EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
By and Between
IRON MOUNTAIN INCORPORATED
and
▇▇▇▇▇▇ ▇▇▇▇▇ CORP.
dated as of
October 20, 1999
TABLE OF CONTENTS
ARTICLE 1. THE MERGER................................................................... 1
Section 1.1. The Merger.................................................... 1
Section 1.2. Action by Iron Mountain Stockholders and ▇▇▇▇▇▇
▇▇▇▇▇ Shareholders............................................ 2
Section 1.3. Closing....................................................... 2
Section 1.4. Effective Time................................................ 2
Section 1.5. Effect of the Merger.......................................... 3
Section 1.6. Articles of Incorporation..................................... 3
Section 1.7. Bylaws........................................................ 3
Section 1.8. Directors and Officers........................................ 3
ARTICLE 2. CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES........................... 3
Section 2.1. Conversion of Securities...................................... 3
Section 2.2. Exchange of Certificates...................................... 4
Section 2.3. Stock Transfer Books.......................................... 5
Section 2.4. Option Securities of ▇▇▇▇▇▇ ▇▇▇▇▇............................. 5
Section 2.5. Option Securities of Iron Mountain............................ 5
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ ▇▇▇▇▇............................... 5
Section 3.1. Organization and Business; Power and Authority;
Effect of Transaction......................................... 5
Section 3.2. SEC Filings; Financial Statements............................. 8
Section 3.3. Changes in Condition.......................................... 8
Section 3.4. Liabilities................................................... 9
Section 3.5. Title to Properties; Leases................................... 9
Section 3.6. Compliance with Governmental Authorizations and
Applicable Law................................................ 9
Section 3.7. Year 2000..................................................... 10
Section 3.8. Related Transactions.......................................... 10
Section 3.9. Tax Matters................................................... 10
Section 3.10. ERISA......................................................... 11
Section 3.11. Authorized and Outstanding Capital Stock...................... 13
Section 3.12. Employment Arrangements....................................... 14
Section 3.13. Material Agreements........................................... 15
Section 3.14. Ordinary Course of Business................................... 15
Section 3.15. Broker or Finder.............................................. 16
Section 3.16. Environmental Matters......................................... 17
Section 3.17. Board Action; Fairness Opinion................................ 17
Section 3.18. Materiality................................................... 17
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF IRON MOUNTAIN.............................. 18
Section 4.1. Organization and Business; Power and Authority;
Effect of Transaction......................................... 18
Section 4.2. SEC Filings; Financial Statements............................. 20
Section 4.3. Changes in Condition.......................................... 21
Section 4.4. Liabilities................................................... 21
Section 4.5. Title to Properties; Leases................................... 21
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Section 4.6. Compliance with Governmental Authorizations and
Applicable Law................................................ 22
Section 4.7. Year 2000..................................................... 22
Section 4.8. Related Transactions.......................................... 22
Section 4.9. Tax Matters................................................... 23
Section 4.10. ERISA......................................................... 24
Section 4.11. Authorized and Outstanding Capital Stock...................... 25
Section 4.12. Employment Arrangements....................................... 27
Section 4.13. Material Agreements........................................... 27
Section 4.14. Ordinary Course of Business................................... 28
Section 4.15. Broker or Finder.............................................. 29
Section 4.16. Environmental Matters......................................... 29
Section 4.17. Board Action; Fairness Opinion................................ 29
Section 4.18. Materiality................................................... 30
ARTICLE 5. ADDITIONAL COVENANTS......................................................... 30
Section 5.1. Access to Information; Confidentiality........................ 30
Section 5.2. Conduct of the Business of ▇▇▇▇▇▇ ▇▇▇▇▇ Pending the Merger.... 30
Section 5.3. Conduct of the Business of Iron Mountain Pending
the Merger.................................................... 32
Section 5.4. Control of Operations......................................... 34
Section 5.5. Agreement to Cooperate........................................ 34
Section 5.6. Affiliate Agreements; Registration Rights Agreement........... 35
Section 5.7. No Solicitation............................................... 36
Section 5.8. Directors' and Officers' Indemnification and Insurance........ 38
Section 5.9. Notification of Certain Matters............................... 39
Section 5.10. Public Announcements.......................................... 39
Section 5.11. Certain Actions Concerning Business Combinations.............. 40
Section 5.12. Option Securities............................................. 40
Section 5.13. Tax Treatment................................................. 40
Section 5.14. Registration Statement and Joint Proxy Statement/Prospectus... 40
Section 5.15. Exchange Listing.............................................. 42
Section 5.16. Disclosure Schedules.......................................... 42
Section 5.17. ▇▇▇▇▇▇ ▇▇▇▇▇ Indebtedness..................................... 42
Section 5.18. ▇▇▇▇▇▇ ▇▇▇▇▇ Command Company.................................. 43
Section 5.19. Stock Dividend................................................ 43
Section 5.20. ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders' Agreement.......................... 43
Section 5.21. Termination of Plans.......................................... 43
ARTICLE 6. CLOSING CONDITIONS........................................................... 44
Section 6.1. Conditions to Obligations of Each Party to Effect the Merger.. 44
Section 6.2. Conditions to Obligations of Iron Mountain.................... 45
Section 6.3. Conditions to Obligations of ▇▇▇▇▇▇ ▇▇▇▇▇..................... 46
ARTICLE 7. TERMINATION, AMENDMENT AND WAIVER............................................ 46
Section 7.1. Termination................................................... 46
Section 7.2. Effect of Termination......................................... 48
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Section 7.3. Amendment..................................................... 48
Section 7.4. Waiver........................................................ 49
Section 7.5. Fees, Expenses and Other Payments............................. 49
Section 7.6. Effect of Investigation....................................... 50
ARTICLE 8. GENERAL PROVISIONS........................................................... 50
Section 8.1. Nonsurvival of Representations and Warranties................. 50
Section 8.2. Notices....................................................... 50
Section 8.3. Headings...................................................... 51
Section 8.4. Severability.................................................. 51
Section 8.5. Entire Agreement.............................................. 51
Section 8.6. Assignment.................................................... 51
Section 8.7. Parties in Interest........................................... 52
Section 8.8. Governing Law................................................. 52
Section 8.9. Enforcement of the Agreement.................................. 52
Section 8.10. Counterparts.................................................. 52
Section 8.11. Mutual Drafting............................................... 52
ARTICLE 9. DEFINITIONS.................................................................. 52
EXHIBITS
1.6 Form of Amended and Restated Articles of Incorporation
1.7 Form of Amended and Restated Bylaws
5.6(a) Form of Affiliate Agreement
5.6(b) Form of Registration Rights Agreement Joinder
6.2(e) Form of Employment Agreement
SCHEDULES
▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule
Iron Mountain Disclosure Schedule
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 20, 1999, by and between
Iron Mountain Incorporated, a Delaware corporation ("Iron Mountain"), and ▇▇▇▇▇▇
▇▇▇▇▇ Corp., a Pennsylvania corporation ("▇▇▇▇▇▇ ▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this Agreement
(this and other capitalized terms used herein are either defined in Article 9
below or in another Article of this Agreement and, in such case, Article 9
includes a reference to such Section), in accordance with the General
Corporation Law of the State of Delaware (the "DGCL") and the Pennsylvania
Business Corporation Law of 1988, as amended (the "PBCL"), ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron
Mountain will carry out a business combination transaction pursuant to which
Iron Mountain will merge with and into ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Merger");
WHEREAS, the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇ has unanimously determined
that the Merger and and the Transactions are in the best interests of ▇▇▇▇▇▇
▇▇▇▇▇ and the shareholders of ▇▇▇▇▇▇ ▇▇▇▇▇ (the "▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders") and
has approved and adopted this Agreement as a tax-free plan of reorganization
within the provisions of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), has approved this Agreement, the Merger and the
Transactions and has recommended approval and adoption of this Agreement, the
Merger and the Transactions by the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders; and
WHEREAS, the Board of Directors of Iron Mountain has unanimously determined
that the Merger and the Transactions are advisable to and in the best interests
of, Iron Mountain and the stockholders of Iron Mountain (the "Iron Mountain
Stockholders") and has approved and adopted this Agreement as a tax-free plan of
reorganization within the provisions of Section 368(a) of the Code, has approved
this Agreement, the Merger and the Transactions and has recommended approval and
adoption of this Agreement, the Merger and the Transactions by the Iron Mountain
Stockholders.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE 1.
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the conditions set
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forth in this Agreement, and in accordance with the DGCL and the PBCL, at the
Effective Time Iron Mountain shall be merged with and into ▇▇▇▇▇▇ ▇▇▇▇▇. As a
result of the Merger, the separate existence of Iron Mountain shall cease and
▇▇▇▇▇▇ ▇▇▇▇▇ shall continue as the surviving corporation of the Merger (the
"Surviving Corporation").
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Section 1.2. Action by Iron Mountain Stockholders and ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------------
Shareholders.
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(a) ▇▇▇▇▇▇ ▇▇▇▇▇, acting through its Board of Directors, shall, in
accordance with and subject to Applicable Law, its Organic Documents and the
rules of the NYSE: as soon as practicable, duly call, give notice of, convene
and hold a special meeting of the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders for the purpose of
adopting and approving this Agreement, the Merger and the Transactions
(including any adjournment thereof, the "▇▇▇▇▇▇ ▇▇▇▇▇ Special Meeting"); include
in the Joint Proxy Statement/Prospectus the conclusion and recommendation of the
Board of Directors to the effect that the Board of Directors, having determined
that this Agreement, the Merger and the Transactions are in the best interests
of ▇▇▇▇▇▇ ▇▇▇▇▇ and the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders, has approved this Agreement,
the Merger and the Transactions and recommends that the ▇▇▇▇▇▇ ▇▇▇▇▇
Shareholders vote in favor of the approval and adoption of this Agreement, the
Merger and the Transactions; and use its reasonable best efforts to obtain the
necessary approval and adoption of this Agreement, the Merger and the
Transactions by the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders.
(b) Iron Mountain, acting through its Board of Directors, shall, in
accordance with and subject to Applicable Law, its Organic Documents and the
rules of the NYSE: as soon as practicable, duly call, give notice of, convene
and hold a special meeting of the Iron Mountain Stockholders for the purpose of
adopting and approving this Agreement, the Merger and the Transactions
(including any adjournment thereof, the "Iron Mountain Special Meeting" and,
together with the ▇▇▇▇▇▇ ▇▇▇▇▇ Special Meeting, the "Special Meetings"); include
in the Joint Proxy Statement/Prospectus the conclusion and recommendation of the
Board of Directors to the effect that the Board of Directors, having determined
that this Agreement, the Merger and the Transactions are advisable to and in the
best interests of Iron Mountain and the Iron Mountain Stockholders, has approved
this Agreement, the Merger and the Transactions and recommends that the Iron
Mountain Stockholders vote in favor of the approval and adoption of this
Agreement, the Merger and the Transactions; and use its reasonable best efforts
to obtain the necessary approval and adoption of this Agreement, the Merger and
the Transactions by the Iron Mountain Stockholders.
Section 1.3. Closing. Unless this Agreement shall have been terminated
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pursuant to Section 7.1 hereof, the closing of the Merger (the "Closing") will
take place at 10:00 A.M., local time, on the fifth business day (the "Closing
Date") after the date on which the last of the conditions set forth in Article 6
is satisfied or waived (other than conditions requiring deliveries at the
Closing), at the offices of ▇▇▇▇▇▇▇▇ & Worcester LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, unless another date, time or place is agreed to in
writing by ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron Mountain; provided, however, that, without the
consent of ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron Mountain, the Closing Date shall not be earlier
than January 15, 2000.
Section 1.4. Effective Time. As promptly as practicable after the
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satisfaction or, if permissible, waiver of the conditions set forth in Article 6
(but subject to Section 1.3 hereof), the Parties shall cause the Merger to be
consummated by filing a certificate of merger with the Secretary of State of the
State of Delaware and articles of merger with the Secretary of State of the
Commonwealth of Pennsylvania, and by making any related filings required under
the DGCL and the PBCL. The Merger shall become effective at such time (but not
prior to the Closing Date) as the later to occur of the due filing of such
certificate with the Secretary of State of the State of Delaware
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and the due filing of such articles with the Secretary of State of the
Commonwealth of Pennsylvania, or at such later time on the Closing Date as is
specified in such certificate and articles (the "Effective Time").
Section 1.5. Effect of the Merger. From and after the Effective Time, the
--------------------
Surviving Corporation shall possess all the rights, privileges, powers and
franchises and be subject to all of the restrictions, disabilities and duties of
▇▇▇▇▇▇ ▇▇▇▇▇ and Iron Mountain, and the Merger shall otherwise have the effect,
as provided under the DGCL and the PBCL.
Section 1.6. Articles of Incorporation. At the Effective Time, the
-------------------------
Articles of Incorporation of the Surviving Corporation shall be amended and
restated in their entirety to read as set forth in Exhibit 1.6 hereto and the
name of the Surviving Corporation shall be Iron Mountain Incorporated.
Section 1.7. Bylaws. At the Effective Time, the Bylaws of the Surviving
------
Corporation shall be amended and restated in their entirety to read as set forth
in Exhibit 1.7 hereto.
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Section 1.8. Directors and Officers. From and after the Effective Time,
----------------------
until successors are duly elected or appointed and qualified (or their earlier
resignation or removal) in accordance with Applicable Law, the officers of Iron
Mountain shall be the officers of the Surviving Corporation (except that J.
▇▇▇▇▇ ▇▇▇▇▇▇ shall be the President of the Surviving Corporation and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ shall be the Senior Vice President of the Surviving Corporation). ▇▇▇▇▇▇
▇▇▇▇▇'▇ Board of Directors shall take all necessary corporate actions to
increase the number of directors of the Surviving Corporation to eleven (11) and
shall nominate the directors of Iron Mountain together with J. ▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇, subject to the approval of the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders at the
▇▇▇▇▇▇ ▇▇▇▇▇ Special Meeting, to serve at the Effective Time as the members of
the Board of Directors of the Surviving Corporation. At the Effective Time,
subject to the approval of the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders, Iron Mountain's Class
A, B and C directors shall be Class II, III and I directors, respectively, of
the Surviving Corporation and J. ▇▇▇▇▇ ▇▇▇▇▇▇ shall be an additional Class III
Director of the Surviving Corporation and ▇▇▇▇▇▇ ▇. ▇▇▇▇ shall be an additional
Class II Director of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and Bylaws of the Surviving
Corporation. At the Effective Time, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. shall be appointed as the
Chairman Emeritus of the Surviving Corporation.
ARTICLE 2.
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1. Conversion of Securities. At the Effective Time, by virtue of
------------------------
the Merger and without any action on the part of Iron Mountain, ▇▇▇▇▇▇ ▇▇▇▇▇ or
the holders of any of the following securities:
(a) Each share of Common Stock, par value $.01 per share, of ▇▇▇▇▇▇ ▇▇▇▇▇
(the "▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock") outstanding immediately prior to the Effective
Time shall remain outstanding.
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(b) Each share of Series A Redeemable Senior Pay-in-Kind Preferred Stock,
par value $.01 per share, of ▇▇▇▇▇▇ ▇▇▇▇▇ (the "▇▇▇▇▇▇ ▇▇▇▇▇ Preferred Stock")
outstanding immediately prior to the Effective Time shall remain outstanding.
(c) Each share of Common Stock, par value $.01 per share, of Iron Mountain
(the "Iron Mountain Common Stock") outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into one fully paid and nonassessable share
of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock. At the Effective Time, all shares of Iron Mountain
Common Stock shall no longer be outstanding and shall automatically be cancelled
and retired. Certificates previously representing shares of Iron Mountain Common
Stock outstanding immediately prior to the Effective Time shall be deemed for
all purposes to represent an equivalent number of shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common
Stock following the Effective Time and shall be so accepted for such purposes by
the Surviving Corporation.
(d) Notwithstanding any provision to the contrary in this Section 2.1,
each share of Iron Mountain Common Stock held in the treasury of Iron Mountain,
each share of Iron Mountain Common Stock owned by ▇▇▇▇▇▇ ▇▇▇▇▇ or any Subsidiary
of ▇▇▇▇▇▇ ▇▇▇▇▇, and each share of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock held by Iron
Mountain or any Subsidiary of Iron Mountain immediately prior to the Effective
Time shall automatically be cancelled and extinguished without any conversion
thereof and no payment shall be made with respect thereto.
Section 2.2. Exchange of Certificates.
------------------------
(a) To the extent the Parties or the Surviving Corporation deem it
necessary or appropriate to permit or facilitate transfers of the Common Stock
of the Surviving Corporation following the Effective Time, the Parties shall use
their reasonable best efforts to agree on customary exchange procedures for
certificates representing shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock or Iron Mountain
Common Stock, as the need may be, to be exchanged for certificates representing
shares of common stock of the Surviving Corporation. The Parties shall agree no
later than twenty (20) days before the Closing Date on such exchange procedures
and appoint an exchange agent (the "Exchange Agent") to exchange certificates
representing shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock or Iron Mountain Common Stock,
as the need may be, outstanding immediately prior to the Effective Time for new
certificates representing shares of common stock of the Surviving Corporation as
soon as practicable after the Effective Time.
(b) To the extent necessary, if an Exchange Agent has been so appointed,
as soon as reasonably practicable after the Effective Time, the Surviving
Corporation will instruct the Exchange Agent to issue (by mail to the most
recent address of such holder as shown on the Surviving Corporation's books and
records) to the holders of certificates to be exchanged (other than shares to be
canceled pursuant to Section 2.1(d)), a letter of transmittal and instructions
to effect the surrender of such certificates in exchange for replacement
certificates.
(c) None of Iron Mountain, ▇▇▇▇▇▇ ▇▇▇▇▇, the Surviving Corporation or the
Exchange Agent shall be liable to any holder of shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common
Stock or Iron Mountain Common Stock for any shares of common stock of the
Surviving Corporation delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
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Section 2.3. Stock Transfer Books. At the Effective Time, the stock
--------------------
transfer books of Iron Mountain shall be closed, and there shall be no further
registration of transfers of shares of Iron Mountain Common Stock thereafter on
the records of Iron Mountain. Shares of Iron Mountain Common Stock that have
been converted into shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock pursuant to Section
2.1(c) shall be deemed outstanding shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock on and
after the Effective Time.
Section 2.4. Option Securities of ▇▇▇▇▇▇ ▇▇▇▇▇. Each unexpired option to
---------------------------------
purchase ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock ("▇▇▇▇▇▇ ▇▇▇▇▇ Options") that is outstanding
at the Effective Time shall remain outstanding.
Section 2.5. Option Securities of Iron Mountain. Effective as of the
----------------------------------
Effective Time, each then outstanding option to purchase Iron Mountain Common
Stock (the "Iron Mountain Options") granted pursuant to the Iron Mountain Option
Plans shall be converted automatically into an option to purchase such number of
shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock equal to the number of shares of Iron
Mountain Common Stock subject to such Iron Mountain Option immediately prior to
the Effective Time and on other terms and conditions (including, without
limitation, exercise price) as were applicable under the applicable Iron
Mountain Option Plan and the underlying stock option agreement. At the Effective
Time, the Surviving Corporation shall assume each of the Iron Mountain Option
Plans and each underlying stock option agreement that relates to outstanding
Iron Mountain Options. The Surviving Corporation shall (i) reserve for issuance
the number of additional shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock that will become
issuable upon the exercise of the Iron Mountain Options, as so converted, and
(ii) as soon as practicable after the Effective Time, have filed a Registration
Statement on Form S-8 to register the shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock
subject to such Iron Mountain Options, as so converted.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ hereby represents and warrants to Iron Mountain as follows:
Section 3.1. Organization and Business; Power and Authority; Effect of
---------------------------------------------------------
Transaction.
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(a) ▇▇▇▇▇▇ ▇▇▇▇▇:
(i) is a corporation duly organized and subsisting under the laws of
the Commonwealth of Pennsylvania,
(ii) has all requisite corporate power and corporate authority to own
or hold under lease its properties and to conduct its business, and has in
full force and effect all Governmental Authorizations and Private
Authorizations and has made all Governmental Filings, to the extent
required for such ownership and lease of its property and conduct of its
business, except to the extent the failure to be in full force and effect
or to have made such Governmental Filings would not, individually or in the
aggregate, reasonably be expected to have an Adverse Effect, and
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(iii) is duly qualified and authorized to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
character of its property or the nature of its business or operations
requires such qualification or authorization, except to the extent the
failure to so qualify or to maintain such authorizations would not
reasonably be expected to have an Adverse Effect.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇ has all requisite corporate power and corporate authority
to execute and deliver, and to perform its obligations under, this Agreement and
each Collateral Document executed or required to be executed by it pursuant
hereto or thereto and to consummate the Merger and the Transactions, and the
execution, delivery and performance of this Agreement and each Collateral
Document executed or required to be executed by it pursuant hereto or thereto
have been duly authorized by all requisite corporate action (other than that of
the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders). This Agreement has been duly executed and
delivered by ▇▇▇▇▇▇ ▇▇▇▇▇ and constitutes, and each Collateral Document executed
or required to be executed by it pursuant hereto or thereto or to consummate the
Merger and the Transactions, when executed and delivered by ▇▇▇▇▇▇ ▇▇▇▇▇ or a
▇▇▇▇▇▇ ▇▇▇▇▇ Shareholder will constitute, legal, valid and binding obligations
of ▇▇▇▇▇▇ ▇▇▇▇▇ or such ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholder, enforceable in accordance with
their respective terms, except as such enforceability may be subject to
bankruptcy, moratorium, insolvency, reorganization, arrangement, voidable
preference, fraudulent conveyance and other similar laws relating to or
affecting the rights of creditors and except as the same may be subject to the
effect of general principles of equity (the "Enforceability Exceptions"). The
affirmative vote of the holders of a majority of the outstanding shares of
▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock present or voting by proxy at the ▇▇▇▇▇▇ ▇▇▇▇▇ Special
Meeting at which a quorum is present is the only vote of the holders of any
class or series of the capital stock of ▇▇▇▇▇▇ ▇▇▇▇▇ necessary to approve this
Agreement, the Merger and the Transactions under Applicable Law and ▇▇▇▇▇▇
▇▇▇▇▇'▇ Organic Documents. The provisions of Section 2538 and Sections 2551-2556
of the PBCL will not apply to this Agreement, the Merger or the Transactions.
