EXHIBIT 2.10
**Confidential portions have been omitted pursuant to a request for
confidential treatment and have been filed separately with
the Securities and Exchange Commission (the "Commission").**
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STOCK PURCHASE AGREEMENT
AMONG
Xxxx X. Xxxxx,
Xxxxx X. Xxxxx,
Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxx Xxxxx Xxxx,
as co-trustees of the Xxxx Xxxxx Xxxx GST Trust,
Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxxx Xxxxx Paszkeicz,
as co-trustees of the Xxxxx Xxxxx Paszkeicz GST Trust,
Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxx X. Xxxxx, Xx.,
as co-trustees of the Xxxx X. Xxxxx, Xx. GST Trust,
and
Xxxx Xxx Xxxxxxxxx and Xxxxxx X. Xxxxx,
as co-trustees of the Xxxxxx X. Xxxxx GST Trust,
AS SELLERS,
DATA BASE, INC., a Washington corporation,
AS THE COMPANY,
IRON MOUNTAIN INCORPORATED,
AS PURCHASER,
Dated as of
February 28, 1999
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TABLE OF CONTENTS
Page
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1. DEFINITIONS.........................................................................................................1
2. PURCHASE AND SALE...................................................................................................7
3. PURCHASE PRICE......................................................................................................7
4. CLOSING.............................................................................................................7
4.1. Time and Place of Closing.....................................................................................7
4.2. Obligations To Be Performed at Closing........................................................................8
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER TO EFFECT CLOSING..................................................9
5.1. Accuracy of Representations and Warranties; Compliance With Covenants.........................................9
5.2. Legal Proceedings; Governmental Filings......................................................................10
5.3. Third-Party Consents.........................................................................................10
5.4. HSR Act......................................................................................................10
5.5. Real Estate Purchase Agreement...............................................................................11
5.6. Resignations; Releases.......................................................................................11
5.7. Related Person Transactions..................................................................................11
5.8. Escrow Agreement.............................................................................................11
5.9. Legal Opinion................................................................................................11
5.10. No Material Adverse Change..................................................................................11
5.11. Satisfaction with Documents.................................................................................12
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS TO EFFECT THE CLOSING...............................................12
6.1. Accuracy of Representations and Warranties; Compliance With Covenants........................................12
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6.2. Legal Proceedings; Governmental Filings......................................................................12
6.2. HSR Act......................................................................................................13
6.3. Real Estate Purchase Agreement...............................................................................13
6.4. Escrow Agreement.............................................................................................13
6.5. Legal Opinion................................................................................................13
6.6. No Material Adverse Change...................................................................................13
6.7. Third-Party Consents.........................................................................................13
6.8. Satisfaction with Documents..................................................................................13
7. REPRESENTATIONS AND WARRANTIES OF SELLERS..........................................................................14
7.1. Organization and Authority...................................................................................14
7.2. Due Authorization and Execution..............................................................................14
7.3. Certain Assets...............................................................................................14
7.4. Contracts....................................................................................................15
7.5. Intellectual Property........................................................................................16
7.6. Permits......................................................................................................16
7.7. Insurance....................................................................................................16
7.8. Financial Statements.........................................................................................17
7.9. Capitalization; Subsidiaries.................................................................................17
7.10. No Approvals or Notices Required; No Conflicts With Material Contracts......................................18
7.11. Affiliated Transactions.....................................................................................18
7.12. Employees...................................................................................................18
7.13. Taxes.......................................................................................................19
7.14. Compliance With Laws........................................................................................19
7.15. Conduct in the Ordinary Course..............................................................................20
7.16. Absence of Legal Proceedings................................................................................21
7.17. ERISA.......................................................................................................21
7.18. No Material Adverse Change..................................................................................23
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7.19. Environmental Matters.......................................................................................23
7.20. Brokerage...................................................................................................24
7.21. Operational Matters.........................................................................................24
7.22. Adverse Restrictions........................................................................................25
7.23. Year 2000...................................................................................................25
7.24. Corporate Records...........................................................................................25
7.25. Seller's Expertise..........................................................................................25
8. REPRESENTATIONS AND WARRANTIES OF PURCHASER........................................................................26
8.1. Organization and Authority...................................................................................26
8.2. Due Authorization and Execution..............................................................................27
8.3. No Approvals or Notices Required; No Conflicts With Material Agreements......................................27
8.4. Absence of Legal Proceedings.................................................................................27
8.5. Restricted Securities; Investment Intent.....................................................................27
8.6. Purchaser's Expertise and Investigation......................................................................28
8.7. Financing....................................................................................................28
8.8. Brokerage....................................................................................................28
8.9. Capitalization of Purchaser..................................................................................29
8.10. SEC Filings; Financial Statements...........................................................................29
8.11. Shelf Registration Statement................................................................................30
8.12. Year 2000...................................................................................................30
9. INTERIM COVENANTS OF THE PARTIES...................................................................................30
9.1. Inspection...................................................................................................30
9.2. Notice of Developments.......................................................................................30
9.3. Conduct of Business in the Ordinary Course...................................................................31
9.4. Employee Benefits............................................................................................32
10. ADDITIONAL COVENANTS OF THE PARTIES...............................................................................33
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10.1. Filings; Cooperation; Information...........................................................................33
10.2. Further Assurances..........................................................................................33
10.3. Exclusivity.................................................................................................34
10.4. Shelf Registration Statement................................................................................34
11. INCOME TAX MATTERS................................................................................................36
11.1. Refunds or Credits; Tax Benefits............................................................................36
11.2. Tax Administration..........................................................................................36
11.3. Contests....................................................................................................36
11.4. Section 338(h)(10) Election.................................................................................37
12. INDEMNIFICATION AND SURVIVAL OF WARRANTIES........................................................................37
12.1. Indemnification.............................................................................................37
12.2. Claim Procedure.............................................................................................38
12.3. Limitations on Claims.......................................................................................39
12.4. Escrow Indemnity Deposits...................................................................................41
13. TERMINATION.......................................................................................................42
14. MISCELLANEOUS.....................................................................................................43
14.1. Confidentiality.............................................................................................43
14.2. Entire Understanding........................................................................................43
14.3. Expenses....................................................................................................44
14.4. Amendment...................................................................................................44
14.5. Waivers.....................................................................................................44
14.6. Parties in Interest; Assignment.............................................................................44
14.7. Notices.....................................................................................................44
14.8. Attorneys'Fees..............................................................................................46
14.9. Counterparts................................................................................................46
14.10. Headings...................................................................................................46
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14.11. Time of the Essence........................................................................................46
14.12. Applicable Law.............................................................................................46
14.13. Specific Performance.......................................................................................46
14.14. Construction...............................................................................................47
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered
into as of February 28, 1999, by and among (i) Xxxx X. Xxxxx, (ii) Xxxxx X.
Xxxxx, (iii) Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxx Xxxxx Xxxx, as
co-trustees of the Xxxx Xxxxx Xxxx GST Trust, (iv) Xxxx Xxx Xxxxxxxxx, Xxxxxx X.
Xxxxx and Xxxxx Xxxxx Paszkeicz, as co-trustees of the Xxxxx Xxxxx Paszkeicz GST
Trust, (v) Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxx X. Xxxxx, Xx., as
co-trustees of the Xxxx X. Xxxxx, Xx. GST Trust, and (vi) Xxxx Xxx Xxxxxxxxx and
Xxxxxx X. Xxxxx, as co-trustees of the Xxxxxx X. Xxxxx GST Trust (each a
"Seller" and collectively, "Sellers"), Iron Mountain Incorporated, a Delaware
corporation ("Purchaser"), and Data Base, Inc., a Washington corporation (the
"Company").
Sellers own all of the issued and outstanding shares (the "Shares") of
Common Stock, $0.0855 par value per share (the "Common Stock"), of the Company.
Sellers desire to sell to Purchaser, and Purchaser desires to purchase
from Sellers, the Shares on the terms and conditions described in this
Agreement.
The parties therefore agree as follows:
AGREEMENT
1. Definitions
For the purposes of this Agreement:
"Benefit Arrangement" means 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 pay, salary continuation for
disability, or other leave of absence, supplemental unemployment benefits,
lay-off, reduction in force or similar benefits, (v) any stock option or equity
compensation plan, (vi) any deferred compensation plan, (vii) any compensation
policy or practice, (viii) any educational assistance arrangements or policies,
(ix) any plan governed by Section 125 of the Code and (x) any change of control
arrangements or policies.
"Business" means the business conducted by the Company, including,
without limitation, the pickup, transportation, storage and delivery of data on
magnetic or optical media or in paper form, the performance of source code
escrow services, and the provision of services relating to the foregoing.
"Cash Portion of the Purchase Price" means the Purchase Price less
$46,000,000.
"Closing" means consummation of the transactions contemplated in
Section 4 hereof with respect to the Shares.
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"Closing Bonus" means a bonus in an aggregate amount of not more than
**The confidential portion has been so omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.** that
the Company intends to pay to certain employees of the Company immediately prior
to Closing (such amount to be financed through an increase in Indebtedness,
therefore reducing the Purchase Price pursuant to Section 3 of this Agreement to
the extent such Indebtedness is not paid by the Company at Closing).
"Closing Date" means the date on which Closing occurs, determined as
provided in Section 4.1 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock, $0.0855 par value per share, of
the Company.
"Company" means Data Base, Inc., a Washington corporation.
"Covered Liabilities" has the meaning assigned to that term in Section
12.1(a) hereof.
"Cumulative Limitation Amount" has the meaning assigned to that term
in Section 10.4(d) hereof.
"Customer Contracts" means all data protection service agreements,
recovery data management and service agreements, source code escrow agreements,
and other contracts and purchase orders between the Company and the Company's
customers related to the Business.
"DBRHC" means Data Base Real Estate Holdings, LLC, a Washington
limited liability company.
"DBRHC Real Estate" means the real estate owned by DBRHC that is the
subject of leases under which DBRHC is the landlord and the Company is the
tenant listed in Schedule A.
"Deferral Notice" has the meaning assigned to that term in Section
10.4(b) hereof.
"Deferral Period" has the meaning assigned to that term in Section
10.4(b) hereof.
"Determination Price" means $31.153125.
"DOJ" means the Antitrust Division of the United States Department of
Justice.
"Environmental Laws" means all Governmental Regulations relating to
pollution or protection of the environment or public health, including without
limitation the Comprehensive Environmental Response, Compensation and Liability
Act, as amended, 42 USC 9601 et seq and any analogous state statutes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"ERISA Affiliate" means any Person that is or has been in the
five-year period ending on the Closing Date treated as a single employer with
the Company under Sections 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA.
"Escrow Agent" means an escrow agent to be selected by Purchaser,
subject to the consent of Sellers (such consent not to be unreasonably withheld
or delayed).
"Escrow Agreement" has the meaning assigned to that term in Section
5.8 hereof.
"Escrow Indemnity Deposits" means **The confidential portion has been
so omitted pursuant to a request for confidential treatment and has been filed
separately with the Commission.** shares of Iron Mountain Common Stock to be
withheld from the Stock Portion of the Purchase Price delivered to Sellers on
the Closing Date, together with any interest and earnings which accrue thereon.
"Escrow Indemnity Period" means a period of **The confidential portion
has been so omitted pursuant to a request for confidential treatment and has
been filed separately with the Commission.** after the Closing Date.
"Escrow Release Date" has the meaning assigned to that term in Section
12.4(c) hereof.
"Excluded Assets" means the assets of the Company listed in Schedule B
that will be distributed by the Company to Xxxx X. Xxxxx at or prior to Closing.
"Financial Statements" has the meaning assigned to that term in
Section 7.8 hereof.
"FTC" means the Federal Trade Commission.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Entity" has the meaning assigned to that term in Section
7.6 hereof.
"Governmental Regulation" has the meaning assigned to that term in
Section 4.1 hereof.
"Hazardous Substance" means any substance (i) the presence of which
requires or may hereafter require notification, removal or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste,"
"hazardous material," "hazardous substance," "dangerous waste," "toxic
substance" or similar term under any present Environmental Law; (iii) which is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous and which is regulated pursuant to any
Environmental Law or (iv) without limitation, which contains gasoline, diesel
fuel or other petroleum products.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" means: (a) debt of the Company evidenced by notes
payable, as shown on the 1998 Balance Sheet, to (i) Seafirst Bank, (ii) Xxxxx
Xxxxxxx, (iii) First Safe Deposit
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Corporation, (iv) Xxxxxxx Xxxxxxxx and Xxxxxxx Xxxxx, (v) Xxxx X. Xxxxx, (vi)
HKLS Inc. and (vii) Xxxxxxx Xxxxxxxxx, as trustee for the Xxx Xxxxxxxx Trust;
(b) all obligations, contingent or otherwise, (i) in respect of borrowed money,
notes or similar interests, (ii) under leases which should be capitalized in
accordance with GAAP on the Company's balance sheet, and (iii) in respect of the
deferred purchase price of property and guarantees, endorsements and other
contingent obligations in respect of obligations of the type referred in this
clause (b) of others; (c) the aggregate full amount of (1) all installment sales
amounts, contingent payments or "earnouts" that the Company may be required to
pay under any agreements pursuant to which the Company acquired the outstanding
capital stock or assets of another Person and (2) deferred compensation payable
pursuant to the deferred compensation plan listed as item 2 on Schedule 7.17(a);
(d) accrued interest to the Closing Date in respect of the obligations of the
type referred to in clauses (a) and (b) above, and all fees, expenses and other
amounts (including any prepayment penalty or so-called "breakage" amounts) due
in connection with the prepayment in full of such Indebtedness which will be
prepaid at Closing; and (e) expenses incurred by the Company directly related to
consummation of the transactions contemplated by this Agreement and,
notwithstanding the limitation in Section 3, whether or not a xxxx or invoice
relating to such expenses has been delivered on or prior to the Closing Date.
"Indemnification Determination Price" as of a particular date means
the average closing price per share of Iron Mountain Common Stock, based on each
day's closing price as provided by the NASDAQ National Market System or, if
unavailable from such source, then as reported in the Wall Street Journal, for
the period of thirty (30) trading days ending on the third trading day prior to
(and not including) such date.
"Indemnified Party" has the meaning assigned to that term in Section
12.2 hereof.
"Indemnifying Party" has the meaning assigned to that term in Section
12.2 hereof.
"Initial Distribution Date" has the meaning assigned to that term in
Section 12.4(b) hereof.
"Intellectual Property" has the meaning assigned to that term in
Section 7.5 hereof.
"Iron Mountain Common Stock" means the common stock of Purchaser to be
issued to Sellers in partial consideration for the Shares pursuant to Section
4.2(b) hereof.
"Iron Mountain SEC Reports" has the meaning assigned to that term in
Section 8.10(a) hereof.
"Joinder Agreement" means the Amendment, Waiver and Joinder Agreement
to Registration Rights Agreement to be entered at or prior to Closing by
Sellers, Purchaser and stockholders of Purchaser named in the Registration
Rights Agreement representing not less than a majority in interest of such
stockholders substantially in the form attached as Exhibit 4.2(a)(2).
"Lien" means any mortgage, lien, charge, security interest, pledge or
other deposit arrangement, encumbrance, condition, sale, title retention or
other similar arrangement, device or agreement, restriction, equity, claim or
right of or obligation to, any other Person, of whatever kind and character.
