the Ordinary Course of
Business; or

(l)          agree, whether in writing or
otherwise, to take any actions described in this Section 7.1.

Notwithstanding the
foregoing, neither the issuance of Additional remedy Tickets nor any action
taken by Seller in furtherance of, and in a manner consistent with the
requirements of, the Project (as defined in the Transition Services Agreement)
shall be deemed to violate the provisions of this Section 7.1.

7.2           Access to Information.  (a) 
From the date hereof until the Closing, upon reasonable notice, Seller
shall, and shall cause its respective officers, employees, auditors and agents
to, (i) afford the officers, employees, agents and representatives of Buyer, at
Buyer’s sole expense, access, during normal business hours, to the offices,
personnel, properties, books and records of Seller relating to the Business and
(ii) furnish to the officers, employees, agents and representatives of Buyer
such additional financial and operating data and other information relating to
the Business as they may from time to reasonably request; provided, however,
that such investigation shall not unreasonably interfere with any of the
businesses or operations of Seller; provided, further, that
Seller shall not be required to provide such access or disclosure to the extent
that such access and disclosure would violate the terms of any agreement to
which Seller is bound or any Law or result in any loss of attorney-client or
other privilege. Buyer and its representatives will at all times comply with
all rules and procedures relating to the foregoing as may be communicated to
them by Seller or its representatives, and will hold in confidence all
confidential information obtained from Seller in accordance with the provisions
of  the Confidentiality Agreement.  In addition, Buyer acknowledges and confirms
that it and its representatives are and remain subject to the Confidentiality
Agreement.

(b)        In order to facilitate the resolution of
any claims made against or by Seller or for any other reasonable purpose (including
the preparation of or audit of any Tax Returns of Seller), for a period of
seven (7) years after the Closing, Buyer shall (i) retain the records relating
to the Acquired Assets and the Business delivered by Seller to Buyer
corresponding to periods prior to the Closing in a manner reasonably consistent
with the prior practice of Seller and (ii) upon reasonable notice, afford the
officers, employees, agents and representatives of Seller reasonable access
during normal business hours, to such books and records (including the right to
make, at Seller’s expense, photocopies).

 

 26

 

 

(c)              In order to facilitate the
resolution of any claims made against or by Buyer or for any other reasonable
purpose, for a period of seven (7) years after the Closing, Seller shall (i)
retain any books and records relating to the Acquired Assets and the Business
for periods prior to the Closing which have been retained by it in accordance
with this Agreement and (ii) upon reasonable notice, afford the officers,
employees, agents and representatives of Buyer reasonable access during normal
business hours, to such books and records (including the right to make, at
Buyer’s expense, photocopies).

(d)              At Buyer’s request, at any time
within one (1) year after the Closing, Seller shall provide to Buyer’s
designated independent auditor access to the books and records of the Acquired
Assets, and all related information regarding the Acquired Assets for the
period commencing January 1, 2005 through the Closing Date.  In
connection with the foregoing audit, Seller shall provide to such auditor a
representation letter in substantially the form of Exhibit I attached
hereto, with such changes as may be necessary to make the representations set
forth therein true and correct as of the date on which such representation
letter is to be delivered.

7.3              Mutual
Cooperation; Further Assurances. 
(a)  Seller and Buyer agree to use
their respective commercially reasonable efforts to take, or cause to be taken,
all actions 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 and the other Transaction Documents, including all of the
following: (i) subject to 7.3(b), obtaining all Consents as are necessary for
the consummation of the transactions contemplated by this Agreement and the other
Transaction Documents, provided, however, other than payment by
Seller of reasonable legal fees incurred by a landlord in connection with a
request for consent to the assignment of a Real Property Lease as contemplated
hereby, neither Seller nor Buyer shall be required to make any payment to any
third party in order to obtain any such consent; (ii) filing timely and
promptly all required notices, applications, reports and requests; (iii)
defending all proceedings challenging the consummation of the transactions
contemplated by this Agreement and the other Transaction Documents; and (iv)
executing and delivering any additional documents necessary to consummate the
transactions contemplated by this Agreement and the other Transaction
Documents.

(b)              Seller shall use commercially
reasonable efforts to obtain, and Buyer shall cooperate in a reasonable manner
with such efforts to obtain, the consent of any party or parties to each Real
Property Lease and each Non-Assignable Contract that is not a Colocation Contract
to the assignment thereof by Seller to Buyer; provided, however,
other than payment by Seller of reasonable legal fees incurred by a landlord in
connection with a request for consent to the assignment of  a Real Property Lease as contemplated hereby,
neither Seller nor Buyer shall be required to make any payment to any such
third party in order to obtain any such consent. Without limiting the
foregoing, Buyer and Seller each agree that (a) if it executes a
consent of the landlord, and the consent imposes an obligation upon such
party to provide landlord with information, such party shall provide
landlord with such information as and when required by the consent, and
(b) if, following landlord’s receipt of the information set forth in
the foregoing clause (a), the landlord has the right to revoke its consent, the
Closing shall be adjourned until the date which is one business day following
the expiration of the period in 

 27
 

 

 

which landlord may revoke its
consent.  Buyer and Seller shall, following the Closing Date, use
commercially reasonable efforts and co-operate with each other to obtain the
consent of any party or parties to each Colocation Contract  which is a Non-Assignable Contract to the
assignment thereof by Seller to Buyer and, if necessary, the separation of such
Non-Assignable Contract into an assignable Contract relating to the Colocation
Rights and a separate Contract relating to any other services to be provided
thereunder prior to such assignment; provided, however,  neither Seller nor Buyer shall be required to
make any payment to any such third party in order to obtain any such
consent.  As soon as practicable
following receipt of any such consent, Seller shall assign and Buyer shall
assume all of the rights and obligations of Seller with respect to such
Contract, such assignment and assumption to be evidenced by the execution of an
Assumption Agreement.  If any such
consent is not obtained, or if an attempted assignment of a Non-Assignable
Contract would be ineffective or would affect the rights of Seller thereunder
such that Buyer would, in fact, not receive all of Seller’s rights under the
Non-Assignable Contract or such that Seller’s rights under any portion of the
Contract which does not relate to Colocation Rights would be impaired, such
Non-Assignable Contract shall not be assigned, shall be an Excluded Contract
hereunder and the obligations of the Buyer and Seller with respect to such
Non-Assignable Contract from and after the Closing and prior to execution of an
Assumption Agreement reflecting the assignment and assumption of such Contract
shall be governed by the Transition Services Agreement and (x) Buyer shall pay
all Liabilities of Seller arising under any such Non-Assignable Contract and
(y) such Liabilities shall be treated as “Assumed Liabilities” for all purposes
of this Agreement, in the case of (x) and (y) to the same extent that such
Liabilities would have been Assumed Liabilities if the consent to the
assignment of the applicable Non-Assignable Contract had been obtained.

(c)  Seller is party to certain Contracts (the “Package
Contracts”) under which Seller has agreed to provide a limited number of
its small customers with one colocation rack, one megabit of IP transport and
the associated power at a single fixed price. 
In order to facilitate the assignment of the Package Contracts to Buyer
and in light of the fact that it is not feasible to determine the portion of
the Package Contract consideration specifically allocable to the IP transport,
Seller and Buyer hereby agree that notwithstanding that IP transport services
provided by Seller are not included in the Colocation Services provided by the
Business and, as a result, Contracts to provide IP transport services are not
being assigned to Buyer and the revenues associated with the provision of IP
transport services after the Closing Date to customers of the Business are
being retained by Seller, Seller hereby agrees to provide the IP transport
services required to be provided under the Package Contracts free of charge during
the remaining term (excluding any renewals or extensions made after assignment)
of each Package Contract assigned to Buyer on or after the Closing Date.

(d)              Prior to or within two (2)
Business Days after the Execution Date, Seller shall request from each landlord
under each of the Real Property Leases the execution of an estoppel certificate
in the form attached hereto as Exhibit G-1, G-2 or G-3, as
applicable.

(e)              Seller and Buyer shall reasonably
cooperate with the other and furnish the other such necessary information and
assistance as the other may reasonably request in connection with the matters
described in this Section 7.3.

 28
 

 

 

(f)               At any time and from time to time
after the Closing, each of the parties agrees to cooperate with each other and
to execute and deliver such other documents, instruments of transfer or
assignment, files, books and records and do all such further acts and things as
may be reasonably required to carry out the transactions contemplated by this
Agreement and the other Transaction Documents.

