EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
By and Between
IRON MOUNTAIN INCORPORATED
and
XXXXXX XXXXX 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 Xxxxxx
Xxxxx 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 Xxxxxx Xxxxx.............................................5
Section 2.5. Option Securities of Iron Mountain............................................5
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF XXXXXX XXXXX..................................................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 Xxxxxx Xxxxx 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. Xxxxxx Xxxxx Indebtedness....................................................42
Section 5.18. Xxxxxx Xxxxx Command Company.................................................43
Section 5.19. Stock Dividend...............................................................43
Section 5.20. Xxxxxx Xxxxx 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 Xxxxxx Xxxxx....................................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
The following exhibits and schedules have been omitted and will be
supplementally filed with the Commission upon request:
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
Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Corp., a Pennsylvania corporation ("Xxxxxx Xxxxx").
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"), Xxxxxx Xxxxx and Iron
Mountain will carry out a business combination transaction pursuant to which
Iron Mountain will merge with and into Xxxxxx Xxxxx (the "Merger");
WHEREAS, the Board of Directors of Xxxxxx Xxxxx has unanimously
determined that the Merger and and the Transactions are in the best interests of
Xxxxxx Xxxxx and the shareholders of Xxxxxx Xxxxx (the "Xxxxxx Xxxxx
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 Xxxxxx Xxxxx 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 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 Xxxxxx Xxxxx. As
a result of the Merger, the separate existence of Iron Mountain shall cease and
Xxxxxx Xxxxx 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 Xxxxxx Xxxxx
Shareholders.
(a) Xxxxxx Xxxxx, 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 Xxxxxx Xxxxx Shareholders for the purpose of
adopting and approving this Agreement, the Merger and the Transactions
(including any adjournment thereof, the "Xxxxxx Xxxxx 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 Xxxxxx Xxxxx and the Xxxxxx Xxxxx Shareholders, has approved this Agreement,
the Merger and the Transactions and recommends that the Xxxxxx Xxxxx
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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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
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 Xxxxxxxx & Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx, unless another date, time or place is agreed to in
writing by Xxxxxx Xxxxx and Iron Mountain; provided, however, that, without the
consent of Xxxxxx Xxxxx 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
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
Xxxxxx Xxxxx 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.
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.
Xxxxx Xxxxxx shall be the President of the Surviving Corporation and Xxxxx X.
Xxxxxxx shall be the Senior Vice President of the Surviving Corporation). Xxxxxx
Xxxxx'x 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. Xxxxx Xxxxxx and
Xxxxxx X. Xxxx, subject to the approval of the Xxxxxx Xxxxx Shareholders at the
Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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. Xxxxx Xxxxxx shall be an additional Class III
Director of the Surviving Corporation and Xxxxxx X. Xxxx 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, Xxx X. Xxxxxx, Xx. 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, Xxxxxx Xxxxx
or the holders of any of the following securities:
(a) Each share of Common Stock, par value $.01 per share, of Xxxxxx
Xxxxx (the "Xxxxxx Xxxxx 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 Xxxxxx Xxxxx (the "Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or any Subsidiary
of Xxxxxx Xxxxx, and each share of Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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, Xxxxxx Xxxxx, the Surviving Corporation or
the Exchange Agent shall be liable to any holder of shares of Xxxxxx Xxxxx
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 Xxxxxx Xxxxx Common Stock pursuant to Section
2.1(c) shall be deemed outstanding shares of Xxxxxx Xxxxx Common Stock on and
after the Effective Time.
Section 2.4. Option Securities of Xxxxxx Xxxxx. Each unexpired option
to purchase Xxxxxx Xxxxx Common Stock ("Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Common Stock
subject to such Iron Mountain Options, as so converted.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF XXXXXX XXXXX
Xxxxxx Xxxxx hereby represents and warrants to Iron Mountain as
follows:
Section 3.1. Organization and Business; Power and Authority; Effect of
Transaction.
(a) Xxxxxx Xxxxx:
(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) Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Shareholders). This Agreement has been duly executed
and delivered by Xxxxxx Xxxxx 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
Xxxxxx Xxxxx or a Xxxxxx Xxxxx Shareholder will constitute, legal, valid and
binding obligations of Xxxxxx Xxxxx or such Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Common Stock present or voting by
proxy at the Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx necessary to approve this Agreement, the Merger and the Transactions under
Applicable Law and Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx
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 Xxxxxx Xxxxx:
(i) will conflict with, or result in a breach or violation of,
or constitute a default under, any Applicable Law on the part of Xxxxxx
Xxxxx or any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or any Xxxxxx Xxxxx 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;
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(ii) will result in or permit the creation or imposition of
any Lien upon any property now owned or leased by Xxxxxx Xxxxx or any
Xxxxxx Xxxxx 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) Xxxxxx Xxxxx does not have any Subsidiaries other than those set
forth on Section 3.1(d) of the Xxxxxx Xxxxx Disclosure Schedule, each of which
is directly or indirectly wholly owned (except as set forth in Section 3.1(d) of
the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx
Disclosure Schedule, each Xxxxxx Xxxxx 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 Xxxxxx Xxxxx
Disclosure Schedule, Xxxxxx Xxxxx owns, directly or indirectly through other
Xxxxxx Xxxxx Subsidiaries, all of the outstanding capital stock or other equity
interests (as shown on Section 3.1(d) of the Xxxxxx Xxxxx Disclosure Schedule)
of each Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Disclosure Schedule, (i) there
is neither outstanding nor has any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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) Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Disclosure Schedule.
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Section 3.2. SEC Filings; Financial Statements.
(a) Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Common Stock are
still available for issuance (a complete list of which is set forth in Section
3.2(a) of the Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx with the SEC, being referred to herein collectively as the "Xxxxxx Xxxxx
SEC Reports"). The Xxxxxx Xxxxx SEC Reports and any forms, reports and other
documents filed by Xxxxxx Xxxxx 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 Xxxxxx Xxxxx SEC Report. None of Xxxxxx Xxxxx'x
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) Xxxxxx Xxxxx'x 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 "Xxxxxx Xxxxx Financial Statements")
(i) have been prepared from, and are in accordance with, the books and records
of Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Financial Statements,
except to the extent specifically described in Section 3.3 of the Xxxxxx Xxxxx
Disclosure Schedule, there has been no Adverse Change in Xxxxxx Xxxxx. To Xxxxxx
Xxxxx'x knowledge, there is no Event known to Xxxxxx Xxxxx which Adversely
Affects, or would reasonably be expected to Adversely Affect, Xxxxxx Xxxxx and
its Subsidiaries, taken as a whole, or the ability of Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Financial Statements, neither Xxxxxx
Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx nor any Xxxxxx Xxxxx Subsidiary has
incurred any such obligations or liabilities, other than those incurred in the
ordinary course of business consistent with past practice of Xxxxxx Xxxxx and
Xxxxxx Xxxxx Subsidiaries, and other than obligations and liabilities which in
the case of clauses (i) and (ii) do not and, to Xxxxxx Xxxxx'x knowledge, would
not, individually or in the aggregate, reasonably be expected to Adversely
Affect Xxxxxx Xxxxx, except to the extent set forth in Section 3.4 of the Xxxxxx
Xxxxx Disclosure Schedule. Neither Xxxxxx Xxxxx nor any Xxxxxx Xxxxx Subsidiary
has guaranteed or is otherwise primarily or secondarily liable in respect of any
obligation or liability of any other Person (other than Xxxxxx Xxxxx or a Xxxxxx
Xxxxx 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 Xxxxxx Xxxxx Financial Statements or in Section 3.4 of the Xxxxxx Xxxxx
Disclosure Schedule.
Section 3.5. Title to Properties; Leases. Except as would not
reasonably be expected to have an Adverse Effect on Xxxxxx Xxxxx, each of Xxxxxx
Xxxxx 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 Xxxxxx Xxxxx Financial Statements, or held by
Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Financial Statements, or (excluding leased real estate) held
by Xxxxxx Xxxxx or any Xxxxxx Xxxxx Subsidiary for use in its business if not so
reflected, or purported to have been acquired by Xxxxxx Xxxxx or any Xxxxxx
Xxxxx 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
Xxxxxx Xxxxx and its Subsidiaries, free and clear of all Liens, except (i) Liens
reflected in the Xxxxxx Xxxxx Financial Statements, (ii) Liens set forth on
Section 3.5(a) of the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx. Each Lease or
other occupancy or other agreement under which Xxxxxx Xxxxx or any Xxxxxx Xxxxx
Subsidiary holds real or personal property has been duly authorized, executed
and delivered by Xxxxxx Xxxxx or a Xxxxxx Xxxxx Subsidiary, and, to Xxxxxx
Xxxxx'x knowledge, by each of the other parties thereto; each such Lease is a
legal, valid and binding obligation of Xxxxxx Xxxxx or a Xxxxxx Xxxxx
Subsidiary, and, to Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx.
Section 3.6. Compliance with Governmental Authorizations and Applicable
Law.
(a) Section 3.6(a) of the Xxxxxx Xxxxx Disclosure Schedule contains a
description of all Legal Actions which are pending in which Xxxxxx Xxxxx or any
Xxxxxx Xxxxx Subsidiary is a party,
10
or to which the businesses, operations or properties of Xxxxxx Xxxxx or any
Xxxxxx Xxxxx Subsidiary are subject or, to Xxxxxx Xxxxx'x knowledge, which are
threatened in writing against, Xxxxxx Xxxxx or any Xxxxxx Xxxxx Subsidiary or
any of their respective businesses, operations or properties, which,
individually or in the aggregate, if determined against Xxxxxx Xxxxx or any
Xxxxxx Xxxxx Subsidiary would reasonably be expected to have an Adverse Effect
on Xxxxxx Xxxxx.
(b) Xxxxxx Xxxxx 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
Xxxxxx Xxxxx or any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx.
Neither Xxxxxx Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx'x knowledge,
would not, individually or in the aggregate, reasonably be expected to have an
Adverse Effect on Xxxxxx Xxxxx.
Section 3.7. Year 2000. Any inability of Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx.
Section 3.8. Related Transactions. Set forth in the Xxxxxx Xxxxx SEC
Reports or on Section 3.8 of the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Financial Statements, between
Xxxxxx Xxxxx or any Xxxxxx Xxxxx Subsidiary and any Affiliate thereof or any
party to the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx and each Xxxxxx Xxxxx 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 Xxxxxx Xxxxx. Except as would not, individually or
in the aggregate, be reasonably expected to have an Adverse Effect on Xxxxxx
Xxxxx, (i) the Tax Returns of Xxxxxx Xxxxx and each Xxxxxx Xxxxx Subsidiary have
been prepared in accordance with all Applicable Laws and generally accepted
principles applicable to taxation consistently applied; (ii) all Taxes which
Xxxxxx Xxxxx and each Xxxxxx Xxxxx 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 Xxxxxx Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or any Xxxxxx Xxxxx Subsidiary for the fiscal years
prior to and including the most recent fiscal year. Neither Xxxxxx Xxxxx nor any
Xxxxxx Xxxxx Subsidiary is a "consenting corporation" within the meaning of
Section 341(f) of the Code. Each of Xxxxxx Xxxxx and each Xxxxxx Xxxxx
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 Xxxxxx Xxxxx
Disclosure Schedule. Neither Xxxxxx Xxxxx nor any Xxxxxx Xxxxx Subsidiary has
ever been a member of any consolidated group (other than exclusively with Xxxxxx
Xxxxx and its Subsidiaries) for Tax purposes, except as set forth in Section
3.9(a) of the Xxxxxx Xxxxx Disclosure Schedule.
(b) From the end of its most recent fiscal year to the date of this
Agreement, neither Xxxxxx Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Disclosure Schedule, and neither Xxxxxx Xxxxx nor any
Xxxxxx Xxxxx Subsidiary has been notified in writing regarding any pending
examination, except as shown in Section 3.9(c) of the Xxxxxx Xxxxx Disclosure
Schedule.
(d) Neither Xxxxxx Xxxxx nor any Xxxxxx Xxxxx Subsidiary is a party to
any tax sharing agreement or arrangement.
(e) Neither Xxxxxx Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Disclosure Schedule. As to all
Plans and Benefit Arrangements listed in Section 3.10(a) of the Xxxxxx Xxxxx
Disclosure Schedule, and except as disclosed in such Section 3.10(a) of the
Xxxxxx Xxxxx 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 Xxxxxx Xxxxx
12
nor any Xxxxxx Xxxxx Subsidiary has received any outstanding written
notice from any Authority questioning or challenging such compliance;
(ii) all such Plans maintained or previously maintained by
Xxxxxx Xxxxx or any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or
any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or any Xxxxxx Xxxxx
Subsidiary may be liable;
(vi) there are no material Claims (other than routine claims
for benefits) pending or, to Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx nor, to Xxxxxx Xxxxx'x knowledge,
any Xxxxxx Xxxxx 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
Xxxxxx Xxxxx or any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or any Xxxxxx Xxxxx Subsidiary to be incurred by Xxxxxx
Xxxxx or any Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx 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 Xxxxxx Xxxxx nor any Xxxxxx Xxxxx Subsidiary
maintains any Plan that provides benefits described in Section 3(1) of
ERISA to any former employees or retirees of Xxxxxx Xxxxx or any of its
Subsidiaries.
(b) Except as disclosed in Section 3.10(b) of the Xxxxxx Xxxxx
Disclosure Schedule, neither Xxxxxx Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx was as set forth in Section 3.11(a) of the Xxxxxx Xxxxx
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, Xxxxxx Xxxxx has not issued any shares of capital stock
other than issuances of Xxxxxx Xxxxx Common Stock in accordance with the
exercise of Xxxxxx Xxxxx Options or under Xxxxxx Xxxxx'x 401(k) Plan in
accordance with past practice. Shares of Xxxxxx Xxxxx Common Stock issued and
outstanding on the record date for the Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx Disclosure Schedule, (i) there is neither outstanding nor has Xxxxxx Xxxxx
or any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx nor any Xxxxxx Xxxxx Subsidiary is
a party to and neither Xxxxxx Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx nor any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Disclosure Schedule, neither Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx'x capital stock and each
Option Security or Convertible Security of Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Common Stock were outstanding under Xxxxxx Xxxxx'x 1997
Stock Option Plan (the "Xxxxxx Xxxxx 1997 Option Plan"), including in such
number Option Securities which were then exercisable to acquire 29,003 shares of
Xxxxxx Xxxxx Common Stock; (ii) Option Securities to acquire 1,047,746 shares of
Xxxxxx Xxxxx Common Stock were outstanding under Xxxxxx Xxxxx'x Nonqualified
Stock Option Plan (the "Xxxxxx Xxxxx Nonqualified Option Plan" and, together
with the 1997 Option Plan, the "Xxxxxx Xxxxx Option Plans"), including in such
number Option Securities which were then exercisable to acquire 802,400 shares
of Xxxxxx Xxxxx Common Stock; and (iii) 1,211,000 shares of Xxxxxx Xxxxx Common
Stock were reserved for future issuance pursuant to Option Securities which may
be granted under the Xxxxxx Xxxxx Option Plans. From September 30, 1999 through
the date of this Agreement, neither Xxxxxx Xxxxx nor any of its Subsidiaries has
issued any Option Securities. The Xxxxxx Xxxxx Option Plans constitute the only
plans or arrangements pursuant to which Option Securities or Convertible
Securities to acquire shares of capital stock of Xxxxxx Xxxxx or any of its
Subsidiaries are currently outstanding. Other than as set forth in Section
3.11(b) of the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx capital stock subject to issuance under an Option Security or
Convertible Security of Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx or any Xxxxxx Xxxxx Subsidiary is a party with respect to the voting of
capital stock of Xxxxxx Xxxxx or any Xxxxxx Xxxxx Subsidiary, except as set
forth in Section 3.11(c) of the Xxxxxx Xxxxx Disclosure Schedule.
(d) At the Effective Time and at the time of issuance, the shares of
Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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, Xxxxxx Xxxxx 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 Xxxxxx Xxxxx nor any Xxxxxx Xxxxx Subsidiary is now or
during the past three (3) years (at the time it was a Subsidiary of Xxxxxx
Xxxxx) has been subject to or involved in or, to Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx Disclosure Schedule. Except as set forth in Section 3.12(a)
of the Xxxxxx Xxxxx Disclosure Schedule, none of the employees of Xxxxxx Xxxxx
and its Subsidiaries are now, or during the past three (3) years (at the time it
was a Subsidiary of Xxxxxx Xxxxx) 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 Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx.
(b) Except as set forth in Section 3.12(b) of the Xxxxxx Xxxxx
Disclosure Schedule, no employee of Xxxxxx Xxxxx or any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx'x knowledge, listed
on Section 3.13 of the Xxxxxx Xxxxx Disclosure Schedule are all Material
Agreements to which Xxxxxx Xxxxx or any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx to
Iron Mountain. All of the Material Agreements are valid, binding and legally
enforceable obligations of Xxxxxx Xxxxx and, to Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx. Except as set
forth in Section 3.13 of the Xxxxxx Xxxxx Disclosure Schedule, Xxxxxx Xxxxx and
each Xxxxxx Xxxxx 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 Xxxxxx Xxxxx, threatened (in writing) Claim that Xxxxxx Xxxxx or
any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or any Xxxxxx Xxxxx 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 Xxxxxx Xxxxx.
Except as set forth in Section 3.13 of the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Disclosure Schedule or disclosed in the Xxxxxx
Xxxxx SEC Reports, since the date of the most recent audited Xxxxxx Xxxxx
Financial Statements included in the Xxxxxx Xxxxx SEC Reports through the date
of this Agreement, Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx;
(ii) any other change, occurrence or circumstance that had or
would reasonably be expected to have an Adverse Effect with respect to
Xxxxxx Xxxxx;
(iii) any change to any accounting methods used by Xxxxxx
Xxxxx, unless required in accordance with GAAP;
(iv) any declaration or payment of any Distributions in
respect of the outstanding shares of capital stock of Xxxxxx Xxxxx or
any of its Subsidiaries (other than dividends declared or paid by
wholly-owned Subsidiaries or Distributions on the Xxxxxx Xxxxx
Preferred Stock in accordance with its terms);
(v) any split, combination or reclassification of Xxxxxx
Xxxxx'x capital stock or any issuance of shares of capital stock of
Xxxxxx Xxxxx or any Xxxxxx Xxxxx Subsidiary or any other change in the
authorized capitalization of Xxxxxx Xxxxx or any Xxxxxx Xxxxx
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 Xxxxxx Xxxxx of shares of
its capital stock or any issuance by Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or is entitled to any brokerage, finder's or
other fee or commission from Xxxxxx Xxxxx in connection with the Transactions.
Xxxxxx Xxxxx has heretofore furnished to Iron Mountain a complete and correct
copy of all agreements between Xxxxxx Xxxxx and the Persons set forth on Section
3.15 of the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx
Disclosure Schedule, Xxxxxx Xxxxx 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 Xxxxxx Xxxxx. There is no
pending or, to Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx.
(b) Except as set forth in Section 3.16(b) of the Xxxxxx Xxxxx
Disclosure Schedule, there have been no releases of any Hazardous Materials into
the environment by Xxxxxx Xxxxx or any of its Subsidiaries, or, to Xxxxxx
Xxxxx'x knowledge, by any other party at any parcel of real property or any
facility formerly or currently owned, operated or controlled by Xxxxxx Xxxxx or
any of its Subsidiaries which would reasonably be expected to have an Adverse
Effect on Xxxxxx Xxxxx.
(c) Section 3.16(c) of the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or
any Xxxxxx Xxxxx Subsidiary within the last three (3) years as to environmental
matters at any property owned, leased, operated or occupied by Xxxxxx Xxxxx or
any Xxxxxx Xxxxx Subsidiary.
Section 3.17. Board Action; Fairness Opinion.
(a) The Board of Directors of Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx Shareholders and has approved the same, (ii) resolved to recommend that
the holders of the shares of Xxxxxx Xxxxx Common Stock adopt this Agreement and
the Transactions, including the Merger and (iii) nominated and recommended for
election to the Xxxxxx Xxxxx Stockholders the individuals who will serve as
members of the Board of Directors of the Surviving Corporation at the Effective
Time.
(b) Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx 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 Xxxxxx Xxxxx.
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 Xxxxxx
Xxxxx.
18
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF IRON MOUNTAIN
Iron Mountain hereby represents and warrants to Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx, 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
Xxxxxx Xxxxx 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/ATSI 1995 Stock Option Plan (the "Iron Mountain/ATSI 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 Xxxxxx Xxxxx. 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, Xxxxxxx & 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 Xxxxxx Xxxxx a complete and correct copy of all agreements between
Iron Mountain and Bear, Xxxxxxx & 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, Xxxxxxx & 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx or will be promptly delivered to Xxxxxx Xxxxx
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 Xxxxxx Xxxxx or Iron Mountain, as the
case may be, shall reasonably request (other than customer contracts or the
pricing thereof). Xxxxxx Xxxxx 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 Xxxxxx Xxxxx by
Iron Mountain or its Representatives or by Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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
Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Pending the
Merger. Between the date of this Agreement and the Closing Date, Xxxxxx Xxxxx
will, and will ensure that each of its Subsidiaries will (except (i) as may be
described on Section 5.2 of the Xxxxxx Xxxxx 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 Xxxxxx Xxxxx;
(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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx, 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Common Stock,
Xxxxxx Xxxxx Preferred Stock or capital stock or other equity interests
of it or any of its Subsidiaries directly or indirectly beneficially
owned
32
by Xxxxxx Xxxxx or any of its Subsidiaries; or (B) split, combine or
reclassify the Xxxxxx Xxxxx Common Stock, Xxxxxx Xxxxx Preferred Stock
or any other outstanding capital stock or other equity interests of it
or any of Xxxxxx Xxxxx'x 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 Xxxxxx
Xxxxx or its Subsidiaries or any other ownership interests (including,
without limitation, stock appreciation rights or phantom stock), other
than (1) shares of Xxxxxx Xxxxx Common Stock reserved for issuance on
the date of this Agreement pursuant to the exercise of Xxxxxx Xxxxx
Options outstanding on the date of this Agreement, (2) dividends paid
in kind in accordance with the terms of the Xxxxxx Xxxxx Preferred
Stock, or (3) shares of preferred stock of Xxxxxx Xxxxx 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 Xxxxxx Xxxxx
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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx, 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 5.4. Control of Operations. Nothing contained in this Agreement
shall give to Xxxxxx Xxxxx or Iron Mountain, directly or indirectly, rights to
control or direct the operations of Iron Mountain or Xxxxxx Xxxxx, as the case
may be, prior to the Effective Time. Prior to the Effective Time, each of Xxxxxx
Xxxxx 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) Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx'x independent accountants may
reasonably request under the circumstances.
(e) Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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, Xxxxxx Xxxxx 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 Xxxxxx Xxxxx'x 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 Xxxxxx
Xxxxx 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
Xxxxxx Xxxxx 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) Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Common Stock to be issued in the Merger and
that for purposes of the Registration Rights Agreement, Xxxxxx Xxxxx Common
Stock shall be considered "Registrable Securities". Xxxxxx Xxxxx 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
Xxxxxx Xxxxx Principal Shareholders who become party to the Xxxxxx Xxxxx
Shareholders' Agreement on or before November 3, 1999 (together with their
Permitted Assignees (as defined in the Xxxxxx Xxxxx Shareholders' Agreement)),
with respect to Subject Shares (as defined in the Xxxxxx Xxxxx Shareholders'
Agreement), for the benefit of such Xxxxxx Xxxxx 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) Xxxxxx Xxxxx 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, Xxxxxx Xxxxx 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 Xxxxxx Xxxxx Shareholders, Xxxxxx Xxxxx may engage in discussions or
negotiations with, and may furnish information concerning Xxxxxx Xxxxx 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 Xxxxxx Xxxxx, 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 Xxxxxx Xxxxx Shareholders pursuant to the Merger (as determined in good
faith by Xxxxxx Xxxxx'x Board of Directors after consultation with Xxxxxx
Xxxxx'x financial advisors) if (1) Xxxxxx Xxxxx'x Board of Directors determines
in good faith, after consultation with Xxxxxx Xxxxx'x outside legal counsel,
that such action is required for Xxxxxx Xxxxx'x 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 Xxxxxx Xxxxx and its Subsidiaries to
such third party, Xxxxxx Xxxxx 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 Xxxxxx Xxxxx
may take and disclose to the Xxxxxx Xxxxx 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
Xxxxxx Xxxxx 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 Xxxxxx Xxxxx, whether or not such Person is
purporting to act on behalf of Xxxxxx Xxxxx or any of its Subsidiaries or
otherwise, shall be deemed to constitute a breach of this Section 5.7(a) by
Xxxxxx Xxxxx. Xxxxxx Xxxxx shall promptly advise Iron Mountain of, and (unless
the Board of Directors of Xxxxxx Xxxxx 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. Xxxxxx Xxxxx shall
further advise Iron Mountain of the status and changes in the material terms
(unless the Board of Directors of Xxxxxx Xxxxx 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), Xxxxxx
Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx of the status and changes in the material terms (unless the Board of
Directors of Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx'x 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) Xxxxxx Xxxxx, Iron Mountain and the Surviving Corporation shall
maintain Xxxxxx Xxxxx'x 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. Xxxxxx Xxxxx and Iron Mountain
agree that the officers and directors of Xxxxxx Xxxxx 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 Xxxxxx
Xxxxx Disclosure Schedule or the Iron Mountain Disclosure Schedule, as the case
may be, or (iii) any failure of Xxxxxx Xxxxx 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
Xxxxxx Xxxxx 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, Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx 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)
Xxxxxx Xxxxx may accelerate the vesting of any Xxxxxx Xxxxx 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.
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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 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 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.
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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: Chairman and CEO
PIERCE LEAHY CORP.
By: /s/ J. Peter Pierce
Name: J. Peter Pierce
Title: President and CEO