(c) Except as set forth in Section 3.1(c) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure
Schedule (which in accordance with Section 5.16 hereof (other than those
sections relating to Applicable Law, Organic Documents and Material Agreements,
which sections shall be delivered herewith), will be delivered within thirty
(30) days after the date of this Agreement), neither the execution and delivery
of this Agreement or any Collateral Document executed or required to be executed
pursuant hereto or thereto, nor the consummation of the Transactions, nor
compliance with the terms, conditions and provisions hereof or thereof by ▇▇▇▇▇▇
▇▇▇▇▇:
(i) will conflict with, or result in a breach or violation of, or
constitute a default under, any Applicable Law on the part of ▇▇▇▇▇▇ ▇▇▇▇▇
or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary or will conflict with, or result in a breach
or violation of, or constitute a default under, or permit the acceleration
of any obligation or liability in, or but for any requirement of giving of
notice or passage of time or both would constitute such a conflict with,
breach or violation of, or default under, or permit any such acceleration
in, any Organic Document or any Contractual Obligation of ▇▇▇▇▇▇ ▇▇▇▇▇ or
any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary, other than any such conflict, breach,
violation or default as would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect;
7
(ii) will result in or permit the creation or imposition of any Lien
upon any property now owned or leased by ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇
Subsidiary, except for such Liens that, individually or in the aggregate,
would not reasonably be expected to have an Adverse Effect; or
(iii) will require any Governmental Authorization or Governmental
Filing or Private Authorization, except for the certificate and articles of
merger and related filings under the DGCL and the PBCL in connection with
the Merger and the Transactions and except pursuant to the HSR Act, the
Exchange Act, the Securities Act or any applicable state securities laws,
or as otherwise would not reasonably be expected to have an Adverse Effect.
(d) ▇▇▇▇▇▇ ▇▇▇▇▇ does not have any Subsidiaries other than those set forth
on Section 3.1(d) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, each of which is
directly or indirectly wholly owned (except as set forth in Section 3.1(d) of
the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule), is an Entity which is duly organized,
validly existing and in good standing under the laws of the respective
jurisdiction of organization set forth opposite its name on Section 3.1(d) of
the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, and is duly qualified and in good standing
in each other jurisdiction in which the character of its property or the nature
of its business or operations requires such qualification or authorization
(except to the extent the failure to be duly organized, validly existing or in
good standing or to so qualify would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect), with full corporate or
similar power and corporate or similar authority to carry on the business in
which it is engaged. Except as set forth in Section 3.1(d) to the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule, each ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has in full force and effect
all Governmental Authorizations and Private Authorizations, and has made all
Governmental Filings to the extent required for such ownership and lease of its
property and conduct of its business, except to the extent the failure to so
have such Authorizations or made such Governmental Filings would not,
individually or in the aggregate, reasonably be expected to have an Adverse
Effect. Except to the extent set forth on Section 3.1(d) of the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule, ▇▇▇▇▇▇ ▇▇▇▇▇ owns, directly or indirectly through other
▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiaries, all of the outstanding capital stock or other equity
interests (as shown on Section 3.1(d) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule)
of each ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary, free and clear of all Liens, and all such stock
or other equity interests have been duly authorized and validly issued and are
fully paid and nonassessable and were issued and sold in compliance with the
Securities Act, the Exchange Act and applicable state securities laws. Except as
set forth in Section 3.1(d) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, (i) there
is neither outstanding nor has any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary agreed to grant or
issue any shares of its capital stock or other equity interests or any Option
Security or Convertible Security, and (ii) no ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is a party
to or is bound by any agreement, put or commitment pursuant to which it is
obligated to purchase, redeem or otherwise acquire any shares of capital stock
or other equity interests or any Option Security or Convertible Security.
(e) ▇▇▇▇▇▇ ▇▇▇▇▇ does not own any capital stock or equity or other
interest in any other Entity or enterprise, however organized and however such
interest may be denominated or evidenced, except as set forth in Section 3.1(d)
or 3.1(e) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule.
8
Section 3.2 SEC Filings; Financial Statements.
---------------------------------
(a) ▇▇▇▇▇▇ ▇▇▇▇▇ has filed all forms, reports and documents required to be
filed by it with the SEC, and has heretofore made available to Iron Mountain, in
the form filed with the SEC (including any exhibits thereto), (i) its Annual
Report on Form 10-K for the fiscal year ended December 31, 1998, (ii) its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and June
30, 1999, (iii) its proxy statement relating to its 1999 meeting of
shareholders, (iv) all of its registration statements that are effective as of
the date of this Agreement under which shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock are
still available for issuance (a complete list of which is set forth in Section
3.2(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule), and (v) all other forms,
reports and registration statements filed by it with the SEC since January 1,
1999 (the forms, reports and other documents referred to in clauses (i), through
(v) above, together with all other forms, reports and documents filed by ▇▇▇▇▇▇
▇▇▇▇▇ with the SEC, being referred to herein collectively as the "▇▇▇▇▇▇ ▇▇▇▇▇
SEC Reports"). The ▇▇▇▇▇▇ ▇▇▇▇▇ SEC Reports and any forms, reports and other
documents filed by ▇▇▇▇▇▇ ▇▇▇▇▇ with the SEC after the date of this Agreement,
(x) complied with or will comply in all material respects with the requirements
of the Securities Act and the Exchange Act, as the case may be, and the rules
and regulations thereunder and (y) did not at the time they were filed, or will
not at the time they are filed, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; provided that no representation or
warranty is made with respect to any information provided by Iron Mountain that
is or will be included in any ▇▇▇▇▇▇ ▇▇▇▇▇ SEC Report. None of ▇▇▇▇▇▇ ▇▇▇▇▇'▇
Subsidiaries is required to file any forms, reports or other documents with the
SEC pursuant to Section 12 or 15 of the Exchange Act.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇'▇ financial statements, including in each case the notes
thereto, contained in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 and its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999 and June 30, 1999 (the "▇▇▇▇▇▇ ▇▇▇▇▇ Financial Statements") (i)
have been prepared from, and are in accordance with, the books and records of
▇▇▇▇▇▇ ▇▇▇▇▇ and its consolidated Subsidiaries, (ii) comply in all material
respects with applicable accounting requirements and with published rules and
regulations of the SEC with respect thereto, (iii) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, except as otherwise noted therein, are true, correct and
complete, and (iv) fairly present the financial condition and results of
operations and cash flows of ▇▇▇▇▇▇ ▇▇▇▇▇ and its Subsidiaries, on the bases
therein stated, as of the respective dates thereof, and for the respective
periods covered thereby subject, in the case of unaudited financial statements
to normal nonmaterial year-end audit adjustments and accruals and to the absence
of complete footnotes.
Section 3.3. Changes in Condition. Since the date of the most recent
--------------------
financial statements forming part of the ▇▇▇▇▇▇ ▇▇▇▇▇ Financial Statements,
except to the extent specifically described in Section 3.3 of the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule, there has been no Adverse Change in ▇▇▇▇▇▇ ▇▇▇▇▇. To ▇▇▇▇▇▇
▇▇▇▇▇'▇ knowledge, there is no Event known to ▇▇▇▇▇▇ ▇▇▇▇▇ which Adversely
Affects, or would reasonably be expected to Adversely Affect, ▇▇▇▇▇▇ ▇▇▇▇▇ and
its Subsidiaries, taken as a whole, or the ability of ▇▇▇▇▇▇ ▇▇▇▇▇ to perform
any of the obligations set forth in this Agreement or any Collateral Document
executed or required to be executed pursuant hereto or thereto.
9
Section 3.4. Liabilities. (i) At the date of the most recent balance sheet
-----------
forming part of the ▇▇▇▇▇▇ ▇▇▇▇▇ Financial Statements, neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor
any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary had any obligations or liabilities, accrued or
unaccrued, fixed, absolute, contingent or other (including, without limitation,
any contingent payments or "earnouts" owing under any acquisition agreement),
except as disclosed in such balance sheet, or the notes thereto, and (ii) since
such date, neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has incurred any
such obligations or liabilities, other than those incurred in the ordinary
course of business consistent with past practice of ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇ Subsidiaries, and other than obligations and liabilities which in the case
of clauses (i) and (ii) do not and, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, would not,
individually or in the aggregate, reasonably be expected to Adversely Affect
▇▇▇▇▇▇ ▇▇▇▇▇, except to the extent set forth in Section 3.4 of the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule. Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has
guaranteed or is otherwise primarily or secondarily liable in respect of any
obligation or liability of any other Person (other than ▇▇▇▇▇▇ ▇▇▇▇▇ or a ▇▇▇▇▇▇
▇▇▇▇▇ Subsidiary), except for endorsements of negotiable instruments for deposit
in the ordinary course of business, consistent with prior practice, or as
disclosed in the most recent balance sheet, or the notes thereto, forming part
of the ▇▇▇▇▇▇ ▇▇▇▇▇ Financial Statements or in Section 3.4 of the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule.
Section 3.5. Title to Properties; Leases. Except as would not reasonably
---------------------------
be expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇, each of ▇▇▇▇▇▇ ▇▇▇▇▇ and
its Subsidiaries has good legal, marketable and insurable title, with respect to
all real property owned (in fee simple), good title with respect to all real
property leased (in leasehold) reflected as an asset on the most recent balance
sheet forming part of the ▇▇▇▇▇▇ ▇▇▇▇▇ Financial Statements, or held by ▇▇▇▇▇▇
▇▇▇▇▇ or any such Subsidiary for use in its business, if not so reflected, and
good indefeasible and merchantable title to all other assets, tangible and
intangible, reflected on the most recent balance sheet forming part of the
▇▇▇▇▇▇ ▇▇▇▇▇ Financial Statements, or (excluding leased real estate) held by
▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary for use in its business if not so
reflected, or purported to have been acquired by ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇
▇▇▇▇▇ Subsidiary since such date, except inventory sold or depleted, or
property, plant and other equipment used up or retired, since such date, in each
case in the ordinary course of business consistent with the past practice of
▇▇▇▇▇▇ ▇▇▇▇▇ and its Subsidiaries, free and clear of all Liens, except (i) Liens
reflected in the ▇▇▇▇▇▇ ▇▇▇▇▇ Financial Statements, (ii) Liens set forth on
Section 3.5(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, (iii) Permitted Liens,
and (iv) such Liens that do not or would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇. Each Lease or
other occupancy or other agreement under which ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇
Subsidiary holds real or personal property has been duly authorized, executed
and delivered by ▇▇▇▇▇▇ ▇▇▇▇▇ or a ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary, and, to ▇▇▇▇▇▇
▇▇▇▇▇'▇ knowledge, by each of the other parties thereto; each such Lease is a
legal, valid and binding obligation of ▇▇▇▇▇▇ ▇▇▇▇▇ or a ▇▇▇▇▇▇ ▇▇▇▇▇
Subsidiary, and, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, of each other party thereto,
enforceable in accordance with its terms (subject to the Enforceability
Exceptions), except where the lack of such authorization, execution or delivery
or the lack of the legal, valid and binding nature of such obligation would not
reasonably be expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇.
Section 3.6. Compliance with Governmental Authorizations and Applicable
----------------------------------------------------------
Law.
---
(a) Section 3.6(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule contains a
description of all Legal Actions which are pending in which ▇▇▇▇▇▇ ▇▇▇▇▇ or any
▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is a party,
10
or to which the businesses, operations or properties of ▇▇▇▇▇▇ ▇▇▇▇▇ or any
▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary are subject or, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, which are
threatened in writing against, ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary or
any of their respective businesses, operations or properties, which,
individually or in the aggregate, if determined against ▇▇▇▇▇▇ ▇▇▇▇▇ or any
▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary would reasonably be expected to have an Adverse Effect
on ▇▇▇▇▇▇ ▇▇▇▇▇.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇ and its Subsidiaries have obtained all Governmental
Authorizations which are necessary for the ownership or use of their respective
properties and the conduct of their respective businesses as now conducted by
▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary and such Governmental Authorizations
are in full force and effect, except for such Governmental Authorizations which,
if not obtained and maintained in full force and effect, would singly or in the
aggregate, reasonably be expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇.
Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is in material breach or
violation of, or in default in the performance, observance or fulfillment of,
any Governmental Authorization or any Applicable Law, and no Event exists or has
occurred, which constitutes, or but for any requirement of giving of notice or
passage of time or both would constitute, such a breach, violation or default,
under any Governmental Authorization or any Applicable Law, except for such
breaches, violations or defaults as do not and, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge,
would not, individually or in the aggregate, reasonably be expected to have an
Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇.
Section 3.7. Year 2000. Any inability of ▇▇▇▇▇▇ ▇▇▇▇▇'▇ and its
---------
Subsidiaries' systems (including, without limitation, any Year 2000 Systems) to
properly recognize and process date sensitive information relating to the year
2000 will not have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇.
Section 3.8. Related Transactions. Set forth in the ▇▇▇▇▇▇ ▇▇▇▇▇ SEC
--------------------
Reports or on Section 3.8 of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule is a true,
correct and complete (in all material respects) description of any Contractual
Obligation or transaction, whether now existing or existing during the period
covered by the most recent audited ▇▇▇▇▇▇ ▇▇▇▇▇ Financial Statements, between
▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary and any Affiliate thereof or any
party to the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders' Agreement that is required to be
disclosed pursuant to Item 404 of Regulation S-K, promulgated by the SEC.
Section 3.9. Tax Matters.
-----------
(a) Each of ▇▇▇▇▇▇ ▇▇▇▇▇ and each ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has in
accordance with all Applicable Laws duly and timely filed all Tax Returns which
are required to be filed, and has paid, or made adequate provision for the
payment of, all Taxes shown on such Tax Returns which have or may become due and
payable pursuant to said Returns and all other governmental charges and
assessments received to date, other than any failure to file Tax Returns or pay
Taxes that would not, individually or in the aggregate, reasonably be expected
to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇. Except as would not, individually or
in the aggregate, be reasonably expected to have an Adverse Effect on ▇▇▇▇▇▇
▇▇▇▇▇, (i) the Tax Returns of ▇▇▇▇▇▇ ▇▇▇▇▇ and each ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary have
been prepared in accordance with all Applicable Laws and generally accepted
principles applicable to taxation consistently applied; (ii) all Taxes which
▇▇▇▇▇▇ ▇▇▇▇▇ and each ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary are required by law to withhold
and collect have been duly withheld and collected, and have been paid over, in a
timely manner, to the proper Authorities to the extent due and payable; and
(iii) neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has executed any
waiver to extend, or
11
otherwise taken or failed to take any action that would have the effect of
extending, the applicable statute of limitations in respect of any Tax
liabilities of ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary for the fiscal years
prior to and including the most recent fiscal year. Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any
▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is a "consenting corporation" within the meaning of
Section 341(f) of the Code. Each of ▇▇▇▇▇▇ ▇▇▇▇▇ and each ▇▇▇▇▇▇ ▇▇▇▇▇
Subsidiary has at all times been taxable as a Subchapter C corporation under the
Code, except as otherwise set forth in Section 3.9(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule. Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has
ever been a member of any consolidated group (other than exclusively with ▇▇▇▇▇▇
▇▇▇▇▇ and its Subsidiaries) for Tax purposes, except as set forth in Section
3.9(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule.
(b) From the end of its most recent fiscal year to the date of this
Agreement, neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has made any
payment on account of any Taxes except regular payments required in the ordinary
course of business, consistent with prior practice, with respect to current
operations or property presently owned.
(c) The information shown on the Federal and foreign income Tax Returns of
▇▇▇▇▇▇ ▇▇▇▇▇ and its Subsidiaries is true, correct and complete in all material
respects and fairly and accurately reflects the information purported to be
shown. Federal and state income Tax Returns of ▇▇▇▇▇▇ ▇▇▇▇▇ and its non-foreign
Subsidiaries have been examined by the Internal Revenue Service or applicable
state Authority through the taxable periods set forth in Section 3.9(c) of the
▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, and neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇
Subsidiary has been notified in writing regarding any pending examination,
except as shown in Section 3.9(c) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule.
(d) Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is a party to any
tax sharing agreement or arrangement.
(e) Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is, and since the
date of its incorporation has not been, a "United States real property holding
corporation" as defined in Section 897 of the Code.
Section 3.10. ERISA.
-----
(a) Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary (which for
purposes of this Section 3.10 shall include any ERISA Affiliate with respect to
any Plan subject to Title IV of ERISA) contributes to any Plan or sponsors any
Plan or Benefit Arrangement or, within the past five years, has contributed to
or sponsored any Plan intended to comply with Section 401 of the Code, except as
set forth in Section 3.10(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule. As to all
Plans and Benefit Arrangements listed in Section 3.10(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule, and except as disclosed in such Section 3.10(a) of the
▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule:
(i) all such Plans and Benefit Arrangements substantially comply and
have been administered in all material respects in form and in operation
with all Applicable Laws, all required returns (including without
limitation information returns) have been prepared in all material respects
in accordance with all Applicable Laws and have been timely filed with any
Authority with respect to any such Plan or Benefit Arrangement, and neither
▇▇▇▇▇▇ ▇▇▇▇▇
12
nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has received any outstanding written notice
from any Authority questioning or challenging such compliance;
(ii) all such Plans maintained or previously maintained by ▇▇▇▇▇▇
▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary that are or were intended to comply
with Section 401 of the Code comply and complied in all material respects
in form and in operation with all applicable requirements of such Section,
a favorable determination letter has been received from the Internal
Revenue Service with respect to each such Plan or the sponsor of the Plan
is entitled to rely on a favorable opinion letter issued to the prototype
sponsor by the Internal Revenue Service with respect to each such Plan or
an application for a favorable determination letter is pending with the
Internal Revenue Service, and no event has occurred which will or would
reasonably be expected to give rise to disqualification of any such Plan
under such Section or to a tax under Section 511 of the Code;
(iii) none of the assets of any such Plan are invested in employer
securities or employer real property;
(iv) neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any of its Subsidiaries has engaged in
any non-exempt prohibited transactions (as described in Section 406 of
ERISA or Section 4975 of the Code) with respect to any such Plan;
(v) there have been no acts or omissions by ▇▇▇▇▇▇ ▇▇▇▇▇ or any
▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary which have given rise to or would reasonably be
expected to give rise to material fines, penalties, taxes or related
charges under Sections 502(c), 502(i) or 4071 of ERISA or Chapter 43 of the
Code for which ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary may be liable;
(vi) there are no material Claims (other than routine claims for
benefits) pending or, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, threatened in writing
involving such Plans or the assets of such Plans, except as set forth on
Section 3.10(a)(vi) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule;
(vii) no such Plan is subject to Title IV of ERISA, or if subject,
there have been no "reportable events" (as described in Section 4043 of
ERISA) as to which there is any material risk of termination of such Plan,
and no steps have been taken to terminate any such Plan;
(viii) neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, any
▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary nor any of their respective directors, officers,
employees or any other fiduciary has committed any material breach of
fiduciary responsibility imposed by ERISA that would subject ▇▇▇▇▇▇ ▇▇▇▇▇
or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary or any of their respective directors,
officers or employees to liability under ERISA;
(ix) no such Plan which is subject to Part 3 of Subtitle B of Title
I of ERISA or Section 412 of the Code had an accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code), whether
or not waived, as of the last day of the most recently completed fiscal
year of such Plan;
13
(x) no material liability to the PBGC has been or is expected by
▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary to be incurred by ▇▇▇▇▇▇ ▇▇▇▇▇
or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary with respect to any such Plan, and there has
been no event or condition which presents a material risk of termination of
any such Plan by the PBGC; and
(xi) except as set forth in Section 3.10(a)(xi) of the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule (which entry, if applicable, shall indicate the present
value of accumulated plan liabilities calculated in a manner consistent
with FAS 106 and actual annual expense for such benefits for each of the
last two (2) years) or pursuant to the provisions of COBRA, which
provisions have been complied with in all material respects, neither ▇▇▇▇▇▇
▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary maintains any Plan that provides
benefits described in Section 3(1) of ERISA to any former employees or
retirees of ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its Subsidiaries.
(b) Except as disclosed in Section 3.10(b) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure
Schedule, neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is or ever has
been a party to any Multiemployer Plan or made contributions to any such plan.
Section 3.11. Authorized and Outstanding Capital Stock.
----------------------------------------
(a) As of September 30, 1999, the authorized and outstanding capital stock
of ▇▇▇▇▇▇ ▇▇▇▇▇ was as set forth in Section 3.11(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇
Disclosure Schedule. All of such outstanding capital stock has been duly
authorized and validly issued, is fully paid and nonassessable and is not
subject to any preemptive or similar rights. From September 30, 1999 through the
date of this Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇ has not issued any shares of capital stock
other than issuances of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock in accordance with the
exercise of ▇▇▇▇▇▇ ▇▇▇▇▇ Options or under ▇▇▇▇▇▇ ▇▇▇▇▇'▇ 401(k) Plan in
accordance with past practice. Shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock issued and
outstanding on the record date for the ▇▇▇▇▇▇ ▇▇▇▇▇ Special Meeting will be the
only class of capital stock eligible to vote on this Agreement, the Merger and
the Transactions. Except as set forth in Section 3.11(a) or 3.1(d) of the
▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, (i) there is neither outstanding nor has
▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary agreed to grant or issue any shares
of its capital stock, other equity interests, any Option Security, Convertible
Security or Voting Debt, and (ii) neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇
Subsidiary is a party to and neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇
Subsidiary is bound by any Contractual Obligation, put or commitment pursuant to
which it is obligated to purchase, redeem or otherwise acquire any shares of
capital stock, other equity interests, any Option Security, Convertible Security
or Voting Debt. Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has any
bonds, debentures, notes or other Indebtedness having general voting rights or
convertible into instruments having general voting rights ("Voting Debt")
outstanding. Between the date of this Agreement and the Closing, except as set
forth in Section 3.11(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, neither ▇▇▇▇▇▇
▇▇▇▇▇ nor any of its Subsidiaries will issue, sell or purchase or agree to
issue, sell or purchase any capital stock, other equity interests, any Option
Security, Convertible Security or Voting Debt of ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its
Subsidiaries, except to the extent required or permitted pursuant to the terms
hereof. All of the issued and outstanding shares of ▇▇▇▇▇▇ ▇▇▇▇▇'▇ capital stock
and each Option Security or Convertible Security of ▇▇▇▇▇▇ ▇▇▇▇▇ were issued and
sold or granted in compliance with the Securities Act and applicable state
securities laws.
14
(b) As of September 30, 1999, (i) Option Securities to acquire 288,500
shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock were outstanding under ▇▇▇▇▇▇ ▇▇▇▇▇'▇ 1997
Stock Option Plan (the "▇▇▇▇▇▇ ▇▇▇▇▇ 1997 Option Plan"), including in such
number Option Securities which were then exercisable to acquire 29,003 shares of
▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock; (ii) Option Securities to acquire 1,047,746 shares of
▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock were outstanding under ▇▇▇▇▇▇ ▇▇▇▇▇'▇ Nonqualified
Stock Option Plan (the "▇▇▇▇▇▇ ▇▇▇▇▇ Nonqualified Option Plan" and, together
with the 1997 Option Plan, the "▇▇▇▇▇▇ ▇▇▇▇▇ Option Plans"), including in such
number Option Securities which were then exercisable to acquire 802,400 shares
of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock; and (iii) 1,211,000 shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common
Stock were reserved for future issuance pursuant to Option Securities which may
be granted under the ▇▇▇▇▇▇ ▇▇▇▇▇ Option Plans. From September 30, 1999 through
the date of this Agreement, neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any of its Subsidiaries has
issued any Option Securities. The ▇▇▇▇▇▇ ▇▇▇▇▇ Option Plans constitute the only
plans or arrangements pursuant to which Option Securities or Convertible
Securities to acquire shares of capital stock of ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its
Subsidiaries are currently outstanding. Other than as set forth in Section
3.11(b) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, neither the execution and
delivery of this Agreement nor the consummation of the Merger or the
Transactions are events which will cause an acceleration of the exercise or
vesting schedule of any such Option Security or Convertible Security. All shares
of ▇▇▇▇▇▇ ▇▇▇▇▇ capital stock subject to issuance under an Option Security or
Convertible Security of ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its Subsidiaries will be, upon
issuance on the terms and conditions specified in such Option Security or
Convertible Security, validly issued, fully paid and nonassessable.