7.4              Updating
of Schedules.  Prior to
the Closing, if as a result of any event or condition occurring or existing
subsequent to the date hereof not caused by the breach by Seller of any
covenants in this Agreement, any representation or warranty contained in
Article 5 has become inaccurate, Seller may update the Schedules to Article 5
to correct such representation or warranty, and the update to the Schedules
shall be deemed an amendment to this Agreement upon delivery of such updated
Schedules to Buyer.  Any indemnification
obligation of Seller under Article 11 of this Agreement for the breach of a
representation or warranty shall be based on the Schedules as so updated and
not the earlier Schedules; provided, however, that solely for
purposes of determining whether the condition in Section 8.3(a) has been
satisfied, the changes in the updated Schedules shall be disregarded.

7.5              Employees.  (a) Prior to the Closing, Buyer shall offer
employment effective as of the Closing Date to each of the employees of Seller
listed on Schedule 7.5, at a salary or compensation rate at least equal
to the salary or compensation rate applicable to such employee’s employment
immediately prior to the Closing.  Any
employees of Seller who accept such offers of employment with Buyer shall be
referred to as the “Transferred Employees.”

(b)              To the extent Buyer maintains
welfare plans that are similar in scope to the welfare Plans of Seller
applicable to employees of the Business prior to Closing, Buyer will (i) waive
all limitations as to preexisting conditions, exclusions and waiting periods
applicable to Transferred Employees under any such welfare plan of Buyer, other
than conditions, exclusions or waiting periods that are already in effect under
welfare Plans of Seller with respect to Transferred Employees and which have
not satisfied prior to the Closing Date, and (ii) provide each Transferred
Employee with credit for any co-payments and deductibles paid by a Transferred
Employee prior to the Closing Date under welfare Plans of Seller for purposes
of satisfying any applicable deductible or out-of-pocket requirements under any
welfare Plan that such Transferred Employee is eligible to participate in after
the Closing Date.

(c)              Except as set forth in this
Section 7.5, Buyer is under no obligation to offer employment to any employees
of Seller and Buyer shall have no obligation or Liability for (and Seller shall
retain the obligation and Liability for) any salary, compensation, benefits,
severance or other amounts owed to or claimed by any employee of Seller,
including for periods prior to the Closing or as a result of Buyer’s election
not to offer employment to such employee as of the Closing.  Nothing in this Agreement shall confer upon
any employee of Seller any expectation, entitlement or right to employment with
Buyer or any compensation, benefits or severance thereunder.

7.6              Public
Disclosures.  Prior to the
Closing, neither Seller nor Buyer (nor any of their respective Affiliates) will
issue any press release or make any other public disclosures 

 29
 

 

 

concerning this
Agreement, the other Transaction Documents or the transactions contemplated
hereby or thereby without the prior written consent of the other.  Notwithstanding the preceding sentence,
nothing in this Section 7.6 will preclude any Party (or its Affiliates) from
making any disclosures required by any Governmental Authority, Law or stock
exchange; provided, however, that the Party (or its Affiliate)
required to make public disclosure shall use reasonable efforts to allow the
other Party reasonable time to comment in advance on such public disclosure.

7.7              “As Is”
Condition of the Acquired Assets.  Except as may be specifically provided in
this Agreement, Buyer expressly understands and agrees that it shall accept the
sale, assignment, transfer, conveyance and delivery by Seller of all of the
Acquired Assets on an “As Is Where Is” basis on the Closing Date regardless of
the condition of the Acquired Assets and whether Buyer has inspected and
examined them.  EXCEPT AS MAY BE
SPECIFICALLY PROVIDED IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATION OR
WARRANTY WITH RESPECT TO THE VALUE, CONDITION OR USE OF THE ACQUIRED ASSETS,
WHETHER EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

7.8              Bulk
Sales.  Buyer hereby
waives compliance with any bulk sales, fraudulent conveyance or similar laws
which may be applicable to the transactions contemplated hereby, subject to the
indemnities of Seller contained in this Agreement.  Nothing in this
paragraph will stop or prevent either Buyer or Seller from asserting as a
bar or defense to any proceeding brought under the bulk sale law that such law
does not apply to the sale contemplated under this Agreement.

7.9              Tax
Allocations.  If for
purposes of determining any ad valorem Taxes, real property Taxes, personal
property Taxes, and similar obligations (“Property Taxes”)
attributable to the Acquired Assets the applicable taxable period does not
terminate on the Closing Date (any such period, a “Straddle Period”),
then such Property Taxes with respect to the Straddle Period shall be
apportioned as of the Closing Date between Seller and Buyer determined by
prorating such Property Taxes on a daily basis over the entire tax period.  If the Closing occurs before the Tax rate is
fixed for the then current fiscal or calendar year, whichever is applicable,
the proration of the corresponding Taxes shall be on the basis of the Tax rate
for the last preceding year applied to the latest assessed valuation.

7.10            Use of Name.  Except as specifically provided in this
Section 7.10, from and after the Closing, Buyer shall not use the name or logos
for the name “AboveNet.”  Promptly
following the Closing, Buyer shall cause all references to AboveNet to be
removed from any signage or other identifying information on or at any of the
Acquired Assets.  Seller hereby grants to
Buyer a limited, worldwide, non-exclusive license to use such “AboveNet” name
during the 90-day period following the Closing Date solely in connection with
notifying customers and suppliers of the sale of the Business to Buyer.

7.11            Confidentiality.  Seller shall keep, and shall use reasonable
efforts to cause its shareholders, directors, officers, employees, consultants,
representatives and agents to keep, 

 30
 

 

 

any and all confidential
and proprietary information relating to the Business, the business operations
and prospects (including, but not limited to, customer lists and related
information) of the Business, services and know-how relating to the Business
and used by Seller solely in the operation of the Business (“Confidential Information”) confidential and shall not
disclose such Confidential Information to any Person; provided,
however, that the Seller may disclose
such information that (i) is or becomes publicly available other than by
disclosure by Seller or any agent thereof or (ii) Seller is required to
disclose by Law, Governmental Authority or stock exchange regulation or in
order to enforce the terms of this Agreement, but Seller will give the Buyer
adequate advance notice so that the Buyer may seek a protective order or take
other reasonable actions to preserve the confidentiality of such information.

7.12            Insurance Proceeds,
Litigation Rights.  In the
event that any property owned or leased by the Seller and used primarily in the
conduct of the Business or otherwise material to the Business suffers any
material damage, destruction or other casualty loss, and the Closing occurs in
accordance with the terms hereof, the Seller shall surrender to the Buyer (i)
all insurance proceeds received by Seller with respect to such damage or loss
and (ii) all rights of Seller with respect to any causes of action, whether or
not litigation has commenced on the Closing Date, in connection with such
damage or loss.  Nothing in this Section
6.6 shall be construed to limit or prejudice the Buyer’s right not to
consummate the transactions contemplated hereby if all of the conditions set
forth in Section 8.3 are not satisfied or waived.

7.13            Notice of Litigation.  Seller shall notify promptly the Buyer of any
actions or proceedings of the type described in Section 5.9 that are commenced
or, to the Knowledge of the Seller, threatened from the date hereof through the
Closing Date.  Buyer shall promptly
notify Seller of any actions or proceedings of the type described in Section
6.9 that are commenced or, to the Knowledge of the Buyer, threatened from the
date hereof through the Closing Date.

7.14            Exclusivity.  As an inducement to the Buyer to enter into
this Agreement, and in consideration of the time and expense which it has
devoted and will devote to the transactions contemplated hereby during such
period, subsequent to the execution of this Agreement and until the earlier of
(i) the Closing Date and (ii) the termination of this Agreement in accordance
with Section 10.1, neither of the Seller nor any of its shareholders,
directors, members, managing members, managers, officers or agents (including,
without limitation, any investment banker, attorney or accountant retained or
acting on behalf of Seller or any shareholder, director, member, managing
member, manager or officer of Seller) will, directly or indirectly, (i)
initiate, solicit, encourage, entertain or respond to any inquiry or proposal with
respect to a merger, consolidation, share exchange, business combination,
liquidation, or dissolution (unless such transaction shall be structured in a
manner that is consistent with, and does not adversely affect, the Buyer’s
rights under this Agreement) or sale of all or a portion of the assets of the
Business (an “Acquisition Proposal”), or (ii) enter into any
discussions, negotiations or agreements concerning an Acquisition Proposal
with, or disclose any information concerning the Business, its business or
properties or afford any access to its properties, books and records to, or
otherwise assist or facilitate any effort relating to an Acquisition Proposal,
by any Person.  The Seller will
immediately cease any existing discussions with any Persons concerning any
Acquisition Proposal.  The Seller or its
shareholders, directors, members, managing members, managers, 

 31
 

 

 

officers or agents will, as the case may be, promptly
notify the Buyer regarding any contact between Seller or its shareholders,
directors, members, managing members, managers, officers or agents and any
other Person regarding any inquiry or contact (and any material terms thereof)
with respect to an Acquisition Proposal, unless inconsistent with the fiduciary
obligations of Seller or its shareholders, directors, members, managing
members, managers, officers and agents.

