CONFORMED COPY
EXHIBIT 2B
AMENDMENT NO. 2
TO
AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT No. 2 TO AGREEMENT AND PLAN OF MERGER is made as of May
___, 1997, among Iron Mountain Incorporated, a Delaware corporation
("Acquiror"), IM-1 Acquisition Corp., a Delaware corporation and a wholly owned
Subsidiary of Acquiror ("Acquiror Merger Subsidiary"), and Safesite Records
Management Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, Acquiror, Acquiror Merger Subsidiary and the Company are
parties to an Agreement and Plan of Merger dated as of February 19, 1997 (the
"Original Merger Agreement");
WHEREAS, the Merger Agreement was amended by Amendment No. 1 to
Agreement and Plan of Merger dated as of April 1, 1997 (the Original Merger
Agreement, as so amended is hereinafter referred to as the "Merger Agreement");
and
WHEREAS, Acquiror, Acquiror Merger Subsidiary and the Company have
agreed to further amend the Merger Agreement as set forth herein pursuant to
Section 7.3 of the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing, the parties hereto,
intending to be legally bound, agree as follows:
1. The sixth line of the first Whereas clause of the Merger Agreement
is hereby deleted in its entirety and the following words are inserted in lieu
thereof: "pursuant to which the Company will merge with and into Acquiror Merger
Subsidiary (the".
2. Section 1.1 of the Merger Agreement is hereby deleted in its
entirety and the following new Section 1.1 is inserted in lieu thereof:
"Section 1.1. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the
DGCL, at the Effective Time, the Company shall be merged with and into
Acquiror Merger Subsidiary. As a result of the Merger, the separate
existence of the Company shall cease and Acquiror Merger Subsidiary
shall continue as the surviving corporation of the Merger (the
"Surviving Corporation")."
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3. Section 1.9 of the Merger Agreement is hereby deleted in its
entirety.
4. Section 2.1(a) of the Merger Agreement is hereby amended by deleting
the words "Cash Merger Consideration" appearing on the third to last line
thereof and inserting in lieu thereof the words "Stock Merger Consideration."
5. Section 2.1(d) of the Merger Agreement is hereby deleted in its
entirety and the following new Section 2.1(d) is inserted in lieu thereof:
"(d) In lieu of issuing fractional shares, Acquiror shall
convert a holder's right to receive shares of Acquiror Stock pursuant
to Sections 2.1(a) and Section 2.1(e) into a right to receive the
highest whole number of shares of Acquiror Stock constituting the
non-cash portion of the Exchange Merger Consideration to be received
plus cash equal to the fraction of a share of Acquiror Stock to which
the holder would otherwise be entitled (in each case after giving
effect to Section 1.2(e) hereof) multiplied by the Determination Price,
and the Exchange Merger Consideration to which a holder is so entitled
shall be deemed to be such number of shares of Acquiror Stock plus such
cash in lieu of fractional shares plus the cash portion of the Exchange
Merger Consideration. In addition, upon distribution to Stockholders of
any portion of the Escrow Indemnity Funds, Acquiror shall deliver to
such Stockholder the highest whole number of shares of Acquiror Stock
to which such Stockholder is entitled plus cash equal to the fraction
of a share of Acquiror Stock to which the holder would otherwise be
entitled multiplied by the Market Price. For purposes of carrying out
the intent of this Section 2.1(d), Acquiror may aggregate Certificates
so that fractional shares of Acquiror Stock due in exchange for
multiple Certificates may be combined to yield a number of whole shares
thereof plus a single fraction."
6. Article 2 of the Merger Agreement is hereby further amended by
inserting the following new Section 2.1(e) immediately following Section 2.1(d):
"(e) In order to implement the indemnification provisions of
Section 8 hereof, the Stock Merger Consideration payable to each
Stockholder pursuant to Section 2.2 prior to the termination of the
Escrow Indemnity Period hereof shall be equal to the product of (i) the
Closing Stock Conversion Number and (ii) the number of Shares
represented by Certificates held by such Stockholder. The remainder of
such Stockholder's Stock Merger Consideration shall be held as part of
the Escrow Indemnity Funds and shall be payable to such Stockholder
after the Escrow Indemnity Period in accordance with Section 8 hereof
and the Escrow Agreement."
7. Section 2.2(a) of the Merger Agreement is hereby amended by deleting
the words "less the amount of cash constituting the Escrow Indemnity Funds"
appearing in the ninth line thereof.
8. Section 2.2(a) of the Merger Agreement is hereby further amended by
inserting the words "less the number of shares of Acquiror Stock constituting
the Escrow Indemnity Funds," immediately before the words "(collectively, the
"Exchange Fund")." appearing at the end of the twelfth line thereof.
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9. Section 2.2(c) of the Merger Agreement is hereby amended by
inserting the words ", subject to Article 8 hereof" immediately after the words
"2.1(a) and 2.1(d)" appearing in the sixth line thereof.
10. Section 2.4(a) of the Merger Agreement is hereby amended by
deleting the words ", subject to the indemnification provisions of Article 8
hereof," appearing in the second line thereof.