(c) There are no voting trusts or other arrangements to which ▇▇▇▇▇▇ ▇▇▇▇▇
or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is a party with respect to the voting of capital
stock of ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary, except as set forth in
Section 3.11(c) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule.
(d) At the Effective Time and at the time of issuance, the shares of
▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock issued pursuant to the Merger will be duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive (or
similar) rights. All shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock subject to issuance
pursuant to converted Iron Mountain Options will be, upon issuance on the terms
and conditions specified in the applicable Iron Mountain Option, validly issued,
fully paid and nonassessable. As a result of an election duly and validly
authorized, ▇▇▇▇▇▇ ▇▇▇▇▇ is not subject to Subchapter E (Sections 2541-2548),
Subchapter G (Sections 2561-2568) and Subchapter H (Sections 2571-2578) of the
PBCL.
Section 3.12. Employment Arrangements.
-----------------------
(a) Neither ▇▇▇▇▇▇ ▇▇▇▇▇ nor any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is now or during
the past three (3) years (at the time it was a Subsidiary of ▇▇▇▇▇▇ ▇▇▇▇▇) has
been subject to or involved in or, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, threatened in
writing with any union elections, petitions therefor or other organizational or
recruiting activities, except as described in Section 3.12(a) of the ▇▇▇▇▇▇
▇▇▇▇▇ Disclosure Schedule. Except as set forth in Section 3.12(a) of the ▇▇▇▇▇▇
▇▇▇▇▇ Disclosure Schedule, none of the employees of ▇▇▇▇▇▇ ▇▇▇▇▇ and its
Subsidiaries are now, or during the past three (3) years (at the time it was a
Subsidiary of ▇▇▇▇▇▇ ▇▇▇▇▇) have been, represented by any labor union or other
employee collective bargaining organization or are parties to any labor or other
collective bargaining agreement, and there are no pending grievances, disputes
or controversies with any union or any other employee collective bargaining
organization of such employees, or, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, threats in
writing of strikes, work stoppages or slowdowns or any pending demands for
15
collective bargaining by any union or other such organization or by any other
employees, except as would not, individually or in the aggregate, reasonably be
expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇.
(b) Except as set forth in Section 3.12(b) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure
Schedule, no employee of ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary will accrue
or receive or is entitled to accrue or receive additional benefits, service or
accelerated rights to payments of benefits, including the right to receive any
parachute payment, as defined in Section 280G of the Code, or become entitled to
severance, termination allowance or similar payments as a result of this
Agreement, the Merger or the Transactions.
Section 3.13. Material Agreements. To ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, listed on
-------------------
Section 3.13 of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule are all Material Agreements
to which ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary is a party or to which it
or any of its property is subject or bound. True, complete and correct copies
of each of the Material Agreements have been furnished by ▇▇▇▇▇▇ ▇▇▇▇▇ to Iron
Mountain. All of the Material Agreements are valid, binding and legally
enforceable obligations of ▇▇▇▇▇▇ ▇▇▇▇▇ and, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, the
other parties thereto (subject to the Enforceability Exceptions), except where
the lack of enforceability would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇. Except as set
forth in Section 3.13 of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, ▇▇▇▇▇▇ ▇▇▇▇▇ and
each ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary have duly complied in all material respects with
all of the terms and conditions of each Material Agreement and have not done or
performed, or failed to do or perform (and there is no pending or, to the
knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇, threatened (in writing) Claim that ▇▇▇▇▇▇ ▇▇▇▇▇ or
any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary has not so complied, done and performed or failed to
do and perform) any act the effect of which would be to invalidate or provide
grounds for the other party thereto to terminate (with or without notice,
passage of time or both) such Material Agreement or impair the rights or
benefits, or increase the costs, of ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary,
under any of the Material Agreements, except as would not reasonably be expected
to have, individually or in the aggregate, an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇.
Except as set forth in Section 3.13 of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule,
neither the execution and delivery of this Agreement or any Collateral Document
executed or required to be executed pursuant hereto or thereto, nor the
consummation of the Transactions, nor compliance with the terms, conditions and
provisions hereof or thereof by ▇▇▇▇▇▇ ▇▇▇▇▇ will conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
acceleration of any obligation or liability in, or but for any requirement of
giving of notice or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any such acceleration
in, any Material Agreement.
Section 3.14. Ordinary Course of Business. Except as set forth in Section
---------------------------
3.14 of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule or disclosed in the ▇▇▇▇▇▇ ▇▇▇▇▇
SEC Reports, since the date of the most recent audited ▇▇▇▇▇▇ ▇▇▇▇▇ Financial
Statements included in the ▇▇▇▇▇▇ ▇▇▇▇▇ SEC Reports through the date of this
Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇ and its Subsidiaries have operated their respective
businesses only in the ordinary and usual course and in substantially the same
manner as previously conducted and there has not been:
16
(i) any damage, destruction or loss with respect to the properties
or assets of ▇▇▇▇▇▇ ▇▇▇▇▇ or its Subsidiaries whether covered by insurance
or not, which has had or would reasonably be expected to have, individually
or in the aggregate, an Adverse Effect with respect to ▇▇▇▇▇▇ ▇▇▇▇▇;
(ii) any other change, occurrence or circumstance that had or would
reasonably be expected to have an Adverse Effect with respect to ▇▇▇▇▇▇
▇▇▇▇▇;
(iii) any change to any accounting methods used by ▇▇▇▇▇▇ ▇▇▇▇▇,
unless required in accordance with GAAP;
(iv) any declaration or payment of any Distributions in respect of
the outstanding shares of capital stock of ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its
Subsidiaries (other than dividends declared or paid by wholly-owned
Subsidiaries or Distributions on the ▇▇▇▇▇▇ ▇▇▇▇▇ Preferred Stock in
accordance with its terms);
(v) any split, combination or reclassification of ▇▇▇▇▇▇ ▇▇▇▇▇'▇
capital stock or any issuance of shares of capital stock of ▇▇▇▇▇▇ ▇▇▇▇▇ or
any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary or any other change in the authorized
capitalization of ▇▇▇▇▇▇ ▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary, except as
contemplated or permitted by this Agreement or pursuant to employee benefit
plans, programs or arrangements in existence on the date of this Agreement;
(vi) any repurchase or redemption by ▇▇▇▇▇▇ ▇▇▇▇▇ of shares of its
capital stock or any issuance by ▇▇▇▇▇▇ ▇▇▇▇▇ of any other securities in
exchange or in substitution for shares of its capital stock except pursuant
to employee benefit plans, programs or arrangements in existence on the
date of this Agreement, in the ordinary course of business consistent with
past practice;
(vii) any grant or award of any Option Securities or Convertible
Securities or other rights to acquire any shares of capital stock or other
equity interests of ▇▇▇▇▇▇ ▇▇▇▇▇ or any Subsidiary, except as contemplated
or permitted by this Agreement or except pursuant to employee benefit
plans, programs or arrangements in existence on the date of this Agreement,
in the ordinary course of business consistent with past practice; or
(viii) any sale or other disposal of, or any contract to sell or
otherwise dispose of, any of its properties or assets, other than in the
ordinary course of business.
Section 3.15. Broker or Finder. Except as set forth on Section 3.15 of the
----------------
▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, no Person assisted in or brought about the
negotiation of this Agreement, the Merger or the subject matter of the
Transactions in the capacity of broker, agent or finder or in any similar
capacity on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇ or is entitled to any brokerage, finder's or
other fee or commission from ▇▇▇▇▇▇ ▇▇▇▇▇ in connection with the Transactions.
▇▇▇▇▇▇ ▇▇▇▇▇ has heretofore furnished to Iron Mountain a complete and correct
copy of all agreements between ▇▇▇▇▇▇ ▇▇▇▇▇ and the Persons set forth on Section
3.15 of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule pursuant to which such Person would
be entitled to payment relating to the Transactions.
17
Section 3.16. Environmental Matters.
---------------------
(a) Except as set forth in Section 3.16(a) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure
Schedule, ▇▇▇▇▇▇ ▇▇▇▇▇ and its Subsidiaries have complied with all applicable
Environmental Laws except where the failure to comply would not be reasonably
expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇. There is no pending or, to
▇▇▇▇▇▇ ▇▇▇▇▇'▇ knowledge, threatened (in writing), civil or criminal Legal
Actions, written notice of violation, formal administrative proceeding or
investigation, inquiry or information request by any Authority relating to any
Environmental Law involving ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its Subsidiaries or any of
their properties, which would, individually or in the aggregate, not reasonably
be expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇.
(b) Except as set forth in Section 3.16(b) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure
Schedule, there have been no releases of any Hazardous Materials into the
environment by ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its Subsidiaries, or, to ▇▇▇▇▇▇ ▇▇▇▇▇'▇
knowledge, by any other party at any parcel of real property or any facility
formerly or currently owned, operated or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇ or any of
its Subsidiaries which would reasonably be expected to have an Adverse Effect on
▇▇▇▇▇▇ ▇▇▇▇▇.
(c) Section 3.16(c) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule (which in
accordance with Section 5.16 hereof, will be delivered within thirty (30) days
after the date of this Agreement) sets forth all site assessments, audits or
other investigations that have been conducted by or on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇ or
any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary within the last three (3) years as to environmental
matters at any property owned, leased, operated or occupied by ▇▇▇▇▇▇ ▇▇▇▇▇ or
any ▇▇▇▇▇▇ ▇▇▇▇▇ Subsidiary.
Section 3.17. Board Action; Fairness Opinion.
------------------------------
(a) The Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇ at a meeting duly called and
held, has by unanimous vote of those directors present (who constituted 100% of
the directors then in office) (i) determined that this Agreement and the
Transactions, including the Merger, are in the best interests of the ▇▇▇▇▇▇
▇▇▇▇▇ Shareholders and has approved the same, (ii) resolved to recommend that
the holders of the shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock adopt this Agreement and
the Transactions, including the Merger and (iii) nominated and recommended for
election to the ▇▇▇▇▇▇ ▇▇▇▇▇ Stockholders the individuals who will serve as
members of the Board of Directors of the Surviving Corporation at the Effective
Time.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇ has received the opinion of First Union Securities, Inc.,
dated as of October 20, 1999, to the effect that, as of the date thereof, the
consideration to be received in the Merger by the shareholders of ▇▇▇▇▇▇ ▇▇▇▇▇
is fair, from a financial point of view, to such shareholders. A signed, true
and complete copy of such opinion has been delivered to Iron Mountain or will be
promptly delivered to Iron Mountain by ▇▇▇▇▇▇ ▇▇▇▇▇.
Section 3.18. Materiality. The matters and items excluded from the
-----------
representations and warranties set forth in this Article by operation of the
materiality exceptions and materiality qualifications contained in such
representations and warranties, in the aggregate for all such excluded matters
and items, are not and would not reasonably be expected to be Adverse to
▇▇▇▇▇▇ ▇▇▇▇▇.
18
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF IRON MOUNTAIN
Iron Mountain hereby represents and warrants to ▇▇▇▇▇▇ ▇▇▇▇▇ as follows:
Section 4.1. Organization and Business; Power and Authority; Effect of
---------------------------------------------------------
Transaction.
-----------
(a) Iron Mountain:
(i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware,
(ii) has all requisite corporate power and corporate authority to
own or hold under lease its properties and to conduct its business, and has
in full force and effect all Governmental Authorizations and Private
Authorizations and has made all Governmental Filings, to the extent
required for such ownership and lease of its property and conduct of its
business, except to the extent the failure to be in full force and effect
or to have made such Governmental Filings would not, individually or in the
aggregate, reasonably be expected to have an Adverse Effect, and
(iii) is duly qualified and authorized to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
character of its property or the nature of its business or operations
requires such qualification or authorization, except to the extent the
failure to so qualify or to maintain such authorizations would not
reasonably be expected to have an Adverse Effect.
(b) Iron Mountain has all requisite corporate power and corporate
authority to execute and deliver, and to perform its obligations under, this
Agreement and each Collateral Document executed or required to be executed by it
pursuant hereto or thereto and to consummate the Merger and the Transactions,
and the execution, delivery and performance of this Agreement and each
Collateral Document executed or required to be executed by it pursuant hereto or
thereto have been duly authorized by all requisite corporate action (other than
that of the Iron Mountain Stockholders). This Agreement has been duly executed
and delivered by Iron Mountain and constitutes, and each Collateral Document
executed or required to be executed by it pursuant hereto or thereto or to
consummate the Merger and the Transactions, when executed and delivered by Iron
Mountain or an Iron Mountain Stockholder will constitute, legal, valid and
binding obligations of Iron Mountain or such Iron Mountain Stockholder,
enforceable in accordance with their respective terms, except as such
enforceability may be subject to the Enforceability Exceptions. The affirmative
vote of the holders of a majority of the outstanding shares of Iron Mountain
Common Stock is the only vote of the holders of any class or series of the
capital stock of Iron Mountain necessary to approve this Agreement, the Merger
and the Transactions under Applicable Law and Iron Mountain's Organic Documents.
The provisions of Section 203 of the DGCL will not apply to this Agreement, the
Merger or the Transactions.
(c) Except as set forth in Section 4.1(c) of the Iron Mountain Disclosure
Schedule (which in accordance with Section 5.16 hereof (other than those
sections relating to Applicable Law,
19
Organic Documents and Material Agreements, which sections shall be delivered
herewith), will be delivered within thirty (30) days after the date of this
Agreement), neither the execution and delivery of this Agreement or any
Collateral Document executed or required to be executed pursuant hereto or
thereto, nor the consummation of the Transactions, nor compliance with the
terms, conditions and provisions hereof or thereof by Iron Mountain:
(i) will conflict with, or result in a breach or violation of, or
constitute a default under, any Applicable Law on the part of Iron Mountain
or any Iron Mountain Subsidiary or will conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
acceleration of any obligation or liability in, or but for any requirement
of giving of notice or passage of time or both would constitute such a
conflict with, breach or violation of, or default under, or permit any such
acceleration in, any Organic Document or any Contractual Obligation of Iron
Mountain or any Iron Mountain Subsidiary, other than any such conflict,
breach, violation or default as would not, individually or in the
aggregate, reasonably be expected to have an Adverse Effect,
(ii) will result in or permit the creation or imposition of any Lien
upon any property now owned or leased by Iron Mountain or any Iron Mountain
Subsidiary, except for such Liens that, individually or in the aggregate,
would not reasonably be expected to have an Adverse Effect,
(iii) will require any Governmental Authorization or Governmental
Filing or Private Authorization, except for the certificate and articles of
merger and related filings under the DGCL and the PBCL in connection with
the Merger and the Transactions and except pursuant to the HSR Act, the
Exchange Act, the Securities Act or any applicable state securities laws,
or as otherwise would not reasonably be expected to have an Adverse Effect.
(d) Iron Mountain does not have any Subsidiaries other than those set
forth on Section 4.1(d) of the Iron Mountain Disclosure Schedule, each of which
is directly or indirectly wholly owned (except as set forth in Section 4.1(d) of
the Iron Mountain Disclosure Schedule), is an Entity which is duly organized,
validly existing and in good standing under the laws of the respective
jurisdiction of organization set forth opposite its name on Section 4.1(d) of
the Iron Mountain Disclosure Schedule, and is duly qualified and in good
standing in each other jurisdiction in which the character of its property or
the nature of its business or operations requires such qualification or
authorization (except to the extent the failure to be duly organized, validly
existing or in good standing or to so qualify would not, individually or in the
aggregate, reasonably be expected to have an Adverse Effect), with full
corporate or similar power and corporate or similar authority to carry on the
business in which it is engaged. Except as set forth in Section 4.1(d) to the
Iron Mountain Disclosure Schedule, each Iron Mountain Subsidiary has in full
force and effect all Governmental Authorizations and Private Authorizations, and
has made all Governmental Filings to the extent required for such ownership and
lease of its property and conduct of its business, except to the extent the
failure to so have such Authorizations or made such Governmental Filings would
not, individually or in the aggregate, reasonably be expected to have an Adverse
Effect. Except to the extent set forth on Section 4.1(d) of the Iron Mountain
Disclosure Schedule, Iron Mountain owns, directly or indirectly through other
Iron Mountain Subsidiaries, all of the outstanding capital stock or other equity
interests (as shown on Section 4.1(d) of the Iron Mountain Disclosure Schedule)
of each Iron Mountain Subsidiary, free and clear of all Liens, and all such
stock or other equity interests
20
have been duly authorized and validly issued and are fully paid and
nonassessable and were issued and sold in compliance with the Securities Act,
the Exchange Act and applicable state securities laws. Except as set forth in
Section 4.1(d) of the Iron Mountain Disclosure Schedule, (i) there is neither
outstanding nor has any Iron Mountain Subsidiary agreed to grant or issue any
shares of its capital stock or other equity interests or any Option Security or
Convertible Security, and (ii) no Iron Mountain Subsidiary is a party to or is
bound by any agreement, put or commitment pursuant to which it is obligated to
purchase, redeem or otherwise acquire any shares of capital stock or other
equity interests or any Option Security or Convertible Security.
(e) Iron Mountain does not own any capital stock or equity or other
interest in any other Entity or enterprise, however organized and however such
interest may be denominated or evidenced, except as set forth in Section 4.1(d)
or 4.1(e) of the Iron Mountain Disclosure Schedule.
Section 4.2. SEC Filings; Financial Statements.
---------------------------------
(a) Iron Mountain has filed all forms, reports and documents required to
be filed by it with the SEC, and has heretofore made available to ▇▇▇▇▇▇ ▇▇▇▇▇,
in the form filed with the SEC (including any exhibits thereto), (i) its Annual
Report on Form 10-K for the fiscal year ended December 31, 1998, (ii) its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and June
30, 1999, (iii) its proxy statement relating to its 1999 meeting of
stockholders, (iv) all of its registration statements that are effective as of
the date of this Agreement under which shares of Iron Mountain Common Stock are
still available for issuance (a complete list of which is set forth in Section
4.2(a) of the Iron Mountain Disclosure Schedule), and (v) all other forms,
reports and registration statements filed by it with the SEC since January 1,
1999 (the forms, reports and other documents referred to in clauses (i), through
(v) above, together with all other forms, reports and documents filed by Iron
Mountain with the SEC, being referred to herein collectively as the "Iron
Mountain SEC Reports"). The Iron Mountain SEC Reports and any forms, reports and
other documents filed by Iron Mountain with the SEC after the date of this
Agreement, (x) complied with or will comply in all material respects with the
requirements of the Securities Act and the Exchange Act, as the case may be, and
the rules and regulations thereunder and (y) did not at the time they were
filed, or will not at the time they are filed, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading; provided that no
representation or warranty is made with respect to any information provided by
▇▇▇▇▇▇ ▇▇▇▇▇ that is or will be included in any Iron Mountain SEC Report. None
of Iron Mountain's Subsidiaries is required to file any forms, reports or other
documents with the SEC pursuant to Section 12 or 15 of the Exchange Act.
(b) Iron Mountain's financial statements, including in each case the notes
thereto, contained in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 and its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999 and June 30, 1999 (the "Iron Mountain Financial Statements") (i)
have been prepared from, and are in accordance with, the books and records of
Iron Mountain and its consolidated Subsidiaries, (ii) comply in all material
respects with applicable accounting requirements and with published rules and
regulations of the SEC with respect thereto, (iii) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, except as otherwise noted therein, are true, correct and
complete, and (iv) fairly present the financial condition and results of
operations and cash flows of
21
Iron Mountain and its Subsidiaries, on the bases therein stated, as of the
respective dates thereof, and for the respective periods covered thereby
subject, in the case of unaudited financial statements to normal nonmaterial
year-end audit adjustments and accruals and to the absence of complete
footnotes.
Section 4.3. Changes in Condition. Since the date of the most recent
--------------------
financial statements forming part of the Iron Mountain Financial Statements,
except to the extent specifically described in Section 4.3 of the Iron Mountain
Disclosure Schedule, there has been no Adverse Change in Iron Mountain. To Iron
Mountain's knowledge, there is no Event known to Iron Mountain which Adversely
Affects, or would reasonably be expected to Adversely Affect, Iron Mountain and
its Subsidiaries, taken as a whole, or the ability of Iron Mountain to perform
any of the obligations set forth in this Agreement or any Collateral Document
executed or required to be executed pursuant hereto or thereto.
Section 4.4. Liabilities. (i) At the date of the most recent balance sheet
-----------
forming part of the Iron Mountain Financial Statements, neither Iron Mountain
nor any Iron Mountain Subsidiary had any obligations or liabilities, accrued or
unaccrued, fixed, absolute, contingent or other (including, without limitation,
any contingent payments or "earnouts" owing under any acquisition agreement),
except as disclosed in such balance sheet, or the notes thereto, and (ii) since
such date, neither Iron Mountain nor any Iron Mountain Subsidiary has incurred
any such obligations or liabilities, other than those incurred in the ordinary
course of business consistent with past practice of Iron Mountain and Iron
Mountain Subsidiaries, and other than obligations and liabilities which in the
case of clauses (i) and (ii) do not and, to Iron Mountain's knowledge, would
not, individually or in the aggregate, reasonably be expected to Adversely
Affect Iron Mountain, except to the extent set forth in Section 4.4 of the Iron
Mountain Disclosure Schedule. Neither Iron Mountain nor any Iron Mountain
Subsidiary has guaranteed or is otherwise primarily or secondarily liable in
respect of any obligation or liability of any other Person (other than Iron
Mountain or an Iron Mountain Subsidiary), except for endorsements of negotiable
instruments for deposit in the ordinary course of business, consistent with
prior practice, or as disclosed in the most recent balance sheet, or the notes
thereto, forming part of the Iron Mountain Financial Statements or in Section
4.4 of the Iron Mountain Disclosure Schedule.
Section 4.5. Title to Properties; Leases. Except as would not reasonably
---------------------------
be expected to have an Adverse Effect on Iron Mountain, each of Iron Mountain
and its Subsidiaries has good legal, marketable and insurable title, with
respect to all real property owned (in fee simple), good title with respect to
all real property leased (in leasehold) reflected as an asset on the most recent
balance sheet forming part of the Iron Mountain Financial Statements, or held by
Iron Mountain or any such Subsidiary for use in its business, if not so
reflected, and good indefeasible and merchantable title to all other assets,
tangible and intangible, reflected on the most recent balance sheet forming part
of the Iron Mountain Financial Statements, or (excluding leased real estate)
held by Iron Mountain or any Iron Mountain Subsidiary for use in its business if
not so reflected, or purported to have been acquired by Iron Mountain or any
Iron Mountain Subsidiary since such date, except inventory sold or depleted, or
property, plant and other equipment used up or retired, since such date, in each
case in the ordinary course of business consistent with the past practice of
Iron Mountain and its Subsidiaries, free and clear of all Liens, except (i)
Liens reflected in the Iron Mountain Financial Statements, (ii) Liens set forth
on Section 4.5(a) of the Iron Mountain Disclosure Schedule, (iii) Permitted
Liens, and (iv) such Liens that do not or would not, individually or in the
aggregate, reasonably be expected to have an Adverse Effect on Iron Mountain.
Each Lease or other occupancy
22
or other agreement under which Iron Mountain or any Iron Mountain Subsidiary
holds real or personal property has been duly authorized, executed and delivered
by Iron Mountain or an Iron Mountain Subsidiary, and, to Iron Mountain's
knowledge, by each of the other parties thereto; each such Lease is a legal,
valid and binding obligation of Iron Mountain or an Iron Mountain Subsidiary,
and, to Iron Mountain's knowledge, of each other party thereto, enforceable in
accordance with its terms (subject to the Enforceability Exceptions), except
where the lack of such authorization, execution or delivery or the lack of the
legal, valid and binding nature of such obligation would not reasonably be
expected to have an Adverse Effect on Iron Mountain.
Section 4.6. Compliance with Governmental Authorizations and Applicable
----------------------------------------------------------
Law.
---
(a) Section 4.6(a) of the Iron Mountain Disclosure Schedule contains a
description of all Legal Actions which are pending in which Iron Mountain or any
Iron Mountain Subsidiary is a party, or to which the businesses, operations or
properties of Iron Mountain or any Iron Mountain Subsidiary are subject or, to
Iron Mountain's knowledge, which are threatened in writing against, Iron
Mountain or any Iron Mountain Subsidiary or any of their respective businesses,
operations or properties, which, individually or in the aggregate, if determined
against Iron Mountain or any Iron Mountain Subsidiary would reasonably be
expected to have an Adverse Effect on Iron Mountain.
(b) Iron Mountain and its Subsidiaries have obtained all Governmental
Authorizations which are necessary for the ownership or use of their respective
properties and the conduct of their respective businesses as now conducted by
Iron Mountain or any Iron Mountain Subsidiary and such Governmental
Authorizations are in full force and effect, except for such Governmental
Authorizations which, if not obtained and maintained in full force and effect,
would singly or in the aggregate, reasonably be expected to have an Adverse
Effect on Iron Mountain. Neither Iron Mountain nor any Iron Mountain Subsidiary
is in material breach or violation of, or in default in the performance,
observance or fulfillment of, any Governmental Authorization or any Applicable
Law, and no Event exists or has occurred, which constitutes, or but for any
requirement of giving of notice or passage of time or both would constitute,
such a breach, violation or default, under any Governmental Authorization or any
Applicable Law, except for such breaches, violations or defaults as do not and,
to Iron Mountain's knowledge, would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect on Iron Mountain.
Section 4.7. Year 2000. Any inability of Iron Mountain's and its
---------
Subsidiaries' systems (including, without limitation, any Year 2000 Systems) to
properly recognize and process date sensitive information relating to the year
2000 will not have an Adverse Effect on Iron Mountain.
Section 4.8. Related Transactions. Set forth in the Iron Mountain SEC
--------------------
Reports or on Section 4.8 of the Iron Mountain Disclosure Schedule is a true,
correct and complete (in all material respects) description of any Contractual
Obligation or transaction, whether now existing or existing during the period
covered by the most recent audited Iron Mountain Financial Statements, between
Iron Mountain or any Iron Mountain Subsidiary and any Affiliate thereof that is
required to be disclosed pursuant to Item 404 of Regulation S-K, promulgated by
the SEC.
23
Section 4.9. Tax Matters.
-----------
(a) Each of Iron Mountain and each Iron Mountain Subsidiary has in
accordance with all Applicable Laws duly and timely filed all Tax Returns which
are required to be filed, and has paid, or made adequate provision for the
payment of, all Taxes shown on such Tax Returns which have or may become due and
payable pursuant to said Returns and all other governmental charges and
assessments received to date, other than any failure to file Tax Returns or pay
Taxes that would not, individually or in the aggregate, reasonably be expected
to have an Adverse Effect on Iron Mountain. Except as would not, individually or
in the aggregate, be reasonably expected to have an Adverse Effect on Iron
Mountain, (i) the Tax Returns of Iron Mountain and each Iron Mountain Subsidiary
have been prepared in accordance with all Applicable Laws and generally accepted
principles applicable to taxation consistently applied; (ii) all Taxes which
Iron Mountain and each Iron Mountain Subsidiary are required by law to withhold
and collect have been duly withheld and collected, and have been paid over, in a
timely manner, to the proper Authorities to the extent due and payable; and
(iii) neither Iron Mountain nor any Iron Mountain Subsidiary has executed any
waiver to extend, or otherwise taken or failed to take any action that would
have the effect of extending, the applicable statute of limitations in respect
of any Tax liabilities of Iron Mountain or any Iron Mountain Subsidiary for the
fiscal years prior to and including the most recent fiscal year. Neither Iron
Mountain nor any Iron Mountain Subsidiary is a "consenting corporation" within
the meaning of Section 341(f) of the Code. Each of Iron Mountain and each Iron
Mountain Subsidiary has at all times been taxable as a Subchapter C corporation
under the Code, except as otherwise set forth in Section 4.9(a) of the Iron
Mountain Disclosure Schedule. Neither Iron Mountain nor any Iron Mountain
Subsidiary has ever been a member of any consolidated group (other than
exclusively with Iron Mountain and its Subsidiaries) for Tax purposes, except as
set forth in Section 4.9(a) of the Iron Mountain Disclosure Schedule.
(b) From the end of its most recent fiscal year to the date of this
Agreement, neither Iron Mountain nor any Iron Mountain Subsidiary has made any
payment on account of any Taxes except regular payments required in the ordinary
course of business, consistent with prior practice, with respect to current
operations or property presently owned.
(c) The information shown on the Federal and foreign income Tax Returns of
Iron Mountain and its Subsidiaries is true, correct and complete in all material
respects and fairly and accurately reflects the information purported to be
shown. Federal and state income Tax Returns of Iron Mountain and its non-foreign
Subsidiaries have been examined by the Internal Revenue Service or applicable
state Authority through the taxable periods set forth in Section 4.9(c) of the
Iron Mountain Disclosure Schedule, and neither Iron Mountain nor any Iron
Mountain Subsidiary has been notified in writing regarding any pending
examination, except as shown in Section 4.9(c) of the Iron Mountain Disclosure
Schedule.
(d) Neither Iron Mountain nor any Iron Mountain Subsidiary is a party to
any tax sharing agreement or arrangement.
(e) Neither Iron Mountain nor any Iron Mountain Subsidiary is, and since
the date of its incorporation has not been, a "United States real property
holding corporation" as defined in Section 897 of the Code.
24
Section 4.10. ERISA.
-----
(a) Neither Iron Mountain nor any Iron Mountain Subsidiary (which for
purposes of this Section 4.10 shall include any ERISA Affiliate with respect to
any Plan subject to Title IV of ERISA) contributes to any Plan or sponsors any
Plan or Benefit Arrangement or, within the past five years, has contributed to
or sponsored any Plan intended to comply with Section 401 of the Code, except as
set forth in Section 4.10(a) of the Iron Mountain Disclosure Schedule. As to all
Plans and Benefit Arrangements listed in Section 4.10(a) of the Iron Mountain
Disclosure Schedule, and except as disclosed in such Section 4.10(a) of the Iron
Mountain Disclosure Schedule:
(i) all such Plans and Benefit Arrangements substantially comply and
have been administered in all material respects in form and in operation
with all Applicable Laws, all required returns (including without
limitation information returns) have been prepared in all material respects
in accordance with all Applicable Laws and have been timely filed with any
Authority with respect to any such Plan or Benefit Arrangement, and neither
Iron Mountain nor any Iron Mountain Subsidiary has received any outstanding
written notice from any Authority questioning or challenging such
compliance;
(ii) except as described in Section 4.10(a)(ii) of the Iron Mountain
Disclosure Schedule, all such Plans maintained or previously maintained by
Iron Mountain or any Iron Mountain Subsidiary that are or were intended to
comply with Section 401 of the Code comply and complied in all material
respects in form and in operation with all applicable requirements of such
Section, a favorable determination letter has been received from the
Internal Revenue Service with respect to each such Plan or the sponsor of
the Plan is entitled to rely on a favorable opinion letter issued to the
prototype sponsor by the Internal Revenue Service with respect to each such
Plan or an application for a favorable determination letter is pending with
the Internal Revenue Service, and no event has occurred which will or would
reasonably be expected to give rise to disqualification of any such Plan
under such Section or to a tax under Section 511 of the Code;
(iii) none of the assets of any such Plan are invested in employer
securities or employer real property;
(iv) neither Iron Mountain nor any of its Subsidiaries has engaged in
any non-exempt prohibited transactions (as described in Section 406 of
ERISA or Section 4975 of the Code) with respect to any such Plan;
(v) there have been no acts or omissions by Iron Mountain or any
Iron Mountain Subsidiary which have given rise to or would reasonably be
expected to give rise to material fines, penalties, taxes or related
charges under Sections 502(c), 502(i) or 4071 of ERISA or Chapter 43 of the
Code for which Iron Mountain or any Iron Mountain Subsidiary may be liable;
(vi) there are no material Claims (other than routine claims for
benefits) pending or, to Iron Mountain's knowledge, threatened in writing
involving such Plans or the assets of such Plans, except as set forth on
Section 4.10(a)(vi) of the Iron Mountain Disclosure Schedule;
25
(vii) except as described in Section 4.10(a)(vii) of the Iron
Mountain Disclosure Schedule, no such Plan is subject to Title IV of ERISA,
or if subject, there have been no "reportable events" (as described in
Section 4043 of ERISA) as to which there is any material risk of
termination of such Plan, and no steps have been taken to terminate any
such Plan;
(viii) neither Iron Mountain nor, to Iron Mountain's knowledge, any
Iron Mountain Subsidiary nor any of their respective directors, officers,
employees or any other fiduciary has committed any material breach of
fiduciary responsibility imposed by ERISA that would subject Iron Mountain
or any Iron Mountain Subsidiary or any of their respective directors,
officers or employees to liability under ERISA;
(ix) no such Plan which is subject to Part 3 of Subtitle B of Title
I of ERISA or Section 412 of the Code had an accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code), whether
or not waived, as of the last day of the most recently completed fiscal
year of such Plan;
(x) no material liability to the PBGC has been or is expected by
Iron Mountain or any Iron Mountain Subsidiary to be incurred by Iron
Mountain or any Iron Mountain Subsidiary with respect to any such Plan, and
there has been no event or condition which presents a material risk of
termination of any such Plan by the PBGC; and
(xi) except as set forth in Section 4.10(a)(xi) of the Iron Mountain
Disclosure Schedule (which entry, if applicable, shall indicate the present
value of accumulated plan liabilities calculated in a manner consistent
with FAS 106 and actual annual expense for such benefits for each of the
last two (2) years) or pursuant to the provisions of COBRA, which
provisions have been complied with in all material respects, neither Iron
Mountain nor any Iron Mountain Subsidiary maintains any Plan that provides
benefits described in Section 3(1) of ERISA to any former employees or
retirees of Iron Mountain or any of its Subsidiaries.
(b) Except as disclosed in Section 4.10(b) of the Iron Mountain Disclosure
Schedule, neither Iron Mountain nor any Iron Mountain Subsidiary is or ever has
been a party to any Multiemployer Plan or made contributions to any such plan.
Section 4.11. Authorized and Outstanding Capital Stock.
----------------------------------------
(a) As of September 30, 1999, the authorized and outstanding capital stock
of Iron Mountain was as set forth in Section 4.11(a) of the Iron Mountain
Disclosure Schedule. All of such outstanding capital stock has been duly
authorized and validly issued, is fully paid and nonassessable and is not
subject to any preemptive or similar rights. From September 30, 1999 through the
date of this Agreement, Iron Mountain has not issued any shares of capital stock
other than issuances of Iron Mountain Common Stock in accordance with the
exercise of Iron Mountain Options or under the Iron Mountain ESPP Plan in
accordance with past practice. Shares of Iron Mountain Common Stock issued and
outstanding on the record date for the Iron Mountain Special Meeting will be the
only class of capital stock eligible to vote on this Agreement, the Merger and
the Transactions. Except as set forth in Section 4.11(a) or 4.1(d) of the Iron
Mountain Disclosure Schedule, (i) there
26
is neither outstanding nor has Iron Mountain or any Iron Mountain Subsidiary
agreed to grant or issue any shares of its capital stock, other equity
interests, any Option Security, Convertible Security or Voting Debt, and (ii)
neither Iron Mountain nor any Iron Mountain Subsidiary is a party to and neither
Iron Mountain nor any Iron Mountain Subsidiary is bound by any Contractual
Obligation, put or commitment pursuant to which it is obligated to purchase,
redeem or otherwise acquire any shares of capital stock, other equity interests,
any Option Security, Convertible Security or Voting Debt. Neither Iron Mountain
nor any Iron Mountain Subsidiary has any Voting Debt outstanding. Between the
date of this Agreement and the Closing, except as set forth in Section 4.11(a)
of the Iron Mountain Disclosure Schedule, neither Iron Mountain nor any of its
Subsidiaries will issue, sell or purchase or agree to issue, sell or purchase
any capital stock, other equity interests, any Option Security, Convertible
Security or Voting Debt of Iron Mountain or any of its Subsidiaries, except to
the extent required or permitted pursuant to the terms hereof. All of the issued
and outstanding shares of Iron Mountain's capital stock and each Option Security
or Convertible Security of Iron Mountain were issued and sold or granted in
compliance with the Securities Act and applicable state securities laws.
(b) As of September 30, 1999, (i) Option Securities to acquire 2,120,795
shares of Iron Mountain Common Stock were outstanding under Iron Mountain's 1995
Stock Incentive Plan (the "Iron Mountain 1995 Option Plan"), including in such
number Option Securities which were then exercisable to acquire 929,631 shares
of Iron Mountain Common Stock; (ii) Option Securities to acquire 264,227 shares
of Iron Mountain Common Stock were outstanding under the Iron Mountain/"TSI 1995
Stock Option Plan (the "Iron Mountain/"TSI Option Plan"), including in such
number Option Securities which were then exercisable to acquire 222,297 shares
of Iron Mountain Common Stock; (iii) no Option Securities to acquire shares of
Iron Mountain Common Stock were outstanding under Iron Mountain's 1998 Employee
Stock Purchase Plan (the "Iron Mountain ESPP Plan" and, together with the Iron
Mountain 1995 Option Plan, the "Iron Mountain Option Plans"); and (iv) 531,350
shares of Iron Mountain Common Stock were reserved for future issuance pursuant
to Option Securities which may be granted under the Iron Mountain 1995 Option
Plan and 375,000 shares of Iron Mountain Common Stock were reserved for future
issuance pursuant to Option Securities which may be granted under the Iron
Mountain ESPP Plan. From September 30, 1999 through the date of this Agreement,
neither Iron Mountain nor any of its Subsidiaries has issued any Option
Securities, other than Option Securities under the Iron Mountain ESPP Plan in
accordance with past practice. The Iron Mountain Option Plans constitute the
only plans or arrangements pursuant to which Option Securities or Convertible
Securities to acquire shares of capital stock of Iron Mountain or any of its
Subsidiaries are currently outstanding. Other than as set forth in Section
4.11(b) of the Iron Mountain Disclosure Schedule, neither the execution and
delivery of this Agreement nor the consummation of the Merger or the
Transactions are events which will cause an acceleration of the exercise or
vesting schedule of any such Option Security or Convertible Security. All shares
of Iron Mountain capital stock subject to issuance under an Option Security or
Convertible Security of Iron Mountain or any of its Subsidiaries will be, upon
issuance on the terms and conditions specified in such Option Security or
Convertible Security, validly issued, fully paid and nonassessable.
(c) There are no voting trusts or other arrangements to which Iron
Mountain or any Iron Mountain Subsidiary is a party with respect to the voting
of capital stock of Iron Mountain or any Iron Mountain Subsidiary.
27
Section 4.12. Employment Arrangements.
-----------------------
(a) Neither Iron Mountain nor any Iron Mountain Subsidiary is now or
during the past three (3) years (at the time it was a Subsidiary of Iron
Mountain) has been subject to or involved in or, to Iron Mountain's knowledge,
threatened in writing with any union elections, petitions therefor or other
organizational or recruiting activities, except as described in Section 4.12(a)
of the Iron Mountain Disclosure Schedule. Except as set forth in Section 4.12(a)
of the Iron Mountain Disclosure Schedule, none of the employees of Iron Mountain
and its Subsidiaries are now, or during the past three (3) years (at the time it
was a Subsidiary of Iron Mountain) have been, represented by any labor union or
other employee collective bargaining organization or are parties to any labor or
other collective bargaining agreement, and there are no pending grievances,
disputes or controversies with any union or any other employee collective
bargaining organization of such employees, or, to Iron Mountain's knowledge,
threats in writing of strikes, work stoppages or slowdowns or any pending
demands for collective bargaining by any union or other such organization or by
any other employees, except as would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect on Iron Mountain.
(b) Except as set forth in Section 4.12(b) of the Iron Mountain Disclosure
Schedule, no employee of Iron Mountain or any Iron Mountain Subsidiary will
accrue or receive or is entitled to accrue or receive additional benefits,
service or accelerated rights to payments of benefits, including the right to
receive any parachute payment, as defined in Section 280G of the Code, or become
entitled to severance, termination allowance or similar payments as a result of
this Agreement, the Merger or the Transactions.
Section 4.13. Material Agreements. To Iron Mountain's knowledge, listed
-------------------
on Section 4.13 of the Iron Mountain Disclosure Schedule are all Material
Agreements to which Iron Mountain or any Iron Mountain Subsidiary is a party or
to which it or any of its property is subject or bound. True, complete and
correct copies of each of the Material Agreements have been furnished by Iron
Mountain to ▇▇▇▇▇▇ ▇▇▇▇▇. All of the Material Agreements are valid, binding and
legally enforceable obligations of Iron Mountain and, to Iron Mountain's
knowledge, the other parties thereto (subject to the Enforceability Exceptions),
except where the lack of enforceability would not, individually or in the
aggregate, reasonably be expected to have an Adverse Effect on Iron Mountain.
Except as set forth in Section 4.13 of the Iron Mountain Disclosure Schedule,
Iron Mountain and each Iron Mountain Subsidiary have duly complied in all
material respects with all of the terms and conditions of each Material
Agreement and have not done or performed, or failed to do or perform (and there
is no pending or, to the knowledge of Iron Mountain, threatened (in writing)
Claim that Iron Mountain or any Iron Mountain Subsidiary has not so complied,
done and performed or failed to do and perform) any act the effect of which
would be to invalidate or provide grounds for the other party thereto to
terminate (with or without notice, passage of time or both) such Material
Agreement or impair the rights or benefits, or increase the costs, of Iron
Mountain or any Iron Mountain Subsidiary, under any of the Material Agreements,
except as would not reasonably be expected to have, individually or in the
aggregate, an Adverse Effect on Iron Mountain. Except as set forth in Section
4.13 of the Iron Mountain Disclosure Schedule, neither the execution and
delivery of this Agreement or any Collateral Document executed or required to be
executed pursuant hereto or thereto, nor the consummation of the Transactions,
nor compliance with the terms, conditions and provisions hereof or thereof by
Iron Mountain will conflict with, or result in a breach or violation of, or
constitute a default under, or permit the acceleration of any obligation or
liability in, or but for
28
any requirement of giving of notice or passage of time or both would constitute
such a conflict with, breach or violation of, or default under, or permit any
such acceleration in, any Material Agreement.
Section 4.14. Ordinary Course of Business. Except as set forth in Section
---------------------------
4.14 of the Iron Mountain Disclosure Schedule or disclosed in the Iron Mountain
SEC Reports, since the date of the most recent audited Iron Mountain Financial
Statements included in the Iron Mountain SEC Reports through the date of this
Agreement, Iron Mountain and its Subsidiaries have operated their respective
businesses only in the ordinary and usual course and in substantially the same
manner as previously conducted and there has not been:
(i) any damage, destruction or loss with respect to the properties
or assets of Iron Mountain or its Subsidiaries whether covered by insurance
or not, which has had or would reasonably be expected to have, individually
or in the aggregate, an Adverse Effect with respect to Iron Mountain;
(ii) any other change, occurrence or circumstance that had or would
reasonably be expected to have an Adverse Effect with respect to Iron
Mountain;
(iii) any change to any accounting methods used by Iron Mountain,
unless required in accordance with GAAP;
(iv) any declaration or payment of any Distributions in respect of
the outstanding shares of capital stock of Iron Mountain or any of its
Subsidiaries (other than dividends declared or paid by wholly-owned
Subsidiaries);
(v) any split, combination or reclassification of Iron Mountain's
capital stock or any issuance of shares of capital stock of Iron Mountain
or any Iron Mountain Subsidiary or any other change in the authorized
capitalization of Iron Mountain or any Iron Mountain Subsidiary, except as
contemplated or permitted by this Agreement or pursuant to employee benefit
plans, programs or arrangements in existence on the date of this Agreement;
(vi) any repurchase or redemption by Iron Mountain of shares of its
capital stock or any issuance by Iron Mountain of any other securities in
exchange or in substitution for shares of its capital stock except pursuant
to employee benefit plans, programs or arrangements in existence on the
date of this Agreement, in the ordinary course of business consistent with
past practice;
(vii) any grant or award of any Option Securities or Convertible
Securities or other rights to acquire any shares of capital stock or other
equity interests of Iron Mountain or any Subsidiary, except as contemplated
or permitted by this Agreement or except pursuant to employee benefit
plans, programs or arrangements in existence on the date of this Agreement,
in the ordinary course of business consistent with past practice; or
(viii) any sale or other disposal of, or any contract to sell or
otherwise dispose of, any of its properties or assets, other than in the
ordinary course of business.
29
Section 4.15. Broker or Finder. Other than Bear, ▇▇▇▇▇▇▇ & Co. Inc., no
----------------
Person assisted in or brought about the negotiation of this Agreement, the
Merger or the subject matter of the Transactions in the capacity of broker,
agent or finder or in any similar capacity on behalf of Iron Mountain or is
entitled to any brokerage, finder's or other fee or commission from Iron
Mountain in connection with the Transactions. Iron Mountain has heretofore
furnished to ▇▇▇▇▇▇ ▇▇▇▇▇ a complete and correct copy of all agreements between
Iron Mountain and Bear, ▇▇▇▇▇▇▇ & Co. Inc. pursuant to which such Person would
be entitled to payment relating to the Transactions.
Section 4.16. Environmental Matters.
---------------------
(a) Except as set forth in Section 4.16(a) of the Iron Mountain Disclosure
Schedule, Iron Mountain and its Subsidiaries have complied with all applicable
Environmental Laws except where the failure to comply would not be reasonably
expected to have an Adverse Effect on Iron Mountain. There is no pending or, to
Iron Mountain's knowledge, threatened (in writing), civil or criminal Legal
Actions, written notice of violation, formal administrative proceeding or
investigation, inquiry or information request by any Authority relating to any
Environmental Law involving Iron Mountain or any of its Subsidiaries or any of
their properties, which would, individually or in the aggregate, not reasonably
be expected to have an Adverse Effect on Iron Mountain.
(b) Except as set forth in Section 4.16(b) of the Iron Mountain Disclosure
Schedule, there have been no releases of any Hazardous Materials into the
environment by Iron Mountain or any of its Subsidiaries, or, to Iron Mountain's
knowledge, by any other party at any parcel of real property or any facility
formerly or currently owned, operated or controlled by Iron Mountain or any of
its Subsidiaries which would reasonably be expected to have an Adverse Effect on
Iron Mountain.
(c) Section 4.16(c) of the Iron Mountain Disclosure Schedule (which in
accordance with Section 5.16 hereof, will be delivered within thirty (30) days
after the date of this Agreement) sets forth all site assessments, audits or
other investigations that have been conducted by or on behalf of Iron Mountain
or any Iron Mountain Subsidiary within the last three (3) years as to
environmental matters at any property owned, leased, operated or occupied by
Iron Mountain or any Iron Mountain Subsidiary.
Section 4.17. Board Action; Fairness Opinion.
------------------------------
(a) The Board of Directors of Iron Mountain at a meeting duly called and
held, has by unanimous vote of those directors present (who constituted 100% of
the directors then in office) (i) determined that this Agreement and the
Transactions, including the Merger, are advisable to and in the best interests
of the Iron Mountain Stockholders and has approved the same, and (ii) resolved
to recommend that the holders of the shares of Iron Mountain Common Stock adopt
this Agreement and the Transactions, including the Merger.
(b) Iron Mountain has received the opinion of Bear, ▇▇▇▇▇▇▇ & Co. Inc.,
dated as of October 20, 1999, to the effect that, as of the date thereof, the
"Exchange Ratio" (as defined in such opinion) equivalent to 1.10 shares of Iron
Mountain Common Stock per share of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock to be paid in
connection with the Merger is fair, from a financial point of view, to the
stockholders of Iron Mountain. A signed, true and complete copy of such opinion
has been delivered to ▇▇▇▇▇▇ ▇▇▇▇▇ or will be promptly delivered to ▇▇▇▇▇▇ ▇▇▇▇▇
by Iron Mountain.
30
Section 4.18. Materiality. The matters and items excluded from the
-----------
representations and warranties set forth in this Article by operation of the
materiality exceptions and materiality qualifications contained in such
representations and warranties, in the aggregate for all such excluded matters
and items, are not and would not reasonably be expected to be Adverse to Iron
Mountain.
ARTICLE 5.
ADDITIONAL COVENANTS
Section 5.1. Access to Information; Confidentiality.
--------------------------------------
(a) Upon reasonable notice, each Party shall afford to the other Party and
their respective Representatives full access during normal business hours
throughout the period prior to the Effective Time to all of its properties,
books, contracts (other than customer contracts), commitments and records
(including without limitation Tax Returns) and, during such period, shall
furnish promptly to one another (i) a copy of each report, schedule and other
document filed or received by either of them pursuant to the requirements of any
Applicable Law (including without limitation federal or state securities laws)
or filed by it or any of its Subsidiaries with any Authority in connection with
the Transactions or which would reasonably be expected to have an Adverse Effect
on such Party and (ii) such other information concerning their respective
businesses, properties and personnel as ▇▇▇▇▇▇ ▇▇▇▇▇ or Iron Mountain, as the
case may be, shall reasonably request (other than customer contracts or the
pricing thereof). ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron Mountain acknowledge that they have
heretofore executed a confidentiality agreement, dated October 4, 1999 (the
"Confidentiality Agreement"), which separately and as incorporated herein shall
remain in full force and effect after and notwithstanding the execution and
delivery of this Agreement, and that information obtained from ▇▇▇▇▇▇ ▇▇▇▇▇ by
Iron Mountain or its Representatives or by ▇▇▇▇▇▇ ▇▇▇▇▇ or its Representatives
from Iron Mountain, pursuant to this Section 5.1(a), the Confidentiality
Agreement or otherwise, shall be subject to the provisions of the
Confidentiality Agreement.
(b) Subject to the terms and conditions of the Confidentiality Agreement,
Iron Mountain and ▇▇▇▇▇▇ ▇▇▇▇▇ may disclose such information as may be necessary
in connection with seeking all Governmental and Private Authorizations or that
is required by Applicable Law or the rules of the NYSE to be disclosed. In the
event that this Agreement is terminated, Iron Mountain and ▇▇▇▇▇▇ ▇▇▇▇▇ shall
each promptly redeliver all non-public written material provided pursuant to
this Section or any other provision of this Agreement or otherwise in connection
with the Merger and the Transactions and shall not retain any copies, extracts
or other reproductions in whole or in part of such written material other than
one copy thereof which shall be delivered to independent counsel for such party.
(c) No investigation pursuant to this Section 5.1 shall affect any
representation or warranty in this Agreement of any Party hereto or any
condition to the obligations of the Parties hereto.
Section 5.2. Conduct of the Business of ▇▇▇▇▇▇ ▇▇▇▇▇ Pending the Merger.
----------------------------------------------------------
Between the date of this Agreement and the Closing Date, ▇▇▇▇▇▇ ▇▇▇▇▇ will, and
will ensure that each of its Subsidiaries will (except (i) as may be described
on Section 5.2 of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure
31
Schedule, (ii) as may be required or expressly contemplated or permitted by the
terms of this Agreement, or (iii) as may be consented to by Iron Mountain, which
consent shall not be unreasonably withheld or delayed):
(i) operate its business in the normal, usual and customary manner
in the ordinary course of business, consistent with prior practice, and use
all reasonable efforts, consistent with past practice, to maintain and
preserve its business organization, assets, employees and advantageous
business relationships;
(ii) not sell or otherwise dispose of or contract to sell or
otherwise dispose of any material amount of properties or assets, other
than in the ordinary course of business consistent with past practice;
(iii) not create or permit to be created any Lien on any of its
properties, except such Liens which, individually or in the aggregate,
would not reasonably be expected to have an Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇;
(iv) except in the ordinary course of business, consistent with prior
practice, not increase the compensation or fringe benefits payable or to
become payable to any of its directors, officers, employees, advisers,
consultants, salesmen or agents or otherwise alter, modify or change the
terms of their employment or engagement, or grant any severance or
termination pay not currently required to be paid under existing severance
plans to, or enter into any employment, consulting or severance agreement
with, any present or former director, officer or other employee of ▇▇▇▇▇▇
▇▇▇▇▇ or any of its Subsidiaries, or establish, adopt, enter into or amend
or terminate any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of directors, officers
or employees;
(v) not settle any pending or threatened material Legal Action or
any other Legal Action which relates to the Merger or the Transactions;
(vi) not (A) enter into, amend or terminate (1) any Material
Agreement, except in the ordinary course of business, consistent with prior
practice, in accordance with the terms thereof and which individually or in
the aggregate would not reasonably be expected to have an Adverse Effect on
▇▇▇▇▇▇ ▇▇▇▇▇, or (2) any Contractual Obligation or transaction with an
Affiliate that would be required to be disclosed pursuant to Item 404 of
Regulation S-K promulgated by the SEC, or (B) enter into or amend any
Contractual Obligation which restrains, limits or impedes ▇▇▇▇▇▇ ▇▇▇▇▇ or
any of its Subsidiaries (or, after the Merger, the Surviving Corporation or
any of its Subsidiaries) from freely engaging in any business or competing
anywhere in the world (including, without limitation, in connection with
any joint venture or similar Entity that provides for such joint venture or
Entity to be the exclusive provider of records management services in a
particular geographic area);
(vii) not, directly or indirectly, (A) sell or transfer or agree to
sell or transfer any shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock, ▇▇▇▇▇▇ ▇▇▇▇▇
Preferred Stock or capital stock or other equity interests of it or any of
its Subsidiaries directly or indirectly beneficially owned
32
by ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its Subsidiaries; or (B) split, combine or
reclassify the ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock, ▇▇▇▇▇▇ ▇▇▇▇▇ Preferred Stock or
any other outstanding capital stock or other equity interests of it or any
of ▇▇▇▇▇▇ ▇▇▇▇▇'▇ Subsidiaries;
(viii) not, directly or indirectly, (A) amend its Organic Documents;
(B) issue, grant or sell any Option Securities, Convertible Securities,
shares of capital stock or other equity interests of ▇▇▇▇▇▇ ▇▇▇▇▇ or its
Subsidiaries or any other ownership interests (including, without
limitation, stock appreciation rights or phantom stock), other than (1)
shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock reserved for issuance on the date of
this Agreement pursuant to the exercise of ▇▇▇▇▇▇ ▇▇▇▇▇ Options outstanding
on the date of this Agreement, (2) dividends paid in kind in accordance
with the terms of the ▇▇▇▇▇▇ ▇▇▇▇▇ Preferred Stock, or (3) shares of
preferred stock of ▇▇▇▇▇▇ ▇▇▇▇▇ that satisfy the definition of Permitted
Indebtedness ("Redeemable Preferred Stock"); (C) incur any Indebtedness
other than borrowings under existing agreements as in effect on the date of
this Agreement and under agreements representing Permitted Indebtedness so
long as the proceeds of such borrowings are used in a manner consistent
with this Section 5.2; or (D) redeem, purchase or otherwise acquire
directly or indirectly any of its capital stock (other than the ▇▇▇▇▇▇
▇▇▇▇▇ Preferred Stock or Redeemable Preferred Stock);
(ix) not declare, set aside or pay any Distribution with respect to
its capital stock (other than (A) the Stock Dividend, (B) in accordance
with the terms of the ▇▇▇▇▇▇ ▇▇▇▇▇ Preferred Stock or (C) in accordance
with the terms of any Redeemable Preferred Stock issued in accordance with
Section 5.2(viii));
(x) not change any accounting methods used by it unless required in
accordance with GAAP;
(xi) not acquire or agree to acquire by merging or consolidating
with, or by purchasing any of the assets of or equity in, or by any other
manner, any business of any Person (A) having a fair market value (which
amount shall include the maximum amount of any earnout or other contingent
payment) in excess of $25 million individually or $100 million in the
aggregate or (B) that is primarily engaged in a line of business different
than those of ▇▇▇▇▇▇ ▇▇▇▇▇ and its Subsidiaries, regardless of fair market
value; and
(xii) not authorize or enter into an agreement to do any of the
foregoing.
Section 5.3. Conduct of the Business of Iron Mountain Pending the Merger.
-----------------------------------------------------------
Between the date of this Agreement and the Closing Date, Iron Mountain will, and
will ensure that each of its Subsidiaries will (except (i) as may be described
on Section 5.3 of the Iron Mountain Disclosure Schedule, (ii) as may be required
or expressly contemplated or permitted by the terms of this Agreement, or (iii)
as may be consented to by ▇▇▇▇▇▇ ▇▇▇▇▇, which consent shall not be unreasonably
withheld or delayed):
(i) operate its business in the normal, usual and customary manner in
the ordinary course of business, consistent with prior practice, and use
all reasonable efforts, consistent with past practice, to maintain and
preserve its business organization, assets, employees and advantageous
business relationships;
33
(ii) except as disclosed in Section 5.3(ii) of the Iron Mountain
Disclosure Schedule, not sell or otherwise dispose of or contract to sell
or otherwise dispose of any material amount of properties or assets, other
than in the ordinary course of business consistent with past practice;
provided, however, that Iron Mountain may sell or otherwise dispose of or
contract to sell or otherwise dispose of any properties or assets which
generated not more than $50 million in revenues for the fiscal year ended
December 31, 1998, excluding, for purposes of such calculation, those
properties and assets described in Section 5.3(ii) of the Iron Mountain
Disclosure Schedule;
(iii) not create or permit to be created any Lien on any of its
properties, except such Liens which, individually or in the aggregate,
would not reasonably be expected to have an Adverse Effect on Iron
Mountain;
(iv) not settle any pending or threatened Legal Action which relates
to the Merger or the Transactions;
(v) not enter into, amend or terminate any Contractual Obligation
or transaction with an Affiliate that would be required to be disclosed
pursuant to Item 404 of Regulation S-K promulgated by the SEC;
(vi) not, directly or indirectly, (A) sell or transfer or agree to
sell or transfer any shares of Iron Mountain Common Stock, preferred stock
or capital stock or other equity interests of it or any of its Subsidiaries
directly or indirectly beneficially owned by Iron Mountain or any of its
Subsidiaries; provided, however, that Iron Mountain or one of its
Subsidiaries may transfer its shares of capital stock of, or other equity
interests in, any Subsidiary so long as such transaction would be permitted
under Section 5.3(ii); or (B) split, combine or reclassify the Iron
Mountain Common Stock or any other outstanding capital stock or other
equity interests of it or any of Iron Mountain's Subsidiaries;
(vii) not, directly or indirectly, (A) amend its Organic Documents or
(B) issue, grant or sell any Option Securities (other than under the Iron
Mountain Option Plans), Convertible Securities, shares of capital stock or
other equity interests of Iron Mountain or its Subsidiaries, other than (1)
issuances by Iron Mountain of additional shares of Iron Mountain Common
Stock in an aggregate amount not to exceed an additional ten percent (10%)
of the number of outstanding shares of Iron Mountain Common Stock as of the
date of this Agreement in connection with acquisitions by Iron Mountain or
any of its Subsidiaries, (2) shares of Iron Mountain Common Stock pursuant
to the exercise of Iron Mountain Options under the Iron Mountain Option
Plans and (3) shares of preferred stock of Iron Mountain that do not
represent Option Securities, Convertible Securities or Voting Debt);
(viii) not declare, set aside or pay any Distribution with respect to
its capital stock (other than in accordance with the terms of any preferred
stock issued in accordance with Section 5.3(vii) hereof);
34
(ix) not change any accounting methods used by it unless required in
accordance with GAAP;
(x) not acquire or agree to acquire by merging or consolidating with,
or by purchasing any of the assets of or equity in, or by any other manner,
businesses or Persons (A) having a fair market value (which amount shall
include the maximum amount of any earnout or other contingent payment) in
excess of $200 million in the aggregate or (B) that are primarily engaged
in a line of business different than those of Iron Mountain and its
Subsidiaries, regardless of fair market value; and
(xi) not authorize or enter into an agreement to do any of the
foregoing.
Section 5.5. Control of Operations. Nothing contained in this Agreement
---------------------
shall give to ▇▇▇▇▇▇ ▇▇▇▇▇ or Iron Mountain, directly or indirectly, rights to
control or direct the operations of Iron Mountain or ▇▇▇▇▇▇ ▇▇▇▇▇, as the case
may be, prior to the Effective Time. Prior to the Effective Time, each of ▇▇▇▇▇▇
▇▇▇▇▇ and Iron Mountain shall exercise, consistent with the terms and conditions
of this Agreement, complete control and supervision of its operations.
Section 5.5. Agreement to Cooperate.
----------------------
(a) Each of the Parties shall use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under Applicable Law to consummate the Merger and
make effective the Transactions, including using its reasonable best efforts (i)
to prepare and file with the applicable Authorities as promptly as practicable
after the execution of this Agreement all requisite applications and amendments
thereto, together with related information, data and exhibits, necessary to
request issuance of orders approving the Merger and the Transactions by all such
applicable Authorities, each of which must be obtained or become final in order
to satisfy the condition applicable to it set forth in Section 6.1(c); (ii) to
obtain all necessary or appropriate waivers, consents and approvals; (iii) to
effect all necessary registrations, filings and submissions (including without
limitation filings under federal or state securities laws or the HSR Act and any
other submissions requested by the SEC, the FTC or the DOJ); and (iv) to lift
any injunction or other legal bar to the Merger and the Transactions. Each of
the Parties recognizes that the consummation of the Merger and the Transactions
is subject to the preacquisition notification requirements of the HSR Act. Each
agrees that it will file with the Antitrust Division of the DOJ and the FTC
within fifteen (15) days of the date of this Agreement a Notification and Report
Form in a manner so as to constitute substantial compliance with the
notification requirements of the HSR Act. Each Party covenants and agrees to use
its reasonable best efforts to achieve the prompt termination or expiration of
any waiting period or any extension thereof under the HSR Act and to obtain any
clearance required under the HSR Act for the consummation of the Merger, which
efforts, for purposes of this Agreement, shall not require either Party, the
Surviving Corporation or any of their respective Subsidiaries in order to obtain
any consent or clearance from the DOJ, FTC or any other Authority to hold
separate, sell or otherwise dispose of any assets, the effect of any of which,
in the reasonable judgment of such Party, would be to materially impair the
value of the Merger to such Party.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇ will use its reasonable best efforts on or prior to the
Closing Date to obtain the satisfaction of the conditions specified in Sections
6.1 and 6.2. Iron Mountain will use
35
its reasonable best efforts on or prior to the Closing Date to obtain the
satisfaction of the conditions applicable to it specified in Sections 6.1 and
6.3.
(c) The parties shall cooperate with one another in the preparation,
execution and filing of all Returns, questionnaires, applications, or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp Taxes or any Plan, Benefit Arrangement or
employment arrangement, any transfer, recording, registration and other fees,
and any similar Taxes which become payable in connection with the Transactions
that are required or permitted to be filed on or before the Effective Time.
(d) Iron Mountain shall cause its independent accountants, and shall use
its reasonable best efforts to cause any other independent accountants that have
audited any financial statements of businesses acquired by Iron Mountain that
are required to be included or incorporated by reference in the Registration
Statement, to cooperate with ▇▇▇▇▇▇ ▇▇▇▇▇ and to consent to the use of their
audit reports on audited financial statements for Iron Mountain or such other
businesses for inclusion in the Registration Statement. Without limiting the
generality of the foregoing, Iron Mountain agrees that it will (i) consent to
the use of such audited financial statements in any registration statement or
other document filed by ▇▇▇▇▇▇ ▇▇▇▇▇ under the Securities Act or the Exchange
Act, and (ii) execute and deliver, and cause its officers to execute and
deliver, such "representation" letters as are customarily delivered in
connection with audits and as ▇▇▇▇▇▇ ▇▇▇▇▇'▇ independent accountants may
reasonably request under the circumstances.
(e) ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron Mountain (i) shall supply consolidated financial
statements for it and, to the extent required under Regulation S-X under the
Securities Act, any acquired businesses, (and any and all documents and consents
related thereto) which comply with Regulation S-X under the Securities Act and
the applicable published rules and regulations thereunder for inclusion in any
registration statement or other public filing of the other Party under the
Securities Act and the Exchange Act, and any other offering circular or document
used by ▇▇▇▇▇▇ ▇▇▇▇▇ or Iron Mountain, as the case may be, in any other
offering, whether public or private, and (ii) shall use its reasonable best
efforts to cause their respective independent accountants to cooperate with the
other Party in connection with the foregoing (including, without limitation,
using reasonable best efforts to cause such independent accountants to deliver
so-called "comfort letters" and written consents relating to the foregoing);
provided, however, that ▇▇▇▇▇▇ ▇▇▇▇▇ or Iron Mountain, as the case may be, shall
reimburse the other for its reasonable out-of-pocket expenses incurred in
connection with its compliance with this Section 5.5(e) (other than with respect
to any services that would ordinarily be provided by such accountants). Without
limiting the generality of the foregoing, ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron Mountain each
agrees that it will (i) consent to the use of such audited financial statements
in any such registration statement, document or circular and (ii) execute and
deliver, and cause its officers to execute and deliver, such "representation"
letters as are customarily delivered in connection with audits and as ▇▇▇▇▇▇
▇▇▇▇▇'▇ and Iron Mountain's independent accountants may reasonably request under
the circumstances.
Section 5.6. Affiliate Agreements; Registration Rights Agreement.
---------------------------------------------------
(a) Prior to the Closing Date, Iron Mountain shall deliver to ▇▇▇▇▇▇ ▇▇▇▇▇
a letter identifying all Persons who are, at the time this Agreement is
submitted to the Stockholders, "affiliates" of Iron Mountain for purposes of
Rule 145 under the Securities Act. Iron Mountain shall
36
use its reasonable best efforts to cause each such "affiliate", to deliver to
▇▇▇▇▇▇ ▇▇▇▇▇ on or prior to the Closing Date a written agreement (an "Affiliate
Agreement") substantially in the form attached hereto as Exhibit 5.6(a).
(b) ▇▇▇▇▇▇ ▇▇▇▇▇ agrees that it will expressly assume the rights and
obligations of Iron Mountain under that certain Amended and Restated
Registration Rights Agreement dated as of June 12, 1997 among Iron Mountain,
certain principal stockholders of Iron Mountain and such other stockholders of
Iron Mountain as are party thereto (the "Registration Rights Agreement") with
respect to shares of ▇▇▇▇▇▇ ▇▇▇▇▇ Common Stock to be issued in the Merger and
that for purposes of the Registration Rights Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇ Common
Stock shall be considered "Registrable Securities". ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron
Mountain agree that the Registration Rights Agreement will be amended as of the
Effective Time to join (the "Registration Rights Agreement Joinder") those
▇▇▇▇▇▇ ▇▇▇▇▇ Principal Shareholders who become party to the ▇▇▇▇▇▇ ▇▇▇▇▇
Shareholders' Agreement on or before November 3, 1999 (together with their
Permitted Assignees (as defined in the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders' Agreement)),
with respect to Subject Shares (as defined in the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders'
Agreement), for the benefit of such ▇▇▇▇▇▇ ▇▇▇▇▇ Principal Shareholders, which
amendment to the Registration Rights Agreement shall be substantially in the
form attached hereto as Exhibit 5.6(b).
--------------
Section 5.7. No Solicitation.
---------------
(a) ▇▇▇▇▇▇ ▇▇▇▇▇ shall not, nor shall it permit any of its Representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it) to, initiate, solicit or facilitate, directly or indirectly, any
inquiries or the making of any proposal with respect to an Other Transaction,
engage in any discussions or negotiations concerning, or provide to any other
Person any information or data relating to, ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its
Subsidiaries for the purposes of, or otherwise cooperate in any way with or
assist or participate in, facilitating any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, a proposal
to seek or effect an Other Transaction, or agree to or endorse any Other
Transaction; provided, however, that, notwithstanding anything to the contrary
in this Agreement, prior to the approval of this Agreement and the Transactions
by the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders, ▇▇▇▇▇▇ ▇▇▇▇▇ may engage in discussions or
negotiations with, and may furnish information concerning ▇▇▇▇▇▇ ▇▇▇▇▇ and its
Subsidiaries and their business, properties and assets to, a third party who,
without any solicitation, initiation, encouragement, discussion or negotiation,
directly or indirectly, by or with ▇▇▇▇▇▇ ▇▇▇▇▇, any of its Subsidiaries or any
of their respective Representatives, or in furtherance thereof makes a written,
bona fide proposal regarding an Other Transaction that is not subject to any
material contingencies relating to financing and that is reasonably capable of
being financed and is financially superior to the consideration to be received
by the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders pursuant to the Merger (as determined in good
faith by ▇▇▇▇▇▇ ▇▇▇▇▇'▇ Board of Directors after consultation with ▇▇▇▇▇▇
▇▇▇▇▇'▇ financial advisors) if (1) ▇▇▇▇▇▇ ▇▇▇▇▇'▇ Board of Directors determines
in good faith, after consultation with ▇▇▇▇▇▇ ▇▇▇▇▇'▇ outside legal counsel,
that such action is required for ▇▇▇▇▇▇ ▇▇▇▇▇'▇ Board of Directors to act in a
manner consistent with its fiduciary duties under Applicable Law and (2) prior
to furnishing information with respect to ▇▇▇▇▇▇ ▇▇▇▇▇ and its Subsidiaries to
such third party, ▇▇▇▇▇▇ ▇▇▇▇▇ shall have received from such third party an
executed confidentiality agreement in reasonably customary form on terms not
more favorable to such Entity than the terms contained in the Confidentiality
Agreement. Notwithstanding the foregoing, the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇
may take and disclose to the ▇▇▇▇▇▇ ▇▇▇▇▇ Shareholders a position with regard to
37
a tender offer or exchange offer to the extent required by Rule 14e-2(a) under
the Exchange Act. In the event of a purported termination of this Agreement by
▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to Section 7.1(c)(ii), any violation prior to such
termination of the restrictions set forth in the preceding sentence (after
giving effect to the proviso contained therein) by any investment banker or
financial advisor retained by ▇▇▇▇▇▇ ▇▇▇▇▇, whether or not such Person is
purporting to act on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its Subsidiaries or
otherwise, shall be deemed to constitute a breach of this Section 5.7(a) by
▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ shall promptly advise Iron Mountain of, and (unless
the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇ concludes that such disclosure is
inconsistent with its fiduciary duties under Applicable Law) communicate the
material terms of, any proposal it may receive, or any inquiries it receives
which may reasonably be expected to lead to such a proposal relating to an Other
Transaction, and the identity of the Person making it. ▇▇▇▇▇▇ ▇▇▇▇▇ shall
further advise Iron Mountain of the status and changes in the material terms
(unless the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇ concludes that such disclosure is
inconsistent with its fiduciary duties under Applicable Law) of any such
proposal or inquiry (or any amendment to any of them). During the term of this
Agreement, except as contemplated or permitted by this Section 5.7(a), ▇▇▇▇▇▇
▇▇▇▇▇ shall not enter into any agreement (other than a confidentiality
agreement), whether oral or written and whether or not legally binding, with any
Person that provides for, or in any way facilitates, an Other Transaction.
(b) Iron Mountain shall not, nor shall it permit any of its
Representatives (including, without limitation, any investment banker, attorney
or accountant retained by it) to, initiate, solicit or facilitate, directly or
indirectly, any inquiries or the making of any proposal with respect to an Iron
Mountain Transaction, engage in any discussions or negotiations concerning, or
provide to any other Person any information or data relating to, Iron Mountain
or any of its Subsidiaries for the purposes of, or otherwise cooperate in any
way with or assist or participate in, facilitating any inquiries or the making
of any proposal which constitutes, or may reasonably be expected to lead to, a
proposal to seek or effect an Iron Mountain Transaction, or agree to or endorse
any Iron Mountain Transaction; provided, however, that, notwithstanding anything
to the contrary in this Agreement, prior to the approval of this Agreement and
the Transactions by the Iron Mountain Stockholders, Iron Mountain may engage in
discussions or negotiations with, and may furnish information concerning Iron
Mountain and its Subsidiaries and their business, properties and assets to, a
third party who, without any solicitation, initiation, encouragement, discussion
or negotiation, directly or indirectly, by or with Iron Mountain, any of its
Subsidiaries or any of their respective Representatives, or in furtherance
thereof makes a written, bona fide proposal regarding an Iron Mountain
Transaction that is not subject to any material contingencies relating to
financing and that is reasonably capable of being financed and is financially
superior to the consideration to be received by the Iron Mountain Stockholders
pursuant to the Merger (as determined in good faith by Iron Mountain's Board of
Directors after consultation with Iron Mountain's financial advisors) if (1)
Iron Mountain's Board of Directors determines in good faith, after consultation
with Iron Mountain's outside legal counsel, that such action is required for
Iron Mountain's Board of Directors to act in a manner consistent with its
fiduciary duties under Applicable Law and (2) prior to furnishing information
with respect to Iron Mountain and its Subsidiaries to such third party, Iron
Mountain shall have received from such third party an executed confidentiality
agreement in reasonably customary form on terms not more favorable to such
Entity than the terms contained in the Confidentiality Agreement.
Notwithstanding the foregoing, the Board of Directors of Iron Mountain may take
and disclose to the Iron Mountain Stockholders a position with regard to a
tender offer or exchange offer to the extent required by Rule 14e-2(a) under the
Exchange Act. In the event of a purported termination of this Agreement by Iron
38
Mountain pursuant to Section 7.1(d)(ii), any violation prior to such termination
of the restrictions set forth in the preceding sentence (after giving effect to
the proviso contained therein) by any investment banker or financial advisor
retained by Iron Mountain, whether or not such Person is purporting to act on
behalf of Iron Mountain or any of its Subsidiaries or otherwise, shall be deemed
to constitute a breach of this Section 5.7(b) by Iron Mountain. Iron Mountain
shall promptly advise ▇▇▇▇▇▇ ▇▇▇▇▇ of, and (unless the Board of Directors of
Iron Mountain concludes that such disclosure is inconsistent with its fiduciary
duties under Applicable Law) communicate the material terms of, any proposal it
may receive, or any inquiries it receives which may reasonably be expected to
lead to such a proposal relating to an Iron Mountain Transaction, and the
identity of the Person making it. Iron Mountain shall further advise ▇▇▇▇▇▇
▇▇▇▇▇ of the status and changes in the material terms (unless the Board of
Directors of ▇▇▇▇▇▇ ▇▇▇▇▇ concludes that such disclosure is inconsistent with
its fiduciary duties under Applicable Law) of any such proposal or inquiry (or
any amendment to any of them). During the term of this Agreement, except as
contemplated or permitted by this Section 5.7(b), Iron Mountain shall not enter
into any agreement (other than a confidentiality agreement), whether oral or
written and whether or not legally binding, with any Person that provides for,
or in any way facilitates, an Iron Mountain Transaction.
(c) In the event ▇▇▇▇▇▇ ▇▇▇▇▇ or Iron Mountain shall determine to provide
any information or negotiate as described above, or shall receive any offer of
the type referred to above, it shall (i) immediately provide the other Party a
copy of all information provided to the third party, and (ii) inform the other
Party that information is to be provided, that negotiations are to take place or
that an offer has been received, as the case may be.
Section 5.8. Directors' and Officers' Indemnification and Insurance.
------------------------------------------------------
(a) From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless each Person who is now, or has been at any
time prior to the date of this Agreement or who becomes prior to the Effective
Time, an officer or director of ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its Subsidiaries
(collectively, the "Indemnified Parties") against all Claims or amounts that,
with the approval of the Surviving Corporation as to settlements only, are paid
in settlement of or otherwise in connection with any Claim based in whole or in
part on or arising in whole or in part out of the fact that such Person is or
was a director or officer of ▇▇▇▇▇▇ ▇▇▇▇▇ or any of its Subsidiaries and
pertaining to any matter existing or arising out of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, any
Claims arising out of this Agreement, the Merger or any Transaction), whether
asserted or claimed prior to, at or after the Effective Time, in each case to
the fullest extent currently provided under ▇▇▇▇▇▇ ▇▇▇▇▇'▇ or the applicable
Subsidiary's Organic Documents (but only to the extent permitted under
Applicable Law), and shall pay any expenses, as incurred, in advance of the
final disposition of any such action or proceeding to each Indemnified Party to
the fullest extent permitted under Applicable Law, upon receipt from the
Indemnified Party to whom expenses are advanced of an undertaking to repay such
advances to the extent required under Applicable Law. Without limiting the
foregoing, in the event any such Claim is brought against any of the Indemnified
Parties, such Indemnified Parties may retain counsel (including local counsel)
satisfactory to them and which shall be reasonably satisfactory to the Surviving
Corporation, and the Surviving Corporation shall pay all reasonable fees and
expenses of such counsel for such Indemnified Parties. The Indemnified Parties
as a group shall retain only one law firm (plus appropriate local counsel) to
represent them with respect to each such Claim unless there is, as determined by
counsel to the Indemnified Parties, under applicable
39
standards of professional conduct, a conflict or a reasonable likelihood of a
conflict on any significant issue between the positions of any two or more
Indemnified Parties, in which event such Indemnified Party shall be entitled to
retain separate legal counsel at the expense of the Surviving Corporation.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇, Iron Mountain and the Surviving Corporation shall
maintain ▇▇▇▇▇▇ ▇▇▇▇▇'▇ existing officers' and directors' liability insurance
policy for a period of not less than six (6) years after the Closing Date;
provided, (i) that the Surviving Corporation may substitute therefor policies of
substantially similar coverage and amounts containing terms no less advantageous
to such former directors or officers and (ii) if the existing officers' and
directors' liability insurance expires or is canceled during such period, the
Surviving Corporation will obtain substantially similar officers' and directors'
liability insurance to the extent available. ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron Mountain
agree that the officers and directors of ▇▇▇▇▇▇ ▇▇▇▇▇ on the Closing Date and
their respective heirs and legal representatives shall be third party
beneficiaries of this Section 5.8.
(c) In the event the Surviving Corporation or its successors or assigns
(i) consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or Entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then and in each such case, proper provisions shall be made so that the
successors and assigns of the Surviving Corporation shall assume the obligations
set forth in this Section 5.8.
Section 5.9. Notification of Certain Matters. Each Party shall give prompt
-------------------------------
written notice to the other of the occurrence or non-occurrence of any Event
the occurrence or non-occurrence of which would be likely to cause in any
material respect (i) any representation or warranty made by it contained in this
Agreement to be untrue or inaccurate, (ii) any change to be made in the ▇▇▇▇▇▇
▇▇▇▇▇ Disclosure Schedule or the Iron Mountain Disclosure Schedule, as the case
may be, or (iii) any failure of ▇▇▇▇▇▇ ▇▇▇▇▇ or Iron Mountain, as the case may
be, to comply with or satisfy, or be able to comply with or satisfy, any
material covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 5.9 shall not limit or otherwise affect the remedies available hereunder
to the Party receiving such notice.
Section 5.10. Public Announcements. Until the Closing, or in the event of
--------------------
termination of this Agreement, each party shall consult with the other before
issuing any press release or otherwise making any public statements with respect
to this Agreement, the Merger or any Transaction and shall not issue any such
press release or make any such public statement without the prior consent of the
other, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, each Party acknowledges and agrees that the other
Party may, without the prior consent of such Party, issue such press releases or
make such public statements as may be required by Applicable Law or by the terms
of any agreement or instrument with any exchange, including without limitation
the NYSE, on which such Party's securities are listed (each, a "Required
Disclosure"), in which case, to the extent practicable, the Party making the
Required Disclosure will consult with, and exercise in good faith, all
reasonable business efforts to agree with the other regarding the nature, extent
and form of such press release or public statement, and, in any event, with
prior notice to the other Party.
40
Section 5.11. Certain Actions Concerning Business Combinations. Neither
------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ nor Iron Mountain will apply, nor will it take any action resulting
in the application of, or otherwise elect to apply, the provisions of applicable
state takeover laws, if any, with respect to or as a result of the Merger or the
Transactions. If any "fair price" or "control share acquisition" or "anti-
takeover" statute, or other similar statute or regulation shall become
applicable to the transactions contemplated hereby, ▇▇▇▇▇▇ ▇▇▇▇▇ and Iron
Mountain and the members of their respective Boards of Directors shall grant
such approvals and take such actions as are necessary so that the Merger and the
Transactions may be consummated as promptly as practicable on the terms
contemplated hereby, and otherwise act to minimize the effects of such statute
or regulation on the Merger and the Transactions.
Section 5.12. Option Securities.
-----------------
(a) Prior to the Effective Time, Iron Mountain and ▇▇▇▇▇▇ ▇▇▇▇▇ shall take
such action as may be necessary to cause each Iron Mountain Option to be
automatically converted in accordance with Section 2.5. At the Effective Time,
all references in the stock option agreements to Iron Mountain shall be deemed
to refer to the Surviving Corporation. As of the Effective Time, the Surviving
Corporation shall assume all of Iron Mountain's obligations with respect to Iron
Mountain Options as so amended.
(b) Without the prior written consent of the other Party, except as set
forth on Section 5.12(b) of the ▇▇▇▇▇▇ ▇▇▇▇▇ Disclosure Schedule, neither Party
will accelerate, or cause an acceleration of, the exercise, exchange or vesting
schedule of any of its Option Securities. Notwithstanding the foregoing, (i)
▇▇▇▇▇▇ ▇▇▇▇▇ may accelerate the vesting of any ▇▇▇▇▇▇ ▇▇▇▇▇ Options described on
Section 5.12(b) of the Pierce Leahy Disclosure Schedule owned by current
employees under the Pierce Leahy Nonqualified Option Plan, which acceleration
shall occur no later than immediately prior to the Effective Time and (ii)
Pierce Leahy may accelerate the vesting of any Pierce Leahy Options described on
Section 5.12(b) of the Pierce Leahy Disclosure Schedule owned by current non-
employee directors of Pierce Leahy, which acceleration shall occur no later than
immediately prior to the Effective Time.
Section 5.13. Tax Treatment. Each of Iron Mountain and Pierce Leahy shall
-------------
use its reasonable best efforts to cause the Merger to qualify as a tax-free
reorganization under the provisions of Section 368(a) of the Code and to obtain
the opinions of counsel referred to in Sections 6.2(d) and 6.3(c).
Section 5.14. Registration Statement and Joint Proxy Statement/Prospectus.
-----------------------------------------------------------
(a) As promptly as practicable after the date of this Agreement, Pierce
Leahy will prepare and file with the SEC a registration statement (the
"Registration Statement") in connection with the registration under the
Securities Act of the Pierce Leahy Common Stock to be issued pursuant to the
Merger, which Registration Statement shall contain (i) a preliminary joint proxy
statement to be mailed by Pierce Leahy and Iron Mountain to their respective
shareholders and stockholders in connection with the vote of such shareholders
and stockholders with respect to the Merger and the Transactions and (ii) a
preliminary prospectus of Pierce Leahy in connection with such registration
under the Securities Act (together, the "Joint Proxy Statement/Prospectus").
Each of Pierce Leahy and Iron Mountain shall use its reasonable best efforts to
(i) have the Registration Statement declared
41
effective under the Securities Act as promptly as practicable after such filing,
and (ii) to cause the Joint Proxy Statement/Prospectus to be mailed to their
respective shareholders and stockholders as promptly as practicable after the
Registration Statement is declared effective under the Securities Act. Pierce
Leahy shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or consenting to service of
process in any jurisdiction in which it has not previously so consented in any
action other than one arising out of the offering of the Pierce Leahy Common
Stock in such jurisdiction) required to be taken to qualify the Pierce Leahy
Common Stock to be issued in the Merger under any applicable state securities or
"blue sky" laws prior to the Effective Time, and Iron Mountain shall furnish all
information concerning Iron Mountain and the Iron Mountain Stockholders as may
be requested in connection with any such action.
(b) Pierce Leahy and Iron Mountain shall cooperate with each other and
provide to each other all information necessary in order to prepare the
Registration Statement. Pierce Leahy and Iron Mountain shall use their
respective reasonable best efforts to respond to any comments of the SEC with
respect to the Registration Statement as promptly as practicable. If at any time
prior to the Effective Time there shall occur any Event with respect to Pierce
Leahy or Iron Mountain or any of their respective Subsidiaries, as the case may
be, or with respect to other information supplied by Pierce Leahy or Iron
Mountain, as the case may be, for inclusion in the Registration Statement, in
either case which Event is required to be described in an amendment of, or a
supplement to, the Joint Proxy Statement/Prospectus or the Registration
Statement, Pierce Leahy or Iron Mountain shall notify the other Party, and such
Event shall be so described, and such amendment or supplement shall be promptly
filed with the SEC and, as required by Applicable Law, disseminated to the
Pierce Leahy Shareholders and the Iron Mountain Stockholders. Pierce Leahy shall
notify Iron Mountain promptly upon (i) the declaration by the SEC of the
effectiveness of the Registration Statement, (ii) the issuance or threatened
issuance of any stop order or other order preventing or suspending the use of
any prospectus relating to the Registration Statement, (iii) any suspension or
threatened suspension of the use of any prospectus relating to the Registration
Statement in any state, (iv) any proceedings commenced or threatened to be
commenced by the SEC or any state securities commission that might result in the
issuance of a stop order or other order or suspension of use or (v) any request
by the SEC to supplement or amend the Joint Proxy Statement/Prospectus after the
effectiveness thereof. Pierce Leahy and, to the extent applicable, Iron
Mountain, shall use their reasonable best efforts to prevent or promptly remove
any stop order or other order preventing or suspending the use of any prospectus
relating to the Registration Statement and to comply with any such request by
the SEC or any state securities commission to amend or supplement the
Registration Statement or the Joint Proxy Statement/Prospectus.
(c) Pierce Leahy and Iron Mountain will notify each other promptly of the
receipt by such Party or its Representatives of any comments from the SEC or its
staff or any other appropriate government official and of any requests by the
SEC or its staff or any other appropriate government official for amendments or
supplements to the Registration Statement or the Joint Proxy
Statement/Prospectus or for additional information and will supply the other
Party with copies of all correspondence between Pierce Leahy, Iron Mountain or
any of their respective Representatives, on the one hand, and the SEC or its
staff or any other appropriate government official, on the other hand, with
respect thereto.
42
(d) None of the information supplied or to be supplied by Pierce Leahy or
Iron Mountain or any Pierce Leahy Shareholder or Iron Mountain Stockholder for
inclusion in (i) the Registration Statement will, at the time the Registration
Statement is filed with the SEC, at any time it is amended or supplemented or at
the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) the Joint Proxy Statement/Prospectus or any other proxy statement or
information furnished to the Pierce Leahy Shareholders or Iron Mountain
Stockholders in connection with the Special Meetings will, at the date it is
first mailed to such shareholders or stockholders or at the time of the
applicable Special Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Joint Proxy Statement/Prospectus and the
Registration Statement will comply as to form in all material respects with the
requirements of the Securities Act.
Section 5.15. Exchange Listing. Pierce Leahy shall use its reasonable
----------------
best efforts to effect, at or before the Effective Time, authorization for
listing on the NYSE, upon official notice of issuance, of the shares of Pierce
Leahy Common Stock to be issued pursuant to the Merger.
Section 5.16. Disclosure Schedules. Iron Mountain shall deliver to
--------------------
Pierce Leahy within thirty (30) days after the date of this Agreement, Sections
4.1(c) (except such sections otherwise required in Section 4.1(c) to be
delivered as of the date of this Agreement) and 4.16(c) of the Iron Mountain
Disclosure Schedule and Pierce Leahy shall deliver to Iron Mountain within
thirty (30) days after the date of this Agreement, Sections 3.1(c) (except such
sections otherwise required in Section 3.1(c) to be delivered as of the date of
this Agreement) and 3.16(c) of the Pierce Leahy Disclosure Schedule. Pierce
Leahy shall deliver to Iron Mountain one (1) business day prior to the Closing
Date an update to Section 3.11(a) of the Pierce Leahy Disclosure Schedule, which
update shall also include the number of Option Securities outstanding (with a
breakdown for each Pierce Leahy Option Plan and an indication of how many Option
Securities are then currently exercisable) under the Pierce Leahy Option Plans,
as of such date; provided, however, that the only changes to the information
contained in Section 3.11(a) of the Pierce Leahy Disclosure Schedule between the
date of this Agreement and the Closing Date shall be changes contemplated or
permitted by this Agreement. Iron Mountain shall deliver to Pierce Leahy one (1)
business day prior to the Closing Date an update to Section 4.11(a) of the Iron
Mountain Disclosure Schedule, which update shall also include the number of
Option Securities outstanding (with a breakdown for each Iron Mountain Option
Plan and an indication of how many Option Securities are then currently
exercisable) under the Iron Mountain Option Plans, as of such date; provided,
however, that the only changes to the information contained in Section 4.11(a)
of the Iron Mountain Disclosure Schedule between the date of this Agreement and
the Closing Date shall be changes contemplated or permitted by this Agreement.
All other Sections of the Pierce Leahy Disclosure Schedule and the Iron Mountain
Disclosure Schedule shall have been delivered on the date of this Agreement.
Section 5.17. Pierce Leahy Indebtedness. Pierce Leahy shall assist Iron
-------------------------
Mountain in, and shall take such actions as Iron Mountain may reasonably request
in order to facilitate, the amendment, repayment, redemption, refinancing or
other restructuring of outstanding Indebtedness of Pierce Leahy on or after the
Effective Time in connection with the Merger.
43
Section 5.18. Pierce Leahy Command Company. Prior to or at the Effective
----------------------------
Time, Pierce Leahy shall cause J. Peter Pierce to transfer his entire ownership
interests in PLC Command I, Inc. and PLC Command II, Inc. to Pierce Leahy or one
of its Subsidiaries for no consideration, such that, after giving effect to such
transfer, PLC Command I, L.P. and PLC Command II, L.P. are wholly owned
Subsidiaries of Pierce Leahy.
Section 5.19. Stock Dividend. Prior to the Effective Time the Board of
--------------
Directors of Pierce Leahy may declare and pay a stock dividend on outstanding
shares of Pierce Leahy Common Stock in an amount equal to one-tenth (1/10) of a
share of Pierce Leahy Common Stock for each share of Pierce Leahy Common Stock
outstanding (the "Stock Dividend"). Pierce Leahy shall convert a holder's right
to receive shares of Pierce Leahy Common Stock pursuant to the Stock Dividend
into a right to receive the highest whole number of shares of Pierce Leahy
Common Stock payable with respect to certificates representing Pierce Leahy
Common Stock plus cash in lieu of fractional shares in a reasonable amount based
on the market value of Pierce Leahy Common Stock, as Pierce Leahy shall
determine. Upon the effectiveness of the Stock Dividend, the number of shares
subject to each Pierce Leahy Option and the exercise price thereof shall be
proportionately adjusted to give effect to the Stock Dividend.
Section 5.20. Pierce Leahy Shareholders' Agreement. Pierce Leahy shall
------------------------------------
use its reasonable best efforts to cause each Pierce Leahy Principal Shareholder
who has not executed the Pierce Leahy Shareholders' Agreement on the date of
this Agreement to execute and become party to the Pierce Leahy Shareholders'
Agreement on or before November 3, 1999. Pierce Leahy shall keep Iron Mountain
informed of the results of such efforts and shall deliver to Iron Mountain
original counterparts executed by each Pierce Leahy Principal Shareholder who
has become party to such Agreement. In the event Iron Mountain does not receive
original, executed counterparts of the Pierce Leahy Shareholders' Agreement from
all Pierce Leahy Principal Shareholders on or before November 3, 1999, Iron
Mountain shall have the right to terminate this Agreement in accordance with
this Section and Section 7.1(d)(iv) by delivering written notice thereof to
Pierce Leahy on or before 5:00 p.m. local time on November 8, 1999.
Section 5.21. Termination of Plans. At least one (1) day prior to the
--------------------
Closing Date, Pierce Leahy shall, at the request of Iron Mountain, take all
actions necessary to terminate its participation in any Plan that complies or is
intended to comply with Section 401 of the Code. If such a Plan is terminated in
accordance with this Section 5.21, benefit accruals, including contributions of
salary reduction contributions, if any, shall cease. For a period of three (3)
years following the Closing Date, if the Surviving Corporation maintains any
Plan intended to comply with Section 401 of the Code, service with Pierce Leahy
prior to the Closing Date shall, to the extent permitted by ERISA and the Code,
count as service with the Surviving Corporation for purposes of the
participation, vesting and benefit accrual provisions of any such Plan to the
extent such service is recognized for similarly situated employees of Iron
Mountain as of the Closing Date; provided, however, that there may be a
reasonable delay in the effective date of participation in any such Plan; and
provided, further, that participation may be limited by the Surviving
Corporation to one such Plan if a similar limitation is imposed by the Surviving
Corporation with respect to Iron Mountain employees as of the Closing Date.
44
ARTICLE 6.
CLOSING CONDITIONS
Section 6.1. Conditions to Obligations of Each Party to Effect the
-----------------------------------------------------
Merger. The respective obligations of each Party to effect the Merger shall be
------
subject to the satisfaction at or prior to the Effective Time of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) This Agreement, the Merger and the Transactions shall have been
approved and adopted in accordance with the PBCL and the DGCL by the affirmative
vote of the Pierce Leahy Shareholders and the Iron Mountain Stockholders,
respectively, holding at least the minimum number of shares of Pierce Leahy
Common Stock and Iron Mountain Common Stock, as applicable, then issued and
outstanding as are required by Applicable Law, Pierce Leahy's Organic Documents
and Iron Mountain's Organic Documents, as applicable, for such approval and
adoption;
(b) As of the Closing Date, no Legal Action shall be pending by or before
any Authority seeking to restrain, prohibit, make illegal or delay materially,
or to impose any Adverse conditions, or which might, in the reasonable business
judgment of Iron Mountain or Pierce Leahy, as the case may be, reasonably be
expected to have an Adverse Effect on the Surviving Corporation and its
Subsidiaries taken as a whole assuming consummation of the Merger;
(c) Other than the filing of the certificate of merger in accordance with
the DGCL and articles of merger in accordance with the PBCL, all authorizations,
consents, waivers, orders or approvals required to be obtained, and all filings,
submissions, registrations, notices or declarations required to be made, by Iron
Mountain or Pierce Leahy or any of their respective Subsidiaries prior to the
consummation of the Merger and the Transactions shall have been obtained from,
and made with, all required Authorities, except for such authorizations,
consents, waivers, orders, approvals, filings, registrations, notices or
declarations the failure to obtain or make would not, in the reasonable judgment
of Pierce Leahy or Iron Mountain, as applicable, assuming consummation of the
Merger, reasonably be expected to have an Adverse Effect on the Surviving
Corporation;
(d) The waiting periods (and any extension thereof) applicable to the
Merger under the HSR Act shall have expired or been terminated, and neither the
FTC, DOJ nor any other Authority shall have authorized the institution of
enforcement proceedings (that have not been dismissed or otherwise disposed of)
to delay, prohibit, or otherwise restrain the transactions contemplated by the
Agreement;
(e) The shares of Pierce Leahy Common Stock issuable to Iron Mountain
Stockholders pursuant to this Agreement shall have been approved for listing on
the NYSE, subject only to official notice of issuance; and
(f) The Registration Statement shall have been declared effective, and no
stop order suspending the effectiveness of the Registration Statement shall be
in effect.
45
Section 6.2. Conditions to Obligations of Iron Mountain. The
------------------------------------------
obligations of Iron Mountain to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions, any
or all of which may be waived, in whole or in part, to the extent permitted by
Applicable Law:
(a) The representations and warranties of Pierce Leahy contained in
Section 3.11(a) of the Pierce Leahy Disclosure Schedule (as updated pursuant to
Section 5.16) shall be true and correct in all material respects at and as of
the Closing Date with the same force and effect as though made on and as of such
date, and all other representations and warranties of Pierce Leahy contained in
this Agreement or otherwise made in connection with the Merger and the
Transactions shall be true and correct at and as of the Closing Date with the
same force and effect as though made on and as of such date except those which
speak as of a certain date which shall continue to be true and correct as of
such date on the Closing Date, except for such failure of such other
representations and warranties to be true and correct as would not reasonably be
expected to have an Adverse Effect on Pierce Leahy or the Surviving Corporation;
each and all of the covenants and conditions to be performed or satisfied by
Pierce Leahy hereunder at or prior to the Closing Date shall have been duly
performed or satisfied in all material respects; and Pierce Leahy shall have
furnished Iron Mountain with such certificates and other documents evidencing
Pierce Leahy's compliance with the foregoing provisions as Iron Mountain shall
have reasonably requested;
(b) As of the Closing Date, there shall not have occurred and be
continuing any Adverse Change affecting Pierce Leahy from the condition thereof
(financial and other) reflected in the most recent Pierce Leahy Financial
Statements;
(c) Each of the officers and directors of Pierce Leahy (other than J.
Peter Pierce, who shall continue as the President and as a director of the
Surviving Corporation) and each trustee under each Plan shall have submitted his
or her unqualified written resignation, dated as of the Closing Date, from all
such positions held with Pierce Leahy and as a trustee for each such Plan;
(d) Iron Mountain shall have received a favorable opinion, dated the
Closing Date, of Sullivan & Worcester LLP, its special tax counsel, to the
effect that this Agreement constitutes a tax-free plan of reorganization in
accordance with the provisions of Section 368(a) of the Code and as to the
consequences thereof to the Iron Mountain Stockholders;
(e) J. Peter Pierce shall have executed and delivered an employment
agreement in the form of Exhibit 6.2(e) attached hereto (the "Employment
--------------
Agreement");
(f) The Pierce Leahy Principal Shareholders eligible to become parties to
the Registration Rights Agreement in accordance with Section 5.6(b)shall have
executed and delivered the Registration Rights Agreement Joinder; and
(g) All agreements, certificates, opinions and other documents shall be
reasonably satisfactory in form, scope and substance to Iron Mountain and its
counsel, and Iron Mountain and its counsel shall have received all information
and copies of all documents, including records of corporate proceedings, which
they may reasonably request in connection therewith, such documents where
appropriate to be certified by proper corporate officers.
46
Section 6.3. Conditions to Obligations of Pierce Leahy. The obligations
-----------------------------------------
of Pierce Leahy to effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions, any or all of which may
be waived, in whole or in part to the extent permitted by Applicable Law:
(a) The representations and warranties of Iron Mountain contained in
Section 4.11(a) of the Iron Mountain Disclosure Schedule (as updated pursuant to
Section 5.16) shall be true and correct in all material respects at and as of
the Closing Date with the same force and effect as though made on and as of such
date, and all other representations and warranties of Iron Mountain contained in
this Agreement or otherwise made in connection with the Merger and the
Transactions shall be true and correct at and as of the Closing Date with the
same force and effect as though made on and as of such date except those which
speak as of a certain date which shall continue to be true and correct as of
such date on the Closing Date, except for such failure of such other
representations and warranties to be true and correct as would not reasonably be
expected to have an Adverse Effect on Iron Mountain or the Surviving
Corporation; each and all of the covenants and conditions to be performed or
satisfied by Iron Mountain hereunder at or prior to the Closing Date shall have
been duly performed or satisfied in all material respects; and Iron Mountain
shall have furnished Pierce Leahy with such certificates and other documents
evidencing Iron Mountain's compliance with the foregoing provisions as Pierce
Leahy shall have reasonably requested;
(b) As of the Closing Date, there shall not have occurred and be
continuing any Adverse Change affecting Iron Mountain from the condition thereof
(financial and other) reflected in the most recent Iron Mountain Financial
Statements;
(c) Pierce Leahy shall have received a favorable opinion, dated the
Closing Date, of Cozen and O'Connor, its special tax counsel, to the effect that
this Agreement constitutes a tax-free plan of reorganization in accordance with
the provisions of Section 368(a) of the Code and as to the consequences thereof
to Pierce Leahy;
(d) Iron Mountain shall have executed and delivered the Registration
Rights Agreement Joinder; and
(e) All agreements, certificates, opinions and other documents shall be
reasonably satisfactory in form, scope and substance to Pierce Leahy and its
counsel, and Pierce Leahy and its counsel shall have received all information
and copies of all documents, including records of corporate proceedings, which
they may reasonably request in connection therewith, such documents where
appropriate to be certified by proper corporate officers.
ARTICLE 7.
TERMINATION, AMENDMENT AND WAIVER
Section 7.1. Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time, whether before or after approval of this Agreement,
the Merger and the Transactions by the Pierce Leahy Shareholders and the Iron
Mountain Stockholders as follows:
(a) by mutual consent of Iron Mountain and Pierce Leahy;
47
(b) by either Iron Mountain or Pierce Leahy:
(i) if any permanent injunction, decree, judgment, statute or regulation
of or by any Authority preventing the consummation of the Merger shall have
become final and nonappealable; or
(ii) if the Merger and the Transactions fail to receive the approval
required by Applicable Law and the Organic Documents by vote of the Pierce Leahy
Shareholders or the Iron Mountain Stockholders at the applicable Special
Meeting;
(c) by Pierce Leahy:
(i) in the event (A) Pierce Leahy is not in material breach of any
covenant or agreement in this Agreement, unless such breach is capable of being
cured by and will not prevent or delay consummation of the Merger by or beyond
the Termination Date, and (B) either (I) Iron Mountain is in breach of this
Agreement or its representations or warranties in Section 4.11 shall have become
and continue to be untrue in any material respect (other than as a result of any
action expressly permitted by the terms hereof) or any of its other
representations or warranties shall have become and continue to be untrue and
such breach or untruth would reasonably be expected to have an Adverse Effect on
Iron Mountain or the Surviving Corporation, unless such breach or untruth is
capable of being cured by and will not prevent or delay consummation of the
Merger by or beyond the Termination Date, or (II) the Merger and the
Transactions have not been consummated by the Termination Date;
(ii) prior to the approval and adoption of this Agreement and the
Transactions by the Pierce Leahy Shareholders, if Pierce Leahy's Board of
Directors shall withdraw its recommendation of this Agreement, the Merger and
the Transactions and recommend any Other Transaction to its shareholders;
provided, however, that (i) Pierce Leahy is not then in breach of Section
5.7(a), (ii) prior to such termination, Pierce Leahy has negotiated with Iron
Mountain in good faith to make such adjustments in the terms and conditions of
this Agreement as would enable Pierce Leahy to proceed with the Transactions,
(iii) Pierce Leahy's Board of Directors has determined in good faith (on the
basis of the terms of such Other Transaction and the terms of this Agreement,
after giving effect to any adjustments offered by Iron Mountain pursuant to
clause (ii) above), after consultation with Pierce Leahy's outside legal
counsel, that such termination is required for the Board of Directors to act in
a manner consistent with its fiduciary duties under Applicable Law and (iv)
Pierce Leahy shall provide to Iron Mountain prior written notice of such
termination; or
(iii) if (A) the Board of Directors of Iron Mountain shall (I) withdraw,
modify or chaits recommendation so that it is not in favor of this Agreement,
the Merger or the Transactions, or shall have resolved to do any of the
foregoing, or (II) have recommended or resolved to recommend to the Iron
Mountain Stockholders any Iron Mountain Transaction, or (B) Iron Mountain shall
have entered into or agreed to enter into any Iron Mountain Transaction.
48
(d) by Iron Mountain:
(i) in the event (A) Iron Mountain is not in material breach of any
covenant or agreement in this Agreement, unless such breach is capable of
being cured by and will not prevent or delay consummation of the Merger by
or beyond the Termination Date, and (B) either (I) Pierce Leahy is in
material breach of this Agreement or its representations or warranties in
Section 3.11 shall have become and continue to be untrue in any material
respect (other than as a result of any action expressly permitted by the
terms hereof) or any of its other representations or warranties shall have
become and continue to be untrue and such breach or untruth would
reasonably be expected to have an Adverse Effect on Pierce Leahy or the
Surviving Corporation, unless such breach or untruth is capable of being
cured by and will not prevent or delay consummation of the Merger by or
beyond the Termination Date, or (II) the Merger and the Transactions have
not been consummated prior to the Termination Date;
(ii) prior to the approval and adoption of this Agreement and the
Transactions by the Iron Mountain Stockholders, if Iron Mountain's Board of
Directors shall withdraw its recommendation of this Agreement, the Merger
and the Transactions and recommend any Iron Mountain Transaction to its
stockholders; provided, however, that (i) Iron Mountain is not then in
breach of Section 5.7(b), (ii) Iron Mountain's Board of Directors has
determined in good faith (on the basis of the terms of such Iron Mountain
Transaction and the terms of this Agreement), after consultation with Iron
Mountain's outside legal counsel, that such termination is required for the
Board of Directors to act in a manner consistent with its fiduciary duties
under Applicable Law and (iii) Iron Mountain shall provide to Pierce Leahy
prior written notice of such termination;
(iii) if (A) the Board of Directors of Pierce Leahy shall (I)
withdraw, modify or change its recommendation so that it is not in favor of
this Agreement, the Merger or the Transactions, or shall have resolved to
do any of the foregoing, or (II) have recommended or resolved to recommend
to the Pierce Leahy Shareholders any Other Transaction, or (B) Pierce Leahy
shall have entered into or agreed to enter into any Other Transaction; or
(iv) in accordance with Section 5.20 hereof.
Section 7.2. Effect of Termination. In the event of termination by
---------------------
Pierce Leahy or Iron Mountain pursuant to Section 7.1, written notice shall
promptly be given to the other Party hereto and this Agreement shall forthwith
become void, there shall be no liability on the part of any Party, or any of
their respective officers or directors, to the other and all rights and
obligations of any Party shall cease, except as provided in Sections 5.1, 5.10,
7.2 and 7.5; provided, however, that such termination shall not relieve any
Party from liability for the breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement, or impair the right of
Pierce Leahy, on the one hand, and Iron Mountain, on the other hand, to compel
specific performance of the other Party of its obligations under this Agreement.
Section 7.3. Amendment. This Agreement may be amended by the Parties by
---------
action taken by or on behalf of the respective Boards of Directors thereof at
any time prior to the Effective Time; provided, however, that, after approval of
this Agreement and the Merger by the Pierce Leahy
49
Shareholders or the Iron Mountain Stockholders, no amendment, which under
Applicable Law may not be made without the approval of the applicable
shareholders or stockholders, may be made without such approval. This Agreement
may not be amended except by an instrument in writing signed by the Parties
hereto.
Section 7.4. Waiver. At any time prior to the Effective Time, except
------
to the extent Applicable Law does not permit, either Iron Mountain or Pierce
Leahy may extend the time for the performance of any of the obligations or other
acts of the other, subject, however, to the terms and conditions of Section 7.1,
waive any inaccuracies in the representations and warranties of the other
contained herein or in any document delivered pursuant hereto and waive
compliance by the other with any of the agreements, covenants or conditions
contained herein. Any such extension or waiver shall be valid only if set forth
in an agreement in writing signed by the Party or Parties to be bound thereby.
Section 7.5. Fees, Expenses and Other Payments.
---------------------------------
(a) All costs and expenses incurred in connection with this Agreement, the
Merger and the Transactions, and compliance with Applicable Law and Contractual
Obligations as a consequence hereof and thereof, including, without limitation,
fees and disbursements of counsel, financial advisors and accountants, incurred
by the Parties shall be borne solely and entirely by the Party which has
incurred such costs and expenses (except as otherwise provided in Section
5.5(e)); provided, however, that all filing fees for all filings made by Pierce
Leahy, Iron Mountain or their respective Affiliates in connection with the
Transactions that are associated with the Registration Statement and the HSR Act
shall be borne one half by each Party.
(b) In order to induce Iron Mountain to, among other things, enter into
this Agreement, Pierce Leahy agrees that if this Agreement is terminated (A) by
Iron Mountain pursuant to Section 7.1(d)(iii) hereof, (B) by Pierce Leahy
pursuant to Section 7.1(c)(ii) hereof, or (C) by Pierce Leahy or Iron Mountain
pursuant to Section 7.1(b)(ii) hereof and (1) Pierce Leahy's Board of Directors
shall have materially modified or withdrawn its approval, determination or
recommendation of this Agreement and the Transactions prior to the Pierce Leahy
Special Meeting or (2) there shall have been a proposal for an Other Transaction
(an "Other Proposal") and such proposal shall not have been withdrawn prior to
the Pierce Leahy Special Meeting and within one (1) year thereafter Pierce Leahy
enters into a definitive agreement with respect to such Other Proposal
(including any definitive agreement relating to an Other Proposal offered by the
same proponent or its Affiliate as such Other Proposal), then Pierce Leahy shall
promptly pay Iron Mountain a fee of $35 million. Any payment required by this
Section 7.5(b) shall be made in same day funds to Iron Mountain by Pierce Leahy
no later than five (5) business days following termination of this Agreement by
Pierce Leahy or Iron Mountain, as the case may be, or if applicable, within five
(5) days after execution of such definitive agreement.
(c) In order to induce Pierce Leahy to, among other things, enter into
this Agreement, Iron Mountain agrees that if this Agreement is terminated (A) by
Pierce Leahy pursuant to Section 7.1(c)(iii) hereof, (B) by Iron Mountain
pursuant to Section 7.1(d)(ii) hereof, or (C) by Pierce Leahy or Iron Mountain
pursuant to Section 7.1(b)(ii) hereof and (1) Iron Mountain's Board of Directors
shall have materially modified or withdrawn its approval, determination or
recommendation of this Agreement and the Transactions prior to the Iron Mountain
Special Meeting or (2) there shall have
50
been a proposal for an Iron Mountain Transaction (a "Iron Mountain Proposal")
and such proposal shall not have been withdrawn prior to the Iron Mountain
Special Meeting and within one (1) year thereafter Iron Mountain enters into a
definitive agreement with respect to such Iron Mountain Proposal (including any
definitive agreement relating to an Iron Mountain Proposal offered by the same
proponent or its Affiliate as such Iron Mountain Proposal), then Iron Mountain
shall promptly pay Pierce Leahy a fee of $35 million. Any payment required by
this Section 7.5(c) shall be made in same day funds to Pierce Leahy by Iron
Mountain no later than five (5) business days following termination of this
Agreement by Iron Mountain or Pierce Leahy, as the case may be, or if
applicable, within five (5) days after execution of such definitive agreement.
Section 7.6. Effect of Investigation. The right of any Party to
-----------------------
terminate this Agreement pursuant to Section 7.1 shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Party, or any Person controlling any such party or any of their respective
Representatives whether prior to or after the execution of this Agreement.
ARTICLE 8.
GENERAL PROVISIONS
Section 8.1. Nonsurvival of Representations and Warranties. All
---------------------------------------------
representations and warranties in this Agreement shall not survive the Closing,
and after the Effective Time neither Pierce Leahy, Iron Mountain or any of their
respective Subsidiaries or officers or directors shall have any further
obligation with respect thereto.
Section 8.2. Notices. All notices and other communications given or made
-------
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by giving
written notice) or sent by confirmed electronic transmission to the telecopier
number specified below:
(a) If to Iron Mountain:
745 Atlantic Avenue
Boston, MA 02111
Attention: C. Richard Reese
Chairman and Chief Executive Officer
Telecopier No.: (617) 535-4734
with a copy (which shall not constitute notice) to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attention: William J. Curry, Esq.
Telecopier No.: (617) 338-2880
51
(b) If to Pierce Leahy:
631 Park Avenue
King of Prussia, PA 19406
Attention: J. Peter Pierce
President and Chief Executive Officer
Telecopier No.: (610) 992-8394
with a copy (which shall not constitute notice) to:
Cozen and O'Connor
1900 Market Street
Philadelphia, PA 19103
Attention: Richard J. Busis, Esq.
Telecopier No.: (215) 665-2013
Section 8.3. Headings. The headings contained in this Agreement are for
--------
purposes of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.4. Severability. If any term or provision of this Agreement
------------
shall be held or deemed to be, or shall in fact be, invalid, inoperative,
illegal or unenforceable as applied to any particular case in any jurisdiction
or jurisdictions, or in all jurisdictions or in all cases, because of the
conflict of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination the effect of which is to Affect Materially and
Adversely either Party, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Transactions are fulfilled and consummated to the
maximum extent possible.
Section 8.5. Entire Agreement. This Agreement (together with the
----------------
Confidentiality Agreement, the Pierce Leahy Disclosure Schedule, the Iron
Mountain Disclosure Schedule and the other Collateral Documents delivered in
connection herewith) constitutes the entire agreement of the Parties and
supersedes all prior agreements and undertakings, both written and oral (other
than the Confidentiality Agreement), between the Parties, or any of them, with
respect to the subject matter hereof.
Section 8.6. Assignment. This Agreement shall not be assigned by any
----------
of the Parties hereto (including, without limitation, by operation of law) and
any purported assignment shall be null and void.
52
Section 8.7. Parties in Interest. This Agreement shall be binding upon
-------------------
and inure solely to the benefit of each Party (except as specifically set forth
in Section 5.8(b)), and, except for such Section, nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 8.8. Governing Law. The validity, interpretation, construction
-------------
and performance of this Agreement shall be governed by, and construed in
accordance with, the applicable laws of the United States of America and the
laws of the State of Delaware applicable to contracts made and performed in such
state and, in any event, without giving effect to any choice or conflict of laws
provision or rule that would cause the application of domestic substantive laws
of any other jurisdiction, except to the extent that the provisions of the PBCL
apply to the Merger. Anything in this Agreement to the contrary notwithstanding,
in the event of any dispute between the parties which results in a Legal Action,
the prevailing party shall be entitled to receive from the non-prevailing party
reimbursement for reasonable legal fees and expenses incurred by such prevailing
party in such Legal Action.
Section 8.9. Enforcement of the Agreement. Each Party recognizes and
----------------------------
agrees that each other Party's remedy at law for any breach of the provisions of
this Agreement would be inadequate and agrees that for breach of such
provisions, such Party shall, in addition to such other remedies as may be
available to it at law or in equity or as provided in this Agreement, be
entitled to injunctive relief and to enforce its rights by an action for
specific performance to the extent permitted by Applicable Law. Each Party
hereby waives any requirement for security or the posting of any bond or other
surety in connection with any temporary or permanent award of injunctive,
mandatory or other equitable relief. Nothing herein contained shall be construed
as prohibiting a Party from pursuing any other remedies available to such Party
for any breach or threatened breach hereof or failure to take or refrain from
any action as required hereunder to consummate the Merger and carry out the
Transactions.
Section 8.10. Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by the different Parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. Any signature by
facsimile shall be deemed to be a manual signature for purposes of the execution
of this Agreement.
Section 8.11. Mutual Drafting. This Agreement is the result of the joint
---------------
efforts of Iron Mountain and Pierce Leahy, and each provision hereof has been
subject to the mutual consultation, negotiation and agreement of the parties and
there shall be no construction against any Party based on any presumption of
that Party's involvement in the drafting thereof.
ARTICLE 9.
DEFINITIONS
As used herein, unless the context otherwise requires, the following terms
(or any variant in the form thereof) have the following respective meanings.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall
53
be deemed to include all genders. Unless otherwise defined or the context
otherwise clearly requires, terms for which meanings are provided herein shall
have such meanings when used in the Pierce Leahy Disclosure Schedule, the Iron
Mountain Disclosure Schedule and each Collateral Document, notice, certificate,
communication, opinion or other document executed or required to be executed
pursuant hereto or thereto or otherwise delivered, from time to time, pursuant
hereto or thereto.
Adverse, Adversely, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean, with
respect to Pierce Leahy or Iron Mountain, as the case may be, any Event which
would reasonably be expected to (a) adversely affect, in any material respect,
the validity or enforceability of this Agreement or any Collateral Document or
the likelihood of consummation of the Merger, (b) to result in a material
adverse effect on the business, operations, management, properties or the
condition, (financial or other), or results of operation (including without
limitation, earnings before interest, taxes, depreciation and amortization) of
Pierce Leahy and its Subsidiaries taken as a whole, or Iron Mountain and its
Subsidiaries taken as a whole, as the case may be (it being understood that (i)
a reduction in the market value of Iron Mountain Common Stock or Pierce Leahy
Common Stock shall not, in and of itself, constitute or be deemed to reflect an
Adverse Change, (ii) changes in general economic conditions or in the industry
of Pierce Leahy and Iron Mountain shall not constitute or be deemed to reflect
an Adverse Change and (iii) any obligation to repay, redeem or purchase
Indebtedness of Pierce Leahy in accordance with the terms thereof as in effect
on the date of this Agreement solely as a result of the Merger and the
Transactions shall not constitute or be deemed to reflect an Adverse Change),
(c) materially impair Pierce Leahy's or Iron Mountain's, as the case may be,
ability to fulfill its obligations under the terms of this Agreement or any
Collateral Document, or (d) materially adversely affect the aggregate rights and
remedies of Iron Mountain or Pierce Leahy, as the case may be, under this
Agreement or any Collateral Document.
Affiliate, Affiliated shall mean, with respect to any Person, (a) any other
Person at the time directly or indirectly controlling, controlled by or under
direct or indirect common control with such Person, (b) any other Person of
which such Person at the time owns, or has the right to acquire, directly or
indirectly, ten percent (10%) or more of any class of the capital stock (other
than Pierce Leahy Preferred Stock) or beneficial interest of such Person, (c)
any other Person which at the time owns, or has the right to acquire, directly
or indirectly, ten percent (10%) or more of any class of the capital stock
(other than Pierce Leahy Preferred Stock) or beneficial interest of such Person,
(d) any executive officer or director of such Person, and (e) with respect to
any partnership, joint venture or similar Entity, any general partner thereof.
Affiliate Agreement shall have the meaning given to it in Section 5.6(a).
Agreement shall mean this Agreement as originally in effect, including
unless the context otherwise specifically requires, all schedules and exhibits
hereto, as the same may from time to time be supplemented, amended, modified or
restated in the manner herein or therein provided.
Applicable Law shall mean any Law of any Authority, whether domestic or
foreign, including without limitation the DGCL, the PBCL, all federal and state
securities laws, the Code, ERISA and Environmental Laws, to or by which a Person
or it or any of its business or operations is subject or any of its property or
assets is bound.
54
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial or legislative, whether foreign or
domestic.
Benefit Arrangement shall mean any material benefit arrangement that is not
a Plan, including (i) any employment or consulting agreement, (ii) any
arrangement providing for insurance coverage or workers' compensation benefits,
(iii) any incentive bonus or deferred bonus arrangement, (iv) any arrangement
providing termination allowance, severance, salary continuation for disability,
or other leave of absence, supplemental unemployment benefits, lay-off,
reduction in force or similar benefits, (v) any equity compensation plan, (vi)
any deferred compensation plan, (vii) any compensation policy and practice,
(viii) any educational assistance arrangements or policies and (ix) any change
of control arrangements or policies.
Claims shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened in writing, claims and judgments of whatever kind
and nature relating thereto, and all fees, costs, expenses and disbursements
(including without limitation reasonable attorneys' and other legal fees, costs
and expenses) relating to any of the foregoing.
Closing shall have the meaning given to it in Section 1.3.
Closing Date shall have the meaning given to it in Section 1.3.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of Title
I of ERISA.
Code shall have the meaning given to it in the recitals to this Agreement.
Collateral Documents shall mean the Pierce Leahy Shareholders' Agreement,
the Iron Mountain Voting Agreement, the Employment Agreement and the
Registration Rights Agreement Joinder.
Confidentiality Agreement shall have the meaning given to it in Section
5.1(a).
Contract, Contractual Obligation shall mean any term, condition, provision,
representation, warranty, agreement, covenant, undertaking, commitment,
indemnity or other obligation which is outstanding or existing under any
instrument, contract, lease or other contractual undertaking to which the
obligee is a party or by which it or any of its business is subject or property
or assets is bound.
control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
55
Convertible Securities shall mean any evidences of indebtedness, shares of
capital stock (other than common stock), equity interests or other securities
directly or indirectly convertible into or exchangeable for shares of capital
stock, equity interests or other securities, whether or not the right to convert
or exchange thereunder is immediately exercisable or is conditioned upon the
passage of time, the occurrence or non-occurrence or existence or non-existence
of some other Event, or both.
DGCL shall have the meaning given to it in the recitals to this Agreement.
Distribution shall mean, with respect to Pierce Leahy or Iron Mountain or
any of their respective Subsidiaries: (a) the declaration or payment of any
dividend on or in respect of any shares of any class of capital stock or other
equity interests of Pierce Leahy or Iron Mountain or any of their respective
Subsidiaries owned by a Person other than Pierce Leahy or Iron Mountain,
respectively, or any of their respective Subsidiaries, (b) the purchase,
redemption or other retirement of any shares of any class of capital stock or
other equity interest of Pierce Leahy or Iron Mountain or any of their
respective Subsidiaries owned by a Person other than Pierce Leahy or Iron
Mountain, respectively, or any of their respective Subsidiaries, and (c) any
other distribution on or in respect of any shares of any class of capital stock
or other equity interests of Pierce Leahy or Iron Mountain or any of their
respective Subsidiaries owned by a Person other than Pierce Leahy or Iron
Mountain, respectively, or any of their respective Subsidiaries.
DOJ shall mean the Department of Justice of the United States or any
successor Authority.
Effective Time shall have the meaning given to it in Section 1.4.
Employment Agreement shall have the meaning given to it in Section 6.2(e).
Enforceability Exceptions shall have the meaning set forth in Section
3.1(b).
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity.
Environmental Law shall mean any Law relating to or otherwise imposing
liability or standards of conduct concerning pollution or protection of the
environment or occupational health and safety, including without limitation Laws
relating to emissions, discharges, releases or threatened releases of Hazardous
Materials or other pollutants, contaminants, chemicals, noises, odors or
industrial, toxic or hazardous substances, materials or wastes, whether as
matter or energy, into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances, materials
or wastes.
ERISA shall mean the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations,
56
and any reference to any statutory or regulatory provision shall be deemed to be
a reference to any successor statutory or regulatory provision.
ERISA Affiliate shall mean any Person that is or has ever been treated as a
single employer with Pierce Leahy or Iron Mountain, as applicable, under
Sections 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA.
Event shall mean the occurrence or existence of any act, action, activity,
circumstance, condition, event, fact, failure to act, omission or incident, or
any set or combination of any of the foregoing.
Exchange Act shall mean the Securities Exchange Act of 1934, and the rules
and regulations of the Commission thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
Exchange Agent shall have the meaning given to it in Section 2.2(a).
FTC shall mean the Federal Trade Commission of the United States or any
successor Authority.
GAAP shall mean generally accepted accounting principles as in effect from
time to time in the United States of America.
Governmental Authorizations shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
Hazardous Materials shall mean any substance (in whatever state of matter):
(a) the presence of which requires investigation or remediation under any
Environmental Law; (b) that is defined as a "hazardous waste", "hazardous
material" or "hazardous substance" under any Environmental Law; (c) that is
toxic, explosive, corrosive, pollutive, contaminating, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated by any
Authority; or (d) that contains or consists of petroleum or petroleum products,
PCBs, asbestos, or urea formaldehyde foam insulation.
HSR Act shall mean the Hart-Scott-Rodino Antitrust Improvement Act of 1976,
and the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Indebtedness shall mean, all obligations, contingent or otherwise, which
in accordance with GAAP should be classified upon the applicable Party's
consolidated balance sheet as liabilities in respect of borrowed money and all
guarantees, endorsements and other contingent obligations in
57
respect of Indebtedness of others (it being understood that obligations of a
Party in respect of trade payables and capitalized leases incurred in the
ordinary course of business shall not be included in the definition of
Indebtedness).
Iron Mountain shall have the meaning given to it in the recitals to this
Agreement.
Iron Mountain/ATSI Option Plan shall have the meaning given to it in
Section 4.11(b).
Iron Mountain Common Stock shall have the meaning given to it in Section
2.1(c).
Iron Mountain Disclosure Schedule shall mean the disclosure schedule dated
as of the date of this Agreement delivered by Iron Mountain to Pierce Leahy;
provided, however, that Sections 4.1(c)(to the extent provided in Section 4.1(c)
of this Agreement) and 4.16(c) of the Iron Mountain Disclosure Schedule shall
be delivered by Iron Mountain to Pierce Leahy no later than thirty (30) days
following the date of this Agreement; and provided further, that Section 4.11(a)
of the Iron Mountain Disclosure Schedule shall be updated one (1) business day
prior to the Closing Date.
Iron Mountain ESPP Plan shall have the meaning given to it in Section
4.11(b).
Iron Mountain Financial Statements shall have the meaning given to it in
Section 4.2(b).
Iron Mountain 1995 Option Plan shall have the meaning given to it in
Section 4.11(b).
Iron Mountain Option Plans shall have the meaning given to it in Section
4.11(b).
Iron Mountain Options shall have the meaning given to it in Section 2.5.
Iron Mountain Proposal shall have the meaning given to it in Section
7.5(c).
Iron Mountain SEC Reports shall have the meaning given to it in Section
4.2(a).
Iron Mountain Special Meeting shall have the meaning given to it in Section
1.2(b).
Iron Mountain Stockholders shall have the meaning given to it in the
recitals to this Agreement.
Iron Mountain Transaction shall mean a transaction or series of related
transactions (other than the Merger) resulting in any "change in control" of
Iron Mountain (as defined in Iron Mountain's indentures).
Iron Mountain Voting Agreement shall mean that certain Voting Agreement of
even date herewith among certain principal stockholders of Iron Mountain, Pierce
Leahy and Iron Mountain, together with all schedules and exhibits thereto, as
the same may from time to time be supplemented, amended, modified or restated in
the manner therein provided.
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Iron Mountain's knowledge (including the term "to the knowledge of Iron
Mountain") means the knowledge, information or belief of C. Richard Reese, John
F. Kenny, Jr. and John P. Lawrence, without any duty to investigate or conduct
any inquiry.
Joint Proxy Statement/Prospectus shall have the meaning given to it in
Section 5.14(a).
Law shall mean any administrative, judicial, legislative or other action,
code, consent decree, constitution, decree, enactment, law, injunction,
judgment, order, ordinance, regulation, requirement, rule, rule of law,
settlement agreement, statute or writ of any Authority, domestic or foreign.
Lease shall mean any lease of property, whether real, personal or mixed,
and all amendments thereto.
Legal Action shall mean any litigation or legal or other actions,
arbitrations, counterclaims, proceedings or suits, at law or in arbitration,
equity or admiralty commenced by any Person, whether or not purported to be
brought on behalf of a party hereto affecting such party or any of such party's
business, property or assets.
Lien shall mean any of the following: mortgage; lien (statutory or other);
or other security agreement; hypothecation, pledge or other deposit arrangement;
assignment; charge; levy; executory seizure; attachment; garnishment;
encumbrance (including any easement, exception, variance, reservation or
limitation, right of way, zoning restriction, building or use restriction, and
the like); conditional sale, title retention or other similar agreement,
arrangement, device or restriction; the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction; or
restriction on sale, transfer, assignment, disposition or other alienation (it
being understood that any Contractual Obligation which restrains, limits or
impedes the Party or any of its Subsidiaries from freely engaging in any
business or competing anywhere in the world shall not, in any event, be
considered to be a Lien for purposes of this Agreement).
Material or materiality for the purposes of this Agreement, shall, unless
specifically stated to the contrary, be determined without regard to the fact
that various provisions of this Agreement set forth specific dollar amounts.
Material Agreement shall mean any (i) employment agreement requiring
payments of base compensation in excess of $250,000 per year; (ii) joint venture
or similar contract or agreement; (iii) note, mortgage, indenture, guaranty,
other obligation, agreement or other instrument for or relating to any
Indebtedness (including assumed Indebtedness) of $1,000,000 or more; (iv)
Contractual Obligation which restrains, limits or impedes the Party or any of
its Subsidiaries from freely engaging in any business or competing anywhere in
the world; or (v) other Contractual Obligations involving an estimated total
future payment or payments by Pierce Leahy or Iron Mountain or any of their
respective Subsidiaries in excess of $2,000,000 annually or $5,000,000 in the
aggregate (it being understood that leases and customer contracts shall not, in
any event, be considered to be Material Agreements for purposes of this
Agreement).
Merger shall have the meaning given to it in the recitals to this
Agreement.
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Multiemployer Plan shall mean a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA.
NYSE shall mean the New York Stock Exchange or any successor stock exchange
or market.
Option Securities shall mean all rights, options and warrants, and calls or
commitments evidencing the right, to subscribe for, purchase or otherwise
acquire shares of capital stock, equity interests or Convertible Securities,
whether or not the right to subscribe for, purchase or otherwise acquire is
immediately exercisable or is conditioned upon the passage of time, the
occurrence or non-occurrence or the existence or non-existence of some other
Event.
Organic Documents shall mean, with respect to any Party, the Articles or
Certificate of Incorporation, by-laws or other organizational documents and all
shareholder or stockholder agreements, voting trusts and similar arrangements
applicable to any of its capital stock to which such Party is a party, each as
in effect from time to time.
Other Proposal shall have the meaning given to it in Section 7.5(b).
Other Transaction shall mean a transaction or series of related
transactions (other than the Merger) resulting in (a) any change in control of
Pierce Leahy, (b) any merger or consolidation of Pierce Leahy, regardless of
whether Pierce Leahy is the surviving Entity (other than any such transaction
pursuant to which Pierce Leahy acquires assets or a business so long as (i) such
transaction is not prohibited by Section 5.2 and (ii) Pierce Leahy is the
surviving corporation), (c) any tender offer or exchange offer for any
securities of Pierce Leahy or any other acquisition of greater than 20% of the
Pierce Leahy Common Stock outstanding, or (d) any sale or other disposition of
assets of Pierce Leahy or its Subsidiaries if the fair market value of such
assets exceeds 20% of the aggregate fair market value of the assets of Pierce
Leahy and its Subsidiaries.
Party shall mean a signatory to this Agreement.
PBCL shall have the meaning given to it in the recitals to this Agreement.
PBGC shall mean the Pension Benefit Guaranty Corporation and any Entity
succeeding to any or all of its functions under ERISA.
Permitted Indebtedness shall mean shares of preferred stock of Pierce Leahy
or additional Indebtedness of Pierce Leahy (other than borrowings under existing
agreements as in effect on the date of this Agreement) that is redeemable or
repayable, as the case may be, at any time at the option of Pierce Leahy for
cash without the payment of any penalty or premium so long as (i) such preferred
stock or Indebtedness does not represent Option Securities or Convertible
Securities and (ii) the sum of (A) the aggregate liquidation preference and
other amounts required to be paid to redeem such shares and (B) the aggregate
principal amount outstanding or available for borrowing (whichever is higher)
under such Indebtedness does not exceed $50 million.
Permitted Liens shall mean any of the following Liens: (i) building and
zoning ordinances and by-laws of any applicable Authority; (ii) taxes assessed
or to be assessed for the then current year to the extent the same are not yet
due or payable; and (iii) rights, easements and restrictions of
60
record, provided the same do not materially interfere with the current occupancy
and use of any property of Pierce Leahy or Iron Mountain or any of their
respective Subsidiaries.
Person shall mean any natural individual or any Entity.
Pierce Leahy shall have the meaning given to it in the introductory
paragraph to this Agreement.
Pierce Leahy Common Stock shall have the meaning given to it in Section
2.1(a).
Pierce Leahy Disclosure Schedule shall mean the disclosure schedule dated
as of the date of this Agreement delivered by Pierce Leahy to Iron Mountain;
provided, however, that Sections 3.1(c)(to the extent provided in Section 3.1(c)
of this Agreement) and 3.16(c) of the Pierce Leahy Disclosure Schedule shall be
delivered by Pierce Leahy to Iron Mountain no later than thirty (30) days
following the date of this Agreement; and provided further, that Section 3.11(a)
of the Pierce Leahy Disclosure Schedule shall be updated one (1) business day
prior to the Closing Date.
Pierce Leahy Financial Statements shall have the meaning given to it in
Section 3.2(b).
Pierce Leahy 1997 Option Plan shall have the meaning given to it in Section
3.11(b).
Pierce Leahy Nonqualified Option Plan shall have the meaning given to it in
Section 3.11(b).
Pierce Leahy Option Plans shall have the meaning given to it in Section
3.11(b).
Pierce Leahy Options shall have the meaning given to it in Section 2.4.
Pierce Leahy Preferred Stock shall have the meaning given to it in Section
2.1(b).
Pierce Leahy Principal Shareholders shall mean those shareholders of Pierce
Leahy identified on Section 9 of the Pierce Leahy Disclosure Schedule.
Pierce Leahy SEC Reports shall have the meaning given to it in Section
3.2(a).
Pierce Leahy Shareholders shall have the meaning given to it in the
recitals to this Agreement.
Pierce Leahy Shareholders' Agreement shall mean that certain Shareholders'
Agreement of even date herewith among all or a portion of the Pierce Leahy
Principal Shareholders, Iron Mountain and Pierce Leahy, together with all
schedules and exhibits thereto, as the same may from time to time be
supplemented, amended, modified or restated in the manner therein provided.
Pierce Leahy Special Meeting shall have the meaning given to it in Section
1.2(a).
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Pierce Leahy's knowledge (including the term "to the knowledge of
Pierce Leahy") means the knowledge, information or belief of J. Peter Pierce,
Douglas B. Huntley and Joseph P. Linaugh, without any duty to investigate or
conduct any inquiry.
Plan shall mean, at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which Pierce Leahy or Iron Mountain, or, in
the case of any such plan subject to Title IV of ERISA, an ERISA Affiliate is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer," as defined in Section 3(5) of ERISA, other
than a Multiemployer Plan.
Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to patents,
trademarks, service marks, trade names, copyrights, computer software programs,
technology and know-how, but not including those with respect to Leases.
Redeemable Preferred Stock shall have the meaning given to it in Section
5.2(viii).
Registered Stock shall mean those shares of Pierce Leahy Common Stock to be
issued in accordance with Section 2.1(c) and to be registered pursuant to the
Securities Act.
Registration Rights Agreement shall have the meaning given to it in Section
5.6(b).
Registration Rights Agreement Joinder shall have the meaning given to it in
Section 5.6(b).
Registration Statement shall mean the registration statement (including the
Joint Proxy Statement/Prospectus, exhibits, financial statements and schedules
included therein), and all amendments thereof (including post-effective
amendments) and supplements to the Joint Proxy Statement/Prospectus which are a
part thereof, filed under the Securities Act registering the Registered Stock.
Representatives of a Party shall mean the officers, directors, employees,
accountants, counsel, financial advisors, consultants and other representatives
of such Party.
Required Disclosure shall have the meaning given to it in Section 5.10.
SEC shall mean the Securities and Exchange Commission of the United States
or any successor Authority.
Securities Act shall mean the Securities Act of 1933, and the rules and
regulations of the Commission thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Special Meetings shall have the meaning given to it in Section 1.2(b).
Stock Dividend shall have the meaning given to it in Section 5.19.
62
Subsidiary shall mean, with respect to any Person, (i) each Entity of
which such Person owns, either directly or indirectly, 50% or more of the stock
or other equity interests, (ii) each partnership in which such Person or another
Subsidiary of such Person is a general partner or a managing partner and (iii)
each limited liability company in which such Person or another Subsidiary of
such Persons is a managing member or otherwise controls.
Surviving Corporation shall have the meaning given to it in Section 1.1.
Tax (and "Taxable", which shall mean subject to Tax), shall mean (a) all
taxes (domestic or foreign), including without limitation any income (net, gross
or other including recapture of any tax items such as investment tax credits),
alternative or add-on minimum tax, gross income, gross receipts, gains, sales,
use, leasing, lease, user, ad valorem, transfer, recording, franchise, profits,
property (real or personal, tangible or intangible), fuel, license, withholding
on amounts paid to or by Pierce Leahy or Iron Mountain, payroll, employment,
unemployment, social security, excise, severance, stamp, occupation, premium,
environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest, levies, assessments, charges, penalties, addition to tax or additional
amount imposed by any Taxing Authority, (b) any joint or several liability of
Pierce Leahy or Iron Mountain with any other Person for the payment of any
amounts of the type described in (a), and (c) any liability of Pierce Leahy or
Iron Mountain for the payment of any amounts of the type described in (a) as a
result of any express or implied obligation to indemnify any other Person.
Tax Return or Returns shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
Taxing Authority shall mean any Authority responsible for the imposition of
any Tax.
Termination Date shall mean April 30, 2000 or such other date as the
Parties may, from time to time, mutually agree.
Transactions shall mean the transactions contemplated by this Agreement or
the Merger or by any Collateral Document executed or required to be executed in
connection herewith or therewith, including, without limitation, the election of
directors contemplated by Section 1.8.
Voting Debt shall have the meaning given to it in Section 3.11(a).
Year 2000 System shall mean any software programs, computer hardware and
networks, telephone and voicemail systems and electronically-based systems
utilized to manage inventory, billing, financial transactions or reporting,
facility security, or fire suppression.
[Signatures appear on following page.]
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IN WITNESS WHEREOF, Iron Mountain and Pierce Leahy have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
IRON MOUNTAIN INCORPORATED
By: /s/ C. Richard Reese
-------------------------------
Name: C. Richard Reese
Title: Chief Executive Officer
PIERCE LEAHY CORP.
By: /s/ J. Peter Pierce
-------------------------------
Name: J. Peter Pierce
Title: Chief Executive Officer