7.15            Title Commitments; Survey;
Searches.  Buyer’s
obligation to purchase the Owned Real Property, assume the Real Property Leases
and consummate the transactions contemplated hereby shall also be subject to
and conditioned upon Buyer’s having approved the condition of title to the Fee
Owned Real Property and Leased Real Property in the manner provided for in this
Section 7.15.

(a)              Title Commitment.  Buyer, at its sole cost and expense, has
caused the Title Company to deliver a commitment (the “Title Commitment”)
to Buyer for a new title insurance policy (the “Title Policy”) with
respect to the Owned Real Property for the benefit of the Buyer as the fee
owner of the Owned Real Property, issued by the Title Company showing Seller as
the previous fee owner of the Owned Real Property and Buyer as the new fee
owner of the Owned Real Property.  Buyer,
at its sole cost and expense, has caused the Title Company to deliver a
commitment (each a “Leasehold Title Commitment”) to Buyer for a
leasehold owner’s title insurance policy (each a “Leasehold Title Policy”)
with respect to each of the Real Property Leases and the Leased Real Property
for the benefit of the Buyer as the assignee of the leasehold estate in the
Leased Real Property pursuant to the Real Property Leases.  The Title Commitment and Leasehold Title
Commitments are attached hereto as Schedule 7.15(a).

(b)              Survey.  Seller shall provide Buyer with a copy of
Seller’s existing survey of the Owned Real Property.  Buyer, at its sole cost and expense, shall
obtain an update of such survey (the “Survey”) of the Owned Real
Property, in a form acceptable to, and certified to, Buyer and the Title
Company.

(c)              Searches.  Buyer, at its sole cost and expense, may
obtain current UCC, tax lien and judgment searches with respect to Seller to
identify liens, security interests and adverse claims affecting the Seller’s
interest in the Owned Real Property, the Real Property Leases, the Leased Real
Property, the Colocation Contracts and/or the other Acquired Assets
(collectively, “Searches”).

(d)              Real Property Permitted Liens.  Buyer shall have the right, up until the
Closing, to object in writing (“Buyer’s Exception Notice”) to any title
matters that are Liens and (x) to the extent related to the Owned Real
Property, are not Real Property Permitted Liens or (y) to the extent related to
the Leased Real Property, are not Permitted Liens; provided that Buyer has
reviewed the Title Commitment and Leasehold Title Commitments as attached
hereto as Schedule 7.15(a), and has accepted, and agreed not to object
to, any title matters that are shown in the pre-printed exceptions to or the
exceptions set forth on Schedule B-Part 2 to the Title Commitment and Leasehold
Title Commitments. Buyer shall have the right to amend Buyer’s Exception Notice
to object to any title matters that are Liens and (x) to the extent related to
the 

 32
 

 

 

Owned Real Property, are not Real Property Permitted
Liens or (y) to the extent related to the Leased Real Property, are not
Permitted Liens, in each case which are disclosed in any supplemental reports
or updates to the Title Commitment, Leashold Title Commitments or Survey
delivered to Buyer prior to the Closing provided that Buyer objects to the same
within three (3) Business Days after Buyer’s receipt of the applicable
supplemental reports or updates to the Title Commitment but in no event after
Closing (“Subsequent Title Defects”).  
Unless Buyer shall timely object to the Liens as aforesaid, such Liens
shall be deemed to constitute additional Real Property Permitted Liens.  Any exceptions which are timely objected to
by Buyer as aforesaid shall be herein collectively called the “Title
Objections.” Seller may elect (but shall not be obligated) to remove or cause
to be removed, or insured over, at its expense, any Title Objections, and shall
be entitled to a reasonable adjournment of the Closing (not to exceed
forty-five (45) days) for the purpose of such removal.  Seller shall notify Buyer in writing within
five (5) days after receipt of any Buyer’s Exception Notice whether Seller
elects to remove the same.  If Seller is
unable to endorse over any Title Objections prior to the Closing in a manner
reasonably acceptable to the Title Company or does not arrange to remove such
Title Objection or if Seller elects not to remove one or more Title Objections,
Buyer may elect to either (a) terminate this Agreement by giving written notice
to Seller and Escrow Agent prior to the Closing, in which event the entire
Earnest Money Deposit shall be paid to Buyer or (b) waive such Title
Objections, in which event such Title Objections shall be deemed to constitute
additional Real Property Permitted Liens and the Closing shall occur as herein
provided without any reduction of or credit against the Purchase Price.  Notwithstanding anything to the contrary
contained herein, any Lien which is a financial encumbrance such as a mortgage,
deed of trust, or other debt security, or an attachment, judgment, mechanic’s
or materialmen’s lien caused or incurred by Seller, or a lien for delinquent
real estate taxes and delinquent assessments, which is outstanding against
title to the Owned Real Property, or any part thereof, and is not a Real
Property Permitted Lien or is outstanding against any of the Leased Real
Property or any of the Real Property Leases and is not a Permitted Lien, that
is revealed or disclosed by the Title Commitment, Leasehold Title Commitment
and/or the Searches (herein such matters are referred to as “Financial
Encumbrances”) shall automatically, and without any requirement for Buyer to
provide notice thereof to Seller, be deemed not to be a Title Objection and
Seller hereby covenants to remove or insure over all such Financial
Encumbrances which are less than that portion of the Purchase Price allocated
to the Owned Real Property on or before the Closing Date.  Further, notwithstanding anything to the
contrary contained herein, Seller shall be obligated to remove (i) any and all
Title Objections that are Subsequent Title Defects created or permitted by
Seller after the Execution Date and (ii) any other Title Objections, provided,
however, that Seller shall not be required to incur costs in excess of $100,000
in the aggregate or pay any amounts for consents of third parties in order to
remove such Title Objections.

7.16            Deed.  Seller shall convey the Owned Real
Property to Buyer by the Real Property Deed.

 

 33

 

ARTICLE 8

CONDITIONS TO CLOSING

8.1           Conditions to the
Obligations of Seller and Buyer. 
The obligations of Seller on the one hand and Buyer, on the other hand,
to consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction at or prior to the Closing of the following conditions:

(a)           Adverse Suits,
Injunctions, Etc.  There shall be no
injunction, order, judgment or decree in effect and issued by any Governmental
Authority having jurisdiction over the Parties which makes it unlawful or
prohibits the consummation of the transactions contemplated by this Agreement; provided,
however, the provisions of this Section 8.1(a) shall not apply to Seller
on the one hand, or Buyer, on the other hand, with respect to any of the
foregoing which either it or its Affiliates has directly or indirectly
solicited or encouraged; and

(b)           Landlord
Consents.  All Consents necessary to
effect the assignment of the Real Property Leases from Buyer to Seller shall
have been obtained and be in full force and effect.

8.2           Conditions to Obligations
of Seller.  The
obligations of Seller to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing of
the following conditions:

(a)           Representations
and Warranties.  The representations
and warranties of Buyer contained in this Agreement shall be true and correct
in all material respects on the Closing Date with the same force and effect as
if made on the Closing Date except (i) to the extent such representations and
warranties expressly speak of an earlier date such representations and
warranties shall be true and correct as of such earlier date and (ii)
representations and warranties which are qualified as to materiality or
material adverse effect shall be true and correct in all respects on the
relevant date, and Seller shall have received a certificate of Buyer to such
effect signed by a duly authorized officer of Buyer;

(b)           Covenants.  The covenants contained in this Agreement to
be complied with by Buyer on or prior to the Closing Date shall have been
complied with in all material respects by Buyer prior to the Closing Date and
Seller shall have received a certificate of Buyer to such effect signed by a
duly authorized officer of Buyer;

(c)           Other Governmental
and Regulatory Consents.  Buyer shall
have delivered, made or obtained all Consents from Governmental Authorities
required to be delivered, made or obtained by it prior to the Closing in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby;

(d)            Resolutions;
Incumbency.  Buyer shall have
delivered to Seller a certificate of the Secretary or Assistant Secretary of
Buyer, dated as of the Closing Date, certifying (i) a true and complete copy of
resolutions duly and validly adopted by the sole

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Member of
Buyer evidencing its authorization of the execution and delivery of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby and (ii) the names and signatures
of the officers of Buyer authorized to sign this Agreement and the other
Transaction Documents to be delivered hereunder;

(e)           Organizational
Documents.  Buyer shall have
delivered to Seller (i) a copy of the certificate of formation of Buyer,
certified by the Secretary of State of the State of  Delaware as of a date not earlier than
forty-five (45) days prior to the Closing Date, accompanied by a certificate of
the Secretary or Assistant Secretary of Buyer, dated as of the Closing Date,
stating that no amendments have been made to Buyer’s certificate of formation
since the date of the attached certification 
and (ii) the limited liability company agreement of Buyer accompanied by
a certificate of the Secretary or Assistant Secretary of Buyer, dated as of the
Closing Date, stating that such agreement is in full force and effect; and

(f)            Transaction
Documents. Buyer shall have delivered to Seller counterparts of the
Transaction Documents to which it or its affiliates are a party executed by
Buyer or such affiliate.