11. Section 2.4(a) of the Merger Agreement is hereby further amended by
deleting the last sentence thereof in its entirety.
12. Section 2.6(b) of the Merger Agreement is hereby amended by adding
the following sentence at the end of such Section: "The Subject Shares shall not
form a part of the shares of Acquiror Stock to be held in escrow as part of the
Escrow Indemnity Funds."
13. Section 5.12 of the Merger Agreement is hereby amended by deleting
the words "(including, without limitation, the Alternative Transaction)"
appearing in the second and third lines thereof.
14. Section 8.2 of the Merger Agreement is hereby amended by deleting
the words "$3,000,000 in cash (the "Escrow Indemnity Funds")" appearing in the
second line thereof and inserting in lieu thereof the words "the Escrow
Indemnity Funds".
15. Section 8.2 of the Merger Agreement is hereby further amended by
deleting the words "and from the cash, if any, issued with respect to
Exercisable Options pursuant to Section 2.4" appearing immediately after the
words "Exchange Merger Consideration" appearing at the end of the third line
thereof.
16. Section 8.2 of the Merger Agreement is hereby further amended by
deleting the name "B. Xxxxxx Xxxxxxxx" appearing in the second line of the last
paragraph thereof and inserting in lieu thereof the name "Xxxxx X. Xxxxxx, Xx."
17. Section 8.3 of the Merger Agreement is hereby deleted in its
entirety and the following new Section 8.3 is inserted in lieu thereof:
"Section 8.3. Limitation of Liability; Disposition of Escrow Indemnity
Funds.
(a) Notwithstanding the provisions of Section 8.2, after the Closing,
Acquiror's rights to indemnification shall be subject to the following
limitations: (i) Acquiror shall be entitled to recover its Loss and Expense in
respect of any Claim only if the Loss and Expense for all Claims exceeds, in the
aggregate, $150,000 and (ii) in no event shall the aggregate amount to be paid
to Acquiror exceed the lesser of (i) the Escrow Indemnity Funds and (ii) shares
of Acquiror Stock having an aggregate Market Value of Three Million Dollars
($3,000,000).
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(b) Anything in this Agreement, including without limitation the
provisions of Sections 8.2 or 8.3(a), to the contrary notwithstanding, the
exclusive recourse of Acquiror with respect to Claims brought after the
Effective Time arising out of the transactions contemplated by this Agreement
shall be the Escrow Indemnity Funds. On or before the Closing Date, Acquiror,
the Company and the Agent shall execute and deliver an escrow agreement
substantially in the form attached hereto as Exhibit 8.3 (the "Escrow
Agreement"). Any Claims of Acquiror for indemnification to be satisfied out of
the Escrow Indemnity Fund shall be made in accordance with the terms of the
Escrow Agreement (it being hereby understood that for purposes of determining
the number of shares of Acquiror Stock necessary to satisfy such Claim, the
Market Price of the Acquiror Stock calculated in accordance with the terms of
the Escrow Agreement shall be used). At the Effective Time, a certificate
registered in the name of Xxxxx X. Xxxxxx, Xx., as Agent, representing the
Escrow Indemnity Funds shall be withheld from the Merger Consideration hereunder
and shall be deposited with the Escrow Agent. In accordance with the terms of
the Escrow Agreement, each Stockholder shall be entitled to receive all ordinary
cash dividends paid in respect of his or her Proportionate Share of Acquiror
Stock that would otherwise be registered in his or her name but for such shares
being a part of the Escrow Indemnity Funds and to vote and to give consents,
waivers and ratifications in respect of his or her Proportionate Share of
Acquiror Stock which is part of the Escrow Indemnity Funds. In connection with
any such vote or consent, the Agent and Acquiror, at Acquiror's expense, shall
cause to be delivered to such Stockholder such information (including, without
limitation, any proxy statement and cards). The Agent shall vote the shares of
Acquiror Stock forming part of the Escrow Indemnity Funds in accordance with the
directions of the Stockholders. In order to take such vote, the Agent shall
tabulate the votes it receives from the Stockholders and inform Acquiror in
writing of the aggregate percent of all votes received for, against and in
abstention with respect to each matter voted upon. Acquiror shall then convert
such percent to number based on the then-existing Escrow Indemnity Funds,
rounded in each case down to the nearest whole number.
(c) In the event there are no Unresolved Claims (as defined in the
Escrow Agreement), on the date which is ten (10) days after the expiration of
the Escrow Indemnity Period, or the next business day if such date is not a
business day, the Escrow Indemnity Funds then remaining shall be distributed to
the Stockholders (or their nominee or transferee, as set forth in the
Transmittal Documents in respect of the Exchange Merger Consideration) entitled
thereto in accordance with the proportions with their ownership of Shares
immediately prior to the Effective Time (provided that cash in lieu of
fractional shares will be distributed in accordance with Section 2.1(d) hereof).
In the event one or more Unresolved Claims with respect to the Escrow Indemnity
Funds, if any, shall exist upon the expiration of the Escrow Indemnity Period,
shares of Acquiror Stock, rounded to the nearest shares, having a Market Price
equal to the sum of (i) the aggregate amount of such Unresolved Claims and (ii)
the amount reasonably estimated by Acquiror to cover the fees, expense and other
costs (including reasonable counsel fees and expenses) which will be required to
resolve such Unresolved Claims shall be retained as part of the Escrow Indemnity
Funds and the balance thereof, if any, shall be distributed to the Persons
entitled thereto. Upon the resolution of all such Claims and the payment of all
such fees, expenses and costs out of the Escrow Indemnity Funds, the balance of
the shares of Acquiror Stock, if any, shall be distributed to the Persons
entitled thereto."
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18. The Merger Agreement is hereby further amended by deleting Exhibit
8.3 thereto in its entirety and inserting in lieu thereof a new Exhibit 8.3
thereto substantially in the form of Exhibit 8.3 hereto.
19. Article 10 of the Merger Agreement is hereby amended by adding the
following new definitions to appear in the Merger Agreement in alphabetical
order with the other definitions:
"Closing Stock Conversion Number shall mean the quotient obtained by
dividing (i) the difference between (a) the Common Stock Amount and (b) the
Escrow Indemnity Funds by (ii) the sum of (a) the number of shares of Company
Stock issued and outstanding immediately prior to the Merger (except shares
subject to Section 2.1(b)) and (b) the number of shares of Company Stock which
may be issued pursuant to Option Securities which are exercisable as of the
Effective Time (including those which will become exercisable by virtue of the
consummation of the Merger)."
"Market Price" shall have the meaning set forth in the Escrow
Agreement."
"Proportionate Share" shall have the meaning set forth in the Escrow
Agreement."
19. Article 10 of the Merger Agreement is hereby further amended by
deleting the definition of "Escrow Indemnity Funds" appearing therein and
inserting in lieu thereof the following new definition:
"Escrow Indemnity Funds shall mean shares of Acquiror Common Stock in
an amount equal to quotient obtained by dividing (i) Four Million Dollars
($4,000,000) by (ii) the Determination Price."
20. Each of Acquiror, Acquiror Merger Subsidiary and the Company
represents and warrants that all requisite corporate action necessary for the
valid execution and delivery of this Amendment No. 2 has been duly and
effectively taken (including, without limitation, that the Company's Board of
Directors have unanimously approved the execution of this Amendment)
21. Each capitalized term used herein without definition shall have the
same meaning herein as is given to such term in the Merger Agreement.
22. The Merger Agreement as amended hereby is ratified and confirmed in
all respects and shall continue in full force and effect. Without limiting the
generality of the foregoing, the term Agreement as used in the Merger Agreement
shall be deemed to be the Original Merger Agreement as amended by Amendment No.
1 and this Amendment No. 2.
23. This Amendment No. 2 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.
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IN WITNESS WHEREOF, Acquiror, Acquiror Merger Subsidiary and the
Company have caused this Amendment No. 2 to be executed as of the date first
written above by their respective officers thereunto duly authorized.
IRON MOUNTAIN INCORPORATED
By: /s/ C. Xxxxxxx Xxxxx
-------------------------------------------
Name: C. Xxxxxxx Xxxxx
Title: Chairman and Chief Executive Officer
IM-1 ACQUISITION CORP.
By: /s/ C. Xxxxxxx Xxxxx
-------------------------------------------
Name: C. Xxxxxxx Xxxxx
Title: President
SAFESITE RECORDS MANAGEMENT
CORPORATION
By: /s/ B. Xxxxxx Xxxxxxxx
-------------------------------------------
Name: B. Xxxxxx Xxxxxxxx
Title: Chairman
By: /s/ Xxxxx X. Xxxxxx, Xx.
-------------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President
Exhibit 8.3
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") is entered into as of the
_____ day of ________, 1997, by and among Iron Mountain Incorporated, a Delaware
corporation ("Acquiror"), Safesite Records Management Corporation, a Delaware
corporation (the "Company"), Xxxxx X. Xxxxxx, Xx., an individual residing at 000
Xxx Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000 (in his capacity as agent for the
Stockholders, the "Agent"), as agent for the stockholders of the Company (the
"Stockholders"), and State Street Bank and Trust Company, as Escrow Agent (the
"Escrow Agent").
W I T N E S S E T H :
WHEREAS, Acquiror and the Company entered into that certain Agreement
and Plan of Merger dated as of February 19, 1997, as amended (the "Merger
Agreement"), an executed copy of which has been provided to the Escrow Agent,
pursuant to which the Company will merge with and into a wholly owned subsidiary
of Acquiror (the "Merger"), and pursuant to which ____________ shares of Common
Stock, par value $.01 per share of Acquiror ("Acquiror Stock") were withheld
from the consideration payable to the Stockholders and were allocated to
indemnify Acquiror for certain matters relating to the Merger Agreement, all as
is more fully set forth in the Merger Agreement;
WHEREAS, this Agreement is being entered into pursuant to Article 8 of
the Merger
Agreement; and
WHEREAS, in accordance with and pursuant to Article 8 of the Merger
Agreement, the Agent has been appointed as agent and attorney-in-fact, with full
power of substitution, to take all actions called for by Article 8 of the Merger
Agreement, including, without limitation, the execution of this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements set forth below, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE 1
ESCROW INDEMNITY FUNDS
1.1 Delivery. Upon consummation of the Merger, Acquiror will deliver to
the Escrow Agent a certificate registered in the name of Xxxxx X. Xxxxxx, Xx.,
as Agent, representing ___________ shares of Acquiror Stock (the "Escrow
Indemnity Funds"). The shares of Acquiror Stock represented by the Escrow
Indemnity Funds shall not be subject to the restrictions set forth in Article
XII of Acquiror's By-Laws.
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1.2 Receipt. The Escrow Agent agrees to hold and disburse the Escrow
Indemnity Funds (together with interest earned thereon) solely in accordance
with the terms and conditions of this Agreement, pursuant to the written
direction of Acquiror, and for the uses and purposes stated herein. The Escrow
Agent shall, upon receipt of the Escrow Indemnity Funds, issue written
acknowledgment to Acquiror and the Agent of receipt thereof.
1.3 Rights of Stockholders.
(a) In the case any distribution of capital or stock dividend
shall be made on or in respect of Acquiror Stock, or any money or property shall
be distributed with respect to Acquiror Stock, pursuant to a recapitalization or
reclassification of the capital of Acquiror, or pursuant to a reorganization or
liquidation or dissolution of Acquiror, any such money or property to be
distributed with respect to the Escrow Indemnity Funds shall be delivered to the
Escrow Agent to be held by it as part of the Escrow Indemnity Funds. Acquiror
shall forthwith deliver to the Escrow Agent an additional certificate registered
in the name of Xxxxx X. Xxxxxx, Xx., as Agent, representing any such additional
Acquiror Stock or such money and the Escrow Agent shall hold such additional
Acquiror Stock or money pursuant to the terms of this Agreement.
(b) Each Stockholder shall be entitled to receive all ordinary
cash dividends paid in respect of his or her Proportionate Share (as defined
below) of Acquiror Stock that would otherwise be registered in his or her name
but for such shares being a part of the Escrow Indemnity Funds and to vote and
to give consents, waivers and ratifications in respect of his or her
Proportionate Share of Acquiror Stock which is part of the Escrow Indemnity
Funds. The Agent shall pay over to each Stockholder, forthwith upon receipt, his
or her Proportionate Share of all ordinary cash dividends paid on the Escrow
Indemnity Funds, and, at the cost of Acquiror, shall execute and deliver to each
Stockholder such proxies or other documents in writing as may be necessary to
enable each Stockholder to exercise the foregoing rights. In connection with any
vote or consent by the Stockholders with respect to shares of Acquiror Stock
which are part of the Escrow Indemnity Funds, the Agent shall vote the shares of
Acquiror Stock forming part of the Escrow Indemnity Funds in accordance with the
directions of the Stockholders to the Agent. In order to take such vote, the
Agent shall tabulate the votes it receives from the Stockholders and inform
Acquiror in writing of the aggregate percent of all votes received for, against
and in abstention with respect to each matter voted upon. Acquiror shall then
convert such percent to a number based on the then-existing Escrow Indemnity
Funds, rounded in each case down to the nearest whole number. The term
"Proportionate Share", as to each Stockholder, shall mean such Stockholder's
proportionate share of the total number of shares of Aquiror Stock to be issued
in connection with the Merger.
ARTICLE 2
PROCEDURES FOR DISBURSEMENT OF ESCROW INDEMNITY FUNDS
2.1 Purpose. The Escrow Indemnity Funds shall be held by the Escrow
Agent to secure the indemnification obligations to Acquiror under the Merger
Agreement and shall be held and released in accordance with the provisions of
this Agreement. The Escrow Agent agrees
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to hold, disburse and invest the Escrow Indemnity Funds solely in accordance
with the terms and conditions of this Agreement and for the uses and purposes
stated herein.
2.2 Disbursement.
(a) If at any time after the Closing Date and prior to the
termination of this Agreement, the Escrow Agent receives written instructions in
accordance with the terms of Section 2.4 hereof from Acquiror to make a payment
to Acquiror, then the Escrow Agent shall make payments out of the Escrow
Indemnity Funds to Acquiror, in accordance with such instructions and with
Section 2.4, unless the Escrow Indemnity Funds shall be insufficient to comply
with such instructions, in which case the Escrow Agent shall pay the entire
Escrow Indemnity Funds to Acquiror and shall advise Acquiror and the Agent in
writing of the amount of such payment. The number of shares of the Escrow
Indemnity Funds to be delivered to Acquiror in connection with each payment
hereunder shall be calculated by Acquiror and shall be equal to the quotient
obtained by dividing (i) the Claimed Amount (as defined in Section 2.4) by (ii)
the average closing price per share of Acquiror Stock for the period of 20
trading days ending three trading days prior to the date of such payment (the
"Market Price"). The closing price for each such trading day shall be the last
quoted sale price or, if not so quoted, the average of the low bid and high
asked prices on the Nasdaq National Market System.
(b) The Escrow Agent may make any payments out of the Escrow
Indemnity Funds that may at the time be permitted to be made under the
provisions of Section 2.4 below, and shall make all such payments that at the
time are required to be made under such provisions or are jointly requested in
writing by Acquiror and the Agent. Any payment which would result in the
disbursement of a fractional share of Acquiror Stock shall be rounded to the
nearest whole share. In the event that any payment is made pursuant to this
Agreement, Acquiror shall deliver to the Escrow Agent a new certificate
registered in the name of Xxxxx X. Xxxxxx, Xx., as Agent, representing the
Escrow Indemnity Funds less such shares disbursed in the payment and all
previous payments.
(c) In the event there are no Unresolved Claims (as
hereinafter defined), on the date which is ten (10) days after the expiration of
the Escrow Indemnity Period, or the next business day if such date is not a
business day, Acquiror shall deliver or cause to be delivered to the Escrow
Agent cash in lieu of fractional shares calculated in accordance with the second
to last sentence of this paragraph (c) and separate certificates registered in
each Stockholder's name (or, in the event of a transfer of ownership of Acquiror
Stock which is not registered in the transfer records of the Company, in the
name of a transferee who has presented documents reasonably required to evidence
and effect such transfer and evidence that any applicable stock transfer taxes
have been paid), representing such Stockholder's Proportionate Share of the
Escrow Indemnity Funds, less such Stockholder's Proportionate Share of all
portions thereof, if any,
(i) paid to Acquiror pursuant to subparagraphs (a) and (b)
above, and
(ii) which are the subject of Unresolved Claims (as
hereinafter defined).
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The Escrow Agent shall retain the portion of the Escrow Indemnity Funds which
relates to all Unresolved Claims until resolution of such Unresolved Claims in
accordance with the terms hereof. In the event one or more Unresolved Claims
with respect to the Escrow Indemnity Funds, if any, shall exist upon the
expiration of the Escrow Indemnity Period, shares of Acquiror Stock with a
Market Price measured as of the date of such expiration (such number to be
determined by Acquiror) equal to the sum of (i) the aggregate amount of such
Unresolved Claims and (ii) the amount reasonably estimated by Acquiror to cover
the fees, expense and other costs (including reasonable counsel fees and
expenses) which will be required to resolve such Unresolved Claims shall be
retained as part of the Escrow Indemnity Funds and the balance thereof, if any,
shall be distributed to the Stockholders entitled thereto. Upon the resolution
of all such Unresolved Claims and the payment of all such fees, expenses and
costs out of the Escrow Indemnity Funds, the balance of the Acquiror Stock, if
any, shall be distributed to the Stockholders entitled thereto in accordance
with the terms hereof. In lieu of issuing fractional shares pursuant to this
paragraph (c), each Stockholder shall receive the highest whole number of shares
of Acquiror Stock to which he or she is entitled plus cash equal to the fraction
of a share of Acquiror Stock to which the Stockholder would otherwise be
entitled multiplied by the Market Price of the Acquiror Stock determined by
Acquiror as of the date three days prior to the distribution of such shares.
Promptly after such receipt, the Escrow Agent will deliver such certificates
together with any cash in lieu of fractional shares to each respective
Stockholder (or transferee) at the addresses to be supplied by Acquiror in
accordance with Acquiror's written instructions. Acquiror shall make all
calculations relating to shares of Acquiror Stock or cash in lieu of fractional
shares, and the Escrow Agent shall not be responsible for determining the
accuracy of any such calculation.
2.3 Unresolved Claims. The term "Unresolved Claims" shall mean any
claim or request made pursuant to the Merger Agreement against the Escrow
Indemnity Funds in accordance with the Merger Agreement and Section 2.4 below,
until such time as such claim or request has been paid in full or otherwise
fully settled, compromised or adjusted by Acquiror, the Agent and the Escrow
Agent or by a final order of a court of competent jurisdiction resolving such
claim, from which no appeal is or can be taken.
2.4 Notice of Request; Dispute Notice. If at any time during the term
of this Agreement, Acquiror believes that it is entitled to any portion of the
Escrow Indemnity Funds, then Acquiror shall furnish to the Escrow Agent (with a
simultaneous copy to the Agent), a notice (the "Indemnity Notice of Request")
setting forth the cash amount (the "Claimed Amount") to which Acquiror believes
it is entitled and the reasons for such belief. If the Escrow Agent does not
receive, within fifteen (15) business days after receipt of the Indemnity Notice
of Request, a notice from the Agent (the "Indemnity Dispute Notice") with a
simultaneous copy to Acquiror that a dispute (the "Indemnity Dispute") exists
relating to Acquiror's right to that portion of the Escrow Indemnity Funds
claimed in the Indemnity Notice of Request, the Escrow Agent shall, immediately
after such fifteen business day period, release to Acquiror the certificate then
held by the Escrow Agent pursuant to the terms of this Agreement in exchange for
a new certificate registered in the name of Xxxxx X. Xxxxxx, Xx., as Agent,
representing a number of shares of Acquiror Stock equal to the quotient obtained
by dividing (a) the difference between, if positive, the Market Price of the
shares of Acquiror Stock represented by the certificate being released
calculated as of the date three trading days prior to such exchange and the
Claimed Amount by (b) such Market Price, and the Escrow Agent shall
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hold such replacement certificate for Acquiror Stock or money pursuant to the
terms of this Agreement.
In the event the Escrow Agent receives an Indemnity Dispute Notice that
an Indemnity Dispute exists, the Escrow Agent shall retain custody of that
portion of the Escrow Indemnity Funds which relates to the Unresolved Claim
until the first to occur of the following events:
(a) Receipt by the Escrow Agent of a notice ("Indemnity
Settlement Notice") signed by Acquiror and the Agent that the Indemnity
Dispute has been resolved, said notice to contain instructions to
Escrow Agent regarding delivery of that portion of the Escrow Indemnity
Funds which relates to the Unresolved Claim; or
(b) Receipt by Escrow Agent of a final order of a court of
competent jurisdiction (the "Indemnity Award") resolving the Indemnity
Dispute and directing the disposition of that portion of the Escrow
Indemnity Funds;
after which Escrow Agent shall promptly pay that portion of the Escrow Indemnity
Funds which relates to the Indemnity Unresolved Claim in accordance with the
Indemnity Settlement Notice or the Indemnity Award.
2.5 Maximum Distributions. Notwithstanding anything in this Agreement
to the contrary, in no event shall Acquiror be entitled to received shares of
Acquiror Stock having an aggregate value of greater than $3,000,000 (calculated,
in each case, based on the shares of Acquiror Stock being disbursed multiplied
by the Market Price employed in connection with such disbursement). At such time
as the aggregate amount paid to Acquiror (calculated in accordance with the
foregoing sentence) equals $3,000,000, any remaining Escrow Indemnity Funds
shall be disbursed to the Stockholders and this Agreement shall terminate, all
in accordance with the other provisions of this Agreement.
ARTICLE 3
ESCROW AGENT
3.1 Appointment. Acquiror, the Company and the Agent hereby appoint the
Escrow Agent to serve hereunder and the Escrow Agent hereby accepts such
appointment and agrees to perform all duties which are expressly set forth in
this Agreement.
3.2 Compensation. The Escrow Agent shall be entitled to compensation
for legal fees incurred in connection with the preparation of this Agreement and
for its services hereunder in accordance with the attached fee schedule, which
may be subject to change hereafter on an annual basis, upon notice to Acquiror
and the Agent. Compensation of the Escrow Agent and all reasonable expenses of
the Escrow Agent (including all reasonable attorneys' fees of those attorneys
not regularly in its employ) in connection with the performance of its services
hereunder shall be borne one half by Acquiror and one half by the Agent. The
Escrow Agent shall be entitled to reimbursement on demand for all reasonable
out-of-pocket expenses incurred in connection with the administration of this
Agreement or the escrow created hereby which are in excess of its compensation
for normal services hereunder, including without limitation,
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payment of any reasonable legal fees and expenses reasonably incurred by the
Escrow Agent in connection with the resolution of any claim in any party
hereunder.
3.3 Indemnification. Notwithstanding anything to the contrary in the
foregoing, Acquiror and the Agent will at their joint and several expense hold
the Escrow Agent, its directors, officers and employees harmless and indemnify
the Escrow Agent in connection with any and all third party claims, losses,
judgments or costs, regardless of their nature, arising out of or because of
this Agreement, except such as may arise because of the Escrow Agent's gross
negligence or willful misconduct or breach of this Agreement (including, without
limitation, Article 2 hereof). Any such expense in the preceding sentence as
between Acquiror and the Agent shall be borne jointly and severally by Acquiror
and the Agent. Acquiror and the Agent also exonerate said Escrow Agent from any
liability in connection with this Agreement or with the administration of its
duties hereunder, including but not limited to reasonable legal fees and other
reasonable costs and expenses of defending or preparing to defend against any
claim or liability except such as may arise because of the Escrow Agent's gross
negligence or willful misconduct in performing its specified duties hereunder or
breach of this Agreement (including, without limitation, Article 2 hereof).
Nothing in this Section 3.3 shall constitute a waiver of any claim which
Acquiror and the Agent may have against the other for contribution arising from
their joint obligations to hold the Escrow Agent harmless hereunder. Anything in
this Agreement to the contrary notwithstanding, in no event shall the Escrow
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Escrow
Agent has been advised of the likelihood of such loss or damage and regardless
of the form of action. The Escrow Agent shall not be obligated to take any legal
or other action hereunder which might in its judgment involve any expense or
liability unless it shall have been furnished with acceptable indemnification.
3.4 Resignation; Removal. The Escrow Agent may resign at any time upon
giving the parties hereto 30 days' prior written notice. Acquiror and the Agent
may also, at any time, mutually agree in a writing signed by Acquiror and the
Agent to remove the Escrow Agent upon 30 days' prior written notice. In either
event, the successor Escrow Agent shall be such person, firm or corporation as
shall be mutually selected by Acquiror and the Agent. It is understood and
agreed that such resignation or removal shall not be effective until a successor
agrees to act hereunder by signing a copy hereof; provided, however, if no
successor is appointed and acting hereunder within thirty (30) days after such
notice is given, the Escrow Agent may pay and deliver the Escrow Indemnity Funds
into a court of competent jurisdiction.
ARTICLE 4
LIABILITIES OF ESCROW AGENT
4.1 Limitations.
(a) The Escrow Agent shall be liable only to accept, hold and
deliver the Escrow Indemnity Funds in accordance with the provisions of this
Agreement and any amendments hereto or other written instructions executed by
Acquiror and the Agent; provided, however, that the Escrow Agent shall not incur
any liability with respect to (a) any action taken or omitted in good faith and
with due care upon the reasonable advice of its counsel, including
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in-house counsel, given with respect to any questions relating to the duties and
responsibilities of the Escrow Agent under this Agreement, or (b) any action
taken or omitted in reliance upon any instrument which the Escrow Agent shall in
good faith and with due care believe to be genuine (including the execution of
such instrument, the identity or authority of any person executing such
instrument, its validity and effectiveness, and the truth and accuracy of any
information contained therein), to have been signed by a proper person or
persons and to conform to the provisions of this Agreement.
(b) The Escrow Agent does not have any interest in the Escrow
Indemnity Funds deposited hereunder but is serving as escrow holder only and
having only possession thereof. The Agent, on behalf of the Stockholders,
covenants and agrees that he will pay or reimburse the Escrow Agent upon request
for any transfer taxes, to the extent that any exist, relating to the Escrow
Indemnity Funds incurred in connection herewith. Any payments or income from the
Escrow Indemnity Funds shall be subject to withholding regulations then in force
with respect to United States taxes. The Agent, on behalf of the Stockholders,
agrees to assume any and all obligations imposed now or hereafter by any
applicable tax law with respect to the payment of Escrow Indemnity Funds under
this Agreement to the Stockholders, and to indemnify and hold the Escrow Agent
harmless from and against any taxes, additions for late payment, interest,
penalties and other expenses, that may be assessed against the Escrow Agent in
any such payment or other activities under this Agreement. Acquiror and the
Agent undertake to instruct the Escrow Agent in writing with respect to the
Escrow Agent's responsibility for withholding and other taxes, assessments or
other governmental charges, certifications and governmental reporting in
connection with its acting as Escrow Agent under this Agreement. The Agent
agrees to hold the Escrow Agent harmless and the Agent agrees to indemnify the
Escrow Agent for any liability on account of taxes, assessments or other
governmental charges, including without limitation the withholding or deduction
or the failure to withhold or deduct the same, and any liability for failure to
obtain proper certifications or to properly report to governmental authorities,
to which the Escrow Agent may be or become subject in connection with any
payment to the Stockholders under this Agreement, including costs and expenses
(including reasonable legal fees and expenses), interest and penalties. The
parties hereto agree that, for tax reporting purposes, all interest or other
income earned in the Escrow Indemnity Funds shall be allocable to the
Stockholders.
Acquiror agrees to assume any and all obligations imposed now or
hereafter by any applicable tax law with respect to the payment of Escrow
Indemnity Funds under this Agreement to Acquiror, and to indemnify and hold the
Escrow Agent harmless from and against any taxes, additions for late payment,
interest, penalties and other expenses, that may be assessed against the Escrow
Agent in any such payment or other activities under this Agreement. Acquiror
agrees to hold the Escrow Agent harmless and Acquiror agrees to indemnify the
Escrow Agent for any liability on account of taxes, assessments or other
governmental charges, including without limitation the withholding or deduction
or the failure to withhold or deduct the same, and any liability for failure to
obtain proper certifications or to properly report to governmental authorities,
to which the Escrow Agent may be or become subject in connection with any
payment to Acquiror under this Agreement or which otherwise arises out of this
Agreement, except as provided in the preceding paragraph, including costs and
expenses (including reasonable legal fees and expenses), interest and penalties.
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The Escrow Agent shall have no more or less responsibility or liability
on account of any action or omission of any book-entry depository or subescrow
agent employed by the Escrow Agent than any such book-entry depository or
subescrow agent has to the Escrow Agent, except to the extent that such action
or omission of any book-entry depository or subescrow agent was caused by the
Escrow Agent's own gross negligence, bad faith or willful misconduct.
No distributions will be made unless Acquiror and the Agent provide the
Escrow Agent with an appropriate W-9 form for tax identification number
certification or non-resident alien certification prior to distribution. This
Section 4.1(b) and Section 3.3 hereof shall survive any termination of this
Agreement or the resignation or removal of the Escrow Agent.
4.2 Collateral Agreements. Other than this Agreement, which shall be
controlling in regards to the Escrow Indemnity Funds, the Escrow Agent shall not
be bound in any way by any contract or agreement between other parties hereto,
including the Merger Agreement and the Stockholders' Agreement, whether or not
it has knowledge of any such contract or agreement or of its terms or
conditions.
ARTICLE 5
TERMINATION
This Agreement shall be terminated upon the earliest to occur of (a)
disbursement or release of all of the Escrow Indemnity Funds by the Escrow Agent
as provided in this Agreement, or (b) the written mutual consent signed by each
of the parties hereto. This Agreement shall not be otherwise terminated.
ARTICLE 6
OTHER PROVISIONS
6.1 Notices. Any notice, demand or request required or permitted to be
given under the provisions of this Agreement shall be in writing and dispatched
by the same means to all of the foregoing on the same day and shall be deemed to
have been duly given and received (i) when delivered if delivered by hand or by
confirmed facsimile transmission or telex and (ii) three business days after
mailing if mailed by reputable courier service or registered or certified mail,
postage prepaid and return receipt requested, to the parties at the following
addresses (or to such other address as any party may request in a notice
delivered in accordance with this Section 6.1 to the other parties hereto,
provided that notices of a change of address shall be effective only upon
receipt thereof):
(a) If to Acquiror:
Iron Mountain Incorporated
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Chief Executive Officer
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With copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
and
If to the Agent:
c/o Xxxxx X. Xxxxxx
000 Xxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Telephone: (508) ___-____
Telecopy: (508) ___-____
With copies to:
Xxxxx, Oviatt, Gilman, Xxxxxxx & Xxxxxx LLP
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
If to the Escrow Agent:
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Corporate Trust Department
Iron Mountain Incorporated-Escrow
Indemnity Funds
Unless otherwise refused by Acquiror or the Agent in writing, the Escrow Agent
shall assume that the receipt of any notice was received by Acquiror and the
Agent on the same day as received by Escrow Agent.
6.2 Benefit and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
6.3 Entire Agreement; Amendment. This Agreement contains all the terms
agreed upon by the parties with respect to the subject matter hereof, except
certain terms and provisions
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set forth in the Merger Agreement and the Stockholders' Agreement and except
that capitalized terms not otherwise used herein shall have the meanings set
forth in the Merger Agreement. This Agreement may be amended only by a written
instrument signed by the parties against which enforcement of any waiver,
change, modification, extension or discharge is sought. A waiver of any of the
terms and conditions of this Escrow Agreement on one occasion shall not
constitute a waiver of the other terms of this Agreement, or of such terms and
conditions on any other occasion.
6.4 Tax Identification Numbers. Each party hereto, except the Escrow
Agent, shall provide the Escrow Agent with their Tax Identification Number (TIN)
as assigned by the Internal Revenue Service. All interest or other income earned
under this Agreement shall be allocated and paid as provided herein and reported
by the recipient to the Internal Revenue Service as having been so allocated and
paid.
6.5 Headings. The headings of the sections and subsections of this
Agreement are for ease of reference only and do not evidence the intentions of
the parties.
6.6 Governing Law. This agreement shall be governed by and construed
and enforced in accordance with the law (other than the law governing conflict
of law questions) of the Commonwealth of Massachusetts.
6.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.8 Dispute Resolution. It is understood and agreed that should any
dispute arise, including a dispute described in Section 2.4 hereof, with respect
to the delivery, ownership, right of possession, and/or disposition of the
Escrow Indemnity Funds, or should any claim be made upon such Escrow Indemnity
Funds by a third party, the Escrow Agent upon receipt of written notice of such
dispute or claim by the parties hereto or by a third party, is authorized and
directed to retain in its possession without liability to anyone, all or any of
said Escrow Indemnity Funds until such dispute shall have been settled either by
the mutual written agreement of the parties involved or by a final order, decree
or judgment of a Court in the United States of America, the time for perfection
of an appeal of such order, decree or judgment having expired. The Escrow Agent
may, but shall be under no duty whatsoever to, institute or defend any legal
proceedings which relate to the Escrow Indemnity Funds.
6.9 Consent to Jurisdiction and Service. Acquiror and the Agent hereby
absolutely and irrevocably consent and submit to the jurisdiction of the courts
in the Commonwealth of Massachusetts and of any Federal court located in said
Commonwealth in connection with any actions or proceedings brought against
Acquiror and the Agent by the Escrow Agent arising out of or relating to this
Escrow Agreement. In any such action or proceeding, Acquiror and the Agent
hereby absolutely and irrevocably waive personal service of any summons,
complaint, declaration or other process and hereby absolutely and irrevocably
agree that the service thereof may be made by certified or registered
first-class mail directed to Acquiror and the Agent, as the case may be, at
their respective addresses in accordance with Section 6.1 hereof.
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6.10 Force Majeure. Neither Acquiror nor the Agent nor the Escrow Agent
shall be responsible for delays or failures in performance resulting from acts
beyond its control. Such acts shall include but not be limited to acts of God,
strikes, lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire, communication line failures, computer
viruses, power failures, earthquakes or other disasters.
6.11 Reproduction of Documents. This Agreement and all documents
relating hereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, and (b) certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
[Signatures appear on following page.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized partners or officers as of the
day and year first written above.
THE COMPANY:
SAFESITE RECORDS MANAGEMENT CORPORATION
By:______________________________________
Name:
Title:
THE AGENT:
---------------------------------------------
Xxxxx X. Xxxxxx, Xx., as Agent
ACQUIROR:
IRON MOUNTAIN INCORPORATED
By:______________________________________
Name:
Title:
ESCROW AGENT:
STATE STREET BANK AND TRUST COMPANY, as
Escrow Agent
By:_____________________________________
Name:
Title:
