EXHIBIT B
INVESTMENT AGREEMENT
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This INVESTMENT AGREEMENT (this "Agreement"), dated the ____ day of
____________, 1997, by and between Iron Mountain Incorporated, a Delaware
corporation ("Acquiror"), and ________________ ("Stockholder").
RECITALS
A. Acquiror, Acquiror Merger Subsidiary and HIMSCORP, Inc. (the "Company")
are parties to that certain Agreement and Plan of Merger dated as of September
17, 1997 (the "Merger Agreement"), pursuant to which the Company will merge with
and into Acquiror Merger Subsidiary, and the issued and outstanding capital
stock of the Company will be converted into cash and shares of the common stock,
$.01 par value, of Acquiror.
B. It is a condition to the obligation of Acquiror to consummate the
transactions contemplated by the Merger Agreement that each stockholder of the
Company execute and deliver this Agreement to Acquiror.
C. Stockholder is a holder of shares of common stock of the Company and has
reviewed the terms of the Merger Agreement.
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:
1. Definitions. Capitalized terms used in this Agreement without definition
shall have the meanings assigned to such terms in the Merger Agreement.
2. Investment Representations; Tax Agreement. Stockholder hereby represents
and warrants that:
2.1 The shares of Acquiror Common Stock to be acquired by Stockholder
pursuant to the Merger Agreement (the "Shares") are being acquired solely for
the account of such Stockholder for purposes of investment and not with a view
to the sale, transfer or other distribution thereof, as those terms are used in
the Securities Act and the rules and regulations promulgated thereunder.
2.2 Stockholder understands that (i) the Shares have not been and will
not be registered under the Securities Act by reason of their issuance by
Acquiror in a transaction exempt from the registration requirements of the
Securities Act, which exemption depends, among other things, on the bona fide
nature of Stockholder's investment intent as expressed herein, and (ii) the
Shares must be held indefinitely by Stockholder unless a subsequent disposition
thereof is registered under the Securities Act or exempt from registration.
2.3 Stockholder is able to bear the economic risk of an investment in
the Shares for an indefinite period of time, as the Shares will not be
registered under the securities laws and cannot be transferred in the absence of
registration or an exemption under the securities laws, and, either alone or
together with his or her financial adviser, Stockholder is financially
sophisticated and has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the proposed
investment and therefore has the capacity to protect his, her or its own
interests in connection with the acquisition of the Shares. Stockholder
acknowledges that (i) Acquiror has provided the Stockholder with the Acquiror
SEC Reports, (ii) Stockholder has been afforded an opportunity to ask such
questions of officers of Acquiror relating to Acquiror and Acquiror Common Stock
as he, she or it determines is necessary to understand the risks of acquiring
the Shares, and (iii) Stockholder has asked any and all questions of interest to
such Stockholder in connection with the transactions contemplated by the Merger
Agreement, all of which have been answered to Stockholder's satisfaction.
2.4 Stockholder agrees not to offer, sell, assign, exchange, transfer,
encumber, pledge, distribute or otherwise dispose of the Shares except in full
compliance with all of the
applicable provisions of the Securities Act and applicable state securities
laws, and any attempt by Stockholder to do so except in such full compliance
shall be treated as ineffective for all purposes. The certificates representing
the Shares issued to Stockholder shall bear the following legend substantially
as set forth.
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT UNDER THE ACT AND
REGISTRATION OR QUALIFICATION FOR SALE UNDER APPROPRIATE STATE SECURITIES
LAWS SHALL BECOME EFFECTIVE WITH RESPECT THERETO, OR (2) THE ISSUER SHALL
HAVE RECEIVED AN OPINION OF COUNSEL TO THE ISSUER OR OTHER COUNSEL
SATISFACTORY TO THE ISSUER, SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO
THE ISSUER, TO THE EFFECT THAT REGISTRATION OR QUALIFICATION UNDER THE ACT
AND APPROPRIATE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED TRANSFER.
2.5 Stockholder understands that Acquiror may issue appropriate stock
transfer instructions to the transfer agent for shares of Acquiror Common Stock
to the effect that such shares may be sold publicly only in compliance with Rule
144 under the Securities Act or in a transaction otherwise exempt from the
registration requirements of the Securities Act.