8.3           Conditions to Obligations
of Buyer.  The obligation
of Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction at or prior to the Closing of the following
conditions:

(a)           Representations
and Warranties. The representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects on the
Closing Date with the same force and effect as if made on the Closing Date except
(i) to the extent such representations and warranties expressly speak as of an
earlier date such representations and warranties shall be true and correct as
of such earlier date and (ii) representations and warranties which are
qualified as to materiality or material adverse effect shall be true and
correct in all respects on the relevant date, and Buyer shall have received a
certificate of Seller to such effect signed by a duly authorized officer of
Seller;

(b)           Covenants.
The covenants contained in this Agreement to be complied with by Seller on or
prior to the Closing Date shall have been complied with in all material
respects by Seller prior to the Closing Date and Buyer shall have received a
certificate of Seller to such effect signed by a duly authorized officer of
Seller;

(c)           Other
Governmental and Regulatory Consents. 
Seller shall have delivered, made or obtained all Consents from
Governmental Authorities required to be delivered, made or obtained by it prior
to the Closing in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby;

(d)            Resolutions;
Incumbency.  Seller shall have
delivered to Buyer a certificate of the Secretary or Assistant Secretary of
Seller, dated as of the Closing Date certifying (i) a true and complete copy of
resolutions duly and validly adopted by the Board of Directors of Seller
evidencing its authorization of the execution and delivery of this Agreement,
the other Transaction Documents and the consummation of the transactions
contemplated hereby

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and thereby
and (ii) the names and signatures of the officers of Seller authorized to sign
this Agreement and the other Transaction Documents to be delivered hereunder;

(e)           Organizational
Documents.  Seller shall have
delivered to Buyer (i) a copy of the certificate of incorporation of Seller,
certified by the Secretary of State of the State of Delaware as of a date not
earlier than forty-five (45) days prior to the Closing Date, accompanied by a
certificate of the Secretary or Assistant Secretary of Seller, dated as of the
Closing Date, stating that no amendments have been made to Seller’s certificate
of incorporation since the date of the attached certification and (ii) the
Bylaws of Seller accompanied by a certificate of the Secretary or Assistant
Secretary of Seller, dated as of the Closing Date, stating that such Bylaws are
in full force and effect;

(f)            Transaction
Documents.  Seller shall have
delivered to Buyer counterparts of the Transaction Documents to which it is a
party executed by Seller;

(g)           Landlord Estoppel
Letters.  Seller shall have delivered
to Buyer estoppel certificates in the form attached hereto as Exhibits G-1,
G-2 or G-3, as applicable, or otherwise reasonably satisfactory
to Buyer executed by each landlord under a Real Property Lease; provided,
however, if the outside date for consummation of the transactions
contemplated hereby as set forth in Sections 10.1(b), (d) and (e) hereof is
extended pursuant to Section 8.3(h) hereof 
the condition to Closing set forth in this Section 8.3(g) shall not
apply and shall be deemed waived by Buyer; provided, however,
that the foregoing waiver of the closing condition shall not constitute a
waiver of Seller’s obligation under Section 7.3(b) to obtain such Consent with
respect to each Real Property Lease;

(h)           Transferred
Employees. Persons holding the positions set forth on Schedule 8.3(h)
have agreed to become Transferred Employees; provided, however,
the condition to Closing set forth in this Section 8.3(h) shall not apply and
shall be deemed waived by Buyer unless, not more than three business days after
the Execution Date, Buyer provides Seller with written notice that the
condition to Closing set forth in this Section 8.3(h) has not been met, which
notice shall include a list of all such positions which will not be filled by
Transferred  Employees (a “Closing
Employee Notice”); provided, further, the condition to
Closing set forth in this Section 8.3(h) shall not apply and shall be deemed
waived by Buyer if, either (x) Seller agrees to provide Buyer, at Seller’s cost
and expense, persons acceptable to Buyer in its reasonable discretion to fill
such positions for such period of time, not to exceed 25 days, following
Closing as Buyer may request or (y) Seller, by written notice to Buyer (a “Closing
Employee Election Notice”), agrees to extend the outside date for
consummation of the transactions contemplated hereby as set forth in Sections
10.1(b), (d) and (e) hereof to a date not less that 15 days after the date of
the Closing Employee Election Notice in which case the dates set forth in
Sections 10.1(b), (d) and (e) hereof shall be deemed changed to the date
specified as the outside date for consummation in the Closing Employee Election
Notice; provided, further, if Seller elects to extend such
outside date for consummation of the transactions contemplated hereby by
delivery of a Closing Employee Election Notice, Buyer shall have the right to
extend such outside date for consummation of the transactions contemplated
hereby for two additional five day periods, in each case by delivery of notice
to Seller (each an “Extension Notice”), in

 36
 

 

which case the
dates set forth in Sections 10.1(b), (d) and (e) hereof shall be deemed changed
to the date 5 days later than the date specified as the outside date for
consummation of the transactions contemplated hereby immediately prior to
delivery by Buyer of such Extension Notice, it being understood and agreed that
in no event shall the exercise of the extension rights contemplated by this
Section 8.3(h) extend the outside date for consummation of the transactions
contemplated hereby to a date more than 25 days after the date of the Closing
Employee Election Notice;

(i)            Title Policies
and Title Affidavits.  The Title
Company shall have irrevocably committed to issue a Title Policy with respect
to the Owned Real Property on the terms set forth in the Title Commitment and
Leasehold Title Policies with respect to each Leased Real Property on the terms
set forth in the Leasehold Title Commitment for such Leased Real Property, in
each case, subject only to payment by Buyer of any fees payable to the Title
Company; provided that in no event shall Seller be required to deliver to the
Title Company any affidavits or other documents in connection with obtaining
such policies other than executed copies of the Title Affidavits substantially
in the form attached hereto as Exhibit H; and

(j)            No Material
Adverse Effect.  No event or events
shall have occurred since the date of this Agreement which, individually or in
the aggregate, have had, or would reasonably be expected to have, a Seller
Material Adverse Effect.

ARTICLE 9

CLOSING

9.1           Closing Date.  Unless this Agreement is terminated and the
transactions contemplated hereby are abandoned pursuant to Article 10 hereof,
the closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place simultaneously at the offices of Kronish Lieb Weiner &
Hellman LLP, 1114 Avenue of the Americas, New York, New York 10036, and at the
offices of Holland & Knight LLP, 2099 Pennsylvania Avenue, N.W., Suite 100,
Washington, D.C. 20006, at 10:00 a.m., New York City time, on September 29,
2006 (or, if later, the date which is three (3) Business Days after the date on
which the conditions to the Closing set forth in Article 8 have been satisfied
or waived in accordance with this Agreement (other than those conditions which
by their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver or such conditions)) or such other date, time and place
as shall be agreed upon by Seller and Buyer and evidenced in the Joint Escrow
Instruction Letter (the actual date of the Closing being herein called the “Closing
Date”).  All references in this Agreement
to the Closing Date shall be deemed made to the Closing and vice versa.

9.2           Buyer Deliveries.  Prior to the Closing, Buyer shall deliver to
the Title Company:  (a) the Cash Purchase
Price as provided in Article 3 hereof, (b) the agreements, documents,
certificates and instruments to be delivered by Buyer pursuant to
Section 8.2 hereof, (c) an executed copy of the Joint Escrow Instruction
Letter and (d) such other agreements, documents and instruments as Seller and
its counsel reasonably request to evidence the transactions contemplated
hereby.

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9.3           Seller Deliveries.  Prior to the Closing, Seller shall deliver to
the Title Company:  (a) the agreements,
documents, certificates and instruments to be delivered by Seller pursuant to
Section 8.3 hereof, (b) a certification of non-foreign status as described in
Section 1445(b)(2) of the Code, to the extent the Seller is a seller of a
United States real property interest as defined in Section 897(c) of the
Code, (c) an executed copy of the Joint Escrow Instruction Letter and (d) such
other agreements, documents and instruments as Buyer and its counsel reasonably
request to evidence the transactions contemplated hereby.  Effective as of the Closing, Seller shall
deliver to Buyer physical possession of the Owned Real Property and Leased Real
Property, including keys, security codes, access codes, combination locks and
any other items affect entry to the premises.

ARTICLE 10

TERMINATION OF AGREEMENT

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

(a)           by the mutual
written consent of Seller and Buyer;

(b)           by either Seller or
Buyer, by written notice to the other, if the Closing has not occurred on or
prior to October 6, 2006; provided, however, the right to
terminate this Agreement under this Section 10.1(b) shall not be available to
any Party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in, the failure of the Closing
to occur on or prior to such date;

(c)           by either Buyer or
Seller, by written notice to the other, if any injunction, order, judgment or
decree issued by any Governmental Authority having jurisdiction over the
Parties which makes it unlawful or prohibits the consummation of the
transactions contemplated by this Agreement shall have become final and
non-appealable;

(d)           by Seller, by
written notice to Buyer, if the conditions to Closing set forth in Section 8.1
or 8.2 hereof have not been satisfied on or prior to October 6, 2006 other than
by reason of a material breach of this Agreement by Seller;

(e)           by Buyer, by written
notice to Seller, if the conditions to Closing set forth in Section 8.1 or 8.3
hereof have not been satisfied on or prior to October 6, 2006 other than by
reason of a material breach of this Agreement by Buyer;

(f)            by Buyer, by
written notice to Seller, if between the date hereof and the date and time
scheduled for the Closing in Section 9.1 (as extended or accelerated in
accordance therewith):

(i)            there has been a
breach of (A) any representation or warranty of Seller contained in this
Agreement such that Section 8.3(a) will not be satisfied or (B) any covenant or
agreement of Seller contained in this Agreement such that Section 8.3(b) will
not be

 38
 

 

satisfied,
and, in both case (A) and case (B), such breach has not been cured within
twenty (20) Business Days after notice to Seller; or

(ii)           Seller makes a
general assignment for the benefit of creditors, or any proceeding shall be
instituted by or against Seller seeking to adjudicate it a bankrupt or
insolvent or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any Law
relating to bankruptcy, insolvency or reorganization;

(g)            by Buyer, by
written notice to Seller, following the delivery by Seller of updated Schedules
to Buyer pursuant to Section 7.4;

(h)           by Buyer in
accordance with Section 7.15(d); or

(i)            by Seller, by
written notice to Buyer, if between the date hereof and the date and time
scheduled for the Closing in Section 9.1 (as extended or accelerated in
accordance therewith):

(i)            there has been a
breach of (A) any representation or warranty of Buyer contained in this
Agreement such that Section 8.2(a) will not be satisfied or (B) any covenant or
agreement of Buyer contained in this Agreement such that Section 8.3(b) will
not be satisfied, and, in both case (A) and case (B), such breach has not been
cured within twenty (20) Business Days after notice to Buyer; or

(ii)           Buyer makes a
general assignment for the benefit of creditors, or any proceeding shall be
instituted by or against Buyer seeking to adjudicate it a bankrupt or insolvent
or seeking liquidation, winding up or reorganization, arrangement, adjustment,
protection, relief or composition of its debts under any Law relating to bankruptcy,
insolvency or reorganization.

10.2         Effect of Termination.  If this Agreement is terminated in accordance
with Section 10.1, this Agreement shall forthwith become wholly void and of no
further force and effect and there shall be no Liability on the part of any
Party hereto, except that this Section 10.2 and Sections 5.21 (Seller Brokers,
Finders, etc.) and 6.6 (Buyer Brokers, Finders, etc.), Article 12, (excluding
Section 12.2 (Further Assurances; Asset Returns) thereof) and Article 11 as it
relates to those provisions shall survive the termination and remain in full
force and effect; provided, however, nothing in this Section 10.2
shall relieve any Party from Liability for any fraud, willful misconduct or
gross negligence of such Party which leads to the termination of this
Agreement.

ARTICLE
11

INDEMNIFICATION

11.1         Survival of
Representations and Warranties. 
Subject to the limitations and other provisions of this Agreement
including the provisions of this Article 11, the representations

 39
 

 

and warranties of the
Parties set forth in this Agreement shall survive the execution and delivery
hereof and the Closing hereunder and shall remain in full force and effect for
a period of fifteen (15) months following the Closing Date except that
representations and warranties made in Sections 5.11(a), (b) and (d) (Ownership
and Transfer of the Acquired Assets), 5.7 (Environmental Matters), 5.15
(Taxes), 5.21 (Brokers, Finders, etc. — Seller) and 6.6 (Brokers, Finders, etc.
— Buyer) shall remain in full force and effect until 30 days after the
applicable statute of limitations therefor has expired.  The agreements and covenants of the Parties
under this Agreement shall remain in full force and effect until the applicable
period under the statute of limitations therefor has expired.  No claim by an Indemnified Party against an
Indemnifying Party for the recovery of Losses may be asserted under this
Agreement after the applicable time period specified in this Section 11.1; provided,
however, that definitive claims for indemnification hereunder first asserted in
writing with specificity within such time period shall not be extinguished
until the resolution thereof .

11.2         Indemnification.  (a) Seller agrees to indemnify, defend and
hold harmless in the manner and subject to the limitations and qualifications
set forth in this Article 11 the Buyer (and its shareholders, directors,
officers, employees, representatives, agents, Affiliates, successors and
permitted assigns) (collectively, the “Indemnified Buyer Group”) against, and
hold the Indemnified Buyer Group harmless from and in respect of, any and all
losses, liabilities, damages, deficiencies, costs, expenses (including,
expenses of investigation and defense and reasonable fees, disbursements and
expenses of counsel incurred by the Indemnified Buyer Group in any action or
proceeding (including, without limitation, any action or proceeding to enforce
the rights of the Indemnified Buyer Group hereunder) between the Indemnified
Buyer Group and the Seller or between the Indemnified Buyer Group and any third
party or otherwise), claims, Liens or other obligations of any nature
whatsoever (collectively, “Buyer Losses”), based upon, arising out of,
or otherwise in respect of or which may be incurred by virtue of or result from:

(i)            the inaccuracy in
or breach of any representation or warranty made by or on behalf of the Seller
in this Agreement or in any of the other Transaction Documents or in any
document or instrument delivered at the Closing pursuant hereto or thereto;

(ii)           the breach by the
Seller of any covenant or agreement set forth in this Agreement or in any of
the other Transaction Documents or in any document or instrument delivered at
the Closing pursuant hereto or thereto;

(iii)          any investigation
or request for information made by a Governmental Authority regarding Seller or
its operations or, to the extent such investigation arises from an
investigation or inquiry into Seller or its operations, the transactions
contemplated hereby;

(iv)          any failure by
Seller to comply with any “bulk sales” laws applicable to the transactions
contemplated in this Agreement (provided that the foregoing shall not require
the Seller to indemnify any member of the Indemnified Buyer Group with respect
to any Buyer Losses which are based upon, arising out of, or otherwise in
respect of or which are

 40
 

 

incurred by
virtue of or result from any Assumed Liabilities or with respect to any Taxes
which are otherwise payable by Buyer hereunder);

(v)           any liability or
obligation of, or claim against, the Buyer with respect to all or any portion
of any of the Business or the Acquired Assets (including the Assumed Contracts)
(x) relating to any period prior to the Closing Date (other than the Assumed
Liabilities) or (y) arising out of any act or omission of the Seller or any
facts or circumstances existing at or prior to the Closing Date whether or not
such liability or obligation was known at the time of Closing (other than the
Assumed Liabilities);

(vi)          any failure by
Seller to pay any liability or obligation for Taxes of Seller for any
Pre-Closing Tax Period (including all liabilities of Seller for Taxes related
to the transactions contemplated by this Agreement except to the extent such
Taxes are to be paid by the Buyer pursuant to Section 12.3 hereof), it being
agreed that the Taxes of Seller for any Straddle Period shall be determined in
accordance with Section 7.9; or

(vii)         the failure by Seller to pay, perform or discharge
when due any of the Excluded Liabilities.

The Seller shall have no right to seek contribution
from any of the Indemnified Buyer Group with respect to all or any part of the
Seller’s indemnification obligations under this Section 11.2(a); provided that
the foregoing shall not restrict the rights granted pursuant to section 11.7
hereof.

(b)           Buyer agrees to
indemnify, defend and hold harmless in the manner and subject to the
limitations and qualifications set forth in this Article 11 the Seller, any
subsidiary or Affiliate of Seller and each of Seller’s and their respective
officers, directors, stockholders, controlling persons, employees, agents,
representatives, successors and permitted assigns (collectively, the “Indemnified
Seller Group”) against, and hold the Indemnified Seller Group harmless from
and in respect of, any and all losses, liabilities, damages, deficiencies,
costs, expenses (including, expenses of investigation and defense and
reasonable fees, disbursements and expenses of counsel incurred by the
Indemnified Seller Group in any action or proceeding (including, without limitation,
any action or proceeding to enforce the rights of the Indemnified Seller Group
hereunder) between the Indemnified Seller Group and the Buyer or between the
Indemnified Seller Group and any third party or otherwise), claims, Liens or
other obligations of any nature whatsoever (collectively, “Seller Losses”),
based upon, arising out of, or otherwise in respect of or which may be incurred
by virtue of or result from:

(i)            the inaccuracy in
or breach of any representation or warranty made by or on behalf of the Buyer
in this Agreement or in any of the other Transaction Documents or in any
document or instrument delivered at the Closing pursuant hereto or thereto;

(ii)           the breach by the
Buyer of any covenant or agreement set forth in this Agreement or in any of the
other Transaction Documents or in any document or instrument delivered at the
Closing pursuant hereto or thereto;

 41

 

 

(iii)          any investigation
or request for information made by a Governmental Authority regarding Buyer or
its operations or, to the extent arising from an investigation or inquiry into
Buyer or its operations, the transactions contemplated hereby;

(iv)          any liability or
obligation of, or claim against, the Seller with respect to all or any portion
of the Business or the Acquired Assets (including, the Assumed Contracts) (x)
relating to any period on or after the Closing Date (other than the Excluded
Liabilities) or (y) arising out of any act or omission of the Buyer or any
facts and circumstances which did not exist at or prior to the Closing Date
(other than the Excluded Liabilities);

(v)           any failure by Buyer
to pay, perform or discharge when due any of the Assumed Liabilities;

(vi)          the operation of the
Business by Buyer from and after the Closing (including the termination of
employment of any Transferred Employee).

The Buyer
shall have no right to seek contribution from the Seller with respect to all or
any part of the Buyer’s indemnification obligations under this Section 11.2(b);
provided that the foregoing shall not restrict the rights granted pursuant to
section 11.7 hereof.

11.3   Limitations on Indemnity.  (a) Seller’s obligations to the Indemnified
Buyer Group set forth in Section 11.2(a) shall be subject to each of the
following limitations:

(i)            Other
than with respect to Buyer Losses arising out of an inaccuracy or breach of the
representations and warranties in Section 5.11(a) and the final sentence of 5.11(b)
(Ownership and Transfer of the Acquired Assets), 5.7 (Environmental Matters),
5.15 (Taxes) and 5.21 (Brokers, Finders, etc. — Seller) (the “Seller Basket
Exclusions”) no indemnification for Buyer Losses asserted against Seller
under Section 11.2(a)(i) shall be required unless and until the cumulative
amount of such Buyer Losses and any Buyer Losses indemnified by Seller under
Section 4(b)(i)(a) of the Transition Services Agreement exclusive of Buyer
Losses arising out of the Seller Basket Exclusions hereunder or thereunder
equals or exceeds two hundred and twenty five thousand dollars ($225,000) (the “Threshold”),
whereupon the Indemnified Buyer Group shall be entitled to indemnification for
Buyer Losses, as finally determined, without regard to the Threshold.  For purposes of clarity, the parties
acknowledge that indemnification for Buyer Losses asserted against Seller under
Section 4(b)(i)(b) of the Transition Services Agreement or under Sections of
11.2(a)(ii)—(vii) of this Agreement shall not be subject to the Threshold.

(ii)           Seller’s
aggregate liability to the Indemnified Buyer Group for Buyer Losses under
Section 11.2(a)(i) and under Section 4(b)(i)(a) of the Transition Services
Agreement other than for Buyer Losses arising out of the Seller Basket
Exclusions hereunder and thereunder shall not exceed two million dollars
($2,000,000) (the “Indemnity Cap”). For purposes of clarity, the parties
acknowledge that indemnification for Buyer Losses asserted against Seller under
Section 4(b)(i)(b) of the Transition Services Agreement or under Sections of
11.2(a)(ii)—(vii) of this Agreement shall not be subject to the Indemnity Cap.

 42
 

 

 

(iii)          The
term “Buyer Losses” shall not include any punitive, exemplary
consequential, indirect, special or incidental damages or Losses, and such
damages or Losses, whether based on contract, tort, strict liability, other law
or otherwise and whether or not arising from any other Party’s sole, joint or
concurrent negligence, strict liability or other fault are not recoverable under
this Agreement, except such damages that are payable to a third party with
respect to a third party claim for which a member of the Indemnified Buyer
Group is seeking indemnification hereunder.

(iv)          Other
than claims based on fraud, willful misconduct or for specific performance,
injunctive or other equitable relief (to the extent permitted by this
Agreement), the indemnity provided in this Article 11 and, to the extent
applicable, Section 4 of the Transition Services Agreement shall be the sole
and exclusive remedy of the Indemnified Buyer Group against Seller at law or
equity for any breach of or inaccuracy in any representation or warranty
contained in this Agreement or any certificate delivered at Closing.

(b)           Buyer’s
obligation to the Indemnified Seller Group set forth in Section 11.2(b) shall
be subject to each of the following limitations:

(i)            Other than with
respect to Seller Losses arising out of an inaccuracy or breach of the
representations and warranties in Section 6.6 (Brokers, Finders, etc.-Buyer)
(the “Buyer Basket Exclusions”) no indemnification for Seller Losses
asserted against Buyer under Section 11.2(b)(i) shall be required unless and
until the cumulative amount of such Seller Losses and any Seller Losses
indemnified by Buyer under Section 4(b)(ii)(a) of the Transition Services
Agreement exclusive of Seller Losses arising out of the Buyer Basket Exclusions
hereunder or thereunder equals or exceeds the Threshold whereupon the
Indemnified Seller Group shall be entitled to indemnification for Seller
Losses, as finally determined, without regard to the Threshold. For purposes of
clarity, the parties acknowledge that indemnification for Seller Losses
asserted against Buyer under Section 4(b)(ii)(b) of the Transition Services
Agreement or under Sections of 11.2(b)(ii)—(vi) of this Agreement shall not be
subject to the Threshold.

(ii)           Buyer’s aggregate
liability to the Indemnified Seller Group for Seller Losses under Section
11.2(b)(i) and Section 4(b)(ii)(a) of the Transition Services Agreement other
than for Seller Losses arising out of the Seller Basket Exclusions hereunder
and thereunder shall not exceed the Indemnity Cap. For purposes of clarity, the
parties acknowledge that indemnification for Seller Losses asserted against
Buyer under Section 4(b)(ii)(b) of the Transition Services Agreement or under
Sections of 11.2(b)(ii)—(vi) of this Agreement shall not be subject to the
Indemnity Cap.

(iii)          The term “Seller
Losses” shall not include any punitive, exemplary consequential, indirect,
special or incidental damages or Losses, and such damages or Losses, whether
based on contract, tort, strict liability, other law or otherwise and whether
or not arising from any other Party’s sole, joint or concurrent negligence,
strict liability or other fault are not recoverable under this Agreement,
except such damages that are payable to a third party with 

 43
 

 

 

respect to a
third party claim for which a member of the Indemnified Seller Group is seeking
indemnification hereunder.

(iv)          Other than claims
based on fraud, willful misconduct or for specific performance, injunctive or
other equitable relief (to the extent permitted by this Agreement), the
indemnity provided in this Article 11 and, to the extent applicable, Section 4
of the Transition Services Agreement shall be the sole and exclusive remedy of
the Indemnified Seller Group against Buyer at law or equity for any breach of
or inaccuracy in any representation or warranty contained in this Agreement or
any certificate delivered at Closing.