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"Material Adverse Change" with respect to a Party means a material
adverse change in such Party's business, assets, liabilities, properties,
financial condition or results of operations, other than any such change arising
out of or resulting **The confidential portion has been so omitted pursuant to a
request for confidential treatment and has been filed separately with the
Commission.** from general economic, financial, competitive or market conditions
or from changes in or generally affecting the industry in which such Party
conducts its business (it being understood and agreed that a reduction in the
price of shares of Iron Mountain Common Stock shall not, in and of itself,
constitute or be deemed to reflect a Material Adverse Change).
"Material Contract" means each agreement, contract or understanding
(other than a Customer Contract) to which the Company is a party or by which it
or any of its assets is bound that (i) involves obligations of or payments to or
from the Company reasonably expected to exceed **The confidential portion has
been so omitted pursuant to a request for confidential treatment and has been
filed separately with the Commission.** per year or **The confidential portion
has been so omitted pursuant to a request for confidential treatment and has
been filed separately with the Commission.** in the aggregate; (ii) constitutes
a joint venture or similar contract or agreement; (iii) constitutes a note,
mortgage, indenture, guaranty, other obligation, agreement or other instrument
for or relating to any lending or borrowing (including assumed debt); (iv)
constitutes an agreement under which the Company is lessee of or holds or
operates any real property or material item of equipment; (v) imposes any
nondisclosure or confidentiality obligations on the Company (other than those
entered into in the ordinary course of business with customers and employees);
or (vi) prohibits or limits the Company from freely engaging in any business or
competing anywhere in the world.
"Material Information Event" has the meaning assigned to that term in
Section 10.4(b) hereof.
"1998 Balance Sheet" means the December 31, 1998 balance sheet forming
part of the Financial Statements.
"Noncompetition Agreement" has the meaning assigned to that term in
Section 4.2(a) hereof.
"Party" shall, unless the context otherwise requires, refer to
Purchaser, on the one hand, and the Company and Sellers, on the other hand.
"Permits" has the meaning assigned to that term in Section 7.6 hereof.
"Person" means any natural person, corporation, firm, unincorporated
organization, partnership, limited partnership, limited liability company,
trust, business trust, joint venture, joint stock company, Governmental Entity
or other organization or entity.
"Plan" means any employee benefit plan (within the meaning of Section
3(3) of ERISA).
"Pro Rata Share" has the meaning assigned to that term in Section
4.2(b) hereof.
"Purchase Price" has the meaning assigned to that term in Section 3
hereof.
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"Purchaser" means Iron Mountain Incorporated, a Delaware corporation.
"Purchaser Indemnified Parties" has the meaning assigned to that term
in Section 12.1(a) hereof.
"Qualified Plan" has the meaning assigned to that term in Section
7.17(d) hereof.
"Real Estate Purchase Agreement" means the Real Estate Purchase and
Sale Agreement that has been, or contemporaneously with execution and delivery
of this Agreement will be, entered into between DBRHC and Purchaser, pursuant to
which DBRHC intends to sell to Purchaser, and Purchaser intends to buy from
DBRHC, all of the DBRHC Real Estate.
"Registration Rights Agreement" means that Amended and Restated
Registration Rights Agreement dated as of June 12, 1997 among Purchaser and the
stockholders of Purchaser named therein, as amended by the Joinder Agreement.
"Related Agreements" means this Agreement, the Escrow Agreement, the
Noncompetition Agreement, the Joinder Agreement and the Registration Rights
Agreement.
"Related Person" with respect to any Person means (i) any member of
such Person's immediate family, (ii) any individual or entity that directly or
indirectly controls, is controlled by or is under common control with such
Person or any member of such Person's immediate family, (iii) any entity which
such Person or any member of such Person's immediate family serves as a
director, officer, partner, executor or trustee of such entity and (iv) any
entity in which such Person or any member of such Person's immediate family owns
a ten percent (10%) or more interest in the capital stock or beneficial interest
of such entity.
"Sale Notice" has the meaning assigned to that term in Section 10.4(b)
hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Indemnified Parties" has the meaning assigned to that term in
Section 12.1(b) hereof.
"Sellers" means (i) Xxxx X. Xxxxx, (ii) Xxxxx X. Xxxxx, (iii) Xxxx Xxx
Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxx Xxxxx Xxxx, as co-trustees of the Xxxx Xxxxx
Xxxx GST Trust, (iv) Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxxx Xxxxx
Paszkeicz, as co-trustees of the Xxxxx Xxxxx Paszkeicz GST Trust, (v) Xxxx Xxx
Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxx X. Xxxxx, Xx., as co-trustees of the Xxxx X.
Xxxxx, Xx. GST Trust, and (vi) Xxxx Xxx Xxxxxxxxx and Xxxxxx X. Xxxxx, as
co-trustees of the Xxxxxx X. Xxxxx GST Trust.
"Sellers' Knowledge" means the actual knowledge of Xxxx X. Xxxxx,
Xxxxxxx X. Xxxx, Xxxxx Xxxxx, Xxxx Xxxxxxxxx and Xxxxxx Xxxxxx.
"Sellers' Representative" has the meaning assigned to that term in
Section 12.4 hereof.
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"Separate Counsel" has the meaning assigned to that term in Section
12.2(b) hereof.
"Shares" means all of the issued and outstanding shares of the Common
Stock.
"Shelf Registration Statement" has the meaning assigned to that term
in Section 10.4(a) hereof.
"Stock Portion of the Purchase Price" means $46,000,000.
"Taxes" has the meaning assigned to that term in Section 7.13 hereof.
"Termination Date" means May 1, 1999.
"Unresolved Claims" means any claim under Section 12 by a Purchaser
Indemnified Party against Sellers, until such time as such claim or request has
been paid in full or otherwise fully settled, compromised or adjusted by
Purchaser, the Sellers' Representative 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.
"Year 2000 Compliant" means the ability to correctly recognize,
record, store, present and process calendar dates after December 31, 1999 in the
same manner as calendar dates before December 31, 1999.
2. Purchase and Sale
Purchaser hereby agrees to purchase from each Seller, and each Seller
hereby agrees to sell to Purchaser, on the terms and conditions contained
herein, all of the Shares owned by such Seller as set forth on Schedule 2
attached hereto, free and clear of all Liens; provided, however, that Purchaser
shall not be required to purchase any Shares unless all Shares (which shall
consist of all shares of outstanding capital stock of the Company) are
transferred to Purchaser, free and clear of all Liens, at Closing.
3. Purchase Price
The purchase price to be paid to Sellers for the Shares (the "Purchase
Price") will be One Hundred Million Dollars ($100,000,000), less the outstanding
balance, if any, of the Indebtedness as of the Closing Date. Subject to the
provisions of Section 12.4 hereof, the Purchase Price shall be payable to
Sellers at Closing in the manner described in Section 4.2(b) hereof.
4. Closing
4.1. Time and Place of Closing
The Closing shall occur in at the offices of Xxxxxx Xxxxxx White &
XxXxxxxxx, 6100 Columbia Center, 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx, xx the
day that is the later of (a) five (5) business days after (i) expiration or
early termination of the "waiting period" and any extensions thereof under the
HSR Act and (ii) if an injunction, court order, judgment, decree,
7
administrative order, statute, law (including common law), ordinance, by-law,
rule, regulation or policy of any Governmental Entity (a "Governmental
Regulation") enjoining or restraining consummation of the transactions
contemplated by this Agreement has been obtained, the reversal, lifting or other
successful appeal or resolution of such Governmental Regulation (which reversal,
lifting, or appeal shall itself become final and non-appealable) or (b) five (5)
business days after satisfaction of all other conditions to performance of the
Parties' obligations to close hereunder, or on such other date as the Parties
may mutually agree in writing. The consummation of the transactions contemplated
by this Agreement and Closing will be deemed to take place at 12:01 a.m. (local
time) on the date on which Closing actually occurs. If Closing does not occur on
or before the Termination Date, either Party may give notice to the other of its
intention to terminate this Agreement, in which event the obligation of each
Party to close the transactions contemplated hereby shall terminate on that date
which is five (5) business days after the giving of such notice if Closing has
not by then occurred, unless the failure to effect Closing shall have resulted
from a default by the Party giving such notice of termination; provided,
however, that the Termination Date shall be extended to June 1, 1999 if the sole
reason Closing has not occurred by the Termination Date is due to the failure to
satisfy the conditions set forth in Section 5.4 and Section 6.3. No such notice
shall relieve any Party of any liability for its breach of this Agreement.
4.2. Obligations To Be Performed at Closing
(a) At Closing, Sellers shall:
(i) deliver to Purchaser stock certificate(s)
representing the Shares, duly endorsed in blank or accompanied by stock powers
or other duly executed instruments of transfer, as may be necessary to effect
the transfer of good and marketable title to the Shares to Purchaser or such
Person as Purchaser may designate to hold such Shares, free and clear of all
Liens;
(ii) deliver the resignations, effective as of the
Closing Date, of all officers and members of the Board of Directors of the
Company as are requested by Purchaser;
(iii) deliver true, correct and complete originals
of the stock books, stock ledgers, minute books and corporate seals of the
Company as are in the Company's possession;
(iv) cause Xxxx X. Xxxxx to execute and deliver to
Purchaser the Noncompetition Agreement in favor of Purchaser in the form
attached as Exhibit 4.2(a)(1) hereto (the "Noncompetition Agreement");
(v) cause the Sellers' Representative to execute
and deliver to Purchaser the Escrow Agreement;
(vi) execute and deliver to Purchaser the Joinder
Agreement;
(vii) deliver to Purchaser payoff letter(s)
relating to the Indebtedness that will be paid by the Company at Closing; and
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(viii) execute and deliver to Purchaser any other
documents required to be delivered by Sellers to Purchaser at or prior to
Closing pursuant to this Agreement or otherwise in connection with the
transactions contemplated by this Agreement.
(b) At Closing, Purchaser shall:
(i) pay to Sellers the Cash Portion of the
Purchase Price by wire transfer to a bank account designated by Sellers in
immediately available funds;
(ii) subject to the provisions of Section 12.4,
execute and deliver to each Seller stock certificate(s) representing that number
of shares of Iron Mountain Common Stock as shall equal the product of (A) the
quotient obtained by dividing the Stock Portion of the Purchase Price by the
Determination Price multiplied by (B) such Seller's pro rata share of the Common
Stock as set forth on Schedule 2 ("Pro Rata Share"), provided, that if such
product would result in a fractional share, then in lieu of issuing any such
fractional share, Purchaser shall pay to such Seller cash in an amount equal to
the product of the Determination Price multiplied by such fraction;
(iii) execute and deliver the Noncompetition
Agreement to Xxxx X. Xxxxx;
(iv) execute and deliver to the Sellers'
Representative the Escrow Agreement;
(v) execute and deliver to each Seller the Joinder
Agreement and deliver to Sellers signature pages for all other parties to the
Joinder Agreement (other than Sellers);
(vi) deliver to Sellers a copy of a resolution of
the directors and, if required by law, shareholders of Purchaser, certified by
an officer of Purchaser, approving the transactions that are the subject of this
Agreement; and
(vii) execute and deliver to Sellers any other
documents required to be delivered by Purchaser to Sellers at or prior to
Closing pursuant to this Agreement or otherwise in connection with the
transactions contemplated by this Agreement; and
5. Conditions Precedent to Obligations of Purchaser to Effect Closing
The obligations of Purchaser to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by it at Closing
shall be subject to the satisfaction of the following conditions at or before
Closing, any one or more of which may be waived by Purchaser and the
non-fulfillment of any of which will permit Purchaser, at its sole option, to
terminate this Agreement:
5.1. Accuracy of Representations and Warranties; Compliance With
Covenants
All representations and warranties of Sellers contained herein
(including all applicable Exhibits and Schedules) shall have been true in all
material respects when made. In addition, the
9
representations and warranties of Sellers contained in this Agreement identified
on Exhibit 5.1 hereto shall be true in all material respects (except for
representations and warranties that contain a qualification as to materiality,
which shall be true and correct in all respects) on and as of the Closing Date
with the same force and effect as if again made on and as of such date. Further,
all other representations and warranties of Sellers contained herein shall be
true in all material respects (except for representations and warranties that
contain a qualification as to materiality, which shall be true and correct in
all respects) on and as of the Closing Date with the same force and effect as if
again made on and as of such date, except for any breaches that, individually or
in the aggregate, would not result in a Material Adverse Change in the Company.
The Company and Sellers shall have performed in all material respects all
obligations and agreements and complied in all material respects with all
covenants and conditions contained in this Agreement to be performed and
complied with by them on or prior to the Closing Date (other than Sellers'
obligations under Section 4.2(a), which shall be performed in all respects). At
Closing Sellers shall have delivered a certificate confirming the matters set
forth in the second, third and fourth sentences of this Section 5.1.
5.2. Legal Proceedings; Governmental Filings
Except with respect to the HSR Act or antitrust matters, which will be
governed by Section 5.4, no Governmental Regulation shall be in effect which
enjoins, restrains, conditions or prohibits, or seeks damages or other relief in
connection with, consummation of this Agreement or the transactions contemplated
herein, and no litigation, investigation or administrative proceeding (other
than action initiated or threatened by Purchaser) shall be pending or threatened
in writing which would enjoin, restrain, condition or prevent, or seeks damages
or other relief in connection with, consummation of this Agreement or the
transactions contemplated herein or which reasonably could be expected to result
in a Material Adverse Change in the Company. All filings required by applicable
law to be made by Sellers with or to any Governmental Entity in connection with
the transactions contemplated by this Agreement shall have been made and any
waiting period thereunder shall have lapsed.
5.3. Third-Party Consents
Except with respect to the HSR Act or antitrust matters, which will be
governed by Section 5.4, Sellers shall have obtained all written consents, if
any, to consummation of the transactions contemplated by this Agreement (i) by
any party to a Material Contract if such consent is required, (ii) by any
licensor of any material Intellectual Property used by the Company if such
consent is required and (iii) any other required consent (other than those
which, if not obtained, would not, individually or in the aggregate, result in a
Material Adverse Change in the Company).
5.4. HSR Act
All required waiting periods applicable to this Agreement and the
transactions contemplated by this Agreement under the HSR Act shall have expired
or been terminated without there being in effect a Governmental Regulation
enjoining or restraining consummation of such transactions; provided that upon
the reversal, lifting or other successful appeal or
10
resolution of such Governmental Regulation, the condition set forth in this
Section 5.4 will be deemed fulfilled.
5.5. Real Estate Purchase Agreement
The conditions precedent to Purchaser's obligations to acquire the
DBRHC Real Estate shall have been satisfied or waived, and DBRHC shall
simultaneously with Closing perform all of its obligations to convey the DBRHC
Real Estate to Purchaser, in accordance with the terms of the Real Estate
Purchase Agreement.
5.6. Resignations; Releases
Each of the officers and directors of the Company and each trustee
and/or administrator under any Plan or Benefit Arrangement of the Company shall
have submitted his, her or its unqualified written resignation, dated as of the
Closing Date, from all such positions held with the Company (and, at the request
of Purchaser, from positions as an employee of the Company) and as a trustee
and/or administrator for each such Plan or Benefit Arrangement (which
resignation shall include a release, in form and substance reasonably acceptable
to Purchaser, pursuant to which the Company will be released from any and all
liabilities, claims and actions effective as of the Closing Date).
5.7. Related Person Transactions
Except for (i) leases between the Company and DBRHC to be assigned to
Purchaser under the Real Estate Purchase Agreement and (ii) such contracts,
agreements and undertakings which Purchaser has given notice to the Company it
wants to retain, which contracts shall be effective as of the Closing Date, all
contracts, agreements and undertakings between the Company and any Related
Person thereof or of any Seller thereof shall have been satisfied and discharged
as of the Closing Date with no further liability to the Company.
5.8. Escrow Agreement
Purchaser, the Sellers' Representative and the Escrow Agent shall have
executed and delivered an Escrow Agreement in form and substance reasonably
satisfactory to Sellers and Purchaser to hold the Escrow Indemnity Deposits
contemplated hereby (the "Escrow Agreement").
5.9. Legal Opinion
Sellers and the Company shall have furnished Purchaser with an opinion
dated the Closing Date of Heller, Ehrman, White & XxXxxxxxx, counsel for Sellers
and the Company, in form and substance reasonably satisfactory to Purchaser and
its counsel.
5.10. No Material Adverse Change
Since December 31, 1998, there shall not have occurred and be
continuing any Material Adverse Change in the Company.
11
5.11. Satisfaction with Documents
All agreements, certificates, opinions and other documents shall be
reasonably satisfactory in form, scope and substance to Purchaser and its
counsel, and Purchaser 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.
6. Conditions Precedent to Obligations of Sellers to Effect the Closing
The obligations of Sellers to perform and observe the covenants,
agreements and conditions hereof to be performed and observed by them at Closing
shall be subject to the satisfaction of the following conditions at or before
Closing, any one or more of which may be expressly waived in writing by Sellers
and the non-fulfillment of any of which will permit Sellers, at their sole
option, to terminate this Agreement:
6.1. Accuracy of Representations and Warranties; Compliance With
Covenants
All representations and warranties of Purchaser contained herein
(including all applicable Exhibits and Schedules) shall have been true in all
material respects when made. In addition, the representations and warranties of
Purchaser contained in this Agreement identified on Exhibit 6.1 hereto shall be
true in all material respects (except for representations and warranties that
contain a qualification as to materiality, which shall be true and correct in
all respects) on and as of the Closing Date with the same force and effect as if
again made on and as of such date. Further, all other representations and
warranties of Purchaser contained herein shall be true in all material respects
(except for representations and warranties that contain a qualification as to
materiality, which shall be true and correct in all respects) on and as of the
Closing Date with the same force and effect as if again made on and as of such
date, except for any breaches that, individually or in the aggregate, would not
result in a Material Adverse Change in Purchaser. Purchaser shall have performed
in all material respects all obligations and agreements and complied in all
material respects with all covenants and conditions contained in this Agreement
to be performed and complied with by it on or prior to the Closing Date (other
than Purchaser's obligations under Section 4.2(b), which shall be performed in
all respects). At Closing Sellers shall have delivered a certificate confirming
the matters set forth in the second, third and fourth sentences of this Section
6.1.
6.2. Legal Proceedings; Governmental Filings
Except with respect to the HSR Act or antitrust matters, which will be
governed by Section 6.3, no order of any court or administrative agency shall be
in effect which enjoins, restrains, conditions or prohibits, or seeks damages or
other relief from Sellers in connection with, consummation of this Agreement or
the transactions contemplated herein, and no litigation, investigation or
administrative proceeding (other than action initiated by the Company or
Sellers) shall be pending or threatened in writing which would enjoin, restrain,
condition or prevent, or seeks damages or other relief from Sellers in
connection with, consummation of this Agreement or the transactions contemplated
herein. All filings required by applicable law to be made by
12
Purchaser with or to any Governmental Entity in connection with the transactions
contemplated by this Agreement shall have been made and any waiting period
thereunder shall have lapsed.
6.3. HSR Act
All required waiting periods applicable to this Agreement and the
transactions contemplated by this Agreement under the HSR Act shall have expired
or been terminated without there being in effect a Governmental Regulation
enjoining or restraining consummation of such transactions; provided that upon
the reversal, lifting or other successful appeal or resolution of such
Governmental Regulation, the condition set forth in this Section 6.3 will be
deemed fulfilled.
6.4. Real Estate Purchase Agreement
The conditions precedent to Seller's obligations to sell the DBRHC
Real Estate shall have been satisfied or waived, and Purchaser shall
simultaneously with Closing perform all of its obligations to acquire the DBRHC
Real Estate to Purchaser, in accordance with the terms of the Real Estate
Purchase Agreement.
6.5. Escrow Agreement
Purchaser, the Sellers' Representative and the Escrow Agent shall have
executed and delivered the Escrow Agreement.
6.6. Legal Opinion
Purchaser shall have furnished Sellers with an opinion dated the
Closing Date of Xxxxxxxx & Worcester LLP, counsel for Purchaser, in form and
substance reasonably satisfactory to Sellers, the Company and their counsel.
6.7. No Material Adverse Change
Since September 30, 1998, there shall not have occurred and be
continuing any Material Adverse Change in Purchaser.
6.8. Third-Party Consents
Purchaser shall have obtained the written consent of stockholders of
Purchaser named in the Registration Rights Agreement representing a majority in
interest of such stockholders.
6.9. Satisfaction with Documents
All agreements, certificates, opinions and other documents shall be
reasonably satisfactory in form, scope and substance to Sellers and their
counsel, and Sellers and their 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.
13
7. Representations and Warranties of Sellers
To induce Purchaser to enter into and perform this Agreement, Sellers
represent and warrant to Purchaser as follows:
7.1. Organization and Authority
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Washington, is duly qualified to do
business and is in good standing in all other jurisdictions where its failure to
qualify to do business would result in a Material Adverse Change in the Company.
The Company has all requisite power and authority to own or hold under lease its
properties and to conduct the Business, to execute and deliver this Agreement
and to perform its obligations hereunder and consummate the transactions
contemplated hereby.
7.2. Due Authorization and Execution
The execution, delivery and performance of each Related Agreement to
which it is a party has been duly authorized by all requisite action on the part
of the Company and each Seller. Each Related Agreement to which it is a party
has been, or at Closing will be, duly authorized, executed and delivered by the
Company and each Seller and is, or at Closing will be, a legal, valid and
binding obligation of the Company and such Seller, enforceable against each of
them in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and except as the availability of equitable remedies may be
limited by equitable principles of general applicability.
7.3. Certain Assets
(a) Except as set forth on Schedule 7.3, the Company (i) has
good and marketable title to all of the material assets and properties used in
the Company's Business or otherwise reflected on the 1998 Balance Sheet and to
all assets and properties acquired by the Company since such date that would,
had it been acquired prior to such date, be capitalized on or included in such
balance sheet (except for assets and properties sold, consumed or otherwise
disposed of by the Company in the ordinary course of business since the date
thereof), and (ii) has good title to all leasehold estates in all material
assets and properties which it leases, in each case, free and clear of all Liens
except for (A) Liens in favor of Seafirst Bank as set forth on Schedule 7.3,
which will be paid in full and terminated at Closing, (B) Liens for current
Taxes not yet due and payable or for Taxes the validity of which is being
contested in good faith and for which adequate reserves have been established on
the 1998 Balance Sheet, (C) statutory mechanics', materialmen's and other
similar Liens which have arisen in the ordinary course of business, and (D)
Liens contemplated by this Agreement or any of the Exhibits or Schedules hereto
or by any of the documents referred to herein or therein. To Sellers' Knowledge,
all material assets and properties owned or leased by it are in good operating
condition and repair except for reasonable wear and tear.
(b) Each lease or other agreement pursuant to which the
Company leases any material assets or properties is a legal, valid and binding
obligation of the Company and, to Sellers' Knowledge, each other party thereto.
Except as set forth on Schedule 7.3, neither
14
the Company nor, to Sellers' Knowledge, any other party thereto, is in material
breach or default of any such lease or other agreement. The Company enjoys
undisturbed possession under all such leases or other agreements.
(c) Schedule 7.3 sets forth a true and complete list of all
banks, brokerage firms, trust companies or savings and loan associations in
which the Company has an account or safe deposit box, and the persons authorized
to have access to, draw on or authorize transactions in such account or safe
deposit box, and the names of all Persons, if any, holding powers of attorney
from the Company and a summary statement as to the terms thereof.
(d) The Company owns, or has the right to use pursuant to
valid leases and licenses, all assets that are necessary for the conduct of the
Business.
7.4. Contracts
(a) Schedule 7.4(a) sets forth a true and complete list of
(i) all customers serviced by the Company as of December 31, 1998, by customer
number (but not by name) and xxxxxxxx for such customer for the month of
December 1998 and (ii) all Material Contracts of the Company. The Company has
made available for Purchaser's inspection the Material Contracts and its
standard forms of (x) data protection service agreements, (y) recovery data
management and service agreements and (z) source code escrow agreements. As of
December 31, 1998, no single Customer account represented more than **The
confidential portion has been so omitted pursuant to a request for confidential
treatment and has been filed separately with the Commission.** of the Company's
gross revenues for the fiscal year then ended.
(b) To Sellers' Knowledge, each of the Customer Contracts
and Material Contracts is valid and in full force and effect and enforceable
against the parties thereto. To Seller's Knowledge, except as set forth in
Schedule 7.4(b)(1), (i) there are no existing material defaults, and the Company
has not received or given notice of a material default or claimed default, with
respect to any Customer Contract or Material Contract (other than delinquencies
by customers of **The confidential portion has been so omitted pursuant to a
request for confidential treatment and has been filed separately with the
Commission.** or less as of the date of this Agreement), (ii) no event has
occurred which with notice or lapse of time, or both, would constitute a default
thereunder and (iii) except in the context of negotiations of expired or nearly
expired contracts in the usual course of the Company's Business, the Company has
not received any notice or other information indicating that any party to any
Customer Contract or Material Contract intends to cancel or terminate the same
or to materially decrease the rate of or materially change the terms of doing
business with the Company. Schedule 7.4(b)(2) sets forth the results of Sellers'
review, conducted in connection with preparations for the transactions
contemplated by this Agreement, of the following features of the Company's
Customer Contracts: (i) the form (if any) used and (ii) whether there are
material deviations from the form and, if so, whether such deviations relate to
the disclaimers of liability for consequential damages or reproduction of data.
**The confidential portion has been so omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.**
15
7.5. Intellectual Property
Except as set forth in Schedule 7.5 and except for licenses of
computer software used by the Company that is generally available
"off-the-shelf" through commercial software vendors, the Company owns or has the
right to use, without payment to or interference from any person, all of the
trademarks, service marks, trade names, copyrights, patents, applications for
registration of any of the foregoing, computer software or software programs
(including source code and object code), proprietary methodologies, processes,
specifications, and other intellectual property of whatever kind or description,
which are necessary for the present or planned operation of the Business (the
"Intellectual Property"), except if the failure to own or have the right to use
the Intellectual Property will not result in a Material Adverse Change in the
Company. Without intending to limit the generality of the foregoing, each of
SecureBase and SecureSync is original and is capable of copyright protection in
the United States, and, except as set forth in Schedule 7.5, the Company has
complete rights to and ownership of SecureBase and SecureSync, including
possession of the source code for such software applications in its most recent
form. Each of SecureBase and SecureSync (i) is free from any material defect or
programming or documentation error and operates and runs in substantial
conformity to the specifications thereof (except (A) as set forth in Schedule
7.23, with respect to whether SecureBase and SecureSync are Year 2000 Compliant,
or (B) where the existence of such defect or error or failure to so operate and
run could not reasonably be expected to result in a Material Adverse Change in
the Company), and (ii) can be recreated from its associated source code. The
Company has received no notice of, and to Sellers' Knowledge (except that as to
SecureBase and SecureSync, such knowledge qualifier shall not apply) there is
no, conflict with, infringement of or other violation of rights of others with
respect to any Intellectual Property. Schedule 7.5 sets forth all licenses,
sublicenses or agreements pertaining to any of the Intellectual Property (other
than with respect to "off-the-shelf" software) owned or used by the Company in
the present and planned operation of the Business. To Sellers' Knowledge, none
of the Company's Intellectual Property is being infringed or violated by any
other Person.
7.6. Permits
The Company has obtained all approvals, permissions, consents,
licenses, franchises, permits and other authorizations (collectively, "Permits")
from any federal, state or local governmental or regulatory entity (a
"Governmental Entity") that are required for the conduct of the Business and no
event has occurred which (with the giving of notice or passage of time or both)
may constitute a material breach or violation of any such Permits. To Sellers'
Knowledge, all Permits are in full force and effect and the Company has not
received notice from any Governmental Entity of its intent to revoke or
terminate any of such Permits.
7.7. Insurance
Schedule 7.7 sets forth a description of each insurance policy
maintained by the Company with respect to the Business (including, without
limitation, expiration dates, risks insured against, amounts of coverage, annual
premiums, exclusions, deductibles and self-insured retention amounts) and each
such policy is in full force and effect. Except as set forth in Schedule 7.7,
the Company is not in default with respect to its obligations under any such
policy and does not have any self-insurance or co-insurance programs. Except as
set forth in Schedule 7.7, the Company
16
has not, within the past year, or to Sellers' Knowledge within the four (4)
years prior to such year, been refused insurance by any insurance carrier to
which it has applied for insurance.
7.8. Financial Statements
The Company has provided to Purchaser true and complete copies of the
audited balance sheets of the Company dated as of December 31, 1997 and 1998,
and the related audited statements of income, cash flow and changes in
shareholders' equity for the Company for the respective 12-month periods then
ended (collectively, the "Financial Statements"). The Financial Statements have
been prepared from the books and records of the Company in accordance with GAAP
applied on a consistent basis and the Company's usual and customary practices.
The Financial Statements fairly present the financial condition, assets and
liabilities of the Company as of the dates thereof and the results of operations
for the indicated periods. At December 31, 1998, the Company did not have any
obligations or liabilities, past, present or deferred, fixed, absolute,
contingent or other, regardless of when asserted, relating to the Company
arising out of transactions entered into at or prior to such date, or any action
or inaction at or prior to such date, except (i) as disclosed in the 1998
Balance Sheet, or the notes thereto, or (ii) for obligations arising under
contracts entered into in the ordinary course prior to such date to the extent
performance is required after such date. Since December 31, 1998, the Company
has not incurred any such obligations or liabilities, other than obligations and
liabilities incurred in the ordinary course of business consistent with past
practice of the Company, which do not and could not be reasonably expected to,
in the aggregate, result in a Material Adverse Change in the Company, and fees
relating to the transactions contemplated by this Agreement.
7.9. Capitalization; Subsidiaries
(a) The authorized capital stock of the Company consists of
500,000 shares of Common Stock, $0.0855 par value per share, including 1,000
shares designated as Voting Common Stock (of which 400 shares are issued and
outstanding) and 499,000 shares designated as Nonvoting Common Stock (of which
99,600 shares are issued and outstanding).
(b) Sellers own all of the issued and outstanding shares of
Common Stock, free and clear of all Liens, except for Liens (i) arising in
connection with this Agreement or (ii) arising from applicable securities laws.
All of the issued and outstanding shares of Common Stock have been duly
authorized, validly issued and fully paid and are nonassessable and are not
subject to any preemptive or similar rights and are owned of record and
beneficially as set forth in Schedule 2. All outstanding Common Stock was issued
in compliance with the Securities Act and any applicable state securities laws.
(c) There are no outstanding (i) securities convertible into
or exchangeable for the capital stock of the Company, (ii) options, warrants or
other rights to purchase or subscribe for capital stock of the Company or (iii)
contracts, commitments, agreements, understandings or arrangements relating to
the sale, transfer or issuance of any capital stock of the Company or any other
equity interests or profit participations in the Company, any such convertible
or exchangeable securities or any such options, warrants or rights, pursuant to
which the Company or any Seller is subject or bound. The Company is not a party
to or bound by any agreement, put or commitment pursuant to which it is
obligated to
17
purchase or redeem any shares of capital stock. There are no voting trusts or
voting agreements with respect to the Common Stock.
(d) The Company does not have any subsidiaries and is not
the owner of capital stock or other equity interests in any entity.
7.10. No Approvals or Notices Required; No Conflicts With Material
Contracts
Except as listed in Schedule 7.10, the execution, delivery and
performance of each Related Agreement to which it is a party by the Company and
each Seller, and the Real Estate Purchase Agreement by DBRHC, and the
consummation of the transactions contemplated hereby and thereby will not (a)
conflict with or constitute a default or violation (with or without the giving
of notice or lapse of time, or both) of any Governmental Regulation, or of any
Permit, authorization, status, concession, franchise, license, statute, law,
ordinance, rule or regulation applicable to any Seller, the Company or DBRHC,
(b) require any consent, approval or authorization of, or declaration, filing or
registration with any Governmental Entity, except (i) for filings with the FTC
and the DOJ pursuant to the HSR Act, and (ii) where the failure to obtain such
consent is not reasonably likely to have a Material Adverse Change in the
Company, (c) result in a material default under or violation of (with or without
the giving of notice or lapse of time, or both), acceleration or termination
(with or without the giving of notice or lapse of time or both) of, or give rise
to an acceleration of any material obligation or to the loss of a material
benefit under, any Material Contract or other restriction, encumbrance,
obligation or liability affecting the DBRHC Real Estate, the Company or the
Business (other than Customer Contracts or the item of Indebtedness described in
clause (a)(i) in the definition of Indebtedness set forth in Section 1), (d)
conflict with or result in a breach of or constitute a default or violation
under any provision of the articles of incorporation or bylaws of the Company or
any applicable trust agreement of Sellers, or (e) result in or permit the
creation or imposition of any Lien upon any property now owned or leased by the
Company or any Seller.
7.11. Affiliated Transactions
Except as set forth on Schedule 7.11 and except for (i) leases of the
DBRHC Real Estate, (ii) Indebtedness to Xxxx X. Xxxxx, (iii) distributions of
the Excluded Assets by the Company to Xxxx X. Xxxxx and (iv) any entitlement to
the Closing Bonus, no Seller or any Related Person of Sellers or the Company is
a party to any agreement, contract, commitment or transaction with the Company
or has any interest in any asset or property of the Company.
7.12. Employees
(a) There are no, and there has not been during the last
five years any, collective bargaining or other agreements with any labor union
or other employee organization to which the Company is a party and which relate
to the Company's employees engaged in the Business. There have not been any
unfair labor practices complaints, strikes, slowdowns, work stoppages, or (to
Sellers' Knowledge) threats of the same, by any of Sellers' present or former
employees. To Sellers' Knowledge, there is no union or other organizational
campaign being conducted, and during the past five years, there have been no
union or other organizational
18
campaigns conducted, for the purpose of obtaining representation of any of the
Company's employees.
(b) Schedule 7.12 contains a list of all employees of the
Company as of December 31, 1998, and their dates of hire, positions, base
compensation and accrued vacation as of such date.
(c) Except as set forth on Schedule 7.12 and Schedule 9.4
and except for the Closing Bonus, no employee of the Company will receive,
accrue or be entitled to receive or accrue any additional benefits, service or
accelerated rights to payments or benefits, or any severance, termination
payments or other similar benefits as a result of the consummation of the
transactions contemplated hereby. No employee shall receive from the Company,
directly or indirectly, any payment, whether made under a Plan, Benefit
Arrangement or otherwise, that shall constitute a parachute payment within the
meaning of Section 280G of the Code.
7.13. Taxes
The Company has duly and timely filed with the appropriate
governmental agencies all tax returns, information returns and tax reports
required by law to have been filed by it. The Company has paid in full all
taxes, including any interest, penalties or other additions to tax imposed by
any federal, state, local or foreign government or any agency or political
subdivision of any such government, including, without limitation, all income
taxes, real and personal property taxes, payroll and employee withholding taxes,
unemployment insurance taxes, social security taxes, sales and use taxes, gross
receipts taxes and other governmental charges that the Company is required to
pay, withhold or collect (collectively, "Taxes"), shown to be payable on such
returns and reports or subsequently assessed. To Sellers' Knowledge, no
deficiencies exist or have been asserted or are expected to be asserted with
respect to Taxes. The Company is not a party to any action or proceeding for
assessment or collection of Taxes nor (to Sellers' Knowledge) has such event
been asserted or threatened. No audit or investigation of the Company for Taxes
by any Governmental Entity is under way. The Company has been a subchapter S
corporation for federal and state income tax purposes since April 1, 1991, and
shall continue to be a subchapter S corporation for federal and state income tax
purposes until Closing.
7.14. Compliance With Laws
The Company is, and has during the past five years been, in compliance
with all Governmental Regulations applicable to the Company and the operation of
the Business, the failure to comply with which might, in the aggregate, result
in a Material Adverse Change in the Company, including, without limitation, all
Governmental Regulations relating to antitrust, consumer protection, currency
exchange, employee compensation, equal opportunity, health, occupational safety,
securities matters, building, zoning and fire safety. The Company has received
no notification that it is in violation of any Governmental Regulation, and no
proceeding or inquiry has been initiated or (to Sellers' Knowledge) threatened
with respect to any alleged violation of any Governmental Regulation. Except as
disclosed in Schedule 7.14, as of the date hereof, there are no judgments,
orders, injunctions, decrees, stipulations or awards against the Company, its
properties or the Business that would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change in the Company.
19
7.15. Conduct in the Ordinary Course
Except as set forth on Schedule 7.15 or as contemplated by this
Agreement, since December 31, 1998, the Company has conducted its business in
the ordinary course, consistent with past practices. Without limiting the
foregoing, except as set forth in Schedule 7.15 or as contemplated by this
Agreement, since December 31, 1998, the Company has not, other than in the
ordinary course of business consistent with past practice:
(a) sold, mortgaged, pledged or encumbered, or agreed to
sell, mortgage or encumber, any of its material property or assets;
(b) incurred any obligation (contingent or otherwise), or
purchased, acquired, transferred or conveyed, any material assets or property,
or entered into any transaction or made or entered in any contract or commitment
(including commitments to purchase any property or equipment);
(c) suffered any material damage or loss to any material
assets or property;
(d) failed to maintain, or suffered the termination or lapse
of, any material Permits necessary for operation of the Business;
(e) amended, terminated or allowed to expire any of its
insurance policies or Material Contracts;
(f) canceled any debt or claim;
(g) borrowed any funds;
(h) waived any material rights without fair and adequate
consideration;
(i) created or permitted to be created any material Lien on
its material assets or property, or discharged or satisfied any Lien or paid any
liability other than current liabilities and the current portion of long-term
debt of the Company;
(j) issued, sold or pledged, authorized or committed to the
issuance, sale or pledge of (A) additional shares of capital stock, or
securities convertible into any such shares, or any rights, warrants or options
to acquire any such shares or other convertible securities or (B) any other
securities in respect of, in lieu of, or substitution for, the Common Stock
outstanding on the date of this Agreement;
(k) entered into, adopted or modified any Plan or Benefit
Arrangement, increased the compensation or fringe benefits payable to any of its
directors, officers, employees or consultants or otherwise altered, modified or
changed the terms of their employment or engagement;
(l) amended its articles of incorporation, bylaws or other
organizational documents;
20
(m) declared or paid any dividend on or in respect of, or
purchased, redeemed or otherwise retired, any shares of capital stock of the
Company, or made any other distribution on or in respect of any such shares
(other than the distribution of the Excluded Assets to Xxxx X. Xxxxx);
(n) entered into any transaction with any Related Person of
the Company or any Seller (whether or not in the ordinary course and other than
(i) the distribution of the Excluded Assets to Xxxx X. Xxxxx, (ii) execution and
delivery of leases relating to the DBRHC Real Estate, and (iii) the payment of
Indebtedness to Xxxx X. Xxxxx);
(o) accelerated the collection of accounts receivable or
delayed payment of accounts payable;
(p) increased, or changed any assumptions underlying or
methods of calculating, any bad debt, contingency or other reserves;
(q) changed any method of accounting or accounting practice
of the Company; or
(r) entered into any agreement or commitment to do any of
the foregoing actions contemplated by this Section 7.15.
7.16. Absence of Legal Proceedings
No litigation, investigation or administrative proceeding (including,
without limitation, any arbitration proceeding) is pending or (to Sellers'
Knowledge) threatened in writing against or affecting the Company, its
properties and assets or the Business which seeks to enjoin, restrain, condition
or prevent consummation by Sellers of this Agreement or the transactions
contemplated herein, or which would alone or in the aggregate have or reasonably
be expected to result in a Material Adverse Change in the Company. Except as
disclosed in Schedule 7.16, to Sellers' Knowledge, there are no events or
conditions which would reasonably be expected to result in a legal or
administrative proceeding against the Company that would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change in the
Company.
7.17. ERISA
(a) Except as described in Schedule 7.17(a), neither the
Company nor any ERISA Affiliate contributes to any Plan or Benefit Arrangement
nor has contributed to or sponsored any Plan or Benefit Arrangement in the
five-year period ending on the Closing Date. For purposes of this Section 7.17,
references to the Company shall be deemed to include its ERISA Affiliates, if
any.
(b) Except as set forth on Schedule 7.17(b), the Company has
(and upon consummation of the transactions contemplated by this Agreement will
have) no liability (contingent or otherwise) under the applicable provisions of
ERISA, any other similar federal or state statute, or under any of its Plans or
Benefit Arrangements, to the Pension Benefit Guaranty Corporation or to any
other person or entity, for any unfunded liability whatsoever with respect to
any current or former employee of the Company, except for routine benefit
claims.
21
(c) The form and operation of each Plan and Benefit
Arrangement of the Company has complied in all material respects with the
applicable provisions of ERISA, the Code and other Governmental Regulations.
Except as set forth in Schedule 7.17(b), the Company has not received notice
from any Governmental Entity challenging such compliance. Except as set forth in
Schedule 7.17(b), the Company has timely complied in all material respects with
all reporting and disclosure obligations as they apply to its Plans and Benefit
Arrangements and has complied in all material respects with the requirements of
parts 6 and 7 of Subtitle B of Title I of ERISA (COBRA and HIPAA) and any
equivalent state Governmental Regulations.
(d) The Internal Revenue Service has issued a favorable
determination letter with respect to each Plan of the Company which is or was
intended to comply with Section 401 of the Code (a "Qualified Plan"). No event
has occurred that will or could reasonably be expected to give rise to
disqualification of any Qualified Plan or to a tax under Section 511 of the
Code.
(e) The Company has not, and has not in the past, been a
party to or made contributions to any multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA). The Company does not maintain or sponsor, and has
not maintained or sponsored in the past, a pension plan (within the meaning of
Section 3(2) of ERISA) subject to Title IV of ERISA. None of the Company, any of
its Plans, or any trustee or administrator of any of its Plans has engaged in a
non-exempt prohibited transaction (within the meaning of Section 406 of ERISA
and Section 4975 of the Code) which would subject the Company or any of its
directors, officers and employees to any material liability.
(f) Except as set forth in Schedule 7.17(b), the Company has
delivered to Purchaser copies of each Form 5500 for each of its Plans and
Benefit Arrangements filed in the last two years, and such forms are true and
complete in all material respects. The Company has delivered to Purchaser
correct and complete copies of all of its Plans and Benefit Arrangements and,
where applicable, each of the following documents with respect to such Plans and
Benefit Arrangements: (i) any amendments; (ii) any related trust documents;
(iii) any documents governing the investment and management of the Plan or the
Benefit Arrangement, or the assets thereof, including, without limitation, any
documents relating to fees incurred by the sponsor or participants and
beneficiaries; (iv) the most recent summary plan descriptions and summaries of
material modifications; and (v) written communications to employees to the
extent the substance of the Plans and Benefit Arrangements described therein
differ materially from the other documentation furnished to Purchaser under this
clause.
(g) None of the Company, any Related Person of the Company,
the directors, officers and employees of the Company or any such Related
Persons, or any administrator or fiduciary of any Plan of the Company, has
engaged in any transaction or acted or failed to act in a manner which would
subject the Company or any of its directors, officers and employees to any
material liability under ERISA for a breach of fiduciary duties under ERISA.
(h) Except as disclosed on Schedule 7.17(h), none of the
assets of any Plan of the Company that is intended to comply with Section 401(a)
of the Code are invested in securities of the Company or in employer real
property, and each asset held under any such Plan
22
may be liquidated or terminated without the imposition of any redemption or
surrender charge or comparable liability.
(i) Except as set forth in Schedule 7.17(b), there have been
no acts or omissions by the Company that have given rise to or could 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 the Company may be liable.
(j) There are no claims (other than routine claims for
benefits) pending or, to Sellers' Knowledge, threatened involving any Plan of
the Company or the assets of any such Plan.
(k) The 1998 Balance Sheet includes a pro rata amount of the
contributions that would otherwise have been made in accordance with past
practices for the periods covered thereby.
(l) No Plan of the Company that 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.
(m) Except as set forth in Schedule 7.17(m), 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 years, and other than pursuant to the
provisions of the COBRA or any equivalent state Governmental Regulation, the
Company does not maintain any Plan that provides benefits described in Section
3(1) of ERISA to any former employees or retirees of the Company or any of its
affiliates.
(n) Except as set forth in Schedule 7.7, each Plan of the
Company providing medical, dental, and prescription benefits, life insurance,
accidental death and dismemberment, and long term disability coverage is
fully-insured and not self-insured.
7.18. No Material Adverse Change
Since December 31, 1998, there has not been and, to Sellers'
Knowledge, there is not threatened any Material Adverse Change in the Company.
7.19. Environmental Matters
The Company has not entered into or become bound by any consent
decree, administrative order or compliance order relating to any Environmental
Laws, nor has it received any request for information or notice of any violation
of, or any liability, investigatory, corrective or remedial obligation under any
Environmental Laws. Schedule 7.19 lists all site assessments, audits or other
investigations that have been conducted by or on behalf of, or are in possession
of, the Company or DBRHC relating to environmental matters at any property now
or formerly owned, leased or operated by the Company and the Company has made
all such site assessments, audits or other investigations available to Purchaser
for inspection. The Company has obtained all material Permits and made all
material filings which are required to be filed by it under
23
applicable Environmental Laws in connection with the ownership of the Company's
properties, facilities and assets, and the operation of the Business, and no
event has occurred which may constitute a material breach or violation of any
such Permits. All Permits are in full force and effect, no application deadlines
for renewal of such Permits have passed and the Company has not received notice
from any Governmental Entity that it intends to revoke or terminate any of such
Permits. The Company has not disposed of, transported, released or arranged for
the disposal of any Hazardous Substance, or owned, leased or operated any
property or facility, in a manner giving rise to liabilities under any
Environmental Laws. To Sellers' Knowledge, there are no underground storage
tanks, polychlorinated biphenyls or asbestos-containing material in any form and
condition at any property owned, leased or operated by the Company. No Lien in
favor of any Governmental Entity relating to any liability of the Company or any
other Person arising under any Environmental Laws has attached to any property
owned, leased or operated by the Company. To Sellers' Knowledge, no facts or
circumstances with respect to the past or current operation, properties or
facilities of the Company or any predecessor or affiliate thereof would give
rise to any liability or corrective or remedial obligation under any
Environmental Laws. The Company is, and at all times has been, in compliance in
all material respects with all applicable Environmental Laws. To Sellers'
Knowledge, no Hazardous Substance has been spilled, disposed of, discharged or
released into, upon, from, over or about any property presently or formerly
owned, leased or operated by the Company, in a manner that has given or would
give rise to liabilities under any Environmental Laws.
7.20. Brokerage
Neither Sellers nor any director, officer, agent or employee acting on
behalf of the Company has retained any broker or finder in connection with the
transactions contemplated by this Agreement other than Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, whose fees shall be paid by the Company.
7.21. Operational Matters
(a) All items received and stored by the Company on behalf
of customers are held in storage by the Company (except for items withdrawn or
destroyed at the customer's request), and are locatable without extraordinary
effort through the Company's inventory software system or manual inventory
system. The Company's invoices to customers do not charge customers for storage
of nonexistent items or services not performed in any material respect.
(b) The Company's invoices to its customers are accurate in
all material respects. Except for invoices to deferred customers who are billed
in advance but as to which the Company does not recognize income until services
are actually performed, the Company invoices for storage monthly in arrears and
does not invoice for any services until the services have been performed.
(c) There are no material pending, or to Sellers' Knowledge
threatened, claims by customers for damage (including damage by water) to
customer materials in the Company's custody.
24
(d) The Company has sufficient racked and unfilled shelving
locations to accommodate all magnetic media in the Company's custody, plus all
magnetic media returned to customers on temporary retrieval.
7.22. Adverse Restrictions
To Sellers' Knowledge, the Company is not a party to or subject to,
nor is any of its property subject to, any contract, agreement, lease, or any
other obligation or restriction of any kind or character, or any aggregation
thereof, which impairs in any material respect the Company from conducting the
Business as it is currently being conducted or which could reasonably be
expected to result in a Material Adverse Change in the Company.
7.23. Year 2000
Schedule 7.23 sets forth the material steps that have been taken by
the Company as of the date hereof with respect to reviewing and assessing the
extent to which the Business is Year 2000 Compliant.
7.24. Corporate Records
The copies of the articles of incorporation, bylaws and all amendments
thereto of the Company that have been delivered to Purchaser are true, correct
and complete copies thereof, as in effect on the date hereof. The minute books
of the Company, copies of which have been made available to Purchaser, contain
accurate minutes of all actions taken at all meetings of, and accurate consents
to all actions taken without meetings by, the Board of Directors (and any
committees thereof) and the shareholders of the Company.
7.25. Seller's Expertise
(a) The shares of Iron Mountain Common Stock to be acquired
by each Seller pursuant hereto are being acquired solely for the account of such
Seller for purposes of investment and not with a view to the sale, transfer or
other distribution thereof, as those terms are used in the Securities Act and
the rules and regulations promulgated thereunder, other than pursuant to a sale
under the Shelf Registration Statement or another transaction registered under
the Securities Act or qualifying for a exemption from registration. Each Seller
understands that (i) the shares of Iron Mountain Common Stock have not been and,
other than pursuant to the Shelf Registration Statement, will not be registered
under the Securities Act by reason of their issuance by Purchaser in a
transaction exempt from the registration requirements of the Securities Act,
which exemption depends, among other things, on the bona fide nature of Sellers'
investment intent as expressed herein, and (ii) the shares of Iron Mountain
Common Stock must be held indefinitely by Seller unless a subsequent disposition
thereof is registered under the Securities Act or exempt from registration. Each
Seller is able to bear the economic risk of an investment in the shares of Iron
Mountain Common Stock for an indefinite period of time. Each Seller is an
informed and sophisticated purchaser, possesses such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of its investment under this Agreement and has engaged expert legal,
financial, tax, business and other advisors, experienced in the evaluation and
purchase of interests in companies such as Purchaser.
25
Xxxx X. Xxxxx and Xxxxx X. Xxxxx are "accredited investors" as defined in Rule
501(a) under the Securities Act.
(b) Each Seller acknowledges that (i) Purchaser has provided
such Seller with the Iron Mountain SEC Reports, (ii) such Seller has been
afforded an opportunity to ask such questions of officers of Purchaser relating
to Purchaser and the Iron Mountain Common Stock as he, she or it determines is
necessary to understand the risks of acquiring the shares of Iron Mountain
Common Stock, and (iii) such Seller has asked any and all questions of interest
to such Seller in connection with the transactions contemplated by this
Agreement, all of which have been answered to such Seller's satisfaction.
(c) Each Seller agrees not to offer, sell, assign, exchange,
transfer, encumber, pledge, distribute or otherwise dispose of the Iron Mountain
Common Stock except in full compliance with all of the applicable provisions of
the Securities Act and applicable state securities laws, and any attempt by such
Seller to do so except in such full compliance shall be treated as ineffective
for all purposes. The certificates representing the shares of Iron Mountain
Common Stock issued to such Seller hereunder shall bear a legend substantially
as follows:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED UNTIL (1) A
REGISTRATION STATEMENT UNDER THE ACT AND REGISTRATION OR
QUALIFICATION FOR SALE UNDER APPROPRIATE STATE SECURITIES
LAWS SHALL BECOME EFFECTIVE WITH RESPECT THERETO, OR (2) THE
ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL TO THE
ISSUER OR OTHER COUNSEL SATISFACTORY IN FORM, SCOPE AND
SUBSTANCE TO THE ISSUER, TO THE EFFECT THAT REGISTRATION OR
QUALIFICATION UNDER THE ACT AND APPROPRIATE STATE SECURITIES
LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER.
(d) Each Seller understands that Purchaser may issue
appropriate stock transfer instructions to the transfer agent for shares of Iron
Mountain Common Stock to the effect that such shares of Iron Mountain Common
Stock may be sold publicly only in compliance with Rule 144 under the Securities
Act or in a transaction otherwise exempt from the registration requirements of
the Securities Act.
8. Representations and Warranties of Purchaser
To induce Sellers to enter into this Agreement, Purchaser represents
and warrants to Sellers as follows:
8.1. Organization and Authority
Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, is duly qualified to do
business and is in good standing in all other jurisdictions where its failure to
qualify to do business would result in a Material Adverse Change in Purchaser.
Purchaser has all requisite power and authority to own or hold under lease
26
its properties and to conduct its business, to execute and deliver this
Agreement and to perform its obligations hereunder and consummate the
transactions contemplated hereby.
8.2. Due Authorization and Execution
The execution, delivery and performance of each Related Agreement has
been duly authorized by all requisite action on the part of Purchaser. Each
Related Agreement has been, or at Closing will be, duly authorized, executed and
delivered by Purchaser and is, or at Closing will be, a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and except
as the availability of equitable remedies may be limited by equitable principles
of general applicability.
8.3. No Approvals or Notices Required; No Conflicts With Material
Agreements
The execution, delivery and performance of each Related Agreement by
Purchaser and the consummation of the transactions contemplated hereby and
thereby will not (a) conflict with or constitute a default or violation (with or
without the giving of notice or lapse of time, or both) of any Governmental
Regulation, or of any Permit, authorization, status, concession, franchise,
license, statute, law, ordinance, rule or regulation applicable to Purchaser,
(b) require any consent, approval or authorization of, or declaration, filing or
registration with any Governmental Entity, except (i) for filings with the FTC
and the DOJ pursuant to the HSR Act, and (ii) where the failure to obtain such
consent is not reasonably likely to result in a Material Adverse Change in
Purchaser, (c) result in a material default under or violation of (with or
without the giving of notice or lapse of time, or both) acceleration or
termination (with or without the giving of notice or lapse of time or both) of,
or give rise to an acceleration of any material obligation or to the loss of a
material benefit under, any material agreement or other restriction,
encumbrance, obligation or liability to which Purchaser or any of Purchaser's
assets is subject (except that the consent of the parties to the Registration
Rights Agreement is required for the Joinder Agreement and the Shelf
Registration Statement), or (d) conflict with or result in a breach of or
constitute a default or violation under any provision of the certificate of
incorporation or bylaws of the Company.
8.4. Absence of Legal Proceedings
No litigation, investigation or administrative proceeding (including,
without limitation, any arbitration proceeding) is pending or (to Purchaser's
knowledge) threatened in writing against or affecting Purchaser, its properties
and assets which seeks to enjoin, restrain, condition or prevent consummation by
Purchaser of this Agreement or the transactions contemplated herein.
8.5. Restricted Securities; Investment Intent
Purchaser is acquiring the Shares for its own account, for investment
purposes and not with a view to, or for sale in connection with, any resale or
other distribution thereof, nor with any present intention of distributing or
selling such Shares. Purchaser acknowledges and agrees that neither the Shares
themselves nor any sale of the Shares have been registered under the
27
Securities Act or the laws of any state, and that the Shares cannot be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of,
and Purchaser will not sell, transfer, offer for sale, pledge, hypothecate or
otherwise dispose of any of the Shares, without registration under the
Securities Act and any applicable state securities laws, except pursuant to an
exemption from such registration under the Securities Act and such laws.
8.6. Purchaser's Expertise and Investigation
(a) Purchaser is an informed and sophisticated purchaser,
possesses such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of its investment under this
Agreement and has engaged expert legal, financial, tax, business and other
advisors, experienced in the evaluation and purchase of companies such as the
Company. Purchaser is an "accredited investor" as defined in Rule 501(a) under
the Securities Act. Purchaser has undertaken such investigation as it deems
necessary or appropriate, and has had the opportunity to ask questions of the
management of the Company with respect to the Company, to enable it to make an
informed decision with regard to this Agreement and the transactions
contemplated hereby.
(b) Purchaser acknowledges and agrees that, in entering into
this Agreement, in acquiring the Shares and in consummating the other
transactions contemplated by this Agreement:
(i) Purchaser has relied and will rely solely upon
its own investigation and analysis and the representations and warranties
contained in the Related Agreements;
(ii) None of Sellers or the Company (nor any of
their respective representatives) has made any representation or warranty except
as expressly set forth in the Related Agreements; and
(iii) None of Sellers or the Company (nor any of
their respective representatives) will have any liability to Purchaser (or any
of its representatives) on any basis on account of any information made
available or statements made except for those expressly contained in the Related
Agreements and only in accordance with this Agreement.
8.7. Financing
Purchaser has and will have on the Closing Date sufficient funds and
Iron Mountain Common Stock available to it to purchase the Shares pursuant to
this Agreement and to otherwise satisfy all of its obligations in connection
with this Agreement.
8.8. Brokerage
Neither Purchaser nor any director, officer, agent or employee acting
on behalf of Purchaser has retained any broker or finder in connection with the
transactions contemplated by this Agreement.
28
8.9. Capitalization of Purchaser
As of the date hereof, the authorized and outstanding capital stock,
option securities and convertible securities of Purchaser is as set forth in
Schedule 8.9 attached to this Agreement. 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. When issued to Sellers under
this Agreement, the Iron Mountain Common Stock will be duly authorized, validly
issued, fully paid and nonassessable and will not be subject to any preemptive
or similar rights.
8.10. SEC Filings; Financial Statements.
(a) Purchaser has filed all forms, reports and documents
required to be filed by it with the SEC since January 1, 1998, and has
heretofore made available to Sellers, in the form filed with the SEC (excluding
any exhibits thereto), (i) its Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, (ii) its Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1998, June 30, 1998 and September 30, 1998, (iii) its
Current Reports on Form 8-K filed by it with the SEC since January 1, 1998, (iv)
its proxy statement relating to its 1998 meeting of stockholders, and (v) all
other forms, reports and registration statements filed by it with the SEC since
January 1, 1998 (the forms, reports and other documents referred to in clauses
(i) through (v) above collectively, the "Iron Mountain SEC Reports"). The Iron
Mountain SEC Reports and any forms, reports and other documents filed by
Purchaser with the SEC after the date of this Agreement and for so long as the
Shelf Registration Statement shall be effective, (x) complied with or will
comply in all material respects with the requirements of the Securities Act and
the Securities Exchange Act of 1934, as amended, 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.
(b) Since September 30, 1998, there has been no Material
Adverse Change in Purchaser and, to the actual knowledge of C. Xxxxxxx Xxxxx,
Xxxx X. Xxxxx or Xxxxxx X. Xxxxxxxx, there has not been threatened any, Material
Adverse Change in Purchaser. Since September 30, 1998, Purchaser has not
incurred any obligations or liabilities, other than obligations and liabilities
incurred in connection with acquisitions or in the ordinary course of business
consistent with past practice of Purchaser, which do not and could not be
reasonably expected to, in the aggregate, result in a Material Adverse Change in
Purchaser. Without limiting the foregoing, since such date, there has not
occurred any (i) increase in, or any change in any assumptions underlying or
methods of calculating, any bad debt, contingency or other reserves or (ii)
change in any method of accounting or accounting practice of Purchaser which
have resulted in or could reasonably be expected to result in a Material Adverse
Change in Purchaser.
(c) Purchaser's financial statements, including in each case
the notes thereto, contained in the Iron Mountain SEC Reports have been prepared
from the books and records of Purchaser and its subsidiaries in accordance with
GAAP applied on a consistent basis and Purchaser's usual and customary
practices, except as otherwise noted therein. Such financial statements fairly
present the financial condition, assets and liabilities of Purchaser and its
29
consolidated subsidiaries as of the dates thereof and the results of operations
for the indicated periods subject, in the case of unaudited financial statements
to normal nonmaterial year-end audit adjustments and accruals.
8.11. Shelf Registration Statement
As of its effective date, the Shelf Registration Statement will comply
in all material respects with the provisions of the Securities Act and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be statement therein or necessary to make the statements
therein not misleading (except for information provided in writing by Sellers to
Purchaser for inclusion in the Shelf Registration Statement).
8.12. Year 2000
Schedule 8.12 sets forth the material steps that have been taken by
Purchaser as of the date hereof with respect to reviewing and assessing the
extent to which its business is Year 2000 Compliant.
9. Interim Covenants of the Parties
9.1. Inspection
From the date of this Agreement to and including the Closing Date, the
Company will grant to Purchaser, its agents, employees, accountants and
attorneys full access to and the opportunity to examine (including the
opportunity to make copies of), during the Company's normal business hours at
the Company's premises and upon reasonable prior notice, all properties,
facilities, employees, books, records, documents, instruments and papers of the
Company relating to the Business and property of the Company, and shall cause
its agents, employees, officers, attorneys, accountants and customers to furnish
such additional information with respect to the Business and property of the
Company as Purchaser shall from time to time reasonably request. No
investigation pursuant to this Section 9.1 or otherwise shall affect any
representation or warranty in this Agreement of Seller or the Company or any
condition to the obligations of Purchaser.
9.2. Notice of Developments
Each Party shall give prompt notice to the other of the occurrence or
non-occurrence of any event the occurrence or non-occurrence of which would be
reasonably likely to cause (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 schedules attached to this Agreement, or (iii) any failure of such
Party 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. No disclosure by a Party pursuant to this Section which constitutes a
change in information originally presented in this Agreement or the Schedules
hereto shall constitute a waiver by the Party receiving such disclosure of any
condition to such Party's obligation to close the transactions contemplated
hereby unless the Party to which such disclosure is made agrees in writing to
waive such condition (it being understood that the delivery of any notice
pursuant to this Section shall not limit or otherwise affect the remedies
available hereunder to the Party receiving such notice).
30
9.3. Conduct of Business in the Ordinary Course
From the date of this Agreement to and including the Closing Date,
Sellers will not transfer the Shares or subject the Shares to any Lien, and will
cause the Company to conduct the Business in the usual and ordinary course with
a view to keeping its organization and properties intact, including its present
business operations, physical facilities, working conditions and employees and
its present relationships with lessors, licensors, suppliers and customers and
others having business relations with it and maintaining or enhancing the value
of the Business, except for transactions outside the ordinary course which are
specifically contemplated by this Agreement (such as distributions of the
Excluded Assets by the Company to Xxxx X. Xxxxx and borrowings constituting
Indebtedness to pay transaction costs and the Closing Bonus). Subject to the
foregoing, Sellers shall not allow the Company without Purchaser's consent to:
(a) sell, mortgage, pledge or encumber, or agree to sell,
mortgage or encumber, any of its material property or assets;
(b) incur any obligation (contingent or otherwise), or
purchase, acquire, transfer or convey, any material assets or property, or enter
into any transaction or make or enter in any contract or commitment, except in
the ordinary course of business;
(c) fail to maintain, or suffer the termination or lapse of,
any material Permits necessary for operation of the Business;
(d) amend, terminate or allow to expire any of its insurance
policies or Material Contracts (other than Material Agreements relating to
Indebtedness);
(e) cancel any debt or claim;
(f) borrow any funds except in the ordinary course of
business and except under the Seafirst Bank facility constituting Indebtedness;
(g) waive any material rights without fair and adequate
consideration;
(h) create or permit to be created any material Lien on its
material assets or property, or discharge or satisfy any Lien or pay any
liability other than current liabilities and the current portion of long-term
debt of the Company and any Indebtedness;
(i) issue, sell or pledge, or authorize the issuance, sale
or pledge of (i) additional shares of capital stock, or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities or (ii) any other securities in respect
of, in lieu of, or substitution for, the Common Stock outstanding on the date of
this Agreement;
(j) enter into, adopt or modify any Plan or Benefit
Arrangement, increase the compensation or fringe benefits payable to any of its
directors, officers, employees or consultants or otherwise alter, modify or
change the terms of their employment or engagement, except for: (i) the vesting
of any otherwise non-vested accounts under any Qualified Plan and payment of an
extraordinary Company contribution to any such Qualified Plan
31
(provided such extraordinary contribution shall be included in calculating the
amount of the Closing Bonus); and (ii) termination of any such Qualified Plan
and distribution of the assets held thereunder to the beneficiaries of such
Qualified Plan in accordance with Section 9.4;
(k) amend its articles of incorporation, bylaws or other
organizational documents;
(l) declare or pay any dividend on or in respect of, or
purchase, redeem or otherwise retire, any shares of capital stock of the
Company, or make any other distribution on or in respect of any such shares
(other than a distribution of Excluded Assets to Xxxx X. Xxxxx);
(m) enter into any transaction with any Related Person of
the Company or any Seller (whether or not in the ordinary course and other than
(i) the distribution of the Excluded Assets to Xxxx X. Xxxxx) and (ii) the
payment of Indebtedness to Xxxx X. Xxxxx;
(n) accelerate the collection of accounts receivable or
delay payment of accounts payable;
(o) increase, or change any assumptions underlying or
methods of calculating, any bad debt, contingency or other reserves;
(p) change any method of accounting or accounting practice
of the Company; or
(q) enter into any agreement or commitment to do any of the
foregoing actions contemplated by this Section 9.3.
9.4. Employee Benefits
(a) From and after the Closing Date, Purchaser will cause
the Company to provide to all persons who were employees of the Company on the
Closing Date severance benefits on the terms and conditions set forth on
Schedule 9.4 attached hereto. Subject to the immediately preceding sentence and
provided that it complies in all material respects with applicable Governmental
Regulations and the terms of the severance arrangements identified in Schedule
9.4, Purchaser may, in its sole discretion, substitute employee compensation,
benefit and severance programs for those of the Company and the Company's ERISA
Affiliates as are comparable with the programs provided from time to time to
Purchaser's employees and the employees of Purchaser's ERISA Affiliates.
(b) At least one day prior to the Closing Date, the Company
shall take, and shall cause each ERISA Affiliate to take, all actions necessary
to terminate each Qualified Plan and distribute the assets held thereunder to
the beneficiaries of each such Qualified Plan as soon as reasonably practicable
after receipt of a favorable determination letter from the Internal Revenue
Service with respect to such termination (unless the determination letter
provides otherwise). Purchaser agrees to cause the Company to apply for such a
determination as soon as practicable after Closing. If a Qualified Plan is
terminated in accordance with this Section 9.4(b), benefit accruals, including
contributions of salary reduction contributions, if any, shall
32
cease. The Company agrees not to take, and agrees to cause each ERISA Affiliate
not to take, any action to merge any of its Qualified Plans, transfer the assets
of any of its Qualified Plans, or terminate any of its Qualified Plans, except
as otherwise provided in this Section 9.4(b) following the execution of this
Agreement without the consent of Purchaser.
10. Additional Covenants of the Parties
10.1. Filings; Cooperation; Information
Promptly after the execution of this Agreement, each Party will
promptly prepare and make (or cause to be prepared and made) all required
filings, submissions and notifications under the laws of any domestic or foreign
jurisdictions, including all filings, submissions and notifications required
under the HSR Act, to the extent necessary to consummate the transactions
contemplated by this Agreement. Each Party will promptly consult and cooperate
with the other Party with regard to, and provide any necessary information and
reasonable assistance to the other Party and copies of, all filings, submissions
and notifications made and other information supplied by such Party with or to
any Governmental Entity in connection with this Agreement or any of the
transactions contemplated hereby. Each Party will furnish to the FTC, the DOJ
and to all other Governmental Entities such necessary information and reasonable
assistance as the FTC, the DOJ or other Governmental Entity may reasonably
request in connection with the foregoing.
10.2. Further Assurances
In addition to obligations elsewhere in this Agreement, each Party
from time to time, whether before or after the Closing Date, will use their best
efforts to ensure that all conditions to the other Party's obligations to
consummate the transactions contemplated by this Agreement have been satisfied
(insofar as such matters are within such Party's control) and 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 Governmental Regulations to consummate and
make effective the transactions contemplated by this Agreement in a manner
consistent with applicable Governmental Regulations, which efforts will include
each Party using its best efforts to lift, prevent or reverse any pending or
threatened preliminary or permanent injunction, order or other Governmental
Regulation that would reasonably be expected to adversely affect the ability of
any Party to consummate the transactions contemplated by this Agreement,
including any Governmental Regulation relating to or arising under the HSR Act
or other applicable antitrust laws, and, if issued, to appeal any such
Governmental Regulation through the United States Court of Appeals for the
relevant circuit. In addition, each Party shall furnish promptly upon request a
copy of each report, schedule and other document filed or received by any of
them pursuant to the requirements of any Governmental Regulations or filed by it
or any of its Related Persons with any Governmental Entity in connection with
the transactions contemplated hereby. Notwithstanding anything to the contrary
contained in this Agreement, in connection with or as a condition to receiving
the consent or approval of any Governmental Entity, third party or otherwise,
neither the Company (except with the consent of Purchaser following Closing) nor
Purchaser shall be required (i) to divest, abandon, license or take similar
action with respect to any assets (tangible or intangible) of it or any of its
respective Related Persons (including, without limitation, the Company after
consummation of the transactions contemplated hereby),
33
or (ii) to expend material sums of money or grant any material financial or
other accommodations (other than as contemplated hereby).
10.3. Exclusivity
Until consummation of the transactions contemplated hereby or
termination of this Agreement pursuant to Xxxxxxx 00, xxxx of Sellers, the
Company or any of their respective Related Persons, representatives, officers,
employees, directors, or agents will, directly or indirectly, (i) submit,
solicit, initiate, encourage or discuss any proposal or offer from any Person
(other than Purchaser or its Related Persons) or enter into any agreement or
accept any offer relating to any (a) reorganization, liquidation, dissolution or
refinancing of the Company, (b) merger or consolidation involving the Company,
(c) purchase or sale of any assets or capital stock of the Company (other than a
purchase or sale of assets in the ordinary course of business consistent with
past practice) or (d) similar transaction or business combination involving the
Company or its assets or (ii) furnish any information with respect to, assist or
participate in or facilitate in any other manner any effort or attempt by any
Person to do or seek to do any of the foregoing. Sellers shall notify Purchaser
promptly if any Person makes any proposal, offer, inquiry or contact with
respect to an action described in clauses (a) through (d) above.
10.4. Shelf Registration Statement
(a) As soon as reasonably possible following the Closing
Date, Purchaser shall prepare and file a registration statement with the SEC
under the Securities Act and Rule 415 thereunder (the "Shelf Registration
Statement"), on the least burdensome form then available to Purchaser, to
register for resale all shares of Iron Mountain Common Stock, and shall use its
reasonable best efforts to secure the effectiveness of the Shelf Registration
Statement as soon as reasonably practicable thereafter. The Company will bear
all Registration Expenses (as defined in the Registration Rights Agreement) in
connection with such registration. Without limiting the generality of the
foregoing, Purchaser will reimburse Sellers for the reasonable fees and
disbursements of one counsel chosen by the holders of a majority of the Iron
Mountain Common Stock in connection with review and maintenance of the Shelf
Registration Statement.
(b) If any Seller shall propose to sell any shares pursuant
to the Shelf Registration Statement, it shall notify Purchaser of its intent to
do so at least three (3) business days prior to such sale (a "Sale Notice"),
which Sale Notice shall generally describe the anticipated volume and timing of
the proposed sale. A Sale Notice shall be deemed to constitute a representation
that any information previously supplied by such Seller for inclusion in the
Shelf Registration Statement is accurate as of the date of such notice and will
continue to be accurate during the period of the proposed sale (except if such
Seller gives notice to Purchaser of any changes to such information). Following
receipt of a Sale Notice, and except as set forth in the following sentence,
Purchaser shall use its reasonable best efforts as soon as practicable to amend
or supplement the Shelf Registration Statement or any filings incorporated by
reference therein to the extent necessary to allow such sales, and shall notify
all Sellers promptly after it has determined that such sales have become
permissible. At any time after receipt by Purchaser of a Sale Notice, Purchaser
may give notice to the Sellers (a "Deferral Notice") that sales of Iron Mountain
Common Stock should not be made at that time pursuant to the Shelf Registration
Statement if, in its good faith judgment (i)(A) there exists material
information concerning
34
Purchaser which has not been disclosed to the public which causes the Shelf
Registration Statement, the prospectus which is part thereof or any document
incorporated therein by reference to contain an untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading ("Material Information Event") and
(B) disclosure of such information at that time would be detrimental to
Purchaser and its shareholders or (ii) it is not legally permissible at such
time to effect sales under the Shelf Registration Statement. If a Deferral
Notice has been given, Purchaser shall use commercially reasonable efforts to
minimize the length of such deferral period (the "Deferral Period") and in any
event shall notify Sellers in writing promptly after the Material Information
Event no longer exists or it is legally permissible to effect sales under the
Shelf Registration Statement (it being understood that, in taking such
commercially reasonable efforts, Purchaser shall not be required to forego any
action it is pursuing for valid business purposes, including, without
limitation, the acquisition or divestiture of a material portion of its assets).
(c) Purchaser shall use its reasonable best efforts to keep
the Shelf Registration Statement effective until the first anniversary of the
Closing Date or, if earlier, the date as of which all shares of Iron Mountain
Common Stock shall have been sold; provided, however, that if the cumulative
number of days covered by Deferral Periods exceeds **The confidential portion
has been so omitted pursuant to a request for confidential treatment and has
been filed separately with the Commission.**, then the Shelf Registration
Statement shall be kept effective for an additional number of days equal to such
excess, unless the shares of Iron Mountain Common Stock owned by Sellers on the
first anniversary of the Closing Date represents less than **The confidential
portion has been so omitted pursuant to a request for confidential treatment and
has been filed separately with the Commission.** of the total outstanding common
stock of Purchaser.
(d) Notwithstanding the foregoing, the Sellers agree that so
long as the Shelf Registration Statement is effective, they will limit their
aggregate sales of Iron Mountain Common Stock (whether in the over the counter
market or in block trades) during any three-month period to that number of Iron
Mountain Common Stock which equals the Cumulative Limitation Amount (as defined
below). The foregoing sentence is not intended to limit or restrict (i) hedging
or (ii) other similar arrangements which do not constitute a transfer of the
Iron Mountain Common Stock or sales of Iron Mountain Common Stock pursuant to
the Registration Rights Agreement. "Cumulative Limitation Amount" means the
number of shares of Iron Mountain Common Stock which could be sold during such
period pursuant to Subsection (e) of Rule 144 under the Securities Act (without
regard to any other limitation contained in Rule 144 under the Securities Act),
multiplied by 1.5.
(e) The rights and obligations of Purchaser and Sellers with
respect to the Shelf Registration Statement shall include those set forth in
Sections 1(c), 2 (with the exception of subsections (c) and (e) thereof), 3 and
7 of the Registration Rights Agreement, which provisions are incorporated herein
by this reference. To the extent that the provisions therein are inconsistent
with the provisions of this Section 10.4, the provisions of this Section 10.4
shall control. The defined terms used in those sections shall have the meanings
given to them in Section 8 of the Registration Rights Agreement, except that all
references to "Registrable Securities" shall mean Iron Mountain Common Stock,
all references to "Registration Statement" shall mean the Shelf Registration
Statement, all references to "Prospectus" shall mean the
35
prospectus which is part of the Shelf Registration Statement, all references to
"Company" shall mean Purchaser and all references to "holders" or "Stockholders"
shall mean Sellers.
11. Income Tax Matters
11.1. Refunds or Credits; Tax Benefits
Any refunds or credits of Taxes imposed upon the Company, to the
extent that such refunds or credits are attributable to any taxable year or
taxable period ending on or before the Closing Date, will be for the account of
Sellers, and, to the extent that such refunds or credits are attributable to any
taxable year or taxable period beginning after the Closing Date, such refunds or
credits will be for the account of Purchaser. Each Party will promptly remit to
the other Party any such amount due to the other Party under this Section 11.1
upon receipt thereof or, if an amount is credited to the account of such Party,
upon such amount being so credited.
11.2. Tax Administration
(a) Sellers will prepare and file (i) all corporate returns
relating to Income Taxes with regard to the Company for which Sellers have
liability as a result of the Company's status as an S corporation for the period
ending on the Closing Date, (ii) the applicable Washington State tax return for
the period ending on the Closing Date and (iii) all other tax returns of the
Company that are due on or prior to the Closing Date. Purchaser will prepare and
file all other tax returns with regard to the Company. All such tax returns will
be prepared in a manner consistent with prior years' tax returns using, to the
extent permitted by law, methods, conventions and elections consistent with
those previously used by Sellers and the Company.
(b) As soon as practicable, but in any event within three
(3) days after Sellers' request, Purchaser will deliver to Sellers such
information and will make available such representatives of the Company and of
Purchaser as Sellers may reasonably request, to enable Sellers to complete and
file all tax returns for which Sellers have responsibility under this Section
11, to address any audit by any taxing authority or other tax controversy with
regard to any taxable year or taxable period for which they have any
responsibility or liability under this Section 11 or otherwise to enable Sellers
to satisfy accounting, tax or other requirements.
11.3. Contests
Promptly after any taxing authority asserts a claim for, makes an
assessment of, or otherwise investigates or disputes, the amount of Taxes for
which Sellers are or may be liable under this Section 11, including in
connection with an audit, Purchaser will provide written notice thereof to
Sellers. Sellers will have the obligation to control any resulting audit or
administrative or judicial proceedings and to determine whether and when to
settle any such claim, assessment or dispute if such audit, proceeding or
determination affects the amount of Taxes for which Sellers are or may be liable
under this Section 11.
36
11.4. Section 338(h)(10) Election
Purchaser and each Seller (i) shall elect to treat the purchase and
sale of the Shares as an acquisition by Purchaser of all of the assets of the
Company and as a sale of all of the assets of the Company to Purchaser pursuant
to Section 338(h)(10) of the Code, (ii) agree to execute Form 8023 and such
other forms and instruments as shall be reasonably necessary, and to supply any
information called for by such forms and instruments, in order to effectuate
such elections and (iii) shall timely file such forms and instruments with
required attachments with the Internal Revenue Service and any applicable state
taxing authorities.
12. Indemnification and Survival of Warranties
12.1. Indemnification
(a) By Sellers. Each Seller agrees that, subject to such
limitations as provided herein, such Seller shall be jointly and severally
liable to Purchaser, its Related Persons, each of their respective directors,
officers, employees and agents, and each of the heirs, executors, successors and
assigns of any of the foregoing (collectively, the "Purchaser Indemnified
Parties") for, and agree to defend and indemnify and hold each Purchaser
Indemnified Party harmless against and in respect of (i) any and all losses,
damages, liability costs and expenses, including reasonable attorneys',
accountants' and experts' fees and expenses, including, without limitation,
those incurred to enforce the terms of this Agreement (collectively, "Covered
Liabilities") incurred by any Purchaser Indemnified Party by reason of a breach
of any of the representations, warranties, covenants or agreements made by the
Company or Sellers in this Agreement, or in any other instrument or agreement
specifically contemplated by this Agreement, (ii) any and all Covered
Liabilities incurred by any Purchaser Indemnified Party by reason of (A) any
violation of Governmental Regulations arising from those matters included as
items 3 and 4 on Schedule 7.17(b), (B) the Company's or Sellers' failure to pay,
withhold or collect any Taxes required to have been paid, withheld or collected
for any taxable period ending on or prior to the Closing Date (including as a
result of the Section 338(h)(10) election described in Section 11.4) or (C) the
Company not being treated as a subchapter S corporation for federal and state
income tax purposes, or (iii) liabilities of the Company or DBRHC arising out of
or in connection with any of the businesses, assets (including the DBRHC Real
Estate), operations or activities of the Company or DBRHC (including any
predecessor of the Company or DBRHC, and any former business, asset, operation,
activity or subsidiary of any of the foregoing) owned or conducted, as the case
may be, on or prior to the Closing Date including any liability based on
negligence, gross negligence, strict liability or any other theory of liability,
whether in law (whether common or statutory) or equity, but excluding (A)
liabilities or other obligations of the type reflected on the 1998 Balance Sheet
incurred in the ordinary course consistent with past practice since December 31,
1998, other than any liabilities or obligations arising from any litigation or
other legal, arbitration or administrative proceeding, or any claim with respect
thereto (including, without limitation, tort claims or other claims based on
strict liability, negligence or willful misconduct or violations of Governmental
Regulations), (B) Indebtedness (but only to the extent Indebtedness at Closing
is not greater than the Purchase Price adjustment under Section 3) and (C)
obligations reflected in the 1998 Balance Sheet, including the notes thereto.
37
(b) By Purchaser. Purchaser agrees that it shall be liable
to Sellers, their respective Related Persons, each of their respective
directors, officers, employees and agents, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "Seller
Indemnified Parties") for, and agrees to defend and indemnify and to hold each
Seller Indemnified Party harmless against and in respect of, any and all Covered
Liabilities incurred by any Seller Indemnified Party by reason of (i) a breach
of any of the representations, warranties, covenants or agreements made by
Purchaser in this Agreement, or in any other instrument or agreement
specifically contemplated by this Agreement or (ii) liabilities of the Company
or Purchaser arising out of or in connection with any of the respective
businesses, assets (including the DBRHC Real Estate), operations or activities
of the Company or Purchaser (including any predecessor of Purchaser, and any
former business, asset, operation, activity or subsidiary of any of the
foregoing) owned or conducted, as the case may be, after the Closing Date
including (A) any liability based on negligence, gross negligence, strict
liability or any other theory of liability, whether in law (whether common or
statutory) or equity, or (B) any claims made by an employee with respect to
employment with the Company after the Closing Date or because of the failure of
the Company to provide continuing employment on or after the Closing Date.
(b) Materiality. For purposes of determining whether any
breach of a representation, warranty, covenant or agreement herein has occurred
and calculating any liability arising under this Section 12.1 (other than any
breach of Section 7.18, the last sentence of Section 8.10(a) or Section
8.10(b)), any and all "materiality," "Material Adverse Change" or similar
qualifiers included in such representation, warranty, covenant or agreement
shall be ignored.
12.2. Claim Procedure
(a) If a Seller Indemnified Party or a Purchaser Indemnified
Party (the "Indemnified Party") is threatened in writing with any claim, or any
claim is presented in writing to or any action or proceeding formally commenced
against such Party, which may give rise to the right of indemnification
hereunder, the Indemnified Party will promptly give written notice thereof
(specifying in reasonable detail the basis for the claim and, to the extent
known, the amount thereof) to the Party subject to such rights of
indemnification (the "Indemnifying Party"); provided, however, that the failure
of any Indemnified Party to give notice as provided in this Section 12.2 shall
not relieve the Indemnifying Party of its obligations under this Section 12.2,
except to the extent that the Indemnifying Party is actually prejudiced by such
failure to give notice. The Indemnifying Party shall have the right to
participate in the defense of such claim, action or proceeding, and, to the
extent the Indemnifying Party so desires and notifies the Indemnifying Party of
such election within ten (10) business days after receiving notice of such claim
(or sooner, if the nature of such claim so requires), jointly with any other
Indemnifying Party similarly notified, to assume the defense thereof with
counsel mutually satisfactory to the parties, such determination to be made on a
reasonable basis. Pending notice and assumption of defense by the Indemnifying
Party, an Indemnified Party may take such steps to defend against such claim as,
in such Indemnified Party's good faith judgment, are appropriate to protect its
and the Indemnifying Party's interests. If the Indemnified Party requests in
writing that such action, claim or proceeding not be contested, then it shall
not be contested but shall not be covered by the indemnities provided herein.
The Indemnifying Party may settle an indemnifiable matter
38
which it has duly elected to contest without the consent of the Indemnified
Party, so long as such settlement includes as an unconditional term thereof the
delivery by the claimant or plaintiff to the Indemnified Party of a written
release from all liability in respect of such claim, unless (i) such settlement
includes injunctive relief or other equitable remedies against the Indemnified
Party, (ii) the amount of such settlement exceeds the limits on indemnification
set forth in this Section 12 or (iii) such settlement otherwise could reasonably
be expected to have an adverse effect upon the Indemnified Party, in which case
such matter shall be settled only with the consent of the Indemnified Party. In
the event an Indemnified Party unreasonably declines to consent to such
settlement, then the Indemnified Party shall have no right to indemnification
beyond the amount of the proposed settlement that the Indemnifying Party and the
claimant shall have tentatively agreed to. The Indemnified Party shall cooperate
with the Indemnifying Party in the defense of any indemnified claim (it being
understood the costs incurred in such cooperation shall be Covered Liabilities).
In the event an Indemnified Party fails to follow the claim procedure specified
in this section with respect to a claim by any third party against such
Indemnified Party, then such Indemnified Party shall have no right to recover
from the Indemnifying Party on such claim based on a breach of warranty or a
right to indemnification hereunder, but only to the extent the Indemnifying
Party was actually prejudiced by such failure. Notwithstanding anything to the
contrary contained herein, any amounts owing from an Indemnifying Party shall be
reduced to the extent any tax benefit derived by the Indemnified Party or any of
its affiliates from the accrual of such claim.
(b) If an Indemnifying Party elects not to defend against a
third-party claim, fails to notify an Indemnified Party of its election as
provided in this Section 12.2 within the ten-day period described in clause (a)
above or, after such notification, does not in fact defend such third-party
claim, the Indemnified Party may defend, compromise, and settle such third-party
claim and shall be entitled to indemnification hereunder (to the extent
permitted hereunder); provided, however, that no such Indemnified Party may
compromise or settle any such third-party claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, an Indemnified Party shall
have the right to employ one law firm as counsel, together with a separate local
law firm in each applicable jurisdiction ("Separate Counsel"), to represent such
Indemnified Party in any action or group of related actions (which firm or firms
shall be reasonably acceptable to the Indemnifying Party) if the Indemnified
Party has been advised by counsel either that there is a reasonable likelihood
of a conflict of interest between such Indemnified Party and such Indemnifying
Party in respect of such claim, or that there may be defenses available to such
Indemnified Party which are different from or in addition to those available to
such Indemnifying Party and the representation of both parties by the same
counsel would be inappropriate, and in that event (i) the reasonable fees and
expenses of each such Separate Counsel shall be considered Covered Liabilities,
and (ii) each of such Indemnifying Party and such Indemnified Party shall have
the right to conduct its own defense in respect of such claim.
12.3. Limitations on Claims
(a) Survival. All representations, warranties and agreements
made by Sellers and Purchaser shall survive Closing. Notwithstanding the
foregoing, if an Indemnified Party fails to give written notice, on or before
the last day of the Escrow Indemnity Period, to the
39
Indemnifying Party of any claim for breach of a representation or warranty
contained herein, or for indemnification hereunder, then such claim is barred,
except that (i) such time limitation shall not apply to the extent any Seller
Indemnified Party seeks recovery under **The confidential portion has been so
omitted pursuant to a request for confidential treatment and has been filed
separately with the Commission.** or to the extent any Purchaser Indemnified
Party seeks indemnification for the breach of the representations and warranties
set forth in **The confidential portion has been so omitted pursuant to a
request for confidential treatment and has been filed separately with the
Commission.**, (ii) with respect to claims under **The confidential portion has
been so omitted pursuant to a request for confidential treatment and has been
filed separately with the Commission.**, written notice by a Purchaser
Indemnified Party must be given on or prior to the date that is **The
confidential portion has been so omitted pursuant to a request for confidential
treatment and has been filed separately with the Commission.** after the Closing
Date, and (iii) with respect to claims under **The confidential portion has been
so omitted pursuant to a request for confidential treatment and has been filed
separately with the Commission.**, written notice by Purchaser must be given on
or prior to **The confidential portion has been so omitted pursuant to a request
for confidential treatment and has been filed separately with the Commission.**
(b) Threshold Amount. Notwithstanding anything to the
contrary contained herein, Sellers shall not be liable under Section 12.1(a)(i)
for breach of any representations or warranties made by Sellers in this
Agreement, or in any other instrument or agreement specifically contemplated by
this Agreement, until such time as the aggregate amount of such liability,
together with any liability of DBRHC under Section 16 of the Real Estate
Purchase Agreement, reaches an amount equal to **The confidential portion has
been so omitted pursuant to a request for confidential treatment and has been
filed separately with the Commission.**, subject to the limitations set forth in
this Section 12.3.
(c) Maximum Amount. The aggregate liability of Sellers, the
Company and DBRHC for breach of this Agreement or the Real Estate Purchase
Agreement or otherwise with respect to the Shares and the transactions
contemplated by this Agreement (other than the Noncompetition Agreement) shall
not in any event exceed **The confidential portion has been so omitted pursuant
to a request for confidential treatment and has been filed separately with the
Commission.** of the sum of (i) the Purchase Price plus (ii) **The confidential
portion has been so omitted pursuant to a request for confidential treatment and
has been filed separately with the Commission.**; provided, however, that such
limitation shall not in any event apply to any claims by any Purchaser
Indemnified Party (i) arising from Sellers' breach of the representations and
warranties set forth in **The confidential portion has been so omitted pursuant
to a request for confidential treatment and has been filed separately with the
Commission.**, (ii) under **The confidential portion has been so omitted
pursuant to a request for confidential treatment and has been filed separately
with the Commission.**, or (iii) that a Seller knowingly or recklessly made
misstatements or omissions with respect to any representation or warranty of
such Seller hereunder or otherwise fraudulently induced Purchaser to enter into
this Agreement. Notwithstanding the foregoing, the Parties understand that after
Closing, the Company shall have no liability for breach of this Agreement or the
Real Estate Purchase Agreement or otherwise with respect to the Shares and the
transactions contemplated by this Agreement.
40
(d) No Claims for Matters Within Purchaser's Knowledge.
Notwithstanding anything contained in this Agreement to the contrary, Sellers
shall have no liability for breaches of any representations, warranties or
covenants made by Sellers herein or in any of the documents required to be
delivered by Sellers under this Agreement if C. Xxxxxxx Xxxxx, Xxxx X. Xxxxx,
Xx. or Xxxxxx X. Xxxxxxxx had actual knowledge of such breach at or before
Closing and Purchaser fails to give Sellers notice of such breach at or before
Closing. No Purchaser Indemnified Party shall have the right to bring any
lawsuit or other legal action against Sellers, or to pursue any other remedy
against Sellers, as a result of any such breach if C. Xxxxxxx Xxxxx, Xxxx X.
Xxxxx, Xx. or Xxxxxx X. Xxxxxxxx had actual knowledge of such breach at or
before Closing and Purchaser fails to give Sellers notice of such breach at or
before Closing.
(e) Pro Rata Share. Subject to clauses (a) - (d) above, the
obligation of each Seller (other than Xxxx X. Xxxxx and Xxxxx X. Xxxxx) with
respect to any liability of Sellers under Section 12.1(a) shall be limited to
the product obtained by multiplying (i) such Seller's Pro Rata Share by (ii) the
aggregate amount of such liability.
12.4. Escrow Indemnity Deposits
(a) An amount equal to the Escrow Indemnity Deposits shall
be withheld from the Purchase Price payable at Closing and held in escrow
pursuant to the Escrow Agreement. Any Covered Liabilities of any Purchaser
Indemnified Party to be satisfied out of the Escrow Indemnity Deposits shall be
made in accordance with the terms of the Escrow Agreement in Iron Mountain
Common Stock, which stock shall be valued at the Indemnification Determination
Price as of the date on which such claim is actually satisfied out of the Escrow
Indemnity Deposits. In the event that the valuation of the Iron Mountain Common
Stock as of any date other than the Escrow Release Date would result in the
issuance of a fractional share to a Seller, then in lieu of issuing any such
fractional share, Purchaser shall round up such fraction to the next whole
number. In the event that the valuation of the Iron Mountain Common Stock as of
the Escrow Release Date would result in the issuance of a fractional share to a
Seller, then in lieu of issuing any such fractional share, Purchaser shall pay
to such Seller an amount equal to the product of the Indemnification
Determination Price multiplied by such fraction.
(b) In the event there are no Unresolved Claims, on the
**The confidential portion has been so omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.**
anniversary of the Closing Date, or the next business day if such date is not a
business day (the "Initial Distribution Date"), an aggregate of **The
confidential portion has been so omitted pursuant to a request for confidential
treatment and has been filed separately with the Commission.** of the Escrow
Indemnity Deposits less any amounts previously distributed to a Purchaser
Indemnified Party from the Escrow Indemnity Deposits shall be distributed to the
Sellers' Representative in shares of Iron Mountain Common Stock (which stock
shall be valued at the Indemnification Determination Price as of the Initial
Distribution Date) for the benefit of each Seller in accordance with such
Seller's Pro Rata Share. In the event one or more Unresolved Claims with respect
to the Escrow Indemnity Deposits, if any, shall exist on the Initial
Distribution Date, that number of shares of Iron Mountain Common Stock (which
stock shall be valued at the Indemnification Determination Price as of the
Initial Distribution Date) equal to the sum of (i) **The confidential portion
has been so omitted pursuant to a request for confidential treatment and has
been filed separately with the
41
Commission.**, (ii) the aggregate amount of such Unresolved Claims and (iii) the
amount reasonably estimated by Purchaser to cover the fees, expenses and other
costs (including reasonable attorneys', accountants' and experts' fees and
expenses) which will be required to resolve such Unresolved Claims shall be
retained as part of the Escrow Indemnity Deposits and the balance thereof, if
any, shall be distributed to the Sellers' Representative (as defined below) for
the benefit of each Seller in accordance with such Seller's Pro Rata Share. Upon
the resolution of all such Unresolved Claims for which notice has been given in
accordance with Section 12.2 prior to the Initial Distribution Date and the
payment of all Covered Liabilities with respect thereto out of the Escrow
Indemnity Deposits, the balance of the Escrow Indemnity Deposits, if any, so
retained on the Initial Distribution Date with respect to such Unresolved Claims
shall be distributed to the Sellers' Representative for the benefit of each
Seller in accordance with such Seller's Pro Rata Share.
(c) In the event there are no Unresolved Claims on the date
which is one day after the expiration of the Escrow Indemnity Period, or the
next business day if such date is not a business day (the "Escrow Release
Date"), the Escrow Indemnity Deposits then remaining shall be distributed to the
Sellers' Representative for the benefit of each Seller in accordance with such
Seller's Pro Rata Share. In the event one or more Unresolved Claims with respect
to the Escrow Indemnity Deposits, if any, shall exist upon the expiration of the
Escrow Indemnity Period, that number of shares of Iron Mountain Common Stock
(which stock shall be valued at the Indemnification Determination Price as of
the Escrow Release Date) equal to the sum of (i) the aggregate amount of such
Unresolved Claims and (ii) the amount reasonably estimated by Purchaser to cover
the Covered Liabilities which will be required to resolve such Unresolved Claims
shall be retained as part of the Escrow Indemnity Deposits and the balance
thereof, if any, shall be distributed to the Sellers' Representative for the
benefit of each Seller in accordance with such Seller's Pro Rata Share. Upon the
resolution of all such Unresolved Claims and the payment of all Covered
Liabilities out of the Escrow Indemnity Deposits, the balance of the Escrow
Indemnity Deposits, if any, shall be distributed to the Sellers' Representative
for the benefit of each Seller in accordance with such Seller's Pro Rata Share.
(d) Each Seller hereby appoints Xxxx X. Xxxxx (the "Sellers'
Representative"), with full and unqualified power to delegate (with the approval
of Purchaser, which shall not be unreasonably withheld) to one or more Persons
the authority granted to such Person hereunder to act as such Seller's agent and
attorney-in-fact, with full power of substitution, to execute the Escrow
Agreement and to take all actions called for by this Section 12 and the Escrow
Agreement on such Seller's behalf, in accordance with the terms of this Section
12 and the Escrow Agreement.
13. Termination
This Agreement may be terminated at any time prior to Closing:
(a) by the mutual consent of Sellers and Purchaser;
(b) pursuant to the provisions of Section 4.1 hereof;
42
(c) by Purchaser if any condition specified in Section 5 has
not been met or waived by Purchaser at any such time as such condition can no
longer be satisfied;
(d) by Sellers if any condition specified in Section 6 has
not been met or waived by Sellers at any such time as such condition can no
longer be satisfied; or
(e) by Sellers or Purchaser, if any Governmental Regulation
shall be in effect which enjoins, restrains, conditions or prohibits
consummation of this Agreement or the transactions contemplated herein, and such
Governmental Regulation has become final and nonappealable.
Upon any termination of this Agreement pursuant to this Section 13,
there shall be no liability on the part of any Party; provided, however, that
such termination shall not affect the liability of any Party for the breach of
any provision of this Agreement.
14. Miscellaneous
14.1. Confidentiality
Prior to Closing no Party hereto shall issue, or cause to be made or
issued, any announcement or written statement concerning this Agreement or the
transactions contemplated hereby for dissemination to the general public without
the prior consent of the other Party, except as required under applicable
Governmental Regulation or the terms of any agreement, undertaking or listing
requirement of any exchange (including, without limitation, the NASDAQ National
Market). Each of Sellers and Purchaser shall maintain the confidentiality of
information relating to the consideration paid under this Agreement and the Real
Estate Purchase Agreement except to the extent disclosure is (i) necessary to
prepare relevant tax returns or (ii) required under applicable Governmental
Regulation or the terms of any agreement, undertaking or listing requirement of
any exchange (including, without limitation, the NASDAQ National Market) on
which a Party or its Related Person's securities are listed. After Closing,
Sellers shall maintain the confidentiality of any such proprietary information
relating to the Company and not, directly or indirectly, disclose or permit the
disclosure of any such information except as may be required by applicable
Governmental Regulation, or make use of or permit the use of such information,
for their own benefit or the benefit of others. Effective as of the Closing
Date, Sellers shall, to the extent possible, assign to Purchaser all of their
rights under any confidentiality or nondisclosure agreements executed by third
parties in connection with the proposed sale by Sellers of the Shares.
14.2. Entire Understanding
The terms set forth in this Agreement (including all Exhibits and
Schedules hereto) supersede all previous discussions, understandings and
agreements among the Parties with respect to the subject matter hereof, and are
intended by the Parties as a final, complete and exclusive expression of the
terms of their agreement and may not be contradicted, explained or supplemented
by evidence of any prior agreement, any contemporaneous oral agreement.
Notwithstanding the foregoing, unless and until Closing shall occur, Purchaser's
use and disclosure of information provided by Sellers and the Company in
connection with the
43
transactions contemplated hereby shall continue to be governed by the
Nondisclosure Agreement dated December 23, 1998, as revised December 29, 1998,
between Purchaser and the Company.
14.3. Expenses
Each Party shall bear its own expenses relating to the negotiation,
preparation, execution and delivery of this Agreement, including without
limitation, fees for its attorneys, accountants and other advisors, except that
the Company shall bear any expenses of Sellers or the Company properly
deductible by the Company for federal income tax purposes.
14.4. Amendment
The Parties may amend, modify or supplement this Agreement at any
time, but only in writing duly executed by all Parties.
14.5. Waivers
Any terms, covenants, representations, warranties or agreements of any
Party hereto may be waived at any time by an instrument in writing executed by
the Party for whose benefit such terms exist. The failure of any Party at any
time or times to require performance of any provisions hereof shall in no manner
affect its right at a later time to enforce the same. No waiver by any Party of
any condition or of any breach of any terms, covenants, representations,
warranties or agreements contained in this Agreement shall be effective unless
in writing, and no waiver in any one or more instances shall be deemed to be a
further or continuing waiver of any such condition or breach in other instances
or a waiver of any other condition or any breach of any other terms, covenants,
representations, warranties or agreements.
14.6. Parties in Interest; Assignment
This Agreement is not intended, nor shall it be construed, to confer
any enforceable rights on any person (other than DBRHC to the extent its
realization of benefits under the Real Estate Purchase Agreement may be affected
by Purchaser's default hereunder) not a party hereto. Neither this Agreement nor
any of the rights, interests or obligations hereunder of any Party shall be
assigned without the prior written consent of the other party; provided,
however, that (i) Purchaser may assign its rights hereunder to any Related
Person (so long as Purchaser remains responsible for its and such Related
Person's obligations hereunder) and (ii) any Party may assign its rights,
interests and obligations hereunder to any Person that acquires all or
substantially all of the assets of such Party (including without limitation as a
result of any merger, consolidation or similar transaction). All of the terms
and provisions of this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors, heirs, executors and
permitted assigns of the parties hereto.
14.7. Notices
Any notice or demand desired or required to be given hereunder shall
be in writing and shall be (i) personally delivered, (ii) sent by a nationally
recognized courier service with proof of delivery, (iii) deposited in the mail,
postage prepaid, certified or registered, return receipt requested, or (iv) sent
by legible facsimile or other electronic transmission; in each case
44
addressed to the intended recipient at the address set forth below or to such
other address as such recipient shall have previously designated to the sender
by such a notice. Any notice delivered personally shall be deemed to be given
when actually delivered; any notice transmitted by mail or courier shall be
deemed to be given on the date of its first attempted delivery; and any notice
delivered by facsimile or other electronic transmission shall be deemed to be
given upon electronic confirmation of such transmission, provided that an
original of such facsimile or other electronic transmission is also sent to the
intended recipient by means described in clauses (i), (ii) or (iii).
Notices shall be sent as follows:
To SELLERS on or before the Closing Date:
Data Base, Inc.
00000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Fax: **The confidential portion has been so omitted
pursuant to a request for confidential treatment and
has been filed separately with the Commission.**
Attention: Xx. Xxxx X. Xxxxx
To SELLERS and/or SELLERS' REPRESENTATIVE after the Closing Date:
c/o Xx. Xxxx X. Xxxxx
**The confidential portion has been so omitted
pursuant to a request for confidential treatment and
has been filed separately with the Commission.**
Fax: **The confidential portion has been so omitted
pursuant to a request for confidential treatment and
has been filed separately with the Commission.**
in each case with a copy to:
Heller, Ehrman, White & XxXxxxxxx
0000 Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxxxx
TO PURCHASER:
Iron Mountain Incorporated
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Mr. Xxxxxxx Xxxxx
45
with copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Mr. Xxxxxxx Xxxxx
14.8. Attorneys' Fees
In the event of any dispute or action regarding the interpretation or
enforcement of any provision of this Agreement, or on account of any default
under or breach of this Agreement, the prevailing Party shall be entitled to
recover from the other Party, in addition to any other relief, all reasonable
attorneys' fees and expenses incurred by the prevailing Party, whether or not
litigation is commenced.
14.9. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14.10. Headings
The headings preceding the text of the Sections of this Agreement are
for convenience only and form no part of the agreement between the parties.
14.11. Time of the Essence
Time is of the essence in this Agreement.
14.12. Applicable Law
This Agreement, including all matters of construction, validity and
performance, shall be governed by and construed and enforced in accordance with
the laws of the Washington, as applied to contracts executed and to be fully
performed in such state by citizens of such state.
14.13. Specific Performance
The Parties each acknowledge that, in view of the uniqueness of the
subject matter hereof, the Parties would not have an adequate remedy at law for
money damages in the event that this Agreement were not performed in accordance
with its terms, and therefore agree that the parties hereto shall be entitled to
specific enforcement of the terms hereof in addition to any other remedy to
which the Parties may be entitled at law or in equity.
46
14.14. Construction
Each Party acknowledges and agrees that (i) such Party has had an
equal opportunity to participate in drafting this Agreement and (ii) no
ambiguity shall be construed against any Party based upon a claim that Party
drafted the applicable language.
47
IN WITNESS WHEREOF, the Parties have entered into and signed this
Agreement as of the date and year first above written.
Sellers:
--------
/s/
-------------------------------------------------------
Xxxx X. Xxxxx
/s/
-------------------------------------------------------
Xxxxx X. Xxxxx
Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxx Xxxxx Xxxx, as
co-trustees of the XXXX XXXXX XXXX GST TRUST
By /s/
--------------------------------------------------
Xxxx Xxx Xxxxxxxxx, Trustee
By /s/
--------------------------------------------------
Xxxxxx X. Xxxxx, Trustee
By /s/
--------------------------------------------------
Xxxx Xxxxx Xxxx, Trustee
Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxxx Xxxxx Paszkeicz,
as co-trustees of the XXXXX XXXXX PASZKEICZ GST TRUST
By /s/
--------------------------------------------------
Xxxx Xxx Xxxxxxxxx, Trustee
By /s/
--------------------------------------------------
Xxxxxx X. Xxxxx, Trustee
By /s/
--------------------------------------------------
Xxxxx Xxxxx Paszkeicz, Trustee
48
Xxxx Xxx Xxxxxxxxx, Xxxxxx X. Xxxxx and Xxxx X. Xxxxx, Xx., as
co-trustees of the XXXX X. XXXXX, XX. GST TRUST
By /s/
--------------------------------------------------
Xxxx Xxx Xxxxxxxxx, Trustee
By /s/
--------------------------------------------------
Xxxxxx X. Xxxxx, Trustee
By /s/
--------------------------------------------------
Xxxx X. Xxxxx, Xx., Trustee
Xxxx Xxx Xxxxxxxxx and Xxxxxx X. Xxxxx, as co-trustees of the
XXXXXX X. XXXXX GST TRUST
By /s/
--------------------------------------------------
Xxxx Xxx Xxxxxxxxx, Trustee
By /s/
--------------------------------------------------
Xxxxxx X. Xxxxx, Trustee
Company: DATA BASE, INC.,
------- a Washington corporation
By /s/
----------------------------------------------------
Xxxx X. Xxxxx, President
Purchaser: IRON MOUNTAIN INCORPORATED,
--------- a Delaware corporation
By /s/
----------------------------------------------------
Xxxxxx X. Xxxxxxxx, Vice President
49
The following exhibits and schedules have been omitted and will be
supplementally filed with the Commission upon request:
EXHIBITS
--------
Exhibit 4.2(a)(1) Noncompetition Agreement
Exhibit 4.2(a)(2) Joinder Agreement
Exhibit 5.1 Certain Representations and Warranties of Sellers
Exhibit 6.1 Certain Representations and Warranties of Purchaser
SCHEDULES
---------
Schedule A DBRHC Real Estate
Schedule B Excluded Assets
Schedule 2 Shareholders
Schedule 7.3 Certain Assets
Schedule 7.4(a) List of Customers and Material Contracts
Schedule 7.4(b)(1) Accounts Receivable Aging for Certain Customers
Schedule 7.4(b)(2) Summary of Customer Contract Review
Schedule 7.5 Intellectual Property
Schedule 7.7 Insurance
Schedule 7.10 List of Required Approvals and Conflicts with
Material Contracts
Schedule 7.11 Affiliated Transactions
Schedule 7.12 Employees
Schedule 7.14 Compliance with Laws
Schedule 7.16 Absence of Legal Proceedings
Schedule 7.15 Conduct in the Ordinary Course
Schedule 7.17(a) Contributions to Plans or Benefit Arrangements
Schedule 7.17(b) Liabilities under Plans or Benefit Arrangements
Schedule 7.17(h) Certain Plan Assets
Schedule 7.17(m) Present Value of Accumulated Plan Liabilities
Schedule 7.19 Environmental Matters
Schedule 7.23 Year 2000 (Sellers)
Schedule 8.9 Capitalization of Purchaser
Schedule 8.12 Year 2000 (Purchaser)
Schedule 9.4 Required Severance Benefits to the Company's
Employees