2.6 Stockholder acknowledges that neither the Company nor Acquiror
would have entered into the Merger Agreement unless the transactions
contemplated thereby qualified as a tax-free reorganization for federal income
tax purposes. In this regard, Stockholder agrees that for a period of one year
from the Effective Time (or at such earlier time as Acquiror may, in its
reasonable discretion, determine that a Transfer (as defined below) otherwise
prohibited by the terms of this sentence may be effected in a manner that does
not adversely affect the tax-free nature of the Merger under Section 368 of the
Code, provided that, in exercising its reasonable discretion, Acquiror shall
take into account, among other considerations, the issuance of final Treasury
Regulations governing the continuity of interest requirement under Section 368
of the Code and shall cooperate with Stockholder in filing any elections or
providing any information on a tax return as may be
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required by such regulations in order to permit Stockholder to engage in the
proposed Transfer), except as otherwise allowed by the Board of Directors of
Acquiror in its sole discretion, Stockholder will not Transfer, and Acquiror
shall not be required to register the Transfer of, the number of shares, rounded
upward to the nearest whole share (the "Subject Shares"), of Acquiror Stock
equal to the product of (1) the quotient obtained by dividing (x) the "Lock-up
Value" by (y) the product of (A) the Common Stock Amount and (B) the lesser of
the Closing Price and the Determination Price multiplied by (2) the Stock Merger
Consideration such Person is entitled to receive in connection with the Merger
(including any portion of such Stock Merger Consideration paid to the Escrow
Agent to fund the Escrow Indemnity Funds). The "Lock-up Value" shall mean forty-
five percent (45%) of the sum of (x) the product of the Common Stock Amount and
the lesser of the Closing Price and the Determination Price plus (y) the Cash
Amount. The "Closing Price" shall mean the closing price per share of Acquiror
Stock for the trading day immediately prior to the Effective Time. The closing
price for such trading day shall be the last quoted sale price or, if not so
quoted, the average of the low bid and high asked prices on the Nasdaq National
Market System. The term "Transfer" means any indirect or direct transfer, offer
to sell, sale, assignment, grant of an option to acquire, pledge, or other
disposition. The certificates representing the Subject Shares may bear the
following legend substantially as set forth:
THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, EXCHANGED,
TRANSFERRED, ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR OTHERWISE
DISPOSED OF, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY
ATTEMPTED SALE, ASSIGNMENT, EXCHANGE, TRANSFER, LIEN, PLEDGE, DISTRIBUTION,
APPOINTMENT OR OTHER DISPOSITION BEFORE ____________, 1998. THE ISSUER
AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH
THE TRANSFER AGENT) AFTER THE DATE SPECIFIED ABOVE.
3. Agreement with Respect to Certain Matters. Stockholder hereby:
3.1 Waives and agrees not to assert any claims or rights Stockholder
may have against any officer or director of the Company
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relating to or arising out of actions or omissions occurring at or prior to the
Effective Time, including, without limitation, in respect of approval or
adoption of the Merger Agreement or the consummation of the Merger or the other
transactions contemplated thereby.
3.2 Authorizes Acquiror and the Exchange Agent to pay to the Escrow
Agent a pro rata portion of the Merger Consideration otherwise payable to
Stockholder for purposes of funding the Escrow Indemnity Funds described in
Section 8.2 of the Merger Agreement. Such payment to the Escrow Agent shall be
made from the stock portion of the Merger Consideration payable to Stockholder.
3.3 Authorizes Acquiror and Acquiror Merger Subsidiary to pay to the
Exchange Agent any amounts payable by Acquiror and Acquiror Merger Subsidiary
under the Merger Agreement after the Closing Date to the former stockholders of
the Company.
3.4 Appoints Xxxx X. Xxxxxx, with full power of substitution, to act
as Stockholder's agent and attorney-in-fact to take all actions that may be
called for by the Escrow Agreement with respect to providing direction to the
Escrow Agent thereunder as to disposition of payments, claims, requests for
payment and similar matters.
3.5 Represents and warrants that the original certificates
representing Company Shares have been placed in the custody of the Exchange
Agent for purposes of surrender of such certificates and the shares of Company
Stock represented thereby at the Effective Time, in exchange for the Merger
Consideration, and Stockholder hereby authorizes the Exchange Agent to take all
such actions as may be necessary or appropriate to effectuate the surrender of
such shares in exchange for such Merger Consideration.
4. Rights Under Merger Agreement. Acquiror hereby acknowledges and agrees
that it will perform its obligations, and will take all action necessary to
cause the Surviving Corporation to perform its obligations, under Sections 2.2,
2.5, 5.5, 5.11, 8.7 and 9.8 of the Merger Agreement, which Sections and (except
as set forth in the following sentence) only such Sections shall,
notwithstanding the provisions of Section 9.6 of the Merger Agreement, from and
after the Effective Time, inure to the benefit of the Stockholders. In addition,
Acquiror hereby acknowledges and agrees that the representations and warranties
in Article 4 of the Merger Agreement shall, notwithstanding the provisions of
Section
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9.6 of the Merger Agreement, survive and inure to the benefit of the
Stockholders for a period of one year after the Effective Time. Notwithstanding
anything to the contrary in the two preceding sentences, Stockholder hereby
agrees that Acquiror shall have no liability or obligation under this Section or
the Sections or Article of the Merger Agreement referred to in the two preceding
sentences, unless the action or proceeding to enforce this Section or such
Sections or Article of the Merger Agreement is conducted by or on behalf (and
with the written consent) of those Stockholders who held a majority of the
shares of all classes of Company Stock outstanding immediately prior to the
Effective Time. Acquiror hereby further acknowledges and agrees that,
notwithstanding anything in the Merger Agreement, including without limitation
the provisions of Sections 8.2 and 8.3(a), to the contrary, the exclusive
recourse of Acquiror with respect to Claims brought after the Effective Time
arising out of the transactions contemplated by the Merger Agreement shall be
the Escrow Indemnity Funds.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand as of
the date first above written.
Stockholder:
Print Name
Address:
Telephone:
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Soc.Sec./Taxpayer I.D. #:
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Accepted:
IRON MOUNTAIN INCORPORATED
By:
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Title:
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