(c)           Notwithstanding any
right of the Buyer to investigate the affairs of the Business and
notwithstanding any knowledge of facts determined or determinable by the Buyer
pursuant to such investigation or right of investigation, the Buyer has the
right to rely fully upon the representations and warranties of the Seller
contained in this Agreement and any of the other Transaction Documents.  Notwithstanding any right of the Seller to
investigate the affairs of the Buyer and notwithstanding any knowledge of facts
determined or determinable by the Seller pursuant to such investigation or
right of investigation, the Seller has the right to rely fully upon the
representations and warranties of the Buyer contained in this Agreement and any
of the other Transaction Documents.

(d)           No representative or
Affiliate of Seller shall have any personal liability to Buyer or any other
Person as a result of the breach of any representation, warranty, covenant,
agreement or obligation of Seller in this Agreement and no representative or
Affiliate of Buyer shall have any personal liability to Seller or any other
Person as a result of the breach of any representation, warranty, covenant,
agreement or obligation of Buyer in this Agreement.

11.4   Claim Procedures.  Any Indemnified Party seeking
indemnification hereunder for any Loss or potential Loss arising from a claim
asserted against the Indemnified Party (each, a “Claim”) shall give
written notice thereof to the Indemnifying Party promptly after such
Indemnified Party becomes aware of the facts giving rise to such potential
Claim; provided, however, that the Indemnified Party shall not be
foreclosed from seeking indemnification pursuant to this Article 11 as a result
of any failure to provide timely notice of a Claim unless the Indemnifying
Party has been damaged or prejudiced as a result of such delay.   Such notice shall specify in reasonable
detail the nature and basis of, and the estimated resulting Losses from, the
Claim and shall include a copy of all papers served with respect to such
claim.  For purposes of this Section
11.4, receipt of written notice of any claim from a third party that may give
rise to a Claim on behalf of such Indemnified Party shall constitute becoming
aware of the facts giving rise to a potential Claim and shall require notice to
the Indemnifying Party as provided in the first sentence of this Section 11.4.

11.5   Additional Procedures for Third-Party Claims.  If a Claim arises from a claim asserted
against an Indemnified Party by a Person unrelated to the Indemnified Party
(each, a “Third-Party Claim”), the Indemnifying
Party shall have the right, at its sole option and expense, to be represented
by counsel of its choice, which counsel shall be reasonably satisfactory to the
Indemnified Party, and, subject to the last sentence of this Section 11.5, to 

 44
 

 

 

defend against,
negotiate, settle or otherwise deal with any Third-Party Claim subject to
indemnity hereunder.  If
the Indemnifying Party declines to assume the defense of such Third-Party
Claim, it shall be liable for all costs and expenses of defending such claim
incurred by the Indemnified Party, including reasonable fees and disbursements
of counsel.  If
the Indemnifying Party has assumed such defense, the Indemnified Party shall be
entitled, at its own cost and expense, to participate in the defense of any
such Third-Party Claim.  If the
Indemnifying Party has assumed such defense and it is later determined that
such Third-Party Claim was not a Claim for which the Indemnifying Party is
required to indemnify the Indemnified Party under this Agreement, the
Indemnified Party shall reimburse the Indemnifying Party for all its reasonable
costs and expenses with respect to such settlement or defense, including fees
and expenses of counsel, within sixty (60) days of such determination.  In connection with the defense of any Third-Party
Claim subject to indemnification under this Article 11, the Indemnifying Party
and the Indemnified Party shall render to each other such assistance as may
reasonably be required in order to ensure proper and adequate defense of such
claim.  Neither party shall, without the
prior written consent of the other party, which consent shall not be
unreasonably delayed, withheld or conditioned, settle, compromise or offer to
settle or compromise any Third Party Claim on a basis which would result in the
imposition of a consent order, injunction or decree which would restrict the
future activity or conduct of the other party or any Affiliate thereof or if
such settlement or compromise does not include an irrevocable and unconditional
release of the other party for any liability arising out of such Third Party
Claim or any related Claim.

11.6   Reduction of Losses.  (a) Each of the Parties shall use commercially
reasonable efforts to mitigate any Losses for which it may seek indemnification
under this Article 11, including exerting such efforts to collect the proceeds
of any insurance that would have the effect of reducing any such Losses (in
which case such proceeds shall reduce such Losses).  In calculating any amount of Losses
recoverable pursuant to this Article 11, the amount of such Losses shall be reduced
by any insurance proceeds actually received relating to such Loss, net of any
related deductible and any expenses to obtain such proceeds, any recoveries
from third parties pursuant to indemnification (or otherwise) with respect
thereto, net of any expenses incurred by the indemnified party in obtaining
such third party payment and  the amount
of any net Tax Benefit resulting from the incurrence or payment of such
Losses.  If, at any time, the
indemnification payments made by an Indemnifying Party to an Indemnified Party
pursuant to this Agreement exceed the Losses of such Indemnified Party as
calculated in accordance with the previous sentence (whether as a result of a
subsequent receipt by the Indemnified Party of insurance proceeds, third party
indemnification payments, Tax Benefits or otherwise), the Indemnified Party
shall promptly remit to the Indemnifying Party the full amount of such excess.

(b)           For purposes of this
Section 11.6, “Tax Benefit” means the amount by which the Tax liability
of the party (or group of entities including the party) making the Claim under
this Article 11 is reduced below the amount which it would otherwise be
required to pay but for the circumstances giving rise to the Losses underlying
such Claim.  Each party shall promptly
inform the other party of the extent of any Tax Benefit realized and shall
permit such other party’s independent accountants to reasonably verify the
extent of such Tax Benefit.

 45
 

 

 

(c)           Nothing in this
Section 11.6 shall impose upon any Party any obligation to obtain insurance
coverage for any Losses, whether occurring before or after the Closing Date.

11.7   Subrogation.  Any Indemnifying Party shall be subrogated to
the Indemnified Party’s rights of recovery to the extent of any Losses under
Article 11 satisfied by the Indemnifying Party. 
The Indemnified Party shall permit the Indemnifying Party to use the name
of the Indemnified Party and the names of the Indemnified Party’s Affiliates to
the extent such use is required by Law or is otherwise commercially reasonable
in any transaction or any proceeding to enforce such rights, shall execute and
deliver such instruments and papers as are reasonably necessary to assign such
rights and shall assist in the exercising of such rights thereof, including
reasonable access to books and records and employees (if required).

11.8   No Double Recovery. No party shall be entitled to
indemnification or reimbursement under any provision of this Agreement for any
amount to the extent such party or its Affiliate has been indemnified or
reimbursed for such amount under any other provision of this Agreement or any
document executed in connection with this Agreement, including the Transition
Services Agreement.

11.9   Treatment of Indemnity Payments Between the
Parties.  Unless otherwise
required by applicable Law, all indemnification payments hereunder or with
respect to claims made under Section 4(b)(i)(a) or 4(b)(ii)(a) of the
Transition Services Agreement shall constitute adjustments to the Purchase
Price for all Tax purposes, and no party shall take any position inconsistent
with such characterization.

ARTICLE 12

GENERAL

12.1   Notices.  All notices and other communications
hereunder shall be effective only if in writing and shall be deemed given when
(a) delivered in person, (b) delivered by nationally recognized courier (with
confirmation of delivery), (c) transmitted by telefax (with confirmation of
transmission) or (d) three (3) Business Days after being deposited in the
United States mail, first-class, registered or certified, return receipt
requested, with postage paid, and

	
  If to Seller

  	
   

  	
  AboveNet Communications, Inc.

  
	
   

  	
   

  	
  360 Hamilton
  Avenue

  
	
   

  	
   

  	
  White Plains,
  New York 10601

  
	
   

  	
   

  	
  Attn: Robert Sokota, Esq.

  
	
   

  	
   

  	
  Tel:  (914)
  421-6708

  
	
   

  	
   

  	
  Fax:  (914)
  421-6793

  

 

 46
 

 

 

	
  With a copy to:

  	
   

  	
  Kronish Lieb Weiner & Hellman LLP

  
	
   

  	
   

  	
  1114 Avenue of
  the Americas

  
	
   

  	
   

  	
  New York, New
  York 10036

  
	
   

  	
   

  	
  Attn: Scott L.
  Kaufman, Esq.

  
	
   

  	
   

  	
  Tel:  (212)
  479-6555

  
	
   

  	
   

  	
  Fax:  (212)
  479-6275

  
	
   

  	
   

  	
   

  
	
  If to Buyer:

  	
   

  	
  Digital Above, LLC

  
	
   

  	
   

  	
  in care of
  Digital Realty Trust, L.P.

  
	
   

  	
   

  	
  560 Mission
  Street, Suite 2900

  
	
   

  	
   

  	
  San Francisco,
  California 94105

  
	
   

  	
   

  	
  Attn: Scott
  Peterson, Senior Vice President

  
	
   

  	
   

  	
  Tel:  (415)
  738-6510

  
	
   

  	
   

  	
  Fax:  (415)
  738-6501

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Holland & Knight LLP

  
	
   

  	
   

  	
  2099
  Pennsylvania Avenue, NW, Suite 100

  
	
   

  	
   

  	
  Washington, DC
  20006

  
	
   

  	
   

  	
  Attn: Samuel P.
  Kastner, Esq.

  
	
   

  	
   

  	
  Tel:  (202)
  419-2462

  
	
   

  	
   

  	
  Fax:  (202)
  955-5564

  

 

or to such other address as any Party shall designate
by written notice to the other Party hereto in accordance herewith.

12.2   Further Assurances; Asset Returns.  Upon request from time to time, Seller shall
execute and deliver all documents, take all rightful oaths and do all other
acts that may be necessary or desirable, in the reasonable opinion of Buyer or
its counsel, to effect the transfer of the Acquired Assets in accordance
herewith.  Upon request from time to time,
Buyer shall execute and deliver all documents, take all rightful oaths and do
all other acts that may be necessary or desirable, in the reasonable opinion of
Seller or its counsel, to effect the assumption of the Assumed Liabilities in
accordance herewith.  In the event that
Buyer receives any assets, properties or rights of Seller that are not intended
to be transferred pursuant to the terms of this Agreement, Buyer agrees to
promptly return such assets, properties or rights to Seller.

12.3   Expenses.   Except
as otherwise provided in this Agreement, each Party shall pay its own expenses
in connection with the preparation, execution and performance of this Agreement
and transactions contemplated hereby, including costs of their respective
attorneys, accountants, investment bankers, brokers and other
representatives.  Seller shall pay (i)
fifty percent (50%) of all excise, sales, use, registration, stamp, recording,
documentary, conveyancing, franchise, property, transfer, gains and similar
Taxes and fees (including, without limitation, penalties and interest), levies
and charges incurred in connection with this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby
(collectively, “Transfer Taxes”) and (ii) fifty percent (50%) of all
costs expenses and charges of the Escrow Agent incurred in connection with the
Earnest Money Deposit.  Buyer shall pay
(i) 

 47
 

 

 

one hundred percent (100%) of the base title insurance premium,
extended title coverage and endorsements, (ii) fifty percent (50%) of all
Transfer Taxes and (iii) fifty percent (50%) of all costs expenses and charges
of the Escrow Agent incurred in connection with the Earnest Money Deposit.

12.4   Non-Assignability.  This Agreement shall not be assigned by
Seller or Buyer without the express prior written consent of the other, and any
attempted assignment without such consent shall be null and void, provided,
however, Buyer, without the consent of Seller, may assign its rights and
obligations with respect to the acquisition of the Owned Real Property and the
Acquired Assets related thereto to one or more of its wholly-owned subsidiaries
and may assign its rights and obligations with respect to the acquisition of
the Real Property Leases and the Acquired Assets related thereto to one or more
of its wholly-owned subsidiaries to the extent the landlord under such Real
Property Lease consents to such assignment; provided, further,
Buyer shall not be released from any of its obligations or liabilities
hereunder as a result of any such permitted assignment; provided, further,
no such assignment shall be effective unless, prior to such assignment, the
wholly-owned subsidiary to whom such Acquired Assets are being assigned agrees
in a written instrument in favor of and delivered to Seller to be bound by the
terms of the Transition Services Agreement applicable to Buyer as if such party
were a party to the Transition Services Agreement. This Agreement shall inure
to the benefit of and be binding on the Parties and their respective successors
and permitted assigns.

12.5   Amendment; Waiver.  This Agreement may be amended, supplemented
or otherwise modified only by a written instrument executed by Seller and
Buyer.  No waiver by a Party of any of
the provisions hereof shall be effective unless explicitly set forth in writing
and executed by the Party so waiving. 
The waiver by any Party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach or
performance.  If any condition to Closing
is waived by a Party hereto, such waiver shall, notwithstanding anything to the
contrary therein, be without reservation of any rights and this Agreement shall
thereafter be construed as if such waived condition to Closing was not included
herein.

12.6   Exhibits and Schedules.  All Exhibits and Schedules to this Agreement
are hereby incorporated by reference and made a part of this Agreement.  Any fact or item disclosed on any Schedule in
such a way as to make its relevance to another representation or warranty made
in this Agreement or another Schedule called for by this Agreement reasonably
apparent, shall be deemed to be an exception to such representation or
warranty, or to be disclosed on such other Schedule, notwithstanding the
omission of a reference or cross reference thereto. Any fact or item disclosed
on any Schedule or Exhibit to this Agreement shall not by reason only of such
disclosure be deemed to be material and shall not be employed as a point of
reference in determining any standard of materiality under this Agreement.

12.7   No Third Party Beneficiaries.  Except as provided in Article 11, nothing
herein shall create or establish any third-party beneficiary hereto nor confer
upon any Person not a Party to this Agreement any rights or remedies of any
nature or kind whatsoever under or by reason of this Agreement.

 48
 

 

 

12.8   Governing Law.  Each of this Agreement and the other
Transaction Documents shall be governed by, and construed in accordance with,
the Laws of the State of New York applicable to a contract executed and
performed in such State without giving effect to conflicts of laws
principles.  The foregoing shall not
apply to the conveyance instruments delivered pursuant to this Agreement to the
extent the law of any state in which any particular asset or property is
located mandates that the law of that state apply to the conveyance of the
asset or property located there.

12.9   Consent to Jurisdiction.  Each Party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Southern
District of New York located in the borough of Manhattan in the City of New
York, or if such court does not have jurisdiction, the Supreme Court of the
State of New York, New York County, for the purposes of any suit, action or
other proceeding arising out of this Agreement, the other Transaction Documents
or the transactions contemplated hereby. 
Each Party further agrees that service of any process, summons, notice
or document by U.S. registered mail to such Party’s respective address set
forth in Section 12.1 shall be effective service of process for any action,
suit or proceeding with respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding sentence. Each
Party hereby irrevocably and unconditionally waives any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement, the
other Transaction Documents or the transactions contemplated hereby in (i) the
United States District Court for the Southern District of New York or (ii) the
Supreme Court of the State of New York, New York County, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.

12.10   Entire Agreement.   This Agreement (including the Exhibits and
the Schedules) and the other Transaction Documents referred to herein set forth
the entire understanding of the Parties hereto and supersede all prior
agreements whether written or oral relating to the same subject matter.

12.11   Severability.  If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect. 
If any provision of this Agreement is so broad as to be unenforceable,
that provision shall be interpreted to be only so broad as is enforceable.

12.12   Counterparts; Facsimile Signatures.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.  The parties to this Agreement need not
execute the same counterpart.  Execution
and delivery of this Agreement by facsimile or other means of electronic
exchange bearing the copies of a party’s signature shall constitute a valid and
binding execution and delivery of this Agreement by such parties and such
electronic copies shall constitute enforceable original documents.

 49
 

 

 

12.13   Waiver of Jury Trial. 
 EACH OF THE PARTIES HERETO HEREBY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO,
IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTION DOCUMENTS OR THE VALIDITY, INTERPRETATION OR ENFORCEMENT HEREOF OR
THEREOF.  EACH PARTY HERETO HEREBY AGREES
THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT
IT WOULD NOT ENTER INTO THIS AGREEMENT IF THIS SECTION WERE NOT PART OF THIS
AGREEMENT.

[BALANCE OF
PAGE INTENTIONALLY LEFT BLANK]

 50
 

 

 

IN WITNESS WHEREOF,
the Parties have caused this Agreement to be duly executed as of the date first
above written.

	
  

  	
  ABOVENET COMMUNICATIONS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   s/ Robert
  Sokota

  	
   

  
	
   

  	
   

  	
  Name: Robert Sokota

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice President and General Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DIGITAL
  ABOVE, LLC, as Digital Above

  	
   

  
	
   

  	
   

  	
  a Delaware
  limited liability company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Digital Services, Inc.

  	
   

  
	
   

  	
   

  	
  a Maryland corporation

  	
   

  
	
   

  	
   

  	
  its sole member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  s/ Scott Peterson

  	
   

  
	
   

  	
   

  	
  Name: Scott Peterson

  	
   

  
	
   

  	
   

  	
  Title: Authorized Signatory

  	
   

  
					

 

 51